by “There are literally no seats available!” Michel von Düsterlho, a 26-year-old backpacker from Germany, says he looks for hostels.
Von Düsterlho, who arrived in Australia on a Working Holiday Visa (WHM), is following a path traveled for decades by young travelers in search of sunnier climes, golden beaches and the opportunity to work casually along the way.
In 2019, the GSA program attracted more than 300,000 travelers and was Australia’s second largest travel market by spending after China.
But when backpackers return after the pandemic, they face significantly higher prices for travel and accommodation as the country’s tourism industry recovers from the pandemic.
Many accommodation providers have closed during 2020 and 2021, especially those that cater to backpackers, so there are fewer places for visitors to stay.
“We have seen capacity shrink across the wider hostel market – in some areas over half of properties have been lost,” says Paul McGrath, managing director of YHA Australia. Across Australia, 19 of YHA’s properties have closed permanently, while Tourism Adventure Group, the owner of Nomads hostels, has closed or sold six of its 16 Australian properties during the pandemic. Now its prices have increased by almost 50%.
Away from the barefoot, self-paced lifestyle that draws many travelers to Australia, backpackers are reporting housing stress and rethinking plans. “It’s almost impossible to find a place to stay without booking in advance…it makes me quite anxious,” says Hannah Storm from the Netherlands. Now book at least two weeks in advance to save money and find higher quality accommodation. “I was thinking about a road trip but not sure if it’s feasible with needing to pay for accommodation en route and fuel price at the moment.”
Beth Stone learned the dangers of last minute booking the hard way. “I paid £100 [$180] for one night in a 100 bed dorm in Surfers Paradise! It was the second place I went after my arrival and didn’t book in advance: either that or a place with no reviews.”
India Taylor, who works as a receptionist at a Byron Bay hostel in exchange for accommodation, says her job is essentially to turn people away as the hostel is fully booked. “Conditions in some of the other hostels I’ve stayed in are awful,” she says. “But the owners can get away with it because they know they will still get bookings. There is no incentive to improve.”
K’Dee Melfi started her round-the-world tour in January and spent the last month in Australia. She knew it would be more expensive than other countries she had visited, but she was still taken by surprise. Even places with bad online reviews “have low availability because everyone is so desperate,” she says. “It was actually cheaper to book a serviced apartment [in Melbourne] and share it with three people who stay in an 8 bed dorm.
Other backpackers report having to couch surf between bookings to avoid paying outrageous prices. Many have had to find work much earlier than originally planned to cover costs.
Thanks to the significant pent-up desire to travel, rising prices haven’t stopped visitors from coming to Australia. Airlines and accommodation providers report buoyant demand during the Christmas and summer seasons. Searches for accommodation on travel website Kayak increased by up to 127% in September and October 2022 compared to the same period in 2019, while Australian domestic airfares reached levels not seen since 2004.
YHA, like many hostels, raises its prices when demand rises, so prices may not have reached their peak yet. McGrath believes there will be an increase in arrivals in the coming months as airfares are reduced and international travel stabilises.
There are still tens of thousands of travelers who have obtained their WHM visa but have not yet entered Australia. McGrath suspects they are waiting for cheaper flights.
YHA is now focusing on broadening its appeal to clientele who won’t be put off by higher prices. They are experimenting with co-working spaces within hostels. With the rise of the digital nomad, McGrath believes the traditional backpacker image is outdated.
“I joke with my boys that backpackers now come with Prada suitcases… the concept of the working holidaymaker is changing and we’ve changed to reflect that.”
Despite the costs, hardly anyone speaks with regret about their trip to Australia. As von Düsterlho summarizes: “It might be expensive, but I’m still having a lot of fun, better than being stuck at home with Covid.”
