Australian tourism and hotel outlook…it’s still all about AsiaDOWNLOAD
29 November 2012: A growing Asian middle class, and a weakening Australian dollar in the medium term, remain the keys to a positive future for the Australian tourism industry according to Deloitte’s latest Tourism and Hotel Outlook.
Deloitte Access Economics’ Lachlan Smirl said visitor arrivals from China and other emerging Asian economies continued to grow strongly, while domestic visitor activity was also recovering as growth in overseas travel by Australians moderates.
“The number of international visitors coming to Australia grew relatively modestly in the year to June 2012, as global economic uncertainty weighed on travel decisions,” Mr Smirl said.
“But the outlook for international visitor arrivals remains positive, with our latest forecasts pointing to above average growth.”
“The headline growth in international arrivals continues to mask vast divergences across source markets, with China growing at double-digit pace while some traditional source markets contract.
“Over the next three years, more than 75% of the growth in international visitor nights will be from Asian travellers. Asia is, and remains, the key, and China continues to present a huge and long term opportunity.”
Mr Smirl said outbound travel by Australians continued to grow, although growth rates have slowed markedly from their peaks.
“In the year to June 2012, outbound trips grew by 8%, reaching eight million for the first time,” he said.
“However, as we noted last quarter, monthly data indicates that the pace of outbound growth is moderating from the double digit growth witnessed in previous years.
“This is partly due to a decline in outbound holiday travel, which grew by 10.2% in the year to June 2012, but by only 3.7% in the period from April to September 2012 relative to the same period in 2011.
“Our latest forecasts suggest annual growth in outbound travel by Australians slowing to between 3% and 4% per annum on average over the next four years, as the value of the Australian dollar moderates and Australians opt for domestic over international travel.
Mr Smirl said that a promising development had been domestic visitor activity continuing to outperform expectations.
“Over the last 12 months, domestic growth rates have been the strongest experienced in a decade,” he said.
“Domestic overnight trips increased by 5.8% for the year to June 2012, while domestic visitor nights grew by 6.7%.
“Domestic visitation has now almost returned to pre-GFC levels and our forecast for growth in domestic visitor nights has been revised upwards, to an average of 1.3% per year over the next three years.
“This positive news is tempered slightly, however, by the mix of domestic travel type, with almost all of the growth in domestic visitor nights attributable to business travel and those visiting friends and relatives.
“Business visitor nights increased 9.2%, while friend and relative visits grew 13.8% in the year to June 2012. Domestic visitor nights by holiday travellers rose by just 0.4%, continuing the trend of sluggish growth in the domestic leisure segment.
“Looking forward, there are strong indications that the domestic tourism market is moving to a positive trend and, while the growth outlook is still moderate, the story is very much an encouraging one.”
This quarter’s Outlook also focuses on the impact digital disruption is having on the tourism and hotel sectors.
“Digital innovation has transformed these industries, and will continue to do so, presenting challenges, but also real opportunities, for operators,” Mr Smirl said.
“Examples of this are numerous. Online hotel aggregator wotif.com began in a Brisbane basement and is today a $50 million, 17-country enterprise. New technology and mobile apps are replacing traditional airline check-in counters and boarding passes. Online and app-based services like Expedia and TripAdvisor have changed the competitive and pricing landscapes.
“Tourism faces a ‘short fuse, big bang’ scenario in terms of the size and timing of the impact of digital disruption and, if they haven’t factored digital innovation into their business planning, operators need to seriously consider this now.”
Deloitte’s quarterly Tourism and Hotel Outlook utilises the forecasting, modelling and analytical expertise of Deloitte Access Economics, one of Australia’s leading economics advisory practices. The Outlook also draws on Deloitte’s real estate industry experience and insights, and a range of other sources, including hotel data generated by STR Global Limited.
Digital disruption: Short fuse, big bang?, the newest paper in Deloitte's Building the Lucky Country series, considers the magnitude of digital transformation within Australian business and government – the size of the 'bang' – as well as how quickly 18 industry sectors will be affected – the length of the 'fuse'.
A separate Tourism & Hotel Outlook media release covers the tourism sector.
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