Australia Key City Hotel Market Outlook September 2022 Edition

This report by Horwath HTL in Australia provides an outlook for 10 key city markets across Australia, assessing the recovery made to date in September 2022 and the outlook for future growth.

The data as published in the report is based on the economic forecast by Deloitte Access Economics September 2022 quarter as well as historical hotel performance from STR as of September 2022.

At the time of the data release, at the end of September 2022, Australia has largely transitioned in the recovery path with international borders open and vaccine requirements and travel exemptions for international arrivals removed. The recovery path will also be impacted by the ongoing conflict between Russia and Ukraine, inflation and rising interest rates.

There is optimism in confidence to travel. MICE and Leisure travel continue to improve, and business travel is resuming, however, the recovery of this segment is expected to take longer. The pause in business travel during the pandemic resulted in a reconsideration of the need, purpose and approach to business-related travel for many organisations. A return of business travel is expected to have a steady increase but might look different than it did pre-pandemic.

With the expected slower return of corporate travel, major capital cities like Sydney and Melbourne where the business travel market is a key demand source will likely face challenges during the recovery pathways. Sydney and Melbourne are expected to return to 2019 RevPAR level in 2023. The recovery has also been impacted by the large volume of supply additions expected to enter those markets.

ADR continues to exceed growth expectations. RevPAR recovery in all eight markets is rate-driven with ADR exceeding the pre-pandemic levels in all markets.