Accor boss demands fixed reopening date
The country’s most powerful hotelier, Accor Pacific boss Simon McGrath has called on the federal government to show “courage” and set a firm date when Australia’s international borders will reopen or risk the country’s tourism recovery falling behind the rest of the world.
Speaking to The Australian Financial Review as Accor embarked on a $700 million rollout of new hotels in Melbourne that it hopes will “kick start a tourism revival” in the Victorian capital, Mr McGrath said the sector required certainty about when overseas travel into the country would resume.
This month’s federal budget provided no firm date when international borders would reopen in 2022 as well as a modest $1.2 billion in fresh support for one of the sectors hit hardest by the pandemic.
Mr McGrath who runs the country’s biggest hotel portfolio with more than 340 properties, commended state and federal governments for their handling of the pandemic, but said now was the time for them to be courageous and put a re-opening plan in place that tourism operators could rely on.
“Certainty is what is required. The date is less important. The uncertainty [shown by the government] shows a lack of ambition,” he said.
Without a fixed date in place, Mr McGrath said investment decisions and new business initiatives were being put on hold.
“We don’t seem to have the courage to take the next step.”
His comments follow Qantas boss Alan Joyce warning Australia risked becoming a “hermit state” if its borders remain shut for too long while Virgin Australia chief executive Jayne Hrdlicka has also pushed for borders to reopen sooner arguing Australians needed to learn to live with the virus as they have the winter flu.
Paris-based Accor, one of the world’s biggest hotel operators, has a lot at stake in the Pacific region and a lot riding on how quickly Australia opens up to the rest of the world.
In Victoria alone it will add over 1500 new hotel rooms across eight hotels between now and 2023 in partnership with developers and investors.
Next month, a 172-room Mövenpick opposite Southern Cross Station will open as part of a high-rise tower completed by Singaporean developer Fragrance.
Other hotels in the pipeline include Novotel & ibis Styles hotels at Melbourne Airport that will offer a combined 464-rooms when they open next year and new lifestyle brands like So and 25hours coming in 2023.
Average occupancy rates have yet to rise above 50 per cent in Melbourne with the CBD in particular facing the toughest recovery path given weak corporate travel, fewer events and half-empty office towers.
At the same time a slew of new hotels have opened in the city including a W Melbourne and Hilton, adding to the accommodation choice.
“Melbourne is one of the greatest cities in the world and now is the time to accelerate the tourism recovery,” Mr McGrath said.
“In 2019, tourism generated $23 billion for the Victorian economy and 250,000 jobs.”
Mr McGrath said domestic travel would dominate tourism over the next three years and there would be a “phased return of business travel”.
He said hotels needed to focus on providing “meaningful experiences” while more broadly the focus needed to be on bringing events calendars back to life.
“When a major event is on in Melbourne, it lifts occupancy by about 40 per cent,” he said.
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