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Youth research by Tourism Australia reveals

July 24th, 2018 | | industry

The research and strategy team at Tourism Australia recently carried out some qualitative research in Germany (Frankfurt and Berlin) and the United Kingdom (Manchester and London). This research was carried out to address the clear decline in working holiday makers from these key markets over the past 5 years. This was recently highlighted in The Byte, but the slide in numbers has been known for some time.

Focus group research was complimented by interview research to ensure accuracy in the results. This gives us some really interesting insights into the current thinking of potential travellers to Australia. These young people ‘have not been to Australia’ and ‘are not in Australia now’. Some are thinking about coming, while some hadn’t thought about it at all but are still the right demographic.

Germany
They all know of someone who has been to Australia, so they feel it’s been done by others. It’s not new and they might as well find somewhere else to visit. They also believe there are too many Germans in Australia and they want to meet and engage with other nationalities. Competition for discretionary spending is also fierce for this group – further education, buying major assets (cars, houses) and taking short short breaks.

Also, competition from competing destinations is strengthening. Canada (especially) and New Zealand for working holidays opportunities. Also Africa, intra-Europe and America for leisure travel.

United Kingdom
They have new concerns about “getting on with my career”. They say they can’t waste one – two years by ‘just’ traveling. Parents also more resistant to co-funding if travel is hedonistic and has no career development (which is rather self-righteous coming from any GenX parents, as this is likely the most hedonistic generation to date). (Edit. This is especially concerning given this ‘US style’ concern about career now stems from our largest source market. Remember a 3% decline in this market nullifies any gains from most other markets.)

On a positive note, any negative news or publicity flowing through Australian or international news sources almost never reaches the market whilst at home. They are blissfully oblivious and they just want to know that the sun will shine and the beaches are open.

Tax, rising visa costs, adventure activity or natural fatalities almost never reach their eyes or ears. (Edit. However, a fairer tax rate of 15% sits well, 32.5% wouldn’t have and any increase from 15% won’t). Also, confusion regarding the tax residency status for working holiday makers still reigns. In their tax declaration they appear to be treated separately (with their own box to tick) but in the end the ATO is treating most as non-resident. While care should also be taken around any employer (especially labour hire or contractor) exploiting any non-resident workforce.)

What can we do?
– encourage Germans to come to Australia but disperse more quickly, steer clear of well trodden routes and avoid many other Germans,. Try inland highways and seek out what’s not in the guides. They represent about 15% of all working holiday makers, so need to try harder to meet locals. Best bet: land in Sydney or Melbourne and agree only to speak English for 12 months!!
– any more thoughts, ideas or comments?
– position Australian travel as a positive life experience and cultural exchange to the UK market and maintain that travel (with some form of career development – volunteering or internships) is a good thing.
– and where possible portray Australia as a location for a solid earning platform. “Can’t save a quid – come and make a dollar”. With case studies and comparisons of minimum wages (between home and Australia) to back this up.

18.7% down is a massive drop in working holiday makers and what they bring into the Australian economy has also dropped – a savvy economist might calculate that for us one day. But some of this is being countered by them arriving in other visa classes and by other forms of tourism. Some suggest that some of the decline is due to younger people travelling here, for a shorter period, are choosing another visa class (tourist or student).

At least now Tourism Australia and the wider indsutry is aware of the problem and is undertaking some great research to address the issues in time to mitigate any future decline.