Today’s decision by the Reserve Bank to keep the cash rate on hold means Australians will continue to have more disposable income to spend on discretionary purchases like holidays, Tourism & Transport Forum Australia (TTF) CEO Margy Osmond said today.
“Many households’ biggest expense is their mortgage. Lower interest rates make repayments easier, giving people more disposable income,” Ms Osmond said.
“With more money in your wallet, a holiday domestically or overseas becomes a lot more attractive.
“Consistently low rates could see more Aussies heading away on holidays, and also offset the impact of the lower Aussie dollar, which is traditionally considered a factor that discourages people from travelling overseas.
“However, the impact of the Aussie dollar on outbound traveling trends is often overstated.
“As most people plan their holidays well in advance, short-term fluctuations in the currency play little part in their travel decisions,” she said.
Today’s Overseas Arrivals and Departure data show Australians are still taking overseas holidays in record numbers – with short-term departures reaching just under 9.2 million over the past 12 months, which is the second highest on record after March 2015.
“Australians are still travelling overseas in record numbers. However, if we see persistent falls in the Australian dollar against currencies used in key markets like the USA and Europe, people may start to rethink their plans,” she said.
“If the Aussie dollar heads lower, Australians may also start to look domestically for their holidays.
“On the flipside, a lower Aussie dollar also makes us an even more attractive destination for international travellers.
“This means we could be seeing more travellers visiting Australia from our established markets like the USA, New Zealand and the UK as well as from emerging markets in Asia.
“Further falls in the Aussie dollar could also help the number of Chinese visitors to Australia crack the one million mark this year.”