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Fall in Australian dollar boosts the country's tourism
20/Oct/2015
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19.10.2015
INTERNATIONAL Fall in Australian dollar boosts the country's tourism
Christian Stead is about to blast away the sweat and toil of another working day in the surf at Manly Beach, in Sydney.

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The cleaning company director has an eye on his next much-needed holiday, and is one of a growing number of stay-at-home tourists who are shunning foreign travel in favour of destinations across Australia.

Since mid-2014, the Australian dollar has fallen by around 25% against its US cousin, and has been out-muscled by the British pound.

While many of Christian's friends unwind in Thailand and the Indonesian island of Bali, he now prefers his own backyard.

"The dollar is down so we are getting more bang for our buck," he told the BBC. "Noosa (on Queensland's Sunshine Coast) is one of our favourite spots. I'm off to Batemans's Bay (280km south of Sydney) in a couple of weeks.

"Melbourne, Tasmania - you name it. We're laughing. We're blessed in Australia. It's not rocket science. Everyone is trying to get to Australia. It is the best country in the world," he says.

Not everyone will agree, but what is not in dispute is the growing popularity of Australian vacations among both foreign travellers and the locals.

"We're blessed in Australia," says Christian Stead

Official figures show that almost 620,000 international tourists came in August, a rise of about 2%, while the number of Aussies heading overseas dipped by 0.7%.

"We are continually seeing very high numbers of short-term overseas arrivals and fewer Australians are deciding to go offshore because the currency has fallen by so much, and domestic trips become cheaper for them," explains Diana Mousina, an economist at the Commonwealth Bank of Australia.

The Australian dollar is being weighed down by various factors, including falling commodity prices that have hit the nation's terms of trade, which measures the value of exports compared to imports.

A long resources boom that helped to ward off the worst effects of the global recession is fading, and Australia's economy is in transition as it seeks new ways to prosperity.

"Tourism is extremely important. I think that people actually forget it is our third largest export," Ms Mousina says.

The tourism boost will help offset a fall in mining activity due to a collapse in commodity prices

The domestic travel industry employs around 530,000 Australians, many in areas far beyond the major cities where jobs can be scarce.

The sector packs a mightier financial punch than agriculture, and generates about A$43bn ($31.2bn; £20.6bn) each year.

Australia's Reserve Bank believes a weaker currency will help make the nation's shift towards a non-mining future far smoother. Not everyone wins, of course, but central bankers take the view that cheaper exports are broadly beneficial.

The Aussie dollar sits around at around $72 cents, and economists forecast it could tumble even further against the US currency. This would inject more vigour into the tourism trade.

But Dr Ranald Taylor, from Murdoch University, believes that it is foreigners, not the locals, who will make a significant difference.

"There is little doubt that the domestic tourism industry in Australia will expand, but not driven by locals but by overseas visitors, particularly the people from China, Singapore and Malaysia," he says.

He doesn't think that a depreciating currency will stop Australians travelling overseas because of affordable air travel and the high cost of holidaying at home.

"Australia is expensive," he says. "No matter how you look at it, the hotels, food and accommodation are still much cheaper overseas than Australia.

"If I am an Australian, I would go to Bali for my annual holiday. It is a lot cheaper. For very little money you can stay in a high-end hotel. Over here you would be lucky to get a caravan for that kind of money."

Many foreigners, though, are happy to pay. Last year, Chinese visitors pumped US$4bn into the Australian economy. That figure could more than double by the end of the decade, according to some estimates.

Stephen Arnerich, the owner of Sydney-based Runaway Tours, which offers foreign-language excursions, believes that the tourism industry is rebounding.

"The American market has been fairly slow because the Australian dollar has been quite high, and also the American economy hasn't be so great, either.

The Great Barrier Reef contributes 5.4bn Australian dollars to the economy each year

"But in the last six months, or so, we are seeing more Americans coming through. We're getting lots of clients coming through from the Chinese market. It is getting much more popular," he says.

'Born travellers'

Many Australians are also rediscovering the beauty and diversity of their own country.

"Where we can, we do like to stay local because there is lots to see and do at home," says Jennifer, a mother-of-two from Manly, in Sydney.

She has recently returned from a trip to the Queensland city of Cairns, but will head off to Fiji, in the South Pacific, on the next family getaway.

But despite the dollar's weakening buying power overseas, she believes that Australians will always be curious to explore what lies beyond the horizon.

"I think we are just born travellers and no matter what the dollar is doing we are not going to stop travelling."











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