Australia: ‘Down Under’ is more pricey than ever
Our World | On 14, Feb 2012
As incentives are beginning to gradually re-join the event world, long haul destinations are still showing a slow take up for UK clients, as they opt for the more affordable and less controversial 3-4 day European locations. Having said this, we are gradually beginning to see interest in locations further afield such as Antarctica, New York and Langkawi.
Australia, and Sydney specifically is probably one of the furthest destinations one would be inclined to travel to for an incentive. And, if they were to do so, it would be for at least a week to get over the journey alone – unless you managed to get 12hrs sleep on a flat bed in business that is!
I was lucky enough to go to the land ‘down under’ for my honeymoon at the back end of last year. With it being a special holiday we wanted to splash out on what has been described to us on numerous occasions as a ‘must see’ destination and ’once in a lifetime opportunity’. I went with visions of colourful fish and coral reefs, white sandy beaches, amazing surf, fresh barramundi, new world wine and sun sun sun!
Having never personally operated an event in Australia before, I very naively compared it cost wise to the likes of South Africa, maybe even the US. How foolish was I?!
Whilst planning the trip, we already began to realise that Australia was not the ‘value for money’ destination we imagined it to be. We booked cute guest houses instead of the luxury hotel resorts and the 4×4 I dreamed of driving through the bush became a Ford Falcon (actually my dream did come true once we arrived as Hertz ended up upgrading us for free to a Rav 4 – what a result). However, I don’t think anything could have prepared us for when we actually touched down. Even my husband was in shock at how expensive everything was, having travelled around Australia 10 years ago, promising me that it was the land of cheap cold beer, cheap fresh fish and Skippy (about £25 to eat in a restaurant or free if road kill).
So what has happened in the interim?
As the world plummets further into recession and the euro zone is in dire straits, surprisingly the Aussie dollar is doing remarkably well, making it very pricey for Brits and Europeans alike. Long gone are the days of the Ten Pound Poms. An airfare alone will set you back £700 if travelling to Sydney or similar, and once there, be prepared to see your money whittle away as you have to pull out a AU$20 note (about £13) to pay for two pints of beer in a very average pub and receive very little change in return! ‘This is more expensive than London or Paris’ I kept exclaiming as I cradled each drink as if it was a newborn baby.
To give you an idea of this dramatic change in the rate of exchange, in 2008-2009 the rate was around AU$2.4 to the GBP1, it is now about AU$1.4 to GBP1.
But we can’t blame it all on the exchange rate. Australia is actually growing as an economy, partly due to their copious amounts of natural resources they are extracting and shipping out to growing nations such as China. It’s also worth mentioning that the average wage in Australia is the equivalent of about £47,000 (in today’s exchange rate) compared to the UK’s £26,000. Which means that goods and services are substantially higher than Europe, simply because they can afford it.
So what does this mean for the event industry when proposing an exciting long haul, value for money destination? Can we consider Australia without our client falling off their chair? The distance is already one bone of contention as we need to ask clients if they would allow us to propose taking their valuable and best employees out the business for a week. Not to mention the cost of meals, activities and those extra special touches. Can we even consider Australia as an incentive destination in this economic climate? Even the Aussies are taking their holiday outside Australia in places such as Bali or Fiji as it’s cheaper for them.
Cost aside… Australia is indeed a naturally beautiful country with friendly people and definitely worth visiting once in your lifetime.
However, be prepared for the cost once you get there. The extras do add up and your after dinner drinks allowance on your gala dinner night might need to be doubled if you want your guests to have more than 2 drinks!
Pia Zeyss, Events Team