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Rates forecast to rise in 2014

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Accor expects room rates across Australia to rise next year, with signs that corporate and government travel is growing and with high occupancies achieved in most states year to date.

Over the last 12 months, according to STR Global, occupancy rates have continued to remain strong in Australia’s largest cities, with Sydney at 85.2% and Melbourne at 83.7% overall.

Sydney is enjoying increasing inbound travel from Asia, which is impacting on occupancy levels, but the closure of the Sydney Convention & Exhibition Centre will see a shift in major events to Melbourne, which will add to an already strong events calendar in that city.

While Brisbane and Melbourne will expect an increase in hotel supply of 11% and 6.2% respectively, new room supply in Sydney (0.7%) and Perth (0.8%) will remain low, putting additional pressure on rates.

“Australian travellers have had a good run in recent years, with excellent rates on offer, but now that the election is over we are expecting a re-commencement of some resource projects and increased government travel,” said Simon McGrath, Chief Operating Officer Accor Pacific.

“Our corporate clients are also telling us that 2014 will see more hectic travel schedules as confidence is on the rise, which is a great sign for the industry.”

It is expected that rates will rise between 7-10% in Sydney and around 7% in Melbourne and Perth, with rates in Adelaide, Canberra and Brisbane to rise between 3-5%.

McGrath says that business travel buyers have become increasingly strategic with their hotel programs, with a greater focus on national and global deals, a trend which is likely to increase in 2014. As the largest hotel operator in the country, with almost 200 hotels across its portfolio, Accor offers a one-stop solution for all travel buyers’ needs and is able to deliver added value to its corporate clients’ hotel programs.

He suggests that businesses with annual hotel programs should start their tender process as early as possible to ensure they get the best value. Accor’s strong network and reach gives corporate buyers access to a wider range of properties and stronger bargaining power, while assisting in travel policy compliance.

Simon also points out that Accor’s new ‘parallel pricing model’ allows corporate clients greater flexibility in their corporate pricing solutions.

“Accor has introduced new more flexible corporate pricing solutions where we tailor rates to the specific needs of each client’s travel patterns,” he said. “By analysing how each client actually travels we can help them find the best rate split to realise better cost savings potential.”

This model gives clients the certainty of fixed rates for advance bookings while allowing the better flexibility of dynamic rates when they book last minute, but now the process is even more tailored to the individual needs of each corporation. So despite the likelihood of rates rising across the country, Accor can help clients find the best possible solution for their travel budgets.

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