Perspective – December 2010/January 2011

2010 – as good as it gets?

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Ian McMahon2010 – as good as it gets?

AFTER the gloom generated by the Global Financial Crisis in 2009, the past 12 months have been spectacularly good for the outbound leisure travel industry.

The soaring Aussie dollar has proved to be a gloombuster, making overseas travel the sort of bargain that has attracted increasing numbers of consumers into travel agencies around the country.

Add in a better than expected rebound in business travel and it is not surprising that a buoyant, optimistic mood has prevailed at the annual conferences staged by the various agency chains over the past two months.

Meanwhile other travel industry sectors that were supposed to be hurt by the rising Australian dollar have, in fact, also achieved solid, if unspectacular, growth.

We have, for example, heard much doom and gloom talked about domestic travel and it is true that, up until March this year, domestic visitor nights fell for eight consecutive quarters. But as you can read elsewhere in this issue, there has been a significant recovery over the past six months with figures up for the June and September quarters.

Even more pessimistic than the domestic industry’s prophets of gloom have been commentators on inbound prospects.

So much so that one of the last things Matt Hingerty did before hanging up his managing director’s shingle at the Australian Tourism Export Council was to reassure economic commentators that the Australian inbound tourism industry will not fall apart just because the Australian dollar is high. He told them the inbound sector, for the most part, is in fact performing well relative to last year.

Will the good times continue into 2011?

The possibility of further interest rate rises and key economic indicators ending the year well below official forecasts are not promising portents.

And as you can read elsewhere in this issue, IATA director general Giovanni Bisignani is warning that, despite a big jump in profitability, airlines’ margins are still too low and one major shock could stunt recovery.

As always hard work and entrepreneurial flair will determine who does well in 2011. But it just may be that 2010 was as good as it gets.

Virgin Blue and Star Alliance

MUCH palaver about the appearance earlier in December of Virgin Blue boss John Borghetti at a Queenstown gathering of the Star Alliance.

As was clearly intended, this triggered speculation that Borghetti’s appearance in the New Zealand snow resort could be the prelude to his carrier providing Star with the Australian presence it has so conspicuously lacked since the collapse of Ansett.

I wrote some months ago that the situation is this: Air New Zealand has hitherto blocked Virgin Blue’s entry into the alliance, but the proposed pact between the two carriers would be game changing.

We can expect Virgin Blue to be welcomed into Star if competition authorities ultimately allow the two carriers to link up. If the competition authorities veto the link we can expect Air New Zealand to similarly veto Virgin Blue’s membership of Star.

I see no reason to believe this is not still the situation.

Compliments of the season

All at travelBulletin send season’s greetings to our readers and supporters and best wishes for the New Year – We will be back in February 2011.






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