The new Omicron variant of COVID-19 has rattled the travel industry and threatens to set back its pandemic recovery just as airlines, agents and tourism operators were preparing for a summer without border restrictions or quarantine.
Leading travel agents reported a dip in bookings since Friday as customers waited to see if Australia would reintroduce harder quarantine requirements for inbound travellers.
The Omicron variant of COVID-19 has already prompted the return of some international travel restrictions. Credit: Brendon Thorne
With the ongoing uncertainty, Flight Centre managing director Graham Turner said the public were taking a wait and see approach. “New bookings have dipped; people will be waiting the next few days just to see what the government’s announcements will be,” Mr Turner said.
“In the short term there’ll be uncertainty because in the past governments have tended to overreact… and people will be thinking about that before they commit to more travel.”
However, Mr Turner said there had not been a high number of cancellations or requests to reschedule trips, even after NSW and Victoria ordered all international arrivals to isolate at home for 72 hours on Saturday.
“I don’t think that’s going to be a problem for people if that’s the worst that happens,” Mr Turner said. “But what will influence them is our record in the past of chopping and changing [rules] in various states. So people don’t really know what’s going to happen next.”
Mr Turner said it was early days, but the initial indications that the Omicron variant caused only mild symptoms in vaccinated people suggested that widespread border closures or lockdowns should not be necessary.
ASX-listed travel stocks have been volatile since Omicron emerged, with Qantas falling 5.4 per cent, Flight Centre down 7.45 per cent and Webjet down 5 per cent on Friday.
Qantas fell another 2 per cent to close at $4.90 on Monday, Flight Centre closed almost 1 per cent lower at $16.99 and Webjet fell 2.8 per cent to $5.20.
Ord Minnet analyst John O’Shea said confirmation about whether Omicron changed the probability of serious illness and death would be critical to what happens to travel stocks over the next few weeks. “It could be less, it could be more, or it could be the same; but what it does do is create uncertainty,” Mr O’Shea said. “You could argue that the market is shooting first and asking questions later.”
Queensland Tourism Industry Council chief executive Daniel Gschwind said the state’s battered tourism sector was watching nervously ahead of the state reopening to NSW and Victoria on December 17.
“This is a discouraging development... and it will likely affect global travel, which is not what we hoped for,” he said.
“Every time a setback like that occurs it feels a little worse than last time; there is crisis exhaustion setting in with the community and the tourism industry.”
With no international tourists expected this summer, Mr Gschwind said any delay to Queensland reopening to the rest of Australia would be a “devastating blow” to the industry.
“We’ve been told that we need to learn to live with COVID in some way and I hope we demonstrate how that will happen,” he said.
Ryan Thomas, CEO of Ignite Travel which operates the My Holiday brand, said customers remained “calm and rational, at the moment”, with an uptick in domestic bookings but some hesitancy for international travel over the weekend.
“We’ve got our first guests flying to Fiji on the first of December and they’re all still travelling at this stage, even though the quarantine restrictions have potentially changed on the way back,” Mr Thomas said.
Customers who have been in lockdown for much of the past two years were willing to spend a few days isolating at home in exchange for an island holiday, he said, but that would change if it was extended.
A return to mandatory hotel quarantine would be “extremely damaging” to the travel industry, he said.
Luxury Escapes CEO Adam Schwab said his group’s travel and accommodation bookings had been above pre-COVID levels for the past six weeks and had only fallen back in line with pre-COVID levels since reports of Omicron emerged, with no big spike in cancellations.
“There is a degree of confidence that the vaccinations will hold up [against Omicron],” Mr Schwab said. “Australians are pretty sensible now, they tend to wait and see, and I think some of them have seen through the hype and see it actually isn’t that big a deal.”
Mr Schwab said that after previous changes to border and quarantine rules, it took three to four weeks for consumer confidence to bounce back and travellers to start bookings trip again.
“People are desperate to travel,” he said. “What we don’t want to see is government overreaction to every potential variant because we know there are variants coming.”
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