Good signs ahead

A number of my posts over the last few months have been about the gloomy state of the Australian hotel market due to the economic slowdown. Thankfully, things start to be looking up again. We're not seeing the full flow-on effect as yet and we have a looooong way to go to get back to normality but some positive signs are there.

Events are starting to fill cities again and a number of cities are back to being busy on a regular basis. Canberra has been pretty steady thanks to a number of sittings of parliament. Adelaide, Brisbane and Perth have been slowly picking up again while Darwin is always very busy at this time of year.

One of the biggest frustrations over the last few months has been that we are still getting some really great enquiries (groups, long-stays, etc) but just haven't ended up booking any of them. Whether its just companies "kicking tyres" or they aren't getting the rates approved by their accounts, its disappointing to get the enquiry and not be able to close the deal. The group bookings and the long-stays are the cream for our business as they take the same time to do as a normal reservation but are obviously worth a lot more.

So it was nice last week to finally close a really good booking and one that I didn't expect to. I had one of the travel agent's we look after call me needing help with accommodation in Geelong. Sure, not a capital city and not somewhere we normally look after but for the right enquiry I'll definitely make an exception. Surprisingly, Geelong is extremely busy over the next month or so with a number of events and the agent needed to find 6 rooms for roughly 6 weeks each. Thankfully one of my friends is the Director of Sales & Marketing at the Four Points by Sheraton Geelong and he was able to work his magic, squeeze them in and give me an excellent rate.

I was actually down in Geelong a month or two ago for my birthday weekend and thanks to my friend we stayed at the hotel. Its in a great location overlooking the bay and I had a nice room overlooking the water (pictured below) ... and paid very little including breakfast and drinks. Two months later, a very good booking for them (and us) ... it obviously pays to have me stay at your hotel! :-)

Australian hotel market ... struggling

A couple of signs that show you how much the Australian hotel market is struggling right now.

1. Adelaide didn't fill for the Clipsal
Usually this is a can't miss event for Adelaide hotels. They can charge what they like for rooms, they can enforce a 4 night minimum stay and they usually fill with a few weeks to go. This year, with a week to go almost all of the hotels still had plenty of rooms so they dropped their rates and their minimum length stay requirements. But it was too late and the city didn't get close to filling.

2. Melbourne didn't fill for the Grand Prix
Again, this is usually a very good event for us and the Melbourne hotels. They charge full rack rates and have a 3 night minimum stay. Some of the hotels filled this year but in the lead up to the Grand Prix you could've got a one night stay on the Saturday night (usually the biggest/most popular night) for less than $200 at a 4.5 star property.

3. Canberra didn't fill for Budget
This was probably the most surprising. Canberra has a lot less 4, 4.5 and 5 star hotels than most of the other cities and usually fills at the drop of a hat when Parliament is in session or there is any sort of event happening. Budget is usually the busiest night of the year for Canberra hotels yet this year most of the 4 star hotels and above didn't fill.

Its clear that hotels aren't making adjustments to the current state of the economy. Companies are being a lot stricter with their corporate travel and aren't willing to pay the exorbitant prices that hotels have demanded in the past. Adelaide and Canberra not filling for their biggest events is evidence of that. The motels and the cheaper hotels that don't add massive event surcharges are still filling, its the top end of town that isn't and needs to make adjustments accordingly.

The next big event on the calendar is the State of Origin. I hope the hotels don't expect to get the rates they have been able to in previous years and start to price their hotel rooms more realistically. Looking at what's currently being asked, I'm afraid they will realise this way too late again ...