Inbound (International) vs Domestic Markets
What is Inbound Tourism?
Inbound tourism covers all international tourist traffic entering a country. It is also known as ‘export tourism’ (Australia is the export), because although tourists enjoy their travel experience within Australia, they are paying for it using foreign currency brought into Australia.
Inbound tourism is big business in Australia. There were 5.7 million visitor arrivals during the year ended 29 February 2008. These visitors spent approximately $23.3 billion on Australian goods and services. This was an increase of around 6.2 per cent compared to the previous 12 month period.
The Tourism Forecasting Committee (TFC) predicts that international visitor arrivals will reach 8.9 million by 2016 with the flow on benefits to the Australian economy in export earnings expected to reach $35 billion.
Inbound vs Domestic – What’s the Difference?
Domestic tourism accounts for 75 per cent of all tourism in Australia. For the year ended December 2007, the economic value of domestic tourism was $58 billion, up by 7 per cent compared to the previous year. International visitors made up the remaining 25 per cent, spending $22.6 billion in the same year. International tourists usually travel for longer and spend more money than domestic travellers, averaging $2,960 per trip compared to $590 per trip for domestic travellers.
Although inbound markets are expected to increase, domestic tourism will continue to dominate Australia’s tourism industry. The vast majority of Australian operators concentrate on marketing
their product domestically and then market to international travellers once they have secured a foothold at home.
While marketing your product to international travellers has many benefits, there are a number of differences between domestic and international tourism markets including:
- Overseas consumers, particularly long haul travellers, may have limited knowledge of Australia; Marketing costs are higher overseas;
- International markets vary considerably from country to country both in terms of travellers’ needs and the structure of the travel distribution system;
- International itineraries are generally more complex than domestic itineraries;
- Selling travel products to the international travel trade usually requires a commitment to their pricing and commission structures over a long period of time;
- Language and cultural differences create additional challenges for both marketing and product delivery; and
- Entering and establishing your business in the international market is a long term investment and it may take several years to recoup costs.
It is important to understand that overseas markets are very competitive, often more so than the domestic market. Not only are you competing against companies that provide similar products, you are also competing against other international destinations. Therefore, it is recommended that you take a different approach to international marketing, using different distribution channels and promotional mediums.
Limited consumer knowledge of Australia may require new promotional messages for your product that highlight the unique benefits of the destination and distinguish it from the rest of the world. In the international arena, selling your region and educating travellers about your destination and its attributes is often the first step in selling your product.
