More pain for hotel sector before recovery led by Canberra, Brisbane and Gold Coast

Brisbane, Canberra and the Gold Coast are expected to lead the nation’s hotel sector recovery as Covid-19 restrictions begin to take effect, according to the latest Colliers Australian Hotel investor survey.

However, Colliers head of hotels Gus Moors warned that investors expect the third quarter of 2020 to be the weakest quarter for hotels, with the recovery expected to take between 18 months and two years before Australia’s hotel investment market stabilises.

Investor sentiment for negative trading was averaging -79.4 per cent, Moors said, with the fourth quarter still negative at -27.2 per cent.

“Which highlights the slow road to recovery which owners, operators, financiers and governments must navigate,” he said.

More than half of investors expect to see city hotel capital values fall by between 10 per cent and 30 per cent by the end of the year, while more than one third expect to see city hotel capital values decline by up to 10 per cent by the end of 2020.

All markets except for Cairns and Darwin are expected to see positive trading in the first half of 2021, according to hotels director Karen Wales, with Canberra, Brisbane and Gold Coast leading the way with the strongest expectations.

“These markets all have a high domestic visitor component which should stand them in good stead as the recovery gains pace,” Wales said.