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36 Charter I September 2011
that international tourists plan to spend
$13.8 billion in Sydney and $7.5 billion in
Melbourne during 2011.
“What is encouraging is that despite the
exchange rate making a visit to Australia
more expensive, international tourists are still
intent on travelling here, which will be a real
boost for our domestic tourism sector at a
time when it is really needed,” he adds.
Mariani says that while Australians
travelling overseas is in double-digit growth,
the bigger problem is how do we manage
our domestic tourism? Domestic tourism
contributes to 75 per cent of industry
A 2008 study Through the Looking Glass
from Tourism Australia which explored the
habits of the Australian travel consumer, found
that Australians didn’t view local travel as a
true holiday destination. They typically viewed
international travel as the mark of a proper
holiday. “The reality is that our members
survive on domestic traffc as much as
international. There is an issue about how we
position Australia as a destination of choice to
our own market,” Mariani says.
The Tourism Forecasting Committee
reports that domestic visitors are forecast
to fall by 0.3 per cent to 259 million in 2011
which is a downward revision from the
growth of 0.6 per cent previously forecast in
“The weaker short-term outlook can be
linked to the effects of recent foods and
cyclones on travel, coupled with the sustained
strength of the Australian dollar and restrained
consumer spending,” Salt says.
Like many operators Hotels.com has
witnessed frst-hand how the continued
strength of the Australian dollar has made
international destinations incredibly attractive
to Australian travellers. The operators on the
front-line have to become more innovative and
engage with customers more aggressively to
keep them travelling domestically.
To support Australia’s domestic travel industry,
Hotels.com has focused heavily on providing
attractive accommodation deals and sales for
key Australian cities and leisure destinations.
They also offer a loyalty program, Welcome
Rewards, which offers one night free for every
10 nights stayed across over 65,000 hotels in
Australia and worldwide.
“Hotels.com is also involved in Tourism
Australia’s No Leave, No Life program
which encourages Australians to holiday
domestically and embrace shorter trips so
they do not accumulate unused annual leave
days,” Svanstrom says.
Airfares are also a big factor in luring
Australian travelers offshore. “In 2009 we saw
prices to travel ex-Pacifc that we hadn’t seen
in years and as spending contracts we will
see more competitive pricing,” Mariani says.
On the positive non-US-centric side of the
world, Mariani highlights that offshore people
are not as obsessed with the value of their
currency like we are.
“If we look at the east we are experiencing
more a substitution of travel rather than a
drop off. There has been a massive surge
in visitation from Asia, China, Singapore,
Malaysia,” she says.
Figures on overseas arrivals released by
the ABS in July reveal that the Asian market
is Australia’s tourist salvation. China now
is one of our most valuable markets after
surpassing the previously lucrative Japanese
market in visitor numbers, nights stayed and
The China market has now moved into
third position by volume with more than
39,000 visitors in May 2011. It also holds the
number one position by value.
Salt adds while markets like the US are
contracting, eastern markets such as China
and India are where the growth will be
coming from in the next fve to 10 years.
“The future of the Australia tourism
sector is all about generating and creating
connectivity with the Asia markets,” he says.
The rising middle class in China has shown
that it is not cost-obsessed when travelling
and will pay for premium experiences that
they cannot get at home.
Salt adds the downturn provides the
industry with time to shift strategic weight
from the traditional areas to new areas of
“The challenge for our industry is to
embrace and grow these emerging markets
and to fnd new ways to attract our domestic
market back on-shore,” says Mariani.
THE CARBON TAX EFFECT
The tourism industry is also bracing itself
for a third major blow coming from the
impending carbon tax.
Research from audit frm BDO has revealed
that Australian tourism businesses face
electricity increases of 30 per cent or more,
with a signifcant impact on operators reliant
on diesel or aviation fuel who face a reduction
in their fuel tax credit of 18 per cent.
BDO head of sustainability, Dylan Byrne
says that under the proposed changes to
the fuel tax credit system, many operators
using diesel or aviation fuel faced real and
signifcant increases to their operating costs.
“There is an urban myth that the tourism
industry will only feel a slight impact from the
introduction of a carbon price, but the reality
is some of the proposals will have major
direct and indirect impacts on the costs
Despite the exchange rate making a visit
to Australia more expensive, international
tourists are still intent on travelling here
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