Lucy Hughes Jones
(Australian Associated Press)
As the dollar goes down, the fortunes of the Australian tourism industry are going up.
Commonwealth Bank economist Gareth Aird says the tumbling Australian currency is enticing tourists from home and abroad, helping the economy to rebalance and stimulate growth in non-mining sectors.
He says the Aussie has fallen by around a quarter of its value against the greenback since mid-2014.
Over that same period, growth in the number of people flying into Australia has outpaced growth in the number of departures.
“Arrivals have lifted, departures growth has slowed and the monthly tourism trade balance is in surplus territory,” he said.
A lower Aussie not only makes it cheaper for foreigners to visit Australia but also makes staycations for locals more attractive, as our hard-earned cash doesn’t go as far overseas.
Mr Aird said discounting New Zealand, the bulk of Australia’s international visitors come from China, with shot-term arrivals increasing more than 21 per cent in 2014/15 compared to the previous year.
He predicts one million Chinese residents to holiday Down Under in 2016 as household incomes rise.
But the number of holidaymakers from the UK and US are also tipped to increase as their economies recover and currencies strengthen.
As Australia’s third largest export – the tourism industry is bigger than the agriculture sector – and brought in $43.4 billion in 2013/14.
It also employs around half a million workers, which represents a significant 4.6 per cent of the total workforce.
It’s the nation’s largest services export as the services sector becomes a major economic driver of growth following the mining investment slowdown.
And while all regions will cash in from the influx of travellers, states most geared to tourism like NSW and Queensland will benefit the most.
“The Barrier Reef has been a major drawcard for international tourists while Sydney Harbour is one of Australia’s iconic places,” Mr Aird said.
“Since the Australian dollar started heading lower, real spending on hotels, restaurants and cafes has lifted considerably.”
He said robust growth in Queensland’s tourism industry is working to offset local job losses associated with the resources downturn.
CBA expects the Aussie dollar to drift lower during the next 12 months and, as a result, the tourism industry’s contribution to growth is set to rise in the next couple of years.