More bad news for TNQ in the National Visitor Survey

The June quarter National Visitor Survey from Tourism Research Australia was released this morning (see here for full details), and it confirms the deteriorating story for the region we’ve been discussing for some time (see commentary from last quarter).

Across the nation domestic overnight visits rose 5.2% y/y and were up 6.2% in Queensland. However, in our own region TNQ saw a decline of 4.0%. Of even greater concern is the fact that expenditure from those overnight visitors fell by 9.1% (which is more than a 10% decline when considered in real, inflation-adjusted terms). The average number of nights also fell from 5.11 nights year ago to 4.89 nights now. TNQ now accounts for just 1.93% of all Australian domestic overnight visits; its lowest share of the market since the post-Yasi period in 2011.

 

Domestic day-trips fared somewhat better and were up 2.6% y/y with expenditure up 0.8% y/y. However, this sector accounts for just 12% of total domestic expenditure in the region.

Overall total domestic expenditure (for both overnight and day trips) in TNQ fell 8.0% in the year to June 2017. With international expenditure in the region also falling slightly in June (down 0.4% y/y) despite the solid pick-up in international tourist numbers, we see total visitor expenditure in the region falling by 5.6% (or closer to 7.5% in real terms) over the year. This is a reduction in visitor spending of almost $200 million over the past 12 months and would go a long way to explaining the seeming disconnect between the “booming” tourism numbers being recorded and the reality on the ground for many operators in the Far North.

 

Chinese visitors to TNQ fall for first time in almost eight years

Further data from TRA for the TNQ region highlights the concern we flagged earlier today. Over the past year the once-booming Chinese sector of the market has seen a decline in the region of 1.2%. Chinese visitors to TNQ fell from 216,726 in the year to June 2016 to 214,082 in the year to June 2017. This is the lowest annual number since March 2016 and is down 6.7% from the highs seen six months ago.

Visitor numbers from the USA continue to grow (up 5.5% y/y) along with Japan (up 5.4%). The UK has contracted over the past 6 months and is down 5.6% for the year to the lowest level since Dec 2015.

International Visitor growth leaves Queensland behind

Today sees the release of the June quarter International Visitor Survey from Tourism Research Australia (full report available here); and although visitor numbers are up strongly it’s not a happy story for Queensland.

Visitor numbers to Australia show a 8.7% y/y increase to almost 7.9 million (another new record high). Expenditure also rose strongly, up 10%, to almost $27.9 billion over the year. Average spend per visitor rose 1.1%, barely in line with inflation.

Queensland’s data was far less impressive. Visitor numbers rose 5.6% which was the weakest increase across all states and territories. Expenditure in Queensland was up an even weaker 3.2% (also the slowest of all states and territories) which resulted in average spend per visitor which fell 2.3% to $1,998. Queensland’s share of the total international visitor market has now fallen to an all time low of just 33.2%; it stood as high as 43% a decade ago.

In our own region, despite the impact of surging Chinese visitors, things are weaker still. Total visitor numbers to TNQ were up just 4.4% for the year while total expenditure actually fell by 0.4%. The average spend per visitor to TNQ is down a disturbing 4.8% over the year (in real terms this is in excess of a 6% decline). These are numbers that must be concerning for the new CEO at TTNQ and should give pause for thought to all those involved in the industry in the North. What is it that the region is not offering to international visitors such that the region’s share of the international market continues to languish close to all time lows?

We shall post further breakdown of the TNQ data once we receive more detailed numbers from TRA later today.

The June National Visitor Survey is due for release in a fortnight.

 

Is North Queensland being dudded by Brisbane? Not according to the data.

A fascinating post from Gene Tunny at Adept Economics over the weekend which attempts to dispel the (widely held) view that the North of the state has received less than its “fair share” of capital expenditure from Brisbane.

Is North Qld under-funded by the State Government relative to the South East?

I would point out that the imbalance, as evidenced by Gene’s data, is greater for the Rest of Queensland (approx +45%) as a whole than it is for North Queensland (approx +32%). Also, within Gene’s definition of North Queensland, the imbalance comes largely from a significant overspend in the Fitzroy region where capital expenditure appears to be some 60% above that justified by population levels. A similar level of overspend is also seen in Inner Brisbane. One might also argue that Darling Downs-Maranoa would be considered as SEQ (certainly by those in the North) where the “overspend” seems to be close to double that justified by population.

A problem with any analysis of capital expenditure is that during any one year expenditures are inevitably very lumpy; large scale expenditure projects tend to be like that. Even considering for a longer period, as Gene has done (in this case 5 years), is unlikely to smooth out all this lumpiness; mining related infrastructure in the Fitzroy region could well be a case in point here.

Nevertheless, however one wishes to cut the cake, the data seems to show clearly that over the period analysed (the past 5 years) the North of the state certainly hasn’t done badly from State government spending; no matter what the received wisdom seems to suggest.

Significant revisions muddy the data but Domestic Tourism numbers not looking good for TNQ

As we have been expecting for some time, today saw the release of some major revisions to domestic tourism numbers for TNQ. Tourism Research Australia have released the National Visitor Survey report for the March 2017 quarter (available here) along with revisions to data going back to the 2014 year (see here for details). The main point of the revisions is a roughly 15% decline in the original estimate of overnight trips to TNQ in 2015. While details of the revisions are sketchy at this stage (TRA are only providing data for year end, and March 2016, rather than individual quarters) it is clear that they remove much of the increases previously reported for TNQ which many (ourselves included) had queried at the time.

Despite a degree of uncertainty about the revisions this new data clearly confirms the ongoing slide in domestic tourism to the Far North.

Australia saw an increase of overnight trips of 3.1% for the year to March 2017; Queensland was up 4.3%. In TNQ however we saw a 6.9% decline in visits and a 8.4% reduction in expenditure over the year.

Even with international tourism expenditure having increased over the year, the drop in domestic expenditure sees the total for the region fall 4.9% since March 2016.

Given the support that the tourism recovery has given to the TNQ economy it will be worrying many to see this degree of a slow-down seemingly now confirmed. There had been hope within the tourism sector that the long-awaited revisions from TRA would confirm that growth remained in place (albeit at a slower pace than originally estimated); that hope appears now to have been misplaced.

Pete talking TNQ tourism numbers on ABC Far North & 4CA

Kier Shorey at ABC Far North, and John MacKenzie from 4CA, both spoke to Pete this morning about yesterday’s International Visitor Survey and what it held for TNQ. You can listen below, and read yesterday’s analysis on the IVS here.

Yesterday also saw the GDP release and, as usual, this coincided with the release of our quarterly regional economic roundup in The CONUS Quarterly. You can download your own copy of that full report here….CONUS Quarterly June 2017

ABC Far North

4CA

International tourism grows but QLD and TNQ are both falling behind

Today’s release by TRA of the International Visitor Survey for March 2017 (available here) shows international visitors up by 9.2% y/y with expenditure up 8.1%.

Numbers to Queensland were also up strongly (+6.8%), although expenditure rose just 2.6% y/y. However, as a result the Sunshine State’s share of the international visitor market has fallen to an all-time low of just 33.4%.

In Tropical North Queensland things were somewhat better with visitors up 7.2%, although expenditure managed to drop by 0.8% on the back of significantly lower average regional expenditure per visit (down from $1,310 a year ago to just $1,212 now). TNQ also saw its share of the international market drop top 11.5%. Growth in key areas such as China and the US have slowed while Japan and the UK remained static.

Domestic tourism continues to dive in TNQ

Tourism Research Australia’s National Visitor Survey for the December quarter (available here) does not make happy reading for the industry in the Far North. While total overnight domestic visitors in Australia rose by 4.2% from the previous year, and were up by 3.4% in Queensland, the TNQ region saw a decline of 11.3%. Overnight domestic visitors to the region fell to 1.9 million for the year to end Dec 2016 from 2.14 million the previous year.

Last quarter we posed the question “is the domestic tourism boom in the Far North coming to an end?” (see here) and concluded that it was probably too early to say. We wanted to see more data. Well, that data’s now in and it doesn’t look good.

Expenditure from domestic overnight visitors to TNQ has fallen by 15.5% from the previous year; this equates to almost $400 million less being spent in the region. Day visits have never played a large part in the TNQ story, but here too we see weakness (down 0.4%) in the face of stronger national and Queensland numbers (both up about 5.5%). Combining both overnight and day visits we see expenditure in TNQ down by 14.4% over the year.

As the chart below makes clear, the solid growth in international visitors (which continues unabated…see here from a fortnight ago) is not enough to make up for the large decline in the (much larger) domestic market. Total visitor expenditure in the region for the 2016 year fell 7.5% from 2015.

The reasons for such a decline over the past three quarters is not yet clear, but anecdotal evidence suggests that the heavily negative media regarding the bleaching event on the northern GBR last year (unfortunately being repeated again this year in the tourist hot-spots further south) may be deterring Aussies from making the trip to the north. Clearly TTNQ, and its soon-to-be-appointed new CEO, will be keen to reverse this worrying slide.

UPDATE. TTNQ have cast doubt on the data (see here) and TRA accept that the data from 2014 and 2015 could have over-stated the position for TNQ. If that is the case then the stellar results in past quarters (that TTNQ were happy to agree with) could have been an illusion…we shall have to see what TRA decide once they’ve completed their work on the data. Good coverage on this issue fro Mark Beath at Cairns Economy…see here.

China helps TNQ beat the international visitor pack

The Tourism Research Australia International Visitor Survey for the quarter to Dec 2016 (available here) shows international visitor numbers continuing to improve; although visitors are staying for less time.

Total visitors for the year hit a new record high of 7.625 million; an increase of 11.2% from the previous year. Expenditures rose by 8.1% to $26.2 bn which saw the average expenditure per night fall by 2.8% while the average length of stay dropped by 8.5%.

Queensland fared not quite as well with total visitors up 10.1%, expenditure up 4.0% and average expenditure per visit falling by 5.6%.

Tropical North Queensland, lead by the surge in Chinese visitors, was a stand-out performer. Total visitor numbers were up 15.4% to 901,000. Despite expenditure rising strongly (up 10.2% to $1.12 bn) the average spend per visit fell 4.5%. As a result TNQ’s share of the international visitor market has started to climb back from the lows seen in 2012, although there’s still a very long way to go to return to the heady days of a decade ago when 17% of all international visitors were coming to the Far North.

But make no mistake, the solid TNQ performance isn’t all down to China. While China saw a huge 32.1% gain in total visitors to the region (to 229,000) Japan also experienced very good growth (up 21.2%) , as did the US (up 14.6%). As we can see from the chart below, the US and Japan have now pulled well clear of the pack behind China.

The tourism picture for 2016 will be completed in a fortnight’s time when we see TRA’s National Visitor Survey released.