Aussie tourists not put off by rising US dollar

Richard Laycock 20 May 2016

Tourists in New York City

More than one million Australians head to US despite a weakening Aussie dollar.

Over one million Australians packed their bags and headed to the USA between April 2015 and March 2016.

According to Australian Bureau of Statistics Overseas Arrivals and Departures data, a record 1.02 million (1,022,700) Aussies headed to America in the year to March 2016, which was a 5.3% increase on the year before (971,200 short term departures).This record comes in spite of the Aussie dollar weakening $0.13 against the Greenback, falling from US$0.867 to US$0.735 (a 15% percent drop) over the past 12 months.

The United States has long been a travel favourite for Australians heading abroad. According to historical data trends from the ABS, the USA comes in second to New Zealand for most popular destination for Australians heading overseas and accounts for over 10% of all short-term departures since the ABS started tracking this data in January 1991.

Does a weak Aussie dollar deter travellers?

The Australian dollar has been very volatile against the Greenback since 1991, at points buying less than US$0.50 and at others buying up to US$1.10. During that time, the average exchange for USD to AUD was US$0.76.

The April 2015/March 2016 period marks the first time since April 2005/March 2006 that the Aussie dollar has fallen below the average. But that hasn't deterred travellers. Year on year short-term departure growth was up from 3.34% to 5.3%. Of the 25 years since the data has been tracked, 14 were below the average of US$0.76.

However, travel slowed in only four of those years. Interestingly, the Australian dollar doesn't seem to have had much of an effect on Australians desire to head to the USA, with departures growing in all but five year on year periods:

  • April 1993/ March 1994
  • April 1998/ March 1999
  • April 2001/ March 2002
  • April 2002/ March 2003
  • April 2008/ March 2009

The period between 2001 and 2003 represented low points for both departures and for the dollar.

The USA is one of the most searched destinations using the travel insurance quote engine, accounting for roughly 14% of all user searches. This is slightly higher than expected since USA departures make up around 10% of all Australian travellers.

So what's keeping Australians travelling?

One factor could be the cheap flights from Australia to Los Angeles that are available. Another possibility is the comparatively cheap cost of living across the United States as a whole. Everyday items such as food, clothing and other sundries are cheaper in the US than in Australia (factoring currency conversion), despite the weak Australian dollar.

Below is a comparison of common everyday expenses and how they compare on price between Australia and the USA (prices are in Aussie dollars).

Three-course meal for two, mid-range restaurant$80.00$68.79-14.01%
Coke/Pepsi (0.33L bottle)$3.18$2.34-26.29%
1 min. of prepaid mobile tariff local (no discounts or plans)$0.39$0.16-59.58%
Milk$1.49 per L$1.26 per L-15.6%
Loaf of white bread$2.74$3.49+27.6%
A dozen eggs$4.70$3.76-20%
Apples (per kg)$4.07$5.77+41.80%
Domestic beer purchased at a restaurant$7.00$5.44-22.2%
One-way ticket on local transport$3.95$3.06-22.4%
1 litre of gasoline/petrol$1.31$0.83-36.4%
Rent of 1-bedroom apartment per month in city centre$1,808.46$1,625.59-10.1%
Pair of Jeans (Levis 501 or similar)$96.90$57.61-40.5%
Water (1.5L bottle)$2.55$2.40-5.71%

Source: analysis of numbeo data, list is in AU$ and no particular order Picture: Shutterstock
Image: Shutterstock

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