The latest Survey of Business Trends and Prospects has revealed the tourism sector experienced mixed trading conditions during the peak holiday and events period. More than a quarter of respondents reported a decline in domestic sales and almost one-third reported a decline in profitability.
Victoria Tourism Industry Council Chief Executive Brad Ostermeyer said the soft domestic sales results and flat exports are a real concern, particularly as the March quarter is the busiest event period.
“The recent National Visitor Survey results for last year highlighted the stagnation in interstate visitor numbers and expenditure. Our own survey results, unfortunately, confirm this trend. A significant boost to the state’s new tourism organisation is required to reverse this worrying trend,” he said.
As in the December quarter, respondents from the tourism and recreational services sectors reported poor profitability. This can be attributed in part to high wage costs, but also increases in energy prices. The special question in the March quarter survey, relating to energy, showed these sectors were, along with manufacturing, the hardest hit by energy price hikes.
The volatility of energy market prices weighs heavily on businesses in the tourism sector, with more than one on four experiencing difficulties in obtaining competitively priced supplies in the past 12 months.
Mr Ostermeyer noted that one positive result of the survey was that tourism businesses have continued to invest in their business. “These businesses should be applauded for taking a longer term outlook and making these investments. But if they are to succeed in the long term, it is important that we drive demand to their businesses, through targeted marketing campaigns, and through government investment in key attractions, events and tourism infrastructure,” said Mr Ostermeyer.
Ahead of the State Budget in May, VTIC is calling for significant funds for interstate and intrastate marketing campaigns and ongoing funding for Regional Events and Business Events.