How do we reset the tourism industry?
AMONG the chaos and devastation from this global health crisis, an opportunity exists that
we would never have thought possible.
While we sit in “iso” (self-isolation) and trust that society will pull together and come through to the other side, we wonder what does that ‘side’ looks like?
Let’s not wonder, let’s re-imagine and reset, akin to the keyboard solution to a frozen
hard drive — Control, Alt, Delete.
The opportunity is to consider how we allow things to happen in our lives, our careers, our
industries, our cities, our governments, our countries and even in our world. Then to re-imagine these with complete hindsight and then, reset.
My industry is tourism and COVID-19 is the third nail that has been hammered into us
since the bushfires started in September 2019 on the East Coast of Australia.
Admittedly, this nail is the longest and hardest of them all and each day the hammer keeps pounding it down deeper and deeper into its very heart.
As our Australian Government bravely does “whatever it takes” to ensure the economic impact is buffered, I fear that the debt building will be one that my grandkids will still be paying down when they are bouncing their own grandkids on their knees.
At least we have a PM that understands our industry, having led Tourism Australia for a time, and the current leadership within TA is doing an incredible job with open, transparent and caring communications and sound and logical decision making.
When we come out on “the other side” of this, what will the priorities of government be?
TA has assured the industry it is building up a war chest to hit the marketing trail, and the
value and sentiment of the “Australia” brand is extremely strong.
The issue will be competing against 140 global destinations with even bigger war chests.
An example is Saudi Arabia’s goal of becoming a top 5 global destination and raising its tourism revenues to 10 per cent of its GDP with a Public Investment Fund of $320 billion.
We need to re-imagine.
I have long been an advocate against the third-party booking sites, and before them, the travel wholesalers in the archaic global distribution model.
What industry allows up to 30 per cent of its revenue to be taken by parties that have no investment in their business?
Where the capital investment for hotels, tour operations and other businesses in the tourism industry is extraordinarily high, how did this happen?
An excuse or reason I was told early in my career was due to the distance between Australia and the rest of the world. I was told we needed these distribution networks and levels of commissions to get access to visitors.
Now we have the internet, and no control, as the duopoly of Booking.com and Expedia are making billions out of our industry with 85 per cent of market share, taking all profits offshore, owing hundreds of millions of dollars in tax.
What if the only distribution of tourism product was via the government channels of
Australia.com, queensland.com and visitnsw.com?
These are great assets and can be re-engineered to be better than the Booking.com’s of the world as an online distribution channel.
Industry would be more than willing to pay a lesser commission that is fixed (say, 5 per cent) knowing that all of this will be invested in the promotion and management of our
industry domestically and on a global scale.
Revenues generated through these commissions, if done right, should well exceed the current investment levels into tourism by our combined state and federal governments, and alleviate the oncoming pressure to find the moneys needed to make Australia competitive.
The tourism industry has been screaming out how vital we are to this nations’ economy,
unfortunately it has taken droughts, bushfires and a global pandemic for all those that
denied they were part of the industry to finally realise when the tap got turned off so did
Let’s re-imagine, with complete hindsight, how we can do this better and take back control of our industry, our assets and the dilution from our profits through commissions.
The government, industry, communities, businesses, employees and visitors will be far better off.
Then we ‘reset’.
This will take both state and federal government agencies to agree on this approach to re-engineer their current digital assets into booking engines with full hindsight of the success
achieved by current multi-billion dollar booking sites.
Next step would be to engage industry to list and provide their best deals, considering they will be 10-15 per cent better off financially this should not be an issue.
Then we delist from the duopoly.
The government agencies must have in their terms and conditions that the profits are
invested solely on the promotion and marketing of Australia, all states, and our industry,
alleviating the need for taxpayer dollars to spent on this.
#CtrlAltDel systems, processes or structures in your industry that you feel now is the most
opportune time to re-imagine and reset for when we come out the other side of COVID-19.
Cameron Arnold is the Chair Destination North Coast and tourism industry leader.