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Thursday, November 3, 2011

Tourism hit hard by the Qantas grounding

The Qantas grounding that saw 98,000 passengers disrupted and 108 aircraft immobilised is having a negative impact on an already struggling Australian tourism industry, according to an expert from The University of Queensland.

Associate Professor
Brent Ritchie
The UQ School of Tourism's Associate Professor Brent Ritchie said the tourism industry was already in poor shape prior to the grounding.

“The industry is losing market share to more cost-effective international destinations,” Dr Ritchie said.

“Barriers of distance, a high Australian dollar and competition from other more cost-effective tourist destinations are already impacting our tourism industry, any industrial action which risks access to destinations will only cause more harm,” he said.

The Global Financial Crisis, January floods and the industrial action that occurred in the months prior to the Qantas grounding left their mark on Australia's regional tourist hot spots.

The Australian Tourism Export Council reported a loss of 16,000 full-time jobs in the regional tourism industry.

“The areas where travel is primarily recreational will be hit the hardest, while destinations with a high proportion of business travellers are less likely to be affected in the long term,” Dr Ritchie said.

The full extent of the damage to the industry will continue to unravel in the months ahead.

However, the impact is expected to be felt beyond the current customers whose travel plans were disrupted, to future travellers within Australia and international inbound tourism.

“If people perceive a risk to their ability to access destinations and have confidence in planning a trip they may look at other destinations,” Dr Ritchie said.

“As an international travel destination, Australia is already falling behind in market share with outbound tourism growth of 9 percent and inbound tourism growth of just 0.5 percent.”

The effects of the industrial action will be felt across the entire industry including accommodation providers, transport companies, tour operators, and businesses in regional communities.

According to Dr Ritchie, Australian event organisations in the professional conference market field were likely to take a “long time to recover” due to the large financial investment for conference events and the “difficulty of making alternate arrangements for delegates, speakers and locations” if industrial action occurred.

While not commenting on the reasons why Qantas made the decision to ground the fleet, Dr Ritchie believed the loss in customer loyalty would be most significant in their international bookings.

“Domestically there is a reliance on Qantas as one of the few major domestic carriers, and some people will go back to them based on necessity. Internationally, they will face more of a struggle to get customers back with many more competitors often with lower pricing and operating costs,” he said.

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