‘A massive blow’: Hidden billion-dollar cost of bushfire crisis

The celebrity donations to Australia’s bushfires are rolling in – but there’s a hidden cost that will affect the economy for years to come.

COMMENT

Australia has been dealt a massive blow with these fires. Even after the first green shoots come up through ashy forest floors, and even after burned out homes start to get rebuilt, the tourism industry will be suffering.

This is a problem because tourism is a huge industry. It generates $110 billion in economic activity every single year, according to estimates by the Tourism and Transport Forum. What’s more, it has been a shining beacon of growth in our economy. With construction suffering and retail struggling, tourism has been surging ahead. That adds much-needed momentum to an otherwise-wobbly economy.

But now, as Australian summer turns to horror, and foreign embassies warn their citizens of danger, tourists are getting worried.

SHOULD I CANCEL MY TRIP?

On the Lonely Planet website, I see tourists asking for advice about changing or cancelling their trip to Australia.

“I am really worried,” said one poster, who had been planning to drive a campervan from Sydney to Cairns with his wife and child. “This seems to be an unprecedented natural catastrophe.”

The fires are getting a huge amount of global attention, with celebrities worldwide raising funds and making huge personal donations, all of which is shared with their millions upon millions of followers around the world. Just this morning I saw Jamie Oliver tweeting about “devastation”.

Jamie Oliver's post was shared with his millions of followers. Picture: Supplied

It’s extremely kind of him to care. But I suspect the many Aussies who run tourism businesses would prefer his millions of fans to see another side of this country.

Meanwhile, the US’ ABC TV network tweeted something showing basically the whole of Australia on fire. That’s … not helpful at all.

Posts like this have not helped our tourism industry's fears. Picture: Supplied

Australia has succeeded as a tourist destination because we are perceived as not only safe but also clean and green. Bushfires are turning that image to ash. Who would want to visit here now?

Margy Osmond, spokesperson for the tourism and transport forum, said the amount of attention the fires had caught globally was “huge”.

“We are currently working on a whole of industry action plan that helps showcase that Australia is open for business,” she said.

“Infrastructure replacement and investment will be key, everything from water, power, roads and national park facilities.... Our priority is to support the businesses and communities that have been directly affected, highlight how many great locations are unaffected and fabulous and make sure the message to locals and international visitors alike Is that we are open for business.”

THE SEASON WE USED TO CALL SUMMER.

A big part of the problem is tourism is so seasonal.

Summer is when foreign visitor numbers spike, as the next graph shows. And who wouldn’t want to come to Australia in summer? Our whole reputation is built around surf and sand and barbecues. The problem is that now, we call summer “fire season”.

Fire season is unfortunately also peak tourist season. Picture: Supplied

When it is summer here, it is cold in the northern hemisphere and the tourists start to flock. The colder it is, the more likely they are to visit us in our summer. Swedes and Finns are three times more likely to visit Australia in summer than in winter. Or at least they were.

Brits are also mad keen on coming here in summer. The number of UK visitors on holiday here traditionally doubles over Christmas and New Year. Chinese visitors – our biggest market – also spike in summer.

But why would a Chinese tourist come to Australia if the air quality is worse than Beijing?

According to the Victorian Government’s tourism marketing plan, “Chinese visitors to Victoria spent $2.7 billion in 2017, representing year-on-year growth of 13.9 per cent.”

GROWTH WE RELY ON

It’s that growth that is really at risk. Nobody thinks tourism is going to fall to zero. But it could start to shrink, especially over summer. And with so many other parts of our economy suffering at the moment, a slump in tourism is the last thing we need.

After all, tourism counts as an export. Just like sending wool or iron ore overseas, foreign tourists spending on hotel rooms, taxis and cruises brings fresh money into our economy. And that helps keep the Australian economy spinning, and keeps us all in work.

More than 3.6 million hectares have been burnt this fire season. Picture: Brett Hemmings/Getty Images

The bushfires will have many impacts – on landscapes, on species, on communities. The hit to tourism is not the most emotional one. But it will be a long-running impact – the damage done to our reputation as a destination. And it will often hurt the very same communities that have been ravaged by fire.

Chinese tourists in particular were just starting to throw off their reputation as stuck in the city, and start spreading some love in rural communities. But if the country is seen as dangerous, any fledgling tourist business stuck in the bush will be at risk of going under – just when the local community can least afford it.

Jason Murphy is an economist | @jasemurphy. He is the author of the new book Incentivology.