The lag in international travel weighs on the recovery of hotels

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“It would take about seven national overnight trips to generate the equivalent expense of an international visitor. And that should be on top of the 14 average domestic trips Australians typically make in a year. This represents a significant challenge for political executives and the sector ”, declared Ms. Labine-Romain.

As a result, markets such as Brisbane, Perth, Gold Coast, Canberra and Darwin, which rely more on interstate and intra-state travel, are expected to see occupancy rates return to 2019 levels by 2023, at least. a year earlier than their big city rivals.

“Sydney and Melbourne will take a little longer due to their high occupancy rates before the pandemic, their greater reliance on demand from international tourists and business travelers, and the significant new online offer.” , declared Ms. Labine-Romain.

“Not the miracle solution”

Before the pandemic, hotels in Sydney and Melbourne had average occupancy rates of between 80% and 90%. For the first 10 months of the year, they were on average well below 40 percent, according to the latest data from STR.

IHG Hotels General Manager for Japan, Australasia and the Pacific, Leanne Harwood, said that while the positive sentiment regarding domestic travel emerging from the Deloitte report was “encouraging” for all in the hospitality industry , the return of international travel was “clearly not the silver bullet for an industry that has lost more than $ 10 billion in room revenue due to lockdowns and COVID restrictions.”

“The impact has been two-tiered: the CBDs of major cities like Sydney and Melbourne have been hit the hardest and have struggled with average weekly occupancy rates as low as 2% due to their reliance on l ‘s regard to international travelers, while regional and rural properties have seen huge surges in demand after each lockdown.

“But all hotels have one common problem that paralyzes us, and that is the lack of qualified staff at all levels of operations,” said Ms. Harwood, who is also president of the Accommodation Association.

“We desperately need government support for trade events, business travel and broader tourism initiatives to fill the void in international business lost over the next two years.

“More immediately, we need support to attract skilled workers to our industry in order to address the talent shortage and allow us to fully reopen and rekindle the incredible Australian culture of hospitality that we are so so fond of. well known, ”she said.

While occupancy rates will take longer to recover, average room rates in the top 11 hotel markets are expected to return to 2019 levels ($ 194 per night) by the end of 2022, reflecting the fact that hotels mainly maintained their rates even in times of tight demand.

However, the addition of up to 15,000 new rooms over the next two years, including 5,000 that will open in 2022, will put additional pressure on occupancy and room rates, especially in Melbourne, on the Gold Coast and Sydney, where 60% of the new stock is concentrated.

The growing popularity of video conferencing and virtual meetings, which has impacted business travel, is also hampering the takeover of hotels in major cities. In the first half of 2021, overnight business travel was only 60% of pre-pandemic levels, noted Deloitte.


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