Long Day Care (LDC) in the Early Childhood Education and Care (ECEC) sector in Australia continues to see a drop in occupancy rates this quarter. Occupancy was offset only by Average Daily Rates (ADR) to result in a slight uptick in revenue versus the previous quarter.
The Quarterly Performance Indicators report for Q2-2021 focuses on three key factors: the average daily rate (ADR), the occupancy rate, and the revenue per available place (RevPAP) ratio.
The following cities and states experienced a slight decrease in revenue in Q2-2021 due to a dip in occupancy rates and ADR:
- New South Wales (NSW) decreased by 7.0% due to a 9% drop in occupancy.
- Sydney decreased by 12.6% due to a 16% drop in occupancy.
- Victoria decreased by 1.7% due to a 4% drop in occupancy.
- Melbourne decreased by 7.1% due to a 2% drop in occupancy and 4.8% in ADR.
- Brisbane decreased by 9.1% due to a 9.3% drop in ADR.
Nevertheless, the performance of the following areas saw growth QoQ, which managed to help the country reach an average RevPAP of $5,000 (quarterly) or $83 (daily) per place in Q2-2021:
- NSW and Sydney, because of their existing higher ADR, still managed to achieve two of the highest daily RevPAP, at $87 and $86, respectively.
- South Australia, Tasmania, Western Australia, and the Australian Capital Territory (SA, TAS, WA, and ACT) increased by 3.3% due to the 4.5% rise in ADR, despite a 1% decrease in occupancy. Their daily RevPAP is the third highest at $82.
- Queensland, although having the lowest daily RevPAPs at $77, notably increased its revenue by 8.3%, thanks to a 5% rise in occupancy and 3.5% in ADR.
Daily RevPAP increased across all childcare centres in Australia by 1.6% QoQ, bringing it up to an average of $83 nationally. The national average occupancy rate comes in at 71%, where the national ADR is $117.
The report also tracks the average enrolment durations and proportion of new enrolments per quarter. Overall, there was a 28.6% decrease in Australia’s average enrolments, now at 13 months instead of the previous quarter’s 18.
There is also a 45.4% drop in new enrolments this quarter, now at only 12% instead of 22% in the previous quarter. Data shows a 68.8% increase in the percentage of children on waitlists, with waitlisted children accounting for 3.2% of the total available places. Centres in Brisbane, in particular, have a high percentage of children on waitlists (7.7%).
The performance indicators are defined below:
- Average Daily Rate (ADR): The ADR is the average daily fee charged by LDC centres for a full day of care.
- Occupancy Rate: The occupancy rate of a childcare service is the percentage of licensed capacity (or places) booked for children at any given time.
- RevPAP Ratio: Multiplying the ADR by the occupancy rate provides a ratio that can be utilised to quickly measure operator ‘health’. Relevancy of this ratio increases after 24 months of operation when most services are running at peak capacity.
Download the full report here to access all results and insights.