South East Queensland Whale Watching - Case Study Example

South East Queensland Whale Watching The whale watching tourism in Australia started in 1987 in Hervey Bay, Queensland. Although, Hervey Bay has been promoted as the central location for whale watching in Australia, during the past few years other whale watching locations in the country are giving tough competition. However, Hervey Bay still maintains its position of being the number one commercial Humpback Whale viewing location. This positioning is based on the number of whales and whale viewing boats available in the area as well as the number of visitors that comes to visit the place (Peake, 2009). During the 1980s as well as the 1990s, the whale watching tourism witnessed significant growth not only at the global level (IFAW, 2004) but also at the community level (Hoyt, 2001). In the Harvey Bay area as well, most of the whale watchers community comprises of people around Australia. According to an estimate based on the data gathered from the three largest whale viewing boat operators in the Hervey Bay area, a total of 67 per cent of the tourist in the area are from places around Australia, 30 per cent are international tourists and only 3 per cent are from the local areas. Most of the international tourists are from the UK, Germany and the Netherlands (Peake, 2009). As per a survey by Muloin (1996), Hervey Bay area attracts more number of female visitors than male visitors. Further, most of the visitors are in the age group of 36-50 years with 42 being the average age of the visitors. It was also found that most of the whale watchers from Australia came from Queensland, which was around 64 per cent, and Hervey Bay contributed around 5 per cent visitors. It is also interesting to note that around 78 per cent of the visitors have never done any whale watching and 87 per cent of the visitors were not affiliated with any environmental group (Muloin, 1996). It has been estimated that the whale watching industry has contirbuted around US$ 300 million towards the Australian economy, with more than 1.6 million tourists visiting the country to watch whales by 2003. Just like any other industry, the whale watching industry also has its own strengths and weaknesses, opportunities and threats. Due to the appeal and attractiveness of the sector, the industry is growing rapidly (Duffus and Dearden, 1990). However, due to the threats from the external operating environment, the growth might get inhibited as well. The following SWOT analysis focuses on the various aspects of the whale watching industry. Strengths Availability of good amount of accommodation Good weather Good transportation facilities Weaknesses Increased pollution level resulting to decrease in marine life Stringent government rules Opportunities Earning of foreign exchange Increase in frequent visitors Excellent for short break holidays Direct booking through Internet Threats Downfall in global economy Rise in fuel rate Environmental protection policies Pollution due to the sector such as noise pollution, increase in marine debris etc Analysis of Competitive Environment In order to analyse the whale watching industry of the South East Queensland, the Porters Five Forces model is being applied. The model focuses on five forces that decide the competitive intensity in the market. The model developed by Michael E. Porter considers five forces, three of which are external and two internal threats. These threats are rivalry within the industry, product substitution, new entrants, bargaining power of customers and suppliers (Porter, 1980). The Poter’s five forces The whale watching industry in South East Queensland faces threats from the competitive internal market, new entrants and advancement in substitute pleasure activities such as dolphin watching. Further, the visitors and the tour operators have the power to choose from a plethora of whale watching companies. This also increases competitiveness in the market. While applying the Porter’s five forces in the whale watching industry of South East Queensland, the following results were found: Threat of rivalry within the industry: (Strong) There is an intense competition in the whale watching industry in South East Queensland. This is due to the fact that there has not been much development or advancement in the Hervey Bay area in terms of other trades or industries. This has led to huge dependency on tourism and almost every family in the area is earning their living through whale watching sector. Further, the Hervey Bay area also has numerous travel agents and other alternative pleasure tourism, such as camping sites, which has also added to the competitive landscape. As these alternative options also offer similar thrills and services, the customer is given more choices, which has further resulted in a competitive atmosphere for the whale watching industry (Weaver and Lawton, 2002). It has also been found that it is difficult to exit from the industry as entering into the industry requires huge investments and capital for buying boats or other peripheral machineries (Weaver and Lawton, 2002). Therefore, the operators cannot exit from the business easily as it is tough to get buyers for their businesses. Threat of substitutes: (Strong) The Hervey Bay area is also facing competition from other alternative tourism options such as the popularity of dolphin watching in the nearby areas. The Bay area is rich in its marine life and besides the humpback whales, for which the area is famous for, it also houses Indo-Pacific humpbacked dolphins and bottlenose dolphins (Hoyt, 2001). Therefore, the whale watching industry is being strongly threatened by substitute tourism of dolphin watching. Further, the whales can also be viewed from the coast line and many prefer to watch them through various whale watching towers on the shore (Higham, 2006), rather than taking the trip in a boat. Also, popularity of alternative sports such as fishing has also dented the revenue of the whale watching operators. Threat due to bargaining power of customers: (Moderate) Most of the visitors coming for whale watching are from the nearby countries of Australia and are either tourists or international students (Hoyt, 2001). As the area also offers a number of options in terms of travel agencies, it is easier for these visitors to choose from them and select the best possible option. Thus, even big brand names cannot ensure huge profits. It is solely the discretion of the customers that would make or break a deal (Peake, 2009). Threat of new entrants: (Low) In order to establish itself in the market, new entrants require huge investments, human resources and strong customer base. Further, stringent environmental rules and regulations also make it difficult for the new entrants to establish themselves in the market. Also, the industry requires the operators to promote them through advertising and other offers, which incurs added expenses (Weaver and Lawton, 2002). As the market has already become saturated, it is also tough to earn higher profit margins and therefore, would prolong the gestation period, making the break-even for the new entrants tougher. Threat due to bargaining power of suppliers: (Low) As the tourism industry in the South East Queensland is saturated and offers many options and operators, in every section from small to large operators, these agents do not have much power to influence the customers to buy their packages, unless they offer them some promotional incentives. Therefore, the suppliers do not have much bargaining power with the customers or the operators and do not pose a greater threat to the industry. The whale watching industry in the South East Queensland has been thriving for a long time, however, due to lack of alternative means of sustenance, people in the area has started being dependent on the trade and has opened up various peripheral businesses around the whale watching sector, such as boat repairing, hotels etc. This has also given rise to intense competition within the industry. Post the analysis of the landscape using Poter’s five forces model, it has been found that threat of rivalry within the industry and the threat of substitute has been the strongest threat to the industry. There is a growing tension within the whale watching operators as the market has become saturated and the competition has become stiff. Price cannibalism and promotional offers are some of the means through which the operators are trying to win the customers, which in turn are affecting the growth of the industry. Further, the industry is also threatened due to the popularity of alternative tourism options such as dolphin watching. As most of the visitors constitute the students or international tourist community, they are not targeted towards only watching whales. They might also be content with watching dolphins, which holds much more attraction and appeal. Statement of Key Issues There are various other key issues that also affect the whale watching industry of the South East Queensland. Some of these issues are described in detail below: Environmental sustainability: The whale watching industry is completely dependent on the environmental sustainability of the area. In case the natural habitat or the marine life of the area is affected due to factors such as pollution, global warming and climate change, it would also affect the industry. The sustainability of the industry is directly dependent on the sustainability of the environment of that region. The growing pollution at the shores and in the water around the shores is deterring the whales from coming close to the shore and they are constantly getting into deeper seas (Peake, 2008). This would surely impact the industry as it would mean taking the visitors into deep sea, which requires much more sophisticated boats. Further, many visitors might not like the idea of traveling too deep into the sea. Also, deep sea tourism requires fulfilling different rules and regulations (Valentine and Britles, 2004). Thus, the industry would definitely get affected if environmental sustainability of the area is not taken into consideration. Financial crisis: The recent global recession also had its impact on the tourism industry in Australia. Therefore, the whale watching tourism also got impacted. The decrease in the number of tourists, together with the growing competition has affected the industry very badly (Mladenović and Zlatković, 2009). Further, the increase in inflation rate in the economy has resulted in price rise of essential products and has impacted to the common man of the South East Queensland as well, who are solely dependent on the tourism industry for their survival. Also, the rise in fuel prices has lowered the profit margins for the boat operators. However, it is due to the recession, people had started saving the money they would have otherwise spent on traveling or other entertainment purposes. They would instead look at cheaper alternatives for entertainment rather than spending money on leisure tourism such as whale watching. Promoting whale watching: The whale watching industry of South East Queensland has taken various initiatives to promote the industry not only in the region but also globally. The Hervey Bay area is the first region to start whale watching in Australia and since then various promotional activities have been undertaken to make the industry popular. The Tangalooma site for instance, offers whale watching tours through aerial survey and land-based sightings. Further, the visitors are also offered to swim with minke whales at selected places during March to October (Arnold, 1998). Hervey Bay, in fact holds an annual whale watching festival for 15-days in August to popularise the trade. Even the Frasher Island World Heritage area and the Hervey Bay Marine Park work in coordination with each other to provide packaged tours and attract more number of visitors. The whale watching tours are excellent platforms to introduce the first time visitors to the ecology of these areas and increase the business. The local radio station of the Hervey Bay area also helps in the initiative to make the trade popular by broadcasting the location and sightings of the whale and dolphins (Gill and Burke, 1999). Further, the Queensland Department of the Environment and Heritage, along with the Australian Commonwealth also hosts various whale watching workshops on a regular basis. These workshops are most held by agencies such as the Great Barrier Reef Marine Park Authority and the Australian Nature Conservation Agency. The workshops help in bringing the industry, government, environmental agencies, the local community and even the scientific community together to conserve and popularise the whale watching tourism (IFAW, 1999). References: Arnold, P.W. (1998). Towards sustainable management of the developing dwarf minke whale tourism industry in northern Queensland. Scientific Committee, International Whaling Commission (IWC) SC/50, May 1998, Oman. Duffus, D.A. and Dearden, P. (1990). Non-consumptive Wildlife-Orientated Recreation: A Conceptual Framework. Biological Conservation, 53, 213-231. Gill, P. and Burke, C. (1999). Whale Watching in Australian & New Zealand Waters. New Holland, French Forest, Australia, 148. Higham, J. (2006). Wildlife Viewing: The Significance of the Viewing Platform. Paper presented at the Getting real about wildlife tourism. The 2nd Australian Wildlife Tourism Conference. Hoyt, Erich (2001). Whale Watching: Worldwide tourism numbers, expenditures and expanding socioeconomic benefits. International Fund for Animal Welfare, 127-129. IFAW (1999). Report of the Workshop on the Socioeconomic Aspects of Whale Watching. Kaikoura, New Zealand, 88. IFAW (2004). From Whalers to Whale Watching: The Growth of Whale Watching Tourism in Australia. Sydney. Mladenović, Igor and Zlatković, Aleksandar (2009). Some aspects of financial crisis influence on tourism industry in West Balkan countries. Economics and Organization, 6 (1), 51-58. Muloin, S. (1996). Whale watching in Hervey Bay: Results from Matilda II. Dept. of Tourism, James Cook University, Townsville, Qld. Peake, S. (2008). The Communication of Conservation: The competing priorities of ecotourism and government, and what it means for the whale-watching tourist in Hervey Bay, Australia. University of the Sunshine Coast, Maroochydore. Peake, Shiela (2009). An Industry in Decline? The evolution of Whale-Watching Tourism in Hervey Bay, Australia. Proceedings of CMT2009, the 6th International Congress on Coastal and Marine Tourism. June 23-26, 2009, Nelson Mandela Bay, South Africa. Porter, M.E. (1980). Competitive Strategy. The Free Press, New York. Valentine, P. and Britles, A. (2004). Wildlife Watching. In K. Higginbottom (Ed.). Wildlife Tourism. Brisbane: CRC Sustainable Tourism. Weaver, D. and Lawton, L. (2002). Overnight Ecotourist Market Segmentation in the Gold Coast Hinterland of Australia. Journal of Travel Research, 40, 270. Read More