While
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Director of Arthur Andersen's Hospitality & Leisure Group, Rutger Smits said Sydney four- and five-star hotels capitalised best on the surge in demand during the Olympic period. The firm undertook two special "Olympic period" surveys to ascertain hotel performance and market sentiment.
Data provided by participants in the Arthur Andersen Hotel Industry Benchmark Survey confirmed a strong September for Sydney hotels.
"Sydney was the clear beneficiary of Olympic demand, recording a doubling in average room rates for September 2000," Mr Smits said when releasing the survey.
"Our Olympic Performance Survey showed five-star Sydney properties recorded average room rates during the Olympic period in excess of AUS$480 per room and occupancy rates of 100 percent. Properties in the four- 4.5-star grade category achieved rates of almost AUS$260 and 100 percent occupancy from September 16-30 and for other star grades surveyed occupancy rates once again stood at 100 percent across the Olympic Games. This compares to data from our 1999 Benchmark Survey showing an overall average rate of AUS$164 for the month of September 1999."
When responses were split into a "Pre-Olympic" and "Olympic" period, this showed the lead-up two-week period to be weaker with average occupancy rates of 67.3 percent. However average room rates were still at a premium, boosting room yield across the month.
Unlike Sydney, other capital cities achieved higher occupancies in the period September 1-15 pre-Olympic period than the actual Olympic period.
"We attribute this pattern to trial Olympic events and 'friendlies' hosted in capital cities," Mr Smits said. "For Melbourne, pre-Olympic average room rates were about AUS$180, and occupancy rates were on par with Sydney at 67.2 percent. The Olympic period saw an 11.2 percent decline in average room rate and a decline in occupancy of 18.6 percent. A similar pattern was recorded for Brisbane, where room rates averaged AUS$130 in the pre-Olympic period but fell by 9.7 percent during the Olympic period, and simultaneously, occupancies declined by 17 percent between the pre-Olympic and Olympic period. Adelaide held ground in terms of average room rate, but occupancy declines of 11.3 percent impacted room yield, falling from a pre-Olympic figure of AUS$98 to AUS$87 during the Olympic period."
Although the differences between pre-Olympic and Olympic data is marked, the Arthur Andersen Survey shows average room rates increased for Adelaide, Brisbane, Canberra and Melbourne in September 2000 relative to September 1999.
But for these cities, the real impact was the decline in occupancy.
"We assumed hotels in cities apart from Sydney would experience diminished demand during the Games period, and the data supports our assumption. But the real message is that the Games were good for the industry development."
The objective behind staging the Olympic Games was not to create extraordinary demand during the event itself, but rather to stimulate industry growth in the years thereafter.
The study showed that Sydney was and is expected to be the main long-term beneficiary of the Olympic Games. Melbourne and Brisbane are also expected to see benefits though not of the magnitude received by Sydney.
Co-presenting at the Arthur Andersen Press briefing, John Morse, Managing Director of the Australian Tourist Commission reinforced that the results showed optimism amongst hoteliers about the long-term benefits of the Games.
"The Games have positioned Australia at a new level, and in the international arena, our ability to successfully stage major international events, generates further opportunity to attract large scale sporting events and stimulate the MICE development. There remains a continued need for hoteliers to work closely with the broader tourism industry to capitalise on the exposure to ensure these translate into increased visitation and satisfaction levels in the future". Mr Morse said.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
