Tourism chief warns: CBD hotels half full

The hotel accommodation industry has warned occupancy rates in Sydney and Melbourne CBDs are half what they used to be.

Empty bar tables in Melbourne’s CBD during the city’s COVID-19 stage four lockdown last year. Picture: David Crosling

The hotel accommodation industry has warned occupancy rates in Sydney and Melbourne CBDs are half what they used to be and cites anecdotal evidence of “significant” job losses as a result of JobKeeper ending.

Appearing before the Senate’s COVID-19 committee, Tourism Accommodation Australia chief executive Michael Johnson said that across hotels in NSW about 25 per cent of staff were let go when the pandemic first hit and a further 15 per cent lost their jobs in March. The federal government’s $90bn JobKeeper scheme ended on March 28.

Mr Johnson said in the month before it finished, staff in “fixed-cost areas” like sales, administration and finance were let go amid ongoing revenue concerns and impacts from state-imposed restrictions and border closures.

“There is no financial safety net from commonwealth, state or territory governments to aid the hospitality industry absorb these losses. This has a devastating financial, emotional and mental cost to businesses and workers.”

Sydney and Melbourne CBDs, which have still not recovered because there is no corporate or international travel, had occupancy rates of 54 per cent and 53 per cent respectively compared to pre-COVID levels as of a week ago. Hotels being used for quarantining returned travellers make up 10 per cent of those bookings, meaning the occupancy rate for domestic guests is more like 44 per cent and 43 per cent.

NAB’s economics consumer insight report for April 2021 reveals six in 10 Australians have either stopped visiting their CBD or are visiting less. Nearly one in five have stopped visiting altogether, which is even higher for over-50s.

Half of those surveyed said they had no reason to visit, one in three said social distancing measures, a fear of COVID or preference to shop locally impacted habits, one in four said parking was too expensive and they did not want to use public transport, while one in five said too many shops and eateries were closed.

Melbourne CBD was worst-affected, with seven in 10 people not visiting at all or visiting less.

Deutsche Bank chief economist Phil Odonaghoe said Australia’s success in suppressing the virus had made daily life as good as anywhere in the world, and the major impact from the slow vaccine rollout would be potentially having to keep international borders closed for longer.

He said the overall economic impact of closed borders was not significant and the increase in Australians holidaying at home had more than made up for the hit to economic activity from the absence of foreign tourists.

Additional reporting: Patrick Commins