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Accounting for about 43% of Australia’s hotels and resorts, the major upscale and upper mid-class hotel brands are characterized by hotels that achieved average daily rates (ADR’s) of between $137 and $280 (average $180.25) and operated with average occupancies of between 64% and 88% (average77.2%) in 2019. The recent performance of the major upscale and mid-market hotel brands in 2019 is illustrated in the accompanying graph.

According to our analysis of STR data derived from the 2018-2019 Australian Accommodation Monitor, upscale and upper mid-class hotels achieved an average occupancy of 75.7%, an ADR of $166.75 and a RevPAR of $126.16 in 2019. Upscale and mid-class hotels in the ACT recorded the highest average occupancies at 80.3%, while upscale and mid-class hotels in NSW achieved the highest ADR’s and RevPAR’s at $188.22 and $148.27 respectively.

The Market Position of Major Upscale & Upper Mid-Class Hotel Brands in Australia, 2019

Source: Hotel Investment Strategies, LLC. Note: The size of the bubble reflects the number of room nights sold in 2019.

The graph clearly displays the spread of price points (ADR’s) for each of the brands and chains with multiple brands in the upscale and mid-class sector. Different factors such as the age of guests, the purpose of travel, and budget for accommodation and related expenses are used by hotel operators to differentiate their brands, thereby capturing a wider range of guests. Utilizing the Herfindahl-Hirschman Index (HHI), a measure of how competitive each major hotel class is, we determined that the upscale and mid-class sector is marginally less competitive than the luxury and upscale brands.

Despite the current upheaval in the lodging industry, we expect the majority of upscale and mid-class brands to survive and prosper, but we do expect several lower-tier mid-class brands to be acquired and merged with other brands in the next few years. Only time will tell if this redirection pays off especially for the country’s upscale and mid-class hotel brands.

Please feel free to call us if we can help you with your brand positioning and market segmentation and customer acquisition strategies or if you need to identify and negotiate with a hotel brand, franchise, or operator that will maximize the performance of your hotel. Our outcome-focused solutions span research, strategy, creative, engagement and execution. Please call us at: +61 466 017 823. We can assist you!