Receive the latest mybusiness news
Copyright © 2020 MOMENTUMMEDIA

Vic accommodation businesses on the ropes following misleading grant program

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
26 August 2020 2 minute readShare
Vic accommodation businesses

Victorian accommodation businesses are asking the state government for clarity after being caught out by its regional tourism accommodation support program, which was slated to help those businesses affected by cancellations arising from the recent lockdowns.

Following its reintroduction of stay-at-home restrictions and border closures across the state, the Victorian government announced the launch of a new initiative to protect its tourism accommodation providers by offering them a grant payment to cover cancelled bookings made by residents who are unable to travel.

According to the criteria, eligible providers are able to apply for funding of up to $225 (ex GST) per night to a maximum of $1,125 (ex GST) per bookable accommodation offering, on the proviso that full refunds are returned to the consumer with no cancellation fees.

However, it now appears that a majority of accommodation businesses may have been caught out by the fine print. 

Bruce Hore, the secretary of the Bright and District Chamber of Commerce, told MyBusiness that over 90 per cent of businesses have been misguided into amending their cancellation policies.

Namely, the initial guidelines, Mr Hore explained, implied that if “all” bookings were cancelled and refunded in their entirety, each booking would be covered by the program to a max of $1,125 per booking. Unfortunately, what was actually meant was that $1,125 max would be issued per bookable “offering”, meaning per booked unit or house in its entirety.

The contested part of the guidelines appears to have been recently updated to now read: “For clarity, the $1,125 cap applies for the full period per bookable offering regardless of how many times the bookable offering was booked or cancelled for that period.”

But Mr Hore explained that most businesses in regional Victoria followed the initial eligibility document.

“Normal process would be for accommodation owners to hold credits for people, unless refunds were requested, to be used at a future date — as was done during bushfires — and this provides a level of cash flow to ride out the gap,” Mr Hore said.

“But to participate in this program, all bookings had to be cancelled and refunded, several thousands of dollars, for only $1,125.”

On top of this, Mr Hore added, is the requirement to hand over a mountain of paperwork to partake in the program.

Mr Hore explained: “This requires days of effort to detail every booking including postcode for only a $1,125 benefit, with Business Victoria recently asking for the information to be updated until 13 September, hopefully to extend the program.

“There are also inconsistencies in the advice when we contact Business Victoria and there is no single source of truth, with some property managers asked to submit one claim for all their properties and another asked to submit one claim per property.”

He clarified that while members of the Bright and District Chamber of Commerce are grateful for the support, this program has required accommodation owners and managers to significantly change their booking cancellation policy during the pandemic, which has adversely affected cash flow.

“There are now accommodation owners that can’t meet their expenses, not because of bad management but because of a program announcement and guideline that was easy to misinterpret, and this needs to be better,” he said.

“We also advocate for the program to be extended by a factor for every month of the pandemic to allow some form of cash flow for these owners/managers.”

Vic accommodation businesses on the ropes following misleading grant program
mybusiness logo
Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

Leave a Comment

Latest poll

How satisfied are you with the SME measures in the federal budget?