BUSHFIRES AND CORONAVIRUS HARM BUSINESS ACTIVITY
Business activity for tourism operators in South Australia has declined according to the TiCSA Tourism Barometer December 2019 quarter.
The barometer survey for the October to December quarter 2019 found that the Business Activity Index fell by 34 per cent to 86 points, which represents the equal largest proportional fall and the lowest activity level recorded since the June quarter of 2012.
Cancellations due to the summer bushfires in Kangaroo Island and the Adelaide Hills was cited as the biggest contributor, alongside hot weather and drought resulting in low visitor numbers.
The business outlook for the next three months has also deteriorated. The proportion of participants expecting stronger activity decreased by 25 percentage points to 24 per cent, while the proportion expecting weaker market conditions grew by 40 percentage points to 61 per cent.
This sentiment was also reflected in the twelve-month outlook. The proportion of respondents who were either ‘extremely confident’ or ‘confident’ dropped by 13 percentage points to 47 per cent in the December quarter 2019. Meanwhile, the proportion of respondents who were either ‘extremely worried’ or ‘worried’ increased by 15 percentage points to 37 per cent.
Factors impacting business sentiment included the bushfires and a negative perception amongst tourists caused by its associated media coverage. The South Australian Tourism Commissions’ #BookThemOut campaign was seen as positive, however, participants also raised some concern that the campaign has diverted attention away from some of the unaffected regions. Furthermore, travel restrictions due to the Coronavirus outbreak has resulted in a decline in international visitors.
Although the statistics were down overall, factors contributing to positive business activity and outlook included networking, trade shows and events, increased product offerings, word of mouth and repeat business as well as marketing and promotions. The Easter long weekend is around the corner which also sparked a positive outlook for some operators.
According to the latest Labour Force Survey, employment levels in the South Australian accommodation and food services sector have dropped slightly over the past year.
60,353 people were employed in the sector on average in the year to the November quarter 2019, which represents a decrease of 0.8 per cent or approximately 477 persons when compared to the previous year.
31 per cent of respondents reported that their wages bill had increased, which is a significant drop when compared to 45 per cent in the previous year. Likewise, 21 per cent reported that their wages bill had decreased compared to 11 per cent in the last quarter.
To help inform our advocacy efforts, members were questioned on the extent to which the summer bushfires had impacted their businesses.
80 per cent of respondents reported that they had been affected in some way, with 29 per cent citing that they had experienced substantial impacts. As well as booking cancellations, reduced walk-ins and cash-flow were noted as having had the greatest impacts.
Of the 94 members that took part in the survey, 57 per cent felt that ‘enhanced tourism promotion to encourage visitation and promote awareness’ was by far the most useful form of assistance to support their business through the recovery process.