FORECASTING AUSTRALIA’S TOURISM FUTURESATIC Tourism Conference

By Dr Leo Jago

Chief Economist & GM

29 May 2014

Presentation Overview

Tourism – the state of play

Tourism – forecasts

Megatrends (CSIRO Futures)

Summary of key tourism drivers

Global Tourism Statistics (UNWTO)

International tourism arrivals in 2013 : 1.1 billion• Annual growth of 4% expected to continue• Predicted arrivals for 2030 of 1.8 billion

Tourism export earnings in 2012 : USD 1.3 trillion

Accounted for 9% global GDP in 2012

Generated 9% of total employment in 2012

Tourism’s Economic Significance (2012-13)

Australia South Australia

Direct tourism GDP $24.2 billion(2.8% of total GDP)

$2.2 billion(2.3% of total GDP)

Tourism exports $27 billion(8.9% of total exports)

$1.1 billion(4% of total exports)

Direct employment 543,600 jobs(4.7% of total employment)

31,000 jobs(3.8% of total employment)

Businesses 280,083

Australian Tourism Figures (YE Dec 2013)

Visitors (millions)

Nights (millions)

Spend (billions)

International 5.9 216.7 $28.9

Domestic Overnight 75.8 282.7 $51.5

Domestic Day Trip 164.3 - $18.3

Total $98.7

Inbound Versus Outbound Visitors

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Inbound visitor ar-rivalsOutbound departures

Inb

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nd

an

d o

utb

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to

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sm

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isit

ors

('0

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)

South Australian Tourism Figures (YE Dec 2013)

Visitors (millions)

Nights (millions)

Spend (billions)

International 0.4 10.5 0.7*

Domestic Overnight 5.2 19.5 $3.2

Domestic Day Trip 11.0 - $1.2

Total $5.1*

* Excludes pre-paid expenses

Visitor Nights in South Australia

2009 2010 2011 2012 20136,000

7,000

8,000

9,000

10,000

11,000

12,000

Vis

ito

r n

igh

ts (

'00

0)

INTERNATIONAL

INTRASTATE

INTERSTATE

Visitor Spend in South Australia

2009 2010 2011 2012 20130

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Vis

ito

r s

pe

nd

($

m)

INTERNATIONAL

DOMESTIC

O'NIGHT

DOMESTIC DAY

International Arrivals to Australia in 2013

New ZealandChina

UKUSA

SingaporeJapan

MalaysiaKorea

Hong KongGermany

IndiaIndonesia

0 200 400 600 800 1000 1200

Visitors ('000)

Source of International Visitors to South Australia

2009 2010 2011 2012 20130

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Vis

ito

r n

um

be

rs

(‘0

00

)

CHINA

USAGERMANY

UK

NZ

Source of International Visitors

Nationality South Australia%

Australia%

United Kingdom 17.2* 10.5New Zealand 10.5 18.4*USA 8.6 8.0Germany 7.8* 2.8China 7.2 11.3*Malaysia 4.2 4.2France 4.1* 1.8Canada 3.5 2.1Italy 3.1 1.1

International Visitor Activities

Visit wineries

Visit history / heritage buildings, sites or monuments

Visit museums or art galleries

Pubs, clubs, discos etc

Visit national parks / State parks

0 10 20 30 40 50 60 70

11.5

21.6

27.2

33.3

28.9

35.1

36.4

44.1

41.0

33.0

37.0

39.5

45.0

45.6

49.0

49.6

56.3

61.2

South AustraliaAustralia

International Visitor Dispersal

Nationality Visitors%

Nights%

China 9 6

Other Asia 17 13

North America 36 25

Europe 48 25

Total 27 18

Nights outside capital cities, GC & TNQYE December 2013

Source of Interstate Visitors to South Australia

Origin %

Victoria 42.6

NSW 26.6

Queensland 13.2

Western Australia 8.3

Northern Territory 5.0

ACT 2.2

Tasmania 1.9

Purpose of Visiting South Australia (All Visitors)

2009 2010 2011 2012 20130

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Vis

ito

r n

um

be

rs (

'00

0)

BUSINESSOTHER

HOLIDAY

VFR

Increasing Visitors to South Australia from UK, US & Europe

53% could name a location in SA unprompted• Adelaide 49%• Kangaroo Island 10%• Barossa 5%

Respondents believed SA:• Has unique attractions• Just seems too far away• Is vast and empty compared to other places in

Australia

Main Reason for not Selecting South Australia in Planning the Trip

Not enough time in trip to include

Too expensive

Other destinations more appealing

Plan to visit in the future

China Forecast to Remain Australia’s Top Expenditure Market

New Zea-land

China United Kingdom

United States

Singapore0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6Arrivals (million)

2013

Forecast 2022-23

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0Expenditure ($billion)

2013Forecast 2022-23

Key Influences on Chinese Visitor Satisfaction

Attractions, especially nature based

Value for money

Good shopping

Good quality food, Western and Chinese

Chinese language servicesSource: Tourism Research Australia’s: Chinese Visitor Satisfaction Research January 2014

South Australia has what China Wants

World class beauty and natural environments

A safe and secure destination

Good food, wine, local cuisine and produce

Friendly and open citizens, hospitality

Native or cultural heritage

Kangaroo Island, whale/dolphin watching

Source: Tourism Australia’s: Understanding the Chinese Consumer June 2013

Tools to Help You

www.tra.gov.au Asia Focus

Mega-trends Impacting Tourism Over Next 20 Years(Prepared by CSIRO Futures for Queensland)

1. The Orient Express

The generation of wealth is moving east

Over 1 billion people in Asia will transition out of poverty into the middle income bracket in coming decades

China will dominate this trend• Chinese tourists prefer historical & cultural sites rather

than just natural scenery• Like to incorporate visits to museum, art shows or

watch sport during holiday

Countries throughout Asia are investing heavily in tourism so there is much competition

1. The Orient Express

2. A Natural Advantage

Impact of climate change

Australia has world class natural assets

Nature is still Australia’s drawcard with tourists

Increased urbanisation is likely to increase the desire for nature

3. Great Expectations

Moving upwards through Maslow’s Hierarchy

As incomes rise, people move from consuming materials to consuming experiences

An increasing desire for authentic experiences

The tourist doesn’t want to be a tourist

VFR is important especially for domestic tourism & forecast to rise

4. Bolts From The Blue

Tourism is highly sensitive to extreme events

Climate change brings more extreme weather events

Increased human mobility is elevating the risk of infectious diseases

4. Bolts From The Blue

Increased uncertainty increases the popularity of domestic holidays

Australia is a relatively safe tourist destination

Australia’s safety ranked more highly by past visitors

5. Digital Whispers

Internet usage continues to grow

Increased internet usage on smartphones

IT will continue to change how tourists access and use information

The changing role of the travel agent

Greater information flows between travellers

The popularity of user-generated content in travel

More bookings are made online

Virtual experiences are not replacing actual experiences yet

A virtual experience may increase the intention to visit

Despite IT, there is the expectation for face-to-face interaction

For some there is too much IT and people want to disconnect

5. Digital Whispers

6. On The Move

Trade leads to travel

Global trade to increase by nearly 75% by 2025

Strong trading ties with Asia

Growth in multi-purpose trips

Education exports (22% of students in 2009)

Rise of medical tourism

Aviation access is critical

Air ticket prices also important

The world’s citizens are becoming more mobile

High speed rail more popular

Cruise ships on the rise

6. On The Move

7. The Lucky Country

Australia rode the GFC better than most

Overseas holidays getting cheaper

Outbound tourism for Australians is on the rise

Australian tourism seen to be high cost globally

Lack of investment in domestic tourism product could hold back local potential

Ageing population means Baby Boomers form a key market

Defining Characteristics Arising From Merging of the Megatrends

Safe and secure Clean Green Friendly and authentic Value

South Australia performs well on most of these dimensions

Domestic Tourism – Key Drivers

Safety and security

Value for money

Picturesque natural environments

Key attractions• Natural landmarks• Heritage sites• Historical landmarks

Food and wine experiences• Especially in natural settings

Domestic Tourism Issues

Outbound tourism growing strongly• Aspirational• Broader product range• Better value

Lack of awareness of Australian product

Domestic travel helps unite families• Offering must suit all family members

VFR continues to grow

Weekend breaks continue to be popular• Challenge is to move them outside peak periods

South Australia

Great natural environments Wide range of natural and heritage attractions Excellent food and wine Good driving location

BUT Low levels of awareness Limited access

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