Weak AUD won’t boost tourism yet: Borghetti

Despite a weaker Aussie dollar, the boost in tourism won’t be felt for a little while longer.

At least that’s what Virgin Australia’s chief executive John Borghetti is saying, according to the Sydney Morning Herald.

Speaking at the launch of the new regional route in Tamworth last week, Borghetti said that if we look to history, both inbound tourism and domestic flying soar whenever the local currency drops to less than 80 cents against the US dollar.

But, as SMH writes, Borghetti is also a strong believer that these healthy boosts to the tourism industry won’t resonate with the country until around the second half of this year.

“Typically there is a time lag and, depending on what market you are looking at internationally, that time lag can vary between six months and 12 months,” Borghetti said.

“I have no doubt that is going to happen. We are seeing a little bit of it now but we will start seeing more obvious change in the second half of this calendar year assuming the dollar stays where it is.”

Virgin Australia John Borghetti Tamworth

Virgin Australia’s chief executive John Borghetti in Tamworth to launch new regional route. Source: Australian Aviation

Last week, the Bureau of Statistics also released new figures that show an increase in the number of Aussies heading OS in the last three months of last year had dipped well below the historical average.

SMH also reported that during his time in Tamworth to launch the six times weekly flight between the regional spot and Sydney, he alluded to the possibility of further expansion in regional operations.

“We haven’t finished with regional Australia,” Borghetti said. “NSW is certainly an area we haven’t done as much in as I would like.”

Virgin’s regional branch, which includes the West Australian airline previously known as Skywest, is taking on QantasLink in a bid to grow bigger domestically.

According to SMH, QantasLink’s chief executive John Gissing said he welcomed the regional competition, and was “very comfortable with [their] position in the market.”

Virgin has typically kept to the WA and Queensland territories in terms of regional operations, but this new reach out to Tamworth could mark the start of more intrastate connections for NSW.

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

Latest comments

Bruce says:
March 9, 2015 at 2:50 pm
Weak AUD? Knee jerk reaction to the USD AUD pairing. The AUD is NOT weak against the Euro, The Pound or the yen, its still very strong for all three. Not to mention many other minor currencies.
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