COVID-19 and its impact on small business in the tourism industry

Prior to COVID-19, tourism was one of Australia’s largest exporting industries, employing 5% of the workforce¹. The sudden halt to international travel, restrictions on domestic mobility, and increased health and safety concerns have created many challenges for travel and tourism.

The impact of COVID-19 on the tourism industry

Many small businesses within the industry have felt and still experience the knock-on effect of COVID-19. From March 2020 to March 2021, international visitors were down by 99.3%².

Because of this, many businesses in the tourism industry have had to close completely, with border restrictions, lockdowns and social distancing regulations making it hard for businesses to operate and stay open. Visitor spending was down by almost 99% in some sectors, with the most significantly impacted being³:

• Convention and conferences
• Organised tours
• Gambling
• Entertainment
• Taxis.

While the entire economy had recovered seven out of 10 jobs in December 2020, tourism managed to recover four out of 10, showing the strength and resilience of many small business owners in the industry.

Domestic tourism bouncing back

The downturn in international travel has led to the sector relying heavily on domestic travel. But a 35% decrease in domestic travel and a 42% decrease in spending³ has meant that this was also a challenge.

However, domestic travel is the driving force behind the gradual recovery of the tourism industry. With limited international travel, there is still an opportunity for businesses in the tourism industry to make money. In late September 2020, two-thirds of Australians said they felt safe to travel in Australia, and 51% of people intended to travel within Australia over the next six months³. While this means shorter, more frequent trips and spending less during the trip, some tourism businesses have been busy throughout peak and off-peak seasons since mid-2020.

Many government initiatives are also emerging to help boost domestic travel in Australia, for example subsidising domestic air travel to 13 areas deemed most reliant on tourism, flight discounts and travel vouchers. Some tourist areas and hotels have found themselves in a boom because of these incentives and are trying to address new challenges in finding workers and limiting bookings.

Small business mental health

The Ahead for Business team has been in touch with national and state tourism networks throughout 2020/21 and discovered mixed responses to the pandemic. On one hand, more local travel has been undertaken and with the inability to travel to a different climate, the usual “off-peak” season has not occurred. Inter-state travel increases have left many businesses working through the whole year with no regular downtime.

One interviewee, a caravan park representative in NSW, said the new demand brought new challenges. For example, people who would normally travel in the low season and wouldn’t have to book ahead, are now unable to book. This has led to customer disappointment and challenging behaviour in some cases.

On the other hand, some small business owners in tourism are dealing with the challenges of a large decrease in business. Businesses that have seen a dramatic drop in customers are finding it difficult to work through the uncertainties of when restrictions may lift, when clientele may return and when their business may generate a steady income again.

Another interviewee, a tour manager in NSW, said that COVID-19 had changed the tourism industry dramatically. Many people are still waiting for work, and are earning a lot less than they used to.

Looking after your mental wellbeing

Take time to look after yourself because the most important resource you have in your small business is you! Whether you are struggling with lessened demand for your tourism business, or you have been busy with increased demand due to more domestic travel, prioritising your mental wellbeing is important.

• Join a network – Get in touch with your local state or territory tourism body and stay connected with others in your industry. It can be really helpful to share your experiences with others in a similar situation.
• Schedule in time for self-care – Whether you’re flat out busy or experiencing a quieter period, it’s important you take time for yourself to relax and recharge.
• Stay active – If you’re feeling down, it can be difficult to find the motivation to exercise, but physical activity and fresh air can boost your energy levels and mood.
• Socialise with family and friends – Spending time with those close to you can help you relax and switch off from your tourism business persona.
• Plan for work and play – Just as you plan your business schedule, plan for leave and holidays, even short ones. This will also help you feel good for supporting other small businesses in the tourism industry.
• Enlist help – If you’re experiencing increased demand from domestic travel, try to outsource some of the work in the business, or get help with some of your jobs at home.