When travel restrictions slammed into place it didn’t take a genius to predict doom for the tourism industry - particularly the parts aimed at an international crowd. Even I did it.
Fast forward to 2021 and the data has finally caught up with our forecasts and broadly seems to confirm them. Employment in a range of tourism-adjacent industries is down across Australia.
However there is one noticeable exception to this trend: Cairns.
In my analysis Cairns was one of the most vulnerable locations with a large tourism sector that was also highly dependant on foreign visitors. But based on the data so far Cairns has completely shrugged off the Covid-19 Recession.
Comparing November 2020 with November 2019 (to control for seasonal effects) we can see that employment in tourism-adjacent industries (Accommodation & Food services, Arts & Recreation, Rental, Hiring & Real Estate and Retail Trade) has consistently grown in Cairns. This measure might be distorted by JobKeeper which encourages firms to keep workers on the books even if they don’t get many actual shifts, but even when you look at hours worked the Cairns labour market seems to have completely recovered from the initial lockdowns.
The recovery is also made clear in Google’s mobility data which show that visits to retail, recreation and “workplaces” in Cairns to be back to or above historical norms. Although public transport remains relatively unpopular.
What explains this resurgence?
Clearly there is a degree of substitutability between domestic and international tourism. It seems clear that Cairns and the lure of surrounding natural wonders has managed to pivot relatively effectively between the two. Why not visit the Reef now when at least you won’t have compete for a spot on the beach with overseas visitors?
While interstate travel has been frequently restricted during the crisis, Queensland may have occupied a sweet spot with relatively few internal lockdowns (compared to say Victoria) and without the “Fortress WA” mindset developed by some of our mort isolationist states. At one point during the crisis Brisbane-Cairns was the busiest flight route in the country - and that clearly shows up in the labour market statistics.
This raises the obvious question of why Cairns has been included in the Federal Government’s Travel Support Scheme. There seems little reason to subsidise flights to a region which has a relatively strong economy - unless perhaps you are more interested in the political fortunes of the local marginal electorates!