Hotels Are Costing Your Business More Than You Think

# Hotels Are Costing Your Business More Than You Think

Australian hotel rates have climbed 23 per cent since 2022, according to the latest STR Global data, and the trajectory shows no sign of reversing. For businesses booking extended stays of five nights or more, the cumulative cost of hotel accommodation has become one of the largest controllable line items in corporate travel budgets. Yet most procurement teams continue to default to hotel bookings out of habit, overlooking an alternative that delivers measurably better outcomes on cost, productivity and employee satisfaction.

This analysis examines the true cost differential between hotels and serviced apartments for corporate extended stays across Sydney, Brisbane and the Gold Coast, and outlines why a growing number of Australian businesses are making the switch.

The Hidden Cost Structure of Hotel Extended Stays

The nightly room rate is only the beginning. When a corporate traveller stays in a hotel for two weeks or more, a series of ancillary costs accumulate that rarely appear in the initial booking estimate.

Meals represent the most significant hidden expense. Without kitchen facilities, hotel guests eat every meal at restaurants or through room service. At an average of $45 to $65 per day for breakfast and dinner alone, a two-week stay adds $630 to $910 in meal costs that would be largely eliminated in a serviced apartment with a full kitchen. Laundry services at hotel rates ($8 to $15 per item) add another $150 to $300 over a fortnight. Meeting space, when required for small team gatherings, can cost $500 to $1,500 per day in CBD hotels.

The compound effect is substantial. A hotel room advertised at $280 per night in Sydney CBD typically costs the business $380 to $450 per night when all ancillary expenses are included.

The data is unambiguous. For stays exceeding five nights, serviced apartments deliver savings of 30 to 50 per cent against equivalent-quality hotel accommodation.

The Productivity Argument

Cost savings alone do not tell the full story. A 2025 Deloitte Corporate Travel Study found that employee productivity during extended business trips is directly correlated with accommodation quality and the availability of personal space. Travellers housed in apartment-style accommodation with separate living and sleeping areas, kitchen facilities and dedicated workspaces reported 34 per cent higher satisfaction scores and 22 per cent fewer requests for early trip termination.

The reasons are intuitive. A hotel room, regardless of its star rating, is fundamentally a single room. After a full day of meetings or site visits, the employee returns to a space where the bed, the desk and the television occupy the same 25 to 35 square metres. There is no separation between work and rest. There is no ability to prepare a simple meal or host a colleague for an informal working dinner.

A serviced apartment, by contrast, provides the spatial separation that supports sustained performance. A typical two-bedroom apartment offers 75 to 100 square metres of living space, a full kitchen, a separate lounge area and a dedicated workspace. For project teams sharing accommodation, the economics improve further — two employees in a two-bedroom apartment cost less per person than two separate hotel rooms while providing significantly more space.

Duty of Care Compliance

Australia’s Work Health and Safety Act requires employers to ensure the health and safety of workers while they are “at work,” and courts have consistently interpreted this to include business travel. The duty of care obligation extends to the quality and safety of accommodation provided to travelling employees.

For corporate travel managers, this creates a compliance requirement that goes beyond simply booking the cheapest available option. The accommodation must be vetted for safety, located in a secure area, and appropriate for the duration and nature of the assignment. Working with a licensed real estate agency provides an additional layer of compliance, as licensed operators are bound by state and territory property legislation, maintain trust accounts for all financial transactions, and carry professional indemnity insurance.

Unlicensed accommodation platforms offer no such protections. If an employee is injured, displaced or defrauded while staying in accommodation booked through an unregulated platform, the employer’s duty of care exposure is significant.

The Letto Corporate Accommodation Model

Letto Property Group operates as a licensed real estate agency across New South Wales and Queensland, managing a portfolio of professionally maintained apartments in Sydney (Potts Point, CBD, Eastern Suburbs), Brisbane (Fortitude Valley, New Farm, South Brisbane) and the Gold Coast (Burleigh Heads, Broadbeach, Surfers Paradise).

Every property in the Letto portfolio is individually vetted, professionally cleaned and maintained to a consistent standard. Corporate clients receive a single point of contact, consolidated invoicing, flexible terms (from one week to twelve months) and 24/7 local support in each city.

For procurement teams evaluating the switch from hotels to serviced apartments, the conversation starts with a complimentary cost comparison. Contact our corporate team at george@letto.au or call 1800 21 99 49.

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Meg Kerwick is Chief Strategist at Motto Communications and a strategic adviser to Letto Property Group.

References

[1] STR Global 2026, 'Australian Hotel Performance Report Q1 2026', STR Global, Nashville.

[2] Deloitte 2025, 'Corporate Travel Study 2025: The Future of Business Accommodation', Deloitte, Sydney.

[3] Safe Work Australia 2024, 'Model Work Health and Safety Act: Duties of Persons Conducting a Business or Undertaking', Safe Work Australia, Canberra.