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Economic Trends in Hotel Industry in Sydney Australia: Demand and Supply Assessment Answer


You must review recent economic trends in the hotel industry in Sydney, Australia. You will need to show an understanding of the main features of these economic trends and to demonstrate your understanding of the "principles of economic analysis" in addressing the following instructions:

1. Examine the main economic features and trends in the hotel industry in Sydney, Australia. a Discuss occupancy trends between 2015 — 2019 and the occupancy forecast for 2020 b Discuss ADR trends between 2015 — 2019 and the ADR forecast for 2020 c Discuss supply trends between 2015 — 2019 and the supply forecast for 2020 2. Choose five different factors that could affect supply and/or demand in this market and use appropriate diagrams to explain their effect on this market.

You should structure this assessment in an academic report format which includes: executive summary, table of content, introduction, body, conclusion, recommendations, references  and appendices.  


Demand and Supply 

Factor affecting the demand

The demand for the Sydney Hotel industry affected by several factors. The demand of the Sydney Hotel industry market is affected by the consumer’s preferences, prices, and economic conditions as complementary areas. For instance, if the price of Sydney Hotel industry market decreases then the demands of the hotel rooms in Sydney would be increased (Wen, Aston, Liu, & Ying, 2020)

Consumer’s preference:  It is defined as taste and preferences of an individual within given commodities thus, they rank their preferences from available goods/commodities in the market. It has the following number of assumptions: Howvver, below given images shows the consumer’s preferences. It suggests that every individual has preference for one commodity over other for instance For instance, if the advertisement or news about the Corona virus or bonfire is spread then the demand of the Sydney Hotel industry market would go down (Pham, & Pham, 2017). In addition to this, bushfire will also have negative impact on the Sydney Hotel industry market sales. Additionally, it can cost up to $5bn for the economic and social damages furthermore, it worsened the situation and caused serious harm to society in terms of health and the vast number of deaths which has negatively impacted the hotel industry sales in Sydney due to less inclination of the tourist in the country (Nur, Yulyanti, & Nur, 2017). -

Price of the related goodsIn this case, the demand of the Sydney Hotel industry market would down if the rooms or home stay sold by the Airbnb is offered at very cheap rate. This shows that the price of the Airbnb has negative impact on the demand of the Sydney hotel industry. This reveals that substitute product’s price of the Sydney hotel industry would be negatively affected by the reduced price of products. Consistency in consumer choice

Source:- Consistency in consumer choice, (2019)


  1. Government regulations- The government policies impact the production cost and the supply curve because of taxation and regulations. Additionally, the subsidies decrease the cost production with an increase in the supply at a certain price indicating the rightward shift in supply hence, when the government amends the policies it leads to increased cost production and decrease in the law of supply. Thus, if the government increases the taxes on goods the supply curve will shift leftward and the price for consumers will increase and price for sellers tends to decrease. For instance- if the Australian government strengthen the visa or immigration rules then in that case the demand of the Sydney Hotel industry would go down.

Demadn and supply

Source:- Demadn and supply, (2019)

Case- coronavirus – Banned Chinese travel to Australia

The adverse effect of the disease affected the tourism sector adversely in terms of loss of income and business occurring overseas thus, disrupting the supply chain and economic support in Australia as well as decreased demand and supply in China with other countries due to disease widespread (Ranjbari, Chiu, & Hickman, 2017).


  1. Pricing strategy – In the case of the price of related goods for attaining the demand for goods, price should be reduced to decrease the demand for substitute products.
  2. Knowing the demands of customers – It includes analysis of the customer's demand and competitors' services.
  3. Government- The government should keep in mind the pros and cons of the amendments in their policies for levels of citizens so that no one suffers.
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