19 February 2009

Australia's bush fires pose a temporary setback

TravelMole guest comment by Parita Chitakasem, research manager for Asia-Pacific, Euromonitor International

Australia continues to recover from one of its worst bush fires in history, which has devastated some key towns in the state of Victoria.

However, despite the devastation, Euromonitor International estimates that this will pose only a minor stumbling block in Victoria’s tourism industry, and strong support will help generate a swift recovery within the next two years.

Victoria’s bush fires in February 2009 were one of Australia’s worst, with a death toll exceeding 200 people.

Whilst its core destinations, such as Melbourne, plus many other destinations surrounding it, are not affected by the bush fires, certain tourist spots have been completely destroyed.

Tourism in the historic village of Marysville, a popular honeymoon destination, has been wiped out, with its buildings, including its guesthouses, hotels and caravan parks, having been burnt down. The town of Kinglake and its tourism industry has also suffered, with several operators, including restaurants and bars, having being destroyed.

However, Australia is very familiar with bush fires, and has a long history of extreme weather conditions from which it has continued to recover.

Nevertheless, these bush fires of February 2009 are expected to hit Victoria’s tourism harder than previous incidents, as it is also compounded by the recession and tougher economic conditions.

Over the next two months, only volunteers rebuilding the towns or tourists coming to observe the devastation, will be making any trips to Marysville and Kinglake.

Visitor numbers to Kinglake in the next three months could drop by as much as 40% on the previous year.

However, its tourism performance may start to recover in the mid-term if domestic tourists show confidence in their spending habits and are drawn back to the area, particularly to visit Kinglake National Park.

If consumer spending picks up over the next few months, any negative effect of the bush fires on Victoria’s domestic tourism industry could be minimal for 2009.

Euromonitor International provisionally forecasts growth of over 3% in number of trips to Victoria to reach 18.5 million trips for 2009 if consumer spending regains confidence.

Already strong public support domestically and internationally puts Victoria in a good position to stave off a more severe impact on its tourism industry.

Similarly to Phuket, Thailand, where full recovery from the December 2004 tsunami took less than a year due to strong media coverage and funds, the aftermath of the bush fires has already been supported by donations from high profile celebrities including Nicole Kidman, Pink and Leonard Cohen to name a few.

With such support, we expect a full recovery for domestic tourism to take place as early as the end of 2009, and with further opportunities for more development throughout 2010.