Whitsundays yacht operator Sharon McNally was enjoying a surge in bookings as Queensland’s battered tourism market began recovering in July after seven months of the COVID-19 pandemic and the bushfire crisis before that.
But earlier this month, the Queensland government reimposed restrictions on its NSW border amid concern about a second wave of coronavirus infections down south.
“We’ve flipped right back,” McNally tells SmartCompany.
“With the border closure, we lost a whole heap of bookings.”
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Tourism-reliant businesses across the state were left reeling when the border closure was reintroduced. With the market having already lost access to the $6.1 billion international tourism market, domestic travellers are the only source of revenue for small business owners.
Now, at least for the time being, intrastate travellers from Brisbane and elsewhere in the state are all that’s left — a category of travellers McNally says has been buoyed by efforts to keep the virus out.
“It’s a double-edged sword,” McNally says.
“Closing the border was a health decision, not an economic one, but local travellers have more confidence now.”
Businesses in Queensland’s tourism hotspots have been some of the hardest hit by the pandemic, with analysis indicating businesses in the Whitsundays and Port Douglas are among the most reliant on JobKeeper wage subsidy payments.
Also heavily reliant on the tourism dollar, both areas are relying on the summer months to revitalise their local businesses, but with the entirety of Victoria, NSW and the Australian Capital Territory still classified as COVID-19 hotspots, the prospect of a bumper seasonal trade are slim.
McNally, owner of Cumberland Charter Yachts, is doing her best to drive business to the region with frequent updates to the company’s website, but the market wasn’t built for reliance on intra-state tourism.
“We could mothball everything again and just tick over, but that would be heartbreaking to go through that again,” McNally says.
Summer uncertainty precedes long-term impact
Luckily, McNally doesn’t have much debt, and a raft of state and federal government support payments are helping the bills get paid. But not everyone is so fortunate, raising the prospect of long-term impacts for the broader community.
Forty-four cents of every dollar spent on tourism in Australia is attributed to regional communities, underscoring the absolute importance of the industry to thousands of communities across the country.
“Businesses are getting to the point of taking their boats out of the marina and putting them in a shed. That’s extreme,” McNally says.
“We’re going to face some long-term challenges, people will leave our communities, we’ll suffer brain drain and a lot of these businesses won’t come back.”
There is still no definitive timeline for when restrictions will be eased, meaning tourism operators are heading into the summer period shrouded in uncertainty about who, if anyone, their customers will be.
A survey of hotel operators in regional Queensland published by CBRE last week found 50% of operators expect a recent spike in coronavirus cases to negatively impact their 2020/21 outlook, while over one-third expect significant decreases in their booking pipeline through to October.
Queensland Tourism Industry Council chief executive Daniel Gschwind says the uncertainty is “sucking the oxygen” out of business capacity across the state, particularly those based around the Great Barrier Reef, which typically draw 70-80% of their business from international visitors.
“If borders remain closed over summer, it would be a very difficult situation for operators,” Gschwind tells SmartCompany.
“There’s a feedback loop. You need airlines to fly to these places, and without critical mass coming out of the southern markets, it’s doubtful they’ll even service those routes.”
While Queensland has few of its own cases, the progress of the virus in Victoria and NSW could make or break businesses across Australia’s northern-most state in the coming months, with Gschwind estimating upwards of 30% of business in Port Douglas and the Whitsundays typically comes from Victoria.
“We’re all coming to grips with this being an event that will leave profound marks on communities,” Gschwind says.
“We will not only have a different business landscape, but consumers will approach us in a different way, and we have to prepare for that.”
State authorities have told the industry body they’re “re-assessing the situation daily”, but Gschwind remains concerned about a situation where Queensland will continue to move between restricted and more open borders for the foreseeable future, an eventuality which would throw business planning into further chaos.
“It appears we will have cases somewhere in Australia for quite some time, so we need to work out how, despite that, we map out and navigate a path through those occasional clusters,” Gschwind says.
“We’re urging the state government to give us a little bit more clarity about what our arsenal of responses looks like.”
Border rules remain the main sticking point for business groups, with widespread acceptance now that international travel restrictions will remain in place over the medium term, unlikely to become a significant part of the market again until well into next year.
Whatever eventuates, McNally says businesses in the region are resilient, and aren’t giving up yet.
“We’re used to tough times. We’re leaning on each other as business owners, supporting one another, things like developing partnerships are a big thing at the moment.”