Increasing international visitation as well as growth in corporate and MICE demand

• Sydney Airport announced that total traffic reached 20.1 million passengers (YTD June), a 10.4% increase on last year, and recovered to 92.9% of 2019 levels. Major events such as Vivid Sydney and more recently SXSW continued to drive strong hotel market performance.
• Market occupancy as of YTD September 2024 improved by more than 1 percentage point from the same period last year. Despite occupancy remaining slightly below pre-pandemic levels, Sydney continues to have the strongest market occupancy of any key city in the country.

No new hotels opened in Q3 2024, as supply cycle moderates

• Sydney has seen a total of 2,270 new rooms open since 2020, representing a 10.4% increase on total room stock. No new hotels have opened over the first three quarters of 2024, after a total of 816 rooms opened over 2023, representing a 3.5% increase on total room stock.
• There are currently six new hotels under construction in the CBD and fringe suburbs, which will add 1,173 rooms or 5.1% to existing stock. The next anticipated hotel opening is set to be The Eve Surry Hills Village (102 rooms), opening in the coming months.

Trading performance continues to outperform 2019 levels

• Sydney RevPAR showed signs of improvement with a notable 5.3% increase from last year, and has now exceeded pre-COVID levels (YTD September 2019). Recovery continues to be driven by steady growth in both ADR and occupancy.
• Sydney transaction volume totalled AUD 338.3 million to YTD Q3 2024, including a handful of notable sales such as Courtyard by Marriott North Ryde, Novotel Parramatta, Woolstore 1888 by Ovolo and Holiday Inn Bondi Junction.

Outlook: Demand continues to improve with a strong forecast for summer months

• Sydney hotels are benefiting from an ongoing recovery in corporate/MICE demand, driven by the market’s reputation as a global business hub and key gateway city. The resurgence of international visitor numbers and Chinese tourists is anticipated to drive future demand.
• Despite challenging economic conditions and elevated borrowing costs, investor interest in Sydney remains robust. This can be attributed to favourable underlying fundamentals, the tightly-held nature of the market, limited new supply and a positive long-term outlook.