United Kingdom

Market Profile Performance overview In 2013, the United Kingdom (UK) was Australia’s third largest inbound market for visitor arrivals, and the second largest market for total expenditure and visitor nights. It was the largest market for total dispersed nights1 during 2013. The October 2013 issue of Tourism Research Australia’s bi-annual Tourism Forecasts estimates that visitor arrivals from the UK will increase 6 per cent in 2013/14 and 4 per cent in 2014/15, with an annual compound growth rate of 4 per cent expected until 2017/18.

Aviation routes from the United Kingdom to Australia2

$5.5-6.7bn Potential for the UK market to be worth by 2020 (Tourism 2020)

$3.4bn

total spend

Total spend from UK in 2013 (up 12 per cent on 2012)3

656,300

arrivals

UK visitor arrivals in 2013 (up 7.9 per cent on 2012)4

Manchester

London Gatwick, Glasgow,  Newcastle and  Birmingham

25.9m

London

total nights

Doha

UK visitor nights spent in Australia in 2013 (up 9 per cent on 2012)3

Hong Kong

Dubai Abu Dhabi Bangkok

38%

Kuala Lumpur

dispersed nights1

Singapore

Percentage of total UK visitor nights spent outside gateway cities in 2013 (same as 2012)3 Perth

Sydney Melbourne

Australia ranks

among all out of region outbound5 destinations for UK travellers6

Visitor profile in 2013 62% repeat visitors3 82% of total arrivals are for leisure3 55+ years largest demographic3 $5,470 average spend3 42 nights average stay3 Jan-Mar and Sep-Nov peak booking period Dec-Mar peak travel period

1. Dispersed nights refer to nights spent outside gateway cities of Sydney, Melbourne, Brisbane and Perth. 2. Source: CAPA - Centre for Aviation, Official Airline Guide (OAG), and Tourism Australia analysis. 3. Source: International Visitor Survey, Tourism Research Australia.

1

United Kingdom Market Profile 2014

5th

Consumer research For detailed research into how UK consumers view Australia and what motivates them to visit the country, see www.tourism.australia.com/ statistics/fact-sheets

4. Source: Overseas Arrivals & Departures, Australian Bureau of Statistics. 5. O  ut of region travel from UK excludes travel to Europe, North Africa and Dubai. 6. Source: Tourism Decision Metrics, Tourism Economics.

United Kingdom

Aviation Landscape >> T he Kangaroo route (UK-Australia) remains highly competitive with a number of airlines offering Brits a range of different routes and airfares to all Australian capital cities. >> British travellers can depart from a number of ports including London (Heathrow and Gatwick), Manchester, Birmingham, Newcastle and Glasgow, via a number of hubs in the Middle East and Asia, to Australia. >> Carriers continue to increase overall capacity to Australia by introducing larger aircraft (A380s and 777s) on their routes, particularly from London Heathrow. These include: Qantas, Emirates, Etihad Airways, Singapore Airlines, Malaysia Airlines, Cathay Pacific Airways and China Southern Airlines. Capacity growth during 2013 was boosted by sporting events such as the British & Irish Lions Rugby Tour (June to July 2013) and the Ashes Cricket Series (December 2013 to January 2014).

>> Comprehensive alliances and codeshare agreements are changing the aviation landscape, opening up new routes for UK tourists to travel to Australia. Middle Eastern carriers continue to drive growth in the region through alliances and increased capacity (up 22 per cent in 2013) particularly to Perth. Australian carriers have also launched and rerouted services via the Middle East en route to Europe. Examples include: »» E tihad Airways and Virgin Australia’s comprehensive alliance has improved access between Europe and Australia. Etihad is launching Abu Dhabi-Perth services in July 2014 and has increased capacity on its Manchester-Abu Dhabi services through the deployment of a larger aircraft (B777-300ER). »» The Qantas and Emirates alliance resulted in Qantas re-routing its London services via Dubai in 2013.

>> Virgin Atlantic withdrew its only Australian services (daily London Heathrow-Hong Kong-Sydney) on 5 May 2014, resulting in British Airways being the only European carrier operating services to Australia.

»» E mirates increased capacity from Dubai to Australia, including the deployment of the larger A380 on Sydney, Brisbane and Melbourne services, in addition to increased Perth and Adelaide frequencies. »» Q atar Airways launched daily DohaPerth services in February 2013 and will launch daily Edinburgh-Doha B787 services on 28 May 2014.



2

United Kingdom Market Profile 2014

>> Oneworld members continue to strengthen their cooperation on the UKAustralia route following the termination of the Qantas/British Airways Joint Service Agreement in March 2013. In the same month, British Airways and Cathay Pacific Airways expanded their codeshare agreement and British Airways is in advanced codeshare talks with Qatar Airways with an agreement expected to be signed in the coming months. Qatar Airways joined the oneworld alliance in October 2013. >> The United Kingdom Government reduced its Air Passenger Duty (APD) by GBP26 per passenger from 1 April 2015 for longer haul destinations such as Australia. The duty was originally introduced in 2008 and has impacted exports and travel. >> London Heathrow’s new Terminal 2 is expected to open in June 2014 and will see all Star Alliance member airlines move into the terminal.

United Kingdom

Distribution The UK distribution system has undergone significant change and consolidation in recent years with online distribution gaining pace. However, traditional distribution channels remain important for Australia, particularly operators who specialise in selling Australia. These people and companies continue to play a key role in converting consumers and influencing them to spend more, disperse further and stay longer, as well as pre-book more ground components.

Distribution System Wholesalers/ Large Agents

Commission Level: up to 20% >> There are more than 80 tour operators selling Australia throughout the UK, however a large proportion of sales to Australia are handled by a few key specialist operators. >> Tour operators vary from traditional wholesalers to companies that combine various wholesale, direct, online and retail channels. >> Direct sellers have been a key feature of the UK market and have traditionally dominated sales to Australia, although overall numbers are decreasing as a result of industry consolidation. >> Trailfinders, STA Travel and Flight Centre are major retail consumer direct sellers for Australia in the market. Other operators sending significant numbers of passengers to Australia include Austravel, Travelbag and Lotus Group. >> Two key consolidators include Travel 2 and Gold Medal. Special Interest >> STA Travel is the leading backpacker and youth travel specialist for Australia.

Online >> Direct flights and accommodation bookings make up the majority of sales through Online Travel Agencies (OTAs). >> OTAs to date have a limited capability to transact complete itineraries for holidays in Australia. True dynamic packaging cannot be purchased online through any OTA in the UK at this stage. >> The major UK online travel agencies are Expedia, Lastminute.com and Opodo. Aussie Specialists >> The Aussie Specialist Program (ASP) is the primary platform for Tourism Australia to train retail agents to sell Australia. Each State and Territory has a module on the ASP website. >> Partner modules available on the ASP platform in the UK include: AAT Kings, Gold Medal, Travel 2, Thomas Cook, Bridge & Wickers, Kuoni, Seasons in Style, Worldchoice, Voyages, 1st Class Holidays, Austravel, ANZCRO, and Cox & kings. Airline-specific modules are also available for Singapore Airlines, Qantas Airways, British Airways, Etihad Airways, Virgin Australia and Emirates.

>> Key operators specialising in the luxury segment include: Bridge and Wickers, Wexas, Audley Travel, Cox and Kings, Black Tomato, Turquoise Holidays and Exsus.

>> As as 28 April 2014, there were 1,934 qualified Aussie Specialists in the UK and a further 688 agents in training. There were 127 Premier Aussie Specialists in the UK.

Retail Agents

Inbound Tour Operators

Commission Level: up to 10% >> There are 1,200 Association of British Travel Agents (ABTA) members in the UK. ABTA represents over 5,000 retail travel outlets and offices. >> Retail agents generally have a basic knowledge of Australia, largely due to the Commonwealth, sporting and historic ties that Australia shares with Britain and the coverage in the media. >> Thomas Cook and TUI Retail (Thomson and First Choice) are the largest retail chains in the UK.

3

United Kingdom Market Profile 2014

Commission Level: up to 30% >> There are several inbound tour operators (ITOs) active in the UK market, these include: ATS Pacific, AOT Inbound, Tour East Australia, Southern World and Goway. In addition, The Tailor (aka Outback Encounter), Southern

Crossings and Wilderness Australia target the high-end sector. Business Events >> The majority of conference and incentive travel from the UK is booked through specialist conference and incentive travel agencies. >> Destination Marketing Companies (DMCs) are still widely used for larger groups with an extensive ground program. However, DCMs must be able to demonstrate value for money to their clients otherwise agencies will book directly with hotels and restaurants. >> S ome of the key UK conference and incentive agencies are Zibrant Live, BI Worldwide, Ci Events, CWT Meetings and Events, Banks Sadler, Grass Roots and BCD Meeting & Incentives.

United Kingdom

Distribution Trends Distribution >> Australia is a key destination for wholesalers and travel agents due to the high-yield value of ground sales to Australia. >> Distribution partners remain important in influencing consumers to spend more, disperse further, stay longer and book more ground components. >> To adapt to the changing distribution landscape, major retail agencies have invested in direct selling channels, such as call centres and online sites. For long haul travel, retail agents remain an important channel for consumers. >> Vertical integration, consolidation and globalisation continue to be key trends in the retail travel sector. As a result, the number of UK retail high street outlets continues to decline, with major groups buying smaller independent chains. Some smaller travel agencies have struggled in the increasingly competitive environment and difficult economic conditions, which has resulted in them joining independent groups such as The Advantage Travel Partnership. Bucking the trend, brands such as Abercrombie & Kent and Kuoni continue to open ‘lifestyle’ stores targeting the high-end discerning traveller and operators such as Virgin Holidays continue to expand concessional outlets in department stores.

Planning a visit to market Planning and purchasing travel >> According to findings from Tourism Australia’s Consumer Demand Research project7, most UK respondents would use online sources to research a trip to Australia. This includes general internet searches and travel advice websites and forums. After online sources, respondents show a preference for talking to family and friends who have visited Australia. The use of social networking for research was considered low. >> I n terms of booking channels, research shows there remains a reliance on retail agents for long haul holidays as British consumers look for more protection. Offline travel agents remain the top method for those who would book a trip to Australia, with four in 10 nominating to book their trip with a high street travel agency. Booking through an OTA was the second most popular booking method, closely followed by booking directly with an airline. >> Australia has traditionally had long lead booking times due to the perceived complexity of the purchase in terms of time, cost and distance. With economic uncertainty and last minute deals prevalent in the market, lead times for booking all international travel, including Australia, has become more volatile.

7. Tourism Australia, Australian Consumers Demand Research, conducted by BDA Marketing Planning, 2012.

4

United Kingdom Market Profile 2014

Top tips for sales calls >> Tourism Australia and State and Territory Tourism Organisations have developed an online manual to assist Australian product suppliers in planning and carrying out independent sales call trips to the UK and Ireland. This can be found on Tourism Australia’s corporate website at: www.tourism.australia.com/ebooks/uksales >> The best time of year for sales calls is March to June and September to November. Try to avoid the holiday period from mid-June to mid-August. >> The key market centre to visit is London, as the majority of specialist operators to Australia are located in or around the city. Gold Medal is located in Preston and operators focused on high-end segments should visit Chester. >> For more general information on sales calls and planning a visit to market, please see Tourism Australia’s Planning for Inbound Success ebook at www.tourism.australia.com/inboundsuccess

United Kingdom

Distribution Seasonality >> T he peak booking period for travel to Australia is January to March, followed by September to November. June to August is the British summer holidays and bookings taken over this period are usually influenced by the weather. >> The peak travel period to Australia is December to March. Seasonality of visitors from United Kingdom

Seasonality of visitors from the UK

120,000 100,000 80,000

2013 2012

60,000

2011 40,000

2010 2009

20,000 0 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Source : Overseas Arrivals & Departures, Australian Bureau of Statistics

Key trade and consumer events Event

Location

Date

World Travel Market (WTM)

London, United Kingdom

3-6 November 2014

International Luxury Travel Market (ILTM)

Cannes, France

1-4 December 2014

European Product Workshop (EPW)

London, United Kingdom

March/April 2015 (TBC)

Corroboree Europe (CE)

TBC, Australia

April/May 2015 (TBC)

Australian Tourism Exchange (ATE)

TBC, Australia

June 2015

Where to find more information Tourism Australia’s activities in the UK and Northern Europe managed from its London office. For more information visit Tourism Australia’s Corporate website at www.tourism.australia.com Australian State and Territory Tourism Organisations operating in the UK include: Destination NSW, the South Australian Tourism Commission, Tourism and Events Queensland, Tourism NT, Tourism Victoria and Tourism Western Australia. Also see: UK Country Brief published by the Department of Foreign Affairs and Trade at www.dfat.gov.au/geo

5

United Kingdom Market Profile 2014