Monday, April 28, 2014

Tourism and the exchange rate

Thinking about any correlation between the exchange rate and tourism a more relevant approach may be to consider both arrivals and departures in the way that Macrobusiness derive a net arrivals (tourism deficit = arrivals - departures): Bogan exodus drives record tourism deficit

To allow for growth in the tourism market over time I have represented this on a proportional basis with arrivals as a percentage of departures since 1976 (LHS). For the exchange rate here I have inverted the Trade Weighted Index (RHS) as a broader indicator then the $US.

 
 

1 comment:

  1. Excellent chart. Very strong correlation it appears. Using TWI is a great idea. I might have a look at the data myself to check the strength of the correlation and how long it takes for changes in TWI to show up in net arrivals.

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