I've been looking at a trip to Australia and keep seeing "Superior" used by a few operators in relation to hotels.
I assume they mean they think the hotel is above average but does it actually mean anything or is it just market hype?
If it is "better", better than what?

I'd go with "hype" myself.

It probably means a slightly better hotel, or better location, or even better room.
For instance, if you stay at Four Seasons, Sydney, a superior room should give you a harbour view. A non-superior room may be just the same, but not have that view!

If you give some examples, I may be able to clarify - but only know Sydney, (and a little of Melbourne)

Well I can only go on what other parts of the world means when they use "Superior room" and if the term applies here as it does in Atlantic City NJ for the Howard Johnson hotel there then I would be looking for the term "sleeze room" as it could only be better :0)
Seriously though what Margo says is right but we would have to know WHAT hotel it is referring to.

Since not all countries use the same "star" system as we might be familiar in the USA - USA has up to 5* (determinations are made on such things as a/c, shower curtain liner, type of carpeting, quality of bed linens, 24-hr room service, number of restaurants, etc) in France the highest is 4* or 4*Luxury or 4*Deluxe (comparable to USA 5*), so tour operators break them out as Deluxe, Superior, First Class, Tourist, Best Available.

If you check a few Australia guidebooks, they might indicate which category the hotels being offered by tour operators fall into.

For example - Regents, Four Seasons would be Deluxe, while Hiltons, InterContinental can be either Deluxe or Superior, and Hyatts can be Superior, but if it's a Hyatt Regency it's Deluxe. Sheratons usually fit into the Superior or First Class category depending???

In other words, an apple isn't always an apple, someplace else.

Thanks - what I thought really!

Have you noticed how these days hotels offer 'de-luxe room', 'superior room', but they never mention a 'standard room', seems everything is called something, it's 'hype' totally, though as someone else said you may get a view or something. I always book whatever is the cheapest, if it's then not much I ask to see any better room, then decide if it's worth it.
Like everyone, I've stayed in a $50 that was better in one hotel than a $200 in another. It varies just so much.
If you are paying Aussie $ 150 then the hotel should be well fine, of course big cities are more than smaller places. AUD/A$60-70 gets you a decent room in smaller towns/locations, but you can pay AUD 350 in the cities.