The Australian dollar has had something of a turbulent recent history. Fluctuating frequently, in January 2016 it reached a low of 0.69 against the USD. Since then it has been slowly rising (with persistent peaks and troughs), until, in July and September 2017, it was valued at above 0.80 to the USD (statistics courtesy of the Reserve Bank of Australia).
As it continues to hover around the 0.80 mark, many of the industries that have benefitted from the Australian dollar's depreciating values in recent years are beginning to feel uneasy. Tourism is one sector that's anticipating difficult times ahead - but are these worries justified?
As the AU dollar increases, visitor numbers may decrease
If the value of the AU dollar continues to rise, the country will become less attractive to international tourists, who will find Australia (and Queensland) a far more expensive destination to visit than it was previously. Likewise, domestic tourism will also shrink, with Australians who would normally holiday at home deciding they can afford to go elsewhere.
In 2012-2013, when the AU dollar was frequently valued at over 1 USD, a similar trend happened, with Australian Bureau of Statistics data showing a much slower increase in visitor numbers than for the period 2013-2016, when the dollar began to decrease again.
The exchange rate ‘not the only thing driving tourism’
If tourism operators have the right foundations, if they've found the right niche and are offering something truly exceptional, the exchange rate doesn't matter - people from all over the world will still come and visit.
This means it's the business owners who take the longer term view that will do well. People shouldn't be scared of the fluctuating exchange rate - it's a natural part of being in a global economy. What matters is how you prepare for these changes - and thinking about investments for the longer term is important.
Two areas Queensland tourist operators could prepare
- Service expectations - some of our international guests can be extremely high, particularly in comparison to our laid-back Aussie style, so future hospitality training may need to be adapted to cater appropriately.
- Being culturally aware - China is clearly a significant and growing market for local tourism. We could be more culturally-aware and welcoming of our Chinese guests including potentially more multi-lingual signage at airports, train stations and cruise terminals
Unique offering can guide the way forward
The last five years of increased tourism will also play in Australia's favour. There were 8.6 million visitor arrivals for the year ending July 2017, according to Tourism Australia, and word of mouth will hopefully mean people continue to visit the country from overseas, having heard about their friends or family's experiences.
All in all, tourism is not set for the dire days that many industry figureheads are anticipating. Yes, some businesses may suffer, but it's the ones that are really strong, the ones that have a unique offering that will win out - and the tourism industry will be all the stronger for it.