Everyone asks: why is accommodation in Australia so pricey?

The hospitality industry is labour intensive. It takes many hands to make the beds, prepare meals, operate the front desk, refresh the flowers and maintain a property.

The high wage costs that hospitality industry employers in this country face puts them at a big disadvantage compared with operators just about anywhere else in the world.

Compounding the problem, the supply of hotel rooms has not kept pace with demand. While the number of overseas arrivals has increased from   4.65 million in 2002-03 financial year to 6.27 million 10 years later, the number of hotel rooms has remained relatively static.

With demand outstripping supply, the only place for the price to go is up. When a two-night weekend stay in even a modest guesthouse in a popular tourist area will probably set you back $500 for a couple, is it any wonder that Australian travellers are voting with their feet in favour of Bali or Bangkok?