Australian Hotels Can’t Make It Past September Without Help: Hotel Boss

By Rebecca Zhu
Rebecca Zhu
Rebecca Zhu
August 20, 2021 Updated: August 20, 2021

Accor Pacific CEO Simon McGrath has warned that hotels will soon close across all Australian states and territories without financial support from the government.

“Across the industry, plans are rapidly accelerating today to hibernate and close hotels due to the lack of government support,” McGrath told The Australian. “Business owners are at breaking point, and there will be closures. Many don’t have the means to keep going beyond September.

Accor runs a wide range of hotel brands, including Grand Mercure, Mantra, Novotel, and Ibis.

“The bickering between state and federal governments on border openings impacts the tourism industry greater than any other industry,” McGrath said. “We are calling on the federal government to resolve these differences and to set an opening date to bring an end to the current uncertainty.”

In a letter to the federal government, McGrath said hotels operating in areas outside of COVID hotspots were suffering because people from Sydney and Melbourne were barred from travelling.

“Financial relief must be delivered not by hot spot definition, but rather on a shortfall in revenue,” he wrote in his letter, adding that the tourism industry was now in a worse state compared to April 2020.

With international borders closure heading towards its 18th month, the tourism industry has shifted to become heavily dependent on domestic tourism.

However, residents in the populous eastern states have been hesitant to travel due to the numerous snap lockdowns in Victoria and Melbourne, making the question of being able to return home uncertain.

Meanwhile, New South Wales is undergoing eight weeks of lockdown restrictions, that was extended by another four weeks today.

Melbourne
A man cycles along a street in Melbourne, Australia, on Feb. 13, 2021. (Luis Ascui/Getty Images)

According to figures by the global data and analytics group, STR, while Australia was one of the best-performing countries in the first half of the year, hotel occupancy levels have since rapidly declined after the lockdowns began.

For the week of July 26 to Aug. 1, Sydney reported an occupancy level of just under 16 percent, its lowest weekly level in 2021.

“New and extended restrictions amid the latest outbreaks have undoubtedly affected performance in recent weeks,” STR Pacific regional manager Matthew Burke said on Aug. 6. “Although winter is likely a precipitating factor for some of the decline, these new restrictions across state borders have meant that a lot of travel is simply not possible.”

The Northern Territory (NT) had the highest hotel occupancy in the country for the same week, at 65 percent. However, the territory has since been plunged into lockdown as well, prompting Treasurer Josh Frydenberg to provide $9 million in support to its tourism industry.

Rebecca Zhu
Rebecca Zhu