How COVID will change Australian travel, tourism industry in 2021

The coronavirus has already had a significant impact on our travel plans but, demand is already returning for one of Australia’s favourite holidays – the cruise.

Domestic airfares are tipped to increase by 20 per cent, while international air travel remains a distant — and most likely very expensive possibility — as the pandemic marches into its second year.

While regional areas within four hours’ drive of Sydney are expected to experience a boom as driving holidays become the norm, tourism and travel industry experts believe in 2021 they will “lose hundreds if not thousands of businesses and the jobs associated with them”.

However, cruise ship advocates say they will focus on tours along the Australian coast and perhaps into the Pacific.

Margy Osmond, who heads peak national tourism, transport and aviation industry association TTF, said the pandemic has created a change in our thinking about holidays and travel.

Cruises for 2022 and 2023 are selling fast.

“I would’ve said three or four months ago that there is an awful lot of pent-up demand for travellers,” she said. “But I think now that there are enough embedded behaviours and uncertainty to make people put travel on the back burner.

“And I would also say that restoring that confidence in the process of travel is going to be a big job and won’t just happen of its own accord.

“I think the government and industry need to work together on this.”

Osmond said people will most likely stay within their own state in the next 12 months and stick to driving within four hours of home.

When people do travel further, she predicts big things for those who can offer a point of difference — such as Indigenous tours.

“People will be looking for something fresh and new and interesting,” she said.

“I foresee very big times for the Northern Territory and potentially for South Australia in areas like the Coorong that are quite unusual.”

Kakadu in the Northern Territory, Big things are expected for Indigenous tourism.

TTF stats reveal that, between Christmas Eve and January 11 in a normal year, Australians would have spent about $5.5 billion on holidays. Border closures sliced a minimum of $3 billion off that.

UNSW aviation expert Tony Webber said airlines will be in balance sheet and profit repair mode and “the best way for them to do that is to pull capacity back and jack up prices”.

“If the domestic market only operates at 60 per cent capacity, then we could see a 20 per cent increase in fares,” the former Qantas chief economist said.

“If capacity increases to 70 per cent, prices will only increase by 10 per cent.”

He also predicts Qantas’ market share will increase from 60 to 70 per cent, meaning people will more likely be using the national carrier for their next interstate holiday.

Australian Federation of Travel Agents chairman Tom Manwaring remains upbeat about the cruise ship industry, saying they have been selling “hundreds of thousands of dollars of cruise ship (tours) a week” for the 2022 and 2023 seasons.

Australians will be holidaying close to home but there is plenty to explore.

“Being on a cruise ship should be one of the safest places,” he said.

“You are in a correct, sterile environment on boarding, you’ve got strict rapid testing and three-day and even embarkation testing.

“Certain cruising domestically, given the low COVID-19 incidents in Australia as we speak, you would think that is a good way and a safe way to enjoy your holiday.”

He expects cruise ships to open to NZ and the Pacific in the second half of this year.

When it comes to overseas travel, experts say everything hinges on the vaccine rollout both here and overseas.

Quest Apartment Hotels chief operating officer David Mansfield said the industry is still holding out hope for international travel.

“We are hopeful there will be a trans-Tasman bubble between New Zealand and Australia — we think that’s more likely to occur in the back half of this year,” Mansfield said.

“All things equal there may also be a travel bubble between us and Singapore and other Asian cities but we are not holding out on that.”

Originally published as How COVID will change Australian travel, tourism industry in 2021