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High Dollar Worries Tourism Businesses

Soaring dollar could hurt Australia's tourism

MEX COOPER  Oct 12, 2009

The glow of Australia's rosy economy is failing to shine on many tourism operators who fear the soaring dollar could cost them their business, the sector's top bodies say.

The managing director of the Australian Tourism Export Council, Matt Hingerty, said he could see dread in the eyes of many tourism operators last week as the Australian dollar climbed to a 25-year-high against the British pound.

Mr Hingerty said local tourism businesses had already had to discount heavily to appeal to cash-strapped tourists from international economies struggling from the global financial crisis.

The Australian dollar's robust performance - it is now buying 57.1 pence and 90.4 US cents - meant overseas tourists would now spend even less and leave earlier.

"This is just going to add more pressure at the worst possible time and a number of my members are hanging on by the skin of their teeth and some of them are starting to fall over, it's going to hurt," he said.

Tourism and Transport Forum executive director Brett Gale said more than 7500 people in Australia's accommodation sector had lost their jobs between September last year and June this year.

As Australians snap up bargain overseas travel deals and cheap flights, travelling Down Under had become more expensive for foreign tourists, Mr Gale said.

Short-term arrivals to Australia dropped by 3.3 per cent from August last year but the real pinch was being felt because tourists were not spending as much.

Mr Gale said job losses nation-wide in tourism were up 6 per cent since last September, compared with 1 per cent for the overall economy.

"Applying that rate to the entire tourism industry and almost 30,000 jobs have been lost over the period," he said.

"It's been the biggest fall in tourism numbers, in terms of job losses, seen since the Olympics.

"Now we have the double whammy of the rising Aussie dollar to contend with."

Mr Gale said destinations that relied almost exclusively on international tourism, such as Cairns, which already has a 12.5 per cent unemployment rate, would be badly hit by the high Australian dollar.

Melbourne and Victoria's main tourism regions - the Yarra Valley, Mornington Peninsula, and Geelong/Otways - were less susceptible because they also attracted local tourism as well as business tourists, Mr Hingerty said.

But he said the closure of the Rialto's observation deck was a sign that Melbourne tourism operators were not escaping the hard times while the Yarra Valley was continuing to cope with the fallout from the Black Saturday fires.

Mr Gale said in recent months business travel had begun to dry up, placing Sydney and Melbourne hotels under strain.

"Business and conference tourists are what fill up the majority of hotel rooms in our major cities over the course of the year so when business and event tourism is down then the hotels in our major cities and all the spin-off tourism suffers," he said.

But a Tourism Victoria spokeswoman was more upbeat, and said visitor growth in the state was above the national average.

"Melbourne continues to be Australia's most lucrative capital city, having outpaced Sydney for two consecutive years," she said.

Tourism Victoria said thousands of international and interstate visitors would come to Victoria for the spring racing carnival, to see the musical Jersey Boys, and to watch Tiger Woods playing at the Australian Masters in November.

Mr Hingerty said he was concerned by the triumphalism being displayed in government and economic circles.

"Every bank's senior economist is out there patting themselves on the back but the GFC is far from over for our industry," he said.

Soaring dollar could hurt Australia's tourism
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