Queensland tourism sector faces flood, image damage

SYDNEY Wed Jan 12, 2011 1:57am EST

SYDNEY (Reuters) - Floodwaters sweeping across Australia's Queensland state are set to cost the state's lucrative tourism sector hundreds of millions of dollar as travellers cancel trips en masse and water damages infrastructure.

With floodwaters inundating Brisbane, Australia's third-largest city, the state came to a standstill and even regions unaffected by the water were suffering as wary travellers opted to stay away.

"It will be very very significant and we are certainly talking in hundreds of millions rather than anything smaller.

It will be a staggering amount," Queensland Tourism Industry Council Chief Executive Daniel Gschwind told Reuters on Wednesday when asked about the potential cost to the sector.

"A state that is as big a Queensland obviously has many regions that are actually open for business but the damage is now being done to them as well, because of the perception interstate and overseas that the entire state has come to a stand still," Gschwind said.

Australia's $32 billion tourism sector was already in trouble due to the record strength of the local dollar driving off overseas visitors and enticing Australians to go abroad.

Queensland -- roughly the same size as Alaska, the biggest U.S. state -- has been among the top recipients of tourism income and Tourism Queensland said popular destinations on the Gold Coast, Whitsundays and far North Queensland were operating as normal.

Nevertheless, Qantas Airways and its low cost subsidiary Jetstar took the unusual step of waiving fees for passengers who wanted to change their travel dates or cancel bookings to flood-affected areas.

"There is no impact on our operations at all," a Qantas spokesman said, echoing comments by Jetstar and Brisbane airport, both of which said it was business as usual.

Still, shares of Brisbane-based Virgin Blue fell more than 3 percent on Wednesday while Qantas was also ended lower against a rising broader market after analysts said they expected the floods to hurt bookings.

Virgin Blue was not immediately available to comment.

Listed Australian travel agent Flight Center said the regions of Queensland most affected so far were not major tourist destinations and it did not expect the flooding to have a big impact on bookings.

"People making bookings now are not making them for the next couple of days, they are making them for a time when it is likely to be a much different story," a Flight Center spokesman said.

(Editing by Balazs Koranyi)

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