Since the COVID-19 pandemic hit Australia, every state has faced lockdowns and border closures to varying degrees. Unsurprisingly, as a direct result, Australia’s tourism industry has suffered and operators have been forced to adapt to a new world. Likewise, consumers have had to adjust to the ânew normalâ, adjusting the way they plan their vacations. Saving for a trip abroad or booking an interstate getaway six months in advance is a thing of the past; indeed, most of us have had to cancel at least one flight or accommodation reservation due to an instant lockdown or a change in border restrictions, making it more difficult for people to plan their trip. trip. But what’s next now that heads of state appear (mostly) to ease their once rigid restrictions, and Australia set to ‘reopen’ after a hiatus since early 2020?
Recent spending data from ANZ points to a strong rebound in consumer spending in retail and travel after lockdown to pre-delta levels, which is great news for Australia’s tourism sector. While this is certainly encouraging, it’s still unclear when Australia will reopen its borders to inbound international travel. In this context, Australian consumers have had to fill the void left by our overseas customers and inject funds into the national economy.
The immediate spike in the number of occupations in Melbourne and Sydney in the weeks following the granting of “liberty” to residents indicates that people are eager to travel within Australia’s borders. STR data showed a nearly doubling of national occupancy levels at the end of October, compared to just three months earlier. This sense of local support was echoed by Marriott’s Australian Vice President Sean Hunt, who commented positively on the adoption by Australian travelers: âWe had the strongest support [in bookings] in the last few weeks since 2019 and the biggest peak in revenue generation since the start of the pandemic â.
There is no place like home, this is the sentiment of local tour groups, and with many national operators offering ‘escape packages’ with built-in bonuses such as free breakfast, round-trip transfers, free children’s passes and more, it’s likely that Australians will continue to enjoy the benefits of national holidays, even after our international borders have officially opened. Quality customer-focused operators always get through tough times and the next 12-18 months will undoubtedly see the gap widening between a vanilla offering and operators who are willing to go above and beyond to ensure an experience. quality customer.
In line with this new focus on operators and their more personalized focus on local vacationers, many travelers are now phasing out third-party reservation services by picking up the phone. While platforms such as Booking.com and Expedia were the preferred booking channels, it is now increasingly common for customers to contact operators directly. Typical commissions payable to these platforms vary between 10-25% of the booking price, with direct bookings operators earn the full amount, significantly increasing their income for the same stay.
With most businesses now accustomed to aligning with the ever-changing COVID restrictions, 2022 will likely herald the return of the business traveler. This will undoubtedly be a huge relief for Australian hoteliers, who have long benefited from domestic business travel. In 2019, business travelers accounted for 40% of the total number of travelers in the Australian domestic market (according to research by the Boston Consulting Group), and this trend is expected to return in 2022. Although it is not expected that most major functions or conferences return immediately, it is expected that the current trend of escalating vaccination rates and national easing of restrictions will provide Australian businesses with the peace of mind to start planning their next corporate events in large scale.
As outbound flights have started to some limited overseas destinations, Australia has created a travel bubble with early data showing turnout has been disappointing. Simply put, Australians as a whole are not ready to take the plunge and go abroad. Another example is Air New Zealand’s recent announcement to cancel more than 1,000 flights citing ‘continuing uncertainty at Australia-New Zealand border’, airline expressing sympathy for its customers developer. Again, this indicates that there is simply “no place like home” for the Australian traveler.
The reality is that for Australians who now face the impending easing of border restrictions, the potential benefits of overseas travel during a pandemic do not outweigh the risks and costs to the country. most people. Being “stuck” in another country as a result of a sudden change in policy or government direction, the inconvenience and costs associated with COVID testing and compliance, or in the worst case, catching COVID there. foreigner, just not worth the perceived benefits of overseas travel. With that in mind, once popular vacation spots for Australians such as Bali, Thailand and Vietnam are likely to seem like a risky option given their relatively poor health systems and low vaccination rates.
In keeping with this, there is a growing tendency for people to revisit their bucket list and look at travel options on their doorstep rather than overseas. Considering the breadth and depth of Australia, the only island continent in the world, we all seem to have a local destination that we are looking for and we just haven’t found the time and effort to make it there. reach. Maybe this is our chance …
So the question is, given the uncertainty surrounding global travel, can domestic travel close the gap in overnight stays back to pre-delta levels? In the long term the answer should be ‘no’, but in the short to medium term the Australian accommodation market is expected to rebound strongly, likely in line with pre-COVID levels. So pack your bags – but you don’t need to search for your passport just yet!
Presentation by Gareth Closter.
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