These Australian Firms Seen as Winners From Global Border Curbs

(Bloomberg) -- Australians eager for a getaway after months of coronavirus lockdowns are likely to spark a domestic travel recovery as international borders remain closed, according to RBC Capital Markets.

“With a potentially increased number of consumers shifting overseas holiday dollars to domestic trips in the coming months, a number of travel companies under coverage are well placed to capture a share of this demand,” RBC analysts led by Tim Piper wrote.

The nation’s travel-booking firms plunged this year as border curbs and social distancing measures dampened demand. Flight Centre Travel Group Ltd. and Webjet Ltd. both tapped shareholders for additional capital to weather the health crisis, while Helloworld Travel Ltd. in March stood down a substantial portion of its workforce. As lockdowns ease, the shift to domestic travel will likely underpin gains for these companies, according to RBC.

Broad tourist-related travel in and out of Australia probably won’t return until 2021, according to the government. The nation’s largest airline, Qantas Airways Ltd., canceled most international flights until late October after the announcement.

Australians spend roughly the same amount per night on domestic and international excursions, though overseas trips usually cost more as they last longer. The average holiday abroad cost A$8,500 ($5,817) and lasted 24 days in 2019, according to Tourism Research Australia and Council of Australian Tour Operators data analyzed by RBC. A vacation closer to home set travelers back A$958 and lasted 3.5 days.

Assets in holiday hotspots such as Kangaroo Island and Fraser Island make SeaLink Travel Group Ltd. best-placed to benefit from a domestic travel boom, RBC said. Corporate Travel Management Ltd. will see a boost as business trips pick up, and is likely to report one of the “least bad” earnings results for the second half compared to peers, the analysts added.

Still, even domestic travel may be limited as individual states keep their borders closed and the threat of additional coronavirus outbreaks loom. Australia’s second-most populous state, Victoria, has tightened Covid-19 controls as a spike in cases raises concerns about a potential second wave.

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