TAA Voice: Weathering the storm

Weathering the storm

If the trials and tribulations of the last few years have taught us anything, it’s that our industry is resilient.

Through fi re, fl ood and plague, accommodation hotels have endured, adjusted, and continued to do their best to support staff and guests, no matt er the challenges. As I write this our members are being tested yet again. The eastern seaboard has just been batt ered by another East Coast Low and many members have again endured terrible fl ooding. Members in NSW in particular have suff ered with major fl ooding in the Hunter, the MidNorth coast, the Shoalhaven and south-western Sydney. The weather event struck right in the busy school holiday period and our hearts go out to these members. TAA will be working with those aff ected to help them get the support they need. Despite the fl ood damage in coastal parts of the south-east, from a national perspective, things are looking very positive for our industry. If you take a step back and refl ect on where we were as an industry at this time last year, the news is overwhelmingly good. The borders are open. Our hotels are restriction free. Demand is high and confi dence is returning. All our gateway cities are experiencing resurgent occupancy fi gures and regional areas not eff ected by the recent fl ooding have seen a school holiday surge in bookings. Brisbane is currently trading at approximately 72 percent occupancy, and the school holidays are proving profi table for the Gold Coast, Sunshine Coast and Perth. The biggest improvements have been in our major markets of Sydney and Melbourne, boosted signifi cantly by the return of big events like the Formula One Grand Prix and the Vivid Festival of Lights. April 2022 fi gures released by STR show Melbourne’s hotel industry recorded its highest monthly room rates on record during the Australian Grand Prix. And the news was just as good in Sydney during Vivid. The lights extravaganza saw hotel bookings jump to above 80 percent for the fi rst time since the pandemic began. This is a far cry from last year when entire fl oors of hotels were closed (indeed some accommodation hotels were actually shut) due to the lack of visitors

Vivid Sydney 2022 smashed att endance records, with more than 2.58 million visitors fl ocking into the city from across regional NSW and interstate. The festival celebrated its largest-ever opening night, with more than 140,000 att endees, plus the biggest opening weekend in the event’s history, with 440,000 att endees.

Large events like Vivid bring foot traffi c and much needed revenue into city hotels which have suff ered badly during the last two years and are still struggling to cope with staff shortages and the muchreduced number of tourists and offi ce workers in our cities.

Data for the last week of May showed revenue per available room in Sydney was up 65.5 percent against the same week in May last year. Occupancy peaked at 82.8 percent on 28 May 2022. It is sad many hotels must cap room numbers at these busy times due to the chronic staffi ng issues faced by all, however, the trickle-down eff ects of these events are clear.

For example, more than 2.1 million Vivid visitors enjoyed a sit-down or take-away meal at the festival, with people dining in restaurants up 24 percent on 2019.

Destination NSW and the State Government should be congratulated for staging an event which gave our sector such a boost in the quiet winter months.

It is a great example other states and territories should be paying close att ention to. Out of the cities, regional NSW, Victoria, and the ACT saw a surge in bookings from the fi rst day of the school holidays. A stark contrast to the winter break last year when COVID restrictions were rigid, and all the borders were closed.

Bookings in places like Albury/ Wodonga, on the Victoria and NSW border were up 75 percent on last year and similar fi gures were recorded in areas like Goulburn and Orange in NSW, the border regions of the ACT and in popular Victorian holiday areas like the Mornington Peninsula.

The biggest issue for all our hotels continues to be staffi ng.

Many hotels struggled to keep up with demand in the holiday period and had to limit services because of a lack of skilled staff and the continued problem of staff being off sick with COVID or the latest strain of infl uenza.

TAA recently held a seminar with immigration experts to inform members how to make the most out of the recently negotiated temporary labour agreement.

The new labour agreement means a list of key occupations, including restaurant manager, hotel or motel manager, hotel service manager, accommodation and hospitality manager, cook, chef and pastry cook, will now have a pathway to permanent residency.

A pathway to permanent residency is a huge drawcard. Countries like New Zealand and Canada have had this in place for a while and this agreement will make Australian hotels much more competitive in att racting key staff .

It is not a silver bullet that will solve all our labour shortcomings, but it is a very good step forward, and it has been encouraging to see so many of our hotels starting the process.

Michael Johnson

CEO, Tourism Accommodation Australia