April 16 2021
By Joyce DiMascio
The 2021 edition of the Deloitte Access Economics Tourism and Hotel Market Outlook has forecast that pent up demand from 2020 is expected to support the kick-start of holiday travel, but business travel is expected to have a longer recovery.
Deloitte Access Economics partner and Deloitte national tourism leader, Adele Labine-Romain says this will have critical implications for many corporate travel focused and convention-based hotels.
“The corporate travel segment which includes conferences is critical to many tourism businesses, especially hotels in capital cities where an average 38 percent of visitor nights in 2019 relate to business travellers,” she said.
“Markets where corporate travellers represent a relatively larger share of demand will face a significant task in the period ahead.
“Other than the Gold Coast and Hobart, major hotel markets are relatively reliant on the corporate market, with over 40 percent of visitor nights from the business traveller.
“In the short to medium term, hotels in the major cities will need to look at ways to encourage a greater volume of domestic holidaymakers to fill the gap from business travellers,” she said.
“These have been, and they absolutely remain, testing and uncertain times for our tourism and hotel operators who employ so many people and who are so important to ‘brand Australia’.
Despite the devastating operating climate in 2020, over 5,000 new hotel rooms were added to the market in 2020. And looking ahead, there is the potential that more than 32,000 new rooms in likelihood adjusted terms will be added to the national room stock, with around 40 percent of these anticipated to open in 2022.
“With plenty of new stock, and even more in the pipeline, hoteliers will face considerable headwinds with average occupancy rates across the major markets covered in the report forecast to remain considerably lower than in recent years, but recovering to 95 percent of 2019 occupancy levels in the final year of the forecast horizon,” Labine-Romain said.
“The corporate travel segment will clearly be critical in terms of the recovery, and markets where corporate travellers represent a relatively larger share of demand will face significant challenges, particularly as so many businesses big and small have settled into people connecting via technology.”
Read more in the Executive Summary of Deloitte’s report.
Top image: The Great Barrier Reef | Photo: Tourism Australia