Gap year trips are being cut short and the local industry is paying for it, especially hostels and operators working out of former tropical hotspots in northern Australia.
The cities are doing ok, though, as the modern youth travel market – so important to the overall health of Australia’s tourism economy – sits tight and parties through the urban night. There are two big factors at play, and both are economic.
The first is the high Aussie dollar, which makes travelling here expensive; the second is fragile to depressed economies hampering crucial source markets in the United Kingdom and Europe.
Julian Ledger, Chief Executive Officer of YHA Ltd, which has 100 properties around Australia, says the modern backpacker is “probably travelling with less money and there is more pressure to work”.
Mr Ledger says YHA properties are “seeing quite a lot of growth from Aussies and that has compensated for a small decline in international.
“Forward bookings are looking quite strong and Sydney, Melbourne, Brisbane and Perth are all doing very well.”
Meg Allen-Armistead, General Manager of the Nomads Network, says the backpacker market has been tough in recent times.
“The last two years have been terrible – I don’t know how some operators are surviving.”
She says occupancies for Nomads hostels are down “like everyone else” but business has been supported by the Australian domestic market and groups.
One big change has been a fresh emphasis on price – everyone is trying to get a deal.
“They are so price conscious it’s not funny,” she says.
“A few years they weren’t worried about price, more quality, now it’s all about the cost.”
Ms Allen-Armistead says many travelers are now waiting until the last minute hoping to get a great rate rather than booking ahead to be sure of a bed.
“Three years ago you’d have a good idea on a Monday of how the week was shaping up,” she says.
“But now it’s different. This morning Nomads Melbourne had 60 beds and they had sold out by 2pm.
“We hold our line on price but a lot of people don’t.”
The speed of modern life, combined with the impact of depressed global economies, is a common theme across the industry.
Peter Ovenden, Chairman of the Youth Tourism Advisory Council, says: “The one thing you can be certain of in life is change.
“It’s almost as if the pace of life has sped up to such a concept that the concept of bumming around the world for a couple of years has been replaced by the reality of funding those trips and the fear of giving up a job and not having that career anymore.”
The result is that “not as many people are travelling for 12 months.
“The majority are doing three to six months. So that means while we are seeing the same number of backpacker arrivals the length of stay is less and spending is down as a result.”
Travel retailers are observing similar trends in markets such as the United Kingdom.
Group Managing Director of youth travel specialist STA Travel, John Constable, says trips have been getting shorter and ostensibly more serious.
“Never before has gap travel been so meticulously planned,” he told Traveldailynews.com.
“Traditionally gap trips were a full 12 months, however for our customers last year the average trip length was 54 days, which indicates a leaning towards a series of shorter blasts of travel – or ‘snap gaps’.
“Usually these mini-gap trips are for a specific reason, such as to take part in a volunteer project, go to a festival or go on a language or skill course overseas.”
He says in 2011 the average STA Travel customer was 23 years old but expects this to drop with young people travelling straight after high school due to the introduction of university fees in the UK.
In fact, STA Travel is predicting a boom in UK student travel with almost three million gap year trips forecast.
The issue for local operators is whether they’ll get past the cheap attractions of hot exotic Asian destinations and make it down to Australia.
But a buoyant Australian jobs market and the chance to earn some cash could be a strong lure.
Either way, Mr Ovenden, who is also a Director of the Australian Tourism Export Council, believes conditions will remain challenging for a number of years.
“It’s a tough time to be in this sector,” he says. “There’s a product over supply and there will be attrition.”