Domestic travel offers opportunities: Ian McMahon's perspective

plane-437745_1920THE steady depreciation of our floating Australian dollar over the course of this year sees it currently at levels around US$0.70.

Most sectors of our industry – outbound, inbound and domestic – would probably agree that these levels provide reasonable prospects for growth.

As leisure travel agents will attest, outbound growth no longer has the exuberance of those heady days when one of our dollars bought US$1.05 or more, but the numbers of Australians travelling overseas continue to increase.

They were up 2.8 per cent to 9.2 million in the 12 months to June 30. That pales by comparison with the headlong 130 per cent growth achieved between 2006 and 2014. Nevertheless it is a respectable amount of new business delivered to an already booming market.

Significantly, however, the headline figures from the latest National Visitor Survey, show domestic travel growth well ahead of the outbound growth figure.

According to TRA, in the year ending June 30, Australians took five per cent more domestic trips (83.2 million); they spent six per cent more nights away from home (313 million); and their spending on these trips was up by four per cent ($55.4 billion).

As with all statistics, there can be quibbles over detail. On the impact of currency devaluation, for example, it should be noted that the USD comparison is by no means the whole story. AUD depreciation has been much less against the Euro, the UK pound and the New Zealand dollar.

Similarly domestic travel growth may be slightly inflated by a change in TRA methodology. For the first time it undertook mobile phone interviewing which improved coverage of business travellers and contributed to the increase shown in this sector.

Nevertheless the trend is clear. Domestic travel is growing and will offer greater opportunities to travel agents.
As the pace of international travel growth slows, there will be new opportunities for agents to market value-added arrangements for longer, interstate holiday trips, short stays (perhaps events-related) and meetings.

A significant figure from the latest TRA results is that interstate trips, typically involving longer stays and visits to more locations, are up by seven per cent. They account for 43 per cent of nights and 54 per cent of money spent ($30.2 billion).

As we recognise there are domestic tourism opportunities to be exploited, let’s applaud our new Prime Minister for restoring tourism to the Federal Government ministry. Welcome, Senator Richard Colbeck.

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