Australian hotels catch coronavirus cold as visitors plummet

“Those destinations that see a higher proportion of Chinese visitation appear to be the most impacted,” Matthew Burke, Pacific regional manager for industry analytics provider STR, said.

STR figures for the period from 24 January to 9 February show Sydney and Darwin hit hardest. Darwin suffered a 15 per cent drop in occupancy.

Melbourne, which saw an influx of international visitors to the grand slam Australian Open tennis, fared better, reporting a marginal 1 per cent drop in occupancy and 10 per cent growth in revPAR.

Mr Burke said the impact of the virus outbreak in January had been limited by the country’s status as a long haul destination. Occupancy for the month of January in Sydney was down 4.9 per cent, due primarily to the growth in supply of rooms.

However, the effects of the outbreak were now starting to be felt. Only two of Australia’s top 10 accommodation markets reported positive revPAR growth for the two week period that includes the 2020 Chinese New Year, compared to the same period in 2019, according to STR.

“This is a distinct variance to more recent performance and against the moving trend,” Mr Burke said.

Accommodation is not the only property class likely to be affected by the outbreak.

Shopping centres located in areas with a high proportion of the local Chinese diaspora may also be buffeted by slowing sales if concerns about the virus escalate.

Analysis by The Data App shows shopping centres like Broadway and Westfield Hurstville in Sydney and Queen Victoria Market and Box Hill Central in Victoria are in the heart of large ethnic Chinese-Australian populations.

Others like Burwood Plaza in NSW and Prahran Market in Melbourne are vulnerable too.

Mirvac chief executive Susan Lloyd Hurwitz said last week there was “no question” the virus will have an impact on retailers.

“The longer it goes on there is no question it will impact retail sales as foreign students are delayed from coming back to school and Uni and international tourist numbers decline,” she said.

The virus scare has emptied once bustling malls in Hong Kong as visitors from the Chinese mainland stay away.

Tourism Accommodation Australia chairman Martin Ferguson told a tourism function last week the sector was in “unchartered waters.”

“It’s too early to measure exactly how damaging this outbreak and the ban on travel from our biggest tourism market, China, will be,” he said.

Tourism bodies were doing all they could to redirect resources to mitigate the fallout and entice travellers to new and existing markets, he said.

“We face an uncertain road ahead … The next 12 months will be a testing time, there is no doubt about that.”

Mr Burke said January and February were usually peak visitation periods so the impact was likely to be “more acute” now.

It was unclear how the coronavirus outbreak will impact corporate travel and visitors from other parts of the world, he said.

Moody’s Investors Service has said the coronavirus outbreak was impacting airport revenue, particularly in the Asia Pacific.

“While it is too soon to determine the ultimate impact of the coronavirus on domestic and non-mainland China-related travel, past experience – including from the 2003 SARS outbreak – suggests that travel between Asian destinations could be significantly affected over at least the next 2-3 quarters,” Moody’s vice president and senior analyst Nicholas Chapman said.