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Australia’s lockdowns weaken domestic travel recovery Australia’s lockdowns weaken domestic travel recovery

Australia’s Lockdowns Set to Weaken Domestic Travel Recovery

With Australia battling a rise in COVID-19 cases, domestic travel has reduced drastically. While Australia’s domestic recovery was strong in the first half (H1) of this year, the reintroduction of lockdowns and state border closures will serve as a blow, and set to weaken and slow down the domestic travel recovery. Additionally, Qantas airline standing down its staff signals the prospect of a longer road to recovery, according to GlobalData, a leading data and analytics company.

Gus Gardner, associate travel and tourism analyst, GlobalData, commented, Quick domestic recovery in Australia could be in jeopardy with the cases spiking, and border closures getting extended, despite strengthening the domestic demand in H1 2021. GlobalData’s latest forecast expects the domestic travel to rebound to 93,8 million trips this year, returning to 80,4 percent of pre-COVID trips (2019), but the delta variant could hinder this expected strong recovery. Australia has been a leader in keeping COVID-19 under control with extremely low infection rates and strict international travel restrictions, kept cases at bay.”

According to Gardner, the rise in infections lead to a blow to the tourism businesses, currently reliant on domestic travelers until at least mid-2022, when international borders may reopen. If lockdowns persist and traveller confidence drops, demand may dampen, and Australia’s domestic recovery could be prolonged.”

The recent restrictions have starved Australia’s tourism industry of trade, and the country’s biggest airline – Qantas – is beginning to feel the bite by standing down 2,500 employees.

Gardner continued by saying,  “Qantas’ recovery has focused on domestic routes with international borders largely closed. The carrier was beginning to experience meaningful recovery, although the rise in cases has become problematic. The sudden decline in domestic travels and expected extension of lockdowns has lowered the carrier’s hopeful outlook. Qantas’ quick actions will reduce the financial burden from the loss of traffic and should help protect the future viability of the airline. However, recovery could now be dampened once restrictions lift as it takes time to return employees and could slow the expansion efforts.”

Australia has been slow to vaccinate its citizens due to low case rates. However, this poses a challenge and could delay the rebound in passenger demand if traveller confidence begins to take a hit.