Supply continues to outpace demand in the Sydney market, according to new data from STR, with Australia’s largest capital city recording its seventh-straight month of Average Daily Rate decline.
Occupancy fell 1.3 per cent in May to 81.5 per cent, the data showed, again blamed on ongoing supply increases in a market not keeping up with demand growth. Supply climbed 1.8 per cent for the month, with demand sitting at a 0.5 per cent step up. STR says demand continues to soften in Sydney, with the airport region acting as the main impetus for the city’s new rooms.
Curiously, the opening weekend of Sydney’s annual Vivid showcase of light, sound and ideas on May 24 and 25 – typically forecast as an international drawcard for tourists – resulted in a 1.7 per cent decline in the city’s occupancy levels. ADR also fell 7.8 per cent over the same period, indicating hotels were slashing rates in order to get guests into their rooms.
For the month, ADR declined at a more modest rate, down 3.2 per cent to $207.72 per night.