Dollar supporting growth
Despite a good deal of pessimism through the year, the Australian economy grew by about 3 per cent in 2015, with household consumption holding up reasonably well.
This sanguine result combined with a short salvo of other positive data of late – largely commodity price related — has seen the Aussie dollar levitate back above 74 US cents. Through most of the latter half of 2015, however, the dollar was tracking in a range between 69 and 73 cents, which encouraged some exchange rate sensitive sectors of the economy to thrive.
Tourism & education boom
The latest figures from Tourism Research Australia (TRA) showed that a record 6.86 million visitors made the trip Down Under in 2015, a buoyant 8 per cent increase from 2014.
Notably there was a 10 per cent increase in the number to holiday makers to 3.1 million.
Meanwhile more folk than ever before nominated their reason for travel as being to visit friends and relatives at 1.8 million. This represents a huge 77 per cent increase over the past decade, reflective of the fact that more than a quarter of Australian residents were born overseas.
There was another dramatic 21 per cent increase in the number of Chinese visitors in the last calendar year, Indian visitors were up by 18 per cent, while visitor numbers from the United States also swelled by 10 per cent as American travellers enjoyed a favourable shift in the exchange rate.
When examining the purpose of trip the biggest percentage increases were for education, with a massive 21 per cent increase in this category to 459,000, and for reasons of employment.
Total trip spend for education visitors exploded 30 per cent higher to $8.7 billion, and education now accounts 24 per cent of total trip spend. International students are forecast by the Department of Border and Immigration Protection (DIBP) to be one the key visa categories driving population growth for the remainder of the decade.
Total trip expenditure leapt by 18 per cent to $36.6 billion, while actual expenditure in Australia soared by 20 per cent to $24.6 billion.
The main driver of the increase over the past decade, as you may be able to guess if you live in a capital city, has been a near sevenfold increase in expenditure by Chinese visitors from $0.9 billion to $6.2 billion.
While well over half of international visitor expenditure continues to benefit the capitals, there was a welcome increase in regional tourism activity and expenditure, notably in national parks and wineries.
Boom to continue?
Tourism Research Australia forecasts further strong growth in tourism, inbound arrivals, and international visitor expenditure through financial year 2016 and beyond. Indeed if TRA forecasts for the next decade prove to be even remotely accurate, the impressive uplift experienced in inbound arrivals to date represents only the beginning.
Chinese visitor numbers are projected to comfortably more than double over the next ten years. The way demographic statistics have been tracking lately, I wouldn’t bet against that trend.