Melbourne’s hotel rates spike beyond 90% during major events

Hotel room occupancy rates across Melbourne are currently averaging 74% – with rates spiking beyond 90% during major events, such as the Formula 1 Grand Prix.

More hotels have opened in Melbourne in the past four years than any other Australian city – with visitors enjoying stays in more than 5,000 new rooms as they soak up everything the city has to offer.  

Developers have shown confidence in Melbourne as a leading tourist destination, with a 21% increase in hotel supply in the city since 2019. 

According to JLL, 22 new hotels have opened their doors in the city since 2019. This coincides with a 9% jump in hotel bookings.

In 2023 alone, four major developments worth over $226 million began welcoming guests in the CBD – adding 1,100 new hotel rooms, including at the Dorsett Hotel, Meriton Suites, the Ritz Carlton and Le Meridien. 

Melbourne is also seeing the largest uptick of premium hotels – with 1,100 luxury and upscale rooms set to open over the coming year in places such as Lanson Place and Seafarers 1. 

The City of Melbourne is supporting hotel developers to invest in the city, approving major developments including a $250 million complex opposite Carlton Gardens, a $200 million project in Southbank and a $25 million development on Russell Street – which are set to provide nearly 900 hotel rooms for visitors. 

Data from the 2023 National International Visitor Survey also showed Melbourne was the number one city for interstate overnight trips in Australia – welcoming 3.9 million visitors who spent $5.1 billion during the year.

Lord Mayor Nicholas Reece notes “everyone wants to visit Melbourne and hoteliers know it. With more than four mammoth hotel developments each year, we’re setting a new benchmark for development across Australia.

“Melbourne will open its doors to more than 1,800 new rooms over the next year – and that means more visitors spending their money at our local attractions, restaurants, cafes and pubs.” 

“Over the Formula 1 Grand Prix week in March, the Marriott Group reported a 91% occupancy rate across its 10 Melbourne properties – which is incredibly high for a hotel of its calibre.”

Accommodation Australia General Manager Dougal Hollis added “The compact nature of Melbourne’s CBD and the breadth and diversity of the precinct’s hospitality and tourism offers are very appealing to domestic and international visitors alike. Few cities in the world boast world class sporting and event stadium infrastructure within walking distance of our city’s vast hotel accommodation network.”

Image: Action at the 2024 Formula 1 Rolex Australian Grand Prix. Credit: Ticketmaster Australia.