Melbourne’s hotel demand is exceeding supply growth. Credit: Victor Maschek via Shutterstock.

Melbourne’s hotels have seen a second decline in revenue per available room (RevPAR) for 2023.

According to STR’s September 2023 preliminary data, the Australian city’s RevPAR was $A138.85, a year-on-year decrease of -3.2%.

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Despite an occupancy growth of 65.4% (+1.4%), Melbourne’s average daily rate (ADR) fell by more than 4.0% for the second time in three months.

The market’s only other month in 2023 with a RevPAR decline was April (1 to 3%), also due to lower room rates.

Melbourne’s demand (+7.3%) is exceeding supply growth (+5.7%) and is enough to create a contraction in room rates. The ADR for September was $A212.47 (-4.5%).

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Analysing daily data, the market’s highest occupancy levels were seen on 30 September (94.8%), the night of the Australian Football League Grand Final 2023, closely followed by Friday 29 September (81.1%). Melbourne’s daily occupancy levels remained above the 50% mark throughout the month, apart from two days.

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Looking forward, occupancy on the books of 53% shows October occupancy tracking on par with the same time in 2022.

Melbourne’s hotels do have a saviour, however, in the form of popstar and economic world power Taylor Swift, whose 2024 concert date for her Eras World Tour has already seen increases in travel searches for the city.

According to research, searches for trips to Melbourne peaked in June 2023, ahead of the release of Taylor Swift tickets on 30 June. There was a 44% week-on-week increase in searches for trips in weeks 24 to 26 of the year (12 June to 2 July), with hotel bookings in Melbourne reportedly increasing almost tenfold for Swift’s concert dates compared with the previous year.