Australian tourism operators feel the European pinch

Sydney Morning Herald: Tourism operators say the number of visitors from Britain and the rest of Europe could decline as much as 15 per cent this year because of the high Australian dollar and weak northern hemisphere economies.

Compounding the problems for domestic tourism operators who rely on overseas visitors is the record number of Australians taking advantage of the strong dollar and cheap fares to travel overseas.

The dollar is trading near an all-time high against the euro and a 25-year high against the pound. One of Australia’s largest inbound tour operators, AOT Group, said bookings from Europe were soft and likely to fall 10 to 15 per cent this year.

‘’Eventually it gets to the point where the euro is really starting to bite,’’ Andrew Burnes, AOT’s founder and chief executive, said.

Britain is Australia’s second-largest inbound market, the source of about 700,000 visitors a year.

The British are regarded as more valuable tourists than New Zealanders because they tend to stay longer. Burnes said tourism operators who relied on overseas visitors in areas such as far north Queensland, Kakadu and Alice Springs were ‘’feeling the pinch’’.

But he said operators were optimistic that an expected increase in tourists from Asia would help fill any void. The number of American visitors was also ‘’holding up’’.

Fares on the Australia-US route have been forced lower since Virgin Blue’s long-haul offshoot, V Australia, and the US airline Delta began competing against Qantas and United Airlines in 2009.

Although inbound tourism operators are suffering, airlines and travel agencies are benefiting from the number of Australians taking trips overseas  — 7 million in the year to October. The figures from the Bureau of Statistics also show departures in October were almost 11 per cent higher than the same month in 2009.

Flight Centre, Australia’s largest travel company, said demand for international trips had led to a ‘’healthy increase’’ in bookings for the Christmas holidays compared with the same period last year. ‘’This is not unexpected, given that the Australian economy and consumer confidence were still in recovery mode 12 months ago,’’ a spokesman said.

The most popular destinations for Australians include the US, Thailand, Fiji, Bali and New Zealand. ‘’Within this group, the USA has really taken off,’’ he said.

Fresh from the grounding of its A380 fleet in early November, Qantas has had to contend with snow storms in Britain and US disrupting flights. But the airline said demand had been strong in December due to the strong dollar and low fares.

‘’It has been a relatively strong travel season,’’ a spokeswoman said. But Jetset Travelworld, part-owned by Qantas, has said it would take up to 18 months for travel demand to return to levels prevailing before the global financial crisis.