Gaming performance has underpinned hospitality recovery in Queensland and NSW pubs, a new CBRE report has revealed.
Gaming in NSW has achieved pre-COVID levels since doors have reopened and Queensland saw an uplift in gaming revenue growth compared to 2019 over the July to August period.
The CBRE report, Thirsty For Business, provides an overview of the national pubs market and also compares key state markets and addresses the challenges facing the sector over the next 12 to 18 months.
Paul Fraser, CBRE Hotels Director and report co-author, said Queensland was expected to see a two-speed economy between metro and regional pub markets, with gaming continuing to perform strongly under challenging conditions.
“Pubs in metro Brisbane are experiencing softer trading conditions as CBD worker numbers remain low, with office occupancy levels sitting between 35% to 45% of pre-COVID levels,” he continued.
“Conversely, there has been a resurgence across key regional tourism markets such as Airlie Beach, the Gold Coast and the Sunshine Coast, with venue operators benefitting from a captive state market and displaced interstate travel.”
First Queensland pub settles during COVID-19
Gaming machine performance was particularly strong during the first two months following reopening, with revenues significantly higher compared to the previous year. Suburban gaming pubs appear to have been the greatest beneficiary of this trend.
“In NSW, non-gaming venues and traditional food and beverage outlets across Sydney and regional NSW will have to rely more so on tourists to spur future performance,” Fraser added.
He noted that Victorian operators, which had clearly been the hardest hit, were beginning to pivot from business continuity towards business reopening as the state government sets out a roadmap to reopen food and beverage and gaming venues.
Victorians are currently spending around 20% less than the national average as a result of the Stage 4 lockdown.
Fears Melbourne pubs won’t recover from COVID-19
” target=”_blank” rel=”noreferrer noopener”>Fears Melbourne pubs won’t recover from COVID-19Western Australia has been a step ahead of the Eastern States, with its hard border with the rest of the country providing a level of certainty around continuity of trade for operators.
Consumer confidence in WA is gradually returning with spending in the hospitality
sector reverting back to positive growth in August.
Despite trade conditions improving across the country, with the exception of Victoria, the pub industry faces a key litmus test over the next 12 to 18 months. JobKeeper payments are being gradually phased out and amnesty periods offered by banks are expiring, and this will place further stress on balance sheets in the future.
Furthermore, rent abatements are due to kick back in with the additional 50% rent to be added to existing rents over the remainder of lease terms.
“Recent times have been some of the most challenging for the pub industry nationally. We believe that this will continue into 2021, putting added pressure on operators in all states,” Fraser said.
“Over the past year, operators have been able to conduct a full top-to-bottom review of their business and overwhelmingly adapt to the challenges they’ve faced and we’ve seen a trading performance bounce back in states where restrictions have been lifted or less onerous.”
Banks have continued to support business continuity over this materially impacted period, but it remains to be seen how far their support extends into 2021. The JobKeeper extension remains a critical source of income for the sector, and further
stimulus will be needed beyond March 2021 to ensure business certainty.
“There is concern for pubs that were struggling pre-pandemic, those that do not have the balance sheet or the cash flow to remain sustainable over the short to medium,” Fraser said.
“Pubs must therefore be leaner, smarter and, more importantly, create a unique place for human connection in order to succeed in this environment.”
Top 10 most profitable pokies pubs in NSW
The latest gaming machine data reports from Liquor & Gaming NSW have revealed the most profitable pokies pubs in the state.
They are:
- Markets Hotel, Homebush West
- Meridian Hotel, Hurstville
- Cross Roads Hotel, Casula
- El Cortez Hotel, Canley Heights
- Berala Hotel, Berala
- Canley Heights Hotel, Canley Heights
- Fairfield Hotel, Fairfield
- The Orchard, Chatswood
- The Crown Hotel, Revesby
- Crown on McCredie, Guilford West
Pictured main: Riverwood Inn