Exclusive: 1834 Hotels CEO Rodney Harrex unpacks the fuel crisis
The fuel crisis is undeniably reshaping how Australians think about travel. We’re seeing a clear trend toward more deliberate trip planning – guests are consolidating travel, extending their stays to maximise the value of the journey, and being more selective about frequency. On the international front, elevated airfare costs are acting as a natural brake on outbound travel, which is actually redirecting spend back into the domestic market. While the headwinds are real, there is a silver lining for Australian tourism operators in that sense.
Another factor to consider is that the fuel crisis is just one element of the broader macroeconomic environment, over recent years interest rates, increasing house prices and ongoing cost of living pressures have all placed downward pressure on household discretionary income. We are mindful of this and are structuring and focusing to leverage opportunities for our group.
Absolutely. In a general sense, region travel has remained strong however certain properties and regions are feeling the effects of current fuel pricing more acutely. and we’re experiencing this directly across our portfolio. Guests are increasingly drawn to places within a comfortable road trip of major cities. There’s also a lifestyle element at play; regional stays offer a sense of escape and value that resonates strongly in the current climate. Properties in our portfolio that sit within that 2–4 hour drive catchment of capital cities have performed particularly well.
Our approach has been multi-layered. Firstly, we’ve been working closely with individual properties to sharpen their value propositions – ensuring guests feel the stay justifies the cost of getting there. That means investing in the guest experience, packaging stays with dining, wellness or local experiences, and offering extended-stay incentives. Importantly embracing what the wider visit to the regional / experiences offer and work together with other businesses.
Secondly, we’ve been very focused on revenue management – using dynamic pricing strategically to remain competitive without eroding rate integrity. We’ve also deepened our focus on drive markets through targeted regional marketing campaigns and partnerships with local tourism bodies.
Finally, from an operational standpoint, we’ve been reviewing our own energy and logistics costs across the portfolio to manage the inflationary pressure the fuel crisis creates on operating expenses.
We have also been very active at engaging owners across our network, keeping them informed of what we are seeing, what teams are seeing and hearing at a property level engaging with our guests.
My key advice would be: know your drive market and lean into it. Operators who understand exactly who is within a 2–4 hour radius of their property, and who are marketing directly to that audience, are best positioned right now.
Secondly, I’d encourage operators not to race to the bottom on rates. The temptation to discount heavily is understandable but protecting rate while adding value through packages and experiences is a more sustainable strategy. Guests aren’t necessarily unwilling to spend – they just want to feel confident they’re getting genuine value.
Beyond that, keep a close eye on your operating cost base. Fuel impacts everything from laundry logistics to food and beverage supply chains, so there are savings and efficiencies to be found if you look carefully.
Finally, if you are not being impacted currently, do not take that for granted. Make sure you continue to refine your value proposition and stay ahead of the game.