WA's tourism industry takes $3.1 billion hit

Accommodation providers and tourism operators in the region have been forced to close indefinitely during the COVID-19 crisis. Image by Shutterstock.
Accommodation providers and tourism operators in the region have been forced to close indefinitely during the COVID-19 crisis. Image by Shutterstock.

The tourism industry has lost $3.1 billion and more than 30,000 jobs as six months' worth of bookings were cancelled, and refunds paid to customers, following WA's regional travel restrictions.

Tourism Council chief executive officer Evan Hall said tourism operators have not just lost three weeks of trade since regional travel restrictions were implemented, they immediately lost six months' worth of bookings as people were encouraged to cancel their holiday plans.

Mr Hall said tourism businesses could not take bookings again until restrictions were lifted, but many businesses would not survive that long due to an immediate cash flow crisis.

"For the tourism industry, it's not simply a case of removing restrictions and customers returning immediately - there will be a lag time before bookings and revenue return," he said.

"For regional seasonal businesses, this means they face up to 18 months without customers and income as they had just concluded their off-season when travel restrictions came into place."

A survey of tourism businesses conducted last week by the Tourism Council of WA, revealed more than 70 per cent of operators had insufficient cash to pay employees or owner-operators and service costs essential to survive a period of hibernation.

Mr Hall said tourism was a significant economic contributor, but the travel restrictions had already resulted in thousands of jobs being shed across the industry.

"More than sixty per cent of businesses have shut down and the remainder have dramatically reduced operations. Without immediate cash flow to sustain them, some of them may never reopen for the eventual recovery," he said.

Registered Accommodation Providers of the Margaret River Region spokesperson Deb Noonan said the immediate impact to income and cash flow started in March.

"Most accommodation providers in the region have lost their whole year's worth of bookings and our phones and emails have been silent for nearly two months, with the exception of cancellations," she said.

"On top of that, many businesses were put into the negative as they had to repay deposits on large numbers of cancellations, that took place in March once the borders were closed and planes were grounded."

Unlike other businesses, Ms Noonan said it was very hard for accommodation providers to adapt their business when the borders were closed seeing many operators in the region shut down indefinitely.

Ms Noonan said the recovery period post COVID-19 would depend on the length of time WA's borders were closed and how many could take advantage of the government incentives on offer.

"Many accommodation providers have reported they have fallen through the cracks," she said.

While the government encouraged small businesses to take out loans or overdrafts to help them through the crisis or pay wages, Ms Noonan said this came with added pressures on the other side.

"Businesses would need to repay that, in some cases, hefty loans in uncertain times," she said.

"Many are questioning how the tourism industry will bounce back, given many people in Australia will be facing an economic crisis, and many Australians have been forced to take their annual leave over this period.

"The uncertainty is certainly a concern for all.

"We have also looked at this down time as a positive."

Ms Noonan said they had been using the downtime to revise their business procedures and complete jobs around the property they did not have time to finish before the crisis.

"Of course with no income many jobs just can't be done, as it costs money," she said.

The state government has established a special team at Tourism WA to offer support and information to members of the tourism industry during the COVID-19 pandemic.

The Industry Support Team was developed with key industry partners to offer information to WA's tourism operators from people who understood the tourism industry.

Tourism Minister Paul Papalia said they knew tourism operators were doing it tough at the moment, so they wanted them to know they were there for them.

"Our aim is to work closely together with tourism industry operators through this challenging time to try to ensure the recovery phase goes as well as possible," he said.