Routes Asia 2018 Conference

Introduction and acknowledgements

Good morning. I would like to start by acknowledging the Traditional Owners of the land on which we are meeting. I pay my respects to their Elders, past and present, and also extend respect to all Aboriginal and Torres Strait Islander people here today.

I would also like to acknowledge the hard work from the teams at Brisbane Airport, Tourism and Events Queensland, Brisbane Marketing and Tourism Australia in bringing this prestigious event to Queensland. 

As the only route development conference in the Asia Pacific region, Routes Asia is an extremely important event for the aviation industry and will strengthen Australia’s position on the world stage as a desirable destination for major airline network planners. 

Competitive and regular flights into Australia ensure we remain an accessible and attractive destination for tourists. 

International air capacity is closely linked to tourism growth and so it is a real pleasure to be here today to speak to you all about the importance of aviation and route development, particularly for an island nation such as Australia. 

Importance of tourism to Australia’s economy

Tourism is a vital component of Australia’s economic wellbeing. 

The latest tourism numbers, that track the industry’s performance to December 2017, show that the tourism industry continues to grow faster than the national economy for the third year in a row. 

International arrivals and spend are at record levels.

In 2017, Australia received 8.8 million visitors, up 6.5 per cent on the previous year.¹

Those visitors spent $41.3 billion, an increase of 6 per cent year on year.²

Tourism is one of Australia’s largest service exports, making up 10 per cent of all Australian exports and providing direct employment for almost 600,000 Australians. 

Tourism creates a greater downstream economic effect than mining, agriculture or financial services. 

For every dollar directly earned by tourism, another 81 cents are generated in other parts of the economy.

Importantly, for every tourism dollar spent in Australia, more than 40 cents are spent in our rural and regional areas, such as my electorate of Parkes. 

And the importance of tourism will only increase as we start to move away from being heavily reliant on the resources sector and more focused on service exports.

This is a sign that the hard work of the Australian tourism industry is paying dividends. However, in the increasingly competitive global tourism landscape, there is much more that can be done.

It is imperative that we continue to foster a strong, resilient tourism industry across the board to ensure that we reach our national Tourism 2020 target of $115 billion in total overnight visitor expenditure. 

With overnight spend currently at $105 billion, we are on track to meet that target and forecasts suggest we may even achieve as much as $130 billion by 2020.

Importance of Asian markets

Connectivity to Asia is a particularly important part of that Tourism 2020 equation.

Australia is lucky to be within close proximity to Asia and we are working hard to capitalise on the potential that holds for Australia’s tourism industry. 

The most recent international visitor survey results show that we are continuing to see double digit growth in spend from China and India, as well as strong growth from Hong Kong, and Malaysia.

In the years ahead, as the Chinese and greater Asian middle class continues to grow, Eastern markets hold incredible opportunities for Australia. 

Australia received 4.3 million visitors from Asia in 2017, representing 49 per cent of all visitors. In 2010, visitors from Asia only represented 39 per cent. 

From a spend perspective, visitors from Asia spent $23 billion, 56 per cent of total visitor expenditure. Comparatively, visitor spend from Asia was only 45 per cent in 2010.

These numbers really demonstrate how quickly tourism from Asia is growing and what a significant impact that has for Australia now and in the future. 

Importance of aviation access

Aviation access is absolutely crucial to meeting the Tourism 2020 goal. 

International air capacity to Australia has increased at roughly similar levels to inbound visitation over the past 10 years. 

This demonstrates the close correlation between Australia’s tourism growth and aviation development.

We saw a great example of this when aviation capacity increased out of Japan in late 2015 and almost immediately visitation, which had been flat for some time, started to grow again.³

There are currently a record number of flights into Australia from 65 airlines. Almost 100,000 planes flew into Australia in 2017. 

And the number of available inbound seats increased 5 per cent from the previous year to 26 million.⁴

This means that the international aviation target is tracking above the upper bound Tourism 2020 target of an additional 24.8 million inbound seats.

This achievement is a result of the hard work of everyone in this room as well as the Australian Government who has made it a priority to focus on opening up and modernising air services agreements where possible, in order to benefit both Australian and international airlines. 

Growth has been driven by increased capacity from New Zealand, Southeast Asia, China, the Middle East and the USA. 

How the Australian Government is supporting aviation access

This is why the Australian Government is actively focusing on increasing aviation connectivity with Australia. 

We recognise that significant and sustainable increases in international aviation capacity are key to achieving the industry’s Tourism 2020 goals. 

At the end of 2016, Australia and China agreed to a landmark open aviation market that removes all capacity restrictions between China and Australia for each country’s airlines.

Since that historic agreement, we’ve seen new flights to Australia from China Southern between Guangzhou to Cairns, Air China launched its new Beijing to Brisbane route, and China Eastern boosted the frequency of its Shanghai to Brisbane route.

The range of new air services from China that have commenced or been announced in recent months suggests that Australia remains as popular as ever amongst China’s rapidly growing number of international travel. 

Chinese travellers can now fly to Australia from 16 cities across China, with 10 airlines operating around 150 direct flights per week between the two countries.

We’ve also seen the return of Malaysian Airlines flying into Brisbane from Kuala Lumpur four times a week from June this year. 

Japan Airlines have put on a new route from Melbourne to Tokyo and we’ve seen an increase in flights from Sydney to Delhi with Air India. 

This coming weekend, Qantas will launch their new Perth to London route, which will be one of the longest flights in the world. 

The development of these ultra-long-range aircraft is a game changer for Australia and will open up numerous opportunities going forward. The convenience and appeal of non-stop travel cannot be underestimated. 

Aviation capacity from North America has never been better. Capacity between the two continents has grown almost 29 per cent over the last five years. In 2015, Qantas re-established flights to San Francisco. Over the last three years, we also saw Air Canada expand operations into Australia, flying into Brisbane in 2016 and Melbourne last year. 

Route development

Of course, the route development aspect is also incredibly important. The Australian Government, through Tourism Australia and Austrade, works with many airlines and airports to increase and encourage route development. 

Investing significantly with over 15 airline partners and through 8 memoranda of understanding with airlines, the Australian Government’s focus on aviation access is a key way we are helping to support the tourism industry. 

Tourism Australia has also made building strong relationships with aviation partners one of their key commercial priorities. 

Working closely and collaboratively with airports and airlines as well as state and territory tourism partners is helping to build demand for our country and grow competitive aviation capacity. 

This ‘Team Australia’ approach to aviation development focuses around long term strategic agreements, co-operative marketing partnerships and working with airlines, airports and state and territory tourism organisations to support new airline routes.

It has been critical to the success Australia has enjoyed in recent years in telling Australia’s tourism story to the world. 

Tourism Australia now enjoys co-operative marketing relationships with most of the largest international carriers serving Australia from its key tourism markets.

Aviation deals of this scale secure significant funds towards our international marketing and distribution activities. 

It means their campaigns have further reach and they can focus on doing what they do best — market our country through global marketing campaigns.

Marketing

Tourism Australia continues to invest in areas that drive increased spend and conversion - targeting their resources towards markets and segments that present the best growth prospects.

Tourism 2020 is about targeting markets where there are the biggest growth opportunities and effective tourism marketing will continue to play a vital role in achieving our goals. 

With the government’s tourism strategy focusing on high yielding consumers, there is a need to capitalise on those international markets that hold the most potential in terms of us being able to tap into high value travellers.

Tourism Australia undertakes much of it’s marketing with airlines to increase reach and to share data so that their marketing is more relevant and targeted. 

Launched at the American Super Bowl, Tourism Australia’s new campaign, which initially appeared as a new Crocodile Dundee movie, features some of Australia’s best-known celebrities and showcases our country in a new, modern light. 

The original 1986 Crocodile Dundee movie was a huge success and helped to put Australia on the map for many Americans. 

While the Dundee campaign is still very much in its early stages, feedback from industry both here and in the US has been extremely positive.

The US is critically important to Australian tourism. It ranks second in terms of expenditure, and third in terms of visitor arrivals. However, whilst awareness and intention to visit amongst Americans are improving, conversion is still low, presenting both a challenge and an opportunity which this campaign seeks to address. 

As we move beyond the year 2020, China will also undoubtedly remain a key market for Australian tourism. Off the back of a successful China-Australia Year of Tourism, annual Chinese visitor numbers have climbed nationally by more than 12 per cent to 1.35 million, only a few thousand shy of our neighbours and long-time largest arrivals market, New Zealand.⁵

As early as next month, China could overtake New Zealand and become our largest market in terms of visitation.

Spend by Chinese visitors recently surpassed $10 billion, now equating to one in every four tourism dollars spent in Australia. In 2017, spend by Chinese visitors grew 14 per cent, evidence that our continued focus on this market is working.⁶

Looking to the future

In other policy developments, in November last year the Minister for Trade, Tourism and Investment, and the Minister for Foreign Affairs, launched the Foreign Policy White Paper. 

This is the first comprehensive review of Australia’s international engagement for 14 years.

This paper sets up the framework for Australia’s international engagement into the future and will be an important focus for the Australian Government.

Of course, the tourism industry has long had a forward-thinking strategy that set a clear and defined goal for Australia with the Tourism 2020 Strategy. 

But with the year 2020 now truly within our grasp, we must look to the future and increase our focus on areas that will yield the best results.

Supported by the Government, the Beyond Tourism 2020 Steering Committee has been established to attract an even greater share of the world’s 1.3 billion international travellers.

Australia’s tourism leaders will develop a bold vision for Australian tourism to ensure the industry keeps attracting record numbers of visitors and creating jobs.

To grow this further, Australia needs to develop a new long-term vision for tourism, encouraging innovation, harnessing new technology and reducing red tape that will offer a world-class experience for travellers.

That is why the Government has brought together Australia’s most experienced tourism leaders to shape the beyond Tourism 2020 strategy. This will ensure we continue to grow visitor numbers and their expenditure, driving economic growth and creating new Australian jobs.

Conclusion

Thank you for your time today.

I trust you will have a productive and enjoyable conference and I encourage you to get out and see a bit of Brisbane while you’re here. 

¹ Australian Bureau of Statistics, December 2017

² International Visitors Survey, December 2017

³ IVS, March 2016.

⁴ BITRE, December 2017

⁵ ABS, December 2017

⁶ IVS, December 2017