Sydney hotels, operating under restricted trading since late June, are now recording occupancy rates under 2 per cent as lockdowns cripple leisure, international and corporate bookings.
According to Tourism Accommodation Australia, operators across pandemic-battered capital city markets, such as Sydney, were now haemorrhaging cash with takings down between 70 and 90 per cent compared to July 2019.
Tourism Accommodation Australia NSW chief executive Michael Johnson said the current situation would result in mass redundancies of staff, most of whom lived in south-western and western Sydney.
“We still have examples where one hotel is ineligible for JobSaver because they are part of an international group, but a neighbouring hotel, just a few hundred metres away, is eligible for weekly JobSaver payments,” Johnson said.
“Both hotels have staff to support and similar ongoing minimum costs, such as salaries, insurance, rent/interest, electricity network charges, land tax and council rates, among other expenses.
“The reality is while the rooms sit empty, the bills keep piling up.”
STR regional manager Matthew Burke told The Urban Developer that July’s results for occupancy across Sydney represented the lowest levels since April 2020.
“With the continued restrictions across NSW, the number of hotel’s experiencing low occupancy is expected to be even higher in August,” Burke said.
“If the [state] government does decide to loosen restrictions and allow some mobility of travel, occupancy will increase but will be to regional NSW.”
The effects of the lockdown have been two-fold as Victoria and NSW were massive feeder states for domestic tourism across the country.
The hotel sector is also one of the largest employers in the country with more than 660,000 full-time and casual staff with hotels of all sizes. In NSW, the tourism and hospitality industry employs more than 50,000 people.
“As evidenced in the recent past, Sydney heavily relies on open state borders for wider leisure, business and meeting travel to be conducted,” Burke said.
“Provided, the current postures of other states and territories it is likely that it will be intrastate travel only for NSW operators in the short term.”
Despite the pandemic, the larger hotel chains are still investing in the country with a swath of new openings in recent months.
New hotels under way include James Packer’s Crown Hotel Resort, One Circular Quay, Pontiac Land Group’s 5-star Capella Sydney and Doma Group's 230-room Little National.
Meanwhile, The Star is pressing ahead with a $1 billion project at its waterfront site in the Sydney suburb of Pyrmont, with revised plans before council for a two-tower, six-star hotel.
Accor is also looking to launch its new luxury boutique MGallery hotel, The Porter House Hotel Sydney, on Castlereagh Street this year.
The only hotels in Sydney doing any kind of business right now are the select few operating as quarantine facilities.
Between late March and October last year, more than 90,000 travellers passed through hotel quarantine in NSW.
Industry heads said a greater take-up of the vaccine would help prevent further lockdowns and the “economic chaos” that follows.
According to a recent survey by Tourism Accommodation Australia, four in five respondents said a vaccinated workforce would be “vital for the safety and wellbeing of employees and guests”.
Respondents, ranging from executives through to hotel staff, and said it should be a mandatory requirement for all hotel employees.
Tourism Accommodation Australia has since submitted a request directly to premier Gladys Berejiklian requesting the state government implement a public health order.
It has called for hotels to “have the discretion to have the right to mandate vaccination” with an exemption for those with a valid medical reason.
The NSW government has said the first step on the road map out of Covid-19 will be a range of family, industry, community and economic restrictions to be lifted for those who are 70 per cent vaccinated.
Further easing of restrictions on industry, community and the economy, will be made when 80 per cent full vaccination level is achieved.