The Australian tourism industry is forecasted to witness zero percent growth in foreign tourist arrivals this year due to surging oil prices and appreciating Australian currency.
As per the Australian Tourism Forecasting Committee, the tourism industry in Australia seems to be heading towards stagnation with foreign tourist arrivals forecasted to grow at zero percent in 2008, as reported by The Australian Business.
The number of foreign tourists is expected to remain flat at 5.6 Million in 2008, the lowest growth rate since 2003. The number of domestic trips in 2008 is likely to rise by 2% to 75.3 Million, with the average staying duration expected to fall this year and the next year. Besides, the domestic tourist nights are projected to come down 3% to 279.7 Million this year and by 2.7% to 272.1 Million next year.
The main reason for slow growth in the Australian tourism industry is soaring oil prices. The effect of rise in oil prices is visible on the tourists as they need to pay more for traveling by road and this is turning them away from the country.
Besides, rising value of the Australian dollar has made traveling an expensive affair for visitors coming to Australia. Airlines have also raised their fares and cut down in flight frequencies to offset losses, casting a direct impact on the Australian tourism industry.
The slowdown in the Australian tourism industry might stretch to a decade as the business conditions that support growth remain unchanged in coming years. Due to slowdown in the tourism industry, the discretionary spending, which accounts for around one-third of the entire Federal spending (including money to purchase things for army, the coast guard, FBI and highway projects), will slump significantly.
According to a Research Analyst at RNCOS, “The Australian tourism industry is forecasted to grow at a slow pace in 2008 as a lot of negative factors are forcing tourists to avoid traveling to the country. Low tourist inflow will also lead to slow economic growth. The impact of sluggish tourism industry will be seen on the related industries like hotel and travel agencies too. However, this seems to be a temporary phase and the industry will grow in long-term”.
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