More Backpacker Hostels to Close?

It seems that Hervey Bay is about to feel some more pain from the rising Aussie dollar (rises that some economists suggest will go on for quite some time thanks to what economists call the “carry trade”) as stories begin to surface that two more large backpacker hostels are set to close their doors soon.

If reports that we have heard are correct one is already in receivership and the other will close simply because large numbers of backpackers aren’t coming to Hervey Bay any more and the hostel is losing money.

3 thoughts on “More Backpacker Hostels to Close?”

  1. The strength of the Aussie Dollar, whilst certainly a contributing factor, has in fact little to do with the drop off in backpacker numbers along the east coast this year. The amazing strength of the $A against the $US has had little effect, as we get very few backpackers from the US, and the $A has not been as strong against other cross currencies. The major factor post GFC has been the weakness of economies in UK and Europe, where a large number of school leavers are now immediately looking for jobs instead of travelling for a gap year because of their nervousness about job prospects in a weak economy. Still – not good that it is having such a negative effect locally.

  2. Rob

    Thanks for your comments … I think they may be closer to the mark than a lot of people think. Only yesterday I heard a European economist say something similar.

    The fact that the Aussie dollar has now become the target of speculators isn’t helping either and it seems that we’re going to be plagued with those speculators for quite some time to come.

    Unfortunately I don’t think either political party has the solutions to the real problems that we’re facing and we’re going to have to get used to a two-speed economy because it’s what we’ll be living with for at least the next few years.

    Stuart

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