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Regional tourism has taken a 44 per cent share of Australia’s market with Covid-diversions driving hotel operators and Airbnb revenue up.
The latest CBRE survey shows 58 per cent of high-end regional operators recorded occupancy increases compared to 2019, pushing their average occupancy levels to 91-100 per cent.
The other 42 per cent—the majority with a high reliance on flight access—recorded declines, almost a third of those had a 20 per cent drop in occupancy.
The regional Airbnb market achieved a 46 per cent revenue increase over May to June this year, compared to a 11 per cent decline observed in metro Airbnb markets over the same period.
The highest proportion of guests were travelling within their home state, closely followed by interstate travellers, according to CBRE’s “Regional Travel Renaissance” report.
This was despite the reintroduction of state border closures limiting interstate travel over the short-term, with operators still afforded access to their respective captive state markets—and being well-placed to become potential recipients of displaced interstate travel.
Domestic travel by Australians
| Year | Domestic outbound travel (visitor nights) | Domestic inbound travel (visitor nights) |
|---|---|---|
| 2019 | 181,000,000 | 410,000,000 |
| 2018 | 178,000,000 | 366,000,000 |
| 2017 | 178,000,000 | 347,000,000 |
| 2016 | 165,000,000 | 328,000,000 |
| 2015 | 165,000,000 | 316,000,000 |
^ Source: CBRE, "The Regional Travel Renaissance"
CBRE capital markets hotels director Tom Gibson said tourism was a key driver to Australia’s economic growth, with 44 cents of every tourism dollar spent in regional areas.
“Healthy occupancies observed among the majority of surveyed operators underlines trending growth in demand for local holidaying, most notably destinations within a few hours’ drive of major CBD markets,” Gibson said.
“An uplift in this space will continue to be supported by a displaced domestic outbound holiday market, representing an opportunity for local operators to capitalise on this high-yielding segment.”
CBRE hotels regional director Troy Craig said Airbnb performance also represented a good bellwether indicator for regional travel.
“The bounce in regional RevPAR [revenue per available room] performance over this period reflects pent-up demand for leisure travel as restrictions in most states and territories gradually began to ease,” Craig said.
“The RevPAR uplift in June 2020 across key regional ‘drive-to’ destinations has been underpinned by a strong intrastate market—a market which is likely to become more prominent following recent state border closures that will limit interstate travel over the short-term.”
According to the report, once the New Zealand–Australia travel bubble opens, both countries are expected to strongly compete for more than 1.3 million cross-border visitors—although this bubble has been delayed due to new Covid-19 outbreaks in both countries.
Hotel operators in regional Australia will also look to increase their share of the inbound NZ market, which historically has seen only 25 per cent of NZ travellers stopping over in the regions.
Regional Australia has taken a big bite of the Australian economic pie since Covid-19 hit, with improved house prices, residential rental vacancies and rates on the way up as well as a greater share of young people moving away from major centres.
