TravelBulletin for June 2021 - Results from the Travel Daily Survival survey, no good news for

JUNE 2021

TRAVEL

SURVIVAL

BY THE NUMBERS The results of the Travel Daily Survival Survey provide a grim snapshot of the travel industry

PLUS NOT MUCH JOY FOR BESTJET CREDITORS AND DETAILS OF NORWEGIAN CRUISE LINE’S NEWEST BUILD

CONTENTS

10

COVER STORY 10 Travel survival by the numbers Travel Daily’s inaugural Survival Survey garnered responses from across the travel industry and presents a bleak picture of how businesses are coping with the ongoing border closures.

Adam Bishop breaks down the numbers.

MONTHLY 02 State of the industry 06 Issues and trends 16 Cruise 20 Last word

COLUMNS 02 From the publisher

06

07 AFTA View

16

18 CLIA View

This month’s contributors Joel Katz, Tom Manwaring Image bottom right: A render of Norwegian Prima ©Norwegian Cruise Line

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travelBulletin JUNE 2021

1

STATE OF THE INDUSTRY

From the publisher Bruce Piper

IN BRIEF

2

EVERYBODY in the Australian travel industry would completely understand it if the entire APT Travel Group (ATG) management team checked themselves in for some well-deserved mental health therapy this month.

Just when we all thought things couldn’t possibly get worse – after a string of bad news announcements including the Federal Budget, Qantas commission cuts and the bungled vaccine rollout – came the shock confirmation that amidst all this ATG had been the victim of a “cyber intrusion”.

As with all incidents like this details are rightly scant, but my reading of the situation is that, as has happened previously to many other organisations with significant IT infrastructure, this involved a phishing email allowing hackers to gain access to the ATG network.

The company has admitted to “assessing reports that a very small proportion of ATG data has been downloaded” and it’s also possible, that as with similar incidents in other companies, the intrusion has seen an unconfirmed so-called “ransomware” demand for a Bitcoin payment to have encrypted systems unlocked.

TTC opens up DMC network THE Travel Corporation (TTC) is one of the world’s largest travel companies, and last month reflected its determination to stay that way with the launch of an initiative opening up its global Destination Management Company network to other travel companies.

The project is being led by Trafalgar CEO Gavin Tollman, who now has the title of TTC

travelBulletin JUNE 2021

Whatever the finer points are, there’s no doubt that this attack could not have come at a worse time for an industry which is already on its knees – and on top of that it coincided with the snap Melbourne lockdown, leaving ATG staff unable to work remotely but also without access to emails or phones.

ATG is cooperating with privacy regulators and working to restore its systems as quickly as possible. Customers have been urged to remain vigilant against any scam emails purporting to be from any of its brands. And most likely by the time you are reading this things will be back to normal.

The company’s response has been utterly professional, but I’m sure behind the scenes there has been plenty of welljustified angst and cries of “how much more can we take?” To Chris Hall and the ATG team, all we can say is that we feel your pain. I’m sure it is cold comfort, but let’s hope that the old platitude “that which does not kill me makes me stronger” proves to be true for you all.

After all this surely your company must be set to emerge from the pandemic looking just like the Incredible Hulk.

President. The move reflects the likely reality of industry consolidation, and makes sense given the extensive resources available to TTC. “During the uncertainty of the pandemic, we spoke to a number of our partners who were looking for an operational solution with the quality, knowledge, infrastructure, consistency and financial resilience to deliver on the ground in a new-post pandemic world,” Tollman said.

“They were excited when they realised we could provide that solution across multiple destinations worldwide, affording them deeper access to the awardwinning expertise and service for which our brands are well recognised,” he added.

The portfolio includes operations in Australia (AAT Kings), North America (Destination USA), Africa (Cullinan, Thompsons and Grosvenor Tours), Greece (Siva Travel), Scotland and Ireland (Brendan Vacations) and TTC’s operations right across Europe, the UK and eastern Mediterranean.

MEANWHILE TTC has also launched a new TTC Groups division, offering agents portfolio-wide access to over 450 trips in 70 countries to power their scheduled groups business.

AFTA seeks new CEO THE Australian Federation of Travel Agents has launched a formal recruitement program for a new CEO, following the shock departure of incumbent Darren Rudd on 1 April. Someone with at least five years of travel industry experience is being sought, with key responsibilities including “creating a financially sustainable organisation focused on delivering value to all members”.

Applications close in early June, with AFTA Chairman Tom Manwaring telling travelBulletin a significant number of “excellent quality candidates” have already applied. “The Board is enthused by the response,” Manwaring added.

“

[Our partners] were excited when they realised we could provide that solution across multiple destinations worldwide, affording them deeper access to the awardwinning expertise and service for which our brands are well recognised

”

Gavin Tollman, President, The Travel Corporation

IBERTOURS BIDS ADIOS!

LAST month’s Federal Budget expectations that Australia’s international borders won’t reopen until mid-2022 were likely to be a factor in the decision for long-time Spain, Portugal and Morocco specialist tour operator Ibertours to gracefully exit the industry.

Founder John Ford, based in Melbourne, said his 30-year industry journey had been a long and enjoyable one, “however the current circumstance, with its great uncertainty and unpredictability along with continued border closures well into 2022 have brought us inevitably to the decision we have taken”.

He said he and daughter Fiona “depart with heaps of fond memories and take this special opportunity to thank all those in our industry who interacted with us and supported our little company over the years’.

ACCC denies QF/JL A JOINT Business Agreement proposed between Qantas and Japan Airlines was last month knocked back by the Australian Competition and Consumer Commission, which cited “significant public detriments” that would likely flow from allowing the carriers to coordinate flights on the Australia-Japan route.

“Granting this authorisation would seem to eliminate any prospect of Qantas and Japan Airlines competing for passengers as they did before the COVID-19 pandemic,” said ACCC Chair Rod Sims.

The carriers vowed to respond to the draft ruling, with Qantas issuing a statement saying the international market was Continues over page

travelBulletin JUNE 2021

3

STATE OF THE INDUSTRY

likely to look very different post-COVID. “It’s our job to convince the ACCC of the merits of this partnership ahead of their final determination,” QF said.

New Express Tickets

TMC consolidation

VISITOR ARRIVALS

Top 10 domestic city pairs, March 2021

Country of residence

City pair

Passengers Passengers % change YE Mar 20 YE Mar 21 (000) (000)

Melbourne-Sydney Brisbane-Sydney Brisbane-Cairns Brisbane-Melbourne Brisbane-Townsville Ballina-Sydney Gold Coast-Melbourne Brisbane-Mackay Adelaide-Sydney Gold Coast-Sydney ALL CITY PAIRS

8,719.1 4,637.1 1,248.7 3,478.2 999.1 423.5 2,050.5 767.6 1,800.8 2,652.1 59,288.7

905.6 702.8 682.8 486.0 460.2 392.4 362.7 350.6 336.3 303.3 12,978.2

RESIDENT RETURNS

Top 10 destinations, March 2021 Original

New Zealand United State of America United Kingdom India Singapore China Tonga Philippines Solomon Islands Germany ALL VISITOR ARRIVALS

-89.6 -84.8 -45.3 -86.0 -53.9 -7.4 -82.3 -54.3 -81.3 -88.6 -78.1

2,060 1,110 810 400 320 260 220 190 160 150 8,320

Top 10 destinations, March 2021

% change - original Mar 20/ Mar 21 -95.7 -96.8 -97.9 -98.0 -97.5 -99.1 -51.5 -96.9 -45.1 -98.7 -97.5

Source: ABS

Country of stay

Original

New Zealand India United States of America Papua New Guinea United Kingdom China Pakistan Singapore Indonesia United Arab Emirates ALL RETURNS

1,760 780 590 490 480 400 330 250 210 180 9,250

% change - original Mar 20/ Mar 21 -98.2 -97.3 -98.9 -92.9 -98.4 -89.2 -91.0 -97.9 -99.7 -95.2 -98.3

Source: ABS

Source: BITRE

Vale Mary Rossi +3

,8 5 - 8 8.6 % 7.

DOMESTIC AIR MARKET Mar 20

Growth % -78.1 -78.9 -72.1 -19.6* -63.2

-

.2 %

3.07m 3.60bn 5.74bn 62.7 43.1

Growth Year end Year end Mar 20 Mar 21 % 2.80m -8.9 59.29m 12.98m 3.14bn -12.9 69.26bn 14.61bn 4.70bn -18.0 86.72bn 24.23bn 66.7 +4.0* 79.9 60.3 37.1 -14.0 624.4 229.7

98

Total pax carried Revenue pax km (RPK) Available seat kms (ASK) Load factor (%) Aircraft trips (000)

Mar 21

.5 %

March 2021

2% -89.

A TRUE doyenne of the Australian travel industry died last month. 95-yearold Mary Rossi had many achievements including founding Sydney-based Mary Rossi Travel, now run by one of her 10 children, Claudia Rossi Hudson. She was also a TV personality and hosted cruise/tours to Europe which opened the eyes of many Aussies to the joy of travel.

-89

Tom Manwaring, CEO Express Travel Group

MAIN DOMESTIC ROUTES

3%

”

DATA ROOM

.2 %

THE corporate travel space is beginning to look slightly less crowded at the top end, after two significant acquisition deals announced over the last few weeks.

The biggest is an agreement between American Express Global Business Travel and Expedia, which will see the online giant’s corporate arm Egencia become part of GBT. The transaction will also see Expedia take a stake in the TMC, and includes a longterm commercial agreement

“

It’s becoming clear that NDC access and flexibility will win the day, and Express Tickets is wellpositioned to take full advantage

between the organisations.

The other “clicks and bricks” deal is the acquisition of Londonfounded Reed and Mackay – which also incorporates the former Concierge Travel Group business in Australia – by online business travel and spend management platform TripActions. Both of the transactions highlight the key role technology is likely to play in managed business travel in the postpandemic future.

-8 6

EXPRESS Travel Group has unveiled a newly branded “Express Tickets” platform for its member agents, based on the company’s previously announced partnership with the Russell Carstensen-led Aeronology travel technology provider.

The new platform offers a user-friendly point-andclick interface, allowing consultants to confidently shop and book tickets as well as complete reissues, undertake refunds and revalidate flights all in the same environment.

The system promises full NDC capability as well as the ability to implement

extensive API connectivity to a range of suppliers including rail, with ETG CEO Tom Manwaring saying “we have taken the COVID period to implement best-in-class ticket and product solutions for our member agents and advisors. It’s becoming clear NDC access and flexibility will win the day, and Express Tickets is well-positioned to take full advantage,” he said.

-90.9%

Continues from previous page

*Percentage points difference

Source: BITRE

-9 6

.8 %

-96.8% -97.7%

INTERNATIONAL AIR MARKET SHARE Share of passengers carried – March 2021

HEADLINES

Singapore Airlines, 19.3% Others, 22.5%

INTERNATIONAL AIR ROUTES Top 10 city pairs, year end March 2021

City pair

03 May 03 May 05 May 06 May 07 May 10 May 11 May 11 May 12 May 13 May

4

Round Two of travel grants NZ and Cook Islands announce bubble Egencia sold to Amex Global Business Travel ACCC blocks Qantas/Japan Airlines alliance Nexus and JobKeeper Helloworld agencies close TTC opens up DMC network Budget forecasts int’l travel from mid-’22 Qantas defers int’l resumption to late Dec Ibertours bids adios

travelBulletin JUNE 2021

18 May 19 May 19 May 19 May 20 May 20 May 21 May 24 May 25 May 26 May

We need 80% vaccinated to travel: Premier Govt extends HLO travel contract Webjet releases nine-month financial results AFTA launches CEO search Qantas slashes int’l commission to 1% VA reveals expanded domestic push Qantas commission cuts only in Aus 1.3 cents in the dollar for Bestjet creditors Seven more domestic routes added by QF TTC adds groups division

Delta Air Lines, 2.4% SriLankan Airlines, 2.4%

Qatar Airways, 15.3%

Air Niugini, 2.5% Etihad Airways, 2.6% United Airlines, 3.9% China Southern Airlines, 5.7%

Air New Zealand, 14.5% Emirates, 8.9% Source: BITRE

Doha-Sydney Auckland-Sydney Doha-Melbourne Guangzhou-Sydney Doha-Brisbane Doha-Perth San Francisco-Sydney Auckland-Brisbane Auckland-Melbourne Singapore-Sydney Top 10 City Pairs Other City Pairs ALL CITY PAIRS

Passengers YE Mar 20 522,120 1,522,674 317,876 343,206 804 281,631 328,847 916,594 1,191,020 1,488,085 6,912,857 33,665,654 40,578,511

Passengers YE Mar 21 66,366 49,270 43,897 35,869 31,827 30,432 29,815 29,423 27,238 26,274 370,411 424,005 794,416

% of total % change 21/20 8.4 -87.3 6.2 -96.8 5.5 -86.2 4.5 -89.5 4.0 3,858.6 3.8 -89.2 3.8 -90.9 3.7 -96.8 3.4 -97.7 3.3 -98.2 46.6 -94.6 53.4 -98.7 100.0 -98.0

Source: BITRE

travelBulletin JUNE 2021

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ISSUES & TRENDS

AFTA VIEW

BESTJET BAD NEWS FOR CREDITORS BESTJET Travel collapsed just before Christmas in 2018 leaving $42 million outstanding to thousands of travellers as well as creditors including IATA, consolidators, GDS companies and other suppliers. Now two and a half years later the Administrators from Brisbane accounting firm Pilot Partners have finalised their investigations, and after a huge amount of work the payout to unsecured creditors will be a maximum of just 1.3 cents in the dollar. The deeply unsatisfying outcome follows months of public examinations, deep forensic inspection of a laptop which remained in the hands of a former employee, and ultimately unsuccessful legal action against the OTA’s former owner Rachel James and her husband Michael, who was the head of Australian Airlines when it collapsed in 2012 owing almost $100 million.

The Administrators successfully recovered some funds, including $3.6 million from credit card processor IntegraPay as well as $165,000 paid in a mediated settlement with Rachel and Michael James over unpaid Sabre rebates in Singapore, but the extensive amount of legal and accounting work involved in the Administration of the failed business amounted to about $2.9 million.

And despite all this, Pilot Partners ultimately concluded that taking further measures would not be cost-effective. The outcome is a balance of just over $900,000 which will be used to pay employees their entitlements and then distributed to the rest of the creditors. Pilot Partners will also not pay any claims worth $50 or less due to the administrative costs, meaning only passengers with tickets costing more than about $3,850 will receive anything at all.

The Public Examinations, conducted in a Brisbane court in 2019, saw many of the players in the collapse testify, including Rachel James and Michael James, who Pilot Partners says may have been acting as a “shadow director” of the business. Also on the stand were the new owners of the company, Robert McVicker Senior and Robert McVicker Junior, who bought Bestjet just six weeks before shutting it down. Testimony included evidence that rather than being a 100%

6

travelBulletin JUNE 2021

sale of the business as originally claimed, the deal actually included an option for Rachel James to buy most of Bestjet back two years later. The examinations also included several staff from the company’s credit card processor Integrapay, IATA’s local chief Matteo Zanarini and Ram Chhabra from CVFR, which was Bestjet’s ticketing consolidator.

Former employees who were examined also included Craig McKim-Hill and David Lanning, with Pilot Partners noting that about 296,000 documents were produced prior to the cases.

Perusing these involved an “extensive of amount of time...to pursue potential recoveries for the benefit of creditors”. The report also detailed legal proceedings in Singapore against Bestjet Singapore, a company owned by the James’. A judgement was handed down by the Federal Court of Australia which formally requested Bestjet Singapore and its bank

to produce management accounts and statements – however “neither Bestjet Singapore nor their bank complied with the notices to produce these documents,” the report noted.

In the end, mediation with Bestjet Singapore resulted in a $165,000 confidential settlement, which Pilot Partners said was a positive outcome because it was achieved “in a more cost-effective and timely way than proceeding to trial”.

Despite Pilot Partners now wrapping up its work, the company said its investigations had revealed that Robert McVicker Junior, Rachel James and Michael James “may have breached their director duties and committed offences pursuant to the Act”. A report outlining the offences that may have been committed, along with the available evidence, has been submitted to the Australian Securities and Investments Commission, while Pilot Partners has also reported Michael and Rachel James to ASIC for failing to provide information in relation to the Company’s affairs. “ASIC’s investigations into the matter are ongoing,” the report concluded.

Tom Manwaring, Interim Executive Chair Australian Federation of Travel Agent

WHERE to from here? It’s a question we’re being asked a lot especially off the back of the reporting of the Federal Budget.

The Government has been talking about safe travel zones for a long time. AFTA has been pushing for more safe travel zones opening sooner rather than later given the mounting economic and social cost of the current approach.

In doing so, we stand alongside many other peak industry bodies, corporate Australia, universities, farmers and primary producers, representatives of other countries and the many, many Australians with family, business interests and friends overseas.

AFTA continues to amplify the compelling need for ongoing support for travel agents and businesses until international travel resumes, especially given the economic contribution we make, the employment footprint our sector has, and the ongoing and increasing consumer and corporate reliance on travel agents for support.

The AFTA Board continues to be actively involved in the fight for a commonsense approach. We recently had Chair Tom Manwaring and seven Directors in Canberra lobbying during Budget week over several days as well as bringing together other interested organisations and stakeholders as part of an alliance summit.

Our message is clear – until international travel resumes, Government must support all of our sector, including via but not limited to the extension of the COVID-19 Consumer Travel Support Grant program. We have come such a long way in terms of making Government understand this but now more than ever we need to keep the pressure on.

Nothing is as it was. We can’t rely on doing things the way we once did pre-COVID, because those days are well and truly gone. As much as we would like the old days and ways to return, the reality is that they can’t and won’t. By working together, by stepping up to the challenges together, and by supporting each other through the necessary changes, we will get through this together.

travelBulletin JUNE 2021

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ISSUES & TRENDS

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“

The reality is that the ongoing paralysis of international travel to and from Australia has hit travel agents and businesses extremely hard, and [the Qantas cuts to commission are] another unwelcome blow

”

AFTA Board

travel to and from Australia has hit travel agents and businesses extremely hard, and this is another unwelcome blow”.

QF noted that there were already several fare types sold by agents which are not eligible for commission, including

domestic and trans-Tasman tickets, corporate fares and group bookings.

“Qantas’ changes to international commission are in line with global trends,” the carrier added, promising to work with the agency community to develop ways to evolve business models and grow again.

“This includes collaborating with the Government and industry as travel bubbles emerge, and working on digital health passes, all of which will benefit the industry in accelerating sales when international travel resumes.”

Igor Kwiatkowski, Qantas Executive Manager, Global Sales & Distribution, said it was expected the change would likely accelerate the growing industry trend towards a “fee for service” model which compensates travel agents for the added value and bespoke service they provide customers beyond the logistics of booking, particularly for managing complex itineraries.

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QANTAS rocked the Australian travel sector’s world last month with the shock announcement that it was cutting travel agent IATA BSP base commission from 5% to 1% on international flights. While the carrier had been increasingly vocal about needing to reduce its distribution costs in recent years, the move still came as a significant blow to the industry which was already reeling from 15 months of COVID-19 disruption, the end of JobKeeper and the Federal Budget forecasts of at least another 12 months before international borders open.

It’s understood that the move will save the carrier some tens of millions of dollars a year, with the clampdown part of a wider COVID recovery plan aiming to reduce annual expenditure by $1 billion. The carrier pointed out it was the first time it had adjusted commission on international fares in more than 15 years, and has given the industry more than 12 month’s notice, with the changes to become effective from 1 July 2022.

With Qantas currently having its entire international fleet grounded the initial financial impact for travel agents in Australia is minimal, but the airline’s move has incensed AFTA which said it had “made strong representations to Qantas on the pressing need to maintain the status quo given travel agents’ primary revenue reliance on international travel and the reality that international travel is unlikely to normalise before mid-2022 at the earliest”. The AFTA Board said it was grateful for the year-long notice period for the changes, but added “the reality is that the ongoing paralysis of international

COVER

Travel Daily’s inaugural Survival Survey garnered responses from across the travel industry and presents a bleak picture of how businesses are coping with the ongoing border closures. Adam Bishop breaks down the numbers.

TRAVEL

SURVIVAL

BY THE NUMBERS 10

travelBulletin JUNE 2021

W

ITH the travel sector on its knees and buckling under the weight of indefinite travel restrictions, last month’s Federal Budget flagging mid-2022 as the likely date for international borders to reopen came as another hammer blow to the sector’s already brittle confidence.

Certainly, companies like Qantas were hopeful of an earlier resumption date for overseas travel, at least for vaccinated Aussies, with CEO Alan Joyce confidently telling a

CAPA Live session in April that the carrier would be back flying most of its international routes

by Oct this year.

However, a slower than anticipated vaccine rollout has stymied Australia’s ability to emerge from the fog of COVID with any great haste, with the scars of 2020 rapidly morphing into a two- to three-year proposition.

And amidst the gloominess, the Federal Government has been pilloried by many within the travel industry for failing to put together a coherent roadmap

out of the fortress state that Australia now finds itself, while many countries around the world in the meantime begin to take their first exploratory steps into the light toward some semblance of travel normality.

Lamentably Australian travellers can only dream about when this might materialise.

Only a few weeks ago, the Council of Australian Tour Operators begged the government to stop leaving the travel industry in limbo and put forward a clear framework for the sector to plan around. Likewise,

travelBulletin JUNE 2021

11

COVER the Australian Tourism Export Council (ATEC) expressed its “dismay” at the lack of government clarity regarding the steps required to reboot international travel.

In a strongly worded letter addressed to the Prime Minister, ATEC said there was a “desperate need” for a government plan by which travel companies can actively strategise around to ensure their short- and long-term business survival.

For its part, the government has been keen to portray the issue as a binary debate weighting health against economics, with Prime Minister Scott Morrison repeating the phrase ad nauseam that the borders will only reopen “when it is safe to do so”, providing very little in the way of details or certainty for the travel industry.

Meanwhile the Australian Chamber of Commerce and Industry has played its part to advance the conversation, submitting a roadmap to the government to unlock international travel that is tightly tethered to the country’s vaccine rollout. The plan incorporates a combination of risk zones based on the number of active COVID cases, vaccination status and self-isolation/ quarantine scenarios.

But whatever the plans being proposed, for the moment at least the government is either unable or unwilling to put something tangible on the table, leaving the many thousands who work in travel to ponder what their collective futures will look like well after the pandemic subsides, or indeed if they even have a future at all.

In order to gauge how the industry is coping, travelBulletin’s sister publication Travel Daily recently launched a Survival Survey in a bid to gather an accurate snapshot of how people in the

12

travelBulletin JUNE 2021

“

For the moment at least the government is either unable or unwilling to put something tangible on the table, leaving the many thousands who work in travel to ponder what their collective futures will look like well after the pandemic subsides

”

sector are reflecting on their plight and how they feel it will change in the future.

The findings were far from shocking given the unprecedented ructions caused by the health crisis, but nonetheless the data still painted a grim picture of where sentiment is at the moment among those working in the hard-hit sectors of travel and tourism.

Perhaps highlighting this sombre mood more than any other data point was the 53.6% of respondents who revealed they were either undecided about staying on in travel or would be exiting the industry altogether in the next 12 months.

Sadly, the bulk of those surveyed have worked in the travel and tourism space for more than 30 years (35.4%), suggesting that the COVID crisis may bring on a major sea change for thousands of people late in their careers. More than half of the respondents were aged over 50, with 16.4% aged between 31 and 40, and only a small fraction (3.4%) aged under 30. The employment crisis facing the sector would also appear to be a gendered one, with close to 70% of those taking part in the survey being women.

Some of the likely factors driving this change around career changes include a major drop off in salaries and business revenue.

The results showed three quarters of travel workers are now earning less than they did back in 2019 before the pandemic struck,

Travel businesses total sales for 2019 $500K - $1m $1m - $2m

17.2% 28.9%

$2m - $5m $5m - $10m

9.8% 7.2%

$10m - $20m $20m - $50m 1.5% 0.2%

Rather not say

3.5%

How much did your sales decline year-on-year in the worst month since March 2020?

51-60% 61-70% 71-80% 81-90%

41-50% Less than 30% Rather not say

Now: How much were your sales down in April 2021 compared to April 2019?

41-50% 51-60% 61-70%

Less than 30% Rather not say

71-80%

More than 90% More than 90%

81-90%

Workforce pre-COVID

53.6% of respondents undecided or exiting the travel industry in the next 12 months

employees on average in travel businesses pre-COVID

3.9%

$50m - $100m $100m - $200m

6.2

14.1% 13.7%

Less than $500K

while 17.6% said they were on the same amount of money, and only a precious few (7.1%) said they were now earning more in 2021 than they did in 2019.

This reality is illuminated by the dramatic shift in the employment status of workers in the industry, with full-time jobs dropping from 80% before the travel shutdown to half that proportion currently.

In turn this has seen a steady climb in the number of part-time or casual staff working more than

20 hours a week, increasing from 11.9% before March 2020, to 22% at the moment.

Travel businesses also indicated just how severe the impact of the travel shutdown has been on their bottom lines, with 93% of companies conceding their worst month since the pandemic struck saw a plunge of more than 90% in year-on-year sales.

Unfortunately, the figures do not suggest most of that financial damage is in the rear vision

2.78 employees on average in travel businesses currently

mirror either, with sales for April 2021 still a shadow of the same period in 2019. Close to 60% of businesses stated their sales were down more than 90% when compared to April 2019, while 22.6% said the number had dwindled by between 81-90%.

The results also reveal that the size of travel companies have shrunk considerably since the health crisis began, with the average number of staff employed dropping by nearly two thirds, from 6.2 to only 2.78 employees.

While revenue has clearly taken a sizeable hit, the travel industry has at least by and large managed to access the Federal Government’s JobKeeper program, a vital lifeline that has helped the vast bulk of businesses in the space stay afloat. The survey showed the government support program was widely subscribed, with more

travelBulletin JUNE 2021

13

COVER than nine in 10 travel companies indicating they were able to access the key government assistance while it was available to the end of March 2021.

However, the picture for the subsequent COVID-19 Travel Support Program appears far less clear, with the number of companies getting knocked back for funding increasing between round one and round two by about 18 points, from 27.4% to 45%.

The reasons for being rejected for the second round of funding included not qualifying or applying for the first round (27.8%), or because an applicant received funding in the first tranche based on Total Transaction Revenue (TTV), the latter being the result of government confusions about how the industry operates which saw funds distributed disproportionately in the first round. The data showed that 11% of respondent businesses received the full $100,000 in the first round of Travel Support Program, while around a quarter received between $10,000 and $100,000 in grants, and 15% were allocated less than $5,000.

The allocation in the second round however appears to have been far less fruitful, with only 3.3% of respondents stating they had received the maximum amount of between $80,000 and $100,000, and around a

More than 9 in 10 travel businesses accessed JobKeeper right until the end of March 2021

Nothing or was not eligible

Less than $5,000 15.7%

27.4%

14.6%

$100,000

6.7% 9.1% $10,000 - $20,000 11.1%

$80,000 - $100,000

travelBulletin JUNE 2021

6.7% 2.2% 3.5%

$80,000 - $100,000

3%

$20,000 - $40,000

$40,000 - $60,000 $60,000 - $80,000

What did you recieve in Round 1 of the COVID-19 Travel Support Program?

Almost 1 in 5 (17.2%) travel businesses didn’t qualify for Round 2 of the COVID-19 Travel Support Program due to receiving Round 1 funding based on TTV. 14

$5,000 - $10,000

quarter of applicants being granted between $20,000 and $80,000.

When it came to what businesses in travel and tourism were spending this emergency funding on, many used the cash for a number of different purposes. Paying technology suppliers of GDS, internet, and computers etc. topped the list for 73% of respondents, followed by paying staff (62%), catching up on

rent (50.9%), keeping food on the table (49.7%) and paying client refunds (37.4%).

Meanwhile the Federal Government’s small business loan offered under the SME Recovery Loan Scheme has seen very few travel businesses apply, with close to 90% opting not to take advantage of the initiative. A minuscule proportion of just 3% of respondents had loans approved, while 7% had their applications rejected.

Two in five travel business also conceded they had not been able to access any alternative forms of financial relief, with only a quarter of companies able to successfully negotiate rental relief from their landlord and 35% said they received state or federal government cashflow bonuses.

While funding has played an important role in keeping the sector alive, many businesses have continued to fall away, some by financial necessity while others have simply made the decision to shut up shop proactively.

For those intent on survival, some have made the decision to weather the storm by stepping out of their comfort zone and starting a unique side hustle, with plucky owners pivoting their sales models

30%

of survey respondents have engaged in a side hustle

What travel businesses spent funds from the Travel Support Program on

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in a variety of weird and wonderful ways in a bid to open up new revenue streams.

Fostering this can-do spirit has been the Australian Travel Agents Co-operative (ATAC) which launched the ATAC Community Market last year, supporting travel agents promote new businesses ideas to help make ends meet.

Agents have so far turned their hands to everything from piemaking, baking home-made muesli to crocheting blankets, proving again the ingenuity and resilience that exists in the travel sector, with survey data supporting this view by showing that 30% of survey respondents have so far engaged in a side hustle.

But it’s not only travel companies that have been dented by the pandemic, with the survey not painting an optimistic picture for the Australian Federation of Travel Agents (AFTA) either. While 78.7% of businesses indicated they were an AFTA member before March 2020, only 54.6% said they would definitely continue their

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membership under the current renewal round. 17% of respondents said they were on the fence about subscribing for another year, while close to 10% suggested they would not be renewing.

The figures from the Travel Daily Survival Survey reflect the current feeling in the industry which, after 15 months of the pandemic, is understandably pretty bleak. And just as Rome wasn’t built in a day, the travel and tourism sector is unlikely to be rebuilt swiftly either.

Will you renew your AFTA membership?

N/A

Maybe

Yes

No

travelBulletin JUNE 2021

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CRUISE

CHAOS IN THE KIMBERLEY KIMBERLEY cruise seasons were scattered across the proverbial floor last month, with both confirmations and cancellations rife, while others played their cards close to their chest.

Scenic Luxury Cruises & Tours was the first to go, pulling the plug on its highly anticipated Kimberley season midway through the month, denying Australians their first chance to board Scenic Eclipse in local waters.

The cruise line said there remained “too much uncertainty about the lifting of restrictions on cruising in Australian waters”.

Ponant expressed perhaps the most positivity of Kimberley

operators, albeit slightly veiled at that, saying it was “optimistic it will be able to operate its forthcoming Kimberley season”, despite cancelling four sold-out departures in June and early July, due to the uncertainty around the easing of restrictions.

Chairman Asia Pacific Sarina Bratton continued to be enthusiastic regarding the season, saying Australian destinations would provide a lifeline to the travel industry, which is desperate for products to sell.

Similar positivity was initially seen from APT, which early in the month confirmed its Kimberley Expedition season

would commence in June aboard Caledonian Sky, which with a capacity of 99 passengers ducks under the exclusion faced by larger ships.

Unfortunately, the company was forced to perform an abrupt about-face less than a week later, when it confirmed the cancellation of the first of its voyages on 2 June due to an enforced amendment of its crew protocols by the Australian Government.

Other operators including Silversea are remaining tightlipped, with the industry on tenterhooks as CLIA and other stakeholders work behind the scenes to secure the season.

©Ponant / Nick Rains

RSSC DROPS LOCAL SEASON REGENT Seven Seas Cruises has been forced to suspend its previously planned 2021/22 Seven Seas Explorer season in Asia-Pacific, with the ship to instead take over three of Seven Seas Mariner’s cruises from October in Venice.

The highly anticipated program, which featured 14 all-inclusive itineraries between October this year and April 2022, was set to see the vessel make her Australian debut, but instead, RSSC is the first big seasonal overseas cruise line to fall victim to the Australian Government’s total cruise reticence.

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The cancellation is part of RSSC’s return to service plan, which will also result in Seven Seas Voyager’s 2021/22 season in Africa and South America suspended, with Chief Executive Officer Jason Montague saying the pandemic’s lingering effects in different parts of the globe forced the cruise line’s hand.

“We’re excited to share with you our plan which will see all of our ships back in the water by early 2022...unfortunately this does mean we’ve had to make some difficult decisions,” Montague said.

NORWEGIAN UNVEILS PRIMA, FIRST NEW SHIP IN THREE YEARS NORWEGIAN Cruise Line last month opened for sale Norwegian Prima, its muchanticipated new ship, which debuted as the company’s most in-demand vessel.

Prima, the first of six in its new eponymous class, will offer guests exciting itineraries, and launch multiple new Norwegian concepts, including Concourse, Indulge, Food Hall, Infinity Beach and Oceanwalk.

Upon her delivery by Fincantieri mid-next year, Prima will also offer a variety of new experiences and thoughtful art & design, with Norwegian President & Chief Executive Officer Harry Sommer telling travelBulletin the cruise line “innovated with purpose” to create the ship.

Prima, which recorded recordbreaking sales during her first day and week in the market, will also offer world-class service, including the highest staffing levels and space ratio of any new cruise ship in the contemporary and premium cruise category.

She will offer 13 suite categories, the largest variety of suites available at sea, and will also offer more wide-open spaces and vast outdoor walkways, resulting in the most outdoor deck space of any new ship.

Pool-goers will be able to relax on more total pool deck space than any other ship in Norwegian’s fleet, with multiple infinity pools overlooking the ocean, and a new outdoor spa

with a glass-walled sauna and cold room.

Prima’s Haven on Norwegian suite complex has been elevated to offer an even more exclusive and centralised experience, now spanning eight decks, and relocated to the aft of the ship.

Norwegian evolved The Haven’s design to be more open to the sea than ever before, with the complex’s Courtyard also transformed into an expansive Sundeck, boasting a new infinity pool and a new outdoor spa, sauna, and cold room.

Guests have responded well to the changes, with Sommer citing 20% of opening week bookings for Haven suites.

“Not only will we begin cruising this July, we’re so proud and so incredibly happy to announce the start of an exciting new chapter as we introduce the Prima Class and the first ship in a line of unrivaled vessels with Norwegian Prima,” Sommer enthused.

“We doubled down on our brand investment in order to deliver unforgettable guest experiences that go well beyond expectations.”

“An exemplary representation of our brand evolution, bringing together our Guest First philosophy and our spirit of innovation, Norwegian Prima personifies everything our guests love about NCL and raises the bar. This brand-new class of ships is truly designed to put our guests first.”

Indulge Food Hall onboard Norwegian Prima

The new infinity pool on The Haven’s Sundeck

All renders ©Norwegian Cruise Line

travelBulletin JUNE 2021

17

CRUISE Ready, Set, e-mail, Sail CRUISE Lines International Association last month launched a campaign aimed at rallying support for a cruise resumption, which in its first week saw more than 20,000 participate.

The campaign includes a web tool that will allow users to easily generate messages to Members of Parliament and ministers in order to voice their support directly to elected officials.

The Ready, Set, Sail campaign targets travel advisors, industry stakeholders, and other members of Australia’s cruise community.

P&O Australia int’l cancellation P&O Cruises Australia last month announced domestic port calls would replace all international components for this year’s cruises.

Travellers happy to remain on the new domestic itinerary can maintain their booking as is, but those who wish to make a change or cancel can receive a full refund of the amount paid to P&O without penalty.

Ambassador rises from the ashes FORMER Chief Executive Officer of the collapsed Cruise & Maritime Voyages Christian Vehounig has reunited his former leadership team, which have together launched phoenix operation Ambassador Cruise Line.

The cruise line has also taken ownership of the former P&O Pacific Dawn, which will sail as Ambassador’s flagship Ambience.

With plans to start sailing next April, the United Kingdom-based Ambassador will target the over50s market.

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CLIA VIEW

Joel Katz, Managing Director CLIA Australasia

30,000 SUPPORTERS STRENGTHEN OUR CASE IN RECENT days we’ve seen further important progress as the cruise industry works towards recovery around the world.

Ships have set sail in the United Kingdom for the first time in over a year. Cruising has resumed for the northern summer in other parts of Europe.

US President Joe Biden has signed legislation that paves the way for cruising in Alaska, and health regulators have given approval for the first sailings to begin from Florida.

On our own side of the world, Hong Kong has approved sailings within a local bubble in a similar style to existing operations in Taiwan and Singapore.

All of which provides yet more evidence that cruising can resume in a responsible and carefully controlled way, and that the cruise industry’s extensive new health measures are working.

Yet, in Australia and New Zealand, we still face uncertainty while there is no clear timeline for resumption.

To help support our ongoing lobbying efforts, CLIA recently

launched its Ready, Set, Sail campaign which has prompted more than 30,000 emails to Members of Parliament.

Each one represents an unmistakable message of support for a domestic cruise resumption, and with such a fantastic response there can no longer be any doubt about the size and passion of our cruise community.

These messages provide an insight into the lives of tens of thousands of Australian people who make up the cruise economy and who have been devastated by its suspension, including travel agents.

If you haven’t already joined the campaign, we encourage you to act now. CLIA has created an online tool at www.ReadySetSail.com.au that allows you to message politicians quickly and easily.

We’re grateful for the incredible support we’ve received. With the success we’re seeing overseas, and the growing momentum at home, our case for resumption is stronger than ever.

Nurture your return.

Your bookings are secure.

Your deals are amazing.

Expedia TAAP, we’ve got your back.

HEADLINES MAY 2021 05 May 10 May 18 May 21 May

APT confirms Kimberley Scenic cancels Kimberley season Local crew requirement for Aus Three lines return in Alaska

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ENJOY TODAY

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LAST WORD

A-MAZE-INGLY INSANE USUALLY mazes are reserved as entertainment for primary-aged kids, but this is not your average maze. See if you can find your way through, with the start down the bottom left of the page and the end at the top right.

Did you know?

Travel & Cruise Weekly produces a weekly consumer magazine called Keep Dreaming, full of destination articles, cruise stories and more to inspire.

Even better, it’s specially designed for agents to send their clients - giving you a reason to reach out to your database who are ready to travel.

Click here to view Keep Dreaming magazine

Click here for a toolkit to help you share it with clients

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