November 15, 2022 | By Graeme Kemlo
Despite being well into the spring major events season, Melbourne’s major hotels recorded lower occupancies, at 64 per cent, during this year’s Melbourne Cup week compared with the same week pre-pandemic in 2019, where occupancy averages were 15 per cent higher at 79 per cent.
One piece of good news for Melbourne, according to Tourism Accommodation Australia CEO Michael Johnson, was that the average room rate for the first week in November this year was 24 per cent higher at $250 a night compared with the same period in 2019.
Melbourne relies on its brace of major events to generate visitor dollars, particularly the higher yielding business tourism sector.
In releasing the figures to micenet, Johnson said another mitigating factor for Melbourne’s seemingly lacklustre result was that there had been a significant increase in four and five-star hotel rooms since 2019. With 6,000 new hotels rooms opened, under construction or planned for Melbourne, it was not unexpected that average occupancy might fall.
Almost all capital city occupancy rates were down for the first week of November, except for Brisbane, which recorded 79 per cent occupancy in 2022 against 71 per cent in 2019. Brisbane also recorded 53 per cent higher room rates during the week – $235 in 2022 versus $155 in 2019. In terms of other capital city results, Sydney’s occupancy was 74 per cent with an average room rate of $270 against 79 per cent at $202 in 2019; Adelaide sat at 74 per cent and a room rate of $228 against 90 per cent at an average of $153 in 2019; and Perth was at 77 per cent occupancy at an average of $224 per room against 81 per cent occupancy at $167 per room in 2019.
Commenting on the latest figures, Johnson said that while Melbourne might have been disappointed with the result, “the event calendar for all cities is back and full-on”.
He said it was likely that a return to 2019 figures now seemed unlikely to happen until at least 2024.
“The international market is critical to us achieving those levels again and we just hope Prime Minister Albanese can chat with President Xi on the side of the G20 in Bali this week.”
He said the figures showed weekends were particularly busy in city hotels, as well as Tuesdays and Wednesdays, but there appeared to be plenty of opportunity for growth on other weeknights.
And while this may be a reflection of the new working from home culture, meaning fewer people are in the city on those nights, it should present an opportunity for meeting planners to negotiate for hotel-based events as the accommodation sector pushes to achieve its 2022 annual results.