While I write this it would seem that we might have ridden out the worst of the “global credit crunch” and some level of confidence restored. For all of us with enough nouse there was a great opportunity to make significant money buying Google and Apple shares on Friday and selling them on Monday. But what about Yahoo!, surely there is a goldmine there for someone.

Regardless of the opportunities and apparent buoyant mood (this I am sure will be different in another few hours – things seem so volatile) it does seem fair to say that global tourism will suffer in the next year or so. Discretionary spend is always the first to suffer and none more so than travel and holidays.

That is in all markets except one –backpacking. In fact I believe that the coming year will see Australia, New Zealand and South America experience a much stronger performance than any tourism sector or market. My reasons are these:

  1. The rise of the currencies of the traditional backpacking countries (Europe, Canada, Scandinavia, UK) related to the NZD, AUD and South American currencies: As investors panicked they pulled their investments closer to home lowering demand for the periphery currencies and strengthening the value of the USD, EUR and GBP. For backpackers this means that their already tight budget is suddenly increased dramatically –almost doubled.
  2. During periods of downturn travel (backpacking is particular) is often a serious alternative to unemployment or low wages: During strong economic periods it is difficult to turn down a job paying GBP 50,000 in finance or law as you come straight out of the university. But in times of recessions business are less likely to take on graduates as the starting salary is much lower; a “gap-year” becomes a viable alternative.
  3. History has shown that in the past 20 or so of downturn such as 1987, ’93 and 2001 have been the catalyst for backpacking booms in Australia and New Zealand in the following few years.
  4. The downturn on other areas of tourism and business travel will put pressure on airlines, which may see them reducing the cost of long-haul flights or including more price competitive offerings aimed primarily at the backpacker market.
  5. The backpacker market has shown itself over the years to be the most resilient market, even during SARS, Kuwait invasion and Sept 11 backpacking numbers continued to grow in New Zealand and Australia (they were negatively hit however in Europe and North America)

Although the overall tourism market is heading for some pretty tough times – I think it could be a very positive time in New Zealand and Australia. Certainly on my travels I have heard some pretty positive feedback from some operators – and the silly season is yet to come. Let’s hope the Australian and New Zealand tourism boards recognise that for the short-term their future lies in backpacking and give the industry all the support they can.

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