Hotel room costs to rise in 2005

Strong occupancy rates are lifting demand, and average rates, for hotel rooms across Perth.

So great is the demand that several Perth hotels have had to refuse bookings in the past few weeks as capacity limits are reached.

This, in turn, is placing upward pressure on contract room rates for bookings in the next three years.

Occupancy rates for November, typically a strong month for Perth’s hotel sector, have reached 85 per cent, with some hotels recording similar occupancy rates in October and forecasting a strong first half of December.

Although occupancy levels for the first three weeks of this month are on par with the previous November, Perth has soared up Deloitte’s HotelBenchmarking Survey for 2003 occupancy rates, according to the Australian Hotels Association.

Deloitte’s survey showed the average occupancy rate in Perth last year was 78 per cent, which positioned Perth behind Kuwait City and Brisbane in the highest average occupancy stakes.

The previous year Perth was ranked 18.

According to Sheraton Perth Hotel business development manager Jeremy Carton, the Sheraton will be raising room rates next year.

“Room rates go up because people can’t buy into the base-room type if they leave things too late. It’s supply and demand,” he told WA Business News.

“Our occupancy rate is higher compared to last year but we also had Rally Australia fall in November; last year it was in September and so that kicks rates up around town.

“We’re going close to 90 per cent at the moment.

“We’re taking a lot of calls from Melbourne and Sydney asking what’s happening in Perth because they can’t get bookings.

“We drop off in mid-December but we have a huge conference in January and there’s one week where we are at 100 per cent occupancy.

“The signs show that the rates will move next year. We are looking at a $20 increase on the average room rate but we’ve got a long way to go to catch up to our properties on the east coast.”

Mr Carton said the average room rate in Melbourne and Sydney was about $100 more than the average rate in Perth.

In lifting its rates the Sheraton will join the Parmelia Hilton, which has already increased the average room rate by $20, according the hotel’s marketing and communications manager, Julia Clark.

The Parmelia Hilton has just added an additional 11 rooms, at a cost of $600,000, to its property to help cope with the demand, particularly from conferences taking place at the Perth Convention Exhibition Centre.

The Emerald Hotel managing director Laurie O’Meara said a shift in the wildflower season and the PCEC were the reasons behind increases in occupancy this November.

“This November it is higher than normal. We averaged 85 per cent last year but we are averaging 90 per cent this year,” he said.

AHA executive director Bradley Woods said the buoyant October and November period was a culmination of high tourism traffic and lots of corporate conferences.

“November is the busiest month of the year for hotels because there are a high number of events, exhibitions, tourists, and the corporate year is coming to an end and people want to get the corporate travel out of the way before December,” he said.

“Our figures show that, as of November 21, we are running on par to previous years. The average occupancy rate is 84 to 85 per cent, each year for the past three years it has been in the mid to low 80s.”