Jobs at risk as Victoria’s crippled tourism sector faces more COVID pain

There are fears one third of Victoria’s tourism and events sector will cut jobs and 13 per cent permanently shut their doors in the wake of the current lockdown if one thing doesn’t happen.

A third of Victoria’s crippled tourism and events sector will slash jobs and 13 per cent permanently shut their doors if the Federal Government’s JobKeeper program is not extended beyond March.

New research from the Victoria Tourism Industry Council (VTIC) shows just over half the state’s businesses were trading as normal before the third lockdown, with 42 per cent still closed or operating with reduced hours.

The latest snap lockdown has further devastated their financial bottom lines and business confidence.

VTIC - the peak body representing the state’s $32 billion visitor economy - surveyed more than 550 tourism operators on their business performance, outlook, confidence and access to support services, from November to January.

The State of the Industry survey showed a staggering 88 per cent of businesses had accessed some form of government support over the past year.

Of that number, 93 per cent accessed JobKeeper, with 57 per cent still reliant on the Federal program to support employment.

One of Melbourne’s tourist drawcards, Federation Square, is deserted during the latest COVID lockdown. Picture: Andrew Henshaw

In Victoria, the State Government’s Business Support Fund was also vital in sustaining the industry, with 45 per cent of tourism businesses being helped through that program.

More than 20 per cent of tourism businesses received payroll tax relief and 20 per cent tapped into government hospitality grants.

VTIC chief Felicia Mariani said the survey demonstrated the urgent need for continued support for a sector that was on its knees and had not been able to reactivate at the same pace or scale of other Victorian industries.

More than 80 per cent of the businesses surveyed said snap state border closures were proving devastating, with 63 per cent saying they were behind a lack of consumer confidence to travel.

About 60 per cent said events being cancelled across the state had also shattered their tourism businesses.

“What is more concerning is that, over the next three months, nearly half of our operators are

expecting business activity to weaken further,” Ms Mariani said.

“Overall business confidence is poor, with most respondents saying they are fairly or extremely concerned about the outlook for their operations.”

Asked about current business challenges, survey respondents said a lack of forward bookings, cashflow and dealing with cancellations were among their top concerns.

The tourism sector in Victoria is struggling through COVID. Picture: Andrew Henshaw

Mental health and wellbeing, the need to adapt products and services and to redefine target markets also ranked highly on the list of most challenging issues.

“All of this points to the absolute need for a targeted package of support for the tourism and events industry, which will be vital to saving our sector and the 250,000 jobs we underpin in the state – including 110,000 jobs in our regional towns and centres,” Ms Mariani said.

Recent projections showed Victoria could lose more than 85,000 jobs from the tourism sector by September 2021 without extended Government support, she said.

“The end of March will be a flashpoint for our sector, which has only been exacerbated by this recent snap lockdown in Victoria. It is critical that governments engage with industry right now to shape packages that will sustain the industry,” Ms Mariani said.

“The tourism and events sector was the first industry to be impacted by this global pandemic, and will be the last industry to come out from under the weight of its restrictions.

“Our survey, which was conducted prior to the latest lockdown, has clearly identified the damaging impacts on business confidence eventuating from the prolonged closure of rolling lockdowns last year, and the outlook for many operators in our sector remains bleak.”