Sydney results hit by bushfires

New hotel room supply in Sydney, Australia has driven declines in both occupancy, despite the increase in demand and hotel performance, according to a report from Horwath HTL Australia. 
Hotels within a two-hour-drive radius of Greater Sydney have seen performance hit

Hotels within a two-hour-drive radius of Greater Sydney reported double-digit declines in each of the three key performance metrics in December, according to STR.

The company said that it expected to see a broader impact in January, following a number of road closures.

The submarket showed a 14.7% year-over-year decline in demand, with occupancy down 14.5% to 52.2%, average daily rate falling 18.4% to AUD194.74 and revpar dropping by 30.3% to AUD101.48.

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Matthew Burke, STR’s regional manager, Pacific, said: “Because the physical impact of the bushfires has been predominantly across the Great Dividing Range of New South Wales and Victoria, we’ve not yet seen significant demand decreases in the major city areas of Australia.

“However, these regional locations are popular tourist spots for family holidays in vacation homes, hotels and holiday parks. The post-Christmas period to the end of January is peak season, when so many local businesses rely on the transient tourist trade. Moreover, with road closures through January, we will watch to see the impact more broadly.”

Across New South Wales, results were mixed. The NSW North Coast submarket, or Northern Rivers region, saw a 7.0% jump in demand and a 5.8% lift in ADR, while the NSW North Coast South submarket saw muted demand growth of 0.4%.

Burke said: “Certainly the focus is on the wellbeing of those dealing with incredible devastation around the country. We also want to do our part to keep the industry informed of hotel performance developments particularly in the recovery phase. Based on the makeup of our sample, we expect to have more to report from our full December and January data.”

 

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