The COVID-19 pandemic has greatly disrupted how Australians travel, with ongoing lockdowns occurring in multiple states. Public transport revenue has declined significantly due to decreasing usage, falling by 6.4% per year over the two years through 2020-21. As Australia gradually moves towards a post-pandemic world, IBISWorld has investigated how the pandemic has caused lasting shifts in consumer transport preferences.
‘The COVID-19 pandemic has driven consumers towards more independent forms of travel, such as cycling. While public transport is expected to rebound, many commuters will likely maintain the transport habits they forged during the pandemic,’ said IBISWorld Senior Industry Analyst Arthur Kyriakopoulos.
The recovery
Revenue for the Urban Bus and Tramway Transport industry is forecast to rise at an annualised 1.9% over the five years through 2026-27, while demand for the Rail Passenger Transport industry is expected to surge at an annualised 3.2% over the same period.
‘Both industries are expected to surpass pre-pandemic demand levels in 2021-22 and 2025-26, respectively. Demand for less traditional transport methods is anticipated to follow similar trends,’ said Mr Kyriakopoulos.
Revenue for the Ride Sharing Services industry is expected to climb to over $1.4 billion in 2026-27, with annualised growth of 10.4% starting from 2021-22. The Bicycle Retailing and Repair industry is also forecast to rise at an annualised 1.6% over the same period.
‘While growth in bicycle retailing may seem slow, this is largely due to the strong performance the industry exhibited during the initial stages of the COVID-19 pandemic,’ said Mr Kyriakopoulos.
Cycling’s golden era
The Bicycle Retailing and Repair industry was one of the few industries to expand during the pandemic, and is projected to rise at an annualised 1.3% over the three years through 2021-22, to $677.7 million. In addition to a surge in demand related to COVID-safe modes of transport, rising health consciousness and concerns over environmental issues have also driven demand for bicycles.
‘Growth in cycling activity will likely be sustained over the next five years, as Australians have never been more conscious about their health or wanting to reduce their carbon footprint,’ said Mr Kyriakopoulos.
Health Consciousness among Australians is at an all-time high and is projected to continue rising over the next five years. Similar trends are forecast in terms of Public Concern Over Environmental Issues, with more than 85% of Australians currently worried about the environment, and this proportion expected to rise to over 90% by 2026-27.
In response to expanding demand for cycling, state governments have invested more in cycling infrastructure. For example, the Victorian Government developed the Victorian Cycling Strategy 2018-2028, which outlines the plan to increase the number, frequency and diversity of people cycling by investing in safer and better-connected cycling infrastructure. In October 2020, the Victorian Government announced it would invest $13 million to deliver 100 kilometres of new cycling routes in Melbourne, while also announcing $12 million in 2021 to make Victoria’s High Country a premier cycling tourism destination in Australia.
A recent study published in the Proceedings of the National Academy of Sciences found that cycling increased by more than 48% in cities with bike infrastructure, compared with cities that did not build cycling facilities. This indicates that rising investment in cycling infrastructure in Australia will likely spur cycling activity.
Public transport set for a boost
The Public Transport industry is also forecast to grow strongly over the next five years. Revenue is projected to rise to over $32 billion in 2026-27, which is approximately 13% higher than prior to the COVID-19 pandemic.
‘State governments have also heavily invested in public transport infrastructure, which will lift passenger capacity and the availability of services,’ said Mr Kyriakopoulos.
In addition to rising investment, a growing population and increased urbanisation levels are also expected to drive revenue for the Public Transport industry. The industry is anticipated to expand at an annualised 3.0% over the five years through 2026-27.
IBISWorld reports used to develop this release:
- Urban Bus and Tramway Transport industry in Australia
- Rail Passenger Transport industry in Australia
- Ride Sharing Services industry in Australia
- Bicycle Retailing and Repair industry in Australia
- Health Consciousness in Australia
- Public Concern Over Environmental Issues in Australia
- Public Transport industry in Australia
For more information, to obtain industry reports, or arrange an interview with an analyst, please contact:
Jason Aravanis
Strategic Media Advisor – IBISWorld Pty Ltd
Tel: 03 9906 3647
Email: mediarelations@ibisworld.com
