Case Study – Tourism Recovery in an Australian Region After Bushfires

Introduction

This case study examines the collapse and partial recovery of the visitor economy of the Kirranda High Country and Coast, a hypothetical eastern Victorian region combining an alpine plateau, a forested river valley and 60 kilometres of coastline, with 31,000 residents. Between mid December 2023 and early February 2024 a prolonged bushfire season burnt an estimated 38% of its land area, closed its single arterial road for 24 days and forced evacuations during the peak summer trading period. Three lives were lost and 214 dwellings destroyed; that human cost is not reducible to the figures below, which are one dimension of recovery rather than its measure. The case addresses how such a disaster is quantified, how the four-phase crisis management lifecycle underpinning Australian emergency management applies to a destination, and what combination of image repair, funded initiatives and adaptation restores viability. Data are illustrative, constructed on National Visitor Survey conventions (Tourism Research Australia 2024).

Regional Context and the Disruption

The region before the fire season

Kirranda’s visitor economy was a conventional regional Victorian mix: an alpine winter season of roughly fourteen weeks, a dominant summer coastal season, and a shoulder trade in walking, cycling and food and wine. Around 1,240 businesses derived material revenue from visitors, and tourism supported some 3,180 full-time equivalent positions, close to a quarter of the region’s estimated 13,400 FTE workforce. Two structural features made it unusually exposed. Seasonality concentrated a disproportionate share of annual turnover into eight weeks from late December, so operators depended on the summer peak to fund the rest of the year. A single sealed arterial route also served both the coast and the plateau, so a fire anywhere along that corridor severed access to the whole destination. Faulkner (2001) observed that destinations rarely fail because of the hazard alone; pre-existing vulnerabilities convert it into a disaster.

The 2023-24 fire season

Fire activity began on 14 December 2023 and was not contained until 6 February 2024. Damage to tourism assets was significant but not catastrophic: 31 accommodation businesses sustained structural loss, and roughly 180 kilometres of walking track and four national park sites closed. The larger effect was on access and demand. Statewide messaging advised against non-essential travel to the eastern districts for six weeks, and that advice, appropriate in itself, applied uniformly to townships more than 100 kilometres from any fire front. Operators in unaffected coastal villages recorded cancellation rates above 80% with undamaged premises. This divergence between physical and economic damage is the defining feature of bushfire impact on a visitor economy (Beirman 2016).

Impact on the Visitor Economy

Scale of the decline

Table 1 sets out the principal indicators across the baseline, fire-affected and recovery years.

Table 1: Visitor economy indicators, Kirranda High Country and Coast, 2023 to 2025.

Total expenditure is derived from its components. For 2023, overnight expenditure is 1,742,000 x 196 = A$341,432,000 and day-trip expenditure is 640,000 x 88 = A$56,320,000, giving A$397.8 million; the same method for 2024 gives (811,000 x 182) + (372,000 x 79) = A$176,990,000. The percentage decline is therefore:

Decline = (177.0 – 397.8) / 397.8 = -220.8 / 397.8 = -0.555, or -55.5%.

The spread across the rows repays attention: expenditure fell 55.5%, nights 53.4% and businesses trading only 10.8%. Expenditure fell faster than nights because average spend per night also declined 7.1%, the market having shifted toward lower-yielding visiting-friends-and-relatives and repair-related stays. Closures lagged the demand shock because recovery grants and deferred loans allowed operators to trade through a loss-making year, so the 134 closures recorded understate distress: a further 190 businesses reported drawing on savings or superannuation to continue trading.

Estimating total economic loss

Direct loss is forgone expenditure against the counterfactual of baseline trading: 397.8 – 177.0 = A$220.8 million for 2024 and 397.8 – 320.3 = A$77.5 million for 2025, a two-year direct loss of A$298.3 million. This understates the regional cost, because tourism spending circulates through supplier and household expenditure. Applying a regional tourism output multiplier of 1.68, consistent with flow-on ratios in the national tourism satellite account (Australian Bureau of Statistics 2024):

Total economic loss = direct loss x output multiplier = 298.3 x 1.68 = A$501.1 million.

Per head of population this is 501,144,000 / 31,000 = A$16,166 for every resident over two years. Employment follows the same logic: the direct loss of 3,180 – 2,105 = 1,075 FTE positions in 2024, multiplied by an employment multiplier of 1.42, implies 1,075 x 1.42 = 1,526.5, or approximately 1,527 FTE lost across the regional economy, equal to 1,527 / 13,400 = 11.4% of total regional employment. Both multipliers are order-of-magnitude estimates, since input-output ratios assume unconstrained supply and no substitution, and some displaced spending was recaptured elsewhere in Victoria.

Recovery against baseline

Recovery is expressed as the recovery year value as a percentage of baseline. For expenditure, 320.3 / 397.8 = 80.5%, while nights recovered only to 1,318,000 / 1,742,000 = 75.7%. Expenditure recovered faster than volume because average spend per night rose to A$205, or 104.6% of baseline, reflecting inflation and the repositioning discussed below. At a sustained 6.5% annual increase, the years required to close the residual gap are:

n = ln(397.8 / 320.3) / ln(1.065) = 0.2167 / 0.0630 = 3.4 years.

Baseline nominal expenditure would therefore be regained during 2029, roughly five and a half years after the fire front passed, and later still in real terms, since A$397.8 million in 2023 prices is worth materially more than the same nominal sum in 2029. A narrative built on returning nominal spending can therefore mask a destination that has not recovered its real yield, and the Royal Commission into National Natural Disaster Arrangements (2020) made the related observation that recovery support is often withdrawn on political rather than evidentiary timelines.

Applying the Crisis Management Lifecycle

Australian emergency management is organised around a four-phase lifecycle of reduction, readiness, response and recovery applied across all hazards (Emergency Management Australia 2023). Figure 1 applies it to the visitor economy, including the learning loop through which each event informs the next reduction phase.

Reduction and readiness were the weakest phases, and the omission was industry-wide. A post-event survey found that 22% of accommodation operators held a written continuity plan and 9% had tested it, while roughly a third were underinsured for business interruption as distinct from property damage. The Australian Institute for Disaster Resilience (2023) is explicit that preparedness obligations should be scaled to the resources of those expected to meet them, which in a sector of owner-operators means embedding readiness in industry process.

The response phase performed well against life-safety objectives and poorly against economic ones. Evacuation and traffic management functioned as designed, but communication followed hazard geography rather than visitor geography: warnings were issued by district, and district boundaries bear little relation to how travellers understand a destination. Ritchie (2004) argued that the tourism dimension of a disaster is routinely treated as a post-response afterthought, when the economic trajectory of a destination is largely set by decisions taken during response.

The recovery phase revealed a coordination problem. Grants sat with a state recovery authority, marketing with the state tourism body, track reopening with the land manager and business advice with the council, so no agency was accountable for the visitor economy. The remedy adopted, a regional recovery coordinator with a standing multi-agency group, reflects the principle that recovery arrangements should be established before events rather than assembled during them.

Destination Image Repair and Marketing

Because physical and economic damage diverged so sharply, image repair was the highest-leverage element of recovery. Benoit’s (2015) image repair theory distinguishes denial, evasion of responsibility, reduction of offensiveness, corrective action and mortification. A natural hazard positions the destination as a victim rather than an agent of harm, so the applicable strategies are bolstering, which restates enduring attributes, and corrective action, which demonstrates that access and safety have been restored. Denial would in any case have been disproved by visitors encountering burnt country along the highway.

Three decisions shaped the campaign. First, the region declined a blanket “open for business” message in the eight weeks after containment, since arriving visitors would find closed tracks and exhausted operators; marketing was sequenced against verified operational readiness instead, consistent with Beirman’s (2016) argument that credibility, once spent, is the most expensive asset to rebuild. Second, the fire was acknowledged rather than concealed, with interpretation of ecological regeneration developed alongside the land manager and the local Traditional Owner corporation. Third, targeting shifted toward higher-yield walking, cycling and food and wine travellers in the autumn and spring shoulders, aligning with the yield and dispersal priorities of the state visitor economy plan (Visit Victoria 2023) and THRIVE 2030 nationally (Austrade 2022). The rise in spend per night to A$205 in Table 1 is the measurable outcome.

Recovery Initiatives and Performance Measurement

Table 2 sets out the recovery program adopted for the two years following containment, with the lead stakeholder, funding and the indicator against which each initiative was assessed.

Table 2: Kirranda visitor economy recovery initiatives, funding and performance indicators, 2024 to 2026.

Committed funding of A$48.9 million equals 48.9 / 298.3 = 16.4% of the two-year direct loss, or 48,900,000 / 31,000 = A$1,577 per resident. Recovered expenditure between 2024 and 2025 was 320.3 – 177.0 = A$143.3 million, an apparent return of 143.3 / 48.9 = A$2.93 for each dollar invested. That ratio is indicative only, since much of the rebound would have occurred through the natural decay of risk perception; a defensible evaluation would compare Kirranda against a matched Victorian region unaffected by fire. Ritchie and Jiang (2019) identify this near-absence of counterfactual evaluation as the most persistent gap in tourism crisis management research. The indicator set is itself instructive: only two of the eight measure visitation, since a destination without staff, insurance or open tracks cannot convert demand when it returns.

Building Resilience and Adapting to Climate Risk

Recovery restores a destination to its previous state; resilience changes the state to which it returns. Hall, Prayag and Amore (2018) distinguish engineering resilience, the speed of return to equilibrium, from adaptive resilience, the capacity to reorganise into a configuration better suited to changed conditions. The distinction is decisive here, because the Bureau of Meteorology and CSIRO (2024) report a lengthening fire season and more frequent dangerous fire weather in the south east; the region should plan for recurrent rather than exceptional disruption.

Four adaptations follow. The first is seasonal restructuring, since a visitor economy earning a disproportionate share of revenue in the eight weeks most likely to be disrupted carries a risk no insurance product prices efficiently; shifting demand into the autumn and spring shoulders is therefore a risk management measure as much as a yield measure. The second is redundancy of access: the single-corridor dependency should be assessed on avoided economic loss rather than average daily traffic. The third is enterprise-level preparedness embedded in industry process, such as making a tested continuity plan a condition of accreditation. The fourth is diversification into all-weather and interpretive product less exposed to a single season.

All four require governance that persists once recovery funding ends. The most durable outcome at Kirranda was not any individual grant but retention of the recovery coordinator as a permanent resilience role, addressing the standing capability problem in which arrangements assembled after an event dissolve once attention shifts.

Conclusion

The Kirranda case demonstrates that the economic damage a bushfire inflicts on a visitor economy is largely independent of the physical damage it causes. Expenditure fell 55.5% and approximately 1,527 full-time equivalent positions were lost across the regional economy, yet fewer than 3% of tourism businesses sustained structural damage. Perception, access and messaging drove the collapse, and recovery to 80.5% of baseline within two years came from restoring confidence and operating capability rather than rebuilding assets. Three conclusions carry beyond the region: response-phase communication should follow how visitors understand geography, since warnings framed by administrative district impose avoidable losses on unaffected townships; recovery marketing must be sequenced against verified operational readiness; and recovery should be evaluated against a counterfactual rather than the previous year. With fire seasons lengthening across south eastern Australia, the objective is not to restore the pre-fire equilibrium but to adopt a configuration that absorbs the next event without comparable loss.

References

Austrade 2022, THRIVE 2030: the re-imagined visitor economy, Australian Government, Canberra.

Australian Bureau of Statistics 2024, Australian national accounts: tourism satellite account, ABS, Canberra.

Australian Institute for Disaster Resilience 2023, Australian disaster resilience handbook: community recovery, AIDR, Melbourne.

Beirman, D 2016, Restoring tourism destinations in crisis: a strategic marketing approach, Routledge, London.

Benoit, WL 2015, Accounts, excuses, and apologies: image repair theory and research, 2nd edn, State University of New York Press, Albany.

Bureau of Meteorology & CSIRO 2024, State of the climate 2024, Commonwealth of Australia, Melbourne.

Emergency Management Australia 2023, Australian emergency management arrangements, Commonwealth of Australia, Canberra.

Faulkner, B 2001, ‘Towards a framework for tourism disaster management’, Tourism Management, vol. 22, no. 2, pp. 135-147.

Hall, CM, Prayag, G & Amore, A 2018, Tourism and resilience: individual, organisational and destination perspectives, Channel View Publications, Bristol.

Ritchie, BW 2004, ‘Chaos, crises and disasters: a strategic approach to crisis management in the tourism industry’, Tourism Management, vol. 25, no. 6, pp. 669-683.

Ritchie, BW & Jiang, Y 2019, ‘A review of research on tourism risk, crisis and disaster management’, Annals of Tourism Research, vol. 79, pp. 1-15.

Royal Commission into National Natural Disaster Arrangements 2020, Report, Commonwealth of Australia, Canberra.

Tourism Research Australia 2024, National Visitor Survey: results for the year ending December 2023, Austrade, Canberra.

Visit Victoria 2023, Victoria’s visitor economy recovery and reform plan, Victorian Government, Melbourne.