Tourism on tenterhooks from coronavirus shock

Tourism on tenterhooks from coronavirus shock

An Australian Tourism Export Council (ATEC) survey has found inbound tour operators (ITO) are facing down the barrel of job losses and business closures if coronavirus Covid-19 woes continue.

As if bushfires weren't enough of a problem for the sector this past summer, the Covid-19 outbreak has led to a travel ban on China - a country whose visitors contributed more than $12 billion to the Australian economy last year.

There is also a travel ban on Iran and yesterday the government extended the ban to South Korea, which now has more than 6,000 cases of the virus.

Traffic statistics from Sydney Airport (ASX: SYD) show South Koreans were the seventh largest cohort of travellers through the airport, while Chinese nationals (including Hong Kong) were second only to Australians. 

A survey undertaken by the ATEC over the past week shows the situation has led to an alarming outlook for the sector.

"We are seeing dramatic contractions in forward bookings across all markets, with China 100 per cent down and apprehension from other Asian markets that are still able to travel," says ATEC managing director Peter Shelley.

"Many Australian ITOs have not been paid for services provided over the Chinese New Year period as most China based travel wholesalers have had to shut their offices due to the virus.

"On top of that they are also facing severe financial difficulties as China outbound travel ground to an abrupt halt."

In response the council is urging the government to extend business support and recovery packages including concessional loans, short term wage subsidies and a reduction in taxes, as well as efforts to preserve the tourism industry ecosystem followed by "investment in aviation and destination marketing to help drive a recovery into the future".

Shelley says with businesses closed and no new travel bookings, cashflow has dried up and is forcing many in the industry to focus on business survival and retaining their experienced staff so that they are in a position to rebound when the 'storm' passes.

"If things don't improve soon, they are likely to make significant redundancies or possibly close their businesses," he says.

Shelley explains any loss of inbound tourism distributors will have a major impact on the ecosystem of the tourism economy which has been developed over the last 20 years.

"Any erosion of our established tourism distribution channels will greatly hinder Australia's ability to rebound once COVID-19 passes," he says.

"The tourism export distribution channel, from the customer in market through to the Australian based product supplier like hotels, tours and attractions, is complex and relationship driven, so a loss of staff and or business failure will have a dramatic impact on our ability to pick up where we left off.

"Given Chinese visitors contributed more than $12bn to the Australian economy last year, we need to proactively protect the infrastructure of this export tourism distribution channel."

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