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CBD recovery slow, but some silver lining

COVID restrictions on hotels and nightclubs, a scaled-back festival season and lack of international students have all been considerable factors in the CBD’s slow visitor recovery, but positives are emerging, Adelaide City Council says.

Apr 28, 2021, updated Apr 28, 2021
Photo supplied.

Photo supplied.

The latest City & Economic Insights report presented to the council last night shows a 30 per cent drop in night time visitor numbers on Friday and Saturday nights for the first three months of 2021 on 2019 and 2020.

Daytime visits to the city are also down five per cent and overall night time visitors down 20 per cent.

Principal Economy Advisor and report author Leandro Lopez Digon told last night’s council committee meeting that a move by universities to online learning, the lack of international students, number restrictions on hospitality venues and a smaller Adelaide Fringe this year than in 2019 and 2020 had contributed to the significant night time decline.

He said there were some positives in the data such as an increase in the level of city job advertisements over summer and an uptick in city spending in January.

“Even though we are still below the levels of 2019 and 2020, it has recovered quite nicely for the first quarter of the year especially when we compare it to some of the data we’ve seen for other capital cities… but we haven’t quite seen the recovery that we wanted to see,” Lopez Digon told the meeting.

“In the areas where international students live we have seen a bigger drop in the city’s visitation, so that shows the impact of international students on our city economy in terms of day to day spending.”

The quarterly report also showed 127 vacant business premises across the city’s key precincts of Rundle Mall and Hindley, Gouger, Rundle, Hutt, Melbourne and O’Connell streets with an average vacancy rate at April 2021 of 13 per cent.

According to the report, market share of online retail sales in South Australia grew from 12.7 per cent in December 2019 to 16.7 per cent in December 2020.

This contributed to a 12 per cent fall in retail spend in Rundle Mall in the same period and a six per cent drop across major suburban precincts.

Lopez Digon said people were still craving experiences and that was something the council would need to focus on to win them back once COVID health concerns had eased.

“How retail has been impacted by COVID has been significant – you can now buy anything online and get it delivered to your home and that’s definitely going to stay,” he said.

“One thing that is significant across all of the (city) streets is we have seen significant turnover of businesses – some businesses have closed and others have opened and that’s important to understand the changes in not only the number of businesses but the type of businesses that are opening and closing in those streets.”

The chart shows how spending in the city has been impacted more than in SA as a whole, particularly during times of shutdowns. Source spendmapp.com.au

The report showed that residential vacancy rates in the city peaked at 8.49 per cent in mid-2020 and now sits at about 6.54 compared with about 3.2 per cent pre-COVID.

The number of businesses in the council district applying for the first round of JobKeeper reached 3878 in September and reduced to 1401 in the second phase of the job subsidy scheme in January.

“We still don’t know what the impact of the ending of JobKeeper on the 28th of March will be but I think it’s important to remember that it was a big number of people in the city that had to apply to JobKeeper.”

Adelaide Lord Mayor Sandy Verschoor said although Australia had navigated the health impacts of COVID-19 better than most countries it was not exempt from the impacts of some global trends such as working from home.

“The closure of international borders and intermittent closure of state borders has also impacted tourism and international education, and therefore city visitation,” she said.

“However we’re seeing some positive trends and a move towards economic recovery.

“Spend is recovering and office occupancy is looking better than in most major capital cities.

“Significant property developments are in train, such as SAHMRI2, 60 King William and the Marriott Hotel. Council is also progressing 88 O’Connell and the Central Market Arcade Redevelopment, which will further support growth in North Adelaide and the Market precinct.

“We will continue to explore what the latest data means for the city in terms of recovery and growth and the role Council and other stakeholders will play in this important recovery phase.”

The council will hold a more detailed workshop on the report on May 18.

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