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News release

Sydney

Australia’s key hotel markets have a strong first quarter 2014


Australia's key hotel markets have had an excellent start to 2014 with the Sydney five-star market leading the way, according to JLL Hotels & Hospitality Groups' review of the latest STR results for the March quarter.

Of all the markets covered, the Sydney five-star market had the strongest start to 2014 posting exceptional RevPAR (Occupancy x Average Daily Room Rate) growth of 14.1%. This result reflected a combination of strong inbound numbers, renewed impetus for corporate travel and an excellent calendar of events.

Mr Craig Collins, Australasian CEO of JLL's Hotels & Hospitality Group said, "Sydney's five-star sector is currently experiencing the best trading conditions in many years with occupancies reaching 89.5% over the first three months of 2014, compared to 85.3% over the same period last year. Reaching pretty much 'full house' levels, operators have been able to push rates 8.7% higher to just under $290 compared to $266 this time last year. With Sydney experiencing buoyant construction and infrastructure related investment, we expect the hotel sector to continue to experience strong trading conditions over the near and medium terms, accelerated by a still benign supply outlook."

"The good news is that with the five-star sector leading the way in Sydney, the wider Sydney market is following suit, posting Rev PAR growth of 10.7% over the March quarter.  Occupancy levels in the wider market are similarly strong at 89.7% while ADR growth reached 7.5% over the quarter. A strong five-star sector is great news for all other sectors as it encourages the entire hotel market to grow rates at a time when occupancies are at near record levels." Mr Collins continued.

"Benefitting from similarly strong conditions, the Melbourne hotel market continues to perform strongly after an excellent year in 2013. Over the three months to March 2014 the Melbourne five-star market posted nation leading occupancy of 91.3% compared to 87.9% over the same period last year. ADR increased by 4.8%, resulting in five-star RevPAR growth of 8.9%. Once again, the stronger five-star results were good news for the wider Melbourne market which achieved Rev PAR growth of 7.3% underpinned by both occupancy and ADR gains." Mr Collins noted.

"Perhaps the most encouraging aspect of the first quarter results is that the stronger growth is broadly based. For instance, the leisure driven markets of Great Barrier Reef, Cairns and the Gold Coast experienced RevPAR growth of 12.7%, 9.8% and 4.8%, respectively. Strong inbound growth and improving domestic demand are underpinning this long awaited recovery in our key leisure markets." Mr Collins concluded.

Australia's strongest hotel markets ranked by RevPAR growth

MarketQ1 OccupancyQ1 ADRQ1 RevPARRevPAR Growth
Sydney five-star89.5%$289.57$259.2114.1%
Great Barrier Reef71.6%$314.22$225.0612.7%
Adelaide84.6%$161.17$136.3412.5%
Sydney All89.7%$239.20$214.5410.7%
Cairns71.0%$121.29$86.079.8%
Melbourne five-star91.3%$271.56$248.008.9%
Melbourne All87.5%$204.41$178.917.3%

Source: JLL/STR Global               
Note: RevPAR Growth is compared to Q1 2013