Sydney’s hotel room inventory hits 21,632 in 2021
This is a 3% increase from the previous year.
In 2021, three hotel projects were completed in Sydney, adding a total of 633 new rooms. According to JLL data, this brought the average room inventory to 21,632, an increase of 3% from 2020.
One project opened in the early months of 2022, with the Ace Hotel Sydney delivering 257 rooms to the market. JLL is also tracking seven properties currently under construction in Sydney City due to complete by 2024. Once opened, these new hotels will result in a net increase of 1,639 rooms or 7.6% of existing stock.
Here’s more from JLL:
The Sydney hotel sector is showing early signs of recovery, with demand currently being domestic led. The recovery will largely be driven by the increase in emerging corporate demand, including conferencing and events, which is already showing early signs of returning. Significant events such as Vivid Sydney will also continue to support ongoing leisure demand.
As at YTD May 2022, the Sydney City average daily rate (ADR) and occupancy were AUD 271 and 49.7% respectively. ADR increased 23% from the same period in 2021, as average occupancy increased 12%. Despite this initial recovery, occupancy rates in Sydney remain well down (-43%) on pre-pandemic levels (YTD May 2019). Resultantly, revenue per available room (RevPAR) was AUD 135 at YTD May 2022, representing a 38% increase from previous year, however remains 39% down on YTD May 2019.
Visitor arrivals are expected to continue steadily recovering to pre-pandemic levels over the medium-term with the recent reopening of international borders on 21 February 2022 to appropriately vaccinated visa holders. We anticipate trading conditions progressively recovery over the short to medium term, as was already beginning to be evident prior to the most recent lockdown.
Sydney’s hotel supply pipeline also remains active with the new completions expected to enhance competition and moderate trading performance somewhat, however over the long-term, returning demand is expected to help absorb the supply and stabilise the market.