Last week, I had the honour of presenting to Tourism Accommodation Australia’s Sydney hotel General Managers in partnership with Business Events Sydney. It was a productive and open discussion about our city’s rapidly growing visitor economy and the hotel revolution on our doorstep.
In light of recent news out of the Perth hotel market, key to the discussion was addressing the role venues like ICC Sydney play in helping to drive demand and the shared need to address long term capacity issues in the Sydney market in particular.
The recent opening of the A$350 million Sofitel Sydney Darling Harbour adjacent to ICC Sydney is an important reminder that in our city, a hotel development revolution has started.
Indeed, according to figures released by Tourism Accommodation Australia, a staggering A$2.3 billion of hotel projects have also been approved for Sydney, with a further A$1.9 billion of projects proposed and in the advanced stages of planning. This equates to 3,000 rooms that are scheduled to open within the next four years, with many more developments in the pipeline.
With Sydney hotels presently running at an 86.9 per cent occupancy rate, up 4.2 per cent year-on-year, and ICC Sydney aiming to host 1,000 events annually by its third year of operation, it is more crucial than ever before that substantial hotel room blocks are opened up in advance. This is also crucial in helping to secure bids for international and national events.
The benefits of business events are of course far-reaching but for hotels, they are truly a boon – driving large-scale patronage and guaranteed revenue. At the same time, the rest of the city receives increased visitation to restaurants, shops and other tourist attractions from visiting delegates.
However, there is still a disconnect between the sectors. Here, the business events industry works with long lead times – sometimes eight years in advance – while hotels in contrast, have historically focussed on their more immediate bookings targets.
For both to succeed, we need to work in tandem and bridge this gap between short-term and long-term visitation planning.
While the curve in supply and demand can fluctuate, as the hotel industry has seen in many cities, if we work collaboratively to build out the Sydney hotel booking cycles, it will deliver massive benefits for the city’s economy, while also supporting the hotel industry’s revenue lines.
We’ve started the journey and, as this next stage of infrastructure development begins, I am looking forward to working with our partners to continue raising Sydney’s profile as a leading destination for events and entertainment on the global stage.