Supporting local hospitality entrepreneurs in Australia
Australia is a land like no other. Renowned for its breathtaking beaches, vast landscapes, fascinating wildlife and cosmopolitan cities, Australia is a gem of the Asia-Pacific (APAC) tourism market and a dream destination for travelers around the globe. We take a look at what makes the Australian tourism sector so unique, and how online travel agencies (OTAs) do their part to help support local hospitality entrepreneurs big and small. A land down under Australia occupies a special place in the hearts and minds of travelers. If you want evidence of its enduring popularity, just look at the numbers. Australia generated AU$122 billion in tourism revenue in the 2018–19 fiscal year (the benchmark year for the travel industry before the coronavirus pandemic struck). Almost 10 million international visitors traveled to Australia from 2018 to 2019 and they spent AU$44.6 billion, a 5% increase on the previous year. 44% of visitor spend was in regional areas, and regional tourism accounted for over 4% of GDP and 8% of regional employment. The Australian travel and tourism sector is diverse, but there are two key features that define it: seasonality and domestic travel. Australia is one of the biggest tourism markets in the southern hemisphere and an important winter sun destination for those living in the Global North. The summer months, unsurprisingly, attract the most visitors; over 2.7 million international travelers touched down in Australia from December 2018 to February 2019. Of the top six countries of origin for international visitors to Australia, four are in the northern hemisphere. “Australian travel is largely concentrated around school holidays. British holidays in September really help us stay occupied during low season for Australians.” (Source: EY Parthenon OTA Impact Report APAC 2021) A key pillar of the travel economy in Australia is domestic tourism. Three quarters of total tourism spend comes from domestic travelers who make an average of five trips a year. Australians are consummate travelers and clearly enthusiastic about the diversity in their country — in 2019, they spent over AU$80 billion on overnight trips and a further AU$26 billion on day trips. Supporting Australian tourism Research from Oxford Economics finds that, in 2019, OTAs generated AU$1.6 billion in incremental GDP and helped create around 12,000 incremental jobs. How does that happen? As trusted intermediaries, digital platforms like Booking.com provide transparency, convenience and choice for consumers. This, in turn, expands the market as more people book stays in a destination, more stays equals more room nights booked, and more room nights booked generates more money and supports more jobs. On average, online platforms helped providers generate 4.1 additional room nights, which equals 4 million heads on Australian beds. Accommodation managers had this to say about working with OTAs: “The biggest advantage of working with OTAs is that our property is having visibility all over the world. When people search for our location on OTAs, we are one of the first properties to show up. This has really benefited us.” Small accommodation provider at tourist destination, Australia (Source: EY Parthenon OTA Impact Report APAC 2021) While it may feel like a very common experience — to book accommodation on a digital platform like Booking.com — actually only 18% of the 259 million nights sold by Australian accommodations in 2019 were processed through OTAs. Perhaps one of the key ways OTAs affect consumer choice is the competition it introduces to other channels of booking accommodation. Ultimately, this improves affordability of travel and helps consumers discover smaller, regional accommodations, who may not have the budgets to market in competition with the larger chains. Guests are more strongly oriented towards small & independent accommodations when booking through online platforms — 67% of sales in 2019 went to these providers compared to 49% in the whole market. Sustainability agenda in travel One of the most notable developments that OTAs, travelers, and hoteliers alike have come to recognize is the importance of preserving our environment. Our research shows that the majority of people want to travel sustainably in the next year. Globally, travelers are becoming agents of change by taking their sustainable habits abroad and Australian travelers are leading the charge. 70% of Australians reuse the same towel, 65% use their own water bottle and 46% shop at local, independent stores (compared to global averages of 60%, 55% and 43% respectively). Travelers want to be sustainable but they’re increasingly concerned about the cost of doing so — over half (58%) are worried about the cost of sustainable travel options. And yet, just over a third (36%) said that they would be willing to pay more for certified sustainable options. Consumers are caught in a balancing act between traveling sustainably and managing their costs. When it comes to the sustainability agenda, Australian tourism authorities, hospitality entrepreneurs, and other players in the ecosystem are not sitting idly by. They are placing sustainability at the heart of the industry. Australia ranks 7th in the world for sustainable and resilient tourism and sustainability is a crucial pillar of the country’s national tourism strategy. This approach mirrors our view that sustainable practices are an investment in the future of travel, and demonstrates that both travelers and providers can be changemakers. In it for the long haul Among many OTAs operating in Australia, Booking.com provides tourists with the freedom to choose from a wide range of options, while offering peace of mind and affordable room rates. Meanwhile, independent accommodations remain competitive and benefit from tailored marketing and distribution resources for a small fee, without any risk or upfront costs. By serving as trustworthy intermediaries, digital platforms are helping Australian accommodations rebound from the 3 years of travel restrictions and forge a special bond between global travelers and hospitality businesses who host them. Australia is a unique destination in the Asia Pacific travel and tourism market. From the tropical paradise of Queensland to the epic landscapes of the Outback, from the cosmopolitan hubs of Sydney and Melbourne to boutique stays in a myriad of different locales, Australia really has it all.