Working holidaymakers bring in $3bn each year – so, how will Australia ensure they come back?

Working holidaymakers will be one of the first international visitor markets to return to Australia in 2022.

But as global travel slowly resumes and many young people start thinking about working overseas again, global competition for this market will be intense. Australia will need to out-compete other destinations to bring working holidaymakers back, particularly those from Europe.

There were more than 300,000 working holidaymakers in Australia per year before the pandemic. The absence of these workers resulted in a loss of more than A$3.2 billion in visitor spending in 2020. It has also created critical labour shortfalls, particularly in regional Australia.

With borders reopening, the Australian government needs to rethink its working holiday program. It needs not only to make it easier for young travellers to come back, but also have a better understanding of their goals and expectations of a fulfilling working holiday experience.

Working holidaymakers stay longer and spend more

The working holiday visa program was established in 1975 as a cultural exchange initiative. Working holidaymaker visas are available for young people (mostly aged 18 to 30) and typically last for one year, though there can be opportunities to extend this. Australia now has reciprocal agreements with 45 countries.

The program has remained open throughout the pandemic to people from eligible countries. Yet, visa applications declined by an astonishing 99.5% in 2020. People were free to apply for working holiday visas, but the closed borders prevented them from actually coming.

Working holidaymakers spend more and stay longer than any other international visitor. On average, they spend A$10,400 per trip and stay 149 nights. In comparison, other international visitors to Australia spend A$5,211 per trip and stay 32 nights, on average.

One-third of working holidaymakers come from the UK, Germany and France. However, there is a growing demand in Asia. In 2019, almost 29% of working holidaymakers were from Japan, South Korea and China.

Combining study with a working holiday is particularly attractive for young people from Asia. As such, reactivating this market after the pandemic is critical to rebuilding Australia’s international education sector.

According to Tourism Australia, the most popular jobs for working holidaymakers are waiter, farmhand, construction worker and childcare worker. New South Wales, Victoria and Queensland were the most affected by the absence of these visitors – the three states accounted for 83% of working holiday jobs in 2019.

But this doesn’t mean working holidaymakers stay in capital cities. In fact, they disperse more widely around the country than other international visitors.

These travellers have been sorely missed in regional Australia, which have suffered from crippling labour shortages during the pandemic. Cairns, Port Douglas and other areas in northern Queensland have been the most severely affected.

This year, the Queensland government launched the A$7.5 million “Work in Paradise” scheme, offering a A$1,500 incentive to lure young Australians to work in tourism and hospitality jobs in regional Queensland.

Extending this program to overseas workers could be instrumental in bringing foreign working holidaymakers back to Queensland as borders reopen.

How Australia can bring them back

As a first step to restarting this market, the Australian government has removed the visa application charge for those working holidaymakers who were previously granted a visa but were unable to come to Australia because of the pandemic.

They have also relaxed some visa requirements, such as allowing working holidaymakers to work for one employer for up to 12 months (up from six months previously). This is aimed at encouraging holidaymakers to take jobs in the tourism and hospitality industry.

Australia and the UK have also just signed a free trade agreement that will extend the reciprocal working holidaymaker agreement between the countries. This includes increasing the age eligibility from 30 to 35 years and visa duration for up to three years, and having no job-specified work requirements.

But luring working holidaymakers back will require more than just loosening the rules. We need to delve deeper into what motivates these young people to take a working holiday trip, particularly to Australia.

In the past, these travellers have worked in low-skilled, low-paid jobs. This experience has also been seen as a “gap year” between high school and university.

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But those in Generation Z have different life aspirations than previous generations. Many are increasingly focused on kick-starting their careers, and taking a year off to travel abroad may be less attractive.

So, for destinations like Australia, it’s important to offer opportunities for young people to use their working holiday to gain critical skills and experience for their careers, not just make money to travel. The Gold Coast-based Global Work and Travel Company, for example, now offers overseas internships so young people can advance their professional skills while gaining international travel experience.

Some backpacker accommodations have also closed or shifted to other purposes during the pandemic. So, one thing local leaders can do is ensure there is adequate low-cost accommodation to support returning travellers.

The government also needs to make it affordable and easy to travel to Australia. Subsidising airfares to get them here, making it easier to find job vacancies, and providing low-cost or free transport out to the regions would help.

Employers also need to ensure holidaymakers are well-treated and have an enjoyable work experience. This requires stronger mechanisms to ensure employers are complying with the legal requirements around fair pay and adequate workplace conditions for those on temporary visas.

Improving the working holiday experience can have long-term benefits for the country. Research shows that many visitors develop a deep emotional attachment and affinity for Australia during an extending working holiday stay and return multiple times throughout their lives.

They can develop an understanding of Australian society and our economic and business practices during their experience. As such, they can help build future trade and investment opportunities between Australia and other countries.

So, making working holiday travel easy, fun and safe is not only vital to getting Australia’s tourism industry back on track – it’s critical for the country’s long-term engagement with the world. We need to make this a priority in 2022.

Editor’s note: This story was updated with details of the Australia-UK free trade agreement.