More than 21,000 Queensland hotel rooms and apartments could sit empty this summer and billions of dollars of tourism revenue be lost if the state government does not provide clarity soon on when border restrictions will ease, the country’s leading hotelier has warned.
Simon McGrath, the Pacific boss of hotel giant Accor, which operates about 100 hotels in the state, said Queensland was approaching “crisis point” and had only weeks to act to prevent thousands of interstate holidaymakers that would normally head for the beaches of Surfers Paradise, Noosa, Cairns and Port Douglas looked at booking their vacations elsewhere.
His warning came as a new survey of hotel investors by real estate agents Colliers International predicted a prolonged bottoming-out of the accommodation market, due to the impact of the second COVID-19 wave in Victoria and the extended border closures.
With its own occupancy rates in Queensland hovering at just 30 per cent, Accor predicts more than 70 per cent of Queensland’s 30,000 hotel rooms and serviced apartments could sit unoccupied through the coming months if the border uncertainty persists.
“It’s not good enough for the Queensland government to say ‘we will make a decision in November or December’. People are making their bookings now, they are not going to sit around and wait,” Mr McGrath told The Australian Financial Review.
“They are looking at places like Northern NSW or finding other destinations intrastate – the pace of bookings into Queensland has slowed quite dramatically.”
He said a hard border reopening date needed to be announced in early October if the state wanted to “save summer”.
Residents from NSW and Victoria are banned from coming to Queensland due to the state declaring them COVID-19 hotspots. No decision has been made about when these restrictions will ease.
Victoria reported 11 new cases on Monday – the lowest number in three months – with just four in NSW and one in Queensland.
Tourism contributes $25 billion to the Queensland economy annnually and employs 217,000 Queenslanders, Accor said, quoting Chamber of Commerce and Industry Queensland and Queensland government figures.
“If Queensland misses this crucial booking window and JobKeeper falls away, then some hotels will close for the first six months of 2021.
“This will significantly impair the state’s ability to bounce back; certainty is required now,” Mr McGrath said.
Amid Accor’s growing concerns about the Queensland market, the latest Colliers International Hotel Investor Sentiment Survey – carried out in August – found the second wave of COVID-19 cases in Victoria and the resultant extension to state border closures had had a “detrimental impact on investor sentiment for trading” compared with two months ago and had “reset expectations around the pace of the recovery of Australia’s hotel and tourism market”.
While the third quarter of 2020 was still expected to represent the trough for hotel trading in Australia, this may be more prolonged than previously envisaged, the latest survey found.
Trading was expected to improve slightly during the final quarter of the year as restrictions relax, but with optimists only just outweighing pessimists.
Over the first six months of 2021, investors are most optimistic about the outlook for the Gold Coast and Brisbane and least optimistic about Melbourne, Darwin and Sydney.
The second half of 2021 will see conditions improve, with 2022 representing the chance for a strong rebound “once the acute impacts of the health crisis have moderated”.
“Whilst investor sentiment for trading on the Gold Coast is – and should be – high, the reintroduction or extension of state border closures has had a pronounced impact on hotel bookings with forward bookings on the Gold Coast trending well below the 2019 levels and trending below other regional and leisure markets,” said Karen Wales, national hotels director at Colliers International.
“Queensland’s hotel markets recorded the most significant declines in hotel bookings over the past month with the announcement that borders will remain closed until the end of the year, despite the fact that there is strong pent-up domestic demand to travel, particularly from the southern states.”
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