Australia slashes prices to maintain tourism demand

Guest Writer

08 Feb 10 ( The number of international visitors to Australia in 2009 was virtually unchanged from 2008, however businesses cut prices, sacrificing profitability to maintain demand, according to peak national body Tourism & Transport Forum (TTF).

The December 2009 Overseas Arrivals and Departures[1], released today by the ABS, show that Australia attracted just 1,700 fewer international visitors in 2009 than in 2008, while the number Australians travelling internationally jumped by nearly half a million on 2008, reaching almost 6.3 million, outstripping arrivals by 700,900 for the year.

TTF Executive Director Brett Gale said maintaining arrivals had come at a cost.

“The forecasts at the beginning of 2009 were for a drop in international arrivals of 4.1 per cent,” Mr Gale said, “so holding steady is a great result.”

“Globally, international tourism fell an estimated 4 per cent in 2009, so Australia has increased its market share by maintaining visitor arrivals.

“However, the tourism industry worked hard to stimulate that demand, with low airfares and great value accommodation deals having a significant impact on businesses’ bottom lines.

“It must also be remembered that as many as 30,000 jobs may have been lost in the tourism industry nationwide as tourism operators battled to stay afloat.

“The good news is that demand picked up substantially in the second half of 2009, and business expectations are rising as consumer confidence returns.

“In further good news, there was growth in three of the key sectors for tourism operators in December, with convention delegates increasing by 11.0 per cent, business travellers by 2.3 per cent and holiday travellers by 2.4 per cent compared to the same month in 2008.

“This is the first month that all three of these major sectors have shown growth since May 2007.

“The bad news is that the phenomenal growth in the number of Australians travelling overseas means that we are now a significant net importer of tourism, and that’s having a negative impact on our terms of trade.

“International departures for 2009 were forecast to fall 2.9 per cent, however they rose by 8.2 per cent, reaching 6.3 million, as Australia’s economy fared relatively well throughout the global financial crisis.

“It’s vital that government and industry continue to work together on cooperative marketing schemes and investment in new tourism infrastructure and product to help drive international visitation, as well as convincing more Australians to holiday at home.

“The tourism industry generates more than $90 billion in economic activity in Australia every year, employing almost half a million people, many in rural and regional areas.

“A healthy and sustainable tourism sector is vital to the long-term prospects and prosperity of the nation.

“Now is not the time to rest on our laurels, and the Federal government must continue to support the marketing of Australia internationally.

“Every dollar spent internationally generates at least $13 in economic activity in Australia, providing a compelling return on investment.

“TTF is calling for Tourism Australia’s budget to be returned to 2007-8 levels, with funding brought forward to be replenished in the upcoming 2010-11 budget.

“It’s crucial that we capitalise on the momentum which has been generated over the past six months to ensure that we can maximise our market share as the global economy continues its recovery.”

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