Roger March provides his thoughts on Australia's inbound tourism industry after 20 years of research. He notes several key observations: 1) Australia's top markets have shifted significantly over time, with India and China now the top growth markets. However, China is forecast to greatly surpass other markets by 2020. 2) The Japanese market, once Australia's largest, has declined dramatically. Factors include stronger competing destinations, an ineffective marketing approach in Japan, and changing demographics and travel preferences among Japanese travelers. 3) Australia faces challenges in becoming overly reliant on price-sensitive segments from growth markets and needs to focus on experience-based tourism and new product development to remain competitive. Government policy has limited impact and

1. Roger March@2013

2. Aims?
Provide my thoughts on the
inbound industry after 20 years in
inbound tourism research.
Gather thoughts of experienced
operators and long-standing
participants in inbound tourism.
Stimulate thought and discussion.
Roger March@2013

3. Australia’s Top Ten inbound markets
2005 2012*
Hong Kong,
143000 Germany, 142000 India, 152,600
HK, 172,600
Malaysia, 148000 Korea, 196,800
Korea,
228000 NZ, 986000 Malaysia,
249,200 NZ, 1,199,600
Singapore, 229000 Singapore,
332,000
China, 272000
Japan, 349,800
UK, 660000 China, 606,400
USA, 413000
USA, 469,100
Japan, 636000 UK, 591,600
*12 mths ending Sept 2012
Roger March@2013

4. Observations about Australia’s
inbound tourism industry - 1
!! We’re not god’s gift to the world, yet we do punch above
our weight. Sydney’s defunct
!! As the closest western destination for most Asian markets tourist attractions.
we’re a “western holiday experience on training wheels.”
!! We’re now an expensive destination, Get used to it.
!! We’re increasingly dependent on segments largely price
driven. Deal with it.
!! “The high yields offered by Europe, UK, Japan and US are being replaced by
a torrent of low yielding visitors whose key interests are shopping ( for
brand labels) and gambling. Traditional product e.g., quality dining
experiences, Bridgeclimbs or quality cruise products are of limited appeal.”!
!! Everything is relative. It’s market share, not numbers, that
reveal our competitive success.
!! By 2020, China is forecast to be FIVE times the economic
value of the next biggest market, India. Consider the
implications…
!! Our resort & accommodation infrastructure is old. And our
competitors’ is new. Real growth in domestic tourism
investment in has been sluggish for two decades and more.!
Roger March@2013

5. Source: Tourism Investment in Australia, TRA June 2011

6. Observations about Australia’s
inbound tourism industry - 2
!! The growth markets are, yes, India and China, although China is forecast to
swamp us. !
!! On sales trips overseas: promote yourself, your destination and then your
product.
!! China should not be the holy grail.
!! Is Queensland a different ‘sell’ to the rest of Australia? Are Qld’s target
segments fundamentally younger and more hedonistic than those of any other
state?
!! Friendly service is not good service.
!! Tourism forecasting is a failure.
!! Government policy affects only the margins. Markets decide.
Roger March@2013

8. Observations about Australia’s
inbound tourism industry - 3
!! The growth markets are, yes, India and China.
!! On sales trips overseas: promote yourself,
your destination and then your product.
!! China should not be the holy grail.
!! Is Queensland a different ‘sell’ to the rest of
Australia? Are Qld’s target segments
fundamentally younger and more hedonistic
than those of any other state?
!! Friendly service is not good service.
!! Tourism forecasting is a failure.
!! Offer an experience, not just a product.
!! “Innovate to differentiate.”
!! Lack of new product development.
!! Government policy affects only the margins.
Markets decide. !
Roger March@2013

9. Government policy doesn’t work.
Markets do.
Roger March@2013

10. Government policy doesn’t work.
Markets do.
Roger March@2013

11. Observations about Australia’s
inbound tourism industry - 4
!! Korea is growing again. “The market is now quality conscious,
against almost all other Asian markets.”
!! Britain: Indications are it will remain weak for 2013. Numbers
contracted thought 2012 and despite the Lions tour we are not
predicting any growth over 2011 numbers for the 2013 year.
(Major Australian tourism transport operator #1)
!! US: The US market surprisingly grew during 2012. however our
view is not bullish as underlying problems in their economy
may impact travel during 2013. We are predicting numbers for
2013 to be about the same as 2012. (#1)
!! Europe:Very weak, will not show any growth. (#1)
!! NZ: Has been very solid throughout 2012 and we are hopeful
that this will continue in 2013.
!! Japan: Showing signs of recovery. we experienced a 5 %
growth over 2011 and we are hopeful that this will continue
throughout 2013. (#1)
!! India:Very weak in 2012 and we don't at this point believe
2013 will be any better. (#1)
Roger March@2013

12. Observations about Australia’s
inbound tourism industry - 5
!! “Europe & US struggled during 2012 and the
forecast ahead is not encouraging. In the past
agents would make block bookings for larger
groups for a 12 month period and the
materialisation was always 60-70%. This use to be
the foundation for most of the large volume
tourism enterprises. These days the block bookings
are smaller, the entire bookings get cancelled and
the materialisation is poor.” (Major Australian
tourism transport operator #2)
!! “For travellers from South East Asia, South Asia,
North Asia the fastest growing market segment is
the online travel agencies. The upside is Wotif.com
presence is growing and is currently holding
around 5th on the market share (behind Agoda,
Booking.com, Expedia and Asiarooms.com), the
growth of Wotif.com outside of Australia will assist
inbound into Australia.” (Australian GM of Thai
resort hotel)
Roger March@2013

13. Observations about Australia’s
inbound tourism industry - 6
!! Communication of market
intelligence and inbound data:
Who needs what?
!! The tensions between big and
small operators. Theme parks,
hotels and small tourism
businesses: Whose voice wins?
Roger March@2013

14. Observations about Australia’s
inbound tourism industry - 7
TOURISM AUSTRALIA
!! “TA Head Office is trying to control everything
from Sydney, even the markets who do not speak
in English.” (Very knowledgeable Japanese with long
TA and STO experience.)
!! Standardized advertising doesn’t work in Japan and
elsewhere.
! !! Have downgraded Japanese market from country
to region, having impact on trade attitudes. (A
Japan/Korea manager requires deep cultural
understanding!)
!! “Have they gone too far with online marketing
strategy?” Forgotten traditional forms of
advertising?
!! TA will close their Japanese student/education
(Shugaku Ryokou) micro site very soon, a
decision made by Head Office without any
consultation with the TA Japan or industry.
Roger March@2013

15. A look at
China,
India and
Japan.
Roger March@2013

16. Inbound to Australia: China, India
and Japan 2005-2012
800,000
700,000
600,000
500,000
China
400,000
India
Japan
300,000
200,000
100,000
0
2005 2006 2007 2008 2009 2010 2011 2012*
Roger March@2013

17. Home truths about China
!! Growing, of course, but significant
price pressure and the yield is low.
!! Europe is far and away the most
desired destination for Chinese.
!! China is not the new Japan. Chinese
are not Japanese. They don’t want the
same thing.
!! There is no universal Chinese tourist.
10 years ago TA had segmented three
distinct markets in Beijing, Shanghai, &
Guangzhou.
!! Almost 70% of Chinese outbound
travellers are travelling to Hong Kong
& Macau. The real Chinese outbound
number is around 20M.
!! Chinese spend only 10% of nights in
Australia outside gateway cities.
Roger March@2013

18. Home truths about India
!! Only 14M Indians travelled overseas in 2011.
!! Smallest leisure market: 20%. Business and education account for 20% each &
VFR 33%.
!! 65% of leisure travellers are males
!! Australia received 156,000 Indians in 2011. California received over 200,000.
!! Indians spend only 12.5% of nights in Australia outside gateway cities.
!! It’s our tenth biggest market now and is growing only steadily.
!! There are no direct flights between India and Australia.
!! Indians are traditionally frugal. Will pay for value, but less for status. Locally
produced goods & mid-range global brands are preferred.
!! VFR is a primary travel motive.
!! The package and group markets are affected due to the high Australian dollar
and significant competition in market from other destinations.
!! Package tours are increasing and FIT travel decreasing
!! There is no universal Indian tourist. Like China, there are sub-segments.
Roger March@2013

19. Home truths about Japan
!! Market share peaked in 1993. Numbers peaked in 1997. Market
share is now the lowest since 1983.
!! The koala did it.
!! Do we understand Japan, even now?
!! Traditional package and honeymoon business is soft. Only the student
market and the skeleton base packages with optionals being sold on
the ground seem to be working.
Honey-
mooners
Family OLs
Jukunen EFTS
Shugaku
Silvers ryoko
New
50s
Roger March@2013

20. “You must be
dreaming…”
!! In 1994, the Australian
Tourist Commission
predicted, following the
announcement Sydney
would host the 2000
Olympics, that Japan
would generate 1.45
million visitors in the
Olympics year and
1.82M by 2004.
!! Japanese inbound to
Australia peaked in 1997
and now stands at
332,000.
Roger March@2013

21. Judged by the company we keep
Roger March@2013

22. What the bloody hell happened?
Between 1986 and 2000, Between 2001-2011,
Japanese outbound grew outbound grew 5%.
323%.
In 2011, 332,000
In 1997, 814,000 Japanese
Japanese visited
visited.
Australia.
Australia’s market share Our market share has
peaked in 1993 at 5.6%. collapsed to 1.8%,
lowest in 30 years.
In 2000, China & Korea In 2011, China & Korea
accounted for 26% of accounted for 43% of
Japanese outbound. Japanese outbound.
Roger March@2013

23. Queensland reflects Australia
Roger March@2013

24. Change in Market Share, Selected
Regions & Countries
25%
China
20%
Resort
destinations
15%
US Mainland
10%
Hawaii
Australia
5%
0%
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Hawaii U.S. Main China Resort Australia
Roger March@2013

25. Market Share by Main Destination:
1998-2009
1998 2000 2002 2004 2006 2008 2009
40
35
30
25
Percent
20
15
10
5
0
Europe NE Asia SE Asia Nth America Oceania Hawaii Guam/Saipan Others
Destination
Source: Market Insight 2010, JTB Foundation
Roger March@2013

26. We are not alone: Market shares of
Australia and Hawaii: 1992-2009
14
12
10
8
6
4
2
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Hawaii Australia

27. Changes in Market Share of Major
Destinations: 1999-2009
Change in Market Share between 1999-2009 (as % difference)
Australia, -51.0%
Singapore, -40.0%
Losers Hawaii, -35.0%
Guam, -10.0%
US Mainland, -6.0%
Thailand, 0.0%
HK, 26.0%
Taiwan, 30.0%
Winners
Sth Korea, 63.0%
China , 90.0%
-60.0% -40.0% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
Source: JNTO statistics
Roger March@2013

28. External factors: non-
controllables
!! Foreign exchange
!! Economic cycles & downturns
!! Japanese consumption & leisure patterns
!! Japanese demographic changes
!! Intensifying competition
!! Investment in tourism
!! Airline events – ANA & Northwest
withdraw, Ansett collapses, Jet! to Japan
Roger March@2013

29. Internal factors: controllables
!! Image of Australia in Japan: Big Nature & cuddly animals
!! Advertising campaigns
!! Coherence of marketing efforts in Japan between TA,
STOs and individual operators
!! Relationship management with Japanese travel
!! Tourism Australia’s conflicting priorities
!! Servicing the Japanese tourist in Australia (& Hawaii)
Roger March@2013

30. Reasons for Decline in Japanese
Market: Survey of Tourism
Operators
Competitor destinations, An-Kin-tan
Airline capacity
Strength of AUD
Campaigns ineffective or inconsistent
Lack of new offerings by Australia
Decline in Japan economy
Australia no longer flavour of the month
Costs in Australia
Roger March@2013

31. …and it ain’t exchange rates
900,000 110
100
800,000
90
700,000
80
Yen/A$
600,000
70
Despite strengthening
yen, numbers fall
500,000 Japanese
Visitors 60
400,000 Exchange rate
50
300,000 40
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Roger March@2013

32. Young Japanese are deserting
overseas travel.
Figure 4: Market share of outbound travel by age: 1990-2009
Market share of
45 outbound travel
40 by age:
35
1990-2009
30
25
The 60+ plus market
20
is now equal largest.
15
10
5
0
1990 1993 1998 2003 2009
60+ 50 to 59 40 to 49 30 to 39 20 to 29 under 20
Roger March@2013

33. Being a
preferred
destination
means
nothing.
Roger March@2013

34. Some gratuitous
observations and advice…
Roger March@2013

35. Observations on the Gold Coast
! Strong network of highly experienced
tourism professionals
! Gold Coast offers the genuine Aussie
holiday experience: beaches, theme
parks, family based
! “2018 Commonwealth Games to
boost visitation.
!! The trick will be how the destination
captures interest in the Gold Coast as a
leisure destination post event, and
capitalises on the investment in new
sporting infrastructure in the region
(similar to what the London Olympics did
with athlete accommodation after the
games). Precinct planning and activation
after the games will be critical.”
Roger March@2013

36. “Fall in love with your
customer, not your product.”
!! Gold Coast Tourism executive says he
believes the ‘Famous for Fun’ campaign
brings to life everything the Gold Coast
is all about.
!! "We're an exhilarating, fun holiday
destination for families mainly, and this
theme is something Las Vegas would kill
for.
!! "It's so powerful. When I saw all the
imagery that goes with it, to be quite
honest, I got quite emotional because
we're lucky enough to live in this place
52 weeks a year. It's got everything and
most other locations have got one of
what we have many of."
(Las Vegas repositioned itself away from
gambling to family destination.)
SMH Oct 9 2011
Roger March@2013

37. You will compete and succeed
based on the quality of the tourism
experience you offer. An integral
part of that experience is the quality
of your customer service.
Roger March@2013

38. Our service standards are not good
enough.
Tourism and Transport Forum chief executive John Lee said you only had to
look online at hotel review websites such as Tripadvisor to see tourists
posting negative comments about their experiences in Australia.
Recent comments described staff at one 4.5 star Queensland hotel as
showing complete indifference'', having a "hick town'' approach and "not my
responsibility'' attitude.
Mr Lee said Australia has struggled to keep up with the rising quality of
service standards in parts of Asia when it came to leisure-based tourism,
particularly in regional areas.
"Tourism is a global industry,'' he said. "Australia is competing with Fiji,
Indonesia, Thailand... the bar keeps rising and it's really important in terms of
customer service.'’
Source: News.com.au, May 3, 2011
Roger March@2013

39. Tourism is a service industry; Asia
comprises many service cultures*
Acknowledge the inbound customer
! It’s always interesting to sit in hotel lobbies in Australia and watch how few
porters, concierge and reception staff greet and welcome incoming guests,
especially those from Asia. In retail environments ot is the same. Some
Japanese friends of ours, after spending two weeks in Australia,
asked if it is a custom in Australia, to NOT welcome customers
as they enter a shop, restaurant or hotel.
! Knowing some greetings in the language of your inbound markets is a plus,
however, if you are unsure of there background, always, always use English
only. Once you are sure of them being Japanese/Chinese/Korean etc, then
utilize your respective greeting for the customer. Also, when using any
foreign language, be sincere when using it.
! Body language needs to be welcoming at all times, with a front-on,
professional stance, without looking like a soldier or bouncer, when trying
to welcome and/or engage the inbound customer.
! Once you have approached the guest, or vice-versa, we always recommend
a very slightly stooped/slightly bowing stance to show some respect and a
sense of paying more attention. Show listening with facial expressions as
well.
* Thanks to Trevor Lee of TravConsult for these insights.
Roger March@2013

40. Appreciate the customer
!! Once you have identified where the customer is from ie China/
Japan/Korea, share this knowledge with the staff around you
in a subtle and professional way. That is, don’t yell it out so the
customer hears, but pass it on through a quiet word. This helps staff
to use the right foreign language if it is known. It can also help
when it comes to recommending restaurants, engaging in
conversation and helping the customer in general.
!! Knowing dates significant to each of your respective
inbound markets is another way of showing appreciation. For
example, Chinese New Year (China/HK/Taiwan etc), Independence
Day – January 26 (India), Korean New Year’s Day (1st day of first
lunar month) / Korean Declaration/Independence Day (March 1)
etc. Staff can learn the correct phrase, for the respective market
and occasion. Appropriate decorations, signage and even food etc
can also be arranged to show both appreciation and respect for the
inbound customer.
Roger March@2013

41. Food, glorious food!
!! Whichever inbound market you are are
engaging, they all like to have even just a little
of their own cuisine while travelling abroad.
Staff should do more than just find out the details of
the nearest Chinese restaurant, for example. They
need to know important items from the menu, prices
and the type of specific cuisine and/or where the
restaurant’s chef is from. Cuisine differs greatly from
region to region and even city to city in all Asian
countries, even Japan. Having this knowledge in
advance really goes a long way in helping the inbound
customer to enjoy their stay.
Roger March@2013

42. “Good service is never
having to ask for
service.”
Bronwyn Green, Quicksilver 1995
Roger March@2013

43. Thank you.
Dr Roger March
rogerstgmarch@gmail.com
Roger March@2013