(Bloomberg) -- When Australia announced on Feb. 6 that, after two tightly locked-down years, it would officially reopen its borders to international tourism two weeks later, Chris Allison, Tourism Australia's acting general manager of the Americas, was caught somewhat by surprise. 

“We would have loved to have as much notice as possible,” he says, “But that’s not necessarily practical. We knew other governments only gave their tourism offices two to four weeks’ notice, too,” he explains.

In those 15 days, Tourism Australia worked around the clock to create a new marketing campaign—“Don’t Go Small. Go Australia” is the tagline—and dole out its A$193 million ($140 million USD) annual budget in hopes of getting visitors back to Oz as soon as possible. That money gets divvied up tactically, with billboards in such major cities as New York and London, TV ads, a global social media campaign, efforts to bring late night talk hosts (and their production crews) from the U.S. to film episodes Down Under, setting up booths at South by Southwest, and sending Tourism Australia reps to visit travel agents around the world and spending heavily on media visits. (Bloomberg does not accept hosted travel.) 

Hanging in the balance are all the hotels, tour operators, restaurant owners, and hospitality employees that have been starved of everything but domestic business since March 2020—if not longer, given the unfortunate way that the pandemic followed closely on catastrophic bushfires across the continent in 2019 and earlier in 2020. 

“It’s very important that we succeed,” says Allison. “The tourism industry in Australia has definitely had it really rough for the last couple of years.”

This time, Allison says success hinges primarily on a single market: Americans. In 2019, North Americans represented a million tourists and $4 billion in expenditures, making it the second-highest-grossing tourism stream behind China, which remains locked off. Even though that still represents a small fraction of Australia’s A$152 billion tourism sector, Allison and his team are spending “an almost unprecedented” amount on juicing business in the U.S., though his office declined to share specific figures. (Historically, the U.K. rounds out Australia’s top three markets, but this year, domestic and regional visitors from Singapore, Korea, and Japan, where travel corridors opened earlier, have been the country’s other priorities.) 

“As we reemerge, we have a lot of focus here in terms of the long-term opportunity and the importance of the American market,” he says, convinced that travelers from the U.S. and Canada will eventually contribute even more than than in 2019.

Such figures are a long way off. Many luxury travel agents in the U.S. who typically sell millions of dollars a year on travel to Australia have yet to notch their first bookings to the continent. And few insiders expect real gains until at least the end of this year, shedding light on just how complicated it is to restore a travel economy that’s been grounded for such an extended period. 

Starting from Zero

Despite Australia’s bevy of bucket list-topping wide-open spaces—including the Great Barrier Reef, the Daintree Rainforest, and the red rocks of Uluru—booking agents from various corners of the world say global travelers are choosing shorter trips with direct flight connections from their home countries, not distant Australia. 

“It’s not as if we’re seeing droves of international hotel bookings yet,” says Michael Johnson, chief executive officer of Tourism Accommodation Australia. “Our biggest influx of internationals are more likely to be in the latter part of the year.”

“People don’t decide overnight that they’re going to fly to Australia. It takes weeks or months for the travel decision to be made,” adds Daniel Gschwind, CEO of the Queensland Tourism Industry Council, which represents the state’s A$27 billion ($19.8 billion) industry.

Among the travel consultants itching to restart business Down Under is native Australian David Prior, founder and CEO of Prior, a New York-based travel membership club. Even Prior says his clients are hesitant.

With the exception of a single family of six that rolled the dice by booking a “big, big trip—a full, six-week Australian immersion” just before the border reopening was announced, Prior says his clients are thinking about Australia as a “long-term proposition” that requires plenty of advance planning. They’re interested, he says, but haven’t emerged from dreaming mode. Moreover, says Paul Tumpowsky of travel agency Skylark, moving the needle on any big-ticket trip becomes harder in the face of the stock market downturn.

Barriers to Entry Remain

That’s just as well. Even if more travelers wanted to come sooner, they’d have a hard time arriving. “At the moment, we are still very much restricted by the number of flights that are coming in from overseas,” explains Tourism Accommodation Australia’s Johnson. 

Australia’s national carrier Qantas Airways Ltd. has forecast that its international capacity will return to just 22% of pre-Covid levels in the quarter ending March 31, with the proportion increasing to 44% by the end of the second quarter in June.

Routes to North America will come back at a faster rate. “We expect to be at 53% of capacity by April,” Allison explains, “and we’re projecting for 100% capacity by the time we hit December, which is traditionally our high season.” 

Those delays will give tour operators and hoteliers time to staff back up. Across the country, acute labor shortages in the hospitality sector have forced many businesses to slash hours, cut the number of patrons they can host, jack up prices, or simply pull down shutters. That’s because the sector much relies on foreign workers who were, until recently, locked out. Before the pandemic, almost 400,000 international students and 250,000 “working holiday makers” (backpackers on special visas that require them to take up jobs) were employed each year in Australia. Many of them worked in pubs, hotels, and restaurants.

“We have some constraints on being booked out. We have some limitations around staffing,” says Glenn Bourke, CEO of Hamilton Island, which is seeing a “strong pickup” in the British and U.S. markets for its properties, which include Qualia, a luxury resort with 60 sumptuous bungalows on the edge of the Great Barrier Reef. “If we can increase our staffing numbers again, we think we’ll be able to build to maximum occupancy.”

A New Kind of Tourism

Prior says that “we shouldn’t talk about the same metrics as before” when gauging the country’s recovery. “It’s going to be a different kind of travel here, to be honest,” he says.

For one thing, he expects consumers to be far more interested in Indigenous and Aboriginal travel experiences—a category he says has grown exponentially during the pandemic and represents “far more than just paying lip service to the cause.” Those experiences vary in cost, but often take travelers far outside cities and extend the length of their stays.

He also expects Australia’s recovery to happen on two tracks: a slower one for the mass market and a much faster one for luxury tourism. “I don’t know what bigger-scale mass tourism will look like, because I can’t tell yet how willing people will be to travel these large distances,” he explains. “But on the luxury end, Australia is so completely suited to the moment—to what people are looking for.” He expects 2023 to “be a big year” and for 2024 to “surpass what it was before.”

Tourism Australia’s Allison is also playing a long game. “The modeling that we have suggests that it will take two to three years across all markets to return to 2019 levels,” he says. “One challenge Australia has always had is that it’s a future plan, a bucket list plan—you can do it later. We need to convince people that now is the moment to go big.” 

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