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Aussies seek domestic holidays as Travel and Tourism industry plans road to recovery – PayPal study

July 3, 2020 Coronavirus (Covid-19) No Comments Email Email


PayPal Australia has released a new Travel & Tourism Trends Report which reveals the impact COVID-19 has had on consumer attitudes to travel and the Australian travel and tourism industry.

The vast majority of Travel and Tourism businesses (83%) have either had to operate in a limited capacity or temporarily shut down during the COVID-19 crisis. The number of those that reported temporarily shutting down (39%) is triple the average of other industries (13%). At the height of the pandemic in May, 83% of Travel and Tourism businesses reported declines in revenue with an average monthly revenue loss of 61%. This decline in revenue mirrors the impact COVID-19 has had on consumer travel plans. More than three-in-five Australian consumers (63%) had to change or cancel holiday plans due to COVID-19. 

While a small number of Travel and Tourism operators (11%) report that revenues have bounced back to normal, 89% are still feeling the impact of COVID-19 and more than half (52%) don’t expect revenues to return to pre-COVID-19 levels within the next 12 months. It’s not just financials that have taken a hit.  Almost two-in-five Travel and Tourism business operators (39%) report feeling ‘overwhelmed by the impact of COVID-19’ on their business – a figure that’s almost double the average of other industries (21%).

However, it’s not all doom and gloom. Two-in-five Travel and Tourism operators (39%) say they have a COVID-19 recovery plan in place and ready to go compared to 23% of businesses in other industries. And as restrictions continue to ease, Australians are ready to make up for lost holidays. Though many interstate borders are yet to open, 65% are already comfortable to travel within Australia. Two-in-five Aussies (37%) can’t wait to go travelling again and one-in-six (16%) Australians have already started researching their next trip.

Aussies want to back local Travel and Tourism businesses 

Only 4% of Australians said they currently feel comfortable travelling overseas, with the exception of travel to New Zealand (20%) and the Pacific Islands (10%). One-in-20 Aussies (5%) say they will never be comfortable travelling beyond Australian shores again.

The good news for domestic operators is that more than a quarter (29%) of consumers said that even if they could travel overseas, they would rather holiday in Australia to support the local Travel and Tourism industry.

As many as two-in-three Australians (65%) already feel comfortable travelling within their own state, and while only a quarter (25%) of Aussies currently feel comfortable travelling interstate, 70% predict they’ll feel comfortable travelling interstate before the end of the year. This shows Australians across the nation are committed to helping our economy recover from the far-reaching impacts of the pandemic and bushfires which marred the first half of 2020.

PayPal Australia’s Head of Business Marketing, Vanessa Lennon said: “The Travel and Tourism sector usually contributes close to $50 billion annually to national GDP[i]. While domestic travel can’t make up for the absence of more than 8 million international visitors, it can provide a much-needed stopgap to help keep the industry afloat until international borders open again.

 “Australians often see the world first and our own country last. Now is the chance for Aussies to get out and explore our amazing backyard while at the same time supporting local businesses and the Australian economy. Even if a fraction of the 11 million individual overseas trips taken by Australians each year[ii] are converted into domestic holidays, it could make all the difference for businesses on the financial edge due to the impacts of COVID-19, the bushfires and drought.”

Flexibility will be key to attracting domestic travellers with 28% saying they are happy to pre-book now if they know they can get a refund or change their dates. Interestingly, more than a quarter of Australians (28%) would be willing to pay more for a holiday if they knew it avoided health risks – potentially leaving the door open for clever operators to develop and market tailored ‘COVID-safe’ tours and experiences.

Discounts, digital payments and social media will be critical to Travel and Tourism recovery

Despite the challenges that Travel and Tourism businesses have faced over the last months, they are ready to bounce back, with 95% saying they plan to make changes to how they run their business to support their recovery from COVID-19. The top initiatives include: reviewing operating expenses (78%); targeting new customer segments (75%); introducing new products or services (70%) and simplifying or reducing product and service offerings (67%).

Seventy percent (70%) of Travel and Tourism businesses plan to offer more discounts post COVID-19 to support their recovery. This is despite the fact that a quarter of Travel and Tourism businesses (25%) said offering discounts devalues their brand and one-in-five (20%) said offering discounts damages their reputation.

However, offering discounts will be an important recovery strategy with more than a quarter of Australians (26%) saying they expect more discounts on accommodation and tours. Additionally, almost one-in-ten consumers (9%) said they can’t afford to travel at all because of the economic hardship they’ve faced due to COVID-19, so it will be important for businesses to offer affordable options where possible.

Accepting digital payments and selling via social media will also be important measures for businesses to take, as consumers increasingly shift to making online payments. Prior to the pandemic, Travel and Tourism businesses said 66% of their sales were made digitally, however post-COVID-19 they expect 82% of their sales to digital. Furthermore, while only 8% of Travel and Tourism businesses sold via social channels, 30% expect to sell via social post-pandemic – an almost four-fold increase.

Ms Lennon concluded: “The social distancing required to fight COVID-19 has accelerated the move to digital payments by up to five years in the space of a couple of months across most industry sectors. We’ve reached a tipping point were digital payments are now an essential service, rather than a nice to have. 

“2020 has been a tough year for everyone and it has been particularly tough for our Travel and Tourism industry where more than 4-in-5 operators have either temporarily shut down or had to operate in a limited capacity. While not all Australians can afford to travel this year, for those who can, we have the rare opportunity to explore our marvellous continent while at the same time supporting our Travel and Tourism industry and the local economy.”



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