The latest Victoria Tourism Industry Council (VTIC) survey of tourism operators across the State revealed that general business conditions in the tourism industry remained positive but eased over the three months to February 2008. Overall, results are weaker than the previous quarter and the corresponding period in 2007.
On a net balance basis, 12 per cent of respondents reported an improvement in general business conditions in the three months to February 2008. This followed a stronger result in the November quarter with a net balance of 27 per cent reporting an improvement and the corresponding period in 2007 (28 per cent).
“Sales growth remained relatively strong with 24 per cent of respondents reporting an increase, average selling prices continued to rise and overall profitability declined partly due to continued growth in wages”, says VTIC Chairman Jeremy Johnson.
“Looking forward, the industry is expecting weaker conditions to continue over the three months to May 2008. Survey respondents indicated that they expected general business conditions, sales, employment and investment to slow.
“However, growth in wages is expected to ease and therefore, may contribute to a slight improvement in profitability.
Oil and petrol prices, together with environmental factors, including drought, remain the most commonly identified factor currently constraining business performance, with 41 per cent and 38 per cent of respondents identifying them as ‘significant’ or ‘critical’ constraints on business respectively. Other issues identified as being a ‘significant’ or ‘critical’ constraint on business include; business taxes and government charges (25 per cent), business and consumer confidence (24 per cent), the cost and availability of insurance (20 per cent), skill shortages (20 per cent) and wage costs (20 per cent).
Only 5 per cent of respondents nominated exchange rate appreciation as a significant or critical factor.
“Tourism businesses are less positive about trading prospects over the longer term, with 42 per cent of those surveyed indicating that they anticipate their business performance will be ‘much stronger’ or ‘somewhat stronger’ over the next twelve months. This is a decrease on both the previous survey (52 per cent) and on the figure reported during the corresponding period last year (53 per cent).
“Going forward, State and Federal Governments need to adopt positive measures to assist the tourism sector to deal with the current economic difficulties such as cutting business taxes and charges, improving infrastructure and implementing realistic industrial relations policies”, says Mr Johnson.
Background - what is VTIC
The Victoria Tourism Industry Council (VTIC) is the peak policy council for the Victorian tourism industry, which represents key industry associations, operators and government agencies, providing one united industry voice. |
