Strong dollar and lack of innovation damages tourism industry

As the Australian tourism sector prepares for one its worst years in a decade, a leading industry figure says the local sector is being held back by a lack of innovative and dynamic thinking.

As the Australian tourism sector prepares for one its worst years in a decade, a leading industry figure says the local sector is being held back by a lack of innovative and dynamic thinking.

Fiona Hunt, general manager of Intrepid Travel’s Australian division, says the industry runs on “gut instinct” rather than innovative thinking and tourism operators tend to stick with the same tired products.

“As an industry we don’t value innovation. There’s a tendency to draw on what you already know rather than look to the future,” she says. “It’s a shame; there is an enormous potential for the industry to help support the economy.”

The Federal Government is predicting Australia’s tourism sector is facing its worst year since 2003, when the sector was rocked by the threat of an outbreak of severe acute respiratory syndrome (better known as SARS).

The Government’s Tourism Forecasting Committee expects international tourist arrivals will be static in 2008 at 5.6 million as a result of a spike in oil prices, which has pushed up airline ticket prices, and the strength Australian dollar.

For example, the sharp increase in the value of the dollar against the Japanese yen over the last few years is forecast to lead to a 20% fall in visitors from Japan.

On the flip side, the committee expects Australian travellers will take advantage of the strong dollar and head overseas, rather than holidaying at home. As a result, local visitor nights – tourism-sector-speak for Australians staying in local hotels – will fall 3% in 2008 and drop a further 2.7% in 2009.

The federal shadow tourism spokesman, Steven Ciobo, says the Rudd Government must act quickly to help the sector survive the downturn. “Labor has no short-term plan for tourism and it is clear many businesses will really feel the pressure, with some going to the wall. It is crucial Labor has a plan now; not in 12 months, but now.”

Hunt says the dip in tourist numbers is understandable given the domestic and global economic climate and is optimistic about the longer-term outlook. “I suspect that will change and I think it will trade out of it over the next few years.”

She says Intrepid, which concentrates on adventure travel, is not experiencing a slowdown and posted sales growth of 25% in 2007-08.

The company is planning a new range of Australian tour products in the next few months, with a focus on smaller groups, local experiences and niche activities.

Hunt says the Australian industry needs to follow the general consumer trend towards more personal travel experiences and exploit the country’s natural advantage in tourism – its unique natural assets.

“We’ve got an enormous amount of natural assets in terms of a global product, but we really lack the infrastructure to leverage that. The tourism industry doesn’t particularly portray itself as dynamic or innovative.

“I think the key is keeping up with consumer trends and utilising new technology.”

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