I, Bob East, as the accountable authority for Tourism Australia, present the 2019/20 Annual Performance Statement for Tourism Australia, as required under section 39(1)(a) of the Public Governance, Performance and Accountability Act 2013 (Cth) (PGPA Act). In my opinion, this Annual Performance Statement is based on properly maintained records, accurately reflects the performance of the entity, and complies with section 39(2) of the PGPA Act.
To grow demand and foster a competitive and sustainable Australian tourism industry through partnership marketing to targeted global consumers in key markets.
Results – GROW DEMAND
Program 1: Grow demand for Australia as a tourism destination.
Objective: Identify and target best-prospect consumers, inspire them to travel to Australia; and to spend more and travel widely throughout Australia.
Portfolio Budget Statements 2019-20; Budget Related Paper No. 1.8, Foreign Affairs and Trade Portfolio (page 154); and Tourism Australia Corporate Plan 2019 to 2023 (page 29).
PERFORMANCE CRITERION AND RESULTS
GROW DEMAND PERFORMANCE CRITERION AND RESULTS
Key performance indicator
VISITOR SPEND AND ARRIVALS a
30 Jun 2019
30 Jun 2020
30 June 2020
Overnight tourism expenditure b, c
$120.1 b (+3%)
International tourism expenditure b
$45.7 b (+3%)
$33.3 b (-25%)h
International tourism visitors d
9.6 m (+3%)
6.7 m (-28%)i
BE expenditure from TA target markets a, c
$2.6 b (+13%)
$1.33 b (-41%)h
Destination brand - consideration e
Destination NPS - visitors recommend Australia e
a Percentage change based on year on year actuals
b Tourism Research Australia, National Visitor Survey
c Tourism Research Australia, International Visitor Survey
d Australian Bureau of Statistics, Overseas Arrivals and Departures
e Tourism Australia, Quarterly Brand Tracking, Consumer Demand Project
f Goal as provided in Tourism Australia’s Corporate Plan 2019 to 2023
g Tourism Research Australia, International Visitor Survey (30 June‘20 data); Tourism Research Australia, National Visitor Survey (30 Jun ‘20 data)
h Tourism Research Australia, International Visitor Survey (30 Jun ’20 data)
i Australian Bureau of Statistics, Overseas Arrivals and Departures (30 Jun ’20 data)
Analysis of performance against criteria
2019/20 has been a year of two very different stories for Australian tourism. In the first six months our industry was performing well – at year ending 31 December 2019, we had welcomed more than 9.5 million international visitors who spent $45 billion, and Australians had taken 113 million trips, injecting $80.7 billion into local and regional economies. Tourism Australia had launched our new brand campaign and anticipated another year of solid growth.
The second half of the year could not have been more different. During the 2019/20 summer, Australia experienced one of its worst ever bushfire seasons, with negative media significantly affecting bookings to Australia. As we worked to rebuild visitation, Australia was hit by the impacts of the global COVID-19 pandemic. With our borders closed to international tourists, we saw tourism businesses across the country impacted, with travel effectively coming to a standstill. At the time of writing, Australia’s tourism industry remains in the grip of the worst crisis it has ever faced.
Visitor spend arrivals
The following year on year performance at 30 June 2020 was achieved:
- Overnight tourism expenditure – down 21 per cent to $96.34 billion
- International tourism expenditure – down 25 per cent to $33.3 billion
- International expenditure by business events visitors from target markets – down 41 per cent to $1.33 billion
- International tourism visitors – down 28 per cent to 6.7 million.
When setting our performance metrics and goals for 2019/20, Australian tourism was tracking relatively well. Goal setting is undertaken during January-February as part of annual planning processes. At that time, total spend had reached $117 billion, international spend was steady at $44 billion and we had welcomed 9.3 million international visitors. Another year of relatively stable visitor numbers and spend was anticipated, despite recognition that the global economy was slowing, which could impact consumer and business confidence. As such, we set solid goals to focus our activity and drive results. We could not have foreseen what was to follow.
Fast forward to January 2020 with one of Australia’s worst bushfire seasons on record, followed soon after by the complete shutdown of global travel due to the coronavirus in March 2020. In short, the impacts have been enormous and unprecedented. Recognising that we were in uncharted territory, we worked with Deloitte Access Economics on an approach to assist our understanding of the macro environment, including forecasts to help guide our planning. We also developed our own internal tracking – the Green Light project – which is a strategic framework that guides our approach to and timing of re-investment in key markets as well as our re-entry into domestic marketing. Within the framework, each market is regularly assessed across a range of indicators to determine where they are on the road to recovery’, this includes insights from our international teams to understand local nuances. This framework was put in place in early 2020 and will continue to be used to inform the right messaging at the right time as we lead recovery efforts in partnership with the tourism industry and government agencies.
Both international and domestic performance decreased significantly in 2019/20. At 30 June 2020, overnight visitor spend from international markets was down 25 per cent to $33.3 billion, while overnight visitor spend from domestic travellers decreased by 19 per cent to $63.01 billion.
Visitors from Star markets remained the largest contributors to international spend, with China representing 25 per cent of total visitor spend, followed by the USA and the UK (both contributing 8 per cent). However, at 30 June 2020, China experienced its largest decline ever, impacted by travel restrictions due to COVID-19, with a 29 per cent decrease in spend. Spend from the USA and the UK also declined (27 per cent and 23 per cent respectively). Spend performance across Solid deliverer and Distribution focused markets has also been significantly impacted, with performance down across all markets. Solid deliverer markets: Germany -18 per cent, Hong Kong -26 per cent, Japan -23 per cent, Malaysia -29 per cent, Singapore -33 per cent; Distribution focused markets: Canada and France -24 per cent, Italy -25 per cent, South Korea -29 per cent. Spend by visitors from Rising Star markets also declined. At 30 June 2020, spend from India was down 22 per cent to $1.4 billion and Indonesia was down 21 per cent to $0.7 billion.20
Business events expenditure from Tourism Australia’s target markets was $1.33 billion at 30 June 2020 (down 41 per cent year on year), with most significant drops from China (down 46 per cent to $0.29 billion) and the USA (down 41 per cent to $0.49 billion). Spend by visitors from New Zealand was down 37 per cent and was also down by visitors from the UK (-39 per cent). While performance was impacted predominantly by COVID-19, it was also affected by large incentives from China in 2018/19 that did not occur in 2019/20.
Tourism Australia re-entered domestic marketing activity in January 2020, in response to the bushfire crisis. We were last active in domestic tourism marketing in 2013/14 (the TA Act outlines domestic functions). Since then we have focused on attracting international visitation to Australia, as outlined in our Minister’s 2014 Statement of Expectations. However, with the significant impacts of the dual crises, we were called to temporarily re-enter domestic marketing, to lead recovery in partnership with industry and STOs. Our Holiday Here This Year and Event Here This Year campaigns were launched in January 2020 to support impacted communities and tourism businesses, particularly our regional and rural communities.
At 30 June 2020, total domestic overnight visitor expenditure decreased by 19 per cent to $63.01 million, and there were corresponding declines in visitor trips. The Northern Territory and the Australian Capital Territory experienced the largest decreases in overnight trip spend, both down 25 per cent, followed by New South Wales and Tasmania (down 20 per cent), and Queensland (down 19 per cent).
Performance against marketing impact measures indicate we performed relatively well given the difficult environment.
The 2019/20 targets for ‘destination brand – consideration’ and ‘destination Net Promoter Score (NPS) – visitors recommend Australia’ were set as stretch targets, aimed at moving the dial on the relatively stable performance of these metrics over the past five years. At the time of setting these targets, Tourism Australia had plans underway to evolve our global brand platform with the launch of a new campaign, Come live our Philausophy. The aim was to grow demand from our key markets, spear-headed by a campaign with significant cut-through.
Our marketing impact metrics are monitored through our brand tracking research which provides a holistic picture of how Australia’s destination brand is perceived, as well as the impact of our marketing communications. In 2019/20, the research was conducted in 11 international markets through an online survey. Countries where the research was conducted were China, Germany, Indonesia, India, Japan, Malaysia, New Zealand, Singapore, South Korea, the UK and USA.
At 30 June 2020, 34 per cent of target consumers responded that they were considering Australia as a destination, down 2 per cent year on year. While we recognise this is a drop, performance on a percentage basis has been steadily declining since 2016, as competitor countries increase their tourism marketing activities. It should be noted that our brand tracking research also shows that Australia continues to rank first for consideration globally. For ‘destination NPS – visitors recommend Australia’, Australia ranked seventh at 30 June 2020, with this ranking relatively stable over the past five years. Australia’s NPS rating on a percentage basis has been suffering a long-term, slow decline, impacted by competitors such as Japan, which have steadily increased tourism marketing activity in our international markets. Thus, while Australia’s ranking has remained steady, the playing field is slowly levelling.
Our marketing impact metrics are supported by a suite of lead indicators and campaign specific key performance indicators and targets that are included in campaign development. These indicators are reviewed regularly, including ‘live’ monitoring of digital campaign metrics to enable insights and updates to messaging as appropriate during campaign roll-out.
The decline in consumer sentiment across our target markets due to the impacts of COVID-19 should also be noted. Given the uncertainty about the depth and duration of the coronavirus, levels of consumer confidence have plunged, showing increased pessimism for business conditions, employment and income prospects, and subsequent appetite for travel. In early 2020, Tourism Australia instituted a fortnightly sentiment tracker across our key markets to provide regular assessment of confidence and travel indicators for our target markets. Not surprisingly, sentiment has mirrored the impact of COVID-19 – as cases have declined, sentiment has improved, however, sentiment has remained relatively low. Perception of ‘Australia as a destination that seems safe to travel’ improved from 56 per cent to 70 per cent over the period May to June 2020, in recognition of the solid management of the coronavirus by the Australian Government compared with many other countries around the world. This bodes well for Australian tourism in the medium to long-term.
Results – INDUSTRY DEVELOPMENT
Program 2: Industry development. Objective: An Australian tourism industry that is competitive and sustainable and delivers on the needs of the target customer.
Portfolio Budget Statements 2019–20; Budget Related Paper No. 1.8, Foreign Affairs and Trade Portfolio (page 155); and Tourism Australia Corporate Plan 2019 to 2023 (page 29).
PERFORMANCE CRITERION AND RESULTS
INDUSTRY DEVELOPMENT PERFORMANCE CRITERION AND RESULTS
Key performance indicator
Stakeholders indicate TA adds value
Analysis of performance against criteria
Tourism Australia achieved exceptional performance against our industry development goals in 2019/20, reflecting our emphasis on delivering value to our stakeholders and partners, and our solid leadership and support, particularly in response to the bushfires and COVID-19. Ninety five percent of stakeholders indicated that ‘Tourism Australia adds value to their business’ (up from 93 per cent in 2018/19), and we achieved a Stakeholder NPS of 64 (up from 48 in 2018/19).
Our industry development performance is measured by stakeholder participation in an annual Stakeholder Survey. We also undertake satisfaction surveys as part of key events during the year which provides a suite of regular lead indicators to inform the satisfaction of our stakeholders and to take action as needed.
As a partnership marketing organisation, we continued to work with tourism businesses, and STOs to align all marketing initiatives. We also worked with industry organisations such as airlines and key distribution partners to develop and build their capacity to sell Australian tourism experiences to target consumers. This included the introduction of specific domestic initiatives to support industry recovery in response to the bushfires and COVID-19.
Analysis of performance against purpose
Tourism Australia’s purpose of growing demand and fostering a competitive and sustainable tourism industry was never more pertinent as we endeavoured to support Australia’s tourism industry through the bushfires and COVID-19 crises. These crises have produced one of the most challenging periods ever for Australian tourism. Given their impacts, Tourism Australia will not achieve our visitor spend and arrivals goals or our marketing impact goals for 2020/21. These goals were set in a very different environment – when Australian tourism was performing well and was on track to achieve the Tourism 2020 goal of between $115 billion and $140 billion in overnight visitor spend by 2020. We also had plans to deliver a new brand campaign in our international markets that aimed to drive consideration and intention to visit Australia for a holiday. These plans were subsequently paused as it was not deemed the appropriate environment to be delivering major tactical marketing campaigns.
In response to the dual crises, Tourism Australia pivoted our strategy and plans, with our main aim being to guide and support industry through this difficult time. Our emphasis has been on delivering initiatives to ensure the sustainability and resilience of Australian tourism into the future. To this end, we are performing well against our stated purpose, with industry stakeholders recognising our efforts, as evidenced by solid stakeholder satisfaction results. We will continue to drive marketing and development activities to ensure Australian tourism is competitive and sustainable, so that we are ready to welcome global consumers when restrictions are lifted.
Outlined below are highlights of our 2019/20 activity that contributed to our results:
- Industry support and engagement: We continued to deliver a program of activities to keep the Australian tourism industry up to date on the latest tourism news, research, insights, and marketing tools. The second half of the year was dominated by the dual crises of bushfires and coronavirus, with a deluge of information which was often complex, sometimes conflicting, and not always accurate. We significantly stepped up our industry communications and engagement during this period, providing a reliable and trusted source of truth with up to date and accurate information. This included industry briefings, newsletters and the introduction of an industry webinar series providing direct access to key decision-makers. Our Managing Director, Phillipa Harrison, communicated directly with industry throughout both crises with regular emails and participation in industry forums. The Industry Relations team also undertook direct outreach, including presenting at bushfire recovery summits, and listening to communities in affected regions as well as direct engagement with industry and stakeholders during COVID-19. This included collating insights and monitoring industry sentiment and providing these insights to inform Tourism Australia’s strategic planning and government recovery processes.
- Marketing campaigns: This year we had planned the evolution of our There’s nothing like Australia platform, with the goal of elevating the strengths of Australia’s people, personality and way of life that our research found resonated with our target customers. Underpinning this shift was the launch of our global campaign platform, Come Live our Philausophy, in October 2019. Following the launch, the campaign was to roll-out across international markets, with the first being Matesong in the UK. The global campaign was paused concurrently with Matesong in late December 2019, due to Australia’s bushfires and their impact on consumer perception of Australia as a holiday destination. Although Matesong did not run in full, lead indicators show it was set up for success – the campaign achieved solid engagement and positive sentiment (0.32 million posts across our social media platforms against a target of 0.3 million), views (14.3 million adults saw the launch ad) and equivalent advertising value ($34.19 million against a target of $20 million).
The bushfires of the summer of 2019/20 immediately affected Australian tourism destinations, products and experiences with many domestic and international consumers delaying or cancelling their travel plans, including to areas that were not directly affected by the fires. In response to this impact on Australia’s reputation as a tourism destination, the Australian Government announced a dedicated recovery package, including $61 million for Tourism Australia to boost recovery through international and domestic marketing efforts. Thus, in early 2020, we developed and launched the Holiday Here This Year campaign, tapping into the goodwill and support for communities impacted by the bushfires. The promotion ran across print, outdoor, content partnerships, radio and regional television and included a social media video featuring industry members from across the country. At 30 June 2020, the campaign had reached over 9 million people on social media channels, the #HolidayHereThisYear hashtag has been used over 74,000 times, and around 19,000 people have pledged to “holiday here this year” on our Facebook event page.
The coronavirus outbreak of 2020 has had a devastating impact on Australia’s tourism industry, with businesses laying off staff or shutting down entirely, while aviation fleets were grounded as our borders were closed in efforts to reduce the spread of the contagion. With considerable uncertainty and a fragile tourism industry, we recognised the importance of maintaining Australia’s tourism presence internationally, even while many people across the globe were in lockdown. We moved our efforts to inspire our target customers to dream about and plan their future holidays. This included delivering a domestic and international television commercial using the With love from Aus campaign creative – heartfelt messages that our country and people would be ready to welcome visitors with open arms when the time was right. The social media campaign reached 117 million people globally and was in the top three ‘most emotionally engaging coronavirus campaigns’ as rated by video marketplace Unruly.
- Business Events Bid Fund Program: The Business Events Bid Fund Program provides Australia with a competitive advantage by providing support for marketing an event once it is confirmed and contracted to be held in Australia. At 30 June 2020, we had plans in place to assist with the delivery of 33 events valued at $289 million to Australia’s economy.
- Digital and social marketing: Our digital marketing continued to support campaign activity in 2019/20, as well as being a core resource for supporting the industry and travellers during the bushfires and COVID-19 by focusing on delivering travel safety tools. To counter misinformation about the extent of Australia’s bushfires, an interactive bushfires map was created that showed their true impact. The map was updated daily and served as an important resource for travellers, industry and the media. With the onset of the coronavirus, a travel status map was created to help navigate travel restrictions and the reopening of state and territory borders. An evolution of the map is currently underway and will include a detailed COVID-19 travel and safety portal to ensure information is ready and available to international travellers when international borders re-open.
Our social media activities also continued to generate awareness and stimulate conversations about Australia, providing a platform for highlighting Australia’s stories and world-class experiences. As with much of our activity, our social media approach shifted in response to the bushfires and COVID-19. Despite these pivots, we were able to maintain strong, positive engagement across all channels, and the growth of our followers, strengthening our position as social media’s most followed destination in the world. For example, our followers on Facebook increased 6 per cent to 8.97 million, while Instagram followers grew 16 per cent to 4.4 million.
- Partnerships: In 2019/20, we continued to work with tourism industry and business partners, which contributed $34.6 million in revenue. This enabled us to extend the reach of campaigns through bought media and our partners’ marketing channels. Partners also provided an important link to booking channels for consumers, allowing us to convert the demand our campaigns generated. Much of this partnership activity was undertaken in the first half of 2019/20, as activity planned for the period January to June 2020 was paused due to COVID-19 travel restrictions.
- Distribution: We continued to work in partnership with STOs and industry to deliver programs and platforms to enhance the knowledge of travel sellers and connect Australian tourism businesses with international distributors. This included: the continued delivery of our Signature Experiences of Australia program that now features eight collectives and 180 tourism businesses offering over 700 export ready experiences; training more than 80,000 frontline travel sellers (up from 34,000 in 2018/19), through our Aussie Specialist Program; and delivery of a range of trade events in Australia and internationally that connected buyers of Australian tourism products with sellers, including through virtual platforms due to COVID-19 travel restrictions.
- Governance: Tourism Australia maintained a robust governance framework in 2019/20, with no major audit findings. We have a comprehensive internal audit program, with audit topics for 2019/20 including digital strategy, gifts and benefits, fraud, in-kind revenue, analytics, transactions, Americas and UK operations, cybersecurity, and the Bushfire Recovery project. Minor recommendations and improvement opportunities were identified in these reviews. Actions have been taken to implement all recommendations made.
- Investment attraction: We continued to work in partnership with Austrade to develop the tourism investment opportunity for Australia, with an emphasis on facilitating the relationship between investors and the states and territories responsible for delivering tourism investment. With the significant impact of COVID-19 on the tourism industry, a restructure was undertaken at Tourism Australia to focus on demand generation. As a result, activity in tourism investment has been ceased and the investment partnership with Austrade was dissolved in June 2020.
- Aviation: Recognising that the health of the aviation environment is integral to the success of Australia’s tourism industry, and to ensure the industry bounces back from the COVID-19 crisis in a sustainable manner, we have developed an aviation recovery strategy to incentivise carriers to re-establish aviation routes between Australia and key markets. Tourism Australia will lead a ‘Team Australia’ approach that will include airports, STOs, Austrade, the Department of Foreign Affairs and Trade, the Department of Infrastructure Transport Regional Development and Communications and the Department of Home Affairs.
- Employees: Our overall employee engagement score was 96 per cent in 2020 (up from 90 per cent in 2019). Since launch of the survey in 2015, scores have ranged between 84 per cent to 96 per cent. In addition to our solid staff engagement, there was a significant increase in our Net Promoter Score, from +23 to +44. These results are testament to the ongoing efforts to create a transparent, genuine and high performing culture by Tourism Australia’s Global Leadership Team. Our gender diversity was ahead of Australian Government benchmarks – the female to male ratio is 70 per cent to 30 per cent, 51 per cent of our Global Leadership Team are women, and this year Phillipa Harrison became our first female Managing Director.
 Tourism Research Australia, International Visitor Survey, 2020 and Domestic Visitor Survey, 2020
 Comprises total overnight spend from international and domestic tourism visitors
 Forecast performance developed with assistance of Deloitte Access Economics
 Tourism Research Australia, International Visitor Survey (31 Dec ’18 data); Tourism Research Australia, National Visitor Survey (31 Dec ’18 data)
 Tourism Research Australia, National Visitor Survey (31 Dec ’18 data)
 Australian Bureau of Statistics, Overseas Arrivals and Departures (31 January 2019)
 Tourism Research Australia, Domestic Tourism Monitor, 2020
 The Conference Board and Nielsen, Global Consumer Sentiment, March 2020
 Tourism Australia’s Fortnightly Sentiment Tracker is undertaken in Australia, Indonesia, New Zealand, Singapore, Malaysia, China, Hong Kong, Sth Korea, Japan, India, USA, Canada, UK, Germany, France, and Italy