Report to members by Chris Porter, Acting Chief Executive Officer of the Victorian Tourism Industry Council

As Victorians prepare to embark on the Easter long weekend holiday, the events in southern Queensland and northern NSW are a stark reminder that the impacts of this pandemic continue to challenge our operations and reinforce the fragile nature of any recovery for our industry. 

These ongoing disruptions only serve to substantiate why the industry needs continued support at both the State and Federal level to sustain a solid pathway to recovery. Until we have a significant acceleration of our vaccination rollout, improved consumer confidence to travel interstate, and a reduction in the current restriction levels that continue to impinge business performance, we cannot achieve the same scale and scope of reactivation that many other industries have enjoyed.   

Yesterday we released our Visitor Economy Recovery Plan 2.0, a blueprint for recovery designed to rescue jobs and rebuild our industry as we face the ongoing challenges of COVID-19.

We again brought together the Visitor Economy Recovery Taskforce, first convened in May 2020, to review what elements of our original plan were funded in the 2020-21 State Budget and what remains unaddressed. As well, the task was to consider our current position nine months later and to further develop a platform that will guide the recovery of Victoria’s visitor economy over the next 3-5 years.   

There will be no silver bullet here, but rather we must have a sustained commitment from Governments at all levels to invest in both demand and supply initiatives that will drive the reactivation of our sector. This commitment needs to extend beyond the period of any single budget year; hence this plan looks to outline a roadmap to 2025 that can see our industry resume its rightful position as a powerhouse to drive Victoria’s economy.

This all becomes even more salient with the release today of TRA’s National Visitor Survey data tracking domestic tourism performance to December 2020. It’s not surprising to see that Victoria’s tourism performance has been hit harder than any other state, racking up a decline of 60% year-on-year in tourism spend, with a net loss of $19.5 billion to the year-ending December 2020. Visitor spend has not been this low in Victoria since 2005.

Bearing out what the industry has been saying for months now, the data confirms that our capital city has borne the brunt of the impact, with visitor spend falling by $14 billion, or 72% of the total decline for the state. Visitor spend in regional Victoria now exceeds that of Melbourne, delivering more than half of the total visitor spend to the end of last year.  

The National Tourism Business Activity and COVID Impact Survey that we have been conducting this week, alongside the Australian Tourism Industry Council (ATIC), so far shows that nearly 60% of respondents experienced weaker activity in the January to March period when compared to last year. Government restrictions, international and state border closures and lack of consumer confidence were cited as the main reasons for this weaker business activity in our industry. Nearly 50% of respondents noted they are worried or extremely worried about their business prospects for the next 12 months.

With JobKeeper now ceased, 35% of respondents are having to reduce operations, with nearly 7% closing either temporarily or permanently. Respondents pointed to the impacts of COVID-19 as the major challenge going forward; these include ongoing restrictions on international and interstate visitors, and low consumer confidence resulting from the erratic practice of snap border closures from state to state.        

Our recovery blueprint calls for further investment in marketing initiatives to drive demand; support for our events sector; industry strengthening; product development and aviation; along with committed long-term funding for Visit Victoria, Melbourne Convention Bureau and Business Events Victoria. Key initiatives include:

• An additional $8 million investment in a second round of travel vouchers for Metropolitan Melbourne
• A $100 million investment in a Relief and Survival Package for the supply chain that supports our multi-million-dollar events sector
• Development of a government-backed events deposit scheme to restore booking confidence and get cash flowing into the business events sector
• Access to the Victorian Managed Insurance Authority for tourism businesses affected by the lack of access to, and affordability of, insurance coverage
• A contestable Product Development and Innovation Fund valued at $200 million per annum for four years to support major attractions and infrastructure improvement – this would include investment in regional airport infrastructure, allowing for additional entry points to encourage wider regional dispersal
• Development and funding of an aviation recovery strategy to attract direct airline services back to Melbourne and Avalon airports.

We welcome the very significant investment the State Government has already made to support the visitor economy. This Recovery Plan 2.0 focuses on critical areas that remain unfunded or underfunded, based on the most up-to-date sector data and the reality of the position we find ourselves in as we step into 2021.

Our industry has been hit particularly hard, and we know that some businesses simply won’t be able to come back from the challenges they’ve confronted. In order to regain our position as an economic powerhouse for Victoria, the sector will need the State Government to assist us in bringing this plan to life. If we get it right, the positive impacts will be felt for decades across the whole of our state.

VTIC is currently engaging with Ministers’ offices along with our colleagues from the Tourism Department to work through the elements of this plan. We know this journey will rely on industry and Government working together to drive much-needed outcomes and we look forward to collaborating on this recovery path for industry.