Short term arrivals continue to grow; QLD continues to underperform

Today’s release of short term arrivals and departures data from the ABS for Dec show arrivals grew by 4% (seasonally adjusted) and 5.8% (Trend) on the same time a year ago. Growth from China continues to be strong, up 10.1% for the year (Trend).

Short term departures of residents grew by just 1.8% for the year.

However, when we consider the data for the state of intended stay the picture confirms the ongoing under-performance of Queensland. This data is presented by the ABS only in its unadjusted, original format so we prefer to use the Conus Trend series. Here we see that Queensland was the only state or territory that saw a decline in numbers over the year; monthly Trend data has now fallen in Queensland for each of the last 9 months. The Trend year/year changes across all the states and territories in Dec were;

  • NSW +2.9%
  • VIC +6.2%
  • QLD -4.1%
  • SA +33.8%
  • WA +11.8%
  • TAS +34.6%
  • NT +8.1%
  • ACT +100.9%

As we have been saying for a long time, Queensland is struggling to keep up with other states in terms of its attractiveness to international visitors (see here). This has been demonstrated by the Tourism Research Australia International Visitors Survey over many quarters and today’s ABS data merely confirms it. Victoria took over second spot from Queensland back in early 2014 and the gap between the two has widen significantly ever since.

Note: The ABS notes “Data quality issues have been identified with the capture and coding of state or territory of stay/residence from incoming passenger cards from July 2017 onwards. Data from the cards is currently being re-processed to correct these issues and will be re-supplied to the ABS. Once this is complete, ABS will revise OAD statistics from July 2017 onwards. Until the data is revised, users should exercise caution when comparing statistics for state or territory of stay/residence for this period with previous periods.” We should therefore be wary of drawing conclusions based simply on this data set. Nevertheless, the confirmation of the general trend of underperformance of Queensland by the TRA data suggest that while nominal levels might see some revision the overarching story remains intact.

 

Overseas Arrivals running at 8% growth. QLD suffering as others states surge.

The release from the ABS of the Overseas Arrivals and Departures data for Nov shows short-term arrivals into Australia rose 8% for the year. Visitors from China continue to grow strongly; up 7.8% (seasonally adjusted) and up 13.7% (Trend). Short-term departures of residents (which are only provided on an original, unadjusted basis) are up 6% y/y.

Such impressive increases in international visitors should translate into healthy numbers for those states attracting the international tourists, and yet data suggests that Queensland has been doing poorly in this regard. As we have been highlighting for some time, Queensland performance in the international visitor market has been poor recently (see here). The International Visitor Survey (IVS) from Tourism Research Australia is only produced quarterly with the most recent, covering the Sept quarter, released just a few weeks ago. Nevertheless this monthly Arrivals and Departures data from the ABS does provide original, unadjusted numbers for the state of intended stay of short-term visitors and, when used correctly, this data can tell us something about what we might expect from the Dec IVS when we get hold of it in March.

By Trending the original ABS data we can see that the worrying trend in the performance of Queensland has continued beyond the most recent IVS data. In the two months since the Sept quarter this data would suggest that visitor numbers to Queensland have fallen 0.8% (while they are up 0.6% across the nation as a whole) and are down 4.8% from their highs in April 2017.

It is important to note that this is a very different data set to the IVS from Tourism Research Australia (which has reported international visitor numbers to QLD growing, albeit at a much slower rate than at a national level) so we would not suggest that this analysis suggests international visitor numbers in QLD are about to contract, but it does demonstrate the relatively poor recent performance of the state.

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.