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$3.4 billion SA tourism black hole sparks fresh calls for help

Business

The latest Tourism Research Australia figures show the industry lost $3.4 billion in South Australia in 2020, prompting fresh calls from the state’s peak body for direct Federal Government backing to save the sector.

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According to visitor survey analysis by Tourism Research Australia, released last week, the value of tourism in South Australia plummeted from $8.1 billion in 2019 to $4.7 billion in 2020.

South Australia’s peak tourism body, the Tourism Industry Council South Australia (TiCSA) says the data highlights the urgent need for direct Federal Government backing to support hard-hit tourism enterprises.

Deloitte Access Economics today also released its 2021 Tourism and Hotel Market Outlook finding that the tourism sector in Australia was among the first to be impacted by government measures at the beginning of the coronavirus pandemic last year and will be among the last to recover.

TiCSA CEO Shaun de Bruyn said the latest tourism industry survey for the March 2021 quarter, which measured business activity and outlook on a quarterly basis, showed that ongoing border restrictions and a lack of consumer confidence were the most significant barriers to industry recovery.

He said the end of the JobKeeper wage subsidy in late March had created a sink or swim scenario that some businesses simply would not survive.

“JobKeeper provided the greatest financial relief for tourism businesses in SA, with 60 per cent of respondents from our latest industry survey reporting that they received the fortnightly payments to keep their business afloat and retain staff.

“With the JobKeeper lifeline having ended, 22 per cent of those businesses will be forced to reduce staff hours or stand staff down.

“It is critical that the Federal Government act now and provide direct financial aid to those particularly vulnerable tourism businesses until borders reopen and vaccine rates are higher.”

The TRA data shows interstate overnight trips to South Australia fell by 61 per cent for the year ending December 2020, while expenditure also decreased by 61 per cent.

Visitation to Adelaide dropped by 51 per cent, with expenditure down by 54 per cent.

Regional visitation fell by 20 per cent, while spend was down by 25 per cent.

International visitation dropped by 78 per cent, with expenditure down by 77 per cent, with de Bruyn saying the numbers provide an accurate representation of just how severely the tourism industry has been impacted by COVID-19.

The introduction of a two-way bubble between Australia and New Zealand announced this week is expected to increase the flow of Kiwi tourists into the state from April 19.

Prime Minister Scott Morrison also last month unveiled a $1.2 billion tourism and aviation rescue package designed to ease the pain when JobKeeper wage subsidies ended on March 28.

About 800,000 government-subsidised tickets will be offered over the scheme’s duration which includes the Easter and winter school holidays.

Return flights to 18 eligible locations including Adelaide and Kangaroo Island will receive a 50 per cent discount between April 1 and July 31.

The state government last month also introduced a third round of travel vouchers to boost South Australia’s tourism sector, although the opposition has criticised the move for not including the hotel and hospitality industry.

The third round of the scheme, this time focused on tours and experiences, follows the first two rounds of accommodation vouchers offered by the government which provided a $32 million boost to the state’s economy.

Vouchers worth $50, $100 and $200 will be available to South Australians from late April.

“Recent initiatives such as the half-price flights to Adelaide and NZ travel bubble are welcomed by the industry, but they are simply not enough,” de Bruyn said.

An Austrade spokesperson said the federal government had supported the tourism industry through access to JobKeeper and the $1 billion COVID-19 Relief and Recovery Fund, which included tourism specific measures.

They said the first tranche of half-price tickets through the $1.2 billion aviation and tourism support package had gone on sale and airlines were reporting strong demand.

“The best thing the Australian Government can do for our tourism businesses is to get tourists back spending money,” the spokesperson said.

“The commencement of a two-way travel corridor between Australia and New Zealand will give tourism operators a significant boost … in 2019, New Zealand travellers spent $1.6 billion on travel and tourism in Australia.

“This latest major step in the resumption of international travel has only been possible due to Australia’s internationally recognised, world-leading response to the COVID-19 pandemic.”

Releasing the 2021 edition of the Deloitte Access Economics Tourism and Hotel Market Outlook today, Deloitte national tourism leader Adele Labine-Romain said the recovery would be affected by capacity challenges, including aviation capacity, tourism business viability in the short-to-medium term along with consumer confidence and travel sentiment.

“These have been, and they absolutely remain, testing and uncertain times for our tourism and hotel operators who employ so many people and who are so important to ‘brand Australia’,” she said.

“They were the first to be impacted by measures introduced by governments in response to COVID, and will be among the last to recover.

“Domestic demand will have to deliver in this recovery, with international tourism unlikely to return in a meaningful way until at least 2022, with the exception of the just-announced travel bubble with New Zealand in the first instance, and talk of the same in parts of Asia and the Pacific down the track.

“And when international travel restrictions lift, Australia will face an extremely competitive landscape with countries looking to reactivate their tourism industries as part of the recovery from the impacts of the pandemic.”

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