Hotel rooms could drop up to $120 per night as the hospitality industry faces a long road to recovery after the coronavirus crisis
- Hotel owners and operators could face losses of up to 30 per cent until 2022
- As a result, hotel rooms in Sydney and Melbourne could fall by up to 50 per cent
- Rooms could fall as low as $80 per night in Sydney and $50 in Melbourne
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Hotels will face years of losses as the industry struggles to recover after the COVID-19 crisis, but room prices could fall by up to $120.
Australia's international and state borders have been closed since March in an effort to curb the spread of the deadly virus - forcing many hotels to shut up shop amid the economic downturn.
With overseas travel bans predicted to stay in place until 2021, Australian hotel consultancy firm Dransfield warned that owners and operators could face losses of up to 30 per cent until travel starts to peak again in 2022.
But in an effort to entice local customers once domestic bans are lifted - possibly September, according to the Dransfield report - hoteliers could slash the cost of rooms by up to 50 per cent.
The cost of a hotel room in Sydney could fall by about 50 per cent amid COVID-19 lockdowns (stock image of a hotel room in Sydney)
Rooms in Sydney could drop to $80 per night and rooms in Melbourne could fall as low as $50 (stock image)
Rooms in Sydney could drop to $80 per night and rooms in Melbourne could fall as low as $50.
Rates likely won't start to increase until March next year.
With more than 400 hotels temporarily closed amid the lockdowns, analysts say the recovery period will be slow.
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'The recovery will be gradual and in stages as travel restrictions and social distancing measures are lifted,' the analysis said.
'There remains uncertainty about when these will start within a probable three to nine-month window, and how long it will be before we are largely unrestricted, with international markets taking much longer than domestic.'
With more than 400 hotels temporarily closed amid the lockdowns, analysts say the recovery period will be slow (stock image of a hotel room in Sydney)
Hotels in major cities have been used to quarantine travellers during the coronavirus pandemic (pictured: the Duxton Hotel in Perth which was used to keep travellers isolated)
The number of rooms available in Sydney and Melbourne will also nosedive as about 5,500 hotel developments came to a grinding halt when the nations borders closed.
Each city could have fewer rooms available until 2028.
'Constructions will delay or fail, proposals and future projects won't eventuate at the same speed or volume,' the analysis said.
It also said the impact of COVID-19 on the economy could mean the industry is impacted for years to come.
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