By Cara Waters
The price of staying at a hotel in Melbourne is at a five-year high, as guests show they’re prepared to spend big money on new luxury hotels that have opened in the CBD.
A night at the five-star Ritz-Carlton Hotel in Lonsdale Street this month costs $700, and a night at the W Melbourne in Flinders Lane is $515.
Tracy Atherton, general manager of the Melbourne Place hotel.Credit: Eddie Jim
The average price of a hotel room in Melbourne in November climbed to $234 a night, the highest rate recorded in five years by real estate analytics company CoStar.
Before the COVID-19 pandemic, the average nightly price was $204. The market has slowly recovered since lockdowns. Occupancy is at 78.8 per cent, still below the 2019 high of 86.6 per cent.
Hotel prices have been buoyed by the opening in the past two years of a wave of luxury hotels, including the Ritz-Carlton, Lanson Place, Le Meridien and Melbourne Place, which opened in November.
Tracy Atherton, the general manager of the 191-room Melbourne Place, said luxury hotels offered a point of difference.
“Our premium rooms get booked up first, which is incredible,” she said. “It’s not the cheaper rooms that get booked; they’re the last to be booked, actually.”
Premium rooms at Melbourne Place have separate living areas filled with Jardan furniture, balconies, freestanding baths and Frette bed linen.
A standard room at Melbourne Place is priced from $325 a night, while premium rooms start at $475.
“I think it’s because people want an experience and they want to have a memory,” Atherton said. “It’s not just a hotel they’re going to forget.”
The rooftop bar at Melbourne Place, which opened in November.Credit: Kristoffer Paulsen
Atherton said the hotel monitored room rates among its competitors and looked at the Ritz-Carlton, the W Hotel and the QT, which have all held their rates firm.
“Sydney has exceeded [occupancy] where they were pre-COVID,” she said. “Melbourne is getting there, but it’s good to see that they are holding the rates, and I think people are happy to pay more money for a really great experience.”
Victorian Tourism Industry Council chief executive Felicia Mariani said Melbourne’s prices were the highest the city had experienced, but still trailed those in Sydney.
“We were coming from the very low bases when we came out of COVID in 2022, and it’s taken us the best part of a couple of years to really recover that lost territory,” Mariani said. “[Last] year we have additional luxury stock opened in Melbourne that would have pushed some of those average room rates up for sure.”
Mariani said Melbourne’s new hotel openings were concentrated in the luxury market, which had not been well catered for in the past.
“These additions in the last 12 to 18 months have really put us on a par with Sydney,” she said. “These new additions that we’ve seen in the past year mean we are the epicentre now for some of this luxury accommodation.”
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