Impact of the bushfires and COVID-19

Implications for Tourism Australia

Economic

• The 2019/20 summer bushfires devastated tourism communities, with international news coverage impacting Australia’s reputation as a tourism destination. To aid recovery, Tourism Australia was allocated an additional $61 million for international and domestic marketing efforts.
• COVID-19 protection measures severely damaged economic activity, with global GDP projected to decline 5 per cent in 2020, and Australia’s GDP forecast to decline 6 per cent.[1] With uncertainty about the depth and duration of COVID-19 and its impacts on business conditions, employment and income prospects, consumer confidence plunged.
• With considerable employment challenges, the Australian Government introduced the JobKeeper and JobSeeker programs to support businesses to retain their workforce, while also keeping Australians afloat.
• Forty-seven per cent of tourism jobs are in regional Australia, with 44 cents in every tourism dollar spent in regions. The bushfires and COVID-19 have had significant impacts on regional Australia.

• The overall macro-economic environment was negative, with low levels of consumer confidence.
• Global travel is predicted to decline by 60 to 80 per cent in 2020, with Australia’s border restrictions likely to remain in place until late-2021[2]
• Remaining flexible and nimble became our modus operandi, including increased scenario planning to enable a swift response to the volatile environment, with plans informed by a dedicated insights framework.
• Maintaining a balanced market portfolio remained relevant, while adjusting our approach by market to ensure best use of resources.
• A temporary return to domestic tourism marketing was undertaken, tapping into pent up demand by Australians, ready to travel after months of self-isolation, and the opportunity to support tourism bushfire recovery, particularly for regional Australia. Plans are also underway to return to leisure marketing in New Zealand.

Travel industry

• Both crises escalated quickly with a deluge of information, often complex, sometimes conflicting and not always accurate.
• From an industry worth $152 billion to Australia in 2019, tourism spend is forecast to be 40 per cent lower in 2020/21.[3]
• Australia’s tourism industry faced its biggest-ever challenge, with many businesses laying off staff or shutting down entirely, and non-essential international flights into Australia suspended. One in three jobs have been lost in tourism, with 60 per cent of accommodation businesses on JobKeeper.[4]
• Many operators who had previously focused on international markets have been forced to pivot to the domestic market. While valuable, the domestic market is not a substitute for international travel – spend on an average domestic interstate trip is $1,500, while an average international trip is $6,500.[5]
• Significant impacts on aviation, with international capacity falling by more than 90 per cent.[6] Modelling by LEK Consulting (2020) indicates that it may take until 2023-24 for Australian airports and airlines to recover to 2019 passenger levels.

• Our crisis management and industry outreach increased significantly with an emphasis on providing timely, accurate information, as well as direct industry engagement. We collected and shared insights to inform our strategy and Government policy and recovery efforts. We also created a ‘one stop shop’ information hub on australia.com to provide reliable and correct information and address misinformation on the impact of the bushfires and COVID-19.
• We ramped up analysis and the sharing of insights with state and territory tourism organisations (STOs) and the tourism industry. This was delivered through dedicated communications platforms and events in Australia and overseas.
• Because tourism in regional areas is heavily dependent upon aviation, we are working with airports, airlines and STOs on an aviation recovery strategy and recovery initiatives.
• We expanded the Aussie Specialist Program to the domestic market to upskill agents to effectively sell Australian experiences and supported holidaying at home.
• With the business events sector significantly impacted, we expanded our Advance Program by increasing its flexibility and practical support for the sector.

Marketing channels and campaigns

• While travel bans remained in place, it was not appropriate to undertake tactical marketing and/or brand marketing, with much of our target audience in self-isolation / unable to travel.
• Digital, video and other content became increasingly important in reaching and inspiring consumers as they engaged in ‘virtual’ and online activities during lock-down.
• Media costs continued to rise (TV costs increased by 7 per cent across the globe, Australia’s costs were up 16 per cent).[7]
• There was increasing competition from other destinations, particularly those that had reopened their international borders to travellers.

• We recalibrated our promotional activity, including pausing the roll out of our international brand campaign due to the impact of bushfires on perception of Australia as a tourism destination and COVID-19 travel restrictions.
• With much of the world in lockdown, we concentrated our efforts on inspiring ‘travel dreaming’ delivered through digital, video and other content, and programmatic media buying.
• Our approach focused on initiatives that could be translated across regions and markets, ensuring best use of resources.

Consumer

• While there has been a softening in consideration of Australia for a holiday by prospective international travellers, longer-term consideration of Australia is positive. It is anticipated that Australia’s relatively low rate of coronavirus cases and its effective management of the pandemic compared with other countries will have a positive impact on consumer perception of travel to Australia.
• Research into the travel plans of Australians regarding domestic travel found that a third of Australians are planning a trip.[8]
• With social distancing becoming the ‘new normal’, consumer preference for self-drive, outdoor and nature experiences are increasing, along with a renewed preference for booking via travel agents.

• Monitoring of consumer sentiment, tracking of forward bookings and searches has been continuous, to inform delivery of the right messaging, at the right time. We are also keeping tabs on the consumer segments and markets that are most likely to come back first so we are ready to take action.
• We continued to make the most of consumer and technology trends, supporting industry by sharing their stories and connecting travellers to experiences. This has included the development of a road trips campaign, an interactive map tool and immersive video content on Australia.com to help Australians plan their Aussie holiday; as well as content partnerships to inspire holiday dreaming.
• The Australian Government’s solid management of the pandemic compared with other countries will aid our marketing efforts, heightening Australia’s desirability compared with other destinations.