Room rates for hotels in Australia’s capital cities are expected to climb by up to 10% in the coming year, with local factors in each city trumping a softening economy.
Perth leads the field with 2014 room rates forecast to increase by 9-10% on the back of a limited hotel supply to meet the demand of the mining sector, predicts corporate travel management company FCm Travel Solutions.
Sydney could see a rise of 3-4% as increasing inbound travel from China, Singapore and Malaysia lifts occupancy levels, although the closure of the Sydney Convention & Exhibition Centre in September this year will see hotels around Darling Harbour become more competitive.
However, the closure of Sydney’s premier conference and exhibition venue is likely to see more major events shift to Melbourne, boosting hotel occupancy and pushing average rates upwards by 4-5%.
Brisbane’s limited hotel supply and a subsequent rise in apartment-style accommodation offering lower rates could see room rates rise by 5-6%.
Canberra should see increases contained to 3-4% as government agencies continue to chase budgetary savings, pushing demand and occupancy levels downward.
The outlook for Adelaide is a more modest 2-3% rise, while oil and gas construction based at Darwin and a high season which is now extending to the end of October will result in rates 3-4% higher than 2013.
The upshot, says FCm Travel Solutions, is that businesses with year-ahead bookings or annual hotel programs should start their tender process now to carve out the best value.
“In Australia, hoteliers traditionally run their Request for Proposal season from September, locking in room/night volume commitments” suggests David Strickland, FCm’s head of client hotel programs.
“When this season peaks, availability of room nights becomes more limited.”
“Talking to hotel suppliers at the start of the financial year will help companies lock in their room night volume and give them access to a wider choice of properties and a higher likelihood of rate flexibility.”
Key strategies recommended by FCm include consolidating suppliers and using just two or three properties in each city. This promotes stronger negotiation resulting in better rates and value added inclusions, while encouraging a higher level of travel policy compliance.
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