Issues & trends
ATAC’S stellar year
Brisbane’s stunning five-star W Hotel was the setting for the 2019 Australian Travel Agents Co-operative (ATAC) annual conference last month with members and suppliers celebrating a year of growth and success.
Proceedings got underway with a board meeting to confirm the election of directors of the co-op before the annual general meeting with members took place.
Among the topics of discussion was the performance of the group which has achieved several key milestones over the past year including record total transaction value (TTV), override payments and new members.
Speaking with travelbulletin, ATAC’S Chairman Ken Morgan said the group would achieve TTV of $250 million which was a 10% increase on the prior year.
Morgan said that members of the co-op would enjoy the spoils of record overrides with the pool increasing to $1.2 million, having hit stretch targets with many preferred partners.
“We’ve been really hammering hard about supporting all of our preferred partners, particularly on air and as we’ve always said to our members you’ve got to play the long game and when you do, look what happens, the override pool increases as we’ve all pitched in,” Morgan said.
The co-op has also grown in membership and now comprises 120 members with the addition of 17 more the past year.
And while there’s no magic number that the co-op wishes to achieve, Morgan believes there’s room for more, with Western Australia seen as a key market for potential members. “We see lots of opportunities to grow through word of mouth. We did some research this year and out of our membership we ended up with a net promoter score of 82%.”
“It’s because of the no fees, low overheads and bonuses that are members are happy and spreading the word,” Morgan added. The 2020 conference will take place in Darwin.
Australia’s tourism industry is remarkably resilient. While it is most certainly being buoyed by the exchange rate, there has been very little impact felt from the global instability of trade wars and political unrest. Great care needs to be taken not to be complacent given that 40% of our visitors are from markets affected by these phenomena.
This month the Visitors Survey found international visitors to Australia for the year reached 8.6 million with a spend of $44.6 billion, with increased spend from the major markets including Japan, the United States and China – albeit the length of stay is decreasing. This is almost certainly the result of the Tourism Australia targeting high value travellers.
In terms of our own value, again despite the exchange rate, we still have a huge mountain to climb. In the World Economic Forum’s 2019 Travel & Tourism Competitiveness Report, Australia ranked 130 out of 140 Countries for price competitiveness. Value is inversely proportional to price. As a result, any further deterioration in price competitiveness will make value difficult to justify.
The quality numerator in value is holding up for Australia. Natural resources were ranked at 3, Tourist Service Infrastructure (including hotels) at 8 and Air Transport Infrastructure at 2. This is good news but in a very competitive global market, where are competitors are not shy about spending significant amounts on promotion, we need to work hard to maintain a value proposition to our visitors.
The stand out performer in terms of visitation growth and growth in spend (at 53% and 68% respectively) is India. This will be greatly assisted by the 2019 Federal budget allocation to promote the T20 World Cup in India. This will help leverage the sporting relationship between Australia and India. This market will yield for Australia but we need to remain focused on ensuring the high value travellers from India are attracted through a strong marketing effort.
India is expected to reach 2 million outbound luxury and MICE tourists by next year. Australia is getting a total of just over 300,000 visitors from India now. As with most markets, the luxury and MICE sector is the sweet spot which all our competitors are chasing. The level of competition is almost overwhelming as can been seen in our own outbound market. Some significant players, such as Japan, have seen a doubling in marketing spend. As a longer haul destination Australia needs to work doubly hard. We are very used to tourism continuing to grow and continuing to contribute to our economy without a lot of effort. Now is the time to make sure we protect our tourism future with a matched Government and industry investment to growth.
The Competitiveness Report describes a tipping point for tourism. The tipping point for Australian tourism is the point at which we realise we might lose out long-term if we don’t match the investment of our competitors.