Australia hotel performance normalizing with improvement in business travel

SYDNEY – 30 August 2023 – Australia’s recent hotel performance represents normalization as leisure demand has peaked and given way to strengthening in corporate business, according to CoStar and STR analysis that will be presented this week at NoVacancy Hotel + Accommodation Industry Expo.

CoStar is a leading provider of online real estate marketplaces, information and analytics in the property markets. STR is CoStar’s provider of data benchmarking, analytics, and marketplace insights for the global hospitality industry.

Australia’s occupancy through the first seven months of the year was 68.2%, which was up 9.8% from last year but down 6.0% from 2019. Average daily rate (ADR) of AUD234.46 was 7.4% higher than last year and 22.4% better than 2019. Driven by gains in ADR, revenue per available room (RevPAR) has been indexing at 120 (20 percentage higher) or better than 2019 since April 2022.  

“Australia is following many other countries into a period of normalization,” said Matthew Burke, STR’s regional director for the Pacific region, Central South Asia and Japan. “That is happening because the surge in domestic leisure travel peaked in 2022, and while room prices are considerably higher than 2019, we’ve seen minimal-to-no rate growth year over year. That isn’t a loss, but more of a shift, as we’ve seen gains in capital cities and on the days most associated with corporate demand.”

Burke’s NoVacancy presentation, which will cover historical performance, profitability and forward bookings is set for 11:30 a.m. on Friday, 1 September: “Industry Outlooks: Prepare for the challenges and opportunities of the future.”

Brisbane shows the highest occupancy index peaks recently, reaching as high as 114 in early July. Perth has remained above 2019 levels for much of the year and peaked as high as 125 in late-April. Sydney trended below 2019 for much of this year but eclipsed that threshold for two straight weeks in late July. Melbourne, whilst absorbing a higher volume of supply, has remained below 2019 comparables all year.

Weekday (Monday-Wednesday) occupancy, which grew the most against last year earlier in 2023, has maintained consistent growth in recent months while shoulder days (Sunday and Thursday) have fluctuated and weekends (Friday-Saturday) have decreased. When compared against 2019, weekends are the furthest recovered whereas weekdays reached 98% of the pre-pandemic comparable in late July.

“Weekend occupancy remains high, and that demand has evolved with major events proving major drawcards to future bookings and high ADR,” Burke said. “Midweek shows plenty of upside opportunity as international meetings, large-scale events, corporate and day-agnostic international leisure are still working their way back. There is anecdotal evidence that finance and professional service corporate travelers have been slower to recover than other industries. With all that considered, our forecast is watchfully optimistic on the assumption of further improvement in international and corporate demand.”

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Additional Performance Data
CoStar’s world-leading hotel performance sample comprises 78,000 properties and 10.3 million rooms around the globe. Members of the media should refer to the contacts listed below for additional data requests.

News Media Contact
Haley Luther
Communications Manager – STR
(216) 278-0627
hluther@str.com

About CoStar Group
CoStar Group (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics in the property markets. Founded in 1987, CoStar Group conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of real estate information. CoStar is the global leader in commercial real estate information, analytics, and news, enabling clients to analyze, interpret and gain unmatched insight on property values, market conditions and availabilities. Apartments.com is the leading online marketplace for renters seeking great apartment homes, providing property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked online commercial real estate marketplace with over twelve million monthly global unique visitors. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X offers a leading platform for conducting commercial real estate online auctions and negotiated bids. Homes.com is the fastest growing online residential marketplace that connects agents, buyers, and sellers. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. Business Immo is France’s leading commercial real estate news service. Thomas Daily is Germany’s largest online data pool in the real estate industry. Belbex is the premier source of commercial space available to let and for sale in Spain. CoStar Group’s websites attract nearly 100 million unique monthly visitors. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time, we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.