Industry Sentiment Decreases, While Other Indicators Suggest Growth – Tourism Barometer June 2018

03 August 2018

The SATIC Tourism Barometer survey for the June quarter of 2018 found that tourism performance and outlook decreased slightly with both indices falling by 3%. The business activity index at 115 points and the business outlook index at 122 points, however, both remain above the mid-point of 100 indicating that sentiment remains positive[1].

When the sector indices are compared with the previous quarter, the activity index was up for the business and conference / business meetings sectors, steady for festivals and events and down for the holiday / leisure sector.

The performance was supported by conferences and business meetings which included the hosting of the Australian Tourism Exchange (ATE) in Adelaide in April. ATE contributed around $10 million[2]to the local economy and provided opportunities for regions to showcase their products.

Adelaide also received two large Chinese incentive groups in June[3]with more than 3,000 visitors contributing an estimated $11.2 million dollars in economic benefit.

Other positive factors mentioned by members included marketing activity, regional events and increased visitor demand from both international and domestic markets. The National Visitor Survey and International Visitor Survey[4] results for the 12 months to March 2018 continue to show record levels of visitation to South Australia with international demand up by 9%, intrastate up by 7% and interstate up by 1% – an increase of 5% overall. The number of visitors from China grew by 14% while visitors from the USA were up substantially by 24%.

Factors that were negatively impacting industry sentiment involved increasing levels of supply, including AirBnB listings and discounting leading to lower yields. While demand appears to be strong, the extent to which individual businesses will benefit will depend on a range of factors, such as the business structure and location, exposure to new markets and the impact of competition.

The cruise ship sector reported a strong performance for the year with 65 ships and 150,680 passengers and crew arriving in 2017/18 – up from nine ships and 6,209 passengers and crew in 2007/08. A total of 86 cruise ship visits are expected to South Australian ports in 2018/19[5].

The ABS Labour Force[6] figures for May 2018 for the accommodation and food services sector in South Australia were also very positive, showing an increase of 21% in the number of persons employed when compared to May 2017. Both full-time and part-time employment were up by 21%.

In the 2017/18 financial year, passenger movements through the Adelaide Airport were up by 3.9% for domestic and 5.5% for international[7]. International passenger movements in the financial year reached one million for the first time.

Growth has been supported by the addition of new routes and additional capacity. Both Malaysia Airlines and Cathay Pacific have announced service increases in the second half of 2018.

SATIC Chief Executive Officer Shaun de Bruyn said that while the SATIC Barometer suggests that industry sentiment has decreased to a degree, there are a wide range of indicators suggesting that demand is strong, with the South Australian tourism industry supporting economic growth and employment.

“SATIC continues to work alongside and support our 900+ members, ensuring for the sustainable growth of profitable tourism businesses.”

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[1] An index above 100 indicates growth with more businesses experiencing an increase when compared to those experiencing contraction. An index below 100 indicates more businesses experienced weaker conditions.

[2]https://eeaa.com.au/event/australian-tourism-exchange-ate-2018/

[3]http://www.travelandtourworld.com/news/article/adelaide-welcomed-3000-chinese-tourists-for-incentive-trip/

[4]Tourism Research Australia www.tra.gov.au

[5] http://tourism.sa.gov.au/news-and-media/news/2018/jul/01/full-steam-ahead-2020-cruise-strategy-launched

[6] Australian Bureau of Statistics. Cat. 6291.0.55.003. Labour Force Australia, Detailed

[7] https://www.adelaideairport.com.au/corporate/wp-content/uploads/2018/07/4.-AAP_Quarterly-report_-June-18.pdf


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