How Big (and how Viable) is Australia’s International
Inbound Tourism Industry?
Bureaucrats tend to chunder out boring retrospective statistics that tell us little more than “where we have been”. Not very helpful if you are driven by the need to go forward!
Author’s Note: This was written in 1998 – it is now (by any measurement) ‘retrospective!’
We’ve taken their figures – projected them and accumulated them. This turns them into something which can be used as a “plug-in” to a business plan – and (now) makes more sense. These figures do not include anything spent on fares, meals, accommodation or tour costs. The truth is that we have no way of telling exactly what the tourism industry’s real spending potential might be – but the Bureau of Tourism Research were able to qualify the above numbers by surveying just three segments of the retail community.
Between 1997 and 2005,
Australia hosted around 45 million international visitors…
45,000,000 extra customers! 2.5 times our domestic population base. They spent (conservatively) $870 each on Shopping alone – around AUD$30.4 Billion. These figures HAVE been adjusted for the Asian downturn!
You might have noticed that we continually refer to the “tourism industry” – NOT the “tourists”…
The most often made mistake by inexperienced
marketers is that they target the Tourists…
instead of targeting the Tourism INDUSTRY.
The distribution channels of international tourism are complex and difficult to penetrate – but failing to include all the relevant levels of the industry’s infrastructure in your marketing strategy will lead to certain failure.
It is NOT a task for amateurs!
The problem faced by nearly all Australian based companies is that very few can gain access to the industry above the level of the Inbound Tour Operators – except perhaps at Australian Tourist Commission (ATC) sponsored Trade Shows. Indeed, they are often advised not to…
Over the last 25 years we have developed and nurtured the “personal relationships” so critical in conducting long-term business in Japan and Asia. We have the ability to access the Tour Wholesalers at decision making level – and THEN we factor in the Inbound Operators. This ensures that all negotiations remain between principals.
Perhaps the best way of illustrating this is to introduce you to some of our own marketing projects… How they began, developed – and how they operate now.
Tourism is an industry often quoted (but seldom understood) by politicians and bureaucrats. It contributes more to our national export effort than any other industry – but enjoys less incentives. It is (arguably) the most private of all Private Enterprises!
The following pages will take a general look at the structure of the International Tourism Industry. We will visit the marketing and distribution systems within it, and destroy some industry myths! We will concentrate (not surprisingly!) on our involvement in it. Where we have come from – and where we are going to. Things we have done, things we are doing – and things we would like to do. We will raise questions, answer some – and probably start a few arguments.
Come with us (Once were Tour Leaders!) as we explore the industry a little further… and learn more about us… If you have any questions, answers – or even arguments – we would like to hear from you. We are ALWAYS available for new challenges!
There is an obvious bias to tourism (Australian tourism) in the following pages – but the strategies will fit any industry (and any country) planning to target the international marketplace.
The common denominator in International Marketing is the “Personal Relationships” which result from successful negotiations – and are critical to long term business.
The personal content is therefore intentional – and only slightly self-indulgent!
International Marketing Projects…
Studied Hotel Management at the University of Surrey (UK) – from Cocktail Bar to General Manager – specialising in Destination Development & Resort Marketing.
1975 – 1988
Tourism Industry Publishing
Weeklies in all major Australian cities and a monthly in Japan.
1979 – 1989
Medical Technology Marketing
Monash University IVF Project Marketing In-Vitro Fertilisation (Test Tube Baby) technology to Japan.
1984 – 1992
Gold Coast Tourism Bureau Limited
Regional Tourism Development. Elected Chairman (1986-1992) with a mandate to restructure.
1987 – 1994
SEA-FM Radio Limited
Director. Successful application for the Gold Coast’s first FM radio licence.
1988 – 1989
Solomon Islands Tourism
Consulting to the Government on an integrated tourism strategy for their group of islands.
1990 – 1991
Parktec International Pty Ltd. Mechanised car parking. Technology-transfer contract with a large Czech Republic munitions company.
1992 – Current
Tourism Shopping Australia
Some short term projects become so successful that they evolve into stand alone corporate ventures.
This one began in 1992 as a one year experiment for AMP Shopping Centres, at Pacific Fair on the Gold Coast, and currently operates as a national retail segment development strategy in conjunction with the ATC.
Summary of the Countries we Operate in…
A detailed list of countries where we have successful strategic access.
Projects – in Detail…
Project Years: 1975 – 1988
During my years in the Hotel Industry I noticed that Australia did not have the quality (colour) destination guides which existed in Europe.
With 3 partners, we launched THIS WEEK ON THE GOLD COAST in July 1975. It was an immediate success. In 1977 we launched DISCOVER BRISBANE, in 1979 DISCOVER MELBOURNE and in 1985 – DISCOVER SYDNEY. From the very early days I insisted that the company become an integral part of the tourism industry – rather than the print media or publishing industry.
As Managing Director – I became involved in most regions of Australian tourism and in the early stages of the rapidly developing International inbound market. I was a regular visitor to Hong Kong and Taiwan (for publishing production) but in 1979 made the first of many visits to Japan. My affinity for the country was immediate and we began planning for a tourism industry diversification into this market.
In 1984, the earliest phenomena of Japanese tourism to Australia was the discovery that most were returning home with un-spent dollars. With senior Australian Trade Commissioners based in Japan, I became involved in the “O-Miyage Project”. We published the first paper aimed at educating manufacturers and retailers in the deep cultural traditions behind this obligatory gift giving – after visits abroad. This paper became part of the Bradbury Report on Tourism Shopping (1987) and (in 1992) gave birth to the Tourism Shopping project at Pacific Fair for AMP Shopping Centres.
In 1986, with the support of Austrade, we launched DISCOVER AUSTRALIA. This 244 page magazine was published entirely in Japanese and was issued through the Australian Visa issuing offices in Tokyo and Osaka. It carried a large section covering Australian products suitable for O-Miyage – and tourism information on all regions of Australia.
All magazines became very successful and, in 1988, I sold my interest in Gold Coast Colour Productions to devote more time to other ventures.
Key Elements to Success:
Apart from the expected fundamentals of strong design aesthetics and quality printing – we concentrated on…
Service Standards – 76% of our advertising clients remained with us since we (or they) started business!
Industry Focus – We became a strategic partner in the development of Australia’s inbound tourism industry – and we took active roles in the development of the international infrastructure.
Personal Relationships – were developed in all our target markets – and nurtured.
Project Years: 1979 – 1989
International marketing of Australian medical technology – to the Universities and hospitals in Japan and Asia. Professor Carl Wood and Professor Alan Trounson of Monash University are the pioneers and acknowledged world authorities on the science of In-Vitro Fertilisation (Test Tube Baby) technology.
In 1979 my wife and I became involved (as patients) with Prof. Wood and Prof. Trounson – on their IVF project. In 1981, our daughter Carla was born. She was Carl Wood’s first test-tube baby, and we spent the next 2 years in the glare of the world media. In 1987, our son John was born. I was invited to become involved with the international marketing of their world leading technology.
Japan was quick to recognise the potential for this technology and scientists soon began arriving on study missions. We decided to slow this process and (instead) offer training seminars and treatment cycles. We negotiated with Universities and offered facilities for patients entering Australia for 2 week treatment cycles. Asia followed – then India and Italy. Most countries now offer Assisted Reproduction technology – and many of the scientists have trained with Professor Wood’s team.
The programme continues at Epworth Hospital and the Monash Medical Centre in Melbourne – at 2 private hospitals on the Gold Coast – and several other infertility clinics in other cities. There have been around 500,000 IVF babies born in the last 19 years and success figures now approximate “natural” conception rates. This subject generates many anecdotes – so I will limit the comments below to just the Japanese experience.
Key Elements to Success:
15% of the world’s population suffer some form of infertility, and representing (the marketing endeavours of) the pioneer of the science – would seem like a “dream” task – but…
Community Attitudes – and Human Issues. Cultural sensitivities take on a whole new dimension in Japan and Asia! Discussing personal problems in public (or in the wider family) is simply not done. For this reason there were no support groups and no community awareness. The first (then ONLY) Japanese IVF baby was born in 1987 – and the public knew nothing about it. By the end of our visit, around USD$10 million of publicity had been generated – and support groups had been formed in Sendai, Tokyo and Nagasaki. Never underestimate the human issues inherent in every marketing strategy.
Industry Focus – We partnered with the universities and medical community – and allowed them to take the credit for “their” successes.
Personal Relationships – as always – played a critical part – old ones were intensified and new ones developed.
Project Years: 1984 – 1992
Gold Coast Tourism (formerly the Gold Coast Visitors & Convention Bureau) was formed in 1975 to be the official Regional Tourism Association for the Gold Coast. A private sector membership organisation – it draws its funding from industry (members), local government and the (State) Queensland Tourist & Travel Corporation.
My election to Chairman in 1986 – 1992 came with a clear mandate to restructure the organisation into a more industry-relevant mode. A true international marketing approach was needed – and relationships with government infrastructures had been neglected – and were strained.
GCT is responsible for the generic marketing of the destination to both the international and domestic tourism markets. It also co-ordinates the collective approaches to (and bids from) the MICE (Meetings, Incentives, Conferences and Events) members in the region. It is a Public (unlisted) Company with a membership-elected Board and Chairman, a Chief Executive and staff of 15-20. It also has a large group of volunteers available for hosting and guiding duties.
I had been a charter member of GCT since it began – and active on most of its committees. In 1984-85 I was elected Vice Chairman. It was a time of radical change – the Gold Coast was emerging from its domestic status – and rapidly becoming a fully fledged international resort.
Because of my private Japanese (and Asian) activities, I had represented Queensland and Gold Coast tourism at the biannual JATA Congress. There were few Australians active in Japan in those days and we became involved in the formation of the Australian Tour Operators Association – the driving force behind the lucrative Japanese market which Australia enjoys today. The originators of this body are now senior executives of their companies and, over the years I made many close friendships and valuable contacts.
In the late 80s and early 90s, we extended this relationship building into Asia and developed new marketing strategies better suited for each of the different cultures in the region.
We recruited a Chief Executive with a sound background in international tourism and introduced him to the Japanese and Asian markets. He, in turn, recruited and trained a staff more capable of taking the Gold Coast into its new era.
The transition of the Gold Coast is well documented – we grew from 5,000 beds to 50,000 during that period. In five years GCT became the largest of all Australian Regional Tourist Associations – funding increased substantially from all levels of government and membership growth reached record levels.
Key Elements to Success:
Corporate restructures are not bloodless events – and I was fortunate to chair a Board which shared my vision and were supportive during the rough bits! Senior membership also kept the faith – and it was an honour to be re-elected each year to the maximum allowable term. Other factors were…
Community Attitudes and Membership Issues – One of the most under-rated aspects of any membership body is the “Management of Expectations.” Are they joining for the right reasons? – Do they REALLY know what the Organisation can do for them? – or CAN NOT do for them?
Community Education is critical. Local people must be brought to understand the economic benefits flowing from tourism. During the above period a Mayoral election was lost by the incumbent – standing on a tourism “ticket!”
Industry Focus – Beware the Chief Executive who travels to tourism forums WITHOUT product members. An RTA (on its own) has nothing to sell – nothing to negotiate. Tour Wholesalers have no interest in meeting with anyone without a firm (commissionable) product offer! Do ALL the staff understand how the tourism industry distribution systems work? REALLY?
Personal Relationships – in Public Office – take on a whole new meaning. A good time to keep the ego in check!
Project Years: 1987 – 1994
Form a syndicate to apply for the Gold Coast’s first commercial FM radio licence.
In 1987 I was invited to join a syndicate making application for the Gold Coast’s first commercial FM radio licence. My role was to bring an involvement in international tourism marketing to the company.
From 14 original syndicates – we were the successful applicant and I was invited to become a director. I held that position for several years – until my travel schedule made it imprudent for a director of a public company. SEA-FM now owns several radio stations. Shares floated in 1994 at $1.00 – were finally privatised at around $4.25.
Key Elements to Success:
Being invited to join a group which included some of the country’s best broadcasters – and some of the Gold Coast’s better corporate thinkers – certainly helped!
Project Years: 1989
The Solomon Islands Government invited tenders for the purchase of the Mendana Hotel in Honiara. They indicated that the purchase proposal should include a strategy for development of their national tourism infrastructure.
I was invited to join a syndicate (of 3) lead by a previous Australian High Commissioner – and we spent 3 months consulting to the Prime Minister and Minister of Tourism. We developed an integrated tourism strategy for the entire group of islands – taking the wishes of each Custom community into consideration. The strategy involved Copra plantations – a golf course – war graves – island accommodation – diving and game fishing charters – and internal transport considerations.
Two companies reached final negotiations and we were ‘out bid’ by Japanese interests – with a proposal for the redevelopment of Henderson Airfield. Many elements of our proposal have since been undertaken – and the Solomon Islands have the potential to become one of the finest tourism assets in the South Pacific region.
Project Years: 1990 – 1991
The company (based in Brisbane Australia) had designed mechanised car parking technology – but lacked the capital to take it to prototype stage. The contract brief was to develop a marketing strategy – and inject an international focus.
In September 1991, I negotiated a technology transfer contract with a Slovak munitions factory – Vihorlat – which used the technology towards their privatisation process (from state ownership.) After Czechoslovakia’s democratisation in 1989, the IMF financed munitions manufacturers in their conversion to “peaceful” production. The company had 30,000 employees – but no marketing department and part of the agreement was for me to supervise the recruitment and training of that team. We managed to find 12 aspiring marketers – all of whom had learned their English from the BBC Home Service – during the Socialist years! This whole process involved living in a small Eastern Slovakian town (7 km from the Ukrainian border) for several months – and during the Russian coup.
During the construction of the prototype, Vihorlat’s engineers discovered (and solved) several design flaws. At about the same time – in Brisbane – a serious dispute over the patent ownership began. A few weeks later I severed my agreement with Parktec and remained with Vihorlat until their first sales campaign (in Paris, Vienna and Bratislava) was completed.
Key Elements to Success:
This was a challenging period – fascinating and rewarding – our international tourism industry negotiating experience and contacts proved critical. Several friendships began – and remain today. They will probably result in new tourism ventures in the future. The Czech and Slovak Republics have a tourism potential which will (one day) rival any destination in the world.
Project Years: 1992 – Current
The flagship project at Pacific Fair Shopping Centre entailed developing a marketing strategy and operational system – to position a large shopping centre into Australia’s inbound tourism industry. It proved very successful and TSA (at the request of the tour wholesalers) expanded into other cities in Australia.
We went on to develop management and marketing strategies for tourism projects in Australia, Europe, Japan, Asia and North America. Our major clients have been AMP Shopping Centres, Coles Myer Properties and Lend Lease Property. Our marketing operations were based in Hong Kong.
The strategy is now operating in conjunction with the Australian Tourist Commission as part of their segment development programme.
It was my connections with the international Tour Wholesalers which drove this project – long standing personal relationships are critical in Asian (or any international) business negotiations.
Some short term projects become so successful that they evolve into stand alone corporate ventures. This one began in 1992 as a one year experiment for AMP Shopping Centres – at Pacific Fair on the Gold Coast – and currently operates as a national retail segment development strategy in conjunction with the Australian Tourist Commission.
Shopping is a critical element in a tourism itinerary – it can be the deciding factor in destination selection.
We average 5 marketing missions each year, mainly within Japan and Asia, but with annual returns to Europe. Since 1992, based from Hong Kong, we have spent an average of nine months each year travelling to the Tour Wholesaler community – world wide.
During the last 20 years we have made many trips to Japan. Lead Gold Coast teams to JATA, several missions to various parts of Japan and have instigated a Sister City relationship between the Gold Coast and Shonan Beach – in Kanagawa Prefecture. In my role as Chairman of Gold Coast Tourism – I was asked by Japan Airlines to negotiate the original contact with the JAL Gold Coast Marathon. We enjoy excellent relationships with Tour Wholesalers, Airlines, the Academic and Medical community, several Government Departments and the Australian Diplomatic and Trade presence in Tokyo and Osaka. I number several senior tourism industry identities amongst my close friends – this seldom happens.
Singapore, Malaysia, Indonesia, Korea, Thailand, Taiwan and the Philippines
Many visits since 1975. Several as leader of Gold Coast tourism missions to the wholesalers – with the ATC, and for Tourism Shopping Australia. Strong connections with Governments in Malaysia, Taiwan and Thailand and good connections with Airlines and the Tourism Industry in all the above countries.
Hong Kong & China
Many visits since 1975 – and we have had a marketing base there since 1992. Lead 6 GCT missions to the tour wholesalers. Trade contacts are current and good within Tourism, Airline, Legal, Banking, Military and Media industries. In 1994 we developed a relationship with the China Merchants Group. This company has been the trading arm of China since the 19th Century and owns several banks, insurance companies, hotels and airlines.
I seldom admit to being born there! During the years at the Rotorua International Hotel, my marketing activities established strong contacts with all tour wholesalers. The Tourism Shopping project has kept them current.
Since my hotel training in the 60s, I have returned every year and maintained connections with major tour wholesalers (and others) throughout Europe. I have lived – for varying periods – in the UK, France, Spain, Austria, Czechoslovakia and Jersey in the Channel Islands.
During my years at the Rotorua International Hotel, I established strong contacts with all major US Tour Wholesalers. The Tourism Shopping project has kept them current.
Since my year at The President Hotel in Johannesburg, I have maintained contact with the industry at all trade events – and made two return visits.
In 1989 I spent 3 months consulting to the Solomon Island Government on an integrated tourism strategy for their group of islands. This project culminated in the sale of the Mendana Hotel and the redevelopment of Henderson Airfield.
More from John’s Story…
|1967||1970||Into, and Out of, Africa|
|1971||1980||A Quieter Life|
|1981||1990||The IVF Years|
|1987||It takes Three to Tango|
|1991||2000||Going it Alone|
|1998||A House Somewhere|
|2001||2010||A Change of Pace|
|2005||More Fishing Trips|
|2011||2020||If We Make It|