A tale of two cities: hotel sector divided by regional response

But the hotel industry remains on a watching brief as the gulf between the low vacancy rates in the city-based hotels – Melbourne in lockdown, versus the bustling regions – widens.

Tourism Accommodation Australia national chief executive Michael Johnson said for accommodation hotels, it really is a “tale of two cities” at the moment.

“In the Sydney CBD, hotels are really struggling; we have empty rooms and no international or domestic visitors to fill them,” Mr Johnson said.

“Sydney CBD hotels are currently operating 73 per cent down in rooms revenue compared to this time last year, and that number is slightly inflated by the Hotel Quarantine Program, which is keeping some afloat.”

But, Mr Johnson said, the momentum is shifting in regional NSW.

“We are seeing good visitor numbers, especially in those areas within easy driving distance of major centres,” he said.

“These school holidays, we have seen some bumper numbers in places [such as] the Hunter Valley, Orange, the Blue Mountains and the NSW North and South Coasts.”

Leanne Harwood, the managing director of IHG Australasia & Japan, which has both regional and city-based hotels, said the opening of the Crowne Plaza Sydney Darling Harbour was a “strong show of unity” and an indication of everyone’s willingness to get the industry moving again.

“This is a tremendously exciting time for the industry, as well as for IHG and Crowne Plaza. Globally, we are completely transforming the brand as we build hotels of the future with flexible design and innovation that modern travellers crave,” Ms Harwood said.

Speaking after the opening event, the chief executive of Tourism & Transport Forum (TTF), Margy Osmond, agreed the sector is running at two-speeds and called on the government for continued support.

Ms Osmond said while the sector welcomed the initiatives in the federal budget, which included the direct wage subsidy scheme, JobMaker Hiring Credit and instant asset write-off, there remained a long way to go.

“I think the budget gets a tick because it is about encouraging growth with jobs and the tax cuts will help with extra cash in everyone’s pockets, which may be spent having a break,” Ms Osmond said.

“But I do think there a much bigger job that needs to be done by the federal government for our industry … we will need JobKeeper extended beyond March, at the very least.”

Mr Johnson added that businesses heavily reliant on international tourism will benefit from a $50 million Regional Tourism Recovery Budget initiative to help the adapt their offerings to appeal to domestic visitors.

“The additional round of the Building Better Regions Fund will see half of the $200 million for projects dedicated to tourism-related infrastructure and $61.7 million of the COVID-19 recovery fund will be invested in heritage upgrades, conservation work and reef building to create more fishing and diving spots,” Mr Johnson said.