Inbound visitor outlook remains positive as encouraging signs emerge for domestic tourismDOWNLOAD
Domestic visits and nights jump, while outbound growth continues to ease
Strength in the emerging Asian economies underpinning solid inbound growth
30 August 2012: The longer term outlook for international visitors remains positive, despite the slowdown in growth across many advanced economies continuing to influence travel decisions.
Releasing the Tourism and Hotel Outlook for the third quarter of 2012, Deloitte Access Economics’ Lachlan Smirl said: “The situation in in many advanced economies, including Australia’s traditional inbound tourism markets, continues to weigh heavily on travel decisions.
“The good news is that the expected moderation of the Australian dollar over time and continuing growth in China and other key Asian economies is forecast to drive solid growth in international visitor numbers into the future.”
On a positive note for domestic tourism, the March quarter 2012 saw a surprising jump in domestic visitor trips and visitor nights. Overnight trips increased 5.4% increase compared to the same period last year, while visitor nights rose by 6.1%.
“While in part this reflects weakness in the first half of last year, with Queensland’s natural disasters adversely impacting activity, it is nevertheless one of a number of positive signs for domestic tourism,” Mr Smirl said.
“The other key positive sign is on the outbound front. There are strong signs that outbound travel by Australians is slowing and our forecasts project it continuing to slow further over the next three years. While it is too early to say to what extent this will buoy domestic leisure travel, the indications are certainly encouraging.”
“Nevertheless, the long term trends still point to Australia becoming increasingly reliant on international tourist expenditure, especially expenditure from emerging Asian economies.”
Mr Smirl said Asia’s strength actually influenced both inbound and outbound travel.
“The demands of the Asian economies has driven strong commodity price growth which has fed through to the Australian dollar and increased Australians’ propensity to travel overseas,” he said.
“At the same time, the Asian boom has seen the emergence and growth of a travel hungry middle class, an increasing number of whom are visiting, or will visit, Australia.
“These broader trends are expected to lead to a narrowing of the gap between domestic and international visitor nights over the next three years before our forecasts indicate international visitor nights should overtake domestic visitor nights by the end of 2018.
Mr Smirl said that while much of the focus was on the growth of China and India as major source countries for international tourists, other Asian countries continued to emerge.
“Malaysia and Indonesia, in particular, have each grown by over 50% over the last decade,” he said.
“Visitor arrivals from Indonesia are also forecast to grow by an average of 7.1% per year over the next three years, a similar rate to both India and China, while Malaysian arrivals are predicted to grow solidly by 4.3% per year over the same period.
“Importantly, however, as the emerging economies of Asia all have significant economic linkages to China, any moderation in Chinese growth will also be felt in these source markets.”
Mr Smirl said the hotel accommodation market continued to grow strongly, with room rates growing above trend and average occupancies at record levels.
‘The near term investment pipeline remains modest, but with an increasing focus on alleviating capital city supply shortages, more activity looks likely over the longer term,” he said.
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.
A separate Tourism & Hotel Outlook media release covers the hotel sector.