Strong dollar hurts tourism

The NT Chamber of Commerce yesterday said the high Aussie dollar could result in a shorter and smaller backpacker season.

On Sunday night the Australian dollar reached a high of 110.2 US cents - the highest it has been since it was floated in December 1983. NT Chamber of Commerce chief executive Chris Young said the higher Australian dollar will have a significant effect on tourism.

"It's going to have quite an impact on our backpacker season because, for overseas visitors coming to the Territory, it is going to be much more expensive for them and as a result they are not going to be able to stay here for as long," Mr Young said.

"From an international competitor's point of view, the higher Aussie dollar means that Australians selling overseas, our products are more expensive."But our buying power means that imports tend to be coming down in price." Tourism and Transport Forum chief executive John Lee said Australia is competing for tourists with Asia-Pacific destinations.

"Australia is competing with Fiji, Indonesia, Thailand ... the bar keeps rising and it's really important in terms of customer service," he said.Ciaran Cross, 24, from Dublin, said Darwin was more expensive than southern cities.

"I came here from Melbourne about six months ago, and everything is so expensive here," he said. "I met a mate in Brisbane, and he came to Australia about seven months ago with $7000 - he's only got about $200 left. And he's been working too."

Mr Cross said he must make his money last for the next four years - when he will decide whether to stay in Australia or go home."I saved 14,000 euros to come over here and I've got about $8000 left," he said.

"And I've been working hard too - two days after I got to the Territory I had work, just as a labourer - but it's still really expensive."But wages are still much better here than they are at home."

What the big Aussie dollar means:

SHOPPING: Cheaper imported goods

A more valuable dollar is making it cheaper for retailers to import things from overseas. They can pass on these savings to shoppers.

INTEREST RATES: Likely to ease pressure

The high dollar is likely to restrict the Reserve Bank (RBA) to only one interest rate rise this year. This means less pressure on the household budgets because it will minimise increases in mortgage repayments.

TRAVEL: Cheaper airfares, more spending power

As Aussies can now buy more with their money overseas, they are also going to become more likely to travel abroad to do so. And as the demand for flights rises, airfares will also become cheaper.

PETROL PRICES: A buffer against oil prices

Petrol prices have been rising - up almost 9 per cent in the latest inflation figures - but the dazzling Australian dollar is acting as a buffer, shielding motorists from even higher fuel costs.Mr Young said Territorians could be paying as much as 15c per litre more if it weren't for the strong Aussie Dollar.

Source = ntnews