Lockdowns Weaken Oz’s Domestic Travel Recovery

According to GlobalData, with Australia battling a rise in COVID-19 cases, domestic travel has reduced drastically.

And the data and analytics company also points out that while Australia’s domestic recovery was strong in H1 2021, the reintroduction of lockdowns and state border closures will serve as a blow, and set to weaken and slow down the domestic travel recovery.

Additionally, GlobalData says that Qantas airline standing down its staff signals the prospect of a longer road to recovery.

Gus Gardner, associate travel and tourism analyst at GlobalData, points out that: “Quick domestic recovery in Australia could be in jeopardy with the cases spiking, and border closures getting extended, despite strengthening the domestic demand in H1 2021.”

Gardner indicated that: “GlobalData’s latest forecast expects the domestic travel to rebound to 93.8 million trips in 2021, returning to 80.4% of pre-COVID trips (2019), but the delta variant could hinder this expected strong recovery. Australia has been a leader in keeping COVID-19 under control with extremely low infection rates and strict international travel restrictions, kept cases at bay.”

And he continues: “The rise in infections lead to a blow to the tourism businesses, currently reliant on domestic travellers until at least mid-2022, when international borders may reopen. If lockdowns persist and traveller confidence drops, demand may dampen, and Australia’s domestic recovery could be prolonged.”

GlobalData notes that the recent restrictions have starved Australia’s tourism industry of trade, and the country’s biggest airline – Qantas – is beginning to feel the bite by standing down 2,500employees.

Said Gardner: “Qantas’ recovery has focused on domestic routes with international borders largely closed. The carrier was beginning to experience meaningful recovery, although the rise in cases has become problematic. The sudden decline in domestic travels and expected extension of lockdowns has lowered the carrier’s hopeful outlook.”

He explained that: “Qantas’ quick actions will reduce the financial burden from the loss of traffic and should help protect the future viability of the airline. However, recovery could now be dampened once restrictions lift as it takes time to return employees and could slow the expansion efforts.”

Australia has been slow to vaccinate its citizens due to low case rates. However, this poses a challenge and could delay the rebound in passenger demand if traveller confidence begins to take a hit.

Gardner adds: “The vaccine has provided a confidence boost to other nations and is beginning to underpin travel recovery. With limited vaccination progress, Australia is behind other countries. With low vaccination rates, travellers could be reluctant to travel without the vaccine as the risk has now increased. Therefore, recovery could now be delayed until the vaccination program gathers pace and Australian travellers become confident once again.”

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