Domestic tourism data for TNQ confirms ongoing worries

We’ve been away from the office for almost three weeks over Christmas and the New Year, so now is the time to start to catch up on the regional data released since we left; and we’re staring with the National Visitor Survey for the September quarter released by Tourism Research Australia on Dec 20th (and available for download here).

We’ve been discussing the weakness in the domestic market in the TNQ region for some time and this most recent release does nothing to mitigate against that. While total domestic overnight visitors rose by 7.2% (for the year to Sept) in Australia as a whole, and by 9.7% in QLD, they fell by 2.8% in the Far North. Overnight expenditure also rose by about 7% nationally, and 6% in QLD, but fell by 2% in our region. The average length of stay in TNQ rose very slightly to 5.03 nights.

The less significant day-tripper market also showed weakness with a 1% rise on QLD compared to a 7% fall in TNQ (and a 10.7% drop in day-trip expenditure).

All up domestic expenditure in the TNQ region fell by 3% for the year (bear in kind these are nominal figures and do not take account of inflation which pushes the real decline close to 5%). As we noted just before we went away (see here), the international market is seeing growth but only at a level well below that witnessed elsewhere in the nation. Combining both domestic (overnight and day-trip) and international expenditure we see a decline in tourism expenditure in our region of 2.5% over the course of the year. Given the nation is in the grip of a tourism “boom” that fact should be causing some red-faces at TTNQ and a good deal of re-thinking within the tourism industry.

IVS highlights problems for QLD and TNQ

The Sept 2017 International Visitor Survey from Tourism Research Australia (available for download here) makes for unhappy reading for the Queensland and the TNQ region in particular.

While total international visitors to Australia rose by 7.3% for the year to Sept 2017, the increase was just 3.0% for Queensland and a very lack-lustre 1.5% increase in the TNQ region. Even more disturbingly, trip expenditures rose 9.8% for the nation as a whole, were up 2.5% in Queensland (barely keeping up with inflation), and fell by 1.3% in TNQ.

With the Sunshine State losing market share we now see just 32.9% of all international visitors coming to Queensland (the lowest level ever recorded) and TNQ’s share falling to 11.1%, which is the lowest since Dec 2011 (before the flood of Chinese visitors really took off). We are awaiting more detailed breakdown of data for TNQ from TRA (which is not published in the usual channels) and will update once we receive this from them.

The stand out performance came from Tasmania which saw total visitor numbers rise by 17% and expenditure jump by 33%. Other states and territories to do well included NSW, Victoria and the ACT (see graphic below taken from the TRA IVS).

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.