18 Apr 2020
Words
MICHAEL THOMPSON Townsville Bulletin
Optimism on the horizon as $4M worth of accommodation of sales get locked in
A specialist accommodation and hospitality agency says more than $4 million in accommodation sales have been recorded in North Queensland since the arrival of COVID-19.
ResortBrokers has sold Ayr Backpackers for $2.5m and the Collinsville Motel for $1.6m, giving the local accommodation industry some optimism as it deals with the double blow of the Townsville floods and now COVID-19.
“After the initial chaos of the travel bans and shutdowns, the phones started ringing again and we’re receiving inquiries from a lot of experienced operators taking a long-term view of both the market and the region,” ResortBrokers’ North Queensland specialist Des Fagg said.
“The experienced operators also now realise that accommodation assets in the north generate healthy returns on investment (ROI) and seem willing to ride out the tough trading conditions caused by coronavirus ahead of an expected bounce back.
“Why are deals still being done? The experienced operators also see the potential of Townsville and the region and its fundamentals, which are underpinned by major infrastructure investment.”
According to the International Monetary Fund, Australia’s domestic economy will rebound by 2021 with a growth of 6.1 per cent after shrinking about 6.7 per cent this year.
Accommodation operator David Esler, who co-purchased Ayr Backpackers and also brought Billabong Lodge Motel on Bowen Rd last year, says the current situation will present major buying opportunities throughout the rest of 2020.
“For buyers who are in a good position with cash available then the next few months will be very interesting, especially in about four to five months,” Mr Esler said.
“Unfortunately there will be operators who need to sell, even with the government concessions, subsidies and loans on offer and this will provide buyers with opportunities.”
Mr Esler said that the Billabong Lodge Motel occupancy was down to levels between 10 and 15 per cent.
