Targeting a market segment
An Australia case study

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Page 1: Introduction

Australia 7 Image 2In recent years, Australia has become an increasingly desirable holiday destination for UK travellers due to its diversity as a travel destination, beaches, outback, rainforests, city lifestyle and adventure. This is also the result of cheap flights and the strength of the £ sterling against the Australian dollar; more than 50% of all European arrivals are from the UK. In addition the UK is the third largest source market for visitors to Australia behind Japan and New Zealand. This influx of visitors from overseas has greatly benefited the Australian economy.

Inbound tourism is an important export industry for Australia that generates more than
a quarter of a million jobs. In fact it is Australia’s fourth largest earner of foreign exchange dollars and represents 11.2% of total export earnings from the 5 million international visitors in the June 2001 financial year. Every billion dollars in tourism export earnings creates 11,367 jobs and export earnings is expected to grow to 30.8 billion in 2008-9.

In the last year, the Australian High Commission has issued just under 40,000 working holiday visas to the UK market (the backpacker market represents more than 100,000 visitors). The working holiday scheme aims to provide opportunities for young people (18-30) to holiday in Australia for up to a year while supplementing their funds through work. Australia is a desirable country to both live and work (no language problems for the UK traveller) and a working visa provides a perfect opportunity to combine travelling with working. Key trade partners have introduced visa processing services along with job contacts and advisory services to encourage backpackers to make use of the opportunity. Australia has many attractions and is one of the world’s best backpacking holiday destinations. The international tourist industry however, is highly competitive and Europeans wishing to travel have many short, medium and long-haul destinations from which to choose. The increasing number of alternative, affordable holiday opportunities on offer represents a considerable, ongoing challenge for the Australian Tourist Commission (ATC).

For countries that depend heavily on tourism for their export earnings and for domestic employment, ‘getting it right’ is critical to their economic wellbeing. It follows from this that marketers of travel and tourism products need to have a good understanding of their customers and must also develop strategies that recognise and take into account the likely response of different consumer groups.  

This case study focuses upon the strategies used by the Australian Tourist Commission to win over segments of tourism and travel business.  In particular, it looks at how the ATC has developed a strategy for attracting young travellers to Australia.

Australia 7 Image 5The Australian Tourist Commission (ATC)

In a competitive environment an organisation needs to have a clear idea of what it is trying to achieve and where it is heading.  It can establish a direction for itself by:

  • giving itself a mission
  • setting a range of objectives.

Setting objectives also establishes targets by which to measure progress.  The targets become performance indicators against which success can be assessed eg targets of 3 million visitors a year, each staying on average for at least 10 days, spending on average 1,000 dollars, and with more than half being under 30 years of age.

ATC was established in 1967 to promote Australia as an international tourism destination.  ATC’s mission statement says: ‘We promote Australia internationally to create a sustainable advantage for our tourism industry, for the benefit of all Australians.’ Two of ATC’s principal objectives are to:

  • increase the number of visitors to Australia from overseas
  • maximise the benefits to Australia from overseas visitors.

To meet these objectives, the ATC provides a range of services, including:

  • helping travellers to plan their trip to Australia through the provision of destination information
  • helping businesses to co-operate in mutually supportive tourist ventures
  • working with a range of partners to convert strong interest levels in visiting Australia into actual travel decisions.

Australia | Targeting a market segment