Australia’s Silver Lining: Weak Currency is Good for Tourism
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More people are traveling to Australia for one simple reason: their money goes further Down Under. The Australian Dollar has been dropping in value for more than a year now. Americans traveling to Australia can buy AU$1 for about US$0.71. Aussie bills are likewise cheap for Pound-carrying travelers.
It doesn’t take much mathematical skill to see that Australia is struggling. However, no one in the tourism industry is complaining. In fact, business is booming in most travel-related sectors.
Everyone wants to take advantage of the exchange rate
Americans and Europeans are coming in greater numbers and, after aggressive promotional campaigns, more Indian and East Asian tourists are arriving as well. The fact that their money will go further is not lost on these incoming travelers. Flights are obviously the biggest expense, especially for Europeans and Americans. However, they also benefit the most from the current exchange rates once they arrive. Asian travelers have access to cheaper, shorter flights, but they don’t do quite as well as Western travelers when they get to the forex counter.
There is another group that is helping to create a travel boom in Australia: Australians.
Staying home... but still hitting the road
More than any other nationality, people from Australia have an international image; they love to travel abroad. Now, because of the currency situation, more people are keeping their passports in the drawer. However, that doesn’t mean they are not traveling. More are hitting the road in their own country, traveling domestically so that they don’t have to deal with exchange rates at all.
Tourism is important to the economy here. Travel in the Great Barrier Reef and surrounding shore areas brings more than AU$5 billion into the economy each year. If more tourists are showing up from abroad and more Australians are traveling domestically, then this important industry will keep going strong despite the weak currency.
Finding destinations where the Aussie Dollar still has value
Some Australians are still intent on heading abroad. They just have to look to some different places where the Aussie Dollar is still the stronger member of a currency pair. The Dollar has only dropped about 4 percent compared to the Yen. Flights are relatively cheap between Australia’s hubs and major Japanese destinations. New Zealand is always a viable option, too. The two neighbors are closely tied economically, so the exchange rate is usually not an issue for travelers.
Flights between Oceania and Europe are more expensive, but if they can get to Russia, Australians can experience what it is like to be on the other side of a currency slide. The Ruble has been dropping dramatically in recent months, so even the weak AUD has gold-like value in Russia.
Opening the door to new places
Interestingly, Canada has become a more attractive choice for the typically US-loving Australians. Australian currency is in much better shape when compared to the Canadian Dollar (as opposed to the U.S. Dollar). Qantas has launched service to Vancouver, and Air Canada will reciprocate starting next year.
Australian travelers have given other countries a blueprint for how to deal with a poor currency situation: travel domestically or regionally, and keep an eye out for places where your currency still holds some clout. The world is big… there is always going to be a place somewhere where you have the upper hand.
More by Josh Lew
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