Tourism industry’s shock losses as Delta rampage continues
Travel companies are now starting to go under, and industry bosses say more will go the same way if states keep shutting their borders.
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Travel companies that hung on during the first year of the Covid-19 pandemic are now going under, and ongoing uncertainties about state border openings could kill off even more, tourism industry bosses are warning.
Australian Federation of Travel Agents Chair Tom Manwaring said the tourism industry had effectively been in lockdown for the past 18 months, and state premiers were in danger of extending this into next year by continuing to equivocate over the reopening of borders once vaccination rates reach 80 per cent.
Keeping borders closed even beyond that milestone would “decimate” the tourism industry, Mr Manwaring said.
“The agreements that we have been told about by the Prime Minister which have been made by the states should be adhered to, and people should be given that hope that at Christmas they should be able to reunite with friends and family around the country, and in fact internationally,” he said.
Mr Manwaring said the hardships of 2020 for many agencies had been cushioned by strong earnings in 2019, but there was no such offset in 2021.
“Last year, there was still cash in the business to get through. Coming into 2021 there was hope for consistency and confidence returning, and that’s just been shot to pieces,” he said.
“The industry itself has been at negative 95 per cent income for 18, 20 months. Everything has been stretched to the absolute limit.”
The result, he said, was a sense of “sheer exhaustion running through the industry”.
Recent data from the Tourism and Transport Forum (TTF) shows spending is down $5.8 billion per month on domestic tourism, and down $3.4 billion per month on international tourism.
The TTF estimated $8.1 billion is being lost from Pay As You Go tax contributions in 2021 from direct tourism job losses alone.
TTF CEO Margy Osmond said of the more than 600,000 jobs that had been lost in the industry since the start of the pandemic, 150,000 had been lost in 2021 – and a similar number could go if state and international border issues were not sorted out by mid next year.
“Because New South Wales and Victoria are powerhouse states in terms of travellers, while they’re in lockdown every other part of the country else suffers,” she said. “We’ve lost three sets of school holidays in a row, that adds up to something over $14 billion, just for Christmas, Easter and July, and we now have the prospect of losing September, at least in NSW.”
The continuing uncertainties around borders had also changed consumer behaviour, Ms Osmond said.
“Australians were quite famous for planning holidays well in advance and booking way ahead. They don’t do that anymore. You’re now lucky if they book a couple of days in advance. What that means is the industry has got no real capacity to calculate what’s going to happen. You used to be able to plan off the basis of bookings you had. You can’t do that anymore. It’s adding enormously to the streets in the industry,” Ms Osmond said.
Travel agent Elizabeth Ellis’s story is indicative of an industry trapped in a continuing crisis. The agency she manages, Cherrybrook Travel in Sydney’s Westleigh, has had just one new booking over the past two months.
“Our clients have hung in with us, but I’ve had people who have cancelled and re-booked a holiday five times, and we only make the commission on the original booking,” she said.
“So for all the work that goes into cancelling and re-booking and cancelling and re-booking, we’re not making any money.”
“But we have to put ourselves in our clients’ shoes and go: ‘You know what, with these lockdowns, would I book another holiday, and would I risk my money?”
Queensland Tourism Industry Council chief executive Daniel Gschwind said the sector had been feeling a sense of optimism around Easter, but it was short-lived.
“We were all buoyed by a sense that maybe we’d got through the worst and we could start to rebuild, and then all of that hope and optimism fell apart with successive long lockdowns in other states and renewed border closures. It effectively smashed the pipeline that tourism relies on.”
Nowhere was this more apparent than on a recent trip to Cairns, Mr Gschwind said.
“I’ve never seen a more depressing sight. Boats were in port, shops were empty, businesses were closing. There was a complete lack of confidence. A really dire situation.
“For the first time I am seriously concerned we are going to lose businesses permanently out of our industry,” Mr Gschwind said.
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