Oxford Economics says the world economy is on the upswing and that there’s no immediate end in sight to Australia’s ride in the Asian sweet spot, which has led to record travel demand.
“Asia is driving the revival and long-term will continue to be a growth engine for the world economy,” Sarah Hunter from Oxford Economics told an STR briefing of hotel execs in Sydney yesterday.
She predicts Chinese growth will moderate to a still-high 6%, providing significant regional impetus. In Australia, a lower dollar, strong export demand and a growing services sector will ensure economic growth. The only bummer is wages are unlikely to grow.
As a consequence Ms Hunter believes more Australians will holiday at home, though her rationale that it’s “cheaper” to take a break in Oz than overseas is up for debate, especially when it comes to longer holidays.
Interesting to note that outbound travel by Australians in March was just 1%, the lowest it’s been since the GFC.
Other remarks from her presentation:
- The AUD will undergo “gentle depreciation” over the next couple of years, but nothing dramatic.
- Inbound will remain robust, around 6% a year.
- Expect to see a pickup in leisure travel spending.
- Business travel spend will start to moderate
All in all, most definitely positive. Thoughts of a North Korean dictator aside, of course.
(PS: Boston Economics recently entered the Australian market through a merge with BIS Shrapnel).