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By Greg Marat
Since its peak of 110 US cents in August 2011, the Australian dollar has been steadily depreciating.
In March of this year, the Australian dollar dropped to 75.6 US cents. This is the lowest point since the global financial crisis in 2008 which created one of the greatest recessions of our generation.
But, this has almost no bearing in Australia’s leisure travel choices.
The RBA (Reserve Bank of Australia) released their findings of the Australia’s overseas departures in March 2015.
Natalia-Eva Trzeciak, a frequent traveler to Europe and the Americas says ‘I don’t think the value of the dollar would have any impact (on my travels). I have done domestic travel but I prefer going overseas because I enjoy the foreign aspect’.
‘It is more culturally enterprising’, she said.
Graph 1.1 Short-term Overseas Departures
The travelling for business, education and employment has only steadily increased.
The business, education and employment sectors has also seen reactionary outcomes from the GFC in 2008, where they have seen a decrease in travel.
In comparison, the leisure sector has increased substantially. It has a contrasting effect on the Australians traveling for leisure.
Tourism Research Australia states that the number of Australians wanting to travel overseas for leisure has increased significantly, while domestic travel has declined.
Stephanie Scobell a frequent traveller to Asia says, ‘I don’t think traveling around Australia is that exciting to be honest. I don’t think I would see anything different from what I would see when I am overseas. There is not much culture here. It is not cheap, it’s expensive here. Places like Thailand and Indonesia is cheap’.
Over the period 1998 to 2010, domestic trips have decreased by 6.4 million trips.
This is a decrease of 8.7 per cent during the twelve years.
In contrast, outbound tourism over the period 1998 to 2010 has more than doubled.
It has increased by 4 million trips with an average annual increase of 7 per cent.
Some of the key factors are the price of tourism, airfares and income with income is the major driver of leisure tourism.
For every 1 per cent increase in an individual income, his or her outbound tourism demand increases by 1 per cent, while domestic tourism demand will decrease by 0.5 per cent.
For every 1 per cent increase in domestic accommodation rates, outbound tourism demand will increase by 0.3 per cent.
For every 1 per cent increase in the Australian dollar, outbound tourism demand will increase by 0.5 per cent.
For every 1 per cent increase in domestic airfares, outbound tourism demand will increase by 0.6 per cent.
Attributes such as an increase in minimum wage and GDP capita would be correlated with an increase in disposable income among Australian Households. Thus, increasing the demand and supply for outbound tourism while decreasing the demand and supply for inbound tourism.
A number of interrelated factors also have contributed to the increase in overseas travel. These include greater affordability of overseas holidays and accommodation (due in part to the increasing competition among airlines), as well as greater marketing and online facilitation of booking and travel information.
In 2014, 11.3 per cent of Australian outbound travel was to Indonesia.
The Indonesian market share has doubled since the last decade.
It was at 5.9 per cent in 2003.
Indonesia is the second favourite destination for Australian travellers.
They are only second to New Zealand’s 13.3 per cent market share.
But, New Zealand’s market shares have been falling.
The New Zealand market share had decreased by 28.8 per cent since the last decade.
It was at 18.7 per cent in 2003.
The trend seems to suggest, by 2020 Indonesia will be the favourite destination among Australians.