Jumping at travel despite rates pain
RISING interest rates, the dropping dollar, and pricey international flights are impacting the travel industry as it attempts to claw itself out of the pandemic.
But agents claim that’s not stopping Australians from spending up on a major Christmas holiday.
The enticement of strolling around Europe’s Christmas markets, cruising the Pacific, or skiing in Japan, are on the list for many Australians at year’s end, with nary a thought for the five successive interest rate rises endured through the year.
But travel agents such as Flight Centre co-founder Graham Turner admits rising interest rates are slicing into his revenues.
“For some people interest rates will make a difference. It will be like the (dropping) Australian dollar. It’s another thing to worry about,” Mr Turner said.
He said travellers will drop hotel standards or reduce the length of their trip, and the main problem for people travelling at Christmas, particularly on international flights, was the lack of flights and the resulting high cost.
“Normally flights are quite expensive, (but) the interest rates will just add to that pain a little bit more. Particularly for people with big mortgages.
“People with no mortgage are not worried. If you have a big mortgage and you do a lot of travel it will cause a bit of indigestion.
“The other pain is the fact that it’s hard to get flights, and the airfare prices are quite high at Christmas.”
Mr Turner said the Australian dollar dropping to 68c has added about 10 per cent to the cost of US travel.
“This will make people drop the length of their stay and the standard of their accommodation,” he said.
“I think Australians love to travel and will do anything but if you are on a budget those (cuts) are things people will do.”
For those without a mortgage there is strong interest in travelling at Christmas with major interest in Japan even though there are still travel restrictions, Mr Turner said.
Skiing in Canada is popular this year with flights to Vancouver and Calgary heavily booked, he said, and added that Europe and the UK are also really popular for the festive season.
But Goldman Travel joint managing director David Goldman said this week’s fifth interest rate increase had not changed travel booking patterns for his upmarket clients.
“There’s been no change at
all. Absolutely not. Bookings for Christmas are up about 65 per cent on last year,” Mr Goldman said, even though buying flights for the year’s end was expensive with business class flights to Europe coming in at around $15,000 return.
People are booking wherever they can get flights, according to Mr Goldman, who says Italy’s Dolomite Mountains are popular. “Fiji, Ha
waii and Asia are also popular, it’s wherever you can get flights, it’s expensive to travel because of reduced capacity.”
Mr Goldman is organising multi generational trips and he said domestic Australian trips were popular.
He said Christmas market trips to Europe are quite lovely and people are prepared to pay extra to travel because they have been dormant for so long due to Covid.