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Melbourne hotel sector witnesses second RevPAR decline in 2023 amid rate contraction

Melbourne

Despite occupancy gains, Melbourne’s hotel industry faces a dip in Revenue per Available Room (RevPAR) for the second time this year. Latest data indicates rate contraction impacting September 2023 performance.

Melbourne’s hotel industry reported a decline in revenue per available room (RevPAR) for just the second time this year, according to September 2023 preliminary data from CoStar. CoStar is a provider of online real estate marketplaces, information, and analytics in the property markets.

September 2023 (year-over-year % change):
  • Occupancy: 65.4% (+1.4%)
  • Average daily rate (ADR): AUD212.47 (-4.5%)
  • Revenue per available room (RevPAR): AUD138.85 (-3.2%)

Even with occupancy growth, Melbourne’s ADR fell by more than 4.0% for the second time in three months. The market’s only other month this year with a RevPAR decline was April (1-3%), also due to lower room rates. Melbourne’s demand (+7.3%) is exceeding supply growth (+5.7%) and is enough to create a contraction in room rates.

When looking at daily data, the market’s highest occupancy levels were seen on Saturday, 30 September (94.8%), the night of the AFL Grand Final 2023, closely followed by Friday 29 September (81.1%). Melbourne’s daily occupancy levels remained above the 50% mark throughout the month apart from two days.

Looking forward, occupancy on the books of 53% shows October occupancy tracking on par to the same time last year.

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George, in his capacity as an intern, diligently oversees the flow of news, assists in the publication of content, and delves into the strategies of social media distribution. He is currently pursuing his studies in Business Administration at the Athens University of Economics and Business.

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