14 Sep 2020
Words Renee McKeown The Urban Developer
Residents, road-trippers drive hotel sector
Hotel operators are seeing the rise of the “temporary resident” as Covid drastically changes the way people live and travel.
In the past six months, hotel owner, operator and investor Minor Hotels have had a 20 per cent increase in people staying in one of their 70 hotels for around eight weeks.
This is due to remote-working, time between leases, quarantine and travel restrictions leaving people stranded.
Minor Hotels chief operating officer Craig Hooley spoke with a panel of experts during The Urban Developer’s recent webinar on the hotel sector.
“We’ve actually found a whole new segment that didn’t exist two months ago, and we call them ‘temporary residents’,” Hooley said.
“They’ve come into a situation where they don’t know what to do, so we said, ‘right-o, come and stay with us for two or three months’ and it’s like a permanent resident agreement, but it’s temporary.”
Hooley said moving forward the future for the hotel sector is all about looking at the moving targets.
“I think adaptability has been really so important in this period, you talk about isolation business, government-related business and you talk about different types of travel: it’s different,” Hooley said.
“There’s no doubt our capital cities have been heavily hit and that's pretty much across the board
“In our view, the further away from the city at the moment, the better you are performing.”
Motels, caravan parks boom in return of the roadtrip
Travel restrictions have impacted the way people use hotels, driving international tourism levels down.
However, there is a growing number of people looking to domestic tourism as they wait for borders to reopen.
Resort Brokers managing director Trudy Crooks, also part of the webinar panel, said investors are looking outside of the cities for opportunities.
“They [Melbourne hotel operators] have definitely been the most affected as you can understand, and Sydney has been the same,” Crooks said.
“Brisbane and WA—surprisingly—were definitely what you’d call oversaturated markets, they’ve survived a little bit better but it certainly seems the regions and tourism locations should come out of this faster.
“I think it’s going to be the return of the road trip, all those regional motels and caravan parks.”
“Caravan parks have been a favourite for a long time and you only need to track caravan park sales to see what a growing industry that is,” Crooks said.
“I think we are going to see a resurgence of people back on the roads, doing long weekends away, going regionally.”
Almost 60 per cent of high-end regional operators recorded an increase in occupancy levels compared to 2019 in places accessible by car.
Meanwhile housing values have also increased markedly as people look to lifestyle to ride out the pandemic and work from home.
The 2020 changes to the hotel industry follows a year of growth and boom when 45,000 rooms were expected to be added to the market, the biggest jump since the Sydney Olympics.