Major events deliver major boost to Melbourne hotel occupancy rate

After massive downturn caused by lockdowns, one Melbourne industry is experiencing a major boom and bouncing back to pre-Covid demand.

Occupancies in Melbourne hotels are set to exceed pre-pandemic levels as the city prepares for Cup Day festivities.

In a welcome relief for the industry, a crowd of 300,000 visitors are expected to stirrup Melbourne’s hotel scene for the racing carnival’s upcoming mane event at Flemington.

During Covid lockdowns, the hotel industry copped an enormous blow with dismal occupancies of about 30 per cent, which has since been boosted to 60 per cent in July.

To match pre-lockdown levels, hotels would need to sit between 70 and 80 per cent occupancy – and hospitality data analyst STR has found city hotels are forecast to hit 79% across the month, slightly ahead of 2019 pre-Covid demand levels.

Visitors to the city are also spoiled for choice, with about 6500 new hotels being added between 2021 and 2024 – including 2000 new hotel rooms opening in Melbourne in the past year.

Hotel worker Charles makes a bed at the Voco Hotel. Picture: Brendan Beckett

Crowds in Bourke Street mall. Picture: David Crosling

Tourism Accommodation Australia’s Dougal Hollis said Victoria’s major events calendar was the envy of all other states and territories, with the racing carnival bringing in an abundance of interstate guests.

“The diversity and quality of Victoria’s events underpins its importance as a key economic driver for our state and is something all Victorians should be proud of,” Mr Hollis said.

“We haven’t seen occupancy levels like this since pre-Covid and the best thing is, they’re actually forecast to exceed what we saw back then.

“Speaking with Victoria Racing Club recently, Cup Carnival ticket sales are tracking well in comparison to pre-Covid levels.

“We host truly world-class events in Victoria and the compact diversity of Melbourne’s CBD is always a winning aspect of the city.”

Compared to previous years, Mr Hollis said hoteliers are experiencing far shorter booking lead times and higher cancellation rates than usual.

“It’s likely a product of travellers wanting their plans to remain flexible, but hoteliers are regularly seeing bookings only come in mere days before these major events.

Bumper crowds are expected for the Spring Racing Carnival.

Andre Jacques of The Langham Melbourne said the influx of visitors to the city was a welcome sight.

“It’s absolutely wonderful to be in this position where there is very strong demand for the whole racing carnival, not just Melbourne Cup Day,” Mr Jacques said.

“It’s not just occupancy that’s surging for us, it’s also the use of our suites and hire rooms which is fantastic to see.”

After not trading at all during lockdown, Mr Jacques said the Langham Melbourne was “absolutely thrilled” to be back in the swing of city excitement.