WITH the Federal Government warning that the number of international tourists heading for Australia is in severe decline, travel marketers have boosted advertising spend in a bid to stimulate demand. And it looks like this is slowly starting to work.
In 2001 the tourism sector was glowing from the success of the 2000 Sydney Olympics, but that was before a series of global shocks rocked the industry.
This included the global economic downturn, the terrorist attack on New York City’s World Trade Centre, the subsequent terrorist bombing in Bali, war in Iraq and most recently, the outbreak of SARS in South-East Asia.
Figures released at the end of June by the Australian Tourism Export Council (ATEC) show that in April international arrivals were down by 11.6% (36,600 visitors) while May’s arrivals were down by 22.5% (75,000 visitors) compared with 2002.
“To the end of May we are potentially looking at 160,000 fewer international arrivals to Australia compared with 2002 due to the effect of Iraq and to a greater degree the outbreak of SARS,” ATEC managing director Peter Shelley says.
At the height of the SARS crisis the Australian Tourism Commission (ATC) cancelled its advertising campaigns in Asia, parts of Europe and the US, reallocating some funds to markets not affected by SARS, for example New Zealand and India.
“If people have no intention of flying then it really is almost pointless to be marketing—you are trying to convince someone that just can’t be convinced,” ATC Western Hemisphere executive general manager Andrew McEvoy says.
But in June the ATC launched a $20m recovery package to rebuild inbound tourism. The co-operative marketing campaign will be funded by a $10m contribution from the Federal Government, matched dollar-for-dollar by the industry including contributions from Qantas Airways, Japan Airlines and Singapore Airlines.
To be rolled out in three stages, the campaign will target Japan, New Zealand, US, the UK and Korea.
Once these markets show signs of recovery the campaign will continue in Italy, Germany and into France.
Campaigns have been tailored to each market and include press, radio and television advertising, direct mail, advertorials and online activity at Australia.com.
McEvoy says it is important to be in the market as the industry recovers in order to capitalise on the pent up demand for international travel.
Already there has been an increase in enquiries and bookings where the campaigns have run, he says.
Gaynor Reid, media relations manager of hotel chain The Accor Group Australia—which has 4,000 hotels and resorts globally across the Sofitel, Novotel, Mercure, All Seasons, Ibis and Formule 1 brands—has also seen signs of market recovery with forward bookings from late July returning to pre-SARS levels.
“The majority of people would have simply put travel off rather than cancelling it altogether and we are hopeful of a strong finish to the year,” Reid says.
During the SARS epidemic, Accor experienced a bookings downturn of between 5% and 10% in its Sydney hotels.
However, it benefited from a slight increase in domestic travel with some properties, for example the luxurious El Questro Wilderness Resort in Western Australia, experiencing record growth.
And while many hotels shut down their marketing and promotions activities during the crisis, Accor increased its spend, promoting nearby destinations such as New Zealand and introducing a domestic campaign in conjunction with See Australia* to encourage Australians to travel at home.
“We believe this is part of the reason we recovered better than many after September 11 and it has helped insulate us from the current crises facing the industry,” says Reid.
Current marketing activity includes winter discounts on select properties, a campaign targeting the seniors market and joint programs with its agencies and offices across the world to launch campaigns in Europe, Asia and the US.
Travel agency network Jetset Travelworld also concentrated on the domestic market during the SARS crisis, general manager marketing Shaun Houston says.
Marketing activity centred on local area activity driven by Jetset’s franchisees. Without this activity Houston expects that the impact would have been much greater.
Regardless, business at Jetset was down by about 30% during the SARS outbreak. At the height of the epidemic he estimates that outbound passengers to Hong Kong would have been down by about 85%, with Bali experiencing a similar downturn after the terrorist bombings.
But now that the last country has been taken off the World Health Organisation’s list of SARS-infected nations, Houston says the international market is starting to pick up and the company is finalising a new marketing strategy to benefit from this.
He thinks there are a number of good signs for the industry, including renewed marketing activity from tourism bodies around the world.
“There’s going to be a fair bit of money put into the sector over the next eight to 10 weeks and that will certainly encourage people to start flying. Furthermore, Singapore Airlines and other carriers have introduced a number of price initiatives to international destinations and these are certainly working well,” he says.
But Australia is going to be competing for attention as travel marketing heats up internationally as many countries launch lavish campaigns to attract travellers, cautions Accor’s Gaynor Reid.
This means that a concerted effort is needed by the ATC and its partners to roll out recovery marketing campaigns and to focus on high-yield events tourism and MICE (meetings, incentives, conferences and exhibitions) tourism to make up for the shortfall of the past few months.
McEvoy agrees. He says though Australia is a very aspirational place to visit, it is vital to maintain advertising and marketing activity in order to remain top of mind.
“If people don’t see or hear from you for a while it is very easy for them to make the choice to go elsewhere,” McEvoy says.
*See Australia was established to develop and implement strategies to encourage Australians to travel more within Australia. It is backed by an alliance between government and the commercial sector, including MasterCard International, AAA Tourism, Accor, Avis, Best Western, Britz, Hertz, Lastminute.com, Qantas, Travel.com.au and Trendwest.
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