23 Jun, 2008
Australia Tourism Struggles To Cope With Slowdown
PERTH: Affected by high fuel costs and the strength of its currency, the Australian tourism industry is struggling to deal with what appears to be a pronounced slowdown in visitor arrivals.
The industry ended 2007 with a fractional arrivals growth of 2.5% to 5.6 million. In Jan-April 2008, visitor arrivals totalled 1.9 million, unchanged over the same period of 2007. In April itself, the 424,100 arrivals were a decrease of 3% over April 2007.
Although the A$81 billion industry is well-known worldwide for the quality of its products, the situation could get worse before it gets better, Tourism Australia Managing Director Geoff Buckley warned. He added, “The era of planning for growth will have to be replaced with planning for change.”
Indeed, Australia is becoming a prime example of how external factors can affect tourism, well beyond the influence of the best marketing strategies, superb research and endless restructuring of the national tourism organisation.
Addressing a press conference at the Australian Tourism Exchange (ATE), Mr Buckley warned that marketing a long-haul destination which is 100% dependent on air-access, and the time, distance and costs of getting there, can pose significant challenges in a tough trading environment.
He said global challenges such as the softening of certain economies are impacting on consumer sentiment.
“In some markets, forward bookings are not at the levels we would like to see. We are also seeing a social change in the way consumers look for and purchase leisure travel. The competition for leisure time is growing continuously, and the other challenge is that of getting the message through to the consumer in an increasingly cluttered environment.”
He also cited the growing competition from emerging destinations. “A huge numbers of countries are now seeing tourism as an opportunity,” Mr Buckley said, citing especially the small countries many of which “have grown their inbound travel by huge percentages. They are grabbing market share and that’s a challenge for us.”
Mr Buckley said that the way forward is to continue to maintain strong market presence and position Australia as a desirable and high value destination.
Efforts are being made to balance inbound arrivals from a broader geographic distribution of source markets. As “external shocks” continue to impact the industry, Mr Buckley said flexibility in terms of response will be critical.
“ Obviously, no-one can predict where these things happen. We can only be flexible in terms of how we respond. It’s not just simply change, but the speed of change as well.”
One example of the unpredictability is the China market. In 2007, arrivals from China totalled 357,400, up a solid 16% over 2006, the fastest growth level along with the Middle East/Africa region.
Although the trend was continuing this year, it is now heading for a slump due to the tragic earthquake and the upcoming Olympics. TA’s Regional Director Johnny Nee said the Beijing government was also trying to get Chinese state enterprises and companies to cutback on their travel.
Still, TA maintained the marketing effort; ATE buyers from China comprised the largest contingent of foreign buyers (76, or roughly 9% of the total).
Although the situation seems to be bleak at the moment, good news is due later this year.
As of September, international travellers visiting Australasia will be able to get discounted air-pass on multiple sectors flown by Virgin Blue in Australia and New Zealand. The Virgin Blue Airpass packages of three flight sectors will start from just $A207 and be available year-round, with no minimum or maximum stay, no season restrictions and no fees for extensions or flight changes.
The pass can be bought independently, and used with any international air ticket on any airline operating to Australia. That will facilitate access to 53 Virgin Blue routes to capital cities and regional towns across Australia and New Zealand.
In October, Qantas, which has taken some stick recently for cutting back its flights to Japan due to high fuel costs, will take delivery of its first A380 and deploy it on the first non-stop routes from Melbourne to Los Angeles.
On 24 November, Qantas will start its first non-stop services to South America, with thrice weekly flights from Sydney to Buenos Aires. It last operated the route via Auckland between 1998 and 2002. The airline says it will re-establish trade and travel links with South America and boost tourism from there.
The biggest day will be November 13, when the planned Hollywood epic called simply “Australia” will premiere in Sydney. The big-budget film, shot over two years, is being promoted as a powerful romance story set against the backdrop of some of Australia’s most scenic topography.
A high-flying cast, including Nicole Kidman and Hugh Jackman, is helping generate the wave of publicity for a film that is being touted as the greatest marketing opportunity for Australia since the Olympics. It is projected to do for Australian tourism what the “Lord of the Rings” did for New Zealand.
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