Research Papers

Axsia Research Paper Series

Download our informative research paper that covers topics such as typical hotel management relationships and the hotel market in Australia and New Zealand.

Road to Recovery

The Road to Recovery

There are few industries that have been impacted more than the hospitality and tourism sector. Apart from a few hotels that serviced returning quarantined travellers many have had zero revenue for 3-6 months depending on which state they are located and are still operating below historical levels with most state borders remaining closed.

With depleted cash reserves, reduced asset values and international borders 10+ months away from opening who will make the distance to get to cashflow positive and eventually restoring asset values.

Owners and operators will have to navigate a bumpy road with most likely pockets of outbreaks of Covid continuing for some time. Also, the extent of assistance from Brands will be constrained with so many of their portfolio hotels seeking assistance and with many of the Brands having significantly reduced staff over the last 6 months.

Hotels will also need to devise new strategies to meet the evolving demand, in many cases they will need to be appealing to a different market than they previously have attracted. Be it hotels that historically attracted international guests needing to refocus on the domestic market, or regional accommodation that will be experiencing unprecedented high levels of demand from guests used to international service levels, or many other challenges of operating outside the norm.

The decisions of Owners and Financiers are critical in determining the ability to trade through the next couple of years and to fund the underperformance as businesses recover. But do they have the right strategy, who will be the winners, and therefore who are worthy of continued financial support notwithstanding breached covenants.

Should you require an assessment of your strategy or if you are seeking additional capital either from your bank or other sources, Axsia is able to assist in completing a strategic review for internal use or for 3rd parties such as lenders or investors. Furthermore, through our extensive domestic and offshore client base we can also access additional equity to bridge you through to full recovery.

A Sprint or Marrathon

A Sprint or a Marathon?

As Australia starts to open borders, we expect to see increased business travel along with increased holidaying particularly as the weather improves and Christmas holidays beckon.

But is the Hotel, Tourism & Leisure industry ready for this influx – have they reassembled a suitable team? are they marketing to previous guests? are they leveraging off government and Brand promotional campaigns? do they have property specific campaigns? are they ‘on-market’ with their offering? have they developed Covid safe cleaning and hygiene protocols? These are just a few of the questions that need to be considered with clear implementation strategies developed to deal with the re-opening.

What will be the new ‘norm’? This is very hard to predict. With the potential of further outbreaks of Covid altering the potential market on a daily basis, this means that operators will need to be nimble. Furthermore, with many Brands having substantially reduced their teams, the level of assistance and mentoring available to GMs will be somewhat reduced. As such, owners need to be aware of this raised isolation and work with GMs to establish mentoring networks or bring in specialist asset managers to assist them through the transition.

Whilst it is always an easy strategy to reduce rates to win business, this simple approach can often lead to long term revenue pressure when you try to return to historical rates. As such it is important to have a clear strategy as to how and to whom this is delivered and what the offer includes as this is not just a simple chase for immediate revenue. Decisions need to also consider the impact on the underlying asset value.

As the international borders are opened, the rush to travel is likely to be slow with many travellers wanting to see sustained low levels of Covid before they are willing to pursue international travel, notwithstanding the strong performance (overall) that Australia has achieved in the battle against Covid. This will mean that accommodation usually focussed on international guests may take longer to recover and therefore need to refocus their attention in the shorter term to domestic markets.

In summary, the road to recovery is likely to have many potholes and bumps. It will be those that have a strong strategy and can communicate that to key stakeholders in a clear and concise manner that will get to the end of the road. Those that struggle to adapt may fall by the wayside.

Danger Zombie Area

Is Your Hotel a Zombie?

Coming out of COVID, banks will categorise Hotels as those that can fully recover and those whose recovery is less certain. They’ll continue to support those who can and move to reduce exposure where they need to.

If you believe in your ability to recover you will be required to demonstrate that with a well-articulated and robust recovery plan. Who is your target market customer, what do they want and how can you deliver the experience better than your competitors. Strong cost management is a given, however, recovery in a more competitive market will depend on your ability to align guest expectations.

Front of 4 star Hotel

Are Your Hotel Clients Breaching Bank Covenants?

Are your hotel clients breaching bank covenants? Are they going to be one of the survivors? Can they get back to pre COVID-19 performance? If so when?

Axsia is a specialist Hotel, Tourism & Leisure advisory company. Our team has deep operational experience in the hotel and hospitality sector combined with legal, accounting, property, debt and equity financing capability. We also hold an AFSL and a Real Estate Licence.

Axsia has curated specific expertise to support hotels through their full lifecycle, including:

  • investment and market evaluation
  • acquisition and development
  • operator selection
  • pre-opening strategies and implementation
  • ongoing asset management
  • asset optimisation – operational and overall asset value

Axsia can at your direction provide a tailored evaluation report on an existing hotel (see sample report), support the implementation of recommended corrective action, manage day-to-day operations, mentor staff and provide asset management services.

For more information contact David Simpson or Ian Knight on 03 9013 6991 or email

Rebooting Visitor Economy

Re-Booting the Visitor Economy

The hotel, tourism and leisure sectors have endured considerable hardship over the last 6 months. Having experienced a devastating summer bushfire season on a national level, the sector then became the first significant casualty of the COVID-19 pandemic.

The impact of current lockdowns and travel restrictions over the last six weeks has been disastrous for everyone involved in hotels, tourism and leisure.

yellow hotel corridor

The Hotel Industry Hit Hard

The difficult times are expected to continue well past the relaxation of current travel restrictions and lock-down regulations.

Government financial support is assisting hotel owners bridge some immediate costs. However, the support is not able or sufficient to protect Hotel Owners and Financiers from the anticipated hardship envisaged over the next several years.

Covid-19 Recovery

COVID-19 Recovery – Now’s the time to get your house in order

Pre COVID-19, we saw many hotels that were operating well only because the market was so strong. COVID-19 has changed that. While we expect recovery will take two to 3 years and during that period, competition will be intense.

Hotels that are not well positioned, who don’t have a clear understanding of their target customer and are not delivering product and service that meets customer expectations will struggle to regain market share. Hotels that have their house in order will dominate market share.


Is your Hotel ready?



#Hotel #Hospitality #tourism #recovery

Focus during Covid 19 World

What should hotels be focusing on in this “new world” of COVID-19

Operators and Hotel Management need to make good decisions during periods of crises. A key area of focus for Owners is to ensure the General Managers and the Operator is focusing on the following areas.


  • Ensure Cashflows are planned and maintained with sufficient cash retained to meet requirement in the forced lock down period and start-up
  • Don’t let short term thinking get in the way of longer-term strategy. Coming out of the COVID-19 crisis requires staffing resources ready to go and strong communication between customers and management
  • Utilise the opportunity to re-consider business mix and re-engage staff to a common goal. Well prepared teams will grow back to retain same or even greater levels of market share
  • Re-assess the cost base and ensure that sustainable cuts are implemented to maximise flow through when revenues re- turn
  • Identify short-term tactics that require action, such as Government support, staff and customer communications etc
  • Ensure marketing strategies are in place for the re-opening particularly for corporate clients
  • Where Hotels have been used for COVID -19 isolation or medical accommodation ensure proper cleaning processes have been undertaken
  • Ensure services have been maintained or are subject to a pre-opening maintenance check
  • The focus should be on keeping the Hotel operating wherever possible with scaled down resources; this is critical to a successful


Oversight should be done through either the Owners internal Asset Management team or external Asset Managers.


Independant Directors

Independent Directors – the Good and the Bad!

I am often asked what makes a good Independent Director. After many years of sitting on Boards and advising Boards I have found there are a number of key skills that sets you apart from the rest….unfortunately, there are also some traits that are best not seen in the Boardroom.

The Good
  1. Broad experience – this is sometimes overlooked in the pursuit of specific industry experience. However, I think the need for an Independent Director to be able to draw upon varied experience gained in a variety of industries can enable them to think outside the square, and not necessarily accept what is supposed to be the “norm” in a specific industry. However, NEDs who are not from the same industry are expected to gain a strong understanding of the industry and the Company. If a Board can absorb the cost of two Independent Directors I would certainly try and make sure the second one did have sound industry experience.
  2. Independence – yes, I know it sounds obvious, but it is amazing how many time I see so called Independent Directors that conflict their position. Independent Directors must bring the integrity that comes with independence into their decision making.
  3. Strong communication skills – there is nothing worse than a NED that does not get to the point. Strong verbal communication skills are a must if one is to bring the thought process along a decision path and to influence without being dictatorial. You must be able to explain your point of view in clear and concise terms.
  4. Financial Skills – there have been a number of recent cases where Non-Executive Directors have been heavily criticised, and in some cases charged, for financial negligence. Whilst an accounting degree is not required, the ability to read and understand financial reports and the willingness to seek clarification on any item, is required. Furthermore, an awareness of financial markets is also becoming a desired skill.
  5. Time availability – the days of rolling up to Board Meetings unprepared are a thing of the past, even though in reality they should never have been deemed acceptable. The expectation from other Board Members, Shareholder and the authorities dictate that sufficient time is allocated to understanding and analysing Board Papers. Furthermore, the expectation is that Independent Directors will lead or sit on Committees such as Remuneration, Audit and Risk. The combination of these demands means that anyone accepting a NED role must be able to commit the necessary time.
  6. Understand and manage Risk – this has become a major focus area for Independent Directors. Risk comes in many forms: financial; operations; compliance; and reputation. You need to be able to identify and understand the risk and then ensure the board deals with the mitigation on a timely manner. Ensuring Boards have the right approach to these matters provides the foundation for a risk management culture to permeate through the company.
The Bad

As to the traits I prefer to see left behind, here are my key “no goes”:

  1. Big Egos & Secret Agendas – are at the top of my list. There is no place for this in the Board room, the focus should be on the Company and other Directors should not have to manoeuvre around political agendas and profile seeking NEDs.
  2. Overpowering personalities – often runs in conjunction with the above trait, and typically comes with a dogmatic approach seeking others to agree to all their points of view. This totally undermines any collegiate relationship between board members.
  3. NEDs that think they are Executive Directors – whilst in many cases this occurs without intent, it should be kept in step, as not only will the independence be lost but it can also undermine the relationship with other Executive Directors and CEOs.
  4. Lack of understanding the business – as stated in the desired characteristics this is one of the worst failures. If you want to accept a NED role you must make an effort to understand the business.

These are some of the key areas Axsia Advisory looks for in assessing potential Independent Directors for clients. For more information contact us at