State of the Industry: October 2015

"If you have a really cheap service, in the case of Airbnb, what does that do to the margins of your traditional infrastructure, and how do you manage to maintain it" says Tourism Minister Richard Colbeck in this month's 'State of the Industry' report.

New travelBulletin one year on

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WoAG air travel tender

The federal Department of Finance has issued tender documents for the provision of domestic and international air travel, under the Whole of Australian Government (WoAG) system where the existing contracts expire at the end of April next year. Clearly public servants fly a lot, with figures in the documents confirming the successful tenderers will provide travel services worth a whopping $420 million annually for 120,000 public servants working across about 140 government departments and agencies.

The scale of the requirements is staggering, with an industry briefing confirming the government also spends about $126 million on accommodation, and $19 million on car rental every year. The evaluation criteria includes the competitiveness of the fares and any discounts offered, and the fare conditions associated with each fare and how these will benefit or disadvantage the government. A panel of successful tenderers will be appointed, with each airline required to work cooperatively with the government’s appointed Travel Management Company – Helloworld’s QBT – to “ensure successful integration and utilisation of the services”. Prospective tenderers must submit their bids by 2pm on 22nd October 2015. 

Trafalgar transparency

The Travel Corporation’s Trafalgar operation is continuing its ongoing evolution, with the launch of a new tagline and collateral in conjunction with its 2016 Europe brochure.

Australia is a key market for Trafalgar – the company which has introduced a whole new “guided holidays” vernacular to the segment – with ceo Gavin Tollman telling travelBulletin the new Simply the Best slogan reinforces the company’s bold move last year to publish unmoderated, uncut traveller reviews on its website. Tollman said the feedback from clients is overwhelmingly positive. “Whenever I’m having a bad day, I just go and look at the reviews and they cheer me up,” he said.

Travel agents can benefit from the company’s openness too, with Tollman suggesting consultants simply turn their screens around and show their clients what passengers are saying. He said a key benefit of the instant reviews had been that Trafalgar is also able to quickly address any problems as soon as they arise, resulting in even higher levels of guest satisfaction.

Meanwhile elsewhere in the Travel Corporation things don’t appear to be sailing as smoothly, with the departure of New Horizons managing director Chris Evans “to pursue a new career challenge” expected to see the Perth-based wholesaler merged into Creative Holidays. The Travel Corporation insisted that New Horizons will continue to maintain a local presence in WA in a joint operation with Creative, with the business to be overseen by Creative Holidays managing director James Gaskell. 

Tourism Australia heads South

The appointment of Tony South as the new chair of Tourism Australia came as a surprise to some, with the coveted job previously held by former Qantas ceo Geoff Dixon the subject of much speculation in mainstream media. Names such as Carnival Australia ceo Ann Sherry and Transfield chair Diane Smith-Gander were bandied about, alongside former politician Bruce Baird and even ANZ chairman Warwick Smith.

However in the end it was South, who had been acting in the role once Dixon stepped down on 30th June, who got the gong – and an excellent appointment it is too. South’s tourism credentials are impeccable, with an extensive industry career including roles with InterContinental Hotels Group, Tourism Accommodation Australia and as a long-time consultant. It will be instructive to see the evolution of Business Events Australia under his leadership, with South also a former managing director of the Sydney Convention and Visitors Bureau, now Business Events Sydney, meaning he has a clear grasp of the strong benefits of the meetings and conference market to build tourism value.

Google continues travel push

Google’s access to big data is unprecedented, and travel appears to be one of the key sectors where it is opening up its intelligence to the wider market. Last month a new “Travel Dashboard” was unveiled at the Future Travel Experience Global show in Las Vegas, presenting data trends and travel booking patterns across 25 major US markets. Initially covering information gathered over a two year period to June 2015, Google promised that users will be able to see the most-searched brands, destination queries and the top five questions asked of its search engine, as well as segmenting the results based on whether the searches were from mobile or desktop devices.

That announcement was followed a few days later by the revelation that Google is also introducing a new commission-based advertising program for hotels. Bookings generated via the Google Hotel Ads platform will see accommodation providers charged “industry standard” commissions for bookings rather than the standard cost-perclick model – meaning Google is becoming a direct competitor to online travel agents. Some analysts say this seismic shift is likely to significantly impact major players such as Expedia and, which spend millions of dollars to ensure they appear at the top of Google search results.

Sydney on the agenda for QR?

Qatar Airways’ outspoken ceo Akbar Al Baker has a love-hate relationship with Sydney. When the carrier first announced its Australian flights from Doha in 2009, Melbourne was the first cab off the rank, but Sydney was planned to follow shortly thereafter – with a Qatar Airways route map clearly indicating the debut of services ex SYD scheduled to commence in early 2010.

Sydney quietly slipped off the QR map shortly thereafter, and since then Al Baker has made a range of assertions, particularly attacking the Sydney curfew which makes onward connections via Doha difficult. In 2012 he told Travel Daily “there will be further Australian routes, but it won’t be to Sydney. We’re not in the business of parking planes on the ground for ten hours”.

The debut of Perth services in 2012 meant QR had used up its full allocation of 14 weekly flights – but late last month a new bilateral has put the matter up for grabs again, with an allocation of 21 services available which would equate to daily flights from three ports. The NSW capital is expected to be the next step – particularly given new rhetoric from Al Baker earlier this year when he insisted “Sydney has never been off the radar”.

Reynolds returns to Australia

The appointment of Steve Reynolds to the role of executive general manager with APT continues the touring and cruising giant’s seemingly relentless expansion. Reporting to APT Group ceo Chris Hall, Reynolds will oversee the APT operations globally, while the new executive structure will also see David Cox with a similar Executive GM role looking after Travelmarvel.

Reynolds has an impeccable in
dustry pedigree, joining APT from his former Londonbased role as managing director of Back- Roads Touring. He joined Back-Roads about three years ago, after steering Tempo Holidays through its acquisition by Cox & Kings. Under the APT restructure Debra Fox will work across both APT and Travelmarvel as executive general manager of Global Sales & Marketing, while David Courage rounds out the team as executive general manager of Global Operations, Innovation and Procurement.

Yes, (Tourism) Minister

New prime minister Malcolm Turnbull wasted no time in putting his stamp on his new government, with the long-awaited appointment of a tourism minister warming the hearts of travel and tourism lobby groups across the country.

Predictably the accolades were followed by calls for the new role to become part of the Cabinet, but you can’t have everything. Tasmanian Senator Richard Colbeck will oversee the tourism portfolio, indicating that Turnbull recognises the importance of the sector which was previously part of Andrew Robb’s Trade and Investment remit.

Interestingly, one of Colbeck’s first initiatives has been to announce he will consider the impact of “sharing-economy” businesses such as Airbnb and Uber on the sustainability of the domestic tourism industry. “If you have a really cheap service, in the case of Airbnb, what does that do to the margins of your traditional infrastructure, and how do you manage to maintain it,” he asked.

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