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News release

Sydney

Australia’s luxury segment off to a flyer in 2014


Sydney and Melbourne's five-star accommodation market has had a stellar start to 2014 with both segments recording double digit RevPAR growth in January at a level which was over and above the general market, according to the latest STR results. This represents a marked turnaround compared to recent years for the country's key gateways with top end trading weighed down global economic uncertainty and corporate austerity measures. 

Mr Ross Beardsell, Senior Vice President – Advisory, Hotels & Hospitality Group said, "Whilst Sydney's luxury hotels strode to the crease with RevPAR growth of 21.0% to reach $230, Melbourne's top end rallied with RevPAR surging 13.0% to $246. Sporting events, notably the Ashes cricket tour and Australian Open Tennis, bolstered demand for five-star hotel accommodation."

Mr Beardsell continued, "Occupancy levels in both cities scorched new highs as major events were underpinned by a run of good weather and buoyant inbound tourism demand with the Chinese New Year celebrations at the end of the month. Li Na's victory at the Australian Open has further cemented Melbourne in Chinese sporting history."

Karen Wales, Executive Vice President – Research and Consulting, Hotels & Hospitality Group said, "Occupancy levels in Melbourne's five-star hotels averaged 88.1% for the month, considerably higher than Sydney's 84.6%. Room rate growth was however strongest in Sydney's five-star hotels with rates surging 11.0% to $271. This compares to growth of 4.7% in Melbourne to $278."

"2014 is Year of the Horse - symbolic of energy and spending money – and it would appear that Sydney and Melbourne's five-star hotel accommodation sectors are direct beneficiaries of the new zodiac cycle. The strong January results follow a solid year in 2013 with occupancy levels in Melbourne's five-star hotels averaging 88.0% for the full year and an average rate of $254. This compares to 85.7% and $261 in Sydney." added Mrs Wales.

Mr Beardsell said, "Moving forward, Melbourne continues to hold the mantle as the events capital of Australia with a solid calendar planned throughout 2014; up next is the Formula One Australian Grand Prix in March. The accommodation market is also expected to benefit from an uptick in conferencing with the closure of the Sydney Convention and Exhibition Centre late last year. Not to be outdone, Sydney will be catapulted onto the global stage with the hosting of the world's finance ministers, central bank governors and their entourages in preparation ahead of the G20 summit in November. This is expected to be a boon for luxury hotels and restaurants in what is typically a strong trading month."

"As trading in the five-star segment enters a definite upswing and inbound tourism continues to rise, hotel owners and operators need to capitalise on the buoyant market conditions by ensuring that the revenue gains are not diluted by sundry cost over runs. Failure to review asset performance through benchmarking and action accordingly could mean an opportunity missed and hotel owners and operators left stumped." concluded Mr Beardsell.