Even spending by domestic tourists – 64% of industry turnover before COVID – fell by a quarter in the first 10 months of 2021 compared to 2019, according to data from Tourism Research Australia. Sydney and Melbourne took the hardest hit, with domestic tourist dollars falling 57% and 68% respectively.
The Omicron variant has not only denied tourism operators the summer revival they have been desperately waiting for, but has also shaken optimism about how quickly the 9 million overseas tourists who had visited Australia each year will return.
“It’s going to be harder to push people off the couch,” says Adele Labine-Romain, senior tourism partner at consultancy Deloitte.
Labine-Romain predicted in November last year that foreign tourists could reach 7 million in 2022, but she now says it will likely be between 3 and 4.5 million.
Omicron has also finally shattered many Australians’ desire to travel again, with no sign of the pent-up demand that was unleashed following lockdowns earlier in the pandemic.
“In 2020 and 2021, each time [lockdown] the people being lifted up would be like chickens coming out of the coop – people were really excited,” she says. “There is a really significant proportion of our population who are waiting a little longer before venturing out again.”
John O’Sullivan, chief executive of Tourism Australia from 2014 to 2019 and now CEO of tour operator Experience Co., which offers boating, diving, skydiving and walking tours across Australia and New Zealand, said said the news from the border is welcome but will not mark an “opening of the floodgates”.
“We know there is pent-up demand, Australia is still leading for many travel markets,” he says. “But…we’re still looking to 2024 to find out when it will return. [to pre-COVID levels].”
The industry’s biggest short-term problem, O’Sullivan says, is staffing shortages, with many of his company’s foreign divemasters, tandem skydiving masters and boat captains returning home overseas. when the pandemic hit.
O’Sullivan only has enough staff to run Great Barrier Reef boat tours five days a week, though he says working holiday visa holders should fill positions when they open of the border.
“One of the strategic challenges now that we’re coming out of it…is how do we get this next generation of workers to say, I want to work in these industries, I see this as a viable career,” he says.
“A lot of people think of tourism as something you do in college, [but] if you go to places like Switzerland or North America, tourism and hospitality are considered long-term careers. ”
O’Sullivan says Australia needs to send a consistent message to the world about travel rules here, with federal and state governments already at odds over whether visitors need two or three knocks.
And the country will have to compete with other destinations to attract visitors, he says, suggesting funding for Tourism Australia should be increased from around $200 million a year to $250 or $300 million to spur a post-COVID revival.
“Every country comes out of this situation and says, ‘How can we make our economy work? Let’s bring in some visitors, but then you have to fight for it,” he says.
Trade, Tourism and Investment Minister Dan Tehan said in a statement that Tourism Australia would launch marketing campaigns ahead of the border reopening to “attract as many tourists as possible”.
Karl Flowers, a tourism and aviation economist who runs Decisive Consulting, says many tourism businesses are currently going through the most difficult period of the pandemic, facing rising labor costs, training new employees and labor. hardware while revenues remain severely depressed.
“The first two-thirds of the pandemic was about loss of demand, and the last third is about loss of demand and increased costs,” he says. “It’s a double whammy.”
Flowers says the country’s handling of the pandemic should reinforce the perception that it is a safe vacation spot, while Australians learning to love their backyards during the border closure will boost volumes of domestic travel in the future. “But like I said, the big issue right now is survival… [and] we’re still not off the hook when it comes to new variants,” he says.
How quickly foreign tourists return will depend on the availability of affordable airfares, according to Morgan Kelly, KPMG’s lead global partner for hospitality, leisure and tourism restructuring.
Airline capacity remains low and the rise of video conferencing will permanently reduce the number of business travellers, whose business class fares subsidize cheaper economy seats.
“If you’re a tourist wanting to come to Australia, it’s probably going to be more expensive,” Kelly says. “There is confusion about border controls… and finally, when we do [get here], operators have their own difficulties in finding staff. ”
Question marks also hang over the return of the cruise ship industry and how the soured Sino-Australian relationship will affect Chinese tourism, which had one in eight visitors before the pandemic.
Still, Aunt Margret Campbell “never felt more optimistic”.
“I never lost hope or inspiration even during COVID,” she says. “I cling to this [Indigenous] knowing and being able to be a keeper and share it are the things that keep us focused and inspired.