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Dollar under pressure but travel remains resilient

September 24, 2015 Business News, Headline News No Comments Email Email

egtmedia59The Australian dollar has slipped again and is close to falling below USD 70 cents, but attractive airfares are in the market and outbound travel appears to be holding up under pressure.

Outbound travel growth has slowed to about 3% over the past year, considerably less than the 7% outbound growth in the heyday of 2013-14.

Very attractive airfares to Hawaii, the mainland US, and earlybird fares to Europe are helping keep things ticking.

Flight Centre managing director Graham Turner spoke recently of “positive momentum” in leisure travel in Australia, with customer enquiries tracking above target and sales in key sectors continuing to grow.

A big US capacity build-up is approaching. Qantas launches flights from Sydney to San Francisco in December and American Airlines starts flying from Sydney to Los Angeles. Additionally, Air New Zealand launches services from Auckland to Houston and is hoping to attract Aussie travellers.

Latest trend estimates from the Australian Bureau of Statistics show that short-term resident departures during July 2015 (781,700 movements) increased 0.2% compared with the preceding month June 2015 (780,300 movements). This followed monthly increases of 0.1% in both May 2015 and June 2015. The current trend estimate for departures is 2.8% higher than in July 2014.

When trend estimates for short-term resident departures for July 2014 and July 2015 were compared, the highest percentage increase was recorded for China (14%), followed by the US (6.9%). Currency fluctuation may have helped the China result but the US result defied currency movements. New Zealand also recorded positive growth, with an increase of 6.8%. Fiji was up 5.2%.

The highest percentage decrease was recorded for Malaysia (14.4%), followed by Singapore (5%). Indonesia (primarily Bali) was down 1.2%.

Written by Peter Needham

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