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ECONOMICS LEGISLATION COMMITTEE
20/10/2010
RESOURCES, ENERGY AND TOURISM PORTFOLIO
Tourism Australia

CHAIR —Thank you for coming in this evening.

Senator PRATT —Could the committee have an update on the progress of the There’s Nothing Like Australia and the No Leave, No Life campaigns?

Mr McEvoy —As you know, in March this year we launched There’s Nothing Like Australia to Australian people to get them involved and 30,000 Australians signed up and uploaded images and 25 words on why there is nothing like our great country, which was quite exceptional, in about 28 days. What we did with those entries was that 3½ thousand have been translated into 16 different languages and launched around the world, so it is almost like postcards from Australians to the world to come to visit our country. On 31 May this year in Adelaide at the Australian Tourism Exchange we launched the full campaign to the travel industry—2,200 delegates from 40 countries—and since then the ad campaign, including broadcast advertising, magazine, print and that big digital presence, has been launched around the world. I think we have launched into at least 17 countries around the world now and there are a number of others releasing in November—another 12 or so that are launching.

So, how do you measure it early on? Certainly web traffic has increased markedly. One of the big measures for us is that the industry has really bought into it. We have more than 40 partners who have bought in, including states and territories, airlines, travel wholesalers and retailers. As campaigns go, it has certainly been very well accepted by an industry who wants to put their money with our money to do better. That is There’s Nothing Like Australia. That is where we are at. I think the Oprah Winfrey program is another example of demonstrating why There’s Nothing Like Australia has been a great success. That is all to come and that will be a big demonstration of the campaign.

Senator PRATT —With respect to the There’s Nothing Like Australia campaign and the partners involved, does its success in part come from its multimedia platform and the social media aspect of it that enables a wide-ranging participation in it?

Mr McEvoy —Yes, definitely. It has been very much built with new media in mind and building social advocacy. Forever our industry has been built around the idea that word of mouth is the strongest way that people get recommendation. You trust a friend or relative and now with the way Facebook, Twitter and Beebo in places likes Japan are going, people can recommend to each other. What we try to do is provide them with the tools to give best recommendation, and those uploads by Australians are great images and words to do that. To your point, the ad has been downloaded more than 100,000 times on YouTube. We have a YouTube channel for our country. We have more than 800,000 Facebook fans in the world now. It is the largest destination Facebook site in the world and it is growing by somewhere between 40,000 and 50,000 fans every week. So that is quite phenomenal. So to your point, it is social advocacy. People passing on recommendations about great places is really important and There’s Nothing Like Australia is right at the heart of it.

Senator PRATT —What is the strategy for penetrating social media in other language groups where we do not have our own Australian people participating in that?

Mr McEvoy —At the core of it, of the stuff that Australians uploaded we did translate 3,500 of those experiences into 16 different languages. While Facebook is very strong throughout the world in many places, it is not as strong as some other social media sites in certain countries.

As an example, in Japan there is a more popular site, and we are very involved in that and building communities of interest in our country, locals telling their stories about our country. So it is a good point. And, again, every market is a little bit different, but the one thing that is common is that social media is much more important in terms of building recommendation for our country. We are up to our neck in that now and it is going very well.

Senator PRATT —Terrific. You did, I think, begin to reference the No Leave No Life campaign. Do you have any sense of whether Australians are indeed starting to use their leave?

Mr McEvoy —Yes. Well, look, we do a survey every year on the big numbers of how many leave days have been stockpiled. I think the global financial crisis is part of this reason, but I will give you some numbers. In March 2009 when it was launched, 123 million days had been stockpiled. Back at I think 30 June this year that had been reduced to 117 million days. I think during the GFC a lot of companies used that as an opportunity to retain employment but get people to take more leave, which was good, but from our point of view I think we have had some role to play.

More than 800 companies now who represent more than a million employees have taken this No Leave No Life concept into their company. We did some survey work on people who understand and were aware of the campaign, and, of those people who are aware, about two-thirds of them are more likely to take an Australian holiday based on the campaign. It is early days and it is a big issue, and it is an issue that only gets solved if employers take a real interest in it and encourage their workers to replenish and holiday.

Senator PRATT —I suppose the strong Australian dollar means that there are unfortunately probably more Australians heading overseas for their holidays. What is the strategy for strengthening the local tourism market in that context?

Mr McEvoy —The dollar is interesting. You are right, Australians are very aware of what our currency buys offshore. Outbound travel has been very strong for many years now in Australia, since probably about 2004, and the dollar is not the only reason. Competitive airfares, low-cost carriers and more destinations have really helped drive that. That has sort of put a bit of a hold on domestic. It has been a tough environment. The dollar is not probably helping at the moment, as Australians look for more value offshore.

The states and territories predominantly do the marketing of Australia to Australians, where 90 per cent of our budget and our effort is inbound, bringing more internationals in, and we are doing that hopefully well and those numbers are growing. More internationals are coming this year than ever before. The likelihood is that we will reach more than six million visitors for the first time this year. So inbound is improving, and that is a good thing for the Australian industry. Domestically it is those programs, No Leave No Life and also what we have done with the campaign, There’s Nothing Like Australia. Getting people to upload those images was quite amazing. We had more than 1.2 million downloads of those images by Australians looking at their own country and all we can do is continue to do that. The states and territories are heavily into that and they are working hard, but certainly it is a difficult environment.

Senator PRATT —You did mention the Oprah effect and the growth in inbound passengers. Can I ask you what US studies have shown about the effect of an Oprah endorsement?

Mr McEvoy —It is sort of a phenomenon they call the Oprah effect. I think perhaps her book club is one of the best examples, where authors who have sold a few copies get to be featured on the book club and they become New York Times bestsellers pretty quickly. So it is that sort of impact that she is well known for. Why did we target the program? The program goes to 145 countries around the world. I think there are 40 million viewers in the US alone and probably that again in those countries around the world.

Really importantly for us, it is watched by predominantly 25- to 54-year-old women who have a household income of more than US$75,000. It is the highest proportion of viewers in that target segment of any program in that market around the world. Those people are the decision makers in travel and tourism. So women 25 to 54 are right at the heart of the audience that we want to try to influence. That is the Oprah effect. We want to see if that can rub off on Australia a bit. Harpo Productions, her production company, have committed to making at least two hours of television about our country. Three hundred audience members will come and experience our country and Oprah and her correspondents will go as far and wide in Australia as good stories do make and broadcast that to the world.

Senator PRATT —Can I ask who Tourism Australia consulted with about the visit?

Mr McEvoy —Yes, sure. We have many partners in the program—major partners including Qantas as an airline, the Sydney Opera House, Tourism New South Wales, Victoria, Queensland—and now also all the other states and territories have an involvement. Where appropriate, these people were consulted to get it across the line.

Senator PRATT —I note you have said ‘and now also the other states and territories’. I am a Western Australian senator. You would be very aware that there has been a campaign from Western Australia to ask the tour to visit Western Australia. Was Western Australia consulted at the inception of this tour proposal?

Mr McEvoy —We had to work with Harpo around issues of nondisclosure in a commercial way, so when we could let Western Australia know we did let Western Australia know. It is really important to note that no decisions were made about the television programming that is being made until after it was announced, and that is really the opportunity. What we have done since the announcement—and prior to the announcement we did discuss it with Tourism Western Australia—is we have given not just Western Australia but every state and territory the opportunity to pitch directly to Harpo Productions about their story ideas. For what it is worth, we would like to see Oprah or her correspondents get to Western Australia also. The intention of Tourism Australia since the beginning has very much been to get as much national coverage as possible about our wonderful country.

CHAIR —On behalf of South Australia as well—

Senator Sherry —I had better put my bid in, too.

CHAIR —Is there a commitment with Harpo to go and see a minimum number of states?

Mr McEvoy —They will make the best television they can make and they will hold that pretty dear to themselves. The spirit of the agreement is that they will go as far and as wide in Australia to make the good stories.

CHAIR —But are they locked into certain states now?

Mr McEvoy —They are locked in on the audience, for sure. I suppose one of the parts of the deal is we had to bring 300 audience members out and give them an experience. One of the criteria was that they have travelled a long way—they have come from Chicago but also all over America through LA to Australia—so they wanted us to keep them relatively close to home to begin with. But as we talked to them, we certainly pitched in a lot of other ideas and the states and territories have directly, and I think they are very interested in those ideas. They will make those final decisions, but certainly I think we will get a lot of great national coverage.

CHAIR —So there is no final decision yet about where they will start?

Mr McEvoy —That is correct. They will be here in early December to make the programming. Frankly, it is an organic process and they will be deciding right up until then what they will film.

CHAIR —Have you consulted with the department of tourism regarding this?

Mr McEvoy —Yes.

CHAIR —And you have got advice from them about where to go and what to pitch?

Mr McEvoy —Not so much about where to go—just keeping the department and the minister informed as we go. There have been thousands and thousands of ideas put forward, which we have dutifully talked to Harpo about. They will be the final arbiter of what stories they make and where they go, because that is TV programming which they are holding close to themselves.

Mr Clarke —Our interest in the department, which TA fully embraced and already had, was that all jurisdictions have an opportunity to put their best case forward to the production company. But at the end of the day it is a matter for the production company to decide.

Senator PRATT —It does seem that at the outset there were only a couple of states involved and that it is only in hindsight that all states now have an opportunity.

Senator BUSHBY —Exactly. When did the states have that opportunity to put their case? When did you actually provide that to them? How far into the development of this huge production was it before you actually introduced the states to that opportunity?

Mr McEvoy —The states got the opportunity when Harpo Productions were thinking about what stories to make. As soon as they started thinking, ‘What television do we make?’ was when the states got that opportunity.

Senator BUSHBY —That was well after you had locked them into coming.

Mr McEvoy —Yes. The first part of it was held pretty tight at the request of Harpo absolutely, because the whole idea of this program is a surprise or a reveal for the US audience and the global audience so the fewer people who knew about it, according to Harpo, the better. They have done these things before and they hold them pretty close to themselves.

Senator PRATT —So does that mean that we will have to wait and see if our states get a guernsey?

Mr McEvoy —Yes. We are in there talking, as are the states and territories, and all will be revealed. They will make a lot of great television for our country.

Senator FIFIELD —It would be fair to say that each state has the opportunity to audition. It is kind of like The X Factor for states.

Mr McEvoy —Yes.

Senator PRATT —So you can tell the Western Australian newspaper, who I am sure are visiting, to keep their campaign going?

Mr McEvoy —I think some of the stuff that has been coming out of all the states and territories has been fun, and I think Harpo are really watching with great interest and they are looking—

Senator Sherry —I might even send them a copy of this estimates hearing. That would really get them interested in coming to Canberra!

Mr McEvoy —There have been more than 11,000 stories written—

CHAIR —That is just inviting me to talk about the joys of the Barossa, the Flinders Ranges and Kangaroo Island.

Senator PRATT —The Ningaloo Reef and the Kimberley are waiting for them. I did have some other tourism questions. I wanted some advice about the National Long-Term Tourism Strategy. I have heard a bit about where we are at now and about the emergence of things like social media. What does the long-term picture for Australia look like?

Ms Madden —Minister Ferguson late last year, on 15 December, announced the National Long-Term Tourism Strategy and an implementation plan that was agreed with all states and territories through a ministerial council. It has proceeded since December last year with the establishment of nine major working groups, the majority of which are headed by states and territories but include Commonwealth, state and territory and industry representation. As you implied, this work on the strategy is supplementing the work on marketing that Tourism Australia is leading but is looking particularly at the supply side or productive capacity of the industry.

You all know that tourism is our largest services export industry. Arguably perhaps, we have not looked behind the scenes at some of the issues like investment, infrastructure, labour and skills as much as we might. So they are some of the key working groups. The work is advancing through the ministerial council leadership. There is an up-to-date summary of each working group which is available on our website, or I can go into specific details if you like. The next ministerial council will receive a full update and be making some decisions in relation to future directions when it meets this Friday in Sydney.

Senator PRATT —When you talk about product quality, would that be things like if particular tourism regions have had a majority of investment at a certain time and place then suddenly their tourism product can start to get out of date? So you have to keep certain tourism regions with a product that is going to suit the current market. Is it that kind of strategy you are talking about?

Ms Madden —Yes, certainly. The work of the strategy is informed by research. In fact, one of the key priorities under the strategy is to improve research—what we are actually looking into and how we are taking forward areas of improvement. For example, the domestic visitor survey, which is conducted by Tourism Research Australia, looks into satisfaction levels and, where there is action, that can come forward in terms of specific measures.

Mr Clarke —The nature of the work being done in this strategy is deep and fundamental. It is called a long-term strategy because it is not going out and suddenly creating some new attraction or facility or piece of infrastructure. It is more looking at what are the impediments to investment in infrastructure that supports the tourism sector, be it regulatory or other matters. What are the impediments to growth in labour in the sector and to getting the appropriate skills? How can you do destination planning more effectively, rather than picking which destination should actually benefit from that?

Senator PRATT —Where does the TQUAL grants program fit into all of that?

Ms Madden —TQUAL was announced for this year by the minister last December and we are rolling out successfully 70 projects. Then, as part of the election commitments, the Labor government did announce that there would be $40 million of new funding made available to TQUAL that will commence from 1 July 2011. So early planning is underway in relation to that. What we have tried to do based on feedback is have a full evaluation of tourism grants to date.

We have consulted very closely with industry and recipients, as well as states and territories and other stakeholders, to inform the planning of the next phase of TQUAL, and the summary of that evaluation is available on our website. But one of the key principles is that some of the grants really have to underpin the strategic approach to tourism more effectively. So that will be an important element of the next round of TQUAL in that it will actually underpin some of those key challenges in the strategy like investment, quality, labour and skills more effectively than has perhaps occurred in the past.

Senator PRATT —All right. That is terrific. Thank you very much.

Senator BUSHBY —A number of the questions I was going to ask have been asked. In fact, I think that Senator Pratt must have stolen my questions about Oprah Winfrey in respect of Tasmania, but basically she has asked everything I was going to ask on that. She has also touched on a few things like the National Long-Term Tourism Strategy. At the June estimates in respect of a number of programs being run through the department I asked how much of the department’s resources are actually spent on each of those programs to which Ms Madden indicated that those details would be provided on notice. In BR10 and a number of other questions on notice the department tells me that it does not allocate internally in a formal budgetary manner how much time is done in kind by its officers for each of the various activities that they undertake. I accept that, but does the department as a management tool or otherwise allocate less formally or keep track of the time actually expended for each of these various activities? In asking that, I note that in BR11, BR12, BR13 and BR14 some breakdown of staff costs for working on some of these activities is provided but not wholly. How is that possible unless there is some way that you actually do it in an informal sense?

Mr Clarke —I recall well your question and I took it on notice and we are now following up. The extent to which we have been able to answer your question reflects the extent to which those goals that were put in the PBS tie directly to the structure of the department. So the resource allocation within the department is through divisions, branches and sections and we can tell you exactly where they go, but they do not always match exactly those higher level objectives that are articulated in the PBS. Some are aligned. Those we were able to give you. Some did not align as well and it would be necessary to take estimates—

Senator BUSHBY —You do not actually have internal management processes that keep track of the resources, human and otherwise, that are being used in particular programs from within the department?

Mr Clarke —We know where all of the people and money goes; it is the mapping of that to those higher level objectives that were outlined in the portfolio budget statement and we have not institutionalised that mapping in our accounting system.

Senator BUSHBY —I will leave it at that for the moment. Also looking back at the last estimates, in BR29 TA indicated that there were only four changes in appropriation to TA’s budget and listed them. This does not appear to explain the apparent fall in real terms that I was asking about in that context. How does TA explain the fall from $142 million this year from $137.5 million last year, including the $9 million brought forward from next year, which, if you deduct from this year, leaves a figure some $6.5 million short of last year’s budget, and next year it is predicted to be $123 million? The figures just do not seem to add up in the sense that you are saying that there has been no change to the budget. If there has been no change other than outlined in BR29 to the government allocation, is the difference accounted for by variations in the actual and predicted revenue sourced from outside of the government?

Mr McEvoy —The two areas of difference from last year are the $9 million brought forward and also the fact that Tourism Research Australia went from Tourism Australia across to the department. So they are the two amounts of money that make up—

Senator BUSHBY —Which was outlined in the answer to the question on notice.

Mr McEvoy —In terms of next year and your figure of $123 million, we just want to have a look at that. We do not think that is right. I think our budget in forward estimates returns to—I have been advised that $123 million is this year, 2010-11. It returns to—

Senator BUSHBY —I may have written my notes—

Mr McEvoy —Yes, the $9 million is returned in next year’s budget.

Senator BUSHBY —So $123 million this year. I was getting my years wrong, but if we shift it back one year and talk about $123 million this year, how does that compare with the $142 million and the $137.5 million?

Mr McEvoy —So the $141.62 million, which was last year’s budget, includes $9 million brought forward out of this year’s and also includes Tourism Research Australia which was part of Tourism Australia in that fiscal year. If you move into this year, there is $9 million out which was brought forward and the full effect of Tourism Research Australia has moved across to the department.

Senator BUSHBY —And that accounts entirely for that difference? I could do a simple sum and it would add up?

Mr Le Loux —There are some other minor variations, but that relates to wage cost increases that are applied to the appropriations. Apart from those major changes, everything is the same.

Mr McEvoy —The budget goes to 133,385, which is that 122 plus the nine million returned. That should add up.

Senator BUSHBY —In BR31, TA notes that expenditure on other domestic activity will fall from $1.5 million in 2009-10 to $0.5 million in 2010-11. Can you tell me what activities that covers and what activities will be cut to explain that million dollar reduction?

Mr McEvoy —We will take that on notice.

Senator BUSHBY —Thank you. What partnerships do you currently have with private enterprise, for example the airlines?

Mr McEvoy —We have some major partnership with airlines. A good example of that is a three-year $44 million partnership with Qantas. We have major partnerships with other airlines like Emirates, Singapore Airlines—in fact many, many airlines. We also have some other partnerships around our cooperative marketing campaigns with travel wholesalers and agents around the world and also the states and territories. We have a number of partnerships. Grant is just pointing out to me some of the major airline partnerships. They are Qantas, Emirates, Singapore Airlines and then a whole bunch of others which make up some additional support. There are two ways we account for it. One is that we are the banker and the money comes through us. The other way is that we support them in some of the things they are doing.

Senator BUSHBY —When you say ‘partnerships’, you have an agreement with them where they spend money through you? Is that the guts of what is involved?

Mr McEvoy —The example would be ‘There’s Nothing Like Australia’, which is the line. That can be demonstrated through an ad in the UK with, say, Emirates. There is a message from them and a message from us about the destination.

Senator BUSHBY —And you will place that ad?

Mr McEvoy —Not always. It will depend on a whole bunch of things. Who can buy the media most cost-effectively is one of the key things. That is a discussion that we have with those airlines.

Senator BUSHBY —But ultimately the partnerships involve a private enterprise partner, like an airline, seeing an advantage in associating with TA and paying you money as a result of that. They anticipate that they will get a commercial run on that money that they are giving you through patronage and you use that money to advance the cause of TA in general but specifically focusing on those partners?

Mr McEvoy —Sure, they are commercial entities and they are looking for commercial return. There is no doubt about that. From our perspective, we do it because it leverages our money and gets a strong and impactful message to the consumer. If you look at the way people make travel decisions, airlines are very important in that—the price of a fare. But also their websites et cetera in many markets are often one of the first ports of call when people are thinking about that. They are very good partners for us.

Senator BUSHBY —In June I was asking about how you were going to cover for the $9 million this year that was brought forward from last year. You indicated that some of those private partnerships were raising enough money and you were fairly confident that they would cover that $9 million but you had not got there yet. Have you got there now?

Mr McEvoy —There are two things that have perhaps worked in our favour. One is that a strong dollar actually works well when you are buying in foreign markets. We have been able to buy better offshore in foreign currencies because our dollar has gone further. That has helped make up that. The second one is to your point that the campaign is working well and a lot more partners have joined up, either directly or indirectly. So I would say that there is as much, if not more, noise being made about Australia now than there was—

Senator BUSHBY —Will you have the same degree of funding? Will you make up the full $9 million shortfall?

Mr McEvoy —I think we do pretty much in currency.

Senator BUSHBY —You thought you would in June but you did not.

Mr McEvoy —I am pretty confident that we have.

Senator BUSHBY —Could you take that on notice and confirm that?

Mr McEvoy —Absolutely.

Senator BUSHBY —You also talked about a forecast of making $9 million on currency gains. You were fairly confident that that was going well and you were going to meet the budget. In terms of currency gains, what were you hedging against—an increase in the Australian dollar?

Mr McEvoy —We do not hedge; we get given a rate through Treasury. The dollar is strong and it is buying better offshore.

Senator BUSHBY —In terms of currency gains, that is what you were talking about?

Mr McEvoy —Absolutely.

Senator BUSHBY —So you actually put that in as a line item of value in your budget, that you expect—

Mr Le Loux —Our overall results reflect either a gain or a loss in terms of bringing in a surplus or a loss in terms of our accounts. The way that we manage internally is against the standard or the set rates. Our external accounts will reflect either a gain or a loss, which either we give back to government or get refunded.

Senator BUSHBY —So if the currency does something different from what you were given by Treasury, that would actually show up in your books?

Mr Le Loux —In our financial statements, yes.

Senator BUSHBY —In your financial statements. Okay. I note—and you have mentioned it already tonight—that the transfer of TRA has been completed and that it has gone back to the department. You previously advised that it came with a straight transfer of funding. It was also noted that it is part government funded and sources funded from elsewhere. Where are the funds from elsewhere sourced? Has there been an impact on the non-government sourced funds for TRA that has affected the revenue neutrality of the transfer? Has it actually in practice effectively been a revenue-neutral transfer or, because of the currency fluctuations or other aspects, has it ended up with either a shortfall or a windfall for the department?

Ms Madden —It has been a neutral transfer, as we mentioned in the previous estimates.

Senator BUSHBY —That was the intention. But there are factors that are outside the department’s or TRA’s control.

Ms Madden —Yes, I am just getting to those, Senator. The other funding for Tourism Research Australia comes from cooperative arrangements with the states and territories that are addressed through individual service level agreements. Those service level agreements are in place with all the states and territories. So there has been no disruption to Tourism Research Australia’s funding stream as a result of the transfer back to the department.

Senator BUSHBY —Okay.

Senator FIFIELD —Mr McEvoy, I have some questions about the Australian Tourism Directions conference, which I think is scheduled for 15 November—in this building, I think. Are you able to tell me what the budget is for the conference?

Mr McEvoy —It is about $120,000.

Senator FIFIELD —Okay. I notice that you have some good speakers there—Professor Ian Harper, who is always good value.

Senator Sherry —Who is he?

Senator FIFIELD —He has held some interesting and important roles in the public sector.

Senator Sherry —I have heard of him and of his background.

Senator FIFIELD —Indeed, he is a good person and also Mr Christopher Sanderson, who is the co-founder of the Future Laboratory, which is responsible for delivering consumer insight, trend forecasting and brand strategy to a client list that includes American Express, the New Yorker, Veuve Clicquot, the Gap, Nokia and British Vogue. He sounds like another very interesting chap. I was just wondering what the budget is that has been allocated for the costs associated with the travel, the accommodation and the fees for Mr Sanderson.

Mr McEvoy —Sure. We will take it on notice. I could not give you the exact numbers now.

Senator FIFIELD —It is not something that you have to hand?

Mr McEvoy —Not at top of mind, no.

Senator FIFIELD —Okay. Is there one of your colleagues there who could just have a ballpark stab of what percentage of the $120,000 is allocated for speakers’ fees and costs?

Mr McEvoy —Sorry; I will just have to take it on notice. I do not have the numbers in front of me.

Senator FIFIELD —Okay. If you could that would be good. I am just wondering if there was any consideration given to bringing an Australian based expert on consumer insight, trend forecasting and brand strategy to the conference.

Mr McEvoy —There were certainly a number of speakers considered, including Australian based speakers, and through a mix of timing and all sorts of things the committee settled on Chris Sanderson from the Future Laboratory.

Senator FIFIELD —If you do not know, could you also take on notice the costs associated for the travel, accommodation and other fees for other presenters? I think Ellen Fanning is going to be moderating the session.

Mr McEvoy —Correct.

Senator FIFIELD —So if you could also take that on notice as well. Is there any part of the conference which will be dedicated to accessible tourism and the accessible tourism market? I am asking in my capacity as the shadow minister for disabilities.

Mr McEvoy —Not specifically, Senator, but I guess the whole idea of the conference is to look at future opportunities in both supply and demand. It is about setting some long-term aspirations for an industry and thinking about what the future consumer is looking for. So, not specifically, but in that context it is quite possible that it would come up.

Senator FIFIELD —Do you know what percentage of the market in Australia would be represented by people with a disability?

Mr McEvoy —From a product point of view, Senator?

Senator FIFIELD —Yes.

Mr McEvoy —I have seen an audit a few years ago of the number of operators that are capable of handling people with disability and it is a low percentage—although I know that many, many more have had to come into line with that. So I would not be able to put a percentage on it.

Senator FIFIELD —Thank you. The generally accepted figure in terms of the population who have a disability ranges between 10 and 20 per cent, which is a significant section of the community. That is why I am asking: because they are a potential market for tourism operators and they are a segment of the community who like to get out and do things as much as anyone. You might be aware that New Zealand recently held a conference focusing on accessible tourism and developing that market. Is that something that you are aware of?

Mr McEvoy —I was not aware of the New Zealand conference, Senator, no.

Senator FIFIELD —To my understanding it is the first government auspiced conference focusing on accessible tourism. Does Tourism Australia have any specific initiatives or ideas in mind to try to develop that market, both for the benefit of tourism operators to tap into a section of the community who might find it difficult to buy their products but also for the benefit of that segment of consumers?

Mr McEvoy —It is a good question, Senator. Our aim is to get people to come to the country or through the country. One of the big things that underpins a lot of what we do is the Australian Tourism Data Warehouse which is, as you may be aware, a database of I think more than 22,000 records of the Australian business operators in tourism throughout the country. One of the sections on that talks about their ability to handle people with disability of all types. So through that, through our network of promoting our country to the world with that as an underpinning database, is where it comes into play.

Senator FIFIELD —Is there the capacity at the Tourism Directions Conference for some discussion or for the moderator to guide discussion to cover that topic in the course of the proceedings?

Mr McEvoy —I think so, Senator. I think this one is an opening day to get this idea of a once-annually stake-in-the-sand conference for the industry underway. The aim, I think, Jane, in the future is to hold it some time mid year each year, and I think that is the opportunity to get all sorts of papers up about the future of tourism in all its capacity and all its interests, absolutely.

Senator FIFIELD —So it is something that could be looked at for future tourism direction conferences as well as having it as a formal part of the proceedings?

Mr Clarke —Senator, your question certainly goes to the intent of this conference and, as Mr McEvoy has said, this is the first. Holding this sort of conference was actually one of the outcomes of the Jackson committee that spawned the national long-term tourism strategy and this was one of the other outcomes. It is pretty much unashamedly modelled on the ABARE outlook conferences that were very effective in providing that economic review of the sectors that that organisation was responsible for doing the research for. So the intent is to develop this as an economic futures conference. It is not a marketing event; it is the industry talking amongst itself about where the industry is going and how the industry could do better. So particular interests, like disabilities and other special interests, are exactly the sort of thing that we would see this conference evolving into addressing—those sorts of opportunities.

Senator FIFIELD —I know what you mean and I am not being critical, but ‘special interest’ is probably not quite the right term.

Mr Clarke —I am struggling for the right term.

Senator FIFIELD —I appreciate that, because I think it is not just disabilities but also people who are ageing.

Mr Clarke —Yes.

Senator FIFIELD —There are particular things which can be done to open up products for those people.

Mr Clarke —That supply side perspective—what developments on the product side does the industry need to invest in and what are the impediments to those investments?—is exactly the sort of thing that we are trying to work through in this strategy and conference.

Senator BUSHBY —You mentioned people who are ageing. The first baby boomers turn 65 next year and there will be a massive increase in the number of labour market exits, to put it technically—the number of people who are retiring over the next five, 10, 15 years. All indications are that they are going to have a very different attitude to their retirement from the one our parents had when they were thinking about retiring. They will want to get out there and spend money and do things. This conference is obviously aimed in some sense at making sure we have products that are suitable for them. In a broader sense, given the opportunities over the next decade as baby boomers start to retire, how have you approached the opportunities there?

Ms Madden —At the Tourism Directions conference, the government will also be launching the inaugural state of the industry report for tourism. One of the key focus points of this state of the industry report will be some of the megatrends that industry and small businesses, which comprise the majority of the tourism sector, need to take into account. Certainly, as you have identified, the ageing of the population and what that could mean for businesses in the supply chain is one of the topics that will be addressed in the report.

Senator BUSHBY —That demographic change will have a huge impact on not just tourism; it will have a fundamental impact on the way a lot of our economy operates. It will have a lot of impacts at both ends. Those people will be reasonably wealthy on the whole and have an ability to spend and they will not want to sit at home, which is how we traditionally think of retired people.

Mr McEvoy —It is very much alive and with us now.

Senator BUSHBY —I am sure it is because some of them would have been retiring already, but technically they will hit that retirement age at 65. It is a milestone in a way.

Senator Sherry —The average retirement age in Australia is just over 60, so it is cutting in a bit earlier than 65.

Senator BUSHBY —I know, but 65 has been the traditional age.

Mr McEvoy —In markets like Japan there is a segment called the Jukunen, which is an over-55s market, which is Senator Sherry’s point. They have maybe cut out of work but they have time, they have money, they have travelled and they are looking for things that satisfy their interests. So you are right: it is a trend today and tomorrow.

Senator BUSHBY —I just interrupted there. I might come back with some more questions later, but I think Senator Birmingham has some questions.

Senator BIRMINGHAM —The statistics indicate fairly strong continued growth in overseas travel by Australians. Obviously I know the dollar has been canvassed to some extent. To what extent do we now have a gap between the number of Australians travelling overseas versus the number of international visitors to Australia?

Mr McEvoy —You know this number, Senator, and so do I but I have not got it with me. I could take it on notice. It is one that is often publicised by the TTF—the value of the number of people coming in versus those going out. It has shifted in favour of outbound expenditure.

Senator Sherry —Do you want the number of people or the expenditure?

Senator BIRMINGHAM —I was looking at people.

Senator Sherry —That is irrelevant.

Senator BIRMINGHAM —Either would be—and I realise in the end expenditure is. However, I suspect—

Mr Clarke —It is one of these big trends, as you say. I will see if we can bring it for you.

Mr Calder —There has been a general trend over recent years of increasing outbound visitation by Australians. I do not have the exact number with me for last year—I could not find it in my pack—but it did exceed the number of inbound arrivals in Australia. Last year there were around about 5.6 million inbound arrivals to Australia and that was slightly exceeded by the number of outbound.

Senator BIRMINGHAM —Slightly exceeded by the number of outbound?

Ms Madden —Outbound was 6.3 million, so the difference there is 0.7 million between outbound and inbound.

Senator BIRMINGHAM —Last year being the last financial year?

Ms Madden —The full 2009 calendar year.

Senator BIRMINGHAM —Fantastic. Insofar as you do collate data on expenditure—because, obviously, I know we keep reasonable data on expenditure for inbound; I am not sure how much data you collate for outbound—is there a comparison—

Mr Calder —The primary source for measuring the trade imbalance for tourism is the Australian tourism satellite accounts. The latest edition of that is the data for 2008-09, so it is still lagging behind at this point. So we do not have the most current data coming up to the 2009-10 figures as yet.

Senator BIRMINGHAM —In the end, I accept that that type of netting-out figure is of relatively little value to the key objective, which is getting more people to holiday in Australia and then the other objective of getting Australians to holiday at home. Just because they are also holidaying overseas does not mean that they are not doing so here, but are we seeing a continued decline in the spend on tourism and travel in the domestic market by Australians that is in line with this continued growth in overseas travel?

Mr Calder —Domestic tourism has been struggling for about 20 years now. There has been a weakness in that particular market. I do not have that particular number here, but there have been generalised falls. In 2009 overnight trips by Australian residents fell by 6.3 per cent and visitor nights fell by 5.6 per cent. Total domestic expenditure fell by 3.5 per cent, but the daytrip component of domestic travel increased by 6.5 per cent during that time. So there has been some substituting for trips of shorter duration.

Senator BIRMINGHAM —Okay.

—Senator, there has been quite a lot of documentation, including the Jackson report that my colleagues referred to, that outlined these trends and, as I mentioned, the government will be releasing the state of the industry report. These form the context for the National Long-Term Tourism Strategy and some of the marketing efforts that Tourism Australia has outlined today as well. But certainly, from a policy viewpoint, these challenges about domestic travel are the reasons we are looking in a concerted way at some of the factors that go into making up our domestic tourism industry—the investment, the labour and skills—and this is the very context in which we are currently operating.

Senator BIRMINGHAM —Okay. Important though the work of TA is in promoting the domestic market, there are another group of players who are particularly critical, and they are the state agencies.

Ms Madden —Yes.

Senator BIRMINGHAM —As we have passed through the budget rounds for all of the states, have the states maintained their investment or improved their investment in tourism marketing activities and particularly, of course, in domestic tourism marketing?

Mr McEvoy —It varies. I would have to take on notice to have a look if you want an exact answer to that, but it varies. By and large, I think they have pretty much maintained their overall budgetary effort. How they use that either domestically or internationally I would not know but, by and large, I think it has been maintained. The growth for us has come in inbound this year. We have had about a five or six per cent growth in inbound. So that has been the good news for the Australian tourism sector.

Senator BIRMINGHAM —As I said, while everybody from the industry can take some credit for that, full marks to TA for their role in that. It is the case, obviously, that extraneous factors like the dollar are going to both help and hinder in these ways, and you have explained that already in terms of your marketing dollars versus the impact on travellers to Australia and the attraction for Australians of travelling overseas.

I promised Senator Williams a bit of time before we move on, so I want to jump through a couple of quick budget specifics. We often find at the budget estimates that TA have not set their own internal budget. We will go through a couple of program lines. I might work backwards from program 1.3, which is primarily the marketing budget line. We see a fair dip in the budget for 2010-11. Is that dip going to be made up by the dollar fluctuations now—by good fortune?

Mr McEvoy —We have certainly been fortunate in a year where $9 million was brought forward. That was a really useful program. We brought $9 million forward for marketing campaigns from the March-June quarter. We spent $9 million in the industry and $11 million, $20 million, on almost 60 campaigns at a time when we really needed it, and that was useful. This year, because our dollar is buying more strongly, without putting a finite number on it, yes, we are buying better. The Australian dollar is more powerful and we can afford more marketing dollars offshore. It has been a fortunate time to be in that situation.

Senator BIRMINGHAM —Aside from investments in offshore marketing, advertising and promotion, have other sectors of TA funded out of this budget line, such as Business Events in Australia, maintained their budgets?

Mr McEvoy —They have been maintained and we have exact numbers there. We have maintained that effort. Again, there have been good partnerships with industry. We are collectively tackling the association business. We have got 16 convention bureau partners involved with us. There has been a slight decrease in the business events funding. It is still up over $3 million. It was at $3.5 million at one point. There has been a bit of a loss there, but, again, we are buying better offshore. I would argue that we have more partners involved with us than perhaps we did last year as well.

Senator BIRMINGHAM —Is the business events sector feeding into the growth in inbound tourism that the industry has enjoyed?

Mr McEvoy —It has been a good story. They were most affected last year. There was more than a 20 per cent decline in business event visitors last year. As you would understand, with the global financial crisis, business events, corporate meetings and incentives were some of the first things cut by corporates. This year we are seeing a return to growth. The latest figures show—and I am not sure we have got them—14 to 16 per cent growth in business event visitors this year. Certainly, that industry is feeling more buoyant. The corporates globally are looking to reward both employees and contractors a lot more again in the incentives area and are holding their corporate meetings offshore again. We have seen a return in the business events sector.

Senator BIRMINGHAM —The dollar does not help you so much in terms of making up in program budget lines 1.1 and 1.2. Have you had to take cuts to programs in either of those areas?

Mr McEvoy —In the interests of time, I will take that on notice.

Senator BIRMINGHAM —I will place some other questions on notice as well and give Senator Williams his promised five minutes.

Senator WILLIAMS —You keep statistics on those who come to Australia. Do you keep them on how many actually visit regional areas?

Mr McEvoy —We do. We were talking about that before offline. Something like 46c in every dollar spent by international tourists goes to regional Australia. I think it is something like six in 10 international visitors go to a regional area and just under 50c in every dollar is spent regionally. It is a good industry for regional Australia.

Senator WILLIAMS —That is good, because I heard figures years ago—it could have been 10 or 15 years ago—that something like 91 per cent of people who visited Australia would have liked to go regional areas but only about 17 per cent did. That is one sector of the tourism industry that has improved, would you say?

Mr McEvoy —I do not know those figures you are quoting, but certainly in my history in tourism—which is about 15 years—regional Australia has always been one of the major beneficiaries. That is why I think we certainly invest in this sector, because regional Australia does benefit from tourism—tourism jobs and tourism visitation.

Senator WILLIAMS —When people do visit regional Australia, do you have a breakdown of whether it is coastal or inland? I imagine that many people who come to Australia land in Sydney and might travel to Cairns, Coffs Harbour, the Gold Coast or especially the North Coast of New South Wales. Do you have any figures of those who travel inland, west of the divide for example in New South Wales?

Mr McEvoy —We do. I think Tourism Research Australia keeps good figures on dispersal.

Mr Calder —We have our international visitor survey, which we publish on a quarterly basis, which will collate the data on where visitors go based on tourism regions. We also have our national visitor survey, which looks at domestic tourism, and also breaks it down by tourism regions. Those surveys were last released on 8 and 15 September. So we are gearing up now for our September quarterly release to come out in December.

Senator WILLIAMS —With the global financial crisis of the last couple of years, as well as the high Australian dollar we are facing now, what is your anticipation? Do you do modelling of tourists coming to Australia? My concern is regional Australia. Do you see this industry suffering much of a decline in the near future or are you optimistic that we can maintain the levels and grow them?

Mr McEvoy —Sure. Smarter people than me do forecasting as part of the Tourism Forecasting Committee, which I sit on and Jane Madden sits on. Certainly Wayne Calder has some input into it, but also economists and other people look at this. I think in November the next Tourism Forecasting Committee numbers will come out. Certainly there is optimism that there is a growth in inbound and the area that is perhaps—

Senator WILLIAMS —Even with the higher exchange rate?

Mr McEvoy —Yes, absolutely. A lot of it also comes down to airline capacity, and there is certainly airline capacity growth. When airlines put more capacity into Australia, fares become competitive. It is not just about the currency; it is also about the perception and the reality that fares are more competitive. There is a lot of pent-up demand for our country. People want to come. So when the fares are right, when there is good competition and good capacity, we tend to do better. The future of aviation capacity is strong for our country.

Senator WILLIAMS —In the past, tourism was about our third largest export earner for our nation. That has obviously dropped back somewhat now?

Ms Madden —It is the largest services export, but I think it currently ranks sixth overall in terms of goods and services exported from Australia.

Senator WILLIAMS —It is behind education I would imagine.

Ms Madden —It is a definitional challenge. Tourism, as defined by the Australian Bureau of Statistics Tourism Satellite Account, includes education, which is a stay of 12 months or less. Under that definition, tourism is ahead of education, yes. Exports totalled $24 billion last year.

CHAIR —That brings us to the dinner break. I thank the officers from the Department of Resources, Energy and Tourism, and specifically for this section the officers from Tourism Australia.

Proceedings suspended from 6.14 pm to 7.16 pm