Brexit will likely lead to a fall in visitor arrivals to Australia from the UK and Europe but is expected to have little impact on visitor arrivals from the USA, China and NZ.
By Janice Wykes, Assistant General Manager, Tourism Research Australia, Austrade
Brexit is expected to have implications for Australia’s tourism industry and inbound tourism in particular, given its potential impact on UK GDP, wages growth and the AUD/GBP exchange rate.
Other issues include the possible flow-on effects to EU GDP and exchange rates, as well as the effect on global growth. These impacts may be exacerbated in the long-term if the terms of the exit are not negotiated and implemented soon.
Tourism is one of Australia’s largest and fastest growing industries.
In 2014-15, tourism directly contributed $47.5 billion to Australia’s GDP (3 per cent of total GDP), employed 580,800 people (5 per cent of total employment) and earned $30.7 billion in export earnings (9.6 per cent of total export receipts). In the year ending June 2016, total visitor expenditure was $116.7 billion, supporting over 270,000 tourism businesses.
The UK is one of Australia’s largest source markets for short-term visitor arrivals. In 2015-16, the UK was our:
- third largest source market (706,200 visitors or around 9 per cent of total visitors)
- second largest market for visitor nights (25 million nights or 10 per cent of total visitor nights)
- second largest market for total trip spend ($3.8 billion or 10 per cent of total visitor spend).
The EU is also an important source market, with many EU countries featuring in our top 20 source markets.
China is our second largest source market for visitors and our largest in terms of expenditure, while New Zealand and the United States of America round out our top four markets in terms of visitor numbers and visitor spend.
- The UK joined the European Economic Community, the predecessor of the EU, in 1973.
- A 1975 referendum committed the UK to staying in the EEC with 67 per cent of voters agreeing to continue membership.
- In the recent June 2016 referendum on EU membership, 52 per cent voted to leave, resulting in the complex process of withdrawal to be negotiated.