As markets slowly begin to reopen and leisure demand picks up, specifically on weekends, it is important to look towards business-on-the-books data to see how these markets will perform in the coming weeks and months.
While evaluating past data is crucial for the industry, it is imperative to take a step into the future to see how your hotel may compare against your market or competitive set. STR's Forward STAR reports do just that—look 90 or 365 days ahead with this report to strategize more efficiently by correlating uptake in bookings with your marketing and promotional campaigns, as well as events or conferences in your area.
STR currently has forward demand data for five markets across Australia: Sydney, Melbourne, Sydney Surrounding, Adelaide and Darwin. This is only the beginning of our forward-looking data, as we are continually working to add new markets.
The next 90 days
As of 15 June, when looking at the next 90 days (through 7 September), there is still very little forward occupancy across the four capital cities and the Sydney Surrounding area.
Among the four capital cities, forward occupancy sits below 20% in all markets except Darwin, which shows occupancy above 20% between 27 July and 10 August.
The Sydney Surrounding market, which includes Hunter Valley, Blue Mountains, Wollongong and Newcastle, is outperforming the Sydney market in forward occupancy over the next 90 days. From 29 June through 13 July, forward occupancy is above 25%, but drops under 20% during 27 July through the week of 7 September.
Demand in the market is returning from leisure travelers, mostly seen on weekends and especially during the long weekends—a trend seen across the board for drive-to markets.
A further extension of leisure demand, the initial driver of recovery, is the demand seen during the New South Wales school holiday period (Monday, 6 July to Friday, 17 July), where occupancy during the week is already higher than the arrival period in June.
The next 12 months
When looking at monthly forward occupancy for Melbourne and Sydney, the metric sits below 30% for the next 12 months. October and November show slightly higher occupancy than the other months but is still relatively low.
For the remainder of 2020, Melbourne's lowest business-on-the-books data is currently in December, while Sydney's lowest is in July.
Recovery: What can you expect?
It's important to know that travel and tourism will recover. Social distancing and border restrictions will likely continue to impact travel until COVID-19 is fully controlled. Full-year 2020 data will be extremely low, especially in comparison with 2019 levels.
We expect demand to remain depressed for a longer time period than the aftermath of the global financial crisis in 2007 and 2008, due to a variety of factors such as travel restrictions, social distancing measures and weaker consumer confidence.
In the next six to 12 months, we anticipate demand to recover to about 60-80% of 2019 levels. We do not expect demand to recover to 2019 levels in most markets until 2023.
As of May, occupancy in Australia was slightly higher than April, at 23.2%. ADR and RevPAR, however, were down slightly from April levels, at AUD119.68 and AUD27.80, respectively.
STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality industry. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com and costargroup.com.