- Australia’s travel, tourism and hospitality sectors are severely hit in the face of COVID-19 crisis.
- Domestic tourism on rise; Tourism Australia is now inviting businesses in its new Business Events Boost Program supporting industry-led marketing and distribution activities to help kick-start domestic business events.
- Trans-Tasman travel still on hold due to the increase in COVID-19 cases in Melbourne and the state of Victoria.
Known in the world for its ancient desert landscapes and coastal cities fringed with golden beaches and deep blue oceans, Australia is today famous for more than its iconic landmarks and faraway lands. Australia is home to the world’s oldest living culture. Since the past few years, the country is expanding its tourism horizons for visitors.
New experiences and places have opened up untouched destinations across the country with a bunch of new attractions to reflect on its multicultural history of the population.
But right now, Australia’s travel, tourism and hospitality sectors are severely hit as any other country in the world amidst grave health crisis.
Since March 2020, the country closed its international borders in land, air and sea, to avoid the spread of the Novel coronavirus (COVID-19) pandemic. Currently, only Australian citizens, residents and immediate family members can travel to Australia.
The cruise ship movement is prohibited until 17th September 2020, but this does not mean the ban will be lifted at that time.
The Australian Health Principal Protection Committee reviews the ban regularly, with the goal for Australia to have no community transmission of COVID-19.
Here is a look at some updates in the travel space that will determine the shape of the industry and its revival –
- Push to Domestic Tourism- While international borders are shut, Tourism Australia started a statewide campaign to promote local travel. It launched a special edition partnering with Australian Traveller Magazine ‘100 Ways to Holiday Here This Year’ to encourage and inspire Australians to experience the best of their country filled with amazing adventures. Tourism Australia is also inviting businesses in its new Business Events Boost Program, supporting industry-led marketing and distribution activities to help kick-start domestic business events.
- Travelling Virtually – In May, Live From Aus series was conducted on Tourism Australia’s social media pages to keep the hungry travellers enticed. Nation’s favourite tourism and entertainment personalities participated in the virtual extravaganza by offering some of the most exceptional experiences on Travel, food & beverages, Music, Art segments.
The series was a big success with Australians coming in support of the domestic tourism industry. But international travel is still one of the most discussed topics among travel enthusiasts. To curb the enthusiasm, The Aussie Specialist team in South East Asia rolled-out series of webinars featuring state and national tourism operators for travel planning in Singapore, Malaysia and Indonesia.
- New Focus on the Multicultural History of the Population – Australia tourism, with utmost respect and gratitude, is promoting the Aboriginal experiences to the travellers. It offers a real connection to the place and a new way of experiencing it. The natives are keen on sharing their story and provide an insight into their vibrant culture, allowing visitors to gain a deeper admiration for Australia.
The new focus includes an exciting array of activities such as tasting bush tucker, fishing, dot painting, kayaking to getting an in-depth look into the Aboriginal culture with experiencing healing powers of nature, discovering ancient rock art, genuine nature and cultural enthusiast will benefit.
- Trans-Tasman Travel Under the Spotlight– With majorly promoting domestic tourism across the state, Auckland Airport saw local passenger traffic improving last month.
New Zealand Prime Minister Jacinda Ardern informed recently that due to the increase in COVID-19 cases in Melbourne and the state of Victoria, the Trans-Tasman travel bubble is on hold. Victoria was declared in a state of disaster and Melbourne is under curfew. Australia now needs to register a continuous 28 days virus free with no community transmission to open the two-country travel connectivity.
- International Travel Impacting Revenue– Border close impacting international travellers coming in the state resulted in massive revenue crunch. According to the reports, 3,440 visitors arrived during the month of May, which is down to 99.6 per cent to the same period of 2019. For the year ending in May 2020, about 7.39m visitors arrived in Australia, a decrease of 20.8 per cent to the year 2019.
- Aviation Sector To Bounce Back - Tourism Australia is playing a vital role in establishing aviation routes between Australia and critical markets through commercial partnerships. The tourism industry is trying to bounce back from the coronavirus crisis in a sustainable manner. As domestic tourism is on the rise, the airlines servicing local travellers gain brownie points in the situation. While, long haul flights are still on the pause, the planes getting back in the air will require government easing on the border restrictions.
- Jobseeker to Save The Day – Recently Australian Government announced the extension of the wage subsidy scheme to help the people affected by economic fall in the country. The move was praised by many as it will support many people who have lost the job in the Travel, Tourism, Hospitality industry.
An additional six months after the scheme ends in September is welcomed as a lifeline for the travel industry.
- The Mutitjulu Community Aboriginal Corporation (MCAC) – The Aboriginal community is worried about the virus spread in their region. Members of the group blocked entry to the visitors to Uluru-Kata Tjuta National Park. Park Australia to work with Mutitjulu Community Aboriginal Corporation, Northern Territory Government and Voyages and plan on additional health and visitors screening measures for Yulara township, at Ayers Rock Airport and departure points. The Northern Territory opened the borders for interstate travel on 17th July.
- Western Australia Tourism Industry Faces Decline - According to Tourism Council WA’s industry report, tourism activity across WA declined 26 per cent in June and July, compared with the same time last year. However, many towns and regions saw a busy school holiday.
Tourism Council WA CEO Evan Hall believes that the Western Australians are travelling and supporting domestic tourism businesses. It is still less business coming from interstate and international tourists. Hall is concerned about the future of the region once the wage relief scheme is over.
- UN World Tourism Organisation (UNWTO) Outlook – Its market intelligence report says International tourist arrivals witnessed a 44% dip in the first four-month of 2020 compared to the same period of 2019. But the tourism is slowly showing definite signs of cautious change in the trend in the upcoming Northern Hemisphere peak summer season. The difference is reflected in the gradual lifting of travel restrictions in several countries around the world.
Scan Through Equity Market Trends
The travel sector is under pressure after the recent lockdown announcement from Victoria. Also, rising coronavirus cases in New South Whales is a significant reason concerning investors. While, stock market trends deserve closer attention:
Flight Centre Travel Group Limited (ASX:FLT) is a retail travel agency with around 1200 outlets across Australia along with New Zealand, Hong Kong, South Africa, Canada and the UK. Its share price has gone down by 71.5% over the last six months, trading at $10.08, up 1.92% as on 4 August 2020 (11:22 AM AEST).
FLT plans to take additional funding to offset short-term pandemic disruption via Bank of England’s Covid Corporate Financing Facility.
Alliance Aviation Services Limited (ASX:AQZ) recently announced expanding fleet with the acquisition of 14 Embraer E190 aircraft in agreement with Azorra Aviation LLC of the United States. The purchase will also include a significant package of related inventory, ground support equipment, tooling and training devices and six spare General Electric CF34 engines.
The total acquisition price is US$79,400,000, which will be funded from the proceeds of the placement and SPP announced by Alliance on 11th June 2020. The aircraft delivery will happen progressively over eight months starting from in September 2020.
AQZ stock has gone up by ~31% over the last six months, trading at $3.33% as on 4 August 2020 (11:22 AM AEST).
Apollo Tourism & Leisure Ltd (ASX:ATL) manufactures and provides a wide range of rental vehicles (RVs) like campervans, motorhomes and caravans on rent as well as via wholesale and retail options. As domestic travel is gradually reopening, the bookings have started to gain momentum.
ATL stock has gone down by ~42% over the last six months, trading at $0.200, up 2.6% as on 4 August 2020 (11:22 AM AEST).