John Hart, executive chair, Australian Chamber — Tourism
If you have ever eaten out in a restaurant in a regional center anywhere around Australia you will appreciate what a vital role backpackers play in the tourism workforce. The truth is they not only sustain hospitality employment throughout the country but also form a very large proportion of visitation and spend in our regions.
What is of great concern right now is the decline in our two largest traditional markets, the UK and Germany. Both markets are around 8% down for the last financial year. Off a base of 50,000 all up, this is a huge decline. Because of the scale, this is a significant problem for visitation and also in terms of the workforce implications. The challenge, however, is not restricted to these markets. Whilst off a lower base, Italy, Sweden, Hong Kong, Finland and Canada also saw a decline last year.
The question is whether this is a hiccup or whether something has changed that may limit the opportunity for working holiday-makers (WHMs) for years to come. Tourism Australia has undertaken some research in this area this year and has determined, quite understandably, that the pay and tax issues (arising from the Backpacker Tax debacle) were non-issues, given the high-paying nature of employment in Australia.
What the Tourism Australia work did question was whether the changing nature of work globally meant that the concept of a working holiday was a thing of the past. To some extent there appears to be an element of truth in this hypothesis. Young people are subject to much greater financial and social pressure today to start their career earlier. Taking time out for a working holiday may just not be worth the impact on career progression for some of today’s youth.
It may also be that the e-generation or millennials don’t need to travel to experience the world when they are connected to it 24-7. This may be particularly so when there is a down-side to the interruption it represents to their career trajectory.
One characteristic that the countries in decline have in common is that they have GDP growth above the OECD average. This may be a signal that more competitive labour markets in home countries are placing pressure on propensity to travel on a working holiday. This could be a turning-point in successive generations of the more footloose and fancy free.
Trend or aberration, this is something all of us in the tourism sector need to keep an eye on. Over $3 billion in spending and a workforce of over 200,000 is vital to Australian tourism. Long may it continue!