travelBulletin

Ian McMahon's perspective: Will TA's new campaign bear fruit?

There are two conflicting theories about what stimulates tourism growth. Paradoxically, both may be about to be proved right. Or wrong, as the case may be, writes Ian McMahon.

There are two conflicting theories about what stimulates tourism growth. Paradoxically, both may be about to be proved right. Or wrong, as the case may be.

The first theory is postulated by the bean counters; the second is advanced by the marketers. The first theory, often espoused by the mandarins of Treasury, is that there is no need for lavish expenditure on tourism promotion because tourism flows – both inbound and outbound – are governed essentially by the value of the Australian dollar. It is a view that the tourism industry has been forced to refute regularly over the years during a succession of controversies over the level of government funding for Tourism Australia (TA).

For my money, this theory has been definitively disproved by recent history. Despite the surging strength of the Australian dollar, the industry’s marketing strategies have ensured that inbound numbers continued to rise steadily.

The opposite theory maintains that, in a world where governments everywhere are ploughing huge sums into attracting visitors, Australia must budget adequate funds for cost-effective destination marketing if it is to retain, let alone grow, its share of lucrative global tourism flows.

The good news is that the Federal Government has provided $40 million for a new, Chris Hemsworth-voiced, aquaticallythemed global campaign. It is now being rolled out in major source markets around the world. And this is occurring at a time when the Australian dollar has dropped from previous highs around parity with the USD to around US70 cents. With this alignment of the stars, surely we can expect a turbocharged boost to inbound numbers.

But what if the anticipated growth does not occur? What if the industry is left asking international travellers “where the bloody hell are you?” – because whatever the theorists say, neither the value of the currency nor the level of marketing will exclusively determine inbound tourism numbers. For example the Federal Government’s plans to abolish the tax free threshold for working holiday backpackers has the potential to undermine this lucrative market sector. A case of cutting off your nose to spite your face.

The Government should note Qantas’ recent experience. A dummy spit by the airline’s chief executive Alan Joyce saw the carrier withdraw from its position as TA’s “go to” airline. Happily, the two parties have now kissed and made up. But Qantas won’t be in the same dominant position it was previously. Rivals have been able to move in and cement new relationships with TA. That’s what happens when you cut off your nose to spite your face.

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