Australian tourism and COVID-19: International travel ban killing industry, say operators

In the Adelaide head office of Bunnik Tours, his family-operated travel business, Dennis Bunnik has had to move desks and other office furniture down to the basement. "It was just too depressing for our remaining staff to look at so many empty desks," says Bunnik, the company's joint CEO.

The lockdown preventing Australians from travelling overseas for leisure purposes has been catastrophic for Australia's travel industry, and particularly the outbound sector, which recorded 11.3 million overseas trips by Australian residents in 2019. Since the pandemic struck the travel business has fallen off a cliff, thousands of staff have been stood down or let go. Outbound tourism, which Tourism Research Australia estimated to be worth $155.6 billion in 2019–20, will be a tiny fraction of that figure in 2020-21.

Dennis Bunnik describes 2020 as "An absolute s---show for all of us in travel." Bunnik Tours is one of Australia's leading operators of small-group tours to the Middle East, Asia and Europe, and as Chairman of the Council of Australian Tour Operators (CATO), Dennis Bunnik knows well the damage the COVID-induced shutdown has inflicted on his sector of the travel industry.

"Our estimate is that 50-60 per cent of jobs in the tour operating sector have already gone and the rest are holding on by a thread," he says. "Pre-COVID-19 there were approximately 7500 jobs just in the tour operator and wholesale sector which formed part of the 40,000 employed in the broader outbound travel industry. Revenue in our sector is down between 85-100 per cent depending on the company. Bunnik Tours has not had a customer travel with us since March."

"Tour operators and wholesalers are the backstage players in the travel industry, yet it is the CATO members that design, create and deliver the travel services sold online and through travel agencies. Without them, travel agencies have nothing to sell and Australians will find it very difficult to travel in a post-COVID world. It's essential that our members survive and emerge from COVID as strongly as possible so that Australians can travel again and the industry can re-employ the staff who have been stood down."

While outbound tourism might be in the doldrums, domestic travel has boomed, fuelled by demand from travellers who would have been heading overseas but for the pandemic – but that doesn't play well for the outbound sector according to Bunnik.

"In terms of pivoting to domestic, whilst a number of CATO members have always sold domestic travel, the reality is that for most a pivot to domestic is unrealistic. Wholesalers specialising in Africa, South America or Egypt will find it very difficult to switch to domestic programs. For these operators their businesses remain in limbo until international borders reopen."

Bunnik Tours recently launched tours to South Australia and Tasmania but all but one of the scheduled departures for this year have had to be cancelled due to the domestic border closures resulting from the Victorian outbreak.

"As it stands we will have one small group tour travelling to Tasmania in December. These will be our first clients to travel since March and they will represent 0.1 per cent of all the international bookings we have cancelled this year. Our revenue from March to December will be 99.9 per cent down on last year."

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What was his reaction to Tourism Minister Simon Birmingham's comment to the National Press Club in June that it was "more likely" Australians will be banned from overseas travel until 2021?

"The overwhelming feeling was one of sadness and a loss of hope. Combined with the lack of industry support in the budget and the Treasurer's commentary around opening of borders being delayed until late 2021, these comments had a devastating impact on the mental health and wellbeing of the entire travel industry. We could see hope fading away and for those of us who have been leading the fight to keep the industry morale up it was simply heartbreaking."

"We just want to get back to work. We want to be able to re-employ the people we've lost and we want to enable Australians to travel and explore again safely. As an association CATO is very much focused on preparing for that future and helping our members survive so that when the time is right we can all travel again. We need the government to join us on this journey because without them hope dies."

Our national carrier

Qantas had big plans for its centenary year until the national carrier hit the COVID-19 wall, as outlined by Qantas CEO Alan Joyce at the airline's AGM held on October 23. "At the start of this year, we were on track for another strong profit. Dividends were set to increase. We were hiring new people and getting ready to order aircraft for Project Sunrise. Instead, we're dealing with the worst trading conditions in our long history. And the biggest crisis global aviation has ever faced."

Noting that the International Air Transport Association has predicted another four years before global travel demand fully recovers, Joyce pointed out that Qantas has "identified $15 billion in cost savings over the next three years, mostly through reduced flying activity, and a review of ground handling operations with a view to saving up to $100 million a year."

"We had expected Group Domestic to be operating at about 60 per cent of pre-COVID levels by now. Instead, the continued border closures mean capacity is now below 30 per cent. We're acutely aware of the impact this crisis has had on 30,000 individuals across the Group. Most are stood down with no clear timeline for when their flying careers with resume. Thousands will lose their job altogether."

As well as the 6000-plus pilots, cabin crew, catering staff, ground handlers and check-in staff who will never work for Qantas again, "right sizing" for the airline's future also has implications for its fleet. According to a Qantas spokesperson, the airline's A380s remain in storage in the US, with no expectation of a return to service in the immediate future.

The adventure tour operator

World Expeditions is one of the most respected names in the adventure travel industry, sending travellers off to experience the world's extraordinary places since 1975.

According to Sue Badyari, the company's CEO, "As an international tour operator at a time when international travel is not possible, the pandemic has been devastating particularly for our outbound, international brands - World Expeditions, UTracks and our school and charity divisions, World Youth Adventures and Huma Charity Challenge. In 2019, around 15,000 Australians travelled overseas with World Expeditions. For 2020 the number is about 800, all before the lockdown happened in April. Apart from New Zealand, all international departures are now cancelled until the end of April 2021."

The picture is a little brighter for domestic travel.

"In 2020," according to Badyari, "World Expeditions saw 15 group departures on the Larapinta Trail walking trip in the Northern Territory. That compares with 85 group departures in 2019, but the same trip in 2021 is already heavily booked."

Revenues will be down 85 per cent this year. From a very busy office staff of around 100, World Expeditions now employs less than half that number, most of whom work remotely and part time.

For the immediate future, World Expeditions is pinning its hopes on a trans-Tasman bubble, and the company has been nimble in positioning itself to operate tours as soon as opportunities for travel to New Zealand arise.

"We are watching this space eagerly," says Badyari. "In Asia, we'd be very quick to look at destinations, provided trips could operate according to our strict CovidSafe Travel requirements. Japan is most likely to be that destination and again, we have trips ready to go."

The cruise operator

Cruising has boomed among Australians over the past decade. On a per capita basis, more Australians take cruises than any other nationality but COVID-19 has put Australia's cruise industry on the chopping block.

According to P&O Cruises Australia President Sture Myrmell "It's no secret that the pandemic has had a major impact on cruising and P&O Cruises Australia hasn't been immune. Our operations have been suspended since March and with all departures cancelled for the remainder of the year, about three-quarters of our business this year has disappeared. We've felt the impact through jobs lost, reduced hours and salary reductions."

"At the end of 2019, before the pandemic hit, the cruise industry was hitting a peak, creating $5.2 billion in economic benefit for Australia as well as over 18,000 jobs," says Myrmell.

"We remain confident about the resumption of cruising. The cruise industry is exceptionally resilient and I am confident it will return to its former strength. It won't be a sprint but rather a gradual, phased approach. The way in which Australia and New Zealand have managed the pandemic has opened the potential for safe travel 'bubbles' including domestic cruises involving interstate and intrastate itineraries and P&O is well positioned for such a resumption of operation as nearly 100 per cent of our guests live in Australia and New Zealand."

See also: Want to travel overseas? We need to address these five issues first

See also: The ban on Australians leaving the country is unique, but is it legal?

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