Aussie holidays ditched as overseas travel costs plummet

Domestic tourism has been left in the slow lane of Australia's two-speed economy, new figures show.

Meanwhile Australians are taking the fast lane to airports to travel overseas so they can take advantage of conditions created by the global financial crisis.

While the cost of an overseas holiday is 5.1 per cent cheaper now than 12 months ago, the cost of domestic holidays has fallen only 2.6 per cent, said Tourism & Transport Forum (TTF) executive director Brett Gale.

Mr Gale said the latest consumer price index data illustrates the challenges facing Australia's tourism industry.

"An overseas holiday is 5.1 per cent cheaper now than 12 months ago and the number of Australians taking advantage of that continues to grow," he said.

"While the cost of domestic holidays has also fallen, it is only down about half as much as international travel.

"Combine that with the strong Australian dollar and weak economies in some of our major international source markets and tourism operators in Australia can expect the subdued trading conditions to persist for some time.

"That being said, it is 2.6 per cent cheaper for Australians to holiday at home than it was a year ago and that's something we'd encourage people to take advantage of."

Mr Gale said the figures also show that tourism was hit hard by the global financial crisis.

"Tourism operators cut their prices to stimulate demand during the downturn, and that's reflected in these data," he said.

"While the cost of living is up 1.3 per cent, the cost of holidays fell 3.7 per cent.

"That's another indication of a two-speed economy - while some industry sectors are recovering strongly, tourism is being left behind."

He said the TTF was urging the federal government to at least maintain funding for Tourism Australia in the next budget, as well as allocating extra funding for the National Long-Term Tourism Strategy.