29 May, 2001

Australia, With New Tourism Chief, Mulls Life After 2000 Olympics

Imtiaz Muqbil

Ken Boundy replaces John Morse as chief of the Australian Tourist Commission and admits he has an hard act to follow.

In this dispatch:

1. HUGE CHALLENGE AWAITS NEW ATC CHIEF

2. REALITY CHECK: POST-OLYMPICS ARRIVALS DIP IN APRIL

3. ATC TO IMPROVE ‘TALKBACK’ WITH INDUSTRY

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1. HUGE CHALLENGE AWAITS NEW ATC CHIEF

One of the most important things a greenhorn chief executive can do just three days before he takes over is to publicly say as little as possible. Which is exactly what Ken Boundy, the new Managing Director of the Australian Tourist Commission, did upon being introduced to the media at the Australian Tourism Exchange in Brisbane on May 27.

Along with a growing number of other executives being appointed in recent months to head Asia-Pacific tourism bodies, Mr Boundy has no background in an industry that is becoming hugely complex technologically, difficult politically and important economically. That is a good thing, said the ATC Board of Directors in confirming his appointment, as it will allow the 49-year-old agriculture science- trained executive to make a fresh start with a fresh perspective. While the board has endorsed his extensive background experience in private corporate life as being right for the job, the Australian tourism industry is going to wait and see. “Time will tell,” is the general reaction.

Mr Boundy is not replacing a former chief executive who, as happens in many high-level corporate shakeouts, has left in disgrace. Rather, he is in the hapless position of having to match, if not outshine, the flamboyant John Morse, a 19-year ATC veteran who capitalised on the Olympics momentum to generate an estimated A$ 3.8 billion worth of exposure for Australia, raise the country’s popularity to an all time-high and seal the Australian brand in the minds of global buyers more solidly than a fiery iron on a cow’s haunches. Admitting to a lot of respect for this huge success story, Mr Boundy says he has the background, the interest and most importantly the passion to help sustain it. But, he adds, “There is a lot to learn.”

Mr Morse’s biggest asset was his ability to spot and seize opportunity. When he took over in June 1997, Asia got hit by an economic crisis, but could only go up. Rather than withdraw from Asia and be seen as a ‘fair-weather friend,’ the ATC did a detailed strategy review that yielded a brilliant tactical campaign to keep Australia before the Asian agents’ eyes. Today, that campaign is yielding big dividends.

Even that was small potatoes compared to the Olympics campaign. Bigwig multinationals were willing to throw major bucks at partnership promotions. The government could be persuaded to come up with extra money, the airlines with the seats and the state and regional tourism bodies with the product development. Nobody wanted the Olympics to be bungled. And they weren’t. Mr Morse admits he decided to quit the day the hugely-successful Olympics ended. “I knew it couldn’t get any better than this,” he says.

Appointed after a six-month headhunt and in what many industry executives say was a come from behind victory over the favoured front-runner, Bill Calderwood, the ATC Deputy Managing Director, Mr Boundy faces the challenge of building on the Olympics momentum. On the plus side, there is great interest in visiting Australia, and the brand image is still strong. Tourism is being taken very seriously at many different levels of the economy and airlines are taking solid advantage of the country’s world-wide popularity.

But at the same time, there is no powerful pot-of-gold product image like the Olympics to ride alongside. The global economy is heading for a slowdown following the bursting of the dot-com bubble, the slack in the US economy and volatile oil prices. There is competition like never before on the international stage. The devalued Aussie dollar has hit marketing and operation budgets. Australia is more ‘value-for-money’ but yields are down. Inbound visitors are rising but critics say that is a double-edged sword; the Olympics were designed to position Australia as a major upmarket destination whereas the devalued dollar will see more backpackers and VFR traffic coming in. Many Sydney hotels, built to capitalise on the Olympic boom, have faced sharp drops in occupancies, and discounting has set in.

Keen to ensure at all costs that its own farming and tourism industries do not get hit by the foot-and-mouth calamity, Australia has stepped up scrutiny of inbound visitors, leading to longer than average queues at its Red Channel exits at international airports.

Most important, expectations are high: Mr Boundy will be spending a lot of time listening and learning about the industry in order to make the most qualified decisions. He has to get to know the issues, the people, the culture and the way global tourism is evolving. ATC chairman Nick Evers has lavished heaps of praise on Mr Boundy. While coming in new may mean not bringing all ‘the baggage’ of times past, Mr Boundy also knows that in an industry with short tempers and even shorter budgets, the honeymoon may only last this long.

Still, he says, “There is an excellent team in the industry. This is not about fixing things, but about improving them. I feel very strongly that the power of an organisation to achieve things is enormous.” He says the priority feedback he is getting from the industry is to strengthen the consultation process with the industry and to boost teamwork within the ATC. That too will take some doing. The budget shortfall is expected to lead to job cuts in the ATC, not always a popular move.

There is also a national election coming up. Current Minister of Sports and Tourism Jackie Kelly will be contesting it. A new budget put up by the Prime Minister John Howard that many feel is a prelude to an election puts no more extra money directly but rather hits it by raising the airport tax for international departures from A$30 to A$38, effective from whenever the budget is passed. Ms Kelly says money has gone into tourism indirectly through more road construction projects and tax relief on corporate incomes. However, she told me, a more specific tourism-friendly platform is being drawn up that will be finalised and presented to the industry in due course.

In turn, the industry is not losing the chance to play off the politicians against each other. ATC chairman Evers told a Press conference that he had spoken to both the current government and the opposition about tourism issues but “we have not heard any flamboyant promises from anyone.” Ms Kelly must have got the message.

Mr Morse, anyway, is walking away with one of the finest innings ever played by a tourism chief executive, and being not out to boot. He has set in motion a strategic plan to convert the awareness of Australia into bookings, specifically by developing the website, expected to be a critical player in future. New product marketing campaigns, like on wine tourism, are coming up.

He is also delivering on his promise of a year ago to double the aboriginal participation at the ATE in two years. This year, it is already up 50% over 2000. The revamp of the ATE is complete and the ATC’s entire trade show participation reviewed (see story below). Opportunities to develop stronger partnership marketing have never been better. Mr Boundy only has to pick up where Mr Morse left off.

Having agreed to sit in as Chairman of Tourism Victoria, Mr Morse said he will do some lecturing, some consultancy work, sit on a few boards and some indulging of his hobby, buying and selling antiques. As to the man who lost the job, Bill Calderwood, several ATC staffers said they were very sorry to have seen him passed over because he had basically been running the ATC “while John (Morse) was out doing the vaudeville act.” There is strong speculation that Mr Calderwood will resign and turn up, probably in the not too distant future, heading one of the state tourism organisations where he would be well-placed to keep an eye on Mr Boundy’s performance rather than the other way around.

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2. REALITY CHECK: POST-OLYMPICS ARRIVALS DIP IN APRIL

April 2001 saw a one per cent decline in international visitors to Australia and feedback from the industry indicates that the June 2001 quarter will show a further softening. Preliminary Australian Bureau of Statistics indicated there were 402,600 international visitors to Australia during April 2001, a 0.7% decline compared to April 2000. This comprised of an 11.4% decline in visitor arrivals from New Zealand and a 8.4% decline from the United Kingdom in April 2001.

However, ATC Deputy Managing Director Bill Calderwood indicated that this decline had to be seen within the context of the fact that April 2000 was an exceptionally strong month with a 21.4% increase in international visitor arrivals to Australia compared to April 1999. That was the result of dramatic growth from a number of Australia’s top performing markets such as the UK and New Zealand which jumped 55% and 31% respectively in April 2000 compared to April 1999.

The industry cannot maintain this level of growth, and this helps to explain the drop in visitor arrivals during April 2001, he said. “The figures clearly show that Australia must continue to proactively promote itself in the international marketplace as the world’s best tourism experience and that we cannot rely on the Olympic Games hype to provide tourism growth for the next decade.”

Mr Calderwood said the figures also showed a softening in visitor arrivals during April 2001 from a number of tourism markets in Asia, including Singapore, Taiwan and Malaysia. China, an emerging tourism market for Australia, is still growing strongly with a 59.5% jump in visitors in April 2001 over April 2000. Arrivals from Australia’s second largest market, Japan touched 58,900 in April 2001, up 7.7%. United States visitors hit 35,200, up 1.4%.

However, calculated on a total period from January to April 2001, arrivals increased by 5.5% with growth from Europe, Asia, the Americas and Japan.

Despite the slowdown in April, the ATC is projecting that 5.3 million visitors will make it to Australia in 2001, an 8.3% increase over 2000. However, said ATC Managing Director John Morse. “However, this jump in visitor arrivals is not guaranteed. We are operating in a tougher environment and the international marketplace is increasingly competitive.

He noted that on the upside, awareness and interest in Australia has peaked, holiday packages and airfares on offer are better value than ever before and the softer Australian dollar means that international visitors will spend more during their travels down under. ATC research shows that the Olympic Games publicity has also increased the likelihood of people travelling to Australia as a tourist destination. For instance around 50% of American travellers indicated that the Olympic coverage had increased their interest in holidaying in Australia.

On the other hand, global economic pressures are impacting on consumer confidence, particularly in the United States which effects potential travellers propensity to holiday overseas. In addition, the slowdown and uncertainty in a few economies in Asia may result in declines in outbound travel from the region. And, at the same time there is fierce competition from holiday destinations world-wide.

Said Mr Morse: “While these are factors are beyond the control of the industry, we need to take precautions and be proactive in driving holiday bookings to Australia. Australia cannot afford to be complacent and expect the Olympic Games publicity to deliver inbound visitors. The window of opportunity for Australia’s tourism industry to capitalise on the Olympic Games will not remain open indefinitely. The industry needs to continue to aggressively promote Australia around the world to convert consumer interest into holiday bookings.”

Mr Morse said he was still optimistic that international visitors to Australia would reach 10 million by 2010, with projections for key tourism markets like China, Japan, New Zealand, the UK and the USA all expected to deliver one million visitors each by 2010. He said Asia will continue to be an important region for Australia with visitors expected to double in five years (1.4 million in 2000 to 2.8 million in 2006.)

Mr Morse warned that for the forecast to be realised, the wider business community and the government would need to address a number of issues. “A national plan for our industry needs to be developed to ensure we can cater for the growth in visitor arrivals and at the same time continue to deliver tourism experiences which meet, and exceed, visitors expectations.”

He said the ATC is undertaking an extensive research in all key tourism markets to look at the world’s perceptions of Australia following the Olympic Games. The research will examine how Australia was perceived prior to and following the Olympic Games in key tourism markets, and the impact this will have on Australia as a holiday destination. In recognition of the shift in perceptions, the theme for this year’s ATE is “Experience Australian Style.” He said the Australian style has been incorporated into the ATC’s “Brand Australia” and will be used in all promotional and marketing activities of Australia overseas.

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3. ATC TO IMPROVE ‘TALKBACK’ WITH INDUSTRY

Over the last two years, one major focus of the Australian Tourist Commission has to be simply go out and ask what its stakeholders think – of Australian tourism in general, the ATC and the Australian product, among others. These questions have been asked to the general public, the Australian tourism private sector as well as buyers and suppliers.

The result: ‘Talkback’, a programme that the ATC says represents a new era in the ATC’s relationship with the industry. It is designed to revamp its interaction with tourism businesses and help strengthen its partnership with them through better communication, consultation and customer service. ATC Deputy Managing Director Bill Calderwood said, “Talkback will allow the ATC to respond quickly to industry needs and stay ahead of competitors in the global tourism marketplace.”

He added, “The industry will now play a more crucial role in the ATC’s planning with a greater say in ATC strategies and activities. In addition, we will be providing more information and market intelligence to the industry which is critical to building inbound tourism to Australia. The bottom line is that the ATC is committed to providing the industry with better information, with increased input in ATC initiatives as well as improved quality of service in our interactions with the industry.

Talkback includes five key aspects to provide the industry with access to market intelligence, new consumer research as well as details on overseas marketing opportunities. The programme will also include opportunities for the industry to provide feedback on ATC activities as well as the future direction of the ATC,’ he said.

The Talkback programme includes:

Industry Advisory Panels: Industry experts will be recruited to form Industry Advisory Panels to provide feedback on current ATC initiatives as well as the future direction of the ATC. Panels will include five regions (Americas; Europe; Japan; Asia and New Zealand) as well as MICE and business tourism, funding and strategic issues. The ATC will also introduce a Talkback Roadshow which will visit all States and Territories to consult with tourism businesses Australia wide.

New corporate and industry website: The ATC’s corporate website will be redeveloped including a new address (www.atc.australia.com). The site will be updated daily and will provide a range of information including global tourism news; market intelligence, consumer research and co-operative marketing opportunities. The ATC will also introduce Essentials, a monthly magazine containing the latest news and information from the ATC and the tourism industry.

Expert Advice: The ATC’s Industry Liaison and Development Unit has been restructured with the introduction of four Market Development Executives. The MDEs will specialise in the Western Hemisphere, Eastern Hemisphere, Segment Development and Aboriginal Tourism.

More research: The ATC will provide the industry with more information on tourism markets which will include redeveloped profiles on Australia’s tourism markets and greater access to ATC research which relates to Australia’s competitive position, potential in key tourism markets and product development.

Customer service: Internal changes at the ATC will assist with quality of service provided and will ensure communication and consultation with the industry is given greater priority.

“Talkback is the most comprehensive consultation and communication programme undertaken by the ATC and it will drive all interactions with the industry. The industry now has the opportunity to work more co-operatively with the ATC,” Mr Calderwood said.