TASMANIAN PARLIAMENT BEING MISLED (3 of 4)

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1 MEDIA RELEASE No th July 2010 TASMANIAN PARLIAMENT BEING MISLED (3 of 4) Tasmanian Government being misled, Tasmanian community being misled Tasmanian tourism industry being misled TOURISM TASMANIA ACTIONS DETRIMENTAL TO BUILDING A STRONG, GROWING, COMPETITIVE AND PROSEROUS PRIVATE SECTOR Tourism Tasmania is wasting taxpayer funds for the self-interest of their bureaucracy. Tourism Tasmania is constantly promoting itself for its wonderful work with marketing Tasmania outside the state. Have MPs in the Tasmanian Parliament ever wondered why they never hear any dissent from the tourism industry? Have MPs in the Tasmanian Parliament ever wondered why there is no public debate about tourism industry issues? If any statements are made by Government sources about agriculture, forestry, wine industry, fishing industry or manufacturing and there is dissent from these industries, MPs and the media very quickly get to hear from their constituents. But isn t it strange how MPs and media don t hear from the private sector of the tourism industry in public. And they won t either. Tourism Tasmania has a ban on democracy in Tasmania s tourism industry. The threat of retribution from the State s Tourism Organisation is very real. Free speech is banned unless any public comments comply with Tourism Tasmania views and actions. TOURISM TASMANIA INSISTS ON TOTAL CONTROL OF THE INDUSTRY. SO ABSOLUTE IS THEIR POWER THAT THERE IS A PERCEPTION WITH MANY IN THE PRIVATE SECTOR THAT THE GOVERNMENT IS POWERLESS TO CHANGE THE SITUATION IN FAVOUR OF IMPROVING THE COMMERCIAL PERFORMANCE AND ECONOMIC HEALTH OF TOURISM S PRIVATE SECTOR It is a not a good sign that a former resident of Tasmania with extensive Tasmanian tourism industry experience at senior levels has to become involved to make the Tasmanian community and the Tasmanian media aware of the control of the state s tourism industry by a small group of public service bureaucrats who know how to abuse the machinery of Government, control of taxpayer funded resources and control of taxpayer funds to ensure the industry is compliant with their wishes and actions. Advance Tourism 1

2 These claims about Tourism Tasmania are not without foundation. This Briefing Paper has further details. Over the last decade, customers (visitors) for the Tasmanian tourism industry have been on a steady decline. This has cost tourism s private sector hundreds of millions of dollars in lost revenue. BUREAUCRATS AT TOURISM TASMANIA MANAGING THE STATE S TOURISM DESTINATION MARKETING HAVE NO private sector executive management experience NO private sector strategic marketing experience at this level NO private sector competitive commercial operational experience They are public service bureaucrats who know how to use the machinery of government and government resources to dominate the industry but they have NOT shown they have the destination marketing skills to rejuvenate growth in demand and strengthen Tasmanian tourism s competitive position. This is a list of some of their failures 1. FAILED to react to the fall in domestic demand with initiatives to boost demand, 2. FAILED to react to loss of market share to offshore destinations particularly New Zealand, 3. FAILED to react to the Global Financial Crisis leaving tourism businesses to lose revenue and tourism jobs were lost, 4. FAILED to understand that tourism marketing today is very much driven by strategies to capture impulse buyers, a big slice of industry revenues today 5. FAILED to understand the deteriorating competitive situation and react accordingly 6. FAILED to take any action to help improve the economic health of the private sector claiming that the $30 million of taxpayer funds are solely for use by Tourism Tasmania to promote the state. Tourism Tasmania does not believe it has any responsibility to help the commercial performance of the private sector 7. FAILED to recognise the commercial importance of the benefits the digital era offers for the industry and to facilitate its introduction across the state at all levels 8. FAILED to set up a state-wide network of competitive standard websites. Instead focused only on the state website which contributes little to the industry s performance 9. FAILED to introduce online booking systems across the state and in a timely manner 10. FAILED to understand the impact of the introduction of low cost airlines as (1) a force to attract more visitors and (2) as a competitor to Tasmanian regional destinations 11. FAILED to react when domestic airline commissions for travel agents ceased, a very significant event. This had a dramatic impact on domestic tourism marketing 12. FAILED to initiate market development action to boost demand from existing markets 13. FAILED to develop initiatives to build new business from interstate markets 14. FAILED to introduce modern merchandising methods like Tasmania s competitors 15. FAILED to maximise benefit from the new online distribution channels by Tasmanian businesses 16. FAILED to lift the industry s marketing to modern standards. Regional tourism across the state is now uncompetitive due to Tourism Tasmania inaction 17. FAILED to provide regions with resources so they could be more competitive 18. FAILED to address development needs of regional destinations more distant from Hobart and Launceston 19. FAILED to restructure regional tourism operations to suit needs of the digital era 20. FAILED to provide any industry LEADERSHIP. Tourism Tasmania insists on managing the industry s destination marketing but there has not been a skerrick of leadership. Advance Tourism 2

3 Attachment is real gem For an independent view, the Attachment to this paper contains an unsolicited received by Advance Tourism in Melbourne from a respected tourism business in Tasmania. If the Tourism Minister reads this Attachment, it will be seen as a succinct summary of some of the problems the industry has faced with Tourism Tasmania together with an indication of their poor performance on programs they have developed. There can be no doubt that Tourism Tasmania has been giving Tasmanian taxpayers poor value for the moneys spent from the annual Tourism Vote. UNDERSTANDING TOURISM INDUSTRY OPERATIONS First and foremost tourism is a commercial industry. It is not a government department any more than farming, fishing, wine producing or retailing. Tourism is a compromised of two levels of commercial operations Individual tourism businesses Destination marketing Individual tourism businesses Individual tourism businesses comprise of accommodation providers (motels, hotels, apartments, B & B s, caravan parks), attractions/tours, cruises, walk-in attractions, wine cellar doors, food sales outlets for chocolate, local foods, restaurants, convention facilities etc. Destination marketing Unique to tourism are these factors. Customers do not live locally, they live in distant markets These customers have to be enthused to visit Tasmanian destinations. For Tasmania this means not only coming to the State but visiting various destinations as far apart as Strahan, Stanley and St Helens. Destination marketing interstate and overseas marketing as far more competitive that it has been over the last 50 years. Since the year 2000, competition has been intensified by the digital era and huge changes in online operations. Australia s domestic tourism industry, particularly Tasmania is far more vulnerable than it was in the 1990 s. Impacting on Australia s tourism markets today, like many other consumer industries, is impulse buying. It offers Tasmania great potential. Impulse buying Advance Tourism is this week releasing to Tasmania A folder of e-newsletters and other modern marketing techniques which are now prevalent on the mainland. The folders include details of other competitor activities impacting on Tasmanian results. A series of folders with over 80 advertisements gathered from Melbourne and Sydney print media in recent times. What little coverage there is for Tasmania is plainly not competitive lacking in market coverage, modern marketing methods or advertising that has impact. TOURISM TASMANIA HAS FAILED TO RESTRUCTURE THEIR OPERATIONS OR FOSTERED CHANGED ARRANGEMENTS THROUGHOUT TASMANIA TO BETTER EQUIP TASMANIA TO CAPTURE A BETTER SHARE OF THIS NEWPOTENTIAL. Advance Tourism 3

4 TOURISM TASMANIA S NEGATIVE ATTITUDE TO BUILDING THREE STRONG REGIONAL TOURISM ORGANISATIONS THAT CAN BE EWFFECTIVE EFFECTIVE ON THE MAINLAND IS DISGRACEFUL. TASMANIA IS THE ONLY STATE WITH THIS NEGATIVE ATTITUDE. REGIONAL TOURISM ORGANISATIONS IN OTHER STATES ARE ENCOURAGED TO BE PROACTIVE WITH INTERSTAE MARKETING. IN THE FOLDERS ARE ADVERTS FROM REGIONAL DESTINATIONS ALL OVER AUSTRALIA BUT NOT TASMANIA. Destination Tourism Organisations/Destination Marketing Organisations These are usually managed by private sector tourism executives with the requisite skills, talents, entrepreneurial flair and competitive skills to deliver strong, growing business results. ALL THAT TOURISM TASMANIA HAS DELIVERED FROM TASMANIAN TAXPAYER FUNDS AND TASMANIA S TOURISM INDUSTRY IS A STRONG POWERFUL ALL-CONTROLLING BUREAUCRACY. HOW DOES TOURISM TASMANIA CONTROL THE INDUSTRY SO TIGHTLY? THE FIRST PROBLEM IS THAT TOURISM TASMANIA OBJECTS TO BEING HELD ACCOUNTABLE FOR RESULTS FROM THE $30 MILLION ANNUAL TOURISM VOTE. THEY ALSO OPPOSE ANY TARGETS BEING SET. As tourism is a commercial industry, this should be standard practice but it seems the bureaucracy objects to the Tasmanian Government introducing accountability. Lack of accountability leaves Tourism Ministers vulnerable. Past Tourism Ministers, the present Tourism Minister and future Tourism Ministers all have the same problem. Under the Westminster system, it is very rare that Tourism Ministers are appointed to the Tourism portfolio with business and/or commercial tourism operational experience. As the Yes Minister TV series shows the bureaucracy with its greater knowledge of a very complex industry always has an advantage. Tourism Ministers never know whether or not proposals being presented for Ministerial approval are sound or not. In Tasmania, because Tourism Tasmania has banned freedom of speech for the private sector, no-one would dare make a comment to the Tourism Minister for fear it would get back to Tourism Tasmania with the risk of retribution. For this reason, the Tourism Minister would rarely get to hear what she needs to hear, only what the bureaucracy wants her to hear. Groups caught up in this bureaucratic control Tourism Tasmania Board The Chairman is a former career bureaucrat with no private sector destination marketing experience. Other Board members are mostly private sector but if they seek to be reappointed they can t afford to speak out on behalf of the private sector. Tasmanian Tourism Industry Council Not known for being an advocate for initiatives to help the private sector which is their primary role. Loss of influence with Tourism Tasmania bureaucracy and possible loss of government funding is enough to deter any bold action. Advance Tourism 4

5 Major companies in Tasmania s tourism industry Tourism industry businesses Tourism Tasmania looks after these groups with strong business support and opportunities. These companies are not likely to bite the hand that feeds them. Tourism Tasmania does not look after the smaller SMEs in the same way. SMEs across the state are petrified of incurring the displeasure of the Tourism Tasmania bureaucracy. Most are frustrated particularly as they see their sales falling. But they dare not speak out. There are various ways the bureaucracy can be penalise tourism businesses eg, Being dropped off the visiting journalists list Not being included in any marketing initiatives that Tourism Tasmania may be contemplating Depriving them of business opportunities.. Although in Melbourne, Advance Tourism has not been exempt either. The consultancy has over a period circulated discussion papers to the tourism industry across Tasmania. After the first of these was released, a very senior executive called by phone expressing in the strongest terms, Tourism Tasmania s disapproval of our action. The call lasted less than 30 seconds and the writer had no opportunity to respond as the caller hung up. Soon after, tourism businesses in Tasmania were reporting Tourism Tasmania was saying to the industry that these actions were a vendetta by Norm White against Tourism Tasmania Norm White s best consultancy days were in the 1990 s and he is past it now. There can be no doubt that skullduggery at Tourism Tasmania has closed down open discussion within the Tasmanian tourism industry which is essential for commercial success. Every commercial operation is constantly talking about good and bad performances. This is how they improve their results. New ideas are born, market opportunities are developed, problems are fixed, inefficiencies are corrected and results benefit accordingly. BUT THIS DOES NOT HAPPEN IN TASMANIA BECAUSE THE TOURISM TASMANIA BUREAUCRACY WILL NOT ALLOW IT. As a result this is curbing a far better business performance. ARRIVAL OF THE DIGITAL ERA In the year 2000 with the digital era came Websites Online bookings E-marketing Websites electronic distribution channels As everyone knows, websites are valuable business tools as well as valuable links partciualary to consumers. When they first arrived Tourism Tasmania decided it would use all taxpayer funding to develop a state website. In doing so they went into competition with private sector managed destination websites around the state. Tourism Tasmania should have fostered a network of high standard destination websites all linked together in an intranet. Their desire to control the industry over-rode any considerations to help private sector business results and facilities to drive more customers into regions. For years regional destinations across Tasmania have had websites that were not competitive. Although several have been improved, many are still not yet at a competitive standard. Tourism Tasmania has seriously failed the Tasmanian tourism industry. Advance Tourism 5

6 Online bookings When these systems first appeared, although Tasmanian Temptations at Launceston were well skilled in this area, the bureaucrats in Hobart did not understand either their marketing value or how to use them to benefit the industry. They took the stance that such activity was up to the private sector. Tourism Tasmania does not suggest who in the private sector should be taking responsibility. In 2008, Tourism Tasmania was offered a system by the Australian Tourism Data Warehouse and suddenly such facilities became the responsibility of the State Tourism Organisation. If a poll was taken today, the state s tourism industry private sector would unanimously confirm that this has been a complete bungle by the public service bureaucrats at Tourism Tasmania since Today online purchase of travel arrangements is a fact of life everywhere like booking theatre tickets, E-Bay, insurance policies etc. BUT NOT THE TASMANIAN TOURISM INDUSTRY. AGAIN TOURISM TASMANIA HAS LEFT THE INDUSTRY AT A COMPLETE DISADVANTAGE. The bureaucrats did not have the essential commercial operational backgrounds. They made very good bureaucratic decisions which could not be questioned. However, these decisions had a woeful impact on tourism business revenues. It is hard to estimate the huge loss of revenue by Tasmanian tourism businesses by Tourism Tasmania s actions. e-marketing Progressive companies today are lowering their marketing costs by using e-newsletters and other web based activities. The Tasmanian tourism industry is well behind the pace and missing out. Again Tourism Tasmania has shown no interest in the commercial performance of the private sector by doing NOTHING with this wonderful new technology. Distribution channels Although a few years late, recently Tourism Tasmania discovered this modern method of reaching new markets. But their efforts have been too little too late. Nor have they been proactive in helping the industry to benefit from these opportunities largely because the public sector bureaucrats lack essential tourism industry commercial experience. The absence of 21 st Century Regional Tourism Organisations across the state exacerbates this process further. Again Tourism Tasmania has shown no interest in the commercial performance of the private sector by doing NOTHING. Tourism Tasmania s bureaucratic approach is wrecking the commercial operations of Tasmania s tourism industry CLOSURE OF TASMANIAN TEMPTATIONS Being good public service bureaucrats, Tourism Tasmania saw the losses of Tasmanian Temptations operations as a good reason to close down one of the Tasmanian tourism industry s greatest assets. Sadly, it also meant losing valuable people who had great knowledge of digital era operations, the travel industry and the new digital era distribution channels. Advance Tourism 6

7 BUT BEING GOOD PUBLIC SERVICE BUREAUCRATS THEY JUST CLOSED IT DOWN. Again the commercial performance of the private sector was not one of their priorities. Had Tourism Tasmania been managed by experienced private sector tourism industry executives, they would have recognised its commercial value and its value for helping large and small tourism businesses. Under private sector management, the operations would have been restructured to help the private sector achieve a greater market share of mainland potential. At the same time restructure and working more closely with the private sector could have reduced the losses and quite possibly turned into profit. Because bureaucrats are usually not entrepreneurial like the private sector, business opportunities were lost that could have been explored with Tasmanian tourism businesses. CAUSE OF THESE PROBLEMS The root cause of many of the serious problems with Tasmania s tourism industry is the wide disparity between The public sector bureaucracy, and Commercially driven SMEs of the tourism industry. The public sector bureaucracy has access to government, they show NO INTEREST in using them to foster strong, growing, competitive, prosperous private sector tourism operations. All they do is spend taxpayer funds in advertising and promotion with no commercial targets and no accountability for results. Meanwhile the economic health of Tasmania s industry of SME s is far from satisfactory but the public service bureaucracy totally refuses to use taxpayer funding resources to improve the situation. The only explanation can be that the public service bureaucrats do not have the private sector marketing skills to deliver what the industry needs more visitors. The sum total is that while the private service bureaucrats are telling MP s and media that all is well, the tourism industry is in a serious state of distress. VERY SERIOUS Tasmania is far from competitive on the mainland. Tasmania has very little presence, it is off the radar with many customers. Advertising by Tourism Tasmania is poor. It is Infrequent Lacks private sector involvement like its competitors Has poor choice of media. Using Fairfax has limited market penetration Lacks supporting promotional activities Compares unfavorably with competitor advertising which is targeting impulse buying. To allow Tasmanian MP s, Tasmanian media and the Tasmanian tourism industry, to make their own assessment Advance Tourism has gathered together an array of over 80 advertisements and other competitor material which will be released by over coming days. This includes Advance Tourism 7

8 some Tourism Tasmania advertising. This way, Tasmanian decision makers can decide for themselves whether they feel that Tasmania s presence on the mainland is adequate and competitive. WHAT NEEDS TO HAPPEN To reinvigorate the commercial performance of Tasmania s tourism industry the following actions by the Tasmanian Government are needed. 1. Recognition that tourism is a commercial industry of 2450 tourism businesses throughout the state employing 25,670 Tasmanians. A media release, preferably from the Premier is needed to declare that the Tasmanian Government recognises the tourism industry is comprised of tourism businesses in the same way that the agriculture industry is comprised of farmers, the wine industry is comprised of wine producers and the fishing industry is comprised of professional fishermen and fish farmers. Presently a view prevails in some quarters that tourism is a government department and this needs to be dispelled. Budget needed : Nil 2. The role of the State Tourism Organisation to change forthwith to support development of the commercial success of the private sector not be a government promotions unit. Tourism Tasmania believes its role is to spend taxpayer funds on advertising and promotions. Nowhere in any Tourism Tasmania plans including the Strategic Plan is there a commitment to helping the commercial performance of the private sector so that it can contribute to the State s economy and local economies. There is a need for the Premier or Tourism Minister to announce The role of Tourism Tasmania will be to support the development of Tasmania s tourism industry by fostering the commercial success of a strong, growing, competitive and prosperous private sector of tourism and other businesses. From this, tourism industry activities are to be designed to maximise contribution to the State and local economies including job creation and attracting private sector investment. Budget needed : Nil 3. Performance targets to be set and Tourism Tasmania s performance to be measured against the targets. To set the performance targets, a panel of experts be formed to set quarterly industry targets for the next three years. Members of the expert panel recommended as follows Chief Executive, Federal Hotels, Tasmania s biggest investor in tourism product Senior executive from Harris Scarfe, Websters, Woolworths or some other large Tasmanian company familiar with planning and budgeting for a consumer driven organisation Senior executive from Jetstar or Virgin Blue with involvement in planning and budgeting Mr Chris Richardson, Access Economics Canberra Advance Tourism 8

9 The Tasmanian Treasury to be asked to provide support for the Expert Panel. The Expert Panel to be asked to produce quarterly targets for three years. The targets to be specific and measureable, not expressed in general terms. They must also be targets for growth. Tourism Tasmania and Tasmanian Tourism Industry Council to be invited to provide input into the Panel s considerations. Budget needed Small budget to cover travel costs and attendance fees for Panel members. 4. New Chairman to be appointed to the Tourism Tasmania Board from the private sector. Since 1996 when Tourism Tasmania was formed, there have only been two appointments to the post of Chairman, both from the public sector. It is time to have an experienced private sector industry person as Chairman. Mr Bob Annels should be thanked for his contribution to Tasmanian tourism. However to oversee a new vibrant approach to benefit the private sector, a new Chairman with private sector senior management experience is needed. A suitable candidate has just become available. Former State Manager Avis and Managing Director Innkeepers, Mr John Dean, has just returned from Cook Islands Tourism where he was enormously successful as CEO. John, when in Tasmania, was also a member of Mike Barnard s Tourism Ministers Advisory Committee and was Chairman of the Tasmanian Convention and Visitor Bureau. After leaving Tasmania he had several different appointments in the private sector including being successful as CEO Tourism Whitsundays. While at Cook Islands, he restructured industry operations, boosted visitors from USA, New Zealand and Australia. He grew the Australian market so much that earlier this month Air New Zealand introduced Cook Islands first ever direct flights from Raratonga to Sydney quite an achievement. Budget needed only normal administrative costs. Advance Tourism 9

10 FROM A TASMANIAN TOURISM BUSINESS Attachment This is an unsolicited received by Advance Tourism in Melbourne on 15 th July 2010 from a respected Tasmanian tourism business that has had no previous contact with the consultancy. Certain information has been deleted to protect the identity of the author. This is indicative of the sentiments being constantly expressed by Tasmanian tourism businesses. Fear of retribution prevents them from making such comments in Tasmania Hi Norm, I value your comments on the Tourism Tasmania and other industry matters. I have a small tourism business at?????? I could not put my concerns in 5000 words let alone 500. Without dwelling too much on years past which are still impacting on today, I will outline my current concerns. The first point that needs to be stated is that TT as much as it pretends to be, is not a marketing organisation. There is no one with any marketing acumen in the organisation. However there is a large number of bureaucrats that gather statistics (For their own glorification mostly) and mould them into presentations to take to the industry to justify enormous government funding. PLUS Set up Zone Marketing Groups to liaise with TT MINUS Use only as a means of telling industry what programs are being put in place. Under no circumstances take any feed back or listen to these members. This is only a front to say consultation takes place. PLUS With the demise of Tas Temps create a replacement for the wholesalers magazine. MINUS Try to emulate the successful private (Fairfax) Travelways planner and Explore guide that already have 100% of tourism businesses registered and have ten times the circulation and print monthly and bi- monthly. They tried to sell this to industry as an annual glossy at grossly over inflated prices, a magazine with a print run 160,000. With less than a 20% interest TT resorted to selling marketing packages where you had to elect to be in this magazine or miss out on a range of Govt programs such as the VJP 1. With little circulation most of these outdated magazines are collecting dust in the back of visitor centres or have been thrown out, a total waste of money. (survey conducted last year on distribution). TT is convinced they had done a masterful job and set about a reprint this year. Industry pleaded to create one magazine not five as nearly all tourists cross over three or more zones. THIS FORAY INTO THE PRINT MEDIA IS A COMPLETE DISASTER AND IS STILL CONTINUING A secret shopper on the TVINS in Tasmania a few weeks ago by XXXXXXXXXXXXXXXXX alarmingly showed that all agents used Travelways as a guide for themselves an actively did not recommend the TT magazine. This independent survey of the gateways makes interesting reading and further illustrates TT is failing yet again. PLUS Launch a campaign in mainland papers MINUS Stale ill conceived Autumn and Spring features in Melbourne Age and other papers. XXXXXXXXXXXXX operators, on a survey, never got one booking from these campaigns. If you saw 1 Visiting Journalists Program Advance Tourism 10

11 the advertisements you would know why. THEY WERE NOT SELLING ANYTHING NOT EVEN ONE OFFER. GENERIC MARKETING IS NOT WHAT IS NEEDED BUT WHO LISTENS TO THE OPERATORS WE DON T KNOW WHAT TOURISTS WANT!!!!!!! ANOTHER FAILED PRINT MEDIA INITIATIVE Ask TT and they will tell you they were a raging success and generated untold visitor numbers to the state (Of course they are experts in measuring marketing!!!!) NORM, I DO NOT EVEN KNOW WHERE TO START ON THE ON-LINE BUNGLES, AND GETTING TOO SARCASTIC, ONLY TO SAY THEY OFFER PROFESSIONAL ADVICE TO OPERATORS, FOR GODS SAKE IT HAS TAKEN THEM FIVE YEARS TO CREATE A MEDIOCRE WEB SITE OF THEIR OWN. DON T EVEN GET ME STARTED ON V3. I WILL HAVE TO LEAVE THIS AS IT WILL BE THE LONGEST YOU HAVE ON FILE. BEST TO SAY I WOULD LOVE TO TALK TO YOU ABOUT THEIR ON-LINE PERFORMANCE. What is the solution? SUPRISINGLY SIMPLE CONTRACT OUT THE MARKETING TO THE PEOPLE WHO DO IT FOR A LIVING HENCE ARE FULLY ACCOUNTABLE, TT TO BE A SMALL ADMINISTRATIVE BODY THAT FUNDS TOURISM MARKETING ON SUBMISSIONS PUT THROUGH RTO S, COUNCILS AND STAKEHOLDERS. THIS IS WHERE YOUR GROUP WOULD BE INDESPENSIBLE IN ENSURING WE ARE NOT PLAYING A KICK BEHIND THE GAME. Advance Tourism 11