Australia’s pandemic-inspired love affair with Australia may be over
By Sue Williams
The passionate pandemic love affair Australians have been having with their own country has begun to cool, with domestic tourist operators reporting that the number of smitten travellers is falling.
The fresh allure of international travel combined with the impact of interest rate hikes, inflation and other cost of living pressures have all converged to lower the libido for staying locally.
“Domestic travel has lost some of its shine,” said Michael Johnson, Accommodation Australia chief executive.
“Coming out of COVID, it was unusually strong and we all thought that might have lasted a lot longer but it certainly has slowed.
Michael Johnson, Accommodation Australia CEO, says domestic travel has lost some of its shine.Credit: Edwina Pickles
“We had so much pent-up demand last year that’s no longer there this year. We’re seeing offshore numbers increase dramatically, with people going away to Europe and Asia, and the rising cost of living is certainly biting when it comes to domestic travel, and the number of international visitors is still only running at 50 per cent of what it was pre-pandemic.”
At tour company Bunnik, which promoted domestic tours during the pandemic, joint chief executive Dennis Bunnik agrees that numbers are down.
“Australians’ love affair with Australia hasn’t necessarily diminished completely; it is still there,” he said. “But maybe we should look at it as having two lovers, with the return of international tourism.
“Domestic tourism isn’t going to go away, but the numbers are lower. Our domestic tours are still selling but not at the same level as they were before.”
This slowdown comes off the back of new figures for the year ending this March that show the number of Australians visiting New South Wales had been up 41.6 per cent on the previous year, with expenditure 61.8 per cent up and nights stayed, at 85.3 million, up 27.2 per cent.
Those numbers were similar for Victoria, with a 45 per cent surge in visitors year-on-year, a 57 per cent spike in spending and 53.3 million nights, up 28 per cent.
But while regional tourism has definitely benefitted from that domestic travel boom, the recent slowdown is hitting hard, said Margy Osmond, chief executive of the Tourism and Transport Forum.
“While total tourism spending in regional areas is above pre-COVID levels, operating costs and other expenses have also increased as cost-of-living pressures intensify,” she said.
“There are fewer visitors to many parts of regional Australia compared to before the pandemic, made worse by the slow return of international tourists, which remain below pre-COVID levels. Increased accommodation and flight costs to travel to regional areas are also impacting the industry, along with difficulties in attracting staff.”
Quest Apartment Hotels’ David Mansfield says despite a dip, visitation numbers are encouraging.Credit: Eamon Gallagher
At Choice Hotels, which operates a huge number of brands, including Quality Hotels, Comfort Hotels, Clarion and the Ascend Hotel Collection, spokesperson Maddy Moloney says during winter many people have preferred to seek the sun in the Pacific Islands, especially when they’ve been so affordable. As a result there may be more deals appearing for local travellers.
“While there’s been a significant growth in corporate travel, the residential interest rates have affected leisure travel,” she said. “So it’s very much about driving promotions through our loyalty programs to incentivise bookings, and booking for later.
“You’ll always be able to find discounted rates of 10 to 20 per cent in the market, especially if you’re booking ahead. But cheaper rates overseas have taken a bit of the shine off the domestic market, especially as a holiday to Fiji might be easy, while a trip to the outback takes more planning.”
Seasonality has also returned with a vengeance to the market, which hadn’t been around last year, when people were just happy to be able to go anywhere at any time, advises David Mansfield, managing director Australia of Quest Apartment Hotels, with 9500 serviced apartments across 121 properties.
“We have seen a bit of a dip and there’s a definite swing back to international travel with every third person I know now in Europe, whereas last year they were all in Australia,” he said. “Domestic visitation is not as strong as last year, but it’s still encouraging.
Discovery Parks Lake Bonney reopened in February 2023 amid a tourism boom.
“We hope inbound travel will continue to trend upwards too. We’re now at only 55 per cent of what we were before, and I don’t see China coming back to pre-pandemic levels any time soon.”
Australian numbers are strongest at holiday parks within an hour or two of capital cities, but weakest further into the regions and outback, says Grant Wilckens, chief executive and co-founder of Discovery Parks.
“There’s certainly been a softening in the numbers compared to last year and we put a lot of that down to overseas holidays taking off during winter,” he said. “But we’re optimistic about summer and forward bookings have been strong for Christmas.”
Meanwhile, chief executive of the Accor Pacific hotel group, Sarah Derry, says city hotels have benefited from the demand for rooms for the FIFA Women’s World Cup, and strong international attendance is expected for the South by Southwest (SXSW) music, film and media conference event in Sydney in October.
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