Balfour Consulting Newsletter

Issue #09 December 2008

Our Recent Work

Recently, Balfour Consulting has:

• Undertaken community consultation for three road projects with the Department of Main Roads.
• Mentored on another Main Roads project.
• Prepared client entries in three awards.
• Provided strategic planning and media relations support for a research launch, conference and follow up debate
• Prepared tender submissions for clients.
• Reviewed a Council development plan and prepared action recommendations.
• Collated, analysed and reported on the results of three Council research projects.
• Undertook a scoping study for an innovative centre of excellence.
• Developed brand strategies and marketing plans for a national building product and a non-profit organisation.
• Undertaken research projects for local government, State government departments and a NSW-based national organisation.
• Reviewed a Council cultural policy and developed a strategic development plan and associated implementation plan.
• Reviewed and updated a communications plan
• Oversaw and developed copy for a tourism signage project

Opportunities always look bigger going than coming.

Community What – Engagement or Consultation?

Townsville residents have been offered a plethora of community consultation opportunities recently – such as the cruise ship terminal and Flinders Mall developments – with more to come.

But is it truly community consultation? Too often, the term “consultation” is used for what is really a community information exercise with some elements of consultation thrown in. And that consultation might consist of questionnaires that are handed out to attendees or posted online.

The responses are therefore self-selecting, and the results have no statistical validity when applied to the larger community. Also, the questionnaires themselves are sometimes selective in that they do not provide for a full range of responses.

Today, professionals working to consult with and engage the community think in terms of community participation. This includes three main areas: information, consultation and engagement.

At its simplest, when devising a community participation program, one of the first things to do is to determine what is negotiable and what is non-negotiable. You then inform the community about the project and the non-negotiable elements, consult on the negotiables and engage the community in finalising and implementing the project.

People give up their time to become involved in community consultation because they believe they have something to offer and that their opinions are valid. It is therefore important that whenever a community is consulted, all individuals and groups have the opportunity to be heard and in the process they are satisfied that the hearing was fair and their opinions duly recorded.

"Never be afraid to try something new. Remember that a lone amateur built the Ark. A large group of professionals built the Titanic."

Tourism - What next?

As a rule, I generally try to avoid getting into predicting the future and eventually looking foolish, mainly because currently I see this as the professional prerogative of economists. However, in the midst of a crazy moment I'm going to look at our tourism industry and try to figure out where it will go over the next two to three years and what local tourism operators should do to succeed.

I have been a part of the Australian tourism industry for over 30 years and I have seen it take some serious kicks in its economic backside (probably none worse for North Queensland than the pilots’ dispute of the early 1990s). The real issue in our current situation is that we still are not exactly how much economic damage has been done as the aftershocks on Wall Street keep reverberating across the world.

For the time being at least, it seems swift actions by governments have eased the panic and created a degree of stability. However, there may still be a number of nasties out there, and consequently we face further challenges, such as house prices continuing to soften in our capital cities. The tourism industry has always been susceptible to economic uncertainty and volatility, simply because leisure travel is highly discretionary and most people will go without an interstate or international holiday before they cut their personal budget elsewhere. This doesn't mean people will stop travelling over the next two years, but it does mean they will do it differently. To survive or perhaps even to prosper, tourism and hospitality businesses will need to adapt to new circumstances and rethink their marketing approach.

International tourism is already feeling tough times with the UNWTO stating that growth in international arrivals worldwide dropped from 5.7% in the first half of 2008 to 2% for the September quarter. They are predicting even lower growth for 2009. The Asia and the Pacific region has been the worst hit and after 18 months of consecutive growth, our region went into decline from March 2008, sliding into negative growth by August. There are also predictions that at least 70 airlines around the world will declare bankruptcy over the next 12 months.

How to Survive

The good thing for the North Queensland regional economy is that tourism represents only around 6% of Gross Regional Product and a slowing of the tourism industry here will not have the same impact as in Cairns or on the Gold Coast. If our local/regional economy performs better than the Australian average, then tourism operators must see the local market as an opportunity and focus on convincing North Queenslanders to holiday at home, at least for the next 12 months. Falling fuel prices can only add to this opportunity.

Another driver for the local/regional tourism market in 2009 will be events, with the V8 Supercars and a total of 24 games scheduled for Dairy Farmers Stadium between the Cowboys and a new football team, The Fury. Add to that all the other events held in and around Townsville on an annual basis (thank God for great weather!), we can be confident most weekends will be busy around town.

The issue for the hospitality sector is that the high levels of business travel that have helped maintain record weekday occupancies across Townsville for some time may drop off for12 to 18 months. If the economic downturn nationally can be turned around within 12 months, there may just be an easing of demand rather than a serious drop-off in business travel. If the economy gets worse or the downturn goes longer that, occupancies could drop significantly.

Falling fuel prices are good news for the interstate touring market and recent research undertaken by Balfour Consulting suggests that just under 50% of campervan and motor home owners intend to visit North Queensland over the next two years and spend up to four months on the road. In doing so, they usually spend just under 30% of their time in caravan parks. Developments like the Great Tropical Drive should encourage more fly/drive and less fly/stay into North Queensland, which would be great for the region but may not be particularly popular with the hoteliers in Cairns. Regional tourism operators must keep in mind that research shows the drive market gets a lot of its information from talking to locals and from visitor information centres, so make sure you are well-known, well-positioned and well promoted across the region.

In tough times you must manage your costs ruthlessly, but the worst thing you can do is to stop spending on marketing. What you must do is make sure you measure the return on every dollar spent and don't get involved in any marketing activity where you are not absolutely certain you will get a solid return on your investment (try to aim for at least $10 back for every $1 spent). Trust your own judgment and don't get sucked into dubious promotional activities, no matter who is telling you it's a good idea.

While our dollar has dropped substantially against the Euro and the $US making us more competitive, the US and northern European economies (our key international markets) are being hit hard and long haul tourism out of these regions will inevitably drop. The backpacker market has traditionally been resilient and as these travellers are undertaking what is more a rite of passage rather than simple leisure holiday, we may see backpacker numbers hold up over 2008. Those backpacker establishments in our region that provide a high quality experience for their customers should weather the current downturn and may find themselves with fewer competitors as things start to improve.

What's my take on the next two years?

• If we are lucky the economy will have turned around inside of 12 months, but don't bet on it.
• Quality tourism products that offer real value for money will survive and some may even prosper.
• Niche markets such as birdwatching or scuba diving offer real opportunity, as people will still travel to experience the things they are passionate about.
• Let Tourism Queensland and Tourism Australia worry about the international markets next year because the horse they will be flogging may not have much life in it.
• The easiest (and cheapest) market to reach is the local/regional market, so make sure you maximise the value of this market to your business.
• Think outside the square when it comes to distribution channels because the old order is crumbling and the Internet offers real opportunities to deal directly with your customers or their advisers - the retail travel industry.
• Be careful about attending retail travel shows or other extravagant events, as they are dubious of value at the best of times.

If you want to discuss this, give me a call on 4771 4566.

"Light travels faster than sound. This is why some people appear bright until you hear them speak."

Visit Our Website for New Case Studies

We have posted some new case studies about the work we do on the Balfour Consulting website, so click on the hyperlink below to learn more:
www.balfourconsulting.com.au

Are you looking for an office?

Balfour Consulting has a serviced office available in our premises at 14 Dean St, just five minutes walking distance from the centre of the city. The office includes a telephone system, Internet access, fax, photocopier and off-street parking. Furniture can be included if required. Anyone interested can call us on 4771 4566.

Can we help you?

Balfour Consulting Pty Ltd has a proven track record in the following areas:

1. Business/marketing strategic plan development

2. Community engagement/consultation

3. Facilitated planning workshops

4. Market and social research

5. Media and presentation skills development

6. Public relations

7. Direct marketing

For further information, contact us on (07) 4771 4556 OR e-mail us as at: office@balfourconsulting.com.au

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