Australia Key City Hotel Market Outlook March 2022 Edition

This report by Horwath HTL in Australia provides an outlook for ten key city markets across Australia, assessing the recovery made to date in March 2022 and the outlook for future growth.

The data as published in the report is based on the economics forecast by Deloitte Access Economics (DAE) in March 2022, the tourism forecast by Tourism Research Australia in December 2021, and historical hotel performance from STR in March 2022.

Since the pandemic started, the Australian hotel markets saw the most robust performance in the March 2022 quarter. While RevPAR in the Sydney and Melbourne hotel markets remain around 50% below the pre-pandemic levels for the March quarter, the remaining markets have recorded RevPAR between 83% to 139% compared to the March 2019 quarter.

Market performance continues to be rates-driven due to a shift in demand segments and the concentration of demand during peak leisure periods. The general market expectation is that June 2022 will be the first quarter to see a real return in corporate-related and MICE demand, though a domestic focus will most likely remain. This is supported by market discussions and preliminary data that suggest a strong rebound in corporate and MICE activities in April and May.

While the international border is likely to be a critical turning point for the tourism sector, more recent data suggest a slower short-term recovery is expected. A return to the pre-pandemic levels around 2025 has been forecasted for international tourist arrivals according to DAE’s March 2022 Edition of Business Outlook.