Market Update: Sydney hotels report strong rebound as summer optimism builds
August trading surges: Highlight from Accommodation Australia NSW’s recent Hotel Market and Economic Outlook meeting.
Sydney’s accommodation sector is heading into the busy summer period on a high, with August recording some of the strongest trading results in years and optimism growing for the months ahead.
That was the key takeaway from Accommodation Australia NSW’s latest Hotel Market and Economic Outlook meeting, where more than 160 hotel managers and directors gathered at the Fullerton Hotel to review the city’s performance and prospects.
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AA NSW general manager Stacey McBride said Sydney’s hotels were nearly at capacity during August, setting the tone for what’s expected to be a buoyant summer.
“It’s pretty clear August was one of the strongest performing months of the year and we have high hopes for summer,” Ms McBride said.
“The city really has a positive vibe after events like the Lions Tour and the marathon – and with events ahead like the busy Christmas and New Year period and then Mardi Gras, hopes are high.”
Record-breaking marathon weekend
According to STR account manager Joanne Cohen, the Sydney Marathon period delivered one of the city’s best-ever trading results, with average daily rates (ADR) up more than 50 per cent and occupancy nearly 46 percent higher year-on-year.
“It’s an encouraging outlook for Sydney’s accommodation market, noting continued rises in occupancy and room rates – though at a steadier pace than earlier in the pandemic recovery,” Ms Cohen said.
She noted that occupancy patterns have now stabilised, with five out of seven days averaging above 80 per cent. Strong weekend leisure bookings, coupled with the rebound in midweek corporate and group travel, continue to support healthy room rates.
International arrivals lift performance
Adding to the positive sentiment, Roy Morgan’s Head of Travel and Tourism Adele Labine-Romain reported that international arrivals are climbing steadily, even as domestic demand softens.
“Over the past three months, international arrivals have reached 95 percent of pre-pandemic levels, helping to offset slower local demand,” she said.
While China and New Zealand arrivals are yet to fully recover, markets such as South Korea are showing strong growth and India is now “stabilising”.
Intrastate visitors remain vital, accounting for more than half of all visitor nights and 44 per cent of total visitor spend. Among international travellers, holidays now lead as the main purpose of travel (44 percent), ahead of visiting friends and relatives (34 percent), business (9 percent) and education (6 percent).
A confident close to 2025
With major summer events ahead and international tourism momentum returning, Sydney’s accommodation operators are feeling confident.
As Ms McBride summed up, the energy across the city is palpable: “After the challenges of recent years, it’s great to see Sydney buzzing again – hotels are busy, visitors are returning, and the outlook is bright.”
