Annual Report 2005 | 2006
Transcription
Annual Report 2005 | 2006
Tourism Australia Annual Report 2005 | 2006 Annual Report 2005 | 2006 29 September 2006 The Hon Fran Bailey MP Minister for Small Business and Tourism Parliament House Canberra ACT 2600 Dear Minister I have pleasure in presenting the second annual report of Tourism Australia for the period 1 July 2005 to 30 June 2006 in accordance with clause 39 of the Tourism Australia Act 1994 and Section 9 of the Commonwealth Authorities and Companies Act 1997 and in accordance with the Finance Minister’s Orders. Yours sincerely The Hon Tim Fischer AC Chairman Tourism Australia Tourism Australia Annual Report 2005|2006 Contents Contact officer For more information about this report please contact: General Manager Corporate Affairs Tourism Australia GPO Box 2721 Sydney NSW 1006 Telephone 61 2 9360 1111 This report can be accessed online at www.tourism.australia.com Chairman’s report 4 Japan 62 Managing Director’s report 6 Gulf Countries 64 Principles 8 New Zealand 65 Highlights 2005-2006 9 United Kingdom and Europe A Uniquely Australian Invitation10 United Kingdom and Ireland 66 Objectives and outcomes16 France 67 Corporate governance 20 Germany 68 Organisational structure 22 Italy 70 Ecologically sustainable development and environmental performance Switzerland and Austria 71 23 Nordic Countries 72 Netherlands 72 Additional information sources 2005-2006 Portfolio Budget Statements 2005-2006 Portfolio Additional Estimates Statements Report of Operations Tourism Australia Annual Operating Plan 2005/06 Tourism Australia Corporate Plan 2005/06— 2007/08 Corporate Services 26 Strategy and Research 28 Financial Report Industry and Organisational Development 32 Independent Audit Report 78 Marketing 40 Statement by directors 80 International Operations 46 Income Statement 81 Balance Sheet 82 Statement of Cash Flows 83 Statement of Changes in Equity 84 Schedule of Commitments 85 Schedule of Contingencies 86 Notes to and forming part of the Financial Statements 87 Freedom of Information Tourism Australia is a prescribed authority under the Freedom of Information Act 1982. One freedom of information request was received by Tourism Australia during the review period. Tourism Australia’s contact officer for freedom of information requests is Mark Davis, Risk and Administration Manager. © Copyright Commonwealth of Australia This work is copyright. Apart from any use permitted under the Copyright Act 1968, no part may be reproduced without prior written permission from the Commonwealth. Requests and enquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Attorney General’s Department, Robert Garran offices, National Circuit, Barton ACT 2600 or posted at http://www.ag.gov.au/cca International markets The Americas Canada 52 United States of America 52 Asia China 54 Hong Kong 55 India 56 Korea 57 Malaysia 58 Singapore 59 Taiwan 60 Thailand 61 Other international markets 74 Glossary112 Index113 Tourism Australia overseas offices114 Tourism Australia Annual Report 2005|2006 Chairman’s report This has been an extraordinarily interesting and exciting year for Tourism Australia, especially with the successful launch of the new international marketing campaign A Uniquely Australian Invitation, but with many other decisions and developments as well. The launch of the marketing campaign was one of our biggest successes. There has been a huge increase of more than 70 per cent in hits to the Tourism Australia website and more than 800,000 people from about 200 countries have played the online advertisement. This was greatly helped by the Prime Minister of Great Britain making strong references to the campaign. A jetlagged Tony Blair remarked: ‘And so I am thinking, so where the bloody hell am I?’ at Parliament House, Canberra! We had 5.5 million international tourists inbound to Australia last year, a number we are aiming to increase with more high yielding travellers. We absolutely want to achieve an increased tourism spend and tourism spread around Australia as key objectives. China is one of our fastest growing markets and we have made great progress with a further Memorandum of Understanding between Australia and China, signed by the Minister for Small Business and Tourism, the Hon Fran Bailey, and Chairman of the China National Tourism Administration, Mr Shao Qiwei. China is in many ways like the Japanese market was in that initial phase of upswing some 15 to 20 years ago but moving rapidly, moving upmarket with more independent travellers, moving with larger and larger numbers inbound. The United Kingdom remains one of our core markets, because when the British tourists come they spend more than most. Minister Bailey has opened a new office of Tourism Australia in Toronto, Canada, helping our Canadian effort with the growth of the snowbird and are sending events to Australia. has joined us as Executive Chair of market. These are Canadians, often retirees, who choose to avoid their winter in December, January and February and who often stay here for four to eight weeks. They spend big and they travel around Australia — so they really are the perfect target. Internationally, we are not targeting one group to the exclusion of others, but we are very conscious that the target group of Experience Seekers will deliver greater spend and dispersal. A breakthrough is the rise in business events tourism from India to Australia. Large Indian companies have held their key client conferences and conventions on the Gold Coast and elsewhere. Increasingly the Gulf Countries are showing greater interest The acid test is the survey by Lonely Planet in the second half of the financial year, after the campaign launch, which showed that Australia had jumped past Thailand and the United States as the number one destination that British independent travellers and backpackers want to visit. It is a really great indication that we are winning conversion from the campaign in exactly the target areas we want. The Australian Experiences, commonly known as niche tourism, which picks up on areas such as Indigenous tourism, rail heritage tourism, wine and food tourism, nature based tourism and adventure tourism, are also going very well. Former Senator Aden Ridgeway Indigenous Tourism Australia and has helped drive Indigenous tourism efforts in conjunction with the board and senior management. I much appreciate the strong support from the Board and its commitment, which has involved members attending some extra meetings, often at short notice, over the year. I particularly praise the staff at all levels in their work throughout the year. Yes, there have been some changes, but this is an industry of change and Tourism Australia has been right up front with many breakthroughs. Tim Fischer Chairman Tourism Australia Annual Report 2005|2006 Managing Director’s report Tourism Australia is the custodian of a proud legacy of promoting Australia as an authentic, experience-rich destination. It also holds an important trust with the 550,000 Australians who work in this major industry and the thousands of businesses that employ them. With great support from the Australian Government and the tourism industry, Tourism Australia has taken some impressive steps forward in 2005/06: >We have developed some innovative new global partnerships with some of the world’s most influential travel and media brands, such as National Geographic and the Discovery network, to name a few. At the same time we strengthened our relationship with existing partners, especially Qantas and American Express. All of these are strongly connected to our global target audience — the Experience Seeker. >Our global strategy is in place and enjoys strong support >Action plans are being implemented to secure our major base markets such as the United Kingdom, Japan, New Zealand and the United States, and we are beginning to realise major growth opportunities in China, Korea and India. These efforts are also focussed on driving growth from our dispersal markets of Europe, in particular Germany, ensuring the benefits of tourism go well beyond the major gateways. — with a focus on yield and dispersal that positions Australia as a destination that competes on the quality of our experience, not the price of the ticket. >Our new A Uniquely Australian Invitation global campaign is up and running and getting a great response. The television commercial ‘So where the bloody hell are you?’ was judged one of the 30 best Australian advertisements of the last 50 years. Nearly 200 million people in 11 key markets around the world have now viewed the campaign through television, print, cinema or online. There have been more than 800,000 downloads from the www.wherethebloodyhellareyou.com website, from more than 200 countries. >We have also taken up the challenge of getting Australians to consider taking more holidays in their own country through our new No Leave, No Life pilot program and national media partnerships. We are putting some great content about Australian holiday destinations in front of Australian consumers. Australia still faces enormous competition from other destinations around the world. The key for Tourism Australia will be to consistently and sustainably implement all of these plans, strategies and initiatives to make the best use of the resources provided to us by the Australian Government and the tourism industry. To this end Tourism Australia has recently made some changes to its global operations structure, to help better align its operations with the strategy. This has been a landmark year for Tourism Australia. Our achievements have been earned through the leadership, quality, experience and focus of Tourism Australia’s people, whom I sincerely thank for their outstanding efforts. They have worked with and had the strong support of the Australian tourism industry and the Australian Government. Tourism Australia’s continued success will depend critically on all of these elements remaining in place. Scott Morrison Managing Director, 2005/06 Tourism Australia Annual Report 2005|2006 Principles Our vision Tourism Australia is a leverage marketing organisation that has adopted the vision to become and remain the best national tourism organisation (NTO) on the planet. Our role To stimulate sustainable international and domestic demand for Australian tourism experiences and to influence the actions of the tourism and travel marketing matrix, by: >championing a clear destination marketing strategy; >articulating and promoting a compelling tourism destination brand; >facilitating sales by engaging and supporting the distribution network; >identifying and supporting the development of unique Australian tourism experiences; >gathering and communicating reliable market intelligence and insights for improved decision making; and >working with partners who can extend Tourism Australia’s influence. Our goal With the inception of Tourism Australia in July 2004, a key focus of tourism marketing is to create sustainable economic benefit, through bolstering a vibrant tourism industry that in turn, will drive jobs growth for Australians. To achieve this goal, Tourism Australia has set core industry and organisational objectives. These are as follows: Industry Objectives >To increase total visitor spending (yield from holiday/VFR visitors); and >To maintain dispersal of that growing spend in regional areas. Organisational Objective >To increase the demand pool – increase international leisure travellers’ intention to visit Australia in the next 12 months. Highlights 2005-2006 Increasing Yield In line with Tourism Australia’s objective to increase the yield generated by international visitors to Australia, there was strong growth in length of stay and spend for the year. In 2005/06 the Total Inbound Economic Value (TIEV) to the Australian economy grew by three per cent to $18.8 billion dollars. There was also a 12 per cent increase in the number of nights international visitors stayed in Australia and a 10 per cent growth in spend, compared to the previous year. New Global Campaign Tourism Australia launched a new global destination campaign, which it developed with global agency partners M&C Saatchi and Carat. The Uniquely Australian Invitation campaign was developed to move consumers from having a high level of awareness of Australia to an actual intention to visit the destination. The campaign was developed to target the ideal visitor for Australia called the Experience Seeker. No Leave, No Life A major research study into the reasons for and the extent of annual leave accrual by Australian employees was completed. The research found that employees across the country had stockpiled 70 million days of accrued leave worth about $11 billion. The findings helped to underpin the development of the No Leave, No Life program in partnership with the Australian Institute of Human Resources to tackle the issue. A pilot program encouraging staff to take their accrued leave was rolled out in 13 companies. Business and Major Events A major events promotional strategy was implemented to gain positive exposure for Australian business and leisure tourism internationally and domestically during the Commonwealth Games, FIFA World Cup Soccer and selected events like rugby test matches. An inaugural mission to China was also organised to assess its interest in Australia as a destination for business events and ability to deliver future business for the sector. The mission included business round table discussions and presentations with travel agents in Beijing and presentations to corporate decision markers and trade in Shanghai. Global Programs Tourism Australia formed the Global Programs unit in July 2005 to harness the opportunities generated by the proliferation of global multi-channel media networks. As part of the initiative a three year global partnership was formalised with National Geographic and Discovery, which will see the two organisations work cooperatively with Tourism Australia to substantially enhance and portray the brand proposition to a worldwide audience of around 150 million people in 30 countries. Queen’s Baton Relay As the official tourism partner of the Queen’s Baton Relay, Tourism Australia implemented a comprehensive program of activities to raise the profile of an Australian holiday with domestic consumers. A domestic public relations program was developed involving the appointment of nine Young Tourism Ambassadors to promote Australian holiday experiences during their sectors of the Queen’s Baton Relay in the lead up to the Melbourne 2006 Commonwealth Games. The program achieved media coverage valued at $500,000 through press, radio and television reports. Indigenous Tourism Australia Indigenous Tourism Australia (ITA) was formed in August 2005 with former senator Aden Ridgeway as Executive Chair. ITA commenced work on a National Footprints Strategy to promote Indigenous tourism products. Domestic Tourism Content Strategy The first of a number of media partnerships were established as part of Tourism Australia’s domestic content strategy. This strategy aims to harness industry support to present a compelling Australian tourism proposition. The first initiative was Explore magazine in partnership with Fairfax. Tourism Australia Annual Report 2005|2006 11 A Uniquely Australian Invitation A New Global Campaign for a New Era Tourism Australia, and its predecessor the Australian Tourist Commission, have been vigorously marketing Australia internationally as a tourist destination for almost 40 years. During this time Australia has established a reputation as an innovator in tourism marketing and has built one of the most successful and desirable destination brands in the world. The new destination campaign developed for 2006 is the next stage in the evolution of Brand Australia, building on the success of previous brand campaigns which focused on reinvigorating awareness of Australia and converting this awareness into actual travel bookings. To achieve this Australia needs to cut through the clutter of sameness in tourism destination marketing, by presenting a compelling single brand proposition about Australia to consumers in all markets. Campaign Development Over the years Tourism Australia has undertaken significant consumer research to supplement its acquired knowledge of markets and of consumer behaviour. The organisation regularly undertakes both quantitative and qualitative research, the results of which shape Tourism Australia’s marketing programs. This campaign was developed on solid consumer insight and moulded with proven brand modelling techniques. The development process included consumer testing of concepts and elements including the final executions. The result of this research provided confirmation that the campaign would not only be acceptable to the target consumer but would also deliver cut through and a platform for a strong supplemental public relations program. This research also helped to identify the ‘ideal visitor’ for Australia – a group of consumers globally who desire what Australia has to offer, based on current and prospective competitive strengths as a destination and who can satisfy the objectives of spend, growth and dispersal. These target consumers are called Experience Seekers. The Experience Seeker is not necessarily defined by their age or which country they come from but how they think and the experiences they are seeking from a holiday. By targeting the Experience Seeker, Australia can take a single, clear and consistent message to the world thereby maximising the return on its marketing investment. Central to the strategy is the objective of increasing potential visitors’ intention to travel to Australia, as well as creating a strong desire to tour widely in the country and to spend more on Australian tourism products. In developing and executing the global destination campaign the key ingredients were: >Brand positioning: From the leisure tourism perspective the brand position was defined as ‘Australia invites you to get involved’. >Message strategy: This positioning was amplified through a message tone which emphasised the Australian character and provided a rich tapestry for the execution of all communication elements. The strategy was structured to achieve cut through and provide a thirst for knowledge and engagement. >Structure: This program commenced with the launch of the advertising campaign featuring the tagline ‘So where the bloody hell are you?’ and was supported with a package of digital programs. This activity was supported by a public relations campaign, harnessing the topical nature of the advertisements and inviting international travellers to experience Australia for themselves. Campaign Creative The aim of the creative is to link potential visitors with the Australian experience, and motivate a reappraisal of Australia. This requires a conversation to be had with the consumer which starts with an invitation, generates a discussion, then results in an enquiry and booking, and concludes with an enjoyable holiday. The proposition for the campaign, ‘Australia invites you to get involved’ is delivered through a uniquely Australian invitation with the ‘So where the bloody hell are you?’ tagline, which captures the essence of Australia’s famous warmth and hospitality and provides a personal invitation to share in the uniquely open Australian experience, defined by the personality, lifestyle and environment of Australia. The creative is uniquely Australian and showcases the different and involving experiences on offer. This is achieved by building on the brand’s strength, the inextricable link between the Australian people, lifestyle and environment. The invitation is uniquely Australian in tone and character. The creative approach highlights amazing experiences and invites the consumer to get involved through use of an irreverent and charming tone. It is friendly and genuinely warm-hearted. The campaign includes television and print advertising, cooperative and retail activity, digital advertising, outdoor advertising, point of sale, and direct marketing. Creative developed for the global trade launch events, which commenced rollout in February 2006 included: >A television commercial — in 30 and 60 second versions — featuring scenes of a variety of Australian tourism experiences drawn from a broad palette. The scenes show both iconic as well as new motivating experiences. >A range of print and magazine executions showcasing the diversity of experiences across Australia in a range of geographical and environmental settings. >Cooperative and retail executions based on the same theme to support the brand-led activity. While there are standard features of all executions in the campaign, there are subtle variations for each market, through the use of colloquial language translations and the inclusion of different sets of experiences based on research. Specific executions and combinations of executions have been tailored for each market, within the framework of the campaign creative concept. This tailoring has been designed from the outset, to enable Tourism Australia to create a campaign that is both globally consistent and locally relevant. Timeline of Global Rollout Launch to trade Sydney 23 February 2006 New Zealand 27 February 2006 Major activity phase Mediums March to end June 2006 TV, Cinema, Online, Print United States of America 7 March 2006 Mid March to mid May 2006 TV, Online, Print Germany 10 March 2006 April to mid June 2006 TV, Cinema, Online United Kingdom 13 March 2006 Mid March to end May 2006 TV, Cinema, Online Hong Kong 20 March 2006 May to mid June 2006 TV, Online China 20 March 2006 June 2006 TV, Online Japan 27 March 2006 Mid April to end June 2006 TV, Cinema, Online Korea 29 March 2006 June 2006 TV, Online Tourism Australia Annual Report 2005|2006 17 Objectives and outcomes Objectives Key Performance Indicators Outcomes Influence international visitors from key markets and target segments to travel to and within Australia. Increase interest in an Australian holiday – evidenced by increased number of web sessions on australia.com (and other web portals where available). >During the year, australia.com and the destination campaign micro-site were visited by over 8.3 million users who viewed some 55 million pages of content and imagery. >Following the launch of the Uniquely Australian Invitation campaign there was a 30 per cent increase in visits to australia.com around the world and a 71 per cent increase to Tourism Australia websites including the www.wherethebloodyhellareyou.com micro-site. Consumers preferring and intending to visit Australia by segment and in comparison to competitors . >Developed a global destination campaign to target the ideal visitor for Australia called the Experience Seeker. Launched the global campaign, A Uniquely Australian Invitation, in key international markets to move these consumers from a having a high level of awareness of Australia to an actual intention to visit the destination. Public relations message, tone and image hits target audience. >Global program partners, Discovery and National Geographic worked cooperatively with Tourism Australia to substantially enhance and portray the brand proposition to a worldwide audience of around 150 million people in 30 countries. >A total of 1,008 international consumer and trade print, online and broadcast journalists and media crew were hosted through the Visiting Journalists Program generating articles, programs and online material with a publicity value at around $260 million and an audience of around 4.7 billion people globally. Performance against individual campaign objectives. >Tourism Australia conducted the country’s largest ever study on annual leave accrual, leading the way in unlocking Australia’s 70 million days of stockpiled leave. >Following the research on annual leave accrual, the No Leave, No Life campaign was launched to encourage Australians to take their leave, giving a boost to the domestic travel industry. Cooperative funding provided by marketing partners. >Established the first of its national media partnerships as part of its strategy to harness industry support to raise the value of Australian holidays with domestic consumers. >The first media partnership initiative, the creation of Explore magazine with Fairfax, resulted in a six per cent circulation increase for the host newspaper and 100 per cent take up of advertising opportunities by the tourism industry. Continued production and distribution of research reports, providing insights to assist more effective decision-making. >In conjunction with the Destination Australia Marketing Alliance, a comprehensive international brand health and communications tracking program was completed for all Tourism Australia’s Tier 1 and Tier 2 markets. >A major, ground-up segmentation study of the Japan market was conducted, which identified and profiled high value segments for Tourism Australia and the industry. Continued delivery of products and services that are valued by stakeholders (meeting stakeholder expectations) and improvement of relationships with key industry stakeholders. >In a survey of domestic and international key stakeholders, Tourism Australia’s activities, programs and staff were rated as ‘highly valued’ by stakeholders. >The first ever series of regional forums were held across Australia, to provide stakeholders with information on Tourism Australia’s programs and to collect feedback on how the organisation can better assist the industry. Influence a larger percentage of Australians to travel within Australia. Foster a more sustainable tourism industry in Australia. Tourism Australia Annual Report 2005|2006 19 Objectives Key Performance Indicators Outcomes Increase the economic benefits of domestic and international tourism to Australia. Continued growth of domestic leisure and international visitor spend. >The Tourism Inbound Economic Value of international visitors to Australia in 2005/06 was $18.8 billion, an increase of 3 per cent compared to the previous year. >Travel spending by the domestic overnight leisure market grew to $31 billion in 2005/06, an increase of 5 per cent. Maintenance of leisure traveller dispersal/regional visitor spend. >In 2005/06 there was a 40 per cent dispersal of visitor nights spent outside Sydney, Melbourne, Brisbane and Perth. Participation in Tourism Australia trade events and user evaluation reports. >The Australian Tourism Exchange (ATE) 2006 attracted around 2,000 Australian delegates from 650 companies to meet with representatives of some 600 key overseas buyer companies from 40 countries. >More than 25 international trade shows, travel markets and missions were organised by Tourism Australia in 15 countries in Asia, Europe and North America. >Tourism Australia hosted three familiarisations for corporate buyers from the United Kingdom, United States of America and Asia. >Four significant international events were organised by Team Australia, the marketing alliance between the Association of Australian Convention Bureaux (AACB) and Tourism Australia. Further enhancement of the Aussie Specialist Program (numbers, participating in training and programs) and expansion of distribution partners. >The Aussie Specialist Program continued to be highly successful in the development of Australian specialist travel agents around the world. >Continued to grow the Aussie Specialist Program, with more than 10,000 agents in Asia, New Zealand, the United States and Europe qualified by the end of June 2006. Close to 2,500 of these fully qualified agents are based in the United Kingdom. Inclusion of new experiences in destination marketing activities and broadening of consumer awareness of the experiences. >Indigenous Tourism Australia (ITA) was established and the development of a National Footprints Strategy was initiated, with the aim of promoting more Indigenous tourism products. >Researched the best Australian experiences and developed copy and images to describe these experiences including beaches, wilderness areas and nature-based activity, the Outback, Aboriginal Australia, distinctive capital cities and Australian hospitality inspired by fresh produce, food and wine. >Tourism Australia was the primary sponsor in the development, implementation and evaluation of the joint Caravan Safari Trails Pilot Program. This was designed to tap into the $6.7 billion market of caravan and campervan tourists who travel throughout Australia each year. Positive media coverage of Tourism Australia activities. >The launch of the global campaign generated over 1,000 stories in the print and electronic media both nationally and internationally, and sparked new interest in Australia as a destination. >As the official tourism partner of the Queen’s Baton Relay, Tourism Australia conducted a very successful domestic tourism campaign. The campaign achieved media coverage valued at $500,000 through press, radio and television reports. Ensure Tourism Australia’s activities and programs are valued by stakeholders. Sustainable increase in destination demand pool. Tourism Australia Annual Report 2005|2006 21 Corporate governance The Board of Directors Tourism Australia is governed by a 10-member Board of Directors, which reports to the Federal Minister for Small Business and Tourism. The main role of the Board, which is defined by the Tourism Australia Act 2004, is to: >ensure the proper and efficient performance of Tourism Australia’s functions >determine Tourism Australia’s policy in relation to any matter. The Tourism Australia Board is responsible for a governance framework to ensure that it achieves its statutory mandate. As a public sector agency, Tourism Australia must be conversant with the general policies of the government of the day, as well as be informed about key ministerial directions, and Commonwealth guidelines on major initiatives that relate to the organisation. The Chairman The Chairman and the Managing Director are separate appointments to ensure appropriate accountability and greater capacity of the Board for independent decision-making. The Chairman ensures that sufficient Board meetings are held to enable it to perform its duties responsibly and that appropriate agenda items are placed before the Board. The Chairman exercises control over the quality, quantity and timeliness of the flow of information between management and the Board. He or she is also responsible for the conduct of meetings of the Board. Board meetings The regular Board papers make directors aware of current and forthcoming issues relevant to the organisation’s operations and performance. These papers contain the year-to-date financial performance of all business groups (compared to budget), a report from each of the executive management team, proposals for significant contracts and tenders, plus papers relating to particular issues. Senior management also presents significant matters to the Board. Personal and corporate integrity All directors and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of Tourism Australia. The Board subscribes to the code of conduct based on principles recommended by the Australian Institute of Company Directors. The code specifies values and behaviours in terms of fairness, equity, lawful obedience, honesty, openness, respect, loyalty, integrity, protective care, efficiency, personal development and leadership, which all employees have a responsibility to comply. Tourism Australia has developed and implemented a code of conduct for its employees, which is consistent with these values and behaviours. Separate policies cover discrimination, employment, harassment, health and safety and other business practices such as email usage, fraud control and security. Disability/Discrimination Tourism Australia’s employment policies, procedures and practices comply with the requirements of the Disability Discrimination Act 1992, the Racial Discrimination Act 1975 and the Sex Discrimination Act 1984. Tourism Australia offers flexible working arrangements and supports staff in undertaking opportunities for personal and professional development as outlined in the Tourism Australia Certified Agreement 2005-2008. The range of mechanisms provided by Tourism Australia to enhance communication and consultation includes the Joint Consultative Committee and regular staff surveys. Conflicts of interest The Board has in place policy and procedures for the disclosure and resolution of any matter which may give rise to actual or potential conflicts between the interests of a director and those of the organisation. Risk management The Board adopts practices designed to identify significant areas of business risk and to effectively manage those risks in accordance with the organisation’s risk profile. Board Sub-Committees The Board carries out its duties through two Board committees. These committees meet regularly and make recommendations to the Board on issues within their charters. The committees operate under the terms of reference approved by the Board. Audit Committee This committee ensures that an effective internal control framework exists across Tourism Australia. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes. The committee also reviews risk management controls and endof-year financial statements. Human Resources Committee This committee oversees the organisation’s human resources principles, practices and programs with regard to employee terms and conditions, management development, equal employment opportunity and remuneration. RECORD OF BOARD MEMBERS AND ATTENDANCE The Board met 10 times during the year in New South Wales, Western Australia, South Australia, Victoria, Queensland and the Australian Capital Territory and had an aggregate attendance of directors of 93 per cent. Board members also represented Tourism Australia at both industry and general forums. Date of appointment/ reappointment Expiry of appointment Board meetings attendance Hon Tim Fischer, Chairman 01 July 04 30 June 07 10 Mr Tony Clark, Deputy Chairman 01 July 05 30 June 08 9 Mr Scott Morrison, Managing Director 13 Dec 04 12 Dec 07 10 Mr Andrew Burnes, Director 01 July 04 30 June 07 10 Mr Wayne Kirkpatrick, Director 01 July 04 30 June 07 9 Ms Valerie Davies, Director 01 July 05 30 June 08 10 Ms Karen Jacobs, Director 01 July 05 30 June 08 8 Ms Jane Jeffreys, Director 01 July 05 30 June 08 9 Mr Peter Burnett, Director 01 July 05 30 June 08 8 Mr Mark Paterson, Government member 01 July 04 30 June 07 9 Ms Patricia Kelly, Alt Government member 13 July 04 12 July 07 1 Member Record of Board Committees 2005/06 Committee members Audit Committee Human Resources Committee Position Attendance Position Attendance Chair 3 Mr Wayne Kirkpatrick Member 4 Mr Andrew Burnes Member 5 Ms Jane Jeffreys Chair 4 Ms Karen Jacobs Member 2 Ms Valerie Davies Member 4 Mr Peter Burnett Member 1 Mr Tony Clark Tourism Australia Annual Report 2005|2006 23 Organisational structure Ecologically sustainable development and environmental performance Tourism Australia has a statutory obligation under the Tourism Australia Act 2004 to help foster a sustainable tourism industry in Australia. Working together with the Australian Government’s Department of Industry, Tourism and Resources, the Department of the Environment and Heritage, State tourism organisations and industry partners, Tourism Australia seeks to fulfil this commitment and help to ensure the responsible development and promotion of Australia’s tourism industry. Tourism Australia has been developing beneficial partnerships which contribute to the long-term environmental, social and economic sustainability of the tourism industry. It has entered into strategic partnerships with National Geographic and Discovery, which will be the two primary international conduits to deliver Australian destination messages globally. Tourism Australia has also been developing a partnership with Parks Australia to more effectively promote our national parks as tourist destinations. Tourism Australia has been providing research and insights to industry to enable effective decision-making processes, which integrate both long-term and short-term economic, environmental and social considerations. Tourism Australia is committed to publicising and creating a high profile for best practice sustainable tourism products. For example, sustainable tourism products were showcased at the 2006 Australian Tourism Exchange in Adelaide. The organisation has also been working to continuously improve its corporate environmental performance and is one of 11 agencies represented on a whole of government Sustainability Working Group, which has been piloted by the Department of the Environment and Heritage. Minister for Small Business and Tourism The Hon Fran Bailey Chairman The Hon Tim Fischer AC Board Deputy Chairman Tony Clark AM Director Peter Burnett Director Valerie Davies Director Jane Jeffreys Director Wayne Kirkpatrick Director Andrew Burnes Director Karen Jacobs Government Member Mark Paterson Managing Director Scott Morrison Director, International Richard Beere Director, Strategy & Research Geoff Buckley Director, Marketing Ian Macfarlane Director, Corporate Services John Hopwood > I nternational Operations > Asia > Americas > UK/Europe > New Zealand > Gulf Countries > Tourism Research Australia >S trategic Insights > Corporate Planning > Aviation > Consumer Marketing > International Media Relations > Marketing Communications > Digital Marketing > Tourism Events Australia > Risk & Administration > Finance > Information Technology > Technology Services Director, Industry & Organisational Development Andrew McEvoy > Australia Marketing > Corporate Affairs >P artnership Marketing >A ustralian Experiences > Trade Events > People & Culture Report of Operations Tourism Australia Annual Report 2005|2006 27 Corporate Services The role of Corporate Services is to supply finance, administration, risk management, technology and Board secretarial services to the organisation. Finance Based at the head office in Sydney, the Finance unit provides professional services for the finance functions of Tourism Australia. The unit develops strategies and maintains operations for financial systems, budgeting, tax reporting and treasury operations for Tourism Australia and supports the regional Corporate Services Managers. The unit’s objectives for the year were to: >Manage financials in line with budgets. >Identify opportunities to re-engineer processes to improve the effective utilisation of resources. >Perform foreign currency funds management, which are undertaken on a spot basis with transactions being initiated to provide Tourism Australia with the most costeffective level of foreign currency funding. A key responsibility for the unit was accounting of the organisation’s financial performance. Highlights and results >Tourism Australia’s expenditure for the year was A$164.6 million. >Government revenue was A$137.8 million and revenue from cooperative industry activities and other sources reached A$30.1 million, a combined total of A$167.9 million. >Tourism Australia recorded a A$3.3 million surplus for 2005/06. >Debts written-off during the year totalled A$21,000 with provision for doubtful debts at A$198,000 at 30 June 2006, to reflect the accrual of potentially non-recoverable debts over the year. Debtors profile and collections were improved during the year. Risk and Administration The Risk and Administration unit supports Tourism Australia offices with administration of premises, despatch services, records management, printing, reception, occupational health and safety, office equipment supplies and maintenance. The unit also controls and coordinates the procurement activities of the organisation. Risk management principles and practices are incorporated into the organisation’s decision making and operational activities. The operations of the risk management area are designed to meet the principal objective of minimising risk to Tourism Australia in a cost-effective manner and to an acceptable level. The major operations of risk management are to provide education and awareness of risk management and to develop and manage systems of risk identification and effective control. It also coordinates and manages insurance, contracts, legal, audit and lease issues. Tourism Australia has a comprehensive insurance program that includes directors’ and officers’ liability, which is managed by Comcover. It also maintains a Fraud Plan as required under the revised Commonwealth Fraud Control Guidelines May 2002 (CFGC). The unit’s objectives for 2005/06 were to: >Provide a risk management information framework and train managers on risk management techniques to encourage a proactive approach. >Review the adequacy of the insurance coverage. >Administer contract management procedures and controls. >Develop effective procurement guidelines. Highlights and results >The Government procurement procedures for the organisation were refined and implemented. >The Risk and Administration unit was restructured and a procurement coordinator appointed. >A full privacy review was undertaken across the organisation with new measures to be introduced in 2006/07. >A central contract register was installed. >The Safety Handbook was distributed to all offices. >Safety Improvement Teams have been established across Highlights and results >The global telecommunications network and internet the organisation to assist in the implementation of safety initiatives. >Ergonomic reviews covering suitability of furniture, work station setup and correct posture training were undertaken in the Sydney and Canberra offices. >There were no accidents during the year, nor were any investigations undertaken. services of the organisation were replaced and improved. >The unit delivered the new Trade Events Online (TEO3) system with fully integrated functionality for management and administration of trade events, including the Australian Tourism Exchange. The new system was developed after extensive planning and testing and incorporates suggestions from end users and regional Tourism Australia staff. >Conducted a program of work to improve the performance and availability of Tourism Australia’s consumer internet site, australia.com. >The implementation of Business Central (new Customer Relationship Management system), to support business activities associated with the management of corporate contacts was completed. >Completed the implementation of the new Human Resources/Payroll system. >Provided all the technology services required for the establishmnet or relocation of new corporate offices in Australia and overseas. >Formalised best practice processes for IT service management within the organisation, based on the Information Technology Infrastructure Library (ITIL) set of guidelines. Technology Services Management of Tourism Australia’s technology related activities continued under the responsibility of the Technology Services business unit group. The unit’s main areas of focus included: >Administration and management of the corporate global technology network infrastructure, including voice and data services, online communications and standard office applications. >Management and development of applications systems. >Management of technology services and user support. >Management, assessment and execution of new technology initiatives through appropriate use of governance and standards. The objectives of the unit in 2005/06 were to: >Maintain an appropriate rate of adoption of enabling technology. >Continue to drive technology improvements to deliver cohesiveness, efficiency and relevance to Tourism Australia’s marketing activities and management of corporate knowledge. >Improve the quality and reliability of the provision of technology services to the organisation, its stakeholders and global audiences. Tourism Australia Annual Report 2005|2006 29 Strategy and Research The Strategy and Research business group delivers market and industry knowledge to Tourism Australia and the tourism industry as a whole. The insights obtained from research and intelligence, collected through primary and secondary sources, underpin the organisation’s strategic and operational decisions. The business group also helps to improve forward planning and business operations within the Australian tourism industry. A critical internal function of the business group is corporate and operational planning for Tourism Australia’s global operations, including managing the development of Tourism Australia’s Corporate Plan and Annual Operating Plan. In addition, the group coordinates the monitoring and evaluation of overall tourism performance and the success of Tourism Australia’s corporate strategy through a framework of Key Performance Indicators. It coordinates, interprets and further analyses the National Visitors Survey and the International Visitors Survey, two core national data sets for the tourism industry. It also provides base domestic and international visitor forecasts. These services are delivered by four functional units: Strategic Insights, Corporate Planning, Tourism and Aviation Economics, and Tourism Research Australia. Strategic Insights The Strategic Insights unit delivers consumer, market and industry-based intelligence and advice, which informs and drives Tourism Australia’s strategies and programs. By providing information on the challenges and opportunities facing the industry, the unit assists external clients, including state and territory destination marketing organisations, industry associations and industry operators with planning and decision-making. The Strategic Insights unit’s four key priorities for the 2005/06 financial year were to: >Deliver research analysis which informs Tourism Australia’s key business needs. >Deliver research insights which inform key industry needs. >Translate research findings into value-added insights to facilitate the use of research by clients and stakeholders. >Focus on the delivery of strategic advice to external clients. Highlights and results >Completed a comprehensive international brand health and communications tracking program of all Tourism Australia’s Tier 1 and Tier 2 markets. >Provided monthly dashboard reports giving snapshot measurements of marketing campaign effectiveness. >Undertook a comprehensive evaluation program of Tourism Australia’s core programs. This included an evaluation of business events (Australian Tourism Exchange), the Media and Visiting Journalists Programs and Tourism Australia websites. >Completed research into the domestic annual leave stockpile. Gathering information from employers and employees, the study looked at key drivers and opportunities to address this accumulation of leave, underpinning the No Leave, No Life campaign. >Conducted a major ground-up segmentation study of the Japan market, which identified and profiled high value segments for Tourism Australia and the industry. >Worked with the Destination Australia Marketing Alliance (DAMA), to conduct research in the Singapore market to identify and address market performance issues. >Conducted the global Brand Australia Creative Territory Research to identify the current state of Brand Australia knowledge, plus attitudes and socio-cultural attributes, of the target international consumer market. Distilled this information into opportunities for ‘creative engagement’ with the target market, to enable fine tuning of the new A Uniquely Australian Invitation campaign. >Working with DAMA, the unit commissioned research in Germany and Singapore to identify motivating experiences, products and activities for the Australian target market. >Reviewed the potential and value of Lead Indicators of tourism performance. >Conducted significant secondary and primary research to identify and qualify Tourism Australia’s global target audience — the Experience Seeker. >Prepared a range of base resources for the domestic tourism market, including fact sheets. >Conducted global research to test the new global creative concept amongst its target market of Experience Seekers. This allowed for fine tuning of the market approach to the campaign. >Conducted several studies to establish benchmarks for new programs, including awareness of annual leave issues amongst employers and employees. >Commissioned research in the domestic market to explore a range of new product development opportunities. >Participated in a broader analysis and review of the state of domestic tourism, with Tourism Research Australia. Corporate Planning The Corporate Planning unit coordinates, implements and manages Tourism Australia’s corporate and operational planning processes. It also coordinates and analyses decisions on resource allocation for Tourism Australia’s key priority areas. By managing corporate performance and evaluation functions, it reviews Tourism Australia’s efficiency and effectiveness. A key role is reporting on Tourism Australia’s responsibility in delivering the Australian Government’s Tourism White Paper initiatives. The two key objectives for the financial year were the: >Development, approval and implementation of Tourism Australia’s Corporate Plan 2006/07 to 2008/09, as required under Section 33 of the Tourism Australia Act 2004. >Development, approval and implementation of Tourism Australia’s Annual Operating Plan 2005/06, as required under Section 36 of the Tourism Australia Act 2004. Highlights and results >Completed Tourism Australia’s 2006/07 to 2008/09 Corporate Plan, a blueprint of the strategic goals of the organisation. The 32-page plan was accepted by the Tourism Australia Board and the Minister for Small Business and Tourism, the Hon Fran Bailey. >Tracked performance of the implementation of Tourism Australia’s Annual Operating Plan 2005/06, providing coordination of the organisation’s strategy and functions. >Facilitated the completion of Tourism Australia’s 2006/07 Annual Operating Plan. Tourism Australia Annual Report 2005|2006 Tourism and Aviation Economics The Tourism and Aviation Economics unit ensures Tourism Australia’s marketing strategies take advantage of aviation developments and are sensitive to aviation constraints. There were dynamic developments in the aviation industry in 2005/06, as record fuel prices drove rationalisation of airline services, posing major challenges for inbound tourism. More positively, Qantas agreed to buy a large number of new aircraft — up to 115 Boeing 787s — and to utilise Jetstar as a long haul, low cost carrier able to viably service low yielding leisure routes. These decisions will have important implications for tourism in the medium term. The unit works closely with airlines, airports, the Departments of Industry, Tourism and Resources plus Transport and Regional Services, and State and Territory tourism organisation partners. It also reviews and evaluates tourism and aviation industry performance, to help Tourism Australia and its stakeholders better understand key drivers of the tourism industry. In 2005/06 the unit’s objectives were to: >Guide the strategies of Tourism Australia and its key partners in engaging airlines as partners in developing Australian tourism. >Ensure Tourism Australia’s strategies reflect relevant intelligence on economic and aviation developments. >Enhance Key Performance Indicators and improve evaluation of Tourism Australia’s measures of Total Inbound Economic Value (TIEV) and regional dispersal. >Enhance evaluation of the marketing effectiveness of the organisation. 31 Highlights and results >Implemented Tourism Australia’s aviation strategy to assist airlines, airports and State tourism organisations to evaluate the potential of new airline services. >Provided high quality, timely analysis, which assisted Tourism Australia’s marketing group to respond to aviation developments and new aviation constraints. >Provided industry and other stakeholders with updates on tourism, aviation and economic developments, including the growing role of domestic low cost airlines and domestic fly/drive tourism. >Revised and improved Tourism Australia’s industry performance measures, including TIEV and regional dispersal measures. >Worked with the Australian Government’s Department of Industry, Tourism and Resources to provide focused tourism industry input into bilateral aviation negotiations, including with Japan, the United States, United Kingdom and a wide range of smaller markets. >Provided an analysis of outbound departures from Tourism Australia’s key source markets. This included a review of the performance of Australia’s competitors and Australia’s share of outbound expenditure. >Initiated the second Australian Bureau of Statistics Private Sector Marketing Survey, which will be delivered in early 2007. >Helped defend the continuation of the QantasJapan Airlines code share on air routes from Japan, in conjunction with regulators. Tourism Research Australia Tourism Research Australia (TRA) provides independent, accurate, timely and strategically relevant statistics and analysis to the tourism industry, all levels of government and the public to help inform decision making and policy development. The unit provides a national focus for the collection and dissemination of tourism statistics and related data. Its role includes undertaking and coordinating research on priority issues and distributing tourism data in a manner that encourages the widest and most effective application by the tourism industry. It promotes an understanding and awareness of the role of this tourism research in the development of Australian tourism. In 2005/06 Tourism Research Australia had six priority objectives. These were to: >Develop, implement and manage a simple and effective strategy to disseminate tourism data, research, insights and forecasts. >Forge stronger links with Industry Associations, Build alliances with research bodies, and engage in joint ventures with other research organisations. >Gain a better understanding of the factors impacting on Tourism and the industry’s information needs. >Provide high quality data, research, insights and forecasts to meet these needs. >Manage finances within budgets and meet financial reporting requirements. >Develop and implement improved administrative procedures. Highlights and results >Rolled out a new Destination Visitor Survey program in all States and Territories. Over 50 destinations were included in the program. >Developed a new web-based reporting platform (TRAONLINE), which will be launched in 2006/07. >Delivered the Drivers of Domestic Tourism report to improve understanding of the key trends and drivers impacting on domestic tourism. >Developed an enhanced forecasting model of domestic tourism activity, which includes an impact analysis of potential shocks to the inbound market. >Assisted the Northern Territory in the development of inaugural tourism forecasts for the territory and created a forecasting research fellowship in partnership with the Sustainable Tourism Cooperative Research Centre and Monash University. >Developed a National Supplementary program for the National Visitor Survey and International Visitor Survey, allowing interested parties to add questions to these core surveys and benefit from the data collected. >Developed a snapshot series of publications, covering topics such as Nature Based Tourism and Mature Aged Travellers, designed to provide research to stakeholders in a simplified manner. >Produced and modelled quarterly estimates of regional expenditure by domestic and international visitors, for distribution to all stakeholders. Tourism Australia Annual Report 2005|2006 33 Industry and Organisational Development The Industry and Organisational Development business group is involved in a wide range of marketing, communications and trade activities. The six units in this group are Australia Marketing, Australian Experiences, Partnership Marketing, Corporate Affairs, People and Culture, and Trade Events. The activities of the units range from coordinating national and international trade events to driving the internal people and culture strategy. The predominant focus of the group is the Australian tourism industry — the ‘supply’ side of the tourism business. The aim is to work with the states, regions and industry to maintain momentum behind Tourism Australia’s global activity. The group manages relationships with industry, the media, government, trade stakeholders and State and Territory tourism organisations. Its Australian Experiences unit researches and markets niche areas like Indigenous tourism, ecotourism, gay and lesbian tourism and backpacking. The group’s objectives include: >Provision of market intelligence on global markets and niche markets for the Australian industry. >Serving as a conduit for communication between staff in the Sydney head office and the regions. >Providing a channel for communication between the Australian travel industry and Tourism Australia staff. Australia Marketing The Australia Marketing unit focuses on understanding domestic leisure travel research and trends, and creating and executing consumer marketing strategies to encourage Australians to travel more for leisure within their own country. The unit targets the Australian Experience Seeker — those one million, high-spending Australians with a preference for both overseas and domestic leisure travel. The domestic strategy focuses on developing innovative national media partnerships that will lift the volume and quality of credible content about Australian holidays to the target audience. In 2005/06, the unit’s objectives were to: >Stimulate domestic leisure travel by Australians. >Increase yield and dispersal of Australian leisure travellers. >Harness industry support around Tourism Australia’s domestic marketing initiatives. Highlights and results >Completed the largest national study into the reasons for, and extent of annual leave accrual, and found that employees across the country had stockpiled 70 million days of accrued leave worth about $11 billion. >Developed the No Leave, No Life program, in partnership with the Australian Human Resources Institute, to tackle the annual leave accrual issue. A pilot program, which encourages staff to take accrued leave, commenced in 13 participating companies. >Established a number of national media partnerships to harness industry support to raise the value of an Australian holiday as a compelling proposition. The first initiative was the creation of Explore magazine, in partnership with Fairfax. The launch of Explore, which had a circulation of 880,000 in Fairfax’s Sunday newspapers in New South Wales and Victoria, resulted in a 100 per cent take up of advertising opportunities by the tourism industry and a six per cent increase in circulation. >As the official tourism partner of the Queen’s Baton Relay, Tourism Australia conducted a domestic tourism campaign, which included a number of activities including: •The appointment of nine Young Tourism Ambassadors, who spoke at each official evening ceremony over the 51 days, encouraging Australians to travel within their own country. •A public relations program, which generated press, radio and television publicity to the value of $500,000. There was extensive coverage on the Today show, including 26 weather crosses, on-air billboard sponsorships plus interviews with the Young Tourism Ambassadors. •Press advertising highlighted unique experiences in each regional town the Queen’s Baton Relay passed through. There were also radio promotions in Sydney, Melbourne, Brisbane and Adelaide; and daily updates on australia.com. >Leveraged its sponsorship of the Australian Tourism Awards by negotiating newspaper and magazine editorial coverage, valued at over $100,000, to bring the ‘best of Australian Tourism’ to the Australian consumer. This included articles on the finalists and winners from each state in News Limited’s Sunday papers and a 16-page supplement on the winners, produced in partnership with The Weekend Australian Magazine. Live crosses on Channel Seven’s Sunrise and stories on the Great Outdoors were negotiated as part of the Seven Network’s media sponsorship. Tourism Australia Annual Report 2005|2006 Australian Experiences The role of this business unit is to help connect the global target market of Experience Seekers with the ‘world’s best’ Australian experiences. This is achieved through knowledge and communication of experiential content — destinations and products — within Tourism Australia’s programs, and externally through the global distribution networks. The unit also handles many of the Australian Government’s key Tourism White Paper initiatives. Australian Experiences’ objectives for 2005/2006 included facilitating the research, development and implementation of a national experiences content framework to communicate a more compelling image of Australia. Highlights and results >Indigenous Tourism Australia (ITA) was established and supported by Tourism Australia, with Former Senator Aden Ridgeway appointed Executive Chairman of ITA. A National Footprints Strategy was developed to bring more Indigenous tourism products to the forefront of the tourism industry. >Established and managed the Indigenous Tourism Government Forum, an alliance which includes representatives of State and Territory tourism government agencies and various Australian Government departments. The forum instituted a National Tourism Product Audit of all Indigenous tourism businesses and is a primary contributor in the National Indigenous Tourism Research Agenda. >Sponsored Mark Olive’s Outback Café television series on The Lifestyle Channel. The first series of six episodes showed the renowned Indigenous chef, Mark Olive, travelling around Australia and cooking with native ingredients. >Sponsored the production of the second edition of the 35 Indigenous tourism guide Australia Walkabout, which won the 2006 gold PATA Travel Guide of the year award. >Was the primary sponsor in the development, implementation and evaluation of the joint Caravan Safari Trails Pilot Program, designed to tap into the $6.7 billion market of caravan and campervan tourists who travel throughout Australia each year. More than 70 people participated in the first Caravan Safari Trail, from Sydney to Cairns, in April 2006 and reported a 100 per cent satisfaction rating for the month long tour. >With partners Tourism Victoria, City of Melbourne and the Melbourne Visitors and Convention Bureau, won the global bid to host the World Student Youth Tourism Conference (WYSTC) 2006 in Melbourne. >Coordinated the Australian Village for over 65 Australian delegates at the WYSTC 2005 Conference in Toronto, Canada. >Established regular communication with the relevant Experience units within each State and Territory tourism organisation to present the Australian Experiences strategy, and to foster integration of the strategy with these organisations. >With Parks Australia, established and managed the National Landscapes Project. A Reference Group was formed and support was gained from all STOs, heads of parks agencies, peak industry and conservation organisations. Established criteria for a ‘national landscape’ with the aim of identifying areas with outstanding natural and cultural attractions to encourage regional planning, destination branding and the provision of tourism infrastructure, while also promoting conservation. >Developed and implemented a National Touring Routes Audit in consultation with STOs. Determined Australia’s ‘top’ journeys (touring routes) and produced a comprehensive marketing audit, to provide stakeholders with consistent and detailed information on each route and highlight the characteristics that provide first-class experiences. >In conjunction with the Winemakers Federation of Australia and the State tourism organisations, conducted five workshops in various wine regions, with the aim of informing industry on how to work with tourism partners and maximise cellar tour opportunities. >Sponsored five key annual industry conferences: the Australian Indigenous Tourism Conference; Ecotourism Australia Conference; Australian Regional Tourism Convention; Adventure Backpacker Industry Conference plus the Food and Wine Tourism Conference. Partnership marketing Partnership Marketing is responsible for developing industry relationships through the distribution of market intelligence, insights and opportunities to the Australian tourism industry. In partnership with the State and Territory tourism offices, Tourism Australia’s Industry Development Executives create awareness of the organisation’s services, meeting face-toface with regional industry representatives and distributing information on Tourism Australia’s activities and programs. The objective of unit in 2005/06 was to enable Tourism Australia to proactively connect with industry on a personal basis. Highlights and results >Produced the product manual the Big Book of Australia, in partnership with Tourism New South Wales, Tourism Victoria and Tourism Western Australia, and also produced specific publications for each state involved. By sharing resources, significant savings were delivered. >Appointed geographically-based Industry Development Executives (IDEs) to extend the team from its Sydney base to the States and put the organisation in closer contact with industry stakeholders. The four IDEs had individual meetings with representatives of 120 key industry partners a month and met a further 900 industry representatives at association meetings in a three-month period. >Organised a series of regional forums for operators, including those in remote areas, to provide information about Tourism Australia’s activities and programs. >Published What’s Around the Corner — a prospectus informing industry partners of Tourism Australia’s activities including research, events, promotions, online marketing and cooperative marketing opportunities. A total of 2,800 copies were distributed to industry in the regions. >Organised two National Operator forums, in Sydney and Melbourne, which were attended by representatives of 280 companies. >Developed a method whereby national tourism operators can feed product information into the Australian Tourism Data Warehouse and immediately receive coverage across all states. >Representatives spoke at the conferences of more than 20 associations, ranging from a state backpacker organisation to a bed and breakfast group. Tourism Australia Annual Report 2005|2006 Corporate Affairs The Corporate Affairs unit is responsible for developing and implementing effective communications strategies and managing Tourism Australia’s reputation. It manages all internal and external communications, including Tourism Australia’s relations with government, industry, media and the public. The unit’s objective in 2005/06 was to ensure that Tourism Australia was portrayed in a positive manner to the media, the tourism industry and other major stakeholders. It also proactively managed any issues impacting on the Brand Australia campaign. Highlights and results >Issued more than 70 media releases to promote Tourism Australia’s activities, generating around 2,000 stories in the Australian media. >Developed and implemented the communications program for the Australian launch of the Uniquely Australian Invitation global destination campaign, which resulted in over 1,000 media stories and positive support from industry stakeholders for the campaign. >Coordinated the launch of Tourism Australia’s Global program’s partnership with National Geographic and Discovery to Australian media, which resulted in positive coverage of the announcement in key print and electronic media. >Managed the communications program for the Australian Tourism Exchange (ATE06) targeting domestic media, industry, government and other stakeholders. This included developing a media program, coordinating 37 daily staff briefings, producing the ATE Daily newsletter, developing the Tourism Australia stand (TA Lounge), and organising the attendance of Federal, State and Territory members of Parliament and Department representatives. >Implemented a communications program for the Queen’s Baton Relay involving regional media and government stakeholders to promote Australian tourism experiences to Australians and the importance of tourism to the nation. >Conducted a launch event in Sydney for G’Day LA 2006 to highlight the importance of the event to the Australian media. >Coordinated a series of Market Briefings in all capital cities and major tourism regions to update the industry on Tourism Australia programs and activities. >Produced and distributed the weekly e-newsletter essentials to approximately 10,000 industry subscribers. >Developed and distributed the quarterly broadsheet newsletter TA Tracks for key industry stakeholders. >Prepared briefing papers for Tourism Australia’s participation in the Australian Government’s Industry Implementation Advisory Group (IIAG), Australian Standing Committee on Tourism (ASCOT) and the Tourism Ministers’ Council (TMC). >Provided regular input for briefings to the Minister for Small Business and Tourism, Ministerial correspondence, and Parliamentary Question Time briefs. >Prepared briefing papers for Senate Estimates and responses to Parliamentary Questions on Notice. >Represented the organisation at Interdepartmental Committees (IDCs), working groups, meetings and conferences including the IDC on International Education; the IDC on Communications convened by AQIS; the IDC on Public Affairs convened by DFAT and the working group for National Visitor Safety. >Organised a program for guests of the Minister for Small Business and Tourism at the Melbourne 2006 Commonwealth Games. >Introduced an internal communications program around Tourism Australia’s People and Culture strategy and conducted a global audit of internal communications needs for the organisation. >Introduced and distributed the weekly OneTA e-newsletter to Tourism Australia staff worldwide. >Developed a strategy for the redevelopment of the staff intranet and implemented stage one of the redevelopment. >Developed a set of corporate communication tools to ensure a consistent organisational look was presented to internal and external stakeholders. >Introduced team building initiatives and organised social activities including sports like dragon boat racing for Tourism Australia’s Sydney office. People and Culture The People and Culture unit is responsible for developing and implementing global strategies for managing staff, including remuneration, training and career development. It also designs and implements cultural change strategies across the organisation. The unit is responsible for enhancing and implementing internal processes and policies. It maintains standards and consistency of processes across the organisation. During 2005/06 the key objectives for the unit were to ensure Tourism Australia’s human resources were ‘ready and capable’ of enabling the organisation to meet its objectives and building and maintaining ‘One Tourism Australia’ through creating a passionate, competitive, disciplined and integrated culture. Highlights and results >On 30 June 2006, Tourism Australia had 247 full-time equivalent employees, 122 of whom were employed overseas. >Of the workforce, 68 per cent were women and 34 per cent men. Women held 54 per cent of senior management roles and 8 per cent of executive roles. >Conducted the Annual Employee Survey, which covered a range of issues, and communicated the results to staff. More than 90 per cent of staff said they understood how their role fitted in with Tourism Australia’s overall strategy and felt the executive team was committed to the organisation’s success. >Implemented a comprehensive People and Culture Strategy. >Completed an audit of human resources compliance requirements in international jurisdictions where Tourism Australia is located. Where necessary, human resources policies and employment arrangements were reviewed and amended. >Implemented a new Certified Agreement, which covered the majority of Australia-based employees. This was adopted with an 88 per cent approval rating. Seven staff were covered by Australian Workplace Agreements. Overseas staff were employed under conditions compliant with local legislation. >Introduced an executive development program, using 360degree feedback instruments. Tourism Australia Annual Report 2005|2006 39 Key Trade Events 2005/06 >Implemented a new performance planning and review system and financial reward system. >Undertook a review of Tourism Australia’s strategic workforce priorities and a talent and succession management framework was implemented. >Ensured Tourism Australia remained fully compliant with all occupational health and safety requirements. >Maintained workplace diversity by ensuring equity in recruitment procedures and the creation of promotional opportunities both in Australia and globally. >Delivered Tourism Australia’s Equal Employment Opportunity program, which recognises employees’ domestic and family responsibilities. In furthering family friendly policies, part-time employment, flexibility in working hours and assistance with child care during school holidays are offered to employees. >There were no industrial disputes during the year. >In line with the Commonwealth Disability Strategy, the organisation’s recruitment information is provided in multiple formats as required. Trade Events The unit’s role is to plan, implement, manage and review all global trade events for Tourism Australia. It works with stakeholders including airlines, State tourism offices and Australian tourism businesses. It assists Australian suppliers to connect effectively with global distribution partners at events such as exhibitions, travel markets and shows. It ensures trade event activities communicate the Brand Australia message to the global distribution system and provide opportunities for the Australian tourism industry to engage commercially with international customers. Among the unit’s objectives for 2005/06 was maintaining cutting-edge practices and improving and evolving its events in order to offer the best event management, and business-to-business opportunities for its partners. With Event Date Country Meeting Professionals International 10–12 July 2005 United States Luxury Travel Expo, New York 15–18 Sept 2005 United States India Travel Mission 19–23 Sept 2005 India communications, it aimed to ensure best practice, to make sure the travel industry was aware of future trade events and how these could benefit tourism business to Australia. Incentive Travel & Meeting Executive Show 27–29 Sept 2005 United States PATA Travel Mart 27–30 Sept 2005 Malaysia Incentive Travel & Conventions, Meetings Asia 11–13 Oct 2005 Thailand Highlights and results >Around 2,000 Australian delegates from 650 companies met with around 600 key overseas buyer companies from 40 countries at the seven-day Australian Tourism Exchange (ATE) 2006. The event was held in Adelaide, South Australia, for the first time where it is estimated to have injected more than $10 million into the local economy with 13,000 visitor nights spent in Adelaide over the week. >Around 100,000 business meetings were held between buyers and sellers at ATE 2006 and over 400 international buyers participated in South Australia familiarisations. >A new scheduling system (SATE) was developed in time for ATE 2006, which minimised walking time between appointments whilst maximising preferences and mutual requests. This was positively received by delegates. >The new Trade Events Online system (TEO3) was completed. TEO3 is a user-friendly system, making it much easier for industry representatives to register for any of the global trade events run by Tourism Australia each year. >More than 25 international trade shows, travel markets and missions were organised by the unit in 15 countries in Asia, Europe and North America. These gave Australian tourism industry representatives additional opportunities to meet travel agents and wholesalers from around the world. At these events, the unit representatives ensured the Brand Australia message was communicated effectively. The list of events coordinated by the Sydney Trade Events team during 2005/06 across all major markets follows. Korea Travel Mission 27–28 Oct 2005 Korea Australian Travel Mission to China 31 Oct–4 Nov 2005 China Corroboree Down Under 2005 24– 27 Nov 2005 Australia World Travel Market 14–17 Nov 2005 United Kingdom China International Travel Mart 24–27 Nov 2005 China The European Incentive & Business Travel & Meetings Exhibition 29 Nov–1 Dec 2005 Spain Luxury Travel Expo, Las Vegas 6–-8 Dec 2005 United States International Luxury Travel Market (ILTM), Cannes 5–8 Dec 2005 France ATEC Meeting Place, Sydney 7– 9 Dec 2005 Australia Vankantierbeurs 10–15 Jan 2006 Netherlands Yinala, Sydney 18– 21 Feb 2006 Australia Borsa Internazionale del Turismo 18–21 Feb 2006 Italy Japan Australia Mission, Atami 23–25 Feb 2006 Japan Market Briefings 24 Feb–30 March 2006 Australia Internationale Tourismus Borse 8 –12 March 2006 Germany Discover South Australia 16-19 March 2006 Australia Team Australia Asia 27 Feb–1 March 2006 Thailand Gulf Countries Roadshow 6–10 May 2006 Middle East Arabian Travel Mission 2– 5 May 2006 Dubai ATEC Symposium, Cairns 17–19 May 2006 Australia IMEX 30 May– 1 June 2006 Germany Australian Tourism Exchange (ATE06), Adelaide 17–23 June 2006 Australia Tourism Australia Annual Report 2005|2006 41 Marketing The marketing business group is responsible for developing and orchestrating Tourism Australia’s global brand marketing strategy, which in 2005/06 resulted in the development of the Uniquely Australian Invitation destination campaign. While television advertising receives most public attention and is crucial to the communications campaign, the business group focuses on global brand and communications strategy development and execution. This includes activities such as outdoor and cinema advertising, online marketing and public relations programs. Central to the strategy is the objective of increasing potential visitors’ intention to travel to Australia, as well as creating a strong desire to tour widely in the country and to spend more on Australian tourism products. These goals require an optimisation of the communications mix, based on a consistent application of brand and message strategy across all elements. The marketing group consists of five units: Consumer Marketing, Digital Marketing, International Media Relations, Global Programs and Tourism Events Australia. Its activities are supported by Tourism Australia’s global creative agency M&C Saatchi and media agency Carat. Consumer Marketing Consumer Marketing is responsible for developing the global brand strategy for Tourism Australia. The unit oversees the global contract arrangements with media and creative agencies, and creates advertising creative and collateral materials to support the global marketing campaign. The unit creates internal and external collateral and publications, many of which are produced in a special inhouse design studio. It also manages global image and video resources for the organisation, ensuring these assets support Tourism Australia’s marketing plans and are available to key external partners to assist in the promotion of Australian destinations. In 2005/06, the Consumer Marketing unit’s objectives were to: >Develop and implement a global brand proposition and advertising campaign to drive intention to travel to Australia among the target audience of Experience Seekers. >Execute the global destination campaign with a full suite of launch materials and collateral. >Manage an effective and efficient global agency network to deliver against the marketing strategy. Highlights and results >Managed the design, production and launch of the new global destination campaign, A Uniquely Australian Invitation, featuring the tagline ‘So where the bloody hell are you?’. >Key creative products delivered for the campaign launch included a range of 60-second and 30second television and cinema commercials in various languages, 13 print commercials and a range of online materials, including a dedicated campaign website. >Significant online activity was generated resulting in a 30 per cent increase in visits to australia.com around the world and a 71 per cent increase in visits to Tourism Australia websites, including the campaign website www.wherethebloodyhellareyou.com. Around 770,000 people in nearly 200 countries downloaded and played the advertisement online at the dedicated campaign website. >To support the brand campaign, the unit designed and co-ordinated the production of a comprehensive range of industry engagement materials, including desk calendars, brochures, window posters and other collateral. >A suite of campaign-aligned materials were developed and utilised for a series of events including the Australian Tourism Exchange (ATE 2006), the Melbourne 2006 Commonwealth Games and Tourism Australia corporate communications. >Tourism Australia’s print image library was enhanced with more than 100 photographs, which were used in a broadbased collateral program related to the new campaign. >Construct and execute a digital program which would support the launch of the global campaign. >Reassess the organisation’s digital capability and put in place mechanisms that would not only enhance Australia’s existing presence but position the destination at the forefront of destination digital marketing. Digital Marketing With digital marketing a key ingredient in marketing campaigns, Tourism Australia’s Digital Marketing unit not only supports but in some areas drives the global campaign messages. Across the world, the dramatic surge in digital technology, combined with massive cost reductions, has seen an exponential growth in the number of people who rely on the internet as the primary source of travel information. Marketing in this cost-effective, interactive online Highlights and results >The unit developed a three-year digital strategy for the organisation, including the redevelopment of australia.com and consolidation of the hosting environment. A global agency was also identified, to implement the strategy in all of Tourism Australia’s major markets. >Developed a comprehensive suite of digital programs to support the global campaign launch. This included the development of a viral television commercial campaign and a digital consumer postcard campaign, which were launched from a specially developed campaign microsite www.wherethebloodyhellareyou.com. Different language versions were developed for the key markets. >There were over 800,000 downloads of the online television advertisement and 55,000 campaign postcards were created and forwarded. Significantly, some 600,000 environment facilitates genuine consumer engagement with brands. The traditional website base has now expanded into an environment where online advertising, search, viral, direct and consumer-driven communications prevail. In 2005/06 the objectives of the unit were to: >Develop a digital marketing strategy with the capacity to deliver compelling marketing communications. of the total viral users resided in Tourism Australia’s Tier 1 Markets. >All language versions of australia.com were enhanced to reflect the global campaign’s A Uniquely Australian Invitation positioning. This was achieved by embedding appropriate imagery and by creating a more welcoming tone and message theme for the site. Tourism Australia Annual Report 2005|2006 >During the year, australia.com and the campaign microsite were visited by over 8.3 million users who viewed some 55 million pages of content and imagery. This was a 32 per cent increase over the previous financial year. >Around 18,300 Australian tourism products were given exposure via australia.com. International Media Relations International Media Relations is charged with promoting Australia as a destination of choice to potential international visitors. To achieve this goal, the unit works with all levels of the Australian tourism industry to generate international editorial coverage on Australia in print, broadcast and online media. These activities are designed to complement and add depth to Tourism Australia’s global marketing programs by increasing awareness and knowledge of Australia through various media channels. With a network of agencies and representatives around the world, the unit coordinates two key global media relations programs: the International Media Relations Program and the Visiting Journalists Program (VJP). Highlights and results >Hosted 1,008 international consumer and trade print, online and broadcast journalists and media crew through the Visiting Journalists Program. These journalists originated from 27 different countries, with the majority travelling from Japan (14 per cent), the United States (12 per cent) and the United Kingdom (11 per cent). >Articles, programs and online material produced through 43 the Visiting Journalists Program delivered publicity valued at around $260 million and coverage to an audience of around 4.7 billion people globally. Highlights included: •United States-based ‘wilderness reporter’ Richard Bangs posted daily stories, photographs and video clips on his interactive yahoo.com travel site Richard Bangs Adventures (http://adventures. yahoo.com/australia) during his Extreme Australia journey to Victoria and Queensland. •A visit by a Malaysian production crew resulted in the production of the eight-episode My Australian Adventure series, which aired on prime time television. Around 1.2 million Malaysian viewers tuned into TV3 to watch the series, which made it the most popular travel program ever aired in the country. •The production of the seven-episode Insider’s Australia series, generated by a visiting Singaporean broadcast crew, resulted in around 500,000 viewers tuning into the series, making it the highest rating travel series ever shown in Singapore. •Editors of four leading lifestyle and travel publications in the Czech Republic and Hungary were the first representatives of their countries to participate in the progam and toured New South Wales and Queensland. •A press tour was conducted to leverage the extensive, permanent Aboriginal art display at the new Musée du Quai Branly in Paris. Journalists from the United Kingdom, France, Denmark, Switzerland and Canada, visited the Northern Territory to experience where some of the participating artists lived, ancient rock art, local art centres and to learn about contemporary Indigenous culture. •A visit by the producers of the Netherlands’ most popular travel show and travel website — RTL Travel and www.rtl-travel.nl — resulted in a mini-series of three episodes, which reached over six million viewers. >Participated in the International Broadcast Centre and the Main Press Centre at the Melbourne 2006 Commonwealth Games to assist international journalists with the provision of Australian destination footage and images, which were broadcast and published in media across the world for the duration of the event. >Hosted 42 international print and online trade journalists from 11 countries during the Australian Tourism Exchange (ATE 06), which generated 62 stories with a publicity value of close to $260,000, and reached an audience of two million. Before and after the event, these journalists toured various Australian destinations, with an emphasis on the host State, South Australia. Global programs The Global Programs unit was formed in July 2005 to orchestrate Tourism Australia’s international communications strategy through selected global multi-channel media networks. With some 14 global media networks now in existence, Tourism Australia has adapted its international campaigns to the changed media environment. The global element is orchestrated from Sydney. Integrating the country, regional and global elements allows Tourism Australia to maximise consumer touch points and, in the case of global programs, the development of significant brand associations. Global Programs’ objective for 2005/06 was to increase the intention to travel to Australia by enhancing the destination’s brand equity. This was to be achieved by expanding brand knowledge and engagement via major global media channels that reached the target audience of Experience Seekers. Highlights and results >Tourism Australia negotiated strategic partnerships with National Geographic and Discovery to deliver messages about Australia through television, editorial, publicity, sponsorship and advertising activities, revitalising their Australian content, and providing direct support to the global campaign. >The two media channels worked cooperatively with Tourism Australia to substantially enhance and portray the brand proposition to a worldwide audience of around 150 million people in 30 countries. This has been achieved through the following initiatives: Tourism Australia Annual Report 2005|2006 National Geographic >During National Geographic’s special Australia Week, the channel screened a package of programs on the country in Tourism Australia’s key markets. >A series of vignettes ‘What makes an Expert?’ were produced and screened across key markets, depicting ordinary Australians whose passionate interest in fields like astronomy and palaeontology take them to hidden and spectacular places. A series of advertorials in National Geographic magazine and a What Makes An Expert? gateway site complemented the vignettes. >A special map depicting lesser known areas of Australia was developed and distributed in National Geographic magazine and online. >Over 20,000 people viewed print and digital versions of an Australian photographic exhibition by photographer Sam Abell in major tourism markets. Discovery Channel >A series of programs on Australia screened during a special Destination Week on the Travel and Living Channel in 14 markets. >A series of three vignettes, giving fresh news on Australian destinations, screened across the Discovery Network globally. >A 120-minute digital program Discovery Atlas: Australia Revealed, showing a journey from the coast to the Outback, was produced. 45 >Production commenced on a 60-minute documentary, The Great Australian Outback Cattle Drive. >A multi-channel media program 5 Takes, which followed five young people on a journey in Australia, was viewed across 44 countries reaching in excess of 1.7 million viewers. >A pilot 3G mobile phone campaign was tested in Japan. Components included a flash game, downloads (ring tones and wallpapers), a flash map of Australia with interactive video clips on Australia and a competition. >Facilitates appropriate engagements between stakeholders to promote and leverage events held in Australia. >Conducts a marketing campaign, which enhances the country’s brand by integrating cultural, lifestyle, sporting and other aspects into the global campaign. In 2005/06 the primary objective of Tourism Events Australia was to better position Australia as a destination and to establish sector specific mechanisms to enable industry to engage with potential clients. Tourism Events Australia Tourism Australia formed the Tourism Events Australia (TEA) unit in September 2005. While leisure travellers tend to dominate tourist arrivals to Australia, the destination also attracts significant numbers of visitors in the business and major events segments. Potential business and tourism events travellers are attracted to destinations for reasons that are often different to leisure travellers. This has been recognised by Australia for many years, and the destination is well resourced to cater for the needs of people who arrive for corporate, sporting and other major events. The unit: >Promotes Australia as a business and major events destination in major source markets. >Coordinates engagements between the business events sector and the market. Highlights and results >As part of its trade and industry marketing program, Tourism Australia hosted three familiarisations for corporate buyers from the United Kingdom, United States and Asia. >Four significant international events were organised by Team Australia, the marketing alliance between the Association of Australian Convention Bureaux (AACB) and Tourism Australia. The events were: •An inaugural exploratory mission to China. •The Team Australia Business Events Educational (TABEE), which was held in February-March 2006 in Bangkok and attracted 92 potential buyers from 10 Asian countries. •Team Australia United Kingdom/Europe event was attended by 77 buyers from the United Kingdom, Belgium, Germany and France. •The Team Australia North America event, which was held in San Francisco, attracted 40 buyers from across the United States. >Marketed Australia at five events on three continents including the Incentive Travel and Meeting Executive Show (IT&ME) in Chicago; the Worldwide Exchange for Incentive Travel Meetings (IMEX) in Frankfurt; the European Incentive and Business Meetings Exhibition (EIBTM) in Barcelona; the Meetings Professional International World Education Congress (MPIWEC) in Miami and the Incentive Travel and Conventions Meeting Asia (IT&MCA) in Pattaya, Thailand. >The website www.events.australia.com was developed to replace www.meetings.australia.com, with user research showing the new site provided more relevant information, and improved design and architecture. >A major events promotional strategy was implemented to gain positive exposure for Australian business and leisure tourism internationally and domestically during the Melbourne 2006 Commonwealth Games, FIFA World Cup Soccer and selected events like rugby test matches. >A research program was established to validate and update insights on the incentive market and Australia’s position within the sector. >A business events strategy was developed and endorsed by the industry, based on research identifying the needs of the trade in the international corporate sector. Tourism Australia Annual Report 2005|2006 47 International Operations The International Operations business unit is responsible for managing Tourism Australia’s operations in Asia, Japan, the Americas, the United Kingdom and Europe, the Gulf Countries, New Zealand and the designated Tier 4 markets, which cover the rest of the world. The scope of activities includes: >Managing the operations of international offices in 12 markets, including developing business and marketing plans. >Identifying and managing issues, challenges and opportunities in key international markets that impact on the delivery of quality Australian tourism experiences. >Assisting internal and external stakeholders to understand the issues, challenges and opportunities in the international markets. >Engaging and leveraging industry, government and commercial partnerships to enhance Tourism Australia’s marketing strategies and tourism development. >Implementing global strategies and programs in the market. The objectives for the 2005/06 financial year included: >Developing a framework of engagement with the global teams to ensure better alignment with regional teams and Sydney business groups. This involved teleconferences, global meetings and management meetings. >Facilitating and developing Australian industry responses to blockages in tourism flows, specifically relating to quality, market performance and market opportunities. >Gathering, developing and communicating timely and relevant information on market trends, activities and opportunities. >Developing and implementing a framework to identify relevant global partners that could assist Tourism Australia to strategically engage segments of the distribution system around the world. These included online, retail, wholesale, direct sellers and Australian suppliers. >Servicing and developing markets where Tourism Australia does not have an active presence. Highlights and results >The unit developed and implemented a Global Distribution Strategy and established a Global Distribution Team. >Played a leadership role or participated in major, multi-agency government committees, which focused on issues management including: •The Action Plan for Japanese Tourism •Japan Implementation Monitoring Group •Emerging Markets Strategy Committee •Korea Action Plan and its subsequent Implementation Group •China Joint Monitoring Group •China Government Co-ordination Group •Tourism Visa Advisory Group. >Provided and developed market information, including monthly market updates for the organisation’s corporate website tourism.australia.com. It gave key market presentations to industry and to governments. >Organised major joint campaigns, events and publicity programs with Qantas and significant joint campaigns with Singapore Airlines. >As part of the Memorandum of Understanding with Austrade, the Aussie Enthusiasts online training program (www.enthusiasts.australia.com) was launched in May 2006 to provide agents in Tier 4 markets with detailed knowledge of Australia. >Provided support at Austrade events including: •Austrade agents familiarisation and workshops in Vietnam •Feria Internacional de Turismo (FITUR) tourism show in Spain •Hungary trade and consumer show •Australia Festivals in Latin America •Australia Week in Moscow, and •Singapore Airlines’ Eastern Europe media familiarisations. >Worked in partnership with State and Territory tourism organisations and attended regular Destination Australia Marketing Alliance (DAMA) meetings, and agreed to joint research projects, a brochure audit program, and improved transparency and cooperation measures. International markets 51 Tourism Australia operates in six regions and has 12 offices covering 22 countries. To maximise its return on investment, Tourism Australia allocates its resources to customers, markets and opportunities that offer the best growth opportunities in terms of spending, that deliver dispersal to regional Australia and that can be effectively influenced by marketing strategies. The Tier 1 countries deliver the vast majority of the total Australian tourism business by spend and include the United Kingdom, United States of America, Japan, New Zealand, China, Korea and Germany. Tier 2 markets, those where the focus is on realising and consolidating growth, include Singapore, Malaysia, Gulf Countries, Hong Kong, Canada, and India. In these markets Tourism Australia works off a modest base but recognises the growth opportunities in terms of visitor spend in the short to medium term. The focus of the Tier 3 markets is one of dispersal and segment development. Markets include Indonesia, Taiwan, Thailand, Italy, France, the Netherlands, Scandinavia, Ireland and Switzerland. While these markets do not account for a significant proportion of global growth in visitor spend, they do offer above average dispersal (travel beyond the major gateways) and often with high relevance to discrete locations. Common strategic objectives While each international office has specific challenges, opportunities, issues and strategies, all were involved in a range of fundamental programs with similar objectives. The rollout of the new campaign, A Uniquely Australian Invitation, injected new energy into the markets. All international offices focused on increasing intention to travel to Australia in the next 12 months and aimed to convert this intention into actual bookings. The corporate strategy in most countries was to target the Experience Seeker. The international offices objectives included: >Raising consciousness about and increasing knowledge and desire for Australia as a ‘must see’ travel destination. >Ensuring the travel industry had relevant knowledge about Australia as a destination and about the range of experiences and products available. >Ensuring that consumers were able to find knowledgeable distribution operators in all the channels that they used. >Developing partnerships with both industry and non-industry organisations that could assist in extending brand impact and reach. >Ensuring availability of travel programs tailored to suit consumer needs and to each market. >Making australia.com the call to action for all markets. Tourism Australia Annual Report 2005|2006 53 The Americas Canada There were a record 106,500 arrivals from Canada in >Expanded the partnership with American Express into Canada in early 2006, with direct mail marketing to Amex 2005/06, a three per cent increase on the previous year, and excellent yield and dispersal per visitor. The Total Inbound Economic Value (TIEV) was $529 million. Tourism Australia started independent operations in Canada in October 2005 with a new office in Toronto, while Qantas introduced services from Vancouver to Sydney, via San Francisco, in June 2006. These developments reflect the enormous potential of the Canadian market for Australia. An important market for Australia is the ‘Snowbirds’, the term used for Canadians who travel to avoid the harsh northern winter. They typically choose short-haul destinations such as the United States or the Caribbean, but a growing number of Snowbirds are seeking a more immersive experience further afield, such as a longstay holiday in Australia. The key to Tourism Australia’s success in Canada is to deliver unique and compelling experiences to Canadians, with particular focus on the youth and experience seeking Snowbirds. The major strategic intention for 2005/06 was to reaffirm the perception that Australia was the right decision in the vacation value equation for Canadian travellers. cardholders across the country and a comprehensive program with Amex travel agents, including in-store displays, agent training and familiarisation trips to Australia. The campaign’s wholesale partner, Holiday House, reported a three-fold increase in bookings. >Trips to Australia by Canadian writers and broadcasters on the Visiting Journalists Program resulted in more than A$4.5 million worth of publicity. Stories resulting from the program were published in magazines and newspapers, including the Globe and Mail, Toronto Star and Ottawa Citizen. There were broadcasts on channels like CTV Travel Channel and the Food network. The program also targeted specialist publications and there was coverage of Australian destinations in magazines ranging from Asian Diver to 50 Plus Magazine, and from Score Golf to Wedding Bells. Highlights and results >A major cooperative advertising campaign in partnership with Qantas resulted in 4,129 consumer enquiries. Around one third of these calls resulted from online visits to australia.com. The campaign generated approximately 2,700 bookings to Australia. >Launched the Uniquely Australian Invitation campaign across Canada in May/June 2006 in a department store promotion with the country’s premier retailer, the Hudson’s Bay Company (HBC). Leveraging off the launch of Australia’s leading cosmetic brand Napoleon in Canada, the promotion consisted of direct marketing to HBC consumers, online sweepstakes, and large brand displays at cosmetics counters in 29 stores across Canada – delivering over 25,000 consumer entries on the campaign website, with 4,000 sign-ups to OzEscapes, the australia.com newsletter. United States of America The United States continues to provide a rich vein of opportunity for Australia’s inbound travel industry. Ongoing changes in consumer planning and buying behaviour mean Tourism Australia has to maintain marketing flexibility and market insight to ensure it stays ahead of the distribution challenge. This strategy continued to pay off in 2005/06 with 452,300 Americans travelling to Australia and generating a TIEV of $1,869 million. More than one third of the nights American tourists spent in Australia were at destinations dispersed around the country. Tourism Australia’s objective in the United States is to realise Australia’s market share potential through best practice brand management strategies, customer acquisition and industry engagement. Australia has long been one of the most appealing international destination brands in the United States, but the challenge has been to convert that brand strength into actual travel. Currently, Australia captures less than one percent of the United States’ outbound travel market. The key strategic intention was to translate the positive features of Australia into meaningful personal benefits and also to ensure a strong value proposition that could not to be undermined by competitors. The target segments were visitors who travelled in style, ‘self-challengers’ and business travellers. Highlights and results >Partnered with Qantas for an annual cooperative advertising campaign, which led to an estimated 19,000 passengers booking trips to Australia. This campaign focused on offering compelling Australian experiences and inspiring consumer action with the Qantas Aussie Airpass as the central product marketed through television, print and online advertising, and backed by media relations and event-based promotions. >Consolidated and grew Tourism Australia’s role in the annual G’Day LA: Australia Week promotion held in Los Angeles in January, which was attended by 7,500 people and generated media coverage reaching an audience of 100 million. The Great Aussie Auction online travel auction, a new initiative in which 50 different Australian holiday experiences were promoted and sold through an online auction, received 141,000 visits. As one of the four organisations that founded the event, Tourism Australia takes central marketing responsibility for the promotion and delivers branded events to create opportunities for Australian businesses and talent to promote the destination direct to their American customers. >The partnership with American Express entered its second year. With the goal of increasing the number of people in the Amex audience who travel to Australia, and the amount of money they spend, activity included travel agent training and familiarisations, card-holder direct mail, advertising in key Amex consumer and card-holder publications plus an online promotion. Around 165,000 Amex cardholders visited Australia, a 25 percent increase on the previous year. There was a 35 per cent increase in card swipes in Australia by targeted Amex card-holders, and a 41 per cent rise in spending whilst in Australia totalling US$270 million. In addition, there were more than 55,730 page impressions on the australia.com/Amex website. >Tourism Australia’s new two-tier Aussie Specialist Program came into effect at the beginning of the fiscal year, creating a more far-reaching and powerful network of trained retail travel agents across the United States. Under the two-tier system, almost 13,000 visitors to australia.com, who wanted the assistance of a retail travel agent, were directed to 114 Premier Agents and there was a 61 per cent conversion rate of leads into actual bookings. The number of second-tier Aussie Specialists has increased considerably since the advent of free training and they are the highest converting of any distribution partner in the market. >Generated broadcast, print and online reports with a publicity value of A$68.8 million through participants in the Visiting Journalists Program. Coverage included more than 80 articles in publications like The New York Times, USA Today, Conde Nast Traveller, Islands, Travel and Leisure and National Geographic Adventure. >Developed a loyalty program for media representatives who had previously travelled to Australia under the Visiting Journalists program. Designed to prompt on-going coverage of the destination, the Aussie Press Club delivers exclusive news, events and continuing education to its 150 members. Tourism Australia Annual Report 2005|2006 55 Asia China Tourism growth from China remained strong during 2005/06 with Australia receiving 292,200 visitors, a seven per cent increase on the previous year and generating a Total Inbound Economic Value (TIEV) of $1,367 million. China is Australia’s fastest growing inbound tourism market with 1 million visitors per year expected by 2014. The forecast growth in both visitor arrivals and yield from China make this market critical now and into the future. Under a bilateral agreement between the Chinese and Australian Governments, Australia has Approved Destination Status (ADS) which enables Chinese tourists to participate in group leisure tours to Australia. Tourism Australia plays a crucial role in implementing the ADS agreement and Chinese travel agents must be trained Aussie Specialists to be granted approval from the Department of Immigration and Multicultural Affairs to handle ADS travel to Australia. Tourism Australia’s focus is on safeguarding the market to ensure Chinese visitors enjoy a high quality tourism experience. In 2005/06, the Australian Government made a A$3.9 million commitment to the ADS scheme, including tightening the assessment process for approved inbound tour operators. Fifty-two approved inbound tour operators had to reapply for registration and new tour operators were also invited to apply. This was complemented by the China National Tourism Administration’s (CNTA’s) Honest Travel Program and Tourism Australia’s Aussie Specialist training program. The China office’s key strategic objective in 2005/06 was to set the foundations for generating sustainable, profitable, quality growth from the developing China market in a rapidly changing environment. Activities targeted self challengers from the major urban areas and sightseers from the new ADS regions, and the incentive market. Industry partners, who cater for these travellers, were sought to ensure supply met demand. To increase awareness and knowledge of Australia as a destination, relationships with the media, including online and non-traditional partners, were further developed. Highlights and results >Launched the global campaign, A Uniquely Australian Invitation, in June. The television commercial featuring the tagline ‘So where the bloody hell are you?’ aired on local Beijing, Shanghai, Guangzhou stations as well as nationally on the Phoenix network and was seen by over six million people. Of the viewers, 65 per cent saw the commercial at least twice. >The new campaign advertisements were seen online by 311 million Chinese, resulting in around 450,000 visits to the consumer websites, including the microsite www.wherethebloodyhellareyou.com. >Conducted separate brand cooperative campaigns with Qantas and Singapore Airlines featuring print, online and outdoor advertising in major, priority markets between February and May 2006. >Launched the Honest Travel campaign in November in partnership with CNTA and supported by 17 key Aussie Specialist travel agents in Beijing, Shanghai and Guangdong. Australia was the first and only ADS country to initiate a campaign focused on addressing quality issues. As part of the initiative, key partners in China made a commitment to deliver quality holiday experiences to Chinese consumers. The launch attracted over 50 media representatives from Beijing, Shanghai and Guangdong and generated over 166 news articles in broadcast, print, and online media. >As part of the Visiting Journalists Program, 54 journalists visited Australia on four theme tours and three regional integrated media visits — themed as Adventurous Australia, Australia with Style and Vibrant and Tasty Australia. Thirty travel journalists from Beijing, Shanghai and Guangzhou’s 16 most influential TV and radio stations, online publications, glossy travel magazines and lifestyle weeklies participated in the three media tours, which visited Queensland, Victoria, South Australia and Western Australia. The visits delivered powerful results, including: •Three Australian TV travel programs (13 half-hour episodes). •Three radio programs (nine hours in total). •The production of three Australian travel websites. •Nineteen travel articles generating a total of A$9.6 million in publicity. •Consumer promotions coordinated by the 16 media outlets involved in the program attracted 6,500 participants. •Three consumer events highlighting the themes of the visits were held in Beijing, Shanghai and Guangzhou and attracted 300 people. >Coordinated the ninth annual Australian Travel Mission (ATM) to China, which attracted 53 seller organisations (52 Australian companies and Air China) and 171 buyers from 154 organisations. The mission provided the opportunity for Australian product suppliers to showcase Hong Kong There was a seven percent increase in visitors from Hong Kong to 158,600 arrivals in 2005/06, with a Total Inbound Economic Value (TIEV) of A$536 million. The growing free independent traveller (FIT) segment and competitive market environment, led by airline partners’ price cutting strategy on ticket-only fares, set the scene for an increasing number of independent-oriented travellers to visit Australia. The key strategic objective in 2005/06 was to motivate the FIT target audience by adding trend-setting, lifestyle dimensions to Australian destinations. The Hong Kong office also aimed to address the perception of Australia as only a long stay destination by positioning Australia as a ‘short their tourism experiences and to better understand the new and emerging source regions within China. >Business Tourism also performed well in 2005/06 with the first Team Australia Mission to China held in February, bringing together seven Convention and Visitor Bureaux partners together with industry speakers and the travel trade. In April, the Society of Incentive Travel and Executives (SITE) seminar in China attracted 34 pharmaceutical and insurance decision-makers to inform them of the potential benefits of incentive travel to their businesses. break’ destination for a five to six-day holiday. Highlights and results >Launched the new A Uniquely Australian Invitation campaign to the travel trade and media in March, generating significant media coverage in travel trade publications, prior to the consumer campaign launched in May 2006. >Partnered with South China Media Publications and Cathay Pacific, for a campaign promoting four experiences: Trend Oz, Taste Oz, Indulge Oz and Fun Oz. Editorial features in leading consumer magazines generated publicity valued at A$220,948. Radio promotions on Metro Finance and Metro Showbiz, reached a combined audience of over 1.8 million listeners while online promotions resulted in 12,300 click throughs. Tourism Australia Annual Report 2005|2006 >Around 80,000 copies of an Australian lifestyle guidebook were distributed in leading consumer magazines. >Worked with Hong Kong’s most influential free-to-air broadcaster, TVB, to coordinate a musical travelogue promoting the Northern Territory and Victoria. The 90minute program, Embark on a Musical Journey to the Centre of the World with Miriam and Leo, featured Cantonese pop stars travelling and performing around Australia. The program achieved high ratings and publicity valued at A$3.5 million. >Conducted a brand cooperative campaign with Qantas, which generated 1,733 passengers for Qantas Holidays’ five-day FIT package, 16,634 tickets for the Qantas ticket-only promotion and 580 passengers for the group package promotion. >Major travel trade activity included the Cathay Pacific VIP familiarisation trip in which 18 senior executives from Hong Kong’s top travel agencies travelled to Western Australia in November 2005. These agencies represent 75 per cent of total outbound tourism to Australia from Hong Kong. >A joint promotion with Galileo resulted in the recruitment of 41 new Aussie Specialist agents and expanded distribution to retail and FIT agents. There were a total of 180 registered Aussie Specialists, 67 per cent of whom had completed the full module, for the year. >Business events activities included below-the-line promotions and assistance to companies organising business incentive trips to reward their employees. This resulted in significant growth in the business incentive sector. The biggest incentive group to visit Australia was 1,000 employees from the American International Assurance (AIA) Company. 57 INDIA India continued to show strong growth in 2005/06, with a 33 per cent increase in visitors to Australia to a total of 78,900 arrivals. India’s growth and increasing yield make this an important, high potential growth market, especially for the future. The key strategic intention was to set the foundations for generating high yield growth from a developing market in a rapidly changing environment. Tourism Australia aimed to position Australia as an ‘out of the ordinary’ holiday destination, targeting upscale family groups, honeymooners and the incentives market. Highlights and results >Conducted a three-month cooperative print advertising campaign with Qantas, aimed at increasing travel to Australia in the peak Indian holiday season (April to July). Three key travel agencies, which supported the campaign, reported a 200 per cent increase in business to the airline, albeit off a small base. The results to the end of June 2006 were 15 per cent above target. >Conducted an integrated consumer promotion in October featuring destination print and radio advertising, store displays, direct mail and competitions with Shoppers Stop, one of India’s leading retailers. The promotion ran across nine cities and was supported by Tourism Australia, five state tourism offices (New South Wales, Canberra, Victoria, Queensland and South Australia), Qantas and Thomas Cook. Store visits increased by 31 per cent and 40 Australian package holidays were awarded as prizes. >Hosted India’s leading travel show Deepti Bhatnagar Productions on a visit to Sydney, Melbourne and the Gold Coast to shoot six episodes on Australia’s tourist attractions. The episodes, anchored by Bollywood actress Vidhya Malavade were shown in April 2006 on India’s Zoom TV lifestyle channel. >Assisted Zee TV to shoot five episodes in Sydney for the Zee TV travelogue Full Circle, which was broadcast to 61 million homes via cable and satellite and generated an advertising equivalent of A$124,000. >Received over 550 enquiries after participating in the bridal show Celebrate Vivaha in Delhi and Mumbai in 2005, with 60 leads converted to honeymoon trips to Australia. >Achieved a 24 per cent increase in the number of travel agencies registered for the Aussie Specialist Program to 127 agencies. More than half of the 434 staff at these businesses have qualified as Aussie Specialists. >Grew the Preferred Aussie Specialist agent scheme — a partnership between Tourism Australia, the Department of Immigration and Multicultural Affairs and the agents— by 25 per cent to 76 agencies and 176 registered agents. The scheme has sped up visa application and approval for clients. >Conducted the 2005 India Travel Mission in Goa in September with 42 suppliers (68 per cent more than the 2004 event). Over 100 travel agencies attended the fiveday event and gave it a 100 per cent satisfaction rating. KOREA Korea is the third strongest tourist market in Asia, with a total of 243,000 visitors arriving in Australia in 2005/06, a two per cent increase on the previous year. The Total Inbound Economic Value (TIEV) of Korean visitors to Australia for the year was $972 million. Activities focused on broadening consumer knowledge and creating compelling reasons for Koreans to visit Australia, to create a sense of wonder about new Australian experiences. It aimed to improve dispersal and create higher returns for the Australian tourism industry by targeting the free/independent traveller (FIT) segment. With limited direct air flights to Australia a major challenge, Tourism Australia worked with Korean Air to initiate charter flights to Melbourne and Cairns and promoted Qantas’ supplementary seasonal flights to Brisbane. Korean consumers are among the most tech-savvy in the world, so digital communication remained an essential part of the marketing mix. The key strategic intent in 2005/06 was to capitalise on the shift in the consumer market and reposition Australia as a destination for long term, high value, independent travellers. Highlights and results >Launched the new A Uniquely Australian Invitation campaign to the travel trade and media in March, which was attended by more than 200 guests, including 71 journalists from 49 media outlets. The campaign was rolled out to consumers in June. >Partnered with Korea’s major internet portals, Daum and Naver, as well as Cathay Pacific and six partner agents to conduct the Best of Australia (BOA) 2 campaign, from May to July. The campaign included innovative digital initiatives to showcase Australian experiences and FIT products. The campaign included promotions such as: •The ‘FIT expedition team’, which involved winners of a travel competition visiting Australia and relaying their experiences via a real time travel blog and a BOA2 event pages in Daum. •An online memory game featuring recommended itineraries plus various interactive consumer online promotions to position Australia as the best FIT destination. •Over one million visits to online pages by 314,697 unique visitors and participation by more than 50,000 people in the online consumer events. •Collaboration with On Style Channel, Mobile MMR and KBS FM Radio to support the digital components of the campaign. On Style compiled and edited 50-second Travel Style clips from Tourism Australia’s stock footage and aired these 85 times in June. Tourism Australia Annual Report 2005|2006 •Key product or experiences messages were sent to 100,000 mobile phones with invitations to the BOA2 online event web pages. •KBS FM radio introduced AussieMate, the new FIT product from Cathay Pacific as the reward for its listeners. •The distribution of a series of FIT guidebooks on Sydney, Melbourne, Brisbane and the Gold Coast, plus a newly produced Sydney transportation guidebook, to consumers and trade partners. >Negotiated with the producers of two Korean television dramas, Princess and One Fine Day, to incorporate Australian storylines into their programs. Both dramas, which featured episodes in Brisbane and Sydney, received good ratings and were seen by over 1.7 million viewers. To leverage the popularity of the programs, an online writing contest on the MBC National TV home page was initiated. >Worked closely with Korean Air to boost capacity and drive interest in new Australian destinations through charter flights from Seoul to Cairns and Melbourne. Combined with additional Qantas flights to Brisbane, this initiative delivered over 9,000 passengers to Australia. >Consolidated the Aussie Specialist Program to 570 registered, of whom 92 have completed the full course, and hosted Aussie Specialist familiarisations to Perth, Adelaide and Melbourne in March. >Ran a special honeymoon familiarisation, in collaboration with Tourism Queensland and Tourism New South Wales in June for a future honeymoon promotion in partnership with Asiana Airlines and 10 major agents. 59 Malaysia Malaysia delivered 152,500 visitors in 2005/06 and had a Total Inbound Economic Value (TIEV) of $567 million. It remains one of the key Asian markets for Australia with a high level of repeat visitation. To increase yield, activities aimed to re-position Australia, by offering new experiences and products to stimulate the first-timer segment and maintain the repeat visitor segment. The challenge was to enhance Australia in the mind of the consumer and present it as an appealing destination, offering a unique combination of accessible nature experiences and cosmopolitan lifestyle. The key objective was to provide new reasons for consumers to visit Australia, through product experiences that catered for returning visitors. Highlights and results >Commissioned the My Australian Adventure travel series, in partnership with channel TV3 and the STOs, making Australia the first foreign destination to gain exposure on the leading prime-time TV channel in the market. The estimated media value of the program was A$660,000, with print articles about the series generating an additional A$185,000 worth of publicity. The eightepisode lifestyle program, starring Malay celebrities and their Australian experiences, consistently out-rated other programs in its timeslot. The program was supported by interactive consumer promotions such as an online contest; SMS; links to STO websites; promotions for trade partners; a consumer fair and consumer events. >Worked with all State tourism offices to develop the ‘Best of Australia’ packages, to support the brand campaign and My Australian Adventure. Targeted at the self-drive and family segments, 10 Aussie Specialist Agencies and 11 trade partners participated in the campaign. In the six months that the campaign ran, 1,467 passenger bookings were confirmed. >The Aussie Specialist agent program continued to be an important vehicle to build the distribution network, with 268 travel agents from 40 agencies enrolled in the program. Of these, 88 agents have completed the program, an increase of 42 per cent. Two networking events were attended by 82 Aussie Specialist agents, while 15 participated in a familiarisation to Australia. >Partnered with Tourism New South Wales and Tourism Victoria for the Taste of Australia consumer promotion to highlight Australia’s cosmopolitan food and wine experiences. During the 10-day event, Australian celebrity chefs, wine makers and chocolatiers hosted gala dinners, cooking classes, wine tutorials and chocolate-making workshops – generating strong attendance and publicity for Australia. >Coordinated the largest ever Australian presence at the annual Malaysian Association of Tour and Travel Agents’ (MATTA) International Travel Fair in March. Ten Australian suppliers and all State tourism organisations participated in the event, which attracted 75,000 visitors. A 12-page supplement was produced to generate awareness about Australian experiences and trade partners supporting the event. >Participated in the annual Penang MATTA fair for the first time. The fair attracted 41,000 visitors. >Organised the first Incentive Training Seminar in Kuala Lumpur, attracting 63 agents from 43 incentive agencies. Singapore Australia received a total of 251,700 visitors from Singapore in 2005/06. While this was a decline of six per cent relative to the same period last year, the Total Inbound Economic Value (TIEV) of the market increased by 11 per cent to $738 million in real terms. As Australia’s most mature Asian tourism market, Singapore continues to be a reliable performer. However, Singaporean’s familiarity with Australia requires a focus on broadening consumer knowledge and introducing a ‘wow’ factor to maintain share in this highly competitive market. Increased fuel surcharges and competition from regional destinations are among the factors that have impacted on Australia’s performance. The appeal of an Australian holiday remains high as Tourism Australia and State Tourism partners continued to present new travel options through a wide range of marketing programs. The key objective for 2005/06 was to secure the repeat travel market with the introduction of new travel experiences as well as identifying potential growth opportunities in business tourism and the school excursion markets. Highlights and results >Launched the Uniquely Australian Invitation campaign to consumers in May. >To coincide with the launch of the new campaign, Qantas offered an air pass, enabling Singaporeans to visit up to three destinations within Australia. The campaign used a combination of television, print, online and direct marketing and was supported by trade partners through their own marketing programs. The campaign generated strong passenger sales and stimulated greater dispersal, with many Singaporeans taking advantage of the offer to visit new destinations such as Tasmania and the Northern Territory. Tourism Australia Annual Report 2005|2006 >Secured 19 print and two broadcast journalists on the Visiting Journalists Program, resulting in the publication of 148 articles on Australia plus a seven-episode All Australian television program on Singapore’s highest rating channel, MediaCorp 8. >The All Australian program, which was the result of collaboration with six State tourism organisations and leading trade partner Chan Brothers, was the highest rating travelogue ever produced in Singapore and generated media coverage with an estimated value in excess of A$8.1 million. The series showcased the experiences of the Singaporean celebrities in Australia and was supported by print advertising and online activity. >Partnered with Singapore Airlines and four State tourism organisations to produce a range of editorial features in the leading newspaper, The Straits Times. The campaign was supported with online and direct marketing activities and succeeded in broadening the range of Australian options available to Singaporeans. >Promoted the Melbourne 2006 Commonwealth Games, in partnership with Tourism Victoria and Anglo French Travel. The M2006 campaign leveraged publicity around the Games by focusing on Melbourne and Victoria. Public relations efforts generated high awareness of the destination and achieved media coverage valued at more than A$462,000. >Partnered with Tower Club, Singapore’s leading private members club, to showcase Australia’s culinary reputation by enlisting Mark Best from Marque restaurant in Sydney for a one-week promotion at the club in March. As a result of the promotion, leading editors and journalists produced 15 articles on Australia’s food and wine scene. >Increased the number of Aussie Specialists to 178 agents from 36 agencies, an increase of 48 agents and two agencies from 2004/05. >Piloted a lead distribution program to support the Qantas brand cooperative campaign, providing a direct link for consumers to Aussie Specialist agents. During the twoweek television advertising program, the system delivered 1,450 leads to agents, with approximately 45 per cent of these converted to travel to Australia. 61 Taiwan Despite a two per cent drop in visitors to 102,100 in 2005/06, Taiwan’s market continued to deliver strong results with a Total Inbound Economic Value of $289 million. Australia remained a popular incentive destination and in market activities continued to promote the growth of this key segment. Utilising limited resources, Tourism Australia has re-engaged the trade and consumers and delivered some good results. It has succeeded in raising awareness about Australia and delivering more Australian products to consumers. Tourism Australia has worked with travel agents to develop quality products and secured stronger Australian tourism industry recognition and trade engagement. The key objective in 2005/06 was to re-engage consumers and trade with high quality, new Australian experiences and build a strong position for Australia in the holiday and incentive segments to improve Australian industry involvement Highlights and results >Coordinated the Australian Pavilion at the Taipei International Travel Fair (TITF), which was visited by 120,000 people, and secured the support of major partners, Tourism Victoria, Tourism Queensland and Cathay Pacific consortium agencies. During the fair, 4,000 visitors filled in a survey on buying behaviour. >Produced a 60-page Australian guidebook, tailored for Taiwanese tourists, that was distributed to 30,000 consumers by Tourism Australia and its trade partners. >Participated in the Team Australia Business Events Educational (TABEE) in Bangkok and organised corporate functions and familiarisations for incentive agents and corporate end-users. >Distributed an incentive guide book, business tourism supplements and agent training kits to 1,700 incentive agents and 100 corporate end-users. >Secured media coverage in Taiwan valued at A$925,000. Strong editorial coverage was achieved through two Visiting Journalists Program trips involving seven journalists, and through media gatherings. Major activity included collaboration with Taiwan Public Television, the leading national broadcaster, which resulted in the filming of a 20-episode drama series in Sydney and its surrounds that aired in prime time to 2.3 million people. >Consolidated the Aussie Specialist Program with 186 travel agents from 45 agencies enrolled. Of these, 82 agents (44 per cent) had completed Part 3 of the course. >Conducted four Aussie Specialist networking training courses, which were attended by 30 ASP agents. The courses were on creative product development, cost analysis of group tours, emergency handling procedures for group tours, and Australian wine. >Engaged three airline partners— China Airlines, Cathay Pacific and Qantas — and 20 agencies to promote 16 quality products through 16 advertorials. During the five week promotion, Tourism Australia received 1,800 enquiries for its free guide book. Thailand Around 75,000 visitors from Thailand arrived in Australia in 2005/06, generating a Total Inbound Economic Value of $288 million. Despite the tsunami and political instability in Thailand, this market continues to provide relatively strong yield and potential, particularly from the business tourism segment. Activities focused on stimulating market demand through consumer promotions, highlighting Australian experiences and enhancing industry engagement. In 2005/06 the key strategic intention was to capitalise on the growing upscale free and independent traveller (FIT) segments by re-engaging these consumers with new, higher quality holiday experiences. The core target markets included upmarket families and double income, no kids (DINKS) travellers. Highlights and results >Achieved publicity valued at more than A$1 million through the Visiting Journalists Program. Visits by 24 print media and two broadcast trips to key destinations generated in excess of 35 stories in publications such as Flavors, Traveller’s Companion, Cosmopolitan, Travel Around the World and Expression. The articles showcased Australian city lifestyle, the variety of food and wines, nature and fun, business tourism and trade events. To ensure greater longevity, all the stories were placed in the travel deals section of australia.com. In addition, Thailand’s Unseen TV station broadcast programs with an estimated publicity value of A$40,000. >Generated more than 500 bookings through a cooperative campaign with Singapore Airlines and Aussie Specialist Agents. The campaign targeted nominated family segments and bookings exceeded the initial target by 25 per cent. >Ran a competition in partnership with two leading consumer brands to highlight Australia’s city and adventure experiences for the family segment. This promotion, with Sizzler restaurants and the Tea Tree cosmetic company, generated more than 150,000 entries for a competition offering a prize trip to Australia. >The Aussie Specialist Program (ASP) continues to be crucial for the distribution of Australian product in the Thai market. Fifty agencies with 122 qualified agents are members of the program. Consumer enquiries to the Tourism Australia office are referred to an ASP agent via the IVR system. >Attracted five Thai corporate leaders and four media representatives to the annual Business Tourism Event in Asia (TABEE), exceeding original targets. >Held business tourism seminars for direct sale and life insurance organisations to promote Australia as an ideal incentive destination. As a result, a large multi-national company chose Australia for its next major incentive in 2007. >Developed advertorial with targeted industry publications to promote Australia as an ideal incentive destination. Tourism Australia Annual Report 2005|2006 63 Japan Japan remained Australia’s third largest market in 2005/06 in terms of arrivals and second in terms of inbound leisure traveller economic value (Leisure TIEV). This was despite a four per cent drop in visitors from Japan to 674,200 in 2005/06. The Total Inbound Economic Value was $2.095 billion, a 1 per cent increase from 2004/05. Australia’s share of the Japanese outbound long haul market has remained at around 3.9 per cent. Free, independent and Experience Seeker travellers now constitute around 45 per cent of the outbound market from Japan. The key strategic intention in 2005/06 was to position Australian experiences so that Tourism Australia could capitalise on the fast evolving market of higher yield independent and special interest travellers. Among the target markets were ‘office ladies’ — young professional women — and Jukunens — the 27.5 million people aged 50 to 64 years, including baby boomers. Supplementary markets included school excursions and sports groups. Highlights and results >Launched the new A Uniquely Australia Invitation campaign in Tokyo in March to over 120 key media and tourism representatives, including the Japan Australia Advisory Group (JAAG), Club Oz and Oznet members. Industry briefings were also held in Osaka, Nagoya, Fukuoka and Sapporo. >Aired the new campaign’s 30-second television commercial from April through to June in Osaka, Nagoya, Fukuoka and Tokyo, reaching 70 per cent of the target market of Experience Seekers in Tokyo and 50 per cent in Osaka and Nagoya. The 60-second cinema version of the advertisement ran in 100 cinemas in five major regions, including Sapporo. >Ran a nationwide brand print advertorial campaign in 29 magazines, with a combined circulation of seven million people. The advertisements featured three Japanese celebrities who had lived in, or experienced life in Australia. >Issued a fortnightly electronic newsletter, Travel Club, to 75,000 subscribers featuring a series of 13 topics by 13 writers, who had visited Australia. >In May and June, around 160,000 Japanese consumers sent electronic postcards as part of a competition promoting Australia through the campaign site on australia.jp. The prize, two return tickets to Australia provided by Qantas Airlines, was publicised through online media ads, the Qantas Frequent Flyer e-newsletter, and Tourism Australia’s consumer e-newsletter. >Embarked on cooperative brand activities with Qantas, Australian Airlines and Japan Airlines targeting Experience Seekers. Both Qantas and Australian Airlines ran advertisements featuring the Sydney Harbour fireworks to promote the Aussie AirPass while Japan Airlines ran a nationwide advertisement featuring a rainforest image to promote emerging independent and semi-independent travel to Australia. >Conducted a promotion with Tokyo’s top radio station, J-Wave, to promote Australian travel experiences in the two weeks before the Japanese summer holiday season. A 10-minute program Aussie Invitation to inspire listeners to travel to Australia was broadcast and over 20,000 consumers attended a one-day Experience Australia event at the Takashimaya department store in the popular Shinjuku district. >Conducted media promotions during the 2006 FIFA World Cup, leveraging interest in the Socceroos. The Australian Embassy in Japan hosted an exclusive ‘live site’ event on 12 June to celebrate the first soccer match between Australia and Japan, which generated media coverage on 11 television programs and in 14 print publications. >The Action Plan for Japanese Tourism was launched by the Minister for Small Business and Tourism, the Hon Fran Bailey. During a visit to Japan, the Minister met with key trade industry and media representatives to discuss the plan and reaffirm the Australian Government’s commitment to the Japan tourism market. The Minister also launched the 2006 Australia-Japan Year of Exchange at the Australian Embassy in Tokyo. >Conducted the Visit More of Australia cooperative marketing campaign with eight wholesalers, Qantas and Japan Airlines. New travel brochures were distributed, highlighting the diversity of package holiday options and experiences, double-page advertorials in the brochures featuring World Heritage sites and wildlife for the Kamiki period (April–September). The campaign also focused on package tours to the Gold Coast, as the main gateway for Kamiki. >Organised the Japan Australia Mission (JAM) 2006, Australia’s premier trade event for the Japan market. A total of 56 Australian suppliers met with 50 Japanese planners over two days of the event, providing participants with face-to-face business and networking opportunities and updates on current market trends. Feedback from sellers and buyers showed they were highly satisfied with the event. >Conducted 10 agent familiarisations with the state tourism organisations for 57 Oznet members, who are the key retail agents in the market. The familiarisations covered themes like Rainforest and Eco and were aimed at increasing tour planners’ knowledge of unique products for specialist and free, independent travellers. As a result, JTB World Vacations, a top Japanese travel company, developed a new package tour to reflect the familiarisation itinerary. >Generated editorial coverage with an estimated value of around A$83 million through 50 television and print media representatives touring Australia as part of the Visiting Journalists Program. Public relations activity generated an additional A$25 million worth of coverage in major media outlets, including NHK television. >Coordinated a familiarisation for 50 school teachers from Japan in partnership with the Japan School Tour Bureau, Tourism New South Wales, Tourism Victoria, Qantas and Japan Airlines. Participants included key decision makers in the Japanese school excursion market. The event was followed by an educational seminar Study in Australia, which was attended by around 100 school teachers in Tokyo, Sapporo, Nagoya and Fukuoka. Tourism Australia Annual Report 2005|2006 65 Gulf Countries Tourism Australia’s activity in the region is concentrated on the Gulf Cooperative Council (GCC) countries of Bahrain, Kuwait, Oman, Qatar, Kingdom of Saudi Arabia and the United Arab Emirates. Other Middle Eastern countries continue to be serviced through the Aussie Enthusiast Program, which is a joint initiative between Tourism Australia and Austrade. In 2005/06 Australia received 39,414 visitors from the GCC countries, an increase of 14 per cent compared with 2004/05. The largest number of travellers came from the United Arab Emirates and the Kingdom of Saudi Arabia. A key objective for 2005/06 was to continue building awareness of Australia as a desirable long-haul travel destination, by profiling Australian products to promote the country’s uniqueness as a holiday destination. Highlights and results >Worked closely with the travel trade throughout the Gulf Countries. >Appointed a new business development manager, based in Dubai, to implement training for travel agents; to build additional distribution partners and to strengthen existing relationships. >Hosted the second travel agents’ training workshop, Yinala, in Sydney, in conjunction with State Tourism Organisations (STOs) and airlines. The event was attended by over 50 agents from across the Gulf region and 50 Australian suppliers. >Attended the three-day Arabian Travel Market in May 2006, in Dubai, in partnership with STOs, Qantas and 18 Australian suppliers. The event received over 16,000 visitors, including 10,000 trade representatives and over 3,000 consumers. >Partnered with Tourism Victoria and Tourism Western Australia, to attend the Emirates Holidays Travel Show in April 2006 in Dubai. The event was visited by 450 travel agents from 29 countries in the region. New Zealand >Held a roadshow in May 2006 in Kuwait City, Doha (Qatar) and Abu Dhabi, with 14 Australian product suppliers and tourist offices. >Distributed Oz News—Gulf Update, a monthly online newsletter to over 800 travel agents. >Released a new version of the Aussie Enthusiasts program in May, providing agents in the region with the opportunity to participate in online training, in order to enhance their overall knowledge of Australia as a tourist destination. >Produced branded marketing material to support travel agents throughout the Gulf Countries. This included the Travellers Guide, Off to Oz directory, dedicated product guides and online visa application instructions. >Trained agents in Riyadh and Jeddah, when the Tourism Australia representative visited the Kingdom of Saudi Arabia. >Ran billboard advertising campaigns in Saudi Arabia and Kuwait City. >Reached over one million viewers through a promotion on Citruss Travel TV, during June 2006. The promotion profiled Australia as a unique holiday destination. >Conducted cooperative advertising campaigns with major travel agents in Qatar and the United Arab Emirates during the key selling months. New Zealand is the number one market for Australian tourism in terms of arrivals, generating 1,090,500 visits to Australia in 2005/06. It is also a primary contributor to the economic value of tourism in Australia delivering A$1.787 billion in Total Inbound Economic Value in 2005/06. New Zealand is unique in that it is the only true shorthaul leisure market for Australia, with the highest return visit rate at 93 per cent. There is a strong awareness level of Australia (80 per cent) and a relatively high preference for travel in Australia (45.6 per cent). The challenge is to create a reappraisal of Australia and address knowledge gap issues. The key strategic objective in 2005/06 was to motivate the ‘ideal visitor’ to travel to other gateway destinations and to increase their stay and spend. Among the target groups were young couples without children, affluent couples aged 35 to 64 years and wealthy retirees. The business market was also targeted. The aim was to Influence ideal visitors to move along the purchase cycle from preference to intention, recognising that they believe they are familiar with Australia and have a ‘been there, done that’ attitude. They prefer to buy trips through the recommendations of family, friends and travel agents. Highlights and results >Launched the Uniquely Australian Invitation campaign, which met its reach and frequency targets for the March to June 2006 phase. The 60-second television commercial was viewed by 84 per cent of the target audience, with 64 per cent of viewing it three times or more. The 30-second commercial was viewed by 93 per cent of the target audience, with 86 per cent viewing it three times of more. Of the target audience, almost 200,000 or 68 per cent saw the magazine advertisement. >Organised the inaugural G’Day NZ: Australia Week 2006, a series of consumer and corporate events focusing on the spirit of mateship between Australia and New Zealand. The events included a gala dinner, the ‘longest lunch’, film festival and photographic exhibition, which attracted over 7,000 people. A total of 70 stories were generated, reaching 2.1 million people and achieving a publicity value of NZ$500,000. >The network of 56 Premier Aussie Specialist agents received 906 leads, the majority of which were referred through australia.com. >A total of 1,326 agents were signed up for the Aussie Specialist Program, of whom 603 were qualified while the remainder are in training. Six State and Territory modules were launched as part of the program. >Hosted 10 media representatives as part of the Visiting Journalists Program. These journalists represented publications such as Metro, NZ Life & Leisure, The New Zealand Herald and NZ House & Garden. Tourism Australia Annual Report 2005|2006 67 United Kingdom and Europe United Kingdom and Ireland The United Kingdom is Australia’s most valuable international source market. Through its increasing investment in new and engaging marketing programs, Tourism Australia aims to more accurately target the higher yielding Experience Seeker segment. The number of visitors from the United Kingdom grew by one percent in 2005/06 from an already large base to 708,700 travellers. Leisure visitors contributed to a Total Inbound Economic Value of A$2.857 billion. There was a five per cent increase in visitors from Ireland to 59,400 people, highlighting the future potential of the market. The key strategic intention in 2005/06 was to have greater direct engagement with customers, in order to trigger an emotional connection that would convince them to visit Australia now. To achieve this, measures that included greater dialogue with the mainstream media and an improved customer relationship management strategy were implemented. Another important aspect was leveraging the tourism potential of key events like the 2005 Ashes Tour and the 2006 Commonwealth Games In terms of partnerships, one of the objectives was to implement a new business strategy to attract new distribution partners. Highlights and results >Launched the new destination campaign in March. The campaign received a welcome publicity boost when the television advertisement was initially banned from screening on United Kingdom television by the Broadcast Advertising Clearance Centre (BACC). The ban made headlines and led to over 50,000 downloads of the uncut version of the advertisement from the campaign website in the first week. The Minister for Small Business and Tourism, the Hon Fran Bailey, flew to London for talks with her counterpart in Britain and the ban was withdrawn. >Reached over 25 million United Kingdom consumers through a cooperative advertising campaign with Qantas in September and January, which generated more than 200,000 responses. >Conducted a cooperative campaign with Singapore Airlines in February and March 2006. >Boosted traffic to the www.work.australia.com microsite, which targets 18-30 year olds and potential Working Holiday Makers by showcasing the working holiday itineraries and experiences itineraries of two young gap year travellers in Australia. Online advertising drove traffic to the microsite, where visitors were urged to ‘forward the link to five friends’ in order to take part in a competition. With 40,000 unique sessions in the first month, the site received more than double the forecast traffic for the campaign period. >Coordinated a 12-page advertorial in the glossy travel magazine Ultra with six tour operator partners and Qantas to target high yield Experience Seekers. The feature showcased Australia’s luxury experiences and provided a strong call to action. A reader event was also organised with Wine Australia as part of the promotion. The supplement reached over one million readers and the reader event was oversubscribed by 700 per cent. >Worked with the television program T4 Down Under, which featured well known presenters broadcasting from both Sydney and Hamilton Island to showcase tourism products in both destinations. The program aired daily on United Kingdom’s Channel 4, from 24 December 2005 to 1 January 2006, to an audience of over four million viewers. >Worked in partnership with Tourism Victoria, Qantas and M2006 to produce a Commonwealth Games supplement for The Daily Telegraph. Additional, broadcast coverage was generated for ‘The Road to Melbourne’ with print coverage achieved through the Visiting Journalists Program. >Produced a Travel Weekly supplement for agents on Australia Day, and organised a Virgin radio consumer promotion as well as media events at the Century Club. >Organised a trade promotion with Travel Trade Gazette to drive recruitment of the Aussie Specialist Program. The promotion, which was supported by Qantas and the State Tourism organisations, offered three travel agents plus their ‘mates’ the chance to win a trip to Australia. The promotion exceeded Aussie Specialist recruitment targets, with 330 qualified and 502 in training. There were over 2,000 hits to australia.com/ttg and coverage with an estimated advertising value of $125,000 was generated in Travel Trade Gazette. >Implemented a new business strategy in October 2005 through the Destination Australia Marketing Alliance, which resulted in upmarket tour companies such as Thomas Cook, Cox & Kings, Bailey Robinson and Scott Dunn incorporating new Australia programs. In addition ITC Classics, Seasons in Style, Elegant Resorts and Abercrombie & Kent agreed to enlarge their portfolios of Australian products and raise the country’s profile with their clients. >Interaction with the Irish trade included the launch of three Aussie Specialist wholesale training modules or wraps, created specifically for tour operators. France There was an 11 per cent increase in arrivals from France to 65,500 visitors in 2005/06. There was a strong 46 per cent dispersal of French tourists to the regions. Tourism Australia’s challenge was to convert the visitor growth into yield, whilst maintaining the high dispersal. The key strategic intent for 2005/06 in France was to sustain high dispersal tendency by pursuing the youth segment and the high-yield honeymoon segment. The strategy was put into practice through a combination of targeted consumer activities and a network of partners in all areas of distribution. Highlights and results >Conducted a cooperative campaign with Qantas, which included radio, print, online and trade advertisements, plus targeted email blasts and public relations activity. Highlights of the campaign, which aimed to motivate consumers to implement their travel plans to Australia, included: •Reaching a total audience of 9.7 million consumers. •Over 53,000 direct responses to online ads (clickthroughs) were received and there was a 90 per cent increase in sessions on the French version of australia. com over the previous year. •Full, half and quarter-page advertisements appeared in leading newspapers and weekly magazines such as Le Figaro, Le Monde, Paris Match, Les Echos Weekend, Courrier International and Télérama Sortir. Tourism Australia Annual Report 2005|2006 •Online activity included a range of advertisements showcasing Australia’s diversity in news, travel and lifestyle websites including, www.Liberation.fr, www.L’equipe.fr, www.lemonde.fr and www.linternaute.com as well as on www.Boursorama.com, website of the Paris Bourse. •Public relations activities, including 13 media relations exercises and four Visiting Journalists Program articles also had a positive impact on australia.com sessions. >Launched the French version of the working holiday visa website – www.travail.australia.com – in January. This followed a two-week promotion in October and November in the Paris, lle de la France edition of the Metro newspaper to promote changes to the Working Holiday Maker visa scheme. The promotion combined print and online advertising, including a competition on the Metro website (www.metrofrance.com) to win a trip to Australia. >Leveraged off the interest generated in Indigenous art and culture through media events around the opening of the Musée du Quai Branly in June. The museum has devoted more than 2,400 square metres to a display of striking Indigenous Australian art. Organised media activities promoted Australia as a travel destination and sponsored the Australian Embassy’s Musée du Quai Branly promotional banner. >French consumers were given 25,000 copies of the 2006/07 edition of The Official Guide to Australia, which were distributed via a variety of mediums including australia.com. 69 Germany There was a six per cent increase in visitors from Germany, with 150,400 arrivals to Australia in 2005/06. Visitors from Germany had a Total Inbound Economic Value of A$703 million. Germany is Australia’s sixth most valuable inbound market in terms of yield and has the third highest rate of dispersal. Tourism Australia worked to develop a closer engagement with consumers in Germany and improve visitation through trade development programs in 2005/06. Australia is now in a strong position with a greater understanding of the consumer and positive consumer sentiment in favour of travel. The key strategic objective was to make visiting Australia more ‘achievable’ for people in Germany. This goal was to be reached through various communication strategies, including increasing the number of visits to the website australia.com by 15 per cent. Tourism Australia intended getting validation of Australia as a destination with endorsements by previous German visitors. Highlights and results >Launched the new A Uniquely Australian Invitation destination campaign to the German travel trade and media at ITB 2006 – the major international tourism fair in Berlin. The campaign was shown exclusively to the trade and to over 40 journalists at the event. This was Tourism Australia’s first TV advertising campaign in Germany since 1999. In addition there was cinema and online advertising as well as television commercials and a SAT1 television breakfast promotion. >Conducted a major advertising campaign with Qantas from September through to December, which included print, online and trade advertisements, as well as public relations activity. The campaign aimed to create a sense of urgency about travelling to Australia with Qantas and included a competitive airfare of €965, plus two flights within Australia for €25 each (taxes included). Results included: •Almost 1,500 calls were fielded by the Qantas campaign hotline, assisting the airline to achieve a total of 7,798 bookings between September and December. •Reached a total audience of over 5.7 million consumers through the combined media activities. •Print advertisements appeared in popular titles like Stern, Welt, Focus and National Geographic, with 85 per cent in priority, right-hand pages of the newspapers and magazines. •Over 50,000 direct responses (click-throughs) were generated to online advertisements. •Sessions on the australia.com German site increased 29 per cent over the previous year during the campaign period. >Launched the German version of the new Working Holiday Maker visa micro-site www.jobben.australia.com in January. An integrated youth campaign with MTV, including online and print advertising was conducted to drive young consumers to the site. >Ran a four-week radio promotion on Planet Radio in the Frankfurt area and a two-week radio promotion with JAM FM in Berlin to build awareness and uptake of Australia’s Working Holiday Maker visa program. The promotion included a competition which received 13,711 entries. >Partnered with the Football Federation Australia (FFA) to conduct media activities focused on leveraging public interest in Australia’s participation in the FIFA World Cup in Germany. >Ran a promotion with a leading German trade magazine, giving three travel agencies in Germany the chance to win their own World Cup party to watch Australia play Japan, Croatia and Brazil. Elements of the Touristik Akutell World Cup Promotion included a one-page editorial on the competition and a seven-page editorial on Australia’s Great Journeys and the Aussie Specialist Program in the ITB edition. This was followed by eight pages of editorial on the competition in post ITB editions. >Leading, specialised consumer magazine Trekkers World published a 36-page dedicated Australia Special Reiseziele Australien. The bimonthly magazine was available across Germany between October and December, with an additional 10,000 copies distributed at German consumer shows in early 2006. An online version of the supplement was placed on the Trekkers World website www.trekkers-world.de for six months. >Achieved an increased share-of-voice with the German public through consumer-orientated activity, including events such as Australia Rocks, Gebeco Roadshow. Tourism Australia was represented at five consumer shows in 2005/06 including ITB. >Undertook training of the German travel trade during familiarisations to Australia and through events such as: Dertour Roadshow, Meiers Top 100, Gebeco Trade and Consumer Roadshow and FTI Roadshow. Individual sales calls at direct seller offices were conducted by a new dedicated trainer. >Organised Aussie Specialist Program initiatives such as Aussie Hero of the Month. Also increased contact with the industry through incentives, competitions, a newsletter with German specific content, continuous trade press support, and additional tour operator modules for Meiers, FTI, Gebeco as well as updates of the existing Dertour module. >Introduced a newsletter to improve communication with the German travel trade. Tourism Australia Annual Report 2005|2006 Italy Italy remains a prime source market in Continental Europe with Australia considered a high quality, fashionable destination amongst the key target traveller segments. In 2005/06 Australia experienced three per cent growth in visitor arrivals from Italy to a total of 50,800. Tourism Australia’s focus in this market is to convert visitor growth into yield through engaging distribution partners and focusing on consumer engagement through media relations programs. The key strategic intention for 2005/06 in Italy was to sustain the high dispersal tendency by pursuing the youth segment and where appropriate target the high yield honeymoon segment. Highlights and results >Ran radio and online advertisements during January and February with Qantas, aimed at creating an urgent desire to travel to Australia. Two radio stations carried advertisements targeted at audiences in Rome and Milan for a fortnight. The combined media reached approximately 7.8 million Italian consumers. There were over 34,000 direct responses to australia.com/voli. More than 80 per cent of the visitors to australia.com went through to the australia.com/voli campaign page. >Generated media coverage with an estimated value of A$20,601,500 through media relations activity, promotions, events and the Visiting Journalists Program. The publications, reports and broadcasts reached more than 45 million people. >Conducted the Hip Australia Promotion which consisted of integrated consumer, public relations and trade promotions highlighting unique and fashionable Australian 71 experiences. Publicity included a 16-page full colour Australia supplement Hip Australia, which was distributed with Traveller and Vanity Fair with 15,000 run on copies also distributed at consumer shows. Consumer web activity included the micro-site www.hip.australia.com plus online content and competitions on www.gqonline.it, www.voguevanity.it and www.glamour.it. >Launched a six-month honeymoon promotion, with leading honeymoon and bridal show organiser Vogue Sposa, part of the Condé Nast group, as part of the Destination Australia Partnership. The promotion included participation in two leading bridal shows, an advertorial supplement in bridal magazines plus web and public relations activities. >Introduced the OzCars, the inaugural Australian Travel and Tourism Awards, to Italian travel industry partners for excellence in the sales and marketing of Australia. >Participated in the leading trade and consumer show, BIT Milan, in the major trade-only show TTG Incontri and in the BMT Napoli Trade Show, which services trade from central and southern Italy. >Launched the Italian version of the dedicated youth site www.lavoro.australia.com, targeting youth and student travel to Australia. >Introduced a regular newsletter and updates to help inform the Italian trade of new developments in Australian tourism. >Distributed around 25,000 copies of The Official Guide to Australia to consumers via a variety of mediums including australia.com requests, travel fairs, Australian Embassy and Consulates, tour operators and airline offices. Switzerland and Austria Swiss visitors remain among the world’s top spenders on trips to Australia. With a high rate of dispersal (55 per cent), Tourism Australia’s focus is on building arrivals through consumer promotions and working with trade distribution partners. There was a seven percent increase in Austrian arrivals, with 19,700 visitors coming to Australia in 2005/06 and a one per cent increase in Swiss arrivals, to 41,300 visitors. The key strategic intention for 2005/06 was to sustain the high dispersal tendency by pursuing the youth segment and the high yield honeymoon segment where appropriate. Highlights and results >Ran an Australian micro-site off Switzerland’s leading portal Bluewin — www.de.bluewin.ch — which has 1.3 million visitors a month. The micro-site featured stories about Australian experiences and tourism products as well as a competition to win a holiday for two to Australia. Traffic to the Swiss version of australia.com increased by 416 per cent as a result. In addition, there were a total of 38,756 page impressions on the microsite, around 18,500 additional user sessions on the Swiss version of australia.com, and 7,000 users to the competition entry section. >Achieved A$4,590,400 in media coverage from its media relations, promotions, events and Visiting Journalists Program activity in Switzerland and Austria. The media coverage reached over 15 million people. >There was a 60 per cent increase in the training of travel agents (130 qualified), predominantly through the Aussie Specialist Program. >Conducted the first Swiss mega-familiarisation to Australia, which took place in April when major Swiss tour operator Knecht Reisen sent 100 top retail agents to Australia for an ‘edutainment’, consisting of a training workshop in the host city Perth and familiarisations. Training also took place through a small workshop during FESPO, Switzerland’s main consumer travel show. >Held the Club Down Under Switzerland event at the Outback Lodge in Zurich and highlighted Australia’s unique food, wine and lifestyle. During the event journalists learned how to cook crocodile kebabs and kangaroo steaks. >Held the first Club Down Under in Austria at the Vienna Concert House, showcasing Australian arts and musician David Helfgott. >Introduced a regular newsletter and updates to inform Swiss and Austrian trade representatives about the Australian market. >Represented Australia at the major Swiss travel trade show Fespo in Zurich in January, through the Destination Australia Partnership . >Achieved positive coverage on Australia through trade journalists attending ATE 2006 in Adelaide, ITB in Berlin, Fespo in Switzerland and Discover Australia as well as through trade advertising. >Distributed around 110,000 copies of The Official Guide to Australia to consumers throughout Switzerland and Austria. Tourism Australia Annual Report 2005|2006 Nordic Countries The Nordic region continues to prove valuable for Australia in terms of yield and dispersal. There were 74,000 visitors from Norway, Sweden and Denmark in 2005/06. The major source markets in the region were Sweden and Denmark, which provided over 58,000 of these visitors, about 10 per cent of whom were high-yielding working holiday makers. The key objective for 2005/06 in the Nordic region was to sustain the high dispersal tendency by pursuing the youth segment. Highlights and results >Launched the Swedish and Danish versions of the Working Holiday Maker Visa website www.job.australia.com. >Organised a promotion with Denmark’s Radio FM100, a popular youth radio station, to provide a listener with a working holiday to Australia. The promotion was organised in conjunction with the Australian Embassy in Denmark, South Australia Tourism Commission and Tourism Western Australia to promote the Working Holiday Maker visa in Denmark and the new microsite. Thai Airways provided flights for the winner. >Sponsored the Beauty Rich and Rare Exhibition, which saw 12 posters selected from around 200 submissions by designers and artists from across Australia. Over 40 industry and media representatives attended the opening of the exhibition in Stockholm. The opening coincided with the Australian Style Vibes Exhibition, which was organised by Austrade to highlight Australian designers and products to the Swedish trade, media and consumers. >Joined forces with Singapore Airlines and one of Sweden’s largest retail travel agencies, Ticket, for an integrated marketing campaign to drive more bookings to Australia. 73 Advertisements were placed in 43 newspapers to encourage consumers to book their Australian holidays through Ticket. In addition four dedicated training events were held for 63 agents to learn about Australian holiday experiences. Eight Ticket travel agents won a place on an educational familiarisation to Australia, flying Singapore Airlines. Netherlands In 2005/06 there were 50,100 visitors from the Netherlands to Australia, a two per cent increase on the previous year. Tourism Australia’s challenge is to hold this growth whilst restoring the impacts in yield and dispersal by undertaking a range of public relations and promotional opportunities plus training development programs. The key strategic intention for 2005/06 in the Netherlands was to sustain the high dispersal tendency by pursuing the youth segment and where appropriate target the high yield segment. Highlights and results >Achieved media coverage worth A$9,041,400 and reached over 34 million people from media relations, promotions, events and the Visiting Journalists Program activity in the Netherlands. >Participated in a range of activities to celebrate the 400th anniversary of the start of the relationship between Australia and the Netherlands. The anniversary celebrates the first sighting of Australia by Dutch Captain Willem Jansz, who sailed alongside Cape York in the Duyfken in 1606. (See www.nederland-australie2006.nl). Activities included: •More than 2.5 million Australian ‘fusion cuisine’ meals and the best Australian wines were served on all KLM Royal Dutch Airline intercontinental flights departing from Amsterdam during April and May 2006, as part of the Tasting Australia Sky High Promotion. KLM’s specially created website – www.australianexperience.net – had a link to the consumer website. •Commenced a 12-month promotion with Qantas and Group LFE, importers and distributors of Hardy’s wine in The Netherlands, giving Dutch consumers who buy a specially branded bottle of Australian wine the chance to enter a competition to win one of 20 trips to Australia. >Exhibited with the Australian industry at Vakantiebeurs, the key consumer and trade show in the Netherlands. >Arranged the first Aussie Specialist Dutch familiarisation ‘Experience Tropical Australia’ with Tourism Northern Territory, Tourism Queensland, Qantas and Australian Airlines. Nine Dutch Aussie Specialists headed to the Red Centre and on to Queensland to experience the Daintree, beaches and the Australian lifestyle. The familiarisation highlighted the distances involved in travelling in Australia, to assist the agents in selling their self drive itineraries. Tourism Australia Annual Report 2005|2006 Other international markets Tier 4 Markets The Tier 4 markets include the balance of international countries, each of which yields less that $200 million a year in real inbound economic value. Tourism Australia does not have a direct presence in these markets, which are serviced through Austrade and Aussie Enthusiasts Program. Activity in these countries is based on opportunities, with Tourism Australia providing ‘off the shelf’ support. The fast growing focus markets in this sector are Russia, South America, Eastern Europe, South Africa and Vietnam. Highlights and results >Trained six Aussie Specialists agents in Russia, as part of Tier 4 education and marketing, to help streamline the visa process. Commenced training with 10 Mexican agents to become Aussie Specialists, which included learning a new faster, visa approval process. >Distributed the Polyglott Guide to Australia, (published by Langenscheidt Publishing Group) throughout Russia. The guide was translated into Russian and 10,000 copies were produced for distribution in the market to help raise awareness of Australia as the ultimate holiday destination for Russian travellers. >Attended the Moscow Leisure and Travel Show, with the objective of educating the travel trade and building awareness about Australia. >Partnered with Qantas to develop a cooperative campaign out of Argentina, with two other key partners in the marketplace. >Worked with Qantas to tailor the Aussie Enthusiasts Program for the airline’s sales representatives and general sales agents in South America, Eastern Europe, South East Asia (Vietnam and the Philippines), South Africa and North Africa. Financial Report Tourism Australia Annual Report 2005|2006 79 I have performed procedures to assess whether, in all material respects, the financial statements present fairly, in accordance with Finance Minister’s Orders made under the Commonwealth Authorities and Companies Act 1997, Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with my understanding of Tourism Australia’s financial position, and of its performance as represented by the statements of financial performance and cash flows. The audit opinion is based on these procedures, which included: >examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial statements; and >assessing the appropriateness of the accounting policies and disclosures used, and the reasonableness of significant accounting estimates made by the directors. Independent Audit Report Independence To the Minister for Small Business and Tourism In conducting the audit, I have followed the independence requirements of the Australian National Audit Office, which incorporate the ethical requirement of the Australian accounting profession. Scope The financial statements and directors’ responsibility The financial statements comprise: >Statement by Directors; >Income Statement, Balance Sheet and Statement of Cash Flows; >Statement of Changes in Equity; >Schedules of Commitments and Contingencies; and >Notes to and forming part of the Financial Statements Audit Opinion In my opinion, the financial statements of Tourism Australia: (a) have been prepared in accordance with the Finance Minister’s Orders made under the Commonwealth Authorities and Companies Act 1997; and (b) give a true and fair view of Tourism Australia’s financial position as at 30 June 2006, and its performance and cash flows for the year then ended, in accordance with: (i) the matters required by the Finance Minister’s Orders; and (ii) applicable Accounting Standards and other mandatory financial reporting requirements in Australia. of Tourism Australia for the year ended 30 June 2006. The directors of Tourism Australia are responsible for preparing the financial statements that give a true and fair view of the financial position and performance of Tourism Australia, and that comply with Finance Minister’s Orders made under the Commonwealth Authorities and Companies Act 1997, Accounting Standards and mandatory financial reporting requirements in Australia. The Directors of Tourism Australia are also responsible for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial statements. Audit approach I have conducted an independent audit of the financial statements to express an opinion on them to you. My audit has been conducted in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing and Assurance Standards, to provide reasonable assurance as to whether the financial statements are free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive, rather than conclusive, evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected. While the effectiveness of management’s internal controls over financial reporting was considered when determining the nature and extent of audit procedures, the audit was not designed to provide assurance on internal controls. Australian National Audit Office P Hinchey Senior Director Delegate of the Auditor-General Sydney 16 August 2006 Tourism Australia Annual Report 2005|2006 Statement by directors 81 INCOME STATEMENT for the year ended 30 June 2006 Notes 2006 2005 $’000 $’000 INCOME In our opinion, the attached financial statements for the year ended 30 June 2006 are based on properly maintained financial records and give a true and fair view of the matters required by the Finance Minister’s Orders made under the Commonwealth Authorities and Companies Act 1997. In our opinion, at the date of this statement, there are reasonable grounds to believe that Tourism Australia will be able to pay its debts as and when they become due and payable. Revenue Revenues from Government 3A 137,823 138,374 Advertising 3B 12,170 10,781 Goods and services 3C 415 1,515 Industry contributions 3D 11,647 13,546 Interest 3E 3,304 3,455 Other 3F 2,585 1,128 167,944 168,799 — 958 — 958 167,944 169,757 Total revenue Tim FischerGeoff Buckley Chairman Acting Managing Director 16 August 200616 August 2006 Gains Net foreign exchange gains 3H Total gains TOTAL INCOME EXPENSES Employees 4A 30,163 27,904 Suppliers 4B 126,970 130,595 Depreciation and amortisation 4C 2,228 1,578 Finance costs 4D 97 64 Net losses from sale of assets 3G 6 335 Net foreign exchange losses 3H 99 — Write-down and impairment of assets 4E 122 136 Other expenses 4F 4,944 5,027 164,629 165,639 3,315 4,118 TOTAL EXPENSES OPERATING RESULT The above statement should be read in conjunction with the accompanying notes. 2 Tourism Australia Annual Report 2005|2006 83 BALANCE SHEET as at 30 June 2006 STATEMENT OF CASH FLOWS for the year ended 30 June 2006 Notes 2006 2005 $’000 $’000 ASSETS 2006 2005 $’000 $’000 27,182 19,296 137,823 138,374 Interest 3,643 3,077 Net GST received from ATO 3,003 3,476 171,651 164,223 30,069 26,993 Suppliers 129,151 130,831 Total cash used 159,220 157,824 12,431 6,399 — 45 — 45 816 954 3,769 2,562 4,585 3,516 (4,585) (3,471) — 549 — 549 Notes OPERATING ACTIVITIES Financial Assets Cash and cash equivalents 5A 24,515 16,768 Receivables 5B 4,855 8,348 29,370 25,116 Total Financial Assets Non-Financial Assets Infrastructure, plant and equipment 6A 2,818 2,733 Intangibles 6B 6,386 3,978 Inventories 6C 16 149 Investments 6D 110 110 Other non-financial assets 6E 792 2,141 Total Non-Financial Assets 10,122 9,111 TOTAL ASSETS 39,492 34,227 Cash received Goods and services Appropriations Total cash received Cash used Employees Net cash from (used by) operating activities LIABILITIES INVESTING ACTIVITIES Payables Cash received Suppliers 7A 14,669 13,388 Other payables 7B 1,395 1,059 16,064 14,447 Total Payables 9 Proceeds from sales of property, plant and equipment Total cash received Cash used Purchase of property, plant and equipment Provisions Purchase of intangibles Employee provisions 8A 4,663 4,569 Other provisions 8B 1,791 1,552 Total cash used 6,454 6,121 Net cash from (used by) investing activities TOTAL LIABILITIES 22,518 20,568 NET ASSETS 16,974 13,659 Total Provisions FINANCING ACTIVITIES Contributed equity EQUITY Contributed equity 827 827 Reserves 685 685 15,462 12,147 16,974 13,659 30,178 27,406 Retained surpluses TOTAL EQUITY Current assets Non-current assets Current liabilities Non-current liabilities The above statement should be read in conjunction with the accompanying notes. Cash received 2 9,314 6,821 19,431 17,751 3,087 2,817 Total cash received Net cash from (used by) financing activities Net increase (decrease) in cash held Effects of exchange rate changes on cash Cash at the beginning of the reporting period Cash at the end of the reporting period The above statement should be read in conjunction with the accompanying notes. 5A — 549 7,846 3,477 (99) 958 16,768 12,333 24,515 16,768 Tourism Australia Annual Report 2005|2006 85 STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2006 SCHEDULE OF COMMITMENTS as at 30 June 2006 Accumulated Results Contributed Equity/Capital Reserves Total Equity 2006 2005 2006 2005 2006 2005 2006 2005 BY TYPE $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Other commitments Operating leases 1 Opening Balance Adjustment recognised directly in equity for initial recognition of make good Adjusted Opening Balance 2006 2005 $’000 $’000 16,241 19,724 21,100 28,916 12,147 8,255 685 632 827 278 13,659 9,165 Other commitments 37,341 48,640 — (226) — — — — — (226) Commitments receivable 3 (650) (330) Net commitments by type 36,691 48,310 12,147 8,029 685 632 827 278 13,659 8,939 One year or less 4,514 4,846 From one to five years 9,197 10,874 Over five years 2,530 4,004 16,241 19,724 6,584 17,873 From one to five years 14,516 11,043 Total other commitments 21,100 28,916 2 Total other commitments BY MATURITY Income and Expense Revaluation adjustment Operating lease commitments — — — 53 — — — 53 Subtotal income and expenses recognised directly in equity Net Operating Result 3,315 4,118 — — — — 3,315 4,118 Total income and expenses 3,315 4,118 — 53 — — 3,315 4,171 Transactions with Owners Equity injections Sub-total Transactions with Owners Transfers between equity components Closing balance at 30 June — — — — — 549 — 549 — — — — — 549 — 549 — — — — — — — — 15,462 12,147 685 685 827 827 16,974 13,659 The above statement should be read in conjunction with the accompanying notes. Total operating lease commitments Other commitments One year or less Commitments receivable 3 Net commitments by maturity (650) (330) 36,691 48,310 NB: Commitments are GST inclusive where relevant. 1. Operating leases comprise leases for office accommodation and computer leases. 2. Other commitments comprise amounts payable under project agreements in respect of which the recipient is yet to either perform the services required or meet eligibility conditions. 3. Commitments receivable comprises GST recoverable. Nature of lease General description of leasing arrangement Leases for office accommodation. The lease payments for some offices are subject to annual increase in accordance with the terms of the leases. The initial periods of the office accommodation leases are still current and some of the leases may be renewed for up to five years at Tourism Australia’s option, with adjustment of rentals according to the terms of the leases. A lease in relation to computer equipment held as at 30 June 2006. The lessors provide all computer equipment and software designated as necessary in the supply contract for two to three years. Items of computer equipment supplied under this lease have useful lives of two to three years from the commencement of the contract. The above schedule should be read in conjunction with the accompanying notes. Tourism Australia Annual Report 2005|2006 SCHEDULE OF CONTINGENCIES as at 30 June 2006 There were no known contingencies as at 30 June 2006 and 30 June 2005. The above schedule should be read in conjunction with the accompanying notes. 87 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Page No Note 1: Summary of Significant Accounting Policies 88 Note 2: The Impact of the Transition to AEIFRS from Previous AGAAP 95 Note 3: Income 96 Note 4: Operating Expenses 97 Note 5: Financial Assets 99 Note 6: Non-Financial Assets101 Note 7: Payables104 Note 8: Provisions104 Note 9: Cash Flow Reconciliation105 Note 10: Director Remuneration105 Note 11:Related Party Disclosures106 Note 12: Executive Remuneration106 Note 13:Remuneration of Auditors106 Note 14: Average Staffing Levels106 Note 15: Financial Instruments107 Note 16: Contingent Liabilities and Assets108 Note 17:Reporting of Outcomes 109 Note 18: Appropriations111 Tourism Australia Annual Report 2005|2006 89 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Note 1: Summary of Significant Accounting Policies 1.1 Basis of Preparation of the Financial Statements The financial statements are required by clause 1(b) of Schedule 1 to the Commonwealth Authorities and Companies Act 1997 and are a general purpose financial report. The continued existence of Tourism Australia (TA) in its present form and with its present programs is dependent on Government policy and on continuing appropriations by Parliament for TA’s administration and programs. The statements have been prepared in accordance with: >Finance Minister’s Orders (or FMOs, being the Commonwealth Authorities and Companies (Financial Statements for reporting periods ending on or after 01 July 2005) ); >Australian Accounting Standards issued by the Australian Accounting Standards Board that apply for the reporting period; and >Interpretations issued by the AASB and UIG that apply for the reporting period. This is the first financial report to be prepared under Australian Equivalents to International Financial Reporting Standards (AEIFRS). The impacts of adopting AEIFRS are disclosed in Note 2. The Income Statement and Balance Sheet have been prepared on an accrual basis and are in accordance with historical cost convention, except for certain assets and liabilities, which as noted, are at fair value or amortised cost. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial report is presented in Australian dollars and values are rounded to the nearest thousand dollars unless disclosure of the full amount is specifically required. Unless alternative treatment is specifically required by an accounting standard, assets and liabilities are recognised in the Balance Sheet when and only when it is probable that future economic benefits will flow and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under agreements equally proportionately unperformed are not recognised unless required by an Accounting Standard. Liabilities and assets that are unrecognised are reported in the Schedule of Commitments and the Schedule of Contingencies (other than unquantifiable or remote contingencies, which are reported at Note 16). Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Unless alternative treatment is specifically required by an accounting standard, revenues and expenses are recognised in the Income Statement when and only when the flow or consumption or loss of economic benefits has occurred and can be reliably measured. 1.2 Significant Accounting Judgements and Estimates No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next accounting period. 1.3 Statement of Compliance The financial report complies with Australian Accounting Standards, which include Australian Equivalents to International Financial Reporting Standards (AEIFRS). Australian Accounting Standards require Tourism Australia to disclose Australian Accounting Standards that have not been applied, for standards that have been issued but are not yet effective. The AASB has issued amendments to existing standards. These amendments are denoted by year and then number. For example, 2005-1 indicates amendment 1 issued in 2005. The table at right illustrates standards and amendments that will become effective for Tourism Australia in the future. The nature of the impending change within the table has been abbreviated, out of necessity, and users should consult the full version available on the AASB’s website to identify the full impact of the change. The expected impact on the financial report of adoption of these standards is based on Tourism Australia’s initial assessment at this date, but may change. Tourism Australia intends to adopt all of standards upon their application date. Impact expected on financial report Title Standard affected Application date* Nature of impending change 2005-1 AASB 139 1 Jan 2006 Amends hedging requirements for foreign currency risk of a highly probable intragroup transaction. No expected impact. 2005-4 AASB 139, AASB 132, AASB 1, AASB 1023 and AASB 1038 1 Jan 2006 Amends AASB 139, AASB 1023 and AASB 1038 to restrict the option to fair value through profit or loss and makes consequential amendments to AASB 1 and AASB 132. No expected impact. 2005-5 AASB 1 and AASB 139 1 Jan 2006 Amends AASB 1 to allow an entity to determine whether an arrangement is, or contains, a lease. Amends AASB 139 to scope out a contractual right to receive reimbursement (in accordance with AASB 137) in the form of cash. No expected impact. 2005-6 AASB 3 1 Jan 2006 Amends the scope to exclude business combinations involving entities or businesses under common control. No expected impact. 2005-9 AASB 4, AASB 1023, AASB 139 and AASB 132 1 Jan 2006 Amended standards in regard to financial guarantee contracts. No expected impact. 2005-10 AASB 132, AASB 101, AASB 114, AASB 117, AASB 133, AASB 139, AASB 1, AASB 4, AASB 1023 and AASB 1038 1 Jan 2007 Amended requirements subsequent to the issuing of AASB 7. No expected impact. 2006-1 AASB 121 31 Dec 2006 Changes in requirements for net investments in foreign subsidiaries depending on denominated currency. No expected impact. AASB7 Financial Instruments: Disclosures 1 Jan 2007 Revise the disclosure requirements for financial instruments from AASB132 requirements. No expected impact. * Application date is for annual reporting periods beginning on or after the date shown. Tourism Australia Annual Report 2005|2006 91 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 1.4 Revenue Revenue from the sale of goods is recognised when: >The risks and rewards of ownership have been transferred to the buyer; >The seller retains no managerial involvement nor effective control over the goods; >The revenue and transaction costs incurred can be reliably measured; and >It is probable that the economic benefits associated with the transaction will flow to the entity. Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when: >The amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and >The probable economic benefits with the transaction will flow to the entity. The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction. Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any provision for bad and doubtful debts. Collectability of debts is reviewed at balance date. Provisions are made when collectability of the debt is no longer probable. Interest revenue is recognised using the effective interest method as set out in AASB 139. Revenues from Government Amounts appropriated for Departmental outputs appropriations for the year (adjusted for any formal additions and reductions) are recognised as revenue, except for certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised only when it has been earned. Appropriations receivable are recognised at their nominal amounts. Resources Received Free of Charge Services received free of charge are recognised as revenue when and only when a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense. Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Contributions of assets at no cost of acquisition or for nominal consideration are recognised as revenue at their fair value when the asset qualifies for recognition. 1.5 Transactions with the Government as Owner Tourism Australia had no equity injection, restructuring on distribution to owner during the financial year. 1.6 Employee Benefits As required by the Finance Minister’s Orders, Tourism Australia has early adopted AASB 119 Employee Benefits as issued in December 2004. Liabilities for services rendered by employees are recognised at the reporting date to the extent that they have not been settled. Liabilities for ‘short-term employee benefits’ (as defined in AASB 119) and termination benefits due within 12 months of balance date are measured at their nominal amounts. The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability. All other employee benefit liabilities are measured as the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date. Leave The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is nonvesting and the average sick leave taken in future years by employees of Tourism Australia is estimated to be less than the annual entitlement for sick leave. The leave liabilities are calculated on the basis of employees’ remuneration, including the Tourism Australia’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination. The liability for long service leave has been determined by reference to the present value of the estimated future cash flows to be made in respect of all employees as at 30 June 2006. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation. Separation and Redundancy Provision is made for separation and redundancy benefit payments. Tourism Australia has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations. Superannuation Australia: Staff of Tourism Australia are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap), or Australian Government Employees Superannuation Trust (AGEST). The CSS and PSS are defined benefit schemes for the Commonwealth. The PSSap and AGEST are defined contribution schemes. The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. Tourism Australia makes employer contributions to the Australian Government at rates determined by an actuary to be sufficient to meet the cost to the Government of the superannuation entitlements of Tourism Australia’s employees. From 1 July 2005, new employees are eligible to join the PSSap or AGEST schemes. The liability for superannuation recognised as at 30 June 2006 represents outstanding contributions for the final fortnight of the year. The contribution rate for Tourism Australia as a Group 2 Authority was 25.3 per cent — CSS, 12.6 percent — PSS, of salaries in 2005/06. In addition, Tourism Australia remitted Employer Productivity Superannuation Contributions to ComSuper for all employees. The contribution rate was variable and banded according to earnings ranging from 2 per cent to 3 per cent of salaries in 2005/06. Asia: In accordance with local regulations Tourism Australia provided superannuation for its locally engaged staff in Hong Kong with HSBC Life (International) Ltd. The contribution rate was 11.5 per cent of salaries in 2005/06 for staff that joined before 1 December, 2000, (11.5 per cent in 2004/05). The contribution rate was 5 per cent of salaries up to a maximum contribution of HK$1,000 per month in 2005/06 for those staff who joined after 1 December, 2000 under the new mandatory provident fund regulations. In Malaysia, Tourism Australia provided superannuation for its locally engaged staff with the Employee Provident Fund where the contribution rate was 12 per cent of salaries in 2005/06, (12 per cent in 2004/5) In Singapore, Tourism Australia provided superannuation for its locally engaged staff with the Central Provident Fund where the contribution rate was 13 per cent of salaries up to a salary ceiling of S$5,000 per month (from 1 July 2005 to 31 December 2005) and S$4,500 per month (from 1 January 2006 to 30 June 2006) in 2005/06, (S$5,500 in 2004/05). In Korea, Tourism Australia provided superannuation for its locally engaged staff with funds run by National Pension. The contribution rate was 4.5 per cent of salaries in 2005/06, (4.5 per cent in 2004/05) In Taiwan, Tourism Australia provided superannuation for its locally engaged staff in accordance with local regulations. The contribution rate was 2 per cent of salaries to Labour Standards Law Fund and 6 per cent of salaries to the employee’s individual pension fund account governed by Labour Pension Act in 2005/06, (8 per cent in 2004/05 to HSBC Life (International) Ltd). In Thailand, superannuation is not mandatory; however Tourism Australia did include 3 per cent in the salaries of staff members. Once superannuation becomes mandatory, the 3 per cent will be contributed to the chosen body. In China, Tourism Australia provided superannuation for its locally engaged staff with the local official agency FESCO. The monthly contribution ranged from HK$2,800 to HK$3,700 per staff member in 2005/06, (HK$2,886 per staff member in 2004/05). In Japan, Tourism Australia provided superannuation for its locally engaged staff with Japan’s National Pension Scheme where the contribution rate was 7.144 per cent of salaries in 2005/06, (6.967per cent in 2004/05). America: Tourism Australia provided an optional employee retirement benefit for its locally engaged staff in Los Angeles with Mutual of America. Tourism Australia matched employees’ contributions up to a maximum of 3 per cent of gross salary in 2005/06 and an annual limit of US$10,000 for employees less than 50 years of age. For employees who are 50 years of age or older, the limit is US$12,000 per annum in 2005 and US$12,500 per annum in 2006. These limits include both employer and employee contributions. Tourism Australia Annual Report 2005|2006 93 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Canada: Tourism Australia provided an optional employee retirement benefit for its locally engaged staff in Canada with Scotia Bank. Tourism Australia matched employees’ contributions up to a maximum of 3 per cent of gross salary in 2005/06. (There were no employees in Canada in 2004/05). Europe: For the United Kingdom, in accordance with locally engaged terms and conditions of employment Tourism Australia provided a group personal pension scheme for its locally engaged staff in London with Standard Life Assurance Co. The contribution rate was variable and banded according to age and earnings ranging from 4 per cent to 20 per cent of salaries in 2005/06 (4 per cent to 20 per cent of salaries in 2004/05). In Germany Tourism Australia contributed an inclusive social amount to the statutory insurance government fund for its locally engaged staff; Tourism Australia matched staff contributions on a 1:1 basis. The contribution rate is not separately nominated. New Zealand: In New Zealand, there was no superannuation contribution requirement for locally engaged staff. 1.7 Leases A distinction is made between finance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased noncurrent assets. An operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains substantially all such risks and benefits. Tourism Australia has not entered into any finance leases. Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefits derived from the leased assets. 1.8 Leases All borrowing costs from unwinding of make good provisions are treated as expenses for the year. 1.9 Cash Cash means notes and coins held and any deposits held at call with a bank or financial institution. Cash is recognised at its nominal amount. Notes to and forming part of the Financial Statements For the year ended 30 June 2006 1.10 Financial Risk Management Tourism Australia’s activities expose it to normal commercial financial risk. As a result of the nature of Tourism Australia’s business and internal and Australian Government policies, dealing with the management of financial risk, Tourism Australia’s exposure to market, credit, liquidity and cash flow and fair value interest rate risk is considered to be low. 1.11 Investments Investments are measured at their fair value. 1.12 Impairment of Financial Assets As prescribed in the Finance Minister’s Orders, Tourism Australia has applied the option available under AASB 1 of adopting AASB 132 and 139 from 1 July 2005 rather than 1 July 2004. Financial assets are assessed for impairment at each balance date. Financial Assets held at Amortised Cost: If there is objective evidence that an impairment loss has been incurred for loans and receivables or held to maturity investments held at amortised cost, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in profit and loss. Financial Assets held at Cost: If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value because it cannot be reliably measured, or a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows discounted at the current market rate for similar assets. Comparative Year: The above policies were not applied for the comparative year. For receivables, amounts were recognised and carried at original invoice amount less a provision for doubtful debts based on an estimate made when collection of the full amount was no longer probable. Bad debts were written off as incurred. Other financial assets carried at cost which were not held to generate net cash inflows, were assessed for indicators of impairment. Where such indicators were found to exist, the recoverable amount of the assets was estimated and compared to the assets carrying amount and, if less, reduced to the carrying amount. The reduction was shown as an impairment loss. 1.13 Trade Creditors Trade creditors and accruals are recognised at their nominal amounts, being the amounts at which the liabilities will be settled. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced). 1.14 Contingent Liabilities Contingent Liabilities and Assets are not recognised in the Balance Sheet but are discussed in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset, or represent an existing liability or asset in respect of which settlement is not probable or the amount cannot be reliably measured. Remote contingencies are part of this disclosure. Where settlement becomes probable, a liability or asset is recognised. A liability or asset is recognised when its existence is confirmed by a future event, settlement becomes probable (virtually certain for assets) or reliable measurement becomes possible. 1.15 Acquisition of Assets Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate. Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and revenues at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor agency’s accounts immediately prior to the restructuring. 1.16 Property, Plant and Equipment (PP&E) Asset Recognition Threshold Purchases of property, plant and equipment are recognised initially at cost in the Balance Sheet, except for purchases costing less than $5,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total). The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions in property leases taken up by Tourism Australia where there exists an obligation to restore the property to its original condition. These costs are included in the value of Tourism Australia’s leasehold improvements with a corresponding provision for the ‘make good’ taken up. Revaluations Basis: Plant and equipment are carried at fair value, being revalued with sufficient frequency such that the carrying amount of each asset is not materially different, at reporting date, from its fair value. Valuations undertaken in each year are as at 30 June. Fair values for each class of asset are determined as shown below: Asset class Leasehold improvements Plant & equipment Fair value measured at: Depreciated replacement cost Depreciated replacement cost Following initial recognition at cost, valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets do not materially vary with the assets’ fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets. Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised through profit and loss. Revaluation decrements for a class of assets are recognised directly through profit and loss except to the extent that they reverse a previous revaluation increment for that class. Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount. Tourism Australia Annual Report 2005|2006 95 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Depreciation: Depreciable property plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to Tourism Australia using, in all cases, the straight-line method of depreciation. Leasehold improvements are depreciated on a straightline basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease. Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. Depreciation rates applying to each class of depreciable asset are based on the following useful lives: Leasehold improvements Plant and equipment 2006 2005 Lease termLease term 3 to 10 years 3 to 10 years Impairment: All assets were assessed for impairment at 30 June 2006. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if Tourism Australia were deprived of the asset, its value in use is taken to be its depreciated replacement cost. No indicators of impairment were found for assets at fair value. Notes to and forming part of the Financial Statements For the year ended 30 June 2006 1.17 Intangibles Tourism Australia’s intangibles comprise internally developed software for internal use. These assets are carried at cost. Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of Tourism Australia’s software are 2 to 5 years (2004/05: 2 to 5 years). The useful life of trade marks is 10 years. All software assets were assessed for indications of impairment as at 30 June 2006. 1.18 Inventories Inventories held for sale are valued at the lower of cost and net realisable value. Inventories held for distribution are measured at the lower of cost and current replacement cost. Costs incurred in bringing each item of inventory to its present location and condition are assigned as follows: >raw materials and stores – purchase cost on a first-in-firstout basis; and >finished goods and work in progress – cost of direct materials and labour plus attributable costs that are capable of being allocated on a reasonable basis. Inventories acquired at no cost or nominal consideration are measured at current replacement cost at the date of acquisition. 1.19 Taxation Tourism Australia is exempt from all forms of taxation except fringe benefits tax and the goods and services tax (GST). Revenues, expenses, assets and liabilities are recognised net of GST: >except where the amount of GST incurred is not recoverable from the Australian Taxation Office; and >except for receivables and payables. Tourism Australia was not subject to exemption from any foreign taxation laws relative to its overseas operations. Note 2: The Impact of the Transition to AEIFRS from Previous AGAAP 2005 2004 $’000 $’000 14,084 9,714 (226) (226) Reconciliation of total equity as presented under previous AGAAP to that under AEIFRS Total equity under previous AGAAP Adjustments recognised directly in equity Initial recognition of make good1 Adjustments to retained earnings: Borrowing costs2 Amortisation for ‘Makegood’ assets3 Total equity translated to AEIFRS (64) (135) 13,659 9,488 Reconciliation of profit or loss as presented under previous AGAAP to AEIFRS Operating results under previous AGAAP 4,317 Adjustments: Borrowing costs1 Amortisation for ‘Makegood’ assets3 Prior year profit translated to AEIFRS (64) (135) 4,118 The cash flow statement presented under previous AGAAP is equivalent to that prepared under AEIFRS. 1The equity has been adjusted by $226,000 due to the initial recognition of make good assets and make good provision. The amount includes $131,000 for the accumulated amortisation of estimated make good costs on leased premises up to 1 July 2004 (AASB 116) and $95,000 for the unwinding of the discount in the make good provision up to 1 July 2004. 2 The operating results has been adjusted by $61,000 due to the unwinding of the discount in the make good provision in 2004-05 (UIG 1). 3 The operating result has been adjusted by $135,000 for amortising the make good assets in 2004-05. Tourism Australia Annual Report 2005|2006 97 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Note 3: Income Notes to and forming part of the Financial Statements For the year ended 30 June 2006 2006 2005 $’000 $’000 Note 3: Income (continued) Revenues Gains Note 3A: Revenues from Government Note 3G: Net Gains / (Losses) from Sale of Assets Appropriations for outputs 137,823 138,374 Total revenues from government 137,823 138,374 Note 3B: Advertising Advertising revenue 12,170 10,781 Total advertising revenue 12,170 10,781 2005 $’000 Infrastructure, plant and equipment: Proceeds from disposal — 45 Net book value of assets disposed (6) (380) Total net gain from disposal of assets (6) (335) (99) 958 (99) 958 24,348 23,280 Note 3H: Net Foreign Exhange Gains / (Losses) Non- speculative Note 3C: Sales of Goods and Services 2006 $’000 Total net foreign exhange gains / (losses) Goods 104 105 Services 311 1,410 415 1,515 — — External entities 104 105 Superannuation 2350 1,825 Total sales of goods 104 105 Leave and other entitlements 838 840 Separation and redundancies 1,592 591 994 1,329 30,122 27,865 Total sales of goods and services Provision of goods to: Related entities Note 4: Operating Expenses Note 4A: Employee Expenses Rendering of services to: Wages and Salaries Other employee benefits expense — — 311 1,410 311 1,410 Industry contributions* 11,647 13,546 Note 4B: Suppliers Total contributions revenue 11,647 13,546 Goods and services from external entities: Related entities External entities Total rendering of services Total employee benefits expense 41 39 30,163 27,904 Advertising 67,077 70,956 Promotion and publicity 21,164 18,594 7,879 10,596 Workers’ compensation premiums Total employee expenses Note 3D: Contributions Revenue Note 3E: Interest Revenue Deposit Interest on deposits 3,304 3,455 3,304 3,455 Information systems and telecommunications Research, service fees and travel Note 3F: Other Revenue Office sub-tenancies Films, publications and distribution 631 846 Other revenue 1,954 282 Total other revenue 2,585 1,128 * Industry contributions reflect the actual value of industry support for Tourism Australia’s activities from cash revenue. In addition to direct revenues from the industry, joint marketing programs were undertaken. Through these programs the industry supplements funds provided by Tourism Australia for product development, visiting journalists and tactical marketing programs. Due to the nature of the programs, these funds do not form part of the reported level of industry contributions for Tourism Australia, but are in addition to it. Operating lease rentals* Total supplier expenses * These comprise minimum lease payments only. 6,573 6,415 18,988 19,122 5,289 4,912 126,970 130,595 Tourism Australia Annual Report 2005|2006 99 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Note 4: Operating Expenses (continued) Notes to and forming part of the Financial Statements For the year ended 30 June 2006 2006 2005 $’000 $’000 643 540 Australian Dollars 1,349 892 Note 4C: Depreciation and Amortisation Infrastructure, plant and equipment Software (includes websites) Trade mark Amortisation for makegood Total depreciation and amortisation Note 5: Financial Assets 2006 2005 $’000 $’000 20,665 14,794 New Zealand Dollars 117 167 Euro 575 57 Hong Kong Dollars 368 225 8 29 Note 5A: Cash and Cash Equivalents 11 11 225 135 2,228 1,578 The aggregate amounts of depreciation or amortisation expensed during the reporting period for each class of depreciable asset are as follows: Korean Won Japanese Yen 1,480 46 Great Britain Pounds 1,006 1,086 United States Dollars 46 148 Singapore Dollars 18 100 Malaysian Ringgit 109 37 255 218 75 89 Thailand Baht 19 47 Leasehold improvement 269 180 Chinese Yuan 82 27 Amortisation for makegood 225 135 Other 16 — Motor vehicles — 4 Cash at bank 24,509 16,763 Other equipment 44 49 Cash on hand 6 5 1,349 892 24,515 16,768 11 11 2,228 1,578 97 64 97 64 Computer equipment Furniture & fittings Software Trade marks Total depreciation and amortisation Note 4D: Finance Costs Unwinding of provision for makegood Total finance costs expense Note 4E: Write-down and Impairment of Assets Provision for bad debts Write down of inventory Total write-down of assets — 37 122 99 122 136 4,944 5,027 4,944 5,027 Note 4F: Other Expenses Other operating expenses Total Other Expenses Total cash and cash equivalents Tourism Australia Annual Report 2005|2006 101 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Note 5: Financial Assets (continued) Notes to and forming part of the Financial Statements For the year ended 30 June 2006 2006 2005 $’000 $’000 Goods and services 3,767 5,803 Less Allowance for doubtful debts (198) (219) Fair value 3,569 5,584 Accumulated depreciation 873 596 4,442 6,180 — 1,656 Interest receivable 173 512 Other receivable 240 — 413 2,168 4,855 8,348 Note 5B: Receivables Deposits and advances Receivables for goods and services (gross) Insurance fund receivable Other receivables Total receivables (net) Note 6: Non-Financial Assets 2006 2005 $’000 $’000 2,092 2,070 (1,683) (1,535) 409 535 Fair value 1,115 986 Accumulated depreciation (589) (555) 526 431 1,890 1,427 Accumulated amortisation (1,051) (787) Total leasehold improvements 839 640 1,535 1,393 Note 6A: Infrastructure, Plant and Equipment Computer and office equipment Furniture and fittings Leasehold improvements Fair value All receivables for goods and services are with entities external to the entity. Credit terms are net 30 days (2005: 30 days). Goods and services (gross) are aged as follows: Current 3,048 4,586 Fair value Overdue by: Less than 30 days 136 330 30 to 60 days 240 618 61 to 90 days More than 90 days Leasehold improvements make good 19 130 324 139 719 1,217 (491) (266) Total leasehold improvement make good 1,044 1,127 Total Infrastructure, Plant and Equipment 2,818 2,733 Accumulated amortisation Note 6B: Intangibles Total goods and services (gross) 3,767 5,803 The allowance for doubtful debts is aged as follows: — Current Software and intangible At cost 13,117 9,394 Accumulated amortisation (6,816) (5,513) 6,301 3,881 — — Total software and intangible — — Trade marks Overdue by: Less than 30 days 30 to 60 days 131 23 At cost 108 108 61 to 90 days 17 57 Accumulated amortisation (23) (11) More than 90 days 50 139 85 97 198 219 6,386 3,978 Total provision for doubtful debts All receivables are current assets. Total software Total intangibles Tourism Australia Annual Report 2005|2006 103 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 TABLE A – Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment TABLE C - Assets under Construction Item Buildings — Leasehold Improvements $’000 Plant & Equipment $’000 Software & Intangibles $’000 Trade Marks $’000 Accumulated depreciation/ amortisation Net book value Gross value at 30 June 2006 — — 4,049 — 4,049 Gross value at 30 June 2005 163 — 1,715 — 1,878 3,056 9,394 108 15,378 (1,053) (2,089) (5,513) (12) (8,667) Note 6: Non-Financial Assets (continuted) 967 3,881 96 6,711 By purchase 468 348 3,769 — 4,585 Makegood asset 142 — — — 142 (494) (374) (1,349) (11) (2,228) — (6) — — (6) Disposals Finished goods Inventories held for distribution 1 Less: Provision for diminution in value 3,425 3,207 13,117 108 19,857 Accumulated depreciation/ amortisation (1,542) (2,272) (6,816) (23) (10,653) Net book value at 30 June 2006 1,883 935 6,301 85 9,204 Total other investments2 Total other non-financial assets3 Buildings — Leasehold Improvements $’000 Plant & Equipment $’000 Software & Intangibles $’000 Trade Marks $’000 Total $’000 As at 30 June 2006 Gross value Accumulated Depreciation/ Amortisation Net book value 3,425 3,207 — — 6,632 (1,542) (2,272) — — (3,814) 1,883 935 — — 2,818 As at 30 June 2005 Gross value Accumulated Depreciation/ Amortisation Net book value 2006 2005 $’000 $’000 16 149 16 149 400 400 (290) (290) 110 110 792 2,141 792 2,141 Note 6E: Other Non-Financial Assets Prepayments TABLE B – Assets at Valuation Item Total $’000 Note 6D: Other Investments Shares in other company – unlisted (at cost) As at 30 June 2006 Gross book value Trade Marks $’000 Note 6C: Inventories Additions Depreciation/ amortisation expense Software & Intangibles $’000 Item 2,820 1,767 Plant & Equipment $’000 Total $’000 As at 1 July 2005 Gross book value Buildings — Leasehold Improvements $’000 2,820 3,056 — — 5,876 (1,053) (2,089) — — (3,142) 1,767 967 — — 2,734 1 All inventories are current assets. 2Tourism Australia held an 11.9 per cent interest in Australian Tourism Data Warehouse Pty Limited (ATDW), which is carried at cost less provision for diminution in value. The provision is based on the estimated statement of financial position of ATDW as at 30 June 2006. ATDW’s principal activity is the development of a database for Australian Tourism Products. The investment is a non-current investment. 3 All other non-financial assets are current assets. Tourism Australia Annual Report 2005|2006 105 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Note 7: Payables Notes to and forming part of the Financial Statements For the year ended 30 June 2006 2006 2005 $’000 $’000 14,669 13,388 14,669 13,388 1,365 1,031 30 28 1,395 1,059 Note 7A: Suppliers Note 9: Cash Flow Reconciliation 2006 2005 $’000 $’000 Cash at year end per Statement of Cash Flows 24,515 16,768 Balance Sheet items comprising above cash: ‘Financial Assets – Cash and Cash Equivalents’ 24,515 16,768 Operating result 3,315 4,118 Depreciation /amortisation 2,228 1,578 99 (958) 6 335 Fixed asset currency translation — 112 Unwinding of discount for make good provision 97 — Net write down of non-current assets — 110 3,493 (3,974) 133 (149) 1,349 (2,147) 94 2,579 1,281 5,483 Reconciliation of cash per Income Statement to Statement of Cash Flows Trade Creditors Total supplier payables 1 Note 7B: Other Payables Revenue received in advance Other short term liabilities Total other payables2 1 Settlement is usually made net 30 days. 2 All other payables are current. Note 8A: Employee Provisions Leave Superannuation Separation and redundancy Total employee provisions Net foreign exchange (gains) / losses Net (gains) / losses on disposal of assets Note 8: Provisions Salaries & wages Reconciliation of operating result to net cash from operating activities: (Increase) / decrease in net receivables 136 1,802 (Increase) / decrease in inventories 3,251 2,758 (Increase) / decrease in prepayments 9 9 1,267 — 4,663 4,569 Increase / (decrease) in employee provisions Increase / (decrease) in supplier payables Increase / (decrease) in other payables Net cash from / (used by) operating activities 336 (688) 12,431 6,399 2006 2005 Current 3,367 3,304 Non-current 1,296 1,265 Note 10: Director Remuneration 4,663 4,569 The number of directors of Tourism Australia included in each remuneration band is shown below: Nil – $14,999 1 1 1,791 1,552 $30,000 – $44,999 6 6 1,791 1,552 $45,000 – $59,999 1 1 $60,000 – $74,999 Note 8B: Other Provisions Provision for restoration costs Total other provision All other provisions are non-current. 1 1 $170,000 – $179,999 — 1 $330,000 – $349,999 1 1 Total number of directors 10 11 $613,246 $821,465 $61,703 $45,391 $674,949 $866,856 Remuneration received or due and receivable by directors Aggregate amount of superannuation payments in connection with the retirement of directors Total remuneration received or due and receivable by directors Remuneration includes net increment in accrued recreation leave and long service leave and separation payments where applicable. Tourism Australia Annual Report 2005|2006 107 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 n/a 14,447 20,568 22,518 14,447 16,064 — — — Total Liabilities — Total financial liabilities — — 7B Other payables 16,064 n/a 1,059 1,395 1,059 1,395 — 14,669 — 7A — — — 6,942 — — 16,763 — n/a 13,388 14,669 13,388 34,227 39,492 6,185 413 413 22,015 — — 29,370 22,948 n/a n/a n/a 6,180 4,442 6,180 4,442 — n/a 5.4 5.7 4.4 $’000 $’000 n/a 4.2 2005 2006 2005 2006 2005 — 5B Trade creditors 245 Financial Liabilities 2005 249 Total Assets 2006 The average staffing levels for Tourism Australia during the year were: Total financial assets Note 14: Average Staffing Levels Other receivables $60,130 No other services were provided by the Auditor-General during the reporting period. Financial Assets (Recognised) $86,798 Remuneration to the Auditor-General for auditing the financial statements for the reporting period. The fair value of services provided are: 2006 Notes 2005 Financial Instrument 2006 Note 15A: Interest Rate Risk Remuneration includes net increment in accrued recreation leave and long service leave. Remuneration relates to amounts paid to officers who worked during the financial year wholly or mainly within Australia. Note 13: Remuneration of Auditors 2006 Total Non-Interest Bearing $217,513 Fixed Interest Rate — Floating Interest Rate The aggregate amount of separation and redundancy payments during the year to officers shown above. 5B $3,316,065 and services (gross) $4,760,658 The aggregate amount of total remuneration of officers shown above. Receivables for goods 16 13,941 21 19,555 Total number of officers — — — 2 — $370,000 – $384,999 — — 13,941 — 1 19,555 1 $355,000 – $369,999 5A $340,000 – $354,999 Deposits at call 3 5 1 — 2,500 1 $325,000 – $339,999 5 $310,000 – $324,999 2,500 1 — — — $265,000 – $279,999 — — — 1 1 5A 3 $235,000 – $249,999 Cash at bank $220,000 – $234,999 2,822 1 2,460 — — $205,000 – $219,999 — 2 — 2 3 2,822 2 $190,000 – $204,999 2,460 $175,000 – $189,999 5A 2 Cash at bank 2 3 $’000 1 $160,000 – $174,999 $’000 $145,000 – $159,999 $’000 1 $’000 3 $’000 $130,000 – $144,999 The number of officers who received or were due to receive total remuneration of $130,000 or more: $’000 2005 2005 2006 2005 Note 12: Executive Remuneration Note 15: Financial Instruments 2006 Note 11: Related Party Disclosures Ms Jane Jeffreys is a Tourism Australia Board Member. She is also the Chairman of Adelaide Convention Centre. During the year Tourism Australia contracted with Adelaide Convention Centre for holding its 2006 trade event. The total value of the contract was $1,422,000. This transaction was on normal commercial terms and conditions. This interest was appropriately declared by Tourism Australia Board Member Jane Jeffreys. No other director has entered into material contract with Tourism Australia since the end of the previous financial year and there were no material contracts involving directors subsisting at year end. Weighted Average Effective Interest Rate Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Tourism Australia Annual Report 2005|2006 109 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Note 15B: Fair Values of Financial Assets and Liabilities Notes to and forming part of the Financial Statements For the year ended 30 June 2006 2006 Total carrying amount Note 17: Reporting of outcomes 2005 Aggregate net fair value Total carrying amount Aggregate net fair value Financial assets Note $’000 $’000 $’000 $’000 Cash at bank 5A 2,460 2,460 2,827 2,827 Deposits at call 5A 19,555 19,555 13,941 13,941 Receivables for goods and services 5B 4,855 4,855 8,348 8,348 Other receivables 6E 792 792 2,141 2,141 27,662 27,662 27,257 27,257 Financial liabilities Trade creditors 7A 14,669 14,669 13,388 13,388 Other payables 7B 1,395 1,395 1,059 1,059 16,064 16,064 14,447 14,447 Tourism Australia operated in Australia and overseas to promote tourism to Australia. Its revenues were sourced primarily within Australia via Parliamentary appropriations and industry revenues. Tourism Australia’s activities to promote Australia as an international tourist destination were primarily focussed overseas with the majority of expenditures made via Tourism Australia’s international offices in Europe, Asia, America and New Zealand. 17A: Outcomes of Tourism Australia Tourism Australia was structured to meet one outcome: Outcome 1: Tourism Australia seeks to stimulate sustainable international and domestic demand for an Australian tourism experience, and to maximise the return on investment of the tourism and travel industry’s total marketing effort, as measured by total visitor spend and dispersal of that spend. Tourism Australia’s statutory objectives were to: >influence people to travel to Australia, including for events; >influence people travelling to Australia to also travel throughout Australia; >influence Australians to travel throughout Australia, including for events; >help foster a sustainable tourism industry in Australia; and >help increase the economic benefits to Australia from tourism. Three Output Groups were identified for this outcome: Output Group 1: Industry and market development through strategic insights. Output Group 2: Increased distribution of Australian tourism product and facilitation of niche, events and regional tourism growth. Output Group 3: Consumer travel demand stimulation. Note 17B : Net Cost of Outcome Delivery Outcome 1 2006 2005 $’000 $’000 164,629 165,639 415 1,515 415 1,515 Advertising 12,170 10,781 Industry contribution 11,647 13,546 3,304 3,455 — 958 2,585 1,128 29,706 29,868 134,508 134,256 Note 16: Contingent Liabilities and Assets Tourism Australia has no contingent assets or liabilities, quantifiable or unquantifiable. Total expenses Cost recovered from provision of goods and services to the non-government sector Total costs recovered Other external revenues Interest Net foreign exchange gains Other Total other external revenues Net cost of outcome — 16 — 102 — 58 — 122 20,525 Net losses from sale of assets Depreciation and Amortisation Finance costs Write-down of assets Total Operating expenses 1,200 1,962 — — 48 159 2,262 67 — — Interest Net foreign exchange gains Other non-taxation revenues Total operating revenues Industry contribution Sale of goods and services 26,210 — — Advertising 20,446 23,000 Revenue from Government 17,958 Funded by: 25,135 16,283 Suppliers & Other Expenses Employees 14,553 $’000 $’000 8,734 2005 2006 Output Group 1 5,792 Operating expenses Note 17C : Revenues and Expenses by Output Groups 27,080 360 — 451 9,257 219 89 16,704 17,231 — — 1,479 — 10,614 5,138 $’000 2006 25,306 216 — 691 11,139 294 556 12,410 28,316 34 — 238 — 21,710 6,334 $’000 2005 Output Group 2 — — 10,225 21 12,081 37 120,418 2,225 — 2,786 117,283 864 — 2,764 445 102,964 103,161 128 111,853 — — 126,770 — — 1,324 97,693 106,872 665 12,836 $’000 2005 19,233 $’000 2006 Output Group 3 — — — — — — — — 103 — 97 — 6 — — $’000 2006 958 — 958 — — — — — 335 — — — 335 — — $’000 2005 Non-Specific 167,944 2,585 — 3,304 11,647 415 12,170 137,823 164,629 122 97 2,202 6 132,039 30,163 $’000 2006 27,904 $’000 2005 169,757 1,128 958 3,455 13,546 1,515 10,781 138,374 165,639 136 — 1,578 335 135,686 Total Tourism Australia Annual Report 2005|2006 111 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Notes to and forming part of the Financial Statements For the year ended 30 June 2006 Note 18: Appropriations Balance carried forward from previous year Balance carried forward to next year Appropriation Receivable Departmental Outputs Loans Equity Total Year ended 30 June Represented by: 2006 2005 2006 2005 2006 2005 2006 2005 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 — — — — — — — — Appropriation Acts 1 and 3 137,823 138,374 — — — 549 137,823 138,923 Appropriation Acts 2 and 4 — — — — — — — — Available for payment of CRF 137,823 138,374 — — — 549 137,823 138,923 Cash payment made out of CRF 137,823 138,374 — — — 549 137,823 138,923 — — — — — — — — — — — — — — — — This table reports on appropriations made by the Parliament of the Consolidated Revenue Fund (CRF) for the payment to Tourism Australia. When received by Tourism Australia, the payments made are legally the money of Tourism Australia and do not represent any balance remaining in the CRF. Tourism Australia Annual Report 2005|2006 113 Glossary AOPAnnual Operating Plan ADS Approved Destination Status Index IMR ITA International Media Relations program Indigenous Tourism Australia AMEX American Express IVS ANTA Australian National Travel Association JAAG Japan Australia Advisory Group ASPAussie Specialist Program JAL International Visitor Survey A Corporate Planning 22, 28, 29 American Express 6, 52, 53, 112 Corporate Services 22, 26, 27 Americas 22, 46, 52 Annual leave accrual 9, 32. See also annual leave stockpile Japan Airlines Annual leave stockpile 28. See also annual leave accrual ATC Australian Tourist Commission JAM Japan Australia Mission Asia 19, 22, 38, 39, 45, 46, 54, 57, 61, 91, 109, 112 ATDW Australian Tourism Data Warehouse JATA Japan Association of Travel Agents ASP 61, 112. See also Aussie Specialist Program ATE Australian Tourism Exchange KPI Key Performance Indicator ATEC Australia Tourism Export Council M2006 Melbourne Commonwealth Games 2006 A$ MATTAMalaysian Association of Tour and Australian Dollar Travel Agents DAMA Destination Australia Marketing Alliance DAP Destination Australia Partnership MOU Memorandum of Understanding DEST Department of Education, Science and Training NVS National Visitor Survey DFAT Department of Foreign Affairs and Trade PATA Pacific Asia Travel Association DIMA Department of Immigration and STOs State and Territory Tourism Organisations TA Tourism Australia Multicultural Affairs ATE 36, 38, 41, 43, 71, 112. See also ATE06; Australian Tourism Exchange ATE06 36, 39. See also ATE; Australian Tourism Exchange Aussie Enthusiasts 47, 64, 74 Aussie Specialist 54, 56, 57, 58, 59, 60, 61, 65, 67, 73. See also Aussie Specialists; ASP; Aussie Specialists Program Aussie Specialist Program 19, 53, 57, 58, 61, 65, 67, 69, 71, 112. See also Aussie Specialists; ASP; Aussie Specialist D ITA 9, 34, 112. See also Indigenous Tourism Australia Italy 39, 51, 69, 70 Japan 6, 11, 16, 28, 30, 39, 42, 44, 46, 51, 62, 63, 69, 91, 112, 114 Strategy and Research 28 Denmark 42, 72 Japan Airlines 30, 62, 63, 112 Sweden 72 Department of Industry, Tourism and Resources 23, 30, 112 Japan Australia Advisory Group 62, 112 Switzerland 42, 51, 71 Destination Australia Marketing Alliance 16, 28, 47, 67, 112. See also DAMA Japan Australia Mission 39, 63, 112 Destination Australia Partnership 70, 71, 112 Korea 6, 11, 39, 46, 51, 57, 91, 114 Destination campaign 9, 10, 16, 36, 40, 66, 68 K L Latin America 47 Digital Marketing 22, 40, 41 M Discovery 6, 9, 16, 23, 36, 43, 44 M&C Saatchi 9, 40 E Malaysia 39, 51, 58, 91, 114 Eastern Europe 47, 74 Managing Director 6, 7, 20, 21, 22 Ecotourism 32, 35 Marketing 22, 40 Emirates 64 Middle East 39 Europe 6, 19, 22, 38, 45, 46, 66, 70, 92, 109 Minister 4, 37, 62 Equal Employment Opportunity TEA Tourism Events Australia FIT Free, Independent Traveller TFC Tourism Forecasting Committee australia.com 16, 27, 33, 40, 41, 42, 51, 52, 53, 54, 61, 65, 67, 68, 69, 70, 71 F Australia Marketing 22, 32 Fairfax 9, 16, 32 National Geographic 6, 9, 16, 23, 36, 43, 44, 53, 69 Australian Experiences 5, 22, 32, 34 Financial Statements 78, 80, 87–111 Netherlands 39, 43, 51, 72, 73 Australian Human Resources Institute 32. See also Australian Institute of Human Resources Food and Wine 35, 59, 60 New Zealand 6, 11, 19, 22, 46, 51, 65, 92, 99, 109, 114 Australian Institute of Human Resources 9. See also Australian Human Resources Institute G No Leave, No Life 6, 9, 16, 28, 32 G’Day LA 36, 53 Nordic 72 G’Day NZ 65 North America 19, 38, 45 Germany 6, 11, 29, 39, 45, 51, 68, 69, 92, 114 P Global Programs 9, 40, 43 Partnership Marketing 22, 32, 35 Gulf Countries 5, 22, 39, 46, 51, 64 People and Culture 32, 37 H Q Hong Kong 11, 51, 55, 56, 91, 99, 114 Human Resources 21, 27, 37 Qantas 6, 30, 47, 52, 53, 54, 56, 57, 58, 59, 60, 61, 62, 63, 64, 66, 67, 68, 69, 70, 73, 74 I Queen’s Baton Relay 9, 19, 33, 36 India 5, 6, 39, 51, 56, 57 R Indigenous 5, 9, 32, 34, 35, 43, 68, 112 Risk and Administration 2, 26 Indigenous Tourism Australia 5, 9, 19, 34, 112. See also ITA S FMOs Finance Minister’s Orders TIEV Total Inbound Economic Value GCC TRA Tourism Research Australia IT&ME Incentive Travel and Meeting Executives Show TTF Tourism and Transport Forum IMEX Worldwide Exhibition for Incentive TTG Travel Trade Gazette Travel, Meetings and Events VFR Visiting Friends and Relatives VJP Visiting Journalists Program Gulf Cooperative Council Australian Tourism Exchange 19, 23, 27, 28, 38, 39, 112. See also ATE; ATE06 Aviation 22, 28, 30 B Backpacker 35 Board 20, 21, 22, 26, 29, 106 C Canada 4, 34, 42, 51, 52, 92, 114 Carat 9, 40 Cathay Pacific 55, 56, 57, 58, 60, 61 Chairman 4, 5, 20, 21, 22, 80 China 4, 6, 9, 11, 39, 45, 46, 51, 54, 55, 61, 91, 114 South East Asia 74 J EEO TABEE Team Australia Business Events Educational South Australian Tourism Commission 72 DAMA 28, 29, 47, 112. See also Destination Australia Marketing Alliance; Aussie Specialists 53, 54, 56, 57, 60, 73, 74. See also Aussie Specialist; Aussie Specialist Program DITR Department of Industry, Tourism and Resources 54, 60, 61, 66, 72 Experience Seeker 5, 6, 9, 10, 16, 29, 32, 34, 40, 43, 51, 62, 66 France 39, 42, 45, 51, 67, 68 Minister for Small Business and Tourism 1, 4, 20, 22, 29, 36, 62, 66, 78 N Niche 5, 32, 109 Scandinavia 51 Consumer Marketing 22, 40 International Media Relations 22, 40, 42, 112 Corporate Affairs 2, 22, 32, 36 Ireland 51, 66 Singapore 28, 29, 42, 51, 59, 60, 91, 99, 114 Corporate Governance 20 IT 27 Singapore Airlines 47, Strategic Insights 22, 28 T Taiwan 51, 60, 91, 114 TEA 44, 112. See also Tourism Events Australia Technology Services 22, 27 Thailand 5, 39, 45, 51, 61, 91, 99, 114 Tourism Events Australia 22, 40, 44, 45, 112. See also TEA Tourism New South Wales 35, 58, 59, 63 Tourism Queensland 58, 60, 73 Tourism Victoria 59, 60, 63, 64, 66 Tourism Western Australia 35, 64, 72 Trade Events 22, 27, 32, 38, 39 U UK 11, 22, 114. See also United Kingdom Uniquely Australian Invitation 4, 6, 9, 10, 16, 29, 36, 40, 41, 51, 52, 54, 55, 57, 59, 65, 68 United Arab Emirates 64 United Kingdom 4, 6, 19, 30, 39, 42, 45, 46, 51, 66, 92. See also UK United States of America 5, 6, 19, 30, 39, 42, 45, 51, 52, 53, 99, 114. See also USA USA 11, 53. See also United States of America V Visiting Journalists Program 16, 28, 42, 52, 53, 54, 60, 61, 63, 65, 67, 68, 70, 71, 72, 112 Y Young Tourism Ambassadors 9, 33 Tourism Australia Annual Report 2005|2006 Tourism Australia offices AUSTRALIA Sydney Level 18, Darling Park Tower 2 201 Sussex Street Sydney NSW 2000 Australia Telephone +61 2 9360 1111 Facsimile +61 2 9331 6469 Canberra Level 3 11-17 Swanson Plaza Belconnen ACT 2617 Australia Telephone +61 2 6228 6100 Facsimile +61 2 6228 6180 Canada 111 Peter Street Suite 630 Toronto, Ontario M5V 2H1 Canada Telephone +1 416 408 0549 Facsimile +1 416 408 1013 China Unit 1501, 15/F, Citigroup Tower 33 Hua Yuan Shi Qiao Road, Lujiazui PuDong, Shanghai 200120 China Telephone +86 21 6887 8129 Facsimile +86 21 6887 8133 GERMANY Neue Mainzer Strasse 22 D 60311 Frankfurt/Main Germany Telephone +49 69 274 00622 Facsimile +49 69 2740 0640 HONG KONG Suite 6706 67th Floor Central Plaza 18 Harbour Road Wanchai Hong Kong Telephone +852 2802 7700 Facsimile +852 2802 8211 JAPAN New Otani Garden Court Building 28F 4-1 Kioi-cho Chiyoda-ku Tokyo 102-0094 Japan Telephone +81 3 5214 0720 Facsimile +81 3 5214 0719 KOREA 20th Floor Youngpoong Building 33 Seorin-dong Chongro-ku Seoul 110-752 Korea Telephone +82 2 399 6500 Facsimile +82 2 399 6507 SINGAPORE 101 Thompson Road United Square #08-03 Singapore 307591 Telephone +65 6255 4555 Facsimile +65 6253 8431 TAIWAN Suite 1512, Level 15 333 Keelung Road, Section 1 Taipei Taiwan Telephone +886 2 2757 7188 Facsimile +886 2 2757 6483 THAILAND Unit 1614, 16th Floor River Wing East Empire Tower 195 South Sathorn Road Yaanawa Sathorn Bangkok Thailand 10120 Telephone +66 2 670 0640 Facsimile +66 2 670 0645 MALAYSIA Suite 12-1 Faber Imperial Court Jalan Sultan Ismail 50250 Kula Lumpur Malaysia Telephone +60 3 2611 1148 Facsimile +60 3 2070 4302 UNITED KINGDOM Australia Centre Australia House 6th Floor Melbourne Place/Strand London UK WC2B 4LG Telephone +44 20 7438 4601 Facsimile +44 20 7240 6690 NEW ZEALAND Level 3 125 The Strand Parnell Auckland New Zealand Telephone +64 9 915 2826 Facsimile +64 9 915 2881 UNITED STATES 6100 Centre Drive Suite 1150 Los Angeles California United States 90045 Telephone +1 310 695 3200 Facsimile +1 310 695 3201