03 Jan 2023
Words Christine Retschlag Informer 105

Industry Predictions for 2023

There would barely be a person on this planet who didn’t wish they’d had a crystal ball in the past few years. And while we can’t accurately forsee the future, we can interpret key signals pointing to what’s in store. Christine Retschlag talks to four key industry figures about their predictions for 2023.

Bernard Salt
Leading Australian Social Demographer

In 2023, business hotels are likely to deliver even more digitisation, more DIY, and more efficiencies in order to ensure survival. Nothing in the past 30 years compares with the seismic shift that has defined the post-pandemic hotel experience. Gone is the courtesy newspaper, in some cases the mini bar, and in most cases the in-room dining paper/carboard menu. In has come visibly fewer staff, QR codes to access room service, multichannel TV-andstreaming services that have to be “learnt” to be used, mood lighting that isn’t always simple and/or obvious to turn off, bathroom and shower systems that seem to require an understanding of plumbing logic to operate, and the room service delivery fee.

Anneke Thompson
Commercial Property Research Expert

The recent 75 basis point increase in the US benchmark rate, and more hawkish commentary around future rate rises, means the outlook for a higher cash rate setting in Australia has strengthened. Upon the announcement, the US dollar strengthened against most currencies, including the Australian dollar. This will result in more expensive imports, further compounding our inflation problem. For the local tourism sector, a weak dollar, coupled with high airfare prices and less discretionary spending capacity means more Australians are likely to holiday locally this summer. Our weak currency may also encourage foreign tourists, especially given energy price issues in the UK and Europe this winter.

Phillipa Harrison
Managing Director, Tourism Australia

At Tourism Australia, we are full of positivity about what lies ahead for Australian tourism next year and beyond. There is no doubt that our industry has been through the most challenging time in its history in recent years, but with travel steadily returning to normal levels, the future is looking much, much brighter. In 2019, Australia’s tourism industry was worth $126 billion annually in overnight expenditure from 117 million domestic trips and 9.5 million international visitors. We never expected recovery to happen overnight, but international demand for Australian holidays remains strong and we expect inbound numbers to normalise towards the end of 2023.

Peter Barge
Consultant and Commercial Property Industry Veteran

The best of times and the worst of times are all times of opportunity. The pre-COVID trend of more capital than assets will be flipped and we are already seeing it as higher interest rates, inflation and currency instability causes private equity, fund managers and IRR driven investors to pause to recalibrate strategies. We are also going to see more of our hotel assets converted to residential as new construction costs increase up to 40 per cent in some key markets. The new supply pipeline will continue to be delayed, reduced and abandoned for the foreseeable future. This will further assist profitability. But as I have seen more than 50 years in the industry, readjustments are inevitable for new opportunities to emerge and growth and attractive profitability to bounce back.