Sector strategises next steps as post-pandemic local gains retreat

Strong growth in international arrivals is the next box to tick for Western Australia’s tourism sector as the industry continues its recovery from the disruption caused by COVID.

WA residents, who made up practically all tourism activity in the state during border closures, are now looking out-of-state for their next trip, while in-bound international tourism to WA has not yet recovered to pre-pandemic levels.

And recent data suggests the recovery has stalled in some parts of the sector, particularly during the three months to June this year, despite strong spending in the 12 months prior to March.

The state’s borders lifted in March 2022, sparking a speedy recovery in interstate tourism over the subsequent 12 months.

Tourism Council Western Australia chief executive Evan Hall said the sector had thrived during this period, as WA residents travelled within their state and interstate visitors boosted business.

“Western Australians were the key market during COVID, and we kept a hold of this market as WA residents were still holidaying in WA,” Mr Hall told Business News.

“Perth makes up roughly 50 per cent of the WA tourism industry as it has the most rooms, staff, attractions and tour departures.

“When domestic travel reopened, Perth had an influx of out-of-state visitors, while the Western Australians continued bringing tourism business to regional WA.”

Mr Hall said interstate visitors were critical to reinvigorate Perth-based businesses that struggled during the pandemic, such as hotels in and around the CBD and long-distance coach tours.

Despite the interstate growth, however, international travel has not recovered as expected.

“That’s largely due to aviation capacity,” Mr Hall said.

“Perth Airport has been clawing international flights back over that 12-month period.

“If you don’t have the seats, visitors can’t come; it’s as simple as that. And the seats that are there are very expensive.

“We’re in a situation where domestic has slowed, but we haven’t yet recovered the international that we needed to, so there’s going to be a shortfall there.

“International is on its way back, but the key is getting more airline services.”

In the past year, 13 international direct flights into WA have either resumed or been launched.

In January, All Nippon Airways relaunched direct flights to and from Tokyo, while the first direct flights between Perth and Manila took off with Philippine Airlines in March, AirAsia’s direct route between Perth and Jakarta started in June, providing 720 seats per week, while Cathay Pacific Airways and Singapore Airlines announced an increase in flights.

In July, Indonesian airline Citilink introduced a direct service between Perth and Jakarta for the first time, in addition to the return of direct flights between Perth and Bali.

These two Perth-Indonesia routes are set to provide nearly 190,000 seats to the market per year.

China Southern Airlines, South African Airways and Thai International announced they would resume direct flights later this year, and Chinese carrier Sichuan Airlines is tipped to start direct flight routes to Perth in early 2024.

Mr Hall said securing international aviation capacity was critical in WA’s tourism sector making a full recovery.

“Other states have done better in this regard,” he said.

“Melbourne and Sydney were always going to get flights back first because airlines will fly where there’s the most demand.

“There’s pretty fierce worldwide and Australia-wide competition, and we’re up against Queensland in particular.”

Evan Hall says the international market is key to the recovery of tourism in WA. Photo: Matt Jelonek

Tourism Western Australia managing director Carolyn Turnbull said once borders reopened, it was only natural WA would experience a fall in activity as in-bound and out-bound travel numbers balanced out.

“It’s really important to keep in mind out-bound is healthy for our in-bound and our aviation partners wouldn’t be able to thrive if they didn’t have a balanced market,” Ms Turnbull told Business News.

“We’re on our way to recovery and we can see that through the reinstatement of many of our international airline partners; and more recently we welcomed new airline partners.”

According to Perth Airport acting chief executive Kate Holsgrove, total passenger numbers are now above pre-COVID levels.

“International passenger numbers are still around 11 per cent below pre-COVID levels but are heading in the right direction,” Ms Holsgrove said.

Activity

While increasing aviation capacity would enable more overseas travellers to get to WA, people need to want to come here first.

September this year will mark the one-year anniversary of Tourism WA’s Walking on A Dream campaign.

Ms Turnbull said the purpose of the branding was to elevate WA as a desirable place to visit as the world emerged from the pandemic.

“To position WA as a unique destination in this highly competitive global marketplace, it was really important for Tourism WA to cut through all the clutter, so to speak, and create something truly awe inspiring,” Ms Turnbull said.

“We felt, in a post-COVID world, creating something aspirational that tapped into that emotional side of what makes a traveller put a destination high on their list needed a brand that was truly unique within the global tourism sector.”

Since going live 11 months ago, the campaign has gained 200 million views worldwide.

Tourism WA marketed the campaign through media and with three-dimensional billboard animations displayed in densely populated locations such as Times Square in New York, Piccadilly Circus in London and recently, Shibuya in Tokyo.

Ms Turnbull said the visual animation was also displayed domestically in places such as Bourke Street Mall in Melbourne.

“Since launching the campaign, we’ve gone from being the seventh most desirable place to visit in the world to the fourth,” Ms Turnbull said.

In the year ending December 2019, total tourism spend in the state was $13.5 billion, according to Tourism Research Australia.

In the year ending March 2023, this figure had risen to $15.9 billion, an 18 per cent increase compared to pre-COVID levels.

Ms Turnbull said this research showed the campaign had not only attracted views but had contributed to the state’s economic prosperity.

“Year to date March … we’ve surpassed our own expectations in terms of restoring that pre-COVID business and now it’s skyrocketing to a record-breaking year,” she said.

Although research showed strong growth in tourism spending in the 12 months to March 2023, new data has found tourism dropped over the following three months to June 30.

A Tourism Council WA survey found net tourism business activity decreased 17 per cent in the June quarter, the first decline since the pandemic.

The survey received 360 responses from tourism operators and found activity levels varied between regions.

For example, operators in the Coral Coast reported an increase in activity in April attributable to the solar eclipse event.

The north-west region suffered the biggest drop compared to the rest of the state. Mr Hall said while the decline was not a disaster, it clearly marked the end of the recovery boom.

“We’ve had good revenue growth over that 12-month period to March, despite cost increases, and it was a strong period for domestic growth,” he said.

“We’ve seen a noticeable decline over this last quarter, especially in May and June, so the story’s changed.

“On average, sixty-eight per cent of businesses across WA are down, but it’s the scale of the downturn that’s truly concerning, falling 29 per cent, which in tourism terms is massive.”

According to the Tourism Council, this decrease had mostly been the result of increased cost of living causing people across Australia to refrain from travel.

Mr Hall said businesses had equally been faced with economic pressures as costs for fuel, food and beverages rose.

“We’ve also had major staffing challenges like everyone else,” he said.

“Over the period of COVID, we lost more than 20,000 jobs from the industry in WA and then we didn’t have enough staff to cope with demand.

“We’re still well short of where we were at our peak, so we’re urging staff to come back and we’re opening advertising to available staff.”

North-west

Ms Turnbull said regional tourism businesses experienced some of the highest recorded activity during the pandemic, as the border closures created an opportunity for WA residents to travel intrastate.

“With regard to some of those smaller businesses in our regions that are experiencing the effect of the out-bound market, I think the downturn Tourism Council was referring to will only be balanced out effectively in the months and years ahead when our international market recovers,” she said.

“Those regions that have traditionally been reliant on domestic and international business, such as the Kimberley, will see international business stabilise over the next 12 months and come back to pre-COVID levels.”

In January, the Kimberley suffered misfortune as heavy rainfall from ex-tropical cyclone Ellie caused major flooding.

The study by Tourism Council found the natural disaster was the primary cause for the decline in net tourism business activity in this region. 

Mr Hall said extensive media coverage of the floods meant unaffected towns that remained open to visitors suffered a loss of demand as people cancelled bookings.

“Tourism WA picked up some marketing to try and counter that, but we just got a surge of booking cancellations and a slowdown of bookings, not just for this season but for the next season too,” he said.

In January, the state government invested $6 million through its Tourism Flood Recovery Package to support Kimberley tourism businesses.

The package covered Tourism WA’s national marketing campaigns, 19,000 discounted airfares from Perth to Broome and Kununurra, and holiday voucher incentives.

“That was all successful in mitigating the scale of the downturn, however, about 85 per cent of businesses in the north still reported that their activity was down in June quarter,” Mr Hall said.

El Questro reported a drop in resort bookings over the Kimberley's recent peak season. Photo: El Questro

 El Questro in the East Kimberley is a popular destination, offering tours, experiences and accommodation.

General manager Geoff Trewin said this year had been difficult for El Questro to gauge the quantity of out-of-state visitors coming to the region due to the floods.

“We cater from campsites to luxury lodges at the Homestead, and we’ve seen a little impact in bookings over the recent past few months that can only be people going overseas instead,” Mr Trewin told Business News.

“But our more major impacts have been caused by the early season floods.”

El Questro and other tourism businesses in the Kimberley that were open to tourists after the floods still suffered cancellations.

Mr Trewin said getting the message to travellers that the region was open was a slow process.

“I think the main issue is the messaging around road access, which should be clearer in regard to availability and when roads are open,” Mr Trewin said.

“Better, more consistent communication between Main Roads and the Department of Fire and Emergency Services is necessary.

“We know that road is going to be impacted again in this coming wet, so we don’t want to go through the same thing next year as we did this year.”

In conversation with Business News, Mr Hall agreed communication about road access was a challenge and contributed to the large number of cancellations.

“The wall-to-wall media coverage left a lasting impression, and you don’t get wall-to-wall coverage when the road reopens,” Mr Hall said.

“You have to work hard to tell people the north was still in business.

“You also need to address that people will put the destination to the back of their minds. That’s where vouchers and discount flights are very effective because it makes people realise the region is open, otherwise they wouldn’t be offering discounted vouchers or discounted flights.”

Mr Trewin said there would be growth in tourism once the international market returned.

“There’s lots happening and there’s a lot of money being spent in tourism and developments going on,” he said.

“Everywhere, tourism operators are pushing the boundaries and encouraging people to travel regional, and local associations are collaborating on this.”

Cable Beach Club Resort and Spa general manager Stuart Kentish said the resort had welcomed the interstate visitation during the past year.

“The resort is forecasting another record-breaking high season for July and August 2023,” Mr Kentish told Business News.

“Cable Beach Club has invested significantly in digital marketing targeting high-value travellers in Sydney and Melbourne, as well as continued engagement with our loyal Perth-based travellers.” 

While the Broome resort didn’t suffer significant business loss following the floods, rising costs have deterred WA residents and interstate travellers from visiting the region.

In an attempt to maintain its current momentum, Cable Beach Club launched package options for visitors.

“Cable Beach Club has focused on inclusive experiences for our guests, including complimentary wine tastings, engaging an activities officer for the family market, and hosting exclusive events such as Cable Carnival for Broome Cup Week,” Mr Kentish said.

“Advocacy for travel to Australia’s north-west needs to continue, highlighting the direct and indirect benefits tourism brings to the region.”

Mr Kentish supported Mr Hall’s view that aviation capacity was critical for the tourism sector, especially as industry forecasts were not anticipating the international market to recover until at least 2025.

“Cable Beach Club supports increased flight capacity and marketing to the region over the shoulder seasons, as well as ensuring the destination remains top-of-mind for high-value travellers from Perth, Sydney and Melbourne over the winter months,” Mr Kentish said.

While the Tourism Council’s research found the north-west suffered the biggest decline in net tourism activity in the June quarter, other regional areas also felt the pressure.

Smiths Beach Resort director Adam McWhirter said there had been a drop-off during this period in the South West.

“While Smiths Beach Resort was fortunate to maintain strong bookings during the peak summer and Easter periods, we have experienced a gradual decline in bookings since around May 2023,” Mr McWhirter told Business News.

“Broadly, we believe this is due to Western Australians’ increasing confidence in international travel after borders opened, and the appeal of the European summer after an extended period of forced intrastate travel.”

Mr McWhirter said Smiths Beach Resort took the pandemic period as an opportunity to improve its facilities.

“We took the opportunity to significantly reinvest in the resort with the installation of new designer furniture and updates such as solar energy to ensure we maintain a high-end and five-star offering,” he said.

“While we’re currently welcoming some guests from the eastern states and international markets like Singapore, it’s not been high enough to make up for the loss of intrastate travel.

“[T]he Margaret River region has a lot to offer to interstate and international travellers, and we’re hopeful these markets will grow to fill the current gaps in the market.”

Smiths Beach Resort upgraded its facilities during the pandemic. Photo: Dylan Alcock

Access, appeal

In May, Qantas launched the first direct flight route between Melbourne and Exmouth to attract out-of-state travellers to the regional destination.

In an effort to expand the Western Australian Inter-Regional Flight Network, a new airline was also launched, bolstered by a $4.05 million investment from the state government until June 2027.

Nexus Airlines, owned by Aviair, commenced flight service between Geraldton, Karratha, Port Hedland and Broome on July 10.

The airline introduced a new Geraldton-Perth service and was expected to deliver upgraded flight services and lower airfares.

The state government has also tapped into the cruise industry to enhance tourism.

On July 19, the opening day of the seventh WA Cruise Exchange conference, Tourism Minister Rita Saffioti launched the Western Australian Cruise Tourism Strategic Plan 2023-2033.

 In 2019, the cruise sector was worth $276 million and was responsible for providing more than 1,000 jobs. Ms Turnbull said Tourism WA had seen the cruise sector return strongly and it had the potential to redeem the drop in activity in the Kimberley.

“The Kimberley is currently experiencing its largest cruise season in history with more than 82 cruise vessels entering various regional ports and its unique tourism destinations injecting millions of dollars into the local economy,” Ms Turnbull said.

She said the purpose of the cruise strategy was to promote WA as the best place to cruise in the world.

“The aim of cruise is to raise awareness that world-class cruise tourism can be achieved in WA by enhancing quality shore-side experiences in port destinations,” Ms Turnbull said.

“We’re confident if a ship arrives in Broome, Albany or Fremantle, travellers are going to receive those onshore experiences just as much as they will when they’re on board.”

Ms Turnbull said the cruise strategy would support the development of onshore infrastructure and services required and would provide other benefits to the entire economy.

“If you think about the vast size of WA, we know Perth has extraordinary accommodation and experiences, however, there are limitations in our regions where there hasn’t been as much development over the years,” she said.

“Our role is to ensure we’re opening opportunities for the private sector and providing a service that allows the sector to navigate through those necessary approval processes.

“We have an extraordinary number of national parks and, working with our partners at the Department of Biodiversity and Conservation, it’s our aim to create development opportunities for the private sector in our national parks and showcase our World UNESCO heritage sites.”

A cruise ship pulls into Port Hedland. Photo: Pilbara Ports Authority

Later this year, Tourism WA is expected to launch its Western Australian Visitor Economy Strategy, or ‘WAVES’.

This strategy would be comprised of sub-strategies, including the new cruise strategy, an event strategy set to be launched in the coming weeks, and the Aboriginal Tourism Action Plan already in market.

“All of these are key components making up what we see as a very robust, resilient and sustainable sector over the next five to ten years,” Ms Turnbull said.

“WAVES will stay the course and take us through to 2033 and the aim is to take our $15.9 billion sector and double that over the next ten years.”

‘Jina’ means discoveries and is the name of the four-year WA Aboriginal Tourism Action Plan, a strategy launched in 2021 and backed by the state government’s $20 million Aboriginal Tourism Fund.

The strategy involved a range of initiatives to be delivered until 2025, including the development of new Aboriginal tourism experiences, encouraging more Indigenous people to work in tourism, and developing administration and booking systems to support Aboriginal tourism businesses.

“Our Jina plan is really setting us up for being the premier Aboriginal tourism destination within Australia, if not the world, and we really believe our 60,000 years of continuous culture needs to be the key message that underpins everything we do as a sector,” Ms Turnbull said.

Tourism WA has scheduled to launch its official events strategy in the next few weeks, according to Ms Turnbull, with the strategic plan expected to outline initiatives to bring major events to every region and for every season.

“Major events are an important way to engage with our audience as a hook to book,” Ms Turnbull said.

“On average, our events department is delivering over 100 events per year, and we can see the results these events provide for accommodation and experience providers.

“It’s important revenue to continue not just doing very well in the high season, but also driving business in the shoulder seasons.”

In February this year, the UFC 284 generated more than $16 million in spending and attracted 8,500 out-of-state visitors to Perth.

“It was also the highest-grossing single event of any indoor arena in the country, earning a gross total revenue of almost $6 million and breaking the previous record for the Sydney Rolling Stones concert in 2014,” Ms Turnbull said.

WA also hosted the London Derby in July, and five FIFA Women’s World Cup matches from late July to early August. Mr Hall said major events made a huge difference in attracting interstate and international travellers.

“People are watching their pennies in the east coast, but I tell you what, there’s nothing like an event to encourage people to travel,” he said.

“For example, we’re expecting tens of thousands of visitors to turn up for Coldplay in November.”

Ms Turnbull said chasing sporting, cultural and entertainment events was healthy for tourism and the economy more broadly.

“We went after Coldplay purely because it was an exclusive opportunity for WA off the back of their tour in Asia,” Ms Turnbull said.

“That’ll be part of our strategy moving forward; identifying unique opportunities like this where concerts haven’t included Australia on their global tour.

“And not just performers like Coldplay, there’ll be a host of different opportunities that will tick those same economic benefits.”

Other significant events announced include three Matildas 2024 Olympic qualifier matches in October, the HSBC SVNS rugby union series in 2024 and 2025, and the British and Irish Lions Rugby Union tour match in 2025.