live-#2330524-v2-agenda - sports arts culture & community ......south east asia and the pacific...

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Agenda – Sports, Arts, Culture & Community Services Committee 14/10/09 - #2330524

SPORTS, ARTS, CULTURE & COMMUNITY SERVICES COMMITTEE

14 OCTOBER 2009 5

ECONOMIC DEVELOPMENT FUND – APPLICATION FROM TOURISM TROPICAL NORTH QUEENSLAND (TTNQ) FOR INTERSTATE CONSUMER MARKETING AND ADVERTISING CAMPAIGNS FOR CAIRNS AND GREAT BARRIER REEF REGION Ian Lowth/ht/: 1/59/13-01: #2201489

RECOMMENDATION: That Council agrees to support Tourism Tropical North Queensland (TTNQ) by way of a $175,000 (ex GST) cash grant from the Economic Development fund in support of interstate consumer marketing and advertising campaigns for Cairns and the Great Barrier Reef region.

INTRODUCTION: This report seeks funding to extend interstate consumer marketing and advertising campaigns for Cairns and Great Barrier Reef region. It is expected that this campaign will be of significant economic benefit to the Cairns region if it progresses as planned.

BACKGROUND: The Economic Development Fund was established by Council in 2009-10 and is open to applications at any stage throughout the course of the financial year. Applications are assessed against a range of Council approved criteria.

COMMENT: The attached application (Attachment 1) has been received from TTNQ, who would like to receive grant support from Council to extend interstate consumer marketing and advertising campaigns for Cairns and Great Barrier Reef region. Council’s contribution is 14% of the total budget for the campaigns.

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The application is made in order to respond to:

• Decline in number of interstate holiday visitors to the region • Decline in number of nights interstate holiday visitors spend in the region • Increase in the number of Australians travelling overseas • Redirection of Cairns Airport’s marketing contributions onto airline specific

relationships, managed by the Airport • A resulting gap in the support of the wholesaler and retailer distribution

networks. Specifically, the campaign will aim to:

• Increase enquiries and bookings for the region • Increase awareness of Cairns and Great Barrier Reef region • Increase Cairns’ competitiveness and positioning as the gateway to the Great

Barrier Reef • Drive demand for a holiday to Cairns and Great Barrier Reef region • Promote the accessibility of the Cairns and Great Barrier Reef region • Encourage Australians to travel domestically rather than overseas by offering

competitive alternatives • Encourage better utilisation of visitor infrastructure • Protect local jobs.

The following is an assessment of the applications stated claims relative to the Economic Development Fund criteria. Assessment: High, Medium or Low Fit with the criteria Criteria Assessment Comment Potential of the project to deliver immediate economic benefit

High Short timelines between campaign delivery and sales impacts

Estimated size of the expected boost to the local and/or regional economy through direct and indirect expenditure generated

High ~$10.2m net benefit p.a.

Potential for project outcomes to provide a lasting legacy for the economy

Medium Assist with the re-establishment of Cairns as gateway to the Great Barrier Reef

Potential for the funded activity to grow in size over time

Medium As momentum builds with the launch of these campaigns into the market place, it is expected that industry support will become a major part of the total contribution to these campaigns.

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Potential for attracting more visitors to the region (tourism marketing potential)

High Previous domestic campaigns in partnership with industry suggest strong likelihood of success in attracting more visitors

Potential to impact the diversity of the local economy

Low This proposal is about strengthening the tourism industry which is already a keystone of the local economy.

The significance of Council's support in the applicant's decision to proceed with the project

Low to Medium

Council support represents 14% of the total project budget.

Capacity to generate favourable media coverage for the community or region

High

Demonstrated feasibility in responding to an identified need or opportunity of economic benefit to the community (show links to strategic directions identified by Council and/or Advance Cairns if relevant)

High Corporate plan strategy "Strengthen Council's support for economic development including tourism and economic diversification"

Demonstrated success with previous projects of this type

High As evidenced through previous annual reports submitted to Council

Requirement for direct support from or involvement of staff from Council or Advance Cairns

N/A

Level of financial support from partners, other sources and from the organisation itself (ie the greater the leveraging of other funds, the better the application will be viewed)

High Support from partners, including industry and Tourism Qld budgeted at $1.07m

Level of potentially negative impacts on surrounds, environment, others

Low

Based on the above assessment, the application appears to be worthy of support. However, there would appear to be some discretion for Council in terms of the level of funding that it could provide, without compromising the overall campaigns significantly.

CONSIDERATIONS: Corporate and Operational Plans: One of the key actions identified in the Corporate Plan in relation to Goal 5 "Creating a Prosperous Region" is to “Strengthen Council’s support for economic development including tourism and economic diversification". The Community, Sport and Cultural Services Department has responsibility for managing these types of proposals.

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Statutory: There are no statutory considerations unique to this type of proposal. Policy: Supporting a proposal of this nature is consistent with Council’s Regional Economic Development Policy. Financial and Risk: Council is being asked to commit $175,000 ex GST. TTNQ has requested a drawdown of all funding in September 2009 if the application is approved by Council. The Economic Development Fund (EDF) currently has an unallocated balance of $603,033. There are EDF applications from TTNQ totalling $415,000 listed on the Agenda for Council’s Sports, Arts, Culture and Community Services Committee meeting of 9 September 2009. The risks to Council from this project should it proceed are considered to be low. Sustainability: The amount of the contribution is relatively small, especially when compared to the economic benefits that it will bring.

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CONSULTATION: Advance Cairns has independently reviewed the application. The results of their assessment are as follows:

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OPTIONS: That Council supports the proposal and agrees funding to the amount requested (i.e. $175,000 ex GST); or That Council supports the proposal as submitted, but with amendments as proposed by Councillors; or That Council not support the proposal.

CONCLUSION: Analysis of the key features of the proposal indicates that there will be considerable economic benefit. The application is recommended for support to the level sought.

ATTACHMENTS: Attachment 1: Application from TTNQ (#2322529). Ian Lowth General Manager Community, Sport and Cultural Services

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Attachment 1: -ECONOMIC DEVELOPMENT FUND GRANT APPLICATION 1. Please provide details of your organisation: Organisation Name: Tourism Tropical North Queensland (TTNQ) Contact Name/Title: Rob Giason (Chief Executive Officer) Postal Address: 51 Esplanade

Cairns QLD 4870

Telephone: 07 4031 7676 Fax: 07 4051 0127 Email: [email protected] Total Funds ($) Requested: Cash: In Kind Support: TOTAL:

$175,000............ $..n/a................... $175,000............

2. Please provide details of the person most able to answer questions

regarding this proposal: Contact Name: Rob Giason Position in Organisation: Chief Executive Officer Telephone: 07 4015 1200 Fax: 07 4051 0127 Email: [email protected] Mobile: n/a 3. Please provide details of your proposed project: Project Name:

Interstate consumer marketing and advertising campaigns for Cairns & Great Barrier Reef region.

Date of Proposed Project:

October 2009 to June 2010

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Project Background: Currently, the Cairns and the Great Barrier Reef region welcomes 1,440,000 domestic overnight visitors who spent 6,870,000 nights in the region with our largest source of visitors originating from Melbourne, Sydney and regional Victoria and New South Wales. As the market for the domestic visitor has become more and more competitive, our region has seen the total number of interstate holiday travellers decline by 17 percent in the past 12 months. The decline in the number of nights interstate holiday visitors spend in the region is even more pronounced – down by one third. The decline has been particularly acute from Sydney, regional NSW and also regional Victoria as the trend for taking self-drive holidays closer to home continues. The number of Australians travelling overseas is also growing. New airlines servicing the west coast of the US, inexpensive packages to destinations such as New Zealand, South East Asia and the Pacific islands are all taking potential domestic holiday visitors to Cairns & Great Barrier Reef out of the country. These interstate campaigns are necessary in order for the region to remain competitive and “front of mind” when the consumer is choosing a domestic versus international holiday experience.

Source: Travel by Australians Overseas – March 09 Quarterly report. Despite these declines, Cairns and the Great Barrier Reef is performing better than the Queensland state average – holiday visitors to the state (and indeed Australia) are down eight per cent in both instances, while our region recorded an overall 6% decline in domestic visitors for the same period. Tropical North Queensland’s better performance has been attributed to more effective marketing programs, and a much more collaborative relationship between tourism stakeholders in the region.

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However, TTNQ’s allocation of domestic marketing funding from Cairns Airport Pty Ltd (CAPL) has been refocused on direct airline-specific relationships, managed by the airport. This is an essential element in maintaining and growing air access to the region, but at the same time, TTNQ needs to continuously invest in supporting the wholesaler and retailer distribution network – who are the people who will substantially ‘sell’ the air capacity made available by the airlines through the airport’s efforts. Thus, for the region to maintain its domestic market share and capitalise on the airline programs undertaken by the airport, TTNQ must find resourcing for a series of new, exciting and innovative advertising programs.

Project Aim:

• Increase enquiries and immediate bookings for the destination and operators participating in the campaigns.

• Increase consumer awareness of Cairns & Great Barrier Reef region and convert bookings.

• Increase Cairns’ competitiveness and positioning as the gateway to the Great Barrier Reef.

• Positively influence and drive demand for a holiday to Cairns & Great Barrier Reef.

• Promote the accessibility of the TNQ region.

• Encourage Australians to travel domestically rather than overseas destination by offering competitive alternatives to convert domestic market to visit the TNQ region.

• Encourage better utilization of our billions of dollars worth of visitor infrastructure.

• Protect local jobs. Scope of Project/Project Milestones: Overview of Domestic Activity:

National: Three major Retail Campaigns: October, February and April 2010;

details as follows. Insights from Tourism Queensland’s new domestic consumer segmentation model have been utilised to better understand the consumer’s holiday needs and wants. The primary target markets for Cairns & Great Barrier Reef region have been identified as: Social Fun-seekers (Interstate) The essence of their holiday is having a fun time. While they do a lot of different activities, it is sharing the experience with friends and other holiday makers that makes the difference.

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Connectors (Intrastate) They see holidays as a chance to connect with the people they care most about. They will often compromise their own preferences in terms of activities to ensure everyone has a good time. It’s about what is real and what’s really important. Key milestones: 8. TTNQ re-establishing a critical message: Cairn & Great Barrier Reef will

now be our lead message/banner to describe the region to our domestic interstate market. Tropical North Queensland will always be a part of our overall brand, but to truly cement our ownership as the gateway to the GBR, and also to ensure there is no confusion as to who and where we are.

9. National Visitor Survey results: Key to understanding what impact these campaigns have potentially had on the domestic market place will be the quarterly release of the NVS in March 2010 for the December YTD quarter results and in June for the March YTD Quarter results. This survey will give us information on visitors, visitor nights and their origin.

10. Achievement of industry support: There exists a high level of confidence in these campaign packages being relevant and effective for tourism operators in the Cairns & Great Barrier Reef region. The wholesalers and their supporting retail agencies already have a critical mass of products from the region with which to promote and sell before, during and long after the campaigns have been put into the consumer market.

Project Activities: INFINITY/FLIGHT CENTRE RETAIL CAMPAIGN – late October 2009

• Timing: Proposed October 3 and 10 • Partners: Infinity & Flight Centre • Airline Partner: Virgin Blue • Call to action: www.flightcentre.com.au/TNQ • Industry: No participation fee required of operators. An exclusive rate/deal for

the sale period is requested from Infinity/Flight Centre. Currently Infinity Holidays has over 180 products from the Cairns & Great Barrier Reef region, meaning maximum selection for the Flight Centre agents during the campaign.

• Familiarisation activity: Ten Flight Centre travel consultants were flown to Cairns for a three day Palm Cove familiarization tour in August. Key objective being to increase awareness and knowledge of the Palm Cove experience with agents prior to the key campaign advg/sell period.

• This famil was funded by Tourism Queensland and coordinated by Tourism Tropical North Queensland.

BLUE HOLIDAYS CAMPAIGN – late February / March 2010

• Timing: February 28, March 7, 2010 • Learnings from 08-09 campaign: Strong campaign result - total revenue

BH/VB $450,785 (Incl pure air revenue) • Sydney top performing market $166,477 • Melbourne second $126,051 • Brisbane third $ 85,322

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• Destination Sales breakdown for Feb 2009 Campaign: • Port Douglas: $156,095 (41%) • Cairns: $178,122 (47%) • Palm Cove: $ 41,655 (12%)

• Call to action: www.virginblue.com.au/cairns • Industry: The opportunity here is to expand the product listings from Cairns &

Great Barrier Reef region in Blue Holidays, giving the agent the maximum amount of product variety and availability throughout and beyond the campaign. Direct training of the BH sales team at their call centre in Brisbane is being planned to occur during the campaign period.

• Creative: Cairns & Great Barrier Reef branded – incorporating BH/VB branding SUNLOVER/HARVEY WORLD TRAVEL RETAIL CAMPAIGN – April 2010

• Timing: April 11 & 18, 2010 (Easter 2/4-5/4) • Learnings from July/August campaign: Strong campaign result - total revenue

for TNQ was $1.7m with over 8,000 room nights sold. Sunlover reported an increase of 8.3% in sales for TNQ compared to the same period in 2008.

• Partners: Sunlover Holidays & Harvey World Travel (TBC) • Call to action: www.sunloverholidays.com.au (TBC) • Industry: Participation level $ vs exclusive rate/deal for sale period • Creative: Cairns & Great Barrier Reef branded – incorporating Sunlover

Holidays branding. GREEN SEASON CAMPAIGN – October – December 2009

• Optimum timing & campaign framework: To be discussed – proposed October/November

• Call to action: Direct call to action and through retail channel. • Target Markets: Primary – Active Explorer, Secondary – Social Fun Seeker • Source Markets: Primary – Sydney / Melbourne, Secondary - Brisbane Key point of difference from 2008 campaign • Consumer Offering: Promote activities & experiences appealing to Active

Explorers and Social Fun Seekers and to be promoted on a package basis involving both air and ground products.

Campaign Results Learnings from ‘08: • The invitation extended to TNQ tour operators to provide the adventure

experiences to maximise the attractiveness of both the campaign message and the product/packages being offered.

• Maintain the campaign with a ‘direct operator call to action’ so operators have direct enquiries relating to this campaign.

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4. Please provide details of the budget calculations; estimates should be based on competitively sought quotations from suppliers:

Council Funding

(ex GST)

a. Project Budget Item (categories of expenditure)

b. Cash c. In-Kind

d. Additional funding (ex GST)

e. Source of additional funding

TNQ Inflight/Flight Centre Retail Campaign

$50k $225k

Tourism Queensland

$140k Flight Centre TNQ Blue Holidays Campaign

$50k $50k Tourism Queensland

$60k Blue Holidays TNQ Sunlover/HWT Campaign


$100k Harvey World Travel $100k Industry (TTNQ

members) TNQ Green Season Campaign


$15k Industry (TTNQ members)

Industry support for famils, sales missions to support campaigns in market.

$100k Industry (TTNQ members)

Total (ex GST) $175k $1,070,000 Total funding (b+c+d) (ex GST)

$1,245,000

Proposed timing of receipt of Council cash assistance if approved: September, 2009

Proposed timing of receipt of Council in-kind assistance if approved:

N/A

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5. Please provide a statement in respect of as many of the following as is considered relevant to your project (enter "not applicable" if that is the case):

Potential of the project to deliver immediate economic benefit:

An example of the type of campaign we are proposing has been a previous cooperative domestic campaign with Sunlover Holidays, the largest wholesaler supplier of Queensland tourism product, Tourism Queensland and our industry called “Unreal Deals”.

Since this campaign was launched in market on July 19 this year, the average booking rate being experienced by Sunlover Holidays is 30-40 confirmed bookings per day, with the majority of visitors arriving in the region from mid August to mid September 2009. This campaign has already netted $1m in sales for the Cairns & Great Barrier Reef region and it still has until the 23 August to run.

This demonstrates the quick conversion from the original communication/campaign being launched in the market place, to the visitor actually arriving in the region providing a spike in economic benefit.

TTNQ industry partners (operator members) who are participating in the “Unreal Deals” campaign are experiencing an average of 60% increase in room nights for the sale period. That is for the period the campaign has been in the consumer market place.

Estimated size of the expected boost to the local and/or regional economy through direct and indirect expenditure generated

Based on the Cairns Regional Council’s contribution to the full number of interstate campaigns, we anticipate the project will deliver an incremental growth of approximately 2% of current interstate visitors in a full year.

This equates to converting an additional 9,520 domestic consumers to visit the region as a result of these proposed interstate campaigns.

Since the average interstate domestic visitor spends $153 per night in our region, and stays on average 7 days, this equates to a net benefit of $10.2m to the local economy.

Source: National Visitor Survey – March 09 Year to date.

Potential for project outcomes to provide a lasting legacy for the economy

In addition to the short term economic benefit outlines above, the series of interstate campaigns will also help to re-establish Cairns as Australia’s gateway to the Great Barrier Reef, and as a world-class, sustainable tropical destination of choice – highly competitive in diversity and value when compared to other domestic and international destinations.

The campaigns will also begin to tackle the often negative media images of the region as a holiday destination in the wet season.

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Potential for the funded activity to grow in size over time

Council funding will not need to be increased for these projects in future years but industry support will grow. Industry will also continue to support educational visits, sales roadshows and agency training programs.

Potential for attracting more visitors to the region (tourism marketing potential)

These domestic campaigns, in partnership with industry, Tourism Queensland and our other wholesaler and airline partners have proved over the years to be effective at attracting more visitors to the Cairns & Great Barrier Reef region.

Despite the general decline in domestic visitors being experiences by Queensland at 8% down to March year to date, TTNQ seeks to maintain the momentum we have achieved with the Cairns and the Great Barrier Reef performing better than the Queensland state average.

With growing competition from other domestic and international destinations, Cairns & Great Barrier Reef region must remain dedicated to the task of taking our tourism product and infrastructure assets to the market place to maintain and grow our market share.

Potential to impact the diversity of the local economy

We believe that positive promotion of the region’s lifestyle will promote relocation from elsewhere in Australia.

The significance of Council's support in the applicant's decision to proceed with the project

Council’s support for this application is vital in order for TTNQ to proceed with the campaign projects from September 2009, and so provide a year round campaign and in order to maximise the state government’s available funds.

Capacity to generate favourable media coverage for the community or region

TTNQ will work with regional and national media to maximise the value received by the associated media coverage, as these campaigns are committed to market. In 2009/10 TTNQ has an objective to generate over $100m in media value for the region through its current media strategy and visiting journalist program.

Demonstrated feasibility in responding to an identified need or opportunity of economic benefit to the community (show links to strategic directions identified by Council and/or Advance Cairns if relevant)

The key objective of these campaigns is to position the region as being proactive in terms of social-economic-environmental sustainability. Through these marketing activities, TTNQ aims to position TNQ as the leading sustainable region in Australia, maintaining our competitive edge over other regions and providing the region’s tourism industry with a strong message and brand which it can pull behind and capitalise on.

This is identified as an opportunity in the Advance Cairns business plan, whose SWOT analysis (pg 14) states, “Position region as pre-imminent tropical sustainable region”

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The large scale support for these domestic campaigns by the tourism industry (estimated at $215k) demonstrates a major commitment by local business, and their effectiveness in leveraging their individual marketing efforts by working together under the regional brand, Cairns & Great Barrier Reef.

This again supports the Advance Cairns business plan (Action plan – pg 26/strategy 1.1.2) “Support the cluster groups in key sectors of educations, tropical expertise and tourism, marine.”

Demonstrated success with previous projects of this type

In March 2009, the Blue Holidays campaign generated over $450k in revenue from packages, airline seats and online bookings. The online activity alone attracted over 33,000 potential visitors to the region, with a conversion rate from enquiry to booking of over $240 per person/enquiry. Last July and August, the Sunlover “Too Easy” campaign generated $1million in sales for the Cairns and Great Barrier Reef region.

Featured over 30 TNQ products. TNQ was the top selling region of the Whole of Queensland campaign. Campaign partners were TTNQ, TQ and Sunlover Holidays.

Requirement for direct support from or involvement of staff from Council or Advance Cairns

N/A

Level of financial support from partners, other sources and from the organisation itself (ie the greater the leveraging of other funds, the better the application will be viewed)

As demonstrated in the budget above, TTNQ can show a financial support from our partners, including industry, Tourism Queensland and our wholesalers and airline partners of $1,070,000.

Level of potentially negative impacts on surrounds, environment, others

N/A

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6. Please confirm that you meet the general eligibility criteria:

Yes No N/A • Be either a properly constituted not-for-profit organisation, or YES

A group sponsored by an incorporated association, or A for-profit group where the funded project will not return an immediate profit

• Have a majority of members of the group/organisation resident in the Cairns Regional Council area

YES

• Operate within Cairns Regional Council Boundaries YES Jjjjjjjjjjj • Have acquitted any previous Cairns Regional Council grant

satisfactorily YES

• Be free of debt with Cairns Regional Council YES ……...• Have a valid public liability certificate to cover any proposed

program/project/event YES ……...

……... 7. Please list here the support material attached to this application, including

any support letters from overarching bodies.

• TTNQ’s Interstate Campaign brief attached. • Supporting letter from Mark Chapman, General Manager for AOT Sunlover

Holidays. • Supporting letter from Claire Boulton, Destination Marketing Specialist for Blue

Holidays (Virgin Blue) 8. Please attach the organisation’s most current financial statement (as

submitted to the Office of Fair Trading) or the latest treasurer’s report covering the previous 12 months.

TTNQ’s financial statements for 2007-2008 are attached. Financials for 2008-2009 have been audited, and will be presented for Board approval mid-September 2009. TTNQ’s 2008/09 financials have been audited, and the 2008/09 financial statements will be available in mid-September, 2009.

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live-#2330524-v2-agenda - sports arts culture & community ......south east asia and the pacific...

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