Update on Tourism Demand Trends

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Update on Tourism Demand Trends

• November 2005

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Tourism Demand

• Visitor arrivals and expenditure are dependent
  upon many variables
• economic conditions
• consumer sentiment and competing products
• private sector spend and resource commitment
• access
• the efforts of government tourism offices
• marketing by competing destinations

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Global

• Recovered strongly in 2004
• Growth in visitor arrivals in 2005 6
• Growth in receipts ()
• (WTO Barometer October 2005)

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Asia-Pacific Region

• fastest growing tourist destination
• received 20 of global tourist arrivals and
  receipts
• Australia received 0.65 of all global arrivals
  in 2004.

World Tourism Organisation, Oct 05
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International Visitors to Australia

• 5 Million in 2004
• 52 came to Sydney
• 44 entered Australia through Sydney
• First-timers very low growth
• Repeat visitation growing

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when you look at holiday visitation.
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Holiday travel to Australia only low growth
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How are NSW Sydney absorbing these trends?

• NSW Sydneys share of the international
  visitors has been declining.
• The repeat travel market now dominates
  international travel to Australia and Sydney
  captures a lower proportion of this market as
  compared to the first-time visit market.  
• Sydney is maintaining its share of repeat
  visitors but is not retaining its share of
  first-time visitors.

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• Domestic Tourism
• Demand

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Domestic Visitors

• Domestic tourism demand has been relatively flat
  for around 20 years.
• It has contracted since 1998.
• It appears that VFR travel (6) has been
  substituted for Holiday travel (-12)
• NSW has fared worse than the other States and
  Territories
• The Sydney source market has contracted the most

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Leisure travel demand trends - nationwide
National Visitor Survey, 1998-2004
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Which parts of the market have declined?

• young singles
• especially those living at home (-29 spend
  since 1999)
• also those not living at home (-17 in spend
  since 2001)
• Young mid-life couples
• -9 in spend since 2002
• Non-working people
• Older non-working singles (-20 in spend since
  1999)
• Older non-working married people (-6 in spend
  since 2001)
• People from the cities
• Sydney (-19)
• Melbourne (-7)
• Brisbane (-5)
• Adelaide (-22)
• Perth (-8)

And those from NT and regional Victoria
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Which parts have grown?

• Older working people
• married people (9)
• singles (20)
• Parents with children
• Youngest under 6 (12)
• Youngest over 6 (4)
• People from regional areas of
• NSW , Tasmania, WA, QLD, SA and the ACT (6)

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Average length of trip
Short-breaks of 1-2 nights (-6) Long trips of
15 nights or more (-7)
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Seasonal Shifts 1..January less popular
January
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December also less popular
December
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The overall popularity of day trips has fallen in
recent years..
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Why is this happening?

• Higher levels of personal and household debt
• Lower discretionary income
• Increased household consumption of competing
  consumer products (household goods, furnishings,
  health and communications)

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Why is this happening?

• Leakage to outbound holidays (particularly among
  the young)
• Changes to the labour market making
  holiday-taking travel more difficult.
• Changing tastes for domestic travel (VFR over
  holiday and increased use of budget fares)
• Decline in the affordability of domestic travel
• Increased interstate migration

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Looking forwards - what next?

• Consumer confidence
• Travel intentions
• Petrol prices
• Interest rates

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Inter Intra state travel - intention
Base Australian population Roy Morgan Single
Source April 00 June 05, n131,258
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This Quarter

• Higher oil prices and lower consumer confidence
• Overall intention to travel by Australians has
  declined.
• Visitation and intention to travel to overseas
  destinations has climbed steadily

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Focusing on Sydney Residents

• Overseas is now the second highest intention
  destination
• The North Coast most preferred New South Wales
  region.
• Sydney residents consumer confidence in decline

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SUMMARY

• International demand
• still growing but NSW losing market share
• Domestic demand
• Contracting and not well understood
• Sydney market hardest hit
• Unlikely to turn around quickly
• Some markets are still performing

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SUMMARY

• Implications
• Many regions are hurting and dont understand why
• Greater competition between destinations for a
  smaller overall pie
• More targeted marketing required to pinpoint
  those market that are still performing

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Launched by Scott Morrison at the Tourism Futures
Conference.
Available from Tourism Research Australia Phone
6213 6940