The Victorian tourism industry will be affected by today’s decision by the Reserve Bank to raise interest rates by 25 basis points.
"This interest rate rise follows on the heels of the August rate rise, as well as fuel price rises, bushfires, floods and drought that have adversely affected the tourism sector, particularly in regional areas", says VTIC Chairman Jeremy Johnson.
"The interest rate rise will also put further upward pressure on the already historically high Australian dollar, compounding the effect of the current exchange rate on inward-bound tourism.
"Apart from reducing operators’ profit margins and opportunities to borrow for further investment, there are likely to be reductions in discretionary spending among consumers, who will be less likely to spend on a meal or a coffee, a night in a city hotel or a drive to locations in regional Victoria.
"Governments can assist tourism businesses in dealing with this interest rate rise by underpinning transport and tourism infrastructure, reducing business taxes and charges, co-ordinating targeted marketing activity, enabling more airlines to fly direct to Melbourne and assisting with the dispersal of tourists to regional areas", says Mr Johnson.
Background - what is VTIC
The Victorian Tourism Industry Council (VTIC) is the peak policy council for the Victorian tourism industry. Jeremy Johnson chairs the Council, which represents key industry associations and operators, providing one united industry voice. |
