Hotels, Tourism to Bite into $200bn Savings
The gap between domestic and international visitor spending is expected to widen as Australians divulge their spending intentions for the new year.
According to the Commonwealth Bank of Australia and Google data, spending intentions for travel and entertainment are well on the way up compared to other industries.
This is promising for the hotel and tourism industry as domestic travel account for the lion's share of overnight visitor stays.
Treasurer Josh Frydenberg said as of mid-January households and businesses have amassed $200 billion in savings which is now available to spend across the country.
Travel spending intentions
^Source: Commonwealth Bank Australia
Prior to the pandemic domestic tourism held the overwhelming share of visitor spending at $79.1 billion compared to $45.2 billion for international visitors according to Tourism Research Australia.
These figures dropped 34 per cent for domestic visitors to $51.9 billion and dropped 51 per cent for international visitors down to $22.4 billion for the year ending September 2020 following bushfires and strict border control.
CBA senior economist Belinda Allen said that both actual spending and Google searches for travel increased last month.
This pushed spending intentions for travel into positive territory for the first time in 2020 and signalled that the economy continues to rebound from the impact of Covid-19.
“Travel spending intentions jumped solidly in December 2020 as state border restrictions were largely lifted,” Allen said.
The CBA research shows travel and entertainment intentions are moving back towards 2019 levels while education, health and fitness lagged behind.
Retail spending intentions on the other hand was well up on 2019 levels and motor vehicle spending was slowly improving.
Meanwhile, spending intentions for home buying pulled back in December, after jumping higher in November.
Home loan applications ticked down in December from a month earlier, though were higher than the year-ago level.
