Australian Tourism Export Council B2B Conference

  • Speech, check against delivery
Topics: Tourism in Australia; COVID-19 impacts on Australia’s tourism industry.
23 November 2020

Simon Birmingham: Thanks so much, Peter and to you, to Denis, to Jacqui, and of course, to all on the call today. I do really appreciate the opportunity to spend some time chatting with you once again and particularly to do so, albeit in this inadequate but best we can manage format, and at a time though when it's so crucial for us to keep these dialogues happening and open.

At the outset can I just extend an enormous thanks. All Australians owe a huge debt of gratitude to the tourism, travel and hospitality sectors who have borne a real brunt in terms of the impact of COVID, and the way in which the measures we've had to apply in Australia to keep us safe have impacted certain businesses and individuals. When we look around the world and do a bit of a scan across the globe, it's easy at present to see real extremes that are taking place and occurring across different nations, that the US is now knocking up on close to 200,000 new cases per day of COVID, and Australia's tracking pretty much at zero. That countries like Sweden who had sought to try to deploy a less interventionist approach, are now facing a second wave so severe in terms of overwhelming their hospital systems that the interventions are applying, and of course that's on top of the self-regulation of people to choose simply not to go out and engage in any event.

So what we certainly can see if we look across the globe, is that economic outcomes are tied very much to health outcomes at an aggregate level and that other parts of the world where people are facing second wave lockdowns, or are simply scared because of the huge scale of spread and deaths associated with that, and the overwhelming of health systems, are also suffering from even greater economic consequences. That doesn't mean that our economic consequences aren’t real, of course they are. The nature of restrictions that had real impacts on people, and especially in this sector, very, very real and ongoing impacts in that regard.

I think all Australians, they may not quite think about it in these terms, but the pain borne by those impacted from the different shutdowns and restrictions that have occurred in Australia, particularly across the hospitality and travel sector, and the pain borne in an ongoing way by those involved in inbound tourism and dependent upon inbound tourism, has helped the rest of the country to stay safe and has helped much of the rest of our economy to stay open and to recover. We see in the economic forecasts that Australia's projections continue to slightly improve, to slightly exceed expectations and just as we came into this crisis with a stronger economic basis, with stronger underpinnings, with a stronger budget position than much of the rest of the world, so too do we look like we are coming through it and in a stronger position than much of the rest of the world. But as I say, the pain is real, and it's why, of course, we sought to respond so intensively during the course of this year with the various business measures and assistance to help people through these tough times.

Now, we are getting to a point where we hope that domestically, notwithstanding the very short but significant blip we saw in my home state last week, we hope that we are getting to a point where we're seeing some semblance of normality, of movement, of activity, of the economy back. And it remains the government's firm desire to see Australia as open as possible by Christmas so people can enjoy a normal Christmas and festive season as much as possible, but also so that we can actually underpin the type of economic and jobs recovery that is necessary from and through that Christmas period and beyond.

Now, what last week did demonstrate to NSA is that these things are fragile and unpredictable. But thankfully, today we meet, as you acknowledged, on a day of great celebration – the reopening of New South Wales-Victorian travel, the scheduling of, I think, it’s some 40 daily flights again on one of the busiest air routes in the world, traditionally, is just fantastic news. And it is something that we can all celebrate, and that ATEC’s discussion happens on this day with this occurring is just sensational. We hope that this really puts momentum back into the domestic travel sector, and that that enthusiasm that Australians are showing to get out and move is actually realised in terms of forward bookings and commitments.

Last week, I have to acknowledge, will have created some additional uncertainty, particularly around long term bookings that people might choose to make. But I do think we can see, in consumer behaviour, at each step of the reopening domestically, that people have shown through enthusiasm to get out there and travel and support different parts of the tourism industry – that when state borders were all in place, that cities were reopened, people flocked out to get into regional areas, to book short drive holidays, and to support tourism businesses and hospitality businesses across those regional settings. Increasingly, as state borders have come down, we've seen a step up in terms of people, again, willing to make commitments to planning travel, to move across those state borders, and to start to take closer to proper holidays.

You know, a big part of our mission and a big part of the reason why we’ve committed Tourism Australia to a more than $230 million budget this period, this year, is to make sure that we encourage Australians to holiday here in a way like they might have overseas. We're not going to go out there in Tourism Australia's campaign and try to simply drive more of the short weekend drive holidays; people are doing that anyway. What we want is for people to book, preferably through a travel agent who can help them to upsell, to travel across borders, on planes, to stay for at least a week or so, moving across different locations, booking experiences and tours and activities, in addition to the accommodation – to actually take the proper breaks in Australia. That's going to be so crucial in terms of supporting so many different parts of the tourism ecosystem for still some period of time.

I wish that I could come to you today saying that there was a silver bullet, an absolutely certain and crystal clear timeline as to how we would reopen to the rest of the world. But I think you've all seen the ups and downs and the uncertainties of this year, and the fact that we still don't have free travel from Australia back into New Zealand which impedes even that bubble of domestic arrangement, as a reality that these are tough and difficult processes and steps to properly reopen to other nations and the rest of the world. So, the international landscape is going to remain quite uncertain for quite a period of time.

The news around vaccines is getting more encouraging. I have to say, I’m much more buoyed now than I was a couple of months ago, and that I had fewer sleepless nights than I probably had at the early stage of the pandemic as to whether there was going to be an answer that made our efforts to save lives in Australia worthwhile in the long term, in terms of being able to keep people safe while reopening. I think there will be that answer now, that there are sufficient positive noises around vaccinations, and the step we've taken as a government in terms of four different contract points with different vaccines to make sure we can secure the manufacture, supply and distribution across Australia for millions and millions of doses that are required is putting us in a very sound and secure position. But there’s still not quite certainty on that, and there's still certainly not that high degree of confidence and certainty as to precisely when we can say that we will have distribution in sufficient volumes to start to be able to reopen those borders with confidence. And that's work that we are prioritising at every single step of our journey, because we know that will be the big breakthrough in terms of the international settings.

Of course, then there is the question of what we have to do in terms of those international opportunities as we see a timeline towards opening becoming viable. And I'm conscious that timeline is a very important thing for you all, that when we have confidence around the processes about vaccinations we do then need to try to provide as much clarity or vindication as to the timeline to be able to facilitate advance bookings, to be able to facilitate people preparing to restart and re-establish their businesses; that these are important things in terms of your plan and your capacity to be able to help drive the recovery as quickly as possible.

It's important also in the aviation sector, where we know that getting flight capacity back on key routes as soon as possible has to be an early priority. And so, again, having some timelines attached to the decision making around vaccines and distribution will be quite crucial. We also recognise the criticality of the business events sector, and we've done that in a domestic sense in trying to underpin activity through some funding mechanisms for exhibitions and conferences to get going again next year. But I know that, then looking through the difficult years of recovery that lie ahead, getting that activity back in the business events space will be a crucial part of that, because I think we all can see that the insatiable desire of leisure travellers to get back out there as quickly as they can will see holidaymakers moving again relatively quickly.

But corporate and business travel will probably be a much slower, harder road back, as businesses face really critically hit and damaged balance sheets, and of course, they’ve discovered that means of communication like this can enable them to get on with travel in different ways. So, we will be looking very much at the plans we can have, and to try to make sure those international conferences, events and the like take place and take place with a high degree of certainty, but also that we are out there quickly back in the marketplace, bidding for those, and supporting them in terms of the recovery agenda for the journey ahead.

Peter, I know you want to deal with some questions and comments today. Perhaps to keep this an interactive forum, I should slow down on the commentary there. I'm committed, as you know, over the next month or thereabouts to going hell for leather as the Tourism Minister and continuing to work to make sure we frame how that rebuild and recovery will occur and continue to work as closely with the industry around that. And I do want to give you all the assurance as well that when the PM reshuffles, whenever he may do that, that as the ongoing Finance Minister, I like to think that you never- you might leave a portfolio, but you certainly continue to maintain and accrue interests. Rest assured that my interest, support, engagement with the sector will remain very, very strong in working closely with whoever picks up the reins as tourism minister into the future to make sure that we have seamless engagement and continue to prioritise this big employing sector for Australians.

Host: Great, Minister. Thank you for all those words and highlights once again you’re right on top of your brief and this industry, and we do appreciate your intimate knowledge and on this industry and the support you’ve given us to date. And congratulations absolutely on your- as the Finance Minister. You know, well deserved and I think you will be- sad to lose you, there’s no doubt of that because you’ve been a great minister for our industry. But I’m sure we’ll look forward to our engagements, with you in your portfolio as I’m sure hopefully we’ve reason to put our hand up to talk to you in some way, shape or form.

Yes, if you don’t mind, maybe a couple of questions. We’ve got a couple coming through and while I try and decipher them, maybe I'll just run with this one just to start. Thank you for your commentary around the vaccine. I think we’re all feeling a little bit more buoyant and with your comments about that, look, this is just a start of it, there's a lot of uncertainty and there's a long way to go. It's nice to get the positive news that we’re almost starting the journey off the back of the vaccine at this stage. Then there’s a lot of talk about what else do we need to do? How else can we open these markets, what can the industry to contribute to the reopening of the markets. And I know ATEC as an organisation’s been working with a group that’s very strong on biometrics and understanding how through testing and testing on a reliable and contracting and tracing through to… can really support the safe travel of international visitors coming in. So there’s probably many ways to do it. So maybe just throwing a bit of an open question, to be honest, like is a vaccine our only way back or is there a combination of considerations that we might be able to… might be able to entertain or we can collectively work towards to bring markets back, even if they’re in part, rather than part through some special cohorts perhaps, as opposed to keeping them closed until we’ve got 100 per cent vaccine coverage.

Simon Birmingham: Thanks Peter. I think it's wise to maintain a belt and braces approach to these things, to make sure that, yes, we are pursuing all of those other potential pathways that could enable other markets to open up in different ways, be that for at least long stay corporate travellers, long stay international students, even if we can't quite get to the to the leisure market travellers initially, but to pursue certainly all those pathways. Because if one is successful, then it leads to the next, that you do eventually then get to opportunities either with other market segments like shorter stay visitors, or head to opportunities in other nations. So it's certainly well worth pursuing those other sort of pathways that can better underpin how we might facilitate movement in and out of the country without undermining the safety protocols, and be able to try to achieve that ahead of vaccine.

If I'm being realistic, and I think that given the positive news on the vaccine front, and the difficulty that we've seen in terms of how you provide absolute safety and surety around other means is that the vaccine is probably the better bet in terms of what a real step change will look like compared with the other pathways. But that doesn't mean we stop working on them, certainly inside government, the work to try to establish better protocols with other countries and to continue to investigate what new testing, what new testing technologies and criteria can provide for how we might be able to establish different quarantine protocols. These are all important considerations that could give us a breakthrough. But I equally look at a circumstance where, just yesterday, I saw when I picked up the hometown Sunday paper, that the state Labor opposition here in South Australia was calling for an end to the hotel quarantining that we have at present because of the risks associated with it. Now those sorts of debates only heighten public anxiety and fear about those we have coming in from overseas at present, which is frankly largely just returning Australians, let alone getting us to the space as to how we talk about other nations. So that's why I'm a little less optimistic, I guess, on what those other breakthrough points might be, because I just think that the challenges we've had with the states and reopening to one another, the challenges we've had with the states in terms of the caps they put on arrival's, the anxiety they have as a result of the Melbourne outbreak from hotel quarantine, the cleaner contracting it in South Australia, the case in New South Wales, all of this feeds into grieve anxiety about international arrivals into the country that makes it that much harder for us to get breakthroughs.

So I'm not saying never. I am saying let's pursue all possible pathways, but realistically, it’s proving pretty challenging out there in terms of those international breakthroughs. I still hope that New Zealand will come to the party pre-Christmas. I think that the pressures on their government in terms of just reconnecting loved ones and families before we even get to the economic opportunities for them are real, and that if we can keep now racking up zero days, and in a sense show New Zealand that instances like what happened in SA last week are actually proof that we're serious about getting on top of any outbreaks in Australia. That where it happens; we identify it quickly, we fix it quickly and just as they went through an outbreak when they thought they had it nipped in the bud, it can happen to anybody at any time. But, what you’ve got to do is have the systems and processes in place to fix it and that if we all have that confidence across one another, then that can at least give us some pathway to reopen together. And look, if we can get that New Zealand pathway going, then maybe others will follow. But, it’s certainly not proving an easy one.

Host: I understand and hear that, it’s a challenge, but congratulations on the work you’re doing and allowing, enabling internationals in a legitimate context to come aboard and we welcome their spend.

Minister, just picking up on your commentary there about vaccine. I think, you know, I think many listening would say: well, that sounds like the right approach. I think as long as we can build other work with Government into support mechanisms, perhaps, around the vaccine in the centre. As you’ve already mentioned, there might be other cohorts that we can bring back in other ways. I think that would be very welcome and I think all of the industry would say health comes first and let’s find a way to build back better industry around the health requirements. I think that will be certainly what our industry is undertaking to do.

One question, probably a little bit more ticklish, and then feel free to handball this off to somebody else. But, it’s really about given the scenario that international borders may not reopen for some time, and given though we’ve got a cohort within our organization – I’m mentioning about the two operators who are just totally a rift of any revenue until they do open underneath it. And so, probably three months afterwards before they get money into their businesses, after all the work that they do to rebuild their pipeline. Do you see an opportunity for the industry or for the Government to revisit what might likely be very specific requirements for specific sectors when JobKeeper runs out? Can I just say, JobKeeper has been such an amazing support for our industry? It’s kept so many of our businesses alive and we’ve able to retain great staff and great skills, enabled to fight back when the opportunity comes. But there is a cliff coming and there seems to be a big gap between where that finishes and where the opportunity for revenue starts to start.

Simon Birmingham: Thanks, Peter.  Look, I am very conscious of the end of JobKeeper. Some of you have probably heard me tell the story before, that if I look back to the beginnings of the pandemic and when initially what we had were largely the international facing sectors of the economy, particularly in the tourism and travel space, most hard hit most immediately before we got to the point where shutdowns across the broader parts of the economy started to hit domestically. That was when I was finding it perhaps to be the most personally challenging in terms of engaging with our industry, understanding the pain that people were seeing happening and the difficulties they were encountering. Particularly those who were also coming off the back of bushfire cancellations and the like as well. And the difficulty though also of how to frame a response to that at that point in time, knowing that it's all well and good to say you can target support to certain businesses, you can target it to a hotel or inbound tour operator or the like. But, what about the audio-visual company that relies on business that comes through the convention centre? What about the laundry service that relies on the hotel for its business? And it was kind of all of those second-tier considerations that were really tough as to how we might think about any type of response. And then, of course, tragically from the national perspective, but not unhelpfully in terms of how the policy response could be designed for our sector, we had the broader shut downs of the domestic economy, and JobKeeper was born at that stage and able to be applied on a universal basis that reached into all parts of the economy, who were hit and who needed it.

Now, as we look to- into a period where most of the most of the economy is reopened, maybe not all of it flying at 100 per cent, but certainly domestically, most of it flying well and truly in excess of the 70 per cent threshold that was there. How do we address the future, when it's kind of back to that narrow segment and possibly even narrower than it was at the outset, given some sectors have managed to adapt. Now, Government hasn't made firm decisions about post the end of March. We are obviously aware that it's coming and engagements like this are important in that regard. What we want in every possible instance is, of course, to drive as much recovery to that point of self-reliance as possible. But I know that for some businesses that's very challenging.

We also, though, don't want is an ongoing circumstance where measures like JobKeeper are propping up what might be zombie businesses or businesses whose pathway back is just far too long to be a viable proposition. And I guess, there is a couple of instances. Zombie businesses, well, everybody can get the idea there that a program structured like JobKeeper has helped some who probably weren't viable anyway, and were likely to topple over even without COVID, may have even lied to the existing shelf businesses in many instances.

But then there are also those where the recovery period might be quite a long one and where adjustment is going to be necessary and we've seen that in the big end of town, big businesses; Qantas's decision and Virgin’s to shed many jobs as part of their restructures is a painful one. None of us like seeing it happen, but it's also based on the reality that aviation, even in 2021, isn't coming back to where it was in 2019. And possibly not in 2022 either, and that the pathway back is a long and slow one and the structural adjustment in those businesses is an important one, too. So, when you look to that future, it's about how do we balance all of these different interests to make sure that the structural adjustment that needs to occur in some parts of the economy and in some businesses does happen, so that capital goes where it's necessary, people look for jobs where they are rather than where they're not, or relying on a false sense of security being created. But also that we don't still lose critical components of the economy. So, they are the balances. There obviously aren't clear answers in terms of the pathway forward from that from here, but the engagement of industries like yours to help shape and frame our thinking as we approach that is very important.

Host: Fantastic, Minister, I know you need to head on to other commitments and so, we will let you go. But I would like to say to your comments, thank you. I think everybody listening today would be comforted by the view that you’ve got a ship to steer, if you like; that maybe there’s not necessarily black lines you’re willing to just keep an eye on what our industry is doing and where we are come March next year, which is good. I think where we sit on it – and you commented about retaining the cryptical, strategic assets of our industry is really important. And inbound tourism operators, in particular, that falls into that category, which we probably think they do to ensure that we’re competitive on the rebound. While, you know, it would be good to have another discussion when the time is right over that. We really do appreciate your thoughts and your time and sharing of your views and your support over the years. Whilst we’ll miss you as our Tourism Minister come the start of 2021, we look forward to the ongoing discussions as I mentioned to you before about your new role as Federal Finance Minister.

So, thank you once again, thank you for being so accessible. Thank you for joining us today, really do appreciate your time. I’ll let you get on with the rest of your day.

Simon Birmingham: Thanks, Peter. Thank you. Thank you, everybody and all the best through what continue to be tough times for all. Cheers.

Host: Thank you, Minister.

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