More than 240,000 hotel rooms stand closed or unoccupied and 300 hotels have shut their doors entirely as the national lockdown and ban on international travel devastates the leisure industry.
Hotel analysts STR estimate between 10 per cent and 21 per cent of capital city hotel rooms were closed as of April 22. Of those still open, average occupancy rates are just 20 per cent. That means more than 240,000 of the estimated 300,000 hotel rooms are either closed or unoccupied.
“Perth is the only capital city that is sitting above 30 per cent in occupancy for the month to date,” said STR regional manage Matthew Burke.
“Their occupancy is slightly higher as in addition to the quarantine of returning international travellers, Perth has become a base for many in the resource sector where state restrictions and domestic air services has meant they have set up Perth as a temporary base with their family.
“Other destinations that have occupancy just above 30 per cent are all resource centred destinations, like Mackay, Gladstone and the Pilbara.
“Conversely, high leisure concentrated destinations, like the Gold Coast, tropical North Queensland and Cairns, are all below 20 per cent.”
The 60-suite Brighton Savoy in Melbourne is one of the hotels that has stopped taking guests. Michael Lee closed the doors at the end of March – the first time in 53 years that the family-owned hotel has stood empty.
The four star, riviera-style hotel overlooking Port Phillip Bay in Melbourne’s affluent bayside suburbs was bought in 1967 by his father, Des Lee, a Holocaust survivor. It has been operated by the family ever since, hosting thousands of weddings and corporate events.
But in March, as the pandemic spread and the restrictions on travel and socialising tightened, the cancellations started coming in.
“Our projected occupancy for the month fell from over 90 per cent to zero in a matter of weeks,” said Mr Lee. “It was death by a thousand cuts.
“We had 90 corporate events and 70 weddings booked at the hotel between March and July. All of them have had to be postponed or cancelled. We had to refund over 1000 bookings.”
On March 25, the hotel transferred its last remaining guest – an overseas arrival whose self-isolation stay had put staff on edge – to a nearby apartment and closed the doors for three months while it undertakes renovations and upgrades.
“We had no choice but to close. There was no point in being here,” said Mr Lee, who hopes to reopen in July.
The Brighton Savoy is one of more than 300 hotels that industry body Tourism Accommodation Association (TAA) estimates have closed their doors in the past month.
Other hotels to close include the historic Windsor Hotel in Melbourne, the Radisson Hotel and Suites in Sydney (now up for sale), and 18 of the 34 hotels operated by British accommodation giant Intercontinental Hotels Group or its franchisees.
The NSW chief executive of TAA, Michael Johnson, said government-mandated quarantine stays had given a boost to some hotels, but with no guarantee of future business many had decided to close.
Depending on how long the recovery takes, some may not reopen.
“I think we’ll see a recovery in stages, with firstly intrastate travel, then domestic, as the state borders open up. But it will be a long time before international borders open -it won’t be this year,” he said.
“It will be a slow recovery … we will be entering a new normal. There will still be some form of social distancing, which will put pressure on hotels’ food and beverage operations and events.”
Corporate accommodation demand from nearby mining work has kept the lights on at the 47-room Quality Suites Pioneer Sands in Towradgi, near Wollongong.
“We’re still getting occupancy of between 35 and 50 per cent Monday to Friday,” said the hotel’s general manager, Rebecca Bauer.
The hotel is also one of a number of Choice Hotel franchisees to have rolled out a new work-from-hotel option for guests, taking advantage of its spacious rooms, Wi-Fi, room service and parking.
For $85, guests can work in a hotel room for 10 hours and are served morning tea, lunch and coffee. A three-hour stay costs $45.
“A few guests have taken it up. We are doing what we can to stay alive,” Ms Bauer said.
Back in Melbourne, Mr Lee is putting together an online photographic archive of weddings at the Brighton Savoy. It’s a way to stay connected to the local community and the hotel’s clientele while the business remains closed.
The hotel has the financial resources to weather a temporary closure, and its bankers have been supportive, but the waiting game and lack of certainty is proving a challenge.
“We employ 60 people and bring $40 million to $50 million to the local economy. But we’ve also got a $238,275 land tax bill and no sales. We need to hear about an end game,” Mr Lee said.
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