Global uncertainty and strong $A to remain challenges as Australian tourism waits for emerging marketsDOWNLOAD
22 November 2011: Depressed markets and a high Australian dollar are expected to remain the reality – and the ongoing challenge – for Australia’s tourism and hospitality industry.
That’s the conclusion of the fourth quarter 2011 Deloitte Hotel Market Outlook on the performance of the Australian tourism and hotel industries to September 2011.
Consultant to Deloitte, Rutger Smits, said: “Higher exchange and interest rates influenced by the commodities boom, combined with global economic uncertainty, have played havoc with a number of Australian industries, most notably the tourism sector.
“The dollar’s strength has seen Australians take flight, with the number of outbound Australian travellers doubling in the past seven years. Across the same period, inbound travel was also up, but not by much, and the lingering weakness in tourist flows has led to the tourism sector holding back on investment in new hotel rooms, facilities and better attractions.
“Challenges will continue for tourism operators, with the exchange rate to remain a concern, and some regional centres affected by skilled tourism and hospitality workers taking advantage of opportunities created by the mining boom.
“The dollar’s strength has also created a perception in some overseas markets that Australia is an expensive tourist destination. This reinforces the importance of effective marketing and new tourism product development.
“On the brighter side, China and other emerging economies continue to develop into major inbound tourism markets, and the recent announcement that the Gold Coast will host the 2018 Commonwealth Games provides a welcome morale boost to the Queensland industry and will further stimulate the development of new tourism infrastructure.”
Visitor flow and tourism consumption
The Outlook references the latest forecasts from the Tourism Forecasting Committee, including:
“There will be big long term gains for Australia’s tourism sector from rising incomes in Asia, but the early impact of the ‘rise of Asia’ has been dampened by the matching rise in the $A keeping the world away from our doorstep,” Rutger Smits said.
“While international tourism globally grew by 4.5 per cent in the first half of this year, international arrivals to Australia improved by 0.8 per cent in the first six months, equivalent to only an additional 22,000 travellers.
On the flipside, an additional 330,000 Australians left for foreign shores, an increase in departures of 10.5 per cent over the same period.”
Key points from the Outlook, which examines hotel markets in Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra, Darwin, Gold Coast and Tropical North Queensland, include the following national trends:
“Hotels – particularly in the nation’s CBDs – have been performing fairly well of late. Business travel demand is up, and the gains on that front have been sufficiently strong to encourage operators to edge up room rates,” Rutger Smits said.
“Yet that is one of the few positives amid an otherwise distressed landscape. While the overall future performance of the Australian market may appear strong in comparison to historic results, it still hides a pronounced performance dichotomy between core CBD markets and regional hotel and resort properties.”