Education and Tourism - Twins or distant cousins, what is the relationship? Dr Perry Hobson. Director THE-ICE AIEC, Melbourne October 11th, 2007

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1 Education and Tourism - Twins or distant cousins, what is the relationship? Dr Perry Hobson Director THE-ICE AIEC, Melbourne October 11th, 2007 When is a tourist an education tourist? If they enrol in a full-time course in Sydney? Learn English for a few weeks in Byron Bay? Listen to lectures given on a cruise ship? 1

2 Overlapping interests Tourism Education Typically this is how the tourism industry sees tourists 2

3 This is typically NOT how the industry sees tourists Promoting Australian Education/Study Tourism - There is a clear division on marketing responsibilities in Australia and even a interdepartmental MoU - Tourism Australia (TA) markets tourism - it comes under the Minister for Small Business and Tourism, which comes under Department of Industry, Science and Resources - Australian Education International (AEI) markets intl education - it comes under the Department of Education Science and Training (DEST) - But is this realistic division given the realities of the marketplace? 3

4 Export value of Australian education Nudging $10 Billion annually following ABS revisions Source ABS International Trade in Goods and Services Exporting education $ billions Australia's top exports 2005/2006 Coal Iron ore Tourism Transport Education Gold Crude Oil Alumina Aluminium Beef Natural Gas Source: The Australian Financial Review 4

5 Education a leading net exporter for Australia $ Billion Education Tourism Exports Imports Net Exports Education services has a major positive impact on Australia s balance of payment position Source: ABS International Trade in Goods and Services 5

6 Singapore Education A multi-government agency 1. Singapore Tourism Board (STB) - Promote and market Singapore Education overseas 2. Singapore Economic Development Board (EDB) - Attract internationally renowned ed. Institutions 3. International Enterprise Singapore (IE) - Aid quality schools in Singapore 4. Spring Singapore - Administer quality accreditation 5. Ministry of Education Singapore (MOE) - Oversee the public school system in Singapore Singapore Education Information Centre 6

7 International Study Tourists Students to Australia International students account for approx: 6.1% of international visitors 29% of total visitor nights and 28% of expenditure ($3bn*) Tourism Australia s primary target of highyield Experience Seekers, who long for self-discovery and education when travelling *Source: Tourism Research Australia IV 2005 Visitors to Australia by main purpose of visit 6% 2% 3% Holiday 16% Visiting friends and relatives Business 53% Education Employment 20% Other Base: All visitors aged 15 years and over. Source: Tourism Research Australia, International Visitor Survey, June

8 Education Top 10 source countries - Growth of China 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Education - Top 10 Countries Brazil USA Indonesia Japan Thailand Malaysia Hong Kong S Korea India China Industry is seeing the connection And also there is an increasing number of Chinese students that are coming to schools and universities, Source: THE AUSTRALIAN Friday January

9 Overlap of both key inbound markets to Australia Top 10 Tourism sources New Zealand UK Japan USA Singapore Korea China Germany Malaysia Hong Kong Top 10 Education sources China India Korea Hong Kong Malaysia Thailand Japan Indonesia USA Brazil TTF Education Tourism Forum March 5th, 2007 INVITED SPEAKERS Hon Fran Bailey (Minister for Tourism) Fiona Buffinton (AEI) Paul Fairweather (TRA) Tony Pollock (IDP) 9

10 Servicing our Future A Parliamentary Inquiry into the service export sector has been conducted. The report was released in May, 2007 Recommendation 14 The report made a very clear recommendation: The committee recommends that the government through Tourism Australia and Australian Education International, engages in a coordinated effort to promote, target growth in and understand the importance of, the interplay between international education and tourism 10

11 Study Tourism Report Tourism Research Australia released its Study Tourism Report in Sept 2007 Segmented into - Formal Study - Informal Study The Study Tourism Market Base: All March and December quarter 2006 international visitors aged 15 years and over. Source: Tourism Research Australia International Visitor Survey, Education Supplementary, March and December Quarters

12 Study Tourists - main purpose for visiting Australia March & December Quarters 2006 Formal Study visitors 75% Informal Study Visitors 25% Holiday 52% VFR 7% Business 27% Employment 11% Other 3% Base: All March and December quarter 2006 international visitors aged 15 years and over. Source: Tourism Research Australia International Visitor Survey, Education Supplementary, March and December Quarters Study tourist average expenditure March & December Quarters 2006 Average Study Tourist Average International Visitor Trip Expenditure % Share Trip Expenditure % Share Spend in Australia $12, $2, Prepaid or airfares $1, $1, Total Expenditure $14,455 $4,833 Base: All March and December quarter 2006 international visitors aged 15 years and over. Source: Tourism Research Australia International Visitor Survey, Education Supplementary, March and December Quarters

13 Formal and informal study tourist average expenditure Formal Study Tourist Informal Study Tourist Trip Expenditure % Share Trip Expenditure % Share Spend in Australia $15, $6, Prepaid or airfares $1,500 9 $1, Total Expenditure $16,700 $7,800 Base: All March and December quarter 2006 international visitors aged 15 years and over. Source: Tourism Research Australia International Visitor Survey, Education Supplementary, March and December Quarters VFR flow-on impacts of the study tourism market Based on the data it can be estimated that: For every 3 formal study visitors to Australia one family member visits For every 4.5 formal study visitors one friend will visit For every 12.5 informal study visitors to Australia one family member visits, and For every 10 informal visitors one friend will visit Projected across the 2006 calendar year, this equates to approximately A$286 million 13

14 Flow-on impacts of the study tourism market March and December quarters 2006 Formal Study Tourists Informal study Tourists All Study Tourists Study visitors 156,000 52, ,000 No. of family visitors per study visitor No. of study visitors who have friends visit Estimated no. of family visitors 50,000 4,000 54,000 Estimated no. of friend visitors 35,000 5,000 40,000 Estimated no. of family and friend visitors 85,000 9,000 94,000 Average VFR spend per visitor $1,686 $1,686 $1,686 Total friend and family spend (SM) $143 $15 $158 Base: All march and December quarter 2006 international visitors aged 15 years and over Source: Tourism Research Australia International Visitor Survey. Education Supplementary, march and December Quarters Formal and informal study tourists by main region source markets March & December Quarters 2006 Formal Study Tourists Informal Study Tourists Base: All March and December quarter 2006 international visitors aged 15 years and over Source: Tourism Research Australia International Visitor Survey, Education Supplementary, March and December Quarters

15 So - education or tourism? Conclusions Education/Study Tourism is clearly more important to Australia than is commonly recognised by the tourism industry We need to better understand the education/ study tourism markets Need for a better understanding about the overlapping commonalities and marketing synergies Finally, a need to think about how are we positioned to deal with future challenges 15