“This diversity of demand reflects positive future signs for the hotel sector going forward,” Accommodation Australia reported last week.
Perth continued to lead the way in major capital city hotel occupancy performance with all cities now performing close to or above their pre-COVID levels in 2019 according to the Accommodation Australia report.
While travel demand for Melbourne and Sydney were similar, Melbourne’s hotel performance continued to be impacted by its significant new supply of hotel rooms.
Nationally, although Hobart topped hotel occupancy in January with 86.9 per cent and the Gold Coast recorded 78.4 per cent, major capital cities were led by Perth at 76.4 per cent, then Sydney at 75.6 per cent, Melbourne at 73.2 per cent and Brisbane at 68.2 per cent.
Melbourne’s hotel occupancy was up 5.5 per cent and the city recorded an average daily rate for January of $246.08, bettered only by Sydney at $276.22.
Dougal Hollis, Accommodation Australia’s general manager for Victoria, said, “The resilience of travel spending in Victoria is reflected in the fact that visitor expenditure [for the year ending Sept 2024] is $40 billion, compared with $32 billion in 2019”.
But he added that considering spend in isolation was “somewhat of a red herring”. He flagged figures from the Commonwealth Bank that suggested while total tourism spend in Victoria was up, “relative to 2019, domestic trips taken to Victoria are only 93 per cent recovered, while international trips sit at 83 per cent of pre-pandemic levels”.
He said cost of living pressures resulted in consumer spending “flat lining” but that travel spend continued to prove remarkably resilient despite travel costs being driven up by inflationary pressures and market pricing
Regional Victoria achieved hotel occupancy growth across 2024, despite cost of living pressures and shifting consumer travel preferences.
“Like Melbourne, new supply across regional Victoria adversely impacts hotel performance metrics – occupancy down six per cent and ADR down seven per cent across FY2024 in the Bellarine and Geelong, impacted by significant new supply” which equated to approximately 10 per cent growth in hotel room inventory.
Hollis said that by the first quarter of 2026, Melbourne would have added an extra 7,050 hotel rooms since 2020, an increase of 32.6 per cent in six years. Sydney, by comparison, will have added just 3,444 rooms, an increase of 16 per cent, over the same period.
