Updated: May 25, 2019
Businesses and holiday makers defer their travel plans when an election is looming, even for critical trips and even when the weather elsewhere looks so attractive. Then there is a flurry of bookings and catch-up travel (READ MORE)
Westpac Small Business Report in collaboration with Deloitte tells us what we in the industry know: Australian small businesses are typically concerned about the impact of an impending federal election and delay critical business decisions, which in turn impact job growth and investment.
The report revealed that 50 per cent of small businesses are worried or uncertain about the impact election policies will have on their operations, and they choose to delay decisions such as staffing and investment.
An estimated 40 per cent of new jobs in the economy are created by small businesses each year, which is equivalent to 107,000 jobs in 2017-18. Similarly, small businesses invest an average of around $530 million each month, so if the net effect of the election was to delay some proportion of small business investment by two months, overall investment levels could decline for that period.
Siphethe Dumeko, chief financial officer at Business Partners, says there is typically a slowdown in business activity prior to an election. Local SME business owners indicated that they are cautiously adopting a "wait and see" stance. 40% of SMEs expected the elections to have a positive impact, 35% of them were uncertain and 25% believed the market will be impacted negatively.
Then there is the post election effect. Owners of small and medium enterprises (SME) are understandably divided over whether any upcoming national election will result in market stability.
Now, with the election behind us and with it the uncertainty, there is already a positive effect in the national economy, and we are seeing that flow through to travel business.
We came across this description of the effect an election has on tourism and travel and ti applies equally to Australia
The impact of the uncertainty is being felt in the tourism industry, as it is in many other sectors. Swings in the market set off a chain reaction. The B2C public is on the alert as the dollar rises against the Real and some people are postponing their leisure travel. Travel agencies and airlines are looking for more attractive alternatives and freezing the dollar to minimise the cascade effect. But it is in this scenario that business-people and corporate travel have shown excellent prospects worldwide in a positive way. It is expected that the increase will reach 5.1% by 2021 thanks to technological advances, the digitalisation of payments and the availability of services in hotels. One such example is artificial intelligence, which helps automate business travel bookings, while virtual payment methods allow executives to charge employers for rooms, meals and other expenses without the need for a credit card.
According to the Ministry of Tourism, spending by foreigners in Brazil, for example, grew by 6% in the first half of 2018. The total accumulated figure in the first six months of the year reached US$ 3.24 billion; in other words, US$ 180 million more than in the same period last year. Year-to-date, spending on foreign exchange was US$ 9.57 billion, which is 8.72% more than in the same period in 2017.
The indicators in tourism are still stable.