High wages, lower prices a tough challenge for tourism sector
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.
Victoria Tourism Industry Council chief executive Brad Ostermeyer said the survey revealed the 2016 summer season was a frustrating period for many.
“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 aligns 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.
“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,” Ostermeyer said.