Hotel occupancy gains a Grand Prix boost
The Grand Prix weekend has once again led to higher occupancy rates among Melbourne hotels compared to the previous year, signalling a broader national improvement.
According to real estate data provider CoStar, final figures are yet to be confirmed, however booking data at the end of last week showed an average occupancy rate of 87% from Friday to Sunday, exceeding the same period in 2024. CoStar, which owns hotel research firm STR, reported the trend suggested final numbers could surpass last year’s 88%,
Despite a downturn in room rates following Taylor Swift’s tour last year—when hotels in Sydney and Melbourne capitalised on heightened demand—occupancy levels remained resilient. “Moderate growth” in demand continued despite this decline, 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 strong outlook for the Grand Prix and Easter school holiday period provides optimism for the Melbourne and Sydney hotel markets, where occupancy rates remain slightly lower year-on-year. However, operators report an uptick in bookings.
While revenue figures suggest a weaker performance, the situation is not as severe as it appears. In February, room rates fell 8.2% in Sydney and 10.9% in Melbourne compared to the previous year, reflecting the impact of Taylor Swift’s 2024 tour, which had driven prices higher during her performances.
“Those few days’ comparison over the Taylor Swift nights were enough to bring the monthly average down,” Burke said.
Accor has stated its occupancy rates across 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.”
The Marriott’s occupancy was up 8 per cent year-on-year.
“The majority of growth is driven through international travel, with the largest proportion of our guests coming from the USA,” Marriott International’s area vice president Jason Nuell said.
“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 said its Grand Prix guests were Australians, with 30% internationals.
Jonathan Jackson, 17th March 2025
