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Increasing Demand To Force Hotel Rates Higher In 2019

December 3, 2018 Hotel Trends No Comments Email Email

Travellers can expect a hotel rate rise of up to 5 per cent for some of the key corporate city hubs in Australia and New Zealand in 2019.

Accommodation prices in Sydney and Queenstown in the South of NZ are both on the upper end of hotel rate rises next year compared to Brisbane and Perth where room rates are tipped to stay flat. Demand for Sydney hotel rooms is impacting rates with an increase in international visitors and cruise ship passengers to the harbour city pushing occupancy levels and prices upwards. In Queenstown it’s the town’s key events and conferences that will fuel demand for local hotel accommodation.

These are a few of the findings in the latest 4th Dimension Business Travel Consulting report. 4D’s Accommodation Focus Report on Australia and New Zealand 2019, provides unique insights to help companies budget for the predicted rate and occupancy increases that could impact business travel budgets.

FCM Travel Solutions General Manager, Melissa Elf said the trends and market analysis in the report would help to keep companies and their travellers abreast of the latest pricing and occupancy trends in the fast-moving accommodation sector.

“We’re anticipating mixed results across the board with the average room rate across Australia set to increase by an average 3-4 per cent, or $6-8,” Melissa said.

“Sydney can expect rate rises of about 5 per cent with close to 90 per cent occupancy, while Melbourne can expect a 3 per cent rate increase with supply to be constrained despite a substantial pipeline of new developments.”

The 4D report focuses on eight cities in Australia and five in New Zealand and reveals which cities will see the biggest increases in Average Room Rates (ARR) and occupancy level increases next year.

A 2018 trend that saw visitor numbers increase in Australia of over 6 per cent and more than 4 per cent for New Zealand, looks set to continue. The boutique hotel revolution that emerged in the past year continues to gain momentum across many cities with both Perth and Brisbane welcoming new and unique properties to the market such as the W Hotel Brisbane.

Melissa said companies looking to contain costs could use the data to be more strategic about when they travelled and where they stayed.

“This report provides a great snapshot of the Australian and New Zealand hotel market,” Melissa said. “For businesses that have significant domestic and trans-Tasman travel in their programs this information can help them manage future or current supplier negotiations and accommodation budgets for 2019.

“If companies need to travel to cities where hotel rates are rising, demand management becomes more important along with strategies such as sticking to your preferred hotels, ensuring negotiated rates are loaded correctly in booking platforms and forward planning to avoid peak travel periods.”

Felicity Burke, General Manager, 4th Dimension Business Travel Consulting (4D) said companies could use this content to plan ahead for their 2019 hotel programs.

“The aim of our research is to help the corporate sector put strategies in place to meet the changing travel landscape. Inbound visitor numbers are growing, so too are local events which impact occupancy levels, rates and quite often airfare prices. It pays to be prepared and plan ahead as far as possible,” Felicity said.

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