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Ouch! Two reports clash head-on over Oz tourism

May 6, 2014 Destination Global, Headline News No Comments Email Email

egtmedia59Oh, the irony! A new, comprehensive report by Tourism Research Australia (TRA), entitled “Tourism’s Contribution to the Australian Economy” has called for “wide ranging government policies seeking to generate greater tourism economic growth”.

The newly released report, which says “tourism is at the forefront of Australia’s future prosperity”, emerged, by coincidence, at about the same time as the report by the government-appointed National Commission of Audit.

TheNational Commission of Audit recommends slashing Tourism Australia’s budget in half, folding the organisation into the Department of Foreign Affairs and Trade (DFAT), and taking an axe to any assistance to the tourism sector. See our story: Shock at ‘dumb, farcical’ plan to gut Tourism Australia

Observers, including Tourism and Transport Forum (TTF) and the Australian Tourism Export Council (ATEC) have condemned the National Commission of Audit’s recommendations as remarkably short-sighted and potentially very damaging.

In the meantime, anyone wishing to remind themselves of the value of tourism to Australia can download “Tourism’s Contribution to the Australian Economy” free on this link.

Some extracts:

In 2012-13:

• Tourism’s total contribution to Australian GDP increased by 4.3% to AUD 91 billion compared to 2011-12 (AUD 42 billion directly and AUD 49 billion indirectly);

• tourism’s total contribution to Australian GVA rose by 4.4% to AUD 80 billion—AUD 39 billion directly and AUD 41 billion indirectly;

• tourism employed 929,026 persons in total (544,000 persons directly and 385,000 persons indirectly), representing 8% of total employment in Australia;

• strong growth in tourism GDP and GVA was driven by solid growth (4.4%) in visitor consumption (3.8% in the domestic and 6.1% in international consumption), compared to 2011–12;

Latest economic indicators available from TRA and other research show that in light of economic changes happening at national and international levels, tourism is at the forefront of Australia’s future prosperity.

These changes include: 

• the economic balance tilting from the West to the East;

• recovery in European and US economies from the recent economic turmoil of the GFC;

• growing significance of service industries resulting from peaking of the investment boom in the mining and resources sector;

• rising unemployment and increasing wage costs mean that many labour-intensive manufacturing businesses are unviable in Australia.

However, among these challenges there are opportunities for the Australian tourism industry. For example, prosperity in the eastern part of the world, especially China, is leading the growth in international visitor expenditure.

Nearly half of the AUD 1.3 billion increase in international visitor expenditure in the year ending September 2013 was provided by China alone.

Further, the Australian dollar is weakening against a range of important tourism-related currencies, improving the price competitiveness of international and domestic tourism. Leisure travel from Australia’s domestic and traditional inbound markets – the main source of economic value – is also starting to pick up.

“With a depreciating currency and Australia’s proximity to the Asia-Pacific, wide ranging government policies seeking to generate greater tourism economic growth are necessary. Longer term, these will likely have a favourable impact on both tourism and the broader economy,” the report concludes.

Written by Peter Needham

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