Australia set for staycation boom as lockdowns ease

Hotels in Australia are finally welcoming guests back as state governments begin easing lockdown restrictions from Covid-19 to permit intrastate travel. Hoteliers are also expecting that regional and luxury accommodation will benefit most from initial pent-up demand.

Restrictions in New South Wales and Victoria begin easing on Monday (June 1) to allow for some domestic holiday travel and dining for 20 to 50 people, making it viable for several hotels to reopen their restaurants.

Hotels in Australia prepare to welcome guests again, as coronavirus lockdowns in the country begin to ease

“What we’re hearing is that there’s been some good bookings in regional locations, particularly with the Queen’s Birthday long weekend happening this month,” said Tourism Accommodation Australia CEO Michael Johnson.

“I think that CBD residents have been looking to get out of their cities after being in lockdown for 10 weeks, so they’re certainly looking to get out to the region,” he continued.

Australia’s Marriott hotels reported the first signs of market recovery about a fortnight ago, with bookings increasing and cancellations decreasing.

“As government restrictions eased, consumers started to see their way out of the current situation,” said Sean Hunt, area vice president, Australia, New Zealand and Pacific, Marriott International.

“Hotels in leisure destinations, particularly, started to see a pick up as the announcement of relaxed restrictions began across the country, which encouraged consumers to go from dreaming into planning mode and we believe these consumers will start to convert in the coming weeks.

“We are also seeing wedding enquiries and bookings pick up for 2021,” he continued, noting that Marriott’s lifestyle and leisure properties are currently taking the lion’s share of the bookings.

Elsewhere, Jerry Schwartz, the owner of 15 hotels across the country, said during an online webinar hosted by CBRE Hotels that he expects his least economical hotels in regional areas to ironically become his best performing when interstate borders reopen, and luxury hotels will do well as people are more willing to spoil themselves.

Australia’s new Tourism Restart Taskforce, formed by The Australian Chamber of Commerce and Industry, has proposed that all domestic travel should restart this long weekend. However, the final decision to open up borders lies with the respective states.

Less than 80 per cent of hotels in Australia remained open during the lockdown, buoyed by government assistance, but operating on average at 20 per cent occupancy levels. Hotels need to be trading at least 30 per cent occupancy to break even.

“Every time there is a positive message on the easing of restrictions from the government, we see an increase in bookings, and school holidays and Q4 are looking promising in the Pacific,” said Simon McGrath, chief operations officer of Accor Pacific.

“Following the lockdown, we expect people might want to travel differently, in a more responsible and safe way and to spend their time and consume differently, with a different mindset. We are working collectively to find, or even invent, the right answers to adapt to this new world,” he continued.

TAA’s Victoria CEO Dougal Hollis confirmed the “vast majority of hotels” in the state will reopen on Monday, noting that 7.9 million Australians who travelled internationally for leisure last year will now be looking for alternative options. But he conceded corporate bookings are more difficult to predict, given that changes in corporate communication methods employed during lockdown periods have introduced new practices.

“We’re mindful that corporate businesses will take longer to return and in fact may not fully come back because you might get people who have decided that they’re so used now to doing Zoom conferences that corporate travel frequency won’t be as high as pre-Covid-19,” said Hollis.

Hollis also told TTG Asia that it may take up to three years for hotel occupancy rates to get close to pre-Covid-19 levels, and that as many as 75 per cent of new hotel developments have been put on hold as their viability undergoes re-assessment.

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