Gate 7 Report - Australia and New Zealand July 2010
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1 Market Intelligence Gate 7 Report - Australia and New Zealand July 2010 Australia Economy Unemployment Rate: 5.1 % in June 2010 (5.1% May 10, 5.8% June 09) Consumer Price Index: 0.6% Apr 10 - Jun 10 (3.1% Jul 09 - Jun 10) GDP Growth: 0.5% Q (0.8% Q1 2009) New Zealand Economy Unemployment Rate: 6.8 % in Q (6.0% Q1 10, 5.9% Q2 09) Consumer Price Index: 0.3% Apr 10 - Jun 10 (1.8% Jul 09 - Jun 10) GDP Growth: 0.6% Q (-0.8% Q1 2009) Exchange Rates AUD$1 = USD$0.91 (Jul : 0.83) NZD$1 = USD$0.73 (Jul : 0.66) Businesses should expect the Australian dollar to remain strong for an extended period of time according to one of Australia s top economists. Westpac Chief Economist Bill Evans said Australia s strength in commodity markets will ensure the $A remains strong against other currencies. Source: Travel Today 9 July Consumer Updates The national Australian election is being held in mid-august and the Opposition Leader Tony Abbott has pledged AUD$90 million to support Australian tourism if the Coalition is elected to government. Australians aged are spending on average 10.9% of their salaries on travel with an average of AUD$4,439 spent on travel in 2009 according to a report from Contiki. Source: Travel Today 5 July
2 Airline Updates V Australia recently underwent a change in management which is bringing about a complete turnaround in style. As part of the changes V Australia has been integrated into the main Virgin Blue company to remove duplication and create great integration across its domestic and international network. The airlines new communications team have indicated that they are moving away from partnerships with tourism boards and media familiarisation trips. Delta Airlines offered special return fares between Sydney and Los Angeles from just AUD$519 excl taxes to celebrate the first anniversary of its non-stop Pacific services. A final decision on whether Delta Airlines and V Australia could form an alliance is expected within weeks. United Airlines and Continental Airlines have received unconditional clearance to proceed with their proposed merger. Source: Travel Today 28 July Airline revenue from premium traffic was up 44% in May compared to May 2009, despite yields and average fares remaining 15% below pre-recession levels. Source: Travel Today 16 July Wholesale/Retail Updates Monthly flight sales figures to California by Flight Centre Ltd: unfortunately Flight Centre is unable to provide us with figures at this time due to legal reasons. TOP 20 FLIGHT CENTRE GROUP INTERNATIONAL RETAIL AIRFARES SOLD IN JUNE Rank Destination 1 LONDON 2 AUCKLAND 3 LOS ANGELES 4 BANGKOK 5 NEW YORK 6 SINGAPORE 7 PARIS 8 MANILA 9 HONG KONG 10 DENPASAR 11 ROME 12 CHRISTCHURCH 13 FRANKFURT 14 PHUKET 15 NADI 16 MANCHESTER 17 DELHI 18 KUALA LUMPUR 19 SHANGHAI 20 VANCOUVER
3 Full details of the proposed Stella Travel and Jetset Travelworld Group merge were released. If shareholders approve the deal the merger will be implemented effective from 30 Sep More details about the merger: o The partners say that the proposed merge will integrate two complementary travel businesses to create a significantly stronger and larger travel company. o The combined wholesaler operations will allow improved pricing and inventory allocation from airline, accommodation and other travel suppliers (Tom Dery JTG Chairman) o The online development of each business would be combined to more effectively compete with other industry participants (namely Flight Centre and online travel agents) in this rapidly growing and competitive section of the market. o o The combined Stella/JTG will have about 2,600 staff. The proposed merger is subject to a number of conditions including confirmation from the Australian Competition and Consumer Commission that it will not object the proposal. JTG and Stella have made submissions to the ACCC detailing why the pact will not result in a substantial lessening of competition in any relevant market. The ACCC has indicated that it will complete its enquiry on 12 August with a formal decision announced on 2 September. Online travel company Webjet s announced a net profit after tax of AUD$10.5 million for the year ending 30 Jun, a 37% increase on last year s results. The firm also reported total turnover values (TTV) were up 30% to AUD$504 million, $3 million higher than previously flagged, despite a general drop in ticket prices, particularly in the six months to 30 Jun. Flight transactions soared 21% to a total of 798,000. Webjet also reported that operating costs increased 26% during the financial year, due to the establishment of a North America operation and preliminary costs for the start-up on an Asia operation. Within the past six months, online travel company Expedia has abolished booking fees and cancellation and amendment fees on flights, hotels, packages and car reservations booked on their Australian and New Zealand websites. General Manager Nicolas Chu belies there is a significant benefit in the long term by abolishing fees, and that they have saved their Australian and New Zealand customers over AUD$1.8 million in booking fees. Flight Centre is on an expansion drive in New Zealand looking to open around 23 new businesses in the next 12 months. New brands will include Student Flights, Intrepid Travel and an expansion in Cruisabout locations. They will also open Travelmoney at Auckland Airport, First and Business Office office in Wellington and another Corporate Traveller office in Auckland. Search engine and lifestyle site Yahoo7 launched a transactional side to the site called TotalTravel. Yahoo7 aims to make its new site the richest travel reference site in Australia with archives from Network 7 television shows The Great Outdoors (no longer shooting) and Coastwatch as well as travel reviews from West Australian newspaper and Pacific Magazines. Source: Travel Today 7 July
4 Media Updates News Ltd released a survey into how readers consume various sections of its publications. Highlights included: o Average time readers perceive they spend reading the metro papers: Weekdays 42.8 minutes, Saturdays 57 minutes, Sundays 62.3 minutes o Just under 50% always or mostly read the sports pages o 55.3% say they always or mostly read the Escape travel section, 24% occasionally o 54.8% say they always or mostly read the Body + Soul section, 22.4% occasionally o Source:
5 Ongoing Activity (more detail will be included in quarterly report) Trade Training - Reservations training conducted in Australia and New Zealand. Wholesalers included: Qantas Holidays, Stella Travel, Harvey s Choice Holidays, Sanford International Travel, Creative Holidays, Pinpoint Travel, Travelscene American Express, Momento Travel, Adventure World, Infinity Holidays NZ, Go Holidays, Adventure World NZ, Air New Zealand Holidays, Dive Fish Snow Travel, House of Travel, Lifestyle Holidays Trade Shows/Industry Events - Attended and sponsored US Embassy Independence Day celebrations - Attended and sponsored United Airlines trivia night in Sydney and Melbourne - Attended United Airlines New Zealand Reception - Attended Anaheim/OC Roadshow in Melbourne, Brisbane and Sydney Coops Stella Travel Coop Coop planning Familiarization Visits Phone/ Leads for June No. of enquiries: 22 Distribution of (not including training and shows/events): California IVG: 22 Australian California Guide: 22 California Road Trips: SFO Brochure: 22 SF Planner: Voyeur Inserts: Collateral: Distribution of (training and shows/events): California IVG: 425 Australian California Guide: California Road Trips: SFO Brochure: SF Planner: Voyeur Inserts: Collateral: Meetings Jetstar United Airlines Handlery Hotels Red & White Fleet House of Travel NZ Qantas Holidays Delta Travelscene American Express
6 Student Flights SeaWorld Howard Johnson Hotel Grayline DNK Hotels Super Shuttle
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