A combination of low wages growth, higher household debt levels and dwindling disposable income could see many Australians cut back on their annual summer holiday, new research undertaken by the Tourism & Transport Forum Australia (TTF) and Nielsen has found.
The research is contained within the inaugural edition of TTF’s new quarterly publication, Tourism Tracker, which for the first time provides a comprehensive insight into the economic factors that influence an Australian’s decision to travel.
TTF Chief Executive, Margy Osmond, said this edition explores what areas of spending people are most likely to cut back on if households need to tighten their belts, with three of the top five areas relating to the hospitality and tourism sectors.
“A range of economic factors are clearly starting to bite household budgets and in worrying news for the tourism and hospitality sectors, they are the industries most likely to be among the hardest hit when people start to tighten their belts,” Ms Osmond said.
“Our research found that if forced to cut back on spending, 73 per cent of people said they would scrimp on eating out and 54 per cent of people said they would look to save by skipping on holidays or leisure travel.
“The first edition of the Tourism Tracker argues that persistent low wages growth and a slowdown in household consumption growth, coupled with many households carrying higher debt levels, are the biggest risk to our local tourism outlook.
“With summer holidays around the corner and many economic indicators showing little sign of an upward lift, the tourism sector may have a nervous few months ahead.”
Ms Osmond said the Tourism Tracker will provide a valuable and unique insight for the tourism sector on the future direction of Australia’s visitor economy by delivering an in-depth analysis of the key factors influencing Australians decision to take a holiday.
“The Tourism Tracker is the first time there has been an analysis of how the current economic climate stands to impact the tourism sector,” Ms Osmond said.
“As a sector, we have a lot of ‘backward looking’ data showing how tourism is progressing. We know how many Australians have recently taken a holiday, how many international visitors have come to our shores, how much people spend when on holiday here, the reason for people’s trips and the number of bed nights they had.
“The missing piece of the puzzle is commentary around the economic trends and factors influencing Australians’ future travel decisions.
“Through the Tourism Tracker, TTF is helping fill that gap with a more ‘forward-looking’ perspective on the sector.
“It brings together a range of indicators that impact on the cost of going on holidays, including measures of domestic travel, accommodation, fuel, international travel and interest rates.
“Through this quarterly report we will have a more complete picture of what our future domestic and international travel trends might look like and on how Australia is performing against the Tourism 2020 targets.”