Maximising Chinese Tourism: A Fairer Share For Regional Australia

Transcription

1 Fastrak Asian Solutions a division of Fastrak Solutions Pty Ltd P.O. BOX 3013, Batehaven, NSW, 2536, Australia Ph: +61 (0) Web: enquiries@fastraksolutions.com.au Maximising Chinese Tourism: A Fairer Share For Regional Australia Revised Final Report Prepared For: NSW Business Chamber Tourism Industry Division Prepared by: Richard Beere Presented on: Tuesday, 17 th October 2017

2 Maximising Chinese Tourism - Report Table Of Contents Project Background:... 4 Executive Summary:... 5 Research:... 5 Marketing:... 6 Infrastructure:... 6 Build Business Capability:... 7 The China Narrative:... 7 Round-Table Discussions:... 8 Access:... 8 Summary:... 8 Detail:... 8 Action: Customer Understanding: Summary: Detail: Action: Business Capability: Summary: Detail: Action: Competitiveness: Summary: Detail: Action: Measurement: Summary: Detail: Action: General: Summary: Detail: Action: High-Level Actions: Appendix 1 - Summary of Wollongong Discussions: Appendix 2 - Summary of Newcastle Discussions: Fastrak Asian Solutions Page 2 of 47 Tuesday, 17 th October 2017

3 Maximising Chinese Tourism - Report Appendix 3 - Summary Of Individual Discussions: Appendix 4 - Key Take-Outs And Actions: Appendix 5 - Round Table Invitation Sample: Appendix 6 - List Of Involved Participants: Appendix 7 - Media Release Issued After Newcastle Round Table: Appendix 8 - Participant Issues Paper: Appendix 9 - China Digital FIT Regional Dispersal Report: Appendix 10 - Fastrak Asian Solutions & Richard Beere Profile: Fastrak Asian Solutions: Richard Beere: Fastrak Asian Solutions Page 3 of 47 Tuesday, 17 th October 2017

4 Maximising Chinese Tourism - Report Project Background: The China inbound tourism market to Australia, and especially to NSW, has been growing rapidly and is forecast to continue to do so in the foreseeable future. There is, however, a marked disparity between metropolitan (city) and regional (dispersed) overnight visitation, and available data suggests that regional NSW may not be fairing as well as other State regional areas. This project sought to clarify the key issues behind this disparity, and suggest short, medium, and longer terms actions for consideration. The Issues Paper (Appendix 8), and the Roundtable Invitations (Appendix 5), developed by the NSW Business Chamber provide detailed background to the project. Additionally, independent research on Chinese FIT Travel was purchased and used to inform and support the discussion and the findings of this Report (Appendix 9). The key consultation method was two Roundtable Discussion forums with identified businesses that are currently engaged with, or seeking to engage with, the Chinese visitor market and were held in Newcastle (for the Hunter Region) and Wollongong (for the Illawarra Region). The Roundtable feedback and input was supplemented with individual one-on-one, detailed 1.5hr telephone discussions with key identified participants who were unable to attend on the day. A full list of participants is provided in Appendix 6. Fastrak Asian Solutions Managing Director, Richard Beere, facilitated the discussions and Roundtable events drawing on his, and the company s, experience overall and specifically from recent projects in Tasmania and South Australia. Background details for Richard and Fastrak Asian Solutions are provided in Appendix 10. Fastrak Asian Solutions Page 4 of 47 Tuesday, 17 th October 2017

5 Maximising Chinese Tourism - Report Executive Summary: The roundtable discussions, available Tourism Research Australia research, separate commercial research, and the facilitator s business experience with the topic, provided a broad range of industry sector and China market engagement input to this Report. At the outset it was acknowledged that the marketing effort and investment by Destination NSW (DNSW) and Tourism Australia (TA) in advertising, promotion, trade development, and social media in China was not in question and, in fact, the strength of, and support provided by, the DNSW team in China was specifically recognised at the Roundtables. Likewise, it was acknowledged that the growth of inbound tourism (from any market) commences with key access points (capital cities), usually in multi-city combinations, then develops to single city, followed by regional dispersal, and is ruled by available time. The Asian markets, including China, have always been more city-centric, with visitors preferring a city plus nature experience. However, this is changing with increasing travel maturity. In this context, there remains a high day spend dispersal (eg: Blue Mountains) but much lower overnight spend dispersal in regions. There is no doubting the growth and potential of the China market overall. The key issue is that the needle is not shifting in terms of the balance between metropolitan and regional areas, and especially between Sydney and regional NSW, in terms of Chinese (and Asian market overall) overnight visitation, dispersal and spend. The industry discussions identified a range of factors that participants believe impact regional dispersal, and need to be considered, under the broad categories of Access, Customer Understanding, Business Capability, Competitiveness, Measurement and General. Details of these factors and participant s proposals for action are provided in the next section. These have been distilled into 5 areas of focus and 8 core recommendations that require action not just at Government level, but also at Industry and business levels. There is, however, a need for leadership by Government, as well as changes in government thinking, improvements to current processes, and some new strategies to supplement the current marketing being done by DNSW. Research: DNSW, and businesses in general, rely largely on the International Visitor Survey (IVS) conducted by Tourism Research Australia (TRA) in conjunction with State tourism agencies. Whilst providing broad regional overviews and historical trend data, sample sizes at the local level are so small that often they are simply not available. As such NSW tourism industry stakeholders do not believe this information is reliable, useful, or detailed enough to build their business plans. Additionally, the Student and Visiting Friends and Relatives (VFR) segments have been identified as key drivers of regional growth, and stakeholders are seeking more information on trends, linkages, and source markets within China. The opportunity exists for the NSW Government to invest in more in-depth NSW and regional specific data and analysis to plug current gaps in the IVS and to leverage their commercial partnerships (ie: Union Pay). Fastrak Asian Solutions Page 5 of 47 Tuesday, 17 th October 2017

6 Marketing: Maximising Chinese Tourism - Report Whilst DNSW marketing efforts in China were recognised and praised, it was felt that increased marketing activity in Australia is needed. Chinese visitors seek Bragging Rights so the identification, development, and promotion of true Signature Experiences (that are relevant to, accessible to, and can deliver for Chinese visitor needs and requirements) is essential. As such, there needs to be clear criteria to help businesses assess their product Sydney has a range of world class and signature and bragging rights, but more needs to be done regionally. DNSW needs to identify and promote Signature Products / Experiences within regional NSW - which involves picking winners. A key driver of regional visitation by Chinese is the Student and associated VFR segments. The students themselves actively seek broader experiences and are often the decision makers (and guides) for new and different (read regional) experiences for their visiting family. Anecdotal evidence suggests up to 3 visits a year by family members was quite usual. Education sector Roundtable participants also noted the importance of Sydney based education recruitment agencies, as a majority of their business comes from or through these agencies. They stated there was little evidence of destination marketing activities targeting or tapping into the Student sector or graduation event opportunities. Government needs a greater focus on and investment into targeting and marketing to the Australian Chinese VFR market and Education Sector, particularly in Sydney. Infrastructure: The key form of transport for regional visitation is self-drive, which relies heavily on road quality, signage, and high-speed broadband / mobile connectivity. It was noted that there remain significant gaps in road quality and directional / key tourist attraction signage. The biggest issue related to both to the availability of high speed broadband and the lack of mobile connectivity at all in many areas. Nearly all Chinese visitors are on mobile devices, accessing Chinese on-line sites via their own carriers, for directions, experience reviews, and translation - in essence for comfort, ease, and safety. Also, technology provides businesses the ability to tailor and deliver information in terms of visitor relevance and language for the visitor, as well as cost effective promotional opportunities. The Government needs to use the NSW visitor economy as a platform to expedite improving the high-speed broadband and mobile coverage in regional NSW and provide increased free public Wi-Fi. Local Government, Councils, and businesses need to maximise available technology (ie: QR Codes). Fastrak Asian Solutions Page 6 of 47 Tuesday, 17 th October 2017

7 Maximising Chinese Tourism - Report The importance of Touring Routes to the self- drive market was also noted. These need to provide options rather than set itineraries thus providing more reasons to visit and more reasons to stay overnight regionally. At a local level this also applies where visitors need to know there is the experience, and accommodation ranges, and dining options. DNSW needs to heavily support the development and promotion of key touring routes in conjunction with local Government, councils, and businesses. Lack of regional transportation options and connectivity was seen as an impediment to disbursement. Stakeholders cited that they have often provided total connectivity on a fully commercial basis (ie. Sydney airport to Jervis Bay) particularly for Chinese visitors. At the Wollongong session at least five businesses were prepared to invest costs with the public sector to plug this gap and grow the market. NSW and Local government need to build upon impending Government regional transport plans to trial public transport services linking rail and bus routes with small clusters of tourism attractions that will serve the visitor and local community. Build Business Capability: Stakeholders agreed that Chinese visitors do things differently, and business needs to understand what they require, what kinds of adjustments are needed to be successful, how much will it cost (time and money), and then who can help them with specific elements of their development. Feedback suggested that at present there was no one stop shop to get advice on these critical business areas individually, and certainly nothing that assisted the business from market entry consideration, to market ready, market active, and market expansion (development pathway). Reference was made to the NSW Business Chambers China Export Growth program as a model and /or potential partner as well the South Australian Tourism Commission s Understanding China Program. Both were seen to provide a staged Development Pathway for business no matter what their current level of engagement with China. Businesses are not capitalising on the opportunity to employ more Chinese students in regional areas through the international business schools and universities. DNSW (in conjunction with NSW Government) should develop a China Export Development Pathway Program which adds to their, and the NSW Chambers, existing Export Ready Programs, and links business with academia. The China Narrative: Federal and State governments present the potential of the China market in terms of overall visitation and spends. The truth is however not everyone or everywhere has the same potential to win the business, especially in regional areas. Business needs to be constantly reminded of this and provided with guidance to help assess their chances of success (for example-the Development Pathway Program). NSW Government, DNSW and TA need to qualify their statements on the China Potential with fact that adjustments (involving time and money) need to be made. Fastrak Asian Solutions Page 7 of 47 Tuesday, 17 th October 2017

8 Maximising Chinese Tourism - Report Round-Table Discussions: During the discussions participants provided their thoughts without prompting, based on their experience and observations. Despite the broad range of individual input provided, the input grouped easily into six categories - Access, Customer Understanding, Business Capability, Competitiveness, Measurement and General. (See Appendices 1, 2 & 3 for whiteboard discussion points.) Access: The Access category relates to Chinese visitor access to destinations, products and /or experiences, and information. Summary: 1) Current Transport infrastructure is seen as an impediment to regional travel and lags behind key China systems today. 2) The majority of regional travel is Self-Drive, and the Touring Route / Product Cluster concept is seen as a key development tool. Victoria, Tasmania, and South Australia were seen as more active and holistic in this space than NSW. 3) Mobile access and on-line connectivity are issues- especially in regional areas. 4) Information is essential - tailored and delivered to meet visitor needs (Channels, Language, Systems). Detail: In terms of destination access, the lack and / or limitations of transport infrastructure was the key issue - especially when compared to what is now available in China. Getting to a central hub within a region, with a choice of transport options, a good and relevant frequency of service, and at reasonable cost was seen as critical to success. The majority of regional visitation is self-drive, so the road network with supporting signage and connectivity to mobile for GPS and navigation systems was most relevant. Australia s major highways do not compare with the 4 lane dual highways connecting key cities in China, and smaller Australian roads are in many cases very narrow (or even dirt) which makes driving more difficult (and less safe) for Chinese visitors. Participants noted the success of some key Touring Routes - such as the Great Ocean Road. Although the majority of Chinese still do this route as a day visit from Melbourne, the numbers continuing on to stay overnight at Port Campbell and then return via Ballart are growing strongly, and, to a lesser extent, so too are the numbers continuing on to Adelaide. It was noted that the success of the Great Ocean Road is due to the awareness and uniqueness of the Twelve Apostles which provides bragging rights to Chinese visitors when they return home (Bragging Rights are discussed in more detail in the Competitiveness section). Notwithstanding that, there was general agreement that the concept of Touring Routes does assist regional visitation, and that Victoria and South Australia have been successful in promoting them to Chinese visitors. It should be noted that Touring Routes need to present options that allow visitors choice, rather than trying to proscribe exactly what to Fastrak Asian Solutions Page 8 of 47 Tuesday, 17 th October 2017

9 Maximising Chinese Tourism - Report do; need to include distances and travel times between towns and / or experiences on the Route; and need to highlight accommodation options available along the way. Obviously, air access into a region is the preferred option for Chinese visitors, however, there was recognition that development of capable infrastructure is a major commitment and requires planning and implementation time. It was also noted that flight frequency and reasonable fares are major requirements for visitors and in many cases (particularly with Chinese visitors) actually enable day visits rather than overnight stays. In the case of Newcastle Airport, it was noted that the upgrading of the runway remains a long-term goal, whilst increasing promotion of the connectivity options from Brisbane and Melbourne and the airport s use as an alternative for Sydney should (and could be) developed immediately. There is also the opportunity to worth with government to grow trade / export freight capability. Rail transport options were also discussed. Whilst there are current connections to key regional centres (including Wollongong and Newcastle), in many cases the travel time is quite long, the infrastructure is quite old, and fares are reasonable, but not that cheap. In comparison to available rail transport options in China however, the Australian options do not really compare. The Chinese High-Speed Rail Network connects key cities with the latest technology, free high speed broad band, very reasonable prices, high speed rail city / airport connections, and metropolitan undergrounds (especially the recently built Shanghai system). It was noted that there are some development plans in the pipeline for improved rail services and stock in regional NSW (especially for Wollongong), but overall it was felt regional Australia will continue to lag well behind. Public transportation to and between tourism products / experiences was also highlighted as a challenge for most visitors (and more so for Chinese) given language difficulties, unfamiliar payment systems, location of stops, and the lack of on-site up-to-date timetables. Participants with successful operations had in fact developed and provided their own connection options - either on their own or in collaboration with other businesses and felt businesses needed to explore this to a greater degree. Access to information (both pre- and during travel) was seen as critical, especially in online channels. It was also noted that those channels, the included content, and language needed to be more relevant and appropriate for the visitor and that delivery must be mobile capable. This is especially relevant for Chinese visitors, with research indicating over 95% access information via mobile devices, mainly via their own Chinese language sites and apps such as WeChat. The power of Social Media for Chinese visitors cannot be overstated, and their ability to provide on-line testimonials in real-time as well as post visit, are proven drivers of business, particularly regarding new experiences and / or areas. (The need for business to understand and utilise this is further detailed in the Business Capability section) Mobile devices today provide visitors with confidence and comfort to venture further afield using navigation and real-time information options, however this is dependent on strong mobile connectivity, high speed broadband delivery, and low or free costs of access. This remains a key issue for visitors to Australia and again in comparison to China, we lag far behind. Fastrak Asian Solutions Page 9 of 47 Tuesday, 17 th October 2017

10 Maximising Chinese Tourism - Report The issue of free WiFi access and actual broadband speed remains contentious, despite developments being made in base infrastructure through NBN (although it is still rolling out and there continue to be issues, such as speed of service). Key issues are the capability and cost of providing free hot spot areas (for regions. cities, towns, and businesses), and the fact that in many cases it is businesses (particularly accommodation) who actually control the pricing to the visitor. There is also, however, the much bigger issue of mobile connectivity overall. Again, this topic is always contentious, but the fact is there are a number of mobile black spot areas (some on key highway routes, some in secondary cities - even Newcastle has one on the route to the airport, some in tourist towns, and many more in regional Australia) where there is no mobile reception whatsoever. This directly impacts road safety, personal safety, and travel safety, all of which can erode visitor confidence in regional travel. These mobile and connectivity issues require immediate attention. It is accepted that there is probably not a quick fix, however, Governments need to immediately (and honestly) identify and qualify the reality of the situation, make such information publicly available, and develop an Action Plan to remedy the situation. Technology provides a more subtle and cost-effective way to tailor and deliver relevant information content, in language, to different visitor markets and most visitors expect this nowadays. Likewise, in many parts of the world (and especially Asia and China), the use of QR codes is much more prevalent than in Australia, and it is a tool they use extensively and are comfortable with. Participants noted this is an element that needs development. Action: 1) Governments and relevant authorities need to accept the challenges of regional public transport; to take visitor usage into account in terms of information, timetables, and payment systems; and to provide assistance for the development of commercial connectivity options. 2) Governments, Councils, and individual businesses need to support the development of relevant Product Clusters and Touring Routes for the self-drive segment, to suit market requirements. 3) Governments need to immediately (and honestly) identify and qualify the reality of the mobile access and on-line connectivity situation (especially in regional Australia), make such information publicly available, and develop an Action Plan to remedy the situation. 4) Government, Councils, and businesses need to use available technology to tailor information content and delivery to meet visitor needs and expectations (including Channels, Language and Systems used - like QR Codes). Customer Understanding: Customer Understanding discussions focused on relevant information about Chinese visitors that could help businesses make decisions regarding market entry, potential reality, and scope of adjustments needed. Fastrak Asian Solutions Page 10 of 47 Tuesday, 17 th October 2017

11 Maximising Chinese Tourism - Report Summary: 1) Current available Chinese consumer data is not specific enough in terms of how they will engage with the product / experience and in some cases can be misleading. 2) There is a focus on the potential and opportunity of the Chinese visitor market without any qualification of requirements for success. 3) Students and Visting Friends & Relatives (VFR) is a key driver of Chinese visitation to regional areas and is presently underrated. Detail: It was noted that there is the historical trend of international visitation being led by access (invariably and firstly to Capital cities) and multi-city, and then dispersal developing as a result of traveller maturity, familiarity, and repeat travel. Also noted was that Chinese visitation to regional areas occurs from a number of Asian countries, each with varying degrees of travel experience, maturity, and assistance and to a large extent through Student and associated VFR. Participants acknowlegded that there is a lot of general data available about Chinese visitors: their motivators, their needs, their wants ( what may attract them), but it was felt this did not adequately cover how they would in fact engage with prodicts and /o or experiences and under what conditions. Likewise, it was noted that Governments and their agencies tend to present and highlight the potential and opportunity of the Chinese visitor market without adequately providing qualification of visitation and and delivery differences, which directly relate to the likelihood of success. This is an area where immediate change would make a big difference. Participants highlighted that Chinese visitors were particularly time poor and as a result sought a much faster pace of delivery than Western visitors; spent less time at each product / experience; planned to fit too much into each day (both in regards to number of experiences and driving distances); in many cases arrived late in regional overnight locations (with associated challenges); and always sought and needed more assistance than their Western counterparts. FIT was raised as an example of all the above. Internationally and traditonally this term means Free and Independent Travellers (think Germans and campervans), but when used by some Government Agencies regarding China, it means Flexible Independent Travellers (defined as those who have not bought a fully inclusive package). There is obviously a big difference here in how these two types of FIT enage with products / experiences. Likewise, whilst visa improvements have seen strong growth in the purchase of multientry tourist visas from China, leading to statistical indicators of FIT, all participants cited that this does not translate to individual arrivals at their business. In fact the vast majority of Chinese visitors arrive in groups of 4 / 8 / 12 (1-3 cars) or a mini bus of up to 15. This was linked directly to the Student and VFR segment, which is seen to be the key driver of regional growth of Chinese visitors and is underrated by many. The Student or Friend provides the the product / experience suitability validation; on-ground assistance Fastrak Asian Solutions Page 11 of 47 Tuesday, 17 th October 2017

12 Maximising Chinese Tourism - Report (including language and transport),and in many cases is the itinerary planner. These Students or Friends also undertake trials, so are also a customer in the first instance and a referrer in the second, if the experience proves acceptable. Whilst there is very limited quantitative research available that correlates parent visitation to Chinese students in Australia, there is qualititatve and indicative data that suggests 2-3 visitations per year, at least one (and up to four) family members on each occasion, and additional visitation of course for Graduation. A look at the Chinese student populations in Sydney and Melbourne and to a lesser extent Canberra and regional centres (including Newcastle and Wollongong), coupled with the potential flow-on warrants serious attention at all levels. Businesses also reported that some of the strongest booking growth is coming from Chinese Day Tour operators in key cities - booked by Students and Friends for their families and relatives. The importance of the link between Students, VFR, and also investment and business requires further specific research. The life time value of a Chinese visitor is already real with some businesses converting day visitors into overnight visitors, into holiday property owners, and then repeating the cycle through their children the next generation of students. This also brought up ideas regarding the potential of School Excursion, Educational, and Technical visit development, using regionalness as a key proposition, which are very small today, but do exist nontheless. Whilst there is a focus on marketing in China (and despite relative costs and complexity, this needs to be continued), there is also a definite need for Government and businesses to market here in Australia to these Student and VFR segments to raise awareness, drive local visitation, and build on-ground testimonials. I noted previously the need to identify how Chinese visitors engage with products / experiences. Given the high use of and reliance upon mobile devices and social media by Chinese visitors, participants felt that there is potential to use this to track actual travel patterns, or at least research the key sites in China as to perceptions and advice. Chinese visitors are renowned for their shopping, however, again participants indicated that their retail habits and requirements were different; there was little information or guidance for busineesess on what Chinese visitors preferred; and there was heavy competition from Chinese owned and operated outlets, especially Tax Free Shops. There were divided comments ranging from cheap and cheerful low-value experiences to highvolume and high-value purchases. There is a need for better information to guide businesses. Action: 1) Government research programs need to seek to identify the circumstances under, and ways in which, Chinese visitors will actually engage with the products, experiences and travel. 2) Governments and their agencies need to change the narrative about Chinese to include the challenges, requirements, and potential for success. Fastrak Asian Solutions Page 12 of 47 Tuesday, 17 th October 2017

13 Maximising Chinese Tourism - Report 3) Governments need to undertake specific research into the Student / VFR market in terms of visitation multipliers, purchase and travel habits, and their role as advisers and decision makers for others. 4) Governments need to provide Customer Understanding training assistance and guidance (including retail) to businesses as part of a Business Capability Program (see next section). Business Capability: Discussion elements in the Business Capability category covered both the ability to assess the potential reality of success and how to cater to Chinese visitor needs. Summary: 1) Regional areas have some generic challenges in terms of service delivery and business capability, which need to be acknolwedged. 2) There is a focus on the potential and opportunity of the Chinese visitor market, without any qualification of requirements for success. 3) Current International / Export / Market Ready programs equip businesses with necessary operational and industry skills, which are necessary, but do not provide business reality assessment tools. 4) The range of current China training and development offers are complex and confusing, and businesses are seeking assistance to help identify the most relevant for them. 5) Businesses are seeking more than just one-off programs, but rather a staged and full Development Pathway Program, which includes Government free (and / or heavily subsidised) starting programs, followed by guidance and direction to entry cost options, through to fully paid commercial self-help options. 6) The Inbound Tour Operator (ITO) distribution channel can and should provide guidance and assistance, but businesses still have a responsibility to understand the basics. Detail: Participants noted up front that there needed to be acknowledgement that in many regional areas there some generic challenges including: higher levels of hobby operators (which can affect consistency of availability); a lack of key player operators to provide the impetus and resources for development; and a lack of skilled staff and high seasonality (which can affect the consistency of delivery). And these issues arise even before trying to cater to Chinese visitors needs. The ability to assess potential reality of business success is linked with the Customer Understanding take-out: promotion of the opportunity without qualification of requirements. Participants noted the Business Ready, Export Ready, International Market Ready terminologies and associated programs available, but also noted that whilst these equip businesses with necessary skills (including industry operational knowledge) and are important in the overall mix, they are not in themselves the panacea for success. Fastrak Asian Solutions Page 13 of 47 Tuesday, 17 th October 2017

14 Maximising Chinese Tourism - Report Primarily business needs to know what the Chinese visitor wants and how they want to engage with the product / experience, have the ability to honestly assess their offer against those and be open to change, actually make adjustments, and be able to actively pursue the business. This knowledge enables business to qualify the stated potential and make appropriate decisions about volumes and yields on the one hand and capability, capacity, scalability, and customer mix impacts on the other, which in turn guides market entry or market expansion decisions. Businesses agreed they need help, but noted that there are a myriad of consultants, trainers, and companies offering China expertise, however the advice regarding requirements ranges significantly, and many programs are one-off and / or one size fits all rather than capable of being tailored to suit the size and development stage of the business. As such, they found it complex and confusing and sought some form of assistance to help them understand what was on offer, for who, where, how, and at what cost. In essence, they were seeking a qualified, central reference centre and a staged Development Pathway. Content should include both the Ready program options and the specific China program; by element (eg translating, cultural understanding, representation, Wechat social media) and by identified and qualified supplier. It is believed that this should be used to inform and add to currently available Business Capability Programs offered by Governments and their agencies. Reference was made to South Australian Tourism which has recently established and implemented (on a simple basis) such a Pathway and Program. Business also noted that the commission rates paid to, and benefits that should be obtained from arrangements with, Inbound Tour Operators (ITOs) should include guidance, support, and assistance, however this can vary significantly across ITOs. There is still a responsibility on businesses to understand the basics and the principals of the industry and the market Action: 1) Governments and their agencies need to change the narrative about China to include the challenges, requirements, and potential for success. 2) Governments need to provide Customer Understanding training assistance and guidance (including retail) to businesses as part of a Business Capability Program. 3) Governments and their agencies need to build on their current range of Ready programs to create a staged China Development Pathway for businesses, which include an introduction to market requirements, assessment tools and training; and a qualified central reference centre / point for specific China development elements. Competitiveness: Discussions ranged from the competitiveness of Australia the country, to the competitiveness of destinations within Australia, and onto the competitiveness of individual products / experiences. Fastrak Asian Solutions Page 14 of 47 Tuesday, 17 th October 2017

15 Maximising Chinese Tourism - Report Summary: 1) Although Chinese visitor growth continues to be strong, Australia has some challenges in the competitive arena. 2) Bragging Rights wins visitors (especially Chinese visitors) by promoting must-do signature destinations, products and / or experiences, which provide more reasons to visit. 3) Signature products / experiences must be both relevant and truly unique in the visitors eyes not our own eyes. 4) Australia s proposition is complex and sometimes confusing, especially due to competition amongst destinations and products / experiences. 5) Product Clusters provide options for visitors, as well as more reasons to visit, and need to include both free and paid products / experiences. 6) Bragging Rights are best earned through testimonials and tapping into the Chinese social media platforms using peer, business leaders, and celebrity endorsements. Detail: In terms the competitiveness of Australia the country, input suggested that whilst Australia has done well in terms of the growth of Chinese visitors overall, in terms of competitiveness (perceptually and in terms of market share) we lag behind other destinations - most notably New Zealand. I noted in the Access section that in a number of areas our infrastructure and / or capability lags behind that offered internationally and even in China. We have to acknowledge this is the situation. Participants were united in their thoughts that Bragging Rights are the key to competing for Chinese visitors and these require relevant, unique, Signature products / experiences, which are perceived as must-do by Chinese visitors and their communities back home. Bragging Rights provide reasons to visit, and the more reasons to visit you have (as a country, as a regional destination, and /or as a business) the more likely you are to succeed. The challenge is, however, being truly relevant and unique - in the Chinese visitors eyes as opposed to our own eyes. Many regions and businesses believe they are unique or the best or the only, when, in fact, the same product / experience is available in many other places. There needs to be assistance provided to help assess the reality of the claims. Participants also raised the challenge of the competing and somewhat confusing range of propositions presented to visitors: best beach, best food and / or best produce available everywhere; something for everyone / all the time claims; as well as vibrant cities and remoteness (apparently side by side). In comparison some other destinations very simple and clear propositions are more successful. There was also discussion around competing with other destinations in terms of Nature. This has become one of the most crowded competitive spaces for countries, destinations, and products / experiences (think New Zealand, South Africa, Bhutan). It is no longer competitive to simply have nature, now there has to be unique experiences and opportunities to interact with nature and, in fact, all things natural. As a proposition, Nature is too general and needs to be defined as a specific element of nature (is it remoteness or accessibility from cities; is it safaris or self -drive, is it lodge Fastrak Asian Solutions Page 15 of 47 Tuesday, 17 th October 2017

16 Maximising Chinese Tourism - Report accommodation or holiday park), and this has to relate to relevance for the visitor. Nature is a free available product / experience, but it needs to be do-able for the visitor and for the Chinese visitor this means being provided with assistance. Providing reasons to visit also relates to the mix of free and paid products / experiences available. For example, the Great Ocean Road is to a large extent a free experience, but also has the Twelve Apostles as a key must-do paid experience, and when combined with Ballarat on a Touring Route, adds a free country experience with a paid relevant history experience at Sovereign Hill. The Blue Mountains again provides free viewing with the addition of a paid unique experience at Scenic World. This leads to the need for Product Clustering, or, in simple terms, the need for collaboration between businesses - themselves and as part of the regional destination. Businesses need to look at what is around them, on the way to and from them, and complementary to their offer, in terms of free and paid options. Regional destinations need to look at building the necessary elements for a visitor into the offer - the products / experiences, as well as supporting elements such as food and beverage, accommodation, and retail options. As with Touring Routes, Product Clusters need to provide options rather than set itineraries for the visitor and to make visitors think there is more here than I thought. This is especially true for increasing overnight visitation. There has to be a reason to stay, a value to packing bags and moving accommodation, and maybe even a reason to pay more. Again, Port Campbell and viewing the Twelve Apostles at sunset or sunrise are testament to this. This proximity of Nature and key signature product / experience to cities in Australia was raised as an advantage, but also a potential barrier to regional overnight visitation for exactly the reasons stated above - it is often easier to stay in the city and do a day trip. This raised discussion around the difference between Sydney and Melbourne. In Sydney there are a number of key signature (and promoted) products / experiences in the city (and a few close by like the Blue Mountains and Port Stephens), whereas in Melbourne the key signature products / experiences are around the city and on well-known Touring Routes like the Great Ocean Road. Time-poor Chinese visitors may well run out of time in Sydney and key day trip surrounds, without getting into regional NSW. This is food for thought. If Bragging Rights are the key to visitation, then destinations, products and experiences need to earn them and the best way to do this is through peer and celebrity endorsement (testimonials by those that can influence others), including peers, business leaders, and most of celebrities. Given the prevalence and reliance on social media by Chinese visitors this is where those testimonials need to appear. It is also the reason WiFi and mobile connectivity is so important, as it allows real-time testimonials. In Newcastle, for example, leveraging Jack Mah and his ownership of the Jets, along with Jets player s personal experiences in the area, would be very powerful. Action: 1) Governments and their agencies need to identify and promote Signature Products / Experiences, which involves picking winners. 2) Governments and their agencies need to build on their current range of Ready programs to create a staged China Development Pathway for businesses, which Fastrak Asian Solutions Page 16 of 47 Tuesday, 17 th October 2017

17 Maximising Chinese Tourism - Report includes an introduction to market requirements, and assessment tools and training, to help destinations and businesses understand not all opportunities are equal. 3) Governments and their agencies need to include Chinese social media (especially WeChat) training and guidance in their Business Capability Programs. Measurement: Probably the most agreed upon category was the challenges of having reliable data on which to make decisions regarding the Chinese visitor in Australia, especially in regional Australia. Summary: 1) Businesses are seeking insights to inform decisions, not just data. 2) Current measurement of all international visitors in regional areas is problematic. 3) Missing data relates to Student and VFR driven traffic versus Holiday traffic, Mainland China versus Chinese visitation, and arrival into the country as individuals but arrival at businesses as groups. 4) Commercial transaction tracking could provide real-time travel and spend pattern data. 5) Local businesses also need to play a part, but need an independent collector or system to protect confidetiality. Detail: Whilst the IVS and NVS provide historical trends, the limitations of sample sizes creates some reliability issues in terms of absolute results and variations within measured regions. Likewise, accommodation data does not track establishments with less than 15 beds, which in turn does not track the majority of B & Bs which make up a good quantity of regional stock. The holiday home rental market, and more recently the shared economy, is also currently not fully measured (although there is some data available through commercial operators), and again this is a key stock segment in regional areas. In terms of the Chinese market, there is a growing trend of Students residing in NSW booking accommodation on Airbnb and other shared economy platforms, but this information is not captured in current IVS data. Participants noted that there are currently reviews by Governments underway which are looking at these issues, but re-enforced the need to find solutions. Likewise, participants noted that one of the best sources of data is in fact, locally collected data, but to date the willingness of businesses to share information has been problematic. It was noted that to be successful the collector needs to be independent or data needs to feed into an independent system. Tracking actual visitation by spend and travel patterns of Chinese visitorswhilst in Australia was seen as one of the key missing data pieces, particularly in relation to Student and VFR driven traffic versus Holiday traffic; Mainland China versus Chinese Fastrak Asian Solutions Page 17 of 47 Tuesday, 17 th October 2017

18 Maximising Chinese Tourism - Report visitation; and arrival into the country as individuals but arrival at businesses as groups. It was noted that, as Governments have commercial partnerships with a number of transaction providers, there could be potential to leverage this wihout compromising commrcial confidentiality. It was also again noted that locally this could be tracked by businesses asking visitors where they live and what passport they have and then aggregating this information in a common system. Given the importance of the Student and VFR segments it is believed that there needs to be much better and deeper research into their planning and buying habits, decision making processes, and the multiplier of family visiting students. There was also discussion around the topic of dispersal and the various definitions used by Federal, State and Town agencies, which can cause comparisons to be void. The definition according to Tourism Research Australia (used in IVS) is an overnight stay in a Capital city that does not have bilateral air capacity restrictions, not simply all capital cities. As such all air travel into Cairns is measured as dispersal and measured against Katoomba!! There was also discussion around dispersal of spend, which can occur without overnight visitation, and again Katoomba provided the perfect example of high dispersal from Sydney for the day with associated spend (read value), but low overnight stay and spend rates. This is partuicularly relevent when reviewing Chinese visitor value. Action: 1) Governments and their agencies need to seek to improve current data collection surveys and seek alternative sources of data through leveraging their commercial partnerships. 2) Governments and their agencies need to undertake specific research into the Chinese Student and VFR segments given its importance to regional tourism growth. 3) Government and their agencies need to look to assist the development of local data collection processes and systems. 4) Businesses need to accept that local data collection, and the sharing of it, are a shortterm solution opportunity, and accept responsibility for implementation. General: A number of the discussion points noted under the General category related to previously noted commentary and actions in this Report and will not be repeated, however, others were observations and ideas that did not fit neatly into other categories and we will focus on these. Summary: 1) Local interaction and exchange of ideas, Collaboration, can lead to local solutions and win visitation. 2) Access to market knowledge and expertise here in Australia is seen as a key to development. 3) Leveraging affinity with Chinese communities provides not just promotion, but also strong development and operational opportunties. Fastrak Asian Solutions Page 18 of 47 Tuesday, 17 th October 2017

19 Maximising Chinese Tourism - Report 4) Anomalies in the definiton and application of Regional exist, and can hinder competitiveness and growth. 5) There is further potential to link destination promotion with sporting institutions and activities, food and wine exporters and / or cultural organisations in region. Detail: Whilst I have spoken about Product Clusters and Development Training, participants noted that in fact the ability to meet and discuss the challenges (in forums such as the Roundtables) provided interchange of knowledge and ideas which could lead to solutions - and this in fact happened at the Wollongong session regarding transport connections. The inclusion and involvement of local mentors (those already successful or with Hero products / experiences) if possible was seen as one of the best forms of Development. In terms of advice and assistance, participants active in the China market had high praise for the on-ground teams in market (including the Destination NSW - DNSW - team). However, others stated the ability to access market knowledge and understanding here in Australia through a central point would be very beneficial and they did not believe such depth of knowledge or expertise was currently available within the DNSW team in Sydney. NSW Business Chamber s China Export Growth Program was cited as an example of a central one stop shop and that DNSW should consider a linkage to extend this to tourism. The ability to leverage affinity with Chinese communities was also seen as a development and business opportunity - such as Jack Mah and the Jets in Newcastle, Nan Tien Temple and their new Buddhist Ministry and Mindfulness Programs in Wollongong, Chinese Student Associations, and Australia China Business Councils. These were seen as avenues for promotion, awareness, direct product testing research, and Chinese social media assistance. The growing importance of the local Chinese travel agents (especially for the Student and VFR segments) out of Sydney, Melbourne and Canberra was recognised, as was the need to better understand and be more active with these new distribution channel operators. A key issue raised was the anomalies in the definition of Regional and the application of this in relation to Newcastle and Wollongong, which restricted their access to a range of Government grants including a number of recently announced new tourism programs, as well as eligibility to score Migration points. Action: 1) The Business Chambers can provide leadership in enabling Connect programs for Visitor Economy businesses. 2) Governments and their agencies need to look to replicate the China Export Growth Program for the visitor economy. 3) Governments and their agencies need to address anomolies in the definition and application of the term Regional. 4) Investigate the opportunities to extend destination promtion through sporting and cultural avenues, possibly including ambassadors Fastrak Asian Solutions Page 19 of 47 Tuesday, 17 th October 2017

20 Maximising Chinese Tourism - Report High-Level Actions: In the final stage of each discussion, participants distilled all their recommended actions into the following high-level strategies. (See Appendix 4 for whiteboard discussion points.) Increase engagement with, and leverage of, Chinese communities in Australia. Develop and implement a comprehensive program to build business capability. Enhance research capabilities for both regional and Chinese visitor measurement - including a focus on the Student and VFR segments. Increase collaboration at the local business and destination levels. Address mobile connectivity issues and maximise technology solution options. Address regional anomalies. Change the China narrative to include qualification and requirements for success, along with the potential. Fastrak Asian Solutions Page 20 of 47 Tuesday, 17 th October 2017

21 Appendix 1 - Summary of Wollongong Discussions: Access To Destination / Product / Information Customer Understanding To Make Decisions Business Capability The Ability and Reality Language schools Time constraints Pace University days WeChat Red Balloon Local Chinatown Agents VFR / Students School excursion market Education tours Technical delegations Making it easy / assistance Timings in itineraries Jervis Bay: linkage & timings Adjustment to meet requirements Competitiveness Measurement Australia / Region / Product Reasons to visit / stay Options within a structure Bragging rights Packages from Sydney Chinatown Agents Websites Night-time Uniqueness Geographic positioning Transport infrastructure: public buses / timetable / stop areas Mobile & connectivity Apps: eg: Camper Mate Reality of information Canberra opportunity Capacity Personalised relevance Closest to nature: Glamping / cabins / motorhomes Collaboration Mix of paid & free Rates & Pricing Touring route / Grand Pacific Drive To Understand Legal requirements: passport FIT but not independent Local measurement General Mentors / Discover Jervis Bay Chamber connect events Sydney / Melbourne sales agents Cultural linkage: Nan Tien Institute (Buddhist Ministry Course / Mindfulness Package) Fastrak Asian Solutions Page 21 of 47 Tuesday, 17 th October 2017

22 Appendix 2 - Summary of Newcastle Discussions: Access To Destination / Product / Information Mobile connectivity WiFi delivery Social media: Chinese Relevant information Runway capability in Newcastle Airport connectivity with Melbourne & Brisbane Airport alternative to Sydney Confusing and complex offers Customer Understanding To Make Decisions Increasing demand for FIT experiences Segments: VFR / Students Need assistance Different requirements: How Opposite but with boundaries Pace Timings Retail Business Capability The Ability and Reality Product ready: What does it mean? Volume capability Margins and business Hobby operators Lack of key players Product development advice ITO capability / reliance / support / advice / interest / profitability Competitiveness Measurement Australia / Region / Product Fragmentation Experiences are key Awareness (eg less than 2% of export wines) Confusing propositions Student / Business / Holiday Liveability What is Australian? Reasons to visit / options To Understand Overnight vs Day spend VFR / Student (segments) travel specifics Proof of student & VFR linkage IVS / NVS integrity Local business General 6,500 Chinese students at University DNSW Australia Team market understanding Role of travel trade What is FIT? Sydney based operators FIT joining Groups Linked to investment & business Business delegation support Testimonials Collaboration Leverage students Message consistency Lack of product clusters Bragging rights Testimonials: celebrity / sports (Jets) / business (Jack Mah) Trust Safety Regional anomalies: migration points not applicable / access to grants Fastrak Asian Solutions Page 22 of 47 Tuesday, 17 th October 2017

23 Appendix 3 - Summary Of Individual Discussions: Access To Destination / Product / Information Infrastructure: rail / roads / air Mobile connectivity WiFi delivery Social media especially Chinese Language Customer Understanding To Make Decisions Lots of what : motivators / needs / wants Lack of how : requirements / conditions to engage Time constraints Business Capability The Ability and Reality Potential success assessment tools needed Lots about potential, little about requirements Do-able vs Available product / experiences Competitiveness Australia / Region / Product Signature experiences Unique Relevant Travel patterns Scalability / Capacity Bragging rights VFR / Student / Investment / Business / Holiday Measurement To Understand Sample sizes Accommodation measurement Shared economy measurement China vs Chinese visitation Adjustments Nature??? Actual spending Degree of difficulty Mass vs Niche vs Small Options / Product clusters Free and paid mix Do-ability Segments and their travel patterns Current actual travel patterns Current actual spending Fastrak Asian Solutions Page 23 of 47 Tuesday, 17 th October 2017

24 Appendix 4 - Key Take-Outs And Actions: Access Customer Understanding Business Capability Competitiveness Measurement To Destination / Product / Information To Make Decisions The Ability and Reality Australia / Region / Product To Understand We make it difficult All what not how Potential without requirements Reality is needed Need insights not statistics Connectivity Chinese social media research Government to change the narrative Business to understand potential but requirements More specific data WeChat Specific VFR / Student research Government to lead provision of development pathway Not everyone the same Potential to use government s commercial partnerships to track travel and spend QR Codes VFR / Student marketing Business to commit Signature experiences mean picking winners Local level option is passport Supported training IVS / NVS improvement Fastrak Asian Solutions Page 24 of 47 Tuesday, 17 th October 2017

25 Appendix 5 - Round Table Invitation Sample: Fastrak Asian Solutions Page 25 of 47 Tuesday, 17 th October 2017

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28 Appendix 6 - List Of Involved Participants: Illawarra Round Table Company Contact Destination Wollongong Tracey Pascoe tpascoe@wollongong.nsw.gov.au Illawarra Fly Lachlan Stevens lachlan.stevens@merlinetnertainments.com.au Caravan & Camping Industry Lyndel Gray Lyndel.gray@cciansw.com.au Symbio Kevin Fallon kevin@symbiozoo.com.au Sage Hotel Nicole Temple manager.wollongong@sage-hotels.com Kiama Municipal Council Karen Ronning karenr@kiama.nsw.gov.au Belle Fleur Lavender Pty Ltd Leonie Yip (Feedback by ) leonie@bellefleurlavender.com.au Nan Tien Institute Rev. Zhili zhili.shi@yahoo.com.au Nan Tien Institute Nicki Norton miaoyou@nantien.edu.au Skydive Australia Andrew Denman a.denman@skydive.com.au Illawarra Chamber Illawarra Chamber Bill Bruck Leanne Newcastle Round Table Company Contact Newcastle Airport Pty Limited Peter Cock pcock@newcastleairport.com.au Rees International Martin Rees martin@reesinternational.com.au Crowne Plaza Newcastle Matt Anderson matt.anderson@ihg.com Novotel Newcastle Beach Thomas Klotz thomas.klotz@accor.com Murray s Craft Brewing Co Murray Howe greatbeer@murraysbrewingco.com.au Willger Group Will Creedon will@willcreedon.com Tamburlaine Wines Mark Davidson mdavidson@tamburlaine.com.au Hunter Resort Phil Hele philip@hunterresort.com.au Hunter Valley Wine & Tourism Association Jo Thomas jo@hvwta.com.au Australian Attractions Ken Corbett kencorbett@mac.com Destination Network SSN Glenn Caldwell glenn.caldwell@dssn.com.au TFO Consulting Services Tim Owen tim@tfoconsultingservices.com.au New Eye Business Karl Puntis karl@neweyebusiness.com.au Fastrak Solutions Richard Beere rbeere@fastraksolutions.com.au University of Newcastle Dary Milani dary.milani@newcastle.edu.au Newcastle Jets & Parent Company Rocky Liu rocky00357@hotmail.com Policy Team Rebecca Burdick Policy Team Luke Aitken HBC Bob Hawes NSWBC Dean Gorddard Company China Ready & Accredited Destination Sydney & Surrounds South Gaibo Agency Gaibo Agency Tour East (Previously) Equity Travel Australian Tours Management (ATM) Individual Discussions Contact Gary Crockett Greg Binskin Garry Burns (To Be Contacted) Jessica Zu Christopher Teh Cheryl Zhong (To Be Contacted) Teh Eng Waa (To Be Contacted) Fastrak Asian Solutions Page 28 of 47 Tuesday, 17 th October 2017

29 Appendix 7 - Media Release Issued After Newcastle Round Table: Fastrak Asian Solutions Page 29 of 47 Tuesday, 17 th October 2017

30 Appendix 8 - Participant Issues Paper: (Provided To Participants Pre-Meeting) Fastrak Asian Solutions Page 30 of 47 Tuesday, 17 th October 2017

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37 Appendix 9 - China Digital FIT Regional Dispersal Report: (Purchased For This Project) Fastrak Asian Solutions Page 37 of 47 Tuesday, 17 th October 2017

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