The accommodation industry is heading for a cliff with 70,000 direct employees, such as cleaners or hotel receptionists, expected to be laid off in the next three months.
“We are in complete freefall as a sector,” Dean Long, chief executive of the Accommodation Association of Australia, told The Australian Financial Review.
“There are major job losses – about 50,000 – coming off the boil in the next 14 days and more in the coming months.”
Heidi Kunkel, vice-president of operations for Hilton Australasia at Sydney Hilton Hotel. She is appealing to the government for sector-specific help. Edwina Pickles
There are about 86,000 direct employees in the accommodation industry in Australia, according to the Association, and 900,000 in the broader tourism sector.
Occupancy levels of hotels across the country are currently between 10 and 20 per cent, compared with a three-year average of about 80 per cent for this time of year, and they are expected to fall further, to below 10 per cent, in the coming weeks.
On Sunday the government announced another round of relief funding, targeting small and medium businesses, by offering wage subsidies, a six-month freeze on repayments, and underwriting of loans up to 50 per cent for enterprises with annual turnovers of up to $50 million, but Mr Long said the measures were not enough.
“The big end of town employ the overwhelming majority of people in the accommodation industry, and that’s our main concern with today’s package. It doesn’t help the companies actually employing Australians and they are the ones with less than three months to go,” he said.
Heidi Kunkel, Hilton’s vice-president of operations for Australasia, implored the federal government to come to the aid of the industry, which includes the hotel group’s 2000 employees in Australia.
“In Hilton’s 100-year history, we have never seen anything like this current situation which is having a devastating impact on our industry.
“Ours is an industry of people serving people, and that’s why we’re asking the Australian federal government for urgent support … through this very challenging time,” Ms Kunkel said.
The industry’s plea for sector-specific help follows the government’s announcement last week of a $715 million relief package for Qantas, Virgin and regional airlines hard hit by COVID-19 pandemic.
Tourism and hotel industry groups on Friday asked for 50 per cent of its PAYG payments from the previous year to be refunded, totalling about $700 million.
“The long-term impact will be costly. The vast economic stimulator will be travel and tourism and Australia may not be in a position to participate in that,” said Simon McGrath, chief operating officer of Accor Pacific, which is Australia’s largest hotel operator with 21,000 employees.
“There’s a number of stimulus packages in the economy … but with a cap [to target] small businesses. They have to allow them to be opened up to major accommodation investors and businesses.”
Mr McGrath said he expected to see owners closing hotels in the coming week as a financial response to control cashflow.
“We are seeing staff so willing, trying so hard under these conditions, caring for people, and yet knowing the reality of shortfalls in occupancies each day.”
Hotel cancellations started en masse last Tuesday, two days after the federal government’s announcement that anyone arriving from overseas would have to self-isolate themselves for 14 days. Qantas and Jetstar then announced they would would be grounding 90 per cent of their international flights.
By Thursday there was a ban on non-residents entering the country.
About 7000 casual workers in the industry have already lost their jobs in the past few weeks, particularly in events, according to the Association.
“With the measures announced on Friday, it’s only going to become harder, because effectively if you can only have 25 people in 100 square meters, there’s not a single event that can go forward in that environment, that includes weddings,” Mr Long said.
The sector has already taken a hit this year because of the bushfires ravaging the country – with the Australian Tourism Export Council (ATEC) estimating a 10 to 20 per cent fall in international holiday bookings that would cost the country at least $4.5 billion by the end of the year – and that was before the escalating coronavirus pandemic forced tourists to cancel their hotel bookings en masse.
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