CORPORATE PLAN - Tourism Australia

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tourism.australia.comCORPORATEPLAN2019 to 2023

CONTENTS1Managing Director’s message32Vision, purpose, and goal43Operating context and strategic risks64Strategies85Implementation: Key deliverables by program component176Resourcing187Performance measurement18Appendix: Risk appetite19Tourism Australia is an Australian Government Corporate Commonwealth entity formed underthe Tourism Australia Act 2004 (TA Act). It is governed by a Board of Directors that is appointedby the Minister responsible for tourism under the Tourism Australia Act 2004 (Cth) (TA Act) andthe Public Governance, Performance and Accountability Act 2013 (PGPA Act).This plan outlines Tourism Australia’s strategic direction, our objectives and goals for theperiod 2019 – 2023. It has been prepared in accordance with the TA Act and PGPA Act.2 Tourism Australia Corporate Plan 2019 to 2023Woolshed Cave, Talia, SA

Tourism Australia Corporate Plan 2019 to 2023 3

1. MANAGING DIRECTOR’S MESSAGEOUR STRATEGICDIRECTION TO 2023Welcome to our Corporate Plan for 2019to 2023, whose theme is ‘acceleratinggrowth towards 2020’.Our core strategy – which remainsunashamedly about increasing yield –involves targeting high value travellersin the markets and tourism segmentsthat we believe will deliver the greatestreturns. It’s also about using highimpact cultural moments to spread thedestination Australia message.Australian tourism remains a key driverof economic growth and employment,and we continue to make strong andsteady progress towards our Tourism2020 goals. We have already exceededthe industry’s 115 billion 2020 targetand are on track to hit 130 billion bydecade’s end.However, while international visitornumbers continue to grow, we arestarting to see some softening in themarket. The stellar double-digit growthdriven by China in recent times ismoderating: the market is still growing,but maturing, and changing fromgroups to independent travellers.4 Tourism Australia Corporate Plan 2019 to 2023As such, our growth rates over themedium term are expected to slow.In addition, the global trend ofinternational visitors taking shortertrips and seeking more immersive andauthentic experiences is something weare starting to see across key markets,including the UK, USA, China and India.Against this backdrop, we are targetingcustomer markets and segments thatpresent the best potential for growthand that will deliver on our Tourism2020 goals and beyond. This includes anincreased focus on our ‘hero’ markets ofChina, the UK and USA, as well as India.In an increasingly competitivemarketing and media environment,with changing consumer travelpreferences and rapid advances intechnology, we are deliberately movingtowards an investment model thatheightens the efficiency, focus andimpact of our activities.A big part of this is delivering fewer,but more impactful, campaigns.Constrained by limited budgets andever-increasing media costs, we

recognise that we can’t be everythingto everyone. Our attention will beon priority markets, with large-scaleprojects that we know will give us cutthrough. Our recent Dundee campaignis the model we use in adopting thisbigger and bolder approach.We are also putting increased focusupon repeat visitation and promotingtravel out of peak periods. Additionally,we’re encouraging visitors to dispersefurther and do more through campaignssuch as UnDiscover Australia, whichhas now been rolled out in Singapore,Malaysia, India, Indonesia, Japan andthe UK. We have done the same inChina with Too Australian for words.As we look to play at the top end ofthe purchase funnel, one significantchange for 2019/20 and beyond willbe an increased focus on marketingAustralia’s destination brand, bybuilding awareness that sparks interestin booking that next trip to Australia.In recent times, we’ve done a great jobof promoting our key pillars – food andwine, aquatic and coastal, and natureand wildlife. These attributes all playan important role in how Australiais perceived internationally and arekey drivers of international visitation.They will still feature heavily in ourcampaigns and marketing activities,but as part of a new brand campaignwe are developing, we’ll start to dial upAustralia’s culture, character and way oflife. We want to bring the country andits rich and varied visitor experiences tolife by focusing upon the Australian wayof life and the personality of our people.Once again, on behalf of the Board, andthe Tourism Australia team, I applaudthe industry for its continuing workin driving such strong and consistentperformance.JOHN O’SULLIVANManaging Director and ChiefExecutive OfficerTourism Australia Corporate Plan 2019 to 2023 5

2. VISION, PURPOSE AND GOALVISIONPURPOSEOur vision is for Australiato be the most desirable andmemorable destinationon Earth.Our purpose is to invite the world to experience theAustralian way of life.VALUES –OUR GUIDING PRINCIPLESOur values support our vision. They arethe essence of our identity and guideour behaviour and the relationships wehave with our customers and partners.They are: United we are one team Positive we are optimistic Genuine we are authentic Commercial we deliver results Innovative we are creative thinkersWe work closely with the Australian tourism industry to deliver on this purpose.Through this partnership, we aim to not only increase visitors and spend in Australia,but to foster a competitive and sustainable tourism industry for generations to come.LEGISLATIVE PURPOSES AND DELIVERABLESUnder the TA Act, our main functions are to: Increase potential travellers’awareness of Australia as a destination Conduct research into, and analysis of,international and domestic travel Increase potential domestic travellers’awareness of Australia as a placeto travel Communicate effectively with theAustralian tourism industry onmatters that may affect it Increase both international anddomestic potential travellers’knowledge of Australia Increase awareness among Australiansof the contribution tourism makes toAustralia’s economy, society and environment Increase both international anddomestic potential travellers’ desire totravel to and throughout Australia1 Report on trends in international anddomestic travel.GOALCore to our success is the increasedeconomic contribution of tourismto Australia’s economy. The Tourism2020 goal – and Tourism Australia’smajor strategic goal – is to increaseovernight tourism expenditure to morethan 115 billion by 2020. We sharethis goal with the Australian tourismindustry and federal, state and territorygovernments to maximise tourism’scontribution to the Australian people.To focus our effort and endeavours,and in partnership with industry andgovernment, for 2019/20 we have setan overnight expenditure goal of 121.3 billion.1 While the TA Act outlines domestic functions, Tourism Australia is not currently engaged in domestic tourism marketing activity.This change in Tourism Australia’s remit came into effect in 2013, and is outlined in the Minister for Trade, Tourism and Investment’sStatement of Expectations for Tourism Australia.6 Tourism Australia Corporate Plan 2019 to 2023

TOURISM 2020Tourism 2020 is a whole-of-government and industrystrategy to build the resilience and competitiveness ofAustralia’s tourism industry and to increase its economiccontribution to Australia’s economy.In 2019/20, we are continuing tochampion Tourism 2020’s objectives, byworking in partnership with Austrade,state and territory governments andthe Australian tourism industry. We arealso planning for the years beyond 2020,with Tourism Australia’s membershipof the Beyond Tourism 2020 SteeringCommittee. This initiative of theAustralian Government supports thedevelopment of a new long-term visionfor tourism by encouraging innovationand new technologies and reducing redtape so that Australia offers a worldclass experience for travellers.When the Tourism 2020 goal wasintroduced, it was set at between 115billion to 140 billion in overnightvisitor expenditure, reflecting a range ofscenarios, from holding market share toits increase across key markets. As partof this strategy, supply-side targets foraviation capacity and accommodationinvestment were also set to ensure theindustry could deliver on the needs oftarget consumers. Implementation hasbeen via a three-phase approach. The2019 to 2023 Corporate Plan plan hasbeen developed for the ‘Looking beyond2020’ phase as shown in Figure 1.2018–2020looking beyond 20202015–2017seeingthe results2010–2014setting the foundationFigure 1: Tourism 2020 phasesPerformance against Tourism 2020 goalsTourism continues to be a solidperformer in the Australian economy,with significant growth since the launchof Tourism 2020. The industry is ontrack to achieve our goal, with recentforecasts estimating total spend will be 131 billion by 2020.2 At 31 December2018, total overnight visitor expenditurereached 116.6 billion, which was anincrease of 11 per cent year on year.3Major contributors to growth have beenvisitors from China and India, up13 per cent and 21 per cent respectively.Overnight visitor expenditure ( billions)PERFORMANCE AGAINST TOURISM 2020 GOALS 140bn 011201280.4103.2110.085.5Setting thefoundation201397.1121.3(2019/20 goal)Seeing theresults201420152016Lookingbeyond gyFigure2: ProgressagainstTourism2020 goals and our 2019/20 goal2 Tourism Research Australia (2017), Tourism Forecast3 Tourism Research Australia (2017), International Visitors SurveyTourism Australia Corporate Plan 2019 to 2023 7

4. OPERATING CONTEXT AND STRATEGIC RISKSOPERATING ENVIRONMENTWe expect a number of trends to impact our operating model as we head towards 2023.These include global economic factors, consumer behaviour changes, shifts in the medialandscape and the composition of the travel industry. We have taken these shifts intoconsideration when planning our budgeting and resourcing, marketing activities andoperations.EXTERNAL CHANGES IMPACTING AUSTRALIAN TOURISMIMPLICATIONS FOR TOURISM AUSTRALIAEconomic Slowing global economic growth is predicted. (Gross DomesticProduct (GDP) is relatively flat, up 3.5 per cent for 2019). China’s economic growth is projected to be 6-6.5 per cent withvolatile consumer confidence. GDP in Tourism Australia’s Star markets is forecast to slow due touncertainty around Brexit and trade disputes between the USAand China. Growth in our Solid deliverer and Distribution Focusedmarkets is predicted to be flat, while robust growth is predictedin Rising Star markets (India, up 7.4 per cent, Indonesia, up5.2 per cent).4 The price of jet fuel is predicted to increase, impacting airfares. An overall slowing economic environment, withmixed consumer confidence across our key markets.We expect a softening in visitor expenditure. We are planning for increased effort in Starmarkets (China, the UK and USA) as well as India.Marketing andcommunicationschannels Media costs will continue to rise (with an estimated increase of8 per cent in 2019/20). Digital disruption will continue, impacting the way wecommunicate with target consumers. Programmatic advertising and media buying and personalisationwill be fundamental to success as media costs continue to escalate. Digital, video and content will continue to be important forreaching and influencing target consumers. Messaging and creative across the tourism category lacksdifferentiation. We will continue to develop as a connected,digitally focused marketing organisation. As our current media spend does not always meetour media threshold, we need to increase focusand resources in the right channels with the rightmessage and partners. To maximise our return on investment we need tofocus on high-impact platforms and campaigns inStar markets. We will differentiate ourselves by promotingAustralia’s people and lifestyle.Consumer Evolving consumer mix to include more independent andsophisticated travellers from Asia, who are seeking authentic,differentiated experiences and products. A preference for mobile and digital channels, with increasingdirect transactions between consumers and tourism experiences/products. Visitor numbers from Asia will outperform other overseas markets,particularly from China, India and Japan. There are fundamental consumer marketing challenges relating toa perceived lack of urgency, fashionability and complexity. We will continue to target High Value Travellers(HVT). We will increase our strategic focus on Asianmarkets. We will continue to make the most of consumerand technology trends; and work with industry toconnect travellers to experiences. Our marketing efforts will be concentrated ontackling core marketing challenges. We will work with industry to develop newexperiences and products that meet visitors’ needsTravel industry The continuing importance of the sharing economy. The increasing presence of online travel agencies as consumersmanage their own travel plans. Global aviation capacity is projected to grow 5.8 per cent in 2019;capacity in the Asia Pacific is forecast to grow 7.1 per cent.5 We will continue to analyse and develop insightsinto industry developments impacting demandfor Australia as a tourism destination and usethese insights to inform marketing Australia as atourism destination.Table 1: Operating environment changes and implications for Tourism Australia4 International Monetary Fund, World Economic Outlook, October 20185 IATA, Industry Fact Sheet, December 20188 Tourism Australia Corporate Plan 2019 to 2023

Duckboard Place, Melbourne Laneways, VICTourism Australia Corporate Plan 2019 to 2023 9

STRATEGIC RISKSEach year Tourism Australia undertakes a strategic riskassessment and uses the insights and results of thisprocess to inform the development of our corporate plan,operational planning and internal audit planning.Our strategic risk assessment is undertaken using our risk appetite, which coverseight areas that have the capacity to significantly impact Tourism Australia’soperations. Our risk appetite and risk profile are provided at Appendix 1, while ourkey strategic risks and planned mitigation activities are outlined in Table 2 below.Strategic risks and mitigation strategies 2019/20HIGH RESIDUAL RISKSChina outbound:Decrease in outbound tourism from China reduces arrivals and spend to Australia, impacting 2020 goals.Mitigation: Use diplomatic channels in market; shift marketing to support tactical opportunities; fundingreallocation.Data accuracy:Tourism Australia is unable to make informed investment decisions, accurately measure the effectiveness ofcampaigns or visitor expenditure due to poor-quality data sources.Mitigation: Seek alternative data sources; develop new metrics using alternative source data and share updates withindustry; continue to collect anecdotal industry and partner feedback.Dundee campaign:Inability to drive results, convert interest and achieve strategic objectives, resulting in reputational damage.Mitigation: Regular reporting to our Executive Leadership Team and Board; regular updates to project risk register.Relevance and funding:Inability to demonstrate continued organisational relevance.Mitigation: Government stakeholder management / broad external communications; new policy proposals.Digital environment:a) Target customers are unable to access information via their preferred platform; b) Inability to continue to deliverrelevant digital platforms in China.Mitigation: Digital media agency appointed.Cyber security:Tourism Australia’s consumer / trade / corporate platforms are compromised.Mitigation: Undertake regular disaster recovery reviews; implement Protective Security Policy Framework protocols;attend government cyber security simulations; external penetration testing.Social license:National loss of social licence for the tourism sector.Mitigation: Learn from competitors – review how other destinations deal with this and consider applicability toAustralia.Keeping pace withchanging travellerpreferences:Inability to understand changing traveller preferences and adapt marketing campaigns accordingly.Mitigation: New creative agency appointed.Beyond Tourism 2020:Poorly developed and executed strategy leads to irrelevance and lack of industry and government support.Mitigation: Tourism Australia is a member of the Beyond 2020 Steering Group.10 Tourism Australia Corporate Plan 2019 to 2023

Strategic risks and mitigation strategies 2019/20MEDIUM RESIDUAL RISKSProjects:Inability to deliver on key strategic projects and to maximise their commercial potential.Mitigation: Include appropriate third-party advisors and experts on steering committees.Governance:Current strong governance levels are not maintained.Mitigation: Continue to streamline the governance framework; continue PGPA Act training; streamline processes.Capacity:The Australian tourism industry does not have enough infrastructure and aviation capacity to meet the needs oftravellers, particularly during peak holiday times.Mitigation: Our marketing and partnerships will promote visits during shoulder / non-peak periods; 2020 and BeyondStrategic Plan to include aviation capacity development.Dispersal:The diverse travel experiences Tourism Australia promotes do not resonate with target consumers, and they do nottravel beyond major gateways.Mitigation: Tourism-Austrade investment partnership will focus on regional Australia; Tourism Australia marketingand partnerships will promote independent travel, regional products, and signature experiencesGovernmentinterdependencies:Inability to influence policy settings and processes not conducive to increasing demand for travel to Australia.Mitigation: Continue to regularly consult with government stakeholders; participate in quarterly state and territorytourism organisation CEO forums and Australian Standing Committee on Tourism.Talent:Inability to retain, develop or direct the talent / capability required to support Tourism Australia’s strategic directionand to nurture long-term talent.Table 2: Tourism Australia’s strategicrisks and ent matrixannually; leadership and management to demonstrate values; focus onretaining and developing Asian talent.Workplace healthand safety:Failure to maintain a safe working environment for staff, contractors, visiting media, delegates and event volunteers.Mitigation: Develop a call tree and escalation process to identify and manage safety-related incidents.Table 2: Tourism Australia’s strategic risks and mitigation strategiesTourism Australia Corporate Plan 2019 to 2023 11

4. STRATEGIESOUR STRATEGICPILLARS 2019–23The diagram below summarises our areas of focus in the period 2019 to 2023.The sections that follow explain how we will deliver on these.VISIONFor Australia to be the most desirable and memorable destination on Earth.PURPOSETo invite the world to experience the Australian way of life.GOALMore than 115 billion in overnight spend by 2020STRATEGIESCUSTOMERTarget high value leisure and business events travellersMARKETSInvest in markets with the best potential to deliver high spending consumers to2020 and beyondLeisureBusiness EventsStar, Solid Deliverers, Distribution focused, Rising starsIncentive, AssociationMARKETINGInvite the world to experience theAustralian way of lifeGrow demand for business eventsexperiences and destinationsengaging campaigns effective channels leverage partnerships distribution developmentENABLINGSupport, deliver, build capabilityFigure 3: Tourism Australia’s key strategic pillars, 2019 to 202312 Tourism Australia Corporate Plan 2019 to 2023

Narlijia Experiences Broome, WACUSTOMER STRATEGYTarget high-value leisure and business events travellers.We will continue to target high valuetravellers in both the leisure andbusiness event

Tourism 2020 is a whole-of-government and industry strategy to build the resilience and competitiveness of Australia’s tourism industry and to increase its economic contribution to Australia’s economy. When the Tourism 2020 goal was introduced, it was set at between 115 billion to 140 billion in overnight visitor expenditure, reflecting a range of scenarios, from holding market share to .

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