Surge In Tourist Numbers Pushes Hotel Boom In Melbourne

Melbourne is set to see a peak in supply of hotel rooms, with around 4500 hotel rooms set to be added to the market over the next four years, according to the city’s official construction monitor.

There are currently 23 projects with a hotel component being monitored by Melbourne City Council.

One reason for this hotel boom may be a recent surge in tourist numbers: mid-2014, Sydney and Melbourne hotel capacity was pushed close to 90 per cent, at or near capacity several nights a week, according to Deloitte Access Economics.

Room rates and RevPAR (revenue per available room) were growing at twice their decade average, according to Deloitte.

This increase in hotel room supply means Melbourne may soon overtake Sydney as the leading occupancy provider in Australia.

According to a JLL register, Sydney has 20,000 hotel rooms - about 1000 fewer than it had 14 years ago. By contrast, Melbourne added 4200 rooms over the past decade, taking its total to 18,840.

The closure of the Sydney Convention and Exhibition Centre to make way for a new space opening in 2016 in Darling Harbour has boosted Melbourne's accommodation sector.

The Melbourne Convention and Exhibition Centre had its most successful month in history in August, hosting more than 100 events with 87,600 delegates and turning away 19.5 per cent of new business due to lack of available space.