HARVEY World Travel (HWT) is expecting revenue to drop by $300 million this year but managing director David Rivers, says the youth and domestic travel markets have been stable.
In Brisbane as part of a nationwide franchisee road-show, Rivers pointed out that when Queenslanders travel domestically they tend to buy deals for within their own state.
“There has been a trend among some to say ‘damn it, I’ll go anyway’ and they’re booking trips to Europe and the US over Christmas, but this market has declined with holidaymakers opting to travel in the Asia-Pacific instead,” says Rivers.
“And the market that used to go to Asia is now going to New Zealand, the Pacific Islands or travelling locally, which are all regions that have really picked up.”
Rivers attributes the decline in revenue to the retiree and pre-retiree market that are cautious to take out cash when their equity levels have sunk.
Conversely, the youth market of late teens to 29-year-olds has not been affected.
But nationwide revenue has plummeted from $1.3 billion last year to an expected $1 billion in 2009.
“Even though we have had a decline it still only brings us back to 2005-06 levels and that said the last two years were boomers – right now we won’t see it decline anymore,” says Rivers.
He doesn’t see companies like Wotif.com as strong in Australia as in other parts of the world, due to the country’s isolation and desire for security.
“When you live in Australia, almost anywhere you go overseas is long haul and the further you go the greater the risk, so more insurance and security is what people want. They want to deal with someone who has done it before that they can call,”
“Online agencies have certainly been growing but they account for a very small percentage of the total travel — we think about 5 to 6 per cent.”
Over the past six years, HWT has contracted from 350 to 330 stores due to closures in regional areas, but in the past 18 months four new stores have opened up on the Gold Coast.
There are currently 33 HWT franchisees in Brisbane and 77 in Queensland.
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