'Open the borders': Australia's tourism and aviation industries are crying out for help as they try to survive

Tourism operators say they’re struggling to go on during the pandemic. (James D. Morgan, Getty Images)
  • The country’s tourism and aviation sectors have made a plea for help on Thursday as they face ongoing shutdowns during the pandemic.
  • Speaking before a Parliamentary Senate committee, representatives urged federal and state governments to reopen domestic borders.
  • There were also calls for another JobKeeper extension, tax concessions, aviation reform, and a focus on building up grassroots tourism.
  • Visit Business Insider Australia’s homepage for more stories.

Australian tourism is firmly back in the spotlight on Thursday as the sector makes its case for urgent assistance.

Fronting the Senate COVID-19 committee, the industry has laid bare the enormous challenge it now faces.

“We were once a $152 billion tourism and visitor economy. Now in annualised terms we believe, based on the advice we’ve received from Austrade, we could be down as low as $80 billion,” Australian Tourism Industry Council (ATIC) executive director Simon Westaway told the Senate.

“In essence, the visitor economy has halved over the course of this year. It’s obviously very concerning.”

Tourism Accommodation Australia (TAA) meanwhile revealed that CBD hotels are 60% emptier than they were this time last year, with Melbourne and Sydney even worse off. The sector’s rapid deterioration comes despite the “lifeline” offered by the federal government’s JobKeeper program.

While tourism organisations on Thursday said the subsidies had allowed businesses to retain around half their workforce on average, more needed to be done to create real stability.

Specifically, tourism operators see state border closures as the single biggest threat, with Westaway revealing ACTI’s research quantified the cost of closures at $84 million and 700 every day they remain in force. Queensland alone is suffering roughly a quarter of that collateral damage.

Most of Australia’s aircraft remain grounded with nowhere to go.

Accordingly, it was the Queensland, Western Australian and Northern Territory governments that received the biggest tongue lashing of the morning’s public hearing, with TAA chair Martin Ferguson speaking his mind.

“Get through your elections and try and work out how you reopen the state boundaries,” Ferguson said. “We understand that you think it’s electorally popular but start to think about the tourism sector and the huge unemployment that grows and [to which] the boundary closures are actually contributing.”

The plan to revive tourism

Clearly, there’s plenty of room for improvement from the perspective of an industry which is trying desperately to keep its head above water, but it’s not just seeking more money.

“No government handout is going to solve our problems. We are in survival mode,” Ferguson said.

Instead, the sector appears to be in lockstep, calling for whatever it takes to restore stability.

“Without confidence, we really don’t have any sustainable tourism industry to speak of moving forward,” Westaway said, noting Australian consumer confidence remains at an all-time low.

He and the ACTI want a national policy put in place which would force regions or states to reopen after 28 days of zero COVID-19 cases.

The ACTI is also calling for further regional spending with a view to have local and state governments help grow regional tourism, and suggested that another JobKeeper extension beyond March could be necessary.

The TAA meanwhile is calling on the government for tax concessions like removing the food and beverage tax for tourism and accommodation providers.

“For SMEs this would stimulate food and beverage sales right across the country,” TAA CEO Michael Johnson said.

“2020 is a write-off with the first half of 2021 not looking much brighter. In fact, forecasters say it will be up to four years before our industry returns to anything like pre-COVID-19.”

Beyond government support, there’s clearly an urgent need for Australians themselves to actually travel, with the sector noting half of all Australians currently won’t consider taking a trip in the next six months.

“[It’s] about you using your discretionary dollars and backing one in 13 jobs which are actually in the tourism sector in Australia,” Ferguson said. “We’re asking you to also think about booking an experience — it could be a day trip or weekend trip — rather than just sitting at home and engaging in retail therapy and purchasing products made overseas.

“Actually spend your dollars here in Australia, back the initiatives of the Australian government, and in doing so back Australians and keep them at work.”

Rescuing aviation

One of the few industries perhaps doing worse than tourism right now is aviation. Virgin Australia 2.0 has already cut 3,000 staff along with its Tiger Air arm, while Qantas recorded a $1.9 billion after-tax loss and revealed it would layoff 6,000 more staff on Thursday.

Qantas CEO Alan Joyce echoed calls for borders to be opened and the sector to be put back to work.

“Otherwise we’re going to have a cliff that’s going to be bigger than the financial impact that COVID-19 has already caused,” he told media on Thursday.

The country’s airports meanwhile are expected to be losing $300 million every month, according to a submission from peak body the Australian Airports Association (AAA). It is calling for a phased reopening of trans-Tasman routes between New Zealand and Australian states with “low rates of COVID-19 infections” as well as increased rebates and a targeted financial assistance package.

However, the idea of a state-based travel bubble looks improbable with Auckland Airport CEO Adrian Littlewood shooting it down.

“I don’t think a state-to-New Zealand option is likely,” he said. “[It] would require a level of comfort around the state-to-state borders in [Australia],” he added, noting a country-to-country bubble was more likely, albeit it more of a longer-term prospect.

With years of tumult potentially ahead of them, the Transport Workers Union (TWU) also reignited calls for the federal government to step up.

“The aviation industry cannot go on limping along like this with an entirely uncertain future. The longer the Government delays a plan the greater the chance that jobs and businesses might not be saved,” TWU National Secretary Michael Kaine said.

The TWU and its workers have instead endorsed a national plan which includes “equity stakes for struggling businesses, ensuring workers are paid the same rate for the same work, making safety a number one priority, ensuring all airport workers stood down have access to Jobkeeper, and capping CEO pay.”

While Joyce, Australia’s highest-paid CEO, would disagree with the particulars, he along with the rest of the tourism industry would concede something needs to be done.

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