When people talk about Accommodation Australia they often focus on the big international brands.
The Hiltons and the Marriotts are glamorous and well-known, but one of the greatest parts of the recent merger of Tourism Accommodation Australia with the Accommodation Association for me was the bringing together of our motel members.
Motels can often feel overlooked but are absolutely an essential part of the accommodation sector. They are mostly regionally based, they are mostly mum and dad operators and they are some of the hardest working people in the business.
At Accommodation Australia we have been working on the issues affecting our motel members and devising strategies to make sure their voices are not lost amongst the louder voices from our CBDs.
Most of our motels, particularly those in rural and regional Australia, got a boost in the post-COVID period. While international travel was still shut down everyone explored their own backyards and our motels were extremely busy – we are confident those holidaymakers will return again over the summer months.
We are already seeing a lot of Australians shift their focus to international trips but the sheer cost of international flights, the Australian dollar and general inflationary pressures should keep many of these travellers closer to home.
But the problems across the economy related to high inflation and the lower spending power of travellers is definitely a worry for these small businesses.
Travel for holidays is largely a discretionary spend, and households may feel the need to cut back if they are struggling with their own mortgages or the rising cost of living.
Many moteliers who are freehold owners have business debt, or mortgages that encompass their homes, which are often within the motel premises. For them, the rising interest rates are hitting hard.
For those moteliers who are leaseholders, the economic times would be hurting them in other ways, including if they have what are called ratchet clauses in their contracts which increase the rent annually in line with the CPI/inflation. These financial pressures can also make it difficult to look at the capital improvements needed to ensure their motels do not become too out of date and tired.
Like everywhere in hospitality, staffing is still a major problem for motels.
It is some relief working holidaymakers and student visa numbers have recovered, as this is crucial in alleviating some of the seasonal and casual demand for workers. But the more difficult problem for many of these small rural businesses is that their staff struggle to find rental accommodation nearby.
This is particularly true in regional tourism areas where a lot of properties have been taken out of the long-term rental market and offered as short-term rental accommodation for tourists. This poses a competition problem for the motel market as well and more needs to be done to rein it in.
Most motels are small businesses with less than 20 staff, and many are managed by couples who work very long hours in their business.
Therefore, small business problems such as dealing with red tape (BAS, local/council regulations, WHS etc.) are a burden, as can be the challenge of managing people and rosters.
Sometimes the complexity of running a motel can be almost overwhelming for members, and they need to ensure they look after their own physical and mental health as well as that of their staff. Many suffered mental stress during the pandemic, with the fate of their homes, their families and their close-knit employees tied up in events and decisions totally out of their control.
Although I have listed the many challenges for motels, I do not want to give the impression all is doom and gloom.
Many of our members have been in the motel business for decades and find great satisfaction in serving their travelling customers and building their businesses.
Motels have a nostalgic, comforting appeal for many of us. And when you combine that with great country service and charm, they will always be a choice for so many of our travellers.
Michael Johnson is the CEO of Accommodation Australia, the peak tourism accommodation body. He has extensive experience in the hotel and tourism industry including the successful relaunch of PARKROYAL Parramatta in 2016 and strong industry connections across Australia and New Zealand. Previously he managed PARKROYAL Melbourne Airport, Amora Jamison Sydney and Totally Tourism in Queenstown New Zealand.