“We are conscious of not getting ahead of ourselves by predicting what it means for the recovery of domestic and international travel, but with every announcement around borders or vaccines the picture around what that recovery could look like becomes a bit clearer,” Mr Culbert said.
Excitement over a potential vaccine comes as falling rates of COVID-19 and the reopening of state borders encourages Australians to book flights and holidays. Retailers have reported a rebound in consumer confidence.
Melbourne Airport is expecting 261 flights to and from Sydney in the week of November 23 after the border between NSW and Victoria opens, up from just 40 flights scheduled for the previous week.
The streets are packed and you can’t get car parks anymore, which is great. I love the fact you can’t get a car park.
— Eric Morris, the chief executive of womenswear retailer PAS Group
James Thornton, CEO of the Intrepid Group, which specialises in adventure travel, said the company has had its best week for domestic bookings since March, booking in 153 people which has earned it $500,000 in revenue.
The bookings included Victorians who were “desperate to get out”. They expect to be allowed to travel around Australia soon after Victoria recorded 11 days in a row with no new COVID-19 cases, he said.
“People are wanting to get out into the great outdoors having been cooped up for so long.”
Tasmania, the Northern Territory and South Australia were the biggest beneficiaries of pent-up demand for travel by Intrepid customers, with Queensland lagging behind because the state government has not yet set a date for opening up to Sydneysiders and Victorians, Mr Thornton said.
But he warned people should not get “carried away” and assume that a vaccine was definitely on its way until the Australian government started relaxing international border restrictions.
Shops also benefited from stronger consumer confidence due to the prospect of a vaccine as well as record low interest rates and the election of Joe Biden as the next US President over Donald Trump.
We are enjoying great demand for fashionable sneakers, especially in colours, which means summer buying is already feeling solid.
— Daniel Agostinelli, CEO of footwear retailer Accent Group
The weekly ANZ-Roy Morgan consumer confidence rating rose by 3.2 per cent, the most in 11 weeks, to a fresh eight-month high of 103.1, although it remains below the long-run average of 112.6.
Sentiment has risen by almost 60 per cent since hitting 65.3 on March 29, the lowest level since 1973.
“We definitely feel that consumer demand and confidence is the strongest to date since the pandemic started,” said Daniel Agostinelli, the chief executive of Australia’s largest footwear retailer, Accent Group.
“We are enjoying great demand for fashionable sneakers, especially in colours, which means summer buying is already feeling solid.”
Richard Facioni, the chairman of Mosaic Brands, which owns Noni B, Katies, Millers and Rivers, said it would take time for the vaccine to take full effect.
“However, the positive news on a vaccine development lifts consumer sentiment and spirits, and gives people more confidence to shop,” Mr Facioni said, adding that “the end of chaos under Trump” would help.
Eric Morris, the chief executive of womenswear retailer PAS Group, said the vaccine and Biden win were good news and that spending was picking up in Melbourne.
“The streets are packed and you can’t get car parks anymore, which is great,” he said. “I love the fact you can’t get a car park.
Retailers also welcomed the Morrison government’s decision to extend JobSeeker payments to March, albeit at a reduced rate.
ARA chief executive Paul Zahra said the extension would allow those on JobSeeker to “feel more confident to open their wallets for the all-important Christmas shopping season” which delivers up to two-thirds of retail profits for the year.
Darren Rudd, CEO of the Australian Federation of Travel Agents, said a successful vaccine would be a huge step forward in restoring confidence in international travel.
“That will then flow through every element of the travel sector and help get people travelling for commerce, for culture, for family, friends and fun.”
Cruise operators were expected to benefit quickly, because people were “positively addicted” to cruising, he said. “I see the vaccine as helping cruises probably in Australian waters to start with and then moving on the international front.”
But agents were not yet taking forward bookings on northern European summer holidays, he said.
Mr Rudd said it had been wise for Australia to secure 10 million doses of the Pfizer/BioNTech vaccine while final tests were still being done.
‘Don’t wait for vaccine’
The Australian Airports Association’s CEO, James Goodwin, said the vaccine news was encouraging but that Australia should not wait for a vaccine before reopening international borders.
“A plan using a combination of rapid testing, contact tracing and quarantine will be essential until a successful vaccination program is rolled out, Mr Goodwin said.
Santos chief executive Kevin Gallagher welcomed the bump up in crude oil prices as a result of the vaccine news, while emphasising that the oil and gas producer’s focus remained on what it could control. Brent oil prices jumped 7.1 per cent to $US42.25 a barrel overnight Sydney time and were holding at around $US42 on Tuesday.
“Certainly the positive vaccine news is welcome as are higher oil prices overnight, but as always I’m focussed on the things we can control – reducing our cost of supply and sticking to our disciplined, low cost operating model so that Santos is resilient throughout the commodity price cycle,” Mr Gallagher said, adding that was also the best way to put downward pressure on domestic gas prices.
But Mr Gallagher said it would take “a period of sustained improvement in oil prices” as well as government stimulus to provide an incentive for the capital investment needed to grow supply to meet future demand and provide the secure, well-paying jobs that will be needed as the economy recovers from the pandemic.
Treasurers from across the travel, transport and building sectors are becoming more optimistic that the worst of the pandemic may have now passed.
Melbourne Airport’s group treasurer, Alice Van Der Geest, said there was a sense of optimism that Queensland’s borders would be able to open by Christmas after both Victoria and NSW recorded no community transmission on Tuesday.
“We’ll be in a much better position to assess the position by the first quarter of next year,” Ms Van Der Geest told an annual Finance & Treasury Association conference on Tuesday.
Transurban’s treasurer, Tom McKay, said that while the second wave of the pandemic in Melbourne was continuing to hurt the use of the company’s toll roads, the group was “heading back towards pre-COVID numbers”.
NAB CEO Ross McEwan said Australia and New Zealand had managed the health and economic impacts of COVID-19 better than most other countries.
“While the outlook remains uncertain, I am optimistic for the opportunities ahead – for a business-led recovery, where new jobs and opportunities are created,” Mr McEwan said. “This crisis will pass.”
With Angela Macdonald-Smith, Patrick Durkin, and James Frost