|
|
Special
Shoalhaven Tourism Advisory Group – Monday 09 October 2017
Page
1
|
TA17.45 International
Marketing Analysis
HPERM Ref: D17/308283
Group: Finance
Corporate & Community Services Group
Section: Tourism
Attachments:
1. Quarterly update June 2017 - PUBLIC
VERSION ⇩
2.
Confidential Annual Report (Confidential - under separate cover)
3.
Confidential Contract (Confidential - under separate cover)
4. Research
- Trade and Consumer Sediment and the potential of the Chinese Market
(Confidential - under separate cover)
5.
Shoalhaven Travel Experience Research - Travel Reviews - Social Listening
(Confidential - under separate cover)
6. 17/18
Partnership Proposal (Confidential - under separate cover)
Purpose / Summary
International Marketing Program
for 2017/2018
|
Recommendation (Item to be
determined under delegated authority)
That the Shoalhaven Tourism
Advisory Group
1. Commit
to 6 months of international marketing with current partner and;
2. Form
a working group to further investigate international marketing opportunities
and report back to STAG by the end of 2017 on an appropriate international
marketing strategy for 2018 and beyond.
|
Options
1. Commit to 6
months of international marketing with current partner, and, form a working
group to further investigate international marketing opportunities and return
to STAG with recommendations on strategy for 2018 and beyond.
Implications: Continue in market whilst compiling
research and a more in-depth market review, potentially diversify international
marketing strategy. Potential to test the market with quotes from other
international marketing companies.
2. Leave as is with
current international marketing business partner for the next 12 months.
Implications: The existing partner has performed
very well to date. However International marketing is a critical growth
area and an examination of opportunities should be considered. Not recommended.
3. Do not continue
with current partnership and create a new international marketing strategy.
Implications: Diversify international marketing
strategy, resourcing is a consideration long term. A review will take time and
there will be a period when the region is not being promoted, risk losing
traction in a growing market, not recommended.
Background – Current Business
Partner relationship
Asia
marketing with current business partner
- Shoalhaven Tourism has been
working with the one international marketing business partner for several
years. This partner promotes the region into primarily Asian countries as
‘Jervis Bay’.
- Markets serviced by our partner
are China, Korea, Singapore, Malaysia, Indonesia, Vietnam, Taiwan, Hong Kong,
Indonesia, India.
- Investment primarily markets up
to 40 Shoalhaven products (Mainly Jervis Bay and North) to wholesalers and
agencies in international offices and at trade shows.
- The typical traveller has
pre-booked a package and is coming to the Shoalhaven ex Sydney for 1-2days
maximum. They experience a few products and then return.
- Packages are booked through
international agents who take commissions and our business partnership services
those agency relationships to continue getting bookings.
- An international bi-lingual
website is maintained (inspirational, no booking platform)
Recent Results -
Financial year 2016/7
Attachment 1 –
Public quarterly partners report
Attachment 2 - CONFIDENTIAL, Commercial
in Confidence – Annual wrap up report
Strengths:
· Built
strong relationships with wholesalers
· Local
business, happy to assist in advocacy across the whole region for international
tourism
· Good
for awareness and potential return higher yield trips as FIT
· Represents
40 products in region to several Asian markets
· Asian
market is growing but off a very low base so figures are still small
· Forecasts
are for the Asia market to boom
Weaknesses:
· Low
yield and day trip market from Sydney – product is highly discounted
· Low
visitor nights’ return (average stay is 1.26 nights)
· Need
more cheap hotels to continue growing this market and many nights re currently
places out of the Shoalhaven
· Difficult
to get return on investment figures for FIT efforts.
· Asia
is a highly volatile market which requires a high level of active maintenance
to grow.
2016
review and research
In 2016, Council undertook a review of consumer sediment and
market potential in the Chinese market. This report involved desktop research,
interviews with key stakeholders, an audit of consumer sediment and
recommendations on future opportunities.
Attachment 4 for the full report
Attachment 5 for a summary of consumer sediment, travel
reviews.
Current Situation
Our current business partner has approached Shoalhaven
Tourism to partner for another 12 months, with contract deliverables reasonably
similar to last year and a decision needs to be made about plans for the next
12 months.
Attachment 3 - CONFIDENTIAL, Commercial in Confidence
– last year’s contract
Attachment 6 – CONFIDENTIAL, 2017/18 Partnership
Proposal
Trends and Research
Marketing
Trends – International [excerpt from DMP]
For the OVERSEAS MARKET,
the Shoalhaven represents the quintessential “Aussie experience”
– pristine beaches, natural wonders, aboriginal cultural experiences,
iconic Australian wildlife and a fast-growing food and wine scene that has
achieved recognition both nationally and internationally. The proximity to
Sydney and the growing international focus of Canberra provides an opportunity
as key market segments package regional visits with the Aussie City “must
Do’s”. There is also an increasing tendency of the international
‘millennial generation’ more likely to travel by themselves outside
capital cities than their parents, who often preferred traditional tours.
Traditional
Markets
European, UK, USA, New Zealand
markets have been drawn to Australia for many years due to a cultural and VFR
connection as well as traditional marketing such as TV ads in the 90s. Most are
still growing with barely any maintenance and together hold a large share of
the market.
Emerging
Markets
There has been a recent push and
investment into the Asia market which shows high potential for the future and
high growth. Research also indicates high forecast growth in Independent
travellers from China, Korea and in the longer term, India.
Types
of travellers
Markets must either be FIT (Free
Independent Travellers) or come on organised bus tours (often day trips from
Sydney). Bus tourists are relatively low yield but may come back again as FIT
(Asia market). FIT can come for anywhere between 2 and 30 nights so more
analysis should be done into these higher yield markets. The business market is
a potential high yield market from Sydney and Canberra if product development
can meet demand potential.
International
Visitor Survey results 2015/6
Our research consultant utilised Tourism Research Australia
results from 2015/6 to ascertain the visitors, visitor nights (and therefore
yield) and the growth on previous biannual period.
Key insights:
- Traditional markets are still
our largest visitor groups
- Traditional markets stay longer
and therefore spend more
- Asia markets have strong growth
but off low bases
- Current Asia market stay for
very short periods of time in region
International Product Analysis
Based on this same International
Visitors Survey as above, we have created a growth-share matrix, also known as
a product portfolio mix. This business model helps us to identify opportunities
and analyse the businesses opportunities. Based on market size and growth, the
following matrix has been collated.
Key insights:
- All
of our international funds are placed in high risk markets with high growth
(traditionally called ‘question marks’)
- Traditional
markets make up the most favourable for growth and market share but we
don’t invest anything into maintaining these markets. (traditionally
called ‘stars’)
- Overall
we invest all of our international our marketing funds into high risk markets
and don’t market at all to our ‘established and growing
stars’.
|
Risky with high
potential
(low market share and high growth)
• Korea (191% growth,
4K/yr.)
• India (300% growth,
2K/yr.)
• Indonesia (536%
growth, 2K/yr.)
• Hong Kong (354%
growth, 7K/yr.)
• China (354% growth,
6.2K/yr.)
• Malaysia (36% growth,
3.3K/yr.)
|
Established and growing
(High market share and high growth)
• New Zealand (52%
growth, 35K/yr.)
• Canada (150% growth,
20K/yr.)
• United Kingdom (19%
growth, 63K/yr.)
• Scandinavia (71%
growth, 12K/yr.)
• France (51% growth,
14K/yr.)
|
|
Not likely to profit
(low market share and low growth)
• Italy (30% decrease,
3k/yr.)
• Japan (40% decrease,
3k/yr.)
• Netherlands (18%
decrease, 7K/yr.)
• Switzerland (65%
decrease, 1.3K/yr.)
|
Established but in downturn
(high market share and low growth)
• USA (0% growth,
28K/yr.)
• Germany (-13%
decrease, 20K/yr.)
|
Future thinking
International Marketing
Opportunities:
- New
flights to Canberra International Airport provide a new
Singapore-Canberra-Wellington flight route, just 2 hours from the Shoalhaven.
- The
new Badgery’s Creek airport will provide a closer connection to
International travellers and will be open by 2030.
- China
is one of the largest inbound markets to Sydney but the vast majority
don’t travel regionally.
- The
Western Sydney market makes up 10% of Australia’s population and the
diversity of these communities is broad and vast, offering access to an
international VFR market.
- Our
largest opportunity remains international travellers ex Sydney and Grand Pacific
Drive is marketed internationally.
- The
Sydney – Melbourne Touring Route is currently marketed to an
international FIT drive market and we are a participant but at a very low
investment level.
- The
Capital to Coast touring route markets internationally and Visit Canberra,
Sapphire Coast and Eurobodalla invest well. We currently do not.
- There
is also a growing number of agencies that can be contracted for international
marketing and social media marketing.
Summary
There are many international marketing opportunities
available to the Shoalhaven, so many more than several years ago when the
channels for direct marketing such as online, didn’t exist. There is also
cultural move toward FIT travellers in Australia with a new more adventurous
generation that can feel confident researching and planning their own trips
online. These FIT travellers are higher yield than the bus day-trippers or
overnighters and have less impact on the capacity of our small towns.
In short, the marketing team recommend an investment of some
time in a complete review of the international marketing opportunities
available and what new ideas for international markets currently not utilised
by Shoalhaven Tourism could be uncovered. A review considering the new
Sustainable Tourism Model outcomes could be timely considering potential
additional measures of success.
