In the latest State of the Nation report, Roy Morgan Research shone a spotlight on Australian tourism, an industry which has the potential to make a larger contribution to national GDP following the commodities boom. But the industry needs to get smarter at leveraging digital technology and embracing disruptive business models to ensure sustainable growth.As the report highlights, digital is disrupting traditional operators through “automation and variable pricing of everything from hotel rooms to airline seats”, which combined with huge changes in media consumption “is impacting the very essence of the industry”.
What does this mean for the industry, and how should it respond? Here is a quick overview:
1. Tourism is a major contributor to exports and to GDP
According to data from the Department of Foreign Affairs and Trade, tourism generated over $14bn in exports in 2014, and is #5 after iron ore, coal, natural gas and education.
In particular, revenue from Chinese tourists, especially “Free and Independent Travellers” (FIT), grew 19% in 2014, and now accounts for around one-third of in-bound tourism revenue.
With an increasing proportion of Australia’s population born overseas (in large part driven by people coming here to study or to work from China, India and South East Asia), it’s only natural that their friends and family will come to visit them for holidays. And since they are likely to be more affluent visitors, they can afford to curate their own itineraries, rather than be locked into package tours.
2. Great attractions need even better infrastructure and UX
It’s no longer enough that Australia can boast many of the best natural, cultural and lifestyle tourism attractions in the world. Increasingly, catering for the “visitor experience” means that travel operators, hotels, resorts, attractions and destinations need to consider things like:
- Multilingual and multicultural capabilities
- Internet & WiFi access
- Smartphone compatibility
- Signage and navigation aids
- Integrated services (e.g., transportation and visitor attractions)
- Content and interpretive tools
3. Market and digital disruption means more choice for travellers
Disruptive market forces mean that tourists have more choice, and can access the sharing/informal economy, such as Uber and AirBnB.
Digital disruption also means a myriad of ways to discover, book and pay for transport, accommodation and services, aided by numerous apps that can bypass official travel and tourism services.
Visitors not only have more choice, they are more likely to be well-informed, having done their research before they arrive, aided by social platforms that offer personal reviews and recommendations.
4. What are the reasons tourists come to Australia (and what do we do with them once they are here)?
I don’t have any official data, but anecdotally, tourists come to Australia because in general they believe it’s safe (notwithstanding shark attacks and venomous insects), it’s clean, it’s unique, it has variety, and for some the language is also a convenience.
Whether it’s natural scenery, food and wine, cultural events, sport, historical sites, gambling, surfing, trekking, arts festivals, fashion weeks, galleries, museums, beaches, or just hanging out in coffee shops, Australia has a lot to offer.
I’m obviously biased, but Melbourne alone hosts a full calendar of cultural, sporting, culinary and commercial events – there’s something significant happening every month of the year:
- Major Festivals – Jazz, Comedy, Film, Arts, Fringe and Cabaret (plus the Laneways Festival)
- Special Events – White Night, SuperSense, Winter Masterpieces, Gertrude Street Projection Festival
- Sport – Tennis, Spring Racing Carnival, AFL Grand Final, F1 Grand Prix, Boxing Day Test
- Commercial – Food & Wine Festival, Design Week, Fashion Week, Art Fair, Trade Expos, Professional and Industry Conferences
And did I mention the coffee shops???
5. Some further opportunities?
Digital won’t displace these attractions; in fact it should make it much easier for tourists to discover, connect to and interact with them before, during and after their visit.
Digital can also help curate the whole end-to-end experience, from suggesting thematic itineraries, managing personalised bookings and organising customised events, to providing travel information and advice in advance, updating information throughout their stay, and keeping in contact with visitors once they leave.
And a personal plea – can Melbourne’s trendy restaurateurs that don’t accept bookings offer an app to let customers know when their table comes up on the waitlist?
Declaration of interest: The author currently consults to Roy Morgan Research. These comments are made in a personal capacity.
Next week: Update on AngelCube