29,000 Tourism Jobs at Risk

29,000 jobs in the tourism industry will go if unemployment reaches 10%, as the global financial crisis pushes the Australian economy into recession, according to analysis of the latest ABS employment data by the Tourism & Transport Forum (TTF).

The scale of the problem demands an immediate response from both Federal and State and Territory governments to minimise the potential impact on families across Australia.

A report prepared for TTF by former Treasury official and Access Economics founder Geoff Carmody, Australian Tourism: How Deep the Recession?, is forecasting that national unemployment will reach double-digits, and that the tourism industry will be disproportionately affected.

The Carmody report also predicts that the tourism industry will perform worse than official forecasts, with tourism spending to fall more than consumer spending on average.

TTF Managing Director Christopher Brown said the loss of 29,000 direct jobs is a frightening but realistic prospect – not to mention the flow-on effects to related employment, which could greatly magnify the problem

As Brown explained “497,800 Australians are directly employed in tourism and about 227,000 of those jobs are in regional areas - 29,000 direct jobs is virtually the entire population of Lismore.

“This means fewer people working at hotels and motels, in restaurants and cafes, for airlines and rental car companies.

“Hotels will be forced to shut off entire floors, while restaurants and cafes will have to reduce their trading hours, if not days.

“A job is a job, and maintaining jobs must be the aim of all levels of government during the economic downturn. “Carmody’s findings are consistent with the latest TTF-MasterCard Tourism Industry Sentiment Survey, which found 72% of tourism businesses have or will cut jobs as a result of the global financial crisis, up from 63% in January.

“58% of businesses surveyed have already made job cuts, while 56% expect to make further cuts in the future.”

Brown said the Carmody report also found that more remote areas will bear the brunt of the downturn.

“The report predicts that rural and remote areas dependent on tourism for economic activity and therefore employment are likely to be hardest hit by the global financial crisis.

“We have identified Central Australia, Tropical North Queensland and the New South Wales north coast as regions which will bear the brunt of the downturn.

“Despite low airfares and great accommodation and attraction offers, some tourism regions are seeing double digit declines in visitor numbers.

“While anecdotally Easter was strong, many operators were running at very low margin levels.

“This is an unsustainable situation, which does not support maintaining employment.”

Brown said the global financial crisis is clearly hitting hard, adding "tourism is especially susceptible to any economic slowdown, because of its reliance on discretionary spending and because it’s a labour-intensive service industry, a downturn means job losses.

“We’ve already seen more than 3,000 jobs cut in the accommodation sector in the December quarter, while Qantas has announced it could cut up to 1,750 staff.

“Unfortunately, all indications are that these job losses will by no means be the last.

“International visitor numbers were down 3.2% in January-February, with holiday visitors down 6.3%, business visitors down 16.5% and conference visitors down 28.7%.

“Official forecasts are for a 4.1% decline for the year, but Geoff Carmody says falls will likely exceed those predictions.”