News In BriefTourism

Regional areas and drive market remain strong but no sign of corporate guests

New data shows that when it comes to Australia’s short-term hotel performance, we will continue to see regional areas outperforming cities, but it may be months before we see a return of corporate travelers.

The Data from STR’s Forward STAR says that figures are parallel to other countries across the world, with higher occupancy in regional areas especially pronounced on weekends, and occupancy-on-the-books data for the next 90 days (as of 5 October) shows a similar pattern.

Matthew Burke, STR’s regional manager, Asia Pacific said: “Regional Australia has benefited from intrastate travel as Australians have elected to take short breaks on weekends and during the school holiday periods. Airline capacity remains low as corporate travel is restricted, and even as state borders reopen, our capital city markets will see limited midweek travel.

To date, as reflected by the occupancy on the books for the capital cities, corporate travel has not recommenced, and it looks more unlikely that it will before the end of 2020.

“Over the next 12 months, the Sydney Surrounding market, as defined by STR, shows higher occupancy on the books when compared to the greater Sydney market. Sydney Surrounding is a key drive-to market, so it is expected to benefit from those travelers wishing to take weekend leisure trips.

“The highest monthly occupancy on the books for both markets is in October: Sydney Surrounding (46 percent) and Sydney (16 percent). Closing out the year, occupancy on the books for Sydney Surrounding remains above 20 percent, while the Sydney market is showing the metric under 10 percent.

“Brisbane, Perth and Canberra lead bookings for the coming weeks,” said Burke. “Cancellations are limited compared with the beginning of the year, but pickup is still much weaker than we would expect to see under a normal trading environment. However, pickup for the past month has been quite consistent, which shows there is travel activity happening and sustaining the current trading levels we have seen most recently.”

The Data for Saturday, 17 October, for example, shows “regional Australia’s occupancy on the books at 46 percent, while the capital cities show 26 percent in the metric. November and December data follows suit, with Regional Australia data sitting between 14-32 percent and capital cities between 8-17 percent. Post-Christmas is where the trend begins to shift slightly, with more Australians set to head out of town for their summer vacations”.

Even with some level of activity, performance data remains well below historical averages. Preliminary September data for the country shows occupancy came at 43.1 percent (-42.3 percent year over year). Average daily rate (ADR) was down 17.9 percent to AUD147.50, while revenue per available room (RevPAR) fell 52.6 percent to AU$63.51.

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