Melbourne Is Victorias Primary Tourist Destination - Research Paper Example

1. Introduction Destination marketing is an innovative method to have an edge over competitive locations. The motive is to enhance the image of the destination and increase the inflow of tourists. This involves several steps such as identification of focus markets and customers, identification of customer needs and wants, useful application of the available resources for the economic and cultural development of a location, while taking into account the business environment (Takamatsu, n.d.). Such a balanced approach takes into account the interest of the visitors, the industry and the community. The business assigned to this DMO is to increase the public image or tourism to Melbourne. Melbourne is Victoria’s primary tourist destination and is the gateway to Regional Victoria. It is the cultural capital and the second largest city of Australia. Overlooking the Port Philip Bay, Melbourne attracts a large number of both national and international visitors. It has places of historical and cultural interest, apart from the shopping malls situated alongside the parks and gardens (Totally Australia, 2010). The city is now seen as the nation’s leading destination for style, romance, cafés, bars and nightlife (Destination Melbourne, 2009). Melbourne boasts of world class restaurants and theatres and is considered the top Australian destination for shopping. It has the potential to be the main point of entry for overseas tourists. However, Melbourne has not been able to attract international students because of growing violence issues (ABC News, 2010). This image should not impact the tourism sector. Thus, to develop Melbourne as a prime destination, it is essential to evaluate the demographics, the needs and wants of the customers that are keen to visit Melbourne. Based on this study, the marketing strategy to promote Melbourne as a tourist destination will be devised. 2. Demographic characteristics Age Group % of tourists 35 to 44 years 21.9% 45 to 54 years 20.4% 55 to 64 years 15.4% The biggest age group among the domestic overnight tourists (21.9%) that traveled to Melbourne in the year ended March 2010 was ‘35 to 44 years’ followed by ‘45 to 54 years’ (20.4%) and ‘55 to 64 years’ (15.4%). Approximately 20.9% Australians prefer to visit Melbourne (Destination Melbourne, 2009). Almost 46% of the visitors prefer to stay the night with friends or relatives while 17.4% of the visitors look for hotels or inn below 4-star category. Those looking for luxury hotel or resort comprise of 16.5 percent. While at Melbourne, people love to eat out (66.7%). Domestic tourism brings in $4.6 billion in Melbourne and the average spend per night is $251. This has been shown in the table below: Source: Destination Melbourne (2009). Visitors to Melbourne also comprise of a sizeable number of international visitors and the figure has been steadily increasing over the years. The following Table gives the statistics of International visitors to Melbourne: Source: Destination Melbourne (2009). In March 2010, Melbourne received over 1.4 million international tourists spending 35.0 million nights in Melbourne. The largest purpose of the international visitors was ‘holiday’ or/pleasure’ followed by visiting friends and relatives. International business visitors made up for only 15% of the total visitors to Melbourne. The largest visitors to Melbourne arrived from New Zealand (14.4%), followed by the UK (12.4%), China (10.9%) and USA (8.5%). The Chinese come with the purpose of learning English (Port Phillip, 2006). Visitors also come to Melbourne for education while backpackers use Melbourne as a work base. The biggest age group of international visitors was between ‘25 to 34 years’ followed by ‘15 to 24 years’. The international visitors spent $3.4 billion in Melbourne and most (48.2%) preferred to live in rented house or apartments. Apart from the domestic and international visitors, Melbourne also receives 14.3 million day-trippers and the largest purpose of holiday or leisure. The biggest age group in this category was ‘35 to 44 years’. The young travelers below 35 years comprised of 32.5% of the visitors. Eating out at restaurants was the main activity of the day visitors followed by visiting friends and relatives. An average day visitors spends $113 per trip to the region and in March 2010, Melbourne received $1.6 billion from day visitors. The tourism industry makes both a direct and an indirect contribution to the local economy. Tourism exports (foreign revenue earned in Australia) are larger than coal and wool exports (Port Phillip, 2006). However, international tourism is still less compared to domestic tourism. Nationality Market share Purpose of visit Motivation of visit New Zealand (High income group/educated) 14.4% Holiday/pleasure Visiting friends/relatives United Kingdom 12.4% Cultural & Heritage activities Social experience, self-challengers, comfort adventurers, keen to taste and try (Tourism Australia, 2010) China 10.9% Learning English Seek challenges and interaction with local people and culture. They seek to experience. USA 8.5% Cultural and Heritage Self-challengers and they travel in style (Tourism Australia, 2010a) Source: Prepared by Self. Thus, the focus or the target customers for promoting Melbourne as a destination should be the international visitors segment. The domestic visitors and the day tourists already contribute significantly to the local economy. Attracting international visitors would also enhance the cultural image of the destination. 3. Motivation to visit Melbourne The common motivation to travel is to unwind, relax or take a break (Tourism Australia, 2010b). The young couples seek to broaden their experience while the affluent families want to break the shackles of busy daily routine. The affluent older couples have plenty of time in hand as the children have left home. Since they have disposable income, they indulge in holidays and pleasure. The youth feel a sense of personal freedom in taking a holiday and it helps them to define their own personality. The affluent families use these occasions as opportunities to reinforce family bonds and re-engage with the kids. The older couples find this as an opportunity to enrich themselves as well as a chance for self-expression. The largest purpose for which the visitors come to Melbourne is to visit friends and relatives (33.2%). This is followed by holiday and leisure (33%) and business (28.7%). The New Zealand visitors who come to Australia are typically from the higher income group and have undertaken tertiary education (Tourism Australia, 2010). They are open-minded but selective about their media consumption. These visitors become the opinion leaders within their peer group and hence it is essential to understand their needs and wants. The Chinese experience seekers look to challenges and they desire a high level of engagement with local people and culture. Their motivation for travel is to experience and not witness destinations.(Tourism Australia, 2010). The Chinese prefer locations that are untouched. The global seeker, too, looks for an authentic experience and has certain wants to satisfy the travel experience. They want a social experience and they wish to connect and interact with the local people. They are keen to learn about the different lifestyles and culture. They wish to participate rather than witness the experience. They are usually experienced international travelers and take pride in being the opinion leaders among their peers (Tourism Australia, 2010). They stay longer and travel beyond the normal route or cities. The visitors from European countries such as Switzerland (71%), Italy (73%) and France (71%) were more likely to participate in cultural and heritage activities than other international visitors (Tourism Research Australia, 2010a). 4. Activity participation Approximately 51 percent of all visitors to Australia participate in at least one cultural or heritage activity (RET, 2010). The seven tourism activities, which form a part of the cultural or heritage activity include attending theatre, concerts or other performing arts, visiting museums and art galleries, visiting art and craft studios, attending festivals or cultural events, experiencing Aboriginal art and craft displays, visiting an Aboriginal site, and visiting historical heritage buildings or sites. The international cultural visitor engages in at least two types of cultural activities and Melbourne is one of the most popular locations visited by international cultural visitors (Hossain, Heaney & Carter, 2005). The following chart demonstrates the preferences for cultural and heritage activities by key markets: Source: Tourism Research Australia (2010a). The expenditure and the length of the stay by cultural and heritage tours in 2009 were as follows: Source: Tourism Research Australia (2010a). Visitors also engage in nature-based activities such as a visit to a national or state park, which is the top activity undertaken by the international visitors. Nature-based activities also include visit to a wildlife park, zoo or aquarium, visit to botanical or any public garden, dolphin watching, rainforest walk, snorkeling or scuba diving. Even though New Zealanders comprise of the highest visitors to Melbourne, more than half the visitors (59%) do not participate in any activity (Tourism Research Australia, 2010). Sizeable number of visitors from Switzerland, Germany and Netherlands participate in most activities as per table below: Source: Tourism Research Australia (2010). Backpacking is also very popular among the visitors to Australia. International backpacker visitation reached 570,000 in 2009 and Europeans comprise of the highest number of international backpackers in Australia (Tourism Research Australia, 2010). Those between the age of 20 and 29 years were the main backpacker market. Backpackers use a combination of backpacker accommodation and rented house or apartment during their stay. International backpacker visitors have been increasing in Australia over the years. They take part in 15 activities on an average which is significantly more than other international visitors. Melbourne is a popular destination for backpacking, second only to Sydney, as per chart below: Source: Tourism Research Australia, (2010). 5. Travel Expenditure Those who engage in more than 3 nature activities spend 48 nights and their expenses amount to $7129 per trip. Such tourists spend 85% of their time holidaying and most of them (42%) are singles (Tourism Research Australia, 2010). As the backpackers stay for a longer duration than the other international visitors, they engage in more activities. Consequently, they also spend more than other international visitors. They spend approximately $8,193 per person on an average per trip, which is significantly higher than other international visitors (Tourism Research Australia, 2010b). The backpackers spend 76% of their time for ‘holiday/pleasure’ compared to other visitors who spend 43% of their time for the purpose of holiday. On an average they spend 15 nights in backpacker accommodation (Tourism Research Australia, 2010b). The international visitor engaging in cultural and heritage activities spend the highest among the international visitors. Per person expenditure per trip amounts to $6280 and the total spend per night is $138 (Tourism Research Australia, 2010a). Other international visitors spend on an average $3832 per trip which is significantly lower than those who come for cultural and heritage tour. Average duration of stay is 45 nights for the cultural and heritage visitors against other international visitors. Visitors from Switzerland, United States, China and Scandinavia spend the most on cultural and heritage tours than other visitors. Expenditure by activity Activity Number of nights Expenses per trip per person Nature-based activities 48 $7129 Backpacker 15 $8193 Cultural and Heritage 45 $6280 Source: Prepared by Self based on data collected. 6. Travel arrangements The experience seekers and the challengers use different channels to make their bookings. Forty-nine percent of the experience seekers used an agent for at least part of their bookings, with 30% using only agents for their trip (Tourism Australia, 2010b). Some required only air bookings and hence booked with the airline directly while others only made hotel accommodation. Some made part booking through agents and part of the journey on their own. This suggests that agents are a critical channel for attracting international visitors. Global experience seekers can be found in any age group, income levels and geographic locations. The global experience seeker is selective in their consumption of media. Their preferences include internet, cable television, lifestyle channels, documentaries, digital media and the cinema. 7. Data Analysis Market segmentation helps to focus on a target market and make product offerings accordingly. It also helps in planning the advertising and media to be used to attract the target customers. To evaluate the market potential, research was conducted to collect data. Data has been collected from several government and other internet websites on the movement of international tourists within Australia and particularly, Melbourne. Most searches have been made through internet or academic journals. The data shows that despite Australia receiving the highest number of tourists from New Zealand, these visitors spend the least time and money on activities. Their purpose of visit is to meet friends or family. The Europeans and particularly those from the UK, spend time to gain experience. They seek challenges and find pleasure in nature-based activities. Even though backpackers bring in the highest revenues to the tourism industry, the age group that focuses on such tours is 20 to 29 years. Melbourne should promote itself as a Destination in the European countries because the potential has remained untapped. Countries such as Switzerland, Italy, France have tremendous potential for attracting visitors for nature-based tours and for cultural and heritage visits. 8. Marketing implications Destination marketing is brand building or building the image of the location. To devise the marketing strategy, it is first essential to determine the target market. Domestic tourism is already at its peak and hence the DMO should focus on attracting international visitors. The statistics on tourist arrival and expenditure helps the DMO to understand and evaluate the marketing strategy. (this has no reference..since this is the inference after the research). The DMO should first focus on the European countries to attract the international visitors. This is because New Zealand visitors, though largest in number, visit Melbourne only to visit friends and family. This does not make any significant contribution to the local economy. Australia has enough tourism resources and products to attract different segments from different target markets. It has natural beauty, heritage monuments, parks and gardens, luxurious to standard accommodation to cater to all budgets, and cuisine to cater to all tastes (Totally Australia, 2010). The target market should be the European countries with focus on the UK, Italy, Switzerland and Germany. While the visitors from the UK are large in number, potential is tremendous. These visitors spend on cultural and heritage tours as well as nature-based activities (Tourism Australia, 2010). The segment that visits Melbourne the most are young couples. Business travelers are the lowest and hence the DMO should consider focusing on young couples. The focus of promotion should be on what motivates them – the need to unwind and relax, to broaden their experience and experience the sense of freedom. Thus, the advertising should take into account these factors while promoting Melbourne in the European countries. The young couples prefer nature-based tours while the cultural and heritage holiday would be preferred by the older affluent couples (Tourism research Australia, 2010). The needs and wants of each segment have to be recorded – what do they want to see, eat and experience. Most visitors like to eat out and hence restaurants and local cuisine could be used as a promotional tool (Destination Melbourne, 2009). The global experience seekers’ mode of booking would help the DMO to identify the right channel and undertake promotional activities accordingly. Bookings through travel agents seem to be the highest and hence the DMO would need to offer attractive incentives and advertising support to travel agents. No reference as this is a suggestion Global experience seekers’ preference for media has to be taken into account and these include internet, cable television, lifestyle channels, documentaries, digital media and the cinema. Segmentation can also be done based on age because age would impact the choice of media. As the motivation for travel of different age groups is known, the DMO can decide on the advertising campaign (ABC News, 2010). No details on competition destination could be obtained which could help in understanding the needs and wants of travelers to these locations from their home country. Such information could help in positioning Melbourne better. (suggestion). References: ABC News. (2010). VECCI plan to lure more tourists to Melbourne. Retrieved 15 September 2010 from http://www.abc.net.au/news/stories/2010/09/13/3009613.htm Destination Melbourne. (2009). Melbourne Brand. Retrieved 15 September 2010 from http://www.destinationmelbourne.com.au/index.php?sectionID=6898&pageID=12816 Hossain, A., Heaney, L., & Carter, P. (2005). CULTURAL TOURISM IN REGIONS OF AUSTRALIA. Retrieved 15 September 2010 from http://www.ret.gov.au/tourism/Documents/tra/Snapshots%20and%20Factsheets/Cultural%20tourism%20in%20regions%20of%20Australia.pdf Port Phillip. (2006). Tourism in Context. Retrieved 15 September 2010 from http://www.portphillipbusiness.com.au/Tourism_Context RET. (2010). Culture and Heritage. Retrieved 15 September 2010 from http://www.ret.gov.au/tourism/tra/snapshots/culture/Pages/default.aspx Takamatsu, M. (n.d.). Strategic Destination Marketing. Retrieved 15 September 2010 from http://www.tourism.jp/trend/column/pdf/070620_takamatsu_Strategic_Destination_Marketing.pdf Totally Australia. (2010). Staying in the Cultural Capital of Australia. Retrieved 15 September 2010 from http://www.totallyaustralia.com/Staying_in_the_Cultural_Capital_of_Australia Tourism Australia. (2010). The UK Traveller Segmentation of the UK market. Retrieved 15 September 2010 from http://www.tourism.australia.com/en-au/documents/Corporate%20-%20Research/UK_Segmentation_Study.pdf Tourism Australia. (2010a). The US Traveller Segmentation of the US Market. Retrieved 15 September 2010 from http://www.tourism.australia.com/en-au/documents/Corporate%20-%20Research/Research_Segmentation_Study_USA.pdf Tourism Australia. (2010b). SUPPLEMENTARY INFORMATION ON THE Experience Seeker in New Zealand. Retrieved 15 September 2010 from http://www.tourism.australia.com/en-au/documents/Corporate%20-%20Research/Research_experienceseeker_NZ.pdf Tourism Research Australia. (2010). Nature Tourism fact Sheet 2008. Retrieved 15 September 2010 from http://www.ret.gov.au/tourism/Documents/tra/Snapshots%20and%20Factsheets/Nature_factsheet_08_FINAL.pdf Tourism Research Australia. (2010a). Snapshots: Cultural and Heritage Tourism in Australia. Retrieved 15 September 2010 from http://www.ret.gov.au/tourism/Documents/tra/Snapshots%20and%20Factsheets/Cultural_09_FINAL.pdf Tourism Research Australia. (2010b). Snapshots: BACKPACKER ACCOMMODATION IN AUSTRALIA. Retrieved 15 September 2010 from http://www.ret.gov.au/tourism/Documents/tra/Snapshots%20and%20Factsheets/Backpacker_09_FINAL.pdf Read More