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THE TARKINE OPPORTUNITY Market and Customer Analysis Understanding the opportunities for local, interstate and international tourism growth


Tarkine Research Report

Purpose The purpose of this report is to provide an overview of the trends and factors likely to impact on the development of the Tarkine area as a focus for tourism and tourism development. Approach The report comprises five sections: Section 1: The performance of the Tasmanian tourism industry on a state-wide basis provides the context for regional and sub-regional tourism outcomes. The Section provides an overview of State outcomes and underlying trends on which to base short to mid term projections. Section 2: The Cradle Coast region and its Tarkine sub-region have distinct tourism characteristics. The region has experienced significant structural changes in visitor demand patterns and its performance is now quite different to the state averages. Section 3: The intrastate visitation data provides an indication of current patterns of travel to and within the Cradle Coast region. Section 4: Data on the Tarkine is extremely limited and this Section provides an overview of some external research commissioned by Forestry Tasmania. Section 5: This Section is included to give readers an understanding of the contemporary discussion around the consumer decision-making and choice behaviours of visitors to Tasmania. This is a very topical subject as there is clear recognition within both the public and private sectors of the Tasmanian industry that previous reliance on ‘holiday types’ as a guide to future visitor behaviours in no longer relevant. Section 6: Conclusions and implications are summarised in this Section based on the trends and key factors likely to influence demand for travel to and within the Tarkine.

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Tarkine Research Report

Data Sources & Acknowledgements The key data sources for this report are: • BDA Marketing Planning. Tracker. Q1 2007. • Tourism Tasmania. Tasmanian Visitor Survey (TVS). December 2006. • Instinct & Reason. Scoping the appeal of new forest tourism experiences in Tasmania. July 2006. The Cradle Coast Authority wishes to acknowledge the assistance given by the providers of the information and for their willingness in supply the data in a presentation form. Both the BDA Tracker and Tasmanian Visitor Survey reports were provided by Tourism Tasmania - and details on these data sources can be obtained from the provider. Access to excerpts from the Instinct & Reason report were provided by Forestry Tasmania. Data Limitations Whilst every endeavour has been made to access relevant data to the Tarkine sub-region it should be recognised that the data sources and series are extremely limited and tenuous. Tourism Tasmania does not collect visitor data specific to the Tarkine in the TVS as the sub-region was not recognised until relatively recently. Any data on the Tarkine is therefore inferred from travel within the immediate geographic area. The Department of Infrastructure, Energy & Resources (DIER) does hold road traffic data for key roads in the Tarkine area, but as there is only limited access to the area this is not seen as a useful guide to future road usage IF tourism related developments occur in the area.

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Tarkine Research Report

Forecasting This report is limited to examining past and current tourism in the Tarkine area. It identifies the trends and key factors likely to influence future demand patterns form local, interstate and international visitors but is only a guide to future demand patterns. In the future situation of the Tarkine as a potential tourism destination, the past does not predict the future, although it may provide some useful guides. To establish a meaningful forecast, a ‘latent demand’ study would be required – which is outside the scope of this report. Latent Demand Latent demand exists when there is a willingness to purchase a good or service, but where demand cannot be met. Typically, this can occur when: demand for a particular product / service cannot be met by existing suppliers, or is temporarily suppressed by lack of access the consumer lacks the knowledge about the availability of the product a market is inefficient (i.e. not representative of relatively competitive levels). Latent demand is not actual or historic sales or travel to the area, nor is it the level of future sales or travel to the area. It is the level of potential demand in an informed, accessible and competitive market with no constraints (often referred by economists as the ‘unconstrained model’). The key commercial issue for the future development of tourism in and around the Tarkine is the level of latent (or unconstrained) demand. To establish the range of possible demand scenarios for tourism in the Tarkine, key assumptions would need to be developed and modeled to give prospective investors a reasonable level of comfort.

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Tarkine Research Report

Disclaimer Whilst every care has been taken to ensure the accuracy of the material, no warranty is given as to the correctness of the material, or for any advice given or omissions. Readers rely upon the material at their own risk and should seek their own full independent legal and financial advice before proceeding to rely on any such material. The observations, conclusions and recommendations contained in this report are not representations of fact, but are opinions formed by Moore Consulting and SCA Marketing.

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Contents

2 Research Report 7 Statewide Market Trends 15 Regional Visitor Market Trends 21 Intrastate Visitor Market Trends 20 The Tarkine 37 Visitor Segments 40 Conclusions

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Section 1 Statewide Market Trends


Statewide Market Trends

BDA Marketing Planning: Tracker Q1 2007

Forecast Growth Over the next five years, growth in the number of visitors to Tasmania is likely to rise marginally from 812,000 to about 822,000 (based on the TASMO forecast). This moderate growth in numbers is likely to be accompanied by a substantial increase in total spend - expected to be more than 20% over the next five years across inbound, interstate and intrastate markets. The forecast is positive overall for the Tasmanian holiday destination. This follows a period of rapid growth from 2002 to 2005 as the impact of low airfares, Bass Straight ferries, and increased access triggered a boom period. It now appears likely that Tasmania will hold and slightly improve on its structural growth at a time of heightened competition and weakened domestic demand. The most encouraging aspect of the forecast is the strong and consistent growth in overall spend across all visitor categories.

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Statewide Market Trends

BDA Marketing Planning: Tracker Q1 2007

Cluster Trends Whilst overall visitation numbers to the State have stabilised, there are two significant structural trends that are now apparent: • Firstly, dispersal across the State has fallen adversely impacting on visitation and stays in the regional clusters. The number of locations visited has also been falling from 3.7 nights to 3.0 nights since 2003 and has become even more concentrated. • Secondly, the dramatic fall in touring holidays in both absolute numbers and as a percentage of total visitors reflects the sharp growth in ‘Getaway’ destinational based holidays. This is exacerbated by the growth in VFR visitors who are staying within their gateway destination and not touring. The Tarkine therefore is becoming even more dependent on the North West Coast region capturing visitors through its twin gateways (air and sea). The implication is that the North West Coast cluster can not rely on ‘passing traffic’ being generated from the Touring Routes, but must become an established and recognised cluster in its own right. The North West Coast cluster is the fifth ranked cluster by number of visitors - and similar in size to the Tasman Peninsula and the North East Coast. It recent months it has enjoyed an above average increase in market share, The critical issue facing areas such as the Tarkine will be the reduced number of touring visitors. This trend will focus visitors on the Hobart and Launceston clusters to the detriment of all those areas dependent on the Touring Routes. The Tarkine will not be immune from this trend and a much stronger performance at a Gateway level will be required. This is both the current weakness and future opportunity for the Tarkine.

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Statewide Market Trends

Length of stay & yield

BDA Marketing Planning: Tracker Q1 2007

The number of interstate visitors and the total number of visitor nights spent in the state have consistently risen since 2001. This has resulted in an increase in the total spend by visitors - and a consequent expansion of the overall Tasmanian tourism sector. However, there has been some adverse effects in that both the average number of nights stayed and the average spend per visitor consistently fell from peaks in 2003 to low points in late 2005. The good news has been a small recovery in both the average nights (up from about 8.0 to 8.8 nights) and the average yield (up from under $1,500 to $1,750) since late 2005. In summary, the last five years has seen: • Total visitor numbers are up • Total nights are up, average nights are down but recovering slowly • Total spend is up, with average yield also improving. These structural changes are closely linked to airfares and access. This is because price points for air and sea fares have continued to fall (in both nominal and real terms) which has opened up the lower price point interstate travel market. This has important ramifications for the North West Coast as both an air and sea gateway. Further changes to airfares and access, such as Tiger Airlines services to Launceston will undoubtedly impact the North West Coast.

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Statewide Market Trends

BDA Marketing Planning: Tracker Q1 2007

Holidays types Big Tour visitor numbers have fallen dramatically since 2003 with some stabilisation at record low numbers in 2006. Short Tour has also fallen and is still falling. The combined impact of the collapse of the touring market over the past five years is balanced by increased VFR and Getaway numbers. There is a marked shift from touring to 4+ night breaks within a single region. The other Holiday Types have been relatively stable over the same period. It is now apparent that there has been a fundamental restructure in the composition of the Tasmanian visitor market - and the underlying drives that shape the visitor segments. • Firstly, the Big Tour (multiple cluster) holiday type represents about 25% of all visitors (ie about 210,000 visitors pa)…and the trend is for further erosion. At the current rate of decline, it is conceivable that multiple cluster / region touring holidays will fall by at least 10,000 to 20,000 visitors per annum. • Secondly, has been the emergence of the Getaway cluster based (single cluster) destinational visitor (refer next page for details).

Origin The big story is that Victorian visitor numbers continue to fall. All other states have gained share during the past five years with Queensland being particularly strong.

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Statewide Market Trends

BDA Marketing Planning: Tracker Q1 2007

Market Restructure The restructure of the Tasmanian visitor market (referred to on the previous page) has two distinct characteristics: • The collapse of the traditional touring holiday type (big tour and grand tour) • The emergence of the shorter duration, destination specific, single cluster based holiday type (that combines short tour, short break and the getaway holiday types). It is therefore critical to understand the composition of this now dominant group and their key characteristics (as depicted in the charts above): • Average stay is shrinking - although this may be stabilising • Trip yield has been rising since 2005 although it dipped slightly in the last quarter • Repeat trips and first time visits are both increasing. A week’s break in a single region / cluster has become the norm with visitor numbers up by 67%, nights up by 76% and spend up 73% over last year. This is clearly the ‘hot spot’ in Tasmanian tourism.

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Statewide Market Trends

BDA Marketing Planning: Tracker Q1 2007

Getaway holidaymakers in the regions Hobart and Launceston / Tamar dominate the Getaway holiday type with the NW and West Coasts holding their respective positions. The key to the emergence of the clusters as the dominant force in Tasmanian tourism rather than touring - is the port of arrivals / gateways. The growth in arrivals through Hobart and Launceston is ‘feeding’ their respective local clusters. By implication, the future success of the Devonport and Wynyard Airports and the Port of Devonport (for the two Spirits) will therefore have a huge bearing on the success of the NW Coast as a tourism cluster.

Getaway activities in the regions NW Coast activities favoured by the Getaway holiday type are: National Parks mixed with local shopping (crafts and antiques), local markets and history. The preferred activities on the West Coast by the Getaway holiday type are markedly different from the NW Coast and include: Gordon River cruises and the WC Wilderness Railway combined with short walks in the wilderness and to historic sites and a little shopping.

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Statewide Market Trends

Summary Fundamental structural changes occurred in the Tasmanian visitor market following the introduction of low price airfares, additional ferry capacity and improved access. Tasmanian visitor numbers increased from around 500,000 to more than 800,000 annually. This increase in numbers has been accompanied by a fundamental shift in the visitor mix - with much less touring and more single gateway destination based travel. A consequence of the changing composition of the Tasmanian visitor market has been the adverse impact on regions and towns dependent on the Touring Routes. The Cradle Coast region has suffered throughout the period of restructuring with Short Break and Short Tour visitors preferring Hobart and Launceston as their gateway - to the exclusion of other regions and clusters. This shift, combined with the poor performance of sea travel, has placed further pressure on tourism within the region. It is clear that declining sea travel exacerbated by the introduction of even lower airfares (Tiger Airline through Launceston) will further marginalise the region’s gateways. The Cradle Coast region will be the loser if these emerging trends are not addressed.

Implications for the Tarkine The Tarkine must have a regional destination with a gateway that can attract the Getaway, Short Break and Short Tour holiday types. The Tarkine must position itself in this growth market if it is to avoid long term decline associated with the reduction in touring visitors. For the Tarkine to be viable, it MUST: • Be a key part of an associated destinational gateway and the related clusters. The gateway is likely to be Burnie / Wynyard for air and Devonport for sea. • Provide accommodation, shopping and restaurants in the gateways that provide easy access to the Tarkine. • Be attractive as a drawcard / icon of sufficient ‘weight’ to pull visitors based on characteristics that are simply sub-sets of the existing regional imagery, attractions and activities. If the Tarkine is to be a viable destination, it needs to focus attention on the region, link it with relevant accommodation and activities and support the local gateways - no small ask!

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Section 2 Regional Visitor Market Trends - Cradle Coast - North West and West Coasts


Regional Visitor Market Trends

Visitors to the region There is only bad news when it comes to the proportion of all Tasmanian who come to the NW and West Coast regions. There has been a steady erosion of market share in total visitor numbers for the past four years - and the decline seems likely to continue on the NW Coast although the downward trend appears to have halted for the West Coast. ‘Visited and stayed overnight’ is showing a similar pattern of decline but still represents the majority of visitors to the region. There is a simple message in these numbers - once a visitor comes to the region, they are likely to visit within the region and stay overnight. Small percentages visited but did not stay - and an even small number just ‘passed through’.

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Regional Visitor Market Trends

First time and repeat visitors The pattern of a declining proportion of first time visitors offset by increases in repeat visitors is common across the State as well as in the regions (West Coast, NW Coast and Cradle Coast). This suggests that State conversion strategies are unsuccessful - and that as more repeat visitors return to the State they are less inclined to be touring, rather they choose a particular destination that interests them and then stay within that region for up to a week. Great if you are a tourism operator in the preferred regions - more than a problem, if you are based in a declining region. As more repeat visitors return, the State is being ‘sliced and diced’ into regional clusters. This will mean an increasing emphasis on developing strong positioning for each regional cluster that can attract through a local gateway.

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Regional Visitor Market Trends

Port of arrival in Tasmania Air arrival numbers and percentage have steadily improved over the past four years - at the expense of sea travel. Sea arrivals appear to be in long term decline - which is of particular significance to regional tourism on the West and NW Coasts. There are some distinctive characteristics associated with region as follows: • West Coast has a much higher dependency on arrivals by sea and therefore is more vulnerable to declines through TT Line at Devonport • NW Coast and Cradle Coast have very similar pattens of arrivals with strong reliance on sea arrivals and the two local airports. The arrival data strongly suggests that the regional gateways are failing to maintain market share over the past four years - and that the declines are persisting downwards. There is nothing in this data that suggests an improvement is likely and as such, strong intervention will be required to slow the rate of decline. Given that all regions are now much more dependent on their local gateways it will be critical to lift the performance of the gateways in attracting visitor traffic.

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Regional Visitor Market Trends

State and country of origin The overall pattern of arrivals by state or country of origin has remained relatively stable over the past four years: • A slight decline in Victorians • Growth in arrivals from Queensland and similar rates of growth from SA and WA (but off very low bases). • Inbound remains stuck under 20%. The three regions simply reflect the overall state position.

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Regional Visitor Market Trends

Summary The Cradle Coast region including the NW and West Coasts is experiencing the ‘unintended consequences’ of the restructuring of the visitor market to Tasmania. The consequences of the restructure caused by lower airfares and improved access is now apparent - the rapid demise of the touring holidaymaker and their replacement by shorter duration, regional destination specific holidaymakers that are dependent on their local port of arrival that determines where and how far they travel. The Cradle Coast region faces a significant structural challenge - and a new visitor reality. Much lower visitors numbers to the region as multiple cluster touring declines further combined with more declines in sea travel as the ship product ‘matures’ and there are more real reductions in the cost of airfares. The region is not currently well placed to respond to these challenges as reflected in the declining visitor numbers. The only upside is the higher spend / yield per visitor.

Implications for the Tarkine Without a material change in the positioning and ‘offer’ to the visitor market, the outlook for the region is long term slow decline mired in a moribund industry. There is simply insufficient intrastate and within region business to create and sustain a vibrant tourism and hospitality sector. The region must create a more recognised gateway combined with a strong focal point - simply claiming ‘lots of diversity’ is not creating sufficient ‘cut through’. The Cradle Coast region can no longer rely on just getting its ‘fair share’ because that share is in decline. The region needs a (Tarkine ) boost! That boost will not flow from statewide initiatives but must be a regional outcome.

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Section 3 Intrastate Visitor Market Trends


Intrastate overnight trips

BDA Marketing Planning: Tracker Q1 2007

Intrastate overnight trips The intrastate trip market declined from a peak in 2003 through to March 2006 as the impact of low airfares drove interstate travel by Tasmanians. This period of increased departures at the expense of intrastate travel appears to have bottomed by mid 2006 and there has been a modest recovery through late 2006 and and early 2007.

Intrastate nights A similar pattern has occurred in the number of intrastate night - a steady decline through to March 2006 and a modest recovery after that time.

Intrastate expenditure & yield The good news is the lift in intrastate expenditure and yield per trip. There has been a steady climb in both expenditure and yield per trip. This has not reach the national averages as yet, but the accelerating rate of expenditure and yield suggests a long term structural improvement in Tasmanian spending time in the State.

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Intrastate overnight trips

BDA Marketing Planning: Tracker Q1 2007

Intrastate overnight trips by trip length One night trips have increase steadily in both percentage and absolute terms since mid 2005 to more than 30% of the intrastate market. The two night market has declined in relative terms to about 50% of the total market and 3, 4-6 nights and 1 week+ have all remain static over the past few years

Intrastate overnight trips by activity Intrastate overnight visitors take short breaks (typically one or two nights) in the state for R&R or VFR purposes. These two purpose of visits account for a massive 86% of reasons for intrastate travel. The strength of the R&R purpose would suggest that there is significant opportunity to convert these travellers into the paid accommodation section, especially on the NW Coast as there is strong preference for the region.

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Intrastate day trips

BDA Marketing Planning: Tracker Q1 2007

Intrastate preference & appeals Intrastate preference (defined as interest or intent to travel with next 12 months) peaked in late 2006 and has recently been falling. This does not bode well for overall intrastate travel numbers nor expenditures in the short term. This is possibly being impacted by the recent strength of the Australian dollar (>USD$0.80) triggering increased overseas travel. At the cluster level: • Freycinet remains in a commanding position and strengthening • Hobart, Cradle Mountain and the West Coast are showing declining preferences to travel • Launceston, North West Coast and Tasman are showing relative improvements • The NE Coast and Huon are exhibiting weakening trends.

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Intrastate day trips

BDA Marketing Planning: Tracker Q1 2007

Intrastate trips by lifestage & tour type Intrastate visitors primarily travel for social purposes – to take short breaks and visit friends and relatives. This result is consist with the stated reason / purpose of travel being R&R and VFR. Special events, getaway, beach and touring are all relatively minor reasons for travel in the big picture. Within these two groupings, there has been a structural shift in the mix between Lower Old (declining) and Young (growing strongly). The Young group appears to be growing at a rate likely to overtake Lower Older in the short to mid term‌with important implications for the types of holidays they are likely to take.

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Intrastate overnight trips

BDA Marketing Planning: Tracker Q1 2007

Intrastate profile Whilst summer and autumn are the preferred break times, there is relatively strong demand (in comparison to interstate and inbound visitors) across the spring and winter seasons. Unsurprisingly, accommodation preferences are dominated by VFR with apartment and standard hotel / motel featuring strongly and some strong gains by 4 star properties. In terms of destinations two tiers have emerged with the popular group comprising Hobart, Launceston, Freycinet and the NW Coast, and the other group comprising Tasman, West Coast Cradle and Huon a distant second. The challenge for the Cradle Coast region and its two clusters is to lift its performance from the second tier to become a first tier player. Freycinet has proven that Tasmanians will take short breaks in Tasmania.

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Intrastate overnight trips

BDA Marketing Planning: Tracker Q1 2007

Intrastate day trips Day trips represent a significant component of the value of the intrastate market in terms of spend and activities. Day trips declined from a peak in mid 2000 to a low point of less than 3 million trips annually by late 2004 - with a steady recovery to late 2003 numbers in March 2007. The rate of the recovery is accelerating to more than 5% pa in the last quarter - suggesting that the recovery is well established. Unsurprisingly, total day trip expenditure mirrored the decline in total numbers in late 2003 and has demonstrated a strong recovery to more than $230M by early 2007. The most notable feature of the day trip market has been the strong improvement in the yield (spend per trip) from about $70 in 2000 to about $90 in 2007. The yield figures peaked in 2006 and have been flat since, but total expenditure continues to rise as the total number of trips increases.

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Intrastate trips

Summary The intrastate visitor market is significantly smaller in size and value than the interstate market. The intrastate market is growing in spend / yield terms and there has been a steady recovery in numbers. The key strength of this market is the base demand across all seasons - without the high seasonal variation inherent in the interstate market. This market is particularly attractive as it has a strong preference for travel to the NW Coast from all major regions and clusters.

Implications for the Tarkine The lack of regional intrastate data constrains the implications that can be drawn directly from the available data sets. However, there are some conclusions that can be made: • There is a strong trend to 1 and 2 night stays by intrastate travellers to the NW Coast • These visitors are primarily visiting for R&R and VFR reasons and taking Short Breaks and staying with friends and relatives (at least for part of the time) • The activities most of interest to intrastate visitors are strongly biased towards Tarkine-like activities, specifically visiting: wildlife (21%), National Parks (19%), bushwalking (15%) and wilderness (15%). They also want to shop and take in a restaurant. This combination of interests and activity preferences suggests that any major development that delivers this combination would be highly attractive to the intrastate market. Developments that achieve accessibility and activities with supporting shopping, dining and accommodation experiences in close proximity to the Tarkine would be likely to attract an increased share of this intrastate market.

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Section 4 The Tarkine


The Tarkine

Tarkine Background Research There has been very little specifically commissioned research to understand potential responses to the Tarkine as a tourism product or destination. There are a number of related studies and reports: • Forestry Tasmania Visitor Surveys were prepared in 1992 and 2005. The most recent study was conducted by Myriad Consulting to gain some insight into visitor composition and reactions to the South Arthur Forest Drive. The study suggested that there are about 4,000 to 6,000 visitors to the area each year with about 50% of them from interstate or overseas and that most were spending at least one night in the NW Coast region. • Tarkine National Coalition prepared the Protecting Forest, Growing Jobs report in 2004 based on a survey of tourism businesses in the region. Industry respondents overwhelming agreed (>85%) that a well promoted Tarkine would lead to increased visitation. The report suggested the development of more walks, guided tours, attractions and public facilities. • Cradle Coast Authority prepared a regional development strategy and, in conjunction with Tourism Tasmania, branded it the “The Great Nature Trail”. This strategy was based on the assumption that touring style holidays would remain the core holiday type in Tasmania - and that the Touring Routes Strategy could be extended. With hindsight, these assumptions are now questionable given the fragmentation of the State into clusters. • Stanley Tourism Precinct Study was prepared in 2005. It recognised that if the Stanley sub-region were to progress towards evolving as a cluster, its strength would not be based on wildlife, wilderness and bushwalking. A subsequent report by The Inspiring Place suggested that these gaps could be an opportunity for the Tarkine. • Forestry Tasmania prepared (unpublished) a pre-feasibility study on its tourism development concepts in 2007. The draft report provided background information on two concepts - the Tarkine Drive and the Phantom Peak eco-wilderness experience.

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The Tarkine Tarkine Specific Research The only primary research conducted on the Tarkine to date was commissioned by Forestry Tasmania (FT) in July 2006 and prepared by Instinct & Reason entitled “Scoping the appeal of new forest tourism experiences in Tasmania”. This is a commercially confidential report not available for public release, but FT has kindly made it available to the consultants to review as part of this desk study. We are grateful for their assistance and co-operation. The findings outlined in the remainder of this Section of the report rely on information extracted from the Instinct & Reason consumer research that used focus groups in Melbourne and Sydney. The participants were Tasmanian preferrers - travellers who indicated their interest in Tasmania a a holiday destination. The key points in the research have been paraphrased by the consultants and these extracts have been reviewed for accuracy and relevance by FT. The reader should be aware that the consumer research referred to in this Section was based on general ‘unaided’ probing about forest experiences followed by the use of stimulus material. When shown the stimulus material, particularly for the existing experiences such as Tahune, a very strong and positive response was provoked.

General Findings The general findings and conclusions drawn by Instinct & Reason in respect to forest based tourism experiences in Tasmania were: • A Tasmanian forest experience is not considered by interstate visitor segment to be the key part of a Tasmanian holiday. Awareness and interest are low, but when probed, respondents were ‘intrigue’ by the possibilities. • Currently, there are no visitor segments that could be ‘triggered’ to consider or take a Tasmanian holiday simply because it contained a generalised forest based experience. The Tarkine may be able to be such a trigger if the accommodation, attractions and activities are able to create a critical mass of awareness. • Most importantly, any forest based experience would need significant ‘awareness building’ communication to generate visitor interest. This awareness raising represents a significant on-going cost that will largely determine the commercial viability (or otherwise) of any forest based experience in the Tarkine. The research makes it very clear that any enterprise or collection of enterprises would need to spend well above industry averages to provoke increased visitor traffic. • Visitation would be most likely amongst repeat visitors to the State, hence, Victoria is likely to be more ‘prospective’ than any other State.

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The Tarkine

Key Findings The key findings and conclusions drawn by Instinct & Reason in respect to potential forest based tourism experiences in the Tarkine were: • Potential visitors expect a high level of differentiation that will capture their interest in any forest based experience. This differentiation comes from both location and the mix of activities (not one or the other). It is the interaction of location with activities that is the key differentiator. • There would be widespread interest once visitors are within the State and within the Cradle Coast region in visiting Tahune, Tarkine and Phantom Peak. However, only one site would be visited on each visit to Tasmania as there is a perception that there would be insufficient differentiation to warrant multiple forest experiences within a single visit to the State. There are two important implications that flow from this finding: –

Firstly, for the touring visitor segments, they would choose between the three forest based experiences and select the one considered to be the most ‘unique’ and compelling Secondly, for those short duration, non-touring visitors accessing a single cluster, it would suggest that all those visitors to the Cradle Coast region would consider a Tarkine experience IF they were to be made aware of it.

• Based on recent research by Tourism Tasmania that indicates that the Tasmanian holiday destination is increasingly being ‘cut up into bite size pieces’ by visitors, there would appear to be a reducing reliance on touring segments to Cradle Coast. There are two important implications that flow from this finding: –

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Firstly, potential visitors increasingly see Tahune as a Hobart cluster / southern region product and the Tarkine as a North West region product. Secondly, there will be little cannibalisation between the different forest based experiences throughout the State as the dominance of touring type holiday diminishes over time.

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The Tarkine

Current Perceptions The current perceptions of nature and forestry within holidays as they may relate to any Tarkine developments include: • Expectations are about trees, green, wilderness, remote, isolated - with activities that may include walking and effort • Tasmania ‘owns’ this space for those segments that can conceptually link ‘forests’ and holidays’ • However, there are some challenges – –

Forests are seen as ‘passive’ and ‘seeing’ more than doing Forests must be strongly linked with a specific activity that incorporates a sense of adventure.

Understanding the Demographic Segments Based on the BDA demographic life-stage segmentation, the research identified responses to forestry based experiences as follows: • Affluent Young - time is the greatest obstacle with ease of access from a major gateway being a key determinant of the destination in Tasmania that is selected. The ferries are not an option for this segment and the airport gateways either unknown or frequency is a barrier. Therefore this is considered to be a low prospective segment. • Families - appeasing everyone is the greatest obstacle with the potential for bored children and major holiday risk. Activities need to be fun and exciting and trees and forests simply ‘don’t cut it’ unless there are relevant activities that attract and engage the visitor. • Older Affluent - are seeking to be rewarded for their efforts through a feeling of achievement. The content of the activity is therefore the key to turning on this segment. • Older Lower - physical limitations represent a mental barrier for some of this segment, however, this segment also contains Active Adventurers who will seek out activities. Overall, this life-stage segment analysis suggests that there are very significant perceptual barriers to the development of any forest based experiences in the Tarkine. Any developments would need to address the segments to create a meaningful set of activities within the context of the Tarkine (ie integrating the location and activities). This appears to represent a significant challenge.

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The Tarkine

Relative Appeals In the research, the ‘relative appeals’ of the Tarkine and Phantom Peak in particular ‘connected’ with the target segments. The Tarkine was considered to have broad appeal, subject to the actual type of activities to be developed in the location. As a guide, 35% of research respondents indicated that they would be likely to visit the Tarkine unprompted - and a massive 72% responded positively after being exposed to possible development options. The relative appeals are displayed in the following diagrams prepared by the Instinct & Reason’s researchers to reflect the different expectations of the demographic segments. The diagram suggests that there may need to be multiple product offers to address each demographic segment within the context of the Tarkine. Basis of appeal of the

Freedom

Tarkine Region High level of adventure

Affluent Families

Stimulation Affluent Young

The Tarkine Social based appeal

Lower Older

Achievement based appeal

Affluent Older

Discovery

Status Low level of adventure

Holiday anchors

Freedom

High level of adventure

Stimulation

Phantom Peak Social based appeal

The Tarkine Great Tarkine Drive

Discovery

Achievement based appeal

Status Low level of adventure

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The Tarkine

Imagery The current key word associations with the Tarkine as a destination included (not in ranked order): • Unique • Remote • Intriguing • Authentic wilderness • Significant contrast • An area of significance • Mineral springs. However, these are insufficient to be drivers of growth or triggers of focus for prospective visitors. To be a viable regional destination, the Tarkine would need to be more than a wilderness forest.

Accommodation The key qualifier from all segments was that the “style and quality of accommodation on offer at each location would be a key differentiator and would be key to dispersal and length of stay”. The research discovered that the role of accommodation would be pivotal to the successful development of the Tarkine as a major drawcard within the Cradle Coast region. A range of accommodation would be required to service the Tarkine including: • Indulgence and wellness possibly based on minerals springs • Isolated wilderness self contained cabins • City locations to meet the expectations of those expecting night time activities such as dining and entertainment.

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The Tarkine

Summary The current interstate perceptions of the Tarkine - based on customer research suggests that the Tarkine already holds brand equity in the form of definite wordassociations. However, this brand equity is presently insufficient to trigger an increase in visits to the region. The Tarkine would require substantial marketing support to build awareness and interest - and this would have to be supported by relevant visitor experiences. These experiences are well beyond trees, forests and wilderness. A total experience is required - according to the research - that encompasses the gateway, the cluster and the related visitor accommodation, transport and activities.

Implications for the Tarkine The Tarkine already represents a destinational concept that comprises an envelope with no content…at least in the visitor’s mind (prior to experiencing the destination). This is a huge potential canvass that can be painted, but it would require the Tarkine to move from a concept to a tangible experience. There must be clarification of what the Tarkine offers, where it’s positioned and which of the two clusters it is associated with. It must also have ‘buy-able’ experiences including appropriate accommodation.

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Section 5 Visitor Segments


Visitor Segmentation Visitor Segmentation Segmentation methodologies provide an understanding of the customer profile and an insight into their perspectives. There are many ways of segmenting Tasmania’s visitors - with each approach providing a different level of understanding and insight. There are three broad approaches to segmentation and all have been used to some extent over time in an attempt understand and evaluate visitor trends and behaviours. The three approaches involve: • socio-demographics - the BDA ‘life-stages’ are typical of this approach • consumption behaviour - the BDA ‘holiday types’ are typical of this approach • needs based including perceptions and desired experiences - limited use has been made of this approach to date.

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Visitor Segments

Summary Each of the segmentation approaches outlined provides a different level and richness of ‘insight’ into the visitor market place. The demographic approach provides an overview of the key characteristics of the visitor population - a very macro high level approach. The Tour Types defines visitors by the type of holiday taken - key information about the changing popularity of different holiday preferences. The motivational / behavioural approach would provide an understanding of what ‘turns on’ particular visitor types and what is important to them if they are to consider visiting Tasmania. At this point in time, the is no public domain behavioural segmentation available for Tasmania - although there are a number of variants being used by larger private and public sector organisations.

Implications for the Tarkine No segmentation analysis has been performed for this report. Existing BDA data and tools could be used specific to the NW and West Coast but these are of limited value in understanding the motivations and behaviours of prospective visitors to the Tarkine.

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Section 6 Conclusions


Conclusions

Summary The Market and Customer Analysis contained in this report clearly demonstrates a market undergoing fundamental structural change - largely caused by cheap air and sea fares. This changing dynamic suggests that the Cradle Coast region, including the NW and West Coasts, will require a fundamental shift in focus if it is to address the structural changes in the visitor market that are already well advanced. For the region, the rapid decline of the touring holiday type and its replacement with short duration single destination visitors will mean that the region must: • Strengthen the role of the gateways and ensure their visibility and competitiveness • Provide greater clarity and focus on the competitive advantages of the region to each priority visitor segment • Shift the marketing effort and communications focus to single destination visitors who can be attracted to the region and progressively de-emphasis the touring routes. For the Tarkine, the key issues are: • Strengthen the role of the gateways and ensure their viability • Clarify the brand positioning and key offer messages including the association with a single cluster • Develop experiences that must include activities and accommodation that will build on the image values of the area.

Next Steps This report provides an overview of the region and the potential of the Tarkine as a visitor destination - based on available data sources. The lack of credible data sources severely limits the conclusions and implications to be drawn. The next steps to better understand the potential of the Tarkine would involve the development of:

•A baseline visitor model with key assumptions about future trends likely to impact the region over the next 5 years • A ‘latent demand’ forecast for the next 5 years based on the key scenarios including but not limited to the key proposals currently being considered • Identification of key triggers that could create ‘critical mass’ to support substantial regional / cluster based visitation.

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Tarkine - Market Customer Analysis v3.1