$0.4bn total spend. 55,100 arrivals. 2.8m total nights. 1.0m dispersed nights* Italy Market Profile. 1.1 Market Overview. Australia ranks 21st

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1 Market Profile 1.1 Market Overview In 2011, Italy was Australia s 19th largest inbound market for visitor arrivals and total expenditure and 20th for visitor nights. Aviation London Milan Italy Frankfurt Venice Rome $0.4bn total spend Total spend from Italy in 2011 (down 1 per cent on 2010) 1 55,100 arrivals Italian visitor arrivals in 2011 (down 2.5 per cent on 2010) 2 Abu Dhabi Dubai Hong Kong 2.8m total nights Italian visitor nights spent in Australia in 2011 (up 19 per cent on 2010) 1 Singapore Key airlines and share of passengers in Emirates Qantas Cathay Pacific Singapore Airlines Etihad Table includes direct and indirect capacity. Visitor Profile Jetstar Thai Airways Malaysia Airways Other 41% are repeat visitors 1 72% of total arrivals are for leisure years largest demographic 2 Average spend $6,737 1 Average stay 54 nights 1 FebMay peak booking period July, Aug, Dec peak travel period Sources: 1. International Visitor Survey, December Quarter ABS Overseas Arrivals and Departures, Australia, December Department of Immigration and Citizenship 4. Tourism Economics (Tourism Decision Metrics) *Dispersed nights refers to nights spent outside gateway cities (Sydney, Melbourne, Brisbane and Perth). 16% 37% 4% 6% 3% 3% 7% 17% 7% 1.0m dispersed nights* Italian visitor nights spent outside gateway cities in 2011 (up 19 per cent on 2010) 1 Australia ranks 21st among all outofregion outbound destinations for Italian travellers 4 Tourism Australia s activities in Italy are managed from the Tourism Australia Frankfurt office and a representative agency in Italy. For more information visit Tourism Australia s Corporate site. Australian State and Territory Tourism Offices operating in Italy include the South Australian Tourism Commission, Tourism Northern Territory, Tourism Queensland, Tourism Victoria and Destination New South Wales. Also see: Italy Country Brief published by the Department of Foreign Affairs and Trade. 1

2 2.1 Arrivals Trends 70,000 History of Arrivals from Italy into Australia Source: ABS Overseas Arrivals & Departures 60,000 Total Arrivals per Year 50,000 40,000 30,000 20,000 10,000 0 Dec80 Dec83 Dec86 Dec89 Dec92 Dec95 Dec98 Dec01 Dec04 Dec07 Dec10 > > In 2011, Italy was Australia s 19th largest inbound market for visitor arrivals. > > Arrivals from Italy have seen a compound average growth rate of 2.4 per cent between 2001 and > > Arrivals from Italy peaked around 2008, with the market seeing declines since the onset of the Global Financial Crisis. 2

3 2.2 Australia s Market Share Australia s Market Share of Italy Total Outbound > > Outbound travel from Italy has increased from 22.4 million trips in 2001 to 31.9 million in 2011 (forecast based on data updated on 9 January 2012). > > Australia s share of Italy s total outbound has remained steady at 0.2 per cent since ,000 22,421 25,126 26,817 Italy Total Outbound & Australia's Market Share Source: Tourism Economics (Tourism Decision Metrics) 23,349 24,796 25,697 27,734 28,284 29,060 30,556 31, % Outbound Travellers (000s) 20, (f) Total Outbound (000s) Australia's Share of Total Outbound (%) Note: 2011 is a forecast value 0.0% Top Five Outbound Destinations > > In 2011, the top five outbound destinations were France, Spain, UK, Germany and Croatia. > > Australia ranked 53rd among all outbound destinations, slipping four positions from ,000 Top Outbound Destinations from Italy Source: Tourism Economics (Tourism Decision Metrics) 8,000 Outbound Travellers (000s) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 France Spain Germany Croatia Greece Australia (f) Note: 2010 is a forecast value 3

4 Australia s Market Share of Out of Region Travel > > Travel outside of Europe and North Africa has increased from 2.5 million trips in 2001 to 4.4 million in 2011 (forecast based on data updated on 9 January 2012). > > Australia s share of Italy s out of region outbound has decreased from 1.7 per cent in 2001 to 1.2 per cent in Italy Out of Region Outbound & Australia's Out of Region Market Share Source: Tourism Economics (Tourism Decision Metrics) Outbound Out of Region Travellers (000s) 5,000 2,500 2, % 2, % 2, % 2, % 3, % 3, % 3, % 3, % 3, % 4, % 4, % 2.0% 1.0% (f) Out of Region Outbound (000s) Australia's Share of Total Outbound (%) Note: 2011 is a forecast value 0.0% Top Five Out of Region Destinations > > In 2011, the top five destinations excluding Europe and North Africa were United States, Brazil, China, Thailand and Mexico. > > Australia ranked 21st among out of region outbound destinations, slipping a position from ,000 Top Outbound Out of Region Destinations from Italy Source: Tourism Economics (Tourism Decision Metrics) Outbound Out of Region Travellers (000s) Canada China United States Mexico Thailand Australia (f) Note: 2011 is a forecast value 4

5 2.3 Visitor Arrivals by Age and Purpose of Visit Visitors from Italy by Age and Purpose of Visit for 2011 Source: Australian Bureau of Statistics, Overseas Arrivals & Departures Other 3,363 (6%) Total Italy 54,925 (100%) Employment 2,814 (5%) Total Number of Visitors Education 2,411 (4%) Business 6,776 (12%) Visit Friend/ Relatives 10,658 (19%) Holiday 28,903 (53%) Under 15yrs 15 to 29yrs 30 to 44yrs 45 to 59yrs 60yrs & over 1,921 (3%) 16,975 (31%) 18,717 (34%) 10,039 (18%) 7,273 (13%) Note: Data in graph refers to 2011 only. Rate of Change charts show year on year changes for Above the axis line indicates growth, below the axis line indicates decline. 5

6 2.4 Spend by Age and Purpose of Visit Spending by Visitors from Italy by Age and Purpose of Visit for Source: International Visitor Survey (Tourism Research Australia) Total Italy 375,125 (100%) Other 14,958 (4%) Employment 13,644 (4%) Education 44,952 (12%) Business 38,867 (10%) Visit Friend/ Relatives 36,207 (10%) Holiday 226,498 (60%) Under 15yrs 15 to 29yrs 30 to 44yrs 45 to 59yrs 60yrs & over Not covered by 148,888 (40%) 141,384 (38%) 57,089 (15%) 27,764 (7%) the IVS Note: Data in graph refers to an average of Rate of Change charts show year on year changes on a quarterly basis for Above the axis line indicates growth, below the axis line indicates decline. 6

7 2.5 Expenditure and Nights Average Visitor Spend $6,976 per trip Stay 45.2 nights Spend $154 per night Purpose of Visit Holiday Spend $7,706 per trip Stay 44.0 nights Spend $175 per night Visiting friends and relatives Spend $3,775 per trip Stay 31.1 nights Spend $121 per night Business Spend $5,565 per trip Stay 18.3 nights Spend $304 per night Other (including education and employment) Spend $9,424 per trip Stay 90.8 nights Spend $104 per night Age Groups 15 to 29 years Spend $8,220 per trip Stay 80.6 nights Spend $102 per night 30 to 44 years Spend $7,053 per trip Stay 28.3 nights Spend $249 per night 45 to 59 years Spend $5,563 per trip Stay 23.7 nights Spend $235 per night 60 years & over Spend $5,190 per trip Stay 29.2 nights Spend $178 per night International Visitor Survey ( ) Note: Data refers to an average of

8 Aviation 3.1 Summary > > Overall aviation capacity to Australia grew in 2011, with the addition of new services and routes from Italy. > > Access from Italy to Australia continues to improve with capacity growth driven by Middle Eastern and Chinese carriers. > > Key airlines for Italian travellers coming to Australia include Emirates, Qantas, Cathay Pacific, Singapore Airlines and Etihad. > > Average airfares have increased in recent years, reducing Australia s price competitiveness. Reduced capacity by Low Cost Carriers, together with increasing taxes and surcharges remain a key issue going into > > Jetstar had been expected to launch services to Europe in the forecast period but continued delays in B787 deliveries means the aircraft won t be delivered until Current weaknesses in European markets may further delay services. > > Virgin Australia s alliance with Etihad also offers more opportunities for travellers to book international and domestic airfares seamlessly in one booking. This is particularly beneficial for Italian travellers, who traditionally have high dispersal rate. > > From January 2012, an airline that lands or takes off in the European Union must offset greenhouse gases as part of the European Union Emissions Trading Scheme. London Milan Italy Key Airlines on the route Airports serviced in Italy (times per week) Emirates Rome (1421) Milan (1421) Venice (14) via Dubai Qantas/ Cathay Pacific code share Singapore Airlines Frankfurt Venice Rome Abu Dhabi Dubai Rome (67) via Hong Kong (nb. Qantas also operates services from Frankfurt (daily) and London (14 per week) to Australia) Rome (23) Milan (7) via Singapore Singapore There are currently no direct services from Italy to Australia, only services operated by intermediate carriers like Emirates and code share carriers like Qantas/Cathay Pacific. Airports serviced in Australia (times per week) Sydney, Melbourne, Brisbane, Perth (total 70) Hong Kong Sydney, Melbourne, Brisbane, Perth, Adelaide, Cairns (Qantas total 23, Cathay 76) Sydney, Melbourne, Brisbane, Adelaide, Perth (total 98108) Alliance/ code share partner (on route) Qantas domestic flights Qantas, Cathay Pacific Virgin Australia, Air NZ, Skywest Etihad Milan (7) via Abu Dhabi Sydney, Brisbane, Melbourne (total 21) Virgin Australia, Air NZ Key airlines and share of passengers in 2011 Airline Emirates 14% 17% 17% 34% 37% Qantas 28% 28% 27% 22% 17% Cathay Pacific 7% 9% 10% 8% 7% Singapore Airlines 11% 10% 12% 8% 7% Etihad 0% 0% 2% 4% 6% Jetstar 0% 2% 3% 4% 4% Thai Airways 8% 8% 7% 4% 3% Malaysia Airways 8% 11% 8% 3% 3% Other 24% 15% 14% 13% 16% 37% 16% 4% 3% 3% 6% 7% 17% 7% Table includes direct and indirect capacity 8

9 Distribution 4.1 Distribution System The online environment plays a key role in Italy for destination selection and planning. Consumers under 30 years are increasingly using online channels for bookings, especially for flights. However, traditional operators remain the main booking channel for the longhaul leisure market and Special Interest Travel such as honeymoons. Tour Operators There are about 65 Tour Operators selling Australia and they can be divided in three categories: Large Wholesalers > > International or Italianowned brands who sell worldwide destinations. The majority produce brochures or combine with New Zealand and Pacific Islands. > > These operators sell their products through travel agencies. Most of them also own travel agency networks or have significant shares in these networks. > > The honeymoon segment is key for these operators, representing between 65 to 80 per cent of their total business to Australia. Special Interest > > Medium size operators heavily specialised on long haul destinations or Pacific area only. > > They produce monographic brochures (print or online) and sell mainly through travel agencies. > > Some of them sell directly to consumers through their own travel agencies or dedicated brands. Travel Agencies with Tour Operator licence > > Small/medium travel agencies with Tour Operator licenses sell destinations on request, buying directly from Inbound Tour Operators. Retail Agents > > There are about 12,500 travel agencies in Italy. They are spread throughout the market but over 70 per cent are concentrated in central and northern Italy. Travel agency networks represent about 80 per cent of total agencies. > > There are over 400 different networks and fifteen main networks. Of these the top five are: Welcome Travel Group with 900 travel agencies. Blu Holding (Cisalpina Tours, Bluvacanze, Vivere & Viaggiare) with 803 travel agencies. Bravo Net with 781 travel agencies. Uvet ITN with 768 travel agencies. > > Retail agencies are very influential in Italy, managing much of the distribution of tour operator brochures. Online > > Seventyeight per cent of Italian travellers used Internet as source of information 1 The top Italian online operators are: Edreams.it with 5 million users Atrapalo.it with 3 million users Lastminute.com with 2.6 million users Expedia.it with 2 million users Aussie Specialists > > As at March 2012, there were 538 qualified Aussie Specialists in Italy. Inbound Tour Operators > > Inbound tour operators form a key part of the distribution chain in Italy, linked with Italian wholesalers who run Australian programs. Sources: 1 Osservatorio Turismo Online, February

10 Distribution Brochures and Rates Brochures and Rates Brochure Validity > > For Australia, most operators in the market produce an annual brochure published between January and March (starting from about 1 April 2012 to 31 March 2013). Brochure Space Policy > > It is not common practice to pay for space in brochures; however for larger space allocations, payment is required. Setting Rates > > Rates are set from October to December. Standard Rate Validity Periods > > There are two main periods: April to September and October to March. Seasonality of Italy Arrivals Source: ABS Overseas Arrivals & Departures, 2007 to 2011 Variation from Monthly Average Arrivals 100% more than the average 50% 0% 50% less than the average 100% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec All Purposes Leisure Business Other Avg: 4,637 Avg: 3,379 Avg: 580 Avg: 495 Seasonality > > The peak booking periods for travel to Australia are February to May. > > The peak travel periods to Australia are July to August and December. > > Most honeymoon bookings are made six months to one year in advance and the main travel period is May to December. > > Most honeymoon shows and events are held from September to January. 10

11 Distribution 4.2 Trends 4.3 Planning a Visit to market Distribution > > Young consumers are increasingly booking direct with airlines and product. > > The Italian online travel agency (OTA) market remains somewhat fragmented, with global players each maintaining a significant share. > > Tour operators are still key distributors for honeymoons, with online used mostly as a research tool. Planning and Purchase of Travel > > Italian consumers are searching for value deals, particularly via online channels. However, traditional retail agencies remain an important channel for long haul, complex destinations such as Australia. Retail agents also remain a vital source of information alongside travel guides for Italian consumers. Top tips for sales calls > > Make sure you know the production and positioning of a tour operator before the meeting. Product managers expect your products to be relevant to their clientele. > > An average sales call with a product manager should last between 45 to 60 minutes. > > The best time for sales calls is January to May and October to early December. > > The key market centres to visit are Turin, Milan and Rome but specialised operators are spread throughout the market. > > For more general information on sales calls and planning a visit to market, please see Tourism Australia s Planning for Inbound Success. 4.4 Key Trade and Consumer Events Key Trade and Consumer Events Event Location Date TTG Incontri (trade only) Rimini October 2012 BIT (consumer/trade) Milan February