TTF View – May 2011
Inbound tourism results: Australia scores goals in one out of five top markets
By John Lee, chief executive, Tourism & Transport Forum
THE rise in Chinese arrivals accounts for more than three quarters of the overall growth in inbound tourists over the past year, with less than favourable conditions in the remaining four of our top five source markets.
The four are New Zealand, the UK, the US and Japan, and between them they account for more than 45 per cent of international arrivals. Our number one source market, New Zealand, is suffering from the impact of the Christchurch earthquake, while the economies of the UK, our number two, and the US at number four are still battling the after-effects of the Global Financial Crisis. In addition, new threats to global economic stabi-lity seem to be emerging almost daily.
We had started to see a recovery in numbers from Japan, our fifth-biggest source market, however the earthquake, tsunami and nuclear crisis have reversed those gains, as the Japanese rightly focus on domestic recovery.
On top of that, people around the world had seen weeks of media cover-age suggesting that Queensland was underwater or had been blown away.
The news for the remaining one of the top five appears, at least on the surface, to be good. Arrivals from China rose almost 30 per cent over the past year and that growth is forecast to continue over the coming years.
Chinese tourists already spend more than visitors from any other country, but more than two thirds of that spending is by international students and the strength of our currency is making Australia less competitive as a place to study.
It’s estimated that international student numbers are down 10 per cent on last year and with the dollar’s strong run, demand for education services could fall even further.
Granted, leisure visitors from China are likely to account for an increasing proportion of spending as their numbers increase over the coming years, but we face a potential drop in revenue until that balance shifts.
Australia was the first country accredited by China under its Approved Destination Scheme and work is continuing to improve access for Chinese tourists, but it is unrealistic to expect that this will see an immediate spike in arrivals. Like all good things, it will take time.
It is vital, however, that we learn from the mistakes of the past and do not become overly reliant on one market. Make hay, by all means, but don’t focus exclusively on China at the expense of other markets.
To spread the risk and to drive demand, we need to invest in products and experiences that are attractive not only to Chinese tourists, but to a broad range of potential visitors – including Australians.
Providing innovative, unique and exciting things to do and places to see and stay will help to improve the value proposition we offer, especially to the many Australians who are currently taking advantage of the strong dollar and travelling overseas.
Much work is going on around the country to address these issues. Public and private projects are under way which will deliver new and refurbished accommodation, events venues and revitalised tourism precincts, and there’s more to come.
TTF View appears quarterly.