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24 June, 2020

ATEC slams federal government’s “unrealistic” view on Australia’s tourism recovery

By Travel Weekly

Australians are being urged to help bring a much-needed boost to the tourism industry by taking a holiday at home this year, but the Australian Tourism Export Council (ATEC) warns it’s not a simple fix for our tourism businesses.

ATEC managing director Peter Shelley said that while the federal government is doing the right thing in urging Aussies to spend their holiday savings at home this year, the idea that it can somehow replace the income the industry derives from international was “unrealistic”.

“Domestic holidays can and will help many Australian tourism businesses, particularly those set up specifically for local visitors,” Shelley said.

“But for those who have strongly invested in the inbound market or who have a business set up purely to service the international visitors, domestic travellers just won’t generate the same income.

“Our research has shown that a third of tourism businesses will not benefit from the domestic tourism market, with more than half of businesses expecting to not be viable within six months without international visitors.

“This is hardly surprising given the average spend of an international visitor is $5,211. It’s just not feasible to think most Australians would spend that amount of money on a domestic holiday in order to make up a $45 billion shortfall.”

Shelley said expectations on the travel budget capacity of Australia’s domestic market are unrealistic given the diminished consumer confidence, perceived economic insecurity and disrupted leave entitlements experienced by many Australians this year.

“We have already seen some tourism products adjusting their pricing to encourage locals to get involved, but this price reduction is often being massively and unsustainably subsidised and not delivering any real profits to the business,” he argued.

“Many other tourism businesses are just not able to ‘pivot’ to the domestic market. They are either exclusively focused on international visitors – like inbound tour operators who build itineraries for international travellers and support and service them during their stay, or tourism businesses which have invested in designing products to appeal to particular international markets.

“Our export tourism industry has been an enormous success and has delivered double-digit growth for much of the last decade.

“What’s important now is that we preserve the export tourism businesses which will form the foundation of our rebuilding so we can reignite that successful growth once international borders are open.”

Shelley warned there would be “very few” export tourism businesses who will benefit significantly from a domestic uptick.

“They definitely won’t be looking at the level of revenue our inbound sector has delivered in the past,” he said.

“While we encourage Australians to get out and see Australia, we need to recognise there are some valuable and otherwise viable businesses which will need government support in order to make it through this long period of hibernation.”

Shelley said the ATEC is currently in discussions with the industry and government agencies to negotiate an extension of industry support to help drag Australia’s tourism industry out of “this huge, dark hole”.

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