Melburnians spending big in regional Victoria after escaping COVID ‘ring of steel’, credit card data shows

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Melburnians eager to escape the city after the abolition of the ‘ring of steel’ dividing them from the rest of the state are splashing record amounts of cash in regional Victoria, according to the latest credit card data from the NAB.

In the two weeks since the end of the travel ban on November 9, spending by Melbourne residents on accommodation, cafes, restaurants, pubs and bars in regional Victoria has surged well above last year’s average.

But while regional hospitality and tourism operators have welcomed the return of money-wielding urbanites, they worry it could be a temporary boost that dries up when interstate and international travel becomes easier.

“Opening up the ring of steel has had a huge impact for regional Australia and Melburnians have really embraced it, going off this data,” Julie Rynski, the NAB’s regional and agribusiness executive, said.

Spending on regional restaurants was up 76 per cent compared to the same time last year in the first full week out of restrictions, while spending at pubs and bars was up 39 per cent, and accommodation up 22 per cent.

In the second week, spending on accommodation rose to 31 per cent, but dropped slightly for restaurants and cafes to 55 percent, and for pubs and bars to 27 per cent.

“People are booking accommodation months in advance, even after the school holidays are over,” Ms Rynski said.

“Fifty per cent of the accommodation being booked in regional areas is coming from people visiting from Melbourne, so I love the aspect of people wanting to support the state.”

The most popular areas to visit were the Geelong region (which includes the Bellarine Peninsula and the Great Ocean Road to Lorne) and the Latrobe-Gippsland region.

The NAB said it decided to publish to help government and industry better understand which sectors were hardest hit by the COVID-19 pandemic.

The bank said customer transaction data was aggregated, meaning people’s individual data was not analysed in the process.

Business booming

Jamilla Cudmore, who has owned the Coach House Inn in the alpine town of Bright for 15 years, said rooms were fully booked until the end of February.

“It’s not only back to normal, it’s better than normal,” she said.

“Usually we are only half full during the middle of the week at this time of year, but at the moment we are full every day of the week.”

Ms Cudmore said another major difference was that guests were booking longer stays, rather than quick getaways.

“People usually come for a weekend or a week at a time, but we are getting a lot of bookings for up to two weeks,” she said.

“Families can’t go overseas at the moment, so instead they are booking longer local holidays.”

Businesses across the border in New South Wales are breathing a big sigh of relief, benefitting from the re-opening of the state border on Monday, as well as the return of Melbourne visitors.

Shenaye Scott, the manager at the Jingellic Pub in New South Wales, said half of her business disappeared when the border closed in August, but it had surged after the travel ban was lifted.

“This has been our busiest week since summer last year, so it’s a huge weight off our shoulders,” she said.

“This summer is going to be absolutely insane.”

‘Sugar hit’ for regional businesses

However, while regional hospitality and tourism industries are noticing a boost now, questions remain over how long that will last and if it’s enough to help businesses already struggling.

“For as long as people can’t travel overseas but still want a break, then it will stay busy for quite a while, but it’s hard to tell how long this influx lasts,” Ms Cudmore said.

Tourism expert, economist Terry Rawnsley, described the intrastate tourism boost as a “sugar hit” for tourism operators, and warned the tap could be turned off as more travel restrictions eased.

“I think Victorian operators will have a really good run from now until Christmas, just from the pent-up demand, but January might see some more Victorians heading to Queensland and New South Wales as interstate travel gets into swing,” Mr Rawnsley said.

“So the Great Ocean Road will start missing out to Noosa, Byron Bay and the Gold Coast.”

Ms Cudmore says demand for accommodation at her inn will need to stay at the present rate for two years before she is able to cover her losses from the pandemic.

“It’s great that it’s now so busy again, but after the bushfires and then closing completely for three to four months, it will take two years or longer to be able to recover financially,” she said.

“Some towns — such as highway towns or ones with well-established tourism industries near larger cities — will do better than others, but the small rural and remote towns will take even longer to recoup their losses.”

Recent modelling by Murray Regional Tourism Board found it would take up to four years for Echuca and Moama on either side of the Murray River to get back to their pre-COVID financial positions.

Chief executive Mark Francis said the impact of shutdowns on Echuca-Moama’s tourism industry had “decimated” the region’s economy, and it would not bounce back quickly.

“At best, we might get back to about 50 per cent of pre-COVID outcomes [for] expenditure and visitation by the end of 2021-22, and it will take until about 2024 to actually get back to a pre-COVID perspective,” he said.

Ms Rynski said that, even as life returned to normal in Victoria, many regional businesses would continue to struggle and encounter more problems if international tourism resumed sooner than expected.

“It is fair to say if a business was already borderline and struggling without any form of buffer, then some of them will still struggle unless they keep this influx,” Ms Rynski said.

“Sadly we are seeing more lease signs come up, and I think there will be some that won’t survive because they were not as robust going into this as they would have liked to have been.”

By Marty McCarthy (Original ABC Article)

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