Strong inbound tourism and a weak Aussie dollar are likely to spur increases in the price of hotels and airfares in Australia in 2020, making the country less competitive with New Zealand but more competitive with Indonesia, according to a new report.
The report was issued before the Australian dollar dived to a 10-year low just before the weekend, its lowest level since the Global Financial Crisis.
The Australian dollar is now worth (according to live market rates yesterday) 68 US cents.
Against various currencies, one Australian dollar equals: USD 0.68, EUR 0.62, GBP 0.56, JPY 72.48, SGD 0.94, NZD 1.04.
Leading business travel company CWT (formerly known as Carlson Wagonlit Travel) and the Global Business Travel Association (GBTA) have produced a joint annual market forecast.
Among its predictions:
- The price of flights in Australia will climb by 4.7% (in local currency) in 2020.
- Hotel rates will rise by 4.4% in 2020.
A 4.7% airfare increase is more than double the forecast global airfare increase of 2.3%.
FOR COMPARISON: Airfare rises forecast in other countries (in local currencies): Australia 4.7%, New Zealand 3.5%, Indonesia 7.5%, China 4.5%, India 5%, Singapore 2%, Japan just 0.4% and same for Hong Kong.
For hotels, the CWT/GBTA report forecasts a price increase in 2020 of 4.4% in Australia, in local currency, which is almost double the forecast global increase of just 2.3%.
FOR COMPARISON: Hotel rate rises forecast for other countries (in local currencies): Australia 4.4%, New Zealand 3.1%, Indonesia 6.3%, China 2%, India 6.8%, Singapore 1.6%, Japan 1.8% and Hong Kong 3%.
The fall in the Australian dollar explains much of the effect. The sixth annual Global Travel Forecast, published by CWT and GBTA, says that after posting sharp rises in 2019, price rises in the global travel industry are likely to slow in 2020.
Manager at CWT Asia Pacific, Jaclynn Kidd told China’s Xinhua news agency that inbound travel to Australia was likely to remain strong, partly due to the lower Australian dollar, which in turn pushed up the price of local hotel rooms.
Overall, the report found that while the global economy is doing well overall – and is expected to grow a solid 3.6% in 2020 – many uncertainties exist.
“The risks and ambiguity have increased over the past few months – not least the threat of escalating trade wars, the impact of Brexit, possible oil supply shocks, and the growing likelihood of recession,” CWT’s president and chief executive, Kurt Ekert, commented.
The overview says although Asia’s expansion has slowed down due to worsening US-China relations, tighter global financial conditions, and natural disasters., the region is still the most dynamic, with “steady GDP growth, benign inflation, and a sense of optimism”.
Written by Peter Needham
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