The large boats at the Cairns marina demonstrate the devastation Covid has already wreaked on international tourism and point to yet more pain ahead if Australia’s botched vaccine rollout delays the reopening of international borders.
Local business consultant Pete Faulkner on Tuesday counted 10 large pleasure craft idle at the marina which would normally be out taking tourists to the Great Barrier Reef.
Faulkner said a boom in domestic tourism was helping keep businesses going but it was nowhere near filling the $1bn-a-year gap left in the local economy by the absence of foreign visitors.
“You’d need a 50% uplift to make up the difference,” he said.
The already-battered education industry is also bracing for more pain if it is unable to reopen to international students in 2021. Its peak body said the sector would be “compromised severely” if it lost a third year of lucrative overseas enrolments.
Australia’s vaccine program was already failing to hit its targets, with jabs by 1 April falling 3.4m short of a target of 4m initially set by the federal government, and also falling behind on the rate needed to hit a subsequent, less ambitious target.
The struggling program was thrown into disarray on Thursday night when Scott Morrison said the AstraZeneca vaccine was not preferred for under-50s.
The prime minister admitted on the weekend not all Australians might be vaccinated by end of the year due to “many uncertainties”. The initial schedule had been to have everyone fully vaccinated by October. He did offer a new goal.
On Monday, the federal treasurer, Josh Frydenberg, said of the delay: “The timing of the rollout is not expected to derail momentum in our economic recovery.”
However, the uncertainty over when Australia will be able to reopen to the world has the potential to delay the recovery in the tourism industry, Deloitte Access Economics partner Adele Labine-Romain said.
Qantas has already said it might postpone restarting international flights, which it had planned to do by late October.
International tourists poured $22.4bn a year into Australia in travel alone in pre-Covid times – a number that plummeted to less than $16.4bn last year as border closures shut the country off from the world.
“Even before this setback we were predicting it would take three years to return to pre-Covid travel,” Labine-Romain said.
She said that if Australians were still vaccinated by November or December, her prediction would stand.
“That said, if we’re in the first quarter of next year and we’re still having this conversation, we’re pushing back that timeframe. Every quarter that we delay this is a quarter we push recovery back and we run the risk of cutting ourselves off from the world.”
Labine-Romain said there was a lot of pent-up demand to travel and Australia was moving slowly to vaccinate its population when its peers – other rich countries – were moving quickly.
“If everyone else is opening up and we’re not, we’re missing out on that first demand,” the tourism industry expert said. She expected a big effort from the government to get the vaccination program back on track.
“If our vaccination program does go into 2022, we will be lagging countries like the US,” Labine-Romain said.
She said areas under most pressure included Cairns and the rest of far north Queensland, Western Australia and Australia’s two big cities, Sydney and Melbourne, which draw between 30% and 40% of their tourism traffic from overseas.
“If you’re dependent on international visitors, your future is looking mighty bleak,” she said.
Simon Westaway, the executive director of the Australian Tourism Industry Council, which represents small and medium-sized operators, said the industry needed assistance to maintain specialised, high-yield tourism such as balloon rides over Melbourne’s CBD that depend on international visitors.
“If we want to be a high-yielding tourism economy, and we were, we were the highest yielding tourism economy in the world … we’re going to have a hollowing-out of the industry in the next 12 to 18 months if we don’t get some targeted assistance.”
Westaway said the government needed to provide a new timetable for the vaccine program so that businesses could plan for the future.
“As an open economy, we’re going to be at a real disadvantage really quickly if the rest of the world vaccinates and we don’t,” he said. “It’s a real handbrake on recovery.”
Labine-Romain said the education sector, which before Covid was Australia’s fourth-biggest export industry, worth $37.8bn a year, faced similar problems to tourism.
The chief executive of the International Education Association of Australia, Phil Honeywood, said the sector could not afford another lost year.
“The loss of a third academic year would compromise our industry,” he said.
“Many students have been patiently studying remotely for two years and they just won’t stick around. As each academic year goes by, we’re estimating we are losing $10bn a year from the Australian economy.”
He said the education association was trying, with limited success, to get state governments to put up “politically courageous” plans to restart education to the federal government, which would only agree to arrangements involving charter flights – so that no seats were taken from Australians stuck overseas – and non-hotel quarantine.
“It’s diabolical, and it comes down to social licence to operate,” he said. “The wider Australian community has this misconception that international students take all their jobs and their student places.”