TNQ Tourism Recovery Fund

Briefing Note Summary

Tropical North Queensland (TNQ) is world renowned as a leading tourism destination.

The visitor economy supports one in six jobs directly and indirectly, and pre-COVID the tourism sector paid more than $1B in State and Federal taxes per annum.

To date, the regional economy has lost $5.3B due to COVID-19 border closures.

A detailed roadmap is required from State and Federal Governments to reinstate traveller confidence.

The Issue

Maximising opportunities for TNQ

Tropical North Queensland (TNQ) is a significant tourism destination for both domestic and international visitors, with the region being the gateway to unique World Heritage assets. With a tourism industry accounting for 17% of the regional economy, and international tourism representing 7.4% (Tourism Research Australia, 2021), the local economy faces significant exposure when an event like the COVID-19 pandemic occurs.

COVID-19 has devastated the TNQ tourism industry, and to date the regional economy has lost $5.3B in Gross Regional Product (GRP) due to border closures. Domestic lockdowns and no international visitors have led to the region losing $7M a day, as well as more than 6,000 jobs, with another 3,000 forecast to have been lost by December 2021. This has been the primary reason the labour force in the Cairns SA4 region has slumped overall by 4,400* (or -4.9%) people in work. This contrasts starkly with other QLD regions like the Gold Coast (+51,600* or 14.2%), Townsville (+8,100* or 4.5%), and the Sunshine Coast (+2,200* or 0.6%). Prior to COVID-19, annual tourism expenditure in the region was estimated to reach $5B by 2029.

In 2019, one in three visitors to the region was international, so the closure of international borders has impacted TNQ disproportionately. When international borders do reopen, the re-introduction of international aviation capacity to Australia is likely to be slow. Tourism Tropical North Queensland (TTNQ) must therefore seek to maximise opportunities to recover domestic airline capacity and target destination marketing to drive the recovery of the TNQ tourism sector.

Background

Rebuilding international tourism

TNQ stretches from Cardwell to the Torres Strait and west to the Northern Territory border. Pre-COVID-19, TNQ received nearly three million domestic and international visitors annually. This equated to an estimated $3.5B in annual visitor spend in the year ended March 2020 (Tourism Research Australia, 2021). Two-thirds of the region’s visitor nights are domestic travellers, and one-third international. The visitor economy, made up of holiday, visiting friends and relatives, business events, major events, and education visitors, contributes over 17% of GRP in the region, supporting one in six jobs directly and indirectly.

Over the past decade, the funds available for tourism marketing in the state have not kept pace with the increased level of competition both in Australia and globally, and the impact of global travel restrictions from COVID-19 has seen the visitor economy come to a virtual standstill since March 2020. As the industry emerges, it is clear that the key to the recovery of the visitor economy, and the wider regional economy, is aviation led.

Air connectivity is key to the economic development of the Cairns region. It opens up new visitor markets, enables the export of agricultural produce, and promotes growth in the education sector. A daily international wide-body flight to Cairns is potentially a $200M a year export business, with $100M of international visitor spend, $50-$150M of agricultural produce sales, and the potential to deliver more than 650 new jobs widely dispersed across the region.

Cairns Airport is the nation’s seventh busiest in terms of combined international and domestic passenger movements. It has historically handled around 130,000 aircraft and more than 5.2M passenger movements per year. The airport is widely recognised as one of the most significant economic drivers in the Tropical North Queensland (TNQ) region and its facilities are critical pieces of economic infrastructure.

With limited international flights returning to Cairns in the immediate future, capturing as much domestic capacity as possible is crucial to support and re-energise the tourism sector and the local economy. The Cairns community welcomed the support of Governments in providing direct support to the airlines and the airports to assist the reintroduction of domestic services to Cairns and across the region. TNQ is seeking direct support for route marketing for secured aviation seats as part of a $40M Tourism Recovery Package.

Next Steps

To drive the recovery of the TNQ tourism industry and wider regional economy, it is vital that there is investment in targeted support that will drive measurable outcomes. The TNQ visitor supply chain has been severely damaged as a result of COVID-19, and 20 years of investment in destination marketing has been disrupted. Rebuilding the supply chain – including sourcing new products and suppliers, attracting new international airline partners, restarting international cruise ship market, and developing new international source markets – will require significant investment in destination marketing and brand building.

Finally, development of a reopening pathway with timeframes would allow the industry to be able to plan for the future and give confidence to travellers and the TNQ tourism sector.

The result will be a framework for more sustainable, affordable, and efficient growth, enabling the region to influence population trends rather than respond to them. The strategy will also provide input to the state population plan, complement federal population initiatives around attracting new migrants to regional cities, and inform the Queensland Government’s delivery of the National Partnership on the Skilling Australians Fund.

Our Recommendation

  • That the Federal Government invests $40M in funding to Tourism Tropical North Queensland (TTNQ) over three years for destination marketing to rebuild and source international markets, restart the cruise ship sector, and support domestic and international airline partners to market the secured aviation routes into the region and boost demand.
  • That the State and Federal Governments provide certainty to the TNQ tourism sector and provide a detailed roadmap to reopening, with timeframes, to enable future planning and instil traveller confidence.