Sydney and Melbourne lead a recovery in capital city hotel occupancies, room rates

Melbourne and Sydney, which are gateway cities for international travel, suffered lengthier lockdowns than the other capitals and so were the hardest-hit hotel markets during the pandemic. Pre-pandemic, they were both generating occupancy rates consistently above 80 per cent.

The other capital cities also posted strong month-on-month and six-month comparative gains in June, according to STR.

David Mansfield: the rest of the year looks very strong. Tash Sorenson

At the right time

Brisbane, which recorded a 72 per cent occupancy rate last month and an average of 64 per cent for the half-year, was the best performing capital city hotel market, outshining Perth and Adelaide, which recorded occupancy rates above 65 per cent for June and above 60 per cent for the six-month period.

For Melbourne in particular, the improving market conditions could not have come at a better time for hotel operators, after many new properties opened their doors. These include the AC by Marriott hotel in Melbourne’s Fishermans Bend developed by Mohan Du’s Capital Alliance and the InterContinental Sorrento on the Mornington Peninsula.

David Mansfield, who heads up the Australian operations of Singaporean serviced apartment giant The Ascott, which brings together the Quest, Citadines and Somerset hotels, said the group had performed above 2019 levels in the first half of calendar 2022 in every city, state and region.

“Our figures are better than the STR numbers,” Mr Mansfield told The Australian Financial Review. “We’re talking 80 per cent-plus occupancy year-to-date.”

Based on its forward bookings, Mr Mansfield said the group was on track to match its first-half calendar year performance in the final two quarters of the year.

“There’s enough pent-up demand to carry us through,” he said.

“Our sweet spot is domestic corporate travel, but we are also getting a lot of leisure bookings with a preference for larger apartments, which has lifted our average daily rate.”

Mr Mansfield said the turnaround in performance had enabled its Quest franchisees “who went through the ringer during the pandemic” to start paying back deferred rent to their landlords.

“We’re telling them to pay it down and get ready for the next seismic shift. We’ll round off the year strongly, but who knows what 2023 will bring?”

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