- Hotel investments have been surging over the past year, owing to tourism resilience.
- International celebrities and major sporting events drive hotel sector boom.
- Major events propelling tourism globally.
While it is no secret that the past year has been challenging for Australia’s commercial assets, assailed by repeated interest rate rises and poor market conditions, the tourism sector weathered the storm, remaining among the few commercial asset classes in the positive.
Hotel investments surged by 56.7% from the previous year, hitting $4.1 billion for 2022/23, as investors swarmed to capitalise on data indicating that air travel and hotel occupancies were once again on the up.
Recently, the tourism industry has had another reason to rejoice, as the nation’s recent influx of international celebrities and major sporting events have caused business to boom, according to the latest update by Ray White‘s head of research, Vanessa Rader.
Hotels set to prosper from ‘Swiftie’ fever
The previous year saw fans from all corners of the globe descend upon Australia to attend major sporting events like the FIFA Women’s World Cup, UFC 293, and Formula One, filling the nation’s hotel rooms and lifting average daily room rates.
Though last year’s performances from superstars like Harry Styles, Ed Sheeran and Coldplay have already caused hotel rates to catapult upwards, hotel rates are now smashing through prior records once again, as the ‘Swiftie’ fever grips the nation.
As fans line up to catch a glimpse of the iconic singer-songwriter, rooms across Sydney are soaring up to 300% over the weekend compared to the average room rate of $287 per night last February.
Furthermore, with Blink 182 performing on the same weekend, hotels situated near Olympic Park are seeing few vacancies and multi-night stays. The remaining rooms are charging record rates north of $1,500 a night.
Swift’s concert takes place on the same week as Valentine’s Day, making it a lucrative period for the hotel sector. In Melbourne, occupancies are close to capacity across the CBD, and rates have spiralled from last February’s $220 per night average, with available rooms going for at least $900 per night.
This high comes just after the Australian Open season, which witnessed Melbourne’s January rates also experience similar spikes.
Meanwhile, Perth, Brisbane, and Adelaide are set to attract a substantial number of tourists in the near future, with acts like P!nk and the WWE taking place soon.
The increase in superstars and major sporting events visiting our shores is partly due to the amount of quality stadium facilities available across the states.
Major events giving the global tourism industry a much-needed lift
The hotel sector boom is a global phenomenon, serving as a critical windfall for an industry floundering not too long ago from the worldwide pandemic.
Although tourism has since recovered since COVID-19, with improving flight activity and room occupancies, these major events are further driving prices up globally.
This week’s Super Bowl has sent the Las Vegas economy into overdrive, with room rates being pushed over 2.5 times their usual rate, and 40% more than the past year’s Super Bowl in Arizona.
Events like last year’s inaugural F1 race have also sent tourism spending, occupancy, and average daily room rates rocketing upwards by as high as 400%.
Sporting fans looking for rooms while attending the Paris Olympics later this year will have to wrestle with high prices and stiff competition, with 15.3 million visitors expected for the period.