Last year, the number of visitors from Brazil, Russia, India and China increased by 6.4%, 7.1%, 13.0% and 28.2%, respectively. Is the Australian Tourism Industry prepared for this?

Here are some thoughts on how to attract the new BRIC Tourist:

Follow the money!

In the next decade, the tourism market for Chinese visitors alone is forecasted to be worth A$6 billion to Australia, with almost one million Chinese visitors forecast to visit Australia in 2020. The Chinese tourist contributes twice as much value as the Japanese, with total inbound economic value (TIEV) having increased on average by 17.1% per year for the past ten years (a contribution to the Australian economy of A$7,287 per person).

Indian tourists also spend on average more each day than other nationalities. The total inbound economic value of an Indian tourist has increased by 14.9% per year for the past ten years. Indian tourists spend, on average, $73 per night and $4,607 per visit. For the next decade, the TIEV for Indian tourists is forecast to grow 6.7% year on year, moving the Indian tourist from Australia’s ninth to our fifth most valuable inbound market.

In 2010, Russians spent $26.5 billion abroad. As the BRIC country with the highest GDP per capita and the lowest levels of debt, the Russians have high purchasing ability and a relatively large luxury consumer market which is predicted to reach the size of Germany’s by the end of this decade.

Education policies requiring Brazilian students to study English are fostering outbound education tourism. Australia is a popular destination for young Brazilians due to our outdoor way of life, beaches and cultural similarities. In addition, Brazilians devote a large portion of their income to discretionary spending and choose to live for the present!

Casting a Wider Net

Unlike in the past, when the tourism industry has relied on above-the-line advertising and travel agents to attract business, the number one source of information for one-third of Chinese, Indian and Russian tourists is the Internet. Even more compelling is the knowledge that, unlike western travellers who usually plan and book their travel many months in advance, Chinese tourists booked their flights within one month of their date of travel.

The importance of reaching potential BRIC customers via online promotional material and marketing campaigns will be a necessary competitive edge for all travel companies in the future.

However, traditional methods of marketing and search engine optimisation are of little significance for BRIC tourists, in particular the Chinese. As an example, the Chinese population’s most popular search engine is Baidu, the Chinese equivalent of Google.  It is therefore very important for the tourist industry to establish a presence in local popular Chinese search engines to attract the lucrative mainland Chinese market.

Revamping the Product

With such alluring growth figures, it is going to become even more important for all tourism companies to develop products that have direct appeal to the BRIC tourist. The BRIC tourist differs quite significantly from their stressed out Western counterparts in that they want to cover as much of Australia in as short a time as possible! A typical day may include a photo stop at Bondi Beach in the morning, followed by a bus trip to the Blue Mountains in the afternoon and then an evening at the casino. This contrasts with Western tourists who typically enjoy sunbathing and relaxing on the beach. With over one fifth of outbound Chinese tourists being labelled as ‘Self Challengers’, Australia is a popular destination for those attracted to adventurous pursuits, being pushed outside their comfort zone and those who are attracted to some of Australia’s more remote areas.

Recruitment

There are approximately 150,000 Chinese students studying at universities in Australia, almost 70,000 Indian students, 18,000 Brazilian students and 1,500 Russians, but very few of them successfully find work in Australian companies after they graduate. These students not only have valuable cross cultural and language skills, but also Australian knowledge, experience and qualifications and possibly even high level connections in their home country. With the limited time available until their visa expires, many students are forced to return home if they cannot find suitable employment in the short period available, and this results in a loss of talent and valuable skill sets which could otherwise be retained in Australia – particularly in the tourism sector.

A good place for Australian tourist companies to start in developing a strategy to attract new BRIC tourists is to review their recruitment policies to attract international students who, after a short period of training and on the job experience, will significantly enhance their ability to tackle the BRIC market.

Business Tourism

The market for business tourism is largely untapped, but with 87% of business travellers staying longer than the ordinary tourist, both before and/or after their business engagements, the business tourism market presents numerous opportunities for the tourist sector. In 2010, business travel from Brazil increased by 59% due to the rapid growth of Australia’s energy and resources sector and the desire amongst Brazilian companies to learn from Australia’s success.

Why not tailor a tourism package that incorporates business meetings, site visits or even networking events for the more entrepreneurial and business-minded BRIC tourist? With numerous delegations coming to Australia from Mainland China every week, is this a niche opportunity for local tourist companies to start tapping into?

Seasonal Differences

While a seemingly obvious point, it is important not to underestimate the power of seasonal differences, particularly to attract Chinese and Russian tourists. The peak months for Chinese tourist arrivals to Australia are in January and February which, amongst other things, is caused by their desire to avoid the harsh winter climate and travel over the Chinese New Year Season. For Russian tourists, December and January are the peak months for tourist arrivals as they seek to escape the harsh Russian winter.

Tourism companies should focus their marketing and promotional activities to attract Chinese and Russian visitors during our warm summer months.

Cultural Differences

Whilst there are distinct cultural differences between Australia and the BRIC countries, Australia is uniquely placed and well positioned to take advantage of our exclusive position as the only western country within the BRIC region.

With over 1 million Chinese Australians (either born in China or of Chinese ancestry), large numbers of business migrants arriving each year from all of the BRICs, our growing number of international students and our strong cultural and historical ties throughout the region, Australia is a truly multi-national, multi-lingual and multi-cultural society which has so much to offer the BRIC Tourist.

“Speak with one Voice”

In the words of Geoff Dixon, Chairman of Tourism Australia, Australia’s tourism industry needs to “speak with one voice” when marketing overseas. Unlike other sectors, The tourist industry is highly fragmented in Australia which means that collaboration, rather than competition, to attract the BRIC tourist will result in everyone having the chance to share in a much bigger pie.

As an example of this, in 2010, Italy, France and Spain signed an agreement to work jointly to attract BRIC tourists, a partnership which would have been unthinkable a decade ago.

Also, in Pattaya, Thailand, high end luxury resorts have been collaborating to attract the Russian Tourist, a innovative strategy which has met with almost immediate success. By introducing Russian street signs, Russian restaurants and developing training courses for hotel staff and waiters to learn Russian language and cultural differences, Pattaya is now attracting large numbers of big spending Russians.

The BRIC tourist presents an unprecedented growth opportunity for the Tourism Industry….what is your BRIC strategy?

This is a summary of a presentation I gave earlier this month to the Australian Tourism Export Council Meeting Place 2011 in Sydney.

The annual Country Brand Index (CBI) report by the global brand and innovation consultancy company documents perceptions for 2011 to 2012 of 113 nations to uncover the drivers behind the development of a country’s brand.

It says the five main influences of a brand are values, quality of life, business, culture and tourism. If a place is able to improve a person’s life, others will then be encouraged to visit, do business and build their lives there.

Australia is ranked as having the fifth strongest branding behind countries including Canada, Switzerland and New Zealand.

With a population of 34, 030 589 and 2009-10 GDP growth of over three percent, the survey says Canada is ranked first for its stable political system, tolerant society and policies that encourage immigration. Coming in second, Switzerland has a strong brand based on its skiing, festivals and food.

In comparison Australia has a population of 21, 766 711 and 2009-10 GDP growth of more than two percent. The country is known for its almost universally positive reputation, offering both the exotic and familiar in an English-speaking society that integrates well internationally.

Countries with the strongest brands performed well in all dimensions of life, business and travel, with weaker ones having no recognisable profiles in any of these.

Australia was ranked 10^th for its value system but was perceived well in areas concerning quality of life, coming second in both areas of job opportunity and places people would most like to live.

It was ranked 11^th as good for business and 8^th for tourism but did not make it to the top 25 for heritage and culture.

While some industries are going through growth periods in the face of the strong AUD, notably imports and mining, which has had a massive investment boom, others that are in direct competition are suffering in comparison.

Offshore travel by Australians is at record levels but local tourism, retail and the tertiary education sector are showing weaker conditions, according to HSBC Global Research. So while some sectors of the economy are growing, and rapidly, others are beginning to slow down in order to make way for those on the up.

Much of the slow down has been in response to increasing numbers of Australians travelling overseas. The highest level of external departures on record, 33 percent, was recorded over the last year, which in turn has an effect on local retail spend and the manufacturing industry. This industry in particular has seen a decline in employment, however latest estimates suggest that manufactured export volumes have continued to rise despite the strong AUD.

The education export sector has also shown a drop in numbers over the past few quarters with local universities struggling to compete with the current exchange rate. Part of the reason for this decline however may be due to changes in slowing the issuance of student visas.

Despite the fact that some industries are decelerating in the face of the strong Aussie dollar, others are continuing to show strength, which can be taken as a positive outlook for Australia.

More than 7,600 people attended the first day of the premier global event for the tourism industry, which is geared towards exhibitors negotiating business with potential clients. The Exhibitor Invite only first day also saw more than 200 invited buyers engaging in an inaugural Speed Networking session, which was another opportunity for exhibitors and buyers to clinch deals.

Reed Travel Exhibitions director, Simon Press, said: “I am delighted with the attendance figures for the day of WTM 2011. World Travel Market is all about exhibitors doing business with WTM Meridian Club buyers. The exhibitor invitation policy for the day of WTM was introduced to allow exhibitors to negotiate business deals with those people they want to sign contracts with.”

Overall, almost 23,000 people attended the World Travel Market this year. The event also made a splash on social media site, Twitter, with WTM 2011 ‘trending’ as the 3rd most talked about topic on the day.

The delegation will include representatives from Tourism Victoria, Tourism Queensland, Gold Coast Tourism and Tourism Northern Territory. They will meet with buyers in Frankfurt and Paris from September 13 to 16, showcasing products for the youth, student and adventure market.

Australian Tourism Export Council (ATEC) boss Felicia Mariani said the trade mission will help re-attract young visitors to the country.

“The strong dollar has had  an impact on travel and we must fight harder to maintain our share of the backpacker market,” Mariani said. “Our unique natural and cultural offerings give Australia a distinct advantage and we must continue to promote and improve the tourism products available.”

Mariani said the Working Holiday Visa (WHV) continues to be strong incentive for young people considering Australia as a holiday destination.

“The availability and flexibility of the WHV is a counterbalance to the high Australia dollar, and it can really influence a visitor’s decision to come here, and how long they stay,” Mariani explained. “We must ensure we continually strive to provide competitive products and experiences with high quality service standards.”

The Guangzhou-Brisbane route will increase from three to four flights per week and Beijing will be added to the flight route.

“This is great news for Brisbane and Queensland as it represents a 33 percent increase in weekly flights,” Bligh said. “It will be a boost for the tourism, attracting more visitors from China’s capital city – a huge and growing market for us.”

The new flights will come into effect from October 30 and will increase the number of seats into Brisbane from 846 per week to 1132.

China Southern Airlines General Manager Queensland Edward Wang said the changes will be beneficial to the airline and passengers.

“We have recorded great business on the Guangzhou-Brisbane service and we believe adding an extra flight per week and including Beijing on the route will help grow our passenger numbers to Queensland,” Wang said.

Tourism, Manufacturing and Small Business Minister Jan Jarratt said the changes present positive tourism opportunities for the state with China now Queensland’s fourth largest and fastest growing international market.

“Along with attracting more high-spending Chinese visitors and developing new airline and travel trade partnerships we are working with Queensland tourism operators to ensure they continue to deliver tourism experiences that the Chinese market requires,” Jarratt said. “It’s vital our tourism industry has the skills, products and experiences to ensure our Chinese friends have the best possible Queensland experience as when they go home they tell their friends and families that Queensland truly is where Australia shines.”

The number of international tourists visiting Australia continues to build on last year’s record arrivals, posting 0.4 percent growth this year, according to the Australian Bureau of Statistics Overseas Arrivals and Departures. However, figures from July reveal a decline of 1.7 percent.

Data from the Australian Bureau of Statistics (ABS) Overseas Arrivals and Departures shows the number of international tourists to Australia continues to build on last year’s record arrivals with 0.4 percent growth this year. However, figures from July reveal a 1.7 percent decline.

“The ongoing strong growth in visitor arrivals from China and south-east Asian markets continues to bolster the sector while the decline in visitors from Japan and other leading markets in Europe and North America reflect the current nature of their economies,” explained Martin Ferguson, Minister for Tourism.

He said the figures reflect new opportunities for the tourism industry.

“The Australian Government is continuing to work with businesses to help them adapt to changing markets, changing consumers preferences, technologies and the effects of globalisation by continuing to implement the National Long Term Tourism Strategy,” Ferguson added. “That means taking advantage of new opportunities in the growing Asian markets and building long-term resilience through investment and sensible regulatory reforms.”

Senator Nick Sherry, Minister Assisting on Tourism, said an agreement to double the number of seats between Australia and Indonesia will offer Australia new opportunities.

“Indonesians are increasingly affluent and looking to Australia for a quality holiday – already, Indonesia is among our top-dozen inbound markets,” Sherry explained. “With practical reforms such as air services agreements, we can make the most of another emerging market.”

Australians have always been proud of their tourism industry. It enables us to show the world what a diverse and beautiful country we have and also generates substantial revenue for many parts of regional Australia and for the economy as a whole. However, the world is changing and the competition for international tourists is intensifying. Governments the world over spend enormous amounts of money trying to attract tourists to visit their country to generate export income.

The problem for Australia is that we suffer from a major competitive disadvantage, being the distance from major North American and European markets. The resulting cost and time to travel in and around Australia deters many travellers, and with the strengthening AUD this will be exacerbated.

For our tourism businesses the AUD strength is a double-whammy with more Australians now travelling overseas than in the past and not holidaying in Australian locations. This is having a significant impact on our balance of trade with Australia’s tourism imports exceeding Australia’s tourism exports every year since 2004/05 and with the deficit of tourism exports to tourism imports reaching $5.0b in 2009/10 according to the Australian Bureau of Statistics. There is significant economic downturn in many parts of regional Australia as a result.

There is no easy fix and any solution must be long term. Tourism Australia has developed an initiative “2020 Tourism Industry Potential” focused on overnight visitor expenditure. There is clearly great potential from increasing visitor night expenditure and the benefits to the Australian economy are clearly enormous but the key question is how can this be achieved? Australia always had great potential as a tourist destination but has rarely fulfilled the potential with the exception of the mid 1980’s when there was a influx of Japanese tourist which incidentally created an significant inbound investment from Japan focused on the tourism industry.

However, past experience has shown that the potential interest in Australia as a tourist destination has not been fulfilled. Many campaigns have been successful in raising awareness of Australia and respondents to surveys indicated that Australia would be a place they would like to visit, but the intentions were not acted upon. I suspect that the recent Oprah Winfrey campaign will raise awareness but not visitor numbers by a significant factor.

Tourism Australia does anticipate that a substantial portion of the potential increase in visitor night expenditure will come from the emerging countries of China and India. This is a logical approach that can be supported on the basis of proximity as well growing economies with large populations. The issues, clearly identified by Tourism Australia that must be addressed to achieve the potential from these markets are more quality accommodation, improved aviation infrastructure, more skilled labour force (including language skills) and new, interesting tourism products.

Leisure tourism must not dominate the discussion on the potential of tourism. Business tourism which includes conventions, conferences, meetings, incentives and events is more rewarding and has some great long term prospects. This has been recognised by governments and now additional infrastructure around business events such as the new convention and exhibition centre in Melbourne and the proposed new centre is Sydney will enable Australia to compete and win additional business events that will generate additional tourism to Australia.

In recent years various governments have funded improved and better infrastructure. In addition to the convention and exhibition centres there have major improvements to regional airports in major tourist destinations such as Gold Coast and Cairns. For tourism to reach its potential this must continue with infrastructure developed that will provide a better standard of amenity for tourists.

The infrastructure, business tourism opportunities, growth from emerging markets, new tourism products  and addressing skilled labour problems may well assist in achieving the “Tourism Industry Potential” by 2020. However, the impact of a strong $A could negate all these improvements to industry. For the Australian tourism industry to reach its potential it is crucial that products are not sold on price but on quality – that is critical.

“The Japanese earthquake and tsunami have knocked one of Australia’s most important tourism markets, particularly in Queensland,” said Federal Minister for Tourism Martin Ferguson, in response to the latest figures from the Australian Bureau of Statistics (ABS).

In March, overseas short-term visitor arrivals fell by 5.1 percent compared with the year before. There was some growth, however, as arrivals from China increased for the 14^th consecutive month, up 16.7 percent.

Ferguson said although traditional markets like the US, UK and Japan remain high-yielding for Australia, both Tourism Australia and the federal government have put funding elsewhere. “We’ll continue to aggressively market into China,” he said.

As more Australians chose to holiday at home, overseas short-term resident departures fell for the first time in 23 months. Both state and federal governments have contributed to a $12 million tourism recovery package, aimed at dispelling myths about the recent devastation in Queensland, which may explain the shift.

“The fact is the majority of Queensland’s tourism regions have suffered minimal or no damage and the majority of those affected are now open and operating normally,” said Jan Jarratt, Minister for Tourism in Queensland.

Speaking at the Australian Tourism Exchange this week, Tourism Australia’s managing director Andrew McEvoy said it was a little early to start popping champagne corks, but there are suggestions the ‘Oprah effect’ is working.

Online travel agency Orbitz reported a rise in flight and hotel bookings from Americans of nearly 10 percent and 13.6 percent respectively. Flight Centre/Liberty Travel has seen a 108 percent increase in flight bookings compared with the same period in 2010. US travel group Signature Travel recorded a 52 percent increase in Australian bookings.

Oprah Winfrey visited Australia to film four episodes of her top-rating show in December 2010. Consumer research recently conducted in America revealed that 61 percent of respondents aware of Oprah’s Australian shows had already investigated holidays in Australia. “About 74 percent of those who were aware of the shows agreed that Australia is worth travelling to,” McEvoy said.

“Since its announcement in September 2010, Oprah’s visit to Australia has generated more than 86,000 media articles across the world, with an estimated equivalent advertising value of $368 million,” he said.

McEvoy told Dynamic Export in February that he didn’t expect Oprah to be the silver bullet for Australian tourism, but he hoped to see the ‘Oprah effect’. “Within 30 minutes of the first show screening in the US, one agent from Texas specialising in Australia reported his first group booking. Another reported a 75 percent uplift in business since the Winfrey visit to Australia was first announced.”

Oprah’s four Australian shows will be re-aired from March 24, in conjunction with the next stage of Tourism Australia’s big American marketing push.

Securing Oprah’s visit was a coup for Tourism Australia, one the organisation hopes will help boost US tourism to Australia by 840,000 visitors. Tourism Australia estimates US travellers could add $5.5 billion to the Australian economy by 2020.