The hotel sector's strength has prompted one of Australia's largest hotel franchise groups, Choice Hotels Asia-Pac, to form a strategic alliance with a boutique luxury brand, Adara Hotels Apartments. 
The tie-up will expand Choice's upmarket Ascend Hotel Collection by including the Adara Collins, Adara Richmond, Adara East Melbourne and Adara Camperdown.
Ascend's premium network is now 11 as the new offerings sit alongside the likes of Balgownie Estate Resort in the Yarra Valley.
Choice chief executive Asia Pacific Trent Fraser said the Adara properties will maintain their local identity as part of Ascend, while utilising Choice's global reservations and distribution systems and property management system.
"We are focused on expansion of the brand across the country," Mr Fraser said. "Last year was solid and with the lower dollar, we see that staycation market gaining momentum this year"
Melbourne's Australian Open tennis tournament boosted the city's occupancy rates to an average 90.4 per cent, an increase of 16.3 per cent from the week before, STR Global figures show. Average daily room rates also rose dramatically, up 36.3 per cent to $238.13.
The off-peak boost followed a stellar 2015 for Australia's hotel sector where tourism, a low Australian dollar, increased air travel and greater business confidence delivered record occupancy and room rates across most markets.
Occupancy rates were up more than 2 per cent in Sydney and Melbourne's five-star hotels. Hobart recorded an average occupancy rate rise above 80 per cent off the back of the Museum of Old and New Art's success. However, rates fell in the mining-dependent states of Perth, Darwin and Adelaide.
A key metric - revenue per room - showed Sydney's five-star hotels up 14.9 per cent. Metropolitan sub-markets such as Ryde, the airport precinct and Parramatta were picking up the spillover from the tight supply in the central city.