With inbound tourism not expected to fully recover until 2023/24, tour operators used to benefiting from international guests need prioritise the domestic market.
Whilst there has been an upsurge in occupancy for regional accommodation providers, many tour operators have been struggling. According to the recent white paper by Tourism Research Australia ‘Moving Forward – The role of domestic travel in Australia’s tourism recovery’ the reasons are obvious:
Two-thirds of spend on group or package tours pre-COVID-19 came from international visitors
Travellers that have seen a decline in household incomes will be more likely to do free activities
Domestic travellers are familiar with what Australia has to offer. They are therefore less likely to pay for many of the tours and attractions that international travellers spend their money on.
Meanwhile, wealthier domestic travellers are 50% more likely to travel interstate and typically spend 80% more per person per night on domestic overnight trips. Those who would ordinarily have spent on first-class international airfares each year now have a surplus of funds to spend here in Australia. Luxury travel agents are searching for ways to provide these wealthy clients with the equivalent of their overseas holiday but the lack of premium regional offerings makes this difficult, meaning funds will simply be saved up and spent overseas when they can finally travel again.
There is a unique opportunity to create distinct offerings that appeal to these sophisticated experience seekers who are forced to substitute their international holiday for a domestic one. These experiences need to be rare, real and exclusive, providing the traveller with a more specialised way of seeing Australia. In addition, the health and safety preference for physical distancing lends itself to private touring.
Lack of luxury hotels in regional areas should not be seen as a deterrent. The domestic traveller is comfortable staying in holiday homes and will travel for the right experience.