• Victoria Tourism Industry Council (VTIC)
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High wages, lower prices a tough challenge for tourism sector

16 /02/ 2017 Comments are Closed

The latest Survey of Business Trends and Prospects has revealed the tourism sector faced a slowdown in customer demand, forcing selling prices down which, combined with high wages, made it the least optimistic peak season in years.

The survey of 378 businesses, 70 in the tourism and retail sector, showed the fourth quarter of 2016 was a frustrating period for many.

Victoria Tourism Industry Council Chief Executive Brad Ostermeyer said despite the survey period coinciding with the peak summer season, the tourism and recreational sector was notably the least optimistic about conditions for the year ahead, with 29 per cent expecting a weakening of the State’s economy.

“The reason for this negative sentiment is due to a damaging combination of high wages and lower selling prices, which considerably affects profitability. Some of the businesses said they were frustrated by difficulties in attracting trainees and apprentices and others noted a slowdown in customer demand,” he said.

Many survey respondents from the tourism and recreational services sector reported stagnant international visitation in the December quarter. This appears in line with the September quarter results from Tourism Research Australia’s International Visitor Survey which showed that although international visitors, nights and expenditure for Victoria continued solid growth, the pace of growth had softened. Moreover, spend growth for the period lagged behind the national average and key competitors.

“These results show the importance of workplace relations and other regulatory reforms that will ease the cost of doing business, as well as the need to stimulate demand and visitation through strong investment programs and marketing campaigns,” Mr Ostermeyer said.

As Victoria’s State Budget approaches in May, VTIC is calling for significant funds for interstate and intrastate marketing campaigns and ongoing funding for Regional Events, Business Events, and tourism infrastructure development.

Kristina Burke

About the Author

Kristina Burke

Passionate about all things tourism, Kristina Burke plays the lead role in VTIC’s policy development and advocacy work. She is our go-to person for stakeholder consultations, advisory boards, government inquiries and understands the nuances of an extraordinary number of industry issues and topics.

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