Following a tough few years for Australia's domestic tourism industry, IBISWorld general manager (Australia), Karen Dobie said the industry's outlook is on its way up – with total expenditure tipped to reach $71.9 billion by 2013.
"In the past year, the total number of domestic overnight trips grew by 5.8 per cent, the total number of visitor nights grew by 6.7 per cent and visitor expenditure increased by a significant 17.5 per cent. In the coming year, IBISWorld expects these figures will rise by a further 4.0 per cent, 4.6 per cent and 5.9 per cent respectively," Dobie said.
Commenting on this growth, Dobie referenced increased visitation from key markets including China, as well as renewed interest among Australians to discover their own backyard.
"While the high Australian dollar and strong discounting strategies will continue to see many Australians flock overseas and domestic weekend getaways increased in popularity last year," Dobie said.
Discovering Down Under
As of June 2012, there were 5.54 million international visitors to Australia, representing an increase of 1 per cent on the previous year. China dominated the list as the top international inbound market by economic value.
"In the coming five years, IBISWorld anticipates visitors from China, India, the United Kingdom, New Zealand and the United States will play the most significant role in contributing to Australia's tourism industry. Tourism Australia's marketing efforts in China, and the gradual rebound of the UK and US economies will support growth," Dobie said.
The tourism sector winners
Transport
According to IBISWorld, aggressive competition from low-cost carriers and heavy discounting strategies have characterised the travel-transport sector in recent years, and Australians have become adept at shopping around for the best deal to get them to their destination.
"In particular, we have seen low-cost airlines increase their range of destinations, driving competition on routes and resulting in downward pressure on airfares, as well as an increase in cruises driven by lower prices and improved products," Dobie said.
Hire car rentals and bus travel are also expected to rebound off the back of increased domestic tourism.
Hotels, motels and serviced apartments
The growth in international tourism, particularly from Asian markets, is expected to bode well for the accommodation sector – with IBISWorld anticipating total spend across hotels, motels, resorts and serviced apartments to reach $11.4 billion in 2012-13.
"And with domestic tourism, which currently contributes 77.3 per cent of total accommodation revenue, also on the up, the future is certainly looking much brighter for Australian accommodation operators," added Dobie.
Tour operators
Inclusive package travellers account for about 15 per cent of all visitors to Australia, while those arriving on group tours account for around 8 per cent of all arrivals. Packaged and group tours are particularly popular with the Chinese. In 2011-12, 209,000 visitors from China came to Australia as part of a group tour – accounting for 52 per cent of all packaged tour visitors.
"While this certainly provides a boost to tour operators, it also presents new challenges – such as the provision of Chinese language materials and catering to Chinese food tastes within accommodation," Dobie said.
Retail
The growth in international tourism - particularly from China and India - is expected to benefit the struggling retail sector, especially within the luxury goods segment.
"The expansion of Louis Vuitton into Sydney last year is an example of this trend, with increasing numbers of high-yielding Asian tourists driving demand for high-end retail in key capital cities," Dobie said.
"Other luxury brands such as Burberry, Bottega Veneta, Hugo Boss and Salvatore Ferragamo have all established retail stores over the past year, attempting to not only lure domestic customers, but also to take advantage of cashed-up overseas tourists, particularly those from China and India," Dobie said.
