PRICE CUTS NOT THE ANSWER TO TOURISM SLUMP

Written on the 7 April 2011 by Tom Reid

PRICE CUTS NOT THE ANSWER TO TOURISM SLUMP

AS the average spend per tourist slumps to a record low of just $400 per person, Gold Coast Tourism (GCT) CEO Martin Winter says cutting prices is not the cure for the city’s ailing tourism sector.

The latest figures released by Tourism Research Australia show that 2010 was the best year for Gold Coast visitation in a decade, but while 11 million tourists flocked to the city last year, the average yield per visitor slumped.

In the face of heightened international competition and the unprecedented strength of the Aussie Dollar, Queensland has been consistently criticised for being too expensive as a holiday destination.

However speaking at a Young Professionals Gold Coast (YPGC) event today, Winter says lowering costs won’t solve the problem.

“Our role is not to make the sustainability of tourism businesses any harder than it already is and so we won’t be encouraging anyone to lower their prices,” says Winter.

“We’ve had an increase in the number of backpackers who come here and spend less than the average tourist and also we’ve seen more interstate travellers making the most of low-cost carriers and really competitive hotel prices to come up and have a really value holiday.

“We’ve seen a change in the type of tourists and also the length of their stay. How do we overcome that? Well it’s not by telling people to cut their prices any lower because their yields are too low already.”

Industry marketing bodies GCT and the State Government’s Tourism Queensland are focusing much of their efforts on attracting higher yield markets, including the Middle East and business incentive tourists.

“I don’t agree that it’s all doom and gloom on the Gold Coast as the Gold Coast is leading the rest of Queensland and Australia,” says Winter.

“What we have to do as an organisation is try and encourage the prices to remain or even go up, and generate more high yielding customers. The strategy is to make sure we continue to target those markets that spend more.

“For instance we’ve taken a hit in the number of Middle Easters visitors over the last two years, who very high yielding and stay a long time. Business tourists also spend much more than leisure tourists.

“Currently, there are an in-proportionate number of domestic tourists who might catch a cheap $59 fare and enjoy the weekend with $200 in their pocket.”

Winter says poor economic conditions and a lack of new infrastructure and has contributed to the Gold Coast’s faltering competitiveness on a global scale.

“The Aussie dollar is a real issue but for me, it’s not the only issue. There are other issues such as the need for us to develop new attractions on the Gold Coast,” he says.

“The other issue is credit. The fact that with the GFC the banks now have a credit squeeze on, it’s really difficult to borrow money to start up a new business without huge capital of your own.

“That’s why we won’t see any new hotels on the Gold Coast in the near future. There aren’t any that have final planning approval or new funding at this stage.

“We need to somehow find an investor or a group of investors who are prepared to take the risk again and that’s a real challenge. We need something we can use as a strong marketing tool.”

China has grown to become the Gold Coast’s second largest international market and Winter is optimistic of the investment potential.

At today’s forum, the public perception of Surfers Paradise was also scrutinised.

Winter says the Gold Coast sends ‘mixed messages’ of Surfers Paradise to the world and turning around the famous destinations ‘sleazy’ image should be a priority of Gold Coast City Council and the State Government.

Criticisms of the strip’s night spots and strip clubs as well as the promotion of Schoolies were also raised at the event.

Surfers Paradise Alliance chairperson Laura Younger however told Gold Coast Business News the Soul, Hilton and foreshore developments are an indication Surfers’ is ‘moving in a positive direction’.

Whether that acts as a deterrent for drunken yobs is yet to be seen.

Read the full investigative feature into the Gold Coast and Queensland's tourism sector in
Gold Coast Business News April edition - out now in more than 450 newsagents.


Author: Tom Reid

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