Tuesday, November 8, 2011

Strong dollar not chasing tourists away?

The ABS has released the latest stats for Overseas Arrivals and Departures, Australia, Sep 2011. 
Business commentator Michael Pascoe has responded with a query on the impact of the currency on inbound tourism: Strong dollar not chasing foreigners away.

Everyone knows the Australian tourism industry is dead because the high Australian dollar means we can't compete for foreigners' business – but like many things that "everyone knows", it's not true.
Although I suspect Pascoe overstates his case he does also point to the strong growth in outbound tourism and the changing mix or our inbound tourists. China is growing strongly while the USA and Japan decline.

The latest big spend by Tourism Australia is providing half of  a $10 million marketing budget with Jetstar with the primary focus on boosting Japanese travel to Australia. That's a very nice deal indeed for Jetstar as it launches its Japanese domestic business, but it's also targeting a population that is shrinking and an economy that's going nowhere much either.
Cairns is the classic example of an Australian tourism destination doing it tough. Australians increasingly are getting their tropic hit a little more exotically – our September departures for Thailand were up 38 per cent on last year, 17 per cent more of us took off for Indonesia and 11 per cent for Singapore, but travel to the USA and Italy were up 16 and 17 per cent respectively.
But it's the fall in Japanese tourism that the FNQ locals seem to be focussing on. Stroll the streets of Cairns and there's no shortage of signs in Japanese, but nowhere near as much Chinese. On the current trend, Chinese visitors to Australia will outnumber Japanese by two to one within months.
Australia presently is winning a surge in Chinese travellers almost by default. It's early days with the industry still in learning mode. You can't yet rely on the average hotel offering noodles or congee for breakfast as a matter of course. The Chinese market itself is fundamentally different with the average new tourist more interested in bright lights, big cities and theme parks than beaches and bush. That average tourist must be catered for, while a marketing strategy is necessary to educate and lure the above-average for our particular delights.
Or we can continue to just whinge about the two-speed economy, the strong dollar and pine for the good ol' days.
 Macrobusiness has a different take on the ABS Stats: No joy for tourism

I will try to expand on previous comments on the Qantas dispute in relation to some points from Pascoe, and maybe take a closer look at the ABS data to resolve the differing perspective of Pascoe from Macrobusiness. In relation to Japanese tourism the Yen has been one of the stronger currencies v the $AUD although Australia would still become a more relatively expensive destination for the Japanese. 

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