Bogan exodus drives tourism woes

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The Australian Bureau of Statistics (ABS) has just released overseas short-term arrivals and departures figures for December, which caps off a record year for outbound international travel.

In seasonally adjusted terms, short-term resident departures rose by 0.9% in December, whereas short-term visitor arrivals rose by only 0.1%. In the 12 months to December, depatures increased by 7.2% year-on-year, whereas arrivals rose by only 1.4%.

According to the ABS, Australians made 7.8 million short-term trips overseas in 2011, up from 7.1 million visits in 2010 and more than double the levels ten years ago (3.4 million visits in 2001).

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Taking a longer-term view, the ratio of annual tourism arrivals to departures has also plummed a new 25-year low (see below chart). Little wonder the domestic tourism industry is reeling!

And as pointed out above, the fall in the ratio of arrivals to departures has been caused predominantly by an exodus of Australians choosing to travel abroad rather than domestically:

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At the beginning of last decade, Australia received around 7 overseas visitors per year for every 5 Australians holidaying abroad. But now this ratio is no longer in Australia’s favour, with just under 4 overseas visitors holidaying in Australia in the year to December 2011 for every 5 Australians visiting abroad.

South East Asia (particularly Indonesia and Thailand) remains Australia’s favourite holiday destination, receiving 30% of Australia’s departures in December 2011. This was followed by Oceania (22%), the Americas (13%), North East Asia (11%) and North West Europe (11%):

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Indeed, it seems that the Aussie bogan’s penchant for Bali and Thailand, in particular, is driving much of the decline in Australian tourism:

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By contrast, the most foreign visitors to Australia came from Oceania (mostly New Zealand) and North East Asia, which each accounted for 23% of arrivals in December 2011. This was followed by North Western Europeans (19%) and South East Asians (15%):

Clearly, the high Australian dollar is crippling Australia’s tourism industry, driving more Australians to holiday offshore whilst also discouraging foreigners from holidaying in Australia. Expect the pain to continue.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.