Motel Market

Another word for adapt? Accommodate

Many businesses across all industries have struggled with changes that they have been forced to incur over the past couple of years. Changes in the way they do business, changes with demand for their product or service, changes in dealing with their employees and changes with their clientele.

The accommodation industry is no different and all types of accommodation businesses have had to make changes in various ways. There are challenges that have faced each in one way or another, whether it be a motel, hotel, caravan park, backpackers, resort, guesthouse, retirement village, workforce village, and so on. Some of the challenges faced have been common across probably all these types of accommodation and others will be specific to just the one. Further to this, those that have food and beverage venues onsite have incurred additional and varied challenges. The good news is that no matter what these challenges the industry and each individual business has faced, they have adapted and changed to either counter these challenges or work with them. During the past two years we have witnessed, too many examples to mention, of this occurring, however there are some common challenges and examples of how they have been countered, that come to mind immediately. One is where demand for short term accommodation had declined in some areas of the state due to border closures or increased COVID case numbers keeping people from moving around. To counter this decline in demand many accommodation businesses changed tact by seeking out other types of potential guests to fill a void. One of these has been medium to longer term stayers. Those people (potential guests) that may require accommodation for more than one or two nights but not necessarily to the extent of six months that would move them into housing/apartment rental time frames. Those that are in the ‘no man’s land’ area of not wanting or being required to stay for six months but somewhere in between.

This type of demand can be driven by many different reasons. Work related such as a one week or four-week contract in a certain area, medical reasons such as the lack of particular medical facilities and machines therefore requiring the person to travel to a larger centre to access the specific requirements. Those moving locations who are unable to access a rental house for weeks or months and need accommodation in between. Students who cannot access residential properties therefore seek alternative accommodation options. The list goes on... Those most savvy operators have looked to fill any void left by those not moving around as much due to the pandemic, either by government determination or self-preservation, by accessing these alternative markets that they did not previously target. The pandemic has helped to fuel the increase in this demand for longer accommodation terms by the, pardon the pun, ‘shot in the arm’ to the real estate market, residential in particular. This includes the increase in people moving around, buying houses or units, and/or building houses using government incentives where available.

Another example that stands out is the backpacker accommodation market. The loss of the international travellers/ backpackers has had a major impact on this industry. Some businesses have struggled however others have adapted and looked to different types of potential customers in need of accommodation. Other types of workers have been targeted to fill the void such as contractors within the construction industry. The construction industry has ballooned in recent times with the demand for trades people at a peak. Short- and long-term construction contracts create the movement of workers thereby fuelling demand for short- and longer-term accommodation. Hospitality workers looking for more affordable accommodation options also assisted to fill a void left by the lack of international travellers. Students have also been able to access this more affordable type of accommodation thereby creating a win-win situation for all concerned. With the residential property industry recording rental market vacancies at less than 1 percent in many areas of Queensland, it is almost impossible for many to find any rentals available, let alone something affordable. There are dozens and dozens of examples of the above situations within businesses that we have witnessed within the accommodation industry throughout the past two years. There is such a resilience and ability of accommodation business operators to change and think outside the square to make their business adapt and improve, within ever changing dynamics.

Andrew Morgan,

Queensland Tourism and Hospitality Brokers

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