Full Asia Strategy Report

Queensland Asia Tourism Strategy

2016-2025

teq.queensland.com

Acknowledgements TEQ recognises and values the Queensland tourism industry and would like to thank the following stakeholders for their input into the development of this strategy: Accor Hotels, Airbnb, Apollo Campers, Ardent Leisure Limited, Australian Cruise Association, Brisbane Airport Corporation, Brisbane Convention and Exhibition Centre, Brisbane Marketing, Cairns Airport, Cairns Convention Centre, China Eastern Airlines, Cruise Whitsundays, Events Management Queensland, Event Hospitality and Entertainment, Far East Consortium, Gold Coast Convention and Exhibition Centre, Gold Coast Tourism, Great Adventures – Cairns Great Barrier Reef & Green Island Tours, Griffith University, Hamilton Island Enterprises, Hana Tour Oceania, Hong Kong Airlines, Intercontinental Hotel Group, Jetstar Airways, Lone Pine Koala Sanctuary, One & Only Hayman Island, Qantas Airways Limited, Queensland Airports, Queensland Government Department of Education and Training, Queensland Government Department of Tourism, Major Events, Small Business and the Commonwealth Games, Quicksilver Group, Scoot Airlines, Shayher Group, Skyrail Rainforest Cableway, TAFE Queensland, Tangalooma Island Resort, The University of Queensland, Tjapukai Aboriginal Cultural Park, Tourism Australia, Tourism Leisure Corporation, Tourism Tropical North Queensland, Trade and Investment Queensland, Trip Advisor and Village Roadshow Theme Parks.

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Queensland Asia Tourism Strategy 2016-2025

Contents EXECUTIVE SUMMARY.............................................................................. 4

7.1

1.0 OUR CURRENT POSITION............................................................6

7.2 Target market strategies...............................................................28

2.0 THE NEED FOR ACTION................................................................. 7

7.3 The potential of the target segments.................................... 35

Strategic links to Government priorities.................................8

8.0 QUEENSLAND EXPERIENCES AND THE

ASIAN MARKET................................................................................ 38

2.1

Defining our targets.........................................................................26

2.2 Consultation and partnerships....................................................9 3.0 OUR VISION.........................................................................................10

8.1

The experience aspirations of the modern Asian traveller...................................................................................... 38

Goal, objectives, measures and 2025 targets....................11

8.2 Queensland brand and experiences.....................................40

4.0 THE RISE OF ASIAN TRAVEL.....................................................12

8.3 Aligning the offering....................................................................... 42

Drivers of outbound travel.............................................................12

8.4 Destination experience delivery............................................... 43

4.2 The new Asian traveller...................................................................14

9.0 STRATEGIC DIRECTIONS TO MAXIMISE

THE POTENTIAL.................................................................................47

3.1

4.1

4.3 The sharing economy.......................................................................14 5.0 QUEENSLAND’S OPPORTUNITY FOR

SUCCESS IN ASIA..............................................................................15 5.1

Objective 1: Increasing OVE from target Asian markets...................................................................................... 16

5.2 Supporting objectives......................................................................17 5.3 Dispersing the benefits...................................................................17

9.1

Strategic Direction 1: Deliver targeted consumer marketing into key Asian markets..........................................47

9.2 Strategic Direction 2: Enrich trade engagement

to increase awareness and encourage conversion...... 48 9.3 Strategic Direction 3: Strengthen aviation

access and partnerships............................................................... 49 9.4 Strategic Direction 4: Prioritise infrastructure

and investment to meet demand............................................50

6.0 ASIAN MARKETS AND THEIR POTENTIAL..................... 18 6.1

The countries........................................................................................ 18

6.2 The cities...................................................................................................21

9.5 Strategic Direction 5: Foster the development

of high quality Queensland experiences..............................51 9.6 Strategic Direction 6: Attract Asian visitors

to experience the best events in Australia........................ 52

6.3 The age groups.....................................................................................21 6.4 The competition................................................................................. 25

9.7 Strategic Direction 7: Leverage the tourism

potential of the international education network.......... 53

7.0 QUEENSLAND’S TARGET MARKETS.................................26

10.0 DELIVERING THE VISION........................................................... 54

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EXECUTIVE SUMMARY Globally, the tourism sector is witnessing phenomenal growth in Asian outbound travel. By 2020, Asian outbound travel will reach 286 million travellers – over 100 million more than in 2014.1 Asian travellers accounted for one in three international visitor nights in Queensland in 2005; today, they represent nearly half.2 Although Queensland is attracting increasing numbers of Asian travellers, competition from domestic and international destinations will intensify.

Our vision is:

Tourism and Events Queensland (TEQ) in partnership with the Queensland Government has developed the Queensland Asia Tourism Strategy 2016-2025 (the strategy) to maximise Queensland’s competitive position with Asian travellers, drive sustained growth in Queensland’s tourism industry and deliver jobs in regional Queensland. The strategy is based on research and insights from Deloitte Access Economics and Tourism Australia and forms a core component of the Queensland Government’s overarching strategy: Advancing Tourism 2016-20 to ensure that Queensland capitalises on the Asian opportunity.

Inspiring Asia to experience the best address on earth

This vision is underpinned by an aspirational goal and objectives that will propel the industry beyond ‘business as usual’.

Aspirational Goal

Objectives

4

By 2025 Queensland will be recognised as the leading Australian destination for market share, reputation and experience delivery by Asian travellers 1. Increase overnight visitor expenditure (OVE) and visitation from Asian target markets, supporting QLD jobs

2. Win market share by accelerating efforts to target priority Asian markets

3. Attract and support increased aviation access from Asia

1

Source: MasterCard Intelligence Report (2015)

2

Source: Tourism Research Australia (TRA) International Visitor Survey (IVS) YE December 2015

Queensland Asia Tourism Strategy 2016-2025

4. Increase average spend per Asian visitor to QLD

5. Increase the proportion of Asian visitors travelling beyond QLD’s three international gateways

Image courtesy of Melbourne Chinese Post

A key focus of the strategy is on Queensland building and maintaining a balanced and diverse portfolio of mature and emerging Asian source markets. The strategy identifies the markets offering the best growth potential and the Queensland experiences that align and appeal to those target markets and deliver the essence of Queensland’s core promise Queensland, Where Australia Feels Most Alive.

Seven strategic directions and a series of targeted actions will be required to achieve the vision, goal and objectives. These strategic directions are comprehensive in scope. They include: 1. Deliver targeted consumer marketing into key Asian markets 2. Enrich trade engagement to increase consumer awareness and encourage conversion 3. Strengthen aviation access and strategic partnerships

Queensland’s target markets in Asia are segmented into nine Asian countries/regions, their major cities and then life stage groups. The nine countries/regions are prioritised based on volume, maturity, and scope to maximise economic and social benefits for the state’s tourism and events industry. China, Japan and South Korea are identified as offering the greatest potential for Queensland. Millennials and Free Independent Travellers (FIT) are the priority demographics across the majority of markets, followed by 35-49 year olds and those aged 50+. Education visitors from China, India, South Korea, Taiwan and Japan are an important segment. Women have been identified as a target for marketing initiatives as they are highly influential in travel decision making.

Our success will depend upon the coordinated efforts of industry and government as the touch points for implementation are wide-ranging.

4. Prioritise infrastructure and investment to meet demand 5. Foster the development of high quality Queensland experiences 6. Attract Asian visitors to experience the best events in Australia 7. Leverage the tourism potential of the international education network

Queensland Asia Tourism Strategy 2016-2025

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1.0 OUR CURRENT POSITION Queensland hosted over one million Asian travellers in the year to March 2016.3 These travellers accounted for nearly half (45%) of international visitor nights in Queensland (increasing 91% since 2007) and are surpassing traditional markets such as New Zealand, the United Kingdom and the United States in expenditure.

China is now Queensland’s largest source market in terms of visitor expenditure and visitor numbers. Visitation from China to Queensland increased 28.9% to 443,000, while expenditure by Chinese visitors grew 34.1% to $1 billion (YE March 2016).

While the significant contribution of China to the growing Asian outbound travel market is well acknowledged, there are a number of other contributors, as reflected in Figure 1. For the same period, Queensland enjoyed strong growth in visitors from Japan (up 15.1%), South Korea (up 17.4%), India (up 19.1%) and Hong Kong SAR China (up 13.4%), and growth in expenditure in Queensland from markets such as Japan $334.7m (up 9.4%) and South Korea $200.5m (up 39.4 %).

Figure 1: Total Asian Visitors to Queensland 2007-2016 and Expenditure 2016

Source: Tourism Research Australia (TRA) (2016), International Visitor Survey (IVS), year end Mar 2007 – 2016

Queensland’s unrivalled natural assets, such as the Great Barrier Reef, beaches and rainforests, coupled with its clean, safe urban offerings in the Gold Coast, Cairns and Brisbane are popular drawcards for Asian visitors.

3

6

Source: TRA, IVS YE March 2016

Queensland Asia Tourism Strategy 2016-2025

Confidential

2.0 THE NEED FOR ACTION Globally, the tourism sector has witnessed phenomenal growth in Asian travel. According to a MasterCard Intelligence Report, outbound Asian travel will increase from 181 million trips in 2014 to 286 million trips in 2020—an annual rate of growth of 7.9%.

Although Queensland has begun to reap the benefits of increased visitor arrivals from Asia, innovative, highly valued and high quality experiences will be necessary to increase the value for the state’s tourism and events industry from the Asian outbound travel anticipated in coming years. Competition from domestic and international destinations for Asian travellers will intensify.

Currently, 24% of Australia’s visitor nights from Western markets are spent in Queensland, compared to only 18% of Australia’s Asian visitor nights. While 39% of all Asian visitors include Victoria in their itinerary and 50% New South Wales, only 32% include Queensland.

Tourism and Events Queensland (TEQ) together with the Queensland Government has prepared the Queensland Asia Tourism Strategy 2016-2025 (this strategy) to maximise Queensland’s competitive position with Asian travellers.

Queensland seeks to increase overnight visitor expenditure from Asian markets to $6.8674 billion by 2025, contributing to the state’s visitor economy and supporting up to 30,000 additional jobs.5

Key Facts

•• In less than two decades, two-thirds of the world’s middle class will reside in Asia.6 •• 66% of Chinese outbound travellers are Millennials.7

•• By 2034, Asia will have 23 of the world’s mega hub airports; up from 13 in 2014.8 •• Over the four years to 2014, Asia was responsible for two-thirds of the global growth in aviation volumes.9

The strategy presents seven strategic directions and priority actions for industry and government to secure strong and sustained growth from key Asian source markets. These markets include a diverse portfolio of both mature and emerging markets across Asia. At the same time, TEQ will continue to focus effort on increasing the contribution of the Western markets to Queensland’s economy. A balance of Asian and Western markets presents the greatest potential to drive growth in Queensland’s tourism and events industry, build resilience to market fluctuations and generate jobs in regional Queensland. Success will depend upon the coordinated efforts of industry and government.

This target was developed based on Tourism Forecasts 2016 published by Tourism Research Australia (TRA) Note: TRA reviews and revises the Forecasts on an annual basis. Accordingly TEQ will review the target annually. All targets are based on existing data sources at the time of publication. Measurement of these is subject to the availability and consistency of these data sources.

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5 Based on achieving the expenditure goal of $6.867 billion and the job creation equivalent of one additional job for every $100,000 of additional international OVE (State Tourism Satellite Account 2014-15 base year) Note: jobs attributable to Asian OVE cannot be measured independently.

6

Source: Deloitte Access Economics (2014) Building the Lucky Country #3, positioning for prosperity.

7

Source: Goldman Sachs (2015) Chinese Tourist Boom Report.

8

Source: Airbus (2014) Global Market Forecast.

9

Source: Airbus (2014) Global Market Forecast.

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2.1 Strategic links to Government priorities The Queensland Asia Tourism Strategy 2016-2025 is a core component of Advancing Tourism 2016-20 which outlines the Queensland’s Government’s priorities for the tourism and events industry. The strategy will be instrumental in delivering the Advance Queensland: Connecting with Asia Strategy 2016-20; a Queensland Government funding commitment of $33.5 million over four years to grow tourism and make Queensland the holiday state in Australia for millions of Asian visitors.

TEQ’s Strategic Plan 2016-2020 identifies the Asian markets as one of five strategic priority areas presenting significant opportunities to grow overnight visitor expenditure for Queensland. Queensland’s Asia Tourism Strategy 2016-2025 is the key deliverable to enable success in this area.

The strategy is aligned with and builds on a number of sector specific strategies that are currently driving the tourism industry, including: •• Governing for Growth: Economic Strategy and Action Plan •• Destination Success: 20 Year Plan for Queensland Tourism •• Queensland Ecotourism Plan 2015-2020 •• 2020 Strategic Marketing Plan – Tourism and Events in Queensland •• Tourism and Events Queensland Strategic Plan 2016-2020 •• Tourism and Events Queensland Events Strategy 2016-2020 •• Queensland Tourism Aviation Blueprint to 2016

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Queensland Asia Tourism Strategy 2016-2025

2.2 Consultation and partnerships The strategy is based on a body of work by Deloitte Access Economics that involved extensive desktop research and consultations with over 50 industry stakeholders in Australia and overseas in the following sectors: ••

Government

••

Convention Bureau

••

Events

••

Regional Tourism Organisations

••

Attractions

••

Cruise shipping

••

Airlines

••

Investors

••

Trade partners

••

Airports

••

Education providers

••

Accommodation

••

Innovation/Technology companies

Due to the breadth of touch points in growing Queensland’s competitive position in Asian markets, implementation will require action by a range of stakeholders. Those critical to the success of the strategy include but are not limited to ••

Attracting Aviation Investment Fund Committee

••

Australian Tourism Export Council (ATEC)

••

Business Events Australia

•• •• ••

••

Queensland’s international airports

••

••

Queensland’s Regional Tourism Organisations

The Department of Natural Resources and Mines (DNRM)

••

The Department of Science, Information Technology and Innovation (DSITI)

••

The Department of State Development (DSD)

••

The Department of Tourism, Major Events, Small Business and the Commonwealth Games (DTESB)

••

Trade and Investment Queensland (TIQ)

••

Tourism Australia (TA)

••

Tourism Research Australia (TRA)

••

Travel trade partners

••

Tourism Transport Forum (TTF)

••

Tourism Visa Advisory Group (TVAG)

••

Queensland’s tourism and events industry

Cruise industry partners

••

Education institutions (Universities, ELICOS, VET and schools)

Queensland Tourism Industry Council (QTIC)

••

Queensland Treasury

••

Strategic Partners including: Qantas, Flight Centre, Singapore Airlines, China Eastern Airlines, China Southern Airlines, Mafengwo etc.

Great Barrier Reef Marine Park Authority (GBRMPA)

••

Inbound Tourism Operators (ITO)

••

Investment partners

••

Media partners

••

Queensland Convention Bureau

••

Queensland industry partners

••

Queensland Parks and Wildlife Service (QPWS)

••

The Department of Aboriginal and Torres Strait Islander Partnerships (DATSIP)

••

The Department of Infrastructure, Local Government and Planning (DILGP)

••

The Department of National Parks, Sports and Racing (NPSR)

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Confidential

3.0 OUR VISION Our vision is:

Inspiring

Asia

to experience

the best

Inspiring Asia to experience the best address on earth

through brand, integrated marketing and events

connecting in a way that resonates with the modern Asian traveller.

in priority Eastern international source markets

accelerating11 : China, Japan and South Korea; growing: India and Indonesia; and winning share: in Singapore, Hong Kong SAR China, Taiwan and Malaysia

Queensland’s signature experiences and events

through cultural immersion in the Queensland lifestyle; authentic and friendly Queensland experiences; and world-class nature including Great Barrier Reef.

through quality and innovation, enhance destination offerings

by championing ‘best of’ tourism products; building the digital capability of tourism businesses; encouraging the tourism industry to adopt ‘Asia Ready’ practices; and providing innovative, quality products, experiences and infrastructure.

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across our five experience pillars: •• Reef, Islands and Beaches address on earth

showcasing the best of Queensland

•• Natural Encounters •• Discovery and Adventure •• Events •• Queensland Lifestyle

Market prioritisation will be evaluated and reassessed annually Refer to Section 7.0 Queensland’s Target Market for definitions of accelerate, grow and win share.

10 11

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Queensland Asia Tourism Strategy 2016-2025

3.1 Goal, objectives, measures and 2025 targets In pursuit of the vision, TEQ’s goal is that by 2025 Queensland will be recognised as the leading Australian destination for market share, reputation and experience delivery by Asian travellers. A series of objectives and strategic directions will propel the industry beyond ‘business as usual’ to deliver this goal by 2025. While the Queensland tourism sector is naturally outward looking, the underpinning motivation for the strategy is to deliver jobs for Queenslanders and build a diverse, vibrant economy.

Inspiring Asia to experience the best address on earth Aspirational Goals

Objectives 1. I ncrease overnight visitor expenditure (OVE) and visitation from Asian target markets, supporting Queensland jobs

By 2025 Queensland will be recognised as the leading Australian destination for market share, reputation and experience delivery

by Asian travellers

2. Win market share by accelerating efforts to target priority Asian markets

3 A ttract and support increased aviation access from Asia

4 I ncrease average spend per Asian visitor to QLD 5. Increase the proportion of Asian visitors travelling beyond Queensland’s three international gateways.

Measures and 2025 Targets OVE from Asian markets: $6.867 billion12 (supporting up to 30,000 additional jobs)13 Visitors from Asian markets 1,626,000 Queensland’s share of Asian visitor OVE in Australia: 17.1% – 23.0% Total direct inbound seats from Asia to Queensland: 3,000,000 seats Queensland’s share of inbound seats from Asia to Australia: 16.0% – 22.0% Average spend per Asian visitor: $3,000 – $3,857 Percentage of total Asian trips to regions outside Queensland’s major international gateways (Brisbane, Gold Coast, TNQ): 9.0% – 15.0%

Strategic Directions 1. T argeted consumer marketing

2. T rade engagement

3. Aviation access & strategic partnerships

4. I nfrastructure & investment

5. E xperience development

6. Events optimisation

7. I nternational education

Queensland seeks to increase overnight visitor expenditure from Asian markets to $6.86712 billion by 2025, contributing to the state’s visitor economy and supporting up to 30,000 additional jobs.13 This target was developed based on Tourism Forecasts 2016 published by Tourism Research Australia (TRA) Note: TRA reviews and revises the Forecasts on an annual basis. Accordingly TEQ will review the target annually. All targets are based on existing data sources at the time of publication. Measurement of these is subject to the availability and consistency of these data sources.

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13 Based on achieving the expenditure goal of $6.867 billion and the job creation equivalent of one additional job for every $100,000 of additional international OVE (State TSA 2014-15 base year) Note: jobs attributable to Asian OVE cannot be measured independently.

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Confidential

4.0 THE RISE OF ASIAN TRAVEL In the past decade, the importance of Asian travellers to Queensland and Australia has grown significantly and is projected to continue.

It is critical to understand the key drivers of outbound travel from Asia and the characteristics of the new Asian traveller.

4.1 Drivers of outbound travel Three megatrends underpin the increase in outbound travel from Asia: population growth, urbanisation and the growth of the Asian economy.

While the megatrends can be identified in the majority of Asian nations/regions, it is important to note that the rate of change will differ, and hence the implications for this strategy may diverge.

Population growth •• More people live in Asia than anywhere else in the world, with the region accounting for 60% of total global population in 2015 – some 4.3 billion people.

•• Asia’s population has rapidly grown in size, tripling since 1950.

•• The United Nation’s World Tourism Organisation (WTO) projects the population in the region will increase to 4.9 billion by 2030.

Urbanisation

•• Urbanisation is occurring globally, but particularly in Asia: the WTO projects that 64% of Asia’s population will live in urban areas by 2050.

•• A greater share of the population residing in densely populated urban areas will mean that more people will reside near an airport and hence have an improved level of air connectivity compared to a population that is dispersed throughout more rural areas.

•• This improved air connectivity lowers the cost and hence increases the propensity of outbound travel.

•• Densely populated cities challenged with air pollution and crime is driving a desire to escape to clean, green and safe destinations such as Queensland.

Growth of the Asian economy •• The Asian economy has grown twice as fast as the rest of the world’s economy since 1970; doubling in size every 16 years.

•• This surge in economic wealth, over the long-term, has underpinned a sharp increase in household incomes.

•• The growth in average incomes at a national level generally leads to disproportionate growth in the number of households who can afford long-haul travel with a higher disposable income.

Alongside these megatrends, aviation connectivity has increased in tandem. Over the four years to 2014, Asia was responsible almost two-thirds of global growth in aviation volumes 12

Queensland Asia Tourism Strategy 2016-2025

> 50,000 Daily long-haul passengers > 20,000 Daily long-haul passengers > 10,000 Dailyairports long-haulinpassengers Figure 2: Mega hub Asia Pacific

2014 By 2034, it is forecast that Asia will have 23 of the world’s mega-hub airports; up from 12 14 SIA WILL in HAVE2014.

23 OF THE WORLD’S MEGA-HUB AIRPORTS,

Beijing, China

Seoul, South Korea Tokyo, Japan Osaka, Japan

New Delhi, India

Shanghai, China

Hong Kong SAR

Mumbai, India

Manila, Philippines

Bangkok, Thailand

UP FROM 12 TODAY

MEGA-HUB AIRPORTS IN ASIA-PACIFIC Source: Airbus Global Market Forecast

Kuala Lumpur, Malaysia

Singapore

> 50,000 Daily long-haul passengers > 20,000 Daily long-haul passengers > 10,000 Daily long-haul passengers

2014

2034 Beijing, China

Seoul, South Korea Tokyo, Japan Osaka, Japan

hi, India

Seoul, South Korea

Beijing, China

Shanghai, China

Tokyo, Japan New Delhi, India

Osaka, Japan

Shanghai, China

Hong Kong SAR

ndia

Dhaka, Bangladesh

Taipei, Taiwan

Guangzhou, China

Manila, Philippines

Hong Kong SAR

Bangkok, Thailand

Mumbai, India

Bangkok, Thailand Manila, Philippines

Kuala Lumpur, Malaysia

Bengalore, India

Chennai, India

Ho Chi Minh City, Vietnam

Phuket, Thailand Colombo, Sri Lanka

Singapore

Maldives

Kuala Lumpur, Malaysia

Singapore

Jakarta, Indonesia

14

2034

Source: Airbus (2014) Global Market Report.

Denpasar, Indonesia

13

4.2 The new Asian traveller While Asian tourists have visited Queensland for decades, as they have grown wealthier and increasingly turned to the west for cues on travel, their tastes have changed.

Previous generations of Asian tourists relied primarily on group travel, with itineraries organised by wholesale travel agents, with a minimal level of customisation.

While group travel is still used by a significant proportion (30%) of Asian visitors to Queensland, the new Asian traveller increasingly wants to find their own way, opting to book and arrange their own travel, accommodation and experiences. This segment is commonly known as ‘Free Independant Travellers’ (FIT).

Asian FIT arrivals to Australia grew from 1.63 million in 2005 to 2.6 million in 2015. Group travel grew from 377,000 to 515,000 over the same time. This increasing number of Asian FIT visitors are placing greater importance on experiences and cultural immersion, preferring to be regarded as travellers, rather than tourists. These new travellers are allocating a larger share of

their budgets toward activities and dining, and are seeking more unique and exotic destinations compared to typical tours and well-worn global tourist hubs. Experiences are judged on perceived quality and authenticity of interactions.

These FIT are: •• •• •• •• ••

Pursuing unique and exotic destinations Experienced travellers not tourists Spending more on activities and dining Seeking high quality experiences and cultural immersion Highly connected and engaged in social and digital media

The other distinguishing trait of the new Asian traveller is their connectedness and proclivity to engage in social and digital media. Smartphone penetration for the region is currently estimated at 41% and is projected to increase to over 50% by the end of the decade. This growth in smartphone usage has dramatically increased access to the internet, and has changed the consumption habits of Asian consumers, increasing their propensity to purchase items digitally via mobile. Similarly, it has also increased their access and use of social media. For example, over 90% of Japan’s population has a presence on some form of social media.

The new Asian traveller is distinct from previous generations: they are highly affluent, educated, urbanised and connected. They prefer autonomy when travelling, rather than a structured group tour. They are also not a homogenous group – today’s Asian travellers differ from country to country, city to city, and generation to generation.

4.3 The sharing economy Travellers are increasingly enjoying the benefits of the sharing economy during their trips to Australia. The sharing economy, also known as the peer economy or collaborative consumption refers to peer-to-peer based sharing where people can choose and pay for accommodation, cars, bicycles, household goods and services online that private individuals provide for a fee. Online companies typically administer these services and offer a rating or review system so people on both sides of the transaction can trust the other.

The sharing economy is growing exponentially as digital technology reduces transaction costs and makes it easy for visitors and residents alike to access shared assets and services.

For visitors, this shared economy also provides the opportunity to engage with locals and live like a local.

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14

Data for Year ending March 2016, IVS

Queensland Asia Tourism Strategy 2016-2025

Two popular services for visitors include Uber and accommodation sites such as Airbnb and Stayz. Currently, 11% of all international visitors to Australia use Uber, with visitors from the USA (19%) and UK (16%) the greatest consumers of this service. Around 8% of Chinese visitors use Uber. It is proving popular among students, with a quarter of Chinese students in Australia making use of the service.

Of holiday visitors to Australia, 5% booked accommodation on a sharing economy site. Airbnb was used by 4% of international visitors to Australia which equals approximately 279,000 visitors in the year ended March 2016. Of the accommodation booked this way by visitors, 20% was in Queensland compared with 43% in New South Wales and 33% in Victoria.15

5.0 QUEENSLAND’S OPPORTUNITY FOR SUCCESS IN ASIA The Queensland Asia Tourism Strategy 2016-2025 is an unprecedented opportunity for the Queensland tourism and events industry to accelerate beyond business as usual and effectively capitalise on the strong growth in outbound Asian visitors. The strategy’s goal and objectives provide a framework for the action required.

Aspirational Goals

Objectives

By 2025 Queensland will be recognised as the leading Australian destination for market share, reputation and experience delivery by Asian travellers

1. I ncrease overnight visitor expenditure (OVE) and visitation from Asian target markets supporting Queensland jobs

2. Win market share by accelerating efforts to target priority Asian markets

3. Attract and support increased aviation access from Asia

4. I ncrease average spend per Asian visitor to QLD

5. Increase the proportion of Asian visitors travelling beyond Queensland’s three international gateways

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5.1 Objective 1: Increasing OVE from Asian target markets To propel Queensland beyond business as usual, the priority objective is to increase overnight visitor expenditure (OVE) and visitation from target Asian markets, supporting Queensland jobs. In 2014, there were 38 million trips taken by Asian travellers beyond Asia.

Queensland welcomed just 2.2%, of these trips. If trips beyond Asia grow in line with the Tourism Forecasting Committee (TFC) forecast of inbound Australian travel, the total number of outbound trips will increase to 62 million trips by 2024.16 In the year ending March 2016, the total OVE from Asian visitors to Queensland was $2,441.1 million. This represents 16.9% of the national total of OVE from Asian visitors and 48% of Queensland’s total international OVE. To increase OVE, Queensland needs to identify the target markets that present the best opportunity for the state. Integral is understanding what experiences high yielding visitors from Asia are looking for in their holidays. Investment may be required in infrastructure, experience development and delivery to secure and retain these travellers.

Figure 3: Asian outbound trips beyond Asia, by source country

Source: UN World Tourism Organisation (WTO) and TFC (2016). Note: 2024 shares were derived by applying TFC cumulative growth rate forecasts to 2014 UNWTO figures.

16

16

Data beyond this date is not available until August 2016.

Queensland Asia Tourism Strategy 2016-2025

5.2 Supporting objectives To increase OVE, winning market share, increasing aviation access and growing average spend will be fundamental as they act in tandem. A growth in market share must include an increasing share of arrivals and overnight expenditure as inbound growth alone is not enough if competitors are growing at double the rate. Continued efforts in improving air accessibility through direct flights and new route development will be critical to cater to the growing demand of Asian markets for leisure travel to Queensland. Spend per visitor in Queensland has typically been lower than in other Australian states, partly because the number of nights spent is less, and also due to the lower average spend per night. Chinese spending per trip is around 60% lower in Queensland than the national average. A boost in yield can be achieved by focusing on the following key factors:

1. the market segments targeted – selected with a clear focus on yield as well as volume; 2. the quality of experiences offered – research and case studies consistently show there is a strong willingness-to-pay for the highest quality experiences; 3. the distinctiveness of experiences offered – if an experience is not unique or distinctive, soon enough it will be under threat from a newer, cheaper, easier one somewhere else; and 4. a strong Queensland brand that is relevant to an Asian consumer – a coveted brand, which involves some degree of exclusivity and is supported by campaigns and partnerships, will provide a dividend for the state in the form of higher yield.

“The philosophy has to be around people, product and place. When I walk around trade shows such as ITB and see images from our competitors like the Maldives, Indonesia and Malaysia they could be anywhere. Today’s new travellers are all about experiences. They want to live like a local and brag about that when they get home.

The defining heart of any country is its people and to be successful into the future we must tell that story.”

John O’Sullivan, Managing Director - Tourism Australia May 2016

5.3 Dispersing the benefits To generate jobs in regional Queensland and build a diverse, vibrant economy, the strategy must facilitate visitor dispersal beyond the international gateways of Brisbane, Gold Coast and Tropical North Queensland (TNQ) to other regions. Broader regional dispersal will also enable Queensland to capitalise on the growing Asian FIT market and extend its experiential appeal.

Already on the rise is the number of Asian visitors choosing selfguided ‘touring of Queensland by private vehicle, up 10.7% from 2014 to 2016 to 48,000.17 Currently, Queensland’s three international gateways receive 96.5% of all Asian visitors. The regions beyond these gateways have averaged 9% of all Asian visitors to Queensland for the

last ten years and 7.5% of Asian holiday visitors. While the rate of change in dispersal has remained steady for Queensland, Victoria in comparison has increased regional dispersal by more than one third in the last three years and now has a dispersal rate of 11.7% for all Asian visitors and 15.5% of Asian holiday visitors.

Queensland has considerable scope to increase regional dispersal of Asian visitors as proven by the 35% of western markets who travel beyond the gateway cities. With the total Asian overnight expenditure in Queensland more than three times the total international OVE for the non-gateway regions, the impact of increased dispersal on the regions would be significant.

Image courtesy of Skyrail Rainforest Cableway 17

TRA (2016) IVS

17

Confidential

6.0 ASIAN MARKETS AND THEIR POTENTIAL In identifying and prioritising the Asian markets for Queensland, three dimensions were examined: countries, cities and age cohort.

Overlaying this assessment are criteria defined by Deloitte Access Economics for targeting markets. They include the following: •• projected to be the largest yielding markets in the next 5-10 years; •• represent a diverse portfolio of outlooks; •• preferences which best align with what Queensland has to offer; •• segments that are easily reachable and will be our next ambassadors in local markets; and •• are measureable.

6.1 The countries Nine nations or regions have been identified as sources of visitors with growth potential for Queensland. The following map (p18) illustrates their geographic catchment in Asia.

Based on the population size and long-haul travel propensity forecast out to 2025, China, Japan and South Korea offer the greatest potential.

18

Queensland Asia Tourism Strategy 2016-2025

19

P4

P9

P5

pe n d

a n t)

tive

on

Hyderabad

Pune

P6

Long Haul (ind

icative

Foshan

arket only – m

depen

dant)

t) endan dep market

Tokyo

P2

P3

P1

P7

P8

Developing (Tier 2) late adopter cities

Population: 23.4M Outbound Trips: 749,000 Australia Share: 11.4% Queensland Share: 6.7% Forecast Growth: 3.5% p.a.* Expenditure: $197.1M

TAIWAN

Population: 7.3M Outbound Trips: 830,000 Australia Share: 24.5% Queensland Share: 6.1% Forecast Growth: 3.5% p.a.

Expenditure: $140.1M

CHINA (HK SAR)

Population: 1,400M Outbound Trips: 12.4M Australia Share: 6.7% Queensland Share: 2.8% Forecast Growth: 7.7% p.a.

Expenditure: $1,029.1M

CHINA

Population: 50M Outbound Trips: 5.5M Australia Share: 3.7% Queensland Share: 0.9% Forecast Growth: 3.6% p.a.

Expenditure: $200.5M

SOUTH KOREA

Population: 128M Outbound Trips: 11.3M Australia Share: 2.9% Queensland Share: 1.4% Forecast Growth: 1.7% p.a.

Expenditure: $334.7M

JAPAN

P Priority. The target market prioritisation will be reviewed annually

WIN SHARE – Singapore, Hong Kong, Taiwan & Malaysia investment will seek to win market share from these mature markets where Queensland has a strong presence

GROW – India & Indonesia investment will build foundations for mid-long term growth with modest growth in the short term

ACCELERATE – China, Japan & South Korea with increased investment these markets have the potential to grow at a much faster rate

Developing (Tier 2) early adopter cities

Nagoya

Osaka

Established (Tier 1) cities

LEGEND

Surabaya

Taipei

Fukouka

Daegu Busan

Seoul

Ningbo

Xiamen Dongguan

HK SAR

Jakarta

Kuala Lumpur Singapore

Shenzhen

Fuzhou

Hangzhou

Guangzhou

Changsha

Shanghai

Nanjing

Qingdao

Wuhan

Zhengzhou

Dalian

Shenyang Tianjin

Beijing

Kunming

Chengdu Chongqing

Xi’an

ly – cative on ort Haul (indi

Sh

Chennai

Kolkata

Population: 5.5M Outbound Trips: 985,000 Australia Share: 37.8% Queensland Share: 6.1% Forecast Growth: 4.2% p.a.

Expenditure: 154.5M

SINGAPORE

Kochi

Bangalore

Mumbai

Ahmedabad

Jaipur

New Delhi

Chandigarh

Amritsar

dica

Population: Demographic Yearbook, United Nations Statistics Division (2016) Outbound Trips: From Asian source markets to a destination that is outside of Asia. Tourism Statistics Database, YE June 2015, UNWTO (2016).

Australia Share of outbound trips beyond Asia: Australian inbound visitation figures. IVS YE December 2015, TRA (2016).

Queensland Share of outbound trips beyond Asia: Queensland inbound visitation figures. IVS YE December 2015, TRA (2016).

Forecast Growth: Australian inbound visitation figures, p.a. growth 2014-2024. Tourism Forecasts 2015, TRA (2015) Expenditure: Overnight Visitor Expenditure to Queensland, IVS, TRA (2016) *assuming same growth profile as comparators modelled by TFC.

Population: 254.4M Outbound Trips: 552,000 Australia Share: 27.2% Queensland Share: 3.1% Forecast Growth: 5.2% p.a.

Expenditure: $35.0M

INDONESIA

Population: 30M Outbound Trips: 826,000 Australia Share: 39.3% Queensland Share: 5.8% Forecast Growth: 4.8% p.a.

Expenditure: $94.9M

MALAYSIA

Population: 1,300M Outbound Trips: 3.4M Australia Share: 5.8% Queensland Share: 1.3% Forecast Growth: 6.3% p.a.

Expenditure: $112.2M

INDIA

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Lon

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) ndant depe arket m – nly ve o icati l (ind

a rk ly – m

QUEENSLAND’S ASIAN TOURISM TARGET MARKETS

While India and China have similar population sizes, China’s rate of outbound travel beyond Asia is around five times greater than for India as illustrated in Figure 4.

Queensland is currently capturing a relatively minor share of long-haul trips beyond Asia, highlighting the strength of other destinations for Indian, South Korean and Japanese travellers. Figure 4 below showcases the opportunity in aligning Queensland’s product offerings to the tastes and preferences of South Korea and Japan markets to capture a larger share of their outbound trips.

Singapore and Hong Kong SAR China have the highest concentration of trips to Queensland, despite the choice of many other destinations.

Qld market share and potential: % of trips per outbound longhaul trip

Figure 4: Asian travel beyond Asia – population, travel propensity, Queensland market share and Queensland’s potential

Travel propensity: Longhaul trips per 1000 population

Source: UNWTO and Deloitte Access Economics (2016) Note: these are estimates of countries visited collected by destination statistical agencies and compiled by UNWTO. Population statistics are taken from UNESCAP.

20

Queensland Asia Tourism Strategy 2016-2025

6.2 The cities Given the socio-economic diversity within Asian countries, a cityfocus has been adopted in identifying the potential of the target market. Key dimensions in determining the size of a city market include: •• the population of the broader metropolitan region – a basic measure of market size; •• the Gross State Product (GSP) of the local province or region – a proxy for average income levels in the city; and •• the passenger volume of nearby airports – a measure of the volume of people that can travel as a result of aviation capacity.

The cities are not clustered in country groups, as illustrated in Figure 5. For example, there is a significant gap in aviation levels between China’s tier 1 coastal cities and the major inland cities. It also reveals the comparability of city markets across countries: for instance, Delhi has a metropolitan population of around 23 million, GSP of $2,100 USD per capita, and aviation traffic of 34 million passengers per year. This is broadly comparable with Chengdu, which has a metropolitan population of around 18 million, GSP of $6,500 USD per capita, and aviation traffic of 37 million passengers per year.

Tokyo and Seoul are prominent as major centres of population, economic wealth, and aviation activity. In comparison India’s most populous cities are generally still lacking economic wealth and aviation capacity to represent the same tourism opportunity as China’s second tier cities.

6.3 The age groups Travel decisions and the experiences sought by travellers vary across age groups. Whether a visitor is likely to return is also impacted by age. The rate of repeat visitation from Asia increases with age as illustrated in Figure 6. If the average frequency of repeat visitation is 2-3 years, then many repeat visitors would have made their first trip aged 20-34.

The patterns of visitation vary across countries in Asia. Young adults (aged 15-34) represent 53% of non-education trips to Australia from Taiwan, compared to 25% for China and 30% for India. Mid-working age (aged 35-49) cohorts are the most common aged group for Indonesian visitors (36%), and Singaporeans (39%). Older travellers (50+) comprise about 50% of visitors from India. Older travellers include those still working, semi or fully retired.

An element common across all markets is that 20-34 year olds have higher yields than their country average, although it ranges from a 4% premium for Singaporeans, to 104% for Indians. This age group falls into the Millennial cohort. These are most commonly defined as people born between 1981 and 1995, i.e. in 2016 are 21-35 years. The world’s Millennials share a desire to travel each year to spend time with family, explore new cultures and take a break. They prefer small travel groups and independent travel arrangements. Milliennials are not a homogenous group however, with differences in behaviour between countries. Currently, approximately 60% of the world’s Millennials reside in Asia and their spend per trip has grown 6.1% p.a. over the past 10 years; significantly faster than the 3.7% p.a. average for Asian visitors of all ages.

As a higher spending cohort, Asian Millennials present a significant opportunity for Queensland.

Figure 6: Rates of repeat visitation by Asian visitors, by age (excluding education purpose of travel)

Source: Deloitte Access Economics (2016) Tourism Research Australia, International Visitor Survey, 2015

21

22

Queensland Asia Tourism Strategy 2016-2025

Figure 5: Major city market snapshot: population, average income and aviation activity

6.3.1 Asian Millennials Currently there are 1 billion Asian Millennials, of which the majority reside in China and India. This group are expected to drive the next wave of tourism growth. Before entering their prime income generating years, Asian Millennials account for almost 35% of the $600 billion that Asians spend on international travel. Their travel spend is expected to increase to $340 billion by 2020.18 Travel spend varies across the Asian markets, reflecting different travel preferences and behaviour. The Chinese are the largest spenders and prefer ‘big name’ destinations. Indian travellers are second to Chinese in their spend per trip. They tend to stay in cheaper accommodation and spend more on flights and food. In comparison the Indonesians and Singaporeans are deal seekers.

Indonesian travellers in particular opt for budget airlines and accommodation. There are a number of characteristics common to Asian Millennials.

•• These travellers have a desire to have greater control and autonomy over their travel experience: to be able to do what

they want, when they want it. They prefer FIT, with strong aversion to highly regimented, ‘military style’ schedules that cram as many attractions as possible into a single day.

•• They gather as much information as possible from a range of sources in their travel planning. They draw on recommendations by family members, magazines, newspapers, travel agents, online travel reviews and social networking sites.

•• Although highly brand conscious they have limited brand loyalty. User reviews rather than brands are considered to offer greater familiarity and reliability in their travel decisions.

•• They enjoy sharing their experiences in real time with social media and having others comment. Travel to Asian Millennials signals social status so posting pictures allows them to brag and increase their standing. Travel blogs are an increasingly popular channel for planning and sharing their travels.

Spotlight on the Chinese millennial

Independent Free and independent travellers that are no longer representative of the traditional Chinese organised tour groups. “Our marketing, distribution and partnership strategies are now all geared towards targeting this new breed of young, independent travellers with the desire and financial means to explore our country.”

Source: John O’Sullivan Tourism Australia MD, News.com Travel Updates Jan 2016 Fun loving Young, independent, more sophisticated, and craving fun. “Millennials are aspirational, leading to structural upside in fun related experience based spending.”

Source: Goldman Sachs Chinese Tourist Boom Report Nov 2015 Global International travel has become a regular part of life and brings “bragging rights”.

“Over the next decade, 74 million Millennials at Chinese universities are set to graduate; we think they will look to travel overseas in large numbers as they are well informed.”

Currently only 4% of Chinese have a passport, this will quadruple in the coming decade.

Source: Goldman Sachs Chinese Tourist Boom Report Nov 2015 Experiential Actively seek out unique, exciting and original experiences and destinations – Desire to live like the locals against the ultimate selfie backdrop. “For the Chinese, travel has become…a powerful lifestyle statement” Source: COTRI Market Report Spring 2016 Digital natives Incredibly engaged with the internet and social media and will gather and share travel info online. 61% of younger Millennials used their mobiles to plan and book trips in 2015 vs 17% in 2014 Source: Hotels.com Wealthier university educated and with strong earning potential, Millennials are high spending travellers. Between 2010 and 2014, 55% of all Chinese visitor expenditure in Australia was spent by 15-29 year olds, although they only made up 28% of arrivals.

Source: TRA IVS Connected Popular social networks (wechat and sinaweibo) are extensively used to share travel pictures, stories & recommendations. “More than 90% of Chinese internet users have a social media account. Microblogging platform Weibo has 50 million daily active users”.

Source: COTRI Market Report Spring 2016

18

Source: Asia Travel Leaders Summit (2013) Capturing the Asian Millennial Traveller.

23

Visitor lifetime value Linked with identifying potential segments is leveraging their lifetime value. Chinese visitors to Australia, for example, contribute economically beyond their initial tourism visit. Respondents to a recent survey commissioned by the Australia-China Business Council said they have pursued, or are likely to pursue the following: •• repeat visitation – 73%;

If Asian travellers visit and engage with Queensland at a younger age, this will increase their likelihood of involvement in these activities. By attracting young Asian visitors to study in Queensland, for example, there is potential to encourage repeat visitation and create loyalty for Queensland, not only among the students but friends and families. Being more socially and digitally connected, these younger travellers can also have a greater wordof-mouth and ‘word-of-mouse’ impact in promoting a destination.

•• tertiary education – 74%; •• real-estate investment – 48%; •• business investment – 41%; and •• purchasing Australian goods and services in China – 24%

Women as decision-makers for travel Women in the Asian household tend to be the primary decision-maker with regard to holiday planning and travel. Analysis from Mintel suggests that more women, on average, influence family financial decisions compared to men. In addition, surveys and analysis conducted for Expedia, Contiki and Trafalgar Tours have shown that women are more interested in travel and actively save more of their resources for travel.

TripAdvisor surveyed female travellers from Asia and found that half of those surveyed made all of the decisions and bookings for family trips. The survey also found that short-haul travel was preferred by women and that safety was a top priority in decision-making.

According to qunar.com, the world’s largest Chinese-language online travel search engine, Chinese Millennial women now have more time and money for travelling and have strong purchasing power. The amount spent on travel by ‘well educated and well-paid’ single Chinese women has risen 20% year-on-year, eclipsing the 9% rise in the same figure for men. Women are significantly more vocal regarding their holiday experiences; being responsible for 70% of comments on hotels left of the qunar. com website.

The influence of Asian women on travel decisions highlights the importance of ensuring Queensland’s experiences and marketing communications resonate with this audience.

24

Queensland Asia Tourism Strategy 2016-2025

24

6.4 The competition visitor arrivals and expenditure. Hawaii, Fiji and the Maldives with their similar climate and natural environments are direct competitors for Queensland. Compared to the less developed tropical destinations, Queensland (and Australia more generally) is favoured for its good safety record and well developed infrastructure without overcrowding and pollution. Western countries including USA, New Zealand, France, Italy, Germany and Switzerland are also highly sought after destinations for Asian consumers. Currently USA and Europe outrank Australia in attracting Asian outbound visitors, as illustrated in Figure 7.

Within Australia, competition for Asian visitors is focussed around the capital city experiences in Melbourne and Sydney and the nature based experiences aligned to those destinations such as the Great Ocean Road, Philip Island, Sydney Harbour, the Blue Mountains and the Hunter Valley. Beyond the cities, Uluru in central Australia entices Asian visitors to explore Australia’s ancient landscape.

Globally, competition for the Asian outbound market is strong, with many other countries vying for their share of

Figure 7: Top 5 destinations for outbound travel beyond Asia

China

6.7%

17.6%

Japan

32.0%

South Korea India

11.6%

26.7%

5.8%

8.0%

6.6%

11.4%

37.8%

HK SAR

24.3%

Malaysia

0.0%

5.5%

8.1%

7.5%

9.0%

28.2%

Singapore

Taiwan

10.2%

5.8%

5.3%

4.8%

7.0%

6.4%

15.4%

14.7%

19.2%

39.3%

9.9%

11.4%

18.3%

8.0%

8.1%

16.9%

19.2%

56.8%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

4.8%

4.6%

8.2%

5.2%

5.9%

70.0%

9.4%

80.0%

Australia

USA

UK

France

Italy

Germany

Spain

Switzerland

Turkey

Croatia

Canada

New Zealand

90.0%

Source: UNWTO (2016) Tourism Statistics Database

25

Confidential

7.0 QUEENSLAND’S TARGET MARKETS 7.1 Defining our targets Based on Deloitte Access Economics’ 2016 Asia Strategy Research and TEQ market intelligence, Queensland’s target markets in Asia have been identified and segmented into nine nations/regions, their major cities and life stage groups. These have been selected on their ability to move Queensland beyond business as usual and grow OVE. The key markets and segments are summarised as follows: •• Millennials (people born from 1981 to 1995) are the primary demographic – They are travelling outbound in large numbers, spend more and explore more, bring friends and will stay engaged with Queensland long after their first visit.

•• Mid-working (aged 35-49) and older travellers (50+) – These are important segments for Queensland to capture the full potential of Asian long-haul outbound travel.

•• FIT – These are a growing segment out of Asia. With their propensity to travel beyond the gateway cities, FITs will be important for increasing regional dispersal.

•• Women – have been identified as a target for marketing initiatives as they are highly influential in travel decision making.

•• China is the cornerstone source market in Asia – China comprises a third of the Asian long-haul outbound market in 2014, and is expected to increase to nearly half by 2024. The scale and immediacy of this market is a significant growth opportunity for Queensland, requiring focussed effort to ensure its potential is met. Millennials and 35-49 year olds are the priority segments within key established (Tier 1) and developing (Tier 2) cities identified as offering the potential to generate the greatest return on investment for Queensland.

26

Queensland Asia Tourism Strategy 2016-2025

•• Japan and South Korea should be more dependable sources of visitation – Counting for 44% of all outbound travel beyond Asia, they have been looking elsewhere in recent years. The task is to reconnect them with Queensland.

•• India and Indonesia are the longer-term opportunities – They are less urgent, but will be important to the long-term prosperity of the state’s visitor economy. Efforts in these markets can build over coming years, starting with new air routes.

•• Singapore, Malaysia, Taiwan and Hong Kong SAR China – Mid-sized, but notable success stories for Queensland, the state has a commanding position in these medium to longhaul travel markets.

The target markets will be reviewed annually to ensure efforts are focused on those markets that maximise Queensland’s return on investment.

The rationale or criteria for targeting certain segments is based on the following: •• projected to be the largest yielding markets in the next 5-10 years; •• represent a diverse portfolio of outlooks; •• preferences which best align with what Queensland has to offer; •• segments that are easily reachable and will be our next ambassadors in local markets; and •• are measureable.

Figure 8 provides an overview of the target markets, their travel group and purpose, time frame for action and the market strategy.

27

Established (Tier 1) city: Taipei

People born between 1981 and 1995 i.e. in 2016: 21yrs - 35yrs

Asia Market Priority 1

Asia Market Priority 2

P1

P2

Established (Tier 1) city: Kuala Lumpur

Millennials

Key

This matrix will be reviewed annually

Taiwan

Malaysia

Win Share

Established (Tier 1) region: Hong Kong SAR

Hong Kong SAR

Win Share

Win Share

Established (Tier 1) city: Singapore

Established (Tier 1) cities: Jakarta, Surabaya

Indonesia

P2

50 years and over

Families P2

P2

P1

P1

P1

P2

ü

Honeymooners P2

P2

ü

P1

ü

P2

P1

P1

P1

P1

P2

ü

ü

P1

P1

P2

ü

ü

P1

P1

Couples

ü

ü

ü

ü

P2

P2

ü

P2

P1

ü

P2

P2

ü

ü

ü

ü

ü

P2

ü

ü

P2

P2

P2

P2

ü

P2

P2

P2

P2

P2

P2

ü

ü

ü

P1

P1

P1

P1

P1

P1

P1

P1

P1

P1

P1

P1

P1

P1

S

S

S

S

S

M

S

S

S

S

S

S

Timeframe

L

M

M

M

M

M

M

L

Women have also been identified by DAE as highly influencial, both with regard to decision making and in terms of traveller numbers, especially in China. Women as a target audience is a gender, rather than a travel group and has therefore been omitted from this table. It must be noted that Women are an important area of focus and has been reflected in the broader strategy

P2

P1

P2

P1

Group

Women

P2

P2

P2

P2

P1

P1

P1

P1

P1

P2

P1

P2

Education

*Millennials and FIT are key focus segments and FIT groups identified by DAE in the 2016 Asia Strategy Research Segments, Travel group, Travel Purpose and Timeframe overlayed into this target market table have been identified by TEQ head office and in-market intel as of 2016

P1

P1

P1

P1

P2

P2

35-49 years P1

Friends

Travel Purpose

Short Term (2016-2019)

*Millennials and FIT

Notes

Developing (Tier 2) cities: Hyderabad, Kolkata, Ahmedabad, Pune, Kochi, Chandigarh, Amritsar, Jaipur

India

Grow

Singapore

P2

Established (Tier 1) cities: Delhi, Mumbai, Bangalore, Chennai

India

Grow

Grow

P2

Developing (Tier 2) cities: Busan, Daegu

South Korea

Grow

Win Share

P2

Established (Tier 1) cities: Seoul

Accelerate

P1 P1

South Korea

Established (Tier 1) cities: Tokyo, Osaka

Developing (Tier 2) cities: Nagoya, Fukouka

P1

Established (Tier 1) cities: Shanghai, Beijing, Guangzhou, Shenzhen

Japan

China

Accelerate

P2

Developing (Tier 2) late adopter cities: Shenyang, Qingdao, Ningbo, Chongqing, Fuzhou, Foshan, Dongguan, Dalian, Xi'an, Changsha, Zhengzhou, Kunming

Japan

China

Accelerate

P2

Developing (Tier 2) early adopters cities: Hangzhou, Nanjing, Chengdu, Tianjin, Xiamen, Wuhan

Grow

China

Accelerate

FIT*

Travel Group

VFR

Age Group

MICE

Geography

Millennials*

Accelerate

Country

Strategy

Leisure

Figure 8: Queensland’s Asian Target Markets 2016-2025

Medium Term (2019-2022)

QUEENSLAND'S ASIAN TARGET MARKETS 2016-2025 Long Term (2022 - 2025)

7.2 Target market strategies Based on volume, maturity, air access, and scope to increase Queensland’s market share, the nine nations/regions are prioritised according to three strategies as follows:

Grow

India & Indonesia

Win share

Singapore, Hong Kong SAR, Taiwan & Malaysia

Investment will seek to win market share from these mature markets where Queensland has a stong presence

Investment will build foundations for the midlong term growth with modest growth in the short term

Accelerate

China, Japan & South Korea

With increased investment these markets have the potential to grow at a much faster rate

TEQ’s current budget allocation largely aligns with these priorities, requiring only a slight shift of investment.

The mix of mature and emerging markets and targeted strategies will position Queensland to grow Asian visitor arrivals to 1.62 million overall by 2025 and reach the target of $6.867 billion OVE.

28

Queensland Asia Tourism Strategy 2016-2025

7.2.1 Accelerate The intent of the Accelerate strategy is to boost the increase in Queensland’s share of long haul visitors from three key markets: China, Japan and South Korea faster than would have otherwise been realised under business as usual activity.

visitors represent 42.3% of Queensland’s Asian visitors.

China

The cornerstone source market in Asia, China represented around a third of all outbound trips beyond Asia in 2014, and is expected to grow to around 43-45% of long-haul outbound by 2024. Currently, Chinese

China is also the highest yielding source market; with visitors to Australia averaging $6,372 spend per trip, 40% more than the Asia-wide average.19 Chinese outbound tourism spending growth has been staggering – 45% p.a. over the past five years, equating to 530% cumulative growth, as illustrated in Figure 9). These figures exceed even bullish projections of outbound visitation a few years ago.

TEQ’s target markets in China comprise established (Tier 1) cities and developing (Tier 2) cities.

China Market Accelerate: Early adopter developing (Tier 2) cities – Hangzhou, Nanjing, Chengdu, Tianjin, Xiamen and Wuhan Accelerate: Late adopter developing (Tier 2) cities – Shenyang, Qingdao, Ningbo, Chongqing, Fuzhou, Foshan, Dongguan, Dalian, Xi’an, Changsha, Zhengzhou and Kunming Age group: 35-49 years and Millennials Travel group: Group and FIT Travel purpose: Leisure and Education Accelerate: Established (Tier 1) cities – Shanghai, Beijing, Guangzhou and Shenzhen Age group: Millennials and 35-49 years Travel Group: Couples, Fit Travel purpose: Leisure, Education, VFR and MICE

Figure 9: Global outbound international expenditure, 1995-201520

Established: The Tier 1 cities are Shanghai, Beijing, Guangzhou and Shenzhen. They continue to be a key part of TEQ’s marketing efforts in China as they have large populations, the highest GDP in China and the most direct flights to Australia. Travellers from Tier 1 cities are well-educated, open minded, sophisticated and are generally repeat visitors to Australia. FIT will be the main focus for these regions, with groups a secondary focus.

Developing (early adopters): Six of China’s Tier 2 cities are identified as early adopters. These are cities presenting a significant opportunity for Queensland to increase OVE, particularly from Millennials and 35-49 year olds, travelling primarily as FITs. The cities are Hangzhou, Nanjing, Chengdu, Tianjin, Xiamen and Wuhan.

Developing (late adopters): 12 cities are identified as late adopters as they are currently strong, growing group travel markets.

The opportunity for Queensland is to create a shift towards FIT over time. These cities include: Shenyang, Qingdao, Ningbo, Chongqing, Fuzhou, Foshan, Dongguan, Dalian, Xi’an Changsha, Zhengzhou and Kunming.

Source: Deloitte Access Economics (2016) UNWTO’s tourism barometer chart13 19

OVE specific figures were not available Data for Japan was not available

20

29

Introducing the new growth opportunities – the early adopters •• Tianjin – the capital city of Tianjin province has high regional wealth, a considerable population of 11 million people and aviation connectivity. The largest coastal city in northern China, it has a similar climate to Queensland.

•• Hangzhou – the capital city of Zhejiang province has a population of 6.2 million people, considerable regional wealth, and with an international airport, aviation connectivity. It is close to Shanghai and is a hub for development of green technology.

•• Chengdu – the capital city of Sichuan province has a population of 7.4 million people, considerable regional wealth and is a key inland aviation hub and region of economic growth for China. The number of airline services with linkages into Queensland is increasing. The Chengdu Tianfu International Airport, a USD $12 billion investment, is due to open in 2020. It will be the second largest airport after the new Beijing airport. This development will be transformative for the international connectivity of the region.

•• Nanjing – the capital city of Jiangsu province has a population base of 7.1 million people, is close to Shanghai and has international airport and aviation connectivity (China Eastern has a direct service from Nanjing to Sydney) with great potential for further development.

•• Xiamen – the gateway city of Fuzhou province has a population of 3.5 million people, aviation connectivity and China’s headquarters for SilkAir. Xiamen Airline provides a direct service from Xiamen to both Sydney and Melbourne. Direct services to Australia continue to grow, with most of the group tour itineraries including Queensland experiences. Xiamen also has direct services to Europe.

•• Wuhan – the capital city Hubei province has a population of 9.8 million people and is centrally located in China with good connectivity to surrounding provinces, including: Jiangxi, Anhui, Hunan, Henan, Guizhou. Currently Jetstar Gold Coast operates from Wuhan. Based on Gross Domestic Product, the city is ranked as one of China’s top ten cities for the first quarter of 2016.

Figure 10: Segmentation of opportunity: value vs growth

GROWTH PROSPECTUS:

High

China: Tianjin, Huanzhou, Chengdu, high-income Tier 2 cities India: Delhi, Mumbai, Bangalore Vietnam: Hanoi, Ho Chi Minh Indonesia: Jakarta

China: Guangzhou, Shanghai, Beijing Education travel Millennial leisure travel

Low

Malaysia: Kuala Lumpur Thailand: Bangkok, Chon Buri Philippines: Manilla

Japan: Tokyo, Osaka, Yokohama Korea: Seoul, Busan Taiwan Hong Kong Singapore

Low

High

CURRENT MAGNITUDE:

30

Queensland Asia Tourism Strategy 2016-2025

Japan

While China will dominate the outbound travel growth and expenditure over the next 10 years, a diversified portfolio of target segments is essential as the China market matures. Japan and South Korea offer the potential of large, stable volume visitor growth if these markets reconnect with Queensland and are inspired to return.

While Japanese travel beyond Asia has declined 10% since 2005, travel to Queensland has fallen 65% as many of these visitors have chosen other destinations, as illustrated in Figure 11.

Despite the long term downward trend in Japanese visitation to Queensland, there has been an encouraging increase in Japanese visitor arrivals in the year to March 2016. This has been supported by the introduction of a daily Tokyo-Narita to Brisbane service in August 2015. Currently, Japanese visitors represent 16.9% of Queensland’s Asian visitors. Japan is a reasonably high-yielding market, with visitors spending an average of $4,500 per trip.21

Japan Market Accelerate: Established (Tier 1) cities Tokyo and Osaka Age group: Millennial and 50+ Travel group: Couples, FIT and Group Travel Purpose: Leisure, VFR, Education and MICE Accelerate: Established (Tier 2 ) cities Nagoya and Fukouka Age group: Millennial and 50+ Travel group: Couples and FIT Travel Purpose: Leisure, VFR, Education

Figure 11: Japanese travel trends, 2005-2015, and Queensland market share

(LHS)

Source: UNWTO, TRA IVS and Deloitte Access Economics (2016) Note: the percentages represent Queensland’s market share of total trips beyond Asia in 2005 and 2014

Alongside Millennials, another important target segment is Japanese retirees. They are online, travelling, and growing in number. In 2012, the first baby boomer Japanese generation reached 65 years old. Since then the number of retirees has continued to grow. This has led to an increase in overseas travel by seniors. Currently, 63% of Japanese aged 65 plus use the internet regularly, up from 37% in 2008. They still rely on word of mouth, printed media and travel agents for information and final guidance on booking decisions.

21

OVE specific figures were not available

31

visitor arrivals, as highlighted by Figure 12.

As an ‘accelerate’ market the intention is to leverage the South Korean market’s air access, spending capacity and propensity

Age: 35-49 years and Millennials

share and in turn grow OVE.

Travel Group: FIT, Group, Families, Friends and Couples

a relatively high yielding market with

Together with Japan, these visitors account for 44% of all outbound travel beyond Asia.

Accelerate: Established (Tier 1) cities – Seoul

to travel to increase Queensland’s market

Similar to Japan, South Korea is

South Korea

South Korea Market

South Koreans averaging $6,000 per trip.22 Currently, South Korea represents 5.7% of Queensland’s Asian visitor market.

Travel Purpose: Leisure, VFR, Education and MICE Grow: Developing (Tier 2) cities – Busan and Daegu Age: 35-49 years and Millennials

The number of South Korean visitors to

Target segments of South Korean

Queensland has plateaued over the past

visitors include 35-49 year olds,

decade, while other destinations beyond

Millennials, friends and FIT travelling for

Travel Group: FIT, Friends, Families and Group

Asia have steadily grown South Korea

leisure and education.

Travel Purpose: VFR and Leisure

Figure 12: South Korean travel trends, 2005-2015, and Queensland market share

Source: UNWTO, TRA IVS and Deloitte Access Economics (2016) Note: the percentages represent Queensland’s market share of total trips beyond Asia in 2005 and 2014

22

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OVE specific figures were not available

Queensland Asia Tourism Strategy 2016-2025

7.2.2 Grow India and Indonesia are growing visitor markets that as they mature will offer Queensland new opportunities to increase OVE.

As part of the grow strategy the focus will be on improving aviation access. This market is expected to move to ‘accelerate’ over the medium term.

Target market segments offering the greatest potential out of India include 35-49 year olds, Millennials, families, honeymooners, travelling for leisure, incentives and education.

India

Based on current trends and the limited air access, India is expected to be a medium term opportunity with slow, steady growth prospects. Despite its large population, India is still an immature market for travel beyond Asia. Currently, India represents 5.6% of Queensland’s Asian visitor market.

Indians travel to Australia as FIT, group, VFR, incentive visitors and international students.

There is potential for steady growth in the target market segments outlined in this strategy. By increasing the Indian market to Queensland, the industry has the opportunity to reduce seasonality. Indians traditionally travel during Queensland’s low season (April June) and December.

proximity and swelling ranks of relatively high-income households. 35-49 year olds and Millennials are the key target segments.

Currently, Indonesia represents 1.6% of Queensland’s Asian visitor market.

Indonesia Like India, Indonesia is still considered an immature market presenting a mediumlong term opportunity. Queensland is well positioned to capitalise on its geographic

Although Indonesia is a relatively immature market, Tourism Australia has tipped Indonesia for strong growth in FIT and Incentives travel. Similar to the Indian market, Indonesian visitors will be important in reducing seasonality. They tend to travel during the festival of Lebaran at the end of June, the low season for Queensland destinations and in December.

India Market

Grow: Established (Tier 1) cities – Delhi, Mumbai, Bangalore and Chennai Developing (Tier 2) cities – Hyderabad, Kolkata, Ahemdabad, Pune, Kochi, Chandigarh, Amritsar and Jaipur Age group: 35-49 years and Millennials Travel group: Families, Honeymooners, FIT and Group Travel purpose: Leisure, MICE and Education

Indonesia Market Grow: Established (Tier 1) cities – Jakarta, Surabaya Age group: Millennials and 35-49 years Travel group: FIT, Families, Friends, Couples Travel purpose: Leisure and MICE

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7.2.3 Win share Singapore, Hong Kong SAR China, Taiwan and Malaysia are mature markets where Queensland has strong appeal and has the potential to grow OVE by increasing market share from other Australian destinations.

Singapore, Hong Kong SAR China, Taiwan and Malaysia Combined, they represent 22.5% of inbound Asian visitors. Relatively stable economically, with established aviation links into Queensland, they represent sound growth potential for Queensland. The focus will be on consolidating Queensland’s position in these markets to increase share and OVE.

Singapore Market Win Share: Established (Tier 1) cities – Singapore Age group: 35-49 years and Millennials Travel group: FIT, Families, Friends, Couples Travel purpose: Leisure and MICE

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Hong Kong SAR China Market

Taiwan Market

Win Share: Established (Tier 1) cities – Hong Kong

(Tier 1) cities – Taiwan

Age group: Millennials and 35-49years Travel group: FIT Travel purpose: Leisure and Education

Queensland Asia Tourism Strategy 2016-2025

Win Share: Established

Age group: Millennials and 35-49years Travel group: FIT Travel purpose: Leisure, MICE and Education

Malaysia Market

Win Share: Established (Tier 1) cities – Kuala Lumpur Age group: Millennials and 35-49years Travel group: FIT, Families and Group Travel purpose: Leisure, MICE and Education

7.3 The potential of the target segments Across the target countries, the priority segment is Millennials as they are travelling outbound in large numbers, spend and explore more and predominantly travel as FITs. Consumers aged 35-49 years and 50+ are the next major targets. Women are a significant target segment from a marketing perspective.

Figure 13 below illustrates the indicative growth potential of key market segments for Queensland. Some are unpacked further to understand the potential they present for Queensland. The established Group Tours and Visiting Friends and Relatives (VFR) segments continue to remain important for Queensland.

Figure 13: Asian Market Segments

VFR Group Tours Millennials

Education

Business Events Free Independent Traveller (FIT)

High Net Worth

Women

7.3.1 Millennials The millennial visitor is a young, sophisticated, independent traveller seeking unique, exciting and original experiences and destinations that have brag-ability. Their main reasons for travelling are leisure (91%), business (43%), with almost one in five visiting friends or relatives. As noted in section 6.3, Asia is an important source of these visitors for Queensland. Millennials may have already travelled to Australia as international students. Already comfortable with the country, these travellers have the potential to be drawn back to explore and engage on a deeper level. The Millennial travellers with their desire to fully immerse themselves into new cultures and feast on local cuisine are a significant opportunity for Queensland.

7.3.2 FIT Asian FITs present significant opportunity for the state. These are high yielding visitors with a propensity to travel beyond the gateway cities into the regions to discover quality, uniquely Queensland experiences in their own way and pace. Queensland’s natural icons, outdoor lifestyle and the ability to explore them within a safe environment are key attractions.

As with all Asian travel markets, the FITs have diverse needs and travel preferences. Tailoring products and experiences will be essential in Queensland’s regions growing this market. Millennials and women are significant subsets of the Asian FIT market.

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7.3.3 Women From a marketing perspective, Asian women are an important target group for Queensland as they have been identified by Deloitte Access Economics as highly influential in travel decision making, particularly in China. Women are earning more, spending more and exerting greater influence on all levels of the travel industry. They also are increasingly travelling solo. In targeting women, the industry will need to ensure marketing messages and the experiences offered resonate with women and meet their needs and preferences distinct from a male audience. Currently Australia is attracting a higher proportion of women than men for short term stays.

7.3.4 Education The education visitor market presents strong growth prospects for Queensland. In 2015, there were 103,251 international student enrolments in Queensland, representing 16% of the Australian total. The economic growth of the Asian region is expected to have a major influence on the international student markets. The top 10 source markets for Queensland are illustrated in Figure 14.

By 2026, six of the eight top source markets for international education are expected to be from Asia: China, India, South Korea, Nepal, Vietnam and Japan. These markets are forecast to make up 56% of the total enrolments in Queensland.23 International students are sourced from Higher Education, Vocational Education and Training (VET), the English Language Intensive Course for Overseas Students (ELICOS) sectors and in private and state primary and high schools. Queensland is also popular with students not on student visas, particularly those in ELICOS courses and study tours.

In attracting Asian students to Queensland the historical connection to Australia’s early settlement can be drawn on, particularly for Chinese students. Australia is not an unknown destination for Chinese students and their parents. Choosing to study and travel in the state provides the opportunity to follow in the footsteps of their ancestors and explore and learn about Chinese migrant settlement in colonial Australia.

In reaching and engaging international students, online and social media are critical.

These digital natives are increasingly drawing on digital content in their travel planning. In the destination they are taking advantage of online services such as Uber. Currently 25% of Chinese students in Australia use Uber.

23

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Figure 14: Top 10 Queensland International Education and Training Source Markets

TOP 10 QUEENSLAND SOURCE MARKETS 2015 CHINA

19,250

1 INDIA

12,711

2 BRAZIL

7,102

3 SOUTH KOREA

6,607

4 TAIWAN

4,356

5 JAPAN

4,124

6 COLOMBIA

3,949

7 HK SAR

3,066

8 USA

3,057

9 MALAYSIA

2,924

10

The other 38% of the international student visa enrolments are from over 150 other countries around the world Source: The and imperative for for Queensland’s international education and training sector, Source: Theopportunity opportunity and imperative Queensland’s international education and training Deloitte Access Economics, May 2016 sector, Deloitte Access Economics, May 2016

Source: Queensland Government (2016) Draft International Education and Training Strategy to Advance Queensland 2016-2026.

Queensland Asia Tourism Strategy 2016-2025

Student Visa Enrolments

7.3.5 Business events Business events is one of the highest yielding sectors in Australia’s visitor economy and has the potential to contribute $16 billion annually by 202024. As trade and investment links between Asia and Queensland continue to grow, the business travel market will become increasingly important in driving yield and volume to Queensland. Business events, or the MICE (Meetings, Incentives, Conferences and Exhibitions) industry as they are known in Asia, can be a key driver of economic growth, regional cooperation and intellectual development. Growing the MICE segment to Queensland will bring benefits beyond profits and short term jobs—adding competitive advantage to Queensland’s destinations, diversifying source markets and engaging both hosts and delegates in global, regional and local issues.

7.3.6 High net worth individuals Across Asia, rising incomes are creating an increasing number of middle class consumers with wealth to spend. Much of the growth is coming from China. Currently, China has a middle class of 146 million people and an additional 1.4 million in the upper middle class —China’s wealthiest citizens25. Chinese High Net Worth Individuals (HNWIs) are those with wealth equivalent to $1.6million and who spent $30,000USD or more on travel in the past 12 months. These individuals are around 40 years old, married, with a 13 year-old child. For these ‘super travellers’ Australia is a favourite destination for leisure. They tend to spend $10,300 USD per person/trip. The majority stay nine days, with 48% staying 9-15 days.26 India has another increasing pool of middle class consumers, although much smaller at around 50 million people, or 5% of the population. India’s middle class is expected to grow steadily over the next decade, reaching 200 million by 2020.27 Queensland is well positioned to capitalise on the desire of affluent Asian citizens to travel. Outbound growth from Asia also includes increasing numbers of low value, high volume groups. In targeting market segments, Queensland must strike the right balance between low value high volume groups and higher yielding markets to ensure the sustainability of the tourism and events industry.

7.3.7 Asian multicultural communities in Australia Alongside the other target segments, an additional market is the migrant Asian communities living in Australia. These communities are both domestic consumers and significant influencers of the travel decisions of friends and relatives in their birthplace. With strong links back to Asia, these communities can build Queensland brand awareness, improve the reach of domestic marketing activity, and encourage increased VFR travel.

In the 2011 Census, there were 5.3 million migrants in Australia, which means one in every four (26%) Australian residents were born overseas. After the United Kingdom and New Zealand, the largest migrant populations were China (319,000 people), India (295,000), Italy (185,000) and Vietnam (185,000).28 Beyond Australia’s early settlement period, contemporary migrants born in China and India are relatively new arrivals to the country, with migration only growing in significance in recent decades. Both migrant groups live predominantly in Sydney and Melbourne.

Source: Australian Bureau of Statistics (2014) Australian Social Trends.

Source: Tourism Australia (2013) Tourism 2020 Potential Business Events.

26 Source: Goldman Sachs (2013) Global Investment Research.

27 Source: Hurun Travel Research (2015) The Chinese Luxury Traveller.

28 Source: Ernst and Young, 2013, Hitting the sweet spot - The growth of the middle class in emerging markets 24

25

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Confidential

8.0 QUEENSLAND EXPERIENCES AND THE ASIAN MARKET 8.1 The experience aspirations of the modern Asian traveller Today’s consumers live in a global market with a myriad of tourism destinations to choose from, where time is in short supply, where the joy of travel is frequently supplanted by the purchase of a new electronic gadget, and where there are lots of opportunities for interaction, but few for meaningful connections. Discerning travellers are looking to get beyond superficial activities in search of more meaningful and enriching experiences they’ll never forget. As increasingly independent travellers, they are seeking to enjoy these experiences with locals and travellers from other countries rather than only with their Asian peers.

Experienced travellers from Asia are choosing to explore more exotic destinations that are authentic and unique. The most important factors for Asian consumers in selecting a holiday destination, ranked in order of importance are: 1. Safety and security 2. Proximity – international and regional 3. Attractions 4. Good food, wine, local cuisine and produce 5. World class beauty and natural environments 6. Price of destination/value for money 7. World class coastlines, beaches and marine life 8. Rich history and heritage 9. Family friendly destination 10. Friendly and open citizens, local hospitality29 The following is a summary of the priority factors for Asian source markets and the Australian features that have the greatest appeal for these visitors (Figure 15).

29 Based on Deloitte Access Economics’s desktop research and consultation and Tourism Australia’s international consumer research study: The Consumer Demand Project, 2016.

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Queensland Asia Tourism Strategy 2016-2025

THE EXPERIENCE ASPIRATIONS PER MARKET Figure 15: The Experience Aspirations per market 30 Source: Deloitte Access Economics, 2016

ACCELERATE

CHINA Aspirations

JAPAN Aspirations

SOUTH KOREA Aspirations

Beauty and natural environments

Local cuisine and product

Local cuisine and product

Interesting attractions

Interesting attractions

Beaches and marine life

Rich history and heritage

Beauty and natural environments

Travel essentials Safety and security

Safety and security

1.

2.

3.

4.

5.

USA

France

11.6%

Italy

10.2%

Safety and security

Germany Australia

8.1%

USA

6.7%

42%

France

9%

Great Barrier Reef Wildlife Beaches Food & wine Natural beauty

Italy

7.5%

Value for money

Greatest appeal 1.

2.

3.

4.

5.

What are their current top markets to travel to?

What are their current top markets to travel to?

17.6%

Travel essentials

Greatest appeal

Coastline Great Barrier Reef Wildlife Food & wine

Interesting attractions

Local cuisine and product

Travel essentials

Greatest appeal 1.

2.

3.

4.

Beauty and natural environments

Germany

5.8%

Natural beauty Wildlife Food & wine Unspoilt wilderness Beaches

What are their current top markets to travel to?

Spain

USA

5.3%

26.7%

Spain

8%

Turkey

6.6%

Italy

5.5%

Croatia

4.8%

GROW

INDIA Aspirations Beauty and natural environments

INDONESIA Aspirations Beauty and natural environments

Interesting attractions

Travel essentials Family friendly

Beaches and marine life Safety and security

Travel essentials

Value for money

Friendliness and openness Safety and security

Greatest appeal 1.

2.

3.

4.

Coastline Wildlife Great Barrier Reef Island experiences

What are their current top markets to travel to?

USA

28.2%

30

UK

11.4%

Italy

7%

Switzerland Australia

6.4%

5.8%

1.

2.

3.

4.

5.

6.

Greatest appeal

Beaches Visiting different destinations Wildlife Cities Island experiences Great Barrier Reef

What are their current top markets to travel to?

Australia

27.2%

USA

17.4%

Turkey Netherland Switzerland

9.5%

7.4%

6.9%

Research did not extend to Hong Kong SAR China and Taiwan

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THE EXPERIENCE ASPIRATIONS PER MARKET Source: Deloitte Access Economics, 2016

WIN SHARE

MALAYSIA Aspirations

SINGAPORE Aspirations Local cuisine and product

Interesting attractions

Family friendly

Interesting attractions

Travel essentials Beauty and natural environments Safety and security

Travel essentials

Value for money

Friendliness and openness

Safety and security

Greatest appeal 1.

2.

3.

4.

Greatest appeal

Great Barrier Reef Food & wine Natural wilderness Wildlife

1.

2.

3.

4.

What are their current top markets to travel to?

Australia

37.8%

UK

18.3%

USA

15.4%

Switzerland New Zealand

8%

Value for money

4.8%

Beaches Wildlife Island experiences Visiting different destinations

What are their current top markets to travel to?

Australia

39.3%

UK

19.1%

USA

9.9%

Turkey

8.2%

Switzerland

4.8%

Source: Based on Deloitte Access Economics’sdesktop research and consultation and Tourism Australia’s international consumer research study The Consumer Demand Project, 2015

8.2 Queensland brand and experiences Queensland has a unique and captivating story to tell. The following table unpacks the elements that make up Brand Queensland.

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Core Promise

Where Australia Feels Most Alive

Brand Personality

Warm, friendly, welcoming, outgoing, positive, carefree, outgoing, positive, carefree, cheeky, accepting, non-judgemental, unpretentious, down-to-earth

Brand Values

Pride in Queensland, hospitality, authenticity, creating holiday experiences that delight visitors – the holiday state

Customer Benefits

Feel connected with loved ones, friends, locals, the place, even with a deeper part of themselves. Relaxed. Happy. Energised. Rejuvenated. A Queensland holiday lets you be “the person I want to be” even if it’s only for the duration of the holiday.

Attributes

There is a huge variety and different attributes will feature depending on the communication, but some of the key ones are – beach, natural attractions, tropical islands, Great Barrier Reef, rainforest, theme parks, wildlife, events, dining and shopping.

Queensland Asia Tourism Strategy 2016-2025

Queensland’s Brand Story encapsulates the essence of what visitors can expect from their Queensland experience.

The Queensland Brand Story Queensland is everything we love most about Australia. Warm and welcoming.

Unpretentious and real. And heart-stoppingly, take-your-breath-away beautiful.

Beauty is a great place to start, of course. But looks will only get you so far. Modern travellers want something more – they don’t just want to see, they want to feel. They don’t just want to tick things off a list, they want life-affirming experiences they’ll never forget.

We’re here to show the world that Queensland isn’t just a collection of stunning locations, natural wonders and picture opportunities (although we’ve got more than our fair share of those too). You can’t get a read on us by simply flicking through a travel brochure or your friend’s holiday snaps. You have to live it. And do we know how to live.

Imagine a place humming with energy and vitality. A place that gets under your skin, that makes you feel something. A land with soul. It’s everywhere: from our sunburnt outback plains to our thriving urban laneways, our ancient rainforests to our pristine beaches and awe-inspiring Great Barrier Reef. It’s present in moments of solitude and in moments shared, an empty stretch of beach or a cheering, crowd-filled stadium.

Ours is a land with heart: where the locals are as warm as the year-round weather. Where there’s always something happening somewhere (and someone who’s happy to give you the guided tour.) Where the characters and wildlife you encounter are as much a part of the story as the land they live on.

Queensland’s not just a place to visit. It’s a place to discover. It’s not a place to sight-see.

It’s a place to feel and reconnect – with yourself, with nature, with everyone around you.

We’re not the place you used to know or think we might be.

We’re alive with possibility and promise. We’re not afraid to make bold statements because we know we’ve got the goods to back them up.

That’s why we call Queensland the best address on earth.

We’re here to inspire you – and the world – to experience it for yourselves.

Five experience pillars capture Queensland’s competitive advantages and unique style as the best address on earth. The pillars group experiences into consumer orientated categories identified in consumer research to leverage relevant destinations to the target markets. Within each pillar unique ‘hero’ experiences have been identified that deliver Queensland’s brand promise. These hero experiences offer ‘wow’, stand out moments such as sitting on the beach and looking west towards the mainland watching a breathtaking sunset over the water.

The experience pillars and their hero experiences are: •• Reef, Islands and Beaches: Great Barrier Reef, Islands, Beaches, Diving and snorkelling and Sailing •• Natural Encounters: Wildlife Experiences, Marine life experiences and Natural landscapes •• Adventure and Discovery: Theme parks, Adventure experiences, Dinosaurs and fossicking, Journey’s, Indigenous culture •• Events: State of endurance, Culinary, Home of country music, Music city, Cultural precinct, Blockbuster sporting events •• Queensland Lifestyle: Food and drink, City experiences, Local characters, Outback and country life

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8.3 Aligning the offering Queensland destinations, in particular Gold Coast and TNQ are well positioned in satisfying the key factors Asian visitors are seeking in a holiday destination. Across all of the key Asian source markets, Queensland’s hero experiences, particularly with respect to Reef, Islands and Beaches and Natural Encounters, strongly align and have great appeal. Figure 16 summarises the key experiences that have greatest association to Australia and appeal to Chinese visitors by way of example.

Figure 16: Australian Opportunity Matrix – China Market

Source: Tourism Australia (2016) Understanding the China Market

Queensland’s renowned warm, sunny climate, conservation areas and nature competitively positions the state against Australia’s eastern states on several counts. Queensland has the greatest area of rainforest and protected natural areas and the most ecotourism businesses. Wildlife encounters also are an important advantage as Queensland hosts the highest levels of biodiversity in Australia, with 85% of the nation’s native mammals and 72% of its native birds.31 The state is well regarded for its beaches and coastline, boasting the most beaches and longest coastline of the eastern states.

Queensland’s beaches – such as Whitehaven and Surfer’s Paradise – are internationally recognised.

Score card on other travel aspirations/factors While Queensland destinations’ hero experiences are major draws for Asian travellers, delivering on other travel factors important to these consumers is also vital. Building on the state’s capabilities across the following factors will ensure Queensland’s products and experiences continue to resonate strongly with the modern Asian traveller.

Safety and security: Coupled with well-developed infrastructure, Australia on the whole is generally considered a safe destination, with little distinction made between particular states or destinations, unless a particular event has occurred.

Family friendly destination: Queensland’s large concentration of theme parks is a drawcard for visitors. Ease of access and safety contributes to the perception of Queensland and Australia as a family friendly destination.

31

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Source: Queensland Department of Environment and Heritage Protection (2012)

Queensland Asia Tourism Strategy 2016-2025

Friendly and open citizens, local hospitality: Australia (and Queensland by default) has a reputation for its friendliness and laid-back approach.

Good food, wine, local cuisine and produce: Globally, culinary tourism is an integral part of the travel experience. It is a factor in holiday decision making and, can help to tell the story of a destination’s heritage, its people and landscape. It is also an important way that visitors create memories and a connection with their experience, and with their travel party, the locals and the place.

Queensland’s strength is in its fresh seasonal produce, seafood and tropical fruits which are renowned throughout Australia and showcased on the menus of many of Australia’s top restaurants.

As a state of food contrasts, Queensland provides a diverse offer and one that changes with the landscapes that visitors travel to – from 5-star dining experiences, to farmers markets, food trails, indigenous experiences and local food events.

What is common to all Queenslanders is a commitment to fresh produce, a love of the outdoors and the breathtaking natural backdrops against which food experiences are shared. Combined these elements provide the “Queensland lifestyle” a lifestyle that enriches the Queensland holiday experience.

For Asian travellers, Queensland’s significant restaurant, cafe culture and Asian food options underpinned by fresh seasonal produce and seafood, cater for those Asian visitors seeking to enjoy a blend of their home cuisine and local food on holiday.

Food events, such as the Royal Queensland Food and Wine

Show (Ekka), Taste Port Douglas and Noosa Food and Wine Festival can also add value to the Asian travellers experience whilst they are here.

Proximity: Queensland’s geographic proximity and a time zone similar to the key Asian source markets position the state favourably. The availability of non-stop flights is not an important factor for Asian visitors, although the length of travel time required and limited annual leave were can be a barrier to planning a holiday to Australia.

Value: With a high standard of living Australia is considered to be a relatively high cost travel destination. This potential obstacle to travel highlights the importance of the Queensland offering and delivering value for money visitor experiences.

Opportunities remain for the industry to focus on niche interest segments that can drive substantive business.

For example, Chinese palaeontology’s standing in world science is at an all-time high following its many recent dinosaur discoveries32. Connecting this niche industry segment to the outback dinosaur experience can deliver a new market of scale to the outback – a non-traditional Chinese market destination.

The Chinese connection to Australian history is another drawcard that can be leveraged and enhanced through investment. Opportunities to understand and engage in Australia and China’s cultural history provide a reason to travel and explore Queensland regions.

Key components of Queensland’s value proposition are the state’s natural wonders and associated nature-based accommodation, attractions and attractions, tours and Indigenous tourism experiences. Coupled with Queensland’s Aboriginal and Torres Strait Islander culture is the wonder of the ancient dinosaur discoveries and the drama and romance of the Queensland outback pioneering story. These Indigenous, dinosaur and heritage experiences, while currently not major influences for Asian markets, represent valuable growth opportunities for Queensland in adding depth and value to Queensland’s established nature-based experiences.

8.4 Destination experience delivery Queensland’s regions are a fundamental element in delivering high quality experiences to Asian visitors. The strategy’s attention is primarily on the Gold Coast, Cairns/TNQ and Brisbane as Queensland’s direct air access points with Asia.

Gold Coast and TNQ with the Great Barrier Reef are particular strengths for Queensland as they have strong awareness and offer desirable products and experiences for Asian travellers.

All three destinations enable Asian visitors to enjoy another Queensland selling point, consistently good weather.

The Whitsundays, with its luxury island resorts and sailing, is a popular honeymoon destination for some Asian markets.

Destinations providing access to the Great Barrier Reef are also attractive.

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As the Asian markets grow and mature, regional dispersal across the state is expected to increase. To maximise regional benefits, implementation of this strategy will include a focus on increasing the proportion of Asian visitors travelling beyond Queensland’s three international gateways.

Through the Attracting Aviation Investment Fund (AAIF), TEQ in partnership with DTESB is working with Queensland’s airports to increase aviation capacity into the state from identified priority markets. Each of the AAIF projects delivers a series of marketing campaigns in partnership with airline and trade partners focussed on the target audience and growing visitation. To date, new and additional flights from China and Hong Kong SAR China have been secured into the Gold Coast, Brisbane and Cairns.

Source: CNN (2015) Meet China’s Dinosaur King.

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8.4.1 Gold Coast Gold Coast is Queensland’s most popular region for Asian visitors, attracting 514,000 visitors, 49.1% of Asian visitors to the state.. The majority of these visitors are from China, Japan, Singapore and Taiwan. The Gold Coast currently captures 19% of visitor nights.

•• Cuddling a koala, feeding Rainbow Lorikeets or patting a kangaroo at a nature park

Gold Coast is Australia’s playground, with its 57 kilometres of golden sandy beaches, World Heritage-listed rainforest, awardwinning restaurants, an immense variety of things to do and a spectacular line-up of iconic events. Gold Coast experiences that have strong appeal to the priority Asian markets include:

•• Discovering the hinterland’s World Heritage listed rainforests, home to 2000 year old Antarctic Beech trees, spectacular waterfalls and is one of Australia’s premier birding areas

•• Learning to surf on one of the many pristine beaches or world famous point breaks

•• Enjoying 360 degree views from the top of one of the world’s tallest residential buildings

•• Savouring fresh seafood, local produce and Australian wines and home-grown brews at stylish restaurants and cafés and surf lifesaving clubs or having fun catching or foraging •• Teeing off on one of the many championship golf courses

•• Living like a local and taking an energising morning stroll along the beautiful beach

•• Participating in the annual Gold Coast Airport Marathon or joining the spectators to cheer the runners home

•• Breathing the pure Gold Coast air and experiencing the active and healthy lifestyle enjoyed by locals

•• Experiencing the whales in Australia’s longest whale watching season late May to early November.

•• Shopping for local treasures or world famous brands in this cosmopolitan city by the sea

The Gold Coast is working steadily with key partners to increase aviation capacity into Queensland. Currently Gold Coast receives 964 flights per annum serviced by five airlines from five Asian cities. The Gold Coast is also serviced by Brisbane international Airport (see below in 8.4.2).

•• Enjoying the thrills at one of the Gold Coast’s world-famous theme parks

Gold Coast International Airport 2016 ASIA MARKET SNAPSHOT Flights: 964 flights per annum Airlines: AirAsia X, Hong Kong Airlines, Jetstar Airways/ Alba Star.es, Qantas Airways and Scoot.

Airports: Hong Kong SAR, Kuala Lumpur, Malaysia, Singapore, TokyoNarita, Japan, and Wuhan, China.

8.4.2 Brisbane Brisbane attracts 469,000 Asian visitors, representing 44.8% of all Asian visitors to Queensland. The majority of Brisbane’s Asian visitors are from China, Taiwan, Japan and Hong Kong SAR China.

Brisbane captures the greatest share, 57%, of Asian visitor nights in Queensland. This is due to the large number of Asian students in the city. Brisbane receives 74% of visitor nights spent by Asian students in Queensland compared with 40% of holiday visitor nights from Asia.

Brisbane is a fun, youthful and savvy new world city with a myriad of cosmopolitan dining, shopping, nightlife, recreation and cultural attractions within easy reach. Brisbane experiences that have strong appeal to the priority Asian markets include: •• Exploring one of Brisbane’s urban villages, areas rich with food and wine and hinterland retreats •• Climbing the city’s iconic Story Bridge, one of the only three bridge climbs in the world •• Enjoying a swim at South Bank, Australia’s only inner-city beach •• Discovering two of the world’s largest sand islands – Moreton and North Stradbroke •• Diving, kayaking or sailing Brisbane’s Moreton Bay Marine

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Queensland Asia Tourism Strategy 2016-2025

Park – sanctuary for large population of dugong (Manatee), six different species of sea turtle, dolphin and thousands of migratory sea birds •• Interact with wild dolphin at Tangalooma Island Resort on Moreton Island •• Cuddling a koala and hand feeding a kangaroo or wild dolphin at a nature park •• Experiencing the excitement of a live show at the Queensland Performing Arts Centre or sporting events at Suncorp Stadium •• Shopping for international and boutique designer brands in the Queen Street Mall, Queensland’s premier shopping destination.

•• Explore Queensland’s largest collection of indigenous art within the impressive Gallery of Modern Art •• Discover street art, hidden treasures and mix with the locals on a Brisbane Greeters tour Brisbane is working steadily with key partners to increase aviation capacity into Queensland. Brisbane currently receives 4911 flights per annum, serviced by 13 airlines, from 10 Asian airports.

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Brisbane International Airport 2016 ASIA MARKET SNAPSHOT Flights: 4911 flights per annum Airlines: Cathay Pacific Airways, China Airlines, China Eastern Airlines, China Southern Airlines, Emirates, EVA Air, Jetstar Airways/ Alba Star.es, Korean Air Lines, Malaysia Airlines, Qantas Airways, Singapore Airlines, Thai Airways and Virgin Australia..

Airports: Hong Kong SAR, Kuala Lumpur, Malaysia, Singapore, TokyoNarita, Japan, Shanghai, China, Seoul, South Korea, Bangkok, Thailand, Denpasar-Bali, Indonesia, Guangzhou, China, and Taipei, Taiwan.

8.4.3 Cairns and the Great Barrier Reef/Tropical North Queensland TNQ is a popular region for Asian visitors, attracting 382,000 visitors, representing 36.5% of all Asian visitors to Queensland in the year ending March 2016. These are predominately from China, Japan, India and Hong Kong SAR China. Currently TNQ captures 9% of Asian visitor nights in Queensland.

In TNQ, the colourful and vibrant city of Cairns is where the two World Heritage icons of the Great Barrier Reef and the ancient Wet Tropics rainforest meet. The destination boasts a year-round outdoor lifestyle, world-class sporting events and festivals and opportunities to explore the outback, experience Indigenous culture and see native wildlife. TNQ experiences that appeal to priority Asian target markets include: •• Visiting the Great Barrier Reef with day trips and extended journeys from Cairns and Port Douglas or staying in one of the region’s spectacular tropical island resorts •• Hiking through the world’s oldest surviving tropical rainforest in the Daintree •• Journeying by historic scenic railway to the rainforest village of Kuranda and returning through the tree tops on the award-winning Skyrail Rainforest Cableway Experience •• Have a unique experience quintessentially Australian experience feeding a Kangaroo or cuddling a Koala •• Experiencing Australian Aboriginal and Torres Strait Islander culture by tours or a cultural festival •• Enjoying abundant fresh seafood and tropical fruits •• Exploring the destination on self-drive touring routes featuring a range of unique coastal and outback trails, farmgate markets and tea and coffee plantations.

Similarly to Gold Coast and Brisbane, a partnership approach in increasing aviation capacity into the state through AAIF is a major focus.

Currently Cairns receives 1225 flights per annum serviced by five airlines from seven Asian airports. Additionally 129 Jetstar Airways/Alba Star.es flights arrive into Townsville from Denpasar-Bali, Indonesia.

Cairns International Airport 2016 ASIA MARKET SNAPSHOT Flights: 1225 flights per annum Airlines: Cathay Pacific Airways, China Eastern Airlines, Jetstar Airways/ Alba Star.es, Philippine Airlines and Silkair.

Airports: Hong Kong SAR, Manila, Philippines, Singapore, Tokyo-Narita, Japan, Shanghai, China, Denpasar-Bali, Indonesia, and Osaka-Kansai, Japan.

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Case Study – Tangalooma Island Resort Background Tangalooma Island Resort is a popular family holiday destination on Moreton Island, just 75-minutes off the coast of Brisbane. The resort offers a myriad of unique adventure, educational and nature based experiences. A highlight for guests is the opportunity to hand feed wild bottlenose dolphins.

Tangalooma’s Asia journey Tangalooma has spent 20 of its 50 plus years in operation establishing and growing its reputation in Asia. From the resort’s beginnings with South East Asia and Taiwan markets — early champions for Tangalooma— the resort now attracts visitors from across Asia, including China, Japan, South Korea, India, Indonesia and Thailand.

Tailoring the experience to Asian travellers Tangalooma’s vision from the outset has been to deliver an exceptional experience for all visitors. Dedicated staff tailor product and experiences to the tastes and preferences of travellers. Since the 1990s Tangalooma has employed multilingual guest service staff who are able to minimise communication problems and ensure the experience is delivered to customers in a way that resonates with that market. Multilingual mobile phone service is available to Chinese, South Korean and Japanese guests to ensure guests feel connected and safe, day and night. Menus are tailored to suit different markets. For the India market, vegetarian meals are prepared by Indian chefs to provide customers with the choice of meal options that suit their cultural background.

Tangalooma’s product offering is vast and varied, with particular experiences resonating more with certain markets. The most popular products in each market are as follows: South East Asia

Quad bikes, Desert Safari tour and sand tobogganing

Taiwan

Desert Safari tour and Sand Tobogganing, parasailing tour, snorkelling tour

China

Whale Watching, parasailing, helicopter tour, sightseeing tours to the shipwrecks

Japan

Desert Safari tour and sand tobogganing, quad bike tour

South Korea

Desert Safari tour and sand tobogganing, quad bike tour

India

Quad bikes, Helicopter flights

Indonesia

Quad Bikes, Helicopter flights

Thailand

Quad Bikes, Desert Safari tour and sand tobogganing

A balanced portfolio of markets An important goal of Tangalooma’s business strategy is to ensure a balanced portfolio of visitor markets. Currently the source markets comprise Domestic 60%, Asian 35% and Western 5%. Within these source markets, Tangalooma targets specific market segments including families, leisure groups, business, students and FIT. Challenges and opportunities In pursuing growth out of the Asian markets, Tangalooma faces a number of challenges that are common across all markets.

As Asian travellers have a relatively short length of stay, gaining inclusion in their travel itinerary is a challenge for businesses, particularly in a competitive market. Perceptions of price and value for money relative to competitor destinations and a lack of room stock in peak seasons are other challenges that the Tangalooma team work hard to address. Tangalooma have found that the number one way to overcome these challenges is by establishing and maintaining strong relationships with trade in market.

Growing Asia market share Tangalooma continues to grow the business and capture market share in all major Asian source markets through dynamic, forward thinking and a preparedness to adapt to changes in market conditions and visitor expectations. A number of business practices fundamental to Tangalooma’s success and that set the resort apart as a market leader, include: •• dedicated sales managers for each market •• strong relationships established with travel trade in key Asia source markets •• consistency of approach in working with trade •• following up with key partners to ensure product is delivering on the marketing promise for the consumer •• strategic approach to in market visits (i.e when visiting Singapore, also visit Malaysia and Jakarta to achieve cost efficiencies) •• selective approach to target market – (i.e less shopping groups, more high value or FIT) •• selective approach to working with agents – (i.e work actively with 6-7 agents in each market)

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Queensland Asia Tourism Strategy 2016-2025

Confidential

9.0 STRATEGIC DIRECTIONS TO MAXIMISE THE POTENTIAL To ensure Queensland capitalises on the growth in Asia’s outbound travel over the next decade, TEQ in partnership with DTESB has identified seven strategic directions fundamental to success:

4. Prioritise infrastructure and investment to meet demand

1. Deliver targeted consumer marketing into key Asian markets

6. Attract Asian visitors to experience the best events in Australia

2. Enrich trade engagement to increase consumer awareness and encourage conversion 3. Strengthen aviation access and strategic partnerships

5. Foster the development of high quality Queensland experiences

7. Leverage the tourism potential of the international education network

9.1 Strategic Direction 1: Deliver targeted consumer marketing into key Asian markets Global competition for tourism expenditure is strengthening as destinations vie for their share of the growing Asian outbound travel market. Leveraging the Australia brand and marketing campaigns through TEQ’s partnerships with Tourism Australia, airlines, wholesalers and trade will be increasingly important in promoting Queensland.

This strategic direction will ensure Queensland resonates with the modern Asian traveller by building our understanding of key target markets, increasing consumer understanding of the Queensland product offering and engaging with consumers at every stage of the ‘customer purchase cycle’ (see also the role of trade engagement in Strategic Direction 2).

Queensland boasts a range of natural assets that favourably position the state as a destination of choice for Asian travellers. Agility is essential though to evolve with consumer expectations. The brand and product offering must strongly appeal to target audiences and hold true to the Queensland identity by reflecting its unique characteristics.

Given the importance to Asian travellers of authentic, local cultural experiences, the ability to discover and connect with the essence of

Queensland through experiences is vital.

Content must focus on the quality, uniqueness and emotional uplift of Queensland’s experiences, not just the static beauty of the physical setting, such as iconic world heritage rainforests, the Great Barrier Reef and the plethora of stunning beaches. There is an opportunity to leverage the strong association of brands such as the Gold Coast and Great Barrier Reef to attract Asian travellers. These brands resonate with many Asian markets and create immediate association with the Australian experience.

Asian consumers are digitally savvy and rely heavily on online sources and personal recommendations when planning holidays.

Asia’s rapidly changing digital landscape is complex and challenging, however digital channels offer tremendous potential for Queensland to increase share from important Asian markets. There are opportunities through partnerships with relevant digital platforms and working with trusted celebrities and digital influencers to build awareness and deliver hyper targeted marketing that engages this massive consumer market and ultimately inspires Asia to experience the best address on earth.

What success will look like:

Asian travellers are inspired to holiday in Queensland 1

Grow Queensland’s understanding of target markets to gain further insights into the opportunities and nuances of individual consumer segments.

2

Increase brand awareness of Queensland and its experiences across target markets in Asia.

3

Develop a range of marketing initiatives within the creative platform that bring the experiences to life and drive conversion.

4

Harness word of mouth marketing by using relevant social media channels, celebrity endorsements and digital influencers.

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9.2 Strategic Direction 2: Enrich trade engagement to increase awareness and encourage conversion In an increasingly cluttered tourism market, Queensland’s ability to grow market share and OVE is dependent upon quality engagement with consumers during the travel planning process.

An efficient and accessible distribution system that inspires, informs and empowers the consumer is critical. A new level of trade engagement will be required that focuses on understanding and respecting the different market nuances. It will demand innovation, building solid trade partnerships, ensuring there is compelling Queensland content and delivering trade marketing programs that speak to the target audience.

The traditional tourism distribution model of the Asian consumer purchasing tourism product through travel agents, other travel intermediaries or third party channels is changing. Although

currently still quite structured, the Asian distribution system is seeing a growing trend of consumers engaging with travel distributors via online platforms. While group bookings and package tours are still prevelant, FIT is growing and is only expected to accelerate. With a greater depth and reliability of information available to consumers online, the desire and confidence to customise and control more aspects of travel planning has increased.

To reach the modern Asian traveller, the five stages of the customer purchase cycle are key touch points. Queensland’s trade partners have a significant role influencing the dream, plan and booking phases; providing quality content that inspires and converts consideration into conviction and travel bookings.

Figure 17: Five Stages of the Customer Purchase Cycle

What success will look like:

Increased conversion from Asian consumers through trade and direct bookings

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1

Focus trade activity on the priority regions and cities, working with agents active in these cities to establish, develop and grow partnerships and maximise results.

2

Grow the awareness of Queensland in Asian markets during the consumers’ dreaming and planning phases, and grow the expertise within the tourism industry to ensure the booking phase is seamless and results in a strong return on their investment.

3

Identify Online Travel Agents (OTAs) and Travel Aggregators who are trusted leaders in Asian source markets and enable Queensland to have a strong presence within these powerful booking sites.

4

Centre effort on Inbound Tour Operators (ITOs) and Domestic Travel Agents based in Australia that have an Asian focus to ensure the distribution system has access to Queensland’s best experiences and products for FIT, groups tours and VFR segments.

Queensland Asia Tourism Strategy 2016-2025

9.3 Strategic Direction 3: Strengthen aviation access and partnerships A key strategy to maximise Queensland’s share of the Asia visitor market towards 2025 is to strengthen aviation access and strategic partnerships. The focus will be on attracting new airline services from key and emerging international markets, developing direct services and partnering with airlines in cooperative marketing to ensure new and existing services are commercially sustainable.

overnight visitor expenditure from target Asian markets by $651M by 2020 and generate 6,500 jobs over four years. An outcome of the Advance Queensland: Connecting with Asia Strategy 2016-20, the fund will drive tourism growth from Asia through:

This strategic direction is aligned with the broader Advance Queensland agenda, in particular, Advancing Tourism 2016-20 that seeks to facilitate government and industry partnerships to secure growth from domestic and international markets. One of the key outcomes is a $33.5 million Advance Queensland: Connecting with Asia Strategy 2016-20 to support an expanded focus on increasing Queensland’s share of the Asian tourism market and driving tourism growth in regional Queensland. This entails two programs that will connect Queensland destinations with priority Asian markets including:

•• building relationships with targeted Asian countries

•• the $30 million Advance Queensland: Connecting with Asia Fund to support industry partnerships and collaborations for new tourism opportunities in key Asian markets; and •• the $3.5 million Asia Boost to be used to support and assess consortia proposals and identify new opportunities for industry partners to invest in key emerging Asian markets.

The fund, which is a matched funding arrangement with industry partners in regions and source markets, aims to increase

•• securing more direct international aviation access •• creating innovative “best of” tourism products

•• improving digital connection •• increasing awareness of Queensland experiences, and •• regional dispersal The Advance Queensland: Connecting with Asia Strategy 2016-2020 is in addition to the AAIF, which was developed to assist in increasing aviation capacity and new routes into Queensland from identified priority markets. Delivering this strategic direction will build on the success to date in securing new and additional flights from China and Hong Kong SAR China into the Gold Coast, Cairns and Brisbane.

In addition to aviation partnerships, the Queensland Government through TEQ will continue to identify and increase partnerships with trade, government and other stakeholders to leverage resources and strengthen Queensland’s ‘share of voice’ and marketing weight in the competitive global tourism environment.

What success will look like:

Increased direct air access to Queensland from priority Asian markets with dispersal across the state and increased engagement with partners that provide opportunities for the Queensland tourism industry 1

Continue to secure international routes through the Attracting Aviation Investment Fund with a particular focus on long-term volume and yield.

2

Through the Advance Queensland: Connecting with Asia Strategy 2016-20, build capacity and support industry partnerships and collaborations for new tourism opportunities in key Asian markets.

3

Support the federal government’s efforts to facilitate bi-lateral agreements and improve access to visas from Asian source markets particularly those with a strong outlook for growth in visitation.

4

Enhance existing strategic partnerships, relationships and alliances and build on existing activity.

5

Develop new strategic partnerships including but not limited to airlines, trade, travel and events industry, non-travel industry and leading organisations in the digital and social arena.

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9.4 Strategic Direction 4: Prioritise infrastructure and investment to meet demand To increase Queensland’s share of the Asian market’s visitor nights, the experiences offered must align with the preferences of the target markets. This strategic direction is focused on fostering investment in tourism infrastructure throughout Queensland and ensuring that a strong and active pipeline of new infrastructure is realised.

As demand from Asia grows, Queensland must also anticipate supply side implications and accommodate accordingly. With the predicted future growth from Asia, the tourism industry will require the expansion of basic infrastructure, such as airports, transport routes and hotels, as well as a larger industry labour force. It is also vital for Queensland to offer innovative tourism products and attractions with distinct appeal to the priority Asian markets. This is a fundamental strategy to support sustainable growth in the sector and generate jobs.

Queensland’s tourism and events industry is a major player in the development and delivery of tourism infrastructure and attractions. The industry’s continued investment in infrastructure and product development will be critical to achieve the strategy’s vision and targets to 2025. The industry’s role in building a premier tourism destination with high quality products and experiences is also important in positioning Queensland as an attractive tourism proposition to new investors.

A key priority is strengthening relationships with industry and government in revitalising existing tourism assets and creating

new tourism infrastructure across the state. The development of long-term sustainable relationships will also be vital with leading investors from Asia who will support investment in Queensland tourism by bolstering demand through their extensive in-market networks.

As part of the investment attraction framework, the Queensland Government recognises the importance of maintaining a strong tourism infrastructure development pipeline to ensure the state fully realises its growth potential. Priority areas include ecotourism and Great Barrier Reef islands, accommodation, attractions and access infrastructure. Queensland’s clean and safe environment and world-renowned natural attractions position the destination well.

In Queensland there is a strong pipeline of projects either under construction or with investment commitment to progress.

This includes integrated resorts, access infrastructure and attractions, with many of the new investments from Asia and being developed to meet the demand and preferences of the Asian market. Ensuring that projects mooted for development are realised as new tourism assets for Queensland, requires commitment to both build demand from Asia and prioritise support for investors and developers. TEQ through the Australian Standing Committee on Tourism (ASCOT) partners with Tourism Australia and Austrade in removing any barriers to investors and providing information and insight on Australian tourism opportunities.

What success will look like:

Sustainable investment in tourism infrastructure and uniquely Queensland visitor experiences for Asian target markets 1 Build relationships with leading Asian tourism industry investors to attract investment into tourism infrastructure.

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2

Foster catalyst tourism infrastructure projects, facilitating an investment pipeline of new hotels, attractions and access infrastructure to meet and grow demand from Asia.

3

Stimulate investment in new and refurbished ecotourism opportunities that support the creation of uniquely Queensland visitor experiences that will be treasured, and inspire learning and conservation of our natural environment amongst Queensland’s visitors.

4

Foster a holistic approach to the transport opportunities in Queensland and highlight the overarching vision of providing an exceptional journey for every visitor from start to finish.

5

Through the Advance Queensland: Connecting with Asia Strategy 2016-20 invest in and partner with consortia to drive growth from Asia and grow jobs for Queensland.

Queensland Asia Tourism Strategy 2016-2025

9.5 Strategic Direction 5: Foster the development of high quality Queensland experiences A destination’s tourism experiences form some of the most memorable and distinctive components of a traveller’s visit.

Queensland offers a diverse variety of authentic and aspirational tourism experiences that position it well as an international tourism destination for Asian travellers. World Heritage listed natural environments like the Great Barrier Reef, thousands of kilometres of unspoilt coastlines, beaches and marine life, along with friendly laid back ‘Queenslanders’, are just some of the alluring features of Queensland’s unique experiences. In ensuring Queensland’s experiences align with the preferences of Asian target markets, the focus will be on capitalising on and growing highly valued and quality visitor experiences.

To the majority of Asian long haul tourists, whether group or FIT, and particularly Chinese millennial travellers, the desire to experience authentically different cultures to their own – cultural immersion – is a crucial motivation behind their choice of an international tourism destination. That immersion means stepping outside of their Asian peer group to enjoy experiences with the locals; to ‘live like the locals’. There is an opportunity to build on the warm Queensland welcome and offer a genuine, quality experience that respects Asian culture while representing not only the Australian way of life but an accurate reflection of how ‘Queenslanders’ live. This requires leveraging Queensland’s unique outdoor lifestyle and providing opportunities to bond with ‘the locals’ such as a barbeque with fresh Queensland seafood; experiencing Indigenous culture; catching a fish and learning how to cook it; or learning to surf.

“Experienced travellers from China rather choose to explore more exotic destinations, or the same destination but in more depth and seeking more adventurous, authentic and unique experiences.

Furthermore, they are more open to interact with the local people, culture, language and cuisine and more likely to book niche travel tours.33”

Asian travellers are looking for quality products and experiences that offer value for money. As Queensland is considered an expensive destination there is an opportunity to build a reputation for high quality with ‘world-class’ products and experiences. With Asian consumers’ preference for coastal attractions, Queensland is well placed to capitalise on its natural assets and promote and develop coastal experiences. The opportunity for Queensland is to profile and build on the nature-based Indigenous experiences and World Heritage areas, including the Great Barrier Reef, the Wet Tropics, Fraser Island, and Gondwana rainforests; and bring the Queensland outback story to life.

What success will look like:

Highly valued, uniquely Queensland visitor experiences that resonate with consumers in priority Asia markets

33

1

Harness Queensland’s competitive advantage in nature-based experiences and align the offering to match the tastes and preferences of travellers across Asia.

2

Provide the Queensland tourism and events industry with guidance on what Asian consumers want through provision of refreshed market-bymarket research on consumer behaviour and travel preferences.

3

Encourage Queensland’s tourism and events industry to adopt ‘Asia Ready’ practices throughout their business and ensure a market-by-market focus is applied to Experience Development activity.

4

Support the digital capability of Queensland tourism businesses to deliver high quality digital experiences in a way that resonates with Asian consumers.

Source: COTRI (2015) China Outbound Market Report

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9.6 Attract Asian visitors to experience the best events in Australia Events play a vital role in motivating visitors to travel to Queensland or extend their stay in the state, to attend or participate. These events grow the visitor economy by generating expenditure directly attributable to the Asian visitor’s stay in the destination. For example, the Gold Coast Airport Marathon is attracting a growing number of runners from Asia each year. In 2016 over 2,500 runners travelled from Asia to participate, which was a 20% increase from 2015.

Leisure events also play an important role in enhancing the experience of visitors who were either already in Queensland, or had decided to come to Australia and were planning their

In order to leverage these opportunities, TEQ will curate an events calendar with distinct appeal to the target Asian markets.

The calendar curation will involve the acquisition, development and promotion of events that has the ability to motivate travel specifically to Queensland to experience the event. Existing events will be leveraged to encourage Asian visitors to include these experiences as part of their travel in Queensland.

TEQ will support a concerted and coordinated effort by the industry to target business events from Asia to Queensland’s key business events destinations. Business events, or MICE (Meetings, Incentives, Conferences and Exhibitions) events as

When included in a visitor’s travel itinerary, events can add more depth to the destination experience and increase connections with friends, family and locals. itinerary. Over 6,200 visitors from Asia attended the 8th Asia Pacific Triennial of Contemporary Art in Brisbane as part of their stay in Brisbane.

TEQ produces and manages a year-round events calendar that is a sustainable, high-value asset for Queensland. It is estimated that Queensland’s 2016 events calendar will generate over $360 million in spend in Queensland directly attributable to event visitors. The calendar showcases a diversity of events across the various genres and destinations. Marketed using the It’s Live! in Queensland platform, Queensland’s events calendar embraces art, culture and music; food and wine; festivals; and sport and lifestyle.

The diversity of these events and the unique destinations in which they are held provides a competitive advantage in attracting visitors to Queensland to experience the best events in Australia.

they are known in Asia, present the greatest opportunity to grow event travel for the Asian market to Queensland. Meetings and conferences attract delegates that are typically bigger spenders than the visitor average, and often on corporate or professional expense allowances. This means they stay, on average, in more expensive accommodation and are able to indulge in more costly restaurants and transportation options.

Incentive travel events can bring large groups of visitors from Asia and generate significant tourism benefits to the state.

Additionally, these events are primarily built around showcasing Queensland’s leisure experiences. The POLA Incentive Group, for example, brought 1,800 qualifiers to the Gold Coast, which generated an estimated economic impact in visitor and corporate spend of over $3.3 million.

What success will look like:

Queensland events are celebrated for increasing visitor demand and enhancing the experience for Asian visitors

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1

Explore event opportunities to attract Asian visitors to Queensland.

2

Support the industry in bidding for incentive travel out of Asia to Queensland’s destinations.

3

Develop event calendars for target markets that can be used to build visitor demand.

4

Work with events in Queensland to enhance the experience for Asian vistors.

Queensland Asia Tourism Strategy 2016-2025

9.7 Leverage the tourism potential of the international education network International student enrolments contributed $2.9 billion in export revenue and generated 19,470 jobs for Queensland in 2015, representing one of the state’s most valuable industries.34 With growing global demand for education and training services, there is a tremendous opportunity to partner with the international education and training industry to maximise the benefits for Queensland tourism.

Uniquely Queensland Edu-tourism experiences that encourage international students to discover Queensland’s world-class experiences will be an essential focus. Currently, international students spend on average, $1,000 per trip when they take time out from studying for sightseeing, shopping and experiencing Queensland’s natural attractions. International students also generate a large visiting friends and relatives market, which in turn creates opportunities for the industry. Deloitte Access Economics estimate that the value added to the 2015 Queensland economy from Queensland international student friends and relative visits alone was $11million, supporting 120 jobs.

There is potential to further extend the distribution of benefits from both students themselves and their visiting friends and family well beyond Brisbane. In 2015, the regional economic contribution of student related export revenue (outside Brisbane) was $937 million.35 Queensland already performs relatively well in dispersing international visitors around the regions. Around 34% of all international students in Queensland were living outside Brisbane, compared to 12% of similar students in New South Wales studying outside Sydney, and 4% in Victoria studying outside Melbourne.

The international alumni from Queensland’s education and training providers are a valuable resource of potential ambassadors for the state’s high quality education and training and tourism experiences. Research shows that 64% of Chinese alumni made a return visit to Australia and a further 93% intended to visit Australia in the next five years.36 This strategic vision aligns with the Queensland Government’s vision for the growth of international education and training, articulated in the Draft International Education and Training Strategy to Advance Queensland 2016-2026.

What success will look like:

International students are ambassadors for tourism in Queensland 1

Engage the expansive student network to create lifelong advocates for travel in Queensland.

2

Elevate the awareness of Queensland’s destinations through increased engagement with Asia specific domestic trade and media partners.

3

Leverage ‘graduation tourism’ to it’s full potential by engaging with students and their visiting friends and relatives.

4

Elevate Queensland’s presence as a world class ‘study tour’ destination through identification and promotion of uniquely Queensland Edu-tourism experiences.

5

Establish strong partnerships with the education and training sectors such as university, ELICOS, VET, and school networks in Australia.

6

Encourage repeat visitation to Queensland by promoting the destination experiences to the Queensland alumni network across Asia.

34

Source: Queensland Government (2016) Draft International Education and Training Strategy to Advance Queensland 2016-2026

35

Source: Queensland Government (2016) Draft International Education and Training Strategy to Advance Queensland 2016-2026

36

Source: Pyke et al, 2013

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10.0 DELIVERING THE VISION The Queensland Government has committed to a four year forward funding schedule to support TEQ in delivering on the Queensland Asia Tourism Strategy 2016-2025. In addition, $33.5 million has been committed to the Connecting with Asia Strategy 2016-20 to grow tourism and unlock Queensland‘s potential as the holiday state in Australia for Asian visitors.

TEQ is a statutory body of the Queensland Government and its lead marketing, destination and experience development and major events agency. In partnership with government, regional tourism organisations, industry and commercial stakeholders, TEQ’s aim is to grow Queensland’s tourism and events industry to foster innovation, drive industry growth and boost OVE. The strategy’s seven strategic directions and their suite of actions will be delivered and monitored through annual action plans with associated KPIs. These plans will be developed and implemented in consultation with partner agencies. The target markets will be reviewed annually.

With the path clearly outlined and resources committed, TEQ and the Queensland Government are well placed to achieve the goal of increasing OVE in Queensland from key Asian target markets to $6.867 billion and delivering jobs to regional Queensland by 2025.

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Queensland Asia Tourism Strategy 2016-2025

HOW DO I GET INVOLVED? The rise of outbound travel presents exciting opportunities for Queensland tourism operators. In order to stand out in the highly competitive global environment it is essential that the Queensland tourism industry is equipped and ready to welcome increased visitor numbers. It is important that businesses perform ‘health checks’ and continue to learn more about the ever-evolving Asia travel market.

ASIA READY HEALTH CHECK – IS MY TOURISM PRODUCT ASIA READY? r

1. Do you know your organisation’s unique value proposition and which Asian markets your product appeals to?

r

2. Do you operate seven days a week, year round?

r

3. Do you offer international standard policies such as cancellation, payment and rooming policies?

r

4. Have you secured a strong foothold with the domestic tourism market?

r

5. Do you understand the travel distribution system and have relevant rate structures in place?

r

6. Have you conducted a careful assessment of your competition both locally and nationally?

r

7. Have you reviewed Tourism Australia’s Consumer Demand Project to understand the cultural nuances, aspirations and drivers of consumers across Asian markets?

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8. Are you aware of Queensland’s Hero Experiences and have you identified how your business delivers on this marketing promise?

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9. Do you have tailored marketing and social media plans specific for relevant markets?

r

10. Do you understand where consumers can source information about your product and invest appropriately in digital marketing?

r

11. Have you developed a range of promotional collateral with targeted and culturally sensitive messages for both consumers and the travel trade?

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12. Do you have booking systems in place to accept international bookings both direct, and via the travel distribution network (on and offline)?

r

13. Are you working with complementary product in your region to jointly package and promote to target Asian markets?

r

14. Do you provide clear location information or transport connectivity to ensure your business is easily accessible to Asian travellers?

r

15. Do you invest in relationship building with your distribution partners whether that be through trade shows, sales missions, sales calls, familiarisations or networking events?

r

16. Have you sought advice from your local and regional tourism offices, TEQ, Tourism Australia and ATEC?

r

17. Do you encourage social sharing while consumers are at your product?

TOTAL __/17 How did you score? The following resources will help equip you with the knowledge to make your business ‘Asia Ready’:

Useful Links Tourism Export and Market Profiles: tourism.australia.com Australian Tourism Export Council: atec.net.au

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“The Asia market provides wonderful opportunities for tourism operators. Building trusted relationships across all markets must be viewed as a long term strategy – consistency is key. A balanced portfolio of markets is critical to a successful Asia strategy.”

“The growing FIT market out of Asia is diverse and rapidly changing. We need to understand their preferences and develop differentiated offerings that resonate. Done well, we will inspire these travellers to visit the best address on earth.”

– David James, Director, Tangalooma Resort

– Michael Healy, Group Director, Sales and Marketing, Quicksilver

“The rise in use of mobile phones and the internet is changing the way Asian consumers plan their travel. User generated content on social travel platforms such as China’s Mafengwo is playing a critical role, inspiring and influencing travellers.”

– Gang Lv, Chief Operating Officer, Mafengwo

“Increasing direct air access from Asia will be vital over the next decade. The Attracting Aviation Investment Fund is a welcome initiative to support route development and heralds an extraordinary time of growth in aviation services to Queensland.”

吕刚，首席运行官, 蚂蜂窝

– Michael Burke, Assistant Director, Commercial

“Coming of age during a time of technological and economic change, Millennials have a different set of expectations and behaviours from their parents. Reaching this ‘we, now and more’ generation and earning their loyalty is critical to Queensland’s tourism growth.”

“The international education sector brings enormous value to the state economically, socially and culturally. International students’ footprint can extend well beyond tuition fees and accommodation as lifelong advocates for Queensland, sharing their experiences and encouraging others to follow.”

– Eva Ng, Vice President, Nielsen

– Alex Blauensteiner, General Manager for Business Innovation, Skills and Trade, Brisbane Marketing

teq.queensland.com/asiastrategy Published by Tourism and Events Queensland August 2016

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Queensland Asia Tourism Strategy 2016-2025