Australia - Travel & Tourism: A volume and innovation driven industry (Strategy, Performance and Risk Analysis)
Australia’s travel and tourism industry is highly rewarding, with high volume and value growth. Domestic trips increased from 74.4 million in 2012 to 88.9 million in 2016, while international arrivals and departures increased at CAGRs of 8.5% and 5.2% respectively over 2012-2016.
Rising tourist volumes have led passenger airlines to increase their fleet size and the number of seats available. Full service airlines have recorded an increase in the number of seats sold for both leisure and business tourists, with its total seats sold increasing at a CAGR of 3.0% over 2012-2016. Australian accommodation facilities are equipped to cater to the large numbers of leisure and business tourists traveling in the country. International arrivals for leisure purposes recorded a CAGR of 11.3% over 2012-2016 owing to the government's efforts to promote Australia as a popular and adventurous tourist destination.
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Increasing business and leisure travel to drive domestic and international trips in Australia
The depreciation of the Australian dollar against the US dollar over the historic period encouraged Australian tourists towards domestic tourism rather than outbound tourism. Domestic trips increased at a CAGR of 4.6%, from 74.4 million in 2012 to 88.9 million in 2016, and is expected to increase further at a CAGR of 3.4%, from 88.9 million in 2017 to 104.4 million in 2021. International arrivals registered strong growth, increasing at a CAGR of 8.5%, from 6.0 million in 2012 to 8.4 million in 2016. Furthermore, it is expected to increase at a CAGR of 6.7%, from 9.1 million in 2017 to 11.8 million by 2021. Government initiatives such as the Working Holiday Program, Approved Destination Status Scheme, and campaigns such as There’s Nothing Like Australia, are major drivers of inbound tourism, boosting international arrivals.
Full service airlines dominate the passenger airlines market
Full service airlines dominate the market and currently contribute an 82% share of total passenger airlines revenue. The market for full service airlines is expected to increase at a CAGR of 1.5%, from US$14.9 billion in 2017 to US$15.8 billion by 2021. The market for low-cost airlines is also increasing and is expected to increase at a CAGR of 2.0%, from US$3.2 billion in 2017 to US$3.4 billion by 2021.
Internet penetration and on-line portals to drive travel intermediaries’ growth
Australian travel intermediaries’ revenue declined over the historic period, from US$29.3 billion in 2012 to US$26.0 billion in 2016, owing to currency devaluation during the period and the country’s economic slowdown. However, the market value of travel intermediaries is expected to increase at a CAGR of 5.6%, from US$28.1 billion in 2017 to US$34.9 billion in 2021.