Chinese Tourists Cancel Trips to Australia After Wildfires
A mannequin on a bench sits among the remains of a property burned out by wildfires in Clifton Creek, East Gippsland, Australia, on Thursday, Jan. 9, 2020. (Photographer: Carla Gottgens/Bloomberg)

Chinese Tourists Cancel Trips to Australia After Wildfires

(Bloomberg) --

Australia’s largest tourism market is turning away as the smoke shrouding Sydney and Melbourne and images of fire-ravaged beach resorts deter Chinese New Year tourists, in a further blow to the economy.

Visitors from mainland China spend an estimated A$12 billion ($8.3 billion) annually Down Under, with trips in January and February accounting for almost a quarter of annual arrivals. Tourism operators say images of the fires broadcast worldwide could have a lasting impact on international arrivals, the nation’s third-largest export earner.

Chinese Tourists Cancel Trips to Australia After Wildfires

“The media coverage made Australia look like a third world country with thousands of refugee fleeing and village after village burnt to the ground,” said Cheryl Zhong of Equity Travel in Sydney, having experienced a wave of cancellations over the past 10 days.

“People even asked if most of the koalas were killed in the fire and there’s no marsupials left to see.” She is concerned about the outlook from March, warning that if the perception that the whole of Australia is ablaze isn’t reversed, bookings could fall by more than 30%.

Zhong says that Australia is currently not perceived as a safe destination with clean air, which is very important for Chinese visitors who are often seeking a break from their own crowded and polluted cities.

Chinese Tourists Cancel Trips to Australia After Wildfires

Zhong’s comments were echoed by David Tang, sales and marketing director of Grand City Tours in Melbourne, who expects a 15%-20% drop in Chinese visitors this Lunar New Year.

“The global media coverage of fires in the countryside and smoke in the cities encouraged some people to delay or decide not to visit us this year,” he said. “We’ll definitely be down this year compared with last year.”

Chinese Tourists Cancel Trips to Australia After Wildfires

Major tourism markets of New Zealand, the U.S. and U.K. raised travel warnings for Australia and the blazes forced a pause to a new international tourism advertising campaign led by pop star Kylie Minogue. The Australian Open tennis tournament has also been under scrutiny with practice sessions canceled in Melbourne Wednesday over air-quality concerns for players.

Absent Tourist Dollar Hits Regions

The fallout from tourism cancellations has been magnified outside of the cities. “It’s like a ghost-town around here,” according to Coralie Bell, tourism manager from the South Coast of New South Wales that is about three hours from Sydney, despite most of the tourism infrastructure unharmed by the fires.

“This is our peak time of year and it’s essential to a lot of businesses to do well now in order to remain viable through the cooler months. If we don’t get tourists soon, some are worrying they won’t make it to the winter,” Bell said.

The South Coast predominantly attracts tourism from Sydney and Canberra, though it is seeing increased numbers of Chinese visitors.

Chinese Tourists Cancel Trips to Australia After Wildfires

It’s a similar story in the southern state of Victoria’s East Gippsland region, which can attract as many as 40,000 tourists in the January peak. “There’s nobody there, and it’s the period when they make the money that keeps them going all year,” said John White, mayor of East Gippsland Shire Council, referring to tourism operators.

While the consensus view is that the fires will shave 0.2-0.4 percentage point from GDP, James McIntyre of Bloomberg Economics estimates that in a worst case scenario the disaster could cut up to 1.6 percentage points from growth.

“The consequences could prove to be larger and longer-lasting, mainly through three channels: impacts on tourism from elevated perceptions of risk; widespread hit to confidence from persistent and prolonged fire season disruptions; and disruption to economic activities from pollution,” he said.

The catastrophic blazes have claimed 28 lives, killed an estimated 1 billion animals and have destroyed more than 2,700 homes as an area almost the size of England has burned.

Chinese Tourists Cancel Trips to Australia After Wildfires

Meantime, at least two of Australia’s iconic luxury resorts that cater to international markets have been forced to close: Southern Ocean Lodge on South Australia’s Kangaroo Island; and One&Only Wolgan Valley Resort, located in the Blue Mountains outside Sydney. The latter said that while it had escaped damage, unlike the Southern Ocean Lodge that was completely destroyed, it’s undertaking “some necessary remedial work” on landscape and hiking trails and will be closed until Feb. 1.

Tourism operators are urging people at home and abroad to resume visiting.

“We want people to keep coming, so much of the country is unaffected by the fires,” said Tang.

©2020 Bloomberg L.P.

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