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.

 

Experimental Environmental-Economic Accounts for the Great Barrier Reef; a welcome addition

The ABS have today produced the first edition of a new data set, the Experimental Environmental-Economic Accounts for the Great Barrier Reef (full details here). There’s a lot of information here, sourced from a wide variety of sources, but some highlights include:

Marine Condition indicators which show Coral condition at 44 (41-60 is classified as “moderate”), Seagrass at 33 (21-40 is “poor”) and Water Quality at 43 (also “moderate”). Across the various NRM regions Coral condition scores were best in Mackay-Whitsunday (58) and worst in Fitzroy (22). Seagrass conditions were best in Buedekin (53) and worst in Fitzroy. Water Quality conditions were best in Mackay-Whitsunday (58) and worst in the Wet Tropics (33).

The dollar value of  benefits produced using ecosystem services (which includes both marine and terrestrial regions) increased from just over $8 billion in 2006-07 to just over $15.1 billion by 2014-15 (with tourism accounting for more than $9 billion of that).

Tourism boom continues as departures exceed 10 million in 12 months for first time

In the past 12 months more than 10 million Aussies have travelled abroad for the first time ever. New data for May from the ABS shows that, over the past 12 months, 10,019,900 short-term departures have been made from the country; a new record. Departures are up 7.6% from a year ago and up 4.3% for the 12 month period.

Arrivals are growing even more strongly. For the month pf May arrivals were 7.9% higher than a year ago and they are up 9.9% for the total over the 12 month period. China continues to show solid growth with arrivals up 9.1% from last May and 11% higher for the 12 month period. More than 1.25 million arrivals from China were recorded in the past 12 months; another new record high.

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.

International Tourism arrivals continue to grow but China is slowing

The ABS Short Term Arrivals and Departures data for April shows arrivals up 10.1% from a year ago to a total for the 12 months of almost 8.5 million.

However, the crucial Chinese market (which accounts for 14.7% of all arrivals) has seen growth slow significantly. Trend growth in Chinese arrivals is up just 7.6% from a year ago; this is the slowest pace of Trend growth since Feb 2010. While a slowing pace of growth is to expected as the actual level of Chinese arrivals increase, the pace of this slowdown appears to be indicating a more potentially disturbing reality. Just over a year ago Chinese arrivals were growing at almost 30% a year. That pace of growth has been slowing rapidly since the start of 2016 and has now reached 7 year lows.

Departures are also up, although at a much slower pace than departures. Short term departures are up 4% from a year ago. The difference in the pace of growth of arrivals and departures has seen the annual gap between the number leaving and those arriving over the past 12 months fall to a 6 year low of just less than 1.5 million.

Domestic visitor numbers will be updated by way of the National Visitor Survey for the March quarter from Tourism Research Australia next Wednesday.