Sydney Olympics: Warnings Sounded in Queensland
Queensland Tourism CEO says tourism patterns will be dislocated during Sydney Olympics.

Internet and Travel Planning
American survey reveals web sites rank as the most useful sources for travel news.

Inbound Review: April 2000
Federal Tourism Minister Jackie Kelly predicts record visitor numbers during Olympic year.

Japan: Time for Action
Fall in Japanese visitors likely to result in negative growth.

Tourism Updates from Across the Globe
The Americas - Europe - UK / Ireland - Southeast Asia - North Asia.

Hotels in Asia Turn to the Internet
Top hotel groups join forces to establish Internet portal in Asia.

And Finally...Canadian Moose on the Wrong Foot
Giant moose hoofing it for Toronto tourism drive.

SYDNEY OLYMPICS: Warnings sounded in Queensland
The Queensland tourism industry needed to be prepared for dislocated visitor patterns before, during and after the Sydney 2000 Olympics, Tourism Queensland Chief Executive Officer Stephen Gregg said recently. "The Sydney Olympics is going to be the biggest marketing campaign ever for Australia and should be seen in a positive light," he said. "But the reality is the industry needs to be prepared for dislocation.  We are hearing from inbound operators that many international visitors are electing to avoid Australia around the period of the Sydney Olympics because of perceived difficulty entering Australia, crowding and price issues. The inbound operators also report many international visitors think the focus will be on Olympic visitors and they would be better off delaying their travel." 

According to a senior industry executive recently back from Southeast Asia, key inbound markets such as Singapore and Malaysia will virtually dry up during the Olympics due mainly to a lack of airline seats caused by heavy passenger traffic between Europe and Australia. 

Mr Gregg said most Queensland tourism operators would need to focus on local and regional markets and look for ways to reduce running expenses during possible quiet periods. Executive interviews conducted by KPMG Consulting for Tourism Queensland found many Queensland operators were preparing for a drop in international visitors during the Sydney Olympics. 

Operators in Tropical North Queensland and the Whitsundays were optimistic about increased international visitation immediately before and after the Sydney Olympics.  Some operators told the researchers they were expecting significant drops in business during the Sydney Olympics and had asked staff to take leave in that period. Conversely, some operators reported that they were planning to put on extra staff immediately before and after
the Olympics in the expectation of increased visitors. 

Note: A major international conference on critical aspects of the Olympics will be held in Sydney in mid-July. I will report on some of the key findings in my next newsletter.

GST: Its effect on travel
Consumer surveys conducted by Tourism Queensland have shown a lot of uncertainty about the GST and when asked, consumers are concerned about its impact. In the most recent research, a third of respondents said they did not understand how the GST would affect them. Thiry-one percent said they thought they would take shorter holidays due to price rises once the GST is introduced, 29 percent said they would stay in cheaper accommodation, 24
percent said they thought they would holiday closer to home to avoid transport costs and 17 percent said they would be more likely to holiday overseas because, relative to domestic holidays, overseas holidays would be cheaper. Considering affordability is the number one reason why those surveyed said they wouldn't be taking a holiday this year, the trend is
worrying, says Tourism Queensland. 

A straw poll among the travel trade during the recent Australian Tourism Exchange on the impact of  GST affecting pricing and demand revealed some uncertainty. 

Accor sales and marketing general manager, Mr Ray Stone, said the situation was still unclear and the full implications  would be known only after its implementation. But NTUC Income Travel general manager, Ms Phoebe Teo, said there  were some signs the Singapore market was picking long-haul trips to the US over Australia with the price gap between the two destinations narrowing. 

The tourist refund scheme will be available from July at all Australian international airports and cruise terminals.  Under TRS, a refund is paid on goods above A$300 bought from the same shop, no more than 30 days before leaving  Australia. To obtain a refund, travellers must get a tax invoice on the item or items from the retailer. A cash register  receipt is not
sufficient to make a claim. 

A cash refund will be given on amounts of A$200 or less, while non-cash options will be paid within 30 days of  departure and they include cheque, credit to an Australian bank account or payment to a credit card.   At the TRS booth, travellers will have to produce the goods on which the refund is being claimed, the tax invoice from  the retailer, their passport and their
international boarding pass or other proof of travel. Woodward: tax on cars is lower.

BTR Statistics: Users Beware
Tourism Tasmania Chief Executive, Rob Giason, has urged stakeholders to use caution when interpreting the expenditure figures provided by the Bureau of Tourism Research (BTR). The BTR released a new publication detailing the use of a new modelling approach in conjunction with the 1998 National Visitor Survey (NVS) designed to highlight the regional value of tourism expenditure (both intrastate and interstate visitors). The BTR results
indicate that domestic tourism expenditure for Tasmania was $1.454 billion, or 3.4% of total expenditure in Australia. However, analysis conducted by Tourism Tasmania indicates total domestic visitors expenditure to be $712 million. 

This data is sourced from the Tasmania Visitor Survey (1998) and the Tasmanian Intrastate Travel Survey (1997), both conducted by Tourism Tasmania. "It is believed that the BTR analysis substantially overestimates the value of tourist expenditure within Tasmania as a consequence of limitations with their sample size for interstate visitors," Mr Giason said.

INTERNET AND TRAVEL PLANNING:
The Australian tourism industry can learn a lot about traveller psychology from America. According to a survey just released by the Travel Industry Association of America (TIA), Internet web sites are ranked as the most useful sources for travel news in the U.S.

The survey, which asked Americans about 14 different types of travel media, included a representative sample of more than 1,300 U.S. adults. According to the survey, 28 percent of U.S. residents say they used newspaper travel sections to plan their travel in the past year. Twenty one percent used an Internet web site for their travel planning and 21 percent used television travel shows.

Mediums used in the past year to plan a trip or vacation were: Newspaper travel section, 28%; Internet Web site, 21%; Travel show on television or cable, 21%; Motor Club Magazine, such as AAA, 18%; Consumer lifestyle magazines, 17%;  news magazines, 12%; consumer travel magazine, 12%; membership publication, 12%; travel guidebook,  11%; in-flight magazine from an airline, 10%; travel trade or business publication, 10%; electronic or e-mail newsletter, 9%. (Multiple responses allowed.) 

However, when travelers who use more than one travel medium were asked which travel medium is most useful to them, 26 percent say that they find Internet web sites most useful, followed by newspaper travel sections and television travel shows. 

"The reason for the usefulness of Internet web sites is clear," said William S. Norman, president and CEO of the Travel Industry Association of America. "Internet web sites are available 24 hours a day, and they can be accessed from both home and office. In addition, Internet sites don't have the time and space limitations of traditional media, and this allows them to have the large volumes of information often required of today's traveler. Internet sites can also be updated more quickly than other forms travel media which gives them the reputation for having the most up to date information on a destination." 

Half of travel media users (50%) say they read, watch or listen to travel media at least once a month or once a week. Fifteen percent of travel media users say they use the travel media 2-3 times per week. Travellers were also asked if they have ever decided to visit a travel destination because of information that they saw or read in the travel media. About one third
(31%) said they have done so. Sixty-eight percent said no and one percent did not know. Of this group, 26 percent said they saw the destination they visited profiled on a television travel show. Eighteen percent said they read about the destination in a newspaper travel section, 12 percent said they read about the destination on an Internet Web site, and 12 percent say
they read about the place in a consumer travel magazine.

INBOUND REVIEW: April 2000
Australia's tourism industry recorded its strongest growth in international visitor arrivals in four years, with preliminary figures showing a 19.7% increase in visitor numbers for April 2000 compared with the previous year. Tourism Minister Kelly said the figures dispelled any lingering doubt that 2000 would be a great year for the industry.

"This is fantastic growth for the Australian tourism industry and means that we are on track for record visitor numbers in our Olympic year," Minister Kelly said. "The figures showed 400,000 international arrivals during April 2000, a 19.7% increase compared with April 1999." 

Among the highlights were  a 51.2%  increase in the number of visitors from the United Kingdom, while gains were seen also from Germany up 13.8%, Switzerland up 19.2% and Sweden up 26.7%. 

In Asia, Korea continued to be a growth market for Australia with an 81.2% increase in April 2000, compared with the previous year. The number of visitors from the Asian market increased by 23.8%, compared with the same time last year. 

The American market also recorded an increase of visitor numbers with United States up by 7.7%, Latin America up by 27.3% and Canada up by 26.5%. The number of visitors from New Zealand jumped by 28.5% in April 2000 compared with April 1999. 

JAPAN: TIME FOR ACTION
Despite the hype, the hoopla and the hope Japanese visitation to Australia is down 0.9% for the first four months of 2000. And our market share for the same period is down to 4.5%. This is a bad sign, since Australia normally performs stronger in these months relative to our competition. As a result, expect 2000 to be another negative growth year for Australia.
This is despite the healthier than expected growth in outbound from Japan (up 6.5% for Jan-Apr).

The main reason is the expected drop-off  in Japanese numbers around the Olympics. Our market share by the end of the year may well approach the 4.2% of 1988. (We had 3.6% in the annus horribilis of 1989.)

As bleak as this may seem, our main rival  (?) is doing about the same. Like Australia, Hawaii is going against the healthy outbound trend and is down 0.4% for the first five months of 2000.

Japanese growth to Hawaii and Australia over the past 5 years have been remarkably similar. Hawaii's peak year in the 1990s was 1992 with 13.9% market share; in 1999 this had fallen to 11.3%, or a fall of 18%. Australia's peak year was 1993 with 5.6%; in 1999 it was down to 4.29%, meaning a decline of 23%. 

Since 1996, annual growth rates to Hawaii and Australia have been as follows: 1996: +4.6% (Hawaii)/ +4% (Australia);  97: + 0.1%/ +0.1%; 98: -6.2%/ -5.8%;  99: -7.7%/ -5.8%. Coincidence? Perhaps. But it also might suggest that Australia is suffering from the same problems that face Hawaii in the Japanese market. 

COMMENT: It's time that an industry study group be dispatched to Hawaii to investigate what's happening there. Brisbane International Airport would be a convenient place to leave from.

Speaking of Hawaii ...

Aloha Magic is the name of the Hawaiian Visitor and Convention Bureau's new campaign in Japan.  HCVB's marketing budget for Japan is A$14.9 million in the next 12 months. It hopes to record a slight positive growth in 2000 and stronger growth from next year. The main concepts of the campaign are 'repeaters' and 'Hawaii, where you can experience all five senses'. With a repeater rate of about 60 percent, the benefit of targeting the experienced
Hawaii visitor is obvious. HCVB will use newspapers, magazines and TV in their campaign. The main consumer segments are 18-30 men and women, honeymooners and 3-generation families. The head of HCVB pointed out that while Japanese visitation to Hawaii has fallen in recent years, the declines have been in conference, incentive and group tours. Honeymooners and family trips have been rising steadily.

H.I.S. Records Another Big Year

H.I.S. recorded the biggest increase in sales for the 12 months ending March 2000 among Japan's major wholesalers. With a rise of 10.5% to ¥176,119,535,000,  H.I.S. has now joined the club of the Top Four wholesalers.  The only other major travel agent to record a rise was Hankyu (+5.2%), mainly due to the success of Hankyu Trapics products. JTB (-5%), KNT (-5.6%) and NTA (-1.5%) were all down. 

Airlines refuse JATA e-ticket proposal 

Japan's three major airlines have rejected a Japan Association of Travel Agents (JATA) request for members to sell discounted e-tickets over the Internet. 

JATA had requested Japan Air Lines (JAL), All Nippon Airways and Japan Air System to allow agents to sell discounted e-tickets for domestic flights on their own websites.  With the deregulation of air fares in February, JAL launched discounted e-tickets for domestic flights this month,  which has now been extended until the end of July, and are only available to
travellers booking via the Internet. 

JATA said the exclusion of agents indicated "a serious disregard" for the trade's role in serving consumers.  Secretary-general, Mr Jun Ishiyama, said: "We are not concerned about airline's direct bookings.  "But to implement an exclusive ticket to the airlines is something else. "This is a matter of principle. Our domestic  travel committee will deliberate the next step to take to deal with the situation." A JAL spokesman said: "E-ticketing is  an important marketing tool for any airline nowadays, but this is still in the experimental stage and minimal bookings  are expected from e-tickets for the time being. It will take some time to work out our
Internet distribution policy. 

"If we extend e-discounts to agent's sites at a time when various on-line operators, other than travel agents are  sprouting, where do you draw a line?"   A retail travel agent in Tokyo said: "Since travel agent's home pages are becoming a must, we must take this issue seriously, regardless of its small market size at present." 

Other news

>>>  Ansett has opened a Japanese homepage targeting both consumers and travel agents in Japan. It's linked to the ATC and the Australian Embassy in Tokyo.

>>>  JTB recently opened a call centre in the Tokyo metropolitan area as part of the company's efforts to boost individual travel (FIT) sales centering on discount travel products. JTB has upgraded some FIT centres in principal sales offices.

>>> The economy centring on the Nagoya region has rebounded in recent years, reflected in the strong growth in overseas departures from its international airport. In 1999, Asian routes performed very well: pax to Shanghai were +31%, Manila +21%, Bangkok +10%, KL +12%, Denpasar +46%. To the U.S. Vancouver was+5%, Los Angeles +44%, Oakland +8%. To Europe, Frankfurt was jumped 51%, Amsterdam +16%. The big drops have occurred on
the European routes: Air France ceased its Paris flights and British Airways also pulled out, resulting in falls in pax to Paris and London falling 57% and 73%, respectively. Among declines were Saipan/Guam -7%, Hong Kong -10%, and Sydney/Cairns -3.3%. All these falls are attributed to reduced services and/or aircraft reconfiguration.

TOURISM UPDATES FROM ACROSS THE GLOBE

THE AMERICAS
QF has launched a $299 retail agent airfare from Canada to promote new Sydney flights.

Sydney Gay Games 2002 organisers expect 60% of participants (15,000) to come from the North America region.

Air Canada inaugural: The ATC is working closely with Air Canada to promote the launch of its new services to Australia, commencing with the inaugural Toronto flight on 28 June. The ATC is currently negotiating a new VJP program with Air Canada which will play a key role in driving Australia's continued growth in the Canadian market. 

EUROPE
Germany
Looking to emulate the high standards set by the extremely successful tourism year of 1998/99, the German tour operators have set themselves stiff targets for this year. Against a background of nine per cent market growth last year, they set their planned targets at a correspondingly high level. The balance sheet for the first six months, however, is a long way
below expectations. Nevertheless, the dominant mood is still an optimistic one.

Of the major tour operators, TUI is claiming the highest rates of increase. This group, the number one on the German travel market, reports "a high single-digit increase" in sales volume and guest numbers for TUI Deutschland, which incorporates the brands Schoene Ferien, Eins-Zwei-Fly, Airtours, Wolters, L¹Tur and TUI Events. 

This indicates that the market leader has been growing more strongly than the market as a whole, an assertion that is confirmed by distribution sources. Owing to the present very high level of incoming bookings, managing director Dr. Volker Boettcher is certain that the planned targets will be reached.

The Rewe subsidiary ITS is also on the winning side. With guest numbers up by 7.4 per cent and sales volume at plus 7.6 per cent.

Dertour pronounces itself satisfied with booking rates so far, and reports growth in both passenger numbers and sales volume.

Airtours, Europe's second-largest tour operator, wants to invest around £100 million in the expansion of its Internet presence. On the other side of the equation the company intends to save about £20 million per year, for example in brochure costs and commissions.

UK / IRELAND
Silversea Cruises is preparing to launch a dedicated Australia / New Zealand brochure in order to boost sales. This new brochure also aims to promote the land content of its Australia program with Silver Cloud in the first quarter of 2000.

Thomson's (including Austravel) have been bought by German operator - Preussag. Preussag have agreed to sell Thomas Cook in order to pass the sale. 

UK operator 'The Travel Bug' has moved on-line and rebranded as 'flynow.com' - the company will continue to feature and sell Australia.

Travelbag - were featured negatively on the BBC Watchdog consumer program for flight ticket irregularities.

SOUTHEAST ASIA
Singapore
SA Tours has just soft launched their website and will be competing with the likes of Chan Brothers and Ken-air for the "Internet" market. Feedback from the travel agents indicated that consumers are using the website for sourcing information and bookings are confined mainly to airticket and accommodation .

Malaysia
Sydney-based Inbound operators indicated a surge in incentive groups from Malaysia. A number of travel agents have also requested secured corporate groups interested to be in Sydney during the Olympic period.

Indonesia
Friendly characters, including the Tasmanian Devil from Warner Brothers Movie World on the Gold Coast,  will be on hand to launch a six-week ATC consumer promotion in Indonesia that showcases Australia as a friendly, family destination. 

Starting 22 June, the promotion, to be held in one of West Jakarta's most prominent shopping centres, Ciputra Mall, will target upper socio economic families and university students. Industry partners include Qantas Airways, Department of Foreign Affairs and Trade, Warner Brothers, BCA Card, Swatch and Samsung. Activities will include quizzes and drawing competitions in which children will be asked to interpret Australian icons

Thailand
Key agents have commented that destination Australia is facing increasing competition from Europe and the United States. The key reason cited being that during the economic downtown, the Thais have been staying away and put off travelling plans to US & Europe due to the unfavourable exchange rate. Now that the economy is on its way to recovery, Thais are looking forward to visiting these countries again.

In a recent meeting with Thai Airways, the airline expressed continued interest and investment in destination Australia, in fact they are hoping to double their current capacity to Australia - 29 flights a week, by next Oct.

Philippines 
By July, the Australian Tourist Commission will be appointing a representative office in Philippines to service the trade and the Philippine market. 

As of 3 June, Philippine Airlines will be flying direct to Sydney (overnight flight arriving next day) 3 flights a week (Fri/Sat/Sun). The PAL Inaugural flight is accompanied and supported by an agent's famil to Sydney 3 - 7 June. The list of participants include a total of some 23 top Philippine agents (executive level) and five key Philippine Airlines top executives.

India
Key operators like SOTC have finally begun to see value in promoting Australia. For the month of May 2000, the number of passengers generated by SOTC was equivalent to their last year's performance. 

Holiday Representation is setting up its own website: Indiatravelcentre.com. This will be launched sometime in July 2000. 

NORTH ASIA
Korea
Another country with low prospects of growth during the Olympic period. The second part of honeymoon season will commence in November.  Some of the agents were already discussing to push their mono Sydney honeymoon promotion to as early as beginning October hoping to get a good post-Olympic deal.

HOTELS IN ASIA TURN TO THE INTERNET
Top hotel groups are joining forces to establish an Internet portal in Asia. Accor is the lead partner in a deal that recruits support from Hilton International, Forte Hotel Group and Starwood Hotels and Resorts. The objective is to target business that is currently being siphoned off by third party travel sites selling hotel inventory.

Accor announced a similar initiative last month for the European market in co-operation with Hilton and Forte, but the Asian version announced last week involves much wider support. Starwood was one addition but there are more on the way with sources saying a leading Asian group would join the portal and possibly an Australia-based group.

Industry experts named Shangri-La group owned by the Kuok family as the most likely, but did not exclude other Asian chains such as Raffles and Century. Driving the initiative is a fear that airline Internet portals could dominate the market and compromise the hotel groups' bargaining power.

Also the proliferation of third party travel sites could mean hotel groups lose control of large blocks of room inventory. "Travellers should be able to get the best Internet rate on our site, not someone else's site," according to Accor's general manager communications - Asia Pacific, Peter Hook.

"The net is an area of distribution that already exists and we are simply tackling that situation so we do not lose control of inventory. We are not in any way turning our backs on our traditional distribution channels - such as wholesalers and travel agents," he said.

"In fact we are totally committed to servicing travel agencies as strongly as possible and a side effect of gaining control of our inventory will be to ensure better control of rates so traditional distribution channels are also protected."

It is likely that two sites will be developed - one for Asia and one for the South Pacific - Australia and New Zealand. Accor argues that this will take into account the differing market characteristics of both regions. "These sites, and the European site, will be as consistent with each other as much as possible both on the technical side and in the product offered,"
Mr Hook said.

Exact set-up costs have yet to be determined also the location is still under discussion although Accor executives said they favoured Singapore. A release issued by Accor said the sites would offer "a vast range of destination options and hotel styles across Asia Pacific, covering the full spectrum from five-star deluxe to budget accommodation." It is possible another Australian hotel chain would also join within in the next few weeks. Accor is already the largest hotel group in Australia in terms of room inventory.

The Internet Joint Venture will enable consumers to book online hotels in the combined European and Asia-Pacific hotel portfolios of the four chains. The partners said the project would, at the same time, involve the development of a "hospitality marketplace" which would give participating hotel groups access to a range of products and services with the aim of
optimising operating costs.

AND FINALLY ... CANADIAN MOOSE ON THE WRONG FOOT
The city of Toronto has 100 life-sized, tourism-promoting, fibreglass moose throughout downtown Toronto city streets. The 2.4 metre tall moose are anchored on concrete bases and are painted by local artists. However, it has been pointed out that the moose are not anatomically correct and the feet should be cloven, not one smooth hoof. Apparently, say the moose designers, this was intentional as the structures are more stable this way.