Transcript of Episode 9

Discover how Australia is reimagining its visitor economy in a post-pandemic world, with fascinating insights from Austrade's Samantha Palmer. From the unexpected silver lining of Australians rediscovering their own backyard during COVID-19 to the strategic focus on emerging Asian markets, this episode unpacks the evolution of Australia's tourism landscape.

With:

Gary
Bowerman

Samantha
Palmer

FIPAA, AusTrade

Transcript

Hello and welcome to the High-Yield Tourism podcast. I’m Gary Bowerman. On today’s show, I’ll be discussing a new approach to growing the visitor economy in Australia with Samantha Palmer of AusTrade. So let’s pleasure to welcome to the High Yield Tourism podcast Samantha

Tourism podcast Samantha Palmer, who is General Manager of Visitor Economy and Client Programs at the Australian Trade and Investment Commission, widely known as AusTrade, to discuss the revitalization of Australia’s visitor economy. So Sam, thanks so much for coming on the show. How are you doing and where are you right now? Thanks

Thanks for having me, Gary. It’s such a pleasure to be talking with you again. I am actually in the beautiful heart of the capital city of Australia, which is Canberra. Lots of people think Sydney is the capital, but actually the ACT, the Australian Capital Territory, Canberra is the place to be for me and AusTrade today.

Lovely place to be. So Sam, let’s take a little bit of a look back. Let’s go back to the time of COVID actually. When you took on your current role at AusTrade, that was back in April 2021, I think. The tourism outlook in Australia and across the region was very, very different back then. Just tell us a bit more.

Oh, gosh. The world couldn’t be a different place to what it was back then. And aren’t we all grateful to everyone for all that they’ve done, the health professionals and everyone who contributed in the community to get us back to this circumstance where we can be safe and well and travel again. Of course, the Asia-Pacific region, Australia, was part of the country group that really focused on the health of our citizens and closed our borders and took some time to reopen them. focused on the health of our citizens and closed our borders and took some time to reopen them. But in that was quite good for our tourism effect, a little bit like China, domestically, I think, in that Gary, our citizens got a chance to fall in love with their own country. We are fantastic travellers in Australia. We love to get out across the world. We don’t find the distances too hard. I know a lot of people are worried about coming to Australia because of the length of the flight, but we love getting out and about. And so we did that in our own country and fell in love with Australia again. But now the borders opened. Australians have been getting out and travelling, visiting friends and relatives, travelling for business, holiday, and a whole range of reasons. And, of course, we’ve welcomed our travellers back from overseas on holiday. Holiday is now the most popular reason for short-term travellers to come. We’ve welcomed back our international students, who are such an important part of our visitor economy. And of course, our visiting friends and relatives have been reconnecting in Australia. And business, as you were talking about in your episode last week, business travel is really coming back in great stride. So we’re really excited.

That’s good to hear. I’m more than overdue a visit back to Australia, Sam. I haven’t been since the pandemic, so I will be coming in the next few months, I promise. Let’s dig a little bit more into Australia’s use of the term visitor economy, which I always think is quite interesting. It covers all visitors who travel to and within Australia, and those visitors are subdivided into various segments. Can you tell us a bit more about those segments and why they matter?

Yes, very much so, Gary. And of course, we have our Thrive Strategy, which stands for the reimagined visitor economy, which we’re really pushing to thrive into the future. And one of the reasons, Gary, we use the term visitor economy instead of tourism is the mind picture that you have when you think of tourism, which is mostly people having a great time on holidays. And yet we know that there are so many short-term traveller segments that are critical, very important to attract, that we love to welcome, that are broader than simply our holiday travellers, of course. So we break our visitor economy down into the international definition. So short-term travellers who are here for less than 12 months, of which holiday is an important part, visiting friends and relatives, business travel. People are here for employment. So Australia, like many countries, needs a whole range of technical skill sets, often for short-term, sometimes for long-term. So travel for employment is an important part of our visitor economy. And international students who are here and a very big part, as I said, of our export market. And it’s quite interesting in Australia, in fact, domestic tourism is still the lion’s share of the contribution into our economy. So about 69% full expenditure in the visitor economy comes from domestic travel and not a huge proportion from international. But what is really interesting about our international travellers, of course, is they have come a long way to come. And so they tend to stay longer and they certainly spend per night a lot more than our domestic travellers do. So we’ve got two goals, Gary, in the visitor economy to get domestic travellers to travel in Australia like they do overseas and to spend in Australia like they do overseas and to attract more international travellers to Australia in our visitor economy across all of our different segments and to try to encourage them to see more of the country to disperse regionally and to spend, perhaps even stay and work, you know, nomad, digital nomad-wise, to stay as long as they can where they’re here and come back again, like you say, we’d love to have you back.

That’s 69%. That’s a really high figure. Sam, overall, how important is the visitor economy to Australia’s economic wellbeing? Overall, how important is the visitor economy to Australia’s economic well-being?

It’s a major contributor to our economy in terms of GDP. It’s been lower post-COVID than it was before. So it was in 2022-23, it accounted for 4.8% of Australia’s gross value add. And tourism GDP as a share of the national economy, it actually increased from 1.5% in 2021-22 to 2.5% in 2022-23. So on a current price basis, tourism GDP was about 4.4% or $2.7 billion higher before COVID. And that really reflects, Gary, that our international travel hasn’t quite returned at the same rate as we had pre-COVID. And, of course, we’re encouraging. But there’s lots of things happening in the world, inflation across the world, conflict across the world. People are a little slower in some of their bigger markets, like China, to travel, as you well know. And so we haven’t quite come back in some of our biggest spending areas as much as we would like. But we’re certainly looking to the future.

We’ve spoken about this before, Sam, but COVID, I think very much in Australia, engendered a real rethink about the value and the yield in the Australian visitor economy and where it would go in future. Tell us a little bit about the influence of the thinking at that time and how you’ve sort of rolled that out in the last two years since.

Yeah, so one of the important things we did, Gary, was we got some independent advice about where the opportunities lay in the visitor economy. We got a report on that, long-term opportunities, and we published that on the Austrade website. We also got an independent panel led by the former tourism minister, Martin Ferguson, supported by a number of industry representatives to really look at that report and engage broadly with industry to think about where the opportunities were into the future. And as a result of that produced our Thrive Strategy, which really has three themes. It says that we really needed to collaborate more effectively. And we spent the last couple of years doing that, building our relationships and working together more effectively, recognising that it is competitive. Of course, every state would like the international holiday traveller to land in their jurisdiction, but we can do a lot more by working together effectively. And we’ve produced a lot of really great outcomes like our sustainability framework for the country that says that when we talk about sustainability in Australia, we’re very clear and we’re all using the same language and we all have the same goals. So collaboration has been a key theme for us working together, modernising and supporting businesses to move with the times. We all know, as you said last week on your podcast, AI, it’s hard to go to any international event without a lot of focus on AI, thinking about digital delivery and understanding what consumers are expecting today. And when we’re seeing a lot of our tourism partners, for instance, in the States and territories and industry, really supporting the uplift of businesses to actually modernise. And diversification, Gary, I think has been a key thing. And we talked about this last year. So AusTrade has an action to build a diversification strategy. And we’ve been looking to markets in Asia, Southeast Asia, closer to home, and also India, of course, where there’s significant growth potential. And that means we’ve got to do a lot to build the supply side and the capability to support businesses because UK, USA, China, very strong markets. New Zealand, very strong markets for us. However, Southeast Asian markets have different preferences and different needs in terms of food and service. And so, actually, over the past couple of years, we’ve been building on and supporting that. And we’ve done particularly a piece of work with Vietnam, which is our strongest returning market post-COVID. It’s so exciting. Gary, I can’t tell you how excited we are to be working with the Vietnamese government and industry. And we continue to see Vietnam up over pre-COVID and it’s still, the data from last month shows it’s 47% higher than it was pre-COVID, supported by strong aviation links with Vietjet and Vietnam Airlines really pushing high levels of capacity into Australia. So that diversification has been really important for us. And we’re working closely with industry and state territories and tourism in Australia to support thinking about where our new markets will come from, the very thing you talk about with your listeners every week.

47% uplift from Vietnam. Congratulations. That’s a huge figure. What you were talking about there, Sam, kind of sets up our next question because before the pandemic, Australia was well known really for being very methodical and strategized in the way that it used research in its tourism planning and development. As you’ve embarked on this new strategy, as you said, to diversify your markets, diversify your inbound segments. How do you use tourism research? Is it in a different way than before?

Well, it’s a really good question, Gary, because a lot of the basis of international statistics, and I was really privileged to work at the Australian Bureau of Statistics, our national statistics organisation before I came into this job. A lot of the basis of data, apart from things like counting airline seats and routes, a etc, a lot of the basis for collecting information about where people go and what they do is based on surveys. And as I’m sure you would have in your part of the world as we have here, there’s an increased engagement with scammers and hackers and people who ring you and mobile phones mean now that you can see who’s calling you if you don’t recognize the number you tend not to answer it it’s a very different prospect to the days of the old handset telephone right where you didn’t know who was on the ad on the other end so we’ve got to think about research in a different way and we’re actually doing some world-leading change in Australia at the moment through Tourism Research Australia to look at how we use mobility data or mobile phone data to have more accurate and higher grade, higher quality data sets that show us where people are going and how we actually combine that with other forms of research to track what people are doing and how they’re spending. So research modernisation is a big part of our Thrive Strategy and other countries are quite interested in what we’re doing and how we’re shifting this because it is quite a difficult area to get quality data and get it down to regional level. So we’re also, of course, when we do our forecast, for instance, which we do annually, we not only look at Oxford Economics and other big databases and data providers, but we in Australia spend quite a bit of time working with people in the industry to get their advice on what things look like on the ground in order to feed in a qualitative element to make sure that we’re not just relying on machine learning information and other big data sets and that there’s some practical, realistic assessment of where the market is going. So that’s been really important as well. And we’ve been increasing our relationships and engagement with the academic sector. So working with institutions like the Griffith Institute for Tourism and a number of other universities engaging like with Curtin University there’s quite a few in Australia where tourism is a very strong focus University of Canberra for instance and building those relationships putting out PhD scholarships for us to actually engage with the academic sector and get other qualitative data to really help us understand and see what’s changing. Business events data is another area where we’ve worked with the industry and producing dashboards now. So it’s a really interesting area, Gary, where you get your data from. And sometimes when I look at things on LinkedIn and I see slides and graphics about what’s happening in Australia and I scratch my head wondering where they got that data from. It’s really important to actually interrogate the source of the information, the quality, is it international statistics standard, does it fit into the national accounts, etc. There’s nothing wrong with a whole range of data sets, of course, but as long as you understand how reliable and consistent and what quality level it is.

Yeah, it’s fascinating to talk to you, Sam. I always hear this holistic, this really multifaceted way of looking at the market, how you research it and how you take the industry forward, which leads us again into the next question. And you’ve referenced this already, Sam, and that’s your international diversification strategy for the visitor economy, which you put in place and you’re moving through the gears on that right now. Can you tell us a little bit more about why did you do this? What were the purposes and what outcomes are you hoping to deliver?

Yeah, so it was a really thoughtful recommendation from the independent panel chair and in fact, the researchers that supported their work to think about where our future markets are going to come from in Australia. Australia is a really interesting country it’s got a whole range of challenges associated with its time cost and distance for most markets and it’s quite fascinating when you look at the history of data collection to the late 80s the majority of our markets actually come from places that reflect our population. So the UK, the USA, New Zealand is obviously quite close by in some ways. It’s almost like another jurisdiction of Australia. It’s so close. And so those with particularly with sustainability, Gary, your listeners have been talking, you’ve been talking with Hannah on this quite a bit. There’s important challenges that we need to meet. Globally, there’s commitments our countries need to achieve in terms of net zero by 2050. And that means that we can’t continue to rely on markets that have to come a really long way to get here. We need to be thinking about markets closer to us. We also need to be thinking about our place in supporting the region. So we have some very important foreign affairs goals that we want to try to achieve to support our region, particularly in the Asia Pacific, working together. But also just even thinking about Vietnam, the rise of the consumer class and the middle class in Vietnam is amazing. It’s huge. Thailand and other economies, Indonesia, Malaysia, Philippines, Singapore, the massive amount of people who are growing in their capacity to spend, in their capacity to want to understand other cultures, engage, develop those relationships, develop business relationships. And even if you look at where our students come from that come to study in Australia, they’re coming from really interesting countries, Thailand, India, China, South American countries. So very different to the traditional USA, which has been our traveller in the past. So it made perfect sense for us to think about why and how we could make better opportunities in the future and therefore what we need to do to support our industry to be able to do that effectively from an investment perspective, from a capability perspective, even from payments. Like I was just in Malaysia and Langkawi for the APEC meeting, tourism meeting recently, and there were lots of things I couldn’t do with a credit card. In Australia, you can do everything with a credit card. We need to actually support our industry to be able to meet the needs of consumers from different markets, and that’s part of the diversification strategy.

Yeah, that’s an interesting point, particularly here in Southeast Asia, the localized payment format is so fragmented. And this is a huge challenge across the industry in these countries as well, Sam, across Southeast Asia alone. A lot of these formats aren’t interoperable across countries yet. And so that is causing challenges. And it’s certainly a big one for the industry. What about the issue of seasonality, Sam? Australia has a very diverse climate. Traditionally, going back probably 20, 30 years, summer holidays were very, very popular. But more recently, particularly from regions like Southeast Asia, you’ve attracted tourists who want to visit during cooler times, perhaps during the winter. How do you use seasonality to attract high-yield tourists?

Well, luckily for me, I leave the marketing to the experts at Tourism Australia. But one of the really important things that you can see the states and territories in our country doing is thinking about how to fill up the slow parts of the calendar, how to make the most of those times when perhaps people wouldn’t ordinarily come. Now, as you said, Australia does have a very wide ranging climate. So if you visit Darwin, it’s 32 degrees pretty much every day of the year. And some days it’s very humid and it rains a lot. And in the dry season, it’s just one of the most perfect places to holiday. But that’s very different to Southern Victoria Kangaroo Island Tasmania where you get snow where you get a full winter alpine experience where you can see a whole range of things in those southern climates with the winds coming from Antarctica you really get a whole different amazing experience in those climates, completely different to what you get in Darwin and the desert in the middle of the country. So people thinking in those marketing roles around our jurisdictions and, of course, Australia in the context of Tourism Australia, thinking about how we can engage and make the best use of selling those opportunities for different experiences and in one one place I think one thing we’ve been doing a lot in the past few years Gary is First Nations Indigenous tourism so really connecting into people’s want for unique authentic experiences that you can’t get anywhere else we have great beaches in Australia amazing beaches but there are many places where there are amazing beaches in the world I don’t think they’re as good as Australia’s but you know you can get them in great there’s plenty of nice places right that’s not that’s unique to Australia of course but other versions there is no place in the world where you can get First Nations experience of the longest and oldest continuous culture in the world is in Australia. More than 65,000 years of history and it’s incredibly diverse. We have hundreds and hundreds of different First Nations cultures, the Tiwi Islands culture, the Palm Islands culture, the Aboriginal cultures of the Woodchuck in Perth, very different. The cultures in Kakadu of Aboriginal people in Kakadu. I mean, we don’t have one homogenous Indigenous culture. We have so many hundreds of different cultures and we can see more and more that Indigenous experiences are on the checklist of our international travellers. And that’s something, you know, all year round, no matter what season, there’s an Indigenous story waiting to be told. And that’s something special and unique about Australia.

Yeah, that’s interesting. You set up the next question nicely because you mentioned that you were in Langkawi for the APEC Tourism Working Group Summit recently, and you spoke on this issue. Looking at sustainability, First Nations and workforce programs. What were some of the key messages you were talking about as different to what you’ve just enunciated there about Indigenous tourism experiences for visitors to Australia?

Yeah, so when we talk about sustainability in Australia, we look at the four platforms, and culture is very much one of those platforms. So we all know about the green and protecting the planet and meeting carbon at zero, but reflecting authentic culture in enabling cultures and communities to have economic benefit and appropriately sharing that culture if they give permission to do so. It’s a very precious wisdom that’s been passed down over many, many generations through the care and custodianship of the language and the storytelling. So that’s something that’s precious. It’s not to be misunderstood in that way. So ensuring that our tourism operators, this was part of the story we were telling, ensuring that they can properly and with respect engage First Nations communities, that we build First Nations businesses and opportunities. So we’ve got about 260 tourism businesses that are owned by First Nations Australians in operation at the moment, we reported recently. So creating the right conditions for people to get an economic benefit and to be able to appropriately and authentically share those experiences in a really special way and doing it effectively and being different in every part of the country and how you do that because the rules and the cultural boundaries and how, the how of that is something that is very different all over the country. So actually explaining how we set up a business toolkit to support businesses to understand a little bit more about First Nations. Many tourism businesses may not know much about it. They may not have had the benefit of having engagement with First Nations personally and actually showing businesses as part of this toolkit I was talking about how to actually engage and make the first steps to properly and respectfully ensure the ability for international visitors to have a First Nations experience.

Sam, I could listen to you talk all day. I love listening to your strategy and your worldview on tourism. It’s fascinating to hear. And Australia being such a beautiful country, it’s incredible to be able to apply that. From where you’ve come from and where you’re going to, you’ve talked a lot about what’s happened post-COVID, a lot of the programs that you’re going You’ve to. talked a lot about what’s happened post-COVID, a lot of the programs that you’re putting in place and the value of the visitor economy up to this point in 2024. So what happens next? What happens in 2025, Sam? What areas will you be focusing and what have you got cooking for next year?

Well, we’re really excited, Gary, because we’ve completed our recovery phase of the Thrive strategy. So it’s broken into three stages and the first one finishes at the end of 2024 and we had a goal of returning to pre-pandemic spend levels by the end of 2024 and we actually achieved that in the middle of 2023. Yes there was a bit of inflation but that didn’t account for everything, there was increased activity. So we’re really excited because 2025 brings forward the next phase what we call the consolidation phase of our plan and we’re working we’ve been talking to industry operators and state territory governments all over Australia over the past six months nine months to actually hear what they think needs to happen what level of support will assist them to make the best growth into the future in a sustainable and resilient way. And we’ve pulled together all of those actions because Thrive is an industry-led, government-enabled strategy. It’s not about government saying to industry, this is what you should do and this is what we’re going to do. It’s actually industry saying this is what we are going to do to work together to deliver and support our members and this is what the states and territories are going to It’s do. actually industry saying this is what we are going to do to work together to deliver and support our members and this is what the states and territories are going to do in their tourism activity, what Tourism Australia is planning to do and what we as the supply side and tourism program and statistics provider is going to do. So we pull all that together and we’re just in the final stages of getting that ready for government consideration so early next year we’re hoping before the middle of the year to have that out and we’ve just had a joint standing committee from one of our parliamentary committees that also spent the last year and a half talking to lots of operators all around Australia on tourism and international education and they’ve just produced a report which the government will respond to with a whole series of recommendations. And that will, you know, what government will be doing as a result of those recommendations will roll out from next year. So we’re really looking forward to building on the great relationships and activities that we’ve been able to create and achieve this year. So that Vietnam project moving forward, the Southeast Asia invested strategy that the government’s implementing and working together with a whole range of countries and businesses in the region. There’s lots happening. And then also there’s the domestic improvement. So, for instance, you know, the Wangetti Trail, Gary, this amazing trail for walking and mountain biking in World Heritage North Queensland, down through parts of the park that’s also related to the Great Barrier Reef, that’s opening soon. All of that will be opened by early next year. We’ve got great new attractions like that that are flying out and new campaigns that will be released next year as well, which the government’s excited about. So yes, things are, of course, not returning necessarily at the great speed that we would like them to, but sometimes that gives us a chance to build our workforce and support our capability building. So we’re ready to welcome as many visitors as we can. And we’re focusing on, of course, value. We’ve often had a volume focus, but really a value focus really helps us keep thinking about what’s most important and sustainable for everybody.

That’s fascinating to hear. So Sam, we’ve got a couple of minutes left. I’ve got one more question to ask you. I know that you’re out and about quite a lot. You post a lot about where you are, what you’re doing, what you’re seeing, what you’re experiencing in the Australian tourism economy. Does it feel like a new era? Does it feel different than it did before the pandemic? I think

I think that people are adjusting to the world. I think that there are some that would like things to go back to the way they were before, but everybody’s changed, right? We as humans, we evolve. The world is never the same. There’s great new products, great new aviation routes going to amazing new places, not only in Australia, but all over the world. And so it’s comforting to think about that snapback, but actually always it’s about having a growth mindset. And you see that last week I was at a mountain bike symposium in Marimbula on the Sapphire coast of New South Wales. And there were councils there, park rangers there, experts, bike enthusiasts, a whole range of professionals, insurers, all wanting to work out how can we make the best mountain bike attractions for international travellers and domestic travellers to support communities to grow and be healthy, happy, and having good wellbeing and economic outcomes. And so that sort of focus on the future, I think, is a really important part of what the way people are thinking about things and that sort of acceptance and excitement about the world growing and changing is there everywhere I go.

Sam, it was a pleasure to talk to you. Thanks so much for joining me on the show today.

Thanks for having me, Gary. I love your show. I listen everywhere. It’s really great. You and Hannah do an amazing job.

Thank you. You’re very kind. Hopefully, we can speak again in 2025. So that’s a wrap for this edition of the High Yield Tourism Podcast. My thanks to Sam for her highly thoughtful insights about a new era for the visitor economy in Australia. Please join the conversation on our LinkedIn page at high yield tourism. That’s at high hyphen yield tourism. And we’ll be back soon to talk more high yield tourism.

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