Aussies holidaying abroad hurting domestic hotel operators: RBA

Larry SchlesingerDecember 8, 2020

The challenges facing the operators of hotels and resorts in regional markets have been highlighted in a speech today by Ric Battellino, deputy governor of the Reserve Bank. 

Speaking about the two-speed nature of the economy, Battelino told delegates at Citi's third annual Australian and New Zealand Investment Conference in Sydney that the increasing numbers of Australians heading overseas, rather than a drop in the number of foreign tourists, is hurting the tourism industry.

“Overseas trips by Australians are running about 60% higher than five years ago. Given the increase in overseas travel, it is not surprising that the traditional holiday destinations in Australia, such as the Gold Coast and North Queensland, are currently among the weaker parts of the Australian economy,” he said.

His comments come as a number of high-profile leisure assets in Queensland have been listed for sale, including 103-hectare Noosa Springs development on the Gold Coast and  Austcorp Group’s masterplanned 476-hectare Coomera Waters development on the Gold Coast.

Latest ABS figures show that Australians heading overseas outnumbered visitors by 181,000 in August, with 649,000 Australians headed overseas compared with 468,000 short-term visitors. Short-term departures are up nearly 11% compared with a year ago, while overseas visitor numbers are trending down 1% over the same period.

Battelino also noted that the commercial property sector was still dealing with the effects of over-gearing that occurred just before the GFC and would take some time to recover.

“In other sectors, such as commercial property, the weakness is mainly the result of investors and lenders having to deal with the consequences of over-gearing in the pre-2008 period,” he said.

“When too much borrowing and lending occurs, as it did in this sector, it can take many years for the excesses to be unwound. Some large adjustments have already taken place in the commercial property sector but the process probably still has further to run.”

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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