Tourism outlook - international visitor arrivals continue to rally while shorter domestic trips growDOWNLOAD
28 February 2013: Continuing growth in international visitor arrivals – from emerging Asian markets, but also more traditional sources – have been highlighted by Deloitte Access Economics’ latest Tourism and Hotel Market Outlook.
The Q1 2013 report also finds that the visiting friends and relatives market has emerged as a major driver of growth in domestic visitor nights, along with an accelerating trend toward shorter domestic trips.
Deloitte Access Economics’ Lachlan Smirl said growth in international visitor arrivals accelerated strongly over the second half of 2012.
“International arrivals climbed 5.8% in December to finish calendar 2012 up 4.6%, as international visitor numbers passed six million for the first time,” he said.
“Growth has been driven by both the continued strong performance of emerging Asian markets – particularly China – and, encouragingly, a revival in the recently subdued markets of Japan and the United States.”
The recent growth reinforces Deloitte Access Economics’ longer term forecasts which, in this latest update, project international visitor nights growing at an average annual rate of 4.7% per year over the next three years.
“Emerging economies continue to fuel demand for travel to Australia, underwriting more than two-thirds of the projected growth. However, the growth in visitors from the US and Japan was a further positive sign for the industry – one that defied both recent trends and local economic conditions.
With the Australian dollar continuing to remain strong against its US counterpart and other major trading currencies, outbound travel has continued to grow.
“The pace of growth has slowed from its double digit peaks, and continues to slow in trend terms” Mr Smirl said. “But Australians are nevertheless taking advantage of the high Australian dollar and discount international airfares to holiday overseas in record numbers.”
Outbound departures grew by 4.9% in the December quarter and have increased by 5.4% over the year to December 2012, but have moderated from the double digit figures recorded in 2010 and 2011.
Deloitte Access Economics forecasts growth in outbound departures continuing to moderate as the Australian dollar gradually recedes from its current heights. By end 2015, outbound travel is projected to have slowed to around 4% p.a.
Mr Smirl said that after exceptional growth over the first half of the year, domestic visitor nights fell 3.8% in the September quarter of 2012.
“However, the strong performance over the March and June quarters meant that domestic visitor nights still grew 4.5% over the year to September, while domestic visitor trips grew by 4.1% over the same period,” he said.
“This was an encouraging outcome for the domestic tourism sector, especially given that domestic visitor nights declined by around 10% between 2004 and 2011 and many of the economic pressures that contributed to this trend remain. However, the negative September quarter result highlights the inherent volatility in the market, particularly among business and friend and family visitors.”
“He also noted that domestic leisure travel remains subdued, growing at a trend rate of less than 1% per year.”
Deloitte Access Economics forecasts domestic visitor nights to grow at modest rates in 2013, before improving gradually in 2014 and 2015 as the Australian dollar begins to moderate. Over the three year outlook period, growth of 1.3% p.a. is forecast.
In contrast to domestic overnight travel, domestic day trips continued to grow strongly throughout the second half of the year, increasing by 10.6% over the year to September to their highest levels on record.
Mr Smirl said domestic day trips had grown considerably since 2008, contributing to a significant shift toward shorter trips by domestic travellers.
“This shift is likely to have been an important factor impacting hotel occupancy rates in regional Australia, particularly those locations which are highly dependent on domestic travel,” he said.
The increase in domestic visitor nights remains more pronounced in the resource states of Western Australia and Queensland, although strong growth was also recorded in Tasmania. Growth was more modest in Victoria and NSW, and there was a slight decline in South Australia.
In terms of international visitors, the standout performer was Western Australia with visitor nights growing by an astonishing 26.4% over the year to September, largely driven by employment related travel associated with the mining boom.
Tasmania and South Australia also managed to capture reasonable growth in international visitors, albeit off a relatively low base. By comparison, international visitor nights grew relatively modestly in NSW, Victoria and Queensland, in part reflecting weaker growth in the international student market.
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.
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