Coronavirus reroutes travel industry to dark — but not uncharted — territory

Lake Tyrrell covers over 200 square kilometres in the sprawling Mallee region in north-western Victoria, about 400km north of Melbourne. It is rarely deeper than five centimeters at any point.

On bright nights in August and September, or on vivid pink dawns year round, the lake acts as mirror, reflecting a perfect double of the sky.

It sits to the north of the tiny town of Sea Lake. By 2014 Sea Lake — after years of decline, lowering population and closing businesses — was in danger of curling at the edges and being taken by the next breeze.

Then, Julie Pringle, a local tour operator, put a photo her sister had taken on Instagram and, more importantly, on Chinese social media platform WeChat.

Soon, a steady stream of Chinese tourists started to arrive. A stream — at peak times up to 1000 a day — that expanded to include several other countries and continued until, of course, early this year.

Now, the famous Sea Lake tourism boom is under the dark cloud of COVID-19.

“We’re already seeing cancellations, obviously, with the travel ban,” Pringle told Crikey. “We still have steady bookings throughout the year, but … we don’t know if those are going to be cancelled yet.”

People in Sea Lake are nervous.

“The numbers are down, anything could happen,” Pringle said.

Many new businesses have opened in the past five years — farm-stay glamping, a revamped pub, Airbnbs, accommodation, new restaurants — and they all rely on tourist money.

Sea Lake acts as an analogue for Australia’s tourism and travel industry, particularly that which relies on international travel.

Indeed, there was a certain queasy symbolism to the fact that James Kwan, the first Australian to die of coronavirus, was himself a veteran of the tourism industry.

Rod Hillman, CEO of Eco Tourism Australia, says that in many regional towns, tourism plays a similar economic role to local agriculture.

“They employ locals, they give the local bank, the local supermarket a reason to stay open,” he said.

“It’s tough times. Not only have tourism businesses lost three months of income with the virus and the fires — they’ve lost it over Christmas and school holidays. It’s the equivalent of losing seven or eight months.”

Tourism in Australia is groaning under the weight of chaos afflicting the wider travel industry.

Qantas has announced it will cut its international capacity by nearly 25% over the next six months. CEO Alan Joyce admitted that the company now had 2000 more staff that it needs. Jetstar is reducing flights to various Asian countries by up to two flights per week.

Sydney Airports Corp has reported the number of international passengers travelling through its terminals has dropped 17% over February, and for March so far it has already dropped 25%.

Cruise ship operator Carnival Corporation has, in the wake of its Diamond Princess ship falling victim to an outbreak and a lengthy quarantine for its guests, had its stock plummet 40% in value since January.

Flight Centre has asked its employers to drastically reduce their hours and take unpaid leave.

The response from many members of the tourism industry has been bullish, given the recovery that followed previous crises that slowed international travel.

“The travel industry has a strong track record of dealing with situations that cause a downturn in travel,” CEO of the Australian Federation of Travel Agents Jayson Westbury told Crikey.

“Be it ash clouds, virus, terrorism, it comes back.”

He defended choices like that made by Flight Centre as “smart commercial decisions in the interests of the long-term employment of their people and business”.

This defiance seems to be, still, relatively prevalent in the industry, albeit mixed with a healthy dose of nerves.

“There’s a feeling in the industry, looking back at say SARS [Sudden Acute Respiratory Syndrome] or MERS [Middle East Respiratory Syndrome], that this is worse,” said Rod Cuthbert, founder and former CEO of travel-booking service Viator.

“There’s still a real belief that the market will bounce back, but the big question is when. A lot of businesses with a big exposure to China are in a world of hurt right now, and if this lasts a few more months, a lot of those would go belly up.”

There were operators who would only face a small downturn during the crisis, Cuthbert says — businesses that rely on domestic travel, or less “risk averse” travellers like backpackers, for example — but no one should be expecting to turn a profit for a while.

Hillman agrees.

“We have a diverse membership — some can adapt quicker than others, but absolutely no businesses I know are rubbing their hands thinking ‘oh, this will be good for us’,” he said.