Rising dollar a 'double-edged sword for tourism

By: Jason Whittaker

Australian tourism businesses are struggling to rebound from the financial crisis and swine flu outbreak, with the rising dollar flagged

Australian tourism businesses are struggling to rebound from the financial crisis and swine flu outbreak, with the rising dollar flagged as a key driver of low expectations.

The latest Tourism & Transport Forum (TTF) – MasterCard Tourism Industry Sentiment Survey shows while industry sentiment is improving, expectations for inbound visitor numbers remain relatively low.

TTF Managing Director Christopher Brown describes the rising dollar is a double-edged sword for the tourism industry.

"On the one hand, it’s great news for the economy generally, because it means Australia is much better placed than other developed nations, but on the other, it makes our exports more expensive – and that includes tourism," Brown says.

"A strong dollar is a real double whammy for Australia’s tourism industry - not only does it make it more expensive for international visitors to come here, it’s cheaper for Australians to go overseas, so they take their holiday and travel dollars elsewhere," he says.

Local operators have also come under further pressure due to the increase in international marketing campaigns pitched to Australia, which has generally faired better than most through the crisis.

Brown also adds that the labour intensive nature of tourism means a downturn equals job losses.

"We calculate that nearly 30,000 tourism jobs have been lost in the past 12 months, many in regional areas which are highly dependent on tourism for economic activity," he says.

According to the survey, 58 percent of businesses have already cut staffing levels, with 17 percent expecting to make further cuts.

"This tells us that some sectors of the tourism industry have yet to see the bottom of the downturn," Brown says.

The survey also found 67 percent of respondents believe the government’s response to the global financial crisis ‘did not go far enough’ in helping the tourism industry specifically, more than double the number (31 percent) who said it was ‘about right’.

Brown says the stimulus spending has helped the economy generally, but many tourism operators have questioned its value to their industry.

"There is evidence of a two-speed economy emerging in Australia with tourism one industry that’s being left behind, largely missing out on the current recovery," he says.

"The industry took strong steps to counter the downturn, employing numerous tactics to stimulate demand which has seen yields suffer, and is looking for positive steps from the Federal Government."

In wake of this latest survey, the TTF is calling on the Federal Government to ensure Tourism Australia’s funding is at least maintained in the next budget, and additional funding is provided for further develop and implementation of the National Long-Term Tourism Strategy.

"This is vital for the industry’s viability in the short term and its sustainability and competitiveness in the longer term," Brown says.

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