Download china market activation plan ii

CHINA MARKET
ACTIVATION PLAN II
OCTOBER 2014
Mindil Beach Sunset Markets
© Northern Territory Government
Disclaimer
Tourism NT
18 Parsons Street
Alice Springs NT 0870
PO Box 2532
ALICE SPRINGS NT 0871
Telephone: 08 8999 3900
Email: [email protected]
www.tourismnt.com (corporate)
www.travelnt.com (consumer)
We have taken due care and attention in ensuring
information contained in this document
was true and correct at the time of publication;
however, changes in circumstances after the time
of publication may impact upon its accuracy. We
do not warrant that it is correct, complete or
suitable for the purposes for which it is intended
to be used. We disclaim all liability associated
with the use of this information.
Published October 2014 by Tourism NT,
a statutory authority of the
Northern Territory Government.
Aboriginal and Torres Strait Islander readers and
viewers should be aware that this material may
contain images or names of deceased persons.
Front cover images: (clockwise from top left)
Territory Day Fireworks
Yellow Water Billabong, Kakadu
Sounds Of Silence, Uluru-Kata Tjuta National Park
Uluru-KataTjuta National Park
Crocosaurus Cove, Darwin City
CONTENTS
Introduction_______________________________________ 3
Background________________________________________ 6
Planning Framework________________________________ 9
Strategic Context___________________________________ 11
Strategic Focus Area One: Marketing Insights__________ 12
Strategic Focus Area Two: China Ready Destination____ 16
Strategic Focus Area Three: Aviation Access___________ 18
Strategic Focus Area Four: Sales & Marketing__________ 19
Strategic Focus Area Five: Investment Attraction_______ 22
Model for Delivery__________________________________ 25
Measuring our Performance_________________________ 26
CHINA MARKET ACTIVATION PLAN II • 1
INTRODUCTION
The China outbound travel market
is the largest and fastest growing
travel market in the world driven
by increasing economic prosperity,
and increased aviation capacity.
As China progressively opens
its doors to the world, a more
internationally aware and digitally
connected population is seeking to
explore the world through travel.
China is Australia’s most valuable tourism market and it
represents a significant opportunity for the Northern
Territory given the NT’s strategic positioning as Northern
Australia’s gateway between Australia and Asia. By the
year 2020 Australia is expected to receive approximately
one million annual visitors from China. Tourism NT has a
target of attracting 30,000 visitors by 2020, equivalent
to 3% of the estimated Chinese visitor market to Australia.
This requires the NT increasing its market share by 1.2%
from 2013/14 figures.
This is an achievable goal if industry is prepared to work
with Tourism NT and other industry partners to effectively target this market: participating in a
consistent and integrated marketing approach, supported by tailored visitor experiences and itineraries
that meet with market expectations.
While the Chinese market represents a significant opportunity for the Northern Territory, global
competition to attract visitation and investment from this market is fierce and a focus on numbers
can over-simplify the challenge. Since the year 2000, Northern Territory visitor numbers from China
(including Hong Kong and Taipei)* have grown at an average rate of 19 percent per annum and while
the growth rate is impressive, it is off a small base. The China market still only represents a 5 percent
share, or 13,000, of the NT’s total international visitation. Figure 1 charts ‘all purpose’ visitation from
China, Hong Kong and Taipei since 2005.
14,000
13,010
12,000
Visitor Numbers
10,000
8,000
6,000
4,000
2,000
3,128
0
YE Jun
06
YE Jun
07
YE Jun
08
YE Jun
09
YE Jun
10
YE Jun
11
YE Jun
12
YE Jun
13
YE Jun
14
Figure 1: Chinese visitors to the Northern Territory (all Purpose, including visitors from Hong Kong
and Taiwan)
The Northern Territory is a relatively remote, big ticket destination choice for the Chinese traveller,
therefore to achieve success, it is critically important that the Northern Territory undertake a targeted
strategy, rather than a more generalised approach focusing on China’s mass market for Australia.
* From this point forward, a reference to ‘China’ refers to the NT target markets
of Hong Kong, Taipei and key cities within Mainland China. See Figure 4 on page 15.
CHINA MARKET ACTIVATION PLAN II • 3
Key to this is focusing on specific target market segments that have the propensity to travel to
the NT and whose travel aspirations and expectations are aligned to what the Northern Territory
has to offer. These target markets include
• 30-49 year old affluent free independent travellers;
• Special interest travellers (eg. photography, self-drive, fishing, hunting, and food and wine);
• Chinese international students, working holiday makers from Taiwan and the Hong Kong FIT
Youth Segment;
• Business event and incentives market aligned to the Northern Territory’s industry strengths,
such as mining and resources.
Central to unlocking these market segments is leveraging and expanding the Northern Territory’s
existing networks and relationships in Australia and China. One exemplar of this approach is the
Northern Territory Convention Bureau’s Business Events Ambassador Program launched in 201314 where prominent industry champions are working to bring business events to the NT in fields
that have strategic importance to the economic, social and cultural development of the Territory.
The Ambassadors have been chosen for their ability to influence at the highest level and a number
of the Ambassadors have been specifically selected for their high level networks in China.
While Tourism Australia has broadened its geographic focus for marketing to China in recent years,
Tourism NT will continue to concentrate marketing efforts on the mature destinations of Hong
Kong and Taipei, the tier one mainland cities of Beijing, Shanghai and Guangzhou, as well as the
tier two mainland cities of Chengdu, Nanjing, Hangzhou, and Shenzhen. The reason for this focus
is that these consumer markets are more mature from a travel perspective, the trade relationships
in-market are well-established and the air linkages are relatively good.
Accordingly Tourism NT is taking a strong digital approach to broaden consumer engagement
around NT destinations and products, with the aim of converting the aspirations to travel to
relatively new Australian destinations. Digital targeting through social media is also being used
to engage with special interest or ‘affinity’ groups both on a business-to-business (B2B) and a
business-to-customer (B2C) basis.
Given the highly competitive nature of the market, it is essential that the Northern Territory
maximise its marketing spend by leveraging partnership opportunities with Tourism Australia,
other gateway State Tourism Organisations, educational institutions, airlines, Australia-China
Business associations and other China tourism stakeholders.
When looking at the supply side, it is evident that whilst a number of Northern Territory businesses
have commenced working in this market, there are significant capacity impediments to growth
that must be addressed in order for the Northern Territory to noticeably expedite growth in
visitation and realise the market’s full potential, relative to the NT’s offering.
Some of the challenges in servicing the market include:
• limited convenient air access and no direct air access from key China source markets into
the Northern Territory;
• the limited number and size of private NT tourism product operators in the Chinese market;
• the limited number of established Chinese specific distribution and ground handling businesses
located in the NT;
4 • CHINA MARKET ACTIVATION PLAN II
Ubirr, Kakadu National Park
• the limited availability of China ready product, in particular China market adapted
accommodation and guest experiences that meet market expectations; access to Mandarin
and Cantonese speaking guides, translated signage and tourist information;
• the limited awareness of China friendly payment options from businesses in the NT (tourism,
hospitality and retail) ie. China Union Pay and Ali Pay;
• the limited number of NT Chinese community involved in the tourism industry; and
• the inability to meet market expectations in relation to pricing due to limited volumes.
Addressing these challenges will require that industry and Government undertake a well informed,
proactive and measured approach to growing the Northern Territory’s market share of the inbound
traffic to Australia, whilst working in parallel to increase industry capability and capacity, aiming
long term for steady sustained growth in the market.
Part of the solution to addressing the shortcomings in supply-side infrastructure is to attract
Chinese investment into the sector. This is a key focus for the Northern Territory Government in
its push to develop Northern Australia and to promote the Northern Territory as a compelling
destination for Chinese investment.
It is essential for the Northern Territory Government to:
• work with industry to identify and package investment opportunities to take to the China
market;
• work with the local Chinese business community where relevant to engage them in tourism
industry; and
• continue to leverage strategic partnerships in-market with key partners such as AustCham
China, the Australia China Business Council, China Development Bank and the China Council
for the Promotion of International Trade to generate awareness, and encourage and facilitate
investment.
CHINA MARKET ACTIVATION PLAN II • 5
West MacDonnell Ranges
BACKGROUND Tourism NT has had a presence in the China market since 2004. In 2012, off the back of strong
growth forecasts for outbound travel from China and an increasing focus on the market at a
national level, the key NT stakeholders came together to review activities, share market insights
and discuss collaborative opportunities to harness the potential of the market for the Northern
Territory into the future.
As a result of these collaborations, Tourism NT developed the China Market Activation Plan in
2012 with the goal of attracting 30,000 Chinese visitors spending $25 million by 2020. In 2013-14,
the Northern Territory received over 13,000 Chinese visitors (including mainland China, Hong
Kong and Taiwan).
This document, the China Market Activation Plan II or CMAP II, provides an update to the original,
focusing on the most recent increased funding, latest consumer insights, target market analysis,
policy changes and collaborative platforms that present opportunities for the Northern Territory
tourism industry. CMAP II also seeks to consolidate existing programs and activities and introduces
a new focus on attracting Chinese investment as a lever to drive tourism growth.
RESEARCH
In recent years, Tourism NT has invested significantly in Chinese–focused consumer research,
including undertaking dedicated consumer research to understand the barriers and triggers to
booking, travel planning timeframes and sources of research. It has leveraged Tourism Australia’s
China research to conduct market audits, consumer demand testing and to deliver 2020 forecasts
specific to the Northern Territory. This investment highlights Tourism NT’s commitment to the
market and its philosophy to adhere to an evidence-based marketing approach. For up-to-date
research and information on Tourism NT’s activities in the China market visit: http://www.tourismnt.com.au/en/Marketing/International-marketing.aspx
6 • CHINA MARKET ACTIVATION PLAN II
AIR ACCESS
Since CMAP was first launched in 2012 changes to the aviation landscape have improved access
opportunities for Chinese visitors to get to the NT. In particular the addition of Philippine Airlines
and Malaysian Airlines services to Darwin, together with the established services of SilkAir and
Jetstar, have increased linkages and capacity opportunities for growth out of China, Hong Kong
and Taipei via Singapore, Kuala Lumpur and Manila.
The expansion of code share arrangements, interline agreements and special price agreements
between Chinese carriers and foreign carriers, such as the China Southern Airlines and China
Eastern Airlines code share on Qantas flights, are increasing the relative attractiveness and
accessibility of Australia as a holiday destination for Chinese travellers from numerous destinations
within China.
While direct services would be a great boost for growth capacity, the Northern Territory has
succeeded in gaining strong tourism visitation numbers from other markets without direct aviation
access (eg. Germany, USA, Japan). It is central to the strategy of CMAP II that the Northern
Territory undertake cooperative marketing partnerships with the Australian states that enjoy
direct air access, leveraging the opportunities to encourage visitors to travel from the key gateways
into the NT. While there are no direct aviation links between the NT and the key Chinese source
markets, it is not seen as a barrier to achieving the target of 30,000 visitors by 2020.
The current priority for the Northern Territory Government is to focus on working with key existing
aviation partners in China to grow passenger traffic via the traditional Australian gateways (including
Cairns) and the Asian hubs of Singapore, Kuala Lumpur and Manila. Dispersal across the NT (to
Darwin, Alice Springs and Uluru) will be achieved by ensuring they have the best possible interline
agreements for connecting through to the Northern Territory, with the aim of filling current
capacity and, over time, generating enough demand to attract the establishment of direct services.
CHINA MARKET ACTIVATION PLAN II • 7
CHINA TOURISM LAW AND THE REDESIGN OF THE AUSTRALIA-CHINA APPROVED DESTINATION STATUS SCHEME
A significant change in the policy landscape since the first CMAP is the introduction of the New
China Tourism Law (the Law) which came into effect on 1 October 2013. The Law seeks to address
the anti-competitive and unfair practices of some inbound travel agents.
These practices often include the travel agents, organising travel at unreasonably low prices,
designating specific shopping sites, or optional tours without the approval of the consumer. Given
that the nature of the market is that the shopping element is an intregal part of the generic
travellers itinerary, this change is having a sizeable impact.
Early effects have seen an increase in the number of Chinese consumers looking for alternative
channels for planning and booking travel, away from the traditional travel agent channels, ultimately
giving rise to more independent travellers. In addition, agents who relied on the traditional group
travel market are looking to the incentives and business events market as a source of new group
customers.
At the time of writing, the Australian Government is in the process of redesigning Australia’s
Approved Destination Scheme (ADS) arrangement with the Chinese Government. The current
scheme has been in place since 1999 and there are several factors driving a redesign of the scheme,
one of which is to bring it in line with the introduction of the Law.
Tourism NT supports a redesign of the ADS on the basis it will maintain Australia’s competitive
advantage and will, together with the recently introduced Law, increase the quality of the experience
for Chinese travellers and, importantly for the NT, promote greater equity and dispersal of economic
benefits arising from Chinese visitation to Australia.
TRADE PARTNERS
Tourism NT has established key trade partners across Tier 1 cities and regions in mainland China
as well as representation in Hong Kong including:
• Beijing CYTS - one of the largest retail agents in North China, with 40 retail shops in Beijing
and nine branches in China
• Ctrip in Shanghai - the largest travel company in China with an online travel presence.
It has 16 product offices in China
• GZL in Guangzhou - one of the biggest retail travel agent groups in South China
• Sichuan CYTS in Chengdu – the largest travel retailer/wholesaler to Australia in South West
China
• Hong Thai Travel Services Limited - one of the largest travel agencies in Hong Kong with 19
local branches and outreach branches in Macau, Shenzhen, Guangzhou and Singapore.
For up-to-date information regarding our trade partners, please visit : http://www.tourismnt.com.au/en/Marketing/International-marketing.aspx
8 • CHINA MARKET ACTIVATION PLAN II
OPERATOR INVOLVEMENT
In 2013-14 Tourism NT delivered the Asia Product Partnership Program which engaged NT operators
in a program of marketing activities focussed on the high growth Asian markets, particularly China.
Results of the program for 2013-14 included: six companies participating in the Greater China
Mission; ten companies participating in the International Tour Operator Engagement Sessions
and; five taking part in China ready workshops.
In October 2014, Tourism NT will lead its third annual Greater China Mission visiting Hong Kong,
Guangzhou, Shanghai, Beijing and, for the first time, Taipei. This mission will provide an opportunity
for NT operators to be introduced and build relationships with the Chinese market; to educate
them about the Northern Territory and their products. At the time of writing, eight operators had
confirmed their participation in the Mission, two more than the previous year.
CHINA READY
Since the 2012 CMAP was launched, a number of China Ready programs have been developed to
assist industry in tailoring products and services to meet the needs of the China market.
In the Northern Territory, a number of China Ready workshops have been held to assist operators
to understand the market, evaluate the opportunity for their business and raise awareness of
assistance programs and channels available to businesses targeting the China market.
In 2013 the Australian Government developed the Servicing the Chinese Visitors Project with the
aim of increasing the supply of quality Chinese speaking tour guides. The program is being rolled
out throughout Australia in 2014. Through the redesign of the ADS scheme it is Austrade’s intention
to develop an approval process for tour guides supervising ADS tour groups and to monitor the
tour guide’s compliance against the new ADS Code of Business Standards and Ethics. The new
code will set out the minimum standards expected of an ADS tour guide.
A China Ready accreditation for tourism businesses has been developed as part of the Australian
Tourism Accreditation Program. This program has the potential to help pave the way for established
businesses, that are interested in tapping into the China market, by offering businesses the
opportunity to become China Ready accredited.
PLANNING FRAMEWORK
Figure 2 provides an overview of the Planning Framework as it relates to Tourism NT’s CMAP II.
Framing the Future is the Government’s vision for the Northern Territory. A Prosperous Economy
is one of four strategic foci of the Government and is underpinned by the Economic Development
Strategy. This strategy places the Northern Territory at the forefront of the Australian Government’s
nation building agenda for Northern Australia, and positions Darwin as Australia’s gateway
to Asia.
The CMAP II directly relates to Tourism Vision 2020 and the Asian Engagement, Trade and Investment
(AETI) Strategy, articulating the key activities and programs to be delivered by Tourism NT and
partners to drive tourism growth and investment from China.
CHINA MARKET ACTIVATION PLAN II • 9
The targets set out in the CMAP II form part of the Tourism Vision 2020 goal to grow the visitor
economy in the Northern Territory to $2.2 billion and the AETI Strategy to capitalise on the
Northern Territory’s high quality offerings, competitive advantages and proximity to rapidly growing
Asian markets to increase trade and investment flows that strengthen and diversify the Territory
economy.
Activities in CMAP II closely align with and leverage off activities undertaken by Tourism Australia
and Austrade in the China market. The Northern Territory will work in close collaboration with
the Commonwealth to achieve economies of scale in marketing initiatives and to ensure maximum
return on investment for every dollar spent in the market.
COMMONWEALTH
GOVERNMENT
RELEVANT PLANS
AND POLICY
NORTHERN TERRITORY GOVERNMENT
PLANNING FRAMEWORK
Framing the Future
• Prosperous Economy
• Balanced Environment
• Strong Society
• Confident Culture
Blueprint for the
Northern Territory
Northern Australia
White Paper
Prosperous Economy:
Economic Development
Strategy
Tourism Vision 2020:
NT Strategy for Growth
Asian Engagement Trade
and Investment Strategy
Tourism Australia
China 2020
Strategic Plan
Austrade /
Tourism Australia
Australia Unlimited
Figure 2: Planning framework
10 • CHINA MARKET ACTIVATION PLAN II
Where Government
is focusing its efforts
and why
Evidence based
strategies with actions
and measures
China Market
Activation Plan
• Eg. Asia Product
Partnership Program
• China Activity Plan
• Investment Attraction
Program
Individual Sector
Activation Plans
TOURISM
2020 VISION
~
30,000 Chinese visitors
$25 million spend
30 operators participating
in the Asia Product
Partnership Program
For more information, go to
Tourism Vision 2020:
Northern Territory’s Strategy for Growth
STRATEGIC CONTEXT
A few of the factors that warrant special consideration in developing strategies to attract
visitation from the China market include:
• The sheer size and diversity of the China market;
• The rapid change in the lifestyles and aspirations of the Chinese population;
• Rapid digital enhancement, and;
• The degree of Government control over traditional travel distribution channels.
Extensive market research and industry consultation was conducted in the development of the
first China Market Activation Plan (CMAP) in 2012. Since that time Tourism NT and industry
partners have been active in the market and the research and consultation has been increased.
Through these insights and experiences in-market, Tourism NT has identified five strategic focus
areas to guide the collective efforts of industry and Government along the path to achieving the
goal of attracting 30,000 Chinese visitors with a total spend of $25 million by 2020:
Strategic Focus Area One: Market Insights
Strategic Focus Area Two: China Ready Destination
Strategic Focus Area Three:
Aviation Access
Strategic Focus Area Four: Sales and Marketing
Strategic Focus Area Five: Investment Attraction
CHINA MARKET ACTIVATION PLAN II • 11
STRATEGIC FOCUS AREA ONE:MARKETING INSIGHTS
The population of China is estimated at 1.3 billion, the country is vast and the culture diverse.
China is not one homogenous market; it comprises multiple different markets in various stages
of maturity.
Understanding the Chinese traveller, who they are, their expectations, purchasing behaviour, travel
desires and choices is vital as it underpins strategy development in marketing and experience
development.
Tourism Australia and Tourism NT have invested heavily in researching the Chinese traveller and
have developed a targeting strategy based on these insights. Tourism Australia uses geographic
segmentation and this research, combined with Northern Territory’s own insights on destination
awareness, perceptions, preferences and areas of latent demand, is used to understand our true
market potential. It is also used to develop a profile of the ideal visitor target segments and to
form the basis of Northern Territory’s marketing direction in China (see Figure 3 below)
Figure 3: Marketing strategy development based on consumer insights
COMMERCIAL INSIGHTS
• In-market expertise
• Commercial business intelligence
• Formal industry surveying
MARKET
FUNDAMENTALS
• NT Market Prioritisation
• Visitor demographics
• Visitor nights
• Dispersal
• Expenditure
COMMUNICATION
PERFORMANCE TESTING
• Awareness measurement
• Execution effectiveness
measurement
• Image testing
• Competitive analysis
12 • CHINA MARKET ACTIVATION PLAN II
DESTINATION
PERCEPTION
• Brand values
• Regional / activity appeal
• Likelihood to travel to the NT
• Aviation access
• Other barriers
TRAVELLER BEHAVIOUR
• Booking lead time
• Information sources
• Prompts / triggers to book
• Preferred holiday types
So who are the Northern Territory’s best prospects?
• 30-49 year old affluent free independent travellers, experienced in Australian travel.
These travellers are the affluent middle-class, mainly university educated with at least basic
English language skills. They are well-travelled and have been previously to Australia or UK/
Europe/ USA. The ability to see iconic and famous sights features strongly in their destination
choice. They are also interested in local culture and exploring nature, however feeling safe
and comfortable is equally important to them. They are described as ‘Assisted’ Free Independent Travellers, tending to pre-purchase their
travel through trade partners recognised for selling Australia, although they do conduct a lot
of travel research online. Most enter Australia through Sydney spending 9-11 days in the country
on a pre-arranged itinerary involving multiple destinations. On the ground, they expect to have a full itinerary and are not accustomed to long road
distances between attractions. While not essential, they would prefer to have access to Chinese
speaking guides and Chinese food for at least one meal per day, ideally breakfast. They have
high expectations of service and like to shop for local products, especially branded, to take
home as souvenirs of their travels.
• Special interest travellers (e.g. food and wine, photography, self-drive, fishing and hunting) These travellers are also from among the affluent middle-class with special interests being a
key motivation for their travel. While not members of official associations, many are members
of online ‘affinity groups’; networking and communicating through social media sites. • Chinese International Students and Taiwanese Working Holiday Makers (WHM) and the
Hong Kong youth segment. In 2012 there were 150,000 enrolments of Chinese student enrolments in education and
training institutions across Australia, equivalent to 29% of all international students . While
only 0.1% of the market is based in the Northern Territory, the Chinese students that reside
in other centres such as Sydney and Melbourne are key targets in the domestic market for
travel to the Northern Territory. In addition, Northern Territory education stakeholders are
working to promote the Northern Territory overseas, including China, as a destination of
choice for education at the secondary and Tertiary level. Taiwan is Australia’s second largest source market for working holiday makers after the UK,
with 29,366 working holiday (first and second) visas granted in 2013-2014. Tourism NT’s main
focus is to target Taiwanese WHM in Taipei and on-ground in Australia, for travel to the NT.
The youth market in Hong Kong is also a key target, particularly for short break experiences
to the Top End via Singapore. • Business events market aligned to the Northern Territory’s industry strengths and the
incentives market. From a business tourism perspective, China is one of the Territory’s major trading partners,
with many Chinese companies connected with the resources sector. There is an opportunity
to leverage these business links and to target business event decision makers and organisers
in China to develop the lucrative business events and incentives market travel segment. The
NTCB’s Business Events Ambassador Program seeks to tap into the business networks and
spheres of influence of prominent industry professionals to develop business event hosting
opportunities for the Northern Territory.
CHINA MARKET ACTIVATION PLAN II • 13
And where do we find them?
While Tourism Australia has broadened its geographic focus for marketing to mainland China in
line with the opening up of the China outbound ADS scheme, Tourism NT will continue to concentrate
marketing efforts on the tier 1 mainland cities of Beijing, Shanghai and Guangzhou, the mature
tier 2 mainland markets of Chengdu, Nanjing, Hangzhou, and Shenzhen and the mature destinations
of Hong Kong and Taipei. Refer to Figure 4 on page 15 for a map of the key target source markets. These are the markets where the Territory’s investment is best realised as the consumer markets
are more mature, trade relationships are well-established and the air access is relatively good. In the consumer market, Tourism NT will target consumers with a high awareness and desire to
travel to Australia, using digital marketing to increase the profiling of NT destinations and
experiences so that the NT is considered as part of planning any Australian itinerary. In addition
to increasing profiling, digital targeting through social media will be employed to tap into special
interest or ‘affinity’ groups such as those interested in food and wine, photography, fishing, hunting
or self-drive holiday experiences.
Now, who are our competitors?
It is a mistake to think that the Northern Territory simply competes with the east coast of Australia
for Chinese visitors as our target market is very different to the traditional east coast Chinese
visitor.
Experts in-market advise that the NT competes internationally for Chinese travellers with
destinations with similar natural, cultural and adventure tourism offerings, such as Mongolia,
Nepal, South America and Africa. This notion is supported by Tourism Australia’s Consumer
Demand Project which found that ‘world class nature’ is a core strength of Australia for China.
Further, according to Tourism Australia’s ‘Knowing the Customer in China’ (2012) research, Australia
is attractive to Chinese travellers due to the relative safety of the destination, the ease of access
(visa processing) and its laidback lifestyle. While iconic attractions are undoubtedly key motivators
for Chinese visitors to Australia, our strengths in safety, access and lifestyle should be a key focus
of all marketing communications targeting the China market.
14 • CHINA MARKET ACTIVATION PLAN II
MARKETING INSIGHTS ~ ACTIVITIES
• Continue customized consumer demand research and share market intelligence from
all sources (eg. Tourism Australia, Tourism NT, in-market representatives) with industry • Further develop target market profiles and insights for sharing and use by the wider
NT tourism industry and in Tourism NT’s marketing programs • Educate NT industry about the opportunity, distribution partners and unique preferences
of Chinese visitors • NT Government to learn from industry experiences in the China market and leverage
existing industry contacts and networks.
• Facilitate partnerships between NT operators and companies active in relevant market
segments to address gaps for sales and marketing, service and product • Match priority segments with market opportunity and stimulate operator involvement • Build a market intelligence system that captures and informs stakeholders of
commercially important market trends and visitor behavior • Refine the target markets and evaluate the return on investment from the various
market segments • Develop Destination Visitor Satisfaction surveys for the Chinese consumer market • Complement IVS statistical data with satisfaction surveys and trade partner reports
along with industry sentiment and reports on visitation
Figure 4: Geographic target markets:
Mainland China, Hong Kong and Taipei
CHINA MARKET ACTIVATION PLAN II • 15
STRATEGIC FOCUS AREA TWO:CHINA READY DESTINATION
The Chinese travel market is unique, with specific requirements and expectations of an international
holiday experience. While there are a number of core experiences in the Northern Territory that
are attractive to the Chinese traveller, the market requires tailored pricing and packaging of
experiences and itineraries, which are culturally relevant and address key practical requirements.
Itineraries must be balanced, delivering the sought after natural and cultural experiences, whilst
also attending to the Chinese traveller’s desire for value, safety and comfort away from their home
environment. While the Northern Territory has made some inroads to developing visitor experiences
that meet the needs of this market, there is a significant amount still to do to deliver a chain of
confidence to the customer and to ultimately harness the full potential of the market for the
destination.
For example, a lack of Mandarin and Cantonese speaking guides, in-language information, signage
and China friendly payment options impacts on the Northern Territory’s ability to deliver a quality
tourism experience to the Chinese visitor and also creates issues from a logistical and safety
perspective. Development of language skills in the sector and provision of not only translated,
but culturally tailored, relevant tourism information, is a priority for destinations and businesses
looking to attract the Chinese traveller.
From an accommodation perspective, the Northern Territory’s current offering rates poorly when
compared to the service and standards available in other approved destinations for Chinese
travellers. Further, inbound tour operators are unable to secure special rates as the Northern
Territory is not a volume destination for Chinese visitation. However, while the Northern Territory
cannot compete on price, it can focus on promoting the destination as a high value region for
agents to sell, for example, leveraging some of the NT’s icons, including the Word Heritage Listed
National Parks of Uluru- Kata Tjuta National Park and Kakadu National Park packaged together
with premium tourism experiences and accommodation.
Highlighted above are the key issues for consideration in relation to developing a ‘China Ready’
Northern Territory. As the market is constantly changing, please reference the following websites
for current information.
Tourism NT http://www.tourismnt.com.au/en/Marketing/International-marketing.aspx
Tourism Australia http://www.tourism.australia.com/markets/market-regions-greater-china.aspx
For insight into our competitors’ approach, Tourism Queensland has some detailed fact sheets on
Understanding the Chinese Independent Traveller, Chinese Visitor Expectations, Chinese Cultural
Overview, Useful Chinese Greetings etc. See http://teq.queensland.com/Industry-Resources/HowTo-Guides/Be-China-Ready
The Northern Territory tourism industry now has access to the extensive information, tools
and programs it requires to make effective business decisions regarding entering and working
China market.
Recent initiatives, including the introduction of a China Ready accreditation as part of the Australian
Tourism Accreditation Program and the Servicing the Chinese Visitor Project presents an opportunity
for Northern Territory operators to develop and align their tourism product with the needs of the
China market.
16 • CHINA MARKET ACTIVATION PLAN II
Ultimately, the Northern Territory’s success in the China market relies on the success of the
tourism industry in attracting the market to the Northern Territory and delivering experiences
that meet the expectations of the Chinese traveller.
CHINA READY DESTINATION ~ ACTIVITIES
• Deliver an annual Asia Product Partnership Program outlining development and
marketing opportunities
• Share with industry resources, research and market insights, marketing assets and
tools for product enhancement and adaptation
• Ongoing delivery of China Ready programs
• Develop Chinese business events and Incentives itineraries that align with NT industry
strengths, and establish the NT as a preferred destination for business events and
incentives with a unique selling proposition relevant to the China market
• Collaborate with NT industry and existing contacts to expand networks and build
relationships from which to develop business.
• Encourage industry to develop appealing Asian travel experiences and offer Chinesespeaking tour guides
• Develop a China specific website and related initiatives for NT operators to better
communicate to Chinese consumers
• Attract appropriate Chinese inbound tour operators to focus on the NT as a destination
to promote through the Chinese distribution partners.
• Identify new and existing tourism opportunities for Chinese visitors and investors
• Identify innovative technology solutions to deliver quality tourism information via
multi-channel distribution
• Work with stakeholders include NT and Commonwealth Park agencies to ensure Chinese
language interpretation, signage and market-appropriate activities are available at
key attractions
• Collaborate with Australian Tourism Export Council (ATEC), Austrade, Tourism Australia
and the Department of Industry to leverage China programs and activities
• Work with NT Airports, Councils and Regional Tourism Organisations (RTOs) to provide
a genuine welcome through improved Chinese language signage and language abilities
• Work with industry, RTOs, China Union Pay and Ali Pay to encourage take up and use
of China friendly payment options
CHINA MARKET ACTIVATION PLAN II • 17
STRATEGIC FOCUS AREA THREE:AVIATION ACCESS
The Northern Territory’s aviation links with mainland China, Hong Kong and Taipei have been
strengthened with the introduction of new and expanded air services offered via the major Asian
hubs of Singapore, Kuala Lumpur and Manila. Aviation providers Qantas, the SilkAir/ Singapore
Airlines network, Jetstar, AirAsia, Malaysia Airlines and Philippine Airlines provide Chinese travellers
with a range of itinerary options to access the Northern Territory. The expansion of code share
arrangements, interline agreements and special price agreements between Chinese carriers and
foreign carriers are increasing the relative attractiveness and accessibility of Australia, and
therefore the Northern Territory, as a holiday destination for Chinese travellers from numerous
destinations within China.
Currently, most Chinese holiday visitors who visit the Northern Territory enter Australia through
Sydney or Melbourne on a multi-destination itinerary that includes a visit to Uluru, Alice Springs
or Darwin. The NT is closely monitoring Cairns to evaluate opportunities to leverage growth on
point-to-point itineraries.
AVIATION ACCESS ~ ACTIVITIES
• Drive demand and build sustainable
aviation services through promotion
of existing flight connections and
cooperative marketing activities with
airline partners
Overall, the NT continues to see healthy increases in Chinese
passenger arrivals partly due to improved aviation links
and a maturing market willing to travel on non-Chinese
carriers. In addition to this, Tourism NT‘s marketing
partnerships with airlines and Tourism NT-led activities
in-market that raise the awareness of the NT as a holiday
and business destination.
Tourism NT’s current focus is on generating demand through
marketing activities to support the existing capacity.
• Link airline partners to Australian
preferred trade partners with the aim
of packaging the NT
Tourism NT will continue to proactively seek opportunities
to offer add-on itineraries to the Northern Territory targeting
those travellers taking direct flights from China, Hong Kong
and Taipei, through the Australian gateways of Melbourne,
Sydney and Brisbane, Cairns and Perth, along with visitors
travelling through the key Asian gateways of Singapore, Kuala Lumpur and Manila for travel into
Darwin. This marketing activity is supported by the Department of Transport and NT Airports
aviation development work in relation to connectivity. Collectively, these efforts, which are
delivering growth in Chinese passenger numbers, all contribute to building the case for direct air
services between key Chinese markets and the NT.
Whilst direct air services to the NT from China are not a requirement in seeking the target of
30,000 visitors per year by 2020, it would provide a welcome boost for the Northern Territory.
Establishment of direct air services comes first and foremost from a sustained increase in demand.
It also requires a whole-of-Government approach to business case development that is cognizant
of the ongoing relationships with the Australian, Chinese and other Asian carriers and the
opportunities for expansion. The NT Government will continue to work strategically to build the
case for the establishment of direct services with China, where those services will operate on a
genuinely sustainable basis.
18 • CHINA MARKET ACTIVATION PLAN II
STRATEGIC FOCUS AREA FOUR:SALES AND MARKETING
Tourism NT’s marketing and communications activities are informed by dedicated Northern
Territory consumer research that identifies the barriers to travel to the Northern Territory, the
triggers to book, the planning time and research touch points. From these insights Tourism NT
works with key trade partners to shape marketing strategies and communications content with
the aim of influencing visitors to book their holidays to the NT. This commercially important
market intelligence is shared with Northern Territory operators to develop their product and invest
their own marketing dollars to grow our NT voice.
As outlined in the Market Insights section of this document, Tourism NT is not targeting the mass
market, many of whom are looking for a cheap trip to go shopping and who only support Chinese
companies. Tourism NT is growing a sustainable free and independent traveller market segment
(FIT) that includes the affluent 30-49 year old middle-class consumer, experienced in Australian
(or UK/Europe/American) travel; the youth traveller comprising the education and working holiday
maker segments; the special interest or affinity groups; and the business events market.
Tourism NT has a representative agency based in Shanghai and currently works in–market on
year round cooperative campaigns with key trade partners across the core cities in mainland China
including CYTS (Beijing), GZL (Guangzhou) and Ctrip (Shanghai), Sichuan CYTS (Chengdu) and
Hong Thai Travel Services (Hong Kong), and other ad-hoc partner campaigns when the opportunity
arises, often in conjunction with Tourism Australia. They comprise digital, social media, print and
consumer seminar activity to promote both the Red Centre and Top End to consumers in these
cities and surrounding regions. The aim is to increase the profile of NT destinations and products
and to equip the trade to better sell the NT to their customer groups. The NT aims to capitalise
on the latent demand following the introduction of the new Law as outlined previously.
In the consumer market, Tourism NT targets consumers, predominantly through digital channels
when they are researching and planning an Australian holiday. In particular, Tourism NT will target
the prominent vertically integrated travel planning sites and apps that are most relevant to the
Chinese consumer. The aim is to ensure that the Northern Territory is considered as part of a
consumer’s planning of ‘any’ Australian itinerary. In addition, digital targeting through social
media is also being employed to tap into special interest or ‘affinity’ groups such as those interested
in photography, self-drive, fishing, hunting and food and wine holiday experiences.
In Australia, Tourism NT works with a select group of partners to promote the Northern Territory
within the Australian based Chinese communities. The purpose of this is to stimulate visitation
from the resident population, and to ensure that the Northern Territory is considered when friends
and relatives come to visit. Tourism NT’s market research shows that 42% of Chinese holiday
visitors made their decision to travel to the Northern Territory based on recommendations from
friends and family. Among the targets onshore are students studying in Australia, WHMs from
Taiwan and the Hong Kong Youth Segment.
Lastly, but most importantly, strategic partnerships with key industry stakeholders such as Tourism
Australia, Austrade, the business and leisure travel trade, aviation and non-tourism related partners
are integral to the Northern Territory achieving success in this market. Similarly Tourism NT’s
relationship with other NT government agencies such as the Department of Chief Minister’s Asian
Engagement Trade and Investment team adds credibility in the business market, particularly in
China where there is a high regard for the office of Government.
It is only through working collaboratively and leveraging strategic partnership opportunities that
the Northern Territory will deliver the 2020 goal of 30,000 Chinese visitors, spending $25 million.
CHINA MARKET ACTIVATION PLAN II • 19
SALES AND MARKETING ~ ACTIVITIES
• Collaborate with Tourism Australia to build market demand for the NT including
leveraging key trade and consumer marketing initiatives e.g. Restaurant Australia,
Aussie Specialist Program, Australia Week in China
• Continue to seek specialist commercial expertise and in-market representation to
optimise the NT’s investment, opportunity and market share growth
• Business Events to target and engage with corporate companies and incentive travel
buyers to attract them to hold events in the NT
• Develop of China-specific marketing assets and content
• Implement a Chinese digital and social media strategy including a website hosted in
China with customised content to present the destination to the Chinese audience
• Lead NT operator in-market activities through the Asia Product Partnership Program
such as the annual China Mission
• Through DOB programs, facilitate the development of pre/post touring and technical
tour itineraries in language
• Insist on consistency in destination marketing communications across industry
• Continue to build major trade partnerships with the preferred Chinese wholesalers
including CYTS, Ctrip, GZL, and Hong Thai Travel.
• Through DOB programs, encourage innovative cluster marketing initiatives amongst
operators, such as delivering packages tailored to the Chinese market.
20 • CHINA MARKET ACTIVATION PLAN II
Mindil Beach Sunset Markets
• Increase focus on relevant special interest groups e.g. self drive, photography, hunting,
fishing, food and wine.
• Identify Australian (east coast) based Chinese market opportunities to attract Chinese
born residents, Visiting Friends and Relatives (VFR) and ex-pats as potential leisure
visitors
• Shift spending over time to more direct channels and partnership support programs
that will have a greater impact
• Establish an international education marketing partnership with Charles Darwin
University and the Department of Education
• Drive a whole-of-government approach to leverage the Australia Unlimited partnerships
to help connect Chinese investors with tourism
• Work with government, local business and community partners in the Northern Territory
who have existing relationships with visiting Chinese travellers
• Explore partnerships with traditional and non-traditional partners to leverage activity
in market inluding building on existing contacts and networks already established by
NT Industry.
• Facilitate distribution training and education through trade partnerships and technology
• Explore visitation opportunities through sister-city relationships
• Build a network of China-based business partners in key regions of China
• Develop strong partnerships with other states and explore dual destination activities
CHINA MARKET ACTIVATION PLAN II • 21
STRATEGIC FOCUS AREA FIVE:INVESTMENT ATTRACTION
China has more than a million high net worth individuals, of whom over 300 are billionaires ($US).
In 2012 alone, China‘s outward Foreign Direct Investment (FDI) increased by 12.6 per cent to exceed
US$77 billion. According to Austrade, State Owned Enterprises (SOE) account for over 90 per
cent of China‘s outward FDI, and Australia is the largest recipient market of accumulated direct
investment from China.
Wealthy private investors in China are increasingly looking to overseas markets to secure growth
opportunities and diversify their holdings. The very high level of interest in Australia‘s Significant
Investor visa program underscores the potential for China‘s high net worth individuals to channel
private investment to the Australian market.
China‘s FDI interests in Australia are overwhelmingly weighted towards the mining and energy
sector, with agriculture emerging as an important new area of focus, so it is important to identify
and focus on outbound Chinese investors with interest in tourism infrastructure. Persuading them
to invest in the NT would alleviate the supply-side constraints currently being experienced.
With annual growth of around 17 per cent, China has overtaken the United Kingdom as Australia‘s
largest source market for tourists. It is Australia’s most valuable market in terms of visitor nights
and per capita spend. However, as the NT currently has just over a 1% share of this market it is
relatively unknown as a destination. It is important therefore that investment efforts focus on
raising awareness of the experiences the NT has to offer and the opportunity for investment in
the hotels and related infrastructure needed to enhance the quality of the visitor experience.
The strategic importance of securing Chinese investment is demonstrated by two flow-on benefits
for the tourism industry:
• The attractiveness of the destination to Chinese visitors will be enhanced by the
knowledge that the Chinese have invested in it and
• Industry capability will increase as a result of increased Chinese investment, for example,
if new Chinese investment resulted in the introduction of a Chinese hotel chain to Darwin,
it has the potential to raise the bar for all NT accommodation providers.
The Northern Territory Government has existing partnerships with the China Development Bank
(CDB) and the China Council for Promotion of International Trade (CCPIT) who have helped promote
NT tourism investment opportunities to their network of members, clients and Chinese investors.
There is genuine interest from the Chinese market in tourism investment opportunities in the NT,
however more work needs to be completed in order to package specific tourism investment
opportunities for the China market.
From a tourism perspective, Chinese investment attraction will aid in delivery of tourism infrastructure
and services in order to meet the supply-side constraints outlined in Tourism Vision 2020; increasing
Chinese visitation through inbound investment missions and increasing NT industry capability
through knowledge transfer and competition.
One of the most important roles the NT Government can play is to open doors, establish
a presence and provide confidence in China. This is a key role of the Department of Chief
Minister’s Asian Engagement Trade and Investment Division (AETI) Such activities would include
• government to government relationship building such as the Chief Minister’s visit to
China and his meeting with key Chinese Government agencies: National Development
and Reform Commission (NDRC) and Ministry of Commerce People’s Republic of China
(MOFCOM)
22 • CHINA MARKET ACTIVATION PLAN II
• promotion of the NT through Ministerial visits / industry delegations to China
• alerting industry of incoming Chinese delegations to the NT
• providing access to Ministers and relevant stakeholders when industry has inbound Chinese
visitors
• providing Chinese investors with information on regulations and approval processes
• providing guidelines and tools for improving professionalism and customising presentation
of proposals to foreign investors
The experience of other government departments in engaging with potential Chinese investors
shows that it will be important to:
• present the investment opportunity with development approval in place and, where relevant,
concept drawings of the opportunity.
• present the return on investment (ROI) based on the Chinese portion of Investment and not
the project debt (this is a different way of presenting ROI compared to western investment
– it delivers a much stronger message and takes advantage of the minimal interest Chinese
investors pay on their loans)
• understand that the audience will look at the direct relevance for the Chinese population
– a broader tourism return on investment will take some education and all the more reason
to target experienced investors.
INVESTMENT ATTRACTION - ACTIVITIES
Identify tourism infrastructure investment opportunities: identify and engage local
industry interested in Chinese investment.
• AETI to maintain an Infrastructure Knowledge Bank
• Establish a Tourism Infrastructure consultative committee/panel to drive sales
• Leverage existing business networks and events e.g. NTG, ACBC, IBC, REINT
• Leverage existing tourism networks e.g. Tourism NT China, Tourism Australia, Austrade
• Leverage existing activities e.g. Shanghai Investment forums, the CDB / CCPIT
delegations, Singapore Real Estate Forums
Identify ‘China Champions’ in the industry sector who are commencing to work or are
successfully working with Chinese investors:
• Communicate NT Government China tourism investment attraction activities strategy through
these networks, activities and champions. (Using direct email, face to face meetings,
communicating to industry at existing events (AGES) and holding customised events to
promote our work in China.)
CHINA MARKET ACTIVATION PLAN II • 23
• Identify Chinese Investor Targets in concert with AETI.
• Commission research into existing Chinese investors in Australia and abroad (Identify people
via CHAMPS, Austrade, and National Real Estate Agents.)
• Liaise with Chinese partners to identify investor leads
• Liaise and partner with NTG investment group to identify investor leads
• Develop further strategic partnerships to identify and access investor leads
• Identify and create business development platforms to capture investment leads e.g. Australia
Week in China 2014, Chief Minister’s next visit to China, targeting Chinese delegations attending
B20 / G20 this year
Promote NT as a competitive destination for Chinese Investment in Tourism
• Ensure tourism is acknowledged alongside the NT Government Investment efforts to develop
Northern Australia
• Ensure mining, agriculture, resources, tourism, and education, as priority investment sectors,
are included effectively and attractively in AETI’s portfolio
• Identify NT differentiation and competitive advantage in line with NT Government Investment
Strategy
• Implement a customised communication strategy
• Develop strategic Chinese partnerships
Facilitate investment process- bring local industry together with Chinese Investors
• Organise introductions and follow-up meetings for industry
• Organise industry delegations to China
• Organise industry to meet Chinese inbound delegations
• Provide targeted support industry to engage with China market
• Increase industry capability to do business with China by using existing resources and networks
available to NT Government to develop relationships with relevant Chinese investors and
government
24 • CHINA MARKET ACTIVATION PLAN II
MODEL FOR DELIVERY
A key requirement highlighted during the development of the China Market Activation Plan
(I and II) is the importance of collaboration among a number of different stakeholders to deliver
a competitive destination that appeals to the Chinese traveller.
Figure 6 provides an overview of the Northern Territory’s key stakeholders when it comes to
delivering a competitive China Ready destination.
Figure 6: NT China Ready Stakeholders
NT GOVERNMENT
Business Development
Business Migration/WHM
Investment and Trade
Marketing and Strategic
Partnerships
Northern Australia
Accreditation
Aviation
COMMONWEALTH GOVT
Marketing Australia
LOCAL GOVERNMENT
Tourism research
Chinese language signage, parks,
precincts, transport hubs
Trade and investment promotion
Immigration Policy
Sister Cities
Transport Policy
International Relations
NT China Ready
EDUCATION
INSTITUTIONS
30,000 visitors
$25 million
by 2020
Charles Darwin University
Business and Community
associations
Secondary Schools
Training Organisations
Resident population
Chinese Cultural and
Language Studies
NT a destination of choice for
international students
CHINESE
CONNECTOR GROUPS
Overseas students
Chinese local media
TOURISM INDUSTRY
Direct links to market
Darwin International Airport
Chamber of Commerce
Regional Tourism Organisations
Operators
Marketing and
on- ground delivery
CHINA MARKET ACTIVATION PLAN II • 25
Cage of Death, Crocosaurus Cove, Darwin City
MEASURING OUR PERFORMANCE
Tourism NT produces an annual operational plan and divisional activity plans which map out the
specific functions, activities and key performance indicators for the Agency. The China Market
Activation Plan II activities will be built into the Agency’s annual operational plan and the divisional
activity plan for International Marketing. The annual operational plan can be viewed at the Tourism
NT corporate website www.tourismnt.com.au as can the annually updated International Market
Fact Sheets which contain summary information from the International team’s divisional plans by
market. These plans are reported on annually in Tourism NT’s annual report, as is the reporting
for Tourism Vision 2020: Northern Territory’s Strategy for Growth (also available on Tourism NT’s
corporate website).
Back cover images: (clockwise from top left)
Ubirr, Kakadu National Park
Uluru - Kata Tjuta National Park
Aerial, Cullen Bay
Bamurru Plains, Mary River Floodplains
Four-wheel driving, Central Australia
26 • CHINA MARKET ACTIVATION PLAN II