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19 Mar, 2001

Aussies Fine-Tune Pitch for Incentives From Asia

In a revamped approach towards marketing incentives and corporate meetings in Thailand and the rest of Asia, the Australian Tourist Commission (ATC) has launched a strategy to get Asian companies to upgrade the content, quality and standards of the incentive travel rewards for their staff and dealers.

In Bangkok last week, a contingent of 80 buyers (travel agents, corporate end-users and incentive houses) from Thailand, Hong Kong, China, Malaysia, India, Taiwan, Korea, Indonesia, Philippines and Singapore were exposed to a two-day marketing pitch from 18 Australian sellers (convention bureaux, hotels, destination management companies, attractions and motivation companies).

The event was the third of its kind, but featured new strategies in the light of changing market conditions and emerging opportunities in both Asia and Australia.

The ATC’s regional director for Asia, Richard Beere, said Australia recorded 4.94 million arrivals in 2000, up 10.9% over 1999. Total visitor arrivals from all of Asia were 1.2 million, up 11.6%. Of these, 10% were business travellers and 2.5% convention delegates.

Capitalising on the post-Olympics glory is a key part of the strategy to boost high-yield business. Said Mr Beere, “The games not only showed Australia to be an exciting destination for overseas visitors, but also proved that the nation was capable of hosting the world’s biggest event in a creative and professional manner. As a result, organisers of business travel want their staff to experience in real life what the world watched on TV.”

The climate for launching this strategy is right, he claims. On the Asian side, there is growing involvement by multinational companies familiar with ways of using travel rewards to raise productivity and performance without necessarily giving cash. On the Australian side, there is a huge global awareness of what the country can deliver, plus a surplus of hotel rooms and upcoming convention space.

Mr Beere says that the ATC’s primary challenge is to change the way Asian buyers think of incentives from being a cost-item to a means of achieving higher profits.

Because there are very few specialised incentive houses in Asia, an ‘incentive’ has traditionally meant just another package-holiday bought from the travel agent at the lowest possible price and offered to the company employees as an incentive to meet sales and revenue targets.

But Mr Beere now says that with outbound travel from Asia on the rise, many middle-class Asians are now well-off enough to buy those packages themselves. Hence, they need something that goes beyond; something that will make them produce that extra burst of sales effort to win the incentive travel award.

He says that in countries like China, there are clear signs that travel agents are actually winning business from corporate clients by demonstrating higher quality in designing incentives and quoting higher prices than simply by competing on cut-price discounts.

The ATC sees a wide-open playing field among companies in the automotive, insurance, pharmaceutical, communications, technology, finance/banking, construction and a number of other industries which are now trying to recover from the recession and being restructured to cope with the new economy era.

Participating for the first time in the promotion were Australian companies specialising in both team-building and theme-party events. Indeed, the entire promotion was built around specific examples of what these companies could deliver so that the Asian buyers could get a practical feel of the product available, not just be exposed to the theory of video demonstrations or brochure hand-outs.

Other new sellers were venues like the Victorian Arts Centre in Melbourne which is looking to broaden its sources of funding from government hand-outs and private donations to revenue-generating streams like incentives and corporate meetings which can be comfortably handled in its numerous foyers and lounges.

Also participating for the first time were a number of corporate end-user buyers, including the entire team from Malaysia who comprised of decision-makers from companies like Avon Cosmetics, IBM Malaysia, Pfizer Malaysia, Smithkline Beecham and Tupperware Australia.

This, said Mr Beere, is because it is becoming more apparent that decisions about where to go for an incentive are being made by companies themselves, with the travel agent then being left to handle the negotiating details related to hotels, airlines and ground arrangements.

The ATC feels that many of these buyers have ‘done’ Asian destinations and are now ready to look beyond. However, the key is to position Australia as being not just another run-of-the-mill destination but one that can make staff salivate. The strategy also helps generate a higher business yield for both airlines and hotels at a time when the Australian dollar, like many Asian currencies, is losing value against stronger dollar-pegged currencies.

From Thailand, 22 buyers were invited, nearly all travel agents with five describing themselves in the manual as incentive travel specialists. All of them had organised incentives and corporate meetings before. Seven of them said that previous business sent to Australia had been specifically on request from the clients.

Country manager Thongchai Wibulsakul reports that about 70% of the outbound incentives and corporate meetings from Thailand head for Malaysia, Singapore, Hong Kong, Taiwan and China. Destinations in Asia, he says, are selected for ‘low-target achievement’ while Australia-New Zealand are for middle-target and USA/Europe for high target.

He said that in Thailand, corporate clients often decide the destination before they appoint a travel agent. Duration of the incentive and costs are of major concerns. Agents often have to make extra inclusions to their proposal on spot to win business.

Even other countries supposedly hit by economic crisis have life in them.

Australia has seen an 11% increase in arrivals from Indonesia, though that might be affected now by the further deterioration in the value of the rupiah. The ATC’s Indonesia manager Junivera Gunawan said there is potential to boost corporate travel and incentives amongst high profile industries like machinery, pharmaceuticals, banking and direct-selling companies.

Arrivals from Korea to Australia have surged 47% in 2000, with business travel on the rise again. From there, the ATC sees additional potential among cosmetics companies with a marked rise in demand for ‘experiences’ like theme-parks, hot-air ballooning, golf days and a mixture of city and nature attractions.

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