Rebuilding domestic tourism
Exterior view of the John Dynon Gallery, Silverton, Destination NSW copyright
Published on LinkedIn, 18 April, 2021
Regardless of the vaccine roll-out, we have no clear view of precisely how the future of international travel looks at this time. And as time passes, virus mutations seem destined to appear, so new vaccines will be required. As Devi Sridhar, Professor of Global Public Health at the University of Edinburgh said: “The more the virus circulates, the more likely it is that mutations and variants will emerge, which could make our current vaccines ineffective. At the same time, poor countries are being left behind without vaccines and basic medical supplies like oxygen.”
This leaves us living in a period of shifting sands for international travel and will result in a seismic – and potentially long-term – change in the global tourism landscape. We might be a safe destination for international tourists, but will we want the risk of them bringing COVID-19 variants to our shores? Probably not. Is the risk worth the financial cost of another outbreak? Probably not.
Like any other uncertainty, it presents both problems and opportunities. On the downside, we must be open to and plan for, the worst-case scenario that international travel does not return to pre-pandemic levels for several years. We must prepare to see few international tourists arriving in Australia or anywhere else.
COVID-19 has caused international visitor numbers to fall by 80% to the year ending December 2020 – a catastrophic decline. According to Austrade figures, in the 2018-2019 financial year, international inbound arrivals to Australia totalled 8.6 million visitors, spending a total of $45 billion while on their trips. The International Air Transport Association estimates that passenger numbers won’t return to these 2019 levels until 2023–24. But, the reality is that we just don’t know if that will happen, and wishful thinking is not a sensible approach to a financial and social crisis of this magnitude. Planning a recovery from this level of lost revenue means developing practical strategies for local travel and tourism.
Australians are one of the world’s great travelling nations. In 2018-2019, 11.2 million of us returned from an overseas trip; an incredible number given our population of just over 25 million. We spend billions of dollars annually in other countries. Now is the opportunity to look inwards and for our local tourism operators to provide holiday packages that compete with the low-cost international packages we used to enjoy so freely.
Trusted travel bubbles, such as with New Zealand, are another source of recovery. However, along with the 6 April announcement came a warning that this was a fragile arrangement and could stop at any time. Given this uncertainty, travel bubbles should be bonus income, not foundation income. Foundation income, whether we like it nor not, will have to come from domestic tourism until we revert to pre-COVID travel conditions.
Foreign visitors to Australia will give way to increased local tourists who cannot travel overseas. Still, most experts agree this will not make up for the loss of international tourist dollars. As the Austrade report, Moving Forward: The role of domestic travel in Australia’s tourism recovery notes: “In the short term there may be some available capacity as people cannot venture overseas, but this is expected to only prop up the domestic market rather than enlarge it.” Given the domestic tourist spends on average $700 on a holiday that lasts only 4 days and the international arrival spends $6500 and stays 18 nights, this seems to be a reasonable assumption. What’s more, from my experience as a hotelier, foreign visitors spend their money on different things and in quite different ways to domestic tourists.
A new-found reliance on domestic tourism will mean that the economics of local tourism will most likely have to change so that local becomes appealing, affordable, and attracts a wide variety of travellers from the budget to the luxury end. The spend might be less, but at least it will be reliable and given people have nowhere else to go, the domestic market should grow.
In the cities, international hotel chains might have to refocus themselves to market to locals as luxury escapes or create themed experiences (without being kitsch) to appeal to domestic travellers. They need to give us a reason to stay with them.
The market for Australiana souvenirs such as those found in the tourist hotspots will all but disappear during this domestic tourism period. This provides an opening for the development and sale of local products and produce to the domestic audience – much like the style of successful tourism spent in regional city escapes from Orange and Mudgee to Ballarat, the Margaret River, and Darwin.
While there are some regional success stories like those above, regional Australia has been dying for decades. And this is where I see our most significant opportunity: the shift to domestic tourism to revive regional centres. It would provide an opportunity for Australia’s struggling regional towns and cities to reinvent themselves for domestic tourism and the associated domestic-style holiday spending. The social and community upside of this could be transformational for our regions, many of which suffer from falling populations, poor employment prospects, lack of infrastructure, and the resulting financial and social hardship.
Local accommodation is heavily booked as I write this, but if domestic tourism is to grow over the longer term, then outside the spend on accommodation, regions will need to become creative to continue to attract tourists. Additional regional holiday spending could be lead by a resurgence of activities such as performances and arts events, rural lifestyle events, crafts, produce, and community-based projects to attract Australians to spend. There is a wealth of small country towns that could reinvent themselves for this market. But to assist this transition, the federal and state governments must support a wide range of tourism services and suppliers. This funding must be spent creatively and across a variety of sectors to promote and support regional tourism development and related businesses and ventures because all this will help generate employment and reinvent these country towns.
Domestic tourism's success also means holidaying in a greater variety of destinations than the traditional coastal escape. It means venturing inland to lesser-known cities and tiny towns and exploring what they can offer. It means learning more about our history and culture and understanding the benefits that spending at home can provide to our far-flung communities and across the country.
On the supplier side, hotels and tourism providers must be strategic about obtaining money from these new tourists. They must attract their new audience by providing increased value for money to this new audience who are desperate to holiday – anywhere.
The shift to domestic tourist also calls for a cultural shift. We need to value our local culture and history and embrace and champion local producers. Regional centres need to package and tell their stories to these new domestic visitors and grow demand by word-of-mouth. Regional museums and cultural centres need to look at how they can make their local stories heard – because there is no end of amazing stories in regional Australia. We need to move away from Australiana souvenirs and experiences and encourage domestic tourists to embrace and learn about indigenous culture and heritage, and champion the country’s natural beauty and skilled craftspeople, artists, and culinary experts who live in all corners of the nation.
The 2019 Buy From the Bush initiative – essentially an Etsy for the regions – was an outstanding example of what can be achieved fast. Started by one woman, Grace Brennan from Warren NSW, it gave regional nano-businesses and producers a new way of accessing national markets on a level playing field. According to an Accenture study of Buy From the Bush: 21% of those involved employed new staff as a result of being a member, 45% of business owners learned new skills, and 90% said they experienced increased quality of life as a result of selling their products there. This is an enormous success story, but the report also notes that 95% of those sellers are in Southeast Queensland and NSW – leaving huge opportunities for us to develop more such initiatives to bring greater online and tourist spend to the regions.
We have done exceptionally well, navigating COVID-19. Now it’s time to approach domestic tourism with a positive and creative mindset to make the most of what we have on our doorstep as we navigate the long tail of the pandemic.