Victoria’s hotel sector suffers $1.7bn loss as revenue dives

Victoria’s tourism sector has undergone its largest peacetime economic contraction over the last 12 months.

Victoria’s hotels have recorded a whopping $1.7 billion in lost room revenue, equating to a decline of 62 per cent.

A report commissioned by the Accommodation Association showed there were 6.6 million fewer nights spent in Victorian hotel rooms in the year leading up to February 2021 than were spent over the same year before.

While CBD hotels have borne the brunt of the coronavirus restrictions, Regional Victoria has also lost an estimated $285 million over the year.

The report conducted by AHS Advisory also found that the hotel sector would take four years before it fully recovered.

“We’re providing a wide range of support to help businesses and support jobs, through direct grants, travel vouchers, major events, and marketing campaigns,” said Tourism Minister Martin Pakula.

“How long the recovery takes will depend on an enormous number of variables, particularly the speed and breadth of the global and domestic vaccine rollout, and how effectively it suppresses the spread of COVID variants. None of that is clear right now. In the meantime, we will continue to back this crucial sector of our economy.”

While the hotel sector has been hit with a loss of cashflow, it is also struggling with a labour shortage with the continued closure of international borders cutting off supply, according to Accommodation Association chief executive Dean Long.

The association is calling for a lift in the current 20 hours a week foreign workers are allowed under most international student visas.

“Seventy-eight per cent of hotels across Australia are experiencing a skilled-labour shortage, [so it’s] a significant barrier to recovery,” he said.