HOTEL operators and owners are set to claw back the $270 million they lost last year through steep discounting as they move to raise room charges by more than 20 per cent in major cities.
The price increases come as occupancy rates rise, few new hotel developments get under way, hotel operators sell some sites as residential properties, and more executives travel on business as the hospitality industry picks up after being battered by the global financial crisis last year.
Accor's vice-president in Australia, Simon McGrath, said rising room rates were more likely in Sydney and Brisbane.
"We all predict for the rest of the year in Sydney it will grow every month," he said. "It's likely 10 out of the 12 months will be record occupancy months."
Sydney suffered last year when some five-star-hotel room rates fell to about $150 a night due to the downturn in corporate travel.
In Brisbane, where occupancy increased 6 per cent from the previous corresponding month to 82 per cent, rooms averaged $177.
Occupancy rose 2 per cent in Melbourne and Perth, but room rates either fell or remained flat.
Hilton Hotels Australasia vice-president Ashley Spencer said the group had started to increase prices and had alerted customers to this.
Most hotels were running at 80 per cent-plus occupancy in Perth, Sydney and Brisbane, he said. "Those three key locations should expect some more aggressive pricing."
Mr Spencer said the group had recently put up prices in Adelaide.
Just how much room rates would rise was difficult to say, but he hoped for more than 20 per cent. "It's just demand coming back into the marketplace," Mr Spencer said. "Last year we were all into the leisure dollar, with family packages and incentives to travel interstate.
"Now the corporate market has kicked back in again and people are willing to travel more to do business and the incentive market has kicked back in again, which is great for Sydney."
Serviced apartment operator Mantra Group said the Melbourne central business district market had been a standout performer for the group, despite it being the only area to open new hotel properties in the CBD.
"June occupancy in Melbourne is averaging 80 per cent, which is 10 per cent up on this time last year. Revenue per available room is also up more than 10 per cent." Mantra chief executive Bob East said he was expecting a revpar increase of $20 in June for Sydney.
"Brisbane has performed well with a June forecast of 81 per cent occupancy and a 10 per cent increase in revpar."
Mr McGrath said Melbourne had soaked up the recently added supply of 1600 rooms through recent hotel developments.
Melbourne would continue to experience strong demand, with high-profile events such as the 2010-2011 Ashes series at the Melbourne Cricket Ground in December and January and the arrival of Tiger Woods in the city during November.
Spurring demand in Sydney would be the arrival of 15,000 Chinese Amway winners, who would come during January.
The room rates of Australia's 500 biggest hotels fell last financial year by an average $9 a night, according to hotel research group STR Global.
According to figures from STR Global, if you took into account an average occupancy rate of between 70 and 75 per cent between 2008 and 2009, and an average $9 room rate reduction over the year, hotel operators in Australian cities would have missed out on an average $739,000 per day, or $270m for the year.







