Interest rates threaten travel spending
Consumers may just be pushed over the edge with the latest interest rate charges and cut discretionary spend on travel. Faced with fuel surcharges, rising petrol and grocery prices, will travel become a luxury they can’t afford?
“The interest rate rise will put pressure on discretionary spending and that has the potential to affect the travel industry, which relies so heavily on the discretionary dollar,” said Christopher Brown, managing director of tourism and transport group TTF Australia.
“The tourism industry competes with plasma TVs and house improvements, and the interest rate rise is another financial pressure that will impact on decisions to take leave. This means that the Government needs to maintain an active role in tourism marketing to stimulate travel intentions.”
Mr Brown said TTF did not expect any short-term fallout but the industry would continue to watch closely.
Qantas executive general manager John Borghetti said it was too soon to tell whether the rate rise would affect travel.
But he was hopeful it would have no effect.
Australian Federation of Travel Agents chief executive Mike Hatton was similarly optimistic.
“From all the information that I’ve got so far, there’s no drop-off at all,” Mr Hatton said.
“As you know, we’ve had two or three increases now, and we haven’t had any drop-off with any of them.”
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