NSW HOTEL OCCUPANCY LEVELS AND ROOM RATES PREDICTED TO RISE

Surging inbound tourism is predicted to boost NSW hotel occupancy levels and room rates in 2024-25, according to a new report by CBRE.

The property services firm predicts Sydney will be the key beneficiary among Australian capital cities as international arrivals recover. This influx of visitors is expected to push occupancy levels even higher during 2024-25.

According to the CBRE Hotels Australia Overview and Outlook report, domestic travel in commercial accommodation surpassed pre-pandemic levels in 2023 in terms of both travel nights and expenditure.

CBRE Australia Head of Hotels Research Ally McDade said last year's spike in outbound travel was beginning to moderate.

“The high cost of overseas flights and accommodation combined with geopolitical tensions globally are expected to benefit the local sector," she said.

In the year ending December 2023, the Sydney hotel sector experienced the highest occupancy of all major markets at 77 per cent (up 20 per cent year on year). Sydney had Australia's highest average daily room rate during the period at $269. Sydney also recorded the highest revenue per available room at $207, up 29 per cent year on year.

CBRE said Sydney would be the key beneficiary among Australian capital cities from recovering international arrivals, which it predicted would help push occupancy levels even higher during 2024-25.

Sydney also has the second largest pipeline in Australia of hotel stock under construction and due to open over the next two years, with the majority of room rates (56 per cent) in the "upper upscale" category.

 
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