Skroo: Ebola and the dollar

Skroo: Ebola and the dollar
By admin

Flight Centre managing director, Graham Turner has dismissed concerns the company’s slower growth in outbound departures reported in August was caused by the Australian dollar’s recent weakness, saying the roots of the slowdown could be traced back six months.

“We believe that currency in itself is not a critical drive of Australian outbound travel,” Turner said at the company’s AGM yesterday.

“Given that leisure demand in Australia slowed in-store in May after the budget and we have not yet seen a full recovery, it was inevitable that this would translate to slower growth in Australian outbound travel in the ensuing months.”

The company reported a 4.4% increase year-on-year for outbound departures in August.

"Australian outbound travel grew in years when the dollar traded at 48 US cents. The outbound market also grew in years when one Australian dollar was worth US$1.10," Turner said.

This year, Turner said travel to America actually increased with first quarter data showing that the US gained more market-share compared to the same period last year.

“We find that customers typically downgrade to lower price products, travel for shorter periods or pay more for their holiday products in advance in Australian dollars if they are concerned about currency”.

“Of course, they may opt to travel to the multitude of other destinations that trade in other currencies,” he said, adding travellers will not automatically switch to domestic holidays as there were “compelling” reasons to travel overseas.

Turner once again said he believed Australia was experiencing a “golden era of travel” highlighted by “significant” advances in airfare affordability.

Turner said he believed Ebola not to have any “meaningful impact” on travel given the major areas of concern were not mainstream tourist destinations, contrast to SARS a decade ago when parts of Asia and Canada were affected and its spread quicker to other countries.

Pic credit: AFR

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