Once restrictions are eased, we expect a bounceback in spending as people venture back outside and try to shift back to normal. But the speed of any recover is still a big unknown as questions linger about safety which could potentially dampen demand. Will people get comfortable again being among large groups of people, or sitting on a crowded airplane? Until they are, the thought of traveling abroad to a busy tourist destination may not be appealing.
In addition to consumer fears, border restrictions in certain countries around the world could also limit the resumption of international travel. In the attached report, we look at Australia, where border restrictions mean international travel is suspended for the foreseeable future. This is a concern as Australians like to travel — they made 11 million offshore trips last year. The silver lining is that a portion of the money Australians would have spent overseas — some A$50 billion — could remain in Australia and benefit the domestic economy. Overall, we expect domestic tourism in Australia to rise 7% and retail growth to be boosted by 1 percentage point as a result of this shift in spending.