Australian hotel bookings surge as supply head winds loom – Colliers International
The volume of hotel bookings in Australia increased through October to exceed the global average, according to a new study.
Colliers International’s Australian hotel markets performance dashboard showed hotel bookings in Australia were at 60.3% of 2019 level, down from 57.7% at the end of September and slightly below the peak in June. 2020.
According to Colliers, this led to a level of bookings in mid-November comparable to that seen in mid-March – just before mandatory quarantine for returning overseas travelers was imposed.
But Colliers International’s national hotels manager Karen Wales said the booking window remains very short with most bookings made within two weeks of stay with the exception of the Christmas and New Years period. An, who has seen a marked increase in bookings due to the fact that many Australians have been mandated to take annual bookings. leave and a pent-up request to travel.
“We expect this to continue to increase once Victorians can cross state borders and when Sydney residents are allowed into Queensland without quarantine,” she said.
âHobart has seen a significant increase in bookings since reopening this month, with bookings currently at 86% of 2019 levels. This indicates a strong peak season. “
Although the unhindered expansion of the Australian accommodation market looked set to continue for a few years, COVID-19 abruptly halted the expansion phase of the hotel market cycle.
Colliers International’s hotel manager Gus Moors said disruptions to global supply chains, blockages, closing international and national borders, introducing social distancing on construction sites and inertia of capital had all had an impact on the delivery of new accommodation rooms.
âSome owners have made the difficult decision to close hotels or delay opening as they watched the barrel of low demand for overnight stays,â he said.
âCombined, these factors have caused a fundamental shift in the accommodation supply base in Australia and pose fundamental challenges to forecasting and budgeting for the hotel market. “
While hotel openings have been pushed back to 2020, the Colliers Australian Accommodation Supply Update report identified that 5,004 rooms are now expected to open in Q4 2020 (2,540 rooms) and Q1 2021 (2,464 rooms), which puts further downward pressure on the city hotel markets. .
Ms Wales said that although Adelaide, the Gold Coast and Sydney would each see a number of new rooms, Melbourne topped the list with 2,011 new rooms due to open in the CBD and an additional 712 rooms in the metropolis over the six next months.
“New openings are expected to moderate through the middle of 2021 before picking up again at the end of the year, particularly in Sydney and Melbourne,” she said.
âThis was offset by a significant reduction in short-term rental housing (STRA). Sydney and Melbourne have the lion’s share of reduced registrations with 6,827 and 5,484 fewer active registrations in the CBD, respectively, compared to the start of the year.
âMuch of that STRA inventory has moved into the long-stay rental market, which may provide greater income certainty while representing a reduction from the pre-COVID STRA room rates per night. “
Mr Moors said 2021 was now billed as the “peak of the supply cycle” with far fewer rooms under construction and slated to open in 2022 and 2023.
“While some urban hotel markets will be challenged by the opening of new offerings over the next few years, this will be the culmination of the rejuvenation of the sector after decades of underinvestment,” he said. .
“New openings will likely be offset by new closures, especially older inventory, which is no longer considered suitable for use in a post-COVID world or hotels whose business plans have fundamentally changed.”
Click here to download a copy of the report.
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