Unrestricted air travel between New Zealand and Australia recommenced this week, representing the first two-way quarantine-free travel since March 2020. The resumption of travel between the two nations is expected to provide a much needed boost to the tourism industries of both countries, which have been hammered by the COVID-19 pandemic.
Australian tourism
In Australia, revenue for the Tourism industry is expected to fall by 38.1% in 2020-21, to $71.2 billion. This follows a decline of 20.9% in 2019-20. International tourist visitor nights in Australia are expected to decline by 82.6% in 2020-21. Over the year through December 2019, over 8.7 million international travellers arrived in Australia. Over the following year, this number fell to only 1.7 million. The number of enterprises in the Tourism industry is expected to decline by 6.7% in 2020-21.
Before the pandemic, New Zealand was the second largest source of international visitors to Australia, accounting for 14.9% of total international arrivals.
In 2018-19, before the COVID-19 pandemic, international travellers accounted for 26.1% of tourism revenue. In 2020-21, this amount has fallen to only 0.4%. The newly commenced travel bubble is anticipated to fuel a partial recovery in revenue from international tourists. However, this recovery will likely be slow, as potential tourists remain wary of committing to travel bookings after experiencing cancellations due to outbreaks of COVID-19 in 2020. The number of travellers between New Zealand and Australia is expected to grow from 9,500 in Q4 2020, to 1.36 million in Q4 2021.
New Zealand tourism
Across the Tasman, the Tourism industry in New Zealand has also been significantly disrupted by the COVID-19 pandemic. The number of international visitor arrivals to New Zealand over the year through February 2021 fell by 94.2% relative to the prior year. In February 2021, a survey by Tourism New Zealand found over half of all tourism operators claim they will need to close this year if operating conditions do not improve.
In February 2021, only 5,297 international travellers arrived in New Zealand, including 1,021 travellers from Australia. Prior to the pandemic, Australia was the most significant source of international visitors to New Zealand, accounting for 43.6% of all arrivals. Close to 194,000 travellers arrived in New Zealand in February 2020 for holiday purposes. In February 2021, this number had fallen to only 111 travellers.
Travel bubble expansion
With travel between New Zealand and Australia now normalising, both nations are focusing on incorporating other countries into the travel bubble. A potential new entrant is Singapore, which was a major travel hub prior to the COVID-19 pandemic. Discussions between the governments of Singapore and Australia have commenced, but no expansion of the travel bubble is expected until the second half of 2021. Beyond Singapore, other targets for travel bubble expansion include South Korea, Vietnam and Japan. Pacific islands that have successfully eradicated COVID-19 may also join the bubble through New Zealand.
The travel bubble remains fragile, with travellers being warned that outbreaks of COVID-19 may lead to flight cancellations. A case of COVID-19 was discovered in Auckland Airport on 20 April, just one day after the travel bubble commenced.
Tourism outlook
Revenue for the Tourism industry in Australia is expected to grow at an annualised 15.9% over the five years through 2025-26, to $149.1 billion. This includes anticipated growth of 58.3% in 2021-22, and 16.3% in 2022-23. In 2024-25, tourism revenue is expected to surpass the peak achieved in 2018-19. However, the recovery in tourism expenditure is forecast to be hindered by ongoing fears surrounding the COVID-19 pandemic, the Federal Government's likely cautious approach to easing Australia's international border controls, and the downturn across the global economy.
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