- Australia’s tourism sector is warning it will not be able to stand on its own two feet come April without further government support.
- When the JobKeeper wage subsidy ends at the end of March, the industry says 80% of remaining jobs will disappear while three in 10 businesses face collapse.
- As a major employer and with Australians still chasing refunds from cancelled 2020 travel plans, businesses claim they will be decimated.
- Visit Business Insider Australia’s homepage for more stories.
With borders still firmly shut, the tourism sector is anticipating a hard landing as it contemplates a fiscal cliff.
Operators are now warning that without an extension to the JobKeeper wage subsidy, due to cut off at the end of March, they won’t be able to afford to keep staff on with business still in the doldrums.
“In this our darkest period, we need ongoing support in a renamed, repurposed JobKeeper equivalent for our sector,” Darren Rudd, CEO of the Australian Federation of Travel Agents, said.
“Without it, when JobKeeper ends on March 28, we will see eight in 10 people still working in travel out of a job, and three in 10 businesses having to close with a further 52% uncertain about their future.”
Citing a survey of more than 1500 members, Rudd said nearly half of all agents didn’t believe they would return to profitability until 2023.
There were more than 600,000 Australians still employed by the tourism sector in June, according to the latest AusTrade figures, after more than 100,000 jobs were terminated at the commencement of the pandemic.
It would suggest that hundreds of thousands more jobs remain in the balance if AFTA’s numbers are anything close to accurate. While the job losses would have a major economic impact, they would also further frustrate Australians navigating refunds from 2020, Rudd claims.
“JobKeeper has been critical in helping travel businesses keep the doors open and support customers with cancellations, refunds and credits,” he said.
“Without this, our sector will be decimated, leaving Australian consumers with nowhere to turn to assist with the estimated $4 billion in refunds from global airlines, hotels and tour operators. Collapse of our sector will also leave the country without the skill set to support the COVID minefield of travel once the international border is liberated.”
Despite the public lobbying however, it seems like the government isn’t going to blink. Certainly, calls to reopen international borders without quarantines or vaccines fell on deaf ears.
Treasurer Josh Frydenberg has meanwhile repeatedly rejected the notion of an extension to JobKeeper, and has effectively ruled out thus far any targeted support.
Instead the Morrion government maintains that the exisiting JobMaker credits will be sufficient to subsidise workers in the transition period.
So too has it emphasised the potential upside Australia’s vaccine program could produce. Prime Minister Scott Morrison, and state health officials, have indicated the vaccine rollout, which began on Monday, would at the very least allow state and territory governments to relax domestic border restrictions.
If those promises ring true, the recovery of local travel would help operators retain some staff.
However, with most tourism dollars being spent by international tourists, vaccines will not be able to singlehandedly turnaround the sector’s fortunes overnight.
For example, 70% of travel agent business in Australia comes via inbound visitors. That group is unlikely to return in any significant way before 2022, with the recovery likely to take some time for travellers to regain their confidence.
Independent businesses say they simply can’t wait around until that happens.