THE STRONG Australian dollar is cutting into backpacker's budgets, forcing them to stay longer in capital cities and away from regional destinations like Byron Bay.
Byron Bay backpacker hostels are reporting a decline in bookings - particularly from Irish, British and American backpackers - and say the high Australian dollar is at least partly to blame.
Dougall Pennefarther, of the Backpackers Inn in Shirley St, said traditional backpacker markets like the US and Britain had dropped by up to 90% in recent years.
Those that were still coming, such as the northern Europeans, Dutch and French, stayed for shorter periods.
He said backpackers were favouring cheaper destinations like Asia to get the best value for money.
"We look a lot more expensive to people these days."
James Robinson Gale, of Main Beach Backpackers, agreed that the backpacker market had shifted, thanks to the increased cost of a holiday in Australia.
"They (backpackers) are doing what the Aussies have been doing in London. Going to Earl's Court, working, then heading off to Europe. European travellers are working in Sydney then going off to places like Thailand and Fiji because it's cheaper."
Swedish backpacker Emike Szanto said she had planned to stay in Australia for six months, but had cut that back to three.
"I didn't expect everything to be so expensive," she said.
"For some reason I thought the prices would be more like Asia."
She said the price of food was one of the biggest shocks.
"I've been eating only noodles," she laughed.
She said she had managed to travel most of the east coast, but a lack of funds meant two of her friends had been unable to leave Melbourne.
Mr Pennefarther said Byron Bay's reputation and its location between Sydney and Brisbane had helped keep numbers up, but the effects were still being felt.
We're a little bit lucky in Byron Bay sometimes, because I know those off the beaten track have suffered more.
"But we do notice there has been a big change."
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