Accor rolls out welcome mat for more bookings; Deloitte sets out challenges for tourism sector

Inflation, interest rates and a volatile geopolitical environment could affect travel spending according to a Deloitte report, but hotelier Accor says forward bookings are stronger than ever.

Accor chief executive Sarah Derry: ‘We will hit 21 million guests by the end of next year.’

Persistent inflation, rising interest rates and a volatile geopolitical environment could affect travel spending, according to a Deloitte report, but hotelier Accor says its forward bookings are stronger than ever.

The French chain, which manages 400-plus hotels across Australia, New Zealand and Fiji, says its bookings for Easter next year are well ahead of 2019 levels.

Accor chief executive Sarah Derry says the hotelier will welcome 15 million guests this year, compared with the 21 million guests it accommodated in the pre-pandemic days of 2019, but she says she is confident the chain will be back to pre-Covid levels by next year.

“We will hit 21 million guests by the end of next year,” Ms Derry told The Australian on Wednesday, saying the guest numbers would be largely driven by leisure travellers, as well as conference and convention delegates.

Ms Derry said friends and family travellers were the first to return to travel.

However, limited flight capacity and high airfares continued to hinder the return of domestic tourism to pre-Covid levels.

“City (hotel occupancies) have returned but not to 2019 levels. We need continued (convention and exhibition investment in cities),” she said.

The continued travel restrictions from Mainland China were particularly affecting places such as New Zealand, while in Australia the domestic market had largely replaced international travel, she said.

Ms Derry’s comments come as Deloitte on Wednesday released its latest tourism report revealing that the pace of travel recovery differs considerably across regional destinations and Australian city areas.

“High and persistent inflation, rising interest rates, and a volatile geopolitical environment mean our tourism sector does now face a different set of challenges,” Deloitte Access Economics partner Adele Labine-Romain said.

“Our economy is better placed than most on this front, but the accelerating headwinds could impact travel spending.

“This is not surprising given international arrivals … make up a significant portion of demand in our cities (and) have yet to return to anywhere near pre-pandemic levels.”

“International arrivals are primarily focused in the visiting family and friends segment, which has recovered to 53 per cent of 2019 levels over the first nine months of 2022, compared to holiday arrivals lagging at 16 per cent,” Ms Labine-Romain said.

“In an encouraging sign, the September quarter saw holiday arrivals return to almost 30 per cent of 2019 levels, suggesting recovery is really starting to gather pace.”

Deloitte said the pace of outbound travel recovery would depend in part on how quickly international aviation capacity could rebuild.

“As a gauge, as at September, international aviation capacity into Australia was at 55 per cent of 2019 levels,” Ms Labine-Romain said.

She reckons the strong momentum around domestic leisure travel supported by the weaker Australian dollar was incentivising many locals to holiday at home and was expected to continue in the short term.

“But rising cost of living concerns could put the brakes on the (travel) recovery.”