SYDNEY (BLOOMBERG) - Australia's two-year ban on cruise ships expires on Sunday (April 17), another step towards the rehabilitation of tourism from the damage wrought by the pandemic.

The ban on foreign cruise ships - imposed in March 2020 after a Covid-19 outbreak aboard the Ruby Princess spilt into Sydney once the vessel docked - cost the Australian economy more than A$10 billion (S$10 billion), the Cruise Lines International Association estimates.

Operators are "preparing for a carefully managed resumption of operations in a sector that previously supported more than 18,000 Australian jobs", the association said in a statement ahead of the ban's expiry.

Australia's states will determine when vessels can enter now that the federal ban has run out. Safety steps include vaccination requirements for crew and passengers over 12 years old, as well as masks and Covid-19 testing protocols.

P&O Cruises Australia's Pacific Explorer will be among the first ships to dock in Sydney Harbour on Monday ahead of a return to service at the end of May.

Before Covid-19, 1.6 million cruise passengers visited Sydney in 2017 and 2018, according to official figures. The pandemic hit cruise ships particularly hard after high-profile outbreaks that led a variety of ports to block access.

Tourism industry bodies say there is significant pent-up demand for cruises, but it remains unclear if the fear of the disease will permanently affect the sector. Travel shares globally have yet to recover the ground lost due to the pandemic and have trailed global equities significantly since the start of 2020.

Australia has relaxed border restrictions this year, relying on high vaccination rates under a strategy of learning to live with the coronavirus.