Strategic Plan for the NT Tourism Industry Recommendations of the by pengxuebo

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									Strategic Plan for the NT
   Tourism Industry:
Recommendations of the
       AECgroup

       September 2007
Northern Territory Tourism Strategic Plan 2008-2012




Table of Contents
          TABLE OF CONTENTS........................................................................................... 1
          1     INTRODUCTION .......................................................................................... 3
          1.1     PURPOSE OF THE STRATEGIC PLAN .......................................................................... 3
          1.2     PURPOSE OF THIS DOCUMENT ............................................................................... 3
          1.3     SIGNIFICANCE OF THE INDUSTRY ............................................................................ 3
          1.4     COMPETITIVE ENVIRONMENT ................................................................................. 3
          1.5     INDUSTRY PERFORMANCE .................................................................................... 4
          1.6     MEASUREMENT OF SUCCESS ................................................................................. 5
          1.7     STRATEGIC PLAN DEVELOPMENT PROCESS ................................................................. 5
          1.8     ROLE AND STRUCTURE OF THE NT TOURISM INDUSTRY .................................................. 6
          2     OPERATING ENVIRONMENT ASSESSMENT .................................................. 7
          2.1     MARKETS AND COMPETITION ................................................................................ 7
                  2.1.1 GLOBAL TOURISM TRENDS ......................................................................... 7
                  2.1.2 AUSTRALIAN TOURISM MARKET TRENDS .......................................................... 8
                  2.1.3 NT TOURISM MARKET TRENDS .................................................................. 10
          2.2     DRIVERS AND INFLUENCES ................................................................................. 13
                  2.2.1 VARIABILITY IN DEMAND ......................................................................... 13
                  2.2.2 GLOBAL DRIVERS AND TRENDS .................................................................. 14
                  2.2.3 DOMESTIC DRIVERS AND TRENDS ............................................................... 15
          2.3     PERFORMANCE AND GROWTH .............................................................................. 16
          2.4     LABOUR AND SKILLS ........................................................................................ 18
          2.5     INVESTMENT ................................................................................................. 19
          3     PLANNING FOR THE FUTURE ..................................................................... 22
          3.1     SWOT ANALYSIS ........................................................................................... 22
                  3.1.1 STRENGTHS ........................................................................................ 22
                  3.1.2 WEAKNESSES ...................................................................................... 22
                  3.1.3 OPPORTUNITIES ................................................................................... 23
                  3.1.4 THREATS ........................................................................................... 24
          3.2     KEY ISSUES .................................................................................................. 25
          4     MARKETS .................................................................................................. 28
          4.1     STAGES OF MARKET DEVELOPMENT ....................................................................... 28
          4.2     THE DOMESTIC MARKET.................................................................................... 29
                  4.2.1 CURRENT DOMESTIC MARKET POSITION – STAGE ASSESSMENT ............................. 30
                  4.2.2 RESPONDING TO TRENDS IN THE DOMESTIC MARKET ......................................... 31
          4.3     INTRA-TERRITORY MARKET ................................................................................ 33
          4.4     THE INTERNATIONAL MARKET ............................................................................. 34
                  4.4.1 CURRENT FOCUS MARKETS ....................................................................... 35
                  4.4.2 EMERGING MARKETS .............................................................................. 38
                  4.4.3 CHINA .............................................................................................. 41
                  4.4.4 INDIA ............................................................................................... 45
                  4.4.5 SOUTH KOREA ..................................................................................... 49
                  4.4.6 INDONESIA ......................................................................................... 51
                  4.4.7 SINGAPORE ........................................................................................ 54
                  4.4.8 OTHER EMERGING MARKETS ..................................................................... 56
                  4.4.9 POSITIONING THE NT FOR THE INTERNATIONAL MARKET ..................................... 56
                  4.4.10 CHANGING BACKPACKER TRAVELLER ............................................................ 58
          4.5     NATURE-BASED TOURISM.................................................................................. 60
                  4.5.1 ECO-TOURISM ..................................................................................... 61
                  4.5.2 DEVELOPING NATURE-BASED TOURISM PRODUCT IN THE NT ................................ 61
                  4.5.3 POSITIONING THE NT FOR NATURE-BASED TOURISTS ........................................ 62
          4.6     CULTURAL TOURISM ........................................................................................ 64
                  4.6.1 UNDERSTANDING CULTURAL TOURISTS ......................................................... 66
                  4.6.2 INDIGENOUS PRODUCT IN THE NT............................................................... 68
                  4.6.3 POSITIONING THE NT FOR CULTURAL TOURISTS............................................... 68
                  4.6.4 CULTURAL TOURISM DEVELOPMENT ............................................................. 69
                  4.6.5 SEASONALITY ...................................................................................... 72



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Northern Territory Tourism Strategic Plan 2008-2012



          4.7        BUSINESS TOURISTS ....................................................................................... 72
          5        PRODUCT DEVELOPMENT .......................................................................... 74
          5.1        ACCESS ...................................................................................................... 74
                     5.1.1 DISTRIBUTION OF TRAVEL TO NT................................................................ 74
                     5.1.2 DISTRIBUTION OF TRAVEL WITHIN NT ......................................................... 74
                     5.1.3 AIR ACCESS ........................................................................................ 75
                     5.1.4 CRUISE SHIPPING ................................................................................. 77
                     5.1.5 ROAD ACCESS ..................................................................................... 78
                     5.1.6 RAIL TRAVEL ....................................................................................... 79
          5.2        INFRASTRUCTURE ........................................................................................... 80
                     5.2.1 ACCOMMODATION ................................................................................. 80
                     5.2.2 BUSINESS/CONVENTION .......................................................................... 81
                     5.2.3 NATIONAL PARKS .................................................................................. 81
          5.3        DESTINATION DEVELOPMENT .............................................................................. 83
          5.4        SKILLS ....................................................................................................... 85
          5.5        INDUSTRY STANDARDS ..................................................................................... 89
          5.6        PARTNERSHIPS .............................................................................................. 90
                     5.6.1 INDUSTRY .......................................................................................... 90
                     5.6.2 COMMUNITY ........................................................................................ 95
                     5.6.3 LOCAL GOVERNMENT .............................................................................. 95
          6        MARKETING AND PROMOTION .................................................................. 97
          6.1        MARKETING .................................................................................................. 97
          6.2        WHOLESALING............................................................................................... 99
                     6.2.1 INCREASED USE OF INFORMATION TECHNOLOGY .............................................. 99
                     6.2.2 INDUSTRY CONSOLIDATION .....................................................................100
                     6.2.3 RATIONALISATION OF TOURISM PRODUCTS ...................................................100
                     6.2.4 TERRITORY DISCOVERIES .......................................................................100
          6.3        CO-OPERATIVE ADVERTISING ............................................................................101
          6.4        RETAIL DISTRIBUTION .....................................................................................102
          6.5        ELECTRONIC DISTRIBUTION ..............................................................................104
          6.6        INTRA-TERRITORY MARKETING ...........................................................................105
          7        ENVIRONMENTAL SUSTAINABILITY........................................................ 107
          7.1        ISSUES OF CLIMATE CHANGE .............................................................................107
          7.2        REDUCING CARBON EMISSIONS ..........................................................................107
          7.3        RESPONDING TO THE CHALLENGES OF CLIMATE CHANGE ..............................................109
          8        RESEARCH & INNOVATION ..................................................................... 110
          9        BUDGETS AND TARGETS.......................................................................... 112
          9.1        TOURISM NT BUDGET .....................................................................................112
          9.2        PERFORMANCE MEASUREMENT ............................................................................114
          REFERENCES ................................................................................................... 116




              Disclaimer:
              Whilst all care and diligence have been exercised in the preparation of this report, the AEC Group Limited does not warrant the
              accuracy of the information contained within and accepts no liability for any loss or damage that may be suffered as a result of reliance
              on this information, whether or not there has been any error, omission or negligence on the part of the AEC Group Limited or their
              employees. Any forecasts or projections used in the analysis can be affected by a number of unforeseen variables, and as such no
              warranty is given that a particular set of results will in fact be achieved.




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Northern Territory Tourism Strategic Plan 2008-2012




1 Introduction
1.1 Purpose of the Strategic Plan
          The Northern Territory Tourism Strategic Plan 2008-2012 (the Plan) outlines the
          collective direction for the Northern Territory (NT) tourism industry over the coming five
          years. This Plan will guide Tourism NT, other levels of government and the private sector
          to meet current and emerging trends and associated challenges and opportunities facing
          the NT tourism industry.

          The former Plan, the Northern Territory Tourism Strategic Plan 2003-2007, was
          successful in providing the strategic direction for the industry to weather a number of
          challenges during a period of uncertainty in the global tourism industry.

          The 2008-2012 Plan outlines the path forward to maximise market potential over the
          next five years by building on the industry’s evolving product, core markets of nature,
          culture and indigenous based tourism and addressing constraints to growth in the areas
          of infrastructure, access and skills. Importantly, the Plan outlines strategies for the
          industry to continue to capitalise on its core European markets (including growth markets
          such as France and Italy) as well as benefit from the nearby fast-growing tourism
          markets of Asia.


1.2 Purpose of this Document
          This document outlines the current approach of the AEC Group, in preparing The
          Northern Territory Tourism Strategic Plan 2008-2012, based on the research and industry
          consultation undertaken.

          This document is for release to the industry to obtain final feedback from industry and
          Government before the final Strategic Plan is prepared. It contains a number of strategic
          recommendations that will impact many areas of the industry.

          The strategies presented in this document represent the views of the
          consultant.


1.3 Significance of the Industry
          The tourism industry contributed 7.2% of the NT’s Gross State Product (GSP) in 2003/04
          and is the Territory’s largest private sector employer, directly and indirectly, accounting
          for nearly 13,000 jobs. Tourism is the leading industry in many rural and remote areas,
          including indigenous areas, where other industry opportunities are often limited. The
          infrastructure provided by the industry is not only utilised by visitors. The industry
          creates critical mass for facilities and activities that locals utilise and enjoy. It promotes
          culture exchange through interaction with visitors from around the world. Tourism
          highlights the importance of environmental assets in the Territory and channels funds to
          their protection and management.

           The tourism industry is the largest industry employer in the
               NT, contributing over 7% to GSP and plays a key role in
                      regional and indigenous economic development.
1.4 Competitive Environment
          The NT tourism industry has largely developed from globally recognised iconic natural
          attractions such as Uluru / Ayers Rock and Kakadu National Park. These origins have
          broadly led to a focus on nature-based tourism represented by the spirited traveller
          segment domestically and the experience seeker segment internationally.




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Northern Territory Tourism Strategic Plan 2008-2012



          These segments represent substantial and growing markets of travellers. However, the
          competition for these markets has intensified in recent years, with many states such as
          Tasmania, Western Australia, Queensland and New South Wales and overseas
          destinations such as New Zealand and South Africa targeting similar markets.
          Domestically, states such as Queensland and Western Australia are promoting similar
          experiences such as the ‘Real Outback’ image of the NT to eastern and western seaboard
          residents but marketing them as more accessible. This competition is often mixed with a
          greater range of experiences and products.

          Internationally, global tourism is expected to increase though is tempered with ongoing
          risks associated with war, terrorism and disease. The Asian region is forecast to continue
          its rapid ascendency and account for an increasing share of the world tourism market,
          both as a destination and a source of travellers. The success of Asia as a tourist
          destination is in part behind the forecast of Australian domestic tourists increasingly
          choosing to travel overseas. As a result, visitor nights are forecast to grow only
          marginally from domestic travellers and will increasingly result from more frequent, but
          shorter trips in the domestic market. While the recent experience in the NT is different to
          this, this overall trend is still a major concern for the NT tourism industry.

            The competitive situation is placing increasing pressure on
                   the NT to continue to diversify its tourism product.
          Targeting the spirited traveller/experience seeker segments and promoting the Territory’s
          iconic natural attractions will remain a core component to the future product range,
          market image and promotion of the NT tourism industry. However, there is now both the
          opportunity and challenge to diversify and strengthen the industry’s product range and
          build long-term sustainable competitive advantage through continued development of the
          unique cultural (in particular Indigenous) tourism product.

          This Plan looks at further developing nature, cultural and Indigenous tourism product
          tailored to the spirited traveller and experience seeker segments, and targeting the high
          value-add fringes of experiences that much of these market segments seek. The Plan
          also targets the significant opportunities provided for within the emerging tourism
          markets of China and India. These should be considered in conjunction with the
          Commonwealth Government’s Department of Industry, Tourism and Resources recently
          released National Tourism Emerging Markets Strategy: China and India.

            The Plan consolidates the core nature and culture markets,
             extends Indigenous tourism product and positions for the
             opportunities in the emerging markets of China and India.
1.5 Industry Performance
          The NT tourism industry’s performance has been sound over the past 5 years when
          considered in the context of global and national tourism market trends.

          Total visitation to the NT (not including day trip visitors) reached 1.41 million visitors in
          2006, showing continued signs of recovery from the slump following 2001. In line with
          the Australian experience, tourism visitation to the NT has been negatively impacted by a
          number of significant events including war, terrorism, disease and exchange rate. The
          most significant of these events was the collapse of Ansett and the NT Tourism Industry
          has only now recovered to the levels prior to its occurrence.

          International visitation has grown in the NT since 2004, although not as strongly as the
          Australian average. However the Territory has recorded stronger growth in domestic
          visitors, which remain the largest source of visitor nights at 70%, despite a slowdown in
          domestic tourism growth across Australia. This has been mostly due to growth in holiday
          visits to the NT in recent years; a positive reflection on recent Tourism NT marketing
          efforts and the focus and distribution of Territory Discoveries.




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Northern Territory Tourism Strategic Plan 2008-2012



          Tourism businesses in the NT have reported 77% increase in sales and a 57% increase in
          profitability over the past 5 years. This positive experience is translating into plans by
          much of industry for further investment in their operations.

                   A key focus of this Plan is to create a more sustainable
                      tourism industry that is built around resilient target
                            markets and less exposure to tourism shocks.
1.6 Measurement of Success
          Performance measurement for the NT tourism industry is essential to drive decision
          making and to monitor the effectiveness of various strategies. Tourism organisations
          often base success on total visitor numbers. While this is important it is not a perfect
          reflection on performance as business travellers (excluding the MICE segment) are likely
          to travel regardless of a destination’s marketing activity. A focus purely on volume is also
          unlikely to be sustainable in the long-term if it places increasing pressure on natural
          attractions in the NT. Instead, it is important to attract tourists that stay longer, spend
          more, travel widely and visit outside of the traditional peaks. This will help create an
          environment where tourism operators can improve and further employment is generated.

          Tourism has a central role to the continued growth, development and sustainability of the
          NT economy, being one of the most significant industries in the Territory. Economic
          growth, through tourism, can be achieved by one or more of the following:

          •   Attracting more visitors;
          •   Getting those that come to stay longer;
          •   Encouraging those that come to spend more; and
          •   Encouraging those that come to come back for repeat visits.

          Tourism NT, as the NT Government’s organization responsible for the development of
          tourism, is committed to achieving all of these goals. Priorities are made where efforts
          will be most profitably rewarded. Clearly, measuring success on only one of these goals,
          or viewing each of them in isolation, can lead to misrepresentation of success.

          The 2003-2007 Strategic Plan has recorded positive results and has been implemented in
          a period of significant change in the global tourism industry. Overall, around 90% of
          targets have been achieved. However, the NT tourism industry has had limited success in
          reducing seasonality of visitation with this aim remaining just as valid today. Also, there
          is now a clear push for a more forward looking approach to research and planning.

             The measurement of success on this Plan will be based on
           the holiday market. Targets will also be set for expenditure,
              seasonality and dispersal to reflect the Plan’s objectives.
1.7 Strategic Plan Development Process
          The Northern Territory Tourism Strategic Plan 2008-2012 builds upon previous plans,
          strategies and updates prepared by Tourism NT and other NT departments. The most up-
          to-date research from around Australia and the world has also been reviewed and
          incorporated to drive strategic directions and provide additional insight.

          Industry and industry stakeholders were widely consulted during the Plan’s development
          though a series of one-on-one consultations, phone discussions, surveys and workshops.
          The strategies in this Plan represent a joint direction by Tourism NT and industry to drive
          the growth of tourism in the NT.

                      The Plan has been developed in partnership between
                       industry and government and provides the strategic
                                  direction for shared growth and success.



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Northern Territory Tourism Strategic Plan 2008-2012



1.8 Role and Structure of the NT Tourism Industry
          The Northern Territory Tourist Commission was legislated as Tourism NT in 2006. Whilst
          remaining an autonomous entity, Tourism NT falls within the portfolio of NT Department
          of Business, Economic and Regional Development (DBERD). This new arrangement
          provides greater opportunities for cooperative work on major projects and improves the
          ability to develop tourism in regional areas and with Indigenous communities.

          Tourism NT is the principal government agency responsible for marketing and facilitating
          the development of tourism in the NT. Tourism NT works to market the destination
          interstate and overseas with tourism industry partners including Tourism Australia, the
          Commonwealth Government and four regional tourism organisations, the travel industry
          that provides the necessary coordination for working with wholesalers, retail agents and
          airlines to facilitate the distribution of Territory travel products. Tourism NT provides
          policy and service delivery advice to the NT Government, through the Minister for
          Tourism.

             Tourism NT’s role is undertaken in cooperation with other
            levels of government, tourism industry partners and travel
                   and tourism industry operators across the Territory.

          Figure 1.1: Role and Structure of the NT Tourism Industry




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Northern Territory Tourism Strategic Plan 2008-2012




2 Operating Environment Assessment
2.1 Markets and Competition
2.1.1 Global Tourism Trends

          The World Tourism Organisation (WTO) estimate that there were 842 million international
          tourists travelling across the globe in 2006, representing an increase of approximately
          150 million international tourists since 2003.

          International tourism growth is being driven largely by economic growth and rising living
          standards, along with improved information flows and more efficient coordination
          between business, consumer, government and tourism organisations.

          Tourism is a discretionary expenditure item and when economic conditions are strong,
          people are most willing to spend on discretionary items such as travel. As a whole, the
          global economic outlook is positive. Barring any unforeseen shocks, this forecast outlook
          will support continued growth in world tourism at least in the short to medium term.

          The WTO forecasts the global tourism market will grow to over 1.56 billion international
          travellers by 2020, with the Asia-Pacific region projected to be one of the fastest growing
          tourism destinations with an average annual growth rate of 6.5% to almost 400 million.
          China and India will be two of the fastest growing market segments within Asia.

          In 2004, total outbound tourism from China reached 18.8 million. According to the WTO,
          by 2020 this figure will grow to 100 million and China will be the world’s fourth largest
          source of outbound travel. Forecasts for India are more modest in the short-term, but
          show the beginnings of powerful growth over the longer term.

                            The global tourism market is forecast to almost double in
                             size by 2020, driven by rapid growth of the Asian tourist
                                       outbound market, particularly China and India.
          Figure 2.1: Global Visitor Numbers

                                                  INTERNATIONAL VISITORS   ANNUAL GROWTH
                           1000                                                                    16.0%

                                900                                                                14.0%

                                800                                                                12.0%

                                700                                                                10.0%
                                                                                                           % ANNUAL GROWTH
             INTERNATIONAL VISITORS




                                600                                                                8.0%

                                500                                                                6.0%

                                400                                                                4.0%
                      )




                                300                                                                2.0%
             (M




                                200                                                                0.0%

                                100                                                                -2.0%

                                      0                                                            -4.0%
                                          1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

          Source: World Tourism Organisation (2007b)




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Northern Territory Tourism Strategic Plan 2008-2012




2.1.2 Australian Tourism Market Trends

          Approximately 5.5 million international tourists arrived in Australia in 2005-06, 1.5%
          more than in 2004-05. International visitation to Australia has grown at a modest
          average rate of 2.0% per annum over the past five years.

          The Tourism Forecasting Committee (TFC) estimates that the economic value of
          international tourism to the Australian economy for the year-ended June 2006 was $18.9
          billion, with leisure visitors accounting for 60% ($11.6 billion) of the total.

          Figure 2.2: International Visitation to Australia
                                                                    International Visitors     Annual Growth
                                                 6                                                                             12.0%



                                                 5                                                                             9.0%
             International Visitors (Millions)




                                                 4                                                                             6.0%



                                                 3                                                                             3.0%



                                                 2                                                                             0.0%



                                                 1                                                                             -3.0%



                                                 0                                                                             -6.0%
                                                     1996   1997 1998   1999   2000    2001   2002   2003   2004 2005   2006

          Source: Australian Bureau of Statistics (2007b)


          In 2007, growth in inbound arrivals is forecast to grow at a slightly faster pace of 4% to
          5.7 million. This growth is expected through forecast weakening of both the Australian
          dollar and world crude oil prices, along with a modest expansion in aviation capacity.

          Over the longer term, the continued expansion of low cost carrier routes in Asia (and the
          associated rapid development of rival destinations in Asia) will compete strongly for
          international arrivals to Australia.

          However, this expansion will also bring major opportunities for Asian markets to feed into
          Australian ports. As such, with the balance of increased aviation capacity and an
          anticipated lower Australian dollar and world oil prices, annual growth in inbound
          visitation is forecast at 5% through to 2015.




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Northern Territory Tourism Strategic Plan 2008-2012



          Figure 2.3: Forecast International Visitation to Australia
                                                                            International Visitors             Annual Growth
                                                 9                                                                                                      9.0%

             International Visitors (Millions)   8                                                                                                      8.0%

                                                 7                                                                                                      7.0%

                                                 6                                                                                                      6.0%

                                                 5                                                                                                      5.0%

                                                 4                                                                                                      4.0%

                                                 3                                                                                                      3.0%

                                                 2                                                                                                      2.0%

                                                 1                                                                                                      1.0%

                                                 0                                                                                                      0.0%
                                                     2006     2007         2008     2009        2010   2011        2012   2013    2014       2015

          Source: Tourism Forecasting Committee (2006)


          In line with its close proximity and ties to Australia, New Zealand is currently the largest
          single country source of international visitors to Australia, accounting for around 19.4%
          of total visitation. However, the Asian market (excluding Japan) is expected to provide
          the most significant source of additional visitors to Australia over the next decade, with
          forecasts suggesting the region will account for an additional 8.7% of total visitation (or
          1.5 million visitors) by 2015. By 2015, visitation from Asia is forecast to account for 50%
          of the Australian international tourist market.

          Figure 2.4: Arrivals from Inbound Markets to Australia, 2006 and 2015
                                                                           2006                                                                                 2015



                                                      REST OF THE W ORLD          NORTH A MERICA                                         Rest of the World             North America
                                                            6.1%                     10.3%                                                     7.0%                        10.0%
                                                                                                         UK                                                                                 UK
                                                                                                       12.9%                                                                              11.3%

             OTHER ASIA
               27.9%
                                                                                                                                                                                          Other Europe
                                                                                                       OTHER E UROPE
                                                                                                                                                                                             11.3%
                                                                                                          11.4%
                                                                                                                            Other Asia
                                                                                                                              36.6%

                                                     JAPAN                        NEW ZEALAND
                                                                                                                                                                            New Zealand
                                                     12.0%                           19.4%                                                                   Japan            14.6%
                                                                                                                                                             9.3%

          Source: Tourism Forecasting Committee (2006)


          The TFC has predicted China and India will be Australia’s two fastest growing tourism
          markets over the next decade, with average annual growth of 16.5% and 14.3%,
          respectively. With rapidly expanding middle classes, and a growing wealth base, the two
          markets offer strong potential for high yield returns.

           The emerging markets of China and India are forecast to be
                the fastest growing markets for the Australian tourism
                 industry, providing strong growth potential for the NT
               tourism industry, the closest Australian market to Asia.
          Domestic tourism was supported between 2002 and 2004 by strong job creation, rising
          household wealth and low interest rates, leading to a greater propensity to spend on
          discretionary items. However, domestic visitor nights fell 7% in 2005 in response to
          factors such as rising petrol prices (increasing the cost of travel or shortening the
          distance destinations chosen), increasing debt levels and a strong Australian dollar
          (increasing the attractiveness of overseas travel).



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Northern Territory Tourism Strategic Plan 2008-2012




          Domestic tourism recovered slightly in 2006 as petrol prices stabilised and is forecast to
          continue to grow modestly through to 2015. Even so, domestic tourism is forecast to
          remain below the levels recorded between 2002 and 2004.

          Holiday / leisure purposes accounted for the largest share of domestic visitor nights in
          2006 (47%), followed by visiting friends and relatives (32%). Over the period to 2015,
          domestic visitation for business purposes is expected to increase marginally in
          significance to 15.1% of total domestic tourism.

          Figure 2.5: Historic and Forecast Domestic Visitor Nights, Australia

                                                                      DOMESTIC VISITOR NIGHTS          ANNUAL GROWTH
                                                  310                                                                          5.0%

                                                  305                                                                          3.5%
            DOMESTIC VISITOR NIGHTS IN MILLIONS




                                                  300                                                                          2.0%

                                                  295                                                                          0.5%




                                                                                                                                        ANNUAL GROWTH
                                                  290                                                                          -1.0%

                                                  285                                                                          -2.5%

                                                  280                                                                          -4.0%

                                                  275                                                                          -5.5%

                                                  270                                                                          -7.0%

                                                  265                                                                          -8.5%

                                                  260                                                                          -10.0%
                                                        1999   2001    2003    2005     2007    2009     2011    2013   2015

          Source: Tourism Forecasting Committee (2006)


          The TFC estimate that the value of domestic tourism to the Australian economy was $57
          billion in 2006. The contribution of domestic tourism is forecast to grow by 0.7% per
          annum on average in real terms through to 2015 to $59.5 billion. This relatively weak
          forecast is based on the assumption of continued higher fuel prices reducing the demand
          for driving holidays and an increased willingness of Australian’s to substitute domestic
          destinations for overseas travel.

               Around 70% of the NT tourism industry’s visitor mix is
          sourced from domestic travel, but this market is expected to
                    grow at a relatively slow rate in the decade ahead.
2.1.3 NT Tourism Market Trends

          Total holiday visitation to the NT (not including day trip visitors) increased by 7.7% in
          2006 to 841,440 visitors, although lower than the 907,460 visitors recorded in 2000. In
          line with the Australian experience, tourism visitation to the NT was negatively impacted
          by a number of significant events including war, terrorism, disease and exchange rate in
          the period 2001-04.




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Northern Territory Tourism Strategic Plan 2008-2012



          Figure 2.6: Total NT Holiday Visitors

                      1000                                                                                                                15%
                                                                                   Total Holiday Visitors
                           900                                                     Annual Growth
                                                                                                                                          10%
                           800




                                                                                                                                                         % Annual Growth
                           700
                                                                                                                                          5%
                           600
               000s




                           500                                                                                                            0%
                           400
                                                                                                                                          -5%
                           300
                           200
                                                                                                                                          -10%
                           100
                              0                                                                                                           -15%
                                    1999         2000       2001            2002        2003       2004         2005       2006

          Source: Tourism NT (2006a)


          The interstate market provides the largest source of visitors to the NT, accounting for
          47.5% of the total in 2006. The reliance on this market has increased since 2001 (up 4.7
          percentage points), while intra-territory travel has reduced in share by 4.9 percentage
          points. Overall, domestic travel accounts for 70% of visitors. International visitors
          currently account for 31% of visitor nights in the NT, down from 34% in 2001, partly
          reflective of a declining length of stay for this visitor type.

          Figure 2.7: Visitors by Origin to NT, 2001 and 2006
                                    Origin of Visitor, 2001                                                       Origin of Visitor, 2006


                                                                                                                                                Intra-Territory
                                                                    Intra-Territory
                                                                                                                                                    26.2%
                                                                        31.1%

             International                                                                  International
                26.1%                                                                          26.3%




                                    Interstate                                                                            Interstate
                                      42.8%                                                                                 47.5%

          Source: Tourism NT (2006a)


          Figure 2.8: Visitor Nights by Origin to NT, 2001 and 2006
                             Visitor Nights by Origin of Visitor, 2001                                      Visitor Nights by Origin of Visitor, 2006



                                                        Intra-Territory                                                                Intra-Territory
                                                            13.2%                                                                          11.5%


                                                                                            International
           International
                                                                                               30.8%
              33.9%




                                                                      Interstate                                                                     Interstate
                                                                        52.9%                                                                          57.7%


          Source: Tourism NT (2006a)




                                                                                                                                                                           11
Northern Territory Tourism Strategic Plan 2008-2012



          Unlike the Australian experience, international visitation has weakened slightly in the NT.
          While international visitation has remained relatively stable in terms of contribution to
          total visitation, since 2001 the number of international visitors has declined by
          approximately 50,000 visitors. Since about 2003, the numbers and subsequently visitor
          nights spent by international visitors to the NT has stabilised and more recently grown.
          The Northern Territory Tourism Forecasting Panel forecasts average annual growth of
          2.1% to 2009 for both international holiday visitor numbers and nights.

          Figure 2.9: International Holiday Visitor Trends in NT, 1999 to 2006


                                450                                                           4000
                                400                                                           3500
                                350




                                                                                                     Visitor Nights ('000)
                                                                                              3000
              Visitors ('000)




                                300
                                                                                              2500
                                250
                                                                                              2000
                                200
                                                                                              1500
                                150
                                100                                                           1000
                                         Visitor nights
                                50       Visitors                                             500

                                 0                                                            0
                                      1999   2000   2001   2002   2003   2004   2005   2006

          Source: Tourism NT (2006a)


          The Territory has recorded growth in domestic visitors, which remain the largest source
          of visitor nights at 70%, despite a slowdown in domestic tourism growth across Australia.
          This has been mostly due to growth in domestic holiday visits to the NT in recent years; a
          positive reflection on recent Tourism NT marketing efforts.

          The outlook for the domestic tourism market is relatively static. Despite a continued
          increase in the number of domestic tourism trips being forecast, shorter stays will result
          in marginal growth in visitor nights, with an expected annual increase of 0.3% per annum
          to 2015. The Northern Territory Tourism Forecasting Panel forecasts a stronger outlook
          for the NT, with domestic market visitor numbers forecast to grow by 1.6% to 2009 and
          domestic visitor nights by 0.7% over the same period.

                             The NT tourism industry is forecast to record growth of
                               1.6% and 2.1% in domestic and international visitor
                            numbers, respectively, in 2009, comparatively faster and
                               slower rates compared with the Australian forecasts.




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Northern Territory Tourism Strategic Plan 2008-2012



          Figure 2.10: Domestic Holiday Visitor Trends in NT, 1999 to 2006


                                600                                                            4500

                                                                                               4000
                                500
                                                                                               3500




                                                                                                      Visitor Nights ('000)
                                400                                                            3000
              Visitors ('000)




                                                                                               2500
                                300
                                                                                               2000
                                200                                                            1500

                                         Visitor nights                                        1000
                                100
                                         Visitors                                              500

                                 0                                                             0
                                      1999   2000    2001   2002   2003   2004   2005   2006

          Source: Tourism NT (2006a)


2.2 Drivers and Influences
2.2.1 Variability in Demand

          The environment in which the tourism industry operates is constantly changing. Tourism
          demand is influenced by a substantial number of internal and external factors, including
          economic and social trends, broader tourism industry trends, infrastructure and access
          arrangements, labour and skills issues, marketing and promotion efforts, and research
          and innovation techniques.

          The introduction of low cost airlines to the Australian market and constant improvements
          to international air access arrangements have changed the dynamics of the tourism
          industry, both working for and against the NT, as have other trends such as improved
          information access, reduced leisure time, increased substitutability and the rise of the
          grey nomad market. Tourism NT has maintained an active marketing program and has
          developed branding tools to strengthen its marketing message.

          The movement of the Australian labour market toward full employment, along with a
          sustained commodities boom, has placed pressure on the industry to attract and retain
          skilled labour, particularly in regional locations, resulting in a number of acute skills
          shortages that threaten the viability of new and existing development. Innovation, which
          is essential to creating competitive advantage, currently remains limited in value-adding
          to core NT tourism icons.

          Tourism demand in the NT is subject to ongoing seasonal visitation fluctuations that
          parallel weather conditions. The result is a low point in visitation in the March Quarter
          (wet and/or hot) and a high point in the June/September Quarters (dry and cooler), with
          numbers fluctuating between 50,000 visitors in the low season and up to 300,000 visitors
          in the peak. All tourist destinations in Australia experience seasonality. However, the
          effect is pronounced for the NT, particularly in the Top End.

          Since 2000, the NT has experienced an overall decline in international visits – in line with
          a global reduction in international travel. This is attributed to poor traveller confidence
          with several years of weak global economic conditions, the commencement of large-scale
          terrorist activities, and world events such as the Iraq war, oil prices and the SARS
          outbreak. In 2005, there was a reversal of this trend, with an increase in the number of
          international visitors. However, the average length of stay of visitors to the Territory
          shortened.




                                                                                                                              13
Northern Territory Tourism Strategic Plan 2008-2012



            Figure 2.11: Visitor Trends to NT by Annum, 1999 to 2006




            Source: Tourism NT (2006f)


            The NT tourism industry’s tourism demand is impacted by a
            number of internal and external factors, including domestic,
                         international and seasonal tourism influences.
2.2.2 Global Drivers and Trends

            The following global trends are considered to be influencing travel behaviour in target
            international markets:

        •      Increased independence of the consumer: Consumers are more confident and
               experienced and expect information about travel destinations to be available globally.
               Major tools of the more confident tourist are comprehensive guide books and the
               Internet as an information source;

        •      Strengthening of the Internet: The Internet is increasingly used for holiday planning,
               information and booking travel. Industry no longer has a choice in continuing to adapt
               to the online world – it is essential to adapt simply to hold market ground;

        •      Change in traditional distribution networks: The travel distribution network has lost
               influence in mature markets. Online product distributors such as Travelocity.com,
               Expedia and ZUJI are evolving to remain relevant;

        •      Increasing substitutability of competitor destinations: Other Australian and
               international destinations are fighting to position themselves in the market as the
               “owners” of the iconic outback, nature and/or culture image;

        •      Social attitudes: Global social attitudes show a concern for health and well being, as
               well as a desire for personal fulfilment. Travellers are also concerned for the
               environment and are demanding socio-culturally acceptable and sensitive experiences.
               These should preferably involve interaction with the natural environment and
               indigenous cultures;

        •      Personalised itineraries: Personalised itineraries, once a niche market, are becoming
               increasingly popular at the expense of organised travel. Through the Internet, people
               are more confident to make their own plans;

        •      Demand for high quality/standard products and services at a competitive/low cost:
               Travellers are demanding better experiences at a lower cost as competition continues
               to raise the bar in the global tourist market. Skills shortages in the NT place additional
               stress on businesses competing on the international stage;




                                                                                                      14
Northern Territory Tourism Strategic Plan 2008-2012



        •       Trends to more frequent, short-stay holidays: Market data displays a decline in the
                average length of stay for holidayers, with analysis indicating more frequent, yet
                shorter trips being taken. It is hypothesised that the current climate of conflicting
                priorities – e.g. work schedules between spouses; children; work related priorities and
                finances – has catalysed this trend.

        •       Prices: This includes the price (or cost) of travel, destination prices, the cost per
                person (this is especially pertinent for family units) and other tour/travel associated
                costs and prices. The structuring of pricing – to reflect perceived value rather than
                simple cost plus, is crucial to competing with low cost destinations;

        •       Household income: The amount of disposable income in a family is correlated with
                demand for travel. Drivers such as interest rates and cost of living impact household
                expenditure affecting their capacity for leisure and travel. Household incomes are
                rising rapidly through much of the Asian markets in close proximity to the Territory;

        •       Exchange rates: The strength of the source country’s and destination country’s
                currency can greatly affect the cost of an international holiday. The Australian dollar is
                currently strong, in part due to the minerals boom, resulting in a loss of
                competitiveness for the NT and Australian tourism industries in some markets such as
                the US and Japan;

        •       Seasonality: Travel patterns are affected by seasonal influences such as weather,
                sports, events, public holidays and other such ‘seasonal’ periods. The NT, particularly
                in the Top End, has a strongly seasonal climate with a clear impact on domestic
                tourism. Key holiday periods do not necessarily match the best times to visit a given
                location. The major domestic summer holiday market is poorly represented in the NT
                (particularly Darwin) due to this time of the year being hot, leading to a perception of
                being uncomfortable and difficult to travel. This is exacerbated by the key attractions
                being outdoor, and relatively remote. However, for the international market the low
                season does allow visitors to escape the northern hemisphere winter;

        •       World events: Events including terrorism, natural disasters, health scares and many
                others can reduce the amount of trips that people travel internationally. These events
                are beyond control or influence and hence management can only be responsive; and

        •       Politics: Political factors in the source and destination country as well as the bilateral
                relationship can impact on the level of demand for travel. A clear-cut example is
                China, which only allows its citizens to be regular tourists in ‘Approved Destination
                Status' countries.

2.2.3 Domestic Drivers and Trends

            Demand drivers affecting domestic tourism on a continuing basis include:

            •    Prices: The price of a holiday is the major determinate of demand. Major costs are
                 airfares, accommodation and fuel. The high price of oil is a major deterrent for the
                 self-driver domestic tourist in the NT; although this sector has grown it would
                 certainly have grown more had oil prices not have moved to such high levels. Current
                 strong Australian exchange rates has also made overseas holidays more affordable to
                 the domestic market;

            •    Air travel availability and capacity: The collapse of Ansett in 2001 was the single
                 largest negative impact on travel to the NT. In recent times air travel to the NT has
                 become more readily available and economic with the introduction of airlines such as
                 Virgin, Jetstar and Tiger (November 2007). This change in the air travel market has
                 helped to even out the competition for tourists across Australia as distance becomes
                 less of a consideration in customer choice as the relativity of ticket price to
                 disposable income has reduced. However, it has also increased accessibility to
                 competing regional tourism destinations in Australia and Asia. A further issue
                 impacting the NT is the back of clock scheduling of flights with many occurring at
                 inconvenient times;




                                                                                                       15
Northern Territory Tourism Strategic Plan 2008-2012



          •   Information accessibility: Information technology and a suite of new popular travel
              guides has meant that customers can conduct extensive research and itinerary
              planning from home. This has further levelled the playing field between tourist
              destinations and reduced the power of travel agents to influence where holidays and
              visits are taken;

          •   Destination image: Negative media coverage of a destination impacts the
              attractiveness of the destination in the minds of the consumer. Nowhere is this more
              evident than the recent negative publicity surrounding health and child welfare in the
              Territory’s Indigenous communities which negatively impacts the significant
              opportunity offered with cultural tourism;

          •   Household income, assets and debt: The amount of disposable income is correlated
              with demand for travel. Drivers such as interest rates, asset prices and cost of living
              impact household expenditure affecting capacity for leisure and travel. Wages are
              continuing to increase rapidly in Australia, however higher interest rates and sluggish
              growth in property prices in the major cities is reducing consumer confidence;

          •   Interstate migration patterns: A large proportion of domestic tourism is associated,
              at least in part, with visiting friends and relatives. Regions in Australia that have
              strong population growth are also experiencing strong growth in domestic visitation,
              with flow-on benefits for regional tourist destinations and activities;

          •   Seasons: The NT has a highly seasonal climate that impacts tourism. Key holiday
              periods do not necessarily match the best times to visit the NT. The major domestic
              summer holiday market is poorly represented in the NT (particularly Darwin) due to
              this time of the year being hot and wet;

          •   Time availability: The amount of leisure time that people have away from work
              impacts on whether they are able to travel. Probably the most significant factor is the
              increased prevalence of double income families, which makes coordinating holiday
              time more difficult. Time restricted holidayers demand destinations where they can
              step off the plane and see sights and product immediately; and

          •   Business/government activity: The amount of business and government investment
              in a region plays a role in corporate travel demand. There is an opportunity for the
              NT to improve its destination image with corporate patronage generated by the
              current strong Territory economy and mining investment.

2.3 Performance and Growth
          The NT tourism industry’s performance has been sound over the past 5 years when
          considered in the context of global and national tourism market trends.

          Performance in recent times has stuttered due to a number of global tourism shocks.
          These shocks have especially affected the NT tourism industry due to its 30% exposure
          to the international market. Slower growth in the domestic market has further
          compounded the international effect, being affected in particular by the collapse of Ansett
          in 2001-02. While low cost carriers such as Virgin Blue and Jetstar have in time replaced
          many of seats lost from the Ansett collapse (the NT has iust reached the capacity it had
          prior to the Ansett collapse), these low cost carriers are not linked into global distribution
          networks (such as Qantas is) and their impact has mainly been limited to the domestic
          market.

          NT’s market share of national visitor expenditure has reduced marginally to 3% of
          domestic spend and 7% of international spend. On the plus side, average daily
          expenditure and yield from visitors is the highest of any state or territory – although
          international visitors reduce their overall yield with relatively short periods of stay in the
          NT.




                                                                                                     16
Northern Territory Tourism Strategic Plan 2008-2012



          Table 2.1: Market Share of Visitor Expenditure by State/Territory
                                     Interstate                                    International
                     $ million       Spend per       Avg Daily         $ million     Spend per Avg Daily
                                     visitor ($)                      Spend per      visitor ($)
            NT         $1,165            $1,145              $182          $383          $1,054    $135
            NSW       $11,569              $477              $138        $4,959          $1,809     $95
            VIC        $7,931              $458              $150        $2,494          $1,785     $83
            QLD       $11,149              $669              $150        $3,388          $1,579    $106
            SA         $2,583              $490              $133          $512          $1,481     $69
            WA         $3,979              $617              $141        $1,305          $2,101     $84
            TAS        $1,487              $732              $157          $211          $1,458     $73
            ACT          $822              $410              $147          $149            $962     $81
          Source: IVS and NVS, Tourism NT


                 Market share of domestic and international visitors has
                 dropped slightly to 3% and 7%, respectively, although
               average visitor expenditure (yield) is highest of all states
                  and territories, resulting in a higher share of revenue.
          Demand for accommodation (including both holiday and corporate market) in the NT has
          recently begun to grow again after a stagnant period following the global shocks to the
          tourism industry. In 2006 it is estimated that hotels with 15 or more rooms had 586,000
          room nights occupied with a further 456,000 room nights occupied in motels. Demand for
          hotel rooms in the NT was particularly strong during 2006 compared to the rest of
          Australia. Room occupancy, at 71.3%, was slightly higher than rates achieved in
          Queensland and Australia as a whole. Bed occupancy was 41.7% during the year –
          slightly higher than Queensland though lower than Australia.

          There have been strong increases in air passenger numbers through the Darwin Airport,
          though there have been clear falls in arrivals to the regional airports of Alice Springs and
          Ayers Rock. Cruise shipping demand has increased sharply (by more than 70%) over the
          past two years, with cruise ship visits increasing to 31 in 2006 from just 14 in 2004. Rail
          services on The Ghan have doubled since establishment in early 2004.

          From an operator perspective, the experience of tourism businesses in the NT is reported
          as largely positive. A survey conducted in 2007 indicated that over the past 5 years, 77%
          reported an increase in sales and 57% an increase in profitability. Business confidence for
          the future is also high with 76% expecting sales to increase and 68% expecting
          profitability to increase. The positive operating climate and confidence has translated into
          63% of businesses reporting increased capital expenditure over the past 5 years and
          58% expecting an increase over the next 3-5 years.


          Figure 2.12: “What have been the trends in your business over the past 5 years in the
          following areas?” (NT Tourism Operators)

                                    DECREASE     STAY THE SAME       INCREASE

             100%

              90%
              80%
              70%
              60%

              50%
              40%
              30%
              20%

              10%
              0%
                        SALES        EMPLOYEES      PRICES       PROFITABILIT     CAPITAL
                                                                 Y              EXPENDITURE
          Source: AECgroup (2007)




                                                                                                           17
Northern Territory Tourism Strategic Plan 2008-2012




                  Air passenger numbers are up, rail demand has doubled,
                      accommodation occupancy compares well to national
                 benchmarks and business performance has been positive.

            Figure 2.13: “Over the next 3-5 years, do you expect your business to experience an
            increase, decrease or stay the same for each of the following?” (NT Tourism Operators)

                                      Decrease      Stay the Same      Increase

               100%

                90%

                80%

                70%

                60%

                50%
                40%

                30%

                20%

                10%

                 0%
                          S ales       Employees         Prices     Profitability       Capital
                                                                                      Expenditure

            Source: AECgroup (2007)


2.4 Labour and Skills
            The tourism industry is service-based and therefore labour intensive. Labour represents
            the most significant variable cost to operators, as such the productivity and availability of
            workers significantly influences the competitiveness of the tourism industry and the yield
            of tourism enterprises.

            During 2003/04 it is estimated that there were approximately 12,845 people directly
            employed in the NT tourism industry, equating to 8.7% of all employed people in the NT.

            The largest tourism related employer is the Retail Trade sector with over 2,200
            employees, or 17.4% of all people employed in the NT tourism industry. Other sectors
            with significant employment are Air & Water Transport and Accommodation, accounting
            for 15.7% and 14.5% of NT tourism employment, respectively.

            Table 2.2: Employment in the NT Tourism Industry, 2003-04
              Industry                                                          Direct        % of Tourism
                                                                            Employees         Employment
              Retail Trade                                                       2,235               17.4%
              Air & Water Transport                                              2,017               15.7%
              Accommodation                                                      1,863               14.5%
              Travel agency & Tour Operators                                     1,708               13.3%
              Other Tourism Characteristic & Connected Industries                1,040                8.1%
              Cafes & Restaurants                                                1,002                7.8%
              Road Transport & Motor Vehicle Hiring                                899                7.0%
              All Other Industries                                                 809                6.3%
              Other Entertainment Services                                         758                5.9%
              Clubs, Pubs, Taverns and Bars                                        514                4.0%

              Total                                                                 12,845          100.0%
            Source: CRC for Sustainable Tourism (2007)


            The workforce of the tourism industry is characterised by:

        •       Demographics: The tourism workforce is young relative to other industry sectors.
                Statistics from the ABS (2005) in the March Quarter 2005, indicate more than 35% of
                employees in the Accommodation, Cafes & Restaurants and Retail Trade sectors are



                                                                                                             18
Northern Territory Tourism Strategic Plan 2008-2012



              aged between 15 and 24 years, more than double the all-industry average. The
              median age of the NT is 31 years which is younger than the national average of 35;

        •     Employment Arrangements: Casual and part-time employment is prominent in the
              tourism industry, with this type of employment increasing as a proportion of total
              employment over the past decade. The seasonality of the tourism industry contributes
              to this trend. Difficulties in attracting local labour means that backpackers are often
              employed during peak season to meet demand;

        •     Skill Levels: The tourism industry is characterised by a high proportion of occupations
              requiring minimal skills and training. As expected, the tourism workforce
              demonstrates a lower qualification profile compared with the all-industry average;

        •     Labour Mobility: Research suggests high staff turnover is a feature of the tourism
              industry. Tourism employees exhibit a higher tendency to switch between jobs both
              within and outside the industry when compared with other workers. The casual and
              part-time nature of many work positions, the seasonality of the industry, the
              competitiveness for good staff and the high share of jobs not requiring formal
              qualifications all contribute to this result. In 2005 over 50% of accommodation, cafes
              and restaurants in the NT reported rates of staff turnover of 20% or more;

        •     Seasonality: The profound wet and dry season in the Top End impacts heavily on
              tourism and employment. During peak tourist season many jobs are filled by
              backpackers as they are able to provide more flexibility and are therefore more
              attractive to employers; and

        •     Training: The most common forms of training provided by employers in the tourism
              industry are non-accredited on-the-job and in-house training, whereby workers learn
              informally from co-workers while doing their job. A large proportion of tourism firms
              are micro-businesses meaning that they do not have the size to be able to carry out
              accredited training in-house. In 2005, 6% of all training courses were involved in
              hospitality courses in line with the comparative size of the tourism industry in the NT.

            Skills shortages are generally likely to be more prevalent during periods of strong
            economic growth (or economic boom times). With Australia recording relatively strong
            and sustained economic growth for the major part of the past decade, skills shortages in
            general have increased across all industry sectors, including tourism. However, the
            causes of skills shortages in tourism are different in nature to other service industries.

            The NT is experiencing labour shortages in many industries, including tourism-related
            sectors. The NT Department of Employment, Education and Training (DEET) have
            identified the following tourist related occupations as suffering from territory-wide labour
            shortages and recruitment difficulties in 2006 – hospitality middle and upper
            management, hospitality staff, chefs, pastry chefs, cooks, tour guides and sales
            assistants.

              Skills shortages represent a major challenge for the future
                    sustainability of the NT tourism industry, particularly
                        attracting and retaining labour in regional areas.
2.5 Investment
            Several projects are currently being undertaken in the NT that will boost the tourism
            industry. Private sector and Territory Government investment, as well as partnerships,
            form the basis of investment in transport infrastructure, resorts and accommodation.

            The value of non-residential building approvals has increased significantly in the NT. The
            value of non-residential building approvals in 2005/06 totalled $274 million (of which
            $113 million was accommodation). This was over $160 million higher than 2004/05; an
            increase of 149.7%. Australia produced growth of 26.9% in the same period.




                                                                                                     19
Northern Territory Tourism Strategic Plan 2008-2012



          Table 2.3: Value of Non-Residential Building Approvals, 2005/06
                                              NT                                Australia
                               Entert. &               Total Non-   Entert. &                Total Non-
                                     Rec Accomm       Residential        Rec Accomm         Residential
          2000/01 ($000)        $25,508 $10,787           $96,206   $688,470 $442,560        $9,529,091
          2004/05 ($000)        $16,487 $7,330           $109,740   $630,017 $1,363,378     $15,807,676
          2005/06 ($000)          $4,853 $113,494        $273,978   $903,649 $1,243,952     $20,065,840
          00/01 - 05/06          -70.6%1,448.3%           149.7%       43.4%      -8.8%          26.9%
          04/05 - 05/06          -28.2%    60.1%           23.3%        5.6%     23.0%           16.1%
          Source: ABS 8731.0


          The most significant tourism related project being undertaken in the NT at present is the
          $1.1 billion Darwin Waterfront Development. The project includes an upgrade of both the
          sea freight and cruise shipping precincts. Being undertaken in several phases, the cruise
          shipping waterfront quarter at completion will include the Darwin Convention Centre - a
          1,500 seat auditorium and 4,000 sq metres of exhibition space, suitable for international
          and national conventions and exhibitions, community leisure and recreation facilities
          including an impounded water body, sea wall, wave lagoon, safe swimming area, public
          promenade, children’s playground, open performance areas, parklands and picnic areas,
          241 rooms spread across a hotel and serviced apartments and harbour side cafes and
          restaurants.

          In terms of transport infrastructure, the Airport Development Group has developed the
          Master Plan 2004-2024 for Darwin Airport and Alice Springs Airport that plans to invest in
          the expansion of both airports. Future investment to meet increased passenger numbers
          will include expansion of apron and parking facilities to cater for more aircraft and larger
          planes as well as redevelopment of the terminals. The rail network that connects Adelaide
          with Darwin via Alice Springs is used by the Ghan train and is at a current level that will
          only require small upgrades and investment in the medium term. The NT and Federal
          Governments are spending large amounts of money in completing road projects in the
          Territory. Major road projects that will benefit tourism include:

               •    $10.5 million ongoing for the Red Centre Way
               •    $45.9 million ongoing for the Victoria Highway
               •    ongoing upgrading of the Litchfield loop road

          The Darwin Airport Resort was opened in May 2005 after the airport made land available
          in 2004. An investment of $9.8 million was made in constructing the 130 room resort.
          High demand in the first year has led to the resort expanding by an additional 70 rooms.
          Planning and approval has been given for the development of a tropical resort at ‘Little
          Mindil’ in Darwin. The NT Government has chosen the Sky City Entertainment Group
          (SCEG) as the preferred developer. SCEG has put forward an offer of $6.6 million for the
          land with a plan to build a 122 room, 5 star tropical resort and redevelop and incorporate
          the adjacent casino. There are number of potential resort developments that are in the
          early stages of planning. These resorts are intended for regional areas such as Katherine,
          Alice Springs and within Kakadu National Park.

          Many smaller projects are being undertaken throughout the Territory in an effort to build
          tourism infrastructure. These projects are diverse and include natural sites and new
          attractions. There are plans by the Territory Government to build a museum to
          commemorate WWII and the role that Darwin played. Still only in the early stages of
          planning, the museum would also likely include a WWII heritage trail passing major
          historical sites in Darwin. Other tourism infrastructure investments outlined in the NT
          Budget 2006 include $1 million to improve Nitmiluk National Park, $1.1 million to
          upgrade Fisherman’s Wharf, $800,000 for ongoing work for the West MacDonnell Ranges
          Visitor Centre and $500,000 for the Hidden Valley upgrade – the venue for the NT V8
          Supercars series.




                                                                                                    20
Northern Territory Tourism Strategic Plan 2008-2012



            Investment in the NT tourism industry is increasing rapidly
             in the areas of accommodation, transport and attractions,
                both in metropolitan and regional areas, although there
              remain a number of investment challenges for the future.




                                                                     21
Northern Territory Tourism Strategic Plan 2008-2012




3 Planning for the Future
3.1 SWOT Analysis
3.1.1 Strengths

        •    Major natural tourist attractions – The NT features a range of naturally occurring,
             significant and internationally recognised tourist attractions, including Uluru (Ayers
             Rock), and Kakadu National Park, two of Australia’s iconic landmarks.

        •    Recognition as a true “Outback” experience – The NT has developed a strong market
             image as a true Australian “Outback” experience.

        •    Recent level of investment in major tourism infrastructure such as the Darwin
             Waterfront and Kakadu.

        •    Association with nature and adventure experiences – The NT has developed strong
             market recognition as a nature-based and outdoor adventure tourism destination.

        •    Cultural aspects – The NT has a unique and long established Indigenous history and
             culture as well as a unique contemporary culture.

        •    Climate – The NT provides a relatively warm and dry climate during the winter season,
             which is a welcome escape for both international and domestic tourists. The summer
             season is also attractive for international tourists escaping the northern winter.

3.1.2 Weaknesses

        •    Lack of diversity of tourist experience – The NT tourism industry is heavily reliant on
             nature-based and outdoor adventure tourism experiences, limiting its target market to
             this segment of the total tourist market. Additionally, tourism products are heavily
             skewed towards major attractions in a few geographic locations, with limited tourism
             options and experiences available in many regions of the NT. The lack of choice
             reduces the attractiveness of the NT in relation to alternative holiday destinations. In
             addition there is a distinct shortage in the luxury product category.

        •    Reliance on nature/natural attraction tourist destinations – Other regions, both
             domestic and international, feature a range of unique natural attractions with high
             quality nature-based and outdoor adventure experiences that compete strongly with
             the NT in this tourist market segment.

        •    Access constraints – Air and road access to the NT is constrained both domestically
             and internationally due to its geographic isolation from major source markets. Access
             by air is constrained by relatively few direct international flights to the NT compared to
             major cities along the east coast of Australia while road access is constrained by the
             lack of all weather roads. Additionally, the NT is widely dispersed, with relatively poor
             connections between major tourism destinations.

        •    Fragmentation of tourism industry – The NT tourism industry comprises a large
             number of small businesses with minimal linkages. As a consequence, the NT lacks a
             critical mass of networked tourism-focussed businesses to mobilise and generate
             economies of scale and scope within the industry. This is in comparison to competitors
             such as Queensland with a large number of tourism-focussed businesses that are
             mobilised, specialised and locally linked.

        •    Seasonality of the industry – The visitor flow to the NT is concentrated in the cool
             season (May to October) when conditions are cooler and roads are easier to travel.
             The low level of business in the wet season impacts cash flow and staffing.

        •    Social perceptions of the NT – Negative perceptions of the NT through the media
             highlighting issues in the NT’s remote communities in particular are negatively
             impacting on the image of the NT as a positive destination.



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Northern Territory Tourism Strategic Plan 2008-2012




        •    Indigenous engagement – Many of the NT’s Indigenous communities remain highly
             disadvantaged in terms of health, education, infrastructure and general participation in
             the economy. An inability to engage the Indigenous community is a weakness for
             many sectors of the NT, including the tourism industry.

        •    Constraints to investment – Ensuring the quality of products, services and
             infrastructure provided in the NT is important to increase visitor satisfaction and
             amenity. This includes, but is not limited to, safety standards, quality of information
             and services provided by tourist businesses, transport infrastructure, accommodation
             and access to icons and destinations. However, due to the fragmented nature of the
             tourism industry, as well as the large size and widely dispersed nature of the NT,
             investment to deliver these outcomes is somewhat constrained.

3.1.3 Opportunities

        •    Increasing inbound travel from Asia – The NT is relatively close to major source
             markets in Asia, which has a very large population base with increasing disposable
             income and is forecast to continue strong economic growth. As a result, countries such
             as China, India and South Korea are identified as emerging markets and are expected
             to be major contributors to global increases in tourist numbers.

        •    Opportunity to develop a reputation in the NT for innovative, unique, luxury,
             indulgent, experiential product. The NT already boasts a number of unique tourism
             products and has developed significant experience with the spirited traveller and
             experience-seeker tourist. The opportunity is to take this further and better
             differentiate the NT from competing destinations.

        •    Indigenous tourism integration – The NT has a unique and long established Indigenous
             history and culture. However, there is a distinct and noticeable lack of integration of
             Indigenous culture and involvement in the NT tourism industry. There is a significant
             opportunity to develop tourism with the Indigenous people, their lands, culture and
             art, in order to provide authentic Indigenous cultural experiences catering to the
             growing demand in this market segment.

        •    Diversification of tourism destinations – The iconic landmarks of Uluru and Kakadu
             dominate consumer perceptions of tourism in the NT. There is an opportunity to
             expand the tourism market to other areas by building on the unique cultural,
             agricultural and outback characteristics of these regions. However, many areas of
             potential tourism attraction in the NT are currently inaccessible and improved roads
             and access arrangements will be required to increase the product availability in the
             NT. Many of these areas depend on engaging the Indigenous workforce.

        •    Expansion and packaging of tourism experiences – Opportunities exist to develop
             alternatives to iconic tourism products and expand the range of tourism experiences,
             including aquatic, nature, historical, cultural, recreational and food tourism based
             activities. This would also provide an opportunity to enhance the link between tourism
             and other industries such as agriculture, manufacturing, accommodation, cafés and
             restaurants, and cultural and recreational services, as well as promote the NT’s unique
             characteristics to outside markets and broaden the identity of the NT.

        •    Improving transport infrastructure and linkages – Currently one of the major
             constraints to growth in the tourism industry relates to access limitations. Upgrades
             are required to road and air transport infrastructure and services to increase tourism
             capacity. Potential upgrades include road infrastructure enabling all weather access to
             the NT, expanded road (and potentially air and rail) infrastructure enabling access to
             more remote areas of the NT, particularly those with cultural and nature-based
             tourism potential and enhanced linkages between transport modes and destinations,
             which will decrease travel times and improve tourism connectivity and coordination.

        •    Developing the summer/wet season market – The NT tourism industry is currently
             highly seasonal in nature, impacting negatively on business profitability and
             sustainability, skilled labour attraction and retention, and investment attraction. In




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Northern Territory Tourism Strategic Plan 2008-2012



             order to smooth seasonal effects, there is an opportunity to examine strategies for
             extending the shoulder season and attracting visitors during non-peak periods.

        •    Developing business tourism – The MICE market, including out of Asia, has significant
             potential for the NT as the tourism industry develops the infrastructure and skills to
             cater to these travellers.

        •    Development of the cruise ship industry – The cruise ship industry in Australia is
             growing at rates of 10% per annum and given the NT’s location there is considerable
             growth potential for the sector. Significant investment in specialised infrastructure and
             facilities is underway – the challenge will now move to maximising visitation by
             building the attractiveness of Darwin as a port of call.

        •    Increasing the number of return visitors – The reliance on sightseeing icons for the NT
             tourism industry can result in a low return visit rate. The industry needs to better
             convert patronage to icons into return visitors by providing a wider range of
             experiences and destinations, as well as more activity and adventure based options.

3.1.4 Threats

        •    Competition for the ‘Real Outback’ image – The NT has been successful with its
             campaign to associate the Territory with the ‘Real Outback’ experience. Other regions
             of Australia, such as Western Queensland, NSW and the Kimberly, are increasingly
             attempting to position themselves as the ‘Real Outback’, providing greater competition
             in this segment.

        •    Levelling of the global tourism market – The global tourism market has become more
             open, with improved access to a larger number of destinations. This has increased
             competition between destinations competing in similar target market segments. Low
             cost carriers are operating an increasing number of services from key NT source
             markets to international and domestic destinations with highly competitive product.
             Additionally, the increasing ease of research and booking (internet) has improved the
             competitiveness of destinations with little collateral for market development. The new
             breed of tourist is becoming more adventurous and will equally seek out an experience
             in a relatively undiscovered part of a developing country as they will a package to the
             NT promoted by a travel agent.

        •    Skills and staff shortages – Australia, particularly regional Australia exposed to the
             resources sector, is facing critical skills shortages. Combined with the seasonality of
             tourism, the forecast decline in backpackers and the generally lower pay of tourism
             jobs, the NT tourism industry is in danger of being severely constrained by skilled staff
             availability. This could potentially result in deteriorating service levels and could
             adversely impact the market reputation of the NT tourism industry.

        •    Increasing travel expenses – Increasing expenses such as the costs of fuel and
             accommodation have resulted in travel becoming less affordable in Australia in recent
             years. While fuel prices are not forecast to continue to rise in the medium term,
             pricing carbon emissions will further increase the cost of travel.

        •    Continued rise of the Australian dollar – Further strength in the Australian currency
             would impact key international markets, particularly those which are most likely to see
             their currencies fall further such as the USA and Japan.

        •    Carbon intensity – The NT’s core markets in Europe, North America and Australia are
             increasingly concerned about the sustainability and carbon intensity of their travel
             decisions. With the NT a long distance from its core markets, and with large distances
             between attractions within the NT, increasing concerns regarding the carbon intensity
             of travel will hurt the NT tourism industry harder than many other destinations.

        •    Climate change – A warmer climate may impact on the attractiveness of many of the
             NT’s iconic natural sites and also extend the off-season in summer. Kakadu is also
             understood to be at risk of major saltwater intrusion into its world-heritage wetlands
             following relatively small sea level rises.




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Northern Territory Tourism Strategic Plan 2008-2012



        •     Increasing global event risk – Threats of global events such as terrorism and health
              scares have increased, making the outlook for international tourism more volatile.

        •     Rising interest rates – Recent increases in interest rates in Australia have resulted in
              an increase in the cost of accessing capital and repayment of loans, decreasing
              domestic consumers’ disposable income and ability to access capital. This reduces
              consumer ability to make discretionary purchases, such as holidays.

3.2 Key Issues
            The NT tourism industry continues to face significant challenges, both new and old:

               •   Seasonality – The NT tourism industry is highly seasonal in nature as determined
                   by the wet and dry seasons. The highly seasonal nature of the industry impacts
                   on long-term industry sustainability, with key issues including:
                   o Ability of tourism operators to cope with demand during peak periods;
                   o Business profitability and cash-flow during low demand periods;
                   o Ability to attract and retain skilled labour due to seasonal demand effects;
                        and
                   o Ability to attract investment in the industry, particularly key infrastructure.

               •   Business profitability and cash-flow during low demand periods impacting:
                       •  Ability of tourism operators to cope with demand during peak periods;
                       •  Ability to attract and retain skilled labour due to seasonal demand
                          effects; and,
                       •  Ability to attract investment in the industry, particularly key
                          infrastructure.

               •   Engaging Indigenous people – Indigenous people present a potential long-term
                   resource and asset to the NT tourism industry. Around 30% of the NT’s
                   population is Indigenous and Indigenous people control nearly 50% of the NT’s
                   land. The NT tourism industry will not develop to the its full potential without
                   strong participation from the Indigenous population. Internationally, there is
                   great interest in experiencing and learning about the multitude of traditional
                   customs and lifestyles in the NT. Tourism is one of the few industries that can
                   provide significant sustainable economic opportunities for Indigenous
                   communities in some of the remote areas of the NT.

               •   Lack of collaboration – Other than for joint marketing or distribution, tourism
                   businesses in Australia are below average in terms of collaboration. Greater
                   cooperation and collaboration between the NT Government, tourism associations,
                   and businesses in the tourism industry is required in order to improve the
                   efficiency and profitability of the NT tourism industry, as well as enhance tourism
                   experiences and increase the attractiveness of the NT as a tourism destination.

               •   Climate change - The issue of climate change brings with it three main areas of
                   risk to the NT tourism industry. The first is that the NT already suffers from
                   severely reduced visitation during the warmer parts of the year and an overall
                   increase in temperatures is likely to increase the season for which many tourists
                   chose to avoid the NT. Secondly, even relatively small rises in sea levels will
                   impact some of the NT’s most valuable natural assets, most notably the wetlands
                   of Kakadu. Thirdly, as consumers become more carbon conscious and carbon
                   taxes become a reality long haul travel destinations will become less attractive.
                   The NT tourism experience is both a relatively long distance from its major
                   markets and involves travelling relatively long distances once within the NT.

               •   Growth of the learning / cultural tourist market niche – Market trends in the most
                   mature tourist markets is toward a stronger interest in cultural experiences and
                   destinations that provide learning opportunities. This niche is seeking genuine
                   experiences that provides contrast to experiences at home. The challenge for the
                   NT is to leverage its uniqueness and differences to provide a compete for the
                   domestic traveller who is increasingly choosing overseas destinations for their
                   greater contrast in experiences and cultures.




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Northern Territory Tourism Strategic Plan 2008-2012




              •   Accessibility – Given the NT is a widely dispersed region, significant transport
                  infrastructure is required to provide access to key tourism destinations in the NT
                  and facilitate growth. Air transport is particularly important to travel the
                  considerable distances involved, as is road infrastructure to accommodate local
                  and intra-regional travel and the self-drive market.

              •   Skills availability – The tourism industry is highly labour intensive. The
                  productivity    and   availability  of   workers    significantly influences   the
                  competitiveness of the tourism industry and the yield of tourism enterprises. With
                  Australia currently experiencing relatively strong and sustained economic growth,
                  skill shortages have more-or-less increased across all industry sectors, including
                  tourism. This is impeding the industry’s ability to take advantage of demand
                  growth. Further, the highly seasonal nature of tourism (and therefore demand for
                  labour) is a deterrent to business to invest resources in providing training to
                  employees to build capacity and increase efficiency. There are several factors
                  particularly relevant to the NT that currently impede the supply of labour and
                  skills including the spread of tourism in the regions, seasonal nature of the
                  industry, lack of tourism training and investment and a low participation rate of
                  the Indigenous workforce.

              •   International competition – The international tourism market is highly
                  competitive. Increasing accessibility to competing destinations and the current
                  strong Australian dollar is providing tourists with new experiences at lower prices,
                  particularly those in developing countries. As a result, Australia cannot generally
                  compete on price, and therefore needs to look at other strategies to attract
                  visitors such as high levels of product differentiation, targeting of less price
                  sensitive market segments, and a larger investment in research and innovation,
                  sales and marketing.

              •   Development of growth tourism markets – In order to position the NT as a tourist
                  destination of choice it is necessary to cater for the experiences that will attract
                  visitors in key growth and emerging markets, and position the NT as a viable
                  alternative to overseas travel for Australians. Key emerging markets that the NT
                  is well placed to accommodate include authentic, socio-culturally acceptable and
                  sensitive experiences, eco-tourism and nature-based holidays, rest and
                  relaxation, and wellness and health holidays and sports and adventure holidays.

              •   Land-related barriers: A significant proportion of land in the NT is subject to
                  National Park and Native Title regulations. This leads to complex procedures in
                  order for the land to be developed under the Aboriginal Land Rights (NT) Act
                  1976 and the Native Title Act 1993. There is also a lack of incentive for
                  development occurring on Aboriginal land resulting in investment being below
                  optimal levels. In addition the tenure arrangements on pastoral land do not
                  encourage tourism investment. A significant portion of the NT’s major tourist
                  attractions are National Parks and other protected regions (including pastoral
                  leases). Yet these are also the areas where the demand for new tourist
                  accommodation is at its highest. The length of tenure available for leasehold land
                  in national parks and native title land is a severe impediment to investment.

              •   Investment in transport infrastructure – A lack of air capacity into the NT has
                  meant that airport expansions have not always been a priority. Heavy regulation
                  in the industry has been damaging to the NT, such as the Australian Government
                  determining who can fly international routes into Australia through bilateral Air
                  Services Agreements. Encouragingly, the Federal Government is moving to relax
                  these regulations. The extensive nature of the NT means investment in
                  developing roads is very expensive relative to the population that it will serve.
                  Private investment in roads is very limited with low traffic volumes making toll
                  roads unviable. The sparse nature of the NT population makes further investment
                  in the passenger rail network unviable. Further investment would have to be
                  freight driven as there is insufficient passenger demand to attract additional
                  investment;




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Northern Territory Tourism Strategic Plan 2008-2012



              •   Cost or availability of finance – The cost and availability of finance is a barrier to
                  investment by the tourism industry, particularly in regional areas, and in areas
                  where financial institutions may have had poor experiences in the past. Some of
                  the investment constraints are institutional-related with a lack of foreign
                  investment into the Territory especially in the accommodation sector, tax-related
                  arising from the lack of tax benefits to attract tourism investments in the NT and
                  remoteness-related given a significant proportion of tourist attractions in the NT
                  are in remote regional locations with a lack of infrastructure making investment
                  less attractive. Overcoming this impediment will require continual lobbying for
                  change.

              •   Widely dispersed industry – The tourism industry is spread across the NT with a
                  large proportion of businesses in regional areas. While this provides greater
                  diversity in product choice, it also creates issues in terms of industry
                  coordination, infrastructure and service provision, and labour attraction and
                  retention.




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Northern Territory Tourism Strategic Plan 2008-2012




4 Markets
          Tourism NT has made a strong impact with the adventure-seeking segments of the
          tourism market, categorised domestically as ‘Spirited Travellers’ and internationally as
          ‘Experience Seekers’. This resulted from a key evolution in marketing strategy from
          Tourism NT that identified markets as co-existing sub-groups of similar minded travellers
          rather than uniform markets within geographic boundaries. The contemporary ‘Share Our
          Story’ market campaign is targeted at these Spirited Travellers and Experience Seekers
          in Australia, North America and Europe.

          The current approach to the NT’s tourism markets remains fundamentally correct for the
          foreseeable future, it is for example well placed to target the rapidly developing cultural
          tourist segment. However, markets will continue to evolve and Tourism NT must respond.
          Some key directions for Tourism NT outlined below include tackling domestic residents
          increasing willingness to travel overseas instead of to the NT; long-term positioning of
          the NT to benefit from Asia, with its rapidly growing wealth and ease of access to the NT;
          meeting rapidly growing demand in most of the NT’s core markets for authentic cultural
          products and sustainable experiences; responding to change in the backpacker traveller
          and improving the attractiveness of the NT to the key nature-based tourists.

4.1 Stages of Market Development
          The NT tourism industry’s history is of presenting itself to the market as the ‘Real
          Outback’ – a destination of natural wonders, iconic national parks and the quintessential
          Australian experience. It has never been a destination that could trade on the traditional
          proven formula of ‘Sun and Sand’. The NT’s nature image is well established in the
          market place, but increasingly under competitive pressure from other destinations in
          Australia and overseas that offer a high level of natural amenity while being able to
          provide a greater level of infrastructure and service.

          For the NT tourism industry to continue to grow and prosper, it must continually evaluate
          its existing markets and look to new markets for development potential. It must also
          respond with its product offerings as tourist markets evolve in terms of the type of
          experiences that they most value and seek.

          As tourism markets develop over time, they tend to move through stages where the main
          growth in the market is looking for a certain type of tourist experience. A classification of
          the stages of evolution in tourism market development since the emergence of modern
          tourism in the 1950s is presented in Table 4.1.

          Table 4.1: Stages of Tourist Market Development
                                             Description                             Period of First Emergence in
                                                                                     Australia
           Tourists as Tourists
               Stage 1 - Products &          Holiday as pre-packaged rewards for                 1960’s
               Activities, Places & Things   hard work and sharing the icons of
                                             successful development.
               Stage 2 - Service             Holiday as a reward / opportunity for               1970’s
               Differentiation, Niche        indulging your passion and fulfilling
               Indulgences                   your interests and pursuits.
           Tourists as Travellers
               Stage 3 - Products &          Holiday as an escapist active                       1980’s
               Emotions, Exhilaration and    adventure with high intensity
               Adventures                    emotions (e.g. excitement).
               Stage 4 - Experiences:        Tap into local knowledge/culture.                   1990’s
               Learning, Authenticity &      Holiday as an opportunity to learn &
               Sustainability                be engaged - self-actualisation.
                                             Environmental and sustainability
                                             considerations rate highly.




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Northern Territory Tourism Strategic Plan 2008-2012



                                               Description                             Period of First Emergence in
                                                                                       Australia
               Stage 5 – Currently Unclear     Increased demand for special interest               2000’s
                                               needs and rarity.
                                               Increased visiting friends and
                                               relative’s travel with people better
                                               linking up across the world through
                                               better communications.
                                               Rise of Hipublicans / Southpark
                                               Generation / College Conservatives
                                               (mostly less than 18 at present):
                                               rational, somewhat selfish, seek
                                               authenticity and highly sceptical of
                                               any extreme or overly marketed
                                               position. Largely happy or accepting
                                               of the world as it is.
          Source: Adapted from McEwan (2007)


          Tourist markets do not completely shift away from previous stages, rather those stages
          stagnate or decline somewhat as demand in the new stage develops. Hence, the early
          stages (Stages 1 to 3) still present significant niches in a mature market such as
          Australia, although they tend to be well catered for by existing developments, and offer
          little prospect of real growth.

          The early stages should not, therefore, be mistaken as being irrelevant, even for the
          furthest developed markets. It is typically the case that the consumer firmly seeking
          Stage 4 type product simply expects Stage 1 to 3 products to be in place, and will be
          disappointed or even surprised if they are discovered to be lacking. For example the
          nature driven tourist may still expect to stay in the resort on the beach. The difference is,
          they are selecting destinations on the basis of nature experiences and expecting the
          resort to also be there, rather than selecting the destination on the basis of having a
          good resort, and largely not caring about nature experiences. In truth, the ‘Sun and
          Sand’ tourism of Stage 2 is still the most reliable drawcard in the global tourism market,
          even if marginal growth in this segment is low compared to the newer tourism drivers.

          Stage 4 offers tremendous potential for the NT, with its base of authentic Indigenous
          knowledge and culture that is significantly unique from other products in the world. While
          this product will be difficult to develop, the cultural tourism segment is currently very
          strong, with growing demand in high yield (mostly developed country) markets. The NT
          has the potential to ‘own’ the Indigenous tourism reputation in a stronger way than it
          ‘owns’ the ‘Real Outback’.

          Broad tourism market trends are often difficult to clearly identify as they form. The most
          mature markets, including Australia are well into the 4th stage. Interest in fun and
          adventure holidays is stable or decreasing while interest in culture, sustainability and
          learning is strong. The next stage (Stage 5) is as yet not clear; although speculation on
          which trends will emerge as the dominant drivers of new travel patterns is widespread.

4.2 The Domestic Market
          Tourism NT has previously conducted extensive market segmentation studies of the
          domestic market. This has resulted in the identification of the ‘Spirited Traveller’ market
          segment as the best fit for the NT tourism product.

          Spirited travellers represent the best target market for the NT because they:

               •    Prefer interactive travel experiences to passive holiday;
               •    Typically seek opportunities for personal growth and transformation;
               •    Tend to crave physical or psychological challenges;
               •    Generally spend more than $1,600 per trip;
               •    Usually travel without children, or with children aged over eight years; and,
               •    Are more likely than other Australians to visit the NT.

          In the market stage model spirited travellers are best represented by stage 3 and early
          stage 4 needs. Tourism NT has built significant experience in targeting the Spirited



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Northern Territory Tourism Strategic Plan 2008-2012



          Traveller segment and should continue to target this segment as it fits very well with the
          NT tourism product. However this market segment is evolving and the market stage
          assessment model provides an indication as to how this segments needs are evolving.
          The NT has considerable assets to develop product to continue to meet the needs of this
          segment as it evolves.

          TRA, in their report Changing consumer behaviour: Impact on the Australian domestic
          tourism market (2007) identify the following incentives as driving domestic tourists travel
          decisions:

          •   The need to relax / recharge and pamper themselves (Stage 2);
          •   To have a break from the routine of everyday life – put life into perspective (Stage
              3);
          •   To indulge a particular interest (Stage 2 and possibly, for particularly specialised
              interests, Stage 5); and
          •   To gain new and diverse experiences – to learn and grow as a person (Stage 4).

          The need to relax / recharge and pamper is associated with shorter holiday breaks.
          This is not an area where the NT currently looks to have a competitive advantage in its
          product offering. Although the NT is not strongly associated as a luxury / indulgence
          location it still requires developments that cater to this market.

          The have a break from the routine of everyday life – put life into perspective is a
          market need that the NT can target by playing on its outback / desert spirituality. The
          current ‘Share Our Story’ campaign plays to this need.

          To indulge a particular interest is an area where the NT is well recognised for several
          pursuits, such as fishing, hunting, bird watching, hiking and 4-wheel driving. The NT has
          a strong product to push for these categories, however does not appear likely to fill a
          wider range of special interests in the short to medium term.

          To gain new and diverse experiences – to learn and grow as a person – is where
          the NT Tourism industry has the greatest potential to differentiate itself in the domestic
          market. Key to this message is presenting the NT as offering experiences as different
          and valuable as those that can be found by travelling overseas.

          Looking forward to the next 5 years the following factors are thought likely to also
          increasingly drive domestic demand:

          •   Sustainability: Australians are increasingly concerned about the sustainability of
              their actions. This may result in reduced demand for high carbon emitting long haul
              travel in favour of options nearer to home. Already, destinations that are able to
              position themselves as eco-friendly, sustainable or carbon-neutral are more attractive
              to significant segments of the market;

          •   Carbon Pricing: It appears almost certain that Australia, in line with many other
              developed countries, will adopt some mechanism for pricing the environmental cost
              of carbon emissions in the near future. This will certainly impact the cost of travel,
              which is relatively carbon intensive; and

          •   Social Conscience: Consumers are increasingly factoring the social cost or benefit
              of their choices. This may increasingly translate into choosing travel destinations
              where social good can be a part of the experience, such as voluntourism or spending
              money that flows to disadvantaged people.

4.2.1 Current Domestic Market Position – Stage Assessment

          The Australian domestic market is currently firmly into Stage 4 but with significant
          demand and interest growth still in Stage 3 product. Stage 5 is undoubtedly developing,
          however the spending power of this stage is still low. The motivators for the domestic
          market identified by TRA (2007) and other consumer survey work indicates that interest
          in Stage 2 product remains strong, while Stage 1 is in decline.




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Northern Territory Tourism Strategic Plan 2008-2012



          Figure 4.1: Stage Assessment of the Australian Domestic Tourism Market (The red box
          represents the NT’s core tourism product image)



               Domestic
               Market        Stage 1 - Products & Activities, Places & things




                             Stage 2 - Service Differentiation, Niche Indulgences



                             Stage 3 - Products & Emotions, Exhilaration and Adventures



                             Stage 4 - Experiences: Learning, Authenticity & Sustainability



                             Stage 5 – Currently Unclear

          Note: This assessment is made using information from a variety of sources and is therefore only a general guide to the market.
          Specific research on visitors to the NT may change the assessment.


          Tourism NT has previously heavily targeted the Stage 3 domestic market with its
          promotions and product mix and is moving to a Stage 4 market focus with the ‘Share Our
          Story’ promotional campaign. The progress of the Australian domestic market through
          the previous stages suggests that the Stage 4 market has another 10-15 years of
          demand growth in front of it. The Stage 3 market will probably stagnate within the next 5
          years (yet will remain important as a ‘foundation’ level of product to the higher stage
          products as Stage 2 currently does).

4.2.2 Responding to Trends in the Domestic Market

          The NT Tourism Industry must position itself to profit from the broad Stage 4 tourism
          market in light of the individual domestic market drivers and trends being observed.

          Table 4.2: NT Tourism Drivers, Considerations and Strategic Direction
           Driver/Trend                    NT Considerations                             NT Tourism Directions
           Observed Trends
                The need to relax /        Relatively little luxury product in the       Where needed, develop and promote the NT
                recharge and pamper        NT.                                           as a ‘recharging and revitalising’ destination
                themselves                 Image of NT as adventurous rather             rather than as a ‘relaxing’ destination.
                                           than relaxing.                                Work to develop further higher service level
                                                                                         products.
                To have a break from       A number of areas and cultures in the         The NT is already promoted as being out-of-
                the routine of             NT are a strong contrast to the               the-ordinary.
                everyday life – put        majority of Australia.                        Need to increasingly promote the unique
                life into perspective                                                    cultures in the NT, both Indigenous and
                                                                                         contemporary, as a real contrast to east
                                                                                         coast Australia
                To indulge a               The NT can competitively compete for          Continued moves to interest group specific
                particular interest        a number of particular interests,             marketing for key special interests that the
                                           especially nature-based pursuits and          NT has strong potential with.
                                           Indigenous art and culture.




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Northern Territory Tourism Strategic Plan 2008-2012



           Driver/Trend               NT Considerations                         NT Tourism Directions
              To gain new and         The vast landscapes and unique            Highlight the value of the NT product, the
              diverse experiences –   cultures offer great potential to match   opportunity for learning, new experiences
              to learn and grow as    this need – if offered and marketed       and culture that cannot be delivered by
              a person                well.                                     other domestic locations.
                                                                                Promote the value of learning about new
                                                                                places and culture: the real Australia.
           Predicted Trends
              Sustainability          The NT has a strong existing image of     To educate operators on sustainability issues
                                      natural assets, but not perhaps of eco    through accreditation programs.
                                      or sustainable activities.
              Carbon Pricing          The relatively long travel distances      Need to offer ability to reduce carbon
                                      into and within the NT will be            footprint of the industry.
                                      impacted more heavily by carbon
                                      pricing.
              Social Conscience       The NT’s Indigenous population is well Need to further engage the Indigenous
                                      recognised as being disadvantaged.     population with the tourism sector.


          In capturing the Stage 4 market, the NT needs to promote its differences from the rest of
          Australia, in its landscape, its culture and its climate. These differences need to be seen
          as worth experiencing. The NT must be seen to be accessible; that Australians can visit
          and immediately feel like they are in a different place, but still easily immerse themselves
          in the unique local culture and environment.

          Tourism NT will continue to develop the ‘Share Our Story’ campaign to grow visitation to
          the NT as a desirable alternative for Spirited Travellers to overseas holidays.

          Previously, Tourism NT had sent different marketing messages to each of the domestic
          and international markets. Research on global trends has revealed that the
          psychographic profiling of these markets did not require investment in two branding
          platforms. While slightly different flavours are required for different markets, ‘Share Our
          Story’ encapsulates all of these very well.

          This process of aligning domestic and international marketing activities will also allow
          investments made in marketing spend, such as collateral production, to be consolidated
          over time.

          One of the key challenges facing Tourism NT at present is defending the ownership of the
          outback brand within Australia to international markets where it is facing strong
          competition from both Queensland and Western Australia. It appears that the competition
          has gained a foothold though the outback image of the NT being narrowly associated in
          the market with the natural features and beauty of the NT. Research by TRA (2007)
          suggests that for the domestic market such an association is not likely to motivate
          travellers:

          “Scenic beauty is seen as a cost of entry for travel unless the offering is unique – it will
          not lead those who travel to choose Australia compared to overseas.”

          In order for the NT to recapture some of the lost outback association, the market must
          understand that the outback of the NT is a unique and persuasive cultural product rather
          than just an association with vast red landscapes and big skys. Other locations are
          capturing the outback image because they lacked the quality of the natural setting and
          hence had to develop the cultural story to their products as foremost. As the market has
          matured to Stage 4 needs, this has worked to their strength. The NT is not lacking in the
          outback cultural story, rather it needs to ensure that the market receives the message.

           STRATEGY

           Progressively build and enhance the “Share Our Story” branding with relevant
           cultural overtones

           Continue to position the NT as a nature-based destination with iconic national
           parks, natural wonders and indigenous culture



                                                                                                                             32
Northern Territory Tourism Strategic Plan 2008-2012




           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           Successful domestic branding that will deliver growth in interstate visitor
           markets

           Combining nature and culture in markets will provide operators with a true point
           of difference over interstate competitors

           It is very much the responsibility of operators to capitalise on this branding and
           align their marketing collateral to ensure consistency across the industry in
           tourism promotion.


4.3 Intra-Territory Market
          In 2006, 26.2% of visitors came from within the boundaries of the NT. Presently the role
          of marketing to this market segment has rested with the Regional Tourist Associations
          (RTA’s). The performance of this segment has declined in recent years due to:

              •   Inconsistent branding and marketing by RTA’s
              •   A small population base with easy and inexpensive access to Asia
              •   The impact of the military’s overseas commitments and subsequent migration of
                  family members to Southern States during overseas deployments; and
              •   Rising fuel costs on intra-Territory travel.

          As a result there is a need for Tourism NT to provide a co-ordinated approach to
          marketing and promotions. In addition it is essential that a common brand platform be
          used across all market segments.

          Previously, RTA’s have operated in isolation from the marketing plans implemented by
          Tourism NT. They have also developed their own brands and products that are exposed
          to a wide range of audiences including consumers, operators and wholesalers. Therefore
          it is imperative that the messages and branding across Tourism NT and the RTA’s is
          consistent so as to minimise confusion in the marketplace. It is recommended that this
          issue of alignment be addressed through Service Level Agreements (SLA’s) with the
          RTA’s where funding provided by Tourism NT is linked to specific outcomes and
          directions.

          The RTA’s also have previously marketed two specific geographic destinations – the Top
          End and the Centre. These regional areas do not align with the Tourism NT destination
          strategy and will create confusion in the marketplace. It is essential that the RTA’s
          approach their markets as needs-driven individuals rather than geographically segmented
          groups. As such, the material they produce for visitors should contain the same branding
          elements as the material produced for visitors by Tourism NT. At the end of the day, the
          consumer does not care where the material has originated, rather that it is providing
          information in a consistent manner.

           STRATEGY

           Align RTA branding and promotional material to the Tourism NT branding
           platform and destination strategy through the use of Service Level Agreements


           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           Consistent marketing and messages of operator products and services across all
           markets.

           It is the responsibility of operators to ensure that RTA’s have the operators
           promotional material and that all information is current.




                                                                                                33
Northern Territory Tourism Strategic Plan 2008-2012



4.4 The International Market
          The NT has established a successful presence in a number of core international markets
          in Europe, North America and Japan. It is recommended that Tourism NT maintain its
          core focus on these markets into the future. The key developing cultural and nature-
          based spirited traveller segments in these markets is discussed in more detail further in
          this document. As a generalisation, Tourism NT has a relatively good understanding of
          these markets needs, their niches and how to target them.

          Looking further forward it is forecast that Asia will provide the strongest growth in
          outbound international tourists in the foreseeable future. Many of these markets are
          currently relatively weak and poorly understood however they are growing rapidly in
          wealth and are located relatively close to the NT. It is still too early for the NT to consider
          devoting major resources to developing most of these markets (China and Korea being
          exceptions). However it is suggested that over the life of this plan that Tourism NT begin
          to pay special attention to the development of these markets and particularly potential
          segments in the markets that may be attracted to the NT. Tourism NT will aim to become
          pre-prepared for these markets, so that it can move rapidly to attain first mover status in
          their developing nature and cultural based market segments when the opportunity is
          ripe. As such, the significant part of this section is devoted to exploring the current
          understanding of some of these emerging markets within the NT context.

          International visitation to the NT is, perhaps, more important to the future of the NT
          Tourism Industry then to any other state or territory in Australia. In 2006, international
          visitors accounted for 41% of holiday tourists in the NT and 44% of holiday tourist
          nights. Nationally, international tourism is forecast to have much greater growth potential
          than domestic tourism with forecasts of 4% per annum growth in international visitation
          versus 0.3% per annum growth in domestic tourism. International tourists from Asia can
          arrive into the NT with similar ease as travellers from other parts of Australia and their
          visitation patterns tend to be less seasonal than for the domestic market.

          The current international source markets for the NT are predominately from Europe (UK,
          Germany and Other Europe accounts for almost 60% of the NT’s international visitors),
          North America (15% of international visitors), Japan (15% of international visitors) and
          Other Asia (5%). These markets are wealthy, have proven segments with interest in the
          NT, have relatively well established distribution links and are relatively well understood in
          terms of marketing needs.
          Figure 4.1: International Tourism Source Markets for the NT by % of Total of
          International Visitors, 2005-06

             30.00%


             25.00%


             20.00%


             15.00%


             10.00%


               5.00%


               0.00%
                        Other Europe   UK             Japan   North America   Germany   Other Asia


          Source: Tourism NT (2006c)




                                                                                                      34
Northern Territory Tourism Strategic Plan 2008-2012




          Forecasts for inbound visitor arrivals growth into Australia are strong (see Figure 4.2).
          The most important data in these forecasts is that the growth in Real Total Inbound
          Economic Value is forecast to grow at an average rate of 5.2% per annum to 2015.
          Driving this growth is the expected rapid increases in visitation from high yield Asian
          markets.


          Figure 4.2: Forecast Inbound Visitor Arrivals and Total Inbound Economic Value for
          Australia to 2015


                          35                                                       9000
                                    Total Inbound
                                    Economic Value (Real)
                                                                                   8000
                          30        Inbound Visitor Arrivals
                                                                                   7000
                          25
                                                                                   6000
              $Billions




                          20                                                       5000




                                                                                          000's
                          15                                                       4000

                                                                                   3000
                          10
                                                                                   2000
                          5
                                                                                   1000

                          0                                                        0
                               2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

          Source: TFC (2006)

4.4.1 Current Focus Markets

          Tourism NT has over time developed a rigorous approach for prioritising and segmenting
          tourism markets in order to facilitate a more strategic and coordinated approach to its
          marketing activity. A holiday market assessment model is used with reference to a range
          of economic and socio-political measures and factors such as aviation access, distribution
          network and travel behaviour.

          Tourism NT's prioritisation model is based on the concept of a ‘portfolio', whereby
          markets are assessed in terms of their overall market attractiveness and the NT's ability
          to be competitive in those markets. The model is regularly updated to reflect changes in
          the market and the NT's competitive position using a range of data, information and
          intelligence sources.

          In terms of market attractiveness, a range of factors are considered including likely
          future performance (forecast growth rates), historical performance (yield and total visitor
          nights), propensity for regional dispersal, propensity to visit in non-peak season, cost of
          operating in market and access to the NT. In terms of competitive advantage, factors
          considered include product compatibility, distribution channel strengths and influence,
          Tourism Australia activity, competitor activity, trade relationships and cultural synergy.

          The portfolio approach helps Tourism NT and its stakeholders understand the relative
          strengths and weaknesses of investing in one market over another.

          Once the markets have been assessed using the prioritisation model, psychographic
          segmentations have been applied to various markets to determine which segments to
          target with particular marketing and promotional activity. In domestic markets, Tourism



                                                                                                  35
Northern Territory Tourism Strategic Plan 2008-2012



          NT targets "Spirited Travellers". In international markets, Tourism NT targets "Global
          Experience Seekers" which is consistent with Tourism Australia's approach. Business
          tourism (MICE) and niche markets are also targeted.

          Table 4.2: International Market Priority Groups for NT Tourism, 2006 update
                                     8
                                     HIGH

                                                                                                                                                                                                         CORE
                                                                                                                                                                                                         United States
                                     7




                                                                              POTENTIAL                                                          GROWTH
                                                                                                                                                                                                              UK / Ireland
                                                                                                                                                                                                    Germany
                                     6




                                                                                                 India                                               China                                  Japan
             Market Attractiveness




                                                                                                                                                                     Canada
                                                                                                                  Malaysia           Singapore
                                                                          Indonesia                                                                          Italy                 France                     Australia
                                                                                                                                     Austria                         Scandinavia
                                     5




                                                                          Other Asia / Pacific                  Korea
                                                                                                                                          Netherlands                     New Zealand
                                                                                                                        Hong Kong     Belgium       Switzerland

                                                                                                                                      Spain
                                                                                                           South Africa
                                     4




                                                                                           Latin America
                                                                                                                            Taiwan

                                                                               Eastern Europe         Greece            Portugal
                                     3




                                                           LOW PRIORITY

                                                                                           Gulf countries
                                     2
                                     LOW
                                     1




                                            1   LOW             2                      3                                4                        5                             6                         7                   HIGH 8
                                                                                                                  Competitive Advantage

          Source: Tourism NT (2006a)


          The current international market priorities for Tourism NT closely match the existing
          source markets. They also broadly align with the overall importance of international
          tourist source markets to the Australian industry (see Figure 4.3).


          Figure 4.3: Ten Most Significant Australian International Tourist Markets by Total
          Inbound Economic Value (2005)

                   $3,500,000,000

                   $3,000,000,000

                   $2,500,000,000

                   $2,000,000,000


                   $1,500,000,000

                   $1,000,000,000

                                     $500,000,000

                                                      $0
                                                                                                                                             ng
                                                                                                                                                a
                                                                                                                                               e
                                                                     n




                                                                                                            na
                                                                                            SA




                                                                                                                                               y
                                                            K




                                                                                                                         a
                                                                             Z




                                                                                                                                             si
                                                                                                                                            or


                                                                                                                                            an
                                                                   pa




                                                                                                                       re
                                                           U




                                                                            N




                                                                                                                                           Ko
                                                                                                          hi




                                                                                                                                          ay
                                                                                           U




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                                                                                                                                          m
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                                                                                                                                       ng




                                                                                                                                        g
                                                                                                                                     M


                                                                                                                                    on
                                                                                                                                     G
                                                                                                                                    Si




                                                                                                                                   H




          Source: Tourism Australia (2005a)




                                                                                                                                                                                                    36
Northern Territory Tourism Strategic Plan 2008-2012



             Proximity and ease of access to Australia are important determinants of an international
             source market’s value to the Australian tourism industry. For example nearby New
             Zealand is worth more to Australia than the much larger and wealthier USA. The
             relatively small Asian countries of Singapore, Malaysia and Hong Kong are comparable in
             value to Germany, the world’s third largest economy. Due to unique historical and
             cultural ties to Australia, the UK contributes a disproportionate value to the Australian
             tourism industry relative to its location, size and wealth.

             The NT’s current core markets are characterised by strong interest in the Stage 3 / Stage
             4 product image of the Territory. The USA, Japan, Germany and the UK are also the
             worlds first, second, third and fifth largest economies respectively.

             Figure 4.4: Estimated Market Stages of the NT’s Current Core International Markets (The
             red box represents the NT’s core tourism product image)
                                                            Kingdom/I
                  Germany




                                              America

                                                            United

                                                            reland
                                  Japan

                                              North




                                                                                Stage 1 - Products & Activities, Places &
                                                                                                things




                                                                                Stage 2 - Service Differentiation, Niche
                                                                                             Indulgences


                                                                                              Stage 3 - Products & Emotions,
                                                                                                Exhilaration and Adventures


                                                                                              Stage 4 - Experiences: Learning,
                                                                                                Authenticity & Sustainability



                                                                                                 Stage 5 - Currently Unclear

             Note: This assessment is made using information from a variety of sources and is therefore only a general guide to the market.
             Specific research on visitors to the NT may change the assessment.


             It is widely forecast that by about 2020, China will have grown to be the world’s second
             largest economy, and India the sixth largest. By virtue of sheer size (economic and
             population) and relative location, China is capable of yielding some very valuable tourist
             niches for the NT over the next decade. China is currently a very small market for the NT,
             however very little research or market development has been conducted for this market
             in the NT context.

             A stage assessment of the NT’s current growth markets is presented below. Due to
             proximity and economic growth it is likely that Asian markets will increasingly populate
             the NT’s priorities into the future. Many of these markets are not right for targeting just
             yet, however Tourism NT must prepare now for the highly likely near future when these
             markets become a priority for development.

             Figure 4.5: Stage Assessment of the NT’s Current Growth International Markets (The red
             box represents the NT’s core tourism product image)
                                                                                                New Zealand
                                                                                Netherlands




                                                                                                              Scandinavia




                                                                                                                                        Switzerland
                                                                                                                            Singapore




                                                                                                                                                      Stage 1 - Products & Activities,
                            Belgium

                                          Canada
        Austria




                                                               France




                                                                                                                                                             Places & things
                                                    China




                                                                        Italy




                                                                                                                                                                                   37
Northern Territory Tourism Strategic Plan 2008-2012




                                                                                                      Stage 2 - Service
                                                                                                     Differentiation, Niche
                                                                                                          Indulgences

                                                                                             Stage 3 - Products & Emotions,
                                                                                               Exhilaration and Adventures

                                                                                                     Stage 4 - Experiences:
                                                                                                    Learning, Authenticity &
                                                                                                         Sustainability


                                                                                                Stage 5 - Currently Unclear

          Note: This assessment is made using information from a variety of sources and is therefore only a general guide to the markets.
          Specific research on visitors to the NT may yield differing results.

4.4.2 Emerging Markets

          The Australian Government has recently developed emerging market strategies, released
          in January 2007, that target the outbound tourism markets of India and China. In the
          long term, China and India are forecast to grow to become the world’s first and third
          largest economies by the middle of the century. However these countries are already
          providing major, and rapidly growing, opportunities for the Australian tourism industry.

          Over the period between 2006 and 2015, the TFC estimate that total inbound tourist
          visitation to Australia will increase by just under 3 million travellers, equating to an
          average annual increase of 4.9% over the period. Australia’s traditional core markets of
          the UK, USA, New Zealand and Japan are expected to account for approximately one
          quarter of this growth.

          The strongest growth is anticipated from the emerging markets of China (20.6% of
          additional visitation) and India (8.3% of additional visitation), and to a lesser extent
          other Asian markets of South Korea (5.5%), Indonesia (3.8%) and Singapore (3.8%). In
          all, 57% of the growth in international visitors to Australia between 2005 and 2010 is
          forecast to derive from Asian markets.

          Figure 4.6: Forecast Contribution to Total Increased Inbound Visitors to Australia, 2006-
          2015


                                   Rest of the World          Japan
                                         8.7%                 4.2%                China
            Other North America
                                                                                  20.6%
                   2.1%
               Other Europe
                  11.0%
                                                                                            India
                Other Asia                                                                  8.3%
                  10.9%
                                                                                         South Korea
                                                                                            5.5%
                   US
                  7.3%                                                              Singapore
                                    UK            New Zealand       Indonesia         3.7%
                                   8.3%              5.6%             3.8%

          Source: Tourism Forecasting Committee (2006)


          At present, emerging Asian markets make up only a very small part of the NT’s tourism
          mix. However with strong economic growth in these markets, the forecast increase in



                                                                                                                                            38
Northern Territory Tourism Strategic Plan 2008-2012



          visitation to Australia and changes to the NT’s aviation industry (ensuring Asians have
          easier access to the NT) indications are that these markets must be closely examined.

          It would not be a sensible investment for Tourism NT to spend heavily on targeting these
          emerging markets until adequate research had been gathered. However the time is now
          right for the NT tourism industry to begin to research these markets and test
          development and marketing strategies for future development. If the NT does not begin
          to prepare itself for the rise of Asia now, it may miss many of the opportunities in these
          markets as they arise.


          NT Aviation – International Prospects

          The prospects for maintenance and growth of existing services to Darwin has been
          enhanced significantly by the growing presence of LCCs and the broader development of
          the LCC network within Southeast Asia. As a consequence, a genuine opportunity exists
          for Darwin to engage more closely with Asia through the LCC system.

          Tourism Futures International (2007) Northern Territory Aviation Strategy 2007-2010


          As highlighted in the draft Northern Territory Aviation Strategy 2007-2010 (Tourism
          Futures International, 2007), Darwin’s developing role in linking to Low Cost Carriers
          (LCCs) into and out of Asia offers the prospect of the airport increasing its role as a
          gateway for NT tourism. In effect, it has the potential to “feed off” the Singapore hub
          that provides linkages not only to nearby Asian markets but also to long haul markets to
          Europe and, to a limited extent, North America.

          Figure 4.7: The Darwin-Singapore Low Cost Carrier Relationship




                             Singapore




                                                                                      Darwin


        Source: CAPA Consulting (not sighted), Tourism Futures International (2007)


          The percentages of these markets to which the NT will appeal may still be relatively
          small, however given the total size of the markets, relatively small percentage demand
          from Asian emerging markets has the potential to be translated into significant new
          visitors for the NT tourism industry. Again it will take a number of years to begin to
          develop market presence and marketing and distribution channels in Asia however the
          industry must begin to understand these markets now.




                                                                                                 39
Northern Territory Tourism Strategic Plan 2008-2012



          Many of the emerging Asian tourists are high yielding visitors (see Figure 4.8) displays
          that Indonesian’s are the second highest spending tourists in Australia, spending almost
          as much per capita as the Swiss. Five of the top ten countries in terms of spending per
          visitor to Australia are Asian (Indonesia, China, Thailand, Malaysia and India). Asian
          visitors also tend to spend their money over shorter average stays, meaning that the
          value per visitor night is even greater.

          Figure 4.8: Average Spend and Total Spend (all visitors) of International Tourist Source
          Markets for Australia

                                           $5,000    Average Spend                            $2,000
                                           $4,500    Total Spend ('000,000)                   $1,800
             Average Spend (per person)




                                           $4,000                                             $1,600
                                           $3,500                                             $1,400




                                                                                                       Total Spend
                                           $3,000                                             $1,200
                                           $2,500                                             $1,000
                                           $2,000                                             $800
                                           $1,500                                             $600
                                           $1,000                                             $400
                                            $500                                              $200
                                              $0                                              $0




                                                               d
                                                         al n
                                                         ay d
                                                   an Ch e
                                                      di ina
                                                        a a
                                                   M aila a




                                                 ew a n
                                                      Eu sia




                                                   G rla ia



                                                          A g


                                                      ng re
                                                 O g K ny




                                                      Fr ries

                                                          It e
                                                 H ermnds
                                                th o n d




                                                 d a a


                                                   C Um
                                                         nt A



                                                        Ja aly
                                           U S K si a
                                                  et I ia




                                                           an
                                                     Ze iwa
                                                             p



                                                             d
                                                      al n
                                                     C vi




                                                      er n




                                              N T pa
                                                             c
                                               te n g r e



                                                     ou S
                                                    he nd




                                                    Ki po
                                                          do
                                                            s


                                                   on a
                                                          ro



                                                    Th na




                                                          an
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                                              O Ind rla




                                                         na
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                                            ni i o
                                                        e
                                                    itz
                                                Sw




                                                Sc




                                                er
                                                N




                                             th
                                           O




          Source: Tourism Forecasting Committee (2006)


          The needs and characteristics of the emerging markets are very diverse, and it is
          impossible to collectively summarise how to develop them. As an indication, the needs
          and characteristics of India, China, Indonesia, South Korea and Singapore are considered
          in some detail below. Other than for China, which is considered a ‘growth’ market, the
          Tourism NT’s current market assessment for all of these markets is ‘potential’.

          Figure 4.9: Forecast Visitor Growth Rates 2006-2016 to Australia by Country

                                           16.00%       Average annual growth
                                                        Average Growth 5.5%
                                           14.00%
              Visitors (% annual growth)




                                           12.00%

                                           10.00%

                                           8.00%

                                           6.00%

                                           4.00%

                                           2.00%

                                           0.00%
                                                                                                  d
                                                             an
                                                             nd
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                                                                                         Ze n
                                                              a



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                                                                                       on ny



                                                                                                m
                                                   ut rica

                                                     Th ea




                                                                                        ng S
                                                              a
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                                                                                              an
                                                           ad




                                                                                                a
                                                            di




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                                                                                               U




                                                                                             do
                                                          iw
                                                          la




                                                                                     H ma




                                                                                     ew ap
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                                                                                              o
                                                           r
                                                M one
                                                         In




                                                                                           ap
                                                        ay




                                                                                            al
                                                So e E



                                                        Ko



                                                        an




                                                                                   te g K
                                                So Af



                                                        ai
                                                        C




                                                       Ta




                                                                                          ng

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                                                      h
                                                      d




                                                     h




                                                    M
                                                   In




                                                                                      Si
                                                  id




                                                                                     d


                                                                                   N
                                                                                 ni
                                                                                U




          Source: Tourism Forecasting Committee (2006)


          Table 4.3 displays the key factors that make the markets of India, China, Indonesia,
          South Korea and Singapore potentially attractive to the NT tourism industry.



                                                                                                                     40
Northern Territory Tourism Strategic Plan 2008-2012




          Table 4.3: Ranking of the Emerging Markets
           Rank    Average Spend in        Forecast           2015 Projected    Approximate
                   Australia               Visitor            Visitor Numbers   Accessibility to
                                           Growth to                            the NT
                                           Australia
           1       Switzerland             India              New Zealand       Singapore
           2       Indonesia               China              United Kingdom    Indonesia
           3       Other Europe            Indonesia          China             Thailand
           4       China                   Middle East        Japan             Malaysia
           5       Scandinavia             South Africa       US                India
           6       Canada                  South Korea        South Korea       New Zealand
           7       Thailand                Thailand           Singapore         Hong Kong
           8       Malaysia                Canada             India             China
           9       India                   Malaysia           Malaysia          Other Asia
           10      Netherlands             Taiwan             Hong Kong         Taiwan
           11      Germany                 US                 Germany           Japan
           12      Hong Kong               Singapore          Indonesia         Korea
           13      Other Asia              Germany            Canada            USA
           14      Korea                   Hong Kong          Middle East       Other Europe
           15      Singapore               United             Taiwan            Italy
                                           Kingdom
           16      United Kingdom          Japan              Thailand          United Kingdom
           17      USA                     New Zealand        South Africa      France
           18      Other Countries                                              Germany
           19      France                                                       Switzerland
           20      Italy                                                        Netherlands
           21      Japan                                                        Scandinavia
           22      Taiwan                                                       Canada
           23      New Zealand                                                  Singapore
          Source: Tourism Forecasting Committee (2006), AECgroup

4.4.3 China

4.4.3.1   Overview
          China’s economy has been growing at a rapid pace in recent years, fuelled by abnormally
          high levels of Government driven investment, high private business and household
          savings rates and a major inflow of foreign direct investment. This strong growth has led
          to increased incomes and standards of living, as well as an upgraded consumption
          structure   towards   healthcare,     transportation,    telecommunications,   education,
          entertainment and housing, rather than just food and clothing.

          Increasing consumer confidence and an increase in the number of Approved Destination
          Status (ADS) countries, which allows for holiday group tours to Australia, has translated
          to higher levels of outbound tourism, resulting in strong growth in inbound visitation to
          Australia in the past five years. China is currently the fifth largest source of inbound
          visitors to Australia, accounting for 311,000 (5.7% of total) inbound visitors in 2006.

          With the Chinese economy expected to continue to grow strongly over the next decade
          and the Chinese Yuan anticipated to remain strong against the Australian dollar, the TFC
          project inbound visitation from China will increase at an average annual rate of 12.7%
          over the next 10 years, to 911,000 visitors by 2015, which would make it the third
          largest source of inbound visitation (10.9% of total) behind New Zealand (14.6%) and
          the UK (11.3%).




                                                                                                   41
Northern Territory Tourism Strategic Plan 2008-2012



          Figure 4.10: Forecast Inbound Visitation to Australia from China

                                                           Visitors     Annual Growth

                                  1,000                                                                60.0%

                                   900                                                                 52.5%

                                   800                                                                 45.0%

                                   700                                                                 37.5%
              Thousand Visitors




                                   600                                                                 30.0%

                                   500                                                                 22.5%

                                   400                                                                 15.0%

                                   300                                                                 7.5%

                                   200                                                                 0.0%

                                   100                                                                 -7.5%

                                     0                                                                 -15.0%
                                          2001   2003   2005     2007     2009    2011   2013   2015

          Source: Tourism Forecasting Committee (2006)

4.4.3.2   Preferences
          Chinese tourists tend to be well educated, young to middle-aged adults with poor English
          skills. As part of the ADS agreement, tour groups must be provided with an escort at all
          times, who is responsible for the schedule of the tour. Chinese tourists expect to do
          more than just sightseeing and visiting icons, preferring to participate in a variety of
          activities that are genuinely different from what they can do at home. Critical to Chinese
          tourist satisfaction is the freedom to experience and learn about a country and culture
          that is very different from their own.

          Key preferences of Chinese tourists in Australia include:

          •          Staying near major Australian cities in order to experience Australian city life
                     firsthand and participate in big city activities (particularly shopping);

          •          Experiencing and learning about local cultures, particularly through activities such as
                     dining out and trying local produce, and meeting and talking to local people;

          •             Seeing the natural environment and wildlife, and participating in outdoor activities;

          •          Relaxed tour scheduling with the flexibility to respond to the needs and preferences
                     of tour group members; and,

          •             Opportunities for free time to do their own shopping and exploring.

          Chinese tourists are often considered to be primarily ‘big-city’ tourists, however this is
          not necessarily the case. Chinese tourists are now visiting a wide range of countries,
          including a number (such as in Africa) that lack the casinos and bright city lights of
          stereotypical interest to the Chinese. Australia is currently very popular as a potential
          destination with the Chinese (see Figure 4.11) the question is how the Australian and
          NT industry’s best profit from this interest. The Chinese also appear to be quite diverse in
          their attitudes to travel depending on which of the various provinces of the country they
          originate.

          With forecasts of 100 million outbound Chinese tourists by 2020, the NT only has to
          appeal to a relatively small portion of this market to greatly benefit its tourism industry.




                                                                                                                42
Northern Territory Tourism Strategic Plan 2008-2012



          Figure 4.11: The Most Preferable Destination for Next Travel of Chinese (2006 survey)


                            Others

                   South America

                Hong Kong/Macao

                   Southeast Asia

                             Africa

                        Caribbean

                         East Asia

                        South Asia

                          Australia

                    North America

                            Europe

                                   0.0%          5.0%          10.0%          15.0%   20.0%   25.0%   30.0%


          Source: Third International Forum on Chinese Outbound Tourism (2007).


          Chinese tourists tend to travel during the three golden weeks of long holidays centred on
          Chinese New Year (January/February), Labour Day (May 1) & National Day (Oct 1).
          Besides the three golden weeks, school summer vacation (July/August) can also provide
          visitors comprising students and/or parents for short-term summer camps.
4.4.3.3   Requirements to Attract Chinese Tourists
          Many parts of the world are scrambling to understand the Chinese tourist. Perhaps
          surprisingly for a new tourist market, the Chinese seem to be very keen to experience
          and interact with local cultures in an authentic way (Stage 4 requirements). There are
          indications that the Chinese are more interested in Indigenous cultural product than most
          other Asians although more research is required. However, these attitudes should be
          understood to be those of the very small percentage of Chinese that currently have the
          wealth to afford international travel. The bulk of the Chinese market, as it begins to
          develop sufficient wealth, may well display earlier stage preferences.




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Northern Territory Tourism Strategic Plan 2008-2012



          Figure 4.12: Estimated Market Stage of the Chinese Outbound Tourist Market (The red
          box represents the NT’s core tourism product image)




                    Stage 1 - Products & Activities,
                           Places & things
            China




                            Stage 2 - Service
                           Differentiation, Niche
                                Indulgences

                    Stage 3 - Products & Emotions,
                      Exhilaration and Adventures

                         Stage 4 - Experiences:
                        Learning, Authenticity &
                             Sustainability


                      Stage 5 - Currently Unclear

          Note: This assessment is made using information from a variety of sources and is therefore only a general guide to the market.
          Specific research on visitors to the NT may change the assessment.


          Targeting the Chinese

          Paris isn't the only European locale angling for Chinese visitors. After Germany won early
          approval for Chinese visits last year, Bavaria's tourist board persuaded a Shanghai TV
          station to undertake a filmic tour of the state, which aired in April. In July the board also
          launched a Chinese-language Web site. The land of lager and lederhosen expects to
          welcome 120,000 Chinese tourists this year, up 64% from 2003. "They love the old
          Bavarian pubs and are in heaven when there's a sing-along," says Richard Adam, head of
          the Bavarian tourist board. Say, what's German for The East Is Red?

          BusinessWeek (December 13, 2004) The Year of the Chinese Tourist


          A major difficulty for the NT Tourism industry in targeting the Chinese market is the low
          proportion of Chinese who speak English. This will gradually change, with the teaching of
          English in China a high priority for the government. Along with the need for approved
          tour operators, the current reality of the Chinese tourist market necessitates a highly
          structured approach to product development and marketing.

          In response to the current observations of Chinese visitors to Australia,




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Northern Territory Tourism Strategic Plan 2008-2012



          Table 4.4: Observations of Chinese Visitors and NT Tourism Considerations
          Observation                                      NT Tourism Considerations
          Staying near major Australian cities             Package tours should consider visits to Brisbane, Sydney
                                                           or Melbourne along with the NT. It is not clear if this
                                                           preference is an artefact of Chinese who currently
                                                           choose to visit Australia – Chinese tourists to New
                                                           Zealand are not attracted to the Cities “The findings from
                                                           interviews among Chinese tourists confirmed that New
                                                           Zealand’s biggest competitive advantage is its beauty of
                                                           nature”.
          Experiencing and learning about local cultures   Australian Indigenous culture may hold significant
                                                           attraction for the Chinese – more so than with many
                                                           other Asian markets. It appears that authentic
                                                           Indigenous culture experiences developed for the North
                                                           American and European markets are likely to be
                                                           attractive and marketable to the Chinese market.
          Seeing the natural environment and wildlife      The NT has considerable experience in natural
                                                           environment and wildlife tourism – most importantly the
                                                           Chinese appear to be seeking active outdoor experiences
                                                           for which the NT can cater.
          Relaxed tour scheduling with flexibility         Tourism NT should work with Approved Tour Operators
                                                           to ensure that their planned schedules are realistic with
                                                           regards to travel and visit times.
          Opportunities for shopping and exploring         Darwin and Alice Springs are never likely to compete
                                                           with Sydney or Melbourne for most goods however
                                                           significant niches or interest to Chinese, such as
                                                           Indigenous art, may have good potential.


          Tourism Australia (2005b) has undertaken market segmentation studies in China and
          identified one of the two core market segments as being Self Challengers, an
          international market segment that the NT is familiar with targeting for its natural and
          cultural tourism focus.

          Targeting the Chinese – New Zealand

          Guangdong tourists prefer flexible and relaxed tour experience, instead of rushing to a
          number of attractions, they like going to attractions with relaxing atmosphere, with no
          pressure and stress. They are also interested in experiencing everything about New
          Zealand, and are willing to try something new and special, which cannot be found in
          Guangdong. Therefore, a theme tour “Kiwi experience” or an afternoon with Kiwi family
          would be a good change and treat for Guangdong tourists, to experience the cooking
          style, gardening, architecture, and interior design of New Zealand people, which can fulfil
          their curiosity about this unfamiliar destination.

          Zhao (2006) Tourism Research Summary Report - Chinese Outbound Market and New
          Zealand’s Destination Image


4.4.4 India

4.4.4.1   Overview
          India’s economy has been growing relatively strongly by international standards since the
          mid-1980s, averaging over 5% annual growth over the past 20 years. In recent years
          this growth has accelerated to over 8% per annum, driven by a significant level of
          investment in India’s information sector and strong harvests from the agricultural sector.

          Economic growth is expected to remain strong in India in the medium term. Despite
          attracting opposition from within the coalition Government, India’s economic reforms
          appear to be improving the country’s prospects resulting in increasing levels of domestic
          and foreign investment. Strong growth in domestic demand and increased economic
          diversification, in particular continued spending on infrastructure should also assist the
          sustainability of economic growth. Further, India is expected to remain an attractive
          destination for foreign investment, fuelling growth in exports that will support the rupee.




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          With strong economic growth anticipated to continue, there is significant potential for
          growth in outbound travel from India. This has encouraged considerable investment
          from competitor destinations, with Asian and European airlines, National Tourism
          Organisations and carriers increasing services and developing products targeting the
          Indian traveller.

          Additionally, India has the largest number of LCCs in the world, and combined with
          increasing disposable income this provides considerable opportunity for growth in long
          haul travel by the Indian population. The second most popular outbound destination from
          India is Singapore, ensuring that the Indian market has relatively easy access to the NT
          via linking LCCs to Darwin.

          As a result, inbound tourist numbers from India to Australia are forecast to grow at an
          average annual rate of 16.0% over the next 10 years, increasing from 86,000 visitors in
          2006 to 327,000 in 2015. At present, the NT only captures 0.1% of Indian visitors to
          Australia.

          Figure 4.13: Forecast Inbound Visitation to Australia from India
                                                         Visitors     Annual Growth

                                  400                                                                 30.0%


                                  350                                                                 25.0%


                                  300                                                                 20.0%
              Thousand Visitors




                                  250                                                                 15.0%


                                  200                                                                 10.0%


                                  150                                                                 5.0%


                                  100                                                                 0.0%


                                  50                                                                  -5.0%


                                   0                                                                  -10.0%
                                        2001   2003   2005     2007     2009     2011   2013   2015

          Source: Tourism Forecasting Committee (2006)


          The Indian market offers a number of potentially useful characteristics to the NT tourism
          industry, including the large number of Indians who speak excellent English and the
          interest of Indians in soft adventure type tourism.
4.4.4.2   Preferences
          Tourism Australia is currently undertaking segmentation studies of Indian tourists that
          will help to better define to strategy that the NT should take with this market. However a
          number of general observations regarding the Indian tourist are currently understood.

          Indian visitors to Australia are predominantly either young adults or over 55s, travelling
          solo or as a couple. With disposable incomes of the middle and upper class increasing,
          outbound travel is increasingly becoming a ‘way of life’ for these tiers of Indian society as
          a reward for their developing prosperity.

          Indian tourists predominantly seek luxurious locations where they can indulge on relaxing
          leisure activities such as dining at restaurants and cafés, shopping for pleasure, or going
          to the beach. As a result, the vast majority of Indian tourists visit the capital cities along
          the east coast, particularly Melbourne. Indeed the very high quality expected by Indian
          tourists is a challenge for the NT. As with Americans, Indians can seem quite rude and




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Northern Territory Tourism Strategic Plan 2008-2012



          demanding of service; in both cases it appears to be due to the very high quality of
          service that they are accustomed to at home. Indians tend to spend on luxurious
          accommodation, however stay for relatively long periods and do not tend to spend so
          much on other items such as entertainment and shopping (although these can still be
          strong motivators for travel).

          In general, Indians tend to be spectators and prefer guided tours and excursions. Only a
          small proportion of Indian tourists tend to seek the more nature or adventure based
          tourist activities that the NT currently provides, although they are understood to like soft
          adventure opportunities that provide ‘bragging rights’ back at home. However they are
          not necessarily city tourists either, with Queensland currently the most popular Indian
          holiday destination in Australia, and dispersal by holiday travellers around New Zealand
          being high.

          There does not currently appear to be much interest from this market segment in
          experiencing or learning about traditional Australian culture and history however further
          research is required here to test Australian and NT cultural product styles.

          In summary key preferences of Indian tourists are:

          •   4 or 5 star accommodation, with excellent levels of service;
          •   Want to be able to return home with ‘bragging rights’ from their travel;
          •   Like to see things at a leisurely pace;
          •   Generally prefer some ‘cosseting’ - guided tours;
          •   Interested in ‘soft’ adventure; and
          •   Large MICE market.


4.4.4.3   Requirements to Attract Indian Tourists
          No segmentation research on the Indian visitor to Australia has been conducted to date.
          Research from other markets suggests that Indian tourists have quite specific cultural
          needs (eg. vegetarians, late morning starts) that need to be understood by local tourist
          operators if they are to succeed with the market. There is a need for better research for
          the NT to target the most appropriate sectors of the Indian tourist market.




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Northern Territory Tourism Strategic Plan 2008-2012



          Figure 4.14: Estimated Market Stage of the Indian Outbound Tourist Market (The red box
          represents the NT’s core tourism product image)




                    Stage 1 - Products & Activities,
                           Places & things
            India




                            Stage 2 - Service
                           Differentiation, Niche
                                Indulgences

                    Stage 3 - Products & Emotions,
                      Exhilaration and Adventures

                         Stage 4 - Experiences:
                        Learning, Authenticity &
                             Sustainability


                      Stage 5 - Currently Unclear

          Note: This assessment is made using information from a variety of sources and is therefore only a general guide to the market.
          Specific research on visitors to the NT may change the assessment.


          India is a challenging market for promoters of tourism. Tourism Australian notes that
          building brand awareness across the Indian population will take a significant investment
          of resources and time, given India contains 28 states and seven union territories, 18
          official languages, and tens of thousands of media bodies.

          The market research to date suggests that the segment of the Indian market to which
          the NT currently appeals is small. However India is forecast to be the fastest growing
          market to Australia over the next 10 years and it is already well accustomed to travelling
          to Singapore (with its increasingly cheap direct access to the NT). The NT is currently
          rapidly improving its ability to provide higher service levels and even luxury products for
          tourists that will widen its appeal to the existing Indian market. Furthermore, the Indian
          tourist market will continue to evolve, probably quite rapidly, with stage progression of
          other markets suggesting that the demand for Stage 3 products will grow strongly in
          India over the next 10-15 years.

          In the immediate term, the major challenge for the NT is to deliver the expected service
          levels required to meet the demands of Indian tourists.




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Northern Territory Tourism Strategic Plan 2008-2012



          Table 4.5: Observations of Indian Visitors and NT Tourism Considerations
          Observation                                             NT Tourism Considerations
          4 or 5 star accommodation, with excellent levels of     The standard of accommodation and service in the NT
          service                                                 may be a challenge to developing the Indian market. It
                                                                  is important that products offered to the market will
                                                                  meet their expectations.
          Want to be able to return home with ‘bragging rights’   The NT has the original ‘outback adventure’ and
          from their travel                                       ‘Crocodile Dundee’ image that may work in the Indian
                                                                  market.
          Like to see things at a leisurely pace                  Training for the cultural expectations of the Indian
                                                                  market is very important. Perhaps highlight the lack of
                                                                  crowds and congestion in the NT – easy to get around
                                                                  and be relaxed while seeing the sights.
          Generally prefer some ‘cosseting’ - guided tours        Traditional targeted tour packages to India would appear
                                                                  to be a natural product.
          Interested in ‘soft’ adventure                          The NT is practiced at building the adventure image and
                                                                  experience; research into how this can be best targeted
                                                                  to the Indian visitor is need.
          Large MICE market                                       Darwin has major potential to market itself as a MICE
                                                                  destination with a difference – only a short flight on from
                                                                  Singapore.


4.4.5 South Korea

4.4.5.1   Overview
          The South Korean economy has been fuelled in recent years by strong consumer demand
          (supported by relatively steady interest rates and jobs growth) and exports (supported
          by strong demand from China and Europe). This has been driven by economic reforms
          that have resulted in a more open, market-oriented economy that provides a favourable
          business and consumer environment.

          Strong consumer demand and increasing household debt due to fast rising property
          prices has prompted the South Korean Government to raise taxes for property and
          squeeze liquidity in an attempt to raise rates of mortgage loans to slow household
          spending to more sustainable levels. As a result, retail sales are expected to grow at a
          slightly slower rate of around 2% a year between 2006 and 2009. Even so, disposable
          incomes are expected to grow by around 4% a year. Further, a strengthening South
          Korean won is expected to assist with growth in outbound travel.

          Combined with increasing capacity to major Australian airports, continued economic
          growth is expected to support solid growth in inbound arrivals from South Korea to
          Australia, which has already recovered to pre-Asian crisis levels (pre 1997) of around
          250,000 visitors. The TFC forecasts South Korean inbound tourist numbers to increase
          by 5.7% per annum on average through to 2015, to 404,000 visitors.




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Northern Territory Tourism Strategic Plan 2008-2012



          Figure 4.15: Forecast Inbound Visitation to Australia from South Korea

                                                         Visitors     Annual Growth

                                  500                                                                 20.0%

                                  450                                                                 17.5%

                                  400                                                                 15.0%

                                  350                                                                 12.5%
              Thousand Visitors




                                  300                                                                 10.0%

                                  250                                                                 7.5%

                                  200                                                                 5.0%

                                  150                                                                 2.5%

                                  100                                                                 0.0%

                                  50                                                                  -2.5%

                                   0                                                                  -5.0%
                                        2001   2003   2005     2007     2009     2011   2013   2015

          Source: Tourism Forecasting Committee (2006)

4.4.5.2   Preferences
          With relatively low and steady interest rates supporting strong consumer confidence,
          overseas travel is becoming an increasingly important part of the South Korean ‘way of
          life’. This trend is expected to continue in line with continued economic growth over the
          medium term.

          Wellbeing is a key concept for consumers in South Korea, resulting in increased demand
          for rest and relaxation and personal fulfilment. In terms of holiday travel, this translates
          to a wide variety in experiences being sought by South Korean tourists. Older South
          Korean travellers tend to prefer major city gateways, having embraced a similar product
          style to the Japanese in the 1980s and 90s based on rewards for hard work. There tends
          to be relatively strong demand for sightseeing experiences in this market that the NT can
          seek to tap into with its iconic natural landscape, but as a generalisation, Korean tourists
          tend to be more adventurous than the Japanese.

          Additionally, there is an emerging backpacker market rising from the younger Korean
          generation that is seeking to experience and learn about traditional local cultures and
          environments. This younger generation of South Korean tourists provides considerable
          potential as an emerging source market for the NT tourism industry.

          Australia currently has a strong position as a destination in the Korean market, and its
          natural assets are a strong feature of Korean’s understanding of the Australian product.

          In summary key preferences of Korean tourists are:

                        •           Activities and experiences that closely associated with Australia’s icons, natural
                                    features and Indigenous culture;
                        •           Opportunities to indulge;
                        •           Outdoor and adventure activities – ‘refresh and invigorate’ rather than ‘relax and
                                    unwind’;
                        •           Activities where local culture can be experienced; and,
                        •           Opportunities to practice English.
4.4.5.3   Requirements to Attract South Korean Tourists
          The Korean market presents a wide spread across the development stages. While
          packages remain popular, the Korean tourist is increasingly becoming more independent,
          particularly with the younger generation.



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Northern Territory Tourism Strategic Plan 2008-2012




          Figure 4.16: Estimated Market Stage of the Korean Outbound Tourist Market
          (The red box represents the NT’s core tourism product image)




                    Stage 1 - Products & Activities,
                           Places & things
            Korea




                            Stage 2 - Service
                           Differentiation, Niche
                                Indulgences

                    Stage 3 - Products & Emotions,
                      Exhilaration and Adventures

                         Stage 4 - Experiences:
                        Learning, Authenticity &
                             Sustainability


                      Stage 5 - Currently Unclear

          Note: This assessment is made using information from a variety of sources and is therefore only a general guide to the market.
          Specific research on visitors to the NT may change the assessment.


          Koreans provide the second highest number of visitors on working holiday visas to
          Australia after the UK. Targeting the young, adventurous Korean for a working holiday in
          the NT could provide the additional benefit of helping to address the critical skills and
          labour shortages in many parts of the NT. English is widely taught and valued in Korea
          with parents often spending large sums to send their children to English speaking
          countries to improve their skills.

          Table 4.6: Observations of South Korean Visitors and NT Tourism Considerations
          Observation                                                      NT Tourism Considerations
          Activities and experiences that closely associated with          The NT has some of Australia’s premier natural features
          Australia’s icons, natural features and Indigenous               and icons. There is also more potential to market the
          culture                                                          NT’s Indigenous culture in Korea than in most other
                                                                           Asian markets.
          Opportunities to indulge                                         The NT does not, as yet, have a competitive advantage
                                                                           in luxury or indulgent experiences.
          Outdoor and adventure activities                                 Opportunities for outdoor and adventure activities that
                                                                           are active and healthy.
          Activities where local culture can be experienced                Opportunity to market the NT as offering a unique
                                                                           Australian culture to the rest of Australia.
          Opportunities to practice English                                The NT could offer working holidays in conjunction with
                                                                           short courses though Charles Darwin University to
                                                                           ambitious young Koreans.

4.4.6 Indonesia

          High fuel prices (due both to higher oil prices and decrease in government subsidies) and
          rising interest rates in 2005 led to increasing inflation and dampened consumer
          sentiment in Indonesia. Retail sales were weak and consumer sentiment low.




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          However the economic outlook has since stabilised and the Asian Development Bank
          believes that Indonesia is on a moderate growth path. Economic growth to the first
          quarter of 2007 was 6%, led by growth in investment of 7.5%. Economic growth in 2007
          is forecast to be 6.3%.

          In the medium to longer term signs are positive for economic direction under the stable
          economic reformist presidency of Susilo Bambang Yudhoyono and the market based,
          consumer led economic system.

          Rising incomes are expected to underpin strong growth in outbound travel in the longer
          term. Low marketing investment by Australia and competitor destinations indicates a
          perception of there being few short-term opportunities for growth.

          Tourism Australia believes that Indonesia has enormous potential as a major inbound
          market for Australia for three reasons: its fast-growing middle class in a population of
          195 million; its proximity to Australia; and the synergy that exists between student travel
          to Australia and flow-on VFR and holiday traffic. The TFC forecast is for Indonesian
          visitation in 2015 to be at a similar level as Chinese visitation in 2006. Indonesia is very
          close to the NT, ensuring that growth in the market has potential for the NT tourism
          industry beyond its relative size.

          Figure 4.17: Forecast Inbound Visitation to Australia from Indonesia

                                      350                               Visitors          Annual Grow th    27.00%


                                      300                                                                   17.00%
              Thousands of Visitors




                                      250                                                                   7.00%


                                      200                                                                   -3.00%


                                      150                                                                   -13.00%


                                      100                                                                   -23.00%


                                       50                                                                   -33.00%


                                       0                                                                    -43.00%
                                            2001   2003   2005   2007   2009       2011      2013    2015

          Source: Tourism Forecasting Committee (2006)

4.4.6.1   Preferences
          There is very little published information on the travel preferences of Indonesians. With
          good links to the country, Australia should have a better ability to develop an
          understanding of the Indonesian tourist market than other western countries.

          Currently, it is understood that Indonesian travellers want to experience a western
          culture in Australia, escape the polluted and chaotic traffic atmosphere of Jakarta, and
          enjoy nature and clean air. They appear to place less emphasis on luxury hotels.

          Most Indonesians are Muslims, and consideration for religious needs (eg. Halal meat)
          must be given to this market.

          For Indonesian travellers to Australia, repeat visitation is very high. Indonesians rely
          more on information about Australia from friends & relatives than any other Asian
          market. Both package and non- package Indonesian tourists in Australia spend long




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Northern Territory Tourism Strategic Plan 2008-2012



          periods in the country – more than just about any other country. They currently spend
          most of their time in the larger cities but will travel to country areas.

          In summary key preferences of Indonesian tourists (as currently understood) are:

                        •    Opportunity to learn about western culture;
                        •    Enjoy a clean atmosphere;
                        •    Few Indonesians to Australia are with package or group tours, many are single
                             travellers; and
                        •    Appear to be interested in Australian wildlife.
4.4.6.2   Requirements to Attract Indonesian Tourists
          The requirements to attract Indonesian tourists to Australian destinations are not well
          understood at present. Indonesians are high repeat visitors to Australia and use word-of-
          mouth as a primary information resource when researched their travel to Australia. The
          limited travel package market in Indonesia is dominated by a small number of Chinese
          ethnic agents.

          Figure 4.18: Estimated Market Stage of the Indonesian Outbound Tourist Market (The red
          box represents the NT’s core tourism product image)
            Indonesia




                            Stage 1 - Products & Activities,
                                   Places & things




                                  Stage 2 - Service
                                 Differentiation, Niche
                                      Indulgences

                            Stage 3 - Products & Emotions,
                              Exhilaration and Adventures

                                Stage 4 - Experiences:
                               Learning, Authenticity &
                                    Sustainability


                             Stage 5 - Currently Unclear

          Note: This assessment is made using information from a variety of sources and is therefore only a general guide to the market.
          Specific research on visitors to the NT may change the assessment.


          Table 4.7: Observations of Indonesian Visitors and NT Tourism Considerations
          Observation                                                      NT Tourism Considerations
          Opportunity to learn about western culture                       The NT should be promoted as a genuine western
                                                                           destination easily accessed from Indonesia.
          Enjoy a clean atmosphere                                         The NT could be promoted as a ‘recharge’ destination to
                                                                           escape the bustle of Asia.
          Few Indonesians to Australia are with package or                 Promotions to Indonesian must be carefully targeted
          group tours, many are single travellers                          (more research required) to the consumers directly.
          Appear to be interested in Australian wildlife                   The NT can be promoted as and easy destination to
                                                                           experience Australian wildlife.




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Northern Territory Tourism Strategic Plan 2008-2012



4.4.7 Singapore

4.4.7.1   Overview
          The Singapore economy grew by 7.9% in 2006. Although it is expected to slow in 2007,
          forecast growth rates remain healthy for this already wealthy country. The budget is
          expected to be in surplus to at least 2009 and inflation remains low. Singapore is highly
          committed to liberalised trade and its economic fundamentals appear sound.

          Consumer confidence has buoyed by growth in employment, rising wages and a positive
          property market. Singapore is a market economy with growth driven primarily by private
          consumption and investment. While the Singapore dollar is currently weak, it is expected
          to strengthen in the foreseeable future.

          With the development of relatively strong aviation links between Darwin and Singapore,
          the Singapore market has clear potential for the NT tourism industry. Singaporeans are
          avid international travellers and are regarded as one of the most mature markets in Asia,
          with very high repeat rates of visitation to Australia (84%). Singapore is currently
          Australia’s 8th most important visitor market. They are also excellent English speakers
          (English is an official language).

          Figure 4.19: Forecast Inbound Visitation to Australia from Singapore

                                                         Visitors     Annual Growth

                                  500                                                                 20.0%

                                  450                                                                 17.5%

                                  400                                                                 15.0%

                                  350                                                                 12.5%
              Thousand Visitors




                                  300                                                                 10.0%

                                  250                                                                 7.5%

                                  200                                                                 5.0%

                                  150                                                                 2.5%

                                  100                                                                 0.0%

                                  50                                                                  -2.5%

                                   0                                                                  -5.0%
                                        2001   2003   2005     2007     2009     2011   2013   2015

          Source: Tourism Forecasting Committee (2006)


4.4.7.2   Preferences
          Overseas travel is an important part of the Singapore lifestyle and common practice. As
          this market matures, free independent travellers (FIT) are growing at the expense of
          group travellers. 19% of Singaporean travellers visitor nights in Australia are currently
          spent outside of the major cities of Sydney, Melbourne, Brisbane and Perth.

          Singaporeans’ travel is highly influenced by the standard school holidays with
          November/December being the longest break, and other shorter school holidays in
          March, June and September. Families do not have the flexibility to travel outside these
          times due to school regulations. In general, time for holidays is getting shorter in
          Singapore, reducing the ability to travel to long-haul destinations. This may have
          potential for the NT as it is the closest genuine western experience from Singapore.
          Furthermore, the proliferation of Low Cost Carriers out of Singapore ensures that there is
          a multitude of nearby international destinations for the short trip. The NT can compete in
          this short-haul market, with a unique product to the other nearby destinations to
          Singapore.



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          In summary key preferences of Singaporean tourists are:

          •               Very interested in shopping experiences;
          •               Are often keen gamblers;
          •               Enjoy visiting parks, gardens, national parks and wildlife attractions, perhaps as a
                          contrast to heavily urbanised Singapore;
          •               Unlike some other Asian markets, there is relatively low demand for packages and
                          group tours; and
          •               Are very interested in food and wine experiences.
4.4.7.3   Requirements to Attract Singaporean Tourists
          Figure 4.20: Estimated Market Stage of the Singaporean Outbound Tourist Market (The
          red box represents the NT’s core tourism product image)
              Singapore




                            Stage 1 - Products & Activities,
                                   Places & things




                                  Stage 2 - Service
                                 Differentiation, Niche
                                      Indulgences

                            Stage 3 - Products & Emotions,
                              Exhilaration and Adventures

                                 Stage 4 - Experiences:
                                Learning, Authenticity &
                                     Sustainability


                              Stage 5 - Currently Unclear

          Note: This assessment is made using information from a variety of sources and is therefore only a general guide to the market.
          Specific research on visitors to the NT may slightly change the assessment.


          Table 4.8: Observations of Singapore Visitors and NT Tourism Considerations
          Observation                                                      NT Tourism Considerations
          Very interested in shopping experiences                          The NT is not likely to be competitive on this interest
                                                                           unless some niche products of interest to Singaporeans
                                                                           can be determined. Interest in Indigenous products by
                                                                           Singaporeans is low.
          Are often keen gamblers                                          Darwin is able to offer holidays with gambling
                                                                           opportunities.
          Enjoy visiting parks, gardens, national parks and                The contrast to Singapore and Asia, the nearby ‘escape’
          wildlife attractions, perhaps as a contrast to heavily           of the NT may be an angle by which to attack this
          urbanised Singapore                                              market.
          Unlike some other Asian markets, there is relatively             Individualistic travellers require promoting to through
          low demand for packages and group tours                          media rather than supply-chains.
          Are very interested in food and wine experiences                 Highlighting the availability of unique cuisine (perhaps
                                                                           even bush foods) in the NT will help to improve the
                                                                           attractiveness of the NT to the Singaporean traveller.




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Northern Territory Tourism Strategic Plan 2008-2012




4.4.8 Other Emerging Markets

          In the key nearby markets in Asia, other areas of notable interest at present include
          Thailand, Malaysia and to a lessor extent, Taiwan. The Philippines are also in relatively
          close proximity however appear to receive very little attention from Australian tourist
          promoters at present. Of key importance to the most relevant emerging markets is their
          ease of access to Australia. Almost all of the tourism market is sensitive to price and
          travel times / logistics. New, cheap routes to the NT have the potential to greatly
          increase inbound tourists if promotions are used to develop interest for the NT product in
          the source market. The area of international markets that are of most interest are
          displayed in Figure 4. below.

          Figure 4.21: Flying Range of A320-200 from Darwin




          Source: Airbus (not sighted). Tourism Futures International (2007)


          Other emerging markets of significant interest to Australia are the Middle East and South
          Africa. These markets are too far away to consider the NT as less of a travel difficulty
          than the rest of Australia. They are also markets where the NT’s product offering is not
          as unique as it is to the Asian markets.

4.4.9    Positioning the NT for the International Market

          Tourism NT is a relatively small tourism body that must carefully target its funds in order
          to achieve the best return for the NT Tourism industry. Tourism NT continues to re-align
          its international marketing focuses in response to ongoing changes in target markets and
          marketing effectiveness.

          The traditional distribution networks have lost influence in many core markets requiring
          Tourism NT to develop alternative marketing techniques to capture the attention of
          international markets. For example the rapid movement to the internet by consumers for
          holiday planning and booking has seen Tourism NT work to strengthen its e-marketing
          capabilities and undertake increased consumer direct marketing.

          Strategies to counter consumers’ increasing scepticism and overloading with traditional
          advertising are also being developed, such as partnerships with organisations as diverse
          as the National Aquarium of Baltimore, Lonely Planet and Sothebys. The aim is to gain
          exposure and recognition for the NT through subtle and relatively neutral media.

          Tourism Australia has been allocated A$134 million in Australian Government funding for
          2006-07 to focus its efforts on the 23 countries where the promotion of Australian
          tourism can have the greatest impact. Key markets include the United Kingdom (UK),
          China, Japan, New Zealand, United States (US), Germany, Korea, Ireland, Taiwan,
          India, Canada, Singapore, Malaysia, Hong Kong, Gulf Countries, Thailand, Switzerland,
          the Netherlands, Italy, the Nordic region, France and Australia itself.



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          Tourism NT will closely follow developments by Tourism Australia in these markets, and
          look for synergies and opportunities to build on its work.

          Tourism NT is also continuing to partner with Tourism Australia in its Destination
          Australia Partnership (DAP) to synergise its exposure in the key European and UK
          markets. As part of this partnership the DAP:

          •     Increases the distribution network by servicing business relationships that Tourism
                NT could not afford on its own;

          •     Provides comprehensive training, especially on induction; and,

          •     Provides a helpline (‘Aussie Specialists’) that offers language-specific support in key
                markets and language help for enquiries.

          It is essential that Tourism NT develop an emerging markets strategy to gain a first
          mover advantage in targeting its core market segments (nature and cultural tourism) in
          the fast growing markets of China, India, Korea and South-East Asia, particularly where
          growth in Low Cost Carrier networks is developing visitor potential into Darwin. Current
          initiatives include:

          •     Expenditure on public relations to increase media profile and greater consumer
                awareness; and

          •     Tourism NT has an international representative based in Shanghai and has
                participated in trade shows in China.

          These moves should be supplemented with:

          •     Development of a consumer direct campaign targeting nature and cultural segments
                in strategic emerging markets;

          •     Forming strategic alliances and relationships with niche wholesalers in strategic
                emerging markets; and

          •     Educating operators on the needs and expectations of these markets including the
                development of Chinese speaking guides and interpretative signage.

          The NT tourism industry needs to be educated as to the opportunities that the Asian
          tourist market presents. This will be a significant task for Tourism NT. Industry needs to
          develop a more sophisticated understanding of Asian travellers, their diversity, needs,
          sensitivities and preferences. Core misunderstandings, such as that all Asian tourists are
          like 1980’s package tour Japanese need to be dispelled if the NT is to maximise the
          potential of these markets.

          Tourism often follows trade (and whilst this hasn’t been the experience to date in the NT,
          it is expected to increase as the NT economy becomes more internationalised) and
          Tourism NT will continue to look at opportunities to leverage trade and educational links
          to key and upcoming markets to the benefit of the tourism industry. Foreign students
          studying at Charles Darwin University are one key channel by which to take messages
          back to their home countries and also to test NT tourism product on foreign markets.

              STRATEGY

              Progressively build and enhance the “Share our Story” branding

              Develop ‘must see and must do’ lists for the NT for its core markets – tailored to
              the NT’s target market segments

              Continue to target the core and traditionally strong markets of UK / Ireland,
              Germany and North America, with particular emphasis being placed on
              developing the growing the cultural, sustainability and authenticity needs of



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              these markets

              Develop an Emerging Market Strategy for China, India and South-East Asia to
              capture a first mover advantage for the nature and cultural tourism segments

              Develop stronger partnerships to improve marketing efficiencies in the
              international marketplace

              Continue participation in the Destination Australia Partnerships (DAP) to
              maximise alignment with Tourism Australia


              WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

              Continued support from Tourism NT to promote the NT in the current core
              markets.

              More information, research and assistance from Tourism NT on how to engage
              nearby Asian markets. Operators should begin planning what skills and
              infrastructure they will require to maximise the opportunities that will arise from
              these emerging markets.

              Targeted information from Tourism NT on what international tourists are looking
              for in their NT experience based on exit surveys and in-market research.
              Operators should use this information to fine tune their product and ensure it is
              relevant to their market.


4.4.10 Changing Backpacker Traveller

          Recent growth in backpacker numbers to Australia appears to be driven by improvements
          in working holiday arrangements for these visitors. However market data reveals
          changing trends within the backpacker market at international, national and local (NT)
          levels. A number of forecasters are suggesting that this market is entering a period of
          long-term decline. Internationally, this is believed to influenced by the perceived lack of
          personal safety associated with backpacking; international incidents such as SARS and
          terrorism, as well as declining interest in once ‘must-visit’ tourism destinations.
          Additionally, backpackers generally go to destinations where others have gone before,
          that are punctuated with amenities and provide cheap accommodation. Where these
          criterion are not met, backpackers are much less likely to visit. The backpacker market is
          driven by rather rapid changes in fashion and the ‘discovery’ of new destinations, and
          hence it is a difficult market to accurately forecast.

          The NT relies heavily on the backpacker market, both for tourists and temporary workers
          in the tourism and other industries, and will need to monitor and respond to changing
          attitudes in this market category.

          Tourism NT released the NT Backpacker Development Plan in 2006 which identified a
          number of key trends and observations for backpackers at the Territory level. These are:

          •     Greater reliance on aircraft (especially low cost carriers) and organised coach tours,
                hence a greater need to plan a visit to the Territory in advance.

          •     On average, backpackers visiting the NT have visited at least four or five other
                locations before arriving in the NT. It can be observed that length of stay tends to
                decrease as the number of stopovers increases, thus creating another hurdle for the
                Territory.

          •     There is a relative lack of diversity in accommodation forms used by backpackers in
                the NT. The market place is dominated by low cost accommodation choices
                (backpacker hostels and caravan parks) but also by a lack of longer term
                accommodation options, particularly legitimate rental houses and staying with friends
                and relatives. This represents a potential weakness compared with other
                destinations, for those considering extended visits.



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          •     The NT is not regarded as a gateway to / from Australia, but as a stopover
                destination (as less than 10% of backpackers arrive in Australia via Darwin).

          •     International backpackers to the Territory are more likely to prefer activities based
                around nature, culture and adventure. As the backpacker matures, the preference for
                culture increases while adventure decreases, but the preference for nature remains
                constant.

          It should be also added that evidence from other work indicates that the broader
          backpacker market is also becoming more interested in ‘cultural immersion’ and as a
          generalisation moving towards Stage 4 tourism interests.

          The NT Backpacker Development Plan contains a number of strategies to address the
          changing backpacker traveller that will be a continued focus over the life of this Strategic
          Plan.

          There is an increase in backpackers seeking a volunteer experience which holds strong
          promise. Tourism NT recognises the potential to develop a co-ordinated approach to
          developing volunteer programs.

          The NT Backpacker Development Plan provides a detailed assessment of the current
          market place and outlines seven priority areas in which stakeholders (including Tourism
          NT and the NT Backpacker Operators Association) can focus on to strengthen this sector
          and improve the NT’s market share. Specific actions include:

          •     Honing marketing efforts to influence the experiential backpacker to consider the
                Territory a must see destination and making it the first port of call on their Australian
                journey;

          •     Leveraging existing trade alliances and developing and extending new cooperative
                opportunities with non-traditional partners;

          •     Developing and promoting work and travel, educational and volunteer opportunities;

          •     Undertaking public relations activities to promote the awareness of the NT as a low
                cost point of entry into Australia and an easy place to find short-term employment
                (particularly for working holiday makers);

          •     Exploring opportunities with other destinations to enhance the appeal of point-to-
                point travel (eg. transit accommodation packages with Singapore);

          •     Invigorating the Territory’s tourism product and services to provide a combination of
                unique and differing experiences to be had in the Territory which will match the
                demands of the ‚experiential backpacker; and

          •     Supporting the Australian Governments investment strategy initiative to encourage a
                concerted effort by government and the industry to prevent illegal operations
                including illegitimate backpacker accommodation outlets, unlicensed tour operators,
                misleading advertising and touting.

              STRATEGY

              Promote NT as “must see” and first entry point to Australia through Asia

              Develop and promote work and travel, educational and volunteer opportunities

              Leverage trade alliances and improving co-operative opportunities

              Target the up-and-coming adventurous backpacker segments emerging in some
              Asian markets such as Korea

              Implement the NT Backpacker Development Plan



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              WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

              Help to develop up-and-coming backpacker markets

              Better co-ordination with other programs of interest to backpackers (eg.
              Voluntourism, education) to help attract visitors

              The backpacker market is continually evolving and it is up to operators to
              respond to this change and work with Tourism NT in meeting backpacker
              expectations. Particularly important is ensuring that operators embrace
              accreditation so as to ensure consistency in product delivery.


4.5 Nature-Based Tourism
          Nature-based tourism is a traditional core market for the NT tourism industry and is often
          a key interest area of the domestic ‘spirited traveller’ and international ‘experience
          seeker’. It is an area of tourism that the Territory’s Tourism industry understands
          relatively well. Nature tourism is defined as being tourism with an interest in natural
          experiences while eco-tourism is defined as tourism where the consumer is also
          interested in the environmental impact of their holiday, and wishes to learn about the
          natural environment rather than simply enjoy it. Nature tourism is not necessarily eco-
          tourism, although much eco-tourism falls under nature tourism.

          Nature-based tourism and eco-tourism are key components of Australian tourism and
          prime attractors of overseas visitors. In 2005, 24 million domestic visitors and 3.4 million
          international visitors participated in nature-based activities (www.tra.australia.com,
          2007).

          Nature-based tourists can be thought as belonging to the following groups:

          1. Active/consumptive. This group is attracted by nature-based activities such as fishing
             and hunting;

          2. Consumptive/passive. This group enjoys relatively sedate activities such as picking
             flowers or beachcombing;

          3. Nonconsumptive/active. This group tends to enjoy ‘adventure’ type activities in
             nature such as hiking, rock climbing and canoeing; and

          4. Nonconsumptive/passive. This group is attracted to relatively sedate activities such
             as guided bird watching and photography tours.

          The applicability of the NT Tourism industries product to these groupings is described in
          the following table:

              Group                               Match with NT   NT Activities
                                                  Product
              Active/consumptive                  Very Good       World-class fishing and hunting in dramatic
                                                                  settings.
              Consumptive/passive                 Minimal
              Nonconsumptive/active               Very Good       4-wheel driving, hiking
              Nonconsumptive/passive              Very Good       Interpretive trails, national park tours


          The NT’s tourism industry has indicated a number of concerns with the ability to deliver
          nature-based tourism products in the NT. These include:

          •      Access to many natural attractions is poor – in some places access has been shut off
                 due to lack of funding;




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          •   The distance between attractions is a reality that needs to be dealt with – either by
              focussing more on natural areas closer to the main entry points of Darwin and Alice
              Springs, or building strategic clusters in natural areas that can attract and interest
              tourists for a number of days;

          •   Management of many of the NT’s natural assets is deteriorating through lack of
              funding; and

          •   Lack of facilities at many natural attractions is deterring the large parts of the market
              that don’t want to ‘rough it’ on location.

          Industry believes that in the past the NT may have traded too strongly on its natural
          assets. Tourism NT has recognised this issue and has begun to add stronger cultural
          overtones to its marketing, while at the same time understanding that the natural
          attractions of the NT will always remain a key part of the Territory’s attraction to tourists.

4.5.1 Eco-tourism

          It is clear that the Stage 4 markets are increasingly interested in sustainability and
          ecological sensitivity. Eco-tourism is a growing market segment around the world. By
          definition it will never be a major segment of the global tourism market, but it is a niche
          for which the NT’s inherent qualities as a tourism destination are suited.

          While eco-tourism is an important growth market for the NT, it is a niche that requires a
          combination of unique factors to work. It is not simply a branding tool that can be used
          to attract tourists to otherwise remote areas, or justify sub-standard infrastructure in the
          hope that visitors will view it as part of the experience. If a tourist is going to spend 14
          hours in a plane and 7 hours in a boat to get to a lodge, it had better be good.

          The Catch-22 of Eco-tourism

          Even if they are financially successful, ecolodges cannot be large enterprises, because
          then they would no longer be offering ecotourism. “It’s become an ecotourism mantra
          that lodges can’t have more than 15 rooms,” Donald Harrison, tourism professor at
          George Washington University told participants in a recent seminar in Washington, D.C.
          “Well, that’s fine if you can charge $800 a day.” For all these reasons, many experts
          believe that ecotourism can never be a big moneymaker. Ecotourism will never grow to
          be a major economic sector, says Luna-Kelser. If it did, it wouldn’t be ecotourism.

          Mehmetoglu (2007) Typologising nature-based tourists by activity—Theoretical and
          practical implications


          In the NT, eco-tourism ventures will mostly be located in quite remote destinations. As
          such they are best suited to areas where there exists a significant diversity of natural
          attractions and activities to occupy the visitor. Because they present to the market best
          when small, exclusive and secluded, eco-tourist operations are also going to be most
          viable when run by businesses that can use them strategically as part of greater tourism
          activities.

4.5.2 Developing Nature-based Tourism Product in the NT

          Nature-based tourism will always be a key plank in the NT tourism product as it is a key
          point of difference for the NT tourism product. Tourism NT will continue its focus on
          nature-based products to increase the attractiveness of the NT to the nature-based
          tourist.

          Colmar Brunton Social Research (2004) tested the market attractiveness of six products
          on the domestic tourist market. The most popular product, a Nature resort, is already a
          target for Tourism NT. The findings are summarised in the following table:




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          Table 4.9: Domestic Tourist Interest in Six Nature Based Products
           Product                                            % of tested Location preferences         Applicability to the
                                                             interested in                             NT Tourism
                                                              the product                              Industry
           Nature resort = “ a secluded luxurious                   46%      The coast – 43%           The NT has numerous
           resort in a natural environment. The resort                       A rainforest – 19%        locations that would
           would blend in with the best features of the                      In the mountains – 14%    work as nature resorts
           natural place. You could indulge in                                                         provided issues with
           massages and beauty treatments or go                                                        access and land
           bushwalking or horse-riding.”                                                               tenure can overcome.
           Holiday house = “ a secluded, scenic                     45%      The coast – 33%           It is noted that the NT
           place to stay in the holiday house. All                           In the mountains – 19%    lacks personalised
           amenities would be provided, and the house                        A rainforest – 16%        accommodation, such
           would feel homely and welcoming. You                                                        as B&B’s. The demand
           could take walks, watch animals and birds in                                                for this product is
           the surrounding bushland or drive to a local                                                strong.
           small town to shop or eat.”
           Lake retreat = “ a cabin by a lake or                    44%      By a lake or waterway –   Fisherman’s retreats in
           waterway in a secluded bush. The cabin                            29%                       areas that also offered
           would provide basic facilities such as hot                        The coast – 22%           activities for the rest
           water and a kitchenette. You could take                           A rainforest – 17%        of the family could
           walks, picnic by the lake or fish from a small                                              work in parts of the
           boat.”                                                                                      NT.
           ‘Socialising with people like me’ = “ a                  35%      Outback Australia – 23%   Interest in this
           holiday in the bush or Outback where you                          The coast – 21%           product style is good,
           can meet people like you, take walks, go                          A rainforest – 15%        and the market
           rock-climbing or talk around a campfire with                      In the bush – 14%         expects it to be in
           the group. You could stay in tents or                                                       settings such as the
           caravans to be close to nature. Meals would                                                 NT offers.
           be cooked at communal barbeques or over
           campfires.”
           Guided educational Experience = “ a                      29%      A rainforest – 26%        The NT already
           place where you could experience and learn                        Outback Australia – 17%   provides some product
           about natural wonders or rare animals or                          The coast – 17%           here.
           plants. Guides would be available to teach
           you about the environment or animals or
           plants during the day or night and
           information would be available for you to
           take home.”
           Friendly Guides = “ a remote location                    20%      A rainforest – 20%        Interest in this
           where you could stay in a rustic one to two-                      The coast – 18%           product is the most
           star motel with basic facilities. Local people                    In the bush – 16%         limited, although it
           and guides would be available to talk to and                      In the desert – 7%        may work in the NT.
           teach you about the local environment. You
           could take walks or explore nature parks.”
          Source: Colmar Brunton Social Research (2004), AECgroup

4.5.3 Positioning the NT for Nature-based Tourists

          The emergence of special interests as a driver of tourist destination choices is clearly
          underway in the most mature tourism markets and is considered likely to be one of the
          key drivers of the emerging Stage 5 market. The NT has some competitive advantages
          indulging a number of nature-based niche interests. Marketing to these niches
          increasingly involves direct methods to reach target groups.

          Table 4.4: Key Niche Markets that Offer Some Consumer Direct Marketing
           Group                                 Product Development
           Active/consumptive                          •    Fishing expeditions
                                                       •    Agricultural Adventure
           Consumptive/passive                         •    Not a target
           Nonconsumptive/active                       •    Birdwatching
                                                       •    Walking / hiking trails
                                                       •    4x4 vehicle trails
           Nonconsumptive/passive                      •    Birdwatching




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          To date Tourism NT has undertaken specialised consumer direct marketing through
          birdwatching associations and this has yielded positive results. Advertising is also
          appearing in other key specialist publications, for example a number of Australian nature-
          based destinations, including Uluru, have been recently advertised in New Scientist.

          The NT has limited cattle station product and experiences with the most notable being
          Bulloo River Station. There is a need to develop additional product and services including
          B&B’s, camping grounds, mustering and horse trail rides etc.

          A major barrier, that impacts the NT to a larger extent than its competitors, is the joint
          management plans for parks which are holding back tourism product development. The
          joint management plan for the Rainbow Valley is the first to be developed and has taken
          in excess of 2 years to prepare. In the meantime, tourism investment is stifled due to
          uncertainty.

          4x4 Drive Market

          Tourism NT is working on the development of a suite of 4x4 trails throughout the NT that
          offer the visitor a unique outback nature based experience away from the masses.

          Currently Tourism NT is working simultaneously on the development of a 4x4 Plan and an
          iconic 4x4 trail called the 'Binns Track'. The Binns Track, or formally proposed as the
          'Outback Explorer Territory 4x4 Trail', has been at the concept stage for over a decade
          due to a number of issues including land tenure and land access.

          The Track links up remote regional National Parks and remote communities and will be
          developed and marketed as one of the top 4x4 experiences in Australia. Presently, the NT
          does not have an iconic trail that is on the must do trips for avid 4x4 adventurers (such
          as Queensland’s Cape York or South Australia’s Oodnadatta Track). The Track will have
          economic spin offs for remote communities with the opportunities for them to develop
          small enterprises catering for the traveller (campgrounds, tyre repairers etc). While the
          4x4 market is not high yield short stay, it does offer regional dispersal, increased length
          of stay in the Territory and the ability for remote communities to consider small-scale
          business enterprises.

          While the Binns Track is the major project, the Development Plan will identify and direct
          the development of a number of other experiential 4x4 tracks across the Territory.
          Tourism NT is leading the development of these trails in consultation with parks and
          roads agencies. While the infrastructure is minimal on these types of drives there is still a
          need to provide tourism-focused signage along the roads to enhance the visitor
          experience.

          The real task for Tourism NT is to provide a project identification and subsequent co-
          ordination role across Government departments and agencies to ensure 4x4 project occur
          in a timely manner and offer a quality and unique visitor experience.

          Walking Trails

          In 2004 Tourism NT identified the potential of the Larapinta Trail as an iconic walking trail
          and set about developing a Management Plan for the trail in partnership with the Parks
          and Wildlife Commission and the wider community. Since 2004 Tourism NT has lead the
          development and marketing of the trail that is now at a point where it is ‘World
          Expeditions’ number one trail in their global program (out performing Nepal and Peru).

          Tourism NT is now working on a Tracks & Trails Development Plan that will identify future
          project management and resources over the coming years. The Jatbula Trail in Nitmiluk
          is the next logical trail development and a long distance trail in the Kakadu escarpment in
          the coming years is also being examined. Both will have a cultural overlay and should
          have economic spin offs for local Indigenous groups.




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              STRATEGY

              Tourism NT to work closely with industry to develop nature based products
              including emerging markets such as bird watching, art trails, fishing and 4x4
              vehicle trails

              Work cooperatively with traditional owners and representative organisations to
              develop and promote sustainable nature-based product

              Tourism NT encourage NRETA to improve the timeliness in the development of
              joint management plans for parks in the NT

              Develop a 4x4 Plan for the NT to ascertain activities and assign the relevant
              budget to realise the infrastructure improvements identified and to implement
              the associated marketing and communications plans.

              Develop a 5-year action plan to ensure the required                 infrastructure
              improvements and other activities will be implemented.

              Tourism NT to work cooperatively with Government and other States to
              implement tourism drive programs


              WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

              Creation of new product and service opportunities for operators. It is the role of
              Tourism NT to identify where opportunities exist but it is the responsibility of
              the operators to seize the opportunities identified and develop new product.

              Stronger market presence for established operators.

              Improved certainty for operators in national parks. Operators must recognise
              that they have a critical role in the presentation of National Parks to the world
              and it is essential that they operate within the established guidelines.


4.6 Cultural Tourism
          Cultural tourism is the fastest growing tourist interest segment in the mature tourism
          markets – those with growing Stage 4 interests. The NT’s current core tourism markets
          and market segments (spirited travellers and self challengers) are very interested in
          cultural product, and the NT has the basis by which to develop a valuable and highly
          unique cultural tourism industry.

          In general, cultural tourists are well educated, relatively affluent, well travelled and
          regularly pander their desire for cultural experiences. They are culturally diverse, as well
          as age diverse. They include couples, partners and friends from a range of social classes.

          Cultural tourists are defined as those visitors who attend one or more cultural attractions
          when travelling including:

          •     Theatre, concerts or other performing arts;
          •     Museums or art galleries;
          •     Art/craft workshops/ studios;
          •     Festivals/fairs or cultural events;
          •     Aboriginal art/craft and cultural displays;
          •     An Aboriginal site/community; and
          •     History/heritage buildings, sites or monuments.

          In 2000-01, cultural tourism represented 28.1% of tourism's total contribution to Gross
          Value Add (GVA) or 1.2 per cent of Australia's GVA (Heaney and Salma, 2002).
          International cultural visitors contributed $8.7 billion to export earnings in 2000-01.



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          Cultural Tourism

          In Europe cultural destinations have witnessed an impressive increase in value sales of
          51% from 2000 to 2005, with tourists increasingly willing to spend their travel and
          leisure time on more educational visits.

          Euromonitor International (2007) The World Market for Travel and Tourism


          Cultural tourists are being increasingly recognised worldwide as a highly attractive
          tourism market segment. Dolnicar (2002) notes that cultural tourists are known to spend
          more money per day at the destination and are less dependent on the main seasons in
          winter and summer. These are both highly attractive prospects for the NT tourism
          industry. From the supply side, Dolnicar (2002) notes that cultural heritage provides a
          unique selling proposition that can hardly be imitated by the vast amount of competitors
          in the global tourism industry. For the NT, the rich Indigenous culture is unique and
          increasingly recognised through the world through the strong growth in Australian
          Indigenous art.

          Cultural tourism is not as exposed to the effects of global warming and climate change as
          the nature-based tourism that the NT currently depends upon. Developing the cultural
          tourism potential in the NT is a defensive strategy to address the potential damaging
          impacts of global warming on much of the NT’s current tourist product.

          By developing the cultural tourist market the NT aims to:

          •   Further develop its core markets, which are mostly Stage 4 markets with the
              strongest current and foreseeable future growth in the cultural tourism segment;

          •   Target a market segment that is very high yielding;

          •   Develop a market segment which is less seasonal than most other tourist market
              segments;

          •   Develop a product based on Indigenous heritage which is relatively unique on the
              global stage, and that cannot be replicated or competed against by other
              destinations;

          •   Engage the Indigenous community and provide them with the opportunity to drive
              the future of tourism in the NT;

          •   Develop a product that will both compliment the current nature-based product
              offerings and diversify the destination image of the NT in its key markets;

          •   Develop a product that is better suited to the ageing component of the critical
              domestic market;

          •   Develop a product that is far less exposed to the likely impacts of climate change
              than key natural attractions such as Kakadu;

          •   Develop a product that has greater flow-on benefits beyond tourism, for example
              cultural marketing would have a positive impact on the market for Indigenous art;
              and

          •   Develop a product that can be supplied both in the Darwin and the towns, and in
              remote areas.

          As well as the Indigenous cultural product, the NT has the opportunity to much better
          market its contemporary and urban culture. Darwin presents a lifestyle, ethnic mix and
          culture that is possibly as different from the rest of Australia as can be found. The
          marketing peak of this image, although now outdated, was the connotations that the NT
          developed through Crocodile Dundee in the 1980s. Indications are that the contemporary



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          culture of the NT will also be more attractive to a number of Asian markets that have not
          currently expressed great interest in Indigenous culture (eg. India).

          The development of the different contemporary culture is important particularly for the
          domestic market. The most successful destination on the domestic market in recent years
          has been Victoria, which has sought to distinguish itself culturally from the rest of
          Australia as an ‘European-esc’ destination.

4.6.1 Understanding Cultural Tourists

          In order to better understand the cultural tourist the following segmentation is described:

          •   Type 1 (Standard culture tour participant): These tourists basically spend their
              entire stay in the bus, shopping, sightseeing and visiting museums. Therefore all of
              them state to engage in these activities, whereas all remaining cultural activities are
              either not taken into consideration at all or far below average;

          •   Type 2 (Super active culture freak): These tourists want to see and do it all. Of
              course, there is a danger that there are some answer tendencies included into this
              group as well, so if this segment is chosen for marketing action, further investigation
              of this particular issue would be necessary;

          •   Type 3 (Inactive culture tourist): This group is the contrary case of type 2. Every
              single activity is rated below average and again their is a danger of hidden answer
              tendencies, which do not particularly worry the marketer here, as the group does not
              seem to be very attractive for the tourism industry (at least from the point of view of
              segmentation variables);

          •   Type 4 (Organized excursion lover): Except for the participation in bus trips this
              group makes use of all cultural offers available proportionally to the sample total, but
              slightly below average;

          •   Type 5 (Event-focused): This group is very active and enriches the standard
              culture tour program by visiting local or regional events;

          •   Type 6 (Individual culture explorers): Shopping, sightseeing and visiting
              museums, these activities are engaged in by every single member of this segment.
              Interestingly, anything including the term “organized” seems to be rejected by these
              travellers and they seem to prefer off-season travel. This segment is very similar to
              type one;

          •   Type 7 (Theatre, musical and opera lovers): This segment is best described by
              the fact that every one of these tourists has been to the theatre, a musical or the
              opera at least once during the stay. But the typical cultural activities have not been
              sacrificed. Events on the other hand are not of interest to this group at all;

          •   Type 8 (Super lean culture tour participant): Another group that is similar to
              type 1, although less than type 6: these tourists seem to fly through the destination.
              73% participate in an organized bus trip and the only activities really undertaken are
              sightseeing and visiting exhibitions. Even for shopping there seems to be no time –
              unfortunately; and

          •   Type 9 (Organized culture tourists): The main characteristic of this segment is
              that every single member participates in organized excursions and organized bus
              trips. With shopping, sightseeing and visiting of museums being of average interest,
              cultural offers in the evening (opera, theatre) are not very attractive to his segment.

          An assessment of the suitability of the above 9 types of cultural tourist in relation to the
          NT’s product offering is provided below.




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           Cultural Tourist Type        Ranking Relation to NT Product Offering
           Type 1 (Standard culture     3          By developing the cultural product in the NT further with better galleries,
           tour participant)                       museums, interpretive centres, this segment would be relatively easily
                                                   catered for.
           Type 2 (Super active         5          This type may be under-whelmed by the current quantity of cultural
           culture freak)                          offering in the NT and hence is a long-term proposition.
           Type 3 (Inactive culture     9          Not a type for targeting
           tourist)
           Type 4 (Organized            2          This type may fit in well by adapting some existing tours of the region.
           excursion lover)
           Type 5 (Event-focused)       7          Current events, as diverse as the V8 Supercars to the GARMA Festival,
                                                   have great potential.
           Type 6 (Individual culture   1          This type is the most likely to find their own path and also prefers off-
           explorers)                              season visitation. The best type at this stage to build the cultural tourism
                                                   industry in the NT.
           Type 7 (Theatre, musical     8          May have some limited interest in the NT products but overall the NT
           and opera lovers)                       lacks competitive advantage in Theatre, Musicals and Opera. Indigenous
                                                   Theatre may be an exception to this.
           Type 8 (Super lean           6          May find the distances in the NT frustrating – a Darwin or Alice Springs
           culture tour participant)               centric approach is needed. Not considered a major value type.
           Type 9 (Organized culture 4             This type offers good potential for the NT provided the organised product
           tourists)                               currently available is sufficiently adapted to meet their cultural needs.


          The study by Dolnicar (2002) developed a breakdown of various tourist market
          parameters by cultural tourist type in Austria. The results by country of origin and season
          are presented below, with the top 3 cultural tourist types for the NT shaded.

          Table 4.10: Analysis of Tourists in Austria by Cultural Tourist Type, Origin and Seasonality
                                                                                             Type
           Current NT Market                                     1       2       3       4      5       6       7      8          9
           Type
                                        Country of Origin
           Core                         Germany               12%     16%     17%    14%      9%     14%    21%     18%     11%
           Growth                       Switzerland            5%      5%      6%     5%      3%      8%      9%     4%       5%
           Growth                       France                12%      7%     10%    10%     10%      5%    10%      7%       5%
           Growth                       Italy                 17%     11%     16%     8%     13%     15%    10%     16%     10%
           Core                         UK                     5%      9%      5%    10%     14%      7%      5%     2%       8%
           Core                         USA                   11%     25%      7%    11%     15%     10%    14%     10%     24%
           Potential                    Spain                 15%      3%      5%    21%      8%     21%      5%    17%     21%
                                        Season
                                        Summer (peak)         70%     80%     69%    78%     89%     43%    68%     67%     76%
                                        Winter (off)          30%     20%     31%    22%     11%     57%    32%     33%     24%
          Source: Dolnicar (2002)


          These results provide an indication as to the breakdown of cultural tourist types in a
          number of the NT’s core markets. However, the breakdown for the tourists that choose to
          visit Australia is likely to be different to those who chose to visit Austria, not least due to
          the different type of cultural product on offer. Further cultural tourist research on visitors
          to the NT is needed.

          Cultural tourists wish to interact with different and exotic cultures, however they are
          often also uncomfortable about doing so, particularly with ethnic cultures. The most
          successful cultural tourism products are those that don’t present as contrived or artificial,
          but also act to reduce tourist’s fear of appearing ignorant or accidentally presenting as
          culturally insensitive. This requires education of the tourist providers, as well as
          reassuring information for the tourist.




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4.6.2 Indigenous Product in the NT

          Research undertaken by Tourism Australia indicates that the Australian tourism industry
          is only meeting half of the current demand for Indigenous tourism experiences.
          International visitors are clearly interested in experiencing these cultures but, at this
          stage, our tourism industry has not been able to develop sufficient Indigenous tourism
          product to meet that demand.

          Presented below are the results of research regarding interest in Indigenous product in
          Australia. The NT’s current core markets are very interested in Indigenous cultural
          product. China, expected to be a major growth market for Australia into the future, is
          also demonstrating encouraging signs of interest in this product. Indeed, according to a
          survey in 2003 (Australian Tourism Commission, 2003) the opportunity to interact with
          Australian people and culture is the most significant satisfaction driver of Chinese tourists
          to Australia, and this flows through to Indigenous culture.

          Table 4.11: Tourist Interest in Indigenous Product in Australia by Source Country
           Current NT Market              Market                  Interest in Indigenous Product in Australia
           Type
           Core                           USA                     84%
           Core                           Germany                 80%
           Core                           UK                      75%
           N/A                            Hong Kong               62%
           Core                           Japan                   62%
           N/A                            Taiwan                  56%
           Core                           Australia               45%
           Growth                         Other Europe            ‘Relatively High Interest’
           Core                           Canada                  ‘Similar to UK and Other Europe’
           Growth                         China                   ‘Good Levels of Interest’
           Growth                         New Zealand             ‘Low Interest’
           Growth                         Singapore               ‘Relatively Low Interest’
           Potential                      Malaysia                ‘Relatively Low Interest’
          Source: Australian Tourist Commission (2003), Colmar Brunton Social Research (no date)

4.6.3 Positioning the NT for Cultural Tourists

          Over the life of this strategic plan, it will be the direction of Tourism NT to move the
          Territory’s brand image in its key markets with stage 4 growth from being a primarily
          nature and natural icon based destination to also being recognised as a cultural
          destination. Tourism NT has already successfully begun this move with the ‘Share Our
          Story’ campaign.

          The greatest impediment to cultural tourists engaging in Indigenous tourism is a concern
          of being a ‘voyeur tourist’ or presenting as culturally inappropriate. Marketing materials
          for Indigenous cultural tourism need to include a welcoming and comforting feel, they
          should provide the impression to the tourist that they can arrive in the NT and immerse
          themselves in an authentic cultural experience without feeling uncomfortable or self-
          conscious.

          While the rate of interest in Indigenous product from Australians is lower than many
          groups of international tourists, the size of the domestic market ensures that the
          domestic Indigenous cultural tourist is none-the-less very important to the NT.

          Competing for Cultural Tourists

          Culture is created to attract more tourists. The importance of the culture trend can be
          seen by the way destinations, which lack a particular cultural attraction, have started to
          create events that will appeal to culture lovers, such as festivals of opera, art, cinema
          and literature. Music festivals, for example, are very popular in Spain, with events such



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          as Benaccassim attracting many festival goers on an annual basis. Tour operators are
          harnessing this great opportunity by arranging special packages to a wide range of
          events, from classical music concerts to jazz festivals.

          Euromonitor International (2007) The World Market for Travel and Tourism


          For the domestic market, it is key to market the contemporary culture of the various
          towns and cities in the NT as different. Domestically, the NT is to be marketed as ‘As
          different as you can experience in Australia’ in a positive fashion – the aim is to spin the
          popular image of the NT (remote and different) as a way that makes it appear more like
          travelling to another country. While the modern, cosmopolitan image of Darwin should
          not be discounted, almost every town and city in Australia attempts to depict itself as
          having a vibrant café culture, nightlife and shopping.

          The NT’s towns need to find their points of differentiation, points that are specific and are
          not able to be easily captured and traded upon by competitors (As is increasingly taking
          place with the ‘Real Outback’ image). Victoria successfully did this by spinning its image
          as a cold, wet and miserable place to visit as being a romantically (and uniquely in
          Australia) ‘European-esk’ destination. Research confirms that this approach has achieved
          the greatest recognition in the market of the various State’s contemporary tourist
          marketing campaigns.

          TRA, in their report Changing consumer behaviour: Impact on the Australian domestic
          tourism market (2007) reach a similar conclusion:

          “Australians are searching for holidays that offer a significant contrast to everyday life,
          especially contrasts in the built environment, people and activities. It is the prospect of a
          temporary ‘new life’ that motivates them – not just in terms of places to see and things
          to do, but also in terms of learning, personal development and gaining genuine social and
          cultural insights”

          Also:

          “At an emotional level, overseas holidays provide a contrast of culture and history to
          their daily lives. This is a key motivation for travel. Not only is Australia not different it
          has a high degree of perceived homogeneity. Indigenous culture is not motivating to
          most Australians and thus also does not provide that cultural contrast.”

          And

          “The TRC stated that ‘it is necessary to address the absence of product or experiences
          that promote the sense of contrast or difference in cultural terms that travellers seek in
          order to create a measure or perspective on their own lives. Many may already exist, but
          are not currently being promoted’.”

          Darwin has a fascinating history of various ethnic groups settling in the city throughout
          its history. There will be an opportunity to ‘piggy back’ off the publicity from the film
          Australia to highlight the unique World War II history in Darwin. There are no other major
          towns in the heart of the desert like Alice Springs. Some of these points may seem
          obvious, but when considering a holiday destination, the cultural tourist may not make
          the connections to the culture implications for these areas.

4.6.4 Cultural Tourism Development

          As a result of the success of the destination development program to date it is proposed
          to implement a similar approach to enhancing the cultural tourism product of the NT. This
          approach of Cultural Product Development would involve Tourism NT:

          •     Selecting a range of cultural opportunities that are available;

          •     Prioritising these opportunities based on likelihood of success;




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          •   Making the identified projects market ready by achieving initial regulatory approvals
              and stakeholder acceptance;

          •   Developing a prospectus for each of the identified opportunities. The prospectus
              would include information on the identified opportunity, market conditions, approval
              process, government support or initiatives available, etc. This is a similar, but scaled
              down approach, to that used by the NT Government with the Darwin Waterfront
              Project;

          •   Take a select number of these project prospectus to market each year through
              advertising and the business broking / real estate network; and

          •   Evaluating the successful tender and facilitating project implementation.

          In undertaking this approach, resources should be sought from Tourism NT (to act in a
          facilitation role), DBERD and Indigenous Business Australia (IBA) to help manage the
          process.

          One of the key challenges to the development of this sector is the need to solve the
          Indigenous cultural approach to business and the necessity for products to have a
          commercial focus. Tourism NT has had difficulty fully developing some of the partnerships
          that were required for some of its destination development projects in the past. Efforts in
          the future will be more targeted to particular projects.

          The delivery of much of the Indigenous product in the NT is not at the level required to
          support the high yield market and the expectation levels of its customers. Whilst
          improvements are being made in the quality of the product offering, and some excellent
          examples do exist, realistically the NT is between 2 and 5 years from meeting the
          standards presented in South Africa and South America.

          It needs to be recognised that whilst the high yield niche market is a priority for
          development there is still a large market that travels to the Territory that prefers a more
          mainstream product presentation such as is achieved by the Tjapukai Theatre in Cairns
          North Queensland. In short, balance is required between the “high yield” and “bread and
          butter” segments. Mainstream projects that require consideration for the Territory
          include:

          •   A cultural and dance entertainment complex such as that proposed in the “Future of
              Darwin” project; and

          •   A National-International scope Indigenous Art Gallery that could encompass
              exhibition space and a retail gallery for the Indigenous art sector that is valued in
              excess of $500m annually.

          These projects should be considered to have value both as stand-alone operations and as
          significant ‘tasters’ to foster further interest from tourists in exploring Indigenous culture
          in more remote parts of the NT. It is recommended that these projects could be included
          on the Cultural Development Program.

          Garma Festival, Yolngu People, East Arnhem land

          Garma has limited capacity and the various categories of attendance are regularly sold
          out long before the Festival commencement date. For the Key Forum, priority is given to
          applicants who are working, studying, training or academically involved in a field relevant
          to the Key Forum theme – in 2007, Indigenous health: real solutions for a chronic
          problem.

          Other programs are filled on a “first come first served basis”.

          Garma Festival website booking notes (June 2007)
          http://www.garma.telstra.com/EOI_intro.html




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          Tourism NT has identified the Daly River and Hermannsberg Regions as two locations
          that have the potential to develop significant Indigenous tourism products. Regional
          development plans are being prepared for these locations.

          The NT currently delivers some very successful Indigenous cultural products in the NT.
          Indigenous cultures across the NT are extremely diverse – it is a common mistake to
          underestimate this. However, new Indigenous tourism operators can learn a great deal
          from existing, successful ventures. The Territory use of successful Indigenous
          businesspeople to mentor new Indigenous entrepreneurs and ventures through the
          ‘Stepping Stones’ program should be encouraged.

          Market research suggests that interest in Indigenous tourism is high amongst the existing
          target market segments for the NT (eg. Spirited Travellers). For existing successful
          Indigenous products, there is scope to better develop complementary products that
          appeal to these market segments (such as in Nature Tourism) to extend the return to
          Indigenous people.

           STRATEGY

           Continue implementation of the “Stepping Stones” program to facilitate
           Indigenous tourism business planning

           Implement the Cultural Product Development program in developing a targeted
           prospectus approach of taking identified opportunities to market

           Tourism NT to work with Indigenous people, and representative organisations,
           to ensure Indigenous tourism opportunities are maximized

           Educate Indigenous organisations about the potential value of tourism for
           Indigenous people and also lead cultural awareness education for industry

           Continue implementing the Tour Operators Licensing and Training System for
           NT Protected Areas

           Develop a mentoring program for Indigenous peoples and communities to
           leverage off successful projects


           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           A stronger theme throughout the NT tourism industry for developing and
           promoting both Indigenous and contemporary NT cultures

           Creation of new cultural product and services for operators to participate in. It is
           essential that operators work with Tourism NT in implementing identified
           opportunities for new cultural product. Without operator participation, this
           competitive edge that the NT has cannot be fully developed.

           Market ready opportunities identified and approved for operators to tender for

           Improved standards for operators and their customers. Operators must
           recognise that licensing and training will ensure consistent standards to visitors
           and improve the long term viability of their business.

           Mentoring available for operators to access. Whilst Tourism NT can provide the
           opportunity for mentoring it is very much up to the individual operators to fully
           commit for this program to succeed.

           Ongoing moves to develop the NT ‘Story’ and culture as the point of
           differentiation that other destinations cannot copy




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4.6.5 Seasonality

          Seasonality affects the operation of the NT Tourism industry more than any other state or
          territory in Australia, except for perhaps Tasmania. Seasonality in the NT is primarily due
          to the wet season in the northern region of the NT (the summer months of December to
          April) being too hot and humid for most travellers. It is certainly the case that it easier
          to promote the virtues of the cooler season. The primary product offering of the NT is
          currently highly geared to the weather (outdoor, natural icon experiences). It should be
          noted that the Central Region is not impacted by the wet season to the same degree as
          the Top End region.

          Previously, the domestic market campaign strategy included elements to increase
          visitation to both the Top End and Central Australia during the shoulder season. Tourism
          NT is beginning to see the benefits from these strategies aimed at reducing the
          pronounced seasonality that negatively impacts the prosperity of the Territory tourism
          industry. Campaigns such as the “Darwin Tropical Summer” and “Red Centre Way” are
          lifting the performance of the industry in the low season and it is recommended that they
          be continued.

          In addition to these shoulder season campaigns, Tourism NT should consider shifting the
          focus of festivals and events occurring in the dry season to supporting new events that
          are scheduled for the low season. These events place significant strain on the available
          tourism infrastructure that in many cases is operating at full capacity during this period
          anyway. Therefore the impact from these festivals and events is not nearly as large as if
          they were to occur in the low season. This is not to say that events and festivals should
          not occur in the dry season rather that Tourism NT should place greater emphasis on
          funding assistance for festivals and events that occur in the wet season.

          Internationally, the most significant wet season festival is Thailand’s Songkran Festival
          held in April each year of which water is the major theme. The throwing of water was
          originated as a way to pay respect to people, by pouring a small amount of lustral water
          on other people’s hands as a sign of respect. The youths also do it in a more fun way.
          They splash others with water to relieve the heat, since April is the hottest month in
          Thailand (temperatures can rise to over 40oc on some days). This has changed to water
          fights and splashing water at people on vehicles, a hallmark of Songkran as tourists
          know, as Thais assimilate more western cultures and technologies.

           STRATEGY

           Continue to undertake shoulder-season campaign

           Assist in the development, promotion and funding of events and festivals that
           occur in the low visitor months


           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           Continued shoulder season campaigns improve operator profitability in the low
           season. For these campaigns to maximise effectiveness it is essential that
           operators fully commit to working with Tourism NT in their development.

           Greater emphasis will be placed on the development of festivals and events in
           the low season to improve operator profitability at these times. Operators must
           be willing to work with Tourism NT and commit to participation in new festivals
           and events as they are developed.



4.7 Business Tourists
          The business tourist is an important market for the NT, particularly in the centre, and one
          with the potential for significant expansion as major new facilities such as the Darwin




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          Convention Centre are developed. However as a generalisation, tourism businesses in
          Darwin have limited experience and capabilities to cater to the discretionary business
          tourism market, in particular the MICE market.

          Maximising business tourism should involve a number of initiatives including:

              •   Targeted promotion of the NT to business associations as a conference market.
                  These promotions need to be targeted both at the decision makers in
                  organizations and at levels that influence the decision makers;

              •   Promotion of the NT conference potential to local businesses and offices who may
                  both increasingly choose to stay in the NT for events and conferences and also
                  pass on positive messages of the NT through their business networks;

              •   Improving the marketing of the NT as a tourist destination to business travellers
                  in order to increase their length of stay and associated leisure activities; and

              •   Education and capacity building of NT businesses to meet the requirements of
                  business tourist markets and improve cross-marketing to this sector.

          A significant sector of business tourism is the corporate visitor market, which is simply
          associated with the level of business being conducted within the NT. Whilst the efforts to
          increase the level of visits from this market would be unproductive, there is an
          opportunity to increase the length of stay from this market, for example by convincing
          them that it is worth overstaying into the weekend in order to explore the NT.


           STRATEGY

           Target business events promotions to decision makers within organisations

           Develop strategies for better cross-selling of NT tourism products to business
           travellers already in the NT

           Conduct capacity building extension with tourism businesses to take advantage
           of increased MICE travel with the completion of the Darwin Convention Centre



           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           Practical support for leveraging the growing MICE market in the NT.

           Development of targeted promotional materials to the business traveller for provision in
           key accommodation and function centres.




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5 Product Development
5.1 Access
          The NT is remote from both key tourism markets and the rest of Australia and its major
          tourist attractions are spread over a large area, meaning tourists have to travel
          considerable distances to access the range of attractions offered by the NT. Efficient and
          effective access for both domestic and overseas tourists to and within the NT is vital for
          the continued development of the tourism industry.

5.1.1 Distribution of Travel to NT

          The remote location of the NT from other Australian capital cities and tourist regions
          means flying is the most common method of arrival into the Territory. Arrival by air
          accounts for 70.2% of arrivals for international visitors and 60.6% for domestic visitors.
          Self-driving is much more common for domestic visitors (33.7%) when compared to
          international visitors (13.7%). Significantly more international visitors arrive in coaches
          (10.5%) and by rail (3.5%) than domestic visitors (5.7% total in coaches and rail).
          Between 2004/05 and 2005/06, the proportion of both domestic and international visitors
          that arrived by air fell while the proportion that drove increased.

          Table 5.1: Trends in Method of Arrival into NT
                                                  International Visitors                   Domestic Visitors
                                                00/01       04/05          05/06   00/01           04/05        05/06
          Air                                   69.7%       73.3%          70.2%   64.6%           67.4%        60.6%
          Self-Drive                            14.6%       11.3%          13.7%   28.8%           25.5%        33.7%
          Coach                                 13.0%       10.5%          10.5%      N/a             N/a          N/a
          Rail                                   1.9%        4.2%           3.5%      N/a             N/a          N/a
          Source: Tourism Australia (2006)


          Figure 5.1: (A & B): (A) Transport into NT by International Visitors (05/06), (B)
          Transport into NT by Domestic Visitors (05/06)
                                   Rail Other                                      Other
                                   3.5% 2.0%                                       5.7%
                        Coach
                        10.5%




           Self Drive                                               Self Drive
             13.7%                                                    33.7%



                                                                                                                Air
                                                                                                               60.6%

                                                            Air
                                                           70.2%



          Source: Tourism Australia (2006)


          Despite lower airfares and higher fuel prices, the proportion
             of visitors arriving to the NT in the self-drive market has
                           increased on the back of the baby boomers.
5.1.2 Distribution of Travel Within NT

          Travel preferences within the NT differ between international and domestic visitors in
          regards to the method of land transport. During 2005/06 self-driving was the most
          popular method of transport for domestic travellers accounting for 71% of intra-Territory
          travel. Self-drive is undoubtedly more popular when people are able to use their own



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          vehicles – it also allows for the most flexibility with itineraries. International travellers on
          the other hand most commonly use coach travel (48%). Self-driving accounts for 35% of
          intra NT travel by international tourists. Flying accounts for a similar percentage of intra-
          Territory travel for both international visitors (13%) and domestic visitors (14%).

          Figure 5.2: (A & B): (A) Transport within NT by International Visitors (05/06),
          (B) Transport within NT by Domestic Visitors (05/06)
                                    Rail                                                    Air
                                              Air                     Other
                                    4%                                                     14%
                                             13%                      15%




               Coach
                48%
                                                    Self Drive
                                                       35%



                                                                              Self Drive
                                                                                71%

          Source: Tourism Australia (2006)


            The domestic self-drive market is significantly larger in the
            NT than the international market which is more associated
                                with coach travel and organised tours.
5.1.3 Air Access

          The remoteness of the NT means air transport is the major form of tourist transportation
          to the NT. Darwin International Airport is the main entry point for domestic and overseas
          tourists, moving an estimated 1,020,000 domestic passengers and 116,500 international
          passengers in 2005-06. International passengers to Darwin are predicted to grow in
          coming years with the Commonwealth Government’s ‘regional open skies’ policy looking
          to allow more international carriers to service Australian airports outside Sydney,
          Melbourne, Brisbane and Perth.

          There is a 20-year master plan, Darwin International Airport: Final Master Plan 2004-
          2024, which outlines the future development of the airport to meet future anticipated
          demand. The Alice Springs and Ayers Rock Airports are serviced exclusively by Qantas
          (excluding regional airlines) and account for just under half of all domestic seating
          capacity in the NT. The Alice Springs Airport also has a 20 year master plan, Alice Springs
          Airport: Final Master Plan 2004-2024, outlining the development of the airport to
          accommodate expected future increases in tourist numbers.

          Presently, there are seven international air service providers operating out of the NT,
          providing 2,660 seats of weekly scheduled capacity. The largest carriers are Qantas (35%
          of total seats), Tiger (30%) and Garuda Indonesia and Royal Brunei (11% each). Recent
          increases in scheduled seats and charter flights, due largely to the entrance of Tiger
          Airways, Jetstar and Japan Airlines, has seen total international seats increase to the
          level they were at prior to September 2001 and the collapse of Ansett Airlines.

          There are 5 domestic air service providers, providing 26,042 seats of weekly scheduled
          capacity. The largest carriers are Qantas (80% of total seats), Jetstar (12%) and Virgin
          Blue (6%). Recent expansion in arrivals at Darwin International Airport saw total weekly
          seating capacity reach record levels in 2006.

          The key air access challenges facing the NT include:




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          •    Currently both the international and domestic airline markets show the impact of thin
               routes and low yields due to the loss of full service airlines, ‘unstable’ frequencies,
               route changes and the growth in ‘back of the clock’ services;

          •    Low Cost Carriers (LCCs) represent a new opportunity for air services and tourism
               development in the NT;

          •    The LCCs do not meet all the needs of the NT in respect of resident travel or in the
               growth of inbound tourism; and

          •    It is difficult to envisage the re-establishment of fully commercial services on routes
               such as Darwin/Katherine/Tennant Creek/Alice Springs and in East Arnhem Land
               without some form of Government involvement.

          In the broader international scale, airline services are likely to become more cost
          effective with the spread of LCCs, the introduction of larger and more cost-effective
          aircraft for long-haul routes and moves to deregulate airline policy globally. This brings
          opportunity to the NT Tourism industry. However, the main effect of cheaper air travel is
          to level the global tourism market, meaning that competition for the NT markets from
          other parts of the world will also be stronger.

               The reduction in airfares associated with low cost carriers
                 has made travel to the NT more affordable but has also
                    improved the affordability of competing destinations.
          The one major threat to the continued trend of more economical and convenient air
          travel is the price of fuel, which is expected to face upwards pressure both due to an
          increasing scarcity of oil, and the pricing of carbon emissions into fossil fuel use. If these
          price pressures overwhelm the efficiencies described above, the global tourism market
          will become less level, and the NT tourism industry will need to depend increasingly on
          nearby markets in Australia, and again, Asia.

          Tennant Creek Airport caters largely to mining companies and the small communities
          surrounding Tennant Creek. There are also many operational airfields throughout the NT,
          but most are private or local government-owned and predominantly catering for the
          general aviation market (i.e. not scheduled airline flights). These smaller facilities have
          potential to be better utilized to overcome both the distances between attractions and
          seasonal road access problems through small, intra-Territory flights targeted at high-
          yield, time-poor tourists.

          Limitations on domestic and international air capacity are widely considered to be
          constraining the development of the tourism industry in the NT. The Register of Available
          Capacity, maintained by the Department of Transport and Regional Services (DOTARS),
          indicates there are currently no Air Service Agreement restrictions preventing additional
          capacity being introduced between the NT and many current and potential tourism
          markets in Asia, including China, Hong Kong, Indonesia, Korea, Malaysia, Vietnam and
          Taiwan, and 4,400 spare seats to India. Tourism NT will develop long-term strategies for
          a number of these markets to build demand for airlines to provide additional capacity. An
          increase in seating capacity will not boost the industry if there is not unmet demand for
          flights. Seating capacity must increase concurrently with demand for seats, which will be
          driven by the continued broadening and expansion of the NT tourism industry.

               There are no air service restrictions to the NT and many of
                  Asia’s growth markets. Demand needs to be created to
                                          create viability on these routes.

              STRATEGY

              Implement the recommendations of the NT Government Northern Territory
              Aviation Strategy



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            Target markets with the best opportunity for increasing air access to the NT

            Work with the airlines and tourism industry to prioritise the development of
            demand for times where excess airline capacity exists


            WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

            Markets that have increasing capacity to travel to the NT will be targeted for
            marketing

            Increased air capacity will lead to increased visitation and exposure for
            operators

            Improved competition on routes will decrease travel costs and increase choice
            for customers of operators


5.1.4 Cruise Shipping

          Cruise shipping is a high-yield tourism industry that is currently experiencing rapid
          growth in Australia and the NT has been able to capitalise on this opportunity. The
          number of large cruise ships stopping at the Port of Darwin has more than doubled over
          the last two years, from 14 in 2004 to 31 in 2006, and the number of small cruise ships
          has been boosted over this period by the introduction of the Oceanic Princess, from 8 in
          2004 to 13 in 2006. The capacity of cruise ships entering the Port of Darwin in 2006 was
          estimated to be 12,726 passengers. The average occupancy rate of this capacity was
          estimated at 73%.

          Figure 5.2: Cruise Ship Arrivals, Darwin Port
            45



            40



            35



            30



            25



            20



            15



            10



            5



            0
                 1996   1997    1998    1999     2000          2001          2002        2003   2004   2005   2006

                                               Large Cruise Ships   Small Cruise Ships


          Note: Small cruise ships have capacity of less than 100 passengers; large cruise ships have capacity between 100 and 300
          passengers.
          Source: Tourism NT (2006b)


          Enhanced infrastructure to service the cruise ship industry is being provided through the
          $1.1 billion Darwin Waterfront Development project already under construction. The
          project will greatly increase the capacity of the Port of Darwin and has the capacity to
          sustain greater tourist numbers. The Darwin Waterfront Development will increase the
          attractiveness of the NT to cruise companies, especially the mega-cruise ship providers,
          which demand extensive infrastructure and tourist facilities. Military ships visitation may
          also benefit from this infrastructure and provide significant economic benefits to the NT
          tourism industry.

          Large cruise ships, bringing the bulk of all cruise passengers visiting Darwin, are in port
          between October and March (the low-season), carrying passengers escaping the Northern
          hemisphere winter. The majority of cruise ships visiting Darwin remain in port for most of



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          the day. Off-season tourists supplied by the cruise shipping industry are important to the
          NT tourism industry’s development and smoothing seasonal demand.

          An issue that needs to be addressed for the growth of this industry is to cater adequately
          for tourists in the rainy season. This includes ensuring that facilities (particularly for
          smaller vessels) are able to keep visitors dry as they disembark and transport to the city
          and attractions is organised and efficient.

             The cruise shipping industry has grown rapidly in the NT
          and is helping to smooth tourism demand between seasons.
              Demand will be boosted by the new Darwin Waterfront.
          The marketing of Darwin as a desirable port of call is required. Darwin centric activities,
          including key cultural and nature attractions, are the required reality to build the
          potential of this market.

          The potential of the NT for small cruise ships (70-120 passengers), with more
          adventurous itineraries and destinations also holds strong potential.

           STRATEGY

           Support development of Darwin Centric attractions and activities that can cater
           to the cruise industry and act as ‘tasters’ to the broader NT experience.

           Work with the Darwin Port Corporation to improve customer service facilities for
           cruise ships.

           Foster a continued relationship with Cruise Down Under to ensure Darwin
           remains an attractive port for cruise shipping.


           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           Significant influxes of visitors to Darwin during ship stays

           Support to market to cruise ship visitors to encourage to return to the NT for a
           longer holiday and visit the more remote attractions

           The average cruise ship passenger spends $131 in the NT every 24 hours

           The average military ship crew member spends $377 in the NT every 24 hours

           It is essential that operators, particularly retailers, are flexible in their hours of
           operation so as to meet cruise ship passengers expectations. If retailers are
           closed when cruise ship passengers are in port, then many of the economic
           benefits of the visit are missed.




5.1.5 Road Access

          Despite the large distances involved, road access remains a key transport method for
          tourists, particularly domestic tourists, when moving around the NT. Self-drive holidays
          let tourists set their own pace and itineraries, and give them the freedom to change
          those itineraries at short notice.

          With it’s large land mass and small, widely distributed population, almost 70% of the
          Territory’s roads remain unsealed, making driving to some of the Territory’s tourist
          attractions uncomfortable and slow during the dry season and impossible in the wet
          season. Consistent, convenient access to the attractions currently affected by road access
          issues will be important for the development of the off-season and shoulder-season
          tourism markets, particularly if they are based on nature/icon attractions.



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                   Much of the Territory’s roads are unsealed, making it
             difficult to access some of the leading tourism attractions,
                                     particularly during the low season.
          Road infrastructure is critical to tourist access to national parks and other major natural
          tourist attractions. Some locations are impacted by Indigenous ownership and
          environmental protection that has resulted in poor and underdeveloped access to some
          attractions. From a tourism perspective, efforts should continue to focus on improving
          access to key attractions and developing touring loops through regions of interest,
          reducing the need for backtracking and increasing tourist exposure.

          An audit of current roads with seasonal access issues needs to be collated and prioritised,
          so funding can be directed at improving those roads that potentially offer the biggest
          “bang for the buck” for the tourism industry in the NT. Greater promotion on the
          www.travelnt.com of which existing and improved routes are sealed and which routes are
          accessible at what times of the year is also appropriate.

           STRATEGY

           Develop a tourist friendly central information point for road conditions and
           accessibility on www.travelnt.com

           Tourism NT to meet regularly with the Roads Department to provide input to
           their work programs in respect of tourism drives

           Focus on progressively developing sealed touring routes in areas of numerous
           attractions


           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           Visitors with more confidence in driving NT roads who are more likely to visit
           remote attractions

           More targeted lobbying for improved road access to key tourism sites

           Improved visitor information on road conditions and accessibility


5.1.6 Rail Travel

          The NT has one rail passenger service, the Ghan, which runs between Adelaide and
          Darwin, providing both a means of transportation to and within the NT but also an
          attraction in its own right. Initially running between Darwin and Adelaide once a week
          and Adelaide and Alice Springs twice a week, a second Darwin to Adelaide trip was
          permanently added in March 2006 in response to higher than expected demand.

          The expansion of Ghan services led to the need for new and developed passenger
          stations to meet increased numbers. The extension of the journey up to Darwin also
          required new stations to be built at Tennant Creek, Katherine and Darwin, as well as the
          redevelopment of the station at Alice Springs, to accommodate the extra-long Ghan.

          Aside from the increase in passengers to Darwin, this second service has given tourists
          the opportunity to stop over in Alice Springs or Katherine for a few days before
          continuing their journey, further diversifying the options available to tourists travelling by
          rail in the Territory. It is not expected that there will be sufficient demand to justify any
          further investment in passenger rail lines in the NT in the foreseeable future.

          There are already tourist operators servicing Ghan passengers during the stops at Alice
          Springs and Katherine with Whistle Stop Tours. Shuttle buses from the train stations into
          each town are also offered. If there are service gaps, they appear to be limited.




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            The Ghan has positioned as a popular rail service and there
                 are no projected additional investment requirements.
          The Ghan is already incorporated into multi-modal holidays, but there may be need to
          examine scope to increase this (i.e. overseas tourists fly in to Darwin, spend a few days
          in Darwin, then a 24 hour train trip to Alice Springs for a trip to Uluru).

           STRATEGY

           Support the promotion of the Ghan in tourist destinations as an alternative to
           road and air transport in the NT


           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           Strengthen the rail product for the benefit of operators servicing the Ghan

           It is important that operators continue to work co-operatively with Tourism NT
           and the RTA’s in the development of new product to meet the needs of the
           Ghan passengers so its true potential as one of the great railway journeys of the
           world can be realised.


5.2 Infrastructure
5.2.1 Accommodation

          While many of the NT’s target tourist markets are driven by natural and cultural features
          the quality of infrastructure and accommodation is important to their satisfaction with a
          visit. There is currently significant investment in accommodation underway in the NT,
          particularly in Darwin but also potentially in Katherine, Alice Springs and Kakadu. A
          number of these developments will provide a higher quality of product than is currently
          available, increasing the markets that the NT tourism industry can target.

          Attracting investment from major national and international accommodation providers
          remains an ongoing focus for Tourism NT. These large investors can deliver a style of
          accommodation in the NT not possible for small to medium enterprises and help drive
          tourism growth through their own marketing channels.

          TRA (2007) has identified a lack of accommodation in Australia in general that is
          moderately priced and displays character. The NT tourism industry has similarly pointed
          out a lack of personalised accommodation (such as B&Bs) in the NT. The evolving tourist
          is increasingly looking for accommodation with individuality, character and a distinctly
          local feel, as well as comfort and quality fittings. Tourism NT will work with industry to
          develop more uniquely ‘NT’ accommodation styles in to work with the ‘Share Our Story’
          identity and the need to differentiate the NT experience from the rest of Australia.

           STRATEGY

           Work with industry to deliver more uniquely NT accommodation styles that
           complement the Share Our Story identity


           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

            Opportunities exist for operators to develop more uniquely “NT”
           accommodation that leverages the work undertaken by Tourism NT. The market
           intelligence provided by Tourism NT identifies the key elements that visitors are
           looking for from their NT experience and this requires industry to adapt their
           product accordingly. This may involve additional investment in infrastructure.




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5.2.2 Business/Convention

          The major new Darwin Convention Centre is currently under construction (opening mid
          2008) and is set to transform the potential for Darwin to cater for the business and
          convention market during the life of this plan. When combined with the successful Alice
          Springs Convention Centre and numerous smaller venues, the business and convention
          market should develop strongly in the near future.

          In order to gain the greatest benefit Tourism NT will work to engage business and
          convention visitors who will be attracted to the NT. This means ensuring that sufficient
          Darwin and Alice Springs centric attractions are available to wet the appetite of the
          business and conference visitors. While these visitors may not be able to easily extend
          their stays it is the messages that they take back to their friends and families that can
          build significant market exposure for the NT.

          The new Darwin Convention Centre also has strong potential to build further links with
          the South-East Asian market, particularly out of Singapore. Tourism NT should strongly
          market Darwin as a uniquely convenient yet western destination for business events.

5.2.3 National Parks

          The NT is home to over 90 National Parks, with the NT Parks and Wildlife service
          managing all of these but the two most famous (Kakadu and Uluru Kata-Tjuta).

          It is undisputed that the NT’s National Parks are critical to the NT tourism industry. While
          the NT tourism industry is moving towards a stronger focus on the NT’s culture to attract
          tourists, the natural attractions need to continue to be developed, and will be a part of
          most visitor experiences. Furthermore, both NT indigenous and contemporary culture
          derives identity from the unique natural environment.

          To date Tourism NT has invested significant funds into infrastructure in National Parks
          within the NT. This is clearly well outside the core business of Tourism NT but has been
          necessary to facilitate the development of destination product such as the Larapinta Trail.
          As a result of the success of the projects facilitated to date, it is logical for Tourism NT to
          examine alternative funding models for new destination projects.

          The NT tourism industry believes that the potential of most of the NT’s National Parks is
          undeveloped. The research outlined in 4.5.2 suggests that there is significant domestic
          demand for selected infrastructure in National Park areas.

          Currently, there is insufficient funding for NT Parks and Wildlife Service to develop
          significant new infrastructure to improve the amenity of these areas for tourists. In order
          to maximise the value of NT’s National Parks for the tourism industry, an injection of
          significant levels of funds is required.

          The NT Parks and Conservation Masterplan is now in effect. However individual park
          plans are now being developed, and these will consider several models for improved
          financing and management and the involvement of the tourism industry.

          Three models to improve financing and infrastructure provision in the future are under
          consideration. These models are in use in numerous National Parks in other states in
          Australia and in other parts of the world.

          These are:

          1. Introduce entry and camping fees for all National Parks in the NT;

          2. Develop Concession arrangements for commercial operators to participate in the
             development and maintenance of National Parks; and,

          3. Develop Public-Private Partnerships for the provision of accommodation and certain
             infrastructure in select National Parks.




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          Moving to a user-pays system for National Park usage has a number of advantages.
          These include:

          •     Prices help gauge consumer preferences (much more accurately than other
                mechanisms such as surveys);

          •     Consumers of services balance the benefits of using them against the costs;

          •     Pricing curbs hidden cross-subsidies;

          •     The deadweight costs of taxation are lowered;

          •     More revenue can be generated and resources directed to the improvement of
                facilities at those parks being demanded.

          Experience from other parts of Australia and the World is that the majority of people
          support the charging of fees for National Parks provided they are used to better the
          management of the park and its infrastructure. However it must be clear in the public
          eye that money raised through fees is not used for any other purpose.

          It should be remembered that free entry to National Parks is a subsidy. National Parks
          cost money to manage - free entry is either a subsidy by the ratepayer or a subsidy by
          the environment, which is neglected through lack of funds. NT residents may continue to
          receive partly subsided access through the provision of reduced price yearly unlimited
          passes for Territorians.

          The Concession Model involves the identification of suitable sites where commercial
          operators can participate in the development and maintenance of the destination product.
          An expression of interest process can be used to identify the most suitable
          concessionaire. Concession fees may include cash and in-kind support such as track
          maintenance, campground maintenance, etc. This model is particularly suited for the
          small-scale nature based and cultural based product required for destination development
          such as the Larapinta Trail. A useful example of this model is Tasmania’s Overland track
          between Cradle Mountain and Lake St Clair.

          The Public-Private Partnership model is a significantly larger and more complex model
          where Government provides access to the park and the operator provides funds for the
          development and maintenance of the trail in exchange for exclusivity for a specific
          period. This model has been successfully implemented in other countries most notably
          the USA (for example Xanterra Parks and Resorts and Yellowstone National park).

          Developing exclusive Public-Private Partnerships for the provision of accommodation and
          key infrastructure in some National Parks will serve to make the economic value of these
          assets clearer. In doing so private owners of natural resources, including Indigenous
          groups, will be better able to see the value in preserving and managing their natural
          assets.

              STRATEGY

              Investigate user pays structures for the NT’s National Parks

              Investigate concession model in conjunction with NRETA, Parks and Wildlife
              Commission

              Investigate the opportunities to establish Public Private Partnerships in Parks


              WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

              Better funded National Parks

              More opportunity for tourists to stay at key attractions and spend more time in
              the NT



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              Better and more relevant data on usage of National Parks

              Improved provision and maintenance of facilities at National Parks

              The opportunity for operators to partner with government in the provision of
              infrastructure in return for improved access to National Parks. This will require
              investment in both and time and resources.



5.3 Destination Development
          In 2006-07 Tourism NT continued its focus on the development of its six priority
          destinations and their sub-regions. In the Destination Development Blue Print 2007-2009
          tourism experiences that are priorities for development work are identified

          The Destination Development Action Plan (an internal Tourism NT document) continues
          to be developed annually to outline upcoming project work. Increasingly, this document
          also outlines the role of other organizations, departments and divisions of Tourism NT in
          developing destinations.

          Continuing product enhancement depends on receiving qualitative feedback from current
          tourists regarding their experiences and expectations. The diagram below demonstrates
          how product development is being driven by this feedback, but also with direct
          considering to marketing needs and activities.




           A strong focus continued on the development of sustainable cultural and nature-based
          tourism experiences, identifying new product opportunities, and increasing the
          professionalism of the wider tourism industry. An aim of the destination development
          program is to increase regional dispersal of tourists to the benefit of more remote
          communities.

          Development activity also seeks to engage and use local partners, to ensure projects are
          “owned” by the community and therefore provide a higher probability of long-term
          viability.

          A series of regional tourism plans are now in place with the aim of increasing regional
          dispersal and developing regional economies. The plans focus on getting small regional
          centres visitor ready by developing new tourism product and expanding the range of
          experiences which underpin the destination.

          Activities undertaken in 2006-07 to support the development of a sustainable tourism
          industry include:

          •     Destination Tourism Plans were developed for Hermannsberg and West Aranda
                region, Batchelor, Barkly region (updated) Borroloola and Larrimah/ Daly Waters;
                and,

          •     33 projects were completed or commenced across the NT during 2006-07. Many of
                these projects provided infrastructure to increase the level of facilities or increase the
                visitor experience.

          At present, Tourism NT contributes a proportion of their budget into hard infrastructure
          within National Parks as part of their destination development strategy. In a perfect world



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          it is not the core business of Tourism NT to undertake this role. However, the rationale
          behind this approach is to ensure appropriate infrastructure and visitor experiences are
          developed, as other agencies are not responsive to the goals of destination development.
          It is therefore imperative that an alternative approach based on co-operative planning
          across government departments is developed so as to remove this burden from Tourism
          NT and allow these resources to be better utilised to capture the opportunities identified
          in the strategy.

          It must be recognised by all government departments that visitors to the NT are
          important stakeholders in the maintenance and development of parks. Visitors account
          for a substantial proportion of the patronage of these parks and accordingly their needs
          and expectations must be accommodated in future planning.

          It is recommended that a Destination Development Working Committee be developed
          between Tourism NT and NRETA. This committee will set a rolling 3-year works program
          for the development of visitor infrastructure and experiences within Territory parks and
          funded from within the existing NRETA budget. To ensure that development occurs in a
          timely and co-ordinate manner, KPI’s should be developed and the works program
          approved by Cabinet.

          Tourism NT’s role is limited to the provision of dedicated personnel to provide:

          •     Destination identification;
          •     Facilitate the working committee outcomes;
          •     Prepare and implement the promotional campaign for new destinations;
          •     Implement and monitor the KPI’s for the program; and,
          •     Report to Tourism NT and NRETA on program progress.


              STRATEGY

              Identify and prioritise current and potential destinations for development which
              fit with the NT’s cultural tourism and nature-based tourism strengths

              Establish the Destination Development Working Committee to provide a co-
              ordinating role with key agencies for marketing and the development of
              infrastructure and experiences at identified destinations

              Encourage the adoption of best practice environmental, cultural and commercial
              practices within the NT tourism industry

              Monitor the progress of projects being developed


              WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

              More available funds for marketing and promotional activities

              A co-ordinated approach across government agencies to the development and
              maintenance of new destination products such as the Larapinta trail

              Recognition in the planning and management of parks of the importance of
              tourism activity

              This also means that operators must recognise their responsibility in ensuring
              the long term sustainability of the destinations they utilise in their product
              offering.




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5.4 Skills
          The tourism industry is service-based and therefore labour intensive. Labour represents
          the most significant variable cost to many operators, as such the productivity and
          availability of workers significantly influences the competitiveness of the tourism industry
          and the yield of tourism enterprises.

          The tourism labour force is characterised by:

          •   A relatively younger work force than other industries;
          •   A more casual and part time workforce;
          •   A high proportion of occupations requiring minimal skills;
          •   Large amounts of informal on the job training;
          •   High staff turnover;
          •   7 day, 24 hour working requirements;
          •   Relatively low levels of union membership;
          •   Lower than average weekly earnings; and
          •   Relatively higher labour intensity than other industries;

          Accordingly, the tourism workforce generally demonstrates a lower qualification profile
          compared with the all-industry average. In 2006-07, more than 60% of tourism
          employees worked in Australian Standard Classification of Occupations (ASCO) categories
          5-9, which require less complex skills and formal education, compared with just 40%
          across all industries.

          Most training in the tourism industry is informal, on-the-job training providing employees
          with enterprise-specific skills. Employers typically do not see it as their responsibility to
          invest in the development of their staff’s generic skills, which they view as the
          responsibility of the individual. Generally employers view skills development as a shared
          investment with employees.

          The seasonality of the NT’s tourism industry is a major impediment to both the formal
          and/or extensive on-the-job training that is required for many tourism industry
          employees. Seasonality also makes it very difficult to retain staff in general.

             Issues such as economic growth, seasonality, competition
           from other industries and the casual, itinerant nature of the
             tourism workforce have all contributed to skills shortages.
          While much of tourism related employment is relatively unskilled, significant roles in the
          industry depend on formal training. Australia and the NT are presently experiencing
          labour shortages in many industries, including in tourism-related industries. The key
          factors contributing to the current skills shortages in tourism-related industries in the NT
          include:

          1) Strong Economic Growth

          Strong economic growth over the last decade has seen unemployment fall to historically
          low levels. This sustained period of high growth has absorbed the excess capacity in the
          economy as well as most of the labour force. Relatively low unemployment means there
          is only a small pool of workers to drive continued expansion of the industry, resulting in
          increased competition for workers. This tight labour market has also seen tourism
          workers moving into positions and industries they view (rightly or wrongly) as preferable,
          leaving the tourism-related industries struggling to attract the skilled workers they
          require to function.

          2) Competition for Skilled Workers

          Over the past few years, this strong economic growth has been partially driven by the
          resources boom. Regions that possess significant resource deposits have witnessed




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          considerable growth, and an increased demand across a broad spectrum of occupations.
          The higher wages and better conditions offered have lured many employees from
          industries such as tourism, which is unable to offer comparable packages or conditions.
          This is particularly the case in the Northern Territory.

          3) Limited Investment in Skills Development by Employers

          Many employers are reluctant to invest in skills development and training in their staff,
          despite evidence showing that tourism businesses believe in the benefits of staff training
          and its positive impact on customer service, staff turnover, recruitment costs, staff
          productivity and business profitability. Low investment in skills and training threatens
          the ability of the industry to attract and retain the labour it requires to fulfil its growth
          potential. There is evidence of a number of barriers or impediments to private sector
          investment in skills in the NT tourism industry, including:

          •   Seasonal skills issues – The tourism industry in the NT is highly seasonal. This
              seasonality makes it difficult for the industry to provide adequate, full-time
              employment for people during the non-tourism season. The temporary nature of
              some tourism employment means that employers have little incentive to invest in
              training, as staff may be working for them for only one season, which is not long
              enough for the business to recoup their investment;

          •   Casual workforce – The fear of staff moving on or being poached by another tourism
              business is a barrier, as they may not capture the full benefits flowing from their
              investment in training and skills development. This is particularly prevalent in casual
              and part-time positions, regional and seasonal tourism regions, and where the
              poaching of employees is high;

          •   Language skills issues – Tourism operators do not appear to be adequately preparing
              for the forecast increase in non-English speaking tourists from emerging markets
              such as China, with low levels of investment in language training. By definition
              tourism is highly mobile, and competition for these tourists will be intense, so this
              current under-investment could impede the Territory’s ability to capitalise on the
              opportunities presented by these markets;

          •   Migration policy – The Working Holiday Maker program has recently been amended
              to allow employment of overseas workers up to six months with any one employer.
              Operators need to be educated as to the opportunities this provides for their
              businesses;

          •   Tourism training system – Concerns have been raised about the functioning of the
              tourism training system, particularly around the issues of course delivery, advisory
              arrangements, skills of graduates and quality of the training provided. A more
              flexible system, one that includes recognition of prior learning and current
              competencies, may encourage higher training provision by employers and
              participation by employees, as both the time and cost involved with gaining formal
              qualifications would be reduced; and,

          •   Small business management skills – Small businesses dominate the tourism
              industry, and most are owner-operated businesses. Many of these firms view
              training as a short-term cost instead of a long-term investment in their businesses.
              This attitude, particularly amongst new business operators, limits participation in
              training and skills development programs.

          4) Limited Supply of Skilled Labour

          There is also an unwillingness of skilled labour to supply the NT tourism industry.
          Reasons for this include:

          •   Worker mobility – Skilled workers are typically mobile, and are able to follow
              employment opportunities. In tight employment markets, when specialist skills are in
              high demand, the choice of where to locate can rest on non-employment factors.
              Workers typically look to work in bigger centres with more flexibility, better lifestyle




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               and alternative job opportunities, which leaves the NT tourism industry, and
               especially those operators in regional areas, at a distinct disadvantage;

          •    Accommodation shortages – Accommodation shortages for workers in regional areas
               is also inhibiting labour supply, as the price of accommodation is being bid up by
               workers in resource-related industries, excluding tourism workers from the
               accommodation market;

          •    Worker perceptions of the industry – One common perception that workers have of
               the industry is that jobs are characterized by ‘low pay, harsh conditions, bad hours,
               stressful, hard work’, which dissuades potential employees from applying. Another
               common perception is that tourism is a glamour industry, which results in employees
               leaving when the reality doesn’t match their expectations. Both of these perceptions
               are limiting the industry’s ability to attract and retain staff;

          •    Individual attitudes to investing in skills – Commonly, because of both low industry
               recognition of formal qualifications and the nature of entry-level positions in the
               tourism industry, new employees with formally accredited qualifications often start in
               similar positions to non-qualified employees, meaning qualified individuals do not see
               a return on their investment in training in terms of higher pay, better conditions and
               enhanced career prospects.         Further, tourism industry pay structures do not
               explicitly take qualifications into account, meaning returns on continued investment
               in training and skills development are also uncertain; and,

          •    Indigenous Workforce - There are an estimated 56,900 Indigenous residents in the
               NT accounting for 28.8% of the population. Employment participation rates by
               Indigenous residents are significantly lower than the rest of the population.
               Indigenous people present a potential long-term resource and asset to the NT
               tourism industry, although it must be recognised that many of these Indigenous
               residents are located in remote locations while the job opportunities are mainly in
               the urban areas.

          There are many options for the industry to address the skills shortages, but most will
          require other changes in the industry to have effect. Until the industry can offer year-
          round employment for skilled staff, there will still be a strong disincentive for employers
          to provide extensive formal training for workers who may only be with the business for
          one season. The small population of the NT reduces the opportunities for skilled staff to
          find employment in a complementary field during the non-tourism season.

          However, seasonality in the tourism industry is not unique to the NT, with most tourism
          destinations in Australia experiencing seasonality to some degree. One potential solution
          for this is to encourage NT tourism operators to organise job-sharing arrangements for
          their skilled workers with tourism operators in regions with complementary peak seasons,
          such as the Gold Coast (December to January) or Tasmania (January to March). These
          arrangements would enable tourism operators to offer the full-time, year-round
          employment opportunities necessary to retained skilled workers and provide greater
          incentive for both parties to undertake additional investment in training and skills
          development. This type of program works successfully in the snow ski industry.

          In addition there is scope for Tourism NT to educate operators on the benefits of utilising
          international placement agencies which specialise in assisting tourists find work in
          Australia whilst they are visiting. The websites of these agencies are extensively used by
          backpackers throughout the world in both looking for work as well as selecting vacation
          locations.

               Future workforce solutions should build the pool of labour
              through targeting different demographic groups, recognise
                 skills, consider international staff and promote training.
          Other options to resolve the labour and skills issue facing the industry include:




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          •     Target Mature Age Workers, Indigenous Workers and Job Seekers: The tourism
                industry has traditionally relied on a pool of young workers to meet labour needs yet
                competition for this pool of young workers is increasing. The tourism industry needs
                to actively support welfare to work policies and recognise their potential within the
                tourism industry, particularly the opportunities that exist for mature age workers,
                sole parents, the long-term unemployed, people with a disability and Indigenous
                Australians;

          •     Structure of New Apprenticeship Program: With the relatively higher attrition rates in
                tourism and hospitality apprenticeships and lack of attractiveness of such training to
                individuals, the industry needs to consider how it can redevelop the apprenticeship
                model for this sector with multiple entry and exit points and opportunities for
                accelerated learning that suits the needs of the tourism industry rather than other
                industries;

          •     Regional Skills Shortages: The inability for regional areas to adequately attract and
                retain skilled staff is a key impediment to tourism investment in regional areas where
                many of the NT’s natural attractions are located. Strategies for consideration include:

                    o   Providing targeted locally based tourism training to regional and remote
                        areas involving a collaborative approach to workforce development;
                    o   Reviewing issues surrounding staff accommodation and taxation;
                    o   Developing a pool of multi skilled staff across a range of seasonal industry
                        sectors; and
                    o   Further investigation of the possibilities for online learning delivery and
                        associated investment in supporting infrastructure.

          •     Migration: Migration plays an important role in the NT’s tourism industry and can
                continue doing so despite the downturn in the backpacker industry. Strategies to
                improve the availability of overseas workers to the tourism industry need to be
                considered at the federal level. However, the NT tourism industry can work to better
                facilitate migrant employees placement within current working guidelines.

              STRATEGY

              Assist tourism operators target mature age workers, indigenous workers and
              apprentices

              Educate operators on the role of working visitor placement agencies

              Investigate establishing job sharing systems with other tourism regions in
              Australia that have complementary tourism seasons


              WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

              Information on how to access working visitors

              Understanding of available government assistance

              Ability to participate in job sharing networks that match the seasonality of the
              industry

              It is recognised that a tight employment market exists throughout Australia and
              not just the NT. Tourism NT is able to advise operators on the range of labour
              market programs available but it is up to operators to take the initiative and
              actively use these programs to suit their individual needs.




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5.5 Industry Standards
          Industry recognises that inconsistent quality of accommodation and some other tourist
          services in the NT is an impediment to providing tourists with good experiences,
          particularly from high-yielding markets with high expectations such as the USA. Much of
          the problem is not so much that budget products are provided, but that visitors have
          higher expectations when booking the product.

          In particular issues of industry standards that need to be addressed are:

          •   Quality and consistency of guiding and interpretation in National Parks;

          •   Previous inaction of NT Government agencies with respect to ‘rogue’ activities;

          •   Misrepresentation in advertising / unrealistic promotions;

          •   Cleanliness and state of repair of accommodation (with an emphasis on mid range
              motel accommodation) and built attractions;

          •   Business operations of tour operators, accommodation houses and built attractions
              incorporating:

                  o   Legal Compliance;
                  o   Strategic / Business Planning;
                  o   Human Resource Management;
                  o   Environmental Management;
                  o   Administration and Operations;
                  o   Customer service;
                  o   Risk Management; and,
                  o   Maintenance

          The solution to this issue is the implementation of clear industry standards through
          accreditation and rating systems. This system is well known in accommodation with star
          ratings providing buyers with a dependable yardstick to gauge their expectations of the
          quality of the product.

          Tourism accreditation in the NT has been driven by industry to ensure the ongoing
          sustainability and best practices of local tourism operators, and identifies a minimum
          standard in business operation and customer service.

                   The competitiveness of the tourism industry and the
           increasing expectations of tourists necessitates a concerted
                    effort on increasing quality and tourism standards.
          A strong stance is required from Tourism NT on ensuring thorough enforcement of
          accreditation and standards. If the NT is to improve its product positioning then it is
          essential that standards improve generally and those operators who repeatedly fail to
          meet minimum standards are removed from Tourism NT product promotion, sales and
          distribution. This approach must also extend to other government regulatory agency’s,
          particularly in ensuring operations meet and maintain minimum standards in terms of
          health inspections and liquor licensing. In addition it is essential that all operators who
          enter the Brolga Awards have mandatory tourism accreditation appropriate to the sector
          of operation.

          It is important for the industry to celebrate its success stories through an awards
          process. This currently occurs through the Brolga Awards. In its current configuration the
          Brolga Awards do not provide a strong return on investment. Industry participation is low
          due to the complexity and cost involved in entering the awards and moves to simplify the
          nomination process are not supported by the National Tourism Alliance (who conduct the
          national awards process into which the Brolga awards feed). Accordingly it is appropriate




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          that Tourism NT restructure the Brolga Awards to become a two-tiered process. Tier 1
          would provide a streamlined and simplified entry process that encourages and maximises
          industry participation in the awards operated initially at an RTA level. Tier 2 would then
          take the category winners at the RTA level to compete for the Brolga Awards on a
          Territory wide basis. Tourism NT could provide guidance to winning RTA operators in the
          preparation of the detailed entry submission required for the Australian Tourism Awards.

              STRATEGY

              Encourage the uptake of tourism accreditation in the NT and encourage
              continued uptake of an approved accreditation program

              Implement a two-tiered approach to the Brolga Awards to improve industry
              participation.

              Continue the implementation of the Tour Operators Licensing and Training
              System for NT Protected Areas


              WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

              Clearer ability to benchmark against other business standards

              More relevant and higher participatory Brolga Awards

              The enforcement of clear industry standards to ensure the professionalism of
              operators

              It is essential that operators, and the tourism industry as a whole, see the
              implementation and enforcement of standards as a necessary requirement to
              ensure a consistent and quality product in the face of a very competitive global
              tourism market. All the marketing and promotional effort of Tourism NT will
              count for nought unless minimum standards are achieved.


5.6 Partnerships
5.6.1 Industry

          Tourism NT has a strategic partnership with the Regional Tourist Associations (RTA’s) and
          the Visitor Information Centres (VIC’s) it funds in the NT. These relationships have
          evolved considerably in recent years as a result of the implementation by Tourism NT of
          destination development programs. With the implementation of this strategic plan it is
          appropriate to evaluate these relationships.
5.6.1.1   Regional Tourist Associations
          The structure and roles of Regional Tourist Associations (RTA’s) are key considerations in
          determining how best these entities can work with Government to drive the industry
          forward over the next 5 years to achieve the strategic vision of this plan.

          Extensive consultation undertaken by the AEC Group with key industry stakeholders,
          RTA’s, VIC’s, local councils, the Tourism Advisory Board, Tourism NT and other
          Government agencies indicated dissatisfaction with the RTA’s, particularly CATIA and
          KRTA. The main themes of this discontent are:

          •       Too busy agitating, boycotting and/or lobbying against Government to be an
                  effective tourism organisation;
          •       Too distracted with personal agendas rather than focussing on the core tasks;
          •       Focussing on non-tourism issues to the detriment of the RTA membership;
          •       Raising issues through the media rather than first-hand with Government;
          •       Steeped in tradition and not changing with the times;
          •       Haphazard approach to intra-territory marketing;
          •       Poor servicing of sub-regional members; and



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          •           Lack of strict governance.

          An operator survey conducted by the AEC Group revealed that 69.5% of RTA members
          stated that their RTA membership had little or no impact on the success of their tourism
          business. Conversely just 30.5% of operators felt their RTA membership impacted
          positively on their business. This is a disappointing outcome given the level of investment
          behind the current RTA model.

          There is also a significant proportion of the industry who aren’t members of an RTA. The
          operator survey revealed that the main reasons for non-membership of an RTA include:

          •      Focus is too political;
          •      Too expensive for small operators;
          •      Too focussed on lobbying government and not on marketing;
          •      Not delivering benefits; and
          •      Not delivering value for money.

          Conversely, the overwhelming reason why operators joined an RTA was for the
          advertising opportunities they provided. Over 60% of operators identified these
          marketing and promotional opportunities as a key reason they joined an RTA. Other
          reasons identified by operators include:

          •         Networking opportunities with other members of the tourism industry (30%);
          •         Information regarding the NT tourism industry (29%);
          •         Support for their business (23%);
          •         Lobbying of government on their behalf (12%);
          •         Opportunities that arise for RTA members (11%);
          •         Bookings and referrals from RTAs (8%);
          •         Needed in order to do business (7%); and
          •         Trial what was on offer from membership (1%).

          It was clear from the broad level of industry consultation undertaken that many
          operators would like to see change in the RTA structure with a much stronger emphasis
          on marketing activity. The industry survey revealed that 60% of tourism industry
          operators would like to see a change in the number of RTA’s in the NT.

          Table 5.2: Operator View on Number of RTA’s
              Number                                     %
              Change number of RTA’s                    60.0
              Stay the same                             40.0

              Total                                    100.0
          Source: AECgroup operator survey 2007


          The key reasons provided by operators for supporting a change in the number and
          structure of RTA’s included:

                •      A new system would lessen competition between RTA’s;
                •      There is significant duplication that could be reduced; and
                •      Less RTA’s would mean more funding allocated for marketing and promotion.

          An examination of RTA’s (or Regional Tourist Organisations as they are generically
          referred to across Australia) with other regions external to the NT is not possible as there
          is no direct comparison of RTA funding arrangements between the states, other than the
          general acceptance that service level agreements are widely used to clarify expectations
          between partners.




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5.6.1.1.1 RTA Income and Expenditure
          Incomes for the RTA’s come from a number of sources other than Tourism NT, including:

              •    Membership dues;
              •    Brochure production and        other   marketing   activities such as cooperative
                   advertising;
              •    Local government grants;
              •    Other grants; and
              •    Sales at VICs.

          Revenue and expenditure figures, based on 2006 data:-

          Tourism Top End (also provides VIC services)

          •       Total Revenue - $1,773,442 (includes NTG grant)
          •       NTG Grant - $640,000 (36% of total revenue)
          •       Approx. Membership base – 490
          •       Employee Costs – $774,285
          •       Materials, Promotion and Publications - $539,525
          •       Overheads inc. depreciation - $396,848

          Central Australian Tourism Industry Association (also provides VIC services)

          •       Total Revenue - $1,286,935 (includes NTG grant)
          •       NTG Grant - $640,000 (50% of total revenue)
          •       Approx. Membership base – 343
          •       Employee Costs – $487,031
          •       Promotion and Publications - $392,888
          •       Overheads inc. depreciation - $217,701

          Katherine Region Tourist Association

          •       Total Revenue - $252,600 (includes NTG grant)
          •       NTG Grant - $230,000 (91% of total revenue)
          •       Approx. Membership base – 207
          •       Employee Costs – $140,198
          •       Materials, Promotion and Publications - $101,654
          •       Overheads inc. depreciation - $74,337

          Barkly Tourism

          •       Total Revenue - $297,456 (includes NTG grant)
          •       NTG Grant - $230,000 (77% of total revenue)
          •       Approx. Membership base – 80
          •       Employee Costs – $93,126
          •       Promotion and Publications - $161,905
          •       Overheads inc. depreciation - $69,350

          As can be seen from this data, the RTA’s rely significantly on NT Government funding to
          exist. Spend of total revenue on marketing activities is moderate, and the majority of
          RTA’s spend almost as much on wages as the amount received from Government.

          Given the significant employee and overhead costs, economies of scale would be
          achieved by channelling these funds through less entities. This would provide critical
          mass to streamline staff resources and reduce administration costs, as well as ensuring a
          synergetic and cohesive approach to marketing and services across the Territory. Funds
          freed up through this process could then be diverted to improved marketing activities.




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5.6.1.1.2 Alternative RTA Models
          Change is needed to the way in which Regional Tourist Associations (RTA’s) and Visitor
          Information Centres (VIC’s) are structured and funded. Current arrangements are not
          effective, and certainly not conducive to moving the industry forward to meet future
          challenges. There needs to be a clear delineation between RTA member activities (such
          as providing representation on issues) and activities undertaken in conjunction with
          Tourism NT. To achieve this delineation there are several options available for
          consideration to redefine the Tourism NT / RTA relationship.

          Four (4) RTA’s are not warranted for the size of the Territory’s tourism industry which,
          according to listings on the Australian Tourism Data Warehouse (ATDW), has a little over
          1000 tourism products and services. Far greater economies of scale can be achieved
          through the amalgamation of the RTA’s or, ideally, the establishment of one membership
          driven tourism body to undertake regional marketing activities and work professionally
          with Government to identify and resolve issues facing the tourism industry.

          However, the role of a single funded entity needs to be absolutely clear to ensure optimal
          outcomes and alignment to Government strategy. At a minimum the role would entail:

          •      Intra-Territory marketing;
          •      Working with Tourism NT to effectively leverage Tourism NT marketing activity. For
                 example, up-selling operator participation in Tourism NT led activities when a
                 destination campaign is in-market;
          •      Develop regional tourism plans in partnership with Tourism NT;
          •      Attending interstate consumer shows (such as Camping and Caravan) to up-sell
                 regional destinations to interested travellers; and
          •      Working with operators to:
                 •     Support Tourism NT to develop or refresh products and services, particularly
                       climate change adaptation measures.
                 •     Respond proactively to aviation developments.
                 •     Respond appropriately to opportunities presented by the growing business
                       tourism market.
                 •     Encourage uptake of accreditation and professional standards.
                 •     Further develop their on-line marketing capacity.

          To ensure revenue expenditure is focussed, it is suggested government funding become
          discretionary and available only on a project basis. Projects would be negotiated and
          agreed upon in advance and based on clearly defined Service Level Agreements (SLAs)
          incorporating project deliverables and KPIs. This would ensure funding is spent in a co-
          ordinated manner in accordance with the Tourism NT marketing and promotional goals.
          Associated administration requirements would be incorporated in the negotiated project
          costs. It is also recommended that to provide continuity for staffing purposes, Tourism
          NT negotiate 3 year SLAs in advance with review options in-built based on performance.

          Although the one entity would be ideal, the views and buy-in from industry about the
          way forward is vital to ensure success. Therefore, several options are listed below for
          consideration. It is suggested the Minister for Tourism consider which option to adopt, if
          any, following industry feedback.

          Option 1 – Provide funding to one new tourism body to undertake regional
          marketing

          The creation of one new tourism body would create significant economies of scale such as
          increased purchasing power and reduced administration, allowing more available funds
          for marketing. For example, the ability to negotiate better prices for advertising and
          marketing, and the budget to attract appropriately skilled senior personnel.

          In addition to regional marketing, this body could be funded to undertake sector
          development (ie; transport, attractions, accommodation etc), as well as future
          management of industry development programs such as Tourism Accreditation, Tourism
          Awards and industry forums.



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          To effectively represent the diversity of the Territory, this body would need to employ
          staff in key regional areas. These staff would liaise with industry in those regions and
          ensure specific issues were tabled for collective resolution.

          This organisation could also become a membership body, attracting members from
          across the whole of the Territory, thus providing a united voice for the Northern Territory
          Tourism Industry and undertake roles assumed by Tourism Councils in other
          states/territories. This function would not attract Government financial contribution and
          would need to be funded via membership fees. The manner in which these issues are
          brought to the table for discussion and resolution with Government, however, would need
          to be professional and non-confrontational.

          In establishing this single entity, major sponsors in addition to Government should be
          encouraged to contribute and participate on the Executive Board of Management. This is
          similar to what occurs in other jurisdictions such as Queensland. Second tier advisory
          committees are then established to encourage active participation by the membership
          base. The outcome of such an arrangement is that serious contenders in both the tourism
          industry and the Government sector work together to represent the regional marketing
          body in a professional capacity at an executive level, whilst broader participation of the
          industry is encouraged in an advisory capacity.

          Option 2 – Provide funding to two bodies to undertake regional marketing.

          Amalgamation of smaller RTO’s has occurred across Australia to gain efficiencies and
          more coordinated promotion. Such a move in the Territory would likely result in two
          bodies being formed, one in the Top End and one in Central Australia. In this case
          appropriate marketing dollars and effort for the Katherine and Barkly regions would be
          maintained through provisions in new Tourism NT partnership agreements with TTE and
          CATIA.

          Focussing funding toward two, rather than four, regional bodies would likely create
          financial efficiencies such as reduced travel to attend interstate trade and consumer
          shows, merged promotional material and fewer administration costs and, possibly,
          human resources.

          There would still be a need to improve the Executive structures of these two bodies,
          along the lines detailed in Option 1 above (ie; sponsor representation on Board of
          Management and second tier advisory committees). This would require a change to the
          RTA’s existing constitutions that can only be achieved through a majority vote of the
          membership.

          Option 3 - Transfer all marketing responsibilities to Tourism NT

          This would mean a realignment of Tourism NT’s marketing functions to incorporate intra-
          Territory marketing, which is not currently a function of the organisation. This would
          change the type of marketing activities Tourism NT undertakes (eg producing regional
          guides and product listings) but is clearly within its area of expertise and would ensure
          alignment of intra-territory marketing with Tourism NT goals. This would require an
          increase to Tourism NT staff numbers that is currently not aligned with government
          directions.


5.6.1.2   Visitor Information Centres


          Only Tasmania and the Northern Territory directly fund Visitor Information Centres
          (VIC’s). All other states rely on local government and industry to support the operations
          of the VIC’s. Staffing of VIC’s across the country is provided by a mixture of full time /
          part time staff and volunteers, with some regions relying heavily on volunteer labour.
          State governments have often contributed to the initial infrastructure for strategic VIC’s,
          usually in partnership with local government.       On occasion (eg Kununurra), state
          governments have funded the entire costs of a facility. However, Northern Territory RTA’s
          and VIC’s have a greater reliance on Government funding and do not currently attract the



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          same support from local government, volunteers and private industry as similar
          organisation around Australia. This is an avenue the NT Government should consider for
          the future.

          The VIC’s are seen as essential tools in the tourism information distribution network. It is
          recommended that they continue in Darwin, Katherine, Tennant Creek and Alice Springs.
          It is proposed that Tourism NT continue to contribute funding for the VIC’s with the
          funding level determined based on the services provided.

          Option 1 – Fund local government entities to provide visitor information
          services

          As outlined above, most local governments in Australia provide a far greater level of
          support for their VIC’s. Ownership and support for VIC’s by local government is seen as
          a desirable future outcome in the Northern Territory. The Katherine VIC is currently
          operating out of Council premises and it has been indicated that, after a few years,
          Tourism NT’s contribution towards this operation could be reduced.

          Naturally, local government entities would need to incorporate this into their own
          planning processes so the introduction of this option would need to occur over a longer
          period of time. In the medium term, Tourism NT support for VIC’s could be negotiated
          downwards with increased local government involvement in the provision of VIC
          infrastructure and service provision across the Northern Territory. However, this could
          also be viewed as cost shifting between levels of Government.

          Option 2 – Fund regional marketing bodies to provide visitor information
          services

          Fund either a single entity or amalgamated RTA’s (refer options above) to undertake
          visitor information services.

           Tourism NT maintains strategic partnerships with RTA’s and VIC’s, although for
                 more efficient management and outcomes, structural changes need to be
                                                                              considered.

5.6.2 Community

          Tourism is a vital industry to the NT and its positive effects are felt across the NT’s
          communities. It is important that the community is understanding of the importance of
          the tourism industry and feels empowered to contribute to the industry’s development.
          Furthermore, as the mature tourism markets increasingly look for local and community
          engagement in their experiences in the NT, communities need to be educated as to how
          they can best interact and benefit from visitors.

5.6.3 Local Government

          Local governments are by their nature at a level where they have the closest interaction
          with the NT’s communities. As such, the role of local government in the development of
          tourism needs to be encouraged. The NT’s local governments are increasingly recognising
          the opportunities available through the development of tourism. Tourism NT will aim to
          work more closely with local governments to ensure that their tourism development
          strategies are better coordinated with the strategies of the Territory as a whole.

           STRATEGY

           Establish new arrangement/s by which to deliver regional marketing and visitor
           information services that better align to Tourism NT’s strategic direction and
           marketing goals

           Seek support from local and community government councils in destination
           development implementation

           Engage the community through education             and   partnerships   with   local
           government to improve support for tourism



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           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           More efficient partnerships with Tourism NT to provide better value for the
           industry

           Less duplication of services

           Better relationships with local groups and councils

           The majority of funding provided to RTA’s and VIC’s is spent on promotions and
           not administration




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6 Marketing and Promotion
6.1 Marketing
          In 2005, Tourism NT undertook a comprehensive branding and positioning strategy to
          develop the current “Share or Story” campaign. Previous to the development of the
          “Share Our Story” branding, the marketing activity undertaken by Tourism NT was not
          effectively geared towards cultural tourism.

          The implementation of the new brand strategy in 2005 has changed this approach and
          provided a consistent message to key markets as well as better articulation of products
          and services. The key change from this strategy was the recognition by Tourism NT to
          approach its markets as needs-driven individuals rather than geographically segmented
          groups. This has enabled Tourism NT’s marketing program to be reshaped to better
          respond to the needs of the “Spirited Travellers”.

          The message “Share Our Story” also strengthens the NT’s unique selling point – the
          combination of nature and culture. This is a distinct competitive advantage the Territory
          enjoys over other regions in Australia and the branding strategy successfully articulates
          the points of difference in the market.

          The “Share Our Story” branding has been rolled out across a range of marketing activity
          including:

          •   The travelnt.com consumer website;

          •   Factsheets designed for trade and consumers featuring the Territory experiences of
              indigenous culture, bushwalking and fishing;

          •   Australian Geographic Map featuring tourism drives, parks and facilities, distances,
              safety tips, weather charts and key contact details;

          •   Brand book introducing the six key destinations of the NT;

          •   Destination advertisements and advertorial both interstate and international;

          •   International Holiday Directory for the international trade detailing information on
              destinations, experiences and product;

          •   Consumer direct and tactical advertising campaigns with partners including Tiger
              Airways; and

          •   Japanese versions of the Blue Book, Aboriginal Guide Japan and the Darwin and Alice
              Springs Town Maps.

          One key message that has arisen from the “Share Our Story” rollout is the need for
          Tourism NT to continue aligning core marketing and communication messages across all
          markets – Intra-Territory, Domestic and International on a common brand platform. This
          will help build and reinforce reasons to travel to the NT.

          The key marketing challenges facing Tourism NT in the implementation of the “Share Our
          Story” branding are:

          1. Competitor Budgets: The marketing budget of Tourism NT is relatively small
             compared to that of its competitors. Further these competitors are able to
             substantially leverage these budgets through cooperative advertising campaigns
             relative to the NT;

          2. Competitive Positioning: Other competitor brands impinge on the NT’s claim as a
             leading nature and culture based tourism destination. In addition other State Tourism
             Organisations are also promoting themselves as the “True Outback”;




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          3. Discerning Targets: Visitors are becoming increasingly discerning, well educated and
             well travelled whilst at the same time they have a much greater range of choice and
             control of informational availability than ever before; and

          4. Purchasing Choice: Traditional tourism networks and distribution methods are being
             challenged by newer alternative consumer direct methods that provide increased
             power and choice to consumers.

          Responding to these challenges the overall focus of Tourism NT marketing activity is to:

          •    Move towards a richer online experience for consumers and deliver a truly world class
               website that enables seamless content display and booking processes;

          •    Develop media and consumer direct partnerships that align with brand values and
               leverage advertising spend;

          •    Building trade and distribution partnerships in those markets which still yield a high
               proportion of trade through these channels;

          •    Develop greater consumer direct marketing campaigns through leveraging available
               technology;

          •    Increase preference and booking intention among Spirited Travellers to journey to
               the NT; and

          •    Stand out from the competitors as a destination that is different, compelling and
               desirable to visit.

          The destination strategy also enabled Tourism NT to market destinations within the NT in
          a consistent and coordinated manner as opposed to the previous approach of campaigns
          based on singular destinations. The key six destinations are:

          1.   Darwin and surrounds;
          2.   Kakadu and surrounds;
          3.   Katherine and surrounds;
          4.   Tennant Creek and surrounds;
          5.   Alice Springs and surrounds; and,
          6.   Uluru-Kata Tjuta and surrounds.

          This approach provides visitors with a clear indication of entry and exit points and also
          provides a clear platform for marketing communications to extend visitor stay by
          articulating movement around and between neighbouring destinations.

          The ongoing campaign by Tourism NT, ‘Share Our Story’ has succeeded in reaching the
          key Spirited Travellers segment of the market and in bringing a stronger cultural and
          experiential focus to people’s perceptions of the Territory. Furthermore, the ‘Share Our
          Story’ campaign is providing a better base for co-operative advertising and marketing
          within industry.

          It has been essential to develop the image of the NT in a way that minimises competitors
          ability to free ride off the Territory’s market image – as is increasingly occurring with the
          ‘Real Outback’. ‘Share Our Story’ develops the image of the NT as unique, natural, life-
          changing, adventurous, spiritual and inspirational.

          The refreshed NT brand is also the basis to continue to develop both contemporary and
          Indigenous cultural product awareness in the markets. Its key emotive messages provide
          sufficient scope for the industry to continue to evolve with the market into the
          foreseeable future.




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              STRATEGY

              Approaching target audiences as needs driven individuals as opposed to
              geographically segmented groups

              Align core marketing messages and collateral across all key markets –
              intrastate, domestic and international

              Continue to leverage traditional distribution wholesalers and retailers as well as
              implementing consumer direct marketing to enhance this effort where
              appropriate

              Implement a process of continual refinement of marketing approach to respond
              to changing market conditions


              WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

              Clear direction from Tourism NT on the messages that markets want to hear in
              promotional activities

              More flexible marketing possibilities within the ‘Share Our Story’ framework

              The provision of a common brand platform for operators to leverage in their
              own marketing material


6.2 Wholesaling
          Tourism wholesalers globally are currently undergoing a period of structural adjustment,
          caused by increased globalisation, consolidation and competition within the tourism
          industry. The continued competitiveness of tourism wholesalers will depend on their
          ability to adapt to these rapid changes in market conditions. These changes will also
          require the NT to adapt its tourism promotion and industry development activities, to
          reflect these changes.

          Three key trends affecting the tourism wholesale industry over the past decade are:

          •     Increased use of information technology;
          •     Industry consolidation; and
          •     Rationalisation of tourism products.

6.2.1 Increased Use of Information Technology

          Increased use of the Internet by tourists is having a profound effect on the production,
          marketing and distribution practices of the tourism industry. The introduction of online
          travel agents in the mid 1990s changed the face of the travel wholesale industry, with
          consumers undertaking their own research into holiday destinations and travel options,
          although many still booked holidays through travel agents.         By the early 2000s,
          increased trust of online purchase security and the continued adoption of internet
          technologies have seen tourists increasingly book and pay for their holiday’s online,
          bypassing traditional travel agents. Online sales accounted for 19.5% of the global retail
          travel sector in 2006. Forrester Research predicts that by 2010 approximately 90% of
          travellers will conduct their trip planning online.

          In addition there has been a shift from pre-packaged holidays to tailor-made holidays,
          driven by the desire of tourists to have unique tourism experiences. The internet enables
          tourists to tailor holiday packages through dynamic packaging technology rather than
          purchase pre-packaged tours. According to PhoCusWright, 33% of online travel buyers in
          the United States today made a combination purchase of travel components using
          dynamic packaging technology, up from 24% in 2003.




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6.2.2 Industry Consolidation

          Since the late 1990s, there has been a global trend towards the consolidation within the
          tourism industry, driven principally by increased use of the internet for holiday research
          and booking and the increased market presence of low-cost airlines, which left traditional
          tourism wholesalers with little option but to merge in order to remain competitive.
          Consolidation in the industry has come in two forms. There has been consolidation of
          tourism wholesalers through mergers (with other major tourism wholesalers) and
          acquisitions (of small independent chains, who were struggling in the increasingly
          competitive environment). There has also been vertical integration in the industry, with
          suppliers of tourism products merging with tourism wholesalers, to allow them to cross-
          market their products and assure the quality of the products. This consolidation has
          resulted in a few major players now dominating many key tourism markets.

          In Australia, a few large players, including Flight Centre and Jetset, dominate the
          wholesale industry. Ongoing consolidation, including S8’s acquisition of Harvey World
          Travel, Transonic Travel, Travelscene Limited and Gullivers Travel Group Limited, has not
          been opposed by the Australian Competition and Consumer Commission (ACCC). The
          ACCC does not believe these mergers will reduce competition in the industry, citing low
          concentration, low barriers to entry and strong competition from online travel retailers.
          These mergers are part of a broader trend of consolidation in the global travel industry,
          as wholesalers and retail agency chains form alliances to strengthen their market
          positions, a trend which is expected to continue for the foreseeable future.

6.2.3 Rationalisation of Tourism Products

          There are a several factors driving the consolidation of tourism product lines offered by
          tourism wholesalers:

          1. Consolidation in the tourism wholesaler industry: The reduction in the number of
             major tourism wholesalers is expected to reduce the number of tourism products
             offered, as firms seek increased productivity through standardisation of their product
             lines;

          2. Rationalisation of air services: Tough competition in the airline industry is forcing the
             rationalization and reprioritisation of services, supported by advances in airline
             technology and changes in booking and travel patterns; and

          3. Shift away from package holidays: The shift from pre-packaged holidays to tailor-
             made holidays, driven by tourists seeking unique experiences, has seen a marked
             decline in the range of packaged holidays offered by tourism wholesalers, who are
             increasingly focusing on their core products and packages.

6.2.4 Territory Discoveries

          Territory Discoveries are seen as an integral component of the operations of Tourism NT.
          In this time of rapid change and fluidity in wholesaling, it is a significant advantage for
          Tourism NT to have its own dedicated distribution channel. It would be a significant
          mistake to rationalise, sell or close this operation.

           STRATEGY

           Continue the NT Government’s operation of Territory Discoveries and align
           participation with industry standards, without adversely affecting the level of
           operator participation

           Investigate avenues for non-traditional forms of special interest product
           distribution and promotion


           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           Recognition of changes to traditional tourism wholesaling, with increasing focus



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           on promotion where consumers are listening

           Access to a strong wholesaling system to market operator products and services

           Ability to leverage from consumer direct marketing undertaken by Tourism NT


6.3 Co-Operative Advertising
          The macro-challenge facing Tourism NT is to get greater involvement from the tourism
          industry in co-operative advertising campaigns. Unlike other states, the NT is unique in
          that it has a majority of members who are small business operators and very few large
          national or international operators. Generally large operators recognise the long-term
          benefits that accrue from co-operative advertising campaigns and have a high degree of
          participation. However small businesses are difficult to harness for co-operative
          advertising campaigns.

          In general very few small tourism businesses take a strategic view to marketing and
          advertising. It is essential that this approach of committing marketing funds to the first
          salesman that walks through the door be replaced with a partnership approach of
          working with Tourism NT. Tourism NT should aim to dedicate a resource to act in a sales
          role to visit the small tourism operator segment to lift co-operative advertising
          contributions.

          The market segments targeted by Tourism NT are ideally suited to, and rely heavily on,
          the small tourism operator. Tourism NT is selling niche products and experiences that are
          in the main delivered by niche operators. It is therefore imperative that a unified
          approach is developed that harnesses these niche operators for co-operative campaigns.
          At present there is an expectation from this segment to rely solely on Tourism NT to
          undertake the promotion and marketing task.

          However Tourism NT is currently heavily constrained in its ability to facilitate co-operative
          advertising. Under the Working for Outcomes framework introduced in 2002-03, Tourism
          NT is required to submit a proposal to the Treasurer, with the agreement of the Minister,
          to use additional revenue if it is more $100,000 over revenue forecasts. This resulting
          uncertainty is a major disincentive for tourism businesses, who may have significant
          additional funds after a better than expected season, to contribute to co-operative
          advertising by Tourism NT to grow the overall market. As a result, tourism businesses,
          who are often small, judge that they are too small to market effectively and either do not
          market or market in a way that is focussed on competing for existing visitors rather than
          growing the overall market size.

          In order for Tourism NT to most effectively help industry to co-operatively grow its
          markets, it is recommended that the Working for Outcomes framework be reviewed to
          remove this hurdle for co-operative advertising investment.

          It is recommended that a sliding contribution scale be introduced into the co-operative
          advertising campaigns used by Tourism NT based on capacity to pay. The lower the
          capacity to pay the higher the contribution from Tourism NT. This will provide an
          additional incentive for niche operators to commit to these campaigns.

           STRATEGY

           Provide a dedicated resource to act in a sales and educational capacity to
           encourage small tourism businesses to participate in co-operative advertising
           campaigns

           Review the Working for Outcomes framework to enable greater cooperative
           advertising campaigns

           Introduce a sliding scale that favours small business operators into cooperative
           advertising campaigns




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           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           Better value promotional budgets for small businesses

           Greater knowledge of and incentive to participate in co-operative advertising
           campaigns

           It is essential that operators, particular smaller and niche providers, become
           more involved in the cooperative campaigns undertaken by Tourism NT if they
           are to achieve maximum benefits from these initiatives.


6.4 Retail Distribution
          Tourism NT maintains a retail presence in Sydney through Territory Discoveries. The
          provision of this retail shopfront, as an adjunct to its wholesale operations, assists
          Territory Discoveries in overcoming the complexity of selling the NT directly to retail
          customers. In addition to this role, the retail shopfront does provide NT tourism operators
          the opportunity to directly market their product through brochures and point of sale
          material. It is recognised that whilst the dedicated retail outlet is a significant expense,
          the benefits it delivers far outweigh the cost and it should be maintained for the
          foreseeable future.

          Perhaps the real challenge facing the traditional retail distribution approach is the need
          for it to integrate within the new digital interface. The relative ability of digital
          applications to improve the effectiveness of communications with a target audience is
          now widely accepted. The task facing Tourism NT in its retail distribution is to determine
          what are the most appropriate applications to ensure sustained and compelling dialogue
          with its target audience. This is a difficult task given the rate of change in the digital
          environment.

          As a first step Tourism NT needs to review on-ground product distribution to determine
          the most appropriate product mix commensurate with target market profile and
          establish the most effective method of promoting local product to visitors whilst they are
          ‘on-location’.

          In terms of digital distribution. Tourism NT must evaluate the return on investment of
          on-ground product promotion, assess the relevance of physical distribution to the target
          audience and contrasting that with alternatives including digital media. Finally it must
          determine an appropriate digital distribution strategy. This needs to include an
          assessment of media channels who are expanding operations into travel product
          distribution.

          Getting the Message to Sink In

          The perception is that there is no information available for Australian destinations.
          Although consumers perceive this to be the case, the fact is that most groups are just not
          seeing it, perhaps because they do not see themselves in the information that is
          available. A more targeted approach is required. Unless budgets for promoting domestic
          tourism can be dramatically increased this may mean a move away from mass marketing
          such as television campaigns.

          TRA (2007) Changing consumer behaviour: Impact on the Australian domestic tourism
          market




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                                               Marketing challenge:
                            Ensure relevancy of the message whilst capitalising on the
                               opportunities presented in the visitor environment




                             Effectiveness                            Efficiency




             Communication                Product                                   Relevancy
                 mix                    distribution           Cost /
                                                                                   of product &
                                                             resource
                                                                                        its
                                                             intensity
                                                                                   accessibility

                                           Physical
                  Balance
                                            Digital                              Product
                                                                               Consumption /
                New media
                                         On-ground                               revenue



                              linkage




           STRATEGY

           Maintenance of the Sydney retail outlet.

           Determine an appropriate level of integration between traditional and digital
           distribution models.


           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           Tourism NT provides the opportunity for operators large and small to
           aggressively market their product and call to action material directly in Sydney.
           It is up to operators to make the most of this opportunity and work jointly with
           Territory Discoveries to promote their product.




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6.5 Electronic Distribution
          The continued emergence of the online tourism environment holds important implications
          for the NT tourism industry. These implications include:

           •    The online booking environment is resulting in shorter horizons for bookings;
           •    The need for greater consistency in pricing (particularly for smaller operators with
                lower capacity);
           •    The need for improved consistency in quality of product as a result of online
                recommendations and travel forums; and
           •    The need to focus on ensuring quality experiences that offer true value for money as
                the online environment makes it easier for customers to shop around and compare.

          As a result of this changing environment, two key needs have been identified for
          improving electronic distribution:

          •    The implementation of a comprehensive web strategy with booking engine; and

          •    The dissemination of quality information on the ground particularly through the
               Visitor Information Centres.

          The overall electronic distribution strategy must focus on providing comprehensive
          information and booking capabilities to the globe whilst at the same time providing the
          same level of service on the ground throughout the Territory (particularly at the Visitor
          Information Centres). In short, Tourism NT must integrate its e-strategies to suit the
          consumer cycle across its entire marketing platform. Achieving this goal will provide
          Tourism NT with a substantial competitive edge.




                                                                                                          CRM
  Media and PR programs
  Australia & International Digital Programs – working with partners
                                                                                    Tactical
  Collateral -general      Programming / content                                   advertising
                                                   Digital Programs
                           travelnt.com
                                                   DM-campaign collateral
                           Brand advertising
                                                   Travelnt.com
                                                                   Campaigns/tactical

                                                                   Digital / travelnt.com

                           Consumer Cycle                                                    Digital / travelnt.com
                                                                                            Partner collateral/ RTAs

  Awareness                Consideration             Preference             Intention            Visit          Post



          As a first step it is imperative that NT tourism industry operators feature in the ATDW
          (Australian Tourism Data Warehouse). ATDW is moving to enable the linkage of price,
          availability and booking capability to the ATDW database through an open booking
          exchange provided by V3. The V3 booking exchange through Tourism NT’s website will
          provide the opportunity for travellers to book their products and services direct. This
          system will require operators to have a basic inventory management system either
          through V3 or Book Easy. This initiative will be a significant step forward for the industry
          in offering dynamic online functionality. The challenge for Tourism NT is to ensure that
          the industry understands the way online distribution works and how they can participate
          so they can maximise the opportunities offered through electronic distribution.

          In addition to these electronic distribution strategies, it is imperative that Tourism NT
          develop a monitoring program of key consumer travel websites and blogs to ensure the
          accuracy of information being presented. There is a perception by consumers that there




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          is no neutral source of web information on domestic travel. TRA (2007) reflected that at
          all levels in Australian there was:

          •     Little awareness of anyone taking responsibility for tourism at a national level;

          •     Little understanding of where to get information if you wanted to do so, unless you
                already travel regularly; and

          •     Too much information to process when you do.

              STRATEGY

              Continue to improve existing sites and develop new gateways including online
              booking capability for the tourism industry through Tourism NT consumer
              websites and with Australia.com

              Maximise the distribution applications of NT product and destination information
              data registered on the Australian Tourism Data Warehouse and the NT Tourism
              Data Warehouse

              Develop new e-marketing strategies to enable improved consumer direct
              marketing to target segments such as birdwatching, art trails, fishing, etc

              Continue to develop partnerships with non traditional organisations such as
              Lonely Planet, Trip Advisor, etc

              Develop a monitoring program of key consumer travel blogs to ensure their
              accuracy eg Tripadvisor, Thorn tree, etc as well as to provide in-country expert
              responses to issues raise


              WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

              Development of new, more cost effective and targeted marketing and sales
              approaches through the internet

              Improved monitoring for accuracy of materials regarding the NT on the web

              Improved networks in the tourism industry through the Internet

              Promotion of product electronically in a consistent manner both locally and
              globally with the ability of customers to book on-line

              It is the responsibility of the individual operator to ensure they are featured and
              have relevant online content in ATDW. It is also timely for operators to examine
              the suitability of implementing booking exchange systems such as V3 and Book
              Easy in order to fully participate in the e-business environment.


6.6 Intra-Territory Marketing
          In 2006, 26.2% of visitors came from within the boundaries of the Northern Territory.
          Presently the role of marketing to this segment has rested with the RTAs. The
          performance of this segment has declined in recent years and there is a need for Tourism
          NT to provide a co-ordinated approach to marketing and promotions. In addition it is
          essential that a common brand platform be used across all market segments.

          Previously RTA’s have operated in isolation from the marketing plans implemented by
          Tourism NT. They have also developed their own brands and products that are exposed
          to a wide range of audiences including consumers, operators and wholesalers. Therefore
          it is imperative that the messages and branding across Tourism NT and the RTAs is
          consistent with the ‘Share Our Story’ campaign so as to minimise confusion in the
          marketplace. It is recommended that this issue of alignment be addressed through



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          Service Level Agreements (SLAs) with the RTAs where funding provided by Tourism NT is
          linked to specific outcomes and directions.

          The RTAs also have previously marketed two specific geographic destinations – the Top
          End and the Centre. These regional areas do not align with the Tourism NT destination
          strategy and will create confusion in the marketplace. It is essential that the RTA’s
          approach their markets as needs-driven individuals rather than geographically segmented
          groups. As such, the material they produce for visitors should contain the same branding
          elements as the material produced for visitors by Tourism NT. At the end of the day, the
          consumer does not care where the material has originated, rather that it is providing
          information in a consistent manner.

           STRATEGY

           Align RTA branding and promotional material to the Tourism NT branding
           platform and destination strategy through the use of Service Level Agreements


           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           Consistent branding or promotional material for customers of operators




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7 Environmental Sustainability
7.1 Issues of Climate Change
          The NT’s tourism industry depends heavily on nature-based, outdoor attractions and
          activities. Favourable climatic conditions at destinations are a key attractor for tourists
          and an influence on demand. This is apparent in the highly seasonal visitation patterns to
          the NT, with tourists having a lower preference for the NT as a destination in the hot
          season.

          Forecast warming of the earth’s climate due to accumulation of greenhouse gases in the
          atmosphere is not positive for the NT tourism industry. The tropical and desert climates
          of the NT mean it is particularly exposed to any marginal warming as a result of climate
          change. The NT already faces problems with heat at certain times of the year not only
          being a major disincentive to people visiting famous sites such as Kakadu and Uluru, but
          resulting in closure of walks due to concerns for safety. Some comfort may be drawn
          from the fact that tropical regions will experience less warming than the higher latitudes.
          However, any warming in the NT is likely to be detrimental to tourism.

          Directly, climate variability and changing weather patterns impede the planning of
          tourism events and programs and impact on tourists’ comfort and travel decisions.
          Indirectly, climate change will have a significant impact on tourism activities by altering
          the natural environment that represents both a key attraction and a basic resource for
          tourism.

          While it feels impacts, the tourism industry is also a significant contributor to climate
          change. Air, sea, road and rail transport all contribute to green house gas emissions
          (particularly air), primarily through the consumption of petroleum fuels. The tourism
          industry is also a significant user of electricity and water, with accommodation
          establishments, tour operators and tourism services notable consumers.

             The NT tourism industry is vulnerable to climate change,
          evidenced by the existing seasonality of the industry. At the
                same time, the industry is also a greenhouse emitter.
          Consumers are increasingly driving responses to minimise greenhouse emissions by both
          government and industry. The tourism industry will increasingly face the same pressures
          from the market to minimise its carbon footprint. Indeed, this is already emerging as a
          significant driver of tourism product offerings in some other developed countries.

          The NT’s core markets in Europe, North America and Australia are increasingly concerned
          about the sustainability and carbon intensity of their travel decisions. With the NT a long
          distance from its core markets, and with large distances between attractions within the
          NT, increasing concerns regarding the carbon intensity of travel will hurt the NT tourism
          industry harder than many other destinations.

7.2 Reducing Carbon Emissions
          To assist in combating the impacts of carbon emissions and help preserve the natural
          assets that the tourism industry relies on, governments, organisations and businesses
          are increasingly looking towards “green travel” options. The market in some parts of the
          world is increasingly demanding such initiatives. Currently the focus is on reducing or
          cancelling out carbon emissions caused by travel or accommodation.

          One strategy that is becoming increasingly accepted following its formalisation in the
          Kyoto Protocol is the concept of trading “carbon credits”, which aims to reduce carbon
          emissions by giving them a monetary value. These credits are then used to fund projects
          aimed at offsetting greenhouse gas emissions, such as tree plantations.




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          Carbon Initiatives in the European Private Sector

          Passengers booking with Flybe will be able to gain a 'green guide' to the aircraft they
          intend to fly on. A detailed breakdown of the fuel consumption, carbon emissions and
          noise patterns of the aircraft type to be used on their journey will be provided at the time
          of booking via the internet. The so called eco-labelling scheme is designed to allow
          passengers to assess the environmental impact of their journey, according to the airline.

          Tourism Australia (2007) Market Intelligence Report

          With the greater awareness of the effects of global warming, not just in the tourism
          industry, there has also been a greater emphasis in recent years on developing
          technology that is more resource use efficient and / or produces energy without carbon
          emissions. In order to reach a carbon neutral environment (where net carbon emissions
          equals zero), a combination of increased resource use efficiency, low emissions
          technology and carbon credit trading will be necessary.

          Many tourism industry sectors are significant emitters of greenhouse gases. Table 6.1
          presents comparative greenhouse gas emissions (per unit of economic value) in Australia
          for various tourism related and other significant industries in the NT. The higher the
          greenhouse gas emissions per economic value add, the more heavily the industry sector
          will be impacted by increases in carbon emissions pricing.

          The greenhouse gas output per unit of economic value add is relatively high for the
          transport sectors but lower than the Australian industry average for accommodation,
          cafes & restaurants and personal services. For other significant industries in the NT, LNG,
          LPG Production, beef and vegetable and fruit growing have higher than average carbon
          intensities relative to their economic contribution while government administration &
          defence have relatively low carbon intensities relative to their economic value.

          Table 7.1: Relative Carbon Emission Intensities in Australia (Relative to Economic Value-
          add) for Industries Important to the NT Tourism Industry and the NT Economy.
          Industry                                Total (Direct and Indirect) Green House
                                                      Gas Emissions (kg CO2 per unit per
                                                          economic value add – Australian
                                                                 Industry Average of 1.02)
          Accommodation, Cafes and Restaurants                                        0.91
          Bus and Tramway Transport                                                   0.86
          Taxi and Hired Car with Driver                                              1.03
          Water Transport                                                             1.95
          Air and Space Transport                                                     1.32
          Personal Services                                                           0.48
          Bauxite                                                                     0.92
          Gold and Lead                                                               0.65
          Other Non-ferrous Metal Ores                                                0.85
          LNG, LPG Production                                                         1.58
          Beef                                                                        4.38
          Vegetable and Fruit Growing                                                 1.41
          Government Administration                                                   0.33
          Defence                                                                     0.46
          Source: Foran, Lenzen and Dev (2005)


          The fact that climate change has in the last two years begun to influence consumer
          decision making with respect to tourism choices is magnified for destinations such as the
          NT whose key markets are built on nature based tourism and typically have to travel
          large distances both getting to, and around, the Territory. It is therefore essential that
          Tourism NT introduces a voluntary Carbon Offset Program specifically for tourism activity.

                         Global tourists are increasingly considering the
                environment and climate change in their travel decisions,
                          requiring the NT tourism industry to respond.


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7.3 Responding to the Challenges of Climate Change
          There is the potential to allocate funds raised from any voluntary Carbon Offset Program
          implemented by Tourism NT to specific destination development projects in conjunction
          with NRETA. However longer term such benefits will most likely require official auditing to
          ensure compliance with carbon trading schemes when these become nationally regulated.

          The NT tourism industry can turn climate change challenges
                     into opportunities by providing leadership and a
            coordinated response, including a Carbon Offset Program.
           STRATEGY

           Develop a voluntary Carbon Offset Program for the NT Tourism industry

           Demonstrate to key tourist markets that the NT is climate friendly and supports
           consumer values and obligations to integrate climate friendly initiatives into
           promotional activities

           Continue to educate operators on the challenges and opportunities presented by
           climate change in its key markets, including working with industry to evaluate
           climate friendly initiatives such as hybrid or small diesel vehicles


           WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

           Greater awareness of challenges and being informed of opportunities resulting
           from consumer attitudes to climate change

           Maintaining a competitive edge and relevance to the key nature and cultural
           market segments

           Ability to promote as a climate friendly operator through the Tourism NT carbon
           offset program.

           Opportunity for individual businesses to build strong overall sustainable
           business outcomes




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8 Research & Innovation
          Tourism NT is proactive in regularly undertaking research in order to examine the
          performance of the tourism industry. The creation of a research partnership with Charles
          Darwin University, as well as a Territory-specific Tourism Satellite Account (TSA) and
          Computable General Equilibrium (CGE) model, demonstrate the tenacity of Tourism NT in
          this role.

          The research partnership with Charles Darwin University contributes valuable data (to the
          industry on topics including product gap analysis and product innovation from
          international experiences. However Tourism NT has limited funding capacity for research,
          and needs to ensure that it receives the specific research that it needs. Tourism NT will
          investigate ways of tightening the process by which it funds research to achieve more
          targeted results and derive better value for the industry.

          In a wider sense, research for tourism is generally limited in Australia. Tourism NT needs
          to continue to evaluate the research that is conducted for relevance to the NT, and target
          its data collection and specific gaps. Minimal research is also done in the global arena,
          with major organisations such as the World Tourism Organisation and World Travel and
          Tourism Organisation publishing papers. With regards to emerging markets, research on
          the Australian and international stage is even more limited. The NT must conduct some of
          its own research in these markets, although initially this will be at a limited scale, if it is
          to capture first mover advantage with their developing cultural tourism and nature-based
          tourism market segments.

          There has been little research on internationally competitive destinations, as well as a
          lack of authoritative studies on competitive destination activities or new product
          developments. In Australia, government funding has been made available for
          organisations undertaking tourism market research activities.

          For its resources, the level of research and data collection undertaken by Tourism NT
          represents strong value for money. However, there is presently no regular direct visitor
          satisfaction research that is consistently undertaken across the NT. It is recommended
          that Tourism NT consider the implementation of an ongoing visitor exit survey to be
          conducted at major transport nodes such as airports, bus and train stations and ports.
          The aims of the exit survey would include the collection of data on:

          •   Expectation levels pre and post trip;
          •   Services and facilities utilised during their stay
          •   Regions visited;
          •   Satisfaction with these services and facilities;
          •   Interest in target products (nature and culture); and,
          •   Data sources used in the decision making and trip planning process.

                The level of research and data collection undertaken by
              Tourism NT, industry and research partners is significant,
                however there is no direct visitor satisfaction research.
          This survey will be designed to provide data of particular interest to tourism operators in
          the NT including:

          •   Monitoring satisfaction levels of visitors using infrastructure, tour operators etc. This
              will enable the identification of and direct feedback to those segments of the industry
              where quality and standards are a concern;

          •   Evaluation of marketing and promotion campaigns and marketing collateral; and

          •   Use in the development of KPI’s for various external government agencies and their
              provision of infrastructure and services that are utilised by visitors eg camping
              ground facilities, toilets, airport terminals, etc.




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          A smarter and evolving tourism industry in the NT depends on relevant, high-quality
          research to help show the path forward.

          Another initiative for Tourism NT is to facilitate annual State of the Industry Forums in
          both Alice Springs and Darwin. This will incorporate existing yearly international market
          updates conducted by Tourism Australia and Tourism NT in Darwin and Alice Springs. The
          aim of this project is to bring Tourism NT and its strategic partners such as airlines and
          wholesalers together with the industry operators to examine issues such as:

          •     Where the industry is heading;
          •     Visitor forecasts and what this means for the industry and the operator on the
                ground;
          •     Changes in visitor demographics and market segments;
          •     Product quality and presentation; and
          •     Changes in IT.

          The goal of this project is to better educate and inform industry of visitor feedback an
          improve industry relationships along the supply chain.

                      Tourism NT has the opportunity to better educate and
                    inform industry of trends, challenges and opportunities
                         through the facilitation of annual industry forums.
              STRATEGY

              Undertake additional profiling of the new emerging international markets such
              as India and China, specific to the cultural tourism and nature-based tourism
              market segments and gaps in data already being collected by Tourism Australia

              Undertake research at departure points such as airports, cruise ship, bus and
              train stations to measure visitor satisfaction

              Facilitate annual State of the Industry Forums in both Alice Springs and Darwin
              to better educate and inform industry


              WHAT DOES THIS MEAN FOR THE OPERATOR ON THE GROUND?

              Better information on the types of tourists in emerging Asian markets

              More information regarding industry trends and changes

              Better information on tourist experiences in the NT

              Meaningful information to improve business performance through benchmarking

              Ability to attend an annual forum to understand changes to the industry and
              opportunities that are arising

              Access to feedback on visitor satisfaction of operator products and services




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9 Budgets and Targets
9.1 Tourism NT Budget
          The NT recorded an average marketing budget of $19.8 million p.a. in the three years to
          June 2006. This is the second highest average tourism budget in Australia after
          Queensland ($36.1 million) and New South Wales ($18.8 million).


          Figure 9.1: State Total Marketing Budgets
                        $50               YE June 04
                                          YE June 05
                        $45
                                          YE June 06
                        $40
                        $35
                        $30
           $ millions




                        $25
                        $20

                        $15
                        $10

                        $5
                        $0
                                                                                                                                               Tasmania
                              Northern




                                                  Queensland



                                                                  New South




                                                                                         Victoria


                                                                                                        Australian




                                                                                                                        Australia




                                                                                                                                                                      Australia
                              Territory




                                                                                                                        Western
                                                                                                         Territory




                                                                                                                                                                       South
                                                                                                         Capital
                                                                    Wales




          Source: AECgroup


        In comparison to other states and territories, the NT records the second highest
        promotional spend per visitor ($14.22/visitor) to Tasmania ($17.04/visitor). South
        Australia, which spends on average $2.94 in advertising per visitor, is the third largest
        spend in the country. The NT also has the highest level of dollars spent per visitor night
        ($2.15/visitor night), followed by Tasmania ($1.91/visitor night), and finally, the second
        lowest ratio of visitors to dollars spent, with 0.07 visitors to the region per dollar spent
        (Tasmania recorded the lowest at 0.06 visitors per dollar spent). This confirms that the
        Tourism NT strategy of targeting niche markets and high yield visitors is appropriate so as
        to maximise economic contribution to the NT economy for every dollar of marketing
        expenditure. For the NT Government, the $14.22 Tourism NT spends attracting each
        visitor, contributes $386 in economic value add to the NT Economy. This represents a
        2,700% return on investment for the NT Government.

          Figure 9.2: Three-Year Average Dollars Spent Per Visitor, and Three-Year Average Visitors
          Per Dollar Spent
                        $20               Average $ per Visitor                                                                                                            6.00
                        $18               Average Visitors per $ spent
                                                                                                                                                                           5.00
                        $16
                        $14
                                                                                                                                                                           4.00
                        $12
                        $10                                                                                                                                                3.00
                        $8
                                                                                                                                                                           2.00
                        $6
                        $4
                                                                                                                                                                           1.00
                        $2
                        $0                                                                                                                                                 0.00
                                                                                                                                    Tasmania
                              Northern




                                             Queensland


                                                               New South




                                                                              Victoria


                                                                                                    Australian




                                                                                                                 Australia




                                                                                                                                                          Australia
                              Territory




                                                                                                                 Western
                                                                                                     Territory




                                                                                                                                                           South
                                                                                                     Capital
                                                                 Wales




          Source: AECgroup




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Northern Territory Tourism Strategic Plan 2008-2012



          It must be remembered that there are a number of unique factors must be considered
          when attempting to benchmark the performance of the NT’s tourism promotions against
          the performance of other Australian states and territories.

          Tourist attractions in the Northern Territory are located considerable distances from the
          population centres of Australia. For the domestic market, lengthy flight times, and small
          traffic volumes result in relatively high travel costs. For the international market,
          established routes take most flights to the major east coast cities, making the NT a
          relatively expensive side trip in an Australian visit.

          Due to the relatively small population and large area, roads and highways throughout the
          Territory are relatively underdeveloped, with many practical for seasonal four-wheel drive
          travel only. By road the Territory is effectively isolated from the major east coast cities,
          and this diminishes its ability to develop synergies with linkages, economies of scale and
          cooperative networks. This is in contrast to the East Coast of Australia where
          Queensland, New South Wales and Victoria have significant physical and relational
          linkages that result in positive benefits for each. For example, an immensely popular
          tourist route in Australia is to start in Sydney and travel up the east coast to North
          Queensland. In practice, the east coast works in synergy with a joint $66.8 million
          marketing budget, in comparison to the Northern Territory that alone has $19.8 million.

          The Territory is, however, comparable to Tasmania with regard to isolation (although
          Tasmania is much closer to the east coast population centres). Tasmania is similar in that
          for most visitors, getting there involves air travel. Despite having a lower total budget
          than the Northern Territory, Tasmania finds it must spend a similar amount of advertising
          dollars per visitor night, and a higher level of dollars spent per visitor. In benchmarking
          the NT against Tasmania, it is clear that Tourism NT is consistently achieving a greater
          return on marketing expenditure than Tourism Tasmania.

          The Northern Territory, as primarily a destination location, must target a vastly different
          market to that of other tourism regions. Famous icons, such as Uluru, help to create a
          destination that draws visitors, but with the disadvantage that icon tourists do not of
          habit visit icons twice (low return rate). Being a relatively small population remote from
          the main tourist areas of Australia, the NT will always find it more difficult to generate
          the critical mass that naturally draws tourists to larger centres.

          In addition once industry advertising spend (including spend by larger RTAs/ Industry/
          Transport) is taken into account, the NT comprises just 5% of total national advertising
          spend outside home state. So whilst Tourism NT has the second highest marketing
          budget of all state tourism organisations, it drops to 8th in total advertising spend outside
          home state. This illustrates the disadvantage faced by Tourism NT due to lower co-
          operative and industry advertising spends relative to other states.




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Northern Territory Tourism Strategic Plan 2008-2012



          Figure 9.3: Total State Tourism Organisation Advertising Spend (including Transport and
          Industry spend outside home state)




          Source: Tourism NT


          Tourism NT’s promotions are targeted internationally and nationally to attract high-value
          tourists to the Territory. Given that the Northern Territory is remote and must work hard
          to convince tourists to come, it is imperative that those that are attracted will bring the
          highest value to the NT tourism industry.

          Tourism NT has effectively maintained the level of visitors travelling to the Territory for
          each dollar spent on advertising, indicating measurable success on the part of Tourism
          NT to effectively market the NT both nationally and internationally. Further this analysis
          clearly demonstrates that any reduction in the tourism marketing budget provided by the
          NT Government would cause a corresponding reduction in visitor numbers. Conversely,
          any increase in the marketing budget would directly lead to increased visitor numbers
          and a consequential positive impact on the NT economy.

9.2 Performance Measurement
          Performance measurement for the NT tourism industry is essential to drive decision
          making for the industry and to monitor the effectiveness of various strategies. Tourism
          organisations have tended to base success on total visitor numbers. This is not a true
          reflection on performance as business travellers are likely to travel regardless of a
          destination’s marketing activity. A focus purely on volume is also unlikely to be
          sustainable in the long-term as it will place increasing pressure on natural attractions in
          the NT. Instead, it is important to attract tourists that stay longer, spend more, travel
          widely and visit outside of the traditional peaks. This will help create an environment
          where businesses can improve and employment is generated.

          Tourism has a central role to the continued growth, development and sustainability of the
          NT economy, being one of the most significant industries in the Territory. Economic
          growth, through tourism, can be achieved by one or more of the following:

          •    Attracting more visitors;
          •    Getting those that come to stay longer;
          •    Encouraging those that come to spend more; and
          •    Encouraging those that come to come back for repeat visits.



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Northern Territory Tourism Strategic Plan 2008-2012




          Tourism NT, as the NT Government’s organization responsible for the development of
          tourism, is committed to achieving all of these factors. Priorities are made where efforts
          will be most profitably rewarded. Clearly, measuring success on only one of these factors,
          or viewing each of them in isolation, can lead to misrepresentation of success.

          Moving forward, Tourism NT will develop a broad indicator for the performance of the NT
          tourism industry that incorporates a mix of key statistics, leading indicators from visitor
          surveys, industry investment and benchmarking. In summary, the four key performance
          groups to be incorporated are:

          •   Tourism Product: The character, attractiveness and satisfaction with the NT tourism
              experience will be measured through regular visitor surveys;

          •   Tourism Investment: The development of infrastructure and facilities will be
              measured against targets and visitor use. Tourism operator surveys will measure
              business confidence, performance and investment expectations;

          •   Tourism Demand: Key statistics such as numbers of visitors, average spends,
              length of stay will continue to be measured; and,

          •   Tourism in Context: Benchmarking against the overall performance of the other
              states and territory is important to account for impacts that are beyond the control of
              the NT (eg. September 11). The outbound performance of key source markets will
              also to be measured.

          The 2003-2007 Strategic Plan has recorded positive results and has been implemented in
          a period of significant change in the global tourism industry. Overall, around 90% of
          targets have been achieved. Similarly, the implementation of the 2008-2012 Strategic
          Plan will be closely monitored with regular reporting to the Board of Tourism NT, the NT
          Government and the NT tourism industry.




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Northern Territory Tourism Strategic Plan 2008-2012




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