Volatility In Investment- The Elephant In The Room

    If investors have seen one thing during this pandemic, it’s volatility. While this term is seen as something to be avoided at all costs, there are times when that’s unavoidable. Those that prosper in these hard times are those that can weather the most volatility without panicking.

    Hospitality was one of the most severely affected industries. These services were hit hard, but while they are still battling, they are far from dead. It’s still unclear how quickly this field will recover due to several factors. One of the major factors is whether or not there are relapses in the virus. Because of this, there are only so many policies that lawmakers can put in place to stimulate growth.

    How Has The Hospitality Industry Bounced Back?

    The industry has quickly adjusted with increased safety regulations, strict housekeeping policies, and digital scheduling and check-in. There may not be as many amenities available, but after months of quarantine, travellers are just looking to get away. The volatility in this investment is therefore mitigated.

    Luxury accommodations have been hit the hardest, with the passengers that are travelling preferring economy. In May, luxury hotels had less than 15% occupancy, while economy hotels were up to 40%. This trend is likely to continue as there are population segments that are still moving. Regardless of the restrictions, these individuals are continuing their holiday plans and are staying healthy. Extended-stay guests and truck drivers are examples of these guests. Economy hotels are also able to cut more expenses and stay open with lower occupancy rates. 

    The strong adaptations and quick adjustments are displays of strength for the hospitality industry. It seems to be a less volatile investment than previously thought, given the way things have turned out for it.

    Who Else Has Weathered Covid, Despite How Volatile Investments Are?

    In Australia, real estate is another industry that is proving to be a less volatile investment. While there are some regions that are struggling, there are others that are swelling not in spite of the pandemic but because of it. Smaller capital cities and key regional centres are the ones that are seeing this growth. They have economies that are set up to withstand shutdown and house sectors that are still hiring during this crisis. Big infrastructure spending is also helping these places thrive.

    Some of the hottest cities right now include:

    • Badgery’s Creek Precinct, NSW
    • Ballarat, Victoria
    • Bendigo, Victoria
    • Marion, South Australia
    • Sunshine Coast, Queensland

    Any hopes that the Virus would quickly disappear have largely faded. Most countries face significant surges during the winter months, an unwelcome fact given the current situation. While vaccines are on the way, for now, the pandemic is here to stay. The investors that do the best during these difficult times are the ones who aren’t afraid of volatile investments. These shutdowns have depressed many markets, but they’ve opened up opportunities in other places for those willing to look.

    To find out more about how the Hospitality and Real Estate investment market are performing, click here!

    Heath Donald
    Heath Donald
    Founder of No Names Digital, Heath is a dynamic and innovative business strategist with the talent, experience and drive to recognise good ideas across a range of industries and transform them into market-busting offerings. With 25 years’ experience, Heath has a deep understanding of what it takes for a digital-age business to thrive, and a rare ability to energise the teams propelling those businesses into the future. Heath’s passion for creating and developing new ventures unlocks potential and yields high returns.

    Latest articles

    Related articles