Bogans still fleeing in April

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By Leith van Onselen

The Australian Bureau of Statistics (ABS) has just released overseas short-term arrivals and departures figures for April, which contained mixed fortunes for the tourism industry.

While short-term resident departures decreased by -0.3% 0ver the month in seasonally adjusted terms – partly driven by a reduction in (bogan) departures to South East Asia – short-term visitor arivals fell by -0.5%.

In the 12 months to April 2012, the annual number of depatures increased by 7.8% relative to the corresponding period of the prior year, whereas arrivals rose by a more subdued 3.1%.

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Taking a longer-term view, the ratio of annual tourism arrivals to departures remains near 25-year lows (see below chart), helping to explain why domestic tourism industry is hurting!

And as suggested 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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In the year to April 2012, 7.9 million Australians holidayed overseas – more than double the level of 10 years ago (3.4 million). This compares to only 6.0 million tourist arrivals over the same period (4.8 million 10 years ago).

South East Asia (particularly Indonesia and Thailand) remains Australia’s favourite holiday destination, receiving 32% of Australia’s departures in April 2012. This was followed by Oceania (20%), the Americas (13%),North West Europe (12%), and North East Asia (11%):

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Despite the modest decline this month, 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 April 2012. This was followed by North Western Europeans (18%) and South East Asians (15%):

With the Aussie dollar drifting lower, thereby pushing-up the cost of overseas travel and making Australia a cheaper holiday destination, there is the prospect that the Australian tourism industry could receive some respite over coming months. It will be interesting to assess bogan sensitivity to this price shift in the month’s ahead.

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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.