STRATEGIC MARKETING PLAN

STRATEGIC MARKETING PLAN 2011-2015 A 5 year vision for the region

CONTENTS 1. Introduction 2 2. Marketing Environment 6 3. Market Priorities 8 4. Strategic Focus 10 5. Market Profiles 16 6. Supporting Documentation 16 1

1. INTRODUCTION The purpose of this document is to outline the strategic direction for Tourism Tropical North Queensland (TTNQ) for 2011 2015. The planning process involved 3 stages: 1. Research - Insights and forecasts 2. Strategy - Australia s potential 3. Activation This document is the output of stages 1 and 2. Stage 3 Activation is contained within a series of individual plans (market profiles) referred to within this Plan. TTNQ s Strategic Marketing Plan takes into consideration the inspirational and challenging vision of Tourism Australia (supported by both Federal and State Governments) to double the economic value of tourism to Australia from $70B to $140B by 2020. Tourism Industry Potential With one of TA s objectives being to target first time visitors, and from past knowledge of these visitors, we will be high on their shopping lists due to the high appeal of the Great Barrier Reef. Tourism Australia, with the Australian States and Territories, has undertaken considerable strategic planning to review the 2020 tourism industry potential, which provides a vision that the industry and all levels of government can rally behind, a unifying direction to improve performance and maximise opportunities. The following chart Tourism Industry Potential presents Tourism Australia growth targets to 2020: $145,000,000,000 $135,000,000,000 $125,000,000,000 $115,000,000,000 $105,000,000,000 $95,000,000,000 Tourism Industry Goal TFC Equivalent $140 billion in 2020 $115 billion Visitor Expenditure in Australia is currently $70B Using Tourism Forecasting Council s (TFC) forecasting, by 2020 visitor expenditure will be $115B $85,000,000,000 $75,000,000,000 $65,000,000,000 $55,000,000,000 TA s tourism industry goal is to increase visitor expenditure to $140B by 2020 (stretch target) $45,000,000,000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Tourism is a vital industry for Tropical North Queensland (TNQ). For tourism to continue to play a significant and sustainable role in the local economy, the industry needs to be consistently competitive in the global market. With an increased investment in tourism marketing, a tourism industry goal of $3.2B in visitor expenditure is possible an additional $1B injection to the economy (by 2015). $2.2 billion Current visitor expenditure 19,000 Current number of direct tourism jobs in TNQ $1 billion Potential additional visitor expenditure $3.2 billion Total potential visitor expenditure by 2015 26,000 Total potential direct tourism jobs by 2015 2

The TTNQ Strategic Plan focuses on achieving a five year target, to be reviewed each year, from 2011 to 2015. The plan focuses on both domestic and international market priorities within Leisure, Business Events and Sport Tourism. The following diagram outlines TTNQ s purpose, mission, vision and objectives to 2015. Purpose Tourism Tropical North Queensland is the peak regional visitor destination marketing organisation for Tropical North Queensland (TNQ) Our Mission To grow sustainable tourism in TNQ Our Vision For TNQ to be the world s best TROPICAL visitor destination Our Goal Grow visitor expenditure by $1B to $3.2B by 2015 3

1.1 2015 TNQ Tourism Industry Goal A scenario for growth TTNQ is following the modelling developed by Tourism Australia (by Access Economics and marketing strategists BDA 2010). This focuses on Australia s potential to capture a larger share of domestic and outbound international markets for those countries seen as the most profitable prospects. TTNQ has reviewed its current market share of international and domestic visitors to Australia (leisure, business events and sports tourism), reviewed history of the past five years and made assumptions on market by market potential including a critical aviation analysis in collaboration with Cairns Airport. OUR Tourism Industry GOAL Tourism Research Australia (TRA) Forecast for TNQ $2.5B: Using forecasting by Tourism Research Australia for TNQ, $2.5B tourism expenditure is forecast by 2015. TNQ Tourism Industry Goal In reviewing priority international and domestic markets, TTNQ has identified growth potential to direct our strategic planning towards growth in visitor expenditure by $1B by 2015 from its current $2.2B (YEDEC10) to $3.2 B by 2015. $3,500,000,000 $3,000,000,000 TRA Forecast TNQ Tourism Industry Goal $3.2B $2,500,000,000 $2,000,000,000 YE DEC 2010 $2.2B $2.5B $1,500,000,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Visitor Expenditure in TNQ The pie charts below highlight that based on the current and forecasted expenditure, the region will become more dependent on international visitors expenditure, as domestic forecasting suggests minimal growth at 2015. International growth predictions by Tourism Australia are based on TA s review and forecast for key markets, and we have followed this methodology in our forecasting and market share. Although in meeting our goals we have the potential to grow our visitor expenditure by $1B, the significant contributor to this will be international visitor expenditure, resulting in a shift in the mix of visitor expenditure percentage with international growing from 30% to 39% by 2015. The pie charts below depict the situation for TNQ and for Australia. TNQ 2010 TNQ 2015 TA 2010 TA 2020 Domestic 64% International 36% Domestic 57% International 43% International 38% Domestic 62% International 45% Domestic 55% 4

1.2 Historical Impacts on Tourism in TNQ Over the last 10 years, many global and local issues have had an impact on tourism in TNQ, despite all these impacts, tourism income has grown from $400M per year in the 1980s, to it s current value of $2.2B (YEDEC10). Over the last 5 years alone, tourism has contributed $12.4B to the regional economy. The graph below depicts the historical impacts and industry resilience since 2000. IMPACTS ON TOURISM INDUSTRY OVER PAST 10 YEARS (Visitor Numbers) 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 Virgin Blue Launched in Australia - AUG2000 Singapore AIrlines Cease September 11 attacks Ansett Collapse Malaysian & Garuda Cease SARS Australian commenced Bird flu Australian ceased Singapore & Hong Kong MAR2006 Cyclone Larry MAR2006 Australian ceased Japan Jetstar commence Japan Bird flu 400,000 200,000 0 YE DEC 2000 YE DEC 2001 YE DEC 2002 YE DEC 2003 YE DEC 2004 YE DEC 2005 YE DEC 2006 YE DEC 2007 YE DEC 2008 YE DEC 2009 YE DEC 2010 YE DEC 2015 Forecast QF cease Japan DEC2008 GFC Strong AUS $ GFC Strong AUS $ Full Year effect of Japan reduced capacity Cyclone Anthony DEC 2010 Cyclone Yasi FEB2011 Wet weather impacts/misperception INTERNATIONAL FORECAST DOMESTIC FORECAST Source IVS/NVS International Domestic 5

2. MARKETING ENVIRONMENT Any planning framework is conducted within a variable and changing environment. Tourism in TNQ faces many challenges and opportunities across the forecast 5 year period. Some immediate influences include the high and rising Australian dollar. This both constrains the potential conversion of Australian holidays from international destinations and stimulates outbound travel for Australians. Other influences include fluctuating fuel prices and introduction of climate related taxes. TNQ must continue to re-invent its experiences, differentiate and responsibly manage its natural assets of World Heritage Great Barrier Reef and Wet Tropics Rainforest to remain competitive and offer premium experiences in the global context. A great opportunity also sits on the horizon with China set to boom as flight paths are secured for TNQ. Growth opportunity exists as Japan recovers, through increased direct access from New Zealand and strengthened exposure across Melbourne, Sydney and South East Queensland. National and international events will also provide opportunities such as World Cup Rugby, Lions Tour and 2012 Eclipse. 2.1 Brand Positioning With global competition strengthening at a rapid pace, it has been critical for TNQ and the Cairns & Great Barrier Reef region to establish a differentiated and powerful brand position. The new positioning Adventurous by nature differentiates TNQ from other Queensland destinations and draws on consumer aspirations to stretch their experiences in a way, and to a level, that isn personally adventurous to them. It captures the essence of TNQ and repositions the region as Australia s nature-based adventure destination offering the best Australia has to offer in the realm of tropical experiences and nature-based adventures. The region adopts a duel branding approach with Tropical North Queensland positioned to grow domestic markets and Cairns & Great Barrier Reef for international and business events markets. The brand critically takes ownership of the Great Barrier Reef and increases consumer awareness of how to engage with the iconic destinations and experiences that comprise the region. We have many iconic experiences within TNQ and these experiences each add to the destinational appeal of the broader region. Our communication strategies will focus on exposing each of our iconic experiences so as to add depth and diversity to secure visitation to the region as a destination of choice. 6

2.2 Distribution Distribution is changing daily with new digital mediums and travel trade re-invention driving greater opportunity for consumer reach and targeted marketing. Travel media continues to present new and different opportunities for the experience rich destination of TNQ. Reality and lifestyle TV, live to air, professional bloggers, a multitude of digital video mediums and partnerships beyond the travel pages into fashion, lifestyle and food just to name a few. The digital landscape continues to shape travel distribution. The emergence of mobile platforms such as mobile websites and iphone applications will see a dramatic transformation in consumer booking behaviours pre, post and during travel. Traditional websites are being overshadowed by Facebook pages and Youtube channels and the battle for site optimisation is tougher than ever. The travel trade is fighting for relevance in a crowded and ever changing market. TTNQ will continue to support the travel trade as they find new ways to communicate with their audience. Travel trade remains particularly important for long haul travel and our commitment to our key markets of UK, Europe and USA remains strong. In addition, the fast growing China market is still dominated by travel trade distribution and we will continue our efforts in this area. Globally, we will work closely with Tourism Queensland and also Tourism Australia to ensure a consistent message is delivered to consumers via the trade. The trade distribution channel continues to evolve and we will be at the forefront of this change to ensure that our region continues to exploit all opportunities. 2.3 Aviation Aviation remains critical to the success of the destination, not only for tourism, but for all facets of business, commerce and lifestyle. With the new ownership of Cairns Airport we have seen a more aggressive engagement strategy with existing and potential airlines. Our focus is to maintain existing services, work with existing carriers and open up potential markets via new direct services, as well as charter services, focusing on low cost carriers providing point-to-point travel driving high yielding independent travellers. In the past three years post the demise of Australian Airlines, and followed by Qantas cancellation of its Tokyo services to Cairns, we have worked with the airport to grow capacity and have seen new services from Japan with Jetstar, and new services from Pacific Blue and Jetstar from New Zealand, as well as significant increases in domestic seat capacity. However, our challenge remains to reach the international capacity levels of 2006, and grow beyond this into the future. 7

3. MARKET PRIORITIES The following provides an overview of market priorities for domestic and international markets based on size of market in terms of potential visitors and visitor expenditure. VISITOR NUMBERS VISITOR EXPENDITURE Size of Market Large (100K+) Medium (70-100K) Market Priorities to 2015 Market Priorities to 2015 Minimal Growth Expenditure Minimal Growth Average Growth Average Growth UK SEQ Sydney North America Strong Growth Japan China Melbourne NZ Large ($100M) Medium ($70-$100M) UK NZ SEQ Sydney North America Germany South Korea Strong Growth Japan Melbourne China Small (40-70K) Germany Small ($40-$70M) France Developing (10-40K) Netherlands Switzerland Scandinavia India South Korea France Developing ($10-$40M) Netherlands Switzerland Italy Scandinavia Source IVS and NVSYEDEC10 8

3.1 Domestic Leisure Market Priorities Melbourne, Sydney and South East Queensland have been identified as TNQ priority domestic leisure markets with strength in market size and expenditure. Regional QLD is also identified as a key market and local operators will be encouraged to drive repeat visitation through their existing relationships, databases and direct marketing activities. 3.2 International Leisure Market Priorities The short to medium haul markets of China, New Zealand and Japan are priority markets based on the size of these markets air access, market potential and destination appeal. The long haul markets of UK, North America, France and Germany are the priority markets which will command significant resources. Aviation developments will largely determine the market potential with India and Korea where market activity will be undertaken to ensure that we are able to capitlise on any change in access. The markets of Netherlands, Switzerland, Scandinavia, Italy and emerging markets are not priority markets, however, we will continue to support TQ and TA where possible, to maintain a presence. 3.3 Business Events Market Priorities Forecasts are based on the trends we have experienced over the past few years along with current market forecasts at a local and national level. There will be a focus on increasing the incentive market as a result of our investment in Project Reward (Million $ Memo) and the global recovery following the GFC. Based on airline access (current and projected) the growth from international markets will be from New Zealand, China, USA and to a lesser degree Japan. Target and source business of Corporate Meetings, support Cairns Convention Centre in the Association Market and Incentive travel. 9

4. STRATEGIC FOCUS In developing future goals TTNQ has identified five key strategic areas of focus: 1 Grow market share 2 Increase visitor expenditure 3 Strategic aviation growth 4 Sustainable funding 5 Destination development partnerships 10

Strategic Grow market share Grow international market share of Australia for all visitors to TNQ from 13% to 16% by 2015 international Focus1 The international market opportunity exists within Leisure, Business and Sports Events and Education Tourism. The following strategies are designed to guide growth in market share of priority markets: Key international strategies: Target growth from priority International Markets Partnership with TQ (leisure) and Events Queensland (business events) to develop trade activity Partnership with TA to attract targeted consumer and business events segment (Nothing like Australia) Partnership with TTNQ members to service key markets All leisure activity aimed at first time visitation Develop airline partnerships to achieve growth from key source markets Develop direct consumer relationships through digital channels for leisure Influence and leverage TA and TQ s media initiatives Build equity in the Cairns & Great Barrier Reef brand TTNQ s international goals represent considered assumptions based on a range of inputs such as Tourism Research Australia forecasts (stretch targets), alignment with Cairns Airport aviation strategy and forecasts based on Tourism Forecasting Council. TOTAL INTERNATIONAL VISITORS Goal TO TNQ - 2015 1,400,000 1,200,000 TRA Forecast TNQ Goal 1,149,000 1,000,000 800,000 600,000 760,000 685,906 400,000 200,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Emerging International Markets The emerging markets of India and Korea will be carefully monitored for future development along with other international markets such as South America, South East Asia and selected European markets. We will continually work with TA and TQ in market, as well as regular engagement with the ITO community in Australia. 11

Strategic DOMESTIC Focus1 Grow market share Grow domestic market share for all visitors to TNQ from 3.6% to 4.2% by 2015 The domestic market opportunity exists within Leisure, Business and Sports Events Tourism. The following strategies are designed to guide growth in market share of priority markets: Key domestic strategies: Target growth from Melbourne, Sydney and South East Queensland Increase marketing reach and investment through affinity partnerships Grow the TNQ social media community through engaging membership, community, cross industry and visitors in conversations and content Grow visitation to and members referrals from www. cairnsgreatbarrierreef.org.au Integrate travel trade co-operative programs across multiple mediums Take a proactive approach to driving media opportunity Leverage events and sports tourism to strengthen brand appeal and extend marketing activity Initiate and leverage marketing partnerships with TA, TQ, Airlines, Cairns Airport Develop and maintain relationships with Business Events network to maximise opportunities in source markets Leverage the creativity and resources of membership in developing and implementing campaigns Develop and maintain relationships with relevant trade partners through attendance at trade shows and sales calls Build equity in the Tropical North Queensland leisure brand positioning, Adventurous by nature Build equity in the Cairns & Great Barrier Reef Brand the Natural place to meet TTNQ s domestic goals represent considered assumptions based on a range of inputs such as Tourism Research Australia forecasts, alignment with Cairns Airport aviation strategy and forecasts based on Tourism Forecasting Council. TNQ DOMESTIC VISITOR goal 2010-2015 1,900 1,800 TRA Forecast TNQ Goal 1,700 1,600 1,500 1,489,000 1,400 1,300 1,200 1,283,000 1,283,000 1,100 1,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 12

Strategic DOMESTIC Focus2 International Increase Expenditure Increase TNQ s international visitor expenditure from $795M to $1.4B by 2015 Domestic Increase Expenditure Increase TNQ s domestic visitor expenditure from $1.44B to $1.85B by 2015 The international market opportunity exists within Leisure, Business and Sports Events Tourism. The following strategies are designed to guide growth of visitor expenditure from priority markets: Key Strategies: Target priority segments by each of the priority markets Encourage increased length of stay in TNQ Develop our shoulder seasons through business, sports and special events INTERNATIONAL VISITOR EXPENDITURE GOAL - TNQ $1,600,000,000 $1,400,000,000 $1.4B $1,200,000,000 $1,000,000,000 $800,000,000 $835M $600,000,000 $400,000,000 $200,000,000 TRA Forecast TNQ Goal $795M $- DOMESTIC VISITOR EXPENDITURE goal - TNQ $1,900,000 $1,800,000 $1.85B $1,700,000 $1,600,000 $1,500,000 $1.6B $1,400,000 $1,300,000 $1,200,000 $1,100,000 $1,000,000 TRA Forecast TNQ Goal 2006 2007 2008 2009 2010 2011 2012 2006 2007 2008 2009 2013 2014 2015 2010 2011 2012 2013 2014 2015 $1.44B 13

Strategic Focus3 Strategic Aviation Growth Grow international seats (incoming) from 478,764 to 800,000 Grow domestic seats (incoming) from 2,000,000 to 2,700,000 Strategic aviation growth is a key success factor for both domestic and international markets across Leisure, Business and Sports Event Tourism. The following strategies, in close collaboration with Cairns Airport, are designed to drive our strategic goals in growing market share and visitor expenditure. Key strategies: Maximise existing and develop new capacity from NZ and Japan Develop China and Singapore market for direct services Continue to protect and grow domestic capacity, particularly from target markets Maximise interline aviation agreements servicing key source long haul markets Continue to develop charter opportunities from China, Japan, Korea Work with Cairns Airport to identify new aviation partners AVIATION IMPACTS AND GOALS 3,500,000 3,000,000 2,500,000 2,000,000 Pilot Strike Asian currency crisis Loss of Thai, Asiana, JAL plus QF reductions Singapore Airlines cease Sept 11 attacks Ansett collapse Malaysian, Garuda cease SARS Australian commenced Virgin and Jetstar capacity Australian ceased Jetstar intl commence 1,500,000 1,000,000 500,000 0 FY 1981 FY 1982 FY 1983 FY 1984 FY 1985 FY 1986 FY 1987 FY 1988 FY 1989 FY 1990 FY 1991 FY 1992 FY 1993 FY 1994 FY 1995 FY 1996 FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 YE DEC 2011 Forecast QF ceased Japan (DEC08) Full year effect of Japanese reduced capacity INTERNATIONAL FORECAST DOMESTIC FORECAST Source Cairns Airport International Domestic 14

Strategic Focus 4 Sustainable funding Increase tourism marketing funding by a minimum of $3M annually To reach our growth goal of $1B by 2015, it is important we achieve and maintain a sustainable local investment in tourism marketing which will allow us to be competitive and aggressive in marketing the destination. The following outlines strategies to achieve the required outcome. Key Strategies: Work with Cairns Regional Council and develop a sustainable funding model to generate increased investment in tourism marketing funds by an additional $3M per annum Negotiate a 3 year agreement with Cairns Airport (2012/2015) Maximise membership revenues and marketing spend Initiate new revenue streams Maximise business events funding opportunities Maximise cooperation opportunities with TA and TQ, airline and trade partners Strategic Focus 5 Destination development partnerships Develop partnerships with agencies that carry responsibility for investment, labour and skills, and infrastructure development to achieve growth Apart from our marketing partnerships with Tourism Australia, Tourism Queensland and Events Queensland, the trade and our membership, it recognises the importance of destination development partnerships in its objectives. The following outlines key potential partners within the region. It is not designed to be a definitive list but a guide to show the type of partnerships under consideration to help drive our strategic objectives to reach our goal. MOU s with key strategic industry partners: Infrastructure, Planning and Development Cairns Regional Council, other TNQ Regional Councils, Advance Cairns, Regional Development Australia FNQ&TSI Investment attraction and industry development - Advance Cairns, Cairns Regional Council and other TNQ Councils, Cairns Chamber of Commerce Marine tourism (cruise ship strategy, home porting) - Ports North, TQ and Cruise Down Under Training and skills development, service standards - QTIC and TAFE Education tourism - Study Cairns, TAFE and James Cook University Aviation strategy - Cairns Airport, TA and TQ Nature based tourism/environmental protection and sustainability WTMA, GBRMPA and National Parks Research - James Cook University, Cairns Institute, Bureau of Tourism Research Strengthening of regional tourism networks Local Tourism Organisations and area promotion committees Sports and events tourism Cairns Regional Council and other TNQ Councils, Events Queensland Protecting the region s reputation Queensland Police, all levels of government, Emergency Services and Cairns Regional Council 15

5. MARKET PROFILES Market Profiles have been developed for priority markets across Leisure, Business and Sports Events Tourism. Each contains a detailed view of visitor and expenditure growth forecasts, customer profiles and aviation overviews. A marketing activites calendar is available on the website and will be updated as new campaigns, mission and member opportunities are known. These plans are available to members of TTNQ only at www.ttnq.org.au. 6. SUPPORTING DOCUMENTATION Tourism Australia Strategic Plan 2010-2020 http://www.tourism.australia.com/en-au/default_6111.aspx Tourism Tropical North Queensland www.ttnq.org.au corporate website www.cairnsgreatbarrierreef.org.au destination consumer website 51 The Esplanade, Cairns, Qld, 4870, Australia Ph: 4015 1201 Email: ceo@ttnq.org.au 16