Roy Morgan: Time To Give Tourism A Rev

How will Australia fare in the new, increasingly competitive environment of travel and tourism? That was the question posed at Roy Morgan’s State of the Nation: Spotlight on Tourism seminar held recently in Sydney.

PAGE 8 - Michelle Levine Roy Morgan ResearchHow will Australia fare in the new, increasingly competitive environment of travel and tourism? That was the question posed at Roy Morgan’s State of the Nation: Spotlight on Tourism seminar held recently in Sydney.

The event suggested the commercial models for airlines, travel agents, tour operators, accommodation providers, destinations and business events are in a ‘state of flux’ with shifting consumer leisure and lifestyle preferences, politics, economics and technological advances all disrupting and fragmenting the tourism and leisure world and shaping the Australian tourism industry’s 21st-century evolution.

Michele Levine, CEO of Roy Morgan, said with the end of the commodities boom, the need to identify long term sustainable industries is imperative, providing a golden opportunity for sectors such as tourism, if they play their cards right.

“With an estimated $100 billion of aggregated expenditure in 2014, tourism can be the industry that stays the distance,” said Levine. “Having adapted to the enormous challenges thrown at it by digital technology and globalisation, it is currently the country’s fifth-most valuable export industry.”

Levine added that the economy is the single most important factor that shapes consumer confidence and determines discretionary spend. A higher unemployment rate tends to curtail consumer sentiment, while fluctuating interest rates, the price of oil and the affordability of airfares all have a big impact upon whether people decide to go on holiday or not. Terrorism was also cited as a significant factor in more recent years as influencing consumer sentiment; counterbalanced by Australia’s progressive and multicultural society and how this is influencing our destination preferences.

So who within the market represents strong long term potential? According to Roy Morgan Research, the age group that’s growing the fastest and has the largest spending power is the Baby Boomers (those born between 1946 and 1964), so Levine advises commercial operators to “follow the money”.

However she issued the caveat that there could be some short term softening with consumer travel intentions, particularly retirees, as low interest rates impact their savings.

That said, with a reported more than 123 million accumulated days of annual leave accrued within the Australian workforce, it’s a question of providing the right impulse to get people travelling, Roy Morgan Research suggests.

The figures confirmed that travel agents are still a considerable influencer on customer choice where complex bookings are involved, with the internet being cited as the number one source for information gathering and customer purchases for younger travel segments.

“Our data indicates that it is not all doom and gloom for bricks-and-mortar chains: not only do Australians still use them (albeit to a much lesser extent than ten years ago), but many are open to the idea of using them for their next trip. Particularly for overseas travel, when specialist knowledge and personal service are often required, bricks-and-mortar agents have the edge over their strictly online rivals,” said Levine.

“Focus on the dollars; focus on the business, tourism is not just fun and games. The big dollars are in the affluent market, socially aware with in excess of $12 billion being spent in that segment,” claimed Levine. “We must stop thinking ageing population and therefore conservatism; they are now spending big dollars. It’s not just the snappy, young and cool – they stay at friends’ places on couches,” she said.

While inbound and outbound travel will continue to be affected by worldwide factors such as exchange rates, global unrest, engagement with Asia, and consumer confidence, the industry has already shown that it is up to the challenge of these tumultuous times.

“Our view is that now is the time to put all our effort into the tourism industry. We no longer have to sit back, it’s time to give it a real rev,” Levine concluded.

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