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Tourism heads for free fall as Japan visitors down 30%  Dec 29, 2008

Foreign tourist numbers to Australia are plummeting - even before the full impact of the global recession is felt - and there is likely to be no lifeline for the $90 billion industry from domestic travellers over the next 12 months.

Despite the benefits for international travellers of a falling Australian dollar and improving conditions for local travellers - including falling petrol prices and low interest rates - a special report by Tourism Australia is predicting a horror year ahead.

It says the value of inbound tourism is expected to drop by almost 4 per cent to $24 billion next year, with foreign visitor numbers falling from 5.56million this year to 5.33 million.

In the report, to be released today, Tourism Australia's Tourism Forecasting Committee says some of Australia's biggest overseas tourist markets are nosediving as recession takes hold, with visitor numbers from Japan dropping from 573,000 last year to an anticipated 407,000 next year - almost 30 per cent down. The Chinese market, which has grown strongly in recent years, has stalled, with tourist numbers falling this year for the first time, down to 352,000 from 358,000 last year.

More than $500 million will be shaved off the value of the inbound tourism industry in Australia this year.

"There is no doubt that tourism operators who are heavily reliant on international tourism are in for a tough time in 2009," said Tourism Forecasting Committee chairman Bernard Salt.

However, Mr Salt said the market was well-placed to rebound strongly in 2010 if the Australian dollar remained at low levels, consumer confidence returned and growth in aviation capacity steadied.

The loss of foreign tourist dollars reflected sharp GDP falls in Australia's biggest inbound markets - New Zealand, Japan, Britain and the US. Further losses would be incurred as economic growth slowed in other leading markets such as China.

The report said next year was shaping as the worst-performing year for the inbound tourism sector since 1989, when foreign visitor numbers fell by more than 7 per cent because of a pilots' strike.

Fewer Australians are also travelling overseas - the number of trips is forecast to fall from 5.75 million this year to 5.58 million next year.

Mr Salt said the lower Australian dollar and slower Australian economy were responsible for the first fall in outbound travel since 2003, with the biggest impact on long-haul European destinations.

The report suggests many Australians are not taking holidays. The number of domestic visitor nights in Australian hotels and other accommodation centres is forecast to drop from 82.3million last year to 78.8million next year. The hotel visitor night levels of last year are not expected to return until 2012, with numbers this year the lowest since the National Visitor Survey began in 1998.

However, the value of the domestic tourism sector is expected to rise by 1.8per cent next year, to $67 billion, indicating that some of the money earmarked for overseas travel will be spent by Australians spending a little more while holidaying at home.

Mr Salt said some revenue benefits were anticipated from the switch from outbound travel as Australians spent on average about eight times more on an overseas trip than on domestic overnight travel.

The low Australian dollar also meant the domestic travel sector was better positioned in terms of price competitiveness than other consumption imports, including outbound travel.

The report says the forecasts for next year indicate Australians are likely to remain concerned about job security, spending fewer nights away from home on long trips but increasing the frequency of weekend and day trips.

The fall in petrol prices is expected to boost road travel, but growth in domestic air capacity will fall next year after expanding by 10per cent this year.

Business travel is turning down, with the number of business overnight trips falling 8 per cent this year from last year and the level of business day travel dropping 25 per cent.

The report indicates the tourism industry was struggling before the global economic slowdown worsened in September, with the domestic and inbound sectors both weak in the first half of this year.

Tourists in Sydney yesterday confirmed the global economic crisis was having an effect.

Jocelyne Adams, a public relations consultant from Shropshire, England, said the downturn almost scotched her trip plans: "We booked in February, but had we booked when the credit crunch kicked in in September, we definitely would have thought twice about it."

Japanese tourist Nobuhiro Takahashi, 36, said: "When we booked in August, oil prices were much higher, so we had to pay an $800 surcharge on the air ticket."

Tourism heads for free fall as Japan visitors down 30%
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