The slow process of rebuilding International tourism a year after borders reopened

A year after Australia’s borders reopened to international visitors, numbers remain well below 2019 levels with high airfares, limited capacity and fierce competition to blame.

Global Ballooning in Melbourne, one of hundreds of tourism operators waiting for international visitors to return, a year after borders reopened to overseas tourists.

A year after Australia’s borders reopened to international visitors ending a two-year shutdown, overseas tourists are trickling back — providing they can afford the airfare.

Australian Bureau of Statistics data for December showed short-term arrivals into Australia remained a long way from pre-Covid levels at 60 per cent, while Aussies heading abroad were at almost 80 per cent of 2019 levels.

The tourism industry has identified expensive fares and limited airline capacity as among the biggest impediments to any rebound in international tourism, along with global conflict and fierce competition for travellers.

Research by FCM Consulting showed international business fares were on average 15 per cent more expensive than in 2019, and discount economy 12 per cent dearer.

Australian Tourism Export Council managing director Peter Shelley said there was never going to be an instant rebound in overseas visitors but they had hoped to be a bit further advanced.

“The figures say 60 per cent but we would say it’s more like 50 per cent of 2019 levels because of the visiting family and friends market which our members really don’t see,” said Mr Shelley.

“I think the chase for the global traveller is more competitive than ever, and as a long haul destination, support for tourism businesses to get back into the marketplace is critical.”

His views were shared by chief executive of large tour operator AAT Kings, Ben Hall, who said limited airline seats and high prices meant international tourists were “not booking at the volumes they had hoped or anticipated”.

Mr Hall said at current rates, his company did not expect to be back to 2019 levels until late 2024 or even 2025.

“There was the hope and wish it would rebound quickly but the reality dawned pretty quickly that airlines couldn’t bring planes and people back quickly,” he said.

“It’s a long process to bring back capacity and reasonable pricing and we expect there will be another 12 months of staffing challenges for the industry.”

An AAT Kings’ glass roofed bus carries tourists through Sydney.

Tourism Australia managing director Phillipa Harrison was encouraged by the strength of key markets, with the UK back to 82 per cent of pre-Covid levels and India at 79 per cent.

By mid-year, airline capacity was forecast to be at 85 per cent of 2019 levels, up from 74 per cent in February.

“We always said the tourism recovery wouldn’t happen overnight, but we are optimistic for the year ahead with people keen to travel and reconnect,” said Ms Harrison who unveiled a new $125m marketing campaign titled “Come and Say G’Day” last October.

“The signs are encouraging with one key distribution partner in the UK telling us January was ‘the strongest demand for holiday sales to Australia since borders opened’.”

Tourism Minister Don Farrell shared Ms Harrison’s optimism, saying international travellers had been steadily returning since borders reopened on February 21, 2022.

“Australia is a magnificent place to take a holiday and we look forward to welcoming more visitors, including the ongoing return of Chinese travellers, which will provide a significant boost for our tourism industry,” said Senator Farrell.

He added that the Albanese government was “working closely with industry to help address immediate challenges and support its ongoing recovery and future growth”.

However the role of governments in shutting down the tourism industry through harsh measures such as border closures and lockdown, remained front of mind for many operators.

Victoria-based Global Ballooning director Kiff Saunders said government actions throughout the pandemic had “rocked his confidence” and made him question whether he wanted to rebuild his business to the same level.

“We’re only now reassessing how all of that looks,” said Mr Saunders.

“For us it’s about right-sizing the business but with the additional concern of more oppressive government intervention in people’s lives. It’s a business consideration you now have to factor into your business plan.”

He said pre-Covid, 55 per cent of his clients were international visitors. Since borders reopened that had regrown to about 20 to 30 per cent.

“The India market has picked up quite significantly and the China market which amounted to most of our international market, is only just restarting,” Mr Saunders said.

“There’s a massive issue with Chinese people getting visas under this system where they have to get a certified Covid. That has been a little disappointing and we’re hoping that’s going to be rectified soon.”

Operators were supportive of the work being done by Tourism Australia after the extended shutdown “stripped away” their investments in international marketing.

Mr Saunders said rebuilding relationships in the international space was a costly process, and the government could help by way of travel subsidies.

“I would like to see a recognition of the work we did prior to Covid, in a way that would allow us to re-enter those markets with confidence,” he said.

Tourism Australia forecasts showed international visitor levels should surpass pre-Covid figures of 9 million in 2025, and exceed 11 million two years later.

International visitor expenditure was expected to match the $44.8bn spent in 2019 next year, and climb to $48.8bn in 2027.