From commissions to Koreans: ABiC debates continue

After Sydney’s successful Adventure and Backpacker Industry Conference drew to a close last Thursday, operators took the rare chance of all being in town together to arrange an extra informal meeting to further discuss some of the burning issues to have arisen from the conference.  

Arranged by Mission Beach hostel owner Boyd Scott, and hosted by Side Bar, Friday’s session saw up to 30 operators, mainly accommodation providers, turn up to discuss a range of issues, which included commissions, getting more Aussies working in tourism, the threat of mining, capitalising on Asian markets and the potential for joint marketing with New Zealand.

The elephant in the room was undoubtedly the divisive issue of the high commissions charged by some agents. Several operators made the point that the reality of having to pay, in some cases, commissions of up to 40% left them unable to spend money on marketing or product investment, which in turn forces them to charge more in order to make a profit, further alienating travellers looking for a cost-effective trip.

A big trend in the discussion, following a theme from ABiC the previous day, was how well New Zealand markets its product, even while battling natural disasters. The room was near unanimous in wanting Australia and New Zealand to work more closely in marketing themselves to the world, although few could see the relevant tourism bodies agreeing.

One potential solution presented was to encourage the 10 largest tourism brands in each country to join forces, and their considerable marketing budgets, to launch a new Australasian campaign and get the ball rolling, hopefully encouraging the tourism bodies to follow suit. Top Deck, Raging Thunder and Oz Experience were some of the companies mentioned which attendees hoped might take up the idea.

Linked to this discussion was the idea of introducing a New Zealand-style Qual Mark accreditation. However, following negative comments from the Kiwis in attendance, much of the group felt this move would become expensive and that, ultimately, it would simply lead to more bureaucratic involvement.

Also debated was the issue of the lack of Australians being involved in the industry, leading to many backpackers lamenting how few real Aussies they meet while travelling around. Likewise, the lack of Aboriginal faces was also considered an issue, with New Zealand’s success, in regards to Maori culture, again being seen as a shining light. Suggested solutions included trying to encourage more Australian students and indigenous Australians to take work in hostels, as well as encouraging more tour desks to place a greater emphasis on selling Aboriginal tourism.

There was also a large debate over how Australia as a product should be marketed towards Asia and how hostels and tours can accustom themselves to make Asian visitors more welcome.

The more controversial subject of Korean workers doing seasonal work in regional areas was also discussed, with some voicing concern that many Korean backpackers pay little money back into the industry, other than accommodation, due to sending the majority of their earnings home.

Regarding the threat from the mining industry, questions were asked as to how hostels can better target miners and their huge incomes, to combat the current practices of mining companies currently filling up caravan parks, rather than hostels, and the miners themselves going on holiday abroad, rather than in Australia.

The informal brainstorming session is likely to get a second instalment before the expo in Melbourne next February.

2 thoughts on “From commissions to Koreans: ABiC debates continue

  • November 2, 2011 at 2:18 pm

    Some very interesting topics were covered in these discussions and I wish I was there to partake or at least be a fly on the wall. It seems many of the topics involved little old NZ and how we do what we do well. I must say I am surprised at the level of commissions paid “over the ditch” and as much as we would love to make up to 40% this is just not possible, how do the small operators survive paying these commissions, this is the industry eating itself?

    Promoting “Down Under” as a united force, yes please let’s do it. Packages that include both our countries seems the most simple idea from a marketing perspective does it not. I cannot understand why this has not already been done, combine our talents and budgets and have a mass campaign. Nz and Australia offer two different experiences in two beautiful countries, last week I had breakfast in Christchurch and then second breakfast in Sydney a few hours later. It says that few can see relevant tourism bodies agreeing, are the people taking part in these discussions the only relevant people who need to get on board and start to discuss how this could work?.

  • November 5, 2011 at 2:17 pm

    The brief notes on several subjects reported above can`t (and don`t ) convey the earnest nature of the discussion and the many other issues and side-issues that were covered in the solid 4 hours of discourse that Friday in Sidebar.

    As there were no tour agents present, conversations on the ‘elephant in the room’ (agent commissions) were particularly revealing to all participants, especially the boys from TNT, Tom and Kevin. The major agreement to pursue that came out of this on this subject was for ALL operators experiencing low profitability due to the ever-higher rate of commission to place more emphasis on direct sales and social media/word of mouth on their product: for instance, if a hostel was presently paying 20% in commission to agents on 30% of its bookings for a year, was it not worth cutting the agent`s rate to 10% and spending some of the equivalent remaining to develop better direct marketing systems instead ??

    An Anon who attended the session revealed how some in the industry had said “No” to what have been called “offers too good to refuse” (upward of 30% commission or the agent wouldn`t sell the product) in the past and, despite lacking agent support, flourished anyway. This was one example raised that had worked in some cases.

    As Stumpy asked above, is higher commission a case of the industry eating itself?? Hell YEAH!!!! But, remember the old Russian proverb: “When bear has teeth in bottom, best not impersonate piece of meat.”

    Another more positive discussion, as noted by Stumpy, was the creation of a Southern Hemisphere marketing partnership: we could start with Australian & New Zealand`s (unfortunately, Stumpy, those present at the session, from both sides of the ditch, were in agreement that both our countries respective tourism bodies would not be keen to market cooperatively) largest tourism brands, get some runs on the board and then possibly broaden the partnership to include Fiji, Vanuatu and emerging destinations such as Samoa, Bouganville/Soloman Islands/New Guinea, Cook Islands etc. A suggested name was “The Other Side”, as in ‘Come and see The Other Side of the world” and use a highlights clip that would knock the sox off any potential international traveller. We were all agreed this plan would be a winner.

    The mining industry is both a threat and an opportunity, it was decided: mining companies’ acquisition of entire accommodation businesses’ available accommodation for unspecified amounts of time will definitely affect tourism in the Bowen Basin/Mackay area (and possiblly elsewhere), as the industry in those areas is expending its workforce by 30,000 in the next 18 months! However, lobbying of the mining industry to pressure the Government to look after the tourism sector (so that its miners have somewhere nice to stay and something fun to do on their weeks off) and also raise the WHV age cutoff to 35 (at least) to allow them to seek qualified skilled workers from O/S and employ them in this growing sector. Work to be done on this, fo sho!

    Better marketing to our demographic by the Federal and State tourism bodies, targeted marketing of emerging WHV markets (Brazil, Argentina, China, India, Thailand?) and engaging more effectively in our traditional source markets (Eire, UK, Scandinavia, Europe, Canada and the USA) was seen again as an opportunity to improve our inbound numbers. Work, especially, was seen as vital, due to the depressed nature of world economies and the high Aussie dollar.

    Of course, in order for this to occur, we would require some flexible thinking by those tourism bodies asking advice on this market not from recently graduated diploma of Travel & Tourism holders, but from those who are in direct contact with modern ‘youth adventure travellers’ (we once more found ourselves discussing whether the term ‘backpacker’ should be replaced, especially when dealing with Government and the higher echelons of tourism bodies, due to the residual and totally incorrect view this term evokes in the above mentioned minds…) We agreed that consultation in the past was a one way street: we are asked for our opinion as a matter of courtesy but a tin ear is turned to what we say……

    There were other topics but this post has run long enough. I have a mailing list of those in attendance and will keep in touch with the representatives of various sectors to achieve to follow up on the outcomes we would like to see result from our 4 hours of free-flowing and incisive tourism innovation and experience.

    Much was achieved and so much more can be, if we are allowed..So, TA , TQ, TNSW, TV, etc, come talk to US, here we are!!


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