Destinations'Unrealistic' to expect expenditure of domestic travellers to make up for the multi-billion shortfall in tourism revenue, warns tourism council head

Domestic travel not a solution for Australia's tourism woes

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ATEC research shows that a third of tourism businesses will not benefit from the domestic tourism market. Credit: Lukas Bischoff/Getty Images
ATEC research shows that a third of tourism businesses will not benefit from the domestic tourism market. Credit: Lukas Bischoff/Getty Images

Australians are being urged to revive the tourism industry by taking a holiday at home this year as borders remain close, but the Australian Tourism Export Council (ATEC) warns that a domestic tourism uptick will not offer a "simple fix" for tourism businesses devastated by the impacts of Covid-19 pandemic.

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

“Domestic holidays can and will help many Australian tourism businesses, particularly those set up specifically for local visitors, 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," he stated.

ATEC research has shown that a third of tourism businesses will not benefit from the domestic tourism market, with more than half of businesses expected to shutter within six months without international visitors.

Said Mr Shelley: “This is hardly surprising given the average spend of an international visitor is A$5,211 (US$3,608). 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 A$45 billion shortfall."

Furthermore, expectations on the travel budget capacity of the domestic market are unrealistic given diminished consumer confidence, perceived economic insecurity and disrupted leave entitlements experienced by many Australians this year, he added.

“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.

“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.

Mr Shelley stressed the importance of preserving the export tourism businesses, which, having having achieved double-digit growth for much of the last decade, will form the foundation of the rebuilding process when international borders reopen.

“In truth, there will be very few export tourism businesses who will benefit significantly from a domestic uptick and they definitely won’t be looking at the level of revenue our inbound sector has delivered in the past.

“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."

ATEC is currently in discussion with the industry and government agencies to negotiate an extension of industry support, according to Mr Shelley.

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