Australia Tourism Report Q4 2011

In 2008, tourist arrivals to Australia had been steadily growing since 2004. In 2003, arrival numbers fell by 1% due to concern over the SARS pandemic. In 2004, 4.77mn tourists visited Australia and by 2008 that number had increased to 5.45mn. In 2009, however, tourist arrivals fell by 2.1% year-on-year (y-o-y) to 5.33mn. Before 2009, Australias tourism growth was helped by the weakness of the Australian dollar, which increased the countrys price competitiveness from major source destinations such as the UK and New Zealand. However, since the dollar strengthened in 2009 and 2010 it has negatively affected the industrys price competitiveness. Tourism was also affected by the global recession in 2009 as discretionary spending was reined in and businesses cut costs, including on international conferences.

About a quarter of all arrivals to Australia are business travellers, with 1.47mn forecast to arrive in 2011 for business purposes and 3.21mn travelling for leisure. For 2010, we estimate tourist arrivals rebounded to 5.56mn, above 2008s figure. We forecast tourist arrivals to reach 5.74mn by 2011 and to rise to nearly 6.64mn in 2015.

Tourism expenditure fell in 2009 to US$28.71bn from US$31.46bn in 2008. However, it is estimated to have recovered strongly in 2010 to US$32.13bn and we forecast increases to US$31.22bn in 2011 and US$47.11bn by 2015. Australias tourism industry accounted for 3.0% of GDP in 2008 but dropped to 2.9% in 2009. It is expected to slowly climb back to its 2007 high of 3.5% and surpass it by the end of our forecast period.

The majority of tourists come to Australia from the Asia Pacific region, followed by Europe and North America. Inbound tourism from Asia Pacific has increased strongly since 2001, when just over 3mn people visited Australia, to reach over 3.8mn in 2010. Arrivals from the region are forecast to continue growing to more than 4.7mn by 2015. Out of the top 10 source markets for the Australian tourism industry, seven are in the Asia Pacific region. Australia attracts more of its tourists from New Zealand than any other country, followed by the UK and Japan.

India is also becoming an important market for Australia. Minister for Tourism Martin Ferguson said: India is very important to Australia as a tourism opportunity. It is the 10th largest economy and has the second largest population in the world. India is going to go through a significant period of growth, which is going to create opportunities for people to rationally think about travel. The ministry launched tourism campaigns in India with Qantas and Singapore Airlines in Q210 and it has a full-time office in Mumbai. However, attacks on Indian students in Australia in recent years may put downward pressure on arrivals from India. Ferguson said the attacks have not caused a decrease in arrivals as tourists do not visit the difficult suburbs where the incidents took place. According to Australia Tourism, there was AUD826mn in total expenditure from the Indian market in 2010. Australia Tourism estimates that India will grow to account for AUD1.85-2.26bn of total expenditure by 2020.

Over the last decade, Australias outbound tourism has become increasingly dominated by New Zealand. Between 2001 and 2010, the number of Australians visiting New Zealand nearly doubled, increasing from 574,500 to 1.01mn. In a distant second place is the US, which 372,600 Australians visited in 2001 and 490,000 visited in 2010. The US is followed by the UK, which attracted 454,000 visitors from Australia in 2010. The other outbound destinations in the top 10 are all in the Asia Pacific region. From 2011 to the end of our forecast period, departures to the UK are forecast to outpace the US through to 2014. In 2011, 450,000 Australians are forecast to visit the US, versus 452,000 to the UK.

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