A slew of high profile events being held in Sydney in the lead up to Christmas, including Prince Harry’s Invictus Games, are expected to deliver a strong end to the year for the city’s hotel market.
The line-up, which also includes concerts from Cher, Taylor Swift, and Bon Jovi, plus conferences such as the World Congress of Accountants, is expected to deliver a welcome boost to hotel investors and operators, who have seen a dip in room rate growth due to a recent dearth of big events, says Troy Craig, Managing Director of JLL’s Hotels and Hospitality Group in Australia.
“Over the nine months to September, Sydney’s hotel market achieved exceptionally strong occupancy levels of 87.2 percent which is only slightly behind the record occupancy levels we saw in 2017. But from an investment perspective, the missing ingredient this year has major events to drive average daily rate growth, which is currently hovering at around 1 percent compared to 7.2 percent last year,” he says.
Sydney remains one of the most highly sought after hotel investment markets in the world, with very high occupancy levels underpinning a confident outlook for average daily rate (ADR) growth, which in turn drives investment returns.
The slowdown in hotel transaction activity in 2018 reflects the scarcity of hotels coming to the market for sale rather than diminished investor appetite, says Ross Beardsell, of JLL Hotels and Hospitality.
There is generally direct correlation between high profile events and a spike in market performance, he adds.
“Major events and the occupancy spikes that follow provide hotel operators with the platform to push ADR growth harder. Given the strong pipeline of concerts and other events in Sydney in the coming months, we would expect to see stronger ADR growth as 2018 draws to an end, compared to earlier parts of the year”.
Other events that are expected to provide a boon to Sydney hotels over the coming months include concerts by Phil Collins, Def Leppard and Shania Twain, as well as performances from comedian Carl Barron; plus gatherings such as the banking and financial conference Sibos, Healing Our Spirit Worldwide, Asia Pacific Osteoporosis Conference and the Financial Planning Association of Australia Congress.
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