Australia's Hotel and Tourism Outlook This 2022

The Federal Budget of Australia for 2022-2023 provides some targeted support for businesses in the travel and hotel industry. In addition, the investment in trainee programs and efforts to minimise the cost of living for Australians provide many Australians hope for the future. 

According to Pacific CEO Sarah Derry, "the budget will help the economy, households and community, and is a good step forward."

"We urge the Government to do more for our cities to help them return to stability and to support the skills shortage."

Michael Johnson, the Chief Executive of Tourism Accommodation Australia (TAA), was optimistic about this year's budget's effect on the hospitality industry. However, he also shared his setbacks in unnoticed areas. 

"We were hopeful that we would see a reduction in the beer excise—we haven't seen that, which is disappointing," Johnson told HM (Hotel Management).

"We were also hopeful of some support with FBT in food, beverage and accommodation, which hasn't gone through either. From that perspective, it's been a little frustrating."

International Employees 

The budget has approved an additional 11,000 Working Holiday Maker visas, which is good news for the hospitality industry, which has been crippled by a labour shortage due to border closures. 

Accommodation Association of Australia (AAoA) President, Leanne Harwood, welcomed the move.

"Our sector, more than most, is struggling with the loss of skills and people across all levels," Harwood said.

"While the Accommodation Association continues to invest in developing our own strategies to attract, retrain and retain people, we applaud the increase of country caps for work and holiday visas by 11,000 places. Working holiday makers make up an important part of our workforce, filling 250,000 jobs prior to the impact of COVID."

The AAoA and TAA agreed that it was disappointed that the Working Holiday Maker visa rebate scheme, which is due to end on 19 April, will not be extended.

"[TAA has been] asking for an extension of the incentives for Working Holiday Makers and international students put in place this year to make Australia a more attractive destination," Johnson said.

"We're still working with the government on that, and hopefully, we will have some success."

Paul Hutton, the Vice President of Hilton APAC Area and Head of Australasia, expressed the need for more government action in terms of labour shortages. 

"Our team members are at the core of all that we do, and the availability of labour is the single biggest challenge for our industry right now," Hutton said.

"The industry as a whole has been impacted by the pandemic, and retaining, and re-hiring strong talent is absolutely critical to our recovery."

"Although the relaxation of working visa laws is welcome, we need to see investment in our industry and encourage the Australian Federal Government to do everything they can to expedite visas for hospitality professionals, international students and backpackers."

A Boost in Skills 

The budget included  $365.3 million to create an extra 35,000 trainees to address the country's skill shortage. This is also an extension of the Boosting Apprenticeship Commencement wage subsidy.

As per Johnson, this will be vital in surviving the labour meltdown. 

"I think the increased focus on skills [in this budget] will assist us. There's a lot of indirect assistance that will flow through to industry," he said.

Moreover, Frydenberg also announced $1.6 billion in tax relief to support businesses with less than $50 million yearly turnover to upskill their workers and shift to digital. 

"[AAoA is] currently working our way through the detail of various small business incentives, including the ability to instantly write-off assets which are in place until 30 June 2023, along with the opportunity for businesses with an annual turnover of less than $50 million to benefit from a range of initiatives under the Digital and Skills Tax Boost package," Harwood said.

The $146.5 million budget for tourism includes the formerly announced $75.5 million for tour providers and travel agents. And $60 million for marketing to bring back international tourists, while the $6.8 million will go to the government's Thrive 2030 strategy. 

In addition, Johnson pointed out that additional funds for Tourism Australia are a sure win. 

"That is critical and something that was in our pre-budget requests," he said. "They need that additional funding in such a competitive international arena. That's certainly been positive."

Harwood welcomed these tourism initiatives saying they would help Australia stand out.

"The challenges our hotels, motels and accommodation providers face are not disappearing any time soon, and the sooner we see tourism normalise, the better," according to Harwood.

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