Data4Brunch Takeaway Points — tourism, events and the visitor economy

From strong domestic travel recovery to potential direct plane services to Japan, US, India, China, South Island NZ and Southeast Asia in the future — Adelaide’s visitor economy looks promising.

On Tuesday 14 February, the Adelaide Economic Development Agency (AEDA) hosted its Data4Brunch event at The Playford Adelaide, which tapped into tourism, events and the visitor economy.

Brunch was very informative, but here are some takeaway points from speakers for you to consume later.

Brenton Cox has been Adelaide Airport’s Managing Director since 2013, and previously was a non-executive director of Sydney and Hobart Airports. Brenton is currently on Adelaide Festival Corporation, South Australian Property Council and South Australian Freight Council boards, is the Chair of Seymour College’s Audit, Risk and Compliance Committee. He also sits on the University of Adelaide’s Business School Advisory Board.

• Prior to COVID-19, Adelaide Airport welcomed 8.5 million people annually and, regularly, 30,000 people a day from around the globe.
• There are 10,000 workers at the airport, which is located only two runway lengths from the Adelaide CBD.
• In December 2022, South Australia (SA) hit 90 per cent of its COVID-19 traffic recovery thanks to international travel. International travel increased to 70 per cent of pre-COVID-19 levels last month (Jan-2023).
• SA is currently forecast to be back, or close to back, at former volume levels by the end of next year.
• Demand has never been stronger, but capacity constraints of both aircrafts and people means that demand cannot be met, creating unsustainably high prices.
• Half of South Australian travel is between Asia, a quarter Europe and a quarter NZ and US combined.
• Prior to the pandemic, only 34 per cent of people flying internationally to and from SA were visitors compared to 45 per cent elsewhere in the country.
• 31 per cent of people travel to Adelaide for leisure, a proportion far less than the rest of the country. Visiting friends and relatives contributes to a higher proportion of visitors.
• The biggest rebound still to occur is from China and Hong Kong. SA needs those inbound markets to recover to get China Southern and Cathay Pacific back into the market.
• Growth in education is crucial for travel and vibrancy in its own right, however, it also means growing awareness and attracting follow on tourism visitation.
• Subject to some leisure heavy destination like Bali and Fiji, airlines need to see balanced demand, both inbound and outbound.
• The biggest unserved opportunities for a direct service are Japan, US, India, China, South Island NZ and Southeast Asia.
• The Adelaide Airport team are working on demand generation alongside the SATC, StudyAdelaide, Department of Trade & Investment and Austrade.

Questions submitted prior to the event, answered by Brenton below.

1. What is the view to increasing capacity to and from Adelaide domestically, particularly with advent of low-cost entrants like Bonza in the Australian aviation market?

• It is exciting to share that our domestic capacity has recovered to 90 per cent against pre-COVID-19 levels for the last quarter (Oct to Dec), up 4 per cent from the previous quarter.
• For the month of January 2023, that increased further to 93 per cent-against pre-COVID-19 levels. Capacity growth is slow, due to resource constraints persisting within global and Australian aviation supply chains and increased absenteeism requiring increased resilience compared to pre-COVID-19.
• We will continue to work with our airlines partners to grow domestic capacity.

• This includes Bonza for when they have the fleet opportunities for growth in our market (although there are no current plans).

2. What is the occupancy of flights coming into Adelaide, and will there be an increase in capacity which may bring down prices?

• We are experiencing strong seat load factors; outperforming pre-COVID-19 levels.
• It is also encouraging to hear from our airline partners that forward bookings are strong. The demand trajectory is still showing signs of strong pent-up demand and never been higher.
• Capacity cannot yet meet this demand and prices reflect this in addition to higher supply costs – especially fuel and labour efficiency.

• This mismatch of demand and supply should unwind over the next 6 to 18 months.

3. When do you forecast international passenger numbers, and international airline schedules, to exceed pre-pandemic levels?

• We are currently at ~70 per cent international network and passenger recovery.
• We forecast capacity and frequencies to return to pre-COVID-19 levels by 2024/25, but are working to bring this forward where at all possible.

• We are excited to see Singapore Airlines, Malaysia Airlines, Fiji Airways, Air New Zealand, and Jetstar operating at pre-COVID-19 frequencies.
• We also see Qatar Airways increasing aircraft movements in Adelaide; from daily pre-COVID- 19 to 3 times daily now — direct to Doha, Auckland and one to Doha via Melbourne).
• Adelaide Airport is also excited to welcome the restart of international services from Virgin Australia, introducing up to daily flights to Bali recently (Dec-22).
• We want China Southern, Cathay Pacific and Emirates to restart their services in Adelaide and we will continue to work with them for the restart.
• We are also working towards in establishing new dots in our network.

Adam Stanford is Strategy and Insights Senior Manager at the South Australian Tourism Commission (SATC). He heads up the strategic planning, research and policy functions, ensuring that the actions of the Commission are focused on achieving the ambitious potential of $12.8bn in visitor expenditure in South Australia by 2030. 

• While overall business confidence is easing, SA tourism businesses are feeling more positive as tourism recovery continues.
• Total SA expenditure lifting strongly to $7.3 billion in year to September 2022, well ahead of projections.
• Very strong demand in recent months with April to September 2022 all close to or above pre-Covid levels, and remaining ahead of projections since March of this year.
• According to SATC, tourism outlook shows:
• Australian economy is performing well, in spite of challenges
  
• Demand is recovering from COVID-19 and remained strong to September 2022;
• Recent increases in the cost of living and rapidly increasing interest rates have had a sharp negative impact on consumer confidence.
  
• Intrastate demand has been steady in recent months and international demand has finally starting to return;
• Business confidence has held up better, though into negative territory in November.
• Savings rate was very high through the pandemic, particularly in lockdowns.
• Over half a trillion has been saved since the pandemic began, which is three times higher than normal.
• Unspent savings have eased from $175 billion June quarter to $127 billion as of September 2022.
• Tourism expenditure in SA reached a $929 million record high in October 2022.
• Total South Australia expenditure is lifting strongly to $7.3 billion in the year to September 2022 – well ahead of SATC’s predictions of $6.4 billion.
• Occupancy in the regions has been strong through the pandemic, and some regions have experienced record occupancy. However, it is Adelaide that took the biggest hit during the pandemic, with virtually no international and very limited interstate visitation.
• AFL Gather Round is now captured in our 3 months Adelaide forward bookings – and it’s already exceptionally strong. The Saturday night has already sold 71% of 10,000 hotel rooms in Greater Adelaide, more than double what you would normally expect this far out. Bookings for LIV Golf are also strong. Forward bookings for these dates are just as strong as the March Long Weekend / WOMAD in mid-March, despite being more than a month ahead. This is the strongest forward bookings we have seen since we started receiving forward booking data in 2020.
• General positivity towards SA remains, though the proportion ‘booked in’ has eased somewhat. Those intending SA have grown strongly over the series.

Jordon Tomopoulos monitors the city’s economy and provides insight into an array of focus areas, supporting the evaluation of initiatives to inform strategic decisions at AEDA. Using his tertiary qualifications in economics and background in market research, Jordon uses both quantitative and qualitative research to analyse data, and provide meaning to economic trends.

• Cruise ships returned in November and December 2022 which physically marked the return of international and interstate guests to SA and thousands making day trips to the city.
• International passengers grew steadily throughout 2022, with record numbers attending our Visitor Information Centre in December.
• January’s international passenger numbers are already higher than at any point throughout 2022. The Adelaide International tennis and Santos Tour Down Under were both great beneficiaries and contributors to this.
• Interstate travel was steady during 2022, peaking in school holidays. The annual portion of interstate spend was higher in 2022 than it was in pre-COVID years, and this comes down to yield. The average value of visitor’s transactions is increasing. Most noticeably in categories such as dining, entertainment and specialist food retailing.

• Month-by-month data shows that spending activity is lower from Sunday to Thursday and higher on Friday and Saturday.
• Major festivals and events such as business conferences have an important role in stimulating activity during traditional quieter times.
• 2023 Business Events Adelaide forecast a 35% growth in delegates to hit a record 50,000 attendees to approximately 90 planned conferences, exhibitions and meetings.
• The city has experienced an 18% increase in the number of accommodation rooms.
• Over the past two years, Adelaide had the second highest occupancy rates, in Australia and New Zealand, recording the highest monthly vacancy rate during May 2022.

• Annual expenditure in the City of Adelaide for 2023 totalled $4.2B with December featuring as a standout month, rising 21% on December 2021 and representing a growth higher rate than annual inflation and larger than experienced in previous years.

• The City of Adelaide plays an important role as a key visitor economy destination, with:
  • All of the Festival City Adelaide events having a presence in the City of Adelaide;
  • 95% consumer expenditure comes from visitors (non-residents);
  • 1 in 7 of Greater Adelaide’s hotel and accommodation rooms are located in Adelaide and North Adelaide;
  • Half of TripAdvisor’s Top 10 attractions for South Australia are located in the city;
  • 12% of the City of Adelaide’s workforce are connected to the tourism industry;
  • The search term “things to do in Adelaide” is five times as popular as “things to do in South Australia”