Earlier this week, Prime Minister Scott Morrison announced that after two years, Australia is finally re-opening its borders to fully vaccinated international tourists from February 21. According to Qantas boss Alan Joyce, Australia is “finally back open for business”. The lack of international tourists over the last two years has cost the retail industry an estimated $90 billion – given tourists spent around $45 billion between July 2018 and 2019, according to data from Tourism Rese
m Research Australia.
However, that money isn’t going to suddenly reappear in retailer’s coffers, warned Australian Retailers Association chief executive Paul Zahra.
“We need to be mindful that it will take years for international travel patterns to return to anywhere near pre-pandemic levels, but we expect there to continue to be a strong appetite for Chinese tourists to visit Australia,” Zahra told Inside Retail.
“It just won’t be an immediate snap back to levels we saw pre-pandemic.”
Prior to the pandemic, Chinese tourists made up $12 billion a year in revenue for retailers, spending around four times the amount of US travellers, the second biggest group of tourists in Australia.
However, in the past few years, as borders remained closed, international relations with China have cooled due to the protectionist attitudes of both the Chinese and Australian governments, and worsening trade tensions between the two countries.
According to a report in the ABC, only two airlines in China are offering flights to Australia, compared to nine pre-pandemic, though this could change in the months to come.
Revitalising retail
While many retail industries will welcome travellers back with open arms, the duty-free and CBD retail spaces will be breathing a sigh of relief over the news.
Duty-free business Heinemann Australia, which operates out of Sydney and Gold Coast airports, has had a stressful two years due to forced closures impacting its operations heavily, managing director George Tsoukalas told Inside Retail.
“Throughout this time, the focus was on our people and ensuring they were safe, healthy and engaged, and that we were able to support them as much as we could,” Tsoukalas said.
“We’re not expecting an immediate recovery back to our pre-pandemic 2019 passenger volumes, but we’re certainly looking forward to welcoming back more shoppers as international flight connections are reinstated and people feel more confident flying.”
Tsoukalas said the business will be scaled back up in line with passenger levels once travel is reopened, and that it has new promotions and brands lined up.
Zahra added that CBD retailers have also experienced a massive drop in business over the last few years due to low foot traffic, which is still yet to recover.
“There’s been a consistent effort on the part of local and state governments to work with us and broader industry groups to get our CBDs back on their feet,” said Zahra.
“The first and necessary step towards the revitalisation of our CBDs is opening us up to international visitors, who will start to return later this month. This has been a long time coming after more than 700 days of being cut off from the rest of the world.
“However, we need to be mindful that the return of international tourists, students and workers aren’t silver bullet solutions. We need a coordinated approach and additional measures to get our CBDs back to the thriving hubs they once were.”
As it stands, the only state that will not accept double vaccinated international travellers is Western Australia.
This decision has frustrated some in the retail community, with Wesfamers’ chief executive Rob Scott stating last week that it was “virtually impossible” to do business in the state.
Australian Institute Group chief executive Innes Willox agreed, noting that states needed to get on the same page in order to entice as many international travellers back to Australia as possible.
“The sooner we are one Australia, the better,” Willox said.
“The challenge now will be for the federal and state governments to support a major push to encourage all manner of visa holders to again look to Australia as an attractive destination. This will [have to be backed up by] similar public and private sector campaigns.”