Sydney Hotel Rates Strengthen Despite Occupancy Fall

The Average Room Rate (ARR) of hotels in Sydney rose nearly 9% in the second quarter of 2017 despite an overall drop in occupancy to 83.9%.

Analysis from Flight Centre Travel Group's business travel consulting division, 4th Dimension, showed Sydney's market leading rates have not cooled since the record occupancy levels of Q1 2017.

Corporate Traveller General Manager Jess Anscombe said visitors to Sydney were unlikely to get a price reprieve in the medium term due to Sydney's underlying supply issue.

"Aside from the Sofitel Sydney Darling Harbour there aren't any other major hotels opening in the Sydney market this year," she said. "Also, the recent reopening of the Sydney International Convention Centre will likely increase pressure on supply with more weekday business travellers visiting for larger conferences and events."

Ms Anscombe said the small number of new premium hotels entering the Sydney market in 2018 was unlikely to put significant downward pressure on rates.

"Travellers who are looking to keep costs down need to be proactive about booking early to ensure they have access to the cheapest rate buckets," she said.

Despite the rate jump in Sydney, the outlook was brighter for accommodation seekers in Melbourne, Perth and Brisbane with 4th Dimension's analysis showing year on year decreases in those markets.

Perth showed the most significant drop with a 7.7% decrease in ARR while Brisbane and Melbourne showed respective decreases of 2.3% and 1.9%.

There were mixed results for major overseas destinations with London's ARR falling by 3.7%, Singapore increasing by 1.7% and New York increasing by whopping 25%.

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