The impact of the collapse of Ansett and the terrorist attacks on the United Sates has been felt immediately by the Victorian tourism industry.
A survey of tourism operators by the Victoria Tourism Industry Council (VTIC) has found that tourism businesses operating in metropolitan areas of the state have noticed a greater impact in terms of lost sales and cancelled bookings than their regional counterparts.
VTIC chairman John Button says around 24% of the 258 businesses surveyed indicated that they would cancel or defer capital expenditure or expansion plans as a result of the recent events, while one third of businesses thought that they would need to reduce staffing levels by between 1-10 persons over the coming 12 months.
"Half of the respondents reported that sales had not been affected by the recent events. However, of those respondents who reported a decline in sales, 25% had experienced a sales drop of between 1-10% and 13% had experienced a fall more than 10%. In contrast, 5% reported that sales had increased.
"Within market segments, half of the hotels in the 4-5 star category reported a decline in sales of between 1-20%, while nearly 90% of respondents in the exhibitions and conference industry reported a declined in sales of between 1-20%.
"These results confirm anecdotal evidence that large metropolitan hotels and conference facilities have suffered a dramatic decline in business since 11 September.
"The clear message from those we surveyed is that ongoing strategic and co-ordinated investment in the tourism industry will be vital to securing the industry's future," Button says.
Respondents strongly supported the following:
- ongoing targeted and timely promotional campaigns, particularly campaigns pointing out the benefits and value of domestic tourism
- strategies to promote road-based tourism in Victoria.
Other issues identified in the survey as important to the industry are:
- understanding by financial institutions that some businesses will experience cashflow problems in the short term
- reinforcing the security and safety of Victoria as a tourism destination
- further development of inter-modal transport packages to better link Melbourne and regional Victoria.
"On a positive note, the majority of businesses believe that in the longer term, the current crisis would provide some business opportunities," Button notes.
Two clear themes emerged from respondents:
- that Australia is a safe and friendly destination and this should be highlighted in any international marketing campaign
- that the recent events would encourage Victorians to holiday in their home state.
"It is interesting that businesses surveyed thought that the collapse of Ansett was more serious in the short term than the events in the United States," Button says.
Other findings include:
- around one quarter of businesses reported that the recent events had a significant negative impact on business confidence, however, the majority (57%) reported that the events would have little impact on business confidence
in terms of duration, respondents thought that the effects would last about a year, with the greatest impact expected in the December quarter of 2001. Only one third of respondents thought that the economic impact would last 12 months or longer - the remainder thought the impact would be a year or less
- one third of those surveyed thought that the recent events would have a more significant impact compared to other events such as the pilots' strike and the ‘Asian crisis'
- A little over one third of respondents reported a decline in bookings of between 1-10%, however, almost half of the respondents reported that bookings had not been affected by the recent events
- around 30% of respondents reported that airline ticket prices had increased as a result of the collapse of Ansett. However, a quarter of businesses reported no airline ticket price rises
- in terms of domestic tourism, a little over half the businesses surveyed thought that the recent events would result in a permanent change in behaviour and attitudes towards Australian tourism. A higher proportion of respondents (73%), however, thought that there would be a permanent change in attitude towards international tourism.