When I was invited to present this topic, I must admit that I had thought little about marketing's relation to tourism forecasting - and understood even less. What I knew was this. I knew that forecasting was something that the BTR and private sector forecasters did. I knew the forecasts were about visitor arrivals.

There are several things I do not understand about forecasts and forecasting. In this presentation, I would like to share a few of them with you.

First, the year 2000 has always been the yardstick in forecasts, well before the Olympic decision. I fail to see the significance of the year 2000 for the Australian tourism industry. Is 2000 somehow more significant than, say next year, or 1996? And is it visitor numbers that we should be emphasizing? Perhaps growth forecasts more useful, more translatable for the tourism marketer? And while we're forecasting inbound numbers, how about some forecasts about where these visitors will be visiting? This is a big country. The three keys to a successful retail business are: location, location and location. Tourism marketers want to be one step ahead of demand. They want to know trends in visitor movements in terms of geographical spread. They want to know where visitors will go in the future, to Northern Territory, to Western Australia or will Queensland's market share continue to grow apace? Will Sydney's icons always attract? Or will the Olympics create only a false dawn?

Second, I cannot understand the usefulness of forecasts when the numbers keep changing anyway. The BTR's "Australian Tourism Forecasts" report released in April 1990 forecasts 4.85 million visitors by the year 2000. The BTR's latest forecast for 2000 is 4.824 million visitors. And only last month The Australian newspaper (Oct 12 1993:p.6) reported the results of "a respected private sector forecaster" who has forecast 5.33 million by the end of the decade. At the same time, we have the ATC and its targets. The Financial Review (29/7/93:6) reported in July this year that the ATC had upgraded its targets to 6.82 million. Which brings me to the question of targets.

(Third) I do not understand the strategic difference between a forecast and a target. I have four points to make about targets.

1) The Australian newspaper stated, correctly I have been informed, that ATC targets are "used by industry to set marketing and sales goals". But whose goals are we talking about? The tourism industry's goals? Precisely who or what is the tourism "industry"? The tourism industry is not one company. It is an amalgam of thousands of products and services. A company sets goals, and harnesses its production, marketing and managerial resources to achieving these goals through its management processes. How is it possible for an industry as geographically dispersed, with thousands of participants with variable financial and managerial competence, to set quantifiable "goals"? Whose interests do these targets serve?

2) Targets, like forecasts, are about visitor numbers. But how does a tourism business person correlate total inbound visitor forecasts with is or her own business performance? There are numerous variables other than inbound visitor numbers. I would guess that, except for the largest operators, inbound visitor numbers are fairly meaningless. There are indications that volume alone is not benefiting our tourism industry. Two of the biggest buzz words in the Australian tourism industry today are 'yield' and 'profitless volume'. In other words, volume does not necessarily equal profit.

3) The achieving of numerical targets is tunnel vision. Many other factors need to be taken into account. Targets and forecasts can blind us to other realities, other insights. Look at inbound tourism from Japan this year. We will not achieve the target of 16 percent growth - that's bad news. But Australia has increased its market share of the total outbound Japanese market - that's good news. Now, if targets are supposed to help the "industry" set marketing goals what does the ATC do about Japan in 1994? Reduce or increase its effort?

4) There is one other concern I have about setting targets. It is this: What sort of messages are we sending to the thousands of operators in the Australian tourism industry when discrepancies between forecasts and targets continually make the headlines? Who are they to believe? And why should they bother?

What if I operate a luxury motel in Coffs Harbour and my overseas visitor room nights for one year are less than last year, but the ATC says Australia surpassed its target for inbound arrivals for the year. What conclusions can I draw? None.

Fourth, I do not understand how the same forecasting techniques can be used for all markets? BTR's Michael Poole, who wrote an article on forecasting methodology in 1988, makes the following admission:

"Most studies which have modelled overseas arrivals have been unable to develop reasonable models of arrivals from Japan." (BTR 1988:8).

Poole goes on to postulate that Japanese visitation may be influenced by supply, rather than demand, factors. I have spent a considerable amount of time over the past eighteen months investigating the structure of the Japanese tourism industry. There is absolutely no doubt in my mind that the Japanese wholesaler plays a very significant role in shaping both demand and supply in outbound tourism. If we cannot get our biggest market right using conventional forecasting methods, perhaps we are overlooking something.

Fifth, I do not understand what tourism marketers are supposed to DO with forecasts. To return to Poole. He began his article with these words.

"The development of more sophisticated tourism forecasting capabilities is essential for the strategic requirements of the tourism industry. Such a facility is necessary to provide a framework for long term marketing, development and investment planning within the industry." (BTR 1988:1).

This reference linking marketing and forecasting was encouraging when I found it. But when I read the Dept of Tourism's document outlining the background and details of the proposed Forecasting Council, for example, there is no mention of the word "marketing". Something must have happened between 1988 and 1993.

We all know what that something was. The boom went bust and the banks got burnt. The primary aim of proposed Tourism Forecasting Council is to produce forecasts and data that will reassure international and domestic investors and lenders that it's okay to go back into the less than pristine water of tourism investment. That is a legitimate and compelling reason to establish the Council. Pity about marketing though.

For data to be useful for tourism marketers the data has to be actionable. What do I with it? How do I use it? What does it tell me about my product? are legitimate questions tourism operators should ask and receive answers to. To my mind, these questions are not being asked by tourism practioners and certainly the answers are not being supplied by the purveyors of tourism data. Let me give one example.

Earlier this year, the ATC staged its Segbuster seminars around Australia. The primary purpose was to celebrate the release of an abbreviated version of a $1.5M market segmentation study commissioned by the ATC for use by its overseas offices. The report contained highly detailed information about the attitudes and perceptions of consumers in some, but not all, of our major source markets. But no-where are tourism marketers specifically told how to use this information. Instead we are told that "the research should be used in conjunction with other sources of data e.g., IVS studies..." (p.5) and that the data is "not product specific". Instead, tourism operators are invited to guess what foreigners' perceptions of their product might be. The Australian tourism industry deserves better than this.

The tourism industry is awash with data. This is not surprising. For economists and like minded quantitative researchers, it is a deliciously dissectable discipline. Perhaps, however, it is time for more quality, and a little less quantity.

Current forecasting is predominantly the domain of policy makers. Forecasting benefits three groups: public sector tourism organisations, because it helps justify budget allocations; managers of public and private sector tourism projects, by (hopefully) encouraging investors and lenders to return to tourism investment; and, of course, forecasters themselves. I see no benefits of forecasting for tourism operators and suppliers for two reasons: the results are not actionable and they are unrelated to the real needs of the great majority of tourism businesses. Marketing is prevented from making a contribution to forecasting because the imperatives driving tourism forecasting bear no relation to the commercial imperatives of operators in our tourism industry.

You will have gathered from what I have said thus far, that I am little interested in policy making. This is true. I AM interested in marketing and what marketing can do for the Australian tourism industry. A knowledge of marketing has enormous potential. It can, for example, improve the quality and delivery of the tourism product. Sadly, there is widespread ignorance in the Australian tourism industry about the benefits that marketing has to offer. You do not have to believe me on this. I commend to everyone Faulkner (1993)'s article which clinically exposes the lack of a strategic marketing approach in Australia's "public sector tourism agencies".

In closing, I would like to return to the Department of Tourism's document outlining the objectives of the Tourism Forecasting Council. I quote:

"One of the first priorities for the Council and the technical committee will be to develop and maintain an appropriate database and forecasting model aimed at providing forecasts on both supply and demand, including information relevant to the variety of interests in the tourism industry." (Commonwealth Dept of Tourism 1993)

I have two comments on this statement.

Forecasts on supply are essential to ensure the long-term healthy growth of the Australian tourism industry. To give one example. The explosion in inbound tourism, especially Japanese, into Cairns continues unabated. Qantas and JAL pour over ten thousand Japanese each and every month into that once sleepy coastal town. At the same time, Cairns is often criticised for its lack of tourism and social infrastructure. Considering that for many overseas visitors Cairns is their first and perhaps only taste of Australia, a long-term strategic approach to its development is essential.

As I mentioned before, forecasts about future geographical shifts in tourism movements around our continent are essential information for long-term strategic planning, for policy makers and for commercial operators. For instance, the Northern Territory is I believe, a boom waiting to happen for the Japanese. But inadequate tourism infrastructure, particularly accommodation, is a major hurdle. Forecasts of supply growth in the Top end would be of benefit to commercial operators and policy makers alike.

Finally, I hope that the Department's reference to the "variety of interests in the tourism industry" embraces the men and women in the Australian tourism industry who have invested their livelihoods in this hyped up industry we call tourism. They, no less than politicians, government bureaucracies and industry organisations, deserve to be served by tourism policy makers.

References
Commonwealth Dept. of Tourism 1993, Tourism Industry Overview, Canberra
Falvey, C. & Westwood, M. 1993, 'Tourism Targets thrown into doubt'. The Australian, Oct 12, p.6.
Faulkner, B. 1993, 'The Strategic Marketing Myth in Australian Tourism' Building a Research Base in Tourism, Proceedings of the National Conference on Tourism Research, University of Sydney, March, pp. 27-36.
Poole, M. 1988, 'Forecasting Methodology', BTR Occasional Paper No.3, Canberra.