Sydney hotels cruise into record territory

Australia’s cruise industry is set to have a pronounced impact on the Sydney hotel market.

Sydney’s booming cruise ship industry is set to deliver a windfall for the city’s hotel market in 2016, research suggests.

A Savills report into the impact of cruise ships on Sydney’s accommodation providers says the market is set to explode over the next 12 months, with ship visits and passenger days to reach all-time highs and deliver a subsequent surge in investment activity.

A string of high-profile ships will make maiden voyages to Sydney Harbour in 2016, including the Italian ship Costa Luminosa, which can carry up to 2260 passengers, and the Golden Princess, which carries up to 2600 passengers and will be based in Australia full-time from 2017.

Shake-up: Six-star hotels to change the face of accommodation industry

The report says Sydney welcomed 256 cruise ships in 2013-14, with passenger days spent in Sydney topping one million for the first time.

There is no doubt cruise ship related hotel occupancy has an accretive impact

But that number will balloon in 2016, with the Port Authority of New South Wales having already locked in at least 346 ships between November 25 this year and November 24 next year, and passenger days expected to reach 1.35 million over that same period.

Circular Quay hotels including the Park Hyatt Sydney, Four Seasons, Shangrila, Pullman Quay Grand and Sydney Harbour Marriott are tipped to enjoy the largest boost in patronage, with other CBD hotels further inland also set to experience a flow-on in bookings.

Sydney is the only port in Australia that has two dedicated cruise facilities.

Sydney is the only port in Australia that has two dedicated cruise facilities.

Savills Hotels Australia director Vasso Zographou says the falling Australian dollar has made local hotels more affordable, particularly at the top end of the market, which is enticing cruise ship guests to stay longer in Sydney.

“Sydney is a bucket list destination and will receive maiden voyages throughout 2015/2016 from cruise ships including Costa Luminosa, Golden Princess, Pacific Aria, Pacific Eden, Explorer of the Seas, Superstar Virgo, Azamara Quest and Pacific Venus,” Zographou says.

Zographou says that the subsequent increase in revenue per available room and higher profitability of CBD hotels will attract new and increased investment in the hotel market.

But he warns that despite the encouraging outlook, the hotel and cruise markets will always be affected by financial and seasonal factors.

“Whilst there is no doubt cruise ship related hotel occupancy has an accretive impact, occupancy patterns continue to reflect the ebb and flow of the corporate market, market seasonality and holiday periods,” Zographou says.