With the Government’s $70 billion JobKeeper wage subsidy scheme scheduled to finish on September 27, and with no international border reopenings in sight, the travel and tourism industry is lobbying the government to extend the program in order to save the livelihoods of countless individuals and businesses.
As it stands at the time of writing, any hopes of an early Christmas gift of international borders reopening are looking increasingly unlikely in light of surging COVID-19 cases in many countries including the U.S, U.K and parts of Asia with the virus still not contained and no vaccine in sight.
While the highly anticipated reciprocal ‘travel bubble’s’ with virus-free New Zealand, Fiji and other South Pacific nations do appear as if they will resume sometime around September, there are still no formal green lights nor confirmations of dates to help give people certainty to plan and book.
Meanwhile, here in Australia, the majority of state borders remain closed with guesses as to when that might change ranging from mid-July to September in the case of Queensland as to when we can begin travelling interstate once more.
Even then, for many in the industry and especially travel agents, hopes of selling domestic travel products is slim given new restrictions and closures, a lack of commissions and a preference by many travel products such as hotels and attractions to sell directly to the public.
So where does that leave the industry? Simple. In a nightmare scenario with around 90-100% of its revenue gone. And it’s been like this for the last three months since COVID-19 hit.
If you ask most people in the industry how things are, the standard response is “If it weren’t for JobKeeper, we’d be out of business.”
So its no surprise then, that the industry is lobbying the government hard to extend JobKeeper.
It’s not that anyone wants to stay on JobKeeper benefits as a solution. It’s just that without it, they will have nothing.
In a recent Australian Federation of Travel Agents (AFTA) survey, respondents were asked what they intend to do if the JobKeeper payment doesn’t continue beyond September 2020.
“42% responded that they intend to either permanently or temporarily close their business if JobKeeper isn’t extended.”
Australian Tourism Industry Council (ATIC) General Manager Simon Westaway has called for an extension until the end of the first quarter of 2021 (March), on the proviso that borders with destinations such as China, New Zealand, south-east Asia, the U.S and the U.K open or have confirmed reopening dates.
“Given the slow, and in many parts of Australia still non-existent, recovery in tourism activity, JobKeeper for enterprises right across the tourism sector needs to be extended beyond September.” He said.
AFTA says the single biggest challenge they are tackling is the extension of JobKeeper.
In a statement released yesterday, they said: “Wages make up the greatest proportion of all travel industry costs, comprising over 50% of the operating costs of traditional shopfront travel agencies. The JobKeeper program has been instrumental in enabling businesses, particularly SMEs, to retain many trained and experienced staff while the economy is in hibernation mode.”
AFTA’s most recent submission to the Treasury Coronavirus Business Liaison Unit meticulously detailed the industry impact and the resounding effects that an abrupt end to this program would have on the Australian travel ecosystem.
“Results of the recent AFTA Travel Agent Membership Survey showed that 82% of respondents have experienced a 100% revenue decline as a result of the COVID-19 pandemic with a further 16% having experienced a 90% decline in revenue,”
Given these significant revenue declines, travel businesses of all sizes were eligible for the JobKeeper program. 97% of all survey respondents said that they had successfully enrolled.
AFTA says the submission demonstrates that the JobKeeper program has been critical to the survival of travel agencies.
The hospitality industry has also requested an extension of the scheme until next year, alongside major hotel groups with consideration for casuals and temporary workers.
The federal government is currently reviewing JobKeeper with Treasurer Josh Frydenberg signalling further changes will be announced on July 23.
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