Sydney hotel supply to increase by 5.1%

Completions have underperformed for six consecutive quarters.

Thanks to six new hotels currently under construction.In a report, JLL said Sydney has seen a total of 2,270 new rooms open since 2020, representing a 10.4% increase in total room stock.No new hotels have opened over the first three quarters of 2024, after a total of 816 rooms opened over 2023, representing a 3.5% increase in total room stock.Here’s more from JLL:There are currently six new hotels under construction in the CBD and fringe suburbs, which will add 1,173 rooms or 5.1% to existing stock. The next anticipated hotel opening is set to be The Eve Surry Hills Village (102 rooms), opening in the coming months.Trading performance continues to outperform 2019 levelsSydney RevPAR showed signs of improvement with a notable 5.3% increase from last year, and has now exceeded pre-COVID levels (YTD September 2019). Recovery continues to be driven by steady growth in both ADR and occupancy.Sydney transaction volume totalled AUD 338.3 million to YTD Q3 2024, including a handful of notable sales such as Courtyard by Marriott North Ryde, Novotel Parramatta, Woolstore 1888 by Ovolo and Holiday Inn Bondi Junction.Outlook: Demand continues to improve with a strong forecast for summer monthsSydney hotels are benefiting from an ongoing recovery in corporate/MICE demand, driven by the market’s reputation as a global business hub and key gateway city. The resurgence of international visitor numbers and Chinese tourists is anticipated to drive future demand.Despite challenging economic conditions and elevated borrowing costs, investor interest in Sydney remains robust. This can be attributed to favourable underlying fundamentals, the tightly-held nature of the market, limited new supply and a positive long-term outlook.Note: Sydney Hotels refer to all grades of accommodation and includes both hotels and serviced apartments.

Gurgaon accounted for over 80% of the sales in the quarter.