“There’s literally nowhere available!” Michel von Düsterlho, a 26-year-old backpacker from Germany, says of searching for hostels.
Von Düsterlho, who arrived in Australia on a working holidaymaker (WHM) visa, is following a path trod over decades by young travellers in search of sunnier climes, golden beaches and the opportunity to work casually along the way.
In 2019, the WHM scheme attracted more than 300,000 travellers, and was Australia’s second-largest tourism market by spend after China.
But as backpackers return after the pandemic, they face significantly higher prices for travel and accommodation as the country’s tourism industry rebounds from the pandemic.
Many accommodation providers were shuttered over the course of 2020 and 2021, particularly those catering to backpackers, so there are fewer places for visitors to stay.
“We’ve seen a reduction in capacity across the wider hostel market – in some areas over half of properties have gone,” YHA Australia’s chief executive Paul McGrath says. Across Australia, 19 of YHA’s properties have closed permanently, while Tourism Adventure Group, the owner of Nomads hostels, closed or sold six of its 16 Australian properties during the pandemic. Now its prices have increased by almost 50%.
Far from the barefoot, go-at-your-own-pace lifestyle that draws many travellers to Australia, backpackers are report housing stress, and rethought plans. “It’s almost impossible to find anywhere to stay without booking in advance … it makes me quite anxious,” says Hannah Storm from the Netherlands. She now books at least two weeks in advance, to save money and find higher rated accommodation. “I was thinking about a road trip but I’m not sure if it’s feasible with the need to pay for accommodation along the way and the price of fuel at the moment.”
Beth Stone learned the perils of booking at the last minute the hard way. “I paid £100 [$180] for one night in a 100-person dorm room in Surfers Paradise! It was the second place I went after arriving and I didn’t book ahead – it was either that or somewhere with no reviews at all.”
India Taylor, who is working as a receptionist at a Byron Bay hostel in exchange for accommodation, says her job essentially involves turning 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’ll get bookings anyway. There’s no incentive to improve.”
K’Dee Melfi started a round the world trip in January and has spent the last month in Australia. She knew it would be more expensive than the other countries she’d visited, but she was still taken by surprise. Even places with bad online reviews “are low on 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 than stay in an 8-bed dorm room.”
Other backpackers report having to sofa surf between bookings to avoid paying unaffordable prices. Many have had to find work much earlier than they had originally envisaged to cover costs.
Thanks to significant pent-up desire to travel, the increased prices haven’t stopped visitors from coming to Australia. Airlines and accommodation providers report buoyant demand over the Christmas and summer period. Searches for accommodation on travel website Kayak are up as much as 127% in September and October 2022 compared with the same period in 2019, while Australian domestic air fares have reached highs not seen since 2004.
YHA, like many hostels, increase their prices when demand climbs, so prices may be yet to reach their peak. McGrath believes there will be an increase in arrivals in the next few months as air fares reduce and international travel stabilises.
There are still tens of thousands of travellers who have been granted WHM visas 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 will not be put off by higher prices. They are trialling co-working spaces within hostels. With the rise of the digital nomad, McGrath believes that the traditional image of a backpacker is now outdated.
“I joke with my guys that backpackers now arrive with Prada suitcases … the notion of the working holidaymaker is changing and we’ve changed to reflect that.”
Despite the costs, almost no one speaks with regret of their trip to Australia. As von Düsterlho summarises: “It might be expensive but I’m still having a great time – this beats being stuck at home with Covid.”