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EXCLUSIVE: Has Australia’s hotel and accommodation industry turned the corner on COVID-19?

Opinion: Kunal Sawhney CEO , Kalkine Group on sector recovery

No doubt, the COVID-19 pandemic opened a can for worms for almost every sector. The hotel and accommodation industry was certainly among the hardest hit. The challenges posed by the pandemic impacted almost every segment of the hotel operations last year, from food and beverage provisioning to room occupancy levels and staffing plans.

However, the year 2021 brought renewed hopes to the accommodation industry, with the country achieving considerable success in containing the virus spread. At the same time, the unprecedented government support, along with vaccine-based confidence and an uptick in domestic travel demand, helped the industry regain its lost vibrancy.

Consequently, some hotels in popular regional tourism destinations of Australia have been as busy as they have ever been due to pent-up demand. With more people travelling domestically, hotels across the country are offering enticing and safe ways to keep customers coming through the front door. They are also ensuring cleanliness, essential hygiene, and social distancing in the new normal.

Green Shoots Gleaming in Hotel Industry

According to the latest data from the world’s largest open hotel commerce platform, the volume of hotel bookings in the country has returned to pre-pandemic levels. As of 14 April 2021, SiteMinder’s World Hotel Index showed the volume of hotel bookings across Australia reached 102.45 per cent of the volume of bookings on 14 April 2019.

The volume of hotel bookings grew as the Australians embraced the new normal and chose to domestically explore their own backyards via nearby holidays and road trips. Interestingly, the performance of hotel bookings in regional areas exceeded the volume of bookings in metropolitan areas as travellers escaped from densely populated regions towards more peaceful areas.

A similar trend was noticeable in Queensland’s hotel occupancy rates, with the state working as an idyllic holiday destination for travellers. The latest statistics shared by Accor showed that the overall level of occupancy for the group’s hotels surged to an average of 74 per cent in April 2021 from 23 per cent in April 2020. Notably, Accor is the biggest hotel operator in the Pacific, which operates more than 100 hotels in Queensland.

A combination of factors elevated holiday travel to Queensland in 2021. These factors comprise an increase in domestic flights, greater certainty regarding borders, Federal and State stimulus measures as well as a range of targeted marketing programs introduced by hotels. Having said that, the recent opening of the Trans-Tasman bubble and the success of the Government’s half-price airfare scheme are further expected to keep hotel demand buoyant over the coming months.

Labour Shortage Remains a Challenge

Although the recovery rate in hotel bookings has intensified over the recent months, the crippling shortage of hospitality workers continues to remain a cause for concern for the hotel industry. Australia’s closed international borders are taking a devastating toll in terms of skills shortage, putting tremendous strain on the hotel industry.

Despite offering massive salaries in a desperate attempt to fill roles, hoteliers are facing a hard time finding skilled labour. Consequently, hotel managers have been multi-tasking and stepping in to fulfil roles that are usually done by the maintenance crew, baggage handlers, cleaners, and baristas.

As per the Accommodation Association of Australia, about 78 percent of hotels are facing a skilled labour shortage, with over 8,000 vacancies for chefs alone waiting to be filled in late May. The absence of backpackers and overseas students seems to be resulting in this shortage.

Towards this end, the Federal Government has also recently provided more visa flexibility for student visa holders working in the tourism and hospitality sector. The Government has decided to remove existing work hour caps (40-hours per fortnight) for such student visa holders to take some pressure off the hotels.

The recently announced changes are expected to support the hotel industry secure the necessary workforce support they need to trade at full capacity.

The speedier rollout of coronavirus vaccination and eventual re-opening of international borders are expected to chart out the growth trajectory of this pandemic-hit industry. Once the coronavirus vaccine de-escalates the fear of contracting the virus, more people are expected to step out with a vengeance, triggering high consumption of accommodation services.

 

Kunal Sawhney CEO , Kalkine Group is an entrepreneur with revolutionary ideas; financial professional with wealth of knowledge in Equities, aiming to transform the delivery of equity research through tech-driven digital platforms.

Kunal is featured regularly on CNBC, Sky Business, Biz News, Daily Mail, Yahoo Finance, KCBS Radio (Audacy), Bloomberg, Sydney Morning Herald, Global Banking and Financial Review and many more.

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Kunal Sawhney

Kunal Sawhney: Entrepreneur with revolutionary ideas; financial professional with wealth of knowledge in Equities, aiming to transform the delivery of equity research through tech-driven digital platforms. With his knowledge, skillset, and overarching vision, Kunal established one of the fastest growing equity market research firms across Australia in year 2014; and subsequently, in other emerging & developed markets – Kalkine - A business that is based on Digitally Powered Architecture and Extensive Data Science led Premium Research. Kunal’s entrepreneurial and commercial skills backed by the passion to establish a tech-empowered research platform, helped in building Kalkine’s global presence across diverse geographies - Australia, New Zealand, Canada, and the United Kingdom. Further, the plans for the US launch in 2021, have set the premise for attaining an all-encompassing client reach for Kalkine’s Subscription and Media Operations. With a Master of Business Administration degree from University of Technology, Sydney; Kunal’s business acumen has enabled his brainchild, Kalkine, help clients navigate through equity related matters in a proficient and seamless manner. Kunal is featured regularly on CNBC, Sky Business, Biz News, Daily Mail, Yahoo Finance, KCBS Radio (Audacy), Bloomberg, Sydney Morning Herald, Global Banking and Financial Review and many more.

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One Comment

  1. It is good to see that tourism is rebounding. The issue in some locations is not just a shortage of workers, it is a shortage of housing and in some areas hospitality workers cannot access dwelling because more properties are listing on tourist platforms. It is a ‘wicked problem’ and migration is not the only factor especially in regional areas.

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