Green Shoots for Hotel Comeback as Occupancy Lifts


Melbourne hotel rates have hit pandemic-era highs and are set to climb further as the national sector looks to its long-term recovery.

The city’s occupancy average daily rate has hit $169.06, the highest since the pandemic began, with occupancy at 33.9 per cent in November.

It is expected to rise to around 57.9 per cent for New Year’s Eve.

Research by STR found that Brisbane and Adelaide were the best performing markets, boosted by The Ashes, nearing 70 per cent occupancy and were expected to stay near that number for New Year’s Eve.

Sydney was performing similarly to Melbourne and was also expected to peak on December 31 at 53 per cent before tailing off.

Across the country, holiday bookings have boosted the market, however, its full recovery is not expected for years, according to Deloitte.

Hotel holiday occupancies by city

Hotel occupancy rates for holiday period

^Source: STR as at December 13, 2021

The tourism and hotel market report predicted that while domestic tourism was in demand and overnight trips were expected to surpass 2019 levels by the end of 2022, the international recovery would be slower than expected.

International tourism would be at 76 per cent by the end of 2022 and would not return to pre-pandemic levels until 2025.

Deloitte national tourism leader Adele Labine-Romain said that looking ahead, 5000 rooms would be added to national hotel stock next year and an additional 10,000 were in the pipeline for coming years.

“These are significant numbers, especially so in some markets, with 60 per cent of the new stock concentrated in Melbourne, Gold Coast and Sydney,” Labine-Romain said.

“The pipeline is weaker than our outlook earlier in the year, due to a shift of some developments from hotel to residential and delays in commitment from investors of projects not yet in the final stages of planning or construction.

“Average room rates are expected to recover more quickly than occupancy, returning to 2019 levels [$194] by the end of 2022 for all markets, given properties mostly maintained rates even in periods where demand was restricted.”

Show Comments
advertise with us
The Urban Developer is Australia’s largest, most engaged and fastest growing community of property developers and urban development professionals. Connect your business with business and reach out to our partnerships team today.
Article originally posted at: