As job openings start to decline, a recovery in foreign tourist numbers and a loosening of visa regulations are already bringing some relief to the Australian hotel sector.
While the busy Christmas vacation season is still anticipated to cause some owners issues, new CBRE data has shown that an increase in visitors has coincided with a fall in the Hospitality Job Advertisement Index, which plummeted by 60 per cent in the three months leading up to July 2022.
The extent of the jobs’ shortage was recently highlighted when Crown Resorts reported 2,000 job openings from a total workforce of 20,000.
According to a report by CBRE, cleaners/launderers and food prep helpers have seen the greatest shortages throughout the industry, with vacancies increasing by 235 per cent and 160 per cent, respectively, from pre-pandemic rates.
While there were still more than 34,000 hospitality related vacancies across Australia in July – more than double the ads recorded three years earlier – the positive trajectory of the job index signals signs of a turnaround, according to Troy Craig, Regional Director of CBRE Hotel Valuation & Advisory Services.
“While the decline in the index has occurred amid inflationary cost pressures and interest rate rises, which may lessen the propensity of businesses to increase wage costs, the overall trend is encouraging,” Craig said.
“A continued rise in international arrivals is expected to bring more desirable conditions for hospitality employment and we expect to see the significant imbalance between worker availability and demand to be largely overcome by mid-2023.
“This is being buoyed by the return of student and working holiday visa holders, aided by recommendations from the Federal Government’s Jobs and Skills Summit to extend visas and relax work restrictions on international students to help solve the industry’s critical jobs shortage.”
According to Retail Trade figures released by the Australian Bureau of Statistics, Australian retail turnover rose 0.6 per cent in August 2022.
The August increase was the eighth consecutive rise and follows a 1.3 per cent rise in July 2022, and a 0.2 per cent rise in June 2022.
Department stores rose by 2.8 per cent to a new record level, while household goods retailing had its largest rise since March 2022, up 2.6 per cent, having recorded three falls in the previous four months.
According to Deloitte’s latest Economics Retail Forecast, retailers are edging closer to a turning point in retail spending.
“Retail is still riding the post-pandemic high, with real retail spending growing 1.4 per cent through the June quarter after an already strong start to 2022,” Retail Forecasts, Deloitte Access Economics partner and principal report author, David Rumbens, said.
“But cracks are starting to show as the economy faces a number of challenges. Retail prices increased 4.8 per cent through the year to the June quarter with the largest price rises seen in food and household goods.
“That left real sales growth up 5.5 per cent over the year, with the spending spree particularly centred around discretionary categories. Indeed, on a quarterly basis, overall retail price growth has already exceeded sales volume growth in both the March and June quarters of 2022.
“The price pinch will continue to be seen in retail over the next 12 months. Indeed, on a quarterly basis, overall retail price growth has already exceeded sales volume growth in both the March and June quarters of 2022.
“The price pinch will continue to be seen in retail over the next 12 months. “While supply side drivers have cooled it will still take some time for year-to price growth to come down to normal levels, though this is expected by late 2023.”
The report noted that a higher share of casual and part-time workers in the retail force is likely weighing on the industry’s ability to retain staff.
CBRE also forecast labour- demand and supply shortfall will largely be overcome by mid-2023.
The COVID-19 and international border closures, according to CBRE’s Head of Hotels Research Ally McDade, have exacerbated the labour crisis.
“Prior to the onset of the pandemic, 23 per cent of temporary workers, 68 per cent of international students and 38 per cent of all working holiday makers were employed in hospitality related roles,” McDade said.
“Pandemic related lock downs also saw rolling closures of most hospitality venues, resulting in many workers leaving the sector in favour of less affected sectors of the employment market.”
McDade said many operators were also thinking outside the box to shore up their supply of workers for the festive season.
This included Australian Venue Co. offering $1,000 F&B vouchers and a $1,000 referral bonus to help fill 2,500 positions to cater for long lead function bookings.