The tourism sector in Queensland is struggling to get back on its feet after the devastating effects of cyclone Yasi and rampaging floods, with Tourism Whitsundays chief executive Peter O’Reilly warning that some companies may be in danger of collapsing if conditions don’t improve.
The comments come during a rough week for tourism. Billionaire Bob Oatley has donated 500 free rooms on his resort on Hamilton Island to try to get things moving, and travel booking agency Webjet presented lower-than-expected results.
Qantas chief Alan Joyce has also said the impact of the natural disasters will affect the company’s results in the second half.
O’Reilly says while the Whitsundays region was not directly affected by the cyclone or the floods, closures of roads and the overall impact of the disasters means bookings are down and it will be some time before they recover.
“We weren’t even physically affected by the floods here, but when the cyclones happened, we were asked by disaster management groups to evacuate people off islands. We sent 2,500 people away, and getting them back is proving problematic.
“Our marine industry is down 70% from January last year, and we have people who are selling their homes trying to save businesses,” he says.
“It’s collateral damage. We’re doing the best we can to get the message out there, and to get people coming back, but it’s just very difficult. I’m afraid it may be just some time before the receivers come knocking on some businesses.”
O’Reilly’s comments come as billionaire Bob Oatley has said he will donate 500 free rooms at his resort on Hamilton Island to promote more tourism in the region.
“Queensland’s tourism industry is right in the bottom of the pits,” he told the Australian Financial Review.
O’Reilly says there is some more activity occurring, but it remains slow overall. “We’re seeing some booking movement…we’ve got a campaign with Wotif next week that will kick off, and hopefully that will spark some interest,” he says
“The impact of the floods is lost on most people. The flow of backpackers has completely ceased on the east coast. We’ve had weeks where highways have been cut off…the damage is quite real.”
O’Reilly says he is holding crisis meetings to determine how some marketing strategies can get people up to Queensland again.
“We are looking at a few big events where we can pull people in, trying to help ourselves. But it’s extremely difficult. There are a lot of people operating great deals but it’s still very slow.”
Meanwhile, Qantas chief Alan Joyce has said the company will be hit due to lower tourism numbers.
“We saw obviously domestic business traffic reduce during the period the floods took place, particularly in Brisbane,” he said.
Those comments come just two days after Webjet chief executive David Clarke said that not only did the natural disasters impact tourism, but the sector in general is suffering due to low consumer confidence. He said that travellers will remain to be “cautious, conservative and, in terms of travel, likely to remain acutely bargain sensitive”.
O’Reilly agrees, saying the industry has been hurting “since the interest rate rises began in late November 2009…it’s been under pressure since then”.
Yesterday, Queensland premier Anna Bligh told a flood benefit that businesses are being dragged down by the image the entire state is being affected by the floods. While that isn’t true, she nevertheless acknowledged that “in the months ahead we have some very significant economic problems to deal with”.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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