Tourism hit from bushfires to soar to $4.5 billion
The real impact of the bushfires on Australia’s tourism as a result of the bushfires has dwarfed initial estimates, with new reports showing the nation could lose more than $4.5 billion by the end of the year.
The Australian Tourism Export Council (ATEC) has revealed the number of international tourists booking holidays to Australia is down 10 to 20 per cent, and it’s only getting worse.
Around 70 per cent of ATEC’s 850 members had received cancellations for trips valued between $5,000 and $500,000, with American, British and Chinese tourists the biggest groups opting out, the AFR has reported.
Also read: A new platform wants you to spend with towns abandoned by tourists
Also read: Here’s all the big business, CEOs donating millions to bushfire relief
ATEC managing director, Peter Shelley, urged the government to produce a new tourism campaign in a bid to boost bookings.
"If we come out with a strong global campaign soon – if we get our messaging right as the fires dissipate, that could really help stem the cancellations and boost forward bookings," he said.
"It's a very sensitive time and has to be handled right, but we need to push the message that Australia is welcoming tourists."
Council members – including Qantas, Helloworld and Intercontinental Hotels Group – found all price points of the tourism market had been affected, with both high net worth individuals and mums and dads cancelling due to the bushfires.
UBS economists estimated earlier this month that a 10 per cent reduction in tourism could be worth $1.3 billion – $3.2 billion under what ATEC is now expecting for the rest of the year.
Knock-on effect on the economy
The dollar-hit to tourism is expected to translate to between a 0.2 and 0.4 per cent GDP hit, economists have said.
“Inbound tourism is… likely to be impacted by the heavy coverage of the bushfires globally,” AMP chief economist Shane Oliver said.
“This [impact] may be short lived but it could last a year or so.”
Chief analyst at Wealth Within, Dale Gillham, expects economic costs to eclipse the impact from the Black Saturday fires at $4.4 billion.
“There is no doubt that the bushfires will impact the economy as government funds are diverted to the relief effort,” Gillham said.
“Given the severity of the fires in the farming community, we will initially see agricultural output fall along with tourism and lost jobs in the fire impacted zones. That said, let’s not forget that the ongoing drought in Australia has already had a significant impact on our economy.
Economist Stephen Koukoulas said: “The hit to the economy from this will be big and will likely show up in the data released over the next few months.”
Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, property and tech news.
