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Successful Regional Tourism
Why some regional centres are more successful
than others with tourism development
This paper can be used as a check list to compare your destination marketing and development activities with other destinations.
Building demand in key markets.
Influenced by many factors, uppermost is the need to maintain a continuing presence in key markets so that customers do not forget the destination and its appealing features. Considerations include
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Awareness |
- What do customers and travel consultants know about your destination and tourism products at the destination?
- What do customers know about why they should visit your destination? Why visit your area when there are so many competing destinations to choose from?
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Positioning |
- What is the "positioning" for your destination?
- Are customers clear as to type of destination and features to be enjoyed?
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Market communication |
- How do your customers learn about your destination and its tourism products?
- Are brochures produced for your destination "customer friendly?"
- If your destination is small, are you linking with a nearby larger destination to form a cluster to get the benefits of economies of scale and better market penetration?
- Is your budget for promotions, publicity, advertising and sales promotion adequate?
- Are you using the Internet for market communication?
- Most important. Is your market communication stimulating decisions to visit?
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Markets |
- What markets are being targeted for best potential? Are these markets being targeted for visitor numbers, business and yield?
- What are the priorities for intrastate, interstate and overseas markets?
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Market segments |
- What market segments are being given priority for their commercial value? Some options
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- backpackers
- coach groups
- drive market
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- food and wine enthusiasts
- meetings market
- touring travellers
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Research |
- What research is being undertaken to identify market demand. Many destinations rely on historical data but this is of little use when trying to assess market demand and customer attitudes. Successful organisations conduct future market demand research. THIS IS AN IMPORTANT PART OF PLANNING FOR GROWTH
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Converting demand into business.
In the modern era, to get most benefit from promotional activities there needs to be a focus on converting demand into business to benefit private sector businesses and to deliver economic benefits to the community to justify funding by the public and private sectors. Some avenues open to build business are
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Merchandising tools |
- Packages
- Special offers
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Touring routes and trails |
- A merchandising technique now being widely used to promote demand for a group of destinations and features
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Special interest markets |
- Different markets require different strategies. Examples include
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- agri-tourism
- drive markets
- events
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- food and wine
- golf tours
- meetings market
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Travel industry |
- More than ever before travel agents and wholesalers are looking for saleable leisure product
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Cooperative partnerships |
- Trend is growing where local tourism businesses work together for mutual benefit
- Participation in programs initiated by the destination’s tourism organisation
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Cooperative marketing - external |
- Participation with organisations associated with targeting business in key markets
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Making it easy for customers to access information and make bookings
Ease of access for information and bookings is an essential part of assisting customers contemplating a visit and securing their business
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Visitor Information Centres
Vital role at every destination |
- The ‘shop window" for customers whether intending to visit or when at the destination.
- Provide information which can persuade travellers to visit
- Can be a valuable source of customers for local businesses
- Important reference point for the travel industry
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Internet
New medium being
under-estimated for its commercial importance |
- Websites have become extremely important in key markets
- Many travellers make their travel decisions based on information obtained from destination websites and the websites of individual tourism businesses
- Many tourism website displays are not at "best practice" standards for customers and the travel industry with information and bookings
- The commercial importance of the Internet in modern marketing is being under-estimated by some regions
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Booking systems
Ease of purchase is a
major consideration |
- Customers today want fast bookings systems
- Travel agents can provide immediate confirmations using computerised booking systems giving some destinations an advantage as travel agents cannot get a matching service from most regional destinations
- Some regional destinations and individual tourism businesses have established automated reservations (Internet based system) which allows customers to book 24 hrs per day 7 days per week from anywhere in the world even when Visitor Information Centres and reception at motels/hotels are closed. This is the operating standard for the future success of regional tourism
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Other distribution systems |
There are many other distribution avenues available to support marketing designed to get regional product to new customers. Examples include
- Tour wholesalers
- Professional Conference Organisers (PCOs)
- Coach tours
- Inbound tour operators
- Backpacker lodges
- Preferred arrangements with travel agent chains
- Internet consolidators like www.wotif.com.au and www.takeabreak.com.au
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Customers drive product development
With product development there are two different situations to consider
- locations that have little or no tourism infrastructure
- locations that already have some tourism infrastructure
Most locations in regional Australia already have sufficient product to generate increased demand (visitor levels) for their tourism industry. If existing visitor volumes are low, extra product on its own is not likely to stimulate increased demand. The priority should be to improve destination marketing by increasing market awareness and appeal about what the destination has to offer.
Given effective destination marketing, increased visitation can lead to private sector investment in product, sometimes expansion of existing businesses and in other instances in new product. Some examples
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Great Ocean Road, Vic |
When Tourism Victoria was formed in 1993, the Kennett Government directed priority be given to boosting demand for the Great Ocean Road in Australian and overseas markets. No funds were to be spent on infrastructure by the Victorian Government. Tourism Victoria formed partnerships with private sector tourism organisations and Councils from Geelong to Portland near the SA border.
Great Ocean Road visitor volumes quickly showed substantial growth. This led to private sector investment in tourism infrastructure, opening up of building blocks for residential accommodation to accommodate new residents being attracted to the new jobs in the tourism industry and new businesses started. Property values jumped and the positive impact of tourism on communities along the Great Ocean Road was outstanding.
Over the years since, the Great Ocean Road has continued to grow and prosper. Ongoing destination marketing by Tourism Victoria and the tourism organisations of the region has continued to fuel the growth.
Councils along the Great Ocean Road have been pro-active in identifying product gaps to satisfy the growing demand and have shown leadership and support by attracting and developing new tourism product.
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Broome, WA |
Broome tourism industry is enjoying boom times with direct flights from the east coast adding to increasing visitor volumes. Qantas and Virgin Blue were not prepared to operate these direct flights unless they could see a growing demand for the destination.
What influenced the airlines was that the private sector of the Broome tourism industry was pro-active with effective cooperative destination marketing in conjunction with industry partners. Much of this marketing was on the east coast which further boosted demand.
Before the direct flights began operating, Broome had adequate accommodation together with extended tours of the Kimberley and extended luxury cruises (sailing from Broome) which provided the capacity to justify the flights.
Introduction of the direct flights has further boosted visitor numbers to the point where construction of additional accommodation properties is now needed to cope with the growth. Also additional luxury cruise vessels are coming into service in coming months.
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Wollongong, NSW |
A few years ago, Wollongong had an industrial image and was not considered a tourist destination. Wollongong City Council introduced a five year strategic plan to reposition Wollongong with a new friendly and appealing image. This has been very successful.
Tourism Wollongong has reinforced this new situation by being pro-active with building demand. Existing destination marketing strategies have led to increased visitor volumes. Tourism Wollongong has been very active in developing business opportunities for local products and cooperative relationships with neighbouring tourism destinations. This strategy is reaping rewards. Additionally Tourism Wollongong has been approaching selected overseas markets and International visitors resulting from this initiative are now staying in Wollongong.
All this marketing activity means that a need has developed for more accommodation in the City and accommodation chains are showing interest.
No money has been spent by the Wollongong City Council on product development. This growth of demand has come from a new positioning of Wollongong backed with effective destination marketing focussing on business development.
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Around Australia today there are many tourism businesses that are just viable and not very profitable. What they need to lift their viability is more customers, not more product.
Building more product is no guarantee that visitor numbers will grow.
However where demand (visitation) is growing and there are opportunities emerging for new accommodation, attractions and hospitality facilities, these ventures are more likely to be successful.
Making product development successful
With product development there is a need to consider the needs of various market segments and to cater to these needs. Examples are
- food and wine enthusiasts need good dining facilities
- B&B accommodation is popular with short break guests particularly indulgent travellers
- Chinese visitors have special dietary needs
- coach tour groups have different needs to school groups
The commercial requirement is to understand customer needs when planning product development
An integral part of tourism success
Infrastructure development is in two broad categories
- access for visitors
- venues and facilities at the destination.
Access
Growth of some destinations depends on good roads from major markets as well as good roads for touring travellers. Rail services can be very important such as the Ghan extending to Darwin, the Tilt trains in Queensland and frequent fast services between Sydney and the Blue Mountains.
Likewise, air services to distant parts like North Queensland, Northern Territory and Broome have a direct affect. With airline services in Australia being deregulated, airlines are only interested in routes which offer a financial return. When a regional destination approaches Virgin Blue to introduce a new service, the airline shows much more interest if the community is prepared to guarantee a profitable operation during the early months of operation. Broome met this requirement but has not had to pay the subsidy.
Venues and facilities
Having the right venues for meetings and sporting events enables the tourism organisation to work with local groups to stimulate demand. This includes wharves and boat ramps.
The best way to benefit from such infrastructure is to target relevant market segments with special packages or travel offers to stimulate their interest. This calls for the tourism organisation and tourism businesses being pro-active with identifying opportunities and making approaches seeking the business.
When growth of visitors occurs and to maintain momentum, introduction of additional facilities then become important.
Private / public sector alliances achieve the best results
Importance of tourism organisations in regions
The cornerstone of success for any destination is the effectiveness of the tourism organisation with the private sector and public sector working in partnership. This is the best approach particularly if the joint aim is to generate maximum business results for tourism and other business enterprises at the destination.
Where the private sector can see business being produced from effective destination marketing by the tourism organisation, tourism businesses are more disposed to provide financial and other support for further marketing activities.
Serious problem. Many tourism businesses do not realise how important it is for their business results for destination marketing to be competitive with other destinations. For any accommodation, attraction, etc to win business from customers, they must first select the destination. If customers succumb to offers from competitive destinations, the business is lost both to the destination and to local tourism businesses. The organisation responsible for destination marketing on behalf of all tourism businesses in regional centres is the tourism organisation - no-one else can do it. By each tourism business supporting destination marketing they are supporting their own business.
Support for tourism businesses
Training. With regional tourism being far more competitive and travellers becoming far more discerning, individual tourism businesses need to be better informed. Training seminars, workshops and other opportunities should be grasped at every opportunity by individual tourism business so that they can be appraised of the latest developments and news with marketing and tourism operations.
Accreditation. Accreditation helps tourism enterprises to lift their business performance. Some tourism businesses see accreditation as an expense without realising the benefits for their business. Not becoming accredited is giving competitor businesses a "free kick" and it also adversely affects destination marketing.
Viability of tourism businesses and yield are closely linked. Many individual tourism businesses market their business by using pricing alone. Some accommodation properties wait for "walk up" traffic and if not fully booked, offer discount deals. Problems with this approach are
- if the destination loses favour and visitor numbers drop so does the number of "walk up" customers
- rates are discounted which not only affects profitability but can also affect the sale price of the property when the operator wants to sell the business later
- other tourism businesses have to cut their prices to compete. This means everyone loses revenue
Overcoming these problems needs an industry wide approach at affected destinations. This problem is not prevalent at successful destinations.
Funding for destination marketing. In the modern competitive environment, this funding is vital. The private sector is more inclined to provide support when they see business being targeted with well planned cooperative strategies, not "one-off" uncoordinated initiatives.
Good strategy planning delivers long term benefits
TOURISM TASMANIA
The principles for success described in this paper were adopted by Tourism Tasmania when it introduced a new strategic direction in 1997 in partnership with Tourism Council Tasmania. That strategic plan was renewed in 2001 and has recently been renewed again until 2007.
In the original plan, a target was set for 26,000 additional industry jobs and an annual turnover of $1 billion within 10 years. These targets have been achieved in 7 years. Congratulations Tasmania. Although a state level performance this is an excellent example of what can be achieved with good strategic planning and partnerships between the public and private sectors.
SOUTH AUSTRALIA
Another example of the principles of this paper is South Australia. Tourism Minister Hon Dr. Lomax-Smith has just announced the following impressive figures for year to March 2004
- almost 2 million visitors travelled to South Australia, an increase of 11% compared with 4% nationally. They stayed 11.5 million nights - up 12%
- visitors from Sydney and Melbourne accounted for much of the rise. Sydney visits were up 21% with nights up 39%. Melbourne visits were up 6% with nights up 16%
Minister Lomax-Smith said "There has been a great deal of effort to sell SA interstate in recent years. Much of this effort has concentrated on Sydney and Melbourne, identified as our most lucrative interstate markets.
We are keeping up the momentum through the bold Sydney campaign we are running right now, with images of SA scenery emblazoned across Sydney buses, ferries and the monorail", she said
This growth of visitors has led to increased investment by the private sector in tourism infrastructure and creation of jobs across South Australia.
Important factors
Factors which are important to strategic planning for future growth and success are
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Forward focus |
- What will be the prevailing business environment over the next few years?
- What factors can be anticipated particularly new developments, changes to governments, Councils, growth of overseas visitors, etc
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Trends |
- What tourism products are growing in popularity?
- Distribution trends are changing rapidly, is your destination prepared?
- What new markets are developing either in Australia or overseas?
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Identifying business opportunities |
- What new business opportunities can be captured for local tourism businesses?
- What new business opportunities can be developed locally eg forming of cooperative groups to collectively target new business? As an example, this happens in many regional centres where properties with meeting venues get together with the tourism organisation to work together to increase conference business.
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Lead times for development |
Tourism success relies on mastering long lead times associated with building demand, product development and industry development. As an example to develop a new market or market segment takes three years, concentrating on the short term only is often not productive. Also it takes time to
- properly plan advertising and marketing campaigns particularly if targeting business
- raise market awareness of a destination. Conducting a two week campaign in isolation usually has no residual benefit, it needs to be part of an ongoing strategy
Planning on an "ad hoc" basis or not allowing proper lead times can be unrewarding.
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Competitive environment |
- Who are your competitor destinations?
- What marketing strategies are your competitors employing in major markets?
- How are you combating the competition?
- What resources are available to combat the competition?
- How can a high profile be established for your destination and leading features in the competitive environment?
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Serious problems limiting progress are
- need for a better understanding of customers wants and desires. What happens in 99% of regional and rural destinations is quite different to the environment where customers live and decide whether or not they will select a particular destination or tourism product to visit. Using local circumstances to make decisions affecting distant markets can often be a trap. There is no substitute for studying market conditions before committing funds for destination marketing.
- local pride in the destination is not shared by customers (prospective visitors). This is particularly so when these potential visitors have never been to that location previously. As an example how many people in regional Australia can describe the features to be enjoyed during a visit to Helsinki? The same applies in reverse. If a couple resident in Melbourne have not previously been to Esperance WA or Broken Hill NSW, how do they know why they should visit either of these fascinating locations?
Follow this link to more TakeABreak.com.au Tourism and Business Articles.
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