Domestic tourism sector under pressure but outlook improving

While the strong Australian dollar has prompted a number of tourists to make overseas trips, local business operators differ on how the domestic market is holding up.

The comments come after the latest National Visitors Survey from the Tourism & Transport forum shows domestic visitor nights fell 1.4% in the 2009 September quarter, while visitor nights for the year were down 7.2%.

Brett Gale, executive director of the Tourism and Transport Forum, says the Australian market is performing “very badly”.

“Those recent figures from the survey represent eight consecutive quarters with declining demand, and that’s pretty bleak for the domestic industry. While the tourism forecasting committee has put out some forecasts expecting a rose of 3.2% in domestic visitor nights, that growth doesn’t get you back to where you were a couple of years ago.”

The survey results show compared to the 2002-03 year, the domestic tourism industry has lost about 50 million visitor nights. But during the same period, the number of Australians taking an overseas trip has increased from 3.2 million to 6.1 million.

Additionally, the latest figures from the Australian Bureau of Statistics show 520,400 Australians travelled overseas in November compared to the 485,000 tourists arriving in the country.

“There is cautious optimism about the year ahead, but these things have been falling for awhile. There are a few more years of growth to go before we get back to where we were.”

But Renton Kelly, chairman of the Central Australian Tourism Industry Association, says members of his organisation have been experiencing some of their best returns in the last few years.

“We are doing surprisingly well. We’ve had a lot of rain here, which I thought would have a dramatic effect but demand seems to be pretty good. Domestic travel has been good, and the international arrivals have been pretty good as well.”

“Of course I would say the international arrivals are probably not from their traditional markets, along with a lot of backpackers, but in general it’s been very good.”

But while Kelly says his members, mostly hotels, are performing well, he recognises different locations across the country are experiencing problems.

“I’m aware the North Queensland guys are having a few problems, but in general most of the operators have said they’re having one of the best years they’ve had for almost a decade, and it seems to be continuing.”

Gale says a number of things need to be done before domestic travel increases, apart from the gradual economy recovery which he says should improve demand.

“There’s actually a whole range of factors at play here. The single most important one is economic recovery, but marketing and deals is one part of it. And while a lot of hotels have cut rates, we don’t expect those to be lost forever because it isn’t a sustainable business model.”

“I think the longer-term issues are around needing to ensure product and supply issues, making sure we have enough of what people want. People want experiences now, they don’t just want to lie around and do nothing, so we have to provide them with tourist destinations and things to do.”