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Australian bushfire crisis predicted to cost tourism industry hundreds of millions | Australia news

The deadly bushfires engulfing Australia’s eastern coast will cost the tourism industry hundreds of millions of dollars, operators say.

Images of fire and smoke making front pages around the world risked further damaging the industry by scaring away international visitors, the Australian Tourism Industry Council said.

Almost 4,300 insurance claims totalling $297m have been lodged since the main fires began on 8 November, but the bill is set to climb as the full extent of damage is uncovered and more country burns over what is expected to be a dangerously hot weekend.

The fires have devastated some of Australia’s key tourism areas, including East Gippsland in Victoria and the New South Wales south coast.

On Sunday, Victoria’s Country Fire Authority ordered the evacuation of East Gippsland, which is visited by tens of thousands of tourists every summer. On Thursday the naval vessel HMAS Choules was off the coast of Victoria waiting to evacuate some of the 4,000 people trapped in Mallacoota, unable to leave because roads from the town have been cut off.

In NSW, the fires have devastated tourist towns including Batemans Bay and Mogo, destroying hundreds of houses and businesses.

On Wednesday, Fire and Rescue NSW also ordered people to evacuate the Kosciuszko national park, including the Thredbo resort, which operator Event Hospitality & Entertainment said would be “closed until further notice”.

The tourism council executive director, Simon Westaway, said the first priority of tourism operators was to help their local communities, but there was “an unquestionable mounting impact on tourism from these fires”.

“The summer school holiday period is the high peak season for many of our regional and rural tourism hotspots,” he said. “It is still too early to fully know and assess the commercial impact but it will clearly run into hundreds of millions of dollars over the near term.”

He said the bushfires were getting heavy coverage overseas and he was concerned visitors might be scared off.

“Atic is calling on our government tourism authorities to remain vigilant and be nimble and coordinated to any perceived or real impact to future travel or a decision to defer visiting our country for fear of not being open and accessible, or what these fires may be doing to our pristine nature,” he said.

“Our industry is terribly resilient but the severity and scale of these fires and their literal strong global reporting and physical impact can’t be ignored over the ensuing period.”

Some tourists whose holidays were cut short due to bushfires in East Gippsland have pledged to return.

Nick Wright and his family have been travelling from their home in Greensborough in Melbourne to spend Christmas at Lake Tyers beach for 22 years. They spent the night with 550 other tourists in a relief centre at nearby Lakes Entrance on Monday, when fire burned south toward the coast, but returned to Lake Tyers for four more days. They planned to leave on Friday, but Wright said they would be back.

“We want to support the area by coming back,” Wright said.

On Thursday, the Insurance Council of Australia said that since 8 November it had declared a catastrophe in 236 postcodes across four states, including areas on the east coast stretching from East Gippsland to the Gold Coast.


Luke Henriques-Gomes
(@lukehgomes)

The insurance catastrophe declared postcodes across Australia right now. #nswfires #vicfires pic.twitter.com/3REJVazjHt


January 1, 2020

The ICA said 4,299 claims worth about $297m had been lodged, with 1,485 properties destroyed, but “these loss numbers are expected to increase as further assessments are undertaken”.

Economist Saul Eslake said bushfire damage would not be properly reflected in economic statistics, which “can give a distorted impression of the impact of natural disasters”.

“The losses – houses burned to the ground – don’t show up, the rebuilding does,” he said. “Disasters can, perversely enough, provide a small boost to growth.”

But he said the statistics would capture the damage to industries including tourism and agriculture.

“The loss of productivity of that will show up as a negative in national accounts,” he said. “If livestock is destroyed, that’s beef production that won’t have occurred, or that’s sheep production that won’t have occurred.”

He said the impact on the whole of Australia’s economy was likely to be “quite small”, pointing out that the long-running drought has cut just 0.2% from the country’s gross domestic product.

The scale of the disaster is also likely to have a drastic effect on insurance premiums.

The operator of the Reef casino in Cairns said disaster insurance had already become more expensive.

Reef Casino Trust told the stock exchange its insurer reduced its coverage against cyclones, floods and tidal waves and increased its annual premium by $487,000, to $1.3m.

“Challenging market conditions in the insurance industry have led to reductions in the insurance coverage available on commercially reasonable terms for certain risks and an increase in premium costs,” executive director Allan Tan said.

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