Tourism industry boost as international visitors hit six million

Australia’s tourism industry continues to improve thanks to growth in both international and domestic visitor arrivals, according to a report by Deloitte Access Economics.

Deloitte’s Tourism and Hotel Outlook, published today, found international arrivals climbed 5.8% in December to finish 2012 up 4.6%, while international visitor numbers passed six million for the first time.

With the Australian dollar continuing to remain strong against its US counterpart and other major trading currencies, outbound travel continued to grow, but the pace of growth has slowed from its double digit peaks and there has been a trend towards shorter domestic trips.

The report also found record hotel occupancy rates, with occupancy rates at or above 80% in Perth, Sydney, Melbourne and Brisbane.

Deloitte Access Economics’ Lachlan Smirl told SmartCompany growth in international visitor arrivals accelerated strongly over the second half of 2012.

“There was a surprisingly strong growth in domestic visitors as well, the domestic tourism market has had a tough decade with a decline in trend terms over the last 10 years,” he says.

“It was grown mainly by friends and family visiting, so not the strong leisure story the tourism industry would have liked to see.”

Smirl says the recent growth reinforces Deloitte Access Economics’ longer term forecasts which, in this latest update, project international visitor nights growing at an average annual rate of 4.7% per year over the next three years.

This projected growth is being driven by emerging economies along with an increase in visitors from the United States and Japan.

Deloitte’s figures are in line with the numbers seen across the industry, according to Trent Zimmerman, acting chief executive of the Travel and Tourism Forum.

“The year finished on a very positive note with international visitors increasing by 4.6%, which was double the forecast growth rate and we saw healthy figures from the United States and Japan,” he says.

“The tourism sector is starting to adjust to the Australian dollar at its current levels, which will hopefully stop the phenomenon we have seen of Australians feeling they have to dash off overseas for their holidays.”

But Zimmerman says the tourism industry is not out of the woods yet, with a divide between city and country and mixed profit results from businesses reliant on tourism.

While Flight Centre has set profit and sales records for the first half of the year of $91.8 million for the six-month period, rival travel agency Jetset Travelworld announced it will continue to cut costs while it considers ways to boost business. It booked a net profit of $8.6 million for the six months ended December 31, down 22.9% on the net profit of $11.2 million in the prior corresponding period.

“Tourism remains patchy around the country and you only have to look at city-by-city growth rates to see huge differences. For example, Perth continues to enjoy huge growth rates but that is largely driven by economic interests like the mining sector,” says Zimmerman.

“There is also a divide between city and regional areas.”