Drive Destinations Running Out of Petrol As People Fly Or Opt for Gadgets Over Experience

By Martin Kelly, TravelTrends.biz

IT was the best of times, it was the worst of times… a famous line from Dickens and one which applies to the Australian domestic tourism industry over the next decade.

That’s the inescapable conclusion from the latest Tourism Forecasting Committee report, which paints a positive picture for outbound and inbound travel, while outlining a much more complicated domestic scenario.

In simple terms, it looks like traditional drive destinations will get screwed at the expense of those served by Low Cost Carriers – in Australia and abroad – as travel habits morph at breakneck speed.

Yet the future may not be that black and white.

That’s because the amount of time Australians spend holidaying in their own country is actually forecast to fall – from 289 million visitor nights in 2007 to 282 million visitor nights in 2016.

In other words, more trips, less time travelling.
 
So undoubtedly there’ll be challenges right across the board for Australia’s domestic tourism industry, including those served by LCCs.

Meanwhile, some of the strongest competition will come from outside the industry as consumers spend increasing amounts of money (and time) on the latest gadgets…

For evidence look no further than the annual results from retailer Harvey Norman, up 16% thanks to the insatiable consumer appetite for new technology.

Anyway, the report predicts that the contribution of tourism to the Australian economy will increase from $84 billion in 2006 to just over $100 billion in 2016 in real terms, underpinned mainly by growth in inbound tourism.

Chairman of the Tourism Forecasting Committee, Bernard Salt, said the value of inbound tourism is forecast to increase at an average rate of 4.9% a year from $22 billion in 2006 to $35 billion in 2016 in real terms.

This longer term growth rate has been revised up from 4.3% a year mainly due to larger than previously assumed increases in aviation capacity serving Australia.

“After a solid start to the year, arrivals are forecast to rise 3% to 5.7 million in 2007,” Mr Salt said.

“In 2008 and beyond arrivals are forecast to grow more strongly with increases in international aviation capacity and weakening of the Australian dollar improving the competitiveness of travel to Australia.

“Turning to the outlook for domestic tourism, aviation developments will also shape this sector of the industry,” Mr Salt said.

“The amount of aviation capacity serving the domestic market is set to expand significantly in late 2007 and through 2008. This is expected to support an increase in tourism trips at the expense of lowering average nights per trip as some travellers switch from ground to air transport.”

“As a result after rising by 1% to 289 million in 2007, domestic visitor nights are forecast to decline by 2% in 2008 and by a further 3% to reach 274 million in 2009,” he said.

“Beyond 2009 domestic visitor nights are forecast to rise moderately to reach 282 million in 2016.

“This growth will support an increase in the economic contribution of the domestic tourism industry from $62 billion in 2006 to $65 billion in 2016 in real terms.

“Throughout the projection period domestic tourism will be under pressure as rival goods and services including overseas travel destinations compete for consumers’ time and money.

“Outbound tourism is forecast to continue growing at a stronger rate than domestic tourism given the increasing desire of Australian’s to travel overseas, the expansion of low cost air capacity to outbound markets and the overall expansion in international aviation capacity servicing Australia from late 2009.

“As a result outbound departures are forecast to grow at an average annual rate of over 5% between 2006 and 2016 to reach 8.2 million,” Mr Salt said.

The TFC’s membership draws on the combined expertise of the private and public sectors in the tourism and finance industries. Its forecasts are available from: http://www.tra.australia.com/

Travel Trends: July 19, 2007

 

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