Tourism's asleep, and needs to wake up

Tourism is the sleeping giant of the Australian economy.

And it really needs to wake up.

Figures this week showed takings from tourist accommodation - hotels, motels and serviced apartment blocks with 15 or more rooms - rose by $35 million over the year to June.

That amounts to just 1.6 per cent, while the value of the economy's goods and services output expanded by 3.0 per cent.

That figure from the Australian Bureau of Statistics doesn't include anything else tourists spend their money on, including meals and drinks.

But it's a good indicator of the sluggish state of the industry.

The same figures show room occupancy rates falling to 65 per cent in the June quarter, from 66.2 per cent a year before.

That's not what the economy needs as the mining investment boom fades.

If unemployment is to stop its upward creep, something needs to pick up where mining leaves off.

So far, no sector has stepped forward.

Housing is a possibility, and there have been signs that a pickup in lending is feeding into new construction.

But it won't be enough at the current rate, especially with non-residential building looking patchy.

It will need help from other sectors, like tourism.

The Tourism Forecasting Committee, resourced by the government's Tourism Research Australia, updated its forecasts in April.

After the number of short term visitor arrivals to Australia rose by five per cent in 2012/13, the TFC expects an increase of a bit over four per cent in 2013/14.

Further out, it projects a decade of growth averaging 3.5 per cent annually.

That looks like a solid growth rate for inbound travellers and incorporates some significant trends, like a rise in visitors from China from 697,400 in 2012/13 to over a million in 2019/20.

But it would be disappointing if that's all that was achieved.

Even with the world recession and the prohibitively high Australian dollar, visitor arrivals still managed an annual growth averaging three per cent over the past decade.

And 3.5 per cent a year would do little more than keep pace with the rest of the economy.

So, aside from the tendency of increasingly well-heeled tourists from Asia spending more time and money in Australia, it's a fairly uninspiring outlook.

But it's probably the best that can be expected given a key assumption underpinning the forecasts.

At the time, the Aussie dollar was trading at around 104 US cents, and was assumed to fall only slowly to 99 cents by 2015.

It's been below 99 since mid-May and fallen as low as 89 in the meantime.

And, as the commodities boom tapers off, there's a good chance it could see more downside and give tourism the stimulus it needs to awaken from its slumber.

No one can be sure when that might happen, but when it does it won't be a moment too soon.

Source: AAP, 27 September 2013