Australia Hotel Market Outlook - The future after COVID-19, October 2021

Following the COVID-19 pandemic in 2020, Australia’s anticipated gradual recovery in 2021 was derailed by the DELTA variant which returned Sydney, Melbourne and Canberra into extended lockdown and border closures nationally.

The lockdowns and associated travel restrictions have activated Australians to become “double vaccinated” with the 80% target to be achieved by December this year, which will then increase to 90%.

Restricted international travel will recommence in Australia in November 2021 and will gradually increase as travel bubbles are initially established, which will inevitably lead to normal international travel.

Despite the COVID challenges, transaction activity has remained buoyant with $1+ billion sales YTD in 2021, characterised by firm yields, unsatisfied capital, and a scarcity of quality purchase opportunities. 

This augurs well for improved conditions in 2022 after the summer break and we would expect that:

• Domestic leisure will return to key city destinations, having been absent for two years and to experience new hotel inventory
• Domestic leisure will continue to support the regional drive markets
• Corporate activity will begin to rebound in Q1 2022 and continue as Australia “gets back to business”
• International travel will resume and gradually build with IATA expecting that 2019 levels will be reached in 2023/24.

This article was originally published in https://www.cbre.com/

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