South Australia Tourism Commission Update – Direct Access To North America Remains Primary Network Gap

Transcript

Rodney Harrex:Rodney Harrex, South Australian Tourism Commission CEO. Look, the current tourism situation in South Australia is a strong one. We've seen exceptional growth coming in terms of international arrivals and expenditure in particular. Domestically, we're also seeing good growth. So what this is showing us is that there is consumer demand for Adelaide and South Australia as a destination. We're also seeing that in the corporate area, so the conference side of business, business Business travel, education, so there's a good cross-section that is really assisting us fulfil our aspirations. Look, in terms of the reasons behind the growth, there's a number of factors. Look, when we've sort of grown into the international market, we've been quite strategic about where we need to get that capacity. We work incredibly closely with Adelaide Airport, so it's a real partnership. So we saw the commencement of China Southern services December '16. In the lead-up to that, we looked at, okay, how are we going to fill it from a freight point of view? what's the cross-section in terms of the passengers on board, both inbound and outbound? And so it was really a strategic framework that looked at that. More recently, the starting of Qantas services from Adelaide to Kingscote, from Melbourne to Kingscote. So again, it's about who's the market, what does the opportunity look like, and how can we fulfil that in terms of loads and ultimately driving visitation to South Australia? Look, the key things that we're finding that are driving international visitors to South Australia and to Adelaide, look, internationally it's about nature tourism, It's about, you know, access to that nature. One of the things we find with Adelaide, particularly with Asian visitors, is that this accessibility— I can be in the hills in 25 minutes— it's a real draw for the Asian market, and we're seeing exceptional growth out of this. Our China arrivals, we've already exceeded our 2020 target. So that's sort of an example. Our European, our traditional markets, America, New Zealand, really are coming to our regions, and so Adelaide's part of it, but our regions are a key draw for them. Domestically, we see that the whole food and wine proposition is a very strong one for us. You know, and so, as I said, it's really what's the market and what do we have to offer. And so it's really about tailoring what we have for those consumer segments. In terms of our aviation gap, or the one that we're working towards, is there's no doubt it's, it's that direct access to the United States, to North America. If we look in terms of our current capacity, Adelaide Airport has been one of the fastest growing in the country consistently for a number of years. And so So it's really about where's the market and where have we got a gap. We see a lot of traffic going over the eastern seaboard, and so that tells us that there's an opportunity in terms of driving that capacity. We've been working closely with Air New Zealand to sort of drive traffic through Auckland as well. From a visitation point of view, what we find out of North America is they come through the East Coast, we lose nights. So ultimately we lose expenditure, which ultimately means jobs. So what we've seen since the sort of expansion of direct services, 3 carriers in the last few years, it's really seen our international visitation grow, and that's where we see that opportunity out of North America. Look, in terms of China, we work very closely with Adelaide Airport to look at which carrier was right for Adelaide and South Australia. You know, when we were talking to a number of carriers, the fact is China Southern fulfilled, you know, really clearly what we needed. They started in December '16. We've been promoting heavily there, but importantly, we worked with our export division of government. We worked with the business community, and it was really about saying, okay, if these services are coming in, how do we all work together? Because ultimately, a service needs to be well outbound as well as inbound. So it was really a good strategic approach— airport, business, other divisions of government— and that really has seen the success of that service. 3 flights a week, it's increasing later this year to 5, and at the peak it'll go to daily. Their loads are strong, but ultimately we've also got to promote our destination in China. And, you know, we last year, or earlier this year, appointed an ambassador, you know, Huang Xiaoming. He's got 54 million followers. So it's about using those individuals to get cut-through in a highly cluttered market. Look, in terms of infrastructure in Adelaide and South Australia, we've seen some significant growth. If we look at hotel rooms as an example, there have been over 1,000 rooms in the last 3 years come into supply. There's a number of hotels that have also recently been announced. some that are already under construction. So ultimately it's about, you know, we have a forward strategy of $8 billion by 2020, and these are targeting high-spending travellers, independent travellers. What we know for Adelaide and South Australia is that we are a more independent destination where it's not sort of volumes and groups, it's that more independent traveller. And so we've been keeping pace with supply, and in terms of what's being built, we believe we're well positioned. There's no doubt about, like the rest of Australia, we need more development in our region, in our regions, and we're working to address that.

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