You’d think that the Australian tourism industry taking a nosedive this year would seem like an entirely foregone conclusion – with The Bat Kiss, the lasting aftermath of summer’s bushfires, and a recession all weighing on our minds (and wallets). It’s been a rough year for virtually all businesses, but those who depend on tourism for their livelihoods are having it particularly rough.
But the gloom and doom of 2020 hasn’t stopped an honest-to-goodness multi-million dollar hotel sale in NSW’s Byron Bay – something which superficially sounds like fodder for a Betoota Advocate headline, but might actually be a savvy business move and a positive sign for the tourism industry.
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The Guoks, a prominent Singaporean business family, reportedly paid around $18 million for the 28-room property.
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Unsurprisingly, hotels have suffered this year – if no-one’s travelling, no-one’s booking rooms. Many businesses have closed or gone under, with occupancy rates in some cases falling below 20%.
But in the same way that the strength of the stock market is more of an indication of future economic horizons than current realities, this sale could be a bellwether for recovery in the industry.
“This is the first Australian hotel sale to have been negotiated and exchanged during the pandemic period, highlighting continued confidence in leisure and boutique hotel investment opportunities,” CBRE Hotels national director Wayne Bunz relates.
Byron Bay, mainland Australia’s easternmost town and top NSW tourist destination, normally sees around 2.4 million visitors every year. The regional centre has been hit particularly hard by COVID-19, with 90% of hotels forced to close their doors and over 60% of all businesses relying on JobKeeper to stay afloat, The Sydney Morning Herald reports.
Yet the Guoks, longtime hoteliers and seasoned investors, apparently have confidence that summer and beyond will see things go back to normal in Byron. Buying up a boutique hotel while prices are low in anticipation of better days seems like a reasonable business decision – if you can weather the current conditions, that is.
However things are still incredibly uncertain. Time will tell how Australia continues to deal with this global pandemic: Victoria’s currently in the grips of a second wave and NSW is on a ‘knife’s edge’ too. Still, in the grand scheme of things, Australia’s done pretty well – which is what international investors and visitors care about.
“Australia has long been viewed as a politically and economically safe investment destination [and] there has been an added focus in recent months on the country’s response to COVID-19,” Bunz says.
The Bower’s successful sale might just be the breath of fresh air; the inspiration the hotel and tourism industry needs to power through this year. We sincerely hope it’s a sign of better things to come, rather than a business decision that’ll come to seem foolish in hindsight.