Packer slams Australian tourism efforts, as high Australian dollar forces operators to focus on value, domestic travel

Gaming billionaire James Packer has added to concerns about the state of Australia’s multi-billion-dollar tourism industry, arguing a change of focus is needed to keep the one of the nation’s top-three export industries competitive.

While Packer’s self-interest is obvious (his investments include the Crown and the Burswood casinos in Melbourne and Perth, which are heavily exposed to the Asian high-roller market), his views will no doubt raise a few eyebrows in Canberra, which has a long history of dealing with the Packer family.

It comes as tourism operators complain that the soaring Australian dollar is not only reducing the nation’s attractiveness as an international destination, but is also luring locals to offshore destinations.

A Roy Morgan survey last week showed that 12.9 million (or 70%) of Australians aged 14 years or older intend to take at least one holiday in the next 12 months, with the percentage who plan to holiday domestically coming in at a historical low of 54%, while those who intend to go overseas reached a high of 10%. Four percent were undecided on their destination.

Packer told The Saturday Age that Australia needs to get “more sophisticated’ if it wants to attract middle-class Asian tourists.

“It’s one thing if you want backpackers on $50 a day, but the market Australia should be aiming for is the affluent and rising middle-class Asian market,” he added.

”That is who Australia needs to be aiming for, because we are too far from Europe and too far from America.”

Central Australian Tourism Industry Association general manager Peter Grigg says it’s difficult to fault Australians for capitalising on the record Aussie dollar by travelling overseas.

He says the challenge for local operators and tourism bodies is working hard to present value for international visitors, while continuing to woo local travellers.

“Realistically, every state within Australia would have experienced a downturn in international visitors,” Griggs says.

“In all honesty, when an international market is probably decreasing or at the very least is static, our domestic drive market is the one that gets us through,” he says.

While Grigg agrees with Packer that the middle-class Asian market has huge potential, he says it would be remiss to ignore the traditional markets of Europe, the US, Japan and the UK.

“I think, in all fairness, that Australia is seen as an outback experience,” Griggs tells SmartCompany.

“Every state except Tasmania markets itself as an outback experience, and while Tassie might not see themselves as the outback, they market themselves as a remote destination.”

And while some have criticised Tourism Australia’s international campaigns such as ‘Where the bloody hell are you?’ featuring a bikini-clad Lara Bingle, and the Baz Luhrmann-directed ad to coincide with his Australia film, Grigg has no complaints about the efforts of Australia’s tourism bodies.

“We’re not unhappy with the campaigns,” he says.

Packer isn’t the only billionaire to draw attention to deficiencies in Australia’s tourism marketing. Last year, Virgin founder Richard Branson said he was “surprised the advertising people can’t get the message across” for the country he most enjoyed visiting.

“I think Australia’s … the country I most enjoy coming to. It’s a fun country. It’s pretty much got everything you could imagine to offer: great people, great variety, it’s got the Gold Coast,” Branson said.

“You name it, Australia has it. So if they want to use me (laughs) to plug Australia, I’d be delighted to do so because I can’t think of another country I’d rather visit.”

Tourism Australia managing director Andrew McEvoy says people are still travelling to Australia at record levels, with 5.9 million visitors in 2010, up 5.4% on the previous year.

“Australia continues to have high appeal and is a desirable place to visit,” he says, adding the body’s most recent campaign – There’s nothing like Australia – is proving “very successful” across Asia.  

McEvoy also highlights a 14% jump in tourist numbers in 2010 from North East Asia, a 9% increase from South East Asia, and 11% rise from India.

“Looking ahead to 2020, we’ve very focused on growing the economic contribution that Asian and other international visitors deliver to the Australian economy,” he says.  

Tourism Minister Martin Ferguson says while he “understands” Packer’s concerns, Australia holds “enormous and growing appeal” for Asian travellers, with the number of visitors from China lifting 6% in the year to February, with South Korean visitors up 15% and visitors from Singapore rising 5%.

“In the current climate with a high Australian dollar and unemployment at less than 5%, the challenges across the industry relate to skills, labour and regulatory reform and the need to evolve their product to deal with the growth from China in particular,” Ferguson says.

“There is no silver bullet – tourism is a large and diverse sector,” he adds, drawing attention to the “phenomenal success” of the Oprah Winfrey visit.