The Holiday is Over by Clive Dorman - Report Example

Running Head: Media Portfolio Media Portfolio Name: Course: Institution: Date: “The holiday is over” by Clive Dorman. The Age. November 27, 2010. The article by Clive Dorman outlines the efforts in place to restore growth in Australia’s tourism industry. A report by Tourism Research Australia Agency seems to finally bring home the long overdue reckoning that the tourism industry in Australia is in dire straits. Over the last decade, Australia’s tourism industry has been on a decline and has even been ranked as the second slowest industry in terms of growth. This has been marked by decreases in tourist arrivals and increases of up to 80 percent in Australians seeking tourist destinations abroad. The industry is thus bleeding with income in terms of tourists and their spending decreasing while the domestic tourism sector leaks potential tourists to more attractive destinations. Dorman indicates some of the factors contributing to this slowdown. For instance, Australians have increasingly complained of deteriorating standards in the tourism and hospitality industry. This is marked by perceptions that Australia, the domestic tourism industry delivers poor value for money at high or exorbitant prices with poor customer service. The article also mentions that the new global preference for luxury-lodge style tourism has led to a shift of tastes from Australia which does not seem to meet this demand to other destinations abroad. To tackle this problem, Tourism Australia is embarking on a new strategic project to revamp the fortunes of the ailing industry. At the center of this strategic approach is doubling overnight expenditure on Australia’s tourism industry from $70 billion to $140 billion by the year 2020. This will involve huge investments such as an additional 50, 000 hotel rooms which are to be provided by the private sector and public investments to create the more unique and authentic experiences needed to boost Australia’s flagging tourism industry. This article highlights the effect of the consumer’s increased bargaining power in the Australia’s tourism industry and the simultaneous decrease in the supplier bargaining power. As more exotic, authentic or luxurious destinations emerge abroad, such as Oriental Asia, the consumer wields more bargaining power in terms of choice and this also shifts their tastes and preferences coincidentally, Australia’s tourism industry has ceded ground to the consumer and has to make far reaching changes such as the proposed investments in infrastructure to try and retain domestic tourists. The article also highlights the effect of reduced destination competitiveness on Australia’s tourism. As a destination, Australia’s competitiveness has waned due to the mentioned factors such as poor customer service, low value for money and high prices. According to Dwyer et al (2003), some of the determinants of destination competitiveness include supporting factors such as value for money through customer service or destination management through ensuring the right infrastructure exists such as suitable hotel capacity. However, prevalent conditions in Australia have worked to reduce or lower Australia’s competitiveness as a destination not just for foreign tourists who according to Dorman no longer find Australia as the “flavor of the month” but among domestic tourists as well. The main thrust of this article is a demonstration of some of the factors or conditions necessary to enhance the competitiveness of a tourist destination or in Australia’s case, a lack of it. While Australia does possess incredible tourist attractions, Australia itself as a destination must be enhanced by management of supporting factors such as the requisite infrastructure or capacity. The focus of the tourism strategy being contemplated seeks to create an enabling and supporting environment for the revival of growth in the industry but as Dorman has mentioned, the distinct lack of attention to the factors affecting the attraction of domestic tourists may be the undoing of the strategic approach. “Australia Welcomes Oprah as Tourism Slumps” by Geoffrey Rogow and James Glynn. THE WALL STREET JOURNAL ASIA, December 15, 2010 The article by Geoffrey Rogow and James Glynn highlights the recent visit by top media mogul, personality and world renowned talk show host Oprah Winfrey and its implications for Australian tourism. The article points out that Australia’s tourism industry has been on a decade long slump. This slump is marked by a negative balance with Australia’s outbound tourists exceeding incoming tourists by an estimated 1.2 million. As part of a wider coordinated response to the flagging tourism industry, the Australian government embarked on a private public partnership to revamp the industry’s fortunes which included investing a substantial amount of resources to bring Ms. Winfrey to Australia to shoot a few episodes of her top rated TV talk show the Oprah Winfrey Show. In doing so, it is hoped that Ms. Winfrey’s, or Oprah as she is fondly referred to by her fans, will market Australia as a tourist destination and herald a turnaround in the dwindling industry’s fortunes. Rogow and Glynn attribute the slowdown in the Australian tourist industry to the appreciation of the Australian dollar which implies that overseas tourist destinations have increasingly become more affordable as compared to domestic attractions and as a result holidaymakers or domestic tourists prefer overseas destinations. To underscore the effect Oprah’s visit is likely to have on Australia, Rogow and Glynn referred to some of the costly undertakings involved. From the $3 million incurred by the Australian government to host Oprah, her production crew, audience and equipment to Qantas Airways- Australia’s national carrier- providing flights for Oprah, crew and audience from and to the USA and to various tourist attraction sites around Australia. The government and the private sector both have a lot to benefit with the government spending geared towards reviving the tourism industry while Qantas expects to reap from the publicity to be gleaned from association with Oprah Winfrey. Both the government and the private sector hope that Ms Winfrey’s endorsement along with her marketing potential and acumen will reverse the sector’s fortunes. While the articles’ focus is predominantly on the effect Oprah Winfrey is expected to have on the tourism industry, it also highlights the role of public private partnerships in the tourism sector and the effect of exchange rates or economic performance on tourism. On public-private partnerships, both the Australian government and Qantas have invested significant resources in the joint venture with the government’s focus being on restoration of the sector while Qantas aims to reverse the low arrival rates which is symptomatic of the troubles facing the tourism industry. In this joint venture, both the public and private sector acknowledge that their fortunes in the industry are complementary- a more vibrant tourism industry implies more earnings for private sector companies such as airlines, travel agents and the hotel or hospitality industry. On the effect of exchange rates, the article points out the economic effects of a strong currency on tourism. Though not empirically supported, Australia’s decade long tourism and its currency’s 3 decade high appreciation may not be entirely coincidental. Currency appreciation implies that foreign goods and services become cheaper compared to local or domestic goods and services. Consequently, overseas tourist destinations become more affordable and economically lucrative and this is usually signaled by increases in Australian departures abroad such as the 25 % increase recorded by Qantas. “Exchange rate lures more Australians” by Christopher Adams. nzherald, December 22, 2010  Christopher Adam’s article analyses recent tourist trends in Australia and New Zealand. With a particular focus on New Zealand, Adam highlights the effect of exchange rates on tourism. New Zealand’s weak dollar has apparently served as an incentive for tourists from neighboring Australia and Asian countries such as China, South Korea, India and Taiwan. The Tourism Industry Association New Zealand and Statistics NZ have recorded increases in arrivals from neighboring Australia by 4 percent, 15 percent from China, 17 percent from India, 28 percent from South Korea, 12 percent from Japan and 30 percent from Taiwan. However, this has not been the case for the considerably further UK and USA market. In addition to the favorable exchange rate, the versatility of Australia’s economy during the global economic recession and the rise of low cost airline carriers have also contributed to the increased volume of tourist arrivals in New Zealand. The article highlights the dismal performance of the New Zealand dollar and flat or zero growth as a blessing for New Zealand’s tourism sector. However, New Zealand or Kiwi tourism operators are being cautioned against overreliance on the Australian market but are instead being urged to turn their focus towards emerging markets in China and India. This is informed by the findings that Chinese tourists, who normally used to tour in groups, are now increasingly touring as individuals. Individual tourists are of a higher value since they spend more time in the country and have greater freedom of purchasing power. The article concludes that New Zealand’s extraordinarily slow pace of recovery could continue to play to the advantage of the Kiwi tourist operators and exporters with Australia as a major destination for Kiwi exports. Kiwi exporters stand to benefit from the exchange rate differentials since Kiwi goods become cheaper in Australia and as a result increase profits for Kiwi firms exporting to Australia. The article is consistent with the exchange rate theories of tourism. The weaker Kiwi dollar attracts neighboring Australian tourists since Kiwi products and services become relatively cheaper. This implies that Australian consumers or tourists will have increased purchasing power in New Zealand and as a result will seek the more economically lucrative Kiwi destinations. This demonstrates how depreciation of a country’s currency may actually serve as a blessing for the tourism industry by attracting more foreign tourists. On the other hand, a strong currency may actually be a curse for a country’s tourism sector especially domestic tourism. Appreciation makes foreign destinations more lucrative for domestic tourists and exporters as is the current case with Australia. The article also shows emerging trends in global tourism. Countries like New Zealand and Australia have turned their focus from their traditional sources of tourism revenue such as the UK and America and are devoting increased attention to emerging markets in Asia such as China, India and South Korea. This diversification and the attendant increases in arrivals have also been made possible by supporting factors such as the growth of the low-cost segment of the airline industry which is complementary to the efforts of tourist operators. Carriers such as Pacific Blue and Jetstar have enabled New Zealand to unlock the potential of markets in close proximity as potential drivers of the tourism sector. “Oprah Can't Save Tourism” by Mike O'Connor. The Courier-Mail , December 05, 2010 In his article, Mike O ‘Connor endeavors to dispel the popular notion that the arrival of media mogul and world renowned celebrity talk show host Oprah Winfrey will herald a turnaround in the dwindling fortunes of Australia’s tourism sector. Still reeling from the massive domestic tourist leakages occasioned by currency appreciation, Connor argues that Ms Winfrey or Oprah as she is popularly and fondly referred to, will not be the magic wand that will transform and restore the glitter and appeal of Australia as the tourist destination of choice. O Connor does not believe that all the hype and fanfare surrounding Oprah’s visit to Australia will be sufficient to save the industry from what he refers to as a “slow death”. O Connor strongly believes that this latest joint venture by the Australian government, Tourism Australia and Qantas is bound to be the latest in a line of expensive, ill conceived overseas advertising campaigns that have simply wasted taxpayer’s money without addressing the real issues plaguing Australia’s tourism. These include bikini model Lara Bingle’s “So Where the Bloody Hell are you?” ad campaign which cost $180 million and $50 million in co-promotion with Baz Luhrman for his film Australia. O’Connor argues that focus should instead be redirected towards addressing the root concerns of Australian tourism. Some of the prevalent conditions which have seen Australians flock airports for the promise of more exotic destinations in Asia and the Pacific include expensive accommodation, lack of adequate infrastructure and hotel capacity, poor service and lack of innovative and authentic experiences. O’Connor argues that Australians themselves are aware of these conditions and this explains why they opt for better resorts, hotels, service and experience abroad. O’Connor thus argues that even the popularity and acumen of Oprah wouldn’t be enough to change tastes and preferences among domestic tourists. While Australia is endowed with sun , sand and fauna, it needs to restore its international competitiveness by offering authentic and innovative experiences, adequate tourist infrastructure and superior service and good value for money. Furthermore, O’Connor argues, only Oprah and Qantas are the real beneficiaries of this undertaking since all of Oprah’s costs are covered and Qantas is getting mass global TV publicity for its involvement in this venture. The article is a demonstration of some of the determinants of destination competitiveness discussed by Dwyer eta al (2003). While Australia may possess the natural resources such as the Barrier Reef, Ayer’s Rock, the Outback and created resources such as Sydney Harbour, for it to be internationally competitive requires a substantial investment in supporting factors and in management of these resources. This implies that a proper infrastructure must be in place to support and sustain competitiveness such as affordable accommodation, unique and authentic hotels, lodges and resorts. Tourism Australia also needs to offer unique experiences which are not entirely dependent on sun, sand and fauna. In conclusion, O’Connor postulates that for tourism in Australia to successfully reverse its fortunes, it will take more than just high profile celebrity visits. Serious efforts need to be directed towards investment in providing value for money for potential tourists. These include expanding hotel capacity, new innovative and authentic experiences and improvement in customer service. “Taxpayer millions wasted in grab for tourists” by Harriet Alexander. the Sydney Morning Herald, July 28, 2006 Harriet Alexander’s article discusses some of the effects of interstate competition among Australian states. A report by the Australian Institute has intimated that the territorial authorities spent $130 million on advertising last year but that was insufficient to cause any real internal shifts in demand. According to Harriet, states are thus investing huge sums of money in competing with each other but all they are achieving is moving jobs and earnings from one end of the country to another. Leading the pack of spenders in promotion of local tourism is Tourism New South Wales – Tourism NSW- followed by South Australia, Western Australia, Victoria, Queensland, Tasmania Northern Territory and ACT in that order. Opinion seems to be split right down the middle over the viability of such expenditures. On the one hand, there is the view of industry experts such as NSW Tourism Minister, Sandra Nori who believe that these investments are worthwhile because of the multiplier effects of such spending are not just limited to the tourism sector but also extend to other sectors such as housing and accommodation, hospitality industry and many small businesses which local tourists are expected to come into contact with. On the other end of the spectrum, the Australian Institute believes that no real net gains are to be made from such competition which is viewed as sibling rivalry. But as part of an emerging consensus, the report is now viewed as offensive to the millions who earn their living through the tourism industry and related businesses. The article by Harriet Alexander demonstrates how different strategies for tourism are implemented by different jurisdictions. In Australia, there seems to be a deliberate and concerted effort to promote local and domestic tourism as the vital stage in restoring vibrancy to the tourism sector. This would explain why the government and the tourism industry are quick to dispel the report and the implicit notion that this competition does not add anything new but at great cost to the taxpayer. Australian tour operators seem to have shifted the focus of their strategies to promotion of state tourism as the first stop in revamping domestic tourism in Australia. In addition, it is argued that the tourism industry does not just face competition from external sources such as overseas destinations or in the Australian context from other states but also from consumer goods such as plasma TVs and poker machines which have emerged as some of domestic tourism’s biggest competitors. The state promotion strategy thus hopes to divert consumer spending from such items towards domestic tourist attractions. Proponents of this strategy have argued that attracting visitors to states is not just for the benefit of tourist operators but that their spending would stimulate and boost other sectors of the local economy as well. State promotion agencies thus view their role as that of ensuring and enhancing the sustainability of the domestic tourism sector by encouraging Australians to explore their own country. References Adams, C. (2010, December 22) Exchange rate lures more Australians. nzherald. Retrieved from http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10695839 Dorman, C. (2010, November 27) The holiday is over. The Age. Retrieved from http://www.theage.com.au/travel/travel-news/the-holiday-is-over-20101126-189uh.html Harriet, A. (2006, July 28) Taxpayer millions wasted in grab for tourists. The Sydney Morning Herald. Retrieved from < http://www.smh.com.au/news/national/taxpayer-millions- wasted-in-grab-for-tourists/2006/07/27/1153816321024.html> O’Connor, M. (2010, December 05) Oprah can't save tourism. The Courier Mail. Retrieved from < http://www.couriermail.com.au/ipad/too-late-for-talk-to-save-tourism/story- fn6ck620-1225966065231> Rogow, G. & Glynn, J. (2010, December 15) Australia Welcomes Oprah as Tourism Slumps. The Wall Street Journal Asia. Retrieved from http://online.wsj.com/article/SB10001424052748703677604576018711645276454.html? mod=googlenews_wsj Read More