Qantas woes, weakened dollar hit ANZ travel market

Qantas woes, weakened dollar hit ANZ travel market
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The weakening of the dollar and the implementation of Qantas’ dramatic turnaround strategy have seen the “once rosy” outlook for the Australian travel market significantly deteriorate, according to a new report.

PhocusWright’s Asia Pacific Online Travel Overview Seventh Edition revealed that the ANZ travel market is expected to make “paltry gains” through to 2016, following a “rough” 2013.

“Travel demand started to taper off with the weakening of the Australian dollar, as travellers who were once riding against the global downturn and enjoying cheap airfares showed signs of hesitation,” research analyst Chetan Kapoor told Travel Today.

“Dismal performance of the domestic air market, dominated by Qantas, was also a significant contributor to the market’s troubles and had a domino effect on the hotel and car rental segments.”

As a result, the year saw the total ANZ travel market decline 8% while online shrank by a less dramatic 4% with growth in the online accommodation sector offsetting the slowdown.

The only market in Asia Pacific that performed worse than Australia over the course of the year was Japan, Kapoor revealed.

Although Australia maintains its claim to the highest online penetration in the region, it is expected to “cede its position” to India by 2015.

Meanwhile, online bookings in Asia Pacific as a whole are increasing at twice the rate of the overall travel market, even as the overall rise of online travel penetration starts to slow.

The report showed that online accounted for a quarter of APAC’s total travel market in 2013, up from one fifth the previous year.

Mobile bookings in the region are growing at an even faster rate, it revealed.

Although Kapoor said ANZ online travel agents (OTAs) had been “slow in seizing the mobile opportunity” compared with those in China and India, he reported a significant change over the last year.

“OTAs have ramped up their mobile offerings, especially apps, which is crucial in retaining customers and building loyalty,” he said.

“Mobile share of OTA gross bookings are already in double-digits, in line with other major APAC markets and are forecasted to account for a quarter of their overall sales by 2016.”

Overall, APAC mobile travel gross bookings doubled from US$3.2 billion in 2012 to $6.4 billion in 2013 with substantial opportunities identified for the future with 30% of the region’s population expected to have a smartphone by 2016 – up from 19% in 2013..

Meanwhile, total travel gross bookings for Asia Pacific shrunk 1% from $325.9 billion in 2012 to $322.6 billion in 2013, seeing it fall behind Europe, due to depreciation of eight out of 13 local currencies against the US dollar. However, with stable foreign exchange conditions, the region is expected to bypass Europe in 2014 to reclaim its title as the world's largest regional travel market.

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