Analyst Insight by Lisandra Minussi.
Australia has been hit by a series of floods, which started in December 2010 and continued into January 2011. The floods have severely damaged one of its most popular tourism destinations, Queensland state and its capital city of Brisbane. According to local authorities, a total of 22 towns and over 200,000 people were affected.
The damages are difficult to measure given the natural disaster left 75% of Queensland underwater, devastating main cities and leading to the cancellation of trips to the state. Additionally, the floods present a major threat to Australia's Great Barrier Reef, the largest coral reef in the world and a major tourist attraction in Australia.
Tourism in Australia accounts for 3-4% of GDP. The real value of tourist expenditure rose by just 0.8% in 2010 and growth of 2.1% was expected in 2011, not considering the impact of the flood.
Located in the Northeastern of Australia, the state of Queensland is a popular destination for domestic and international tourists because of its warm weather all year long, which is the source of its nickname the “Sunshine State. It is also home to a variety of tourist attractions including the capital city of Brisbane, the Gold Coast, the Great Barrier Reef, Townsville, Magnetic Island and the Whitsundays (a collection of 74 islands near the Great Barrier Reef).
High season often starts in November and runs until April – a fact that led many Australians who would travel to Queensland in the midst of the Australian summer holidays to either cancel or postpone travel plans because of the floods.
The state of Queensland attracted a total of 15 million domestic tourists in 2010. The total number of domestic trips to Queensland regained growth in 2010, after registering a 4% decline in 2009 due to the economic crisis. Additionally, the capital of Brisbane is the third most visited city by international tourists, having attracted around 956,000 inbound tourists in 2010.
Flood's current impact
Tourists are avoiding sites like the Gold Coast, Sunshine Coast, Fraser Coast, Bundaberg, Gladstone, Agnes Water, 1770, Whitsundays, Mackay, Townsville, Cairns and Tropical North Queensland, even though many are relatively unscathed by the floods early in 2011.
Meanwhile, leading airlines Virgin Blue Holdings Ltd and Qantas Airways Ltd, Australia's biggest airline, and its low cost carrier Jetstar, are waiving fees for changing flights and are flying less to the area as passengers cancel or delay travel to the affected regions.
Within travel accommodation, the overall impact may be worse as hotels like the Stamford Plaza and Marriott were forced to close their doors and others like Hilton remained on alert as water invaded basement areas.
Additionally, most of the hotels located in flood areas are opening their doors not to inbound tourists but for relocated guests, the housing of local victims as well as relief workers and emergency staff.