Melbourne has just recorded its busiest month ever for hotel room sales, with March setting a new benchmark that challenges previous concerns about oversupply in the city’s accommodation market.
Driven by major events such as the Formula 1 Grand Prix, the Melbourne International Comedy Festival, and a strong lineup of international concerts, March outperformed even February, when Taylor Swift’s concerts significantly boosted demand.
According to STR research, each month from January to April 2025 has outpaced the same month in 2024 for hotel room bookings. March alone saw 1.144 million rooms sold—69,000 more than the same month last year—making it the highest on record.
This demand is helping to absorb the 5,500-plus new hotel rooms added to the Melbourne market since 2020. With an additional 2,030 rooms in the pipeline, the city’s hotel supply will have grown by 34 percent over five years.
Melbourne now holds the highest number of hotel rooms among Australian capital cities, with 27,391 rooms—roughly 3,000 more than Sydney. Research from JLL confirms that Melbourne overtook Sydney’s room count in 2022.
By the end of 2025, five more hotels are scheduled to open, including Accor’s Mercure Hotel West Melbourne with 192 rooms and IHG’s Holiday Inn and Hotel Indigo on Bourke Street Mall, adding 452 more rooms to the CBD.
Adrian Williams, Chief Operating Officer at Accor Pacific, said the record month wasn’t about peak occupancy but rather underlying demand, which continues to be driven by a strong calendar of events. He said Accor remains confident in long-term growth across Melbourne and other major cities.
Accor has also introduced Hyde Melbourne Place—the first Hyde-branded hotel in the Pacific region—following a rebrand agreement with Ennismore. A second Hyde property is expected to open in Perth later this year. In addition, Accor recently announced its acquisition of three hotels formerly operated by a Malaysian group, covering two properties in Australia and one in New Zealand.
Hotel adviser Dean Dransfield noted that Melbourne has added significantly more hotels than Sydney over the past decade, particularly in the last few years. While the increase in supply initially softened occupancy rates, the actual volume of rooms sold has reached all-time highs. He believes the long-term outlook is strong, particularly as Melbourne continues to grow its international and domestic airline arrivals, a feat Sydney has not matched.
Peter Harper, Managing Director and Head of Investment Sales at JLL Hotels and Hospitality Australasia, said the city has absorbed new supply impressively well. He attributed this to Melbourne’s strong events calendar, population growth, economic base, and year-round tourism appeal, all of which contribute to steady hotel demand.
Source from: Australian Financial Review
