Hospitality industry issues warning about JobKeeper, cites ‘unsustainable’ costs

Hotel and accommodation operators have asked for help, saying COVID-19 has halved occupancy rates at CBDs.

Parliament’s COVID-19 committee also heard “anecdotal evidence” on Thursday of significant job losses in the sector following the end of JobKeeper.

Michael Johnson, Managing Director of Tourism Accommodation Australia said the industry does not have a federal or state safety net to help it deal with the impact of instant lockdowns.

“It comes at a devastating financial, emotional and mental cost to businesses and workers,” he said.

“Many workers have found other jobs in other sectors less exposed to the effects of COVID-19.”

Australia has experienced a strong economic recovery from COVID-19, and Treasurer Josh Frydenberg noted Thursday that 200,000 more people than initial estimates had found work.

But Mr Johnson said 15 percent of New South Wales hotel workers had been made redundant since March, adding to the 25 percent abandoned at the start of the pandemic.

The cuts came mainly from administrative roles that operators could no longer justify, but the sector faced “serious” shortages in frontline cooking and food skills, he said.

“So we have a huge need for people. On the other side, we had highly qualified people who left for other industries, ”he said.

Mr Johnson said that in the Sydney and Melbourne CBD, which relied heavily on business travel, occupancy rates were around 50%.

“The problem is, if (people) are traveling and there is a closure, then they are restricted or placed in a quarantine environment,” he said.

“We’re still seeing a very, very slow recovery in business travel, and the corporate market represents a significant portion of our domestic travel.”

Anthony Brierley, chief executive of the Australian Hotels Association ACT, said unemployment was “nearly 100 percent” in the industry at the start of the pandemic.

Mr Brierley said the federal government’s $ 80 billion JobKeeper program had eased that pain, but agreed there would be “significant job losses” after the end of last month.

“This is anecdotal evidence. I think the ABS data will confirm this in time, ”he said.

He predicted that unemployment would remain at around 11 percent, which equates to around 100,000 jobs.

Mr Brierley also warned that hoteliers’ fixed costs, including rent and mortgages, had returned to or exceeded their pre-pandemic levels.

Coupled with capacity limits, he said the situation for operators had become “unsustainable”.

“Our industry is being asked to do these things with only 50 percent of its customers. It is not fair. It’s not financially sustainable, ”he said.

Mr Brierley said targeted assistance from the federal government had already closed the holes caused by the instant locks, but that was no longer the case.

“There’s a blackout out there and our industry is caught in the middle of it, and people seem to be unaware of the financial situation that comes with it,” he said.

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