One in three tourism businesses unable to benefit from domestic demand

The March quarter International Visitor Survey (IVS) results still show some value delivered early in the year by international visitors before the borders officially closed mid-March, but overall international spending was down by almost $4 billion in one quarter and visitor numbers down by 28 per cent.

“The March quarter IVS show the last gasps of our valuable export tourism industry as it once was,” Australian Tourism Export Council managing director Peter Shelley said.

“The last time we reviewed these IVS numbers we were looking at record inbound visitation of close to 9 million visitors who delivered over $45 billion in spending to the Australian economy.

“While the industry is fully supportive of a strong health response, all tourism businesses have taken a battering in 2020, especially businesses relying on international visitors which were heavily impacted by mass cancellations off the back of the January bushfires, floods and then the pandemic which all rolled into each other.”

Shelley said Australian tourism businesses which have traditionally had a heavy focus on catering to international visitors will need continued government support to ensure they remain capable of reigniting inbound tourism once borders reopen.

“Not all tourism businesses are capable of embracing domestic tourism as their saviour as many have built their product specifically to service international visitors,” he said.

“Changing their business model requires investment and rebuilding that they simply either do not have or the risks outweigh the opportunity to embrace domestic tourism.

“ATEC’s industry survey shows 48 per cent of tourism businesses derived 60-100 per cent of their revenue from international visitors while 35 per cent say the return of domestic tourism would make no difference to the desperate state of their business viability.

“We believe tourism businesses will need continued wage support along with support to manage ongoing business overhead costs in a period of zero revenue, plus stimulus restart grants. We need to retain support for businesses who are trying to starve off business failure while the international borders are closed which may be as long as a further 12 months, and then marketing funding to help restart our international trade once borders open.”

The Northern Territory was down 70 per cent with just $8 million coming in from international visitors compared with $27 million for the same time in 2019.

The Northern Territory’s overall tourism industry took a $40 million hit in March, with tourism spend in the Territory plunging 33 per cent, from $74 million compared to $110 million for the same time last year. Queensland suffered the biggest drop of 50 per cent.

Tourism Minister Simon Birmingham said tourism businesses and employees have borne the brunt of Covid-19 restrictions.

“Our economic support, including cash payments to businesses of up to $100,000 and the JobKeeper payment, has given hundreds of thousands of tourism businesses across Australia a lifeline to help them get through the COVID-19 crisis,” he said.

“As government considers what future assistance may be necessary beyond September, the best thing that many Australians can do to support these businesses is to book a holiday here in Australia.

“With our international borders expected to remain closed for the foreseeable future, our priority right now is getting Australians travelling to parts where we have successfully suppressed the spread of COVID-19.

“As some state borders begin to open up in the next few weeks, the best thing that can happen for our tourism industry right now, is for people to make bookings and undertake trips to regions where it is safe to do so, because this will help save a small business or the job of a fellow Australian.”