The GFC. How We’ve Been Impacted - An Australian Perspective

Alec Gilbert

Australia -

So how bloody bad is it?

Recent Studies Indicate. . .

• Not technically in recession, but close to it;

• Unemployment on the rise – but only slightly;

• Downturn in tourism spending – inbound, outbound and domestic;

• Tourism demand downturn. Overseas arrivals: by 1.1%

No. Convention Visitors to Australia by Country of

Residence

05

101520253035404550

New Zealand

USA China Japan India United Kingdom

Korea Singapore Canada Thailand

Year Ended April 2008 Year Ended April 2009

-2%

-32%

-2%

-11%-6% -27% -26% -20% 18% -21%

Thousands

Convention Visitors

by 7% for year ending April;

by 28% for last 3 months

Why. . . .?

Number of Meetings Grown Slightly

Source: ICCA

International Meetings in Australia between 2007 and

2008

16%

Source: UIA

GFC Induced?

• Less meetings mean less visitors• No evidence of cancellations in

associations sector• Wash factor may contribute to

recent slump.

A Closer Look

Business Segments

• Association Business – holding its own– Associations need to meet– Associations do well in tough times – Little or no cancellations– Beware a second dip!– Numbers vary (-40% to +10%)

Projected Attendance Numbers at 2009 Events

Compared to 2008

Source: incon

• Corporate Business – the worst hit– 70% Corporate training – Cut back in travel, especially smaller end of

market, virtual conferencing

• Exhibition Business– 15-20% in terms of space take up– Consumer shows:

• as much as 30% in terms of attendance• Reduction in floor space• Cancellations

Business Segments

Client Reaction• Bid calls and announcements delayed• Later confirmation of all types of events• Payment variations requested• Cut the frills• Less add on costs, more inclusive pricing• Choice of destination more economic

than rotation driven• Recognition of increased buying power

Buying Power with Suppliers in 2009 Compared to 2008

Source: incon

Centre Responses

• Remove the financial pressure– Reduce cancellation penalties– Flexible approach to payment– Discounts– Subventions

• Assistance in maintaining numbers• Reduced yields

The ACC Experience

Adelaide•Regional capital, 1.4 million people•International Airport•Not an iconic destination but competitive and convenient•A very good Convention Centre!

Revenue by Type

GFC Impact

• 1.5% on last year’s record performance• No cancellation in association sector• Cancellation of 1 small consumer exhibition

and reduction in floor area of another• A few charity banquet/auctions cancelled

(but others have grown)• Little growth expected next year• An opportunity to rationalise and increase

efficiencies

Australia – The Lucky Country!

• Generally yields are lower but a sense of optimism prevails

• Impact greater in larger destinations due to business mix

• Second tier cities relatively unscathed• The ‘cocooning’ phenomena is

underway – regions losing out to population centres

Future Challenges

• GFC:– Postponement of ACC Extension– The impact of a second dip

• Other Factors:– Increasing competition– Subventions and their impact on

regional centres