Sydney is the major gateway to Australia and a key hub for the Asia Pacific region. Famous for its harbour, the city offers extensive shopping, entertainment and dining experiences as well as countless beaches within the wider metropolitan area. 

As such it is widely regarded as a must-see tourist destination and targeted by international students, notably from Asia. The city also boasts a large domestic visitor segment, being the primary corporate centre in Australia and a key leisure destination. Sydney Airport – Australia’s most significant tourism, corporate and logistics transport hub – received 39.7 million passengers in 2015 and is forecast to receive circa 74.3 million per annum by 2033. 

Major infrastructure projects such as the Barangaroo urban renewal project and the development of the International Convention Centre Sydney (ICC Sydney) will provide an added boost to the market over the medium to long term.

Tourism

In 2015, 40.7 million visitor nights were spent in Sydney City which represents
7.1% of all visitor nights spent in Australia. International visitor nights accounted for 75.0% and domestic nights 25.0%. Domestic visitor nights in Sydney increased marginally by 2.5% in 2015, which can be partly attributed to the weakening Australian Dollar, while international visitor nights moderated by 1.5%.

Demand

Sydney has benefitted from a combination of a strong corporate and leisure market, a number of major sporting events, and demand outstripping supply growth in terms of rooms built, which has resulted in its robust trading performance.

Supply

JLL are aware of five accommodation developments currently under construction in the city centre due for completion between 2016 and 2018. If all projects materialise, this will represent an increase of 923 rooms or 5.3% on the existing stock. We note however that this will be largely offset by two proposed hotel closures which will result in a reduction of 565 rooms or 3.2% of existing stock

Outlook

The outlook for Sydney’s accommodation market remains strong, with a continuation of recent trends anticipated. Both occupancy and ADR are at record levels on a moving annual average basis, with ADR growth expected to further improve in line with the consistent supply outlook and more stable demand environment with growth across a variety of segments including corporate, cruise and inbound. Occupancy is predicted to remain in the high 80% range in the coming years, further strengthening RevPAR.

New Notable Hotels

• Four Points Darling Harbour (Extension) (Rebranded as Hyatt Regency Sydney) - 209 rooms
• Sydney Hotel CBD - 76 rooms

Notable Hotel Deals

• Pullman Sydney Airport
• Mercure Parramatta
• Park Regis City Centre

Upcoming hotels

• Sofitel Sydney Darling Harbour
• Skye by Crown

Quick facts

• 3.6million International Visitor Arrivals (YTD June 2016)
• 285 new rooms 2016
• 87.9% occupancy
• $245 Average Daily Rate (ADR)
• $233Revenue per Available Room (RevPAR)

Note: Sydney Hotels refers to Market wide
Source: STR Global (YTD July 2016), Tourism Research Australia, JLL
ADR - Average daily rate 
RevPAR - Revenue per available room

See full report here

JLL Hotels and Hospitality Group

This group of JLL has completed more transactions than any other hotels and hospitality real estate advisor over the last five years, totaling more than $68 billion worldwide. The group’s 350-strong global team also closed more than 4,400 advisory, valuation and asset management assignments. 

JLL are recognised as the global leader in real estate services across hospitality properties of all shapes and sizes. Using their capital markets expertise, hospitality industry knowledge and global relationships to execute bespoke deal

See also:

JLL Report Into Brisbane as a Hotel Destination

JLL Report Into Auckland as a Hotel Destination

JLL Report Into Melbourne as a Hotel Destination