Rising currency threatens Australia’s tourism

As the Australian dollar rises, tourism industry fears Australians may find holidaying abroad cheaper.

20 April, 2007

Australians are likely to find holidaying overseas cheaper than at home if local currency keeps rising, hoteliers and tourism business fear.

The Australian dollar moved closer to US84 cents in the third week of April 2007 to reach its highest levels since August 1990. It gained 2.5% against the US dollar since March.

According to Australian Hotels Association deputy chief executive David Elliott, domestic travelers from places such as Sydney would go overseas more if the currency edged closer to US90 cents. If the dollar keeps going the way it has, then it becomes cheaper to spend a few days holidaying in Hawaii than on the Gold Coast, and a week skiing in New Zealand than the Snowy Mountains, Elliott adds.

Countering the grim forecast, marketing body Gold Coast Tourism says Australians would still visit the beaches of Queensland even if they also took a holiday in the Pacific islands or in Asia in 2007. The Australian traveler, according to Gold Coast Tourism’s chief executive Pavan Bhatia, takes more than one holiday.

He hopes that low-cost flights from Sydney and Melbourne as well as cultural events would lure the domestic travelers to the Gold Coast even if the Australian dollar kept rising.

Like Singapore, the Gold Coast plans to market itself increasingly as a more upmarket destination to attract Australian leisure seekers who have the advantage of higher wages. To this end, the Gold Coast will launch a 30-day GC Bazaar festival in June 2007 to entertain those who enjoy fine dining and shopping.

To prevent domestic and international travelers from going for destinations outside Australia, accommodation providers may have to start offering discounted room rates.

Many rich travelers from the United States would not mind paying higher charges for hotel accommodation in Australia because of a weaker US dollar, according to an expert in the tourism business.

He says that good arrivals of European travelers had kept the Northern Territory market afloat despite the Australian dollar gaining strength against the US currency.