The carefree image of the fun loving backpacker is a relic of the past – sort of; of course they are still having fun, it's just that there's not enough time for the good times.

Gap year trips are being cut short and the local industry is paying for it, especially hostels and operators working out of former tropical hotspots in northern Australia.

The cities are doing ok, though, as the modern youth travel market – so important to the overall health of Australia's tourism economy – sits tight and parties through the urban night. There are two big factors at play, and both are economic.

The first is the high Aussie dollar, which makes travelling here expensive; the second is fragile to depressed economies hampering crucial source markets in  the United Kingdom and Europe.

Julian Ledger, Chief Executive Officer of YHA Ltd, which has 100 properties around Australia, says the modern backpacker is "probably travelling with less money and there is more pressure to work".

Mr Ledger says YHA properties are "seeing quite a lot of growth from Aussies and that has compensated for a small decline in international.

"Forward bookings are looking quite strong and Sydney, Melbourne, Brisbane and Perth are all doing very well."

Meg Allen-Armistead, General Manager of the Nomads Network, says the backpacker market has been tough in recent times.

"The last two years have been terrible – I don't know how some operators are surviving."

She says occupancies for Nomads hostels are down "like everyone else" but business has been supported by the Australian domestic market and groups.

Full story:

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