4.3 International Markets

Vision: Melbourne and Victoria will be an essential inclusion in international visitors' Australian holiday itineraries.

Objectives

• Increase visitation, length of stay, regional dispersal and yield while maintaining market share from all international source markets.
  
• Develop the Victorian tourism industry's capacity to deliver products and services that match the needs and requirements of the international visitor.
  
• Lift destination awareness by working with the media both independently and with the Australian Tourist Commission through the Visiting Journalists Program.
  
• Maximise international tourism destination exposure and visitation from Commonwealth countries in the lead-up to the Commonwealth Games in 2006.
  
• Integrate Internet marketing in strategies applicable to markets where there is high Internet penetration.
  
• Enhance convergence between Brand Australia and Brand Melbourne in key markets.
  
• Grow direct and same plane services from all key international markets.
  
• Address infrastructure constraints with respect to international markets.

BACKGROUND

The fallout from the US counter-offensive on terrorism in 2001, the final collapse of Ansett in March 2002 and a troubled global airline industry, have combined to greatly influence international travel plans. This international strategy is written, acknowledging that the Victorian tourism industry is currently operating in a state of uncertainty, but with strong indications that the market is recovering. It assumes a complete recovery during the life of the plan and includes strategies that attempt to offset some of the decline in arrivals. The plan capitalises on Australia's reputation as a friendly holiday and business haven, and Victoria's growing reputation as a key destination with a range of high quality attractions.

The rate of growth of the international markets, means they will play an increasingly important role in the State's tourism strategies. October 2001 figures from the Tourism Forecasting Council reveal international visitor nights are expected to grow at an average annual rate of 4.1% between 2001-2010. In comparison, domestic visitor nights are expected to grow at a rate of 1.4% over the same period, reinforcing the importance of the international market in the future tourism mix for Victoria. The international tourism market is also a high yield sector, attracting visitors who generally stay longer and spend more than domestic visitors.

Strong partnerships forged between Tourism Victoria and the tourism industry over the life of the 1997-2001 Strategic Business Plan form the basis for new strategic directions, which set a path for maximising international and national tourism yield to Victoria.

Emphasis will be placed on increasing visitor numbers, length of stay, regional dispersal and levels of expenditure by developing and implementing integrated consumer and trade marketing strategies for target markets and segments.

Victoria's tourism industry, in conjunction with Tourism Victoria, will continue to focus on working cooperatively with and influencing the travel distribution systems. This will be undertaken through the development of marketing campaigns, leveraging travel trade and Victorian industry resources, and through a series of trade education initiatives. Increased consumer awareness of Victoria as a tourist destination will be achieved through public relations opportunities targeting appropriate media.

Forecasts and trends

International Visitor Survey statistics show Victoria hosted about 1.1 million international visitors in the year to June 2000 staying 20.6 million nights.

Europe, including the United Kingdom, is Victoria's largest source market (33%), compared to total Asia (excluding Japan), which generates about 27% of visitors. The State's top five individual source countries, United Kingdom, New Zealand, United States of America, Japan and Singapore, have been stable over the past five years.

According to the Tourism Forecasting Council, the Asian market is expected to present the greatest proportional increase in visitor growth in the period to 2006, due primarily to the rapidly growing Chinese market. Asian source markets comprise 27% of Victoria's total international visitation, equating to 290,040 visitors. This proportion is forecast to grow to 34% in 2006, or 514,727 visitors. The proportion of Chinese visitors to Victoria is forecast to grow from 3% to 9% by 2006.

The Japan, North America, United Kingdom and European markets are all forecast to grow, however their proportional share of Victoria's international visitors will remain steady.

International Visitation to Victoria (1993-1999)

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Prioritisation of markets

Market prioritisation model

Consideration of which markets would become primary, secondary and emerging for the purposes of Tourism Victoria's marketing activities involved the use of a market prioritisation model. The model applies an agreed weighting to key variables including levels of visitation (current and forecasted), yield, market share, ease of air access and product match.

Weightings were applied which were indicative of each variable's importance in determining priority markets. Each market was then ranked against each variable and the scores calculated. The list of scores was then ranked to identify those markets which performed consistently across the key variables.

Using the prioritisation model as one factor in the decision-making process it was established that the primary markets for Victoria are the United Kingdom, United States of America, China, New Zealand, Japan, Singapore, and Germany. The secondary markets are Malaysia, Thailand, Indonesia, Hong Kong, Korea, Taiwan, Scandinavia, Netherlands, and Canada. The key emerging markets are the Middle East, South Africa, India and South Pacific.

Over the life of this plan it is expected that the high growth markets will be China, Thailand and Korea, however Victoria's market share will be highest for Germany, China, Taiwan and USA.

Market Share vs Growth 2001 and 2006

These growth-market matrices illustrate the impact of growth and market share on a range of key Victorian international markets during the next five years. They identify China as a market with potential for significant growth in visitor numbers. The United Kingdom, New Zealand and United States of America will retain their strength as primary Victorian markets. Other notable trends include growth in visitors from Korea, and Thailand.

To plot the graph, the market share of each individual country or region was compared to the average market share of all international visitors to Victoria, which is 25%. The average growth rate is compared to the forecast average annual growth rate for all Victoria's international markets of 6.6%. The size of the circle is representative of visitor numbers, proportional to the largest market. It should be noted that a market plotted low on the graph does not indicate negative growth, only relatively lower than average growth when compared to other markets.

 

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Product Priorities

Cosmopolitan Melbourne as the gateway city to Victoria and southern Australia is the hook for international visitors, offering product strengths such as shopping, food and wine, nightlife and European heritage. Ease of access to a diverse range of regional product such as nature-based attractions like national parks, wineries and unique wildlife is a key competitive strength for the State.

Brand images and positioning have been defined for each of the primary markets based on an analysis of research on target segments, holiday needs, and Victoria's relative product strengths. These will be further refined over the course of the plan.

 

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Activity Emphasis

Over the life of this plan there will be an increased emphasis on consumer marketing in the mature markets (subject to financial resource availability). However, trade marketing will continue to be the cornerstone of marketing efforts in areas such as China and the emerging markets.

The Internet will play a much more significant role for consumer marketing in countries such as the United States of America, Singapore, Korea, United Kingdom and Germany.

Market Maturity verses Marketing Focus

This graphic shows relativities between markets in relation to their maturity and the recommended mix of consumer and trade marketing in 2006.

 

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Brand attributes

Brand Attributes and Global Markets

This diagram shows Victoria's brand attributes with appeal in the State's nine key global markets.

The core attributes of interest to these markets centre on diversity, a cosmopolitan, stylish and vibrant city life and unspoiled, accessible nature and wildlife. A recurring peripheral attribute across the United Kingdom, Japan and Germany is "revitalising the senses".

 

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Regional Strategy

A growing focus on the State's regional assets aims to cultivate tourism in country Victoria by highlighting the attractions and assets to a growing international market. Over the period of this strategic plan, strengths in individual markets will be developed through a range of intergrated consumer and trade marketing strategies. More information can be found in the Marketing Regional Victoria section of this plan (Chapter 4).

ISSUES

The rapidly growing Chinese market presents opportunities for Victoria. With the proportion of Chinese visitors to Victoria forecast to jump to 9% by 2006, there is a need to maintain the State's traditionally strong markets, while also embracing the potential gains from Asia.

Australia's southern states have suffered from a lack of representation of cool climate holiday product being profiled in some Australian Tourist Commission (ATC) Brand Australia advertising. Tourism Victoria must continue to work with the ATC to address this imbalance and enhance convergence between Brand Australia and Brand Melbourne in key markets. Direct and same plane services to Melbourne are a crucial part of the State's marketing efforts. Growing these services from all key international markets is a priority for future development of the industry. More information on international air services can be found in the Aviation section of this plan (Chapter 10).

Victoria has key infrastructure gaps that are placing constraints on the development of visitation from some international markets. Investment in quality infrastructure that meets specific market needs must be addressed to ensure the State's tourism industry continues to remain competitive. More information on infrastructure priorities for international markets, can be found in the Investment Attraction section of this plan (Chapter 7).

STRATEGIES

Due to the structure of Victoria's tourism industry, cooperative relationships between Tourism Victoria, industry and trade are needed to implement these strategies.

• Pursue a balanced portfolio of marketing activities across all source markets - primary, secondary and emerging - to minimise the impact of sudden political, economic and environmental changes. As well as maintaining a balance, the focus will be on target segments with the highest yield potential.
  
• Increase the ratio of consumer marketing to trade marketing, particularly in more mature markets. Increase focus on destination awareness, media familiarisations and independent public relations activities.
  
• Based on research into consumer use of the internet in each market, migrate strategies to include online marketing where there is evidence it is an important tool for consumer research or bookings.
  
• Leverage partnerships with the Australian Tourist Commission (branding, tactical campaigns, internet, research and the media), the airlines and trade (conversion), and industry stakeholders (participation in international marketing programs and activities).
  
• Maintain and grow air services, particularly direct (as opposed to same plane) flights from Korea, Taiwan and North China.
  
• Introduce an accelerated media familiarisation program.
  
• Increase timeliness and reliability of statistical data on international markets including factors such as yield.
  
• Integrate national and international marketing strategies and programs to target Free Independent Travellers and key market segments.

Primary markets

UNITED KINGDOM

Background

The United Kingdom generated 157,506 visitors to Victoria in the year ending June 2000, making it the largest single source of international visitation for the State. The market has shown solid growth in recent years and forecasts point towards a continuation of this upward trend.

Target segments

1. Independent travellers: aged 25 - 34. Well travelled, independent and adventurous.
   
2. Third Agers: aged 45 - 65. Well travelled, but with a preference to pre-book. Enjoy soft adventure and likely to prefer coach and rail travel.
   
3. Visiting Friends and Relitives (VFR): all ages. There are very few pure VFR travellers and both the above segments often have a VFR element.
   
4. Backpackers: aged 18 - 24. Usually single, independent, and likely to be students. They generally book an airfare and then make their own arrangements when they are in the country. Often long stay (up to one year) and part working holiday.

N.B. It should be noted that all target segments referred to in the international market profiles are derived from the work undertaken by the Australian Tourist Commission in conjunction with Millward Brown and Yann Campbell Hoare Wheeler.

Issues

The United Kingdom is a mature market, with strong links to Australia, high levels of awareness of the destination and products, and 50% repeat visitation. Opportunities exist to continue to build on Brand Melbourne/Victoria awareness, while coming to grips with the pace of industry consolidation and the rapidly emerging online distribution system.

Australia as a holiday destination provides excellent value for the UK traveller due to a favourable exchange rate. Increasing competition from other countries (i.e. United States of America, South Africa, South East Asia, the Caribbean) and also other Australian states, dictates that a continued level of marketing activity is necessary to maintain and increase results.

The United Kingdom has the highest level of internet use in Europe. Travel bookings via the internet are still minimal, but hold significant growth potential. Many UK visitors organise their own trip using the internet and purchase airline tickets through the traditional travel channels.

 

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Strategies

Consumer Marketing

• Build destination awareness directly with the consumer by working with the Australian Tourist Commission on the Visiting Journalists Program and through independent public relations activities.
  
• Develop consumer promotions and facilitate destinational media coverage through major newspapers, television travel shows and lifestyle media.
  
• Use Brand Melbourne positioning and images applicable to the younger markets and emphasise Melbourne as "grovy".

Trade Marketing

• Work with key tour operators to grow the representation of Victoria, particularly regional Victoria, in holiday brochures.
  
• Undertake integrated marketing campaigns supported by appropriate collateral with selected tour operators. These should reflect Brand Melbourne and continue to position Melbourne as a stylish, exciting city and gateway with easy access to regional attractions (especially natural attractions) and authentic experiences.
  
• Enhance support of key tour operators through training, familiarisations and an in-market mission.
  
• Exploit favourable exchange rates as a competitive advantage.

UNITED STATES Of AMERICA

Background

The USA generated 131,535 visitors to Victoria in the year ending June 2000. The introduction of non-stop services between Los Angeles and Melbourne by Qantas has represented an excellent opportunity to work with the trade to package Melbourne as the first port-of-call on an Australian holiday.

Target segments

1. Experienced long haul/Sophisticated traveller/Adventure seekers: 25-64 years. Household income in excess of US$80,000, college educated with no children under 12 years. Positive attitude to overseas travel, very independent and seek interaction. Particularly interested in soft adventure, self-drive and unique accommodation. Looking for an experience and use the internet for research.

2. Niche market segments requiring acceleration through specialist marketing activity are:

• youth backpackers;
  
• gay and lesbian;
  
• non-profits/affinity;
  
• educational travel (non-profits, affinity, alumni groups).

Issues

The long-term tourism outlook for the USA is strong. However in the short-term consumer confidence is low in the wake of the September 11, 2001 terrorist attack and the economic climate.

Off-season airfare initiatives and aggressive competition between the major tour operators have kept airline load factors high.

Independent travel dominates the market with travellers using a wholesaler for some or all of their travel arrangements. The market boasts 43% repeat visitation, but barriers to conversion still exist, including perceptions that Australia is too far away, the flights are long and expensive and the destination itself is too vast or diverse to see on one visit.

 

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Strategies

Consumer Marketing

• Provide access to digital content for online travel companies as an adjunct to Australian Tourist Commission (ATC) activities in North America which are primarily directed towards the consumer. Conduct further research on potential e-marketing partners with a view to developing increased online marketing of Victoria.
• Pursue opportunities for specialist database membership to target specific segments.
  
• Use the internet as an effective and efficient way to reach prospective travellers and reduce inquiry service costs.

Trade Marketing

• Continue working with tour operators including Qantas Vacations, Inta-Aussie, Newman's, Swain Australia Tours and established group tour operators, e.g. Globus and TAUCK to ensure increased Victorian content in their wholesale brochures and through their own advertised package deals. Familiarisation support will be provided as required.
  
• Continue to look at opportunities to be involved in tactical campaigns with the ATC and industry partners to grow Victorian product and leverage marketing dollars.
  
• Build on the Victoria Specialist Agents Scheme. This scheme is administered totally online and targets the 1500 ATC Aussie Specialist agents. The specialists will recieve newsletters and online communication and be offered participation in familiarisations.

CHINA

Background

China generated 35,208 visitors to Victoria in the year ending June 2000 and according to the Tourism Forecasting Council (TFC), outbound travel from China is forecast to grow an average of 27% over the next five years. Victoria currently has a market share of 35% and a key challenge is to maintain Victoria's destination desirability.

Australia was the first western destination to be given Approved Destination Status (ADS) by the Chinese government, allowing Chinese citizens in Beijing, Shanghai and Guangdong Province to apply for ADS visas to Australia for leisure travellers. The China National Tourism Administration (CNTA) approved 20 travel agencies to sell Australia under the ADS process. Outbound agents in China deal through ADS-approved inbound tour operators (ITOs) in Australia to coordinate the land arrangements for their tourist groups. There are currently 30 CNTA approved ITOs and the 20 authorised China agents can only enter into commercial agreements with these nominated operators. However, the number of operators and agents is expected to grow.

Target segments

1. 1. Beijing, YSD (Young, Single and DINKs): Under 30 years. White collar workers with higher education levels. Relatively inexperienced though independent travellers.
   
2. Shanghai, Family: Older couples with children still at home. Relatively inexperienced travellers. Prefer group travel.
   
3. Guangdong Province, "Hedonistic/Fun Seeker" travellers: Skew towards married/single males of all ages. Inexperienced travellers. Usually have international travel experience to other Asian destinations. Prefer group travel.
   
4. Incentive travellers and student tours.

Issues

Given the immaturity of the market, efforts to raise awareness and increase the desirability of Victoria as a destination will continue by working extensively with the nominated ADS travel agents, air carriers and the ATC. Strengthening communication and relationships with the key ITOs will also be an integral part of the strategy given their importance in this market. Competition between ITOs has introduced a degree of price sensitivity. Traditional itineraries include up to five cities covering the east coast of Australia.

As efficiencies with visa processing are introduced, the current average lead-time for holiday bookings of six weeks is likely to reduce.

China's entry into the World Trade Organisation and the increase in joint venture companies in China could have positive implications for the business events segment.

The one-child policy in China means parents are often willing to invest more in quality education, and with Victoria's strong reputation for education, opportunities exist to grow the student market and the associated Visiting Friends and Relatives segment
.
Victoria, indeed all of Australia, has infrastructure issues to be addressed if the future potential of this market is to be realised. These include:

• Lack of appropriate accommodation - three and four star. (There is also a perception that Melbourne's accommodation is relatively more expensive than other east coast destinations);
  
• Scarcity of quality Chinese language guides; and
  
• Increased direct or same plane air access.

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Strategies

Consumer Marketing

• Extend the media familiarisations program.
  
• Participate in consumer shows that provide an opportunity to showcase the destination in partnership with key trade partners.
  
• Work closely with the ATC on sub-branding opportunities.

Trade Marketing

• Continue to liaise effectively with key ADS agents, ensuring appropriate levels of training and familiarisations.
  
• Attend and encourage Victorian industry participation in relevant trade shows such as the Australian Travel Mission to China and the China International Travel Mart.
  
• Encourage Victorian industry participation in Tourism Victoria led missions.
  
• Undertake integrated campaigns in conjunction with key airline partners, which encourage increased length of stay in Victoria.
  
• Ensure Victorian product information appropriate for technical visits is provided to agents handling this segment.
  
• Integrate online strategies in all trade marketing campaign activities.

NEW ZEALAND

Background

New Zealand is the second largest source country for visitors to Victoria, producing 146,851 tourists in the year ending June 2000. It has grown at an average annual rate of 7% between 1994 and 2000. Key strengths include excellent air access from the major New Zealand gateways and the introduction of Freedom Air flights which have opened up the regional hubs of Hamilton, Dunedin and Palmerston North.

Travel is a middle-class habit in New Zealand and shorter, more frequent trips, spurred on by competitive airline price initiatives are becoming the norm. The trade has seen a spate of takeovers and mergers and commission cuts have seriously impacted on the viability of retail agencies.

Target segments

1. Experienced youthful travellers: 25 - 44 years. Singles and couples travelling without children. Melbourne's events, shopping, restaurants and cultural activities appeal to the segment.
   
2. Empty nesters: 45 - 64 years. Couples travelling without children. This segment is often disposed towards exploring beyond the tourist routes.
   
3. Retired: 64+. Often with specialist interests e.g. gardening.
   
4. The gay and lesbian market is a niche high yield segment with potential for Melbourne.

Issues

Melbourne has strong positioning as a stylish, cosmopolitan city and the gateway to regional Victoria, South Australia and Tasmania. Post Olympics, Sydney is in a strong position with its revitalised and refreshed image and work needs to be done to protect Victoria's market share. The trade, including the airlines, will continue to deliver volume business that is price sensitive. However, given the maturity of the market and the degree of familiarity that the consumer has with Australia, there is a need to focus energy on continuing to build the brand and undertake segment marketing in line with product strengths applicable to this market.

The Australian Tourist Commission undertook consumer research in 2001 to evaluate the desirability and interest in seven different Australian product experiences. City Life and Great Aussie Journeys were the two highest rating product experiences with key target segments. There is clearly an opportunity for Melbourne and Victoria to be featured in tactical campaigns that hero these two themes. Of lesser interest, but scoring high on the awareness scale, were Indulgence and Events - areas in which Victoria also has significant competitive strengths.

 

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Strategies

Consumer Marketing

• Focus media earned ink initiatives* and other consumer marketing undertaken through consumer shows and direct marketing on:

1. Self-drive touring to leverage marketing already undertaken for the Great Southern Touring Route and the Capital and Country Touring Route.
   
2. City experiences. Shopping, theatre and Melbourne's cosmopolitan array of restaurants. Melbourne's key competitor as a short break destination is Sydney and it is important to differentiate Melbourne, emphasising its sophistication, style and culture.
   
3. Gardens - substantial resources have gone into Victoria and Tasmania positioning themselves around gardens as a strength. Earned ink in this area will support trade marketing campaigns.
   
4. Food and wine - seen as part of the indulgence/romance associated with the destination. Earned ink will concentrate on food markets and food and wine experiences in regional Victoria, including the Yarra Valley and Mornington Peninsula.
   
5. The internet - integrate all tactical offers advertised in mainstream media on visitmelbourne.com/nz.

* Earned ink refers to media coverage derived through Tourism Victoria's public relations activities, media campaigns and familiarisations program.

Trade Marketing

• Introduce tactical campaigns with key trade partners targeting the empty nesters and experienced youthful travellers.

JAPAN

Background

As Australia's second largest single source market of visitor arrivals, Japan continues to remain one of Victoria's highest yield markets. Japan is currently ranked third in terms of yield among Victoria's international markets (A$129.6 million) and represented just under 80,000 visitors to Victoria for the year ending June 2000, a market share of 12%.

The Japanese perception of Australia through Australian Tourist Commission (ATC) branding as "the country of big nature", combined with the distinctive charm of Victoria's unique wildlife, has led to the re-positioning of Phillip Island's Little Penguin viewing experience as an exceptional nature based tourism asset.

Target segments

1. New 50s: primarily housewives in their 50s and 60s. Typically very active. The travellers in this segment generally have a language barrier and prefer structured, fully escorted tours.
   
2. EFTs (Experienced Female Travellers): including sub-groups Honeymooners and Overseas Weddings - women in their 20s and 30s who have some overseas travel experience. They are more independent in their travel patterns than the New 50s.
   
3. Student/Education: This segment incorporates school children aged between 13 and 18, but the PR/tactical target is school teachers and officials of parent and teacher associations.

Issues

The ATC has tended to concentrate exclusively on the Experienced Female Traveller segment, which is of lesser importance to Victoria due to an inadequate product match. It is only more recently that the ATC is engaging in marketing activities directed at the more mature market, in recognition that by 2002 almost 40% of the Japanese population will be aged 50 or over. Given the motivators to travel of this key market segment, significant opportunities exist for the green destinations in Australia, namely Victoria, South Australia and Tasmania.

The opportunity exists to significantly increase visitiation and grow market share with the introduction of daily Tokyo/Melbourne air services comencing July 2002.

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Strategies

Consumer Marketing

• Showcase unique experiences that embody a sense of freedom from cultural constraints.
  
• Create status around Victorian experiences by association with influential Japanese identities, opinion leaders and celebrities.
  
• Use public relations activities to target newspapers, magazines and television programs that appeal to the New 50s and EFT market, with a strong focus on products that are featured in campaign tour itineraries.

Trade Marketing

• Use the Little Penguins as a hook from which to link other regions and product experiences, adding further dimension to a Melbourne and Victorian tourism experience. Regions to be featured as part of Penguins Plus promotions include the Great Ocean Road, Yarra Valley and Dandenong Ranges and Mornington Peninsula.
  
• Build a stronger, more independent image of Melbourne City. It is important to differentiate Melbourne from other cities within Australia and promote the attractiveness of its trendy streets and precincts, gourmet fine dining and lush, green parks and gardens.
  
• Encourage Victorian suppliers to provide consistent support in-market for Japanese tour operators.
  
• Arrange educational seminars and agent familiarisation tours for the trade and key referrals for the student market.

SINGAPORE

Background

Singapore generated 64,449 visitors to Victoria in the year ending June 2000 and during the past six years has grown on average an impressive 16% annually. Officially in recession, the growth from Singapore is expected to gradually taper with the Tourism Forecasting Council predicting a growth rate of 5.3% per annum until 2010. Given the maturity of the Singapore market with 74% repeat travellers to Australia, the key objective is to strengthen Victoria's destination desirability through brand building, while continuing to provide new reasons to travel through tactical campaigns developed with key partners.

Target segments

1. Double Income No Kids (DINKs)/Young Singles: aged 25 - 34. Experienced frequent international travellers who can make their decision to travel overseas on an impulse. Inclination towards free and easy travel packages.
   
2. Young Families: aged 30 - 44 with children under 12. Fifty percent of Young Families travel on group tours during school holidays.
   
3. Older Families: aged over 40 and have children over 12. Sixty percent of this segment travel as part of a group during the school holidays.
   
4. Silver/Matures: aged over 55. Group travel dominates as they are inexperienced international travellers with generally a low level of English.
   
5. Students and Youth: Educational trips for students aged from 15 - 24 years.
   It should be noted that these target segments are in line with the Australian Tourist Commission, except that the Commission's top priority segment is families. Victoria is not seen to have a competitive advantage in terms of suitable family friendly product for this market.

Issues

Despite the success in aggressive Brand Australia advertising, Visiting Journalists Programs and cooperative campaigns, Australia is still seen in a relatively limited dimension. There is a need to introduce new product experiences through the trade, supported by public relations activities that prominently profile Victoria.

In general, there is increased consumer demand for something different which is a reflection of the maturity of the market and high repeat visitation levels. Product development research undertaken by the ATC in four key markets in Asia, including Singapore, has identified appropriate experiences as important motivators for travel. Tourism Victoria is working with the regional tourism bodies to identify appropriate products that correspond to these themes.

It should be noted that the high penetration of internet technology in Singapore, and the proliferation of portals offering new marketing channels, facilitate increased online applications of tactical campaigns and consumer promotions.

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Strategies

Consumer Marketing

• Undertake consumer research to determine perceptions and attitudes of key target segments and use the findings as the basis for further refinement of Brand Melbourne and consumer marketing.
  
• Support key trade partners that are actively involved in consumer shows.
  
• Use earned ink initiatives and the Visiting Journalists Program to profile Melbourne as a cosmopolitan and stylish city in harmony with a range of easily accessible natural attractions.
  
• Pursue direct mail opportunities with airline frequent flyer and other appropriate databases.
  
• Embrace the internet in marketing activities.

Trade Marketing

• Support the development of the recently introduced Aussie Specialist Program and introduce, if appropriate, a Victorian Specialist Program.
  
• Encourage the travel trade to carry information about Victoria on their websites.
  
• Pursue product development opportunities with the trade based on the continued growth of the Free Independent Traveller segment.
  
• Undertake tactical campaigns with trade partners that achieve regional dispersal objectives.

GERMANY

Background

German visitors to Australia totalled 142,899 for the year ending June 2000, a 15% increase over the previous year. Germany is the single largest source of visitors from continental Europe to Victoria. Results for the year ending June 2000 indicate that Victoria attracted 53,534 visitors from Germany, representing an increase of 16% over the 1999 results.

Target segments

1. Repeaters: 40 - 54 years. They are keen to explore Australia and are excellent travellers in regional Victoria.
   
2. Independents: 18 - 54 years. Fly/drive segment is a very important travel component.
   
3. Third Agers: 50+ years. Empty nesters, still very much Free Independent Travellers (FIT). They may travel in small groups on escorted coach tours with a German speaking guide. Soft adventure, culture and wildlife tours appeal. (There is a shift in the demographics taking place with the over 50 population growing dramatically.)
   
4. Backpackers: highly independent, 18 - 35 years. Backpacker specific coach touring, backpacker facilities and short duration soft adventure modules. The newly introduced Working Holiday Visa Program in Germany will enable young Germans, aged 18-30 years to travel and work in Australia for up to one year. This will be a boost for young travellers to Australia and therefore also Victoria.

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Issues

Despite underlying economic strength, Germany is undergoing a period of economic uncertainty with the costly merger with the east still presenting huge fiscal burdens.
Consumer confidence is low as new taxes have meant that savings for luxuries such as holidays are decreasing. However, Germans will still travel, but a trend is emerging towards shorter holidays.

Strategies

Consumer Marketing

• Ensure better alignment of Brand Melbourne and Brand Australia.
  
• Develop a greater share of the Visiting Journalists Program and employ a more aggressive effort in building independent media relations and growing earned ink.
  
• Further develop Tourism Victoria's German gateway internet site.
  
• Develop and grow visitation to regional Victoria including the Great Ocean Road, The Grampians and Mildura.

Trade Marketing

• Ensure regular training of the trade through road shows and workshops.
  
• Continue a campaign to grow the awareness of the southern states of Victoria, South Australia and Tasmania.
  
• Undertake product development strategies that reflect the consumer segment holiday priorities while encouraging longer length of stay and regional dispersal.
  
• Further develop collateral and marketing support for self-drive options in Victoria - particularly the Great Alpine Road, the Sydney to Melbourne routes and Around the Bays.

Secondary markets

MALAYSIA

Market summary

Malaysia generated 35,451 visitors to Victoria in the year ending June 2000, representing growth of 6% over the previous year. This market has continued to bounce back from the economic crisis of 1997 and is gradually becoming more mature. The Tourism Forecasting Council predicts an annual average growth in visitation to Victoria of 9.3% between 2001 and 2010.

The opportunity exists to further develop Brand Melbourne while continuing to support key partners and the Australian Tourist Commission in campaigns introducing new product experiences.

The Visiting Journalists Program and earned ink opportunities will need to be fully exploited and the value of consumer shows monitored as an opportunity to support key trade partners and build the brand.

In terms of trade marketing, support will be given to the development of the Aussie Specialist Program and evaluation made of the appropriateness of introducing a Victorian Specialist Program. Product development opportunities with the trade will continue to be pursued to ensure group and independent travel itineraries reflect the needs of this maturing market. Tactical campaigns will also be undertaken with trade partners that achieve regional dispersal objectives.

 

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Target segments

1. Young Singles/DINKs: aged 25 - 34. Experienced frequent international travellers who can make their decision to travel overseas on an impulse. Inclination to purchase basic travel packages.
   
2. Families: aged 30 - 44 with children under 12. English speaking. Forty percent travel on group packages and the majority purchase base packages only.
   
3. Families and Matures: aged 30 - 44 with children, and matures aged over 45. Chinese-speaking. Ninety percent travel as part of a group.
   
4. Matures: aged over 45: English/Chinese speaking. Sixty percent travel on group tours outside of peak school holiday periods.

THAILAND

Market summary

Economic indicators in Thailand continue to show signs of improvement, although the economy remains vulnerable and the government has consistently tried to promote more domestic tourism. Australia received over 61,000 visitors from Thailand during the year ending June 2000. Victoria has a market share of 28%, which equates to more than 17,000 visitors.

The cornerstone of Tourism Victoria's trade marketing is trade servicing through regular visitation, including frontline staff training and familiarisation activity. Together with the Australian Tourist Commission, tactical campaign opportunities will be undertaken and Melbourne will be pitched to the trade as the gateway city to eastern states in both group and independent travel packages.

In the area of consumer marketing, high profile opportunities simmilar to the filming of a drama series in Victoria in 2001 will be pursued to generate significant awareness for the destination.

 

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Target segments

1. DINKS/singles: 25 - 34 years old.
   
2. Families: children over 12 years, age 35 - 54. Group travel dominates this segment.

INDONESIA

Market Summary

In the year ending June 2000, Victoria received 20,277 visitors from Indonesia. Between 1994 and 2000 visitors from Indonesia have declined at an average annual rate of 2%, largely due to the unstable political environment. Tourism Victoria has continued to maintain a presence in Indonesia and it is hoped the market will rebound in the short term.

Given major changes in the Indonesian travel trade, the challenge is to continue to build relationships with the industry and continue to undertake educational seminars and destination training.

Opportunities for cooperation on tactical and media initiatives will be reviewed on a case by case basis.

 

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Target segments

1. DINKs/Young Singles: aged 25 - 34. Experienced, frequent international travellers. Travel independently, but pre-purchase most of their trip.
   
2. Older Families: over 40 with children over 12. Travel during school holiday period.
   
3. Young Families: Families with children under 12. Trips carefully planned and all pre-purchased before departure.

HONG KONG

Market Summary

Hong Kong generated 32,839 visitors to Victoria in the year ending June 2000. Hong Kong is regarded as the most mature of the North Asian markets and although there is a move toward independent and partially packaged travel, group travel will remain the base of outbound travel to Australia in the short to medium term.

The market is still price sensitive, but the trend for short breaks and fewer destinations augurs well for Melbourne. Short lead times are the norm.

As a relatively mature market, the opportunity exists to start a brand building exercise through support of the Australian Tourist Commission's Visiting Journalists Program and through independent earned ink efforts.

Trade activity will focus on raising agent awareness of the wealth of experiences available in Victoria and securing inclusion of additional Victorian product in tour programs while retaining Melbourne, Phillip Island and Sovereign Hill.

Opportunities exist to promote niche segments such as skiing and wine tourism, while Melbourne's synergies with the education market can be leveraged.

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Target segments

1. Young Singles/DINKs: aged 25 - 34 and 35 - 44 years. Frequent international travellers who prefer short holidays and new cosmopolitan and local experiences. Prefer independent travel.
   
2. Young Families (Children under 12): Prefer short holidays, independent travel, cosmopolitan and local experences.
   
3. Older Families (Children over 12): Tendency for longer travel over school holidays, including soft adventure and cosmopolitan experiences. Prefer group travel with set itineraries.
   
4. Matures (45 years+): Tendency for longer holidays, including soft adventure and cosmopolitan experiences. Prefer group travel with set itineraries.
   
5. Incentives, business/sales people and executives: Attend business events. Group travellers. Enjoy experiencing indulgence/luxury/pampering.

KOREA

Market summary

Korea generated 15,971 visitors for Victoria in the year ending June 2000. This equates to a market share of 12% of all Korean visitors to Australia. Growth from the Korean market is forecast to continue at an extremely high rate for Australia, but Victoria's efforts in the market place are severely hampered by a lack of direct or same plane air services. Marketing activities will continue to focus on educating and raising the awareness of Victoria with the travel industry.

Korean inbound tour operators, of which there are few in Melbourne, play a crucial role in the distribution system. Education and familiarisations for inbound tour operators and in-market wholesalers will continue.

There will be continued support for media familiarisations arising from the Australian Tourist Commission's Visiting Journalists Program..

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Target segments

1. Honeymoon/young office ladies: aged 25 - 44. March, May and September to November are the peak travelling periods. Seek exciting and affordable activities.
   
2. Young families, adults: aged 25 - 44. The trend is towards independent travel, with peak season corresponding to school holidays, July-August and December. Look for an active itinerary filled with a variety of experiences.
   
3. Mature age/silvers: aged 45+. Inexperienced international traveller, usually travelling as a group. Prefer city bound itineraries and Korean speaking guide.
   
4. Backpackers: aged 20 to 34. Seeking flexible, affordable experiences not available in Korea.
   
5. Education travel: aged less than 24. Combined study/touring holiday with focus on English language study.

TAIWAN

Market summary

Taiwan generated 41,341 visitors to Victoria in the year ending June 2000. Victoria has 32% market share, but growth from this market has been impeded by a lack of direct flights. The Tourism Forecasting Council is not bullish about inbound average annual growth from Taiwan which is expected to be only 0.1% during the period 2001-2010.

More than 90% of the market pre-book all arrangements, accommodation, meals, tours and transport with the group market continuing to dominate. Efforts will concentrate on working with key partners in tactical advertising, with promoters often focusing on dual-city combinations - Sydney and Melbourne. Increasingly though, more Melbourne itineraries are being trialled. Tourism Victoria seeks to build Brand Melbourne awareness through cooperation with the Australian Tourist Commission on the Visiting Journalists Program while strongly pursuing earned ink opportunities with the trade and consumer media.

The traditional Chinese gateway site on visitmelbourne.com will be used to mirror tactical campaigns advertised in other media. Efforts will be directed to continuing to build content on this site and promote it as an information tool to the consumer and trade.

Target segments

1. Young Singles: 25 - 34 years. Experienced female travellers. Well educated. Travel as Free Independent Travellers (FITs) or groups. Short stay holidays.
   
2. DINKs: 30 - 39 years, male and female. Experienced and regular travellers. White collar professionals. Travel as FITs or groups. Short stay holidays.
   
3. Young Office Ladies: 25 - 39 years, female, well educated. Experienced travellers who travel at least once every two years in groups or FITs. Tendency for short haul Asian countries with 6-10 day stays.

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SCANDINAVIA

Market Summary

Scandinavia is comprised of the four Nordic countries of Sweden, Finland, Denmark and Norway. Although there are differences between these four countries, the common features such as economy, social factors and geography allow them to be considered as a single market.

Australia received 78,315 visitors from Scandinavia for the year ending December 1999. Of these visitors, 50% were from Sweden, 26% from Denmark, 17% from Norway and 7% from Finland. Victoria attracted 26,533 visitors from Scandinavia for the period and holds a 34% market share.

In terms of travel interests, Scandinavians are experienced travellers and enjoy their independence when travelling. They are interested in culture, wildlife, adventure and wide open spaces. Australia has huge appeal for Nordic travellers.

The four Nordic countries have a high acceptance of new technology. The open-mindedness of Scandinavians towards new communications channels, provides a great platform for travel-related businesses and destination marketers such as Tourism Victoria.

Offering a variety of nature and adventure based experiences, the Great Ocean Road, The Grampians and Victoria's beaches will be the main focus in consumer marketing. The close proximity of the State's adventure based products is appealing to the market.

A more regular pattern of visitation to the trade will be developed to ensure a wider representation of Victorian product in key tour operator brochures.

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Target segments

1. Independent Adventurers: 29 - 39 years. This segment prefers beach, nature, hard and soft adventure holidays.
   
2. Older Independents: 40 - 64 years. Similar to the younger independent travellers, but looking for soft adventure and a better accommodation standard. They are likely to book all their travel arrangements prior to departure.
   
3. Backpackers: Highly independent, 19 - 29 years. Coach touring (backpacker specific tours), backpacker facilities and short duration soft adventure modules.

NETHERLANDS

Market Summary

The Dutch economy is regarded as very successful in the European Union and enjoys low unemployment rates and a buoyant economy.

In the year ending December 1999, International Visitor Survey figures show 79,805 Dutch visitors arrived in Australia, while Victoria received 30,241 visitors (38% market share). Forecasts indicate strong average annual growth from the Netherlands of 6.9% over the period 2001-2010, reinforcing the potential of this market for Victoria in the future.

The Dutch community in Victoria is large and brings with it a strong Visiting Friends and Relatives (VFR) market. A large part of the market however continues to be price sensitive and budget-oriented, with a preference for independent travel and self-drive touring. Working holidays remain a major motivation for young Dutch people to travel to Australia.

Trade visitation will be maintained and cooperative opportunities in Australia-wide tactical and media initiatives will be embraced.

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Target segments

1. Independents: 18 - 54 years. Fly/drive preferred. Love wildlife and outdoor activities. VFR/holiday arrivals.
   
2. Backpackers: 18-34 years. Very independent, interested in soft adventure and outdoor touring modules. Working Holiday Visa Program will assist in growing visitor numbers from this market.

CANADA

Market Summary

For the year ending June 2000, Victoria received 22,636 visitors from Canada representing a 30% share of total Canadian visitors to Australia. Figures from the Tourism Forecasting Council indicate that Victoria will receive about 34,000 visitors by the year 2006.

Same-plane Air Canada services to Melbourne which began in December 2001 provide a further opportunity to grow market share.

Tourism Victoria will continue to look at opportunities to be involved in tactical campaigns with the Australian Tourist Commission, airlines and operators. The themes of self-drive, good living and five-star accommodation will continue to feature.

Work will continue with larger wholesalers on increasing Victoria's selection of product and on product development in the regions. Aussie Specialist agents and Victorian Specialists will be trained by newsletter, on-line communication and participation in familiarisations.

Use of the internet continues to grow at a staggering rate and will be utilised as an effective and efficient way to reach prospective travellers and reduce inquiry service costs.

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Target segments

1. Experienced long haul/Sophisticated traveller/Adventure seekers: 25 - 64 years. Household income in excess of US$70,000, college educated with no children under 12 years. Positive attitude to overseas travel. Very independent. Seek interaction. Particularly interested in soft adventure, self-drive and unique accommodation. Looking for an experience and use the internet for research.
   
2. Youth/Student/Working Holiday: Seeking active and outdoor oriented product at good prices. Longer than average stay and good dispersal to regional areas.
   
3. Snowbird/retiree: 55+ years. Resides in the snowbelt of Canada and has the time to travel year round, particularly in the harsh winter. Tends to stay longer than average.

Emerging Markets

A number of markets and regions fall under the emerging market category as they are not currently responsible for significant visitation or yield. However, some of these markets show potential for Victoria because of high length of stay and expenditure per night.

Victoria's key emerging markets.

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Based on available International Visitor Survey (IVS) data (December, 1999)

MIDDLE EAST

Victoria has an important competitive advantage in the Middle East market with direct air services to Melbourne by Emirates, together with numerous air services from Asian ports. A very high yielding market, the Victorian industry's activities are targeted largely at the Arab family segment which offers a long length of stay.

While there is a diverse mix of many countries and nationalities, focus in the region will continue on the markets of United Arab Emirates, Kuwait, the Kingdom of Saudi Arabia and Israel. These markets provide the strongest visitation for Victoria and have considerable potential given relatively large populations with high disposable incomes, a history of long haul travel and taking long holiday breaks.

With a peak travelling season of Victoria's winter, this market has the potential to provide excellent low season visitation. Efforts will be made to continue working closely with the trade, increasing destination awareness within the distribution system and seeking cooperative promotional opportunities. Importance will also be placed on gaining the Victorian industry's support for in-market activities. In the area of consumer marketing, the Australian Tourist Commission's (ATC) Visiting Journalists Program will continue to be a key focus.

Following recent world events, the USA is no longer a favoured destination for many Middle Eastern visitors. Australia is therefore poised to reap considerable rewards provided its image as a welcoming and safe destination is maintained.

SOUTH AFRICA

An increase in recent years in holiday visitation from South Africa is expected to continue for Australia and Victoria. Although hampered by a lack of direct air access, Australia rates highly on visitor intention polls. This is due to perceptions of safety and Victoria's product strengths including sporting events, shopping and self drive activities.

Continued trade education is a key strategy to be employed in the market, in both the wholesale and retail sectors. Tourism Victoria will also work closely with key trade on promotional and cooperative marketing opportunities. Consumer marketing will focus on increased activity with the media either through the ATC Visiting Journalists Program, or other media visitation sourced in conjunction with the key trade or independently. Tourism Victoria will continue to work closely with the Commission's Aussie Specialist Program and other in-market training and accreditation programs.

A focus will also be made on working with key sporting tour operators for a range of events, including the 2006 Melbourne Commonwealth Games.

INDIA

India is a high potential market for which Victoria has several competitive strengths including sport, shopping and dining. The travel trade generally has little knowledge of Victoria and consumer knowledge of the destination is largely built through the profile of cricket. Consumers are also unaware of the diversity of the holiday experience.

Strategies for boosting awareness through trade education will be employed. Trade servicing will continue and opportunities for cooperative marketing persued.

Tourism Victoria will continue to support ATC's public relatrions strategy and grow media coverage throught the ATC's visiting journalists program and media sourced in conjunction with key trade, or independently.

SOUTH PACIFIC

The South Pacific market has provided good visitation over many years with minimum marketing activity.

New Caledonia is the key market in the area and Victoria will continue to be responsive to any potential opportunities as they arise. Continued education of both the wholesale and retail sectors is a key strategy and this will be undertaken in conjunction with the sourcing of promotional and cooperative marketing opportunities.

Consumer marketing will focus on increased activity with the media through the ATC Visiting Journalists Program, and other media visitation sourced in conjunction with the key trade or independently.

Australian Tourism Exchange

Victoria will host Australia's premier international travel industry event, the Australian Tourism Exchange (ATE) in both 2003 and 2004. This prestigious event will bring more than 700 of the world's top international travel industry buyers to Melbourne. It is vital that Victoria uses this opportunity to showcase Melbourne and regional product to trade and media. Hosted familiarisations will be held before and after ATE to promote Melbourne and regional product.

 

Australian Tourist Commission

A vital key to leveraging Victoria's international marketing efforts is maintaining a strong partnership with the ATC.

The ATC's mission is to market Australia internationally to create a sustainable advantage for the country's tourism industry for the benefit of all Australians. It is arguably Tourism Victoria's most important partner in international marketing and Tourism Victoria seeks to collaborate with the organisation on a range of brand, research and consumer and trade marketing activities. Working together effectively will assist the Victorian industry to benefit from promotion of Brand Australia through the adoption of destinational images that reflect Victoria's products and experiences.

The ATC re-evaluated its international marketing activity in light of the significant changes in the global and domestic business environment caused by the terrorist attacks in the US and the collapse of Ansett in September 2001. It found inbound tourism prospects in the mid to longer term continue to remain positive.

The ATC's internal review conducted in 2001 found the importance of building State Tourism Office (STO) partnerships. In line with this, the Commission committed to increase its STO engagement and work in an open, transparent and productive partnership with its broad range of stakeholders. Tourism Victoria and the State's tourism industry welcome this decision which also aims to better align ATC and STO strategies.

Tourism Victoria is co-located with the ATC in many markets. An independent consultant has been appointed jointly by the STOs and the ATC to review existing structures and resources globally. Further analysis is recommended to ensure there is clear role definition between the STOs and the ATC in the areas of trade and consumer marketing. A combined global marketing approach between the ATC and Tourism Victoria, and a closer match between Brand Australia and Brand Melbourne will assist Victoria's marketing efforts. It is important that synergies are exploited and duplication eliminated.

Tourism Victoria is committed to working with the ATC to continue building partnerships with industry and tourism organisations to deliver regional specific marketing programs.