Far North tourism on the brink

The recent and ongoing lockdowns in NSW, ACT and Melbourne are obviously having a significant effect on the tourism sector in the Far North.

The data from Cairns Airport for July passenger numbers clearly shows the beginnings of that effect being felt with passenger numbers down 12.5% from June. Given what we know has happened since then, it is clear that the data will show further declines in August (and likely into Sept).

The domestic tourism sector had been enjoying something of a regional boom until the Delta variant outbreaks changed everything.

Monthly snapshot data from Tourism Research Australia up to May was showing that total domestic expenditure in Regional Queensland for the 12 month period was up 6.6% from a year earlier, compared to a 12.9% decline nationally and a drop of 6.4% in Queensland.

With international borders closed Aussies were taking their holidays at home, and in particular in the regions. Recent lockdowns have clearly put paid to much of that, at least for the time being.

The snap 3-day lockdown in Cairns earlier in August will have further exasperated the problems being felt by Far North operators.

The State and Federal Governments have joined together to extend some support for the sector but the longer, and more widespread, these lockdowns continue to be the less sufficient such support appears to be.

With international tourism still apparently many months away (we are certainly not anticipating any international tourism at scale until the middle of 2022) the losses in the tourism sector continue to stack up. A domestic tourism boom, albeit now curtailed, was never going to be enough to compensate for the lose of 25-33% of total tourism expenditure in the Far North which the international sector used to provide.

There is now genuine concern within the sector that many operators, who managed to hang on through 2020 with significant Government support, are now teetering on the brink of collapse in the face of the present lockdowns.

Without increased Government support, probably along the lines of JobKeeper, we are likely to see a major hollowing-out of the sector in the Far North which will make a recovery, when domestic and international borders finally open, all the more difficult to sustain.

 

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