There is currently a lot of concern in Australia about the slowdown in the resources sector and what that means for the country’s broader economy, but Alan Joyce, Chief Executive Officer, Qantas has highlighted in a article has written in the Business Section of the Herald Times this week that while there’s no doubt that the switch from construction to production in the resources sector, and the big drop in commodity prices, represents a major shift for Australia's economy, he believes it provides a great opportunity for its tourism industry.
The changes in the resources sector are clearly visible to Qantas, according to Joyce, with the airline witnessing a steady drop in passenger demand in-and-out of parts of Western Australia and Queensland over the past 12 months.
“But the flipside to this is a great opportunity in our tourism industry. Because the focus away from the resources means tourism has the potential to be the source of our next boom,” he said.
Historic tourism trends show Australia as a destination ranks highly on people’s wish-list, particularly for residents of the USA, China and UK and enhanced global air connectivity has truly shrunk the world and reduced the issue of distance in the decision-making process.
“Distance has become much less of a barrier,” said Joyce. “There are more airlines flying into Australia than ever before and the cost of a flight from London, for instance, has fallen by about 30 per cent over the past decade.”
Now that the mining boom has faded and the dollar is returning to more ‘normal’ levels, Australia will likely become a lot more attractive to foreign tourists simply because their currency buys 20 or 30 per cent more than it did a year ago.
“That is excellent news for a lot of local businesses, because it encourages overseas visitors to spend more when they’re here and also encourages more Australians to holiday domestically. Already, about 70 per cent of our tourism activity is Australians seeing their own country,” said Joyce.
Growing international arrivals to Australia
All these factors are starting to show up in the statistics. In the 12 months to August this year, more than seven million tourists visited Australia, up 6.5 per cent on the prior year. The biggest growth market by far was China with a 21 per cent increase in visitors in 12 months, to reach 950,000 visitors, according to Australian Bureau of Statistics, Overseas Arrivals and Departures.
Data shows that in the last financial year international visitors to Australia spent a record $33.4 billion, up ten per cent on the prior year. “That’s the biggest year-on-year growth in expenditure since the Sydney Olympics in 2000,” said Joyce.
The value of the Chinese market is also clear with visitors for the country spending $7billion during their time in Australia, a 32 per cent increase in comparison to the previous financial year. Chinese visitors now account for $1 in every $5 spent by international visitors to Australia, according to Tourism & Transport Forum Australia.
“This all shows how our tourism economy is changing – and its potential. Forecasts predict that Chinese visitor spending will grow to $13 billion by 2020,” explained Joyce.
Competition for international travellers
But Australia is not alone in eyeing up tourism as a key growth industry and in particular the valuable outbound Chinese market. “We’re competing in a global market for visitors,” noted Joyce, suggesting that in practical terms the country needs to get the four pillars of tourism working together: branding and marketing; global networks; tourist experiences; and infrastructure.
“That means the private sector and tourism authorities working together to maximise investment in promoting tourism. Our marketing efforts should go beyond big ad campaigns to a more agile approach, especially through digital channels. Qantas is the biggest single private investor in promoting Australian tourism, and we’re now working with individual states and territories to showcase the best each has to offer,” said Joyce.
The role of enhanced connectivity
The airline executive highlighted that network development opportunities will help facilitate this but warned that a cautious approach to growth that supports the home Australian economy rather than others.
“We also have to strengthen our aviation links with the rest of the world. That shouldn’t be done by throwing the doors open to anyone who wants to fly here, because in many cases that succeeds mostly in helping other countries with their own tourism ambitions at the cost of ours,” he said
“Rather, it should focus on strategic relationships with key markets to deliver more visitors to Australia. That’s what Qantas aims to do with its new China Eastern Airlines partnership, which is about making travel easier between Australia and our fastest growing tourism source market,” he added.
Meeting visitor exepctations
Highlighting a key issue that can get forgotten when seeking to attract and support foreign arrivals, Joyce said the country needs to ensure its tourism experiences are “easy to get to, easy to navigate and easy to understand” – simple things like signs in different languages make a huge difference, but, he acknowledged, “Australia has some catching up to do on that front”.
He also noted that bureaucratic practices and procedures should be brought into line with international levels and not necessarily used for short-term economic gain and not for sustainable benefit. “Australia is looking at charging $1000 for a ten-year multiple entry visa for a Chinese national wanting to come back-and-forth to Australia. The US recently introduced a similar visa for just $215, and the number issued jumped by 68 per cent in two months,” he noted.
Pursuing tourism success means investing in infrastructure that’s vital to the smooth running of the tourism industry, especially airports, public transport and events facilities. Joyce said the commitment to a second Sydney Airport “is a move in the right direction”, but urged current airport operators to “get our current major airports working as smoothly as possible” so they provide the best possible first impression of Australia.
“You don’t want to get off a twelve hour flight and spend the next hour in a queue,” he noted, highlighting US Customs and Border Protection as a great of example of how an investment in new technology can enhance the customer experience and provide a more efficient customer journey.
“Australia is in a competitive neighbourhood. Our natural beauty and lower dollar are huge advantages for attracting tourism. But if we want to turn this industry into the source of our next boom, we need to start with a sense of optimism as well as some important reforms,” added the airline boss.