Australia’s Hotel Boom

Australia’s Hotel Boom

Staying on-top of hospitality news is second nature to us Melbournians. There is always something new and exciting to discover, and delicious opportunities to scout out. But, if you move aside FWO café and restaurant violations, much of hospitality news nowadays seems to be dominated by a common theme – hotels.

Old hotels are being renovated and new hotels are being constructed.

2018 – 19 saw the announcement for new hotels such as: Hotel Chadstone, Australia’s first Moxy hotel by the Marriott International chain, and the announcement that Hong Kong’s Mandarin Oriental group plans to open a luxury hotel on Collins St  – and this is just to name a few. Not to mention old hotels pouring millions into reconstruction; like Melbourne’s Windsor Hotel, who won an appeal for 2020 finish of a $330 million redevelopment.

While the growth of Melbourne, and wider Australia’s, hotel sector skyrockets the construction rate for residential dwellings continues to fall. The growth of Australia’s hotel sector is indicative of the success of Australian tourism. According to the Australian Financial Review we have the Chinese to thank for the Australian Tourist boom.

As Mark Ludlow from the Australian Financial Review stats “Chinese tourists’ love affair with Australia shows no sign of abating, but more importantly for tourism operators, they are starting to open their wallets more”.

On the Other hand, CEO of Tourism Accommodation Australia (TAA) sites the cause for the rapid expansion as ‘investor confidence’. “We’ve had good growth in demand,” she said. “Low interest rates and the [Australian dollar] exchange rate mean there’s still potential there.”

On top of that, new airline agreements are credited to helping boost tourism. Ms Giuseppi, CEO of TAA, said the Federal Government’s creation and negotiation of over 100 bilateral air services agreements has helped increase overseas tourism.

For example, in 2016 Australia and China signed an open skies agreement. This agreement allows Chinese airlines greater access to Australia. “China has grown from 285,000 [airline] seats in 2005 to 1.5 million seats in 2018,” Giuseppi told ABC News.

China isn’t the only country that Australia made bilateral air agreements with.

June 2018 the Federal Government signed an air services agreement with India that would open direct services from India. According to ABS data, India is Australia’s fastest growing inbound tourism market.

With no signs of tourism slowing down, Tourism Accommodation Australia expects another 272 hotels to be built in Australia’s capitals over the next six years. In other words, 450,000 new rooms are making their way into Oz.

So, what does this mean for those of us who work in hospitality?

Increases in tourism is great for hospitality! It means more people will be going out to local restaurants and cafes, more people will be attending local events – like concerts at Rod Laver, and footy games at Marvel. It also means that more hospitality staff will be needed to accommodate for the rapid influx of people.

“Victoria’s long-standing policy of attracting major events and investing in venue development has resulted in an enviable calendar of iconic events positioning Victoria globally and ensuring purpose driven interstate and international visitation that is consistent across the seasons.” – Invest Vic

The Victorian Government’s 2020 Tourism Strategy aims to grow tourism’s contribution to the state’s GSP to approximately AUD$34 billion by 2020. One of the four industry strength the Victorian Government claims will be a driver of success is: attracting and maintaining high quality workforce skills training.

What The Victorian Government’s 2020 Tourism Strategy highlights is the problem Melbourne will inevitably face: quality over quantity.

In order to maintain our globally recognized achievements in hospitality we must maintain our excellent workforce, the people who carry the success of Melbourne’s hospitality scene on their back.

Maintaining the quality of workforce we currently have will prove to be problematic if tourist rates continues to rise the way they are predicted, as we will need A LOT more hospitality staff to compensate for the massive influx of people. Our hospitality status will begin to dwindle if quality service begins to be swept aside for quantity.

At Octopus Hospitality, we have both the experience and the arsenal of highly trained and experienced hospitality professionals.

As a collective, we understand the wants and needs of our trusted clients and valuable candidates, empowering us to recommend strategic opportunities and realize impactful staffing solutions. Together we have developed Victoria’s best little black book of short and long term hospitality staff.

By |2019-03-19T02:09:57+00:00March 13th, 2019|Blog|Comments Off on Australia’s Hotel Boom