JLL - Sydney Hotel Market Q1 2019

JLL’s Q1 2019 Asia Pacific Digest includes commentary on the Sydney hotel market

Key points:

  • Market wide occupancy of 87.5%

  • RevPAR growth YOY: -4.4%

  • “New supply coming online results in negative RevPAR growth as the market adjusts.” - Troy Craig, Managing Director – Hotels & Hospitality Group, Australia

JLL’s Q1 2018 Asia Pacific Digest includes commentary on the Sydney hotel market.

Sydney continues to realise strong tourist

  • Sydney has experienced market-wide occupancy of 87.5% on a moving average annual basis for the 12 months ending February 2019.

  • Returning and new events held within the International Convention Centre Sydney, and the implementation of annual events by the NSW Government, such as Vivid Sydney, have increased demand in traditionally weaker months.

One new hotel addition comes online in 1Q19

  • Major hotel openings comprised the 90-room Sydney Hotel QVB, which represented 0.4% Sydney's of total room stock.

  • Future notable additions to room stock include, but are not limited, to the Crown Hotel at Barangaroo (352 rooms), the W Hotel Darling Harbour (590 rooms), and the Crowne Plaza Sydney (152 rooms).

Increased supply contributes to softening occupancy

  • As at YTD February 2019, occupancy had decreased 0.8% y-o-y to 87.3% and ADR experienced an decrease of 3.6% y-o-y, resulting in a decline in revenue per available room (RevPAR) of 4.4% to AUD 235.

  • On a moving annual average basis, RevPAR was recorded at AUD 223 for the 12 months ending February 2019, a decline of 5.5% from the high experienced in the year ending March 2018 of AUD 236.

Outlook: RevPAR should strengthen, albeit moderately

  • Anticipated increases in average daily rate (ADR) are expected to outweigh the slightly falling occupancy and continue to drive RevPAR upwards, although at a lower level than experienced historically.

  • While a relatively large number of rooms are anticipated to enter the Sydney market over the next 3 years, it is expected that persistent strong demand will offset the incoming supply increases.

The full report:

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