Sydney Hotel Rates Jump as Occupancy Squeeze Hits

Travellers could well face stiffer hotel bills in Sydney this year, with rates surging by 8.7% in the first quarter of 2017.

Analysis from 4th Dimension, Flight Centre Travel Group's (FCTG) business travel consulting division, showed average nightly rates had risen to AU$270 with occupancy levels topping out at more than 90%.

The figures represented the highest increase in the Sydney accommodation market since 1996.

Corporate Traveller General Manager Jess Anscombe said business travellers were especially vulnerable to the fluctuations with the uptick having strong implications for companies that regularly need accommodation in Sydney.

"Sydney is now one of the highest occupied accommodation markets in the world. It even outranks New York, London and Hong Kong," Jess said. "As the number one business hub in Australia, travellers need to start booking accommodation as early as they possibly can to avoid being caught in the highest rate buckets. Companies with high volume requirements should look to consolidate with a small number of preferred hotels and lock in negotiated rates. For those with lower booking frequency, moving to a best rate of the day purchasing strategy will be a great help. While you may not always be kicking back in luxury, it's a great insulator against higher rates."

The analysis cited increases in domestic and international business travellers, a boom in tourism and leisure travel activity, higher demand for Sydney's 5-star hotels due to the weaker Australian dollar and flat supply as the key factors for the surge in demand.

Ms Anscombe said selecting properties outside the CBD, like in the Sydney Airport precinct, was also a good tactic for maintaining convenience and accessing affordable rates.

"Airport hotels can often be up to 35% lower, and 50% lower in some cases, than CBD properties," Jess added. "Linking your accommodation spending to frequent flyer points earning is also a great way to help alleviate the burden of a Sydney business trip."

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