November 2002

1
Consumer Confidence Within The Australian Travel
Industry

• November 2002

2
Research Aim

• The overall aim of this study is to update
  measures of Australian consumer travel confidence
• Post September 11 Anniversary 2002 vs 2001
• Post the Terrorist bombing in Bali (October 12th
  2002)

3
Research Objectives

• Measuring the impact and comparison to 2001 of
  the following on consumer intentions and
  attitudes to having a short break or holiday
• Terrorist activity overseas
• Possible Iraq conflict
• Australian Airline Industry
• Measure the number of people that are changing
  travel plans and to isolate the key reasons for
  this change in plans
• Profile those that have changed their plans to
  further understand the key issues impacting on
  travel
• Revisit the key drivers of overseas and domestic
  travel - 2002

4
Methodology

• Telephone survey contacting Australians aged
  18-79 years who can realistically afford a
  holiday or short break
• Benchmark of 401 interviews completed 17th
  September - 17th October 2001 (Post September 11)
• Update of 400 interviews completed 17th September
  - 11th October 2002 (Post September 11
  Anniversary - labelled as Pre Bali)
• Boost of 170 interviews completed 18th -24th
  October 2002 (Post Bali Bombing - labelled as
  Post Bali)
• After each event interviewing was started 6 days
  after the event to avoid hysteria of response

5
Consumer Travel Confidence

• Changes in travel plans
• Reasons for these changes

6
Changes in Travel Plans
7
Changed Holiday Plans
Yes
8
Reasons Why Changing Plans
2001
2002

• One year on the key reasons for changing plans
  have changed with respondents significantly more
  likely to state
• family reasons (28)
• personal reasons (24)
• money/lack of finance (18)
• and significantly less likely to state
• possibility of war/terrorism (3)
• Ansett Collapse/Frequent Flyer Points (2)

• Post September 11 2001 the key reasons for
  changing plans were
• possibility of war/terrorism (48)
• Ansett Collapse/Frequent Flyer Points (17)
• family reasons (new baby, health) (16)
• work study contraints (12)

9
Instead Of Holiday Expenditure
Q33. You mentioned that you do not intend to take
a holiday in the next year - what do you think
you will spend your money on instead of a holiday?
10
Those Who Have Changed Holiday Plans in 2002

• Those that have changed their holiday plans in
  2002 are more likely to be female (70) and from
  blue collar working backgrounds (29)
• They are also more likely than the total to
  choose a place to holiday where relatives are
  nearby
• Despite the fact that family/personal reasons and
  financial concerns have taken over from terrorism
  as a nominated reason for change in travel (2002
  vs 2001) terrorism remains a key theme as those
  that have changed their plans to travel in 2002
  are more likely than the total to strongly agree
  with
• holiday within own state given the threat of war
  between Iraq and USA
• holiday in Australia given the threat of
  terrorism
• holiday within own state given the threat of
  terrorism
• It is possible that the risk of terrorism is
  simply another excuse to defer the actual taking
  of holidays

11
The Timing of Holidays

• In the aftermath of September 11 consumers stated
  they were going to transfer October-November
  holiday plans into Christmas and New Year
• This consumer intention was not converted into
  behaviour as issues such as the NSW Bushfire
  threat and general economic uncertainty impacted
  on actual holiday behaviour
• One year later, (refer next slide) those that say
  they have changed their holiday plans recently
  seemed to be shying away from the months of
  October, November, December and January even more
  than the forecasted trend in 2001
• This trend, coupled with the stated financial and
  family reasons for not taking a holiday ON TOP OF
  the threat of and actual terrorist activity
  overseas should be of great concern to the
  tourism industry

12
Months Impacted By Changing Holiday Plans 2001
vs. 2002
How to interpret this chart The change in
intention to travel in October 2001 pre and post
Sept11 moved from 15 intending to 10, a -5
movement. In the same period in 2002 the
October intention has slipped from 17 to 9, an
8 movement. Whilst in total slightly less
people in 2002 are changing their travel plans
there is a worrying trend towards changing plans
in the traditional summer holiday period (Nov
2002-Feb 2003)
13
World Issues and Impact on Australian Travel
Consumer Confidence
14
Holiday in own state given the threat of terrorism
Strength of agreement (red) peaks post Bali
15
Holiday within Australia given the threat of
terrorism
Consumer Anxiousness increases post Bali
Directional difference at 85 CI.
16
Holiday in Australia given the threat of war
between Iraq USA
Consumer Anxiousness increases post Bali
17
Holiday within Australia given the recent Bali
bombings
Base Post Bali n170
18
Holiday Attitudes
The issue of risk is becoming increasingly
important in the decision making process. This
is especially the case with those with young
families. Those with older families are more
likely than the total to want to see their own
country first.
19
Overseas vs. Domestic Holidays
Q25. Was your last holiday in Australia or
Overseas?
In a direct comparison between 2001 and 2002
actual behaviour has significantly trended
towards domestic holidays
20
Australian Holiday Intent
21
The Collapse of AnsettOne Year On
22
Airline Industry 2001 vs 2002

• 2001 Im more inclined to take a holiday or
  short break within my own state given the recent
  situation with Ansett
• 2002 Im more inclined to take a holiday or
  short break within my own state given the current
  situation with the airline industry

23
Impact of the collapse of Ansett Australia on
holidaying - Pre Bali
Base Pre Bali, n395
24
Impact of the collapse of Ansett Australia on
holidaying - Pre Bali
Base Lost frequent flyer points (Pre Bali) n64
25
Impact of the collapse of Ansett Australia on
holidaying - Pre Bali
Base Lost frequent flyer points and planned to
go on holiday (Pre-Bali), n32
26
Holiday impact of the loss of Ansett Frequent
Flyer Points

• It appears that the loss of Ansett frequent flyer
  points has impacted on the holiday plans of 4 of
  Australians aged 18-79 that can realistically
  afford a holiday
• The biggest impact appears to be on young
  families.
• This group were the most likely to lose FF points
  and the most likely to not take the holiday they
  planned once points were lost

27
Drivers of Overseas vs. Domestic Travel
28
Attitudes That Drive The Travel Decision
Domestic vs Overseas

• Since October 2000 See Australia has monitored
  the movement in attitudes towards tourism of
  Australians aged 18-79.
• We have also linked attitudes back to actual
  behaviour ie holiday in Australia or overseas.
• One of the key dimensions has always been

Familiarity
Difference
More likely to want to travel overseas
Tend to travel within Australia
29
Key Drivers Pre September 11 2001
Familiarity
Difference
I truly like to immerse myself in a holiday
destination, eat the food, mix with the locals,
pick up the lingo Nothing in Australia
offers the degree of difference you get in an
overseas holiday
I avoid going overseas because I know if I got
sick or injured the health care would be
inferior to here You should always see your
own country first before exploring others I
like to holiday where I can speak the
language and read the signs
30
Key Drivers Post September 11 2001
Familiarity
Difference
You should always see your own country
first before exploring others I avoid going
overseas because I know if I got sick or
injured the health care would be inferior to
here Id avoid any overseas destination that
is politically unstable
Nothing in Australia offers the degree of
difference you get in an overseas holiday I
like to take some risks when I travel, holiday
and adventure go together for me I truly like
to immerse myself in a holiday destination,
eat the food, mix with the locals, pick up the
lingo
The emergence of risk
31
The Challenge

• Post September 11 2001 the issue of risk has been
  more prominent (attitudinal) in the decision to
  travel overseas vs. domestic
• This is likely to increase with the recent
  bombing of a well known tourist destination of
  Australians - Bali
• What has historically driven overseas travel has
  been the need to experience difference, to
  immerse oneself in other cultures
• So consumers may be looking for different holiday
  experiences that they can get closer to home

Familiarity
Difference
More likely to want to travel overseas
Tend to travel within Australia
32
Communication Challenges

• See Australia communications messages are more
  important than ever as consumers may look to stay
  home where it is safe and not holiday at all
• Importance of holidays, family time
• holiday affordability
• See Australia and you can have a really different
  holiday experience

Familiarity
Difference
Risk Holiday Overseas
Security Holiday in Australia
Considered a different experience
33
Summary
34
Summary of Consumer Travel Confidence

• There are numerous issues impacting on consumer
  confidence within the Australian tourism market
  and the issue of risk is becoming more important
  in both where and if people take holidays
• Intention to travel is also relatively flat
• Whilst the majority of respondents (81) stated
  that nothing had happened recently to change
  their travel plans, almost 1 in 5 stated that
  their plans had changed. They are more likely to
  be female (70) and from blue collar working
  backgrounds (29)
• They are also more likely than the total to
  choose a place to holiday where relatives are
  nearby
• Despite the fact that family/personal reasons and
  financial concerns have taken over from terrorism
  as a nominated reason for change in travel (2002
  vs 2001) terrorism remains a key theme in
  attitudes towards choosing a domestic holiday

35
Summary of Consumer Travel Confidence

• The recent tragedy in Bali have once again made
  people more inclined to holiday within Australia
  and within their own state
• The Bali terrorism has also had an affect on
  Australians intentions to holiday abroad, with
  50 more likely to stay within Australia when
  they holiday. This has increased from 39 from
  the period Pre Bali
• The threat of war between America and Iraq is
  also influencing Australians in their holiday
  destination decisions, with 47 saying that they
  would stay within Australia given the threat of
  war, up 6 from the period Pre Bali
• 46 of respondents saw the recent bombings in
  Bali as strong reason for choosing to stay within
  Australia for any holidays in the near future

36
Summary of Consumer Confidence

• It appears that the loss of Ansett frequent flyer
  points has impacted on the holiday plans of 4 of
  Australians. The biggest impact appears to be on
  young families.
• In 2002 those that say they have changed their
  holiday plans recently seemed to be shying away
  from the months of October, November, December
  and January even more vigorously than the trend
  in 2001

37
Conclusion
38
The Job At Hand

• It appears clear that selling the importance of
  holidays in peoples lives are more important than
  ever as consumers will use any excuse they can
  find to stay at home where it is safe and not
  holiday at all
• Key messages that need to be communicated quickly
  include
• Importance of holidays, family time
• holiday affordability
• See Australia and you can have a really different
  holiday experience
• The timing of this communication is critical as
  the period October 2002 - January 2003 could be a
  quiet time for the Australian travel industry

39
AppendixSeptember 2002 - 2003 Day, Business and
Overnight Trip Plans
40
Day trips
mean 3.92
Base Pre Bali, n400
41
Business Trips
mean 1.03
Base Pre Bali, n400
42
Overnight trips
mean 3.13
Base Pre Bali, n400