Luxury hotels continued to be adversely impacted by COVID-19 restrictions in Australia in 2021. With restrictions easing in the second half of 2020 and first half of 2021 there was a peak in bookings from international tourists, believing they would be able to travel to Australia.
Despite the closure of Australian borders since March 2020, luxury hotels were temporarily able to limit their losses due to an increase in demand for accommodation amongst local tourists between June 2020 and June 2021. Domestic travel and accommodation, including at the luxury end of the scale, was largely driven by Australians unable to travel and spend abroad, paired with the effects of social isolation and confinement, which resulted in locals craving interaction and experiences.
Prior to the pandemic, there was an increase in demand for personalised and unique accommodation experiences, which saw the emergence of small cabins and unique accommodation spots in secluded areas within Australia. Restrictions and confinements since March 2020 further accentuated people’s desire for different accommodation options, particularly those that provide unique and memorable experiences.
Luxury hotels is expected to have a slower return to pre-pandemic levels than economy hotels, because of the need for higher occupancy rates and a higher number of employees to operate the business than their economy counterparts. Snap lockdowns and potential future waves of COVID-19 infection will continue to negatively impact the performance of luxury retailers in Australia.
Luxury hotel operators in Australia are well-positioned to capture both domestic travellers and returning international travellers when the borders reopen, considering that developments that were in the pipeline before the pandemic hit are likely to come to completion in the next 12 months. In addition, with expectations of increased demand for local tourism and potential travel bubbles between Australia and other countries in the region, operators and investors are preparing by refurbishing the current infrastructure and developing new concepts in the short to medium term, with brands such as the Mercure Melbourne Doncaster, Porter House Hotel Sydney – MGallery, The Langham Gold Coast, InterContinental Parramatta and W Sydney due to open in Australia, amongst others.
With the industry facing multiple challenges, including bush fires and the pandemic, many properties were forced to close permanently due to financial losses. This situation is anticipated to continue, as potential tourists remain locked out from Australian cities due to the closure of national and state borders.
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Understand the latest market trends and future growth opportunities for the Luxury Hotels industry in Australia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Luxury: includes luxury and upper upscale hotels. Would generally include 5-star hotels and above, but may include some “4.5-Star” outlets, provided that the brands positioning warrants it. The luxury classification is primarily determined by the brand’s positioning and marketing, which will be at the high-end. Brand examples include Marriott, Hilton, Sofitel and InterContinental.See All of Our Definitions
This report originates from Passport, our Luxury Hotels research and analysis database.
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