Hotels still struggling with cash flow during slow rebound

A new report has been released outlining the impacts of varying economic scenarios on the beleaguered accommodation sector.

The Australian Hotels Association (AHA) and Tourism Accommodation Australia’s report, Economic Impacts of Stimulus for the Accommodation and Food Services Sector, was submitted to the federal government earlier this month ahead of Treasurer Josh Frydenberg’s update on the economic and fiscal outlook on Thursday.

Hotel operators are still struggling with cash flow problems despite a slow rebound as restrictions ease.

The report showed a national average fall in accommodation hotel room revenue of 77 per cent and a plunge in occupancy rates of 66 per cent.

Occupancy rates stood between 10 and 20 per cent at the height of the pandemic and would stay below 50 per cent of capacity based on current bookings over the 90-day period from 15 June to 12 September, according to the report.

Decreasing revenue was also a concern, with 84 per cent of businesses reporting a drop in revenue and more than half (53 per cent) reporting revenue decreases of 50 per cent or greater.

Current estimates suggest the national average fall in revenue currently sits at 23 per cent while occupancy rates are at 34 per cent.

It also found that 15 per cent of hoteliers were in extreme uncertainty with current cash at hand able to support operations for less than a month.

AHA chief executive Stephen Ferguson said the report was further evidence for the case for continued economic support including JobKeeper and the suspension of Fringe Benefits Tax on accommodation, meal, beverage and entertainment expenses for three years.