Grand Prix boosts hotel occupancy amid wider recovery

Not even a Taylor Swift hangover – the singer’s tour a year ago allowed hotels to increase room rates, which are now down significantly in Sydney and Melbourne by comparison – was holding back “moderate growth” in demand, STR regional director Matthew Burke told The Australian Financial Review.

“The Formula 1 continues its popularity with Greater Melbourne,” Burke said.

“In further evidence that event demand has not softened, [the AFL] Gather Round in Adelaide is tracking ahead (+6 percentage points) of last year a month out, with an average of 79 per cent booked across the four-day period.”

The buoyant outlook for the Grand Prix and Easter school holiday period offers hope to the Melbourne and Sydney markets, where new figures from STR parent company CoStar show occupancy rates remain slightly down year-on-year, but where operators say bookings are picking up.

The picture is not as bad as revenue figures indicate. February room rates were down 8.2 per cent in Sydney and down 10.9 per cent in Melbourne from a year earlier, showing the effect of Swift’s tour on room prices during her tour last year.

“Those few days’ comparison over the Taylor Swift nights were enough to bring the monthly average down,” Burke said.

Accor, which operates 51 hotels in the city including the Mercure, Pullman, ibis and Novotel, said occupancy in its portfolio was up year-on-year for the weekend and its Sunday occupancy alone was 7.3 per cent higher than last year.

“The Formula 1 Australian Grand Prix is one of the biggest drawcards on Australia’s events calendar, and 2025 was another blockbuster season opener,” Accor Pacific chief executive Adrian Williams said.

“We continue to see guests prioritising these global events as non-discretionary leisure experiences, choosing to extend their stay and make the most of this world-class event.”

At Marriott’s 10 Melbourne hotels, including The Ritz-Carlton, W Melbourne and The Westin Melbourne, occupancy was up 8 per cent year-on-year, driven by international travellers.

“The majority of growth is driven through international travel, with the largest proportion of our guests coming from the USA,” said Jason Nuell, Marriott International’s area vice president.

“International room nights increased 25 per cent year-on-year to almost half of all stays, highlighting the growing international appeal of the sporting event to our traveller base.”

Hilton Australasia head Paul Hutton did not provide comparative numbers but said 70 per cent of the company’s Grand Prix guests were Australians who were travelling for entertainment, and just 30 per cent were international arrivals.

“Live entertainment is a major travel driver,” Hutton said. “We’re also seeing strong demand for upcoming events like the Oasis tour and the British & Irish Lions series.”

STR’s Burke agreed.

“There is enough evidence through various activities that travel is highly sought after and that enough of the travelling public are still travelling, especially for event experiences,” he said.

Accor said its hotel bookings across Australia for Easter were up 40 per cent compared with the period before Easter last year. Growth was strongest in Canberra (up 118 per cent), Victoria (up 52 per cent) and Queensland (up 40 per cent).

School holiday occupancy across Australia was tracking 47 per cent higher year-on-year, it said.

But while the general outlook was that occupancy rates were likely to keep rising, the preliminary February data show south-east Queensland and northern NSW were in recovery mode after ex-tropical cyclone Alfred prompted many people to cancel their reservations, Burke said.

“Cyclone Alfred’s impact had an immediate impact,” he said. “It reveals a dramatic 50 per cent decline in occupancy across south-east Queensland and northern NSW due to mass cancellations.”

Occupancy data for the night of March 11 showed Gold Coast hotels down 38 per cent year-on-year, Sunshine Coast down 42 per cent and Northern Rivers down 60 per cent, Burke said.

“Brisbane is showing signs of resilience with potential recovery demand, with occupancy across the start of this week down less than 10 per cent in Brisbane centre,” he said.