Tourism Australia Corporate Plan Delegates from Perfect China climb the Sydney Harbour Bridge, 13 July 2013

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1 Tourism Australia Corporate Plan Delegates from Perfect China climb the Sydney Harbour Bridge, 13 July 2013 MINISTER S MESSAGE Tourism is a major contributor to the Australian economy. It generates $98.5 billion in spending and employs over half a million Australians. The Tourism Australia Corporate Plan continues the blue-print established in 2010 under the Tourism 2020 strategy. Strengthening competitiveness, focusing on the needs of the target customer and delivering through partnership are core to the plan. I commend to you the Tourism Australia Corporate Plan. Hon. Andrew Robb, AO MP Minister for Trade and Investment Tourism Australia s role is to grow demand and foster a competitive and sustainable Australian tourism industry through partnership marketing to targeted global consumers in key markets. Who we are, what we do As Australia s national tourism organisation, Tourism Australia aims to increase international leisure and business events visitation by promoting Australia as a compelling tourism destination. Originally established as the Australian Tourist Commission in 1967, Tourism Australia is an Australian Government statutory authority formed under the Tourism Australia Act It is governed by a Board of Directors that reports to the Australian Minister for Trade and Investment, under the Statement of Expectations, the Tourism Australia Act 2004 and the Commonwealth Authorities and Companies Act Along with its predecessor, the Australian Tourist Commission, Tourism Australia has a strong reputation for developing innovative tourism marketing campaigns, and has built one of the world s most admired and desirable destination brands. Objectives Tourism Australia works with the Australian tourism industry and federal, state and territory governments to maximise the industry s economic contribution. To provide industry with a long-term vision and focus effort, the Tourism 2020 strategy was launched in Under the strategy, the industry aims to increase annual overnight visitor expenditure from $70 billion 2 to between $115 billion and $140 billion by To help achieve this target, Tourism Australia is focused on: increasing the number of leisure and business event visitors improving visitor value, including spend per trip and spend per night competing with out-of-region travel destinations 3 supporting supply-side factors, such as aviation and tourism infrastructure investment. 1 The CAC Act details rules about reporting, accountability and matters relating to Commonwealth authorities such as banking, investment, the conduct of officers. 2 The 2009 benchmark under the 2020 Tourism Industry Potential the latter preceded the Tourism 2020 strategy. 3 Out-of-region travel destinations are places beyond target customers immediate geographic region. The immediate geographic region is a short-haul travel destination for the target customer and so is not a direct competitor with Australia. 1

2 Managing Director s Message Proximity to the thriving Asian region and Australia s international appeal as a tourism destination - particularly our landscapes, our people, and our food and wine - provide significant opportunities for Australian tourism. This Tourism Australia Corporate Plan outlines clear strategies to take advantage of these and other strengths. An important impetus will be a renewed focus on innovative partnerships, as well as continued collaboration with the tourism industry and state and territory tourism organisations. Tourism Australia looks forward to working with our partners and stakeholders to achieve the Tourism 2020 vision and ultimately deliver real economic benefits to all Australians. John O Sullivan Managing Director The Tourism Australia Corporate Plan continues the strategic path established by Tourism Australia in 2010 under the banner of the 2020 Tourism Industry Potential and Tourism Emphasis has been on strengthening competitiveness; taking advantage of growth in the Asian region while maintaining activity in traditional markets like the UK and USA; and continuing to deliver on the needs of the high-spending target customer. Since the launch of Tourism 2020, the Asian region has continued to grow strongly, led by China 4. Marketing funding has been bolstered by the Asia Marketing Fund announced in May The Fund will provide $48.5 million over four years 5 to promote Australian tourism, significantly increasing Tourism Australia s marketing footprint in Asia. Initiatives that will continue through include the rollout of the China and India 2020 Plans; work with states and territories, airports and airlines to support new routes to Australia; increased use of digital and social media platforms and partnership marketing initiatives. Tourism Australia will continue to improve its competitive position. Research confirms that Australian tourism has clear competitive differentiation through world class nature, people and food and wine. Strong brand recognition has been built through the There s nothing like Australia campaign. From 2014, food and wine content and imagery will be strengthened, with Restaurant Australia positioning integrated into marketing activities in all markets under the There s nothing like Australia umbrella. This will emphasize the uniqueness of Australia s food and wine experiences. A new version of australia.com will also be launched. This will enhance consumers online experience of what Australia has to offer as a tourism destination. Tourism Australia is a partnership marketing organisation. Working with partners will help to heighten marketing effectiveness and achieve cut through with audiences. The Best Jobs in the World campaign, launched in 2013, is an example of Tourism Australia s partnership marketing at its best. The success of this campaign will be leveraged and continued in 2014 and beyond. This plan has been prepared in consultation with state and territory tourism organisations, recognising the importance of our partnership. Penguin Parade, Phillip Island, VIC 4 At September 2013, Asia remained the key growth region, contributing 60 per cent of arrivals growth with China alone contributing slightly over a quarter of total growth. (Tourism Research Australia). 5 Funding ends in

3 Australian tourism industry outlook Australian tourism is uniquely placed to take advantage of this Asian century. The region is forecast to provide over a million additional visitors to Australia by (Tourism Research Australia). China is already Australia s most valuable market in financial terms and will remain a top priority for the Australian tourism industry in Whilst targeting growth, Tourism Australia will maintain a balanced portfolio approach to its global marketing over the period, recognising the important contribution of traditional markets such as the UK, USA and Japan as well as the need to increase presence in those markets with potential to provide strong returns. Economic Tourism Australia anticipates an improved economic environment for inbound tourism in , with global GDP forecast to trend at around 3.1 per cent in 2014 (Tourism Research Australia). Economic growth in Asian economies is expected to ease slightly, while the economies of the USA, Western Europe and New Zealand are forecast to increase modestly. The Asian region provides significant opportunity for Australian tourism. It is one of the fastest growing tourism markets in the world, driven by good economic growth and an emerging urban and affluent middle class. Over the period , Australian tourism is likely to benefit from a weakening Australian dollar. The Australian dollar is expected to average US$0.91 in 2014, depreciating to US$0.88 by (Tourism Research Australia). A depreciating Australian dollar increases the price competitiveness of Australian tourism products and services for visitors from overseas, particularly for price sensitive segments. Destination appeal Australia is regularly rated as one of the most desired tourism destinations in the world. In FutureBrand s Country Brand Index, Australia remained the number one country brand in the world for Advocacy 6, indicating that it continues to deliver on and exceed travellers expectations. In , Tourism Australia will strive to convert this strong support into travel to Australia. Arrivals, expenditure and visitor nights increased in the year ending June 2013 compared to the year ending June there were 6.3 million visitors to Australia (up 4.9 per cent), $28.2 billion in spending (up 5.9 per cent) and 212 million visitor nights (up 5.9 per cent). Arrivals from Asia represented 43 per cent of total inbound arrivals, up from 41 per cent in Asia continues to be the fastest growing region arrivals were up 9 per cent for year ending June 2013 (while averaging 4 per cent over the past 5 years). China was the biggest contributor to this growth. A review of Australia s market share between 2009 and 2012 reveals mixed performance across key markets. There was growth in India, the Middle East, Indonesia and France; steady performance in China, Hong Kong and Brazil; slowing loss of share in Singapore and Malaysia; and decreasing market share in the USA, Canada, the UK, Japan, South Korea, Germany, Italy and New Zealand (Tourism Economics, 2013). In an increasingly competitive market, holding or growing market share is an ambitious goal that Australian tourism will strive to achieve. Over , travel demand is forecast to increase steadily. International visitors are estimated to increase by 5.6 per cent in (to 7 million visitors) and by 4 per cent for the following financial years to (to 9.3 million). Through the period, Australian tourism will face a progressively competitive marketing environment, with increased marketing by competitor destinations, changing distribution channels and broadening media options. Aviation outlook Air access will play a fundamental role in the achievement of Tourism 2020 objectives. During , aviation is expected to remain a positive factor for Australian tourism. Tourism Research Australia forecasts assume slightly weaker overall growth in inbound aviation capacity through and , up 7 and 5 per cent respectively. Over , carriers within the Asia Pacific, Middle East and Latin America regions are likely to continue to drive global aviation growth, with Australia expected to benefit from strong capacity increases from Asia particularly China, Malaysia and Singapore as well as the USA and Middle East. Modest contractions in direct services from the UK and Europe are anticipated over the next two years. Growth is also likely from continued expansion of Low Cost Carriers. Similarly, alliances, code shares and consolidation will continue to evolve both in Australia and overseas, improving connections and point-to-point booking processes for consumers. 6 Advocacy = Do visitors recommend the country to friends, family and colleagues? (Futurebrand, Country Brand Index ) 3

4 Tourism 2020 Tourism 2020 is the Australian tourism industry s long-term strategy to grow its economic contribution. The strategy focuses on improving the industry s global performance and competitiveness by pursuing new opportunities for growth and addressing supply-side factors. Tourism Australia will work with the tourism industry and governments across Australia to achieve Tourism 2020 s goals and make the most of growing demand from Asia. All state and territory tourism organisations have adopted the Tourism 2020 strategy as a base for their own strategies. Tourism ministers from federal, state and territory governments are leading the implementation of Tourism 2020, supported by the Australian Standing Committee on Tourism (ASCOT), which comprises chief executive officers of peak government tourism organisations. Tourism 2020 aims to: increase overnight tourism spend from $70 billion in 2009 to between $115 billion and $140 billion by 2020 hold or grow market share in key regions increase tourism labour and skills increase accommodation capacity, particularly in capital cities increase international and domestic aviation capacity increase the tourism industry s quality and productivity. 6 Key Delivery Strategies Tourism Australia s contribution 1 Grow visitor demand from Asia, particularly China and India 2 Build competitive digital capacity 3 Encourage investment through regulatory reform 4 Improve tourism transport capacity and infrastructure 5 Address labour and skills shortages and greater Indigenous participation 6 Increase industry productivity, innovation and quality Deliver Asia Marketing Fund (AMF) initiatives, including: China: accelerating the China 2020 Geographic Strategy to grow tourism to Australia and gain competitive advantage in China s secondary cities of Qingdao, Chengdu and Chongqing Japan and South Korea: strengthening efforts to rebuild these inbound markets Across Asia: increasing aviation cooperative partnerships between Tourism Australia, state and territory tourism organisations, airlines and airports serving Australia from Asia Research: undertaking new research and assisting industry s understanding and engagement with Asia. Increasing resources on digital marketing in Tourism Australia s marketing mix. Delivering digital and online devices and applications that meet target customer needs. Participating in the Digital Distribution Working Group and National Online Strategy for Tourism, building competitive digital capability. Working with Austrade to attract investment in Australian tourism infrastructure. Partnering with airlines, airports and state and territory tourism organisations to support existing and new route development. Participating in the Tourism Access Working Group and supporting air service negotiations and other access issues. Promoting and developing indigenous tourism product through the Indigenous Tourism Champions Program, industry marketing initiatives and participation in the Indigenous Tourism Group. Participating in the Tourism Visa Advisory Group, working with Austrade and the Department of Immigration and Citizenship on visa issues. Promoting iconic landscapes through Australia s National Landscapes Program. Partnering with state and territory tourism organisations to deliver the 2020 Distribution Strategy, ensuring Australian tourism product is effectively distributed. 4

5 Oyster Shucking, Freycinet, Tasmania Achieving Tourism 2020: Tourism Australia s strategies and policies 4 strategies focus effort 1 Customer what we do centres on the target consumer 2 Partnership building Australia s competitiveness 3 Government whole-of-government approach 4 Right people, strong and accountable organisation 5

6 What we do centres on the target consumer Know the best prospect target customer who they are, where they live and what they like to do and disseminate these insights to the industry Deliver effective marketing communications the right message through the right channel with a digital focus Customer focus Tourism Australia will target leisure consumers who are predisposed to travel to Australia and likely to spend more and do more when they travel to Australia. The demographics and psychographics of this target may differ across markets. From a business events perspective, Tourism Australia will target international corporate conference and incentive agents, corporate end decision-makers and international associations. Tourism Australia will undertake research to understand the target customer and the products and experiences that they want and share these findings. Insights from this research will refine marketing communications and inform product development by governments and industry operators. Global market resourcing will focus on markets that represent the greatest expenditure growth potential to Tourism Australia will continue to work with partners to promote Australia and encourage more people to visit, growing visitor expenditure and numbers of international visitors. Marketing communications will continue under the There s nothing like Australia campaign umbrella and will lead with the best of Australia s tourism experiences. Insights on the global consumer will drive the right messaging in the right channels. The aim will be to raise the urgency to visit, increase knowledge and build a strong image of what Australia has to offer global travellers. Marketing will include traditional channel activities such as brand advertising, cooperative advertising with partners, promotions, famils, public relations and events that promote positive word of mouth. Increased resources and effort will be dedicated to digital and content marketing initiatives led by a revitalisation of australia.com that will provide an enhanced online Australian tourism experience for consumers. Tourism Australia s digital and social marketing emphasis will be to personalise, socialise and mobilise content to make it more relevant and timely by using data and analytics. Digital and social media channels are an important area to gain competitive advantage for Australian tourism. Consumers use of these channels to research, plan, book and share holiday experiences is significant and will continue to grow. Global market resourcing Forecast value by 2020 Market Over $5 billion Greater China North America United Kingdom Over $2.5 billion New Zealand Singapore Malaysia South Korea Over $1 billion India Indonesia Japan Middle East Germany Rest of world fast emerging Brazil Rest of world high priority France Italy Whole-of-government approach»» Collaborate with government partners to present a strong Australia brand to target customers Government focus Supporting and collaborating with government will continue to be central to Tourism Australia s operations. A whole of government approach, through partnership with Austrade and the Tourism Division and agencies such as the Department of Foreign Affairs and Trade, the Department of Infrastructure and Regional Development and the Department of Immigration and Border Protection will help Tourism Australia deliver on the needs of the broader tourism industry. Collaboration with state and territory tourism organisations will be integral to success. This partnership approach will align activities and drive efficiencies. 6

7 Create demand by leveraging partnerships that engage the target customer and facilitate access Strengthen marketing through partnerships that are aligned with Australia s brand image and leverage partner marketing activities Build partnerships that engage customers across distribution channels, media, industry and events Develop relationships with traditional and non-traditional distributors to ensure the target customer can easily access quality Australian tourism products Strengthen access by working closely with airlines, airports and state and territory tourism organisations, supporting existing aviation capacity and new routes Work with Austrade and state and territory tourism organisations to identify and promote investment in new tourism infrastructure Partnership focus Tourism Australia is a partnership marketing organisation that actively collaborates with government and industry to create demand for travel to Australia. Leveraging partnerships will strengthen share of voice and marketing weight in the competitive global tourism environment. Ensuring the target customer can easily access quality tourism products will drive continued improvement to distribution mechanisms, making it easier for consumers to plan, book and buy quality Australian tourism products and services. Industry knowledge and understanding of the target customer will be shared with Australian government agencies and partners to inform partnership marketing; and aid in attracting investment opportunities in new tourism infrastructure in Australia, particularly capital city hotel rooms and improvements in products and services in regional areas. Similarly, Tourism Australia will play a strategic role in aviation, sharing customer and market knowledge to facilitate aviation development. Right people, strong and accountable organisation Build a constructive culture, an efficient organisational structure and effective communication and decision-making channels Respect and enforce the highest standards of accountability and governance Right people Tourism Australia will recruit, develop, promote and reward employees who have the skills and values needed to support its strategy, processes and culture. To fulfil this strategy, Tourism Australia will continue to grow capability through training and development, strategic talent management, targeted recruitment and robust performance and development plans. The Tourism Australia team will align to a constructive, achievement-oriented culture whose core behaviours are Sharing for Success, an Inquiring Mind, and Value for Money. The organisation s structure, communication and decision-making channels will maximise flexibility and responsiveness. Strong and accountable organisation Tourism Australia is committed to best practice corporate governance. Accountability, transparency and probity across all business activities will be required. This will be achieved by: project planning and performance monitoring of major projects and contracts; open communication with the Australian Government, Minister for Trade and Investment and regulatory bodies; sound risk management and adherence to legislative and internal compliance and procurement procedures; regular review of Tourism Australia s strategies and policies by the Tourism Australia Board to ensure Tourism Australia is delivering on the Minister s Statement of Expectations and policies of the Australian Government. Tourism Australia s risk management framework will address strategic, operational and project risk. This includes: risk assessments as part of annual operating plan development; regular risk review and reporting, including fraud risk assessment 7 ; business continuity management risk assessments aligned with planning cycles; procurement and insurance risk assessments as required under Tourism Australia policies; and work, health and safety risk assessments to identify and eliminate workplace hazards. 7 Fraud risk assessments are undertaken every two years as required by the Commonwealth Fraud Control Guidelines

8 What will success look like? Progress toward the Tourism 2020 goal of increased spend is Tourism Australia s core measure of success. Tourism Australia recognises that it is only one contributor to this industry goal. Tourism Australia has strategic key performance indicators (KPIs) to track its effectiveness under its two government programs - increase demand and industry development. These measures and associated goals are provided in the table below. Tourism Australia teams in overseas offices and in Sydney set strategic KPIs aligned to Tourism 2020 outcomes. Australian Government Program Key Performance Indicator Actual Goal YIELD / INCREASED SPEND Increase on previous year (Year ended December 2013) Increase on previous year (Year ended December 2016) Total overnight tourism spend (all purposes) 4.1% 6.0% Total spend by visitors from Tourism Australia target markets (all purposes, excluding rest of world) 6.2% 12.8% Increase demand Total spend by Target Audience, Leisure visitors 8.4% 14.4% Total spend by Target Audience, Business events visitors -12.1% 10.4% MARKETING EFFECTIVENESS (Year ended December 2013) (Year ended December 2016) Traditional Marketing > Tourism Australia campaign recall by target customer 54% Maintain / improve results Digital Marketing > Total monthly unique visitors to Tourism Australia owned websites STAKEHOLDER AND PARTNER SATISFACTION 24.4 million (up 26% on previous year) Maintain / improve results Key stakeholders > Indicate Tourism Australia adds value to their business (excellent, very good or good value) 79% >75% Industry development Key partners > Indicate Tourism Australia adds value to their business (excellent, very good or good value) First time measure data to be collected (available June 2014) >65% DISTRIBUTION 2020 DELIVERY Achievement of deliverables in core program areas Australian Tourism Exchange, Aussie Specialist Program, Global distribution partnerships On track Achieve planned deliverables 1 Tourism Australia s high level outcome as described in Portfolio Budget Statements is to grow demand and foster a competitive and sustainable Australian tourism industry through partnership marketing to targeted global consumers in key markets. This outcome is delivered via two Australian Government Programs: increase demand and industry development. 8

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