No magic formula in the recovery of tourism

There is no easy comeback for Australian export tourism. The recent official ABS data for end December 2022 confirmed the recovery of international visitors arriving for holidays had grown to 40 percent of pre-pandemic levels, supporting the views of many across the inbound tourism industry that we may not achieve a full recovery until late 2024, or early 2025.

While it appears there is no magic formula for the immediate recovery of inbound, there are several considerations in play which ATEC and the inbound industry are focused on including the ongoing recovery of air capacity which is now around 75 percent of pre pandemic levels. Analysts are suggesting that improving airline profits will continue to facilitate increased capacity and the return of lower fares over the coming six months which in turn will make Australian holidays a bit more accessible.

There are other global factors impacting decision making, especially for long haul travel, including the rise in energy costs and inflation driving up the cost of living which tends to delay travel decisions as well as ongoing geopolitical tensions. Locally we are part of an economy wide challenge which sees service sector businesses struggling with workforce availability and the need for both skilled and unskilled labour. The good news is that we are now seeing significant volumes of international students returning as well as a pickup in the number of working holiday makers, a cohort which has been slow to return. While the collective contribution of these two groups is starting to make a difference, the lack of specialist language tour guides and coach driver guides remains a key issue across many parts of the country.

In addition to the above, is the need to invest in rebuilding the trade distribution network which has been decimated by the pandemic. While we are seeing positive signs of forward demand, we are also acutely aware that we need a strong and efficient trade distribution channel to convert these travel enquiries into bookings, without this conversion capability, many potential travellers will fall between the cracks.

So, while tourism export recovery is slow, and indeed quite a bit slower than we anticipated, it’s critical we have all shoulders to the wheel. This means supporting all our export products in getting back into the market and being visible. Without visibility, through involvement with trade events and in market activity, Australian products risk being left out of the global travel resurgence.

Tourism exports are a key sector of the very significant visitor economy which is the fourth largest contributor to the economy, generating 3.1 percent of Gross Domestic Product prior to the pandemic. It is critical therefore that we remain focused on addressing any impediment which are impacting the recovery of this sector.