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State Of Australian Tourism

New market report: Australia tourism Q2 2010

Jun 14, 2010

Since the severe acute respiratory syndrome (SARS) pandemic in 2003, tourist arrivals in Australia have grown steadily. In 2009, however, we estimate that tourist arrival numbers dropped by nearly 2% yearon- year (y-o-y) to 5.34mn. The industry was hit by dwindling price competitiveness from its major source destinations such as the UK and New Zealand as the Australian dollar strengthened,, while discretionary spending was reined in by many potential tourists and business travellers.

The numbers would have decreased further were it not for heavy fare discounting by airlines. These discounts are expected to be short-lived as global oil prices trend upwards, putting pressure on airlines' profitability in 2010. That said, competition between low-cost carriers in Australia and the Asia Pacific region will keep fares relatively low. Tourist arrivals are forecast to increase by 3.1% y-o-y to 5.51mn in 2010 and to continue to increase to the end of our forecast period in 2014.

Collective government expenditure on travel and tourism amounted to an estimated US$2.77bn in 2009 and is forecast to increase to US$3.38bn in 2010. After 2010, collective government expenditure is forecast to level off, hover around US$3.3-3.4bn through to 2014.

The government has launched a new marketing campaign to brand the country, spending US$20mn between 2009 and 2013, and to launch a new brand in 2010. Minister for Trade Simon Crean said the plan is to create 'a cohesive brand that captures the essence of Australia and underscores the quality of all that we have to offer in sectors such as trade, investment and education'. The Only in Oz Holidays campaign is aimed at first-time travellers to Australia, especially those that prefer independent travel and are looking for new experiences. Australia receives the majority of its tourists from Asia Pacific, followed by Europe and North America. New Zealand is its largest source market, while Japan and China are growing steadily. China has been flagged by the Ministry of Tourism as Australia's fastest growing market, although inbound tourism is under threat due to souring diplomatic relations between Australia and China. A series of incidents, including the arrest in China of four Rio Tinto executives and the Australian government granting a visa to Uighur leader Rebiya Kadeer, who is regarded as a terrorist by the Chinese government after fatal riots in Xinjiang in July 2009, have increased tensions. Inbound tourism operators said that, as a result, they are fielding an increasing number of questions regarding anti-Chinese sentiment from potential tourists. Tourism Australia is also targeting Malaysia, partnering with Malaysia Airlines and launching a Malay language version of its consumer website, while the Ministry of Tourism has also set its sights on India as a good growth market.

In terms of outbound tourism, New Zealand dominates the Australian market. Outbound tourist numbers to the country nearly doubled between 2001 and 2009, increasing from 574,500 to 963,000. In 2014, 1.21mn Australians are forecast to visit New Zealand. The US and the UK follow New Zealand, while the remaining destinations in the top 10 visited by Australian tourists are all in the Asia Pacific region. In 2009, 3.82mn Australian tourists visited the region and we forecast growth to continue through to 2014, when outbound tourists to the Asia Pacific region will total 5.16mn.

New market report: Australia tourism Q2 2010
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Source: and OfficialWire

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