AFTA view: the end of 2019
JAYSON Westbury, chief executive AFTA
As 2019 comes to an end there is no question that it has been a year of two stories. The first is it being a year of record international departures and for most parts of the industry a strong year with growth. The second story has been the disaster in the form of the various supplier collapses which have put incredible stress and strain across the industry, and this is of course inconsistent with how the industry was tracking for the year.
It seems to me to be irreconcilable that when the industry across all categories was in growth and doing well, one large supplier goes broke. It is a clear demonstration that there are significant questions to be asked and no doubt this will be something that AFTA will be keeping a close eye on next year.
As we turn our minds to 2020 there will be plenty of challenges ahead of us, and as the regional economy of Australia starts to really feel the financial impact of the drought, those in regional areas of the country will be in for some difficult times.
Meanwhile the rest of the Australian economy appears to charge forward, with interest rates looking to hold at the record low levels, which is good for people with a mortgage but not so good for people in retirement. The stress and strain of these two issues may play out in the travel industry as people decide whether or not to take a holiday.
Early reports however for the longer-range booking categories appear to show strong forward demand, so we will need to wait and see what happens. My hope is that the forecasters have it right that outbound movements for 2020 will increase by the 3-4% foreshadowed.
In addition, 2020 will see many of the reforms being called for from the Hayne Report to be confirmed, decided and implemented. Sadly, the travel industry has been caught up in many of the Hayne review findings. Add on insurance being in the spotlight, Point of Sale Credit being another area under review (which has even more penetration on the travel industry as more products come to market) and then we will still have to contend with the ASIC review into the remuneration model of travel insurance — 2020 already has quite a watch list.
2020 will also start to see the rubber hit the runway on airline NDC strategy roll out. Many airlines have indicated that 2020 would be the year of commercialisation of NDC. It would seem that while NDC is a standard, there is no standard way airlines will choose to implement their own distribution strategies under the cloak of NDC.
So as is the case every year, there is a tapestry of issues to be thinking about for the travel industry and I look forward to ensuring AFTA plays its role and helps support, decipher and guide travel agents as best we can throughout the year.