2021 has so far only brought more pain and anxiety to an already paralysed global and local travel industry. Faced with indefinite international border restrictions and an unstable domestic market, industry leaders are now appealing for more federal government support and the extension of JobKeeper.
In a comment that was about as welcome as a poke up the nose with a Covid-testing swab, Health Department chief Brendan Murphy told ABC Breakfast TV on Monday that he estimated international borders would likely remain closed until 2022, even with a vaccine.
“I think we’ll go most of this year with still substantial border restrictions,” he said. “Even if we have a lot of the population vaccinated we don’t know whether that will prevent transmission of the virus, and it’s likely that quarantine will continue for some time.”
You have to wonder why Dr Murphy would make such a sweeping statement so early into 2021. Surely “We’re still not sure at this stage,” or perhaps “I honestly can’t answer that question right now,” would have been a better choice of words.
Instead, aside from the reciprocal travel bubble with New Zealand still thankfully scheduled to begin in April 2021, Australians are now being warned that international travel to other destinations is unlikely to resume until 2022, even as coronavirus vaccines are rolled out.
This is the last thing the travel industry needs to hear in a time of such grave uncertainty.
With travel and tour agency revenue already estimated to be down anywhere between 80-100% since the pandemic hit almost a year ago, the ceasing of JobKeeper at the end of March 2021 could be the tipping point for many.
Tourism and Transport Forum chief executive Margy Osmond says the sector cannot survive on domestic travel alone, particularly if state borders keep closing.
“There is no way that domestic tourism can fill the gap that will be left by inbound international travel,” she told the ABC on Tuesday.
“Essentially your average Chinese visitor to Australia probably spends $8500 while they’re here. Your average Aussie who heads off for a holiday is probably spending about $1500.
“Make no mistake, while international borders remain closed, we have no hope of recovery.”
Ms Osmond is calling for nationally consistent protocols around state border restrictions after snap shutdowns caused chaos over Christmas.
She is also urging the federal government to provide more payroll support if the JobKeeper wage subsidy scheme does end in March as planned.
“The government is going to have to think very seriously how it supports this industry for the next couple of years, not just the next couple of months if it wants to have a tourism industry when we actually reopen our international borders,” Ms Osmond said.
Treasurer Josh Frydenberg has consistently stated the JobKeeper scheme will not be extended beyond March, instead citing additional funding and rescue programs already launched including the much-maligned $128 million ‘Agent Support Package’ to help travel agents with up to $100k one-off payments.
Nevertheless, there are now growing expectations Mr Frydenberg could announce extra, targeted support packages for the hardest-hit sectors such as tourism, hospitality and major events in light of continued financial hardship for the sector with no end in sight.
In the interim, Australia’s small business ombudsman has raised concerns about an existing rule affecting struggling companies.
Under the terms of the wage subsidy scheme, eligible businesses cannot replace staff with new employees and still attract government payments.
This is affecting businesses unable to top up wages since the subsidy was slashed in January, leading some staff to look for work elsewhere.
“From a struggling small business perspective, this JobKeeper rule makes a bad situation worse because they are losing their staff and cannot afford to replace them,” ombudsman Kate Carnell said.
“It’s imperative that the government changes JobKeeper so that small businesses that have been hit hardest by the COVID crisis can replace their staff to help them get their businesses back up and running.”