Wide Open Spaces

Tourism Council of Western Australia

There’s an awful lot of Western Australia, and much of it is hugely attractive, especially if crowds are not your scene. Lonely Planet gushes: “Somehow different, almost a separate country… packed with wonders… a state of incredible contrasts… the perfect eco-tourism destination… includes something for all types of traveller…”

So it sounds as though tourists should be forming an orderly queue to hand over lovely foreign currency and tour the state. But according to Evan Hall, of the Tourism Council of Western Australia (TCWA), it’s not quite that simple.

TCWA is the tourism industry’s association in WA, not to be confused with the government’s statutory authority (Tourism WA), whose role is to market WA to interstate and international visitors and not funded at all by government. Evan and his team represent the businesses in WA that derive income from tourism and travel (large or small, from airlines and hotel groups to individuals offering dive experiences) and focus their energies on lobbying on their behalf to the authorities, developing policies, and organising training.

Since 2000, there has been a pattern of Australians taking holidays abroad. Traditionally the domestic tourism industry catered to 75 per cent domestic customers and 25 per cent from overseas, but that ratio has changed significantly, with more tourists coming in but not as many as are leaving. Evan says one reason is that Australians generally have more money in their pockets, but an important factor has been the spread of low-cost air carriers that has made ‘abroad’ a lot cheaper to get to. “People’s expectations have changed,” he says. Planes fly both ways, and the same factor has driven growth in inbound visitors, although the well-known strength of the Aussie dollar has inhibited that increase to some extent, especially in the longer-haul markets.

Measured by dollar spend, Australia is now a net loser in this in-and-out equation, although overseas visitors are “very valuable to us, spending around four to five times as much as an interstate visitor.” Nationally, the tourism industry is currently worth around 93 billion dollars.

New markets for tourism are all in Asia, many relatively close to Australia, and this is an opportunity for WA in particular. “Our comparative advantage is that Australia has always been at the top of the polls when people are asked their most desirable destination, but the comparative disadvantage is that we have always been a long-haul destination from our primary markets in Europe and the US. But with the shift to Asia, we move to a medium-haul destination and closer to the time zones.” WA is strategically placed; it’s a mere five-hour flight from Singapore, for example, and in the same time zone, as is the whole of China. “We are the closest ‘western-world’ experience for the China market.”

The importance of this new market cannot be overstated. China is expected to become the world’s biggest exporter of tourists for the first time this year, with about 78 million Chinese expected to travel abroad in 2012, according to the UN World Tourism Organisation. China’s outbound tourists are transforming the world’s travel sector. “The downside is that we have only just got the first direct flight from China to Perth, which started last November, although that was a big step forward for us,” not least because it is operated by China Southern, one of China’s biggest airlines and with a serious domestic network for Chinese travellers to connect to (the flight was secured with some funding from Perth airport, as well as incentives from government and Tourism WA).

New Zealand has traditionally been the number one market for inbound tourists (although many in the industry regard this as a ‘domestic’ market), with the UK at number two and China currently in third spot overall – but with 21 per cent growth per year in the past three years. “But almost all of that has been pouring into the east coast of Australia, Sydney in particular, and very little has come to WA.” Current numbers show 13 per cent growth in Chinese visitors to WA, albeit from a low total of some 24,000 per year out of a national half-million arrivals. Evan confirms that, contrary to some preconceptions, Chinese visitors are big spenders and “they have a very high propensity to shop.” As numbers increase, he says, the WA industry is gearing up to give them an appropriate welcome, “getting China-ready. It’s changing the mix of foods offered on trips; hotel breakfast menus; safety advice and interpretive materials in Mandarin and 101 other things that need to be done.” A significant amount of restructuring is needed to meet the requirements of the Chinese traveller, says Evan. “Whether you are showing them the outback or sampling wines, it needs to be done in a way that is meaningful to a Chinese visitor.”

Chinese or Western, everyone arriving in Perth will note a certain limitation in terms of available accommodation. Evan says this is not unique to Perth but common to some extent in all Australia’s capital cities, although “in Perth it is at an extra level. Occupancy is at 87 per cent, which basically means we are full midweek,” due to the significant amounts of business travel occasioned by the resource industry’s massive activities in WA (and not including FIFO). Evan points out that there has been no significant investment in hotels in Perth since 2005 (things are set to change in this area, though – see our feature on Perth Convention & Exhibition Centre) so the stock of rooms is stuck at around 5,000 while the number of visitors has increased “significantly.” Of course, this does not apply every day of the week – you can easily get a room on a Friday or Saturday night – so part of the challenge for the industry is to package experiences for the Chinese market which brings them through the state capital at low-demand times and out into the surrounding state when it’s most busy. “Longer term, of course, we must have more investment in hotel infrastructure.”

This ‘bottleneck’ has important consequences. Hotel accommodation typically accounts for some 15 per cent of a visitor’s total spend, leaving 85 per cent for cafés, restaurants, shops, trips and transport. If there’s no room, that 85 per cent doesn’t get to the community.

Evan knows that many Australians complain about costs in Perth – the high cost of a meal, or a beer. “Certainly perception can be a deterrent, but it is really down to the market. The leisure market is primarily interested in regional WA where prices are quite reasonable.” Perth has three limitations – constraints on numbers at the airport, the hotel room situation and a lack of available labour, and although this is not unique to this city, “we probably have it worse than any other destination in Australia,” because practically all arrivals have to come through the Perth hub. It is vital, says Evan, that Perth is an affordable hub.

To this end, TCWA was vocal and influential in changing state government policy on land use late last year, which among other things means the release of Crown land at discounted rates and zoned for hotel use only (or as part of a mixed development) to incentivise developers. The pending Perth Waterfront development will also have conditions imposed that mean developers must include hotels. This, again, is not unique to Perth, but Evan says other states are now looking at what is being done there. “We are very pleased because it is right for government to intervene in the market to encourage hotel development.”

Beyond the Perth bottleneck, the regional picture is patchy. “There are regions in the north which are now so dominated by mining, where every sector of the industry with the exception of leisure tours – meeting space, airport space, room space, even restaurants – everything has been shifted over to the resources sector.” Evan cites Port Hedland, admittedly never a major destination but a gateway to some important leisure spots (Karajini, for example, or the Dampier archipelago): “we can’t shift leisure visitors through and rightly or wrongly they have written themselves out of the tourism equation. A significant recovery operation will need to be undertaken once the construction phase of the mining boom passes.” He hints at potential long-term damage to tourism (4WD tours, for example) resulting from short-term resource industry operations.

This situation has greater impact on some business sectors than others. While an airline is happy to sell seats to suits or surfers, a boutique winery marketing spa services doesn’t make much out of miners and people building pipelines don’t buy pearls. “It’s vital to minimise the impact.” TCWA has been instrumental in holding talks with authorities and the big mining and Oil & Gas companies about a wide range of issues – dress standards at the airports, for example, in view of thousands of FIFO miners passing through, or, “what it will be like going for a drink at your local hotel in Broome – will it be a great leisure experience or will you see thousands of guys doing some hard drinking? It’s a matter of managing those situations and keeping some affordable rooms and seats so you can keep open things like the classic Indigenous tour, or 4WD or camel tour during that period.”

TCWA’s influence is considerable in maintaining a balance and ensuring a future for all its members in tourism, as well as in helping them to better market themselves, train staff and connect to people who want to buy their products – not least in regions, especially down south, where there is not the same effect from mining and resources. Despite the challenges, Evan sees a bright future for the vast state which, many visitors suggest, has almost more sights to see than inhabitants.

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

December 19, 2018, 5:29 PM AEDT