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Coronavirus set to claim 133,000 Aussie jobs

SYDNEY, AUSTRALIA - FEBRUARY 08: The Ruby Princess docks at the Overseas Passenger Terminal on February 08, 2020 in Sydney, Australia. Authorities around the world are imposing travel bans and extra health screening measures to try and contain the spread of the coronavirus. (Photo by Lisa Maree Williams/Getty Images)

The Australian jobs market is set to become even tighter following fresh estimations that Australia’s tourism industry is set to lose as many as 133,200 jobs.

According to a new report by the Tourism and Transport Forum Australia (TTF), the coronavirus – which has resulted in travel bans on people from mainland China and Iran – has cost Australia’s tourism industry dearly, with international visitors already down by 1.8 million visitors compared to the first half of 2019.

Staff reductions are estimated to be at 15-20 per cent, meaning a loss of 99,000 to 133,200 jobs, mostly in part-time, casual, or contract/seasonal roles.

This is expected to take a $3.9-$5.3 billion bite out of the broader economy in lost wages.

The estimated job losses come after the ABS reported 31,000 more Australians were out of a job in January this year, with the unemployment rate rising from 5.1 per cent to 5.3 per cent.

Where the job losses will be

Although the reduction in tourists from China will contribute to the decrease in activity in the tourism sector, the fallout will be greater than that.

We’ve already seen Chinese restaurants and businesses take a 80 per cent hit in sales – but visits to natural and built attractions will fall, and room bookings in regional areas as well as major cities will see “significant reductions”.

Tour companies, travel agents, wholesalers and tour operators will no doubt be affected, as will airports, airlines, the cruise ship sector, and retail facilities like souvenir shops.

Coronavirus to hit Australian visitor economy ‘much harder than SARS’

When you compare the impact of coronavirus with SARS side by side, coronavirus has already proven itself to be more infectious at a more rapid rate, with the number of coronavirus cases are nearly 1,000 per cent that of SARS.

SARS spread to 29 countries in the span of nine months – but it took coronavirus only eight weeks to spread to as many countries.

“Although the full extent of the economic impact [of coronavirus] won’t be known for some time the industry is facing a contracted visitor economy with significant losses across international visitation, tourism spend and employment across 2020,” TTF’s report stated.

“The economic impacts reflect the loss of direct tourism spend (tourism receipts) by the reduction in international visitor arrivals and the estimated reduction in employment within the visitor economy due to business slowing, in some instances, closure.

“Although we have a robust health system, this global health crisis comes at a time when Australian tourism is already on its knees.”

Number of tourists from China drop 90-100%

As a result of the coronavirus, Australia has implemented travel restrictions, airlines have cut or reduced the number of inbound and outbound flights from Asia, and the number of visitors coming from countries other than Asia have also slowed.

“The outbound travel ban imposed on many regions in China by the Chinese Government, coupled with the Australian Governments ban on arrivals from China and those who have travelled through China, has resulted in a total loss of Chinese visitors over the last 6 weeks into Australia,” the report said.

Australia has leant heavily on China for economic growth in multiple ways including manufacturing, trade, education and retail spend. Regarding tourism alone, international visitors from China contribute $12.3 billion to our economy, which is nearly a third of all tourism receipts.

The average spend of each Chinese visitor to Australia is $9,235, and Chinese students studying in Australia spend $27,000 each on average.

By April-May 2020, the loss of tourism receipts from Chinese visitors is estimated at $2.31 billion.

The coronavirus/bushfire double whammy

The tourism sector has copped twin hits of late, first from the deadly Australia bushfires which was rapidly followed by the coronavirus outbreak.

“Whilst the outbreak has not yet reached the classification of a pandemic the Treasurer has indicated that the economic impact will be greater than the bushfires and it will play-out more broadly across the Australian economy,” the report said.

“What is unique about tourism is that we have been directly in the firing line for both crises.”

Australian tourism was already suffering major damage from the nation’s bushfire crisis, with UBS economists estimating reduction in tourism could reach $1.3 billion.

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