Tourism operators told high Aussie dollar 'no excuse for woes'

TOURISM operators have been told they cannot use the sky-high dollar to excuse their woes.

TOURISM operators have been told they cannot use the sky-high dollar to excuse their woes, with new research showing interest rates weigh more heavily on Australians' holiday decisions.

The Roy Morgan Research data found the propensity of Australians to take an annual holiday tracks interest rate movements rather than the exchange rate.

When people can afford to take a holiday, they increasingly choose to travel overseas, regardless of the comparative value of the dollar.

Tony Charters, who is convening the inaugural Tourism and Events conference in Melbourne in September, said: "This debunks the exchange rate as a prime influence on people's holiday plans."

Separately, analysis on exchange rates by Tourism Australia and Tourism Research Australia shows the fundamental drivers of tourism demand for Australia are the state of the economy in source countries and consumer confidence.

"Exchange rates have some influence on destination choice and travel purchases, but that influence is modest and only one part of the consumer's decision-making process," the report says.

"Exchange rates have more bearing on tourism expenditure than visitation. People are still travelling to Australia at record levels."

With the dollar breaking through the $US1.10 mark this week amid indications it would continue to rise against the greenback, the exchange rate is compounding the hangover for Australian tourism from the 2008 global financial crisis.

The surging dollar simultaneously makes Australia more expensive for most overseas visitors, and international travel cheaper for Australians.

This is particularly so for the US, where post-global financial crisis blues have triggered heavy discounting in accommodation and for holiday packages, even in prime destinations such as New York and Las Vegas.

Australians have been able to buy a return business-class seat to Japan for less than $1000 this winter, and stay in a four-star hotel in Tokyo for $130 a night.

Brisbane businessman John Sharpe, who operates the Riverlife activity and function centre at the foot of the Kangaroo Point cliffs, said yesterday his clientele used to split evenly between overseas tourists and Australians. Now it was more like 75-25 per cent in favour of the locals.

Last year Australia had 5.9 million visitors, up 5.4 per cent on 2009. New Zealanders accounted for nearly a fifth of these.

Mr Charters said this highlighted the challenges confronting Australian tourism. "It is unacceptable that Australia still relies on New Zealand - a country of less than 4.5 million - as the biggest source of international visitors," he said.

"The industry must face up to the new realities and do better."