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‘Absolutely no end in sight’. Tourism implodes, down 99.7%

June 16, 2020 Headline News No Comments Email Email

Australia’s once thriving tourism industry has been reduced to a barely recognisable ghost of its former self, with latest figures showing a situation so dire, the graphs depicting it would once have seemed a joke or an hallucination.

At least everyone knows the cause – and eventually the situation will recover.

In the meantime, the latest Australian Bureau of Statistics (ABS) Overseas Arrivals and Departures results for April 2020 are worth a glance. They show that Australia’s tourism industry suffered an extraordinary 99.7% decrease on April 2019, the largest fall ever recorded. The graph is now flatlining.

“This is the beginning of what will be a deep and protracted downturn for our export tourism industry and there is absolutely no end in sight,” Australian Tourism Export Council managing director Peter Shelley declared, on seeing the figures.

April 2020 original ABS estimates for short-term trips show the number of visitors arriving in Australia for short-term trips in the month plummeted 99.7% since the same month the previous year, the largest decrease ever recorded.

  • The total was just 2250 trips, with New Zealand the largest source country, accounting for 16% of all visitor arrivals.
  • Overseas visitor arrivals to Australia plunged 99.3% since the previous month to 2200 trips, the largest monthly decrease on record.

Outbound is no better, with residents banned from leaving the country and quarantine in force around the world. The figures show Australian resident returns from overseas decreased 96.8% since the previous month to 17,000 trips, which is the largest monthly decrease on record. Those returning went straight into quarantine isolation.

No vapour trails in clear blue skies

Perhaps the most striking illustration is when you look at the state of New South Wales, the most populous state in Australia and prime gateway to the country by air and sea.

The number of visitors arriving in New South Wales for a short-term trip (less than 1 year) in April 2020 decreased 99.7% since the same month the previous year.

  • There were just over 720 short-term visitor arrivals
  • Largest source countries were New Zealand, USA and UK.

The three leading source countries for short-term visitor arrivals to New South Wales in April 2020 were:

  • New Zealand (150 trips)
  • USA (60)
  • UK (50).

Visitors arriving in New South Wales for a long-term trip (1 year or more) in April 2020:

  • Decreased 99.5% since the same month the previous year
  • There were just over 80 long-term visitor arrivals.

 

Visitor arrivals, short-term trips. Two years from April 2018 to 2020. Source: ABS

 

International Students

The outbreak of COVID-19 which started in China in December 2019, continued to disrupt the movement of international students in April, due to the introduction of travel restrictions in February 2020. In 2019, China was the largest source country nationally. Educational exports are an important contributor to the Australian economy.

Of all arrivals to New South Wales travelling on an international student visa in April 2020, there were just over 10 students, which was a decrease of 16,940 students compared to the same month in the previous year. This was close to a 100% decrease.

Commenting on the overall picture, ATEC’s Shelley commented: “Covid has simply decimated our $45 billion export tourism industry which now faces a very difficult future with many businesses unlikely to last the distance while there is so much uncertainty surrounding the reopening of international borders.

“While JobKeeper is a critical part of the business survival package in supporting the retention of valuable staff, the commercial challenge of meeting the costs of fixed overheads over 12 months without revenue will be a bridge too far for many.

“It’s devastating to see so many small businesses effectively cut down overnight after years of hard yards carving out a profitable business, with many choosing to walk away because the mountain is simply too big to climb for a second time.

“While there is some relief for businesses who can connect to domestic tourists, for many tourism businesses who have built their strength on international visitation, the prognosis is dire.”

Shelley said ATEC’s survey of export tourism businesses across Australia suggests half of these tourism businesses will fail if borders are not opened in the coming six months.

“Domestic tourism simply won’t be enough to plug the $45 billion hole left by our international visitors.

Resident returns, short-term trips. Two years from April 2018 to 2020. Source: ABS

“While most Australian’s will look to holiday at home for the foreseeable future, it can’t be presumed that those people who had international travel plans for 2020 will reinvest that budget toward a domestic trip.

“Consumer confidence, employment insecurity and budget priorities will all be major factors in the spending choices of Australians and travel is likely to be one of the discretionary expenses people choose to do without.

“These issues, coupled with the business costs of social distancing, will put many thousands of tourism businesses under enormous strain and many will simply choose not to reopen or will quickly fail.

“We can see from the ABS data that Australia’s export tourism industry has been a strong and vibrant contributor to the national economy over many years, bringing wealth to regional communities and providing a significant number of jobs – and all of this benefit has now been destroyed.

“The Government’s JobKeeper program has helped to support thousands of tourism businesses to hold on.  We know most of them can remain viable once business returns, but in the meantime they will continue to need support.”

Written by Peter Needham

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