International travel to and from Australia reached an all-time low in 2020-21. The COVID-19 pandemic has essentially halted international travel since March 2020. Only 130,000 international travellers came to Australia in 2020-21, down from 9.34 million in 2018-19. Australians hoping to travel overseas fared little better in 2020-21, with 220,000 overseas trips being reported during the year. This represents a remarkable 98.0% decline from 2018-19, when Australians made 11.23 million trips overseas. Although there are few surprises in these results given the strict border closure implemented by the Federal Government, the scale of the decline demonstrates the challenges faced by tourism-reliant businesses in Australia. Tour operators, accommodation providers and airlines will continue to face challenges while the international border remains closed, which is increasingly likely to be until March 2022.
Travel bubbles have been heralded as a potential relief to tourism sector businesses. While COVID-19 outbreaks often thwarted these plans, the brief establishment of a travel bubble with New Zealand provided a slight uptick in international travel in late 2020-21. 22,610 Australians travelled overseas in April 2021, up from 8,320 in the previous month. Travel to Australia rose again in May 2021, to 36,190, with New Zealand accounting for 78.8% of all visitor arrivals. However, international travel to Australia fell slightly in June 2021, after the New Zealand travel bubble was paused on 26 June due to COVID-19 outbreaks in several Australian states.
The strong recovery in domestic travel expenditure has been a silver lining for tourism sector enterprises. In May 2021, domestic tourism expenditure totalled $6.4 billion dollars, 9% higher than in May 2019. This is despite May 2021 trip numbers being 12% below the pre-COVID benchmark in 2019. Closed international borders have forced high-value travellers, that typically opt for trips overseas, into the domestic tourism market. As a result, expenditure per trip has been highly elevated during 2020-21, supporting the tourism sector.
International travel to and from Australia is expected to rebound once international border restrictions are eased. Pending any additional major outbreaks of COVID-19, Australia’s border is likely to be reopened later in 2021-22. Assuming an opening at end March 2022, international travel to Australia is forecast to grow by 884.6% during the year, with international travel by Australians growing at a similar rate. However, the projected total of 1.28 million arrivals to Australia remains significantly below pre-COVID benchmarks. The full recovery of the international tourism market is expected to occur during 2024-25. Overall, international travel to Australia is forecast to grow at an annualised 54.7% over the five years through 2026-27.
