ATC MD John Morse calls for a 'reality check' on tourism. “Expectation was a little naive in that we thought it [high inbound numbers] will just keep on growing." (SMH 5/7/97).

Tourism Victoria Chief Executive Bob Annells: "The industry has become complacent and lazy, sticking to admittedly a hugely successful formula based on the classics of Sydney Harbour, the reef, the rainforest and the rock for too long”. (The Aust. 21/6/97)

On June 18 Federal Government announced a review into the nation's tourism industry. John Hutchinson: "We are getting to the point where we need to look in other directions and perhaps break new ground." (The Aust.19/6/97)

Even the chief executive of Tourism Taskforce, Chris Brown, said in mid June that "some of that blue sky is disappearing from tourism". When TTF starts to talk down tourism, things must be very bad.

• Of the last ten months, 6 have seen negative growth

• The twelve months through April 1997 saw market share fall to 4.78%.

Qantas, perhaps more than any other single organisation in Australia or Japan, must bear responsibility for Australia’s decline in the Japanese market.

The Qantas mentality:
"The ATC count their success by passenger numbers and we have another object called revenue. We have been very successful so far and we will continue to be so."
Warwick Blacker, Qantas Japan MD, The Australian 29/3/95

Qantas head James Strong said in February this year that the Japanese market for the second half of 1996 contributed virtually nothing to Qantas profits. He must have had his tongue firmly planted in his cheek when he said that reliance on the Japanese market had been "unhealthy".

Working parties - Action Plans: Competitive Strategy, Product Development,
Marketing Strategy; resourced by airlines, ATC, Nisuikai, wholesalers, STOs

• improve Japanese industry’s knowledge of Australian product diversity

• increase the range of product available & assist in the development of new product that will meet the needs of the Japanese market

• improve communication between Australian product suppliers and the Japanese travel industry

• increase Australia's rate of conversion within the Japanese market

• evaluate competitive positioning of Australia's image

• review the issue of seasonality

• visa requirements

1. Narrow consumer - and trade - perceptions of Australia.
The ATC's focus on the Great Barrier Reef, the Gold Coast, Sydney and Ayers Rock was partly forced by the refusal of wholesalers to add expensive domestic legs to package and group tours. Though the ATC could still have promoted other destinations - Perth, Adelaide, Melbourne, etc - it is doubtful whether any substantial demand could have been generated that would have 'forced' wholesalers to add these destinations to new tour programs. And because of the market power and influence of the wholesalers the ATC is under pressure to promote destinations that wholesalers believe will sell best in their market.

Many managers in the Japanese trade still believe that Australia has limited appeal to their customers. Even they view Australia as a 'big nature, cute animals' destination. One Japanese inbound operator in Cairns once complained to me about Cairns: "It's got nothing but nature here!"

2. Prices held too high for too long
The years of virtually non-competition on the Japan-Australia route, in other words the cosy relationship developed between Qantas and JAL, are now coming home to roost. While Australia's land operation prices (for hotels, attractions, transport, etc.) are on a par with other destinations, the air component in travel to Australia, at some 70-75% of the total tour price, is influential in the consumer's decision making.

I attended an ATC/Qantas sponsored Incentive Seminar in Tokyo in February 1993 in which the main question asked Qantas executives was why Qantas doesn't reduce its prices in the October-March period. Outbound agents and incentive organisers complained that prices were too high. At that time, Qantas could still maintain a high price regime. But the market shifted quickly through 1994 and 1995 and Qantas was too slow to react. Reducing air prices by 5-8% from April 1997 is a belated but positive start and improved growth can be expected from the second half of this year. Long-term prospects unknown.

3. Questionable dependence on honeymoon and OL market
Australia's initial dramatic growth in market share in Japan was due to the ATC's focus on the honeymoon and the burgeoning office lady (OL) markets. That was in the late 1980s. Ten years later and our focus has not changed. The $10M marketing program announced in June is targeted primarily at one segment and one segment alone - the experienced female travellers (termed the EFTs). The descriptor is different but the target is the same. Given the past criticism of ATC for focusing too heavily on particular segments, is it dangerous to put all our eggs in one basket once again?