Opening the doors as infections hit new highs
Australia's Prime Minister Scott Morrison has insisted the time for the "heavy hand of government" has passed despite Australia's cumulative new daily infections surpassing 4500. In the future the impact of pandemic-related restrictions is anticipated to be much diluted, based on the National Plan to transition Australia's National COVID-19 Response. Right now the Australian Medical Association is calling on states and territories to agree on a unified approach to tackling the new Omicron variant to help bring more certainty.
Domestic driven 1H as international takes tentative first steps
This will be welcomed by an industry that has been hit hard by the restrictions imposed to try to limit the spread of the pandemic. Still, Mr Jolly explains in the CTC interview that there will remain a domestic focus even as international corridors start to open.
"It will take time to get a level of certainty," he says, noting that - as has been the case between individual Australian states - it may not be an issue of being able to travel, but concern about being able to return home. "I think it is going to be staggered approach," he notes.
For international demand, Mr Jolly says the property is "looking at the second half of the year being a lot more stronger than the first" with 1H being mainly domestic driven. "There will be an element of individual traveller, maybe holidaymakers, but corporates as a whole, or groups travelling will be a little more reluctant," he adds.
Spending up helps partly offset reduced occupancy
On a positive, Mr Jolly acknowledges a trend of "spending up" as people increasing seek to look after and treat themselves. While this may not offset the loss in occupancy levels it has helped the property boost its guest spend and a trend he sees spreading much wider across the sector.
"People are spending a lot of money on luxury goods, but that also translates into hotels," notes the hotel general manager. "People have been prepared to buy up, take the big suites, buy those extra bits and pieces, take the champagne. There a lot of helicopter money put into the economy and people are now out there spending."
Domestic visitor nights declined sharply but recovered rapidly
Domestic visitor nights in Australia declined sharply in early 2020 as a result of the nationwide pandemic-induced lockdown. But, as those restrictions eased, domestic demand started returning fairly swiftly to pre-pandemic 2019 levels with domestic visitor nights in Jan-2021 to Apr-2021 only down -6% on the first four months of 2019, and +35% above the same period in 2020.
Domestic visitor nights declined again in mid-2021 as several states experienced widespread lockdowns in response to Delta variant outbreaks. Latest Domestic Tourism Forecasts 2021-2022 to 2025-26 from the Australian Trade and Investment Commission expect domestic tourism to rebound at "a similarly rapid pace" from these lockdowns, supporting a return to around its pre-pandemic level in 2022-23, and then surpassing that previous peak in 2023-24.
Pent up demand is 'definitely there' but lead time is short
In the CTC interview Mr Jolly notes there is "no doubt about it" that "pent up demand is definitely there". It remains difficult to predict though as the lead time to booking is short.
Over the last few years pre pandemic the lead times to booking was already getting shorter and shorter as it became easier to travel and get around. "Because of what has been going on that lead time has got even shorter," says Mr Jolly.
Boutique offering supports immediate bounce back in corporate demand
For The Langham, Sydney, a boutique offering means that the property is not widely used by the traditional corporate road warriors and that has actually helped to support a quick recovery in its own corporate demand, according to Mr Jolly.
He says corporates have generally "remained quite reluctant" to allow staff to travel, but as a small boutique offering, the property has seen "an immediate bounce-back in corporate".
In fact, The Langham, Sydney this month picked up the title of Australia's number one Boutique Hotel for a second time at the 2021 HM Awards for Hotel and Accommodation Excellence. For the 19th time, the HM Awards recognised the biggest and brightest stars in the accommodation industry across Australia, New Zealand and the South Pacific, from individuals to properties, departments, brands and chains.
Australia hotels show holiday demand lift
Lifted by the upcoming holiday season, occupancy on the books is rising in Australia's key hotel markets with Brisbane and Adelaide nearing 70% for New Year's Eve, according to data from STR's Forward STAR.
"Occupancy on the books is once again trending upward, and throughout the holidays, levels are already sitting above 60% in some key markets," says Matthew Burke, STR's regional manager for the Pacific region. With more reopening taking place around the country, and leisure travellers booking in shorter windows, levels are likely to increase further as we move closer to the new year.
Adelaide, Brisbane, Melbourne, and Sydney each show rising occupancy on the books after Christmas that eventually builds to high points on 31-Dec-2021, according to STR's data. Adelaide, with early Dec-2021 peaks above 70% for the Ashes cricket test, dips as low as 31.6% before gradually rising to 67.4% on New Year's Eve. Brisbane, which falls as low as 41.8%, rises to a high of 68.5% on New Year's Eve. Melbourne and Sydney occupancy on the books hit highs of 57.9% and 53.0%, respectively.