Open borders will help see consumer spending surge by $1bn a week in NSW and Victoria

The nation is poised for a pre-Christmas boom with a $1bn-a-week surge in consumer spending, as airlines post rapid rises in ticket sales.

Sydneysider Susan Griffiths packs her bags for a Monday take-off to the Spanish Canary Islands, where she will see her family for the first time in more than two years. Picture: Chris Pavlich

The nation is poised for a pre-Christmas economic boom with a $1bn-a-week surge in consumer spending across NSW and ­Victoria, as airlines post dramatic increases in flight bookings ahead of international borders partially reopening on Monday.

The Australian understands Qantas has taken close to half a million domestic bookings in the past two weeks, compared with about 20,000 a fortnight in ­August, as it prepares to return 11,000 furloughed employees back to work within weeks.

Virgin Australia has also ­recorded a 280 per cent increase in bookings for international flights and 125 per cent rise in domestic bookings, with the ­Melbourne-to-Sydney route tipped to soon bounce back as one of the most travelled air routes in the world.

Josh Frydenberg told The Australian that Monday was a day to “celebrate” because of the reopening of international borders and the easing of restrictions on the borders between NSW, Victoria and the ACT and this would underwrite a bounce back in the economy.

“Australia’s economy is ready for lift off as millions of Australians get their freedom back. Today is a day for Australians to celebrate,” the Treasurer said.

“With border walls coming down between NSW, the ACT and Victoria, and quarantine-free international travel for the first time since early 2020, Australians are finally reuniting and our economy is coming back.

“Encouragingly, our airlines are seeing some very positive signs of recovery, with Virgin’s ­demand for domestic services soaring 125 per cent in the past four weeks, while Qantas is seeing hot demand for international flights, especially the London and Delhi routes.

“In a sign of the confidence that the reopening creates, ­Qantas will have their 11,000 stood-down workers back at work by the first week of December.”

International travel resumes on Monday from NSW and Victoria, with Australians who are fully vaccinated able to move freely without the need to quarantine.

Mr Frydenberg said that prior to Covid-19, international and domestic tourism was a “crown jewel” in the Australian economy, with the visitor economy (including business and education) worth $166bn. International arrivals topped 8.6 million in 2018-19, with total spending of almost $45bn and an average annual growth rate of 7 per cent.

That disappeared almost overnight following the closure of the international border. Domestic tourism dropped by 30 per cent in 2020-21.

Qantas bookings to Brisbane, Gold Coast and Cairns are up tenfold in the past two weeks, while Jetstar’s recent international sale for travel in 2022 saw 75,000 seats sold in 72 hours.

The airline has also been forced to add 10 return flights to meet the demand for flights between Sydney and London to meet the demand from Australians wanting to return home for Christmas. Demand is also surging for flights from New Dehli, which restart in December.

Virgin Australia said that demand for domestic services had risen 125 per cent in the past four weeks, with 50 per cent of bookings being for flights operating in and out of either Melbourne or Sydney. Demand for Virgin Australia’s international services has increased by 280 per cent since the announcements several weeks ago that borders would be reopening in November.

Qantas and Jetstar’s domestic bookings are expected to increase from around 30 per cent of pre-Covid demand currently to almost 90 per cent for the Christmas period.

Passport applications have risen 100 per cent since August to now number more than 5000 a day, with 102,000 applications made in October compared to 82,000 in September and 53,000 in August.

Sydney resident Susan Griffiths, 46, will be among Australians heading overseas on Monday.

She booked tickets to Fuerteventura, one of the Spanish Canary Islands located off northwest Africa, as soon as she heard the borders were opening. There she will be reunited with her parents and siblings after more than two years apart.

“It’s overwhelming. We would go every year or 18 months. I was supposed to go late last July,” she said.

“(There will be) quite a lot of tears. There are tears even thinking about it.”

Ms Griffiths will surprise her parents in Fuerteventura on Tuesday. They have been told to be home to “sign for a package” just after 6.30pm.

“I reached out to my brother, who is based in the UK. He will be there too but he said ‘let’s keep it a surprise’,” she said. “I am going to be in a taxi as the package.”

Treasury analysis of major bank data has shown that household spending has soared since NSW and Victoria emerged from lockdown, with the economy on track for a strong recovery for the December quarter.

According to the analysis, average spending across the two most populous states increased by $150m a day since both states announced an effective end to restrictions.

In NSW alone, there has been a $1.3bn increase in spending in the first 2½ weeks since the end of restrictions compared to the previous fortnight. In Victoria, spending has increased by more than 10 per cent, or $45m a day, on average.

“Australians are opening their wallets as restrictions ease, given that in NSW and Victoria we saw spending surge by an average of $150m each day compared to what occurred over lockdown,” Mr Frydenberg said. “With their double-dose vaccination rates nearing or above 90 per cent, NSW, Victoria and the ACT are showing the rest of the nation how we can safely reopen to each other, and the rest of the world.”

Trade and Tourism Minister Dan Tehan on Sunday said the first arrival flights on Monday would be carrying Australians who, for the first time since March last year, would not be forced to submit to any quarantine period.

He said foreign workers and students would be among the next cohort returning, with international tourism expected to begin flowing again before Christmas.

“Obviously, we want to make sure that we get all those returning Australians comfortably back home,” Mr Tehan told the Weekend Sunrise program.

“We want to make sure that with New Zealand and Singapore, we’re opening up successfully. And then we want to bring that workforce in that we need, those working holiday visa makers, our agricultural workforce.

“And then hopefully before Christmas, we might even see some international tourists coming, so exciting times.

“We’ve all got to do this safely, but we’re on our way.”

Additional reporting: Angelica Snowden