Aust exporters benefit by strong brand as tourist destination

It was during the 1982-83 recession and the medical doctor was asked by her cheeky 17 year old economics student son where the jobs were going to come from. “Tourism” she said which was met with heckles of laughter from her son and his mates (including yours truly). “What have you got planned Rosemary, more day trips to Burra?” was the reply. But despite the disbelief shown by the young economists, the doctor-turned Senator was clearly onto something as tourism flourished to be the billion dollar export industry we know it to be today.

The contribution of tourism is important in terms of GDP, exports and employment. According to Tourism Research Australia and the ABS, the inbound tourism industry accounted for $8.1 billion of GDP in 2004-05, and Tourism export earnings were worth $18.3 billion in the same year. The industry is an important employer too – especially in creating entry level jobs for your Australians embarking on their careers. The Tourism industry employs over 550,000 workers and is an important source of jobs particularly in regional Australia. Outbound tourism is also important particularly as Australian tourist expertise is being used in countries like China who are building up their own domestic industries. As a result many tourist exporters are accessing the export market development scheme (EMDG) with 455 tourist businesses – representing 13 per cent of all recipients - accessing $12.6 million in grants last year. 

Tourism has also been crucial to creating ‘Brand Australia’. Many other Australian exporters benefit from Australia’s strong brand as a tourist destination and Australia regularly tops the GMI-Anholt index of ‘country brands’ derived from business and consumer surveys.

But after expansion in the 1980s and 1990s, the current decade has been pretty tough for our tourist exporters. The triple whammy of September 11, SARS and fears of bird flu has made things hard internationally for tourism and in Australia’s there been the impact of fuel costs and labour shortages to worry about. Also, after Australia’s strong head-start in lifting our brand thanks to the brilliant Paul Hogan “shrimp on the barbie” campaign, other long-haul destinations in Asia, Southern Africa and South America have also lifted their game.

In recent years, the high Australian dollar has been challenge for the tourism industry. However, the DHL Export Barometer regularly shows that tourist exporters experience less impact on their business than do agricultural producers or the resources industry despite the fact that tourism operators have less opportunity to engage in hedging strategies than other exporters. For the inbound industry, the exchange rate doesn’t seem to affect the decision to visit Australia as much as it may affect the level of average expenditure undertaken by international visitors.

Looking ahead, climate change is a key ‘factor X’ to watch – particularly for the in-bound tourism industry. According to Australian Tourism Exports Council (ATEC) chief Matt Hingerty “the growing global guilt industry” that discourages long-haul air travel because of carbon emissions, is a major challenge for Australian transport and tourism operators.

In conclusion, maybe it’s ok to listen to doctors now and again, even if we economists claim to have all the answers.