The State of the Travel Industry

Travel

The tourism industry has faced a few interesting years recently due to slower than expected growth rates and currency volatility on a global scale due to the global financial crisis. That being said there has been steady improvement in the metrics of the industry, a fact which is highlighted by a tourism report by Tourism Research Australia for 2013/2014 which will no doubt be continued with their 2014/2015 report. The statistics and projections within last year’s report are a great way for agencies and providers to identify how the industry is evolving as a whole and to target growth areas that could be targeted by their services.  For the rest of this article we will be examining some of the key figures and statistics and what impact they have had or will have on the industry for the rest of 2015/2016.

Total Trips Statistics (International and Domestic)

The report states that Australia saw a total of 6.1 million international visitors (up 8%) and there were more than 79.1 million overnight domestic visitors (up 5%). These two figures together produced respectively $30.1 billion (up 7%) and $53.3 billion (up 4%) in spending.  It is also important to note here that the purpose of visitors travel has seen some changes. While there was a slight downturn in domestic holiday expenditure there was strong growth in both the Visiting Friends and Relatives (VFR) and Business trip expenditure domestically. Paradoxically international outbound travel expenditure continues to be driven by both holiday and VFR trips with business trips seeing expenditure fall 10.7% to $6.6 billion.

What This Means:

With over 12 times as many overnight domestic visitors than international visitors agencies and providers should be looking to capitalise on the strong and growing domestic travel market. Offering services that cater to the domestic short stay market should help your business further tap into this sizable pool of spending; some steps you can take might be offering domestic visitors airport shuttle services, short sightseeing activities (Bike tours, Winery Tours), business travel enabled accommodation (conference rooms, business centres) or local information packs for their destinations as a means to boost subscribers or further develop your email list.

International Visitors (Demographics)

The report’s demographic information while not surprising does highlight some interesting developments about who is visiting Australia, who is spending the most money and on what. To begin with the largest growth in arrivals was found to be from Singapore, China and Malaysia which were up 18.2%, 10% and 8.9% respectively. This is more than likely not only due to their close proximity but also their relatively good economic growth in the recent couple years.  These growths in arrivals not surprisingly helped to make the Asian market once again the largest contributor to international tourism expenditure with approximately 47% of the total expenditure. The biggest contributors being Thailand (17.1%), China (16.3%) and Hong Kong (14.2%) which helped to drive growth from the Asian markets up to 7.4%. Interestingly it was noted that the increased expenditure was driven by increased spending on package tours, education and take home shopping. The report further predicts that the inbound tourism from China will continue to grow with estimates stating that China will contribute approximately 1/4 (24%) of total growth until 2022-2023. Somewhat surprisingly it was noted that both Japanese and South Korean visitors declined by 2.4% and 0.1% respectively and saw their expenditure fall by 7.2% and 9.6%. This reduction for both Japanese and South Korean tourists is most likely a symptom of harsh economic realities and poor growth at home (Japan/South Korea) and perhaps instability in the region due to tensions with North Korea and China.

What This Means:


What all these metrics and data mean is that now more than ever are there opportunities for agencies and providers to develop strong tour/experience packages for the Asian market, in particularly China, Thailand and Malaysia. Agencies and providers should continue to develop services that provide packaged sightseeing and retail experiences for their influx of Asian customers. The growth markets of China, Malaysia and Thailand could be specifically targeted and facilitating multilingual tours or experiences could be beneficial. Furthermore incentivising travel to Australia for South Korean and Japanese tourists could be looked at through incentive programs and discounted travel packages.

This report highlighted some interesting trends within the travel industry and might be able to provide the data agencies and providers need to gear and transform their services for the coming years ahead.

For access to the report go to:
http://www.tra.gov.au/research/Latest-State-of-the-Industry.html