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Travel sector on the verge of collapse

Australia’s travel industry is on the verge of collapse with up to 40,000 people set to be left unemployed without urgent intervention, a new study reveals.

A national survey of travel agents found just one in 10 will survive beyond April 1 without targeted assistance or an extension of the federal government’s JobKeeper scheme.

The industry has been left decimated by ongoing border closures with 95 per cent of businesses seeing a decline in revenue of between 70 and 90 per cent.

Those businesses say they will not be able to support themselves beyond April 1 without urgent intervention, with 90 per cent flagging they will close.

The move would threaten 40,000 jobs and has sparked concerns about a mental health crisis.

Despite a federal government rescue package aimed at keeping the struggling sector afloat almost all businesses said it failed to hit the mark because of its complicated structure.

And 65 per cent of independent travel agents surveyed said they missed out any funding.

More than 700 businesses took part in the Small Business Australia survey which was completed this month.

Travel agent Josh Zuker has been hard-hit by Covid. Picture: Nicki Connolly

Small Business Australia executive director Bill Lang said immediate action was needed.

“These numbers are frightening, we are talking here of some 2600 businesses going out of business, some 30,000 plus jobs lost and the extinction of an entire industry, many of which were good trading and successful businesses pre-pandemic, who have through no fault of their own will be sent to the wall by government health policy, inaction and incompetence,” he said.

“Immediate action from the Prime Minister down to the Treasurer and Minister Tourism and Travel, Dan Tehan is required to sort this mess, you cannot have a policy that bans international travel for the entirety of 2021 and then offer limited or no support to an industry that cannot trade under the rules you have created to keep the nation safe.”

“The stories we have heard from owners of these businesses are harrowing, these are people who have been in business for over 20 years, built successful businesses through blood, sweat and tears, who have been hung out to dry by both the State and Federal governments who seem to have no interest in supporting the sector and are happy to see them wiped out.”

Josh Zuker, the 2019 Victorian Travel Agent of the Year, started an independent business after a career working in retail and corporate travel.

He was turning over in excess of $10 million a year when the borders were closed in March last year.

“I woke up and there was no business, overnight it was all gone.”

Mr Zuker has shut his Hampton office, has been forced to sell his home and said he would be left wiped out by the worst crisis to hit travel agents.

Industry on the brink

■ 40,000 jobs at risk

■ 2600 businesses could shut

■ 95 per cent of businesses suffered decline in revenue between 70 and 90 per cent

■ 90 per cent of businesses won’t survive if JobKeeper ends in March

■ 88 per cent of travel agency owners have concerns for their mental health and wellbeing

■ 90 per cent are dissatisfied with the federal government’s travel support fund

Source: Small Business Australia

“I’ve done this for 20 years and survived all the terrorist attacks and natural disasters that we’ve faced,” he said.

“Planes still flew on September 11. But the travel industry collapsed in March last year. Overnight, businesses were gone.”.

Mr Zuker, who was chasing more than $500,000 in refunds for his clients and had let go of eight staff, said the government’s rescue package had been a disaster that most agents couldn’t access.

Federal Trade, Tourism and Investment Minister Dan Tehan said more than 800 travel agents had received $33 million in COVID-19 Consumer Travel Support Program payments since December.

Another 1500 were being processed.

“Our Government is supporting travel agents as they deal with the extraordinary challenge of COVID-19,” Mr Tehan said.

“I encourage all travel agents who haven’t applied yet to go online and start an application.”

Rachel Powell and fiancee Nic Rone co-own HelloWorld Travel at Varsity Lakes but face having to shut the business.

But Mr Zuker said the way most independent agents reported turnover left them ineligible for any substantive relief.

Mr Lang called on the extension of JobKeeper for travel agents until international travel was allowed, followed by cash injections into businesses.

“The issues to the $28 billion travel agent industry have been caused by the policies of governments, both State and Federal, they are the ones who have closed borders and banned travel, which for the health of the nation no one is arguing with,” he said.

“What we are saying at Small Business Australia is that when you do that you have a responsibility of protecting those you affect and right now those who work in the travel sector are being failed by the government and this needs to be addressed immediately.

“This is a national tragedy and the pressure on those who own travel agencies is immense, with many earning zero income and then being asked to spend long nights trying to get refunds back for their clients, with mental health a significant issue among agents, with over 88 per cent reporting concerns for their own mental health and wellbeing.”

Human behaviour expert Mark Carter warned of a mental health crisis among the decimated industry.

“The stress and mental impact faced by those in travel, the hardest hit industry and likely last to bounce back, is something the nation needs to take very seriously,” he said.

Latest data from the Australian ­Securities & Investments Commission shows 115 Victorian businesses entered external administration in ­November.

DESPERATE FOR MORE SUPPORT

Box Hill travel agent Robyn Davies spends her days dealing with airlines, hotels and travel providers, and trying to recoup money for customers whose travel plans have been stymied.

But some companies have taken more than 100 days to respond or no longer exist.

Ms Davies said she would have to retrench her staff when JobKeeper ended.

This was despite a federal government support program which she had hoped would allow agents to stay open long enough to get customers’ money back.

Travel agent Jennifer Gorrie has been hit hard by the pandemic. Picture: Toby Zerna

“They need to do a JobKeeper scenario until everyone can do the refunds,” Ms Davies said.

“If I don’t have an income, how can I pay (my staff)?”

She supported the border closure but said the grant formula to assist agents fell short. “The Australian government closes the border but doesn’t recompense the travel agents or anyone who relies on them,” she said.

“It’s just wrong.”

JOBKEEPER ENDS AND IT’S OVER

Rosemary Thomas says the federal government has ignored small bricks and mortar travel agents, slamming their response as “utterly heart breaking”.

After more than two decades running a growing business, the Niddrie travel agent said she struggled to pay rent on her shop last year, with the landlord now fighting to seize her home.

“I’m happy to send my client list of a couple of millions bucks of refunds to Scott Morrison … because once JobKeeper finishes that’s the end,” she said.

Rosemary Thomas says the federal government has ignored small bricks and mortar travel agents.

“No amount of careful planning can prepare you for no income for nearly 12 months.

“You just wonder some days is it worth getting up.”

She said she did the right thing, helping clients return home and fighting for their refunds, and criticised the Prime Minister for failing to support an industry impacted by his travel ban.

“The hardest part is … I can’t shield my kids from any of this,” she said.

Shannon Deery | shannon.deery@news.com.au

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