Nina Mistilis

Qantas is facing a further drawn-out battle with the unions, and that may cause yet more long-lasting damage to its brand. The Qantas dispute is settling in for the long haul, now that it has been taken into binding arbitration – a move that could take months to resolve.

This confrontation with the unions has been building for years and seem and has now culminated in arbitration. All of this has taken place in full view of the travelling public. Qantas – in going to arbitration – has won what it was seeking – which is a stay on industrial action – but in the long term it seems to have lost the war.

I believe it has alienated passengers, the industry and the government, and that’s not a good position to be in. The Qantas brand is tarnished.

Negotiations between the airline and the Transport Workers Union, the Australian and International Pilots Association and the Australian Licensed Aircraft Engineers’ Association collapsed just before a deadline set by Fair Work Australia (FWA).

I believe the longer this dispute rumbles on, the more the Qantas brand image will be badly impacted.

That’s a global perception, because passengers all over the world who want to get to Australia for a holiday, or back home for work, are wondering if it is safe to book a Qantas plane, or whether it will be cancelled again. Many are saying they will never trust Qantas again, particularly in business class, because business wants reliability above everything else. Certainly, in the immediate future, the brand is tainted and they’re really behind the eight ball.

I don’t see how they’re going to catch up easily. Even if the arbitration settles on the side of Qantas, it may still hurt Qantas in the medium to long term, although I think it’s really hard to say what the long term damage will be. It partly depends on how events unfold. If it is solved quickly, which seems very unlikely, then the brand will be restored. But if it continues, and if there’s a perception – as the unions are saying – that service will drop due to the “asianisation” of the airline, then the brand will be completely damaged. Will that mean that less passengers book on Qantas? I don’t know the answer to that. Time will tell.

Qantas chief executive Alan Joyce yesterday said while his preferred option had been to resolve the dispute through negotiation, it was now time to let FWA bring the matter to a close.

But it is reliability is an important factor in terms of the branding of an airline. When it comes to the crunch, we need to get to the destination on a certain date and we cannot afford to be stranded at home, or somewhere in Australia, or abroad. So when it comes to the choice, will we choose Qantas or will we choose another airline?

Nina Mistilis is a senior lecturer in Tourism at the Australian School of Business.

Larry Dwyer

What is the future for tourism in Australia?

Aussies travelling and taking their holidays at home seem to be a “dying breed”, thanks to the high dollar, with most Australian residents having a taste for international travel only cataclysmic world events could change.

I feel Australia should place more emphasis on its urban tourism attractions, rather than the outback. Its cosmopolitan cities, its attractive streetscapes, its fine dining, sophistication and the sheer liveability of its cities are second to none. There are many fine urban tourism precincts that rival any around the world. And remember that Melbourne has vaulted Vancouver to become the best city in the world to live, according to the latest Economist Intelligence Unit’s Global Liveability Survey, with Sydney not far behind.

Domestic tourism products struggling the most are large-scale resorts in remote or outback destinations which are harder and more expensive to reach, and which simply can’t compete for value for money with overseas destinations.

I’ve also seen that consumer values are changing in ways that favour urban tourism, including strong Generation Y attributes such as being money rich and time poor, plus seeking hedonistic, discerning experiences. They are less loyal to brands – something the airlines know well now – and they seek value for money, not necessarily low prices, within authentic tourism experiences.

Australia should give up trying to compete at the mass-market level to attract tourists. A move to putting emphasis onto Australia’s urban areas has a good synergy with meetings, conferences, and events. Business tourism would be an important market in this context. However there is a place for the outback, and tours to more remote areas could piggyback on this.

One of the world’s fastest growing tourism markets is that of business events tourism. It is typically one of the highest yielding inbound tourism segments because of the high per-delegate spend. Worldwide, there is competition among destinations for such business and, with substantial government support for marketing activity and infrastructure development, this trend is expected to continue.

There are substantial opportunities for operators to associate themselves with business event tourism by way of accommodation, catering, tour operations, and organising professional conferences. Herein could be the future of Australian tourism, with business tourism capable of providing increased opportunities for the Australian tourism industry with strong appeal across all key markets.

Larry Dwyer is a Professor in the School of Marketing at the Australian School of Business.

– Ray Spurr

There is little doubt that the strength of the dollar is hurting the Australian tourism industry. As with other trade exposed industries, Australia’s tourism industry will face increasingly tough times in a high Australian dollar world.

The Tourism and Transport Forum has reported that the number of Australians heading overseas outstripped international visitors in the past year. This is the biggest deficit in tourism data history, with 7.4 million trips out of the country and only 5.9 million trips inbound.

A time lag between planning a trip, and arrival, means the full effect on international tourists coming to Australia still isn’t showing up in the statistics. For international tourists coming to Australia full awareness of the extent to which Down Under has become a more expensive destination is likely to filter through only gradually – and having filtered through, these perceptions will take time to dispel when eventually the dollar turns down again.

The Aussie dollar has been at a high of 110 US cents, although it has dropped a little from there. It is also at a 28 year high against Sterling. Against a broad basket of currencies the Aussie Dollar is the best-performing major currency in the past year. The strong dollar is encouraging many locals to leave the country. There is a deficit of 1.5 million people and that is the largest gap ever between the number of Aussies going overseas compared to people from overseas coming to our country.

We can expect to see a further decline in visitor numbers as the impact of the more expensive Australian dollar on our price competitiveness, relative to competing destinations, becomes more widely appreciated. In the meantime tourism incomes will suffer a further cut as those visitors who have set a limit on their holiday budget in advance of their arrival in Australia spend less on tours, wine, food, and souvenirs during their stay.

It is not just tourists from overseas who are staying away from Australia – so are home-grown tourists. Just as important as the loss of income from inbound visitors, however, is the effect of the rising dollar for those leaving the country. As Australians recognise how much further their dollars now go, more of them are choosing to take their holidays overseas. They fund that travel by reducing their spending on consumer goods within Australia or by not paying down their mortgage, and very often by switching from taking a holiday in Australia. The loss is likely to fall most heavily on longer-haul Australian destinations like Far North Queensland, the Gold Coast and the Northern Territory, which compete most directly with holidays abroad.

Ray Spurr is a senior research fellow at the Australian School of Business.