Deloitte released its Tourism Market Outlook 2023 late last year with the headline “Travel demand proves resilient in the face of economic headwinds”.
The report notes that the Australian tourism sector has rebounded strongly, and while recent months have shown slowing growth in domestic travel, the return of international visitors has picked up pace, with September data showing a recovery of 83% on pre-pandemic levels.
The reopening of China earlier this year, and the return of Australia’s Approved Destination Status with China have given a boost to visitor volumes with aviation capacity from China at over 70% of 2019 level as at September 2023.
International visitors are building momentum, with holidaymakers at 60 per cent of expenditure and 47 per cent of trips compared to pre-pandemic levels. Visiting friends and relatives (VFR) at 115 per cent of expenditure and 86 per cent of trips while business is at 85 per cent expenditure and 62 per cent of trips.
In relation to education, The Koala was initially a tad miffed that the report showed international education related visitor expenditure only at 73 per cent of pre-pandemic levels and trips at 59 per cent of pre-pandemic levels. With Australia surpassing its student commencement and enrolment numbers against 2019 this year, how could it be?
The Koala followed up with the author.
Adele Labine-Romain is the National Travel, Hospitality and Leisure Sector Leader and Partner at Deloitte Access Economics, her response:
“There are a few differences in the data sets used across the tourism and education sectors.
The most significant is the definition of a visitor – someone staying for less than 12 months (United Nations World Tourism Organisation), therefore education visitors are a subset of the categories in the Austrade education pivot table data of commencements and enrolments..
Another factor is the specific timing of the data – in the chart shown in the Tourism Market Outlook, the data is for year ending June 2023 which was the most recent at the time we were preparing the forecast. Given visitation from China was still ramping up (though quickly) as at June 2023, this will impact the results. A further timing factor is related to the data collection, as visitor data is captured when visitors depart Australia and so those commencing (as reflected in the Austrade data) in the recent year are unlikely to be departing in the time period considered.”
Of course. The first point Adele makes is vital and one that was picked up within section 2.15 in the Interim Report into International Education. It relates to how the length of stay in Australia affects the calculation of expenditure. Austrade said:
Correcting that the statistic is more accurately 68 per cent, Austrade clarified that this percentage represents the total international student expenditure in the 2019 calendar year, including students here for less than 12 months and more than 12 months, as a proportion of total international visitor spend. Comparatively, the proportion of expenditure in Australia by international students here for less than 12 months of the total international visitor expenditure was 39 per cent. Austrade explained that the way in which the data is analysed depends on the definition of visitor in the context of the visitor economy:
International students here for less than 12 months are counted as part of the visitor economy and, while students in Australia for longer than 12 months are not technically counted as visitors for the purposes of the visitor economy definition, THRIVE 2030, the national strategy for Australia’s visitor economy, makes clear that the targets set for the recovery and sustainable growth of the sector include spend by international students here for more than 12 months. Many of the spend patterns of short-term and long-term students are similar and naturally international students undertake tourism activities while they are staying in Australia.
Further good news is that international aviation capacity in Australia has picked up the pace and is on track to reach 90% of pre-pandemic levels by the end of 2023 which will be helpful across both the tourism and international education sectors.
The Koala encourages a thorough read of the report.
A big thank you to Adele Labine-Romain, the Author of the report and National Travel and Tourism Sector Lead Partner at Deloitte Access Economics, for her collegiality.
The report can be seen in full here.
