Tasmanian Holiday Travel Accommodation costs

 

 

Tasmanian Holiday Travel Accommodation cost are up. There is no denying it.

 

It is not that suppliers here are being greedy! It is inflation, which is hitting at every aspect of holiday planning.

It is affecting flight and driving costs for the consumers. and supply issues and costs for the providers. And that flows on in accommodation, meals and other costs to the consumers.

 

From our end, inflation is impacting every aspect of our operations. Even something as simple as driving our linens to Hobart for professional cleaning has been impacted by petrol hikes.

 

The increased cost of supplying coming on top of recent wage increases, is leaving many hospitality providers struggling. They either increase prices, or eliminate non-profitable services – much as the airlines are doing.

Many have reduced their days/hours of operation, although it is true that staff shortages had also contributed to this.

 

But the consumers, already hit by crazy flight costs, can be forgiven for thinking that they being gouged.

 

 

I found a recent analysis and report on inflation by Greg Jericho, to be most interesting.

 

 

Some Inflation insights from Greg Jericho

 

The economy in Australia and around the world is different from what it was 12 months ago.

 

Australia is showing inflation is growing at 7.8%, the fastest since just before the 1990s recession.

The highest inflation growth for 32 years was driven by a big uptick in prices in the month of December. Monthly inflation figures from the Bureau of Statistics, showed that prices in the month of December alone rose 1.6%.

 

And interestingly, for the first time since 2020, discretionary items rose faster than the price of non-discretionary ones.

In the December quarter, the average price on discretionary items rose 2.7%, compared with 1.3% for non-discretionary items.

Similarly, the price of services rose faster than that of goods for the first time in two years.

 

 

Domestic Holidays – high inflation contributor

 

What was an eye opener was that the increased cost of domestic holidays was significantly contributing to inflation.

The cost increases are across the board, even affecting major cities which have economies of scale benefits. Given our isolation and accessibility issues, Tasmanian Holiday travel accomodation and associated costs are perhaps impacted even more.

 

15 items accounted for 77% of all the growth in inflation in the December quarter. Largest, by some way, as the price of domestic holidays. The cost of holidays accounted for a quarter of the total increase in inflation in the December quarter.

 

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And the effect?

International short-term arrivals clearly show the tourism market is massively different from what it was pre-pandemic.

 

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Tasmanian holiday travel accommodation, both domestic and international, is down significantly.

I have never seem so much availability of accommodation in Hobart in what should be peak season January.

Accommodation suppliers are grappling with no-win pricing decisions. Raise prices to reflect their real cost profile. Or reduce prices, despite the costs, to try to grab market share. Either way  they lose.

 

Read the full article by Greg Jericho in theguardian.com