International Tourism in Australia Struggles to Recover as Cruise Industry Booms

Australia's tourism sector faces slow recovery, with visitor numbers still below pre-pandemic levels. However, the cruise industry has seen a strong rebound, while the Great Barrier Reef faces climate-driven impacts. The aviation industry is rebounding, with international seat capacity surpassing pre-COVID levels.

Ayesha Mumtaz
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International Tourism in Australia Struggles to Recover as Cruise Industry Booms

International Tourism in Australia Struggles to Recover as Cruise Industry Booms

Australia's international tourism sector continues to face challenges in returning to pre-pandemic levels, with visitor numbers still significantly lower than in 2019. Despite the easing of travel restrictions in late 2021, key source markets like China have seen a dramatic drop in visitors, falling from 1.3 million in 2019 to just 507,000 in 2022.

Factors contributing to the slow recovery include high airfares, inflationary pressures on costs, and a shift in European travel preferences towards more environmentally-friendly options like trains. Experts estimate it could take until 2025-26 for Australian tourism to fully rebound. Affordability remains a key concern, with visitors reporting high costs for flights, accommodation, food, and transportation.

Efforts to re-establish links with traditional markets like Japan and target emerging markets like India and Southeast Asia are seen as potential solutions. The government is also considering subsidies and discounted tourism packages to boost visitor numbers .

In contrast, the Australian cruise industry has seen a strong recovery, with 1.25 million Australians taking a cruise vacation in 2023, surpassing the 1.24 million who sailed in 2019. Australians are showing a preference for close-to-home itineraries within Australia, New Zealand, and the South Pacific. The cruise industry contributed over $5.6 billion to the national economy and supported more than 18,000 jobs in 2023.

However, the Great Barrier Reef has experienced substantial climate-driven impacts over the 2023-24 summer, including widespread coral bleaching, two cyclones, and several severe flood events. Aerial surveys found that 73% of reefs within the Marine Park and 6% in the Torres Strait experienced coral bleaching. The Reef Authority is working with various partners to monitor and respond to the conditions.

In positive news for the aviation industry, international seat capacity on planes has surpassed pre-pandemic levels as of April 2023, leading to a decrease in international airfares. Domestic air passenger traffic in India is also estimated to reach 154 million in the 2023-24 financial year, surpassing the pre-COVID figure of 142 million in 2019-20. The Indian government plans to invest $3.6 billion to expand airport infrastructure to cater to the growing demand.

Why this matters: The slow recovery of international tourism in Australia has significant economic implications for the country, which heavily relies on the sector for jobs and revenue. The contrasting boom in the cruise industry and the challenges faced by the Great Barrier Reef highlight the complex dynamics at play in the tourism sector post-pandemic.

Looking ahead, Tourism Australia has seen a surge in Indian arrivals, particularly for business and MICE events, with the Bid Fund Program securing over $17 million worth of events from India. As stated by Melissa Elf, Flight Centre's corporate global COO, "Over the next month, Australia's international capacity is expected to rise from 95% to 98%, while domestic capacity has been between 98-100% in recent months." The aviation industry's recovery, coupled with targeted marketing efforts, may help bolster Australia's international tourism numbers in the coming years.

Key Takeaways

  • Australia's international tourism still below pre-pandemic levels, with China visits down 60%.
  • Factors hindering recovery: high costs, shift to eco-friendly travel, and slow rebound in key markets.
  • Australian cruise industry has strongly rebounded, surpassing 2019 passenger numbers.
  • Great Barrier Reef suffers widespread coral bleaching and other climate-driven impacts.
  • International air capacity and domestic India travel have surpassed pre-pandemic levels.