Report paints dire picture for FNQ hotels

interstate tourism ramps up due to its distance from large drive source markets and the slow reintroduction of flights.

“Domestic holiday seekers may choose a more easily accessible and shorter trip option,” it says.

“The five-month wet season also presents a more volatile market and this coincides with the first major recovery period expected in the coming summer and Easter 2021.”

The prediction means hotels, already operating on next to no income, have about a year of slim pickings ahead.

The report lends weight to the push for Cairns Airport, tourism authorities, Cairns Regional Council and the State Government to rapidly open new flights as restrictions ease.

In good news for travellers, room rates are expected to drop dramatically and not rise again until March next year.

Hotel construction is also expected to slow, with only 1300 new rooms to be created over the long term to 2028 – down on the 2000 rooms predicted before coronavirus hit.

Occupancy for this financial year is likely to have dropped 15-20 percentage points lower than the previous year to an annualised level of 50-55 per cent.

Dransfield foreshadows a further reduction in 2020-21 to end that financial year with an annualised occupancy of 35-40 per cent.

“FY2022 will likely see a big recovery as demand blockages unwind and Australians continue to choose to travel domestically in the short term,” the report states.

“We anticipate market occupancy will increase to circa 65-70 per cent, recognising that substantial new supply will have also come into the market at the same time.”

There are glimmers of optimism but they will all take time to materialise.