Summary
- The Australian economy is showing remarkable signs of healing that can bode well for travel and tourism players.
- The mutually beneficial relationship between tourism and the economy can be a win-win situation for a country.
- The higher level of discretionary income and enhanced business operations can have a domino effect on tourism recovery.
The COVID-19 pandemic emerging out of the blue turned flourishing economies into basket cases overnight, with industries like travel and hospitality being worst-hit by the impromptu restrictions. However, with the rollout of vaccines, it appears that the past can finally be put behind, as the world emerges stronger and more resilient.
The optimistic signs are already out there. Australia witnessed an above-the-anticipated GDP growth of 3.1% in the December quarter while consumer sentiments are moving on an upward trajectory. Significantly, the Westpac-Melbourne Institute index of consumer sentiment marked an increment for a second consecutive month in March, rising 2.6%, over 1.9% in February.
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Although retail sales dipped 1.1% in February due to localised lockdown in Western Australia and Victoria, economists are betting on further rebounds with improving employment rates.
The upbeat scenario could prove to be the golden ticket for the travel industry to not only come out of the woods but repay the favour through substantial contribution back into the economy.
Let us look at how the recovering economy is all set to bolster the travel and tourism industry.
More disposable income for leisure travel
The number of tourists hailing from a particular country is inextricably linked to its income and population. For the same reason, the number of Chinese travellers taking international trips has increased significantly with the rise in the Chinese economy.
Thus, a stabilised employment scenario would mean a higher number of people having that extra cash and financial security to take a trip for leisure purpose.
In turn, it is expected to increase the number of job opportunities and grease the wheels for a tourism reboot. Luxury travelling providing high margins to travel players would be at the forefront to catapult the economy.
Higher business travel requirements
An elevated consumer activity generally cascades down to increased meetings and discussions as companies buoy up their business operations to tap the growing market potential. Several face-to-face conferences that were put to a halt amid extreme restrictions last year have already started to take place.
While the digital tools remained fundamental for business communication during the pandemic epoch, the situation can change once the fully revived air travel is back in the picture. Many anticipate that following the pandemic recovery, physical and virtual meetings are expected to exist side by side, complementing the business scenario.
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More direct & indirect support to travel industry
With the economic scenario improving, both the Government and people are better placed to offer a lending hand to the battered travel industry. The Morrison Government is investing $12 million in 800 K discounted holiday flights backed by the Government, which is expected to assist smaller tourism operators.
Furthermore, the Government is urging Australians to book a domestic holiday which would increase cash influx into the trouble tourism industry.
As part of the Government’s indirect effort, infrastructure developments can play a key role in alleviating the travel and tourism scenario. The 2021 Infrastructure Priority List released by Infrastructure Australia consists of several development projects that can be a support-system for travel and tourism revival.
The ongoing economic developments can be a green light to expedite the recovery tourism and travel sector, involved in a mutually beneficial relationship with the economic scenario. However, several travel complexities still dominate the current pandemic era, which would require some practical solutions before economic upliftment can press a fast-forward button to travel recovery.
Source: Kalkine Media
