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Many in the industry believe it is cyclical, that when the dollar falls so will demand for overseas holidays, which are now running at record levels. But others, including  Tourism Australia, are not so sure.

According to the most recent figures from the Australian Bureau of Statistics "2010-11 saw a record 7.4 million short-term resident departures from Australia, an increase of 9.9 per cent from 2009-10”.

That increase equates to 1,842 additional resident departures a day – the equivalent of more than four packed Boeing 747-400 jets leaving Australia every 24 hours.

Inbound tourism figures are also looking strong with a record 5.9 million short-term arrivals into Australia last financial year.

This visitor boost – led by gains from China, New Zealand and Malaysia – helped drive good growth in tourism spending.

The ABS believes tourism now contributes almost $35 billion – or $94.8 million a day – to the Australian economy.

However, while international travel into and out of Australia is strong, the domestic travel market is flat. And that doesn’t look like changing any time soon.

According to the latest National Visitor Survey, the number of Australian domestic visitor nights for the year to the end of September was stable at 262 million. Domestic spend grew by just one per cent.

To an outsider these look like unsatisfactory figures but Tourism Australia’s Managing Director Andrew McEvoy says they are good after a tough 12 months marred by weather events.

He says the domestic industry has regained some momentum and that a number of key markets have reported improved trading over the Christmas holiday period.

Inbound visitors have been a strong factor in that, and Mr McEvoy believes they are the future for Australian tourism, not Australians holidaying in Australia.

The fact is Tourism Australia does not believe the domestic market has much growth left in it, maybe one or two per cent a year.

It’s why Tourism Australia is only allocating around 10 per cent to 15 per cent of its time, money and resources to marketing Australia domestically.

The reality is that it sees the trend toward overseas travel by Australians as structural, not cyclical.

International growth ex-Australia may slow but it will not go backwards.

It is a long-term trend that transcends the high dollar, is now entrenched in the Australian travel psyche and cannot be stopped; the overseas trip is now part of our way of life.

But there’s another school of thought, which is that the domestic tourism will bounce back if the dollar falls and the economy falters.

Wotif.com CEO Robbie Cooke is a proponent of this cyclical theory – and is supported by recent history.

Immediately after the Global Crisis hit, international travel slumped dramatically – Qantas even offered two-for-one ticket deals to get people flying again – and domestic holidays were hot again.

Over that period Wotif.com did outstanding business as Australians holidayed at home.

But as confidence returned, domestic travel growth stopped and in some cases went backwards with Australians heading overseas in record numbers once again.

This is despite rolling global uncertainty, something Australians have learned to live with.

Every second day there is reports of European turmoil and the potential of a second recession, yet Australians keep booking overseas holidays.

They’ve been hearing about financial Armageddon for the past four years but they still have jobs and the local economy keeps ticking over.

There’s been no bust, yet, so we may as well go on holidays, so thinking goes.

Indeed, according to research from the Canadian Tourism Commission: "One out of every two Australians has taken a long-haul trip in the past three years or is planning to do so in the next two years".

The report adds: "The proportion of Australian travelers who feel that long-haul travel is very important has increased from 44 per cent in 2007 to a peak of 51 per cent in 2011."

And even if there was a Australian economic slump, which may keep more people holidaying at home, the long-term trend would remain in place.

The trend to international travel is structural not cyclical. An overseas holiday is now part of Australian life.

Ends.

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Given that parent site TripAdvisor.com is in 4th place with a 4.09% share, fair to say the consumer review site is now dominant Down Under. TripAdvisor Senior Vice President Julio Bruno will be speaking at No Vacancy Sydney on March 30.

Meanwhile, the Advertising Standards Authority (ASA) in the United Kingdom said it was possible that "non-genuine" reviews could be carried on TripAdvisor.

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For the record, Travel Daily reports:

"Effective 15 Feb QF international fuel surcharges will rise to $350 one way, up $60, for flights to London and Frankfurt. The new fuel surcharge for US flights will be $310 in each direction, also up $60, while for Buenos Aires/Santiago/Johannesburg flights the surcharge rises $40 to $240. And for Asia and Honolulu flights the current $145 surcharge will increase to $165 one way.

"Qantas year-round domestic fares will also increase from 9 February, with increases of around $5 per sector.

"Qantas Frequent Flyer Classic redemptions will incur a $12 fuel surcharge, up $2.

"Also from 15 February Qantas will impose a surcharge of $3.50 each way to fares booked in Australia for QF flights to and from London and Frankfurt, in relation to the EU Emissions Trading Scheme.

"The Australian carbon pricing system, which comes into effect on 1st July, will see a distance-based surcharge applied to Qantas and QantasLink fares, costing $1.82 for flights up to 700km, $2.79 for 701-1200km, $4 for 1201-1900km and $6.86 for 1900km+. These surcharges will take effect for tickets booked on or after 15 February, for travel on or after 01 July.

"Jetstar will also increase all domestic lead-in fares by $10 "in response to higher cost inputs including fuel prices and the introduction of the carbon price," with these increases also effective 15 February for travel from 01 July 2012."

ends.

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Chinese tourists have been a focus for the region and this year there were an extra 13 charter flights plus regular services into Cairns from China Southern, China Eastern, Cathay Pacific and Qantas to cope with the demand during the peak Chinese holiday season.

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“The traditional daily deals formula is not well suited to the holiday rental industry, with the need for high levels of deals per property and high supplier fees, however, we believe there is a way that we can implement a daily deals approach that works for both consumers and our property owners’ desire to secure more bookings,” says Anton Stanish, General Manager, Travel Marketplaces Division Fairfax Digital.

"If the feedback is positive we may look at rolling this out on an ongoing basis.”

Mr Stanish says the holiday deals will be based around weekend bookings, excluding peak periods, with properties discounted at 50% off their regular price.

The major difference from many daily deals offerings is that there's no set number of "deals" have to be purchased before the discount is triggered.

Stayz is also running a consumer competition, giving away five holidays. See new website.

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Choice Hotels International, Hilton Worldwide, Hyatt Hotels Corporation, InterContinental Hotels Group, Marriott International and Wyndham Hotel Group all own a piece of the new site – Roomkey.com.

It’s caused something of a stir in the tight-knit world of travel distribution though not the controversy it might generate in some other industries where suppliers would never set up shop to compete directly with retailers.

But the travel industry has seen it all before.

A recent example includes the oddly named Opodo, a European Online Travel Agent now owned by private equity, which was originally formed in 2000 as a joint venture between Aer Lingus, Air France, Alitalia, Austrian Airlines, British Airways, Finnair, Iberia, KLM and Lufthansa.

Their motivation, same as the Roomkey.com founders, was to cut travel agency distribution costs, which can be as high as 30 per cent.

The partner airlines figured they could sell their airfares at a reduced commission through their very own online co-operative, just like Roomkey.com

But it wasn’t that simple.

For a start, big commercial websites cost a lot of money to run and market – they eat cash, especially in the early formative years.

Then there’s the issue of ultimately funding what is essentially a competitor to your own branded site, which is not only a straight out conflict of interest but also undermines the cheapest distribution channel for any business.

So over time the original partners sold out to Amadeus, a global travel distribution system, which eventually divested it as a non-core asset to AXA Private Equity and Permira Funds for €500 million.

That works out at 11.7 earnings, which is pretty good money, though you’d have to think a lot had been spent along the way so it was probably a zero sum game.

It’s worth noting that when Opodo was started 12 years ago, the internet was all about potential – no-one was really making any money online.

But that quickly changed as global travel slumped in the aftermath of 911 and hoteliers turned to online travel agents to help sell heavily discounted rooms.

These days everyone buys travel on the web and online travel agents have matured into highly profitable businesses.

How profitable?

Let’s use Priceline.com, one of the fastest growing on international online travel agents, as an example.

In the third quarter alone, Priceline.com had a turnover of US$6.3 billion (up 56.2 per cent year on year), revenue of US$1.5 billion (up 45 per cent) and net income of US$469.5 million compared with US$223 million for the same period a year ago.

That’s a lot of money, and the growth rates remain astonishing, especially at a time when the hotel industry in many parts of the world is going through hard times.

Hence the hoteliers feel they are doing all the work but the online travel agents are making all the money for little effort.

An obvious question at this point is: why don’t the hotels just stop selling through online travel agents?

The answer is they can’t afford to. Online travel agents dominate the market and are still growing at a ferocious rate, as we can see from the Priceline.com example above.

This brings us back to where we started – Roomkey.com.

It’s a nice site – softer, prettier and simpler than its commercial rivals – but in my opinion Roomkey.com will have no meaningful impact on the online accommodation market.

The major reason is that hundreds of millions of dollars are required each year to gain the kind of profile and scale a site like this needs to be profitable.

And there is no way the partner companies have that kind of money to invest in a website that is 1) a potential competitor and 2) a non-core business.

Ultimately, Roomkey.com is expensive rhetoric.

Ends

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Joyce said: "The determination from Fair Work Australia does not contain any of the restrictive demands that would have handed control of parts of the airline to the union." Qantas is still  negotiating with the Australian and International Pilots Association and the Transport Workers Union through FWA.

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