Arrivals and Departures data confirms tourism strength continues into Q2

Wednesday’s release by TRA of the International Visitor Survey for the first quarter (see commentary here) left no one in any doubt that tourism in Australia was moving ahead strongly. Today we see the first ABS data for arrivals and departures relating to the second quarter with April’s numbers; and they confirm that the strength continues.

Short term arrivals were up a seasonally adjusted 11.6% from this time a year ago and over the course of the past 12 months have grown by 8.5% (the strongest annual growth since Nov 2014). China leads the way with arrivals up 23.2% yr/yr and up 23.7% for the 12 months as a whole. China now accounts for 14.6% of the past 12 months’ worth of arrivals; a new record high. As was highlighted in the IVS data earlier this week, the US is also a strong growth market with arrivals up 20.5% from a year ago.

Short term departures also increased, albeit at a much slower rate. Departures were up a seasonally adjusted 2.2% for the year and 3.8% for the total of the previous 12 months. However, on a Trend basis, departures actually fell slightly in April (-0.2%) which is the first decline in 18 months; since June 2009 there have only been three other months where we have seen Trend departures decline. It may be that with the A$ seemingly settled at a weaker level  (and indeed having weaken further since April) we may be starting to see the end of the Aussie overseas travel boom. As the chart below makes clear this boom has been on a one way ride since early 2004; with only a temporary GFC-induced pause in ’08-’09. In early 2004 the A$ was trading at similar levels to now but overseas departures have increase by about 2.8 times since then. Part of that growth can certainly be pegged to the A$ strengthening to, and then beyond, parity with the US$, along with a general increase in Australian living standards over the same period.

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