Bushfires and Coronavirus Amount to a Double-Hit for Australia’s Tourism Industry

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When bushfires erupted around the majestic valleys of the Scenic Rim in Queensland, Australia, in September, Steve Noakes received a message from his wife. “I’ve locked up the house,” she said. “Not sure it'll be there when you go back home.” 

Noakes’ home-and his cat-survived. But there the luck stopped for the chairman of the award-winning Binna Burra Lodge. The lodge’s cabins, which were operating for practically 90 years, were destroyed-as was the heritage-listed lodge itself. The newly built sky lodges were also damaged. 

“If the embers are coming, you need to make some pretty important decisions: to remain and defend [property], or even to get out,” says the 64-year-old Noakes. “We did a voluntary evacuation [of the guests and staff]. A few hours later, the trees had come down and caused rock-falls on our single access road. Luckily the team got out before access was cut.” 

Half a year later, Binna Burra Lodge has yet to re-open. The single-access road remains take off. And not just does the business have to find the cash to rebuild, but up to now Binna Burra has lost A$750,000 (US$493,863) on future bookings. The lodge’s usual staff of 70 people, which managed to get the largest employer locally, has been whittled down to a core of just seven. 

Binna Burra Lodge isn't alone in its woes. Australia’s catastrophic bushfire season, combined with new risk of the global coronavirus epidemic, has resulted in a devastating double-hit for the tourism industry here. 

“This has been the largest bushfire by an extended shot since the beginning of European settlement,” says Dr. David Beirman, senior lecturer in tourism at the University of Technology Sydney. “It isn’t confined to 1 state-it’s the complete country. The impact, certainly short-term, will be horrific.”

Bushfires are part of an all natural pattern of destruction and regeneration in Australia. Yet fires come early july have burned for longer, and with an increase of ferocity, than in previous years. By January, a record-breaking 8.4 million hectares in the united states had been razed. And, crucially for tourism within the major cities, this is the first time that hazardous smoke has infiltrated Sydney and Melbourne, often for weeks at a time. 

As such, both domestic and international tourists are staying away, with the Australian Tourism Export Council (ATEC) predicting that the fires could have cost Australia A$4.5 billion by the finish of 2020. Earlier this season, the ATEC explained that 70% of its members had suffered cancelations.

Meanwhile, Australia’s travel ban on any non-citizens entering the country from China-the country’s major way to obtain tourism, who spent A$12 billion in Australia in 2018 alone-could cost the united states further billions.

Critically, the bushfires, specifically, run the chance of changing just how that Australia is perceived worldwide-as a happy-go-lucky country filled up with easy-going people, endless sunshine, and untouched natural splendor. 

Indeed, news headlines during the last half-year have depicted Australia as the contrary: a country on the frontline of climate change in the throes of a national emergency, the one that might well continue for years. As Richard Denniss, chief economist and former executive director of policy think tank The Australia Institute, puts it: “Beyond a war, Australia has already established a number of the worst press imaginable. Instead of summer [here] being truly a time of relaxation and fun, it’s becoming among fires and anxiety.” 

That anxiety arrived completely force on New Year’s Eve. Images broadcast globally showed 4,000 tourists and residentsbeing evacuated by the navy from Mallacoota in Victoria, where these were stranded on the beach as skies in it turned orange. 

For tourism operators, the havoc has not only damaged or destroyed infrastructure and created larger reputational loss, but hasalso damaged future running costs. 

O’Reilly’s Rainforest Retreat, which opened in 1926 and is nestled within Queensland’s National Lamington Park, were able to avoid the fires. 

Evacuations, however, still cost A$239,000 in canceled bookings over another 48 hours. Further cancelations led to a complete cost to the retreat of around A$400,000.

Insurance, too, is proving prohibitive continue. This past year, O’Reilly’s insurance cost A$380,000 per annum and covered losses up to A$70 million. This year, that figure has jumped to A$1.3 million with coverage of just A$10 million.

“They are convinced it'll burn down next year,” explains Shane O’Reilly, 58, managing director of the family-run business. So that you can pay the insurance, he's looking at hiking room rates from A$190 a night to just under A$500. “It would probably be a lot cheaper for us to return to running cattle. What we've been given is unaffordable, but where we go from here? We’re unsure,” O’Reilly says. 

Noakes, too, is suffering from insurance issues. While Binna Burra Lodge was insured for up to A$16 million, the fact that it had been destroyed by a bushfire signifies that insurers will only dole out A$3 million. “We’re burning that up real fast,” he says. “Paying our creditors, retaining core staff, paying back lost bookings.”

So what can be done? Advertisements are now rolled out internationally as part of a A$76 million government grant provided to Tourism Australia. They promise: “There’s still nothing like Australia.” 

Yet Beirman believes that the primary and most important challenge “is to get the domestic market travelling again.” 

He uses the example of the holiday-destination of Tathra on the Sapphire Coast in New South Wales, that was devastated by bushfires in 2018. With Beirman’s help, they put out a note to the domestic market. It amounted to, he says, “Yes, we’ve sustained a whole lot of damage, nothing is as good as it usually is, but, particularly for individuals who head to Tathra year in, year out, please come as a manifestation of solidarity.” Inside a fortnight, visitors were arriving again, albeit cautiously.

The main element, “particularly with sunlight, sand, and sea destinations is to concentrate on your annual holiday travelers who always come back to the same place with their families,” he adds. “Start with them and build-up the staircase of confidence.” 

For Noakes, it is a stairway he's eager to start climbing. “We do want to rebuild” and reopen, he says. “How? I don’t know yet. However the response to the question is yes.”
Source: https://www.barrons.com

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