Starting July 2020, in the post Brisbane and SEQ lockdown, we as a population, couldn’t wait to travel. And…. this need-to-travel remains!
Short stay operators, on the average, had a rough time of it from March to June last year, with the majority forced to switch rooms from short to long stay. There was simply little choice.
Of course, this saw the business bottom lines deflate both significantly and rapidly – mostly within the month of March. Beware the Ides of March as they say!
However, that determined need-to-travel-anywhere has seen almost every operator who has reverted partially or wholly back to short stay, in a boom period of both high demand for accommodation plus a willingness to pay the room rate without question!
One of my middle of Queensland clients advised they averaged an 83% occupancy for the year ending 30 June plus the month of May 2021 being their best month in the last 10 years! Admittedly, its a particularly nice complex with spectacular ocean views and mostly its warm all year round, but this is an excellent indication of just how buoyant the Queensland Tourism market is!
Closer to home in BrisVegas and the more corporate styled businesses, we’re seeing the same, high occs and high tariffs plus lots of forward bookings!
One client, at Kangaroo Point didn’t need to convert any rooms to long stay during covid 2020, as they were booked out for the entire lockdown period with construction & project people.
Another, located next to a major Hospital, experienced the same thing, booked out for most of covid with patients and or family of patients.
So, its a part of the management rights industry that is not all blood and tears I’m pleased to say and it goes to prove the point I’ve been banging on about for years, that every one of these business is entirely different from the next!
In writing this article, I confirmed for myself and readers the dates and length of the Brisbane lockdowns. Here they are along with a couple of key dates:-
- Nation-wide shutdown (23 March 2020 – 31 May 2020). Total of 70 days.
- December 1, 2020 Queensland border open to NSW & Victoria.
- December 11, 2020, Everyone in Australia is welcome into Queensland.
- January 8, 2021, SEQ 3 day lockdown – Friday/Saturday/Sunday.
- March 3, 2021, SEQ 3 day lockdown – Monday/Tuesday/Wednesday.
- June 30, 2021, SEQ 4 day lockdown – Wednesday to Saturday.
Quick Analysis: All up we’ve experienced a total of 80 days of lockdown in the last 16 months (434 days to more exact). This equates to around 18% of that combined period.
In 2021, SEQ has had 10 lockdown days to date. This equates to approximately 5% of the 193 days that have transpired so far this year.
Obviously, we’re on the improve as to “lost days” in the short stay sector. Still not ideal, I agree, but can I suggest, that at least for the remainder of 2021 and it would seem feasibly to include most of 2022, that this might well be the ‘new norm’?
Other Countries: Trust me when I say that I’m not arguing for or against lockdowns, they are what they are and whilst not economically ideal, this is what living in a government driven world looks like. Well, Australia at least.
Other countries seem to be just getting on with it and have returned to the work as normal – just take precautions approach. We’re going to see more of this from around the world, and there’s pressures on here in Australia for us to follow suit. Again, not arguing either way here.
Summary: Short stay has to adapt to these sudden changes and roll with the short term punches.
If you’re considering buying a short stay business, they are booming and you as an operator could do very well !
Don’t be frightened off, the world is improving and the current low multiples on short stays won’t last! Just work through the bumps, stay focused and you’ll be fine!