Tourism slump a wake-up call for operators

Photo above: Local woman Doreen Nakamarra is hunting for witchetty grubs with tourist Jade Yang, from Shanghai. She was in a group with prominent Chinese art dealer, Sun Kongyang, in The Centre recently for the Desert Mob art fair, and hosted by tourism operator Steve Strike. Photo below: Brendan Heenan’s pancakes are a charming value-add as powered sites alone are no longer enough for tourists on the road.

 

By ERWIN CHLANDA

 

The tourism industry in Alice Springs has had two sharp consecutive drops in annual earnings. The total spend by visitors dropped 16% from $300m in calendar year 2009 to $252m in 2010, and 26% from $360m in financial year 2010 to $265m in 2011, according to figures from the Territory Government’s Tourism NT. The amounts are not adjusted for inflation. There was a sharp drop in visitor nights and a small rise in the spend per visitor (see graph).

The industry has been flat since at least 2004 with small peaks in 2006 and 2009. One major hotel says it sold 13,356 room nights since January, down from 14,552 for the same period last year and well below a five year average of of 15,241.

This equates to an occupancy rate for the current year of just 35%. A prominent tour company had 11,250 passengers this season, down from 12,150 last season, but well up on that company’s five year average of 9776. All other operators we contacted were tight-lipped.

The conventions business is also poor this year: there were just 23 events. The average number of people attending was around 80 (the capacity of the Convention Centre is 500), and the average length was 2.3 days. Peter Grigg, the CEO of the industry lobby Tourism Central Australia (TCA), says The Alice needs to come up with a brand new story for why people should visit. Some operators are failing to adjust to market needs and  may not be offering what today’s tourist wants: “The product hasn’t changed and now is the perfect opportunity to critically look at what is being delivered and renew, refresh and re-invigorate to continue to capture a tourists imagination and dollar,” says Mr Grigg.

“The traveller today is more active, even retirees. “They are fitter, better researched, have more money. “They don’t want to sit on a bus and be shown a destination.

“They want to walk, feel, smell the place, get involved,” says Mr Grigg.

Visitors are well informed about the place even before they come and now they want to be put in touch “with the landscape, the culture, the people themselves”.

Mr Grigg says towns and regions far less known than Alice Springs are taking advantage of opportunities: Outback SA, for example, is having a boom year with Lake Eyre in flood as a magnet, and so is outback NSW with the big rivers flowing, and visitors enjoying the plant and bird life. Visitor numbers to Alice are 8% to 11% down, putting the town into much the same position as other remote centres which are 11% to 15% down. Mr Grigg says the town just can’t win a trick this year. The withdrawal of Tiger Airways came at the beginning of the season. The airline was bringing some 1400 people in and out of town per week.

The high Aussie dollar was a double whammy: international visitors have stayed away in droves and the Aussies have gone overseas for their holidays. As if to add insult to injury, now that the season is over the dollar has dropped sharply – too late for the industry in 2011. Mr Grigg says the industry’s need to adjust must extend to the drive market and the “grey nomads” in their caravans and motor homes – the most significant segment of the industry, although he doesn’t have any figures.

Many vehicles are fully equipped and neither need nor want caravan parks: they overnight at roadside parking spots or in the national parks where they pay $3 or $4 and all wayside stops are set up to cater for what have become long term “tenants”, exactly the opposite for what they were designed to do.

A powered site in caravan parks can cost as much as $38 a night: instead of staying a week they stay a couple of days and “bush camp” the rest of the time.

A powered site isn’t enough these days: visitors need to be enticed to a caravan park by other facilities – pools, playgrounds, entertainment.

“Luckily Alice Springs has a number of caravan parks that value add their product to entice customers into their property,” says Mr Grigg.

Brendan Heenan’s award winning MacDonnell Range Caravan Park is a great example, he says.

Getting useful data about the industry is a nightmare. Tourism NT provides year-by-year figures about spend, numbers and visitor nights, but seems to have no monthly or weekly data. The ABS has comprehensive quarterly statistics going back to 2003 but their problem is that in some years, backpacker hostels and caravan parks are included, in others they are not. This makes comparison difficult, as it is not apples with apples.

Tourism Central Australia generates no figures of its own, which makes a mystery of how it can function as a watchdog over the government’s Tourism NT – annual budget about $40m – and how it can evaluate its own promotions. By contrast, several hotels in Darwin feed their business information – such as revenue and rooms occupied – to STR Global which “tracks supply and demand data for the hotel industry and provides valuable market share analysis for all major international hotel chains and brands,” according to its website.

For a fee the participants can get extensive information, day by day if necessary, about how the industry is performing in a variety of markets, including their own, and get comparisons with earlier periods and indications of trends.

The data include REVPAR (revenue per available room) and ADR (the average rental income per occupied room in a given time period). A similar system, coordinated by Aurora Hotel manager Ron Thynne, was in use in Alice Springs at some time but no longer is. Another vexed question is promotion.

The National Road Transport Hall of Fame is one of Alice Springs’ three “big ones” which attract around 100,000 visitors a year, says Mr Grigg. The others are the Desert Park and the Overland Telegraph Station.

Yet the Hall relies just on a newsletter, its annual reunion and word of mouth for promotion, and runs hardly any paid advertising at all. And with the spread of online direct bookings, TCA’s visitor centre, used by some 120,000 people a year, may need to look for other revenue.

Mr Grigg says his research around the country has revealed that similar centres had to branch out into ventures including selling fuel through discount vouchers, wedding planner services, producing a local phone directory and the provision of local maps.

This week Tourism NT is seeking to get the NT tourism industry to provide timely information on visitation levels and a forward looking business outlook as part of its quarterly industry online poll.

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2 Comments (starting with the most recent)

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  1. rosco_p_coletrain
    Posted January 28, 2012 at 5:16 pm

    I concur AND take the greed out of Alice! Perhaps the high AU dollar might correct prices because in my humble unqualified opinion, 30% will have to come off across the Centralian economy. To see it competitively positioned, a correction, the recession that Alice has to have!

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  2. Steve Brown
    Posted October 9, 2011 at 2:42 pm

    In my lifetime in Central Australia I have seen tourism develop from its infancy, nothing more than the dreams of a few passionate locals who went about selling what they saw around them.
    It was bringing the sheer rugged beauty of The Centre to the world! Nobody tried to invent a product, with clear and open eyes they saw the beauty, the dynamic and contrasting colors, the rugged ancient ranges with their sheltered awe-inspiring gorges, the clear blue skies of the day and a firmament as big as the universe at night.
    There was our sheer isolation, the almost mystic stories of survival and triumph of our people over such a harsh environment, our interaction with one of the world’s oldest living cultures.
    Yep, they saw we had more than enough to attract the world to our doorstep, and they were right!
    By the early eighties our tourism was booming bringing people from all over the world.
    Australians thought of us as their own precious back yard, they sent us their children on the school holidays in huge numbers, with buses in their hundreds arriving for events such as Henley on Todd and the Camel Cup.
    We were riding the crest of a wave, the whole world before us, new businesses springing up everywhere, investment pouring into hotel motel accommodation.
    Alice Springs had the country’s fifth busiest air port, much to the chagrin of Darwin – and then disaster!
    In 1989 came the pilots’ strike, the whole world of tourism collapsed, and our visitor numbers dropped in the order of 80% overnight, and till this day have not returned to pre-strike levels.
    We should be asking ourselves why? What has changed so radically about our product that the only tourist we now attract, apart from a mediocre caravan trade, are middle-class trendies looking for an exotic life experience in a place no one else wants to go?
    And how should we go about changing that? Well we can’t blame it all on the pilots. Tourism had reached a pinnacle at the time of the strike, it had undergone a huge injection of funding and enthusiasm at the hands of a young, first off-the-ranks CLP Government celebrating the Territory’s new found freedom in self government.
    They had taken many risks and backed all kinds of ventures in their enthusiasm to bring about a self sustaining economy for the Territory, none greater than the Yulara Development. Eventually, after facing sustained criticism from some quarters, with interest rates at an all time high, they panicked and in the scramble to divest themselves of what they now saw as a liability, they sold Territory Tourism down the drain.
    They were making deals, signing contracts that should never have been made, agreeing to airport and road expansions that sabotaged tourism elsewhere in the Territory.
    The flagship of Territory tourism, Yulara, was pandered to at the expense of the rest of the industry and eventually sold off.
    The price? The success of Territory tourism! Yulara became an even more gung-ho monopoly, stifling smaller trend-setting competitors, introducing a disrespectful, meat-market approach to their visitors.
    Giving no consideration to the concept of returning visitations they set about ripping as much as possible for as little as possible from every unfortunate visitor who went their way.
    A year or two before the strike we began receiving lots of very angry long winded comments about the Yulara resort from passing tourists who felt used and ripped off.
    Yulara was often compared to Hamilton Island that was also receiving very bad press at the time. Tragically what was happening at Yulara began to reflect on the rest of the Territory. When you add to that the anger generated by an increasingly militant Commonwealth park management, that was then and is now hell-bent on saving the park from tourists, you have the makings of an industry disaster! And that’s exactly what we got, a disaster.
    How do we save ourselves from this plight, reinvigorate the industry? Do we spend our time pandering to the whims of a few demanding middle class trendies who might have a few more dollars but only because they are to bloody stingy to spend them, or do we cater for that market as best we can while we fight like hell to get back our lost, our rightful appeal to the vast numbers of ordinary every day travelers who once made us so successful?
    If we are to achieve the latter there are some very necessary clean-up steps required.
    • At Yulara firstly, by hook or by crook, control of the park must be wrested from the Commonwealth and put into the hands of a board of management whose entire income is directly related to visitor numbers through the gate.
    • The board must remove the ridiculous restrictions and charges on commercial photography that have generated such enmity for the region, and cost taxpayers billions in exposure.
    • Rangers, either Commonwealth or Territory, must take a step back into a purely regulatory role. All direct management of any park must be by persons whose income is generated by visitor numbers. The monopoly of the Yulara resort must be split up, either by buy back or by the release of further land for other developments.
    • Single attraction, flagship advertising by government must cease! Any tourism advertising by government must fund each region equally. Alice needs to go back to its original products, where it began, before The Rock was of any significance, back to the MacDonnell Ranges and the many services and attractions the town itself has to offer.
    • Bring an end to the deliberate misuse of work, health and safety issues to manipulate the opening and closing of the climb and walks by setting a firm, measured (by publicly displayed gauges) ruling that says the climb will be closed while the temperature is over for example 42 degrees Celsius and / or 20 knots wind speed and reopened immediately conditions change.
    • Stop supporting the Rock and Yulara at the expense of the rest of the industry! Market the whole of the Territory as a destination, severely limit direct flights into The Rock and directly favor by price and access, those who tour elsewhere in the Territory. We need to see a lot less of The Rock and a lot more of everywhere else in our advertising.
    Above all else, we must give people what they pay for. We must get rid of the paternalistic lecturing that requires not only that people are told about, but that they actually comply with Aboriginal traditions such as not climbing The Rock. It’s an expectation that is both paternalistic and utterly ridiculous.
    In short we have to open up access to our parks, remove the nanny state bullshit being used to manipulate public access, start treating our tourist as we should, as VIPs, reintroduce some good old fashioned customer service and in time our industry will shine again.
    Steve Brown
    Alice Springs

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