The announcement of a $1.2 billion government tourism stimulus package could be just what ASX 200 hospitality shares need.
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With people staying close to home, odds are they won’t be spending much time in luxury hotels. Or eating at the various restaurants these hotels offer. Or taking a punt at their gaming venues.
JobKeeper helped these ASX 200 companies remain afloat and retain key staff. But JobKeeper is winding down as the vaccine rollout begins, and the government eyes an end to the pandemic.
Enter the government tourism stimulus package
Yesterday’s announcement of a $1.2 billion government tourism stimulus package could be just what ASX 200 hospitality shares need.
In an effort to boost economic growth and revive the battered tourism and hospitality industries, the package includes the government providing 800,000 half-price airfares to tourism-dependent areas.
Here’s what Prime Minister Scott Morrison told Today:
We have got to get tourists on the ground and that’s what is going to keep people in their jobs. Just like we have seen in many states where people have been getting in their cars and going to those tourist destinations, we need to get fights to far-flung areas in Cairns, Gold Coast and northern Tasmania and ensure those visitors are getting there…
This package will take more tourists to our hotels and cafes, taking tours and exploring our backyard.
Indeed, with people paying only half price for their airfare, they’ll have more money to spend on a hotel room, their meals and even a little extra punting cash.
ASX 200 hospitality shares could see a welcome lift
A potential influx of cashed-up travellers to areas like the Gold Coast could spell good news for the likes of ASX 200 listed The Star Entertainment Group Ltd (ASX: SGR) and Crown Resorts Ltd (ASX: CWN), among others.
Among its holdings across Australia, Crown Resorts owns the Mantra Crown Towers Resort in the Gold Coast.
Star Entertainment also has assets in major cities and tourist destinations across the nation, including the Star Gold Coast located in, you guessed it, the Gold Coast.
The Crown Resorts share price is edging higher today, up 0.1% in early afternoon trade. Over the past twelve months, Crown shares are up 8.5%, despite some significant recent issues around the company’s corporate governance.
Star Entertainment shares are also moving higher today, up 1.3%. That puts the Star Entertainment share price up nearly 22% over the past full year.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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