Tarkine - Market Customer Analysis v3.1

THE TARKINE OPPORTUNITYTHE TARKINE OPPORTUNITY

Market and Customer AnalysisMarket and Customer Analysis

Understanding the opportunities for local,Understanding the opportunities for local,interstate and international tourism growthinterstate and international tourism growth

© September 2007 SCA Marketing2

Tarkine Research Report

Purpose

The purpose of this report is to provide an overview of the trends andfactors likely to impact on the development of the Tarkine area as a focusfor tourism and tourism development.

Approach

The report comprises five sections:

Section 1: The performance of the Tasmanian tourism industry on astate-wide basis provides the context for regional and sub-regionaltourism outcomes. The Section provides an overview of State outcomesand underlying trends on which to base short to mid term projections.

Section 2: The Cradle Coast region and its Tarkine sub-region havedistinct tourism characteristics. The region has experienced significantstructural changes in visitor demand patterns and its performance is nowquite different to the state averages.

Section 3: The intrastate visitation data provides an indication of currentpatterns of travel to and within the Cradle Coast region.

Section 4: Data on the Tarkine is extremely limited and this Sectionprovides an overview of some external research commissioned byForestry Tasmania.

Section 5: This Section is included to give readers an understanding ofthe contemporary discussion around the consumer decision-making andchoice behaviours of visitors to Tasmania. This is a very topical subjectas there is clear recognition within both the public and private sectors ofthe Tasmanian industry that previous reliance on ‘holiday types’ as aguide to future visitor behaviours in no longer relevant.

Section 6: Conclusions and implications are summarised in this Sectionbased on the trends and key factors likely to influence demand for travelto and within the Tarkine.



Data Sources & Acknowledgements

The key data sources for this report are:

• BDA Marketing Planning. Tracker. Q1 2007.

• Tourism Tasmania. Tasmanian Visitor Survey (TVS). December 2006.

• Instinct & Reason. Scoping the appeal of new forest tourismexperiences in Tasmania. July 2006.

The Cradle Coast Authority wishes to acknowledge the assistance givenby the providers of the information and for their willingness in supply thedata in a presentation form.

Both the BDA Tracker and Tasmanian Visitor Survey reports wereprovided by Tourism Tasmania - and details on these data sources canbe obtained from the provider. Access to excerpts from the Instinct &Reason report were provided by Forestry Tasmania.

Data Limitations

Whilst every endeavour has been made to access relevant data to theTarkine sub-region it should be recognised that the data sources andseries are extremely limited and tenuous.

Tourism Tasmania does not collect visitor data specific to the Tarkine inthe TVS as the sub-region was not recognised until relatively recently.Any data on the Tarkine is therefore inferred from travel within theimmediate geographic area.

The Department of Infrastructure, Energy & Resources (DIER) does holdroad traffic data for key roads in the Tarkine area, but as there is onlylimited access to the area this is not seen as a useful guide to future roadusage IF tourism related developments occur in the area.



Forecasting

This report is limited to examining past and current tourism in the Tarkinearea. It identifies the trends and key factors likely to influence futuredemand patterns form local, interstate and international visitors but isonly a guide to future demand patterns. In the future situation of theTarkine as a potential tourism destination, the past does not predict thefuture, although it may provide some useful guides.

To establish a meaningful forecast, a ‘latent demand’ study would berequired – which is outside the scope of this report.

Latent Demand

Latent demand exists when there is a willingness to purchase a good orservice, but where demand cannot be met. Typically, this can occurwhen:

demand for a particular product / service cannot be met by existingsuppliers, or is temporarily suppressed by lack of access

the consumer lacks the knowledge about the availability of the product

a market is inefficient (i.e. not representative of relatively competitivelevels).

Latent demand is not actual or historic sales or travel to the area, nor is itthe level of future sales or travel to the area. It is the level of potentialdemand in an informed, accessible and competitive market with noconstraints (often referred by economists as the ‘unconstrained model’).

The key commercial issue for the future development of tourism in andaround the Tarkine is the level of latent (or unconstrained) demand.

To establish the range of possible demand scenarios for tourism in theTarkine, key assumptions would need to be developed and modeled togive prospective investors a reasonable level of comfort.



Disclaimer

Whilst every care has been taken to ensure the accuracy of the material,no warranty is given as to the correctness of the material, or for anyadvice given or omissions.

Readers rely upon the material at their own risk and should seek theirown full independent legal and financial advice before proceeding to relyon any such material.

The observations, conclusions and recommendations contained in thisreport are not representations of fact, but are opinions formed by MooreConsulting and SCA Marketing.


Contents

2 Research Report

7 Statewide Market Trends

15 Regional Visitor Market Trends

21 Intrastate Visitor Market Trends

20 The Tarkine

37 Visitor Segments

40 Conclusions

Section 1Section 1Statewide Market TrendsStatewide Market Trends


Statewide Market Trends

Forecast Growth

Over the next five years, growth in the number of visitors to Tasmania is likely to risemarginally from 812,000 to about 822,000 (based on the TASMO forecast). Thismoderate growth in numbers is likely to be accompanied by a substantial increase intotal spend - expected to be more than 20% over the next five years across inbound,interstate and intrastate markets.

The forecast is positive overall for the Tasmanian holiday destination. This follows aperiod of rapid growth from 2002 to 2005 as the impact of low airfares, Bass Straightferries, and increased access triggered a boom period. It now appears likely thatTasmania will hold and slightly improve on its structural growth at a time of heightenedcompetition and weakened domestic demand.

The most encouraging aspect of the forecast is the strong and consistent growth inoverall spend across all visitor categories.

BDA Marketing Planning: Tracker Q1 2007



Cluster TrendsWhilst overall visitation numbers to the State have stabilised, there are two significantstructural trends that are now apparent:

• Firstly, dispersal across the State has fallen adversely impacting on visitation andstays in the regional clusters. The number of locations visited has also been fallingfrom 3.7 nights to 3.0 nights since 2003 and has become even more concentrated.

• Secondly, the dramatic fall in touring holidays in both absolute numbers and as apercentage of total visitors reflects the sharp growth in ‘Getaway’ destinational basedholidays. This is exacerbated by the growth in VFR visitors who are staying withintheir gateway destination and not touring.

The Tarkine therefore is becoming even more dependent on the North West Coastregion capturing visitors through its twin gateways (air and sea). The implication isthat the North West Coast cluster can not rely on ‘passing traffic’ being generatedfrom the Touring Routes, but must become an established and recognised cluster inits own right.

The North West Coast cluster is the fifth ranked cluster by number of visitors - andsimilar in size to the Tasman Peninsula and the North East Coast. It recent months ithas enjoyed an above average increase in market share,

The critical issue facing areas such as the Tarkine will be the reduced number oftouring visitors. This trend will focus visitors on the Hobart and Launceston clusters tothe detriment of all those areas dependent on the Touring Routes. The Tarkine will notbe immune from this trend and a much stronger performance at a Gateway level willbe required. This is both the current weakness and future opportunity for the Tarkine.




Length of stay & yieldThe number of interstate visitors and the total number of visitor nights spent in thestate have consistently risen since 2001. This has resulted in an increase in thetotal spend by visitors - and a consequent expansion of the overall Tasmaniantourism sector.

However, there has been some adverse effects in that both the average number ofnights stayed and the average spend per visitor consistently fell from peaks in 2003to low points in late 2005. The good news has been a small recovery in both theaverage nights (up from about 8.0 to 8.8 nights) and the average yield (up fromunder $1,500 to $1,750) since late 2005.

In summary, the last five years has seen:

• Total visitor numbers are up

• Total nights are up, average nights are down but recovering slowly

• Total spend is up, with average yield also improving.

These structural changes are closely linked to airfares and access. This is becauseprice points for air and sea fares have continued to fall (in both nominal and realterms) which has opened up the lower price point interstate travel market. This hasimportant ramifications for the North West Coast as both an air and sea gateway.Further changes to airfares and access, such as Tiger Airlines services toLaunceston will undoubtedly impact the North West Coast.




Holidays typesBig Tour visitor numbers have fallen dramatically since 2003 with some stabilisationat record low numbers in 2006. Short Tour has also fallen and is still falling. Thecombined impact of the collapse of the touring market over the past five years isbalanced by increased VFR and Getaway numbers.

There is a marked shift from touring to 4+ night breaks within a single region. Theother Holiday Types have been relatively stable over the same period.

It is now apparent that there has been a fundamental restructure in the compositionof the Tasmanian visitor market - and the underlying drives that shape the visitorsegments.

• Firstly, the Big Tour (multiple cluster) holiday type represents about 25% of allvisitors (ie about 210,000 visitors pa)…and the trend is for further erosion. At thecurrent rate of decline, it is conceivable that multiple cluster / region touringholidays will fall by at least 10,000 to 20,000 visitors per annum.

• Secondly, has been the emergence of the Getaway cluster based (single cluster)destinational visitor (refer next page for details).

OriginThe big story is that Victorian visitor numbers continue to fall. All other states havegained share during the past five years with Queensland being particularly strong.




Market RestructureThe restructure of the Tasmanian visitor market (referred to on the previouspage) has two distinct characteristics:

• The collapse of the traditional touring holiday type (big tour and grand tour)

• The emergence of the shorter duration, destination specific, single clusterbased holiday type (that combines short tour, short break and the getawayholiday types).

It is therefore critical to understand the composition of this now dominant groupand their key characteristics (as depicted in the charts above):

• Average stay is shrinking - although this may be stabilising

• Trip yield has been rising since 2005 although it dipped slightly in the lastquarter

• Repeat trips and first time visits are both increasing.

A week’s break in a single region / cluster has become the norm with visitornumbers up by 67%, nights up by 76% and spend up 73% over last year. Thisis clearly the ‘hot spot’ in Tasmanian tourism.




Getaway holidaymakers in the regionsHobart and Launceston / Tamar dominate the Getaway holiday type with the NW and WestCoasts holding their respective positions.

The key to the emergence of the clusters as the dominant force in Tasmanian tourism -rather than touring - is the port of arrivals / gateways. The growth in arrivals through Hobartand Launceston is ‘feeding’ their respective local clusters. By implication, the future successof the Devonport and Wynyard Airports and the Port of Devonport (for the two Spirits) willtherefore have a huge bearing on the success of the NW Coast as a tourism cluster.

Getaway activities in the regionsNW Coast activities favoured by the Getaway holiday type are: National Parks mixed withlocal shopping (crafts and antiques), local markets and history.

The preferred activities on the West Coast by the Getaway holiday type are markedlydifferent from the NW Coast and include: Gordon River cruises and the WC WildernessRailway combined with short walks in the wilderness and to historic sites and a littleshopping.




SummaryFundamental structural changes occurred in the Tasmanian visitor marketfollowing the introduction of low price airfares, additional ferry capacity andimproved access. Tasmanian visitor numbers increased from around 500,000 tomore than 800,000 annually.

This increase in numbers has been accompanied by a fundamental shift in thevisitor mix - with much less touring and more single gateway destination basedtravel.

A consequence of the changing composition of the Tasmanian visitor market hasbeen the adverse impact on regions and towns dependent on the Touring Routes.

The Cradle Coast region has suffered throughout the period of restructuring withShort Break and Short Tour visitors preferring Hobart and Launceston as theirgateway - to the exclusion of other regions and clusters. This shift, combined withthe poor performance of sea travel, has placed further pressure on tourism withinthe region.

It is clear that declining sea travel exacerbated by the introduction of even lowerairfares (Tiger Airline through Launceston) will further marginalise the region’sgateways. The Cradle Coast region will be the loser if these emerging trends arenot addressed.

Implications for the TarkineThe Tarkine must have a regional destination with a gateway that can attract theGetaway, Short Break and Short Tour holiday types. The Tarkine must positionitself in this growth market if it is to avoid long term decline associated with thereduction in touring visitors.

For the Tarkine to be viable, it MUST:

• Be a key part of an associated destinational gateway and the related clusters.The gateway is likely to be Burnie / Wynyard for air and Devonport for sea.

• Provide accommodation, shopping and restaurants in the gateways that provideeasy access to the Tarkine.

• Be attractive as a drawcard / icon of sufficient ‘weight’ to pull visitors based oncharacteristics that are simply sub-sets of the existing regional imagery,attractions and activities.

If the Tarkine is to be a viable destination, it needs to focus attention on theregion, link it with relevant accommodation and activities and support the localgateways - no small ask!

Section 2Section 2Regional Visitor Market TrendsRegional Visitor Market Trends

- Cradle Coast - North West and West Coasts- Cradle Coast - North West and West Coasts


Regional Visitor Market Trends

Visitors to the region

There is only bad news when it comes to the proportion of all Tasmanian whocome to the NW and West Coast regions. There has been a steady erosion ofmarket share in total visitor numbers for the past four years - and the declineseems likely to continue on the NW Coast although the downward trendappears to have halted for the West Coast.

‘Visited and stayed overnight’ is showing a similar pattern of decline but stillrepresents the majority of visitors to the region. There is a simple message inthese numbers - once a visitor comes to the region, they are likely to visitwithin the region and stay overnight.

Small percentages visited but did not stay - and an even small number just‘passed through’.



First time and repeat visitorsThe pattern of a declining proportion of first time visitors offset by increases inrepeat visitors is common across the State as well as in the regions (WestCoast, NW Coast and Cradle Coast).

This suggests that State conversion strategies are unsuccessful - and that asmore repeat visitors return to the State they are less inclined to be touring,rather they choose a particular destination that interests them and then staywithin that region for up to a week. Great if you are a tourism operator in thepreferred regions - more than a problem, if you are based in a declining region.

As more repeat visitors return, the State is being ‘sliced and diced’ into regionalclusters. This will mean an increasing emphasis on developing strongpositioning for each regional cluster that can attract through a local gateway.



Port of arrival in TasmaniaAir arrival numbers and percentage have steadily improved over the past fouryears - at the expense of sea travel. Sea arrivals appear to be in long termdecline - which is of particular significance to regional tourism on the West andNW Coasts.

There are some distinctive characteristics associated with region as follows:

• West Coast has a much higher dependency on arrivals by sea and thereforeis more vulnerable to declines through TT Line at Devonport

• NW Coast and Cradle Coast have very similar pattens of arrivals with strongreliance on sea arrivals and the two local airports.

The arrival data strongly suggests that the regional gateways are failing tomaintain market share over the past four years - and that the declines arepersisting downwards. There is nothing in this data that suggests animprovement is likely and as such, strong intervention will be required to slowthe rate of decline.

Given that all regions are now much more dependent on their local gateways itwill be critical to lift the performance of the gateways in attracting visitor traffic.



State and country of originThe overall pattern of arrivals by state or country of origin has remainedrelatively stable over the past four years:

• A slight decline in Victorians

• Growth in arrivals from Queensland and similar rates of growth from SA andWA (but off very low bases).

• Inbound remains stuck under 20%.

The three regions simply reflect the overall state position.



SummaryThe Cradle Coast region including the NW and West Coasts is experiencingthe ‘unintended consequences’ of the restructuring of the visitor market toTasmania.

The consequences of the restructure caused by lower airfares and improvedaccess is now apparent - the rapid demise of the touring holidaymaker andtheir replacement by shorter duration, regional destination specificholidaymakers that are dependent on their local port of arrival that determineswhere and how far they travel.

The Cradle Coast region faces a significant structural challenge - and a newvisitor reality. Much lower visitors numbers to the region as multiple clustertouring declines further combined with more declines in sea travel as the shipproduct ‘matures’ and there are more real reductions in the cost of airfares.

The region is not currently well placed to respond to these challenges asreflected in the declining visitor numbers. The only upside is the higher spend /yield per visitor.

Implications for the TarkineWithout a material change in the positioning and ‘offer’ to the visitor market, theoutlook for the region is long term slow decline mired in a moribund industry.There is simply insufficient intrastate and within region business to create andsustain a vibrant tourism and hospitality sector.

The region must create a more recognised gateway combined with a strongfocal point - simply claiming ‘lots of diversity’ is not creating sufficient ‘cutthrough’.

The Cradle Coast region can no longer rely on just getting its ‘fair share’ -because that share is in decline. The region needs a (Tarkine ) boost!

That boost will not flow from statewide initiatives but must be a regionaloutcome.

Section 3Section 3Intrastate Visitor Market TrendsIntrastate Visitor Market Trends


Intrastate overnight trips

Intrastate overnight tripsThe intrastate trip market declined from a peak in 2003 through to March 2006as the impact of low airfares drove interstate travel by Tasmanians. Thisperiod of increased departures at the expense of intrastate travel appears tohave bottomed by mid 2006 and there has been a modest recovery throughlate 2006 and and early 2007.

Intrastate nightsA similar pattern has occurred in the number of intrastate night - a steadydecline through to March 2006 and a modest recovery after that time.

Intrastate expenditure & yieldThe good news is the lift in intrastate expenditure and yield per trip. There hasbeen a steady climb in both expenditure and yield per trip. This has not reachthe national averages as yet, but the accelerating rate of expenditure and yieldsuggests a long term structural improvement in Tasmanian spending time inthe State.




Intrastate overnight trips by trip lengthOne night trips have increase steadily in both percentage and absoluteterms since mid 2005 to more than 30% of the intrastate market.

The two night market has declined in relative terms to about 50% of thetotal market and 3, 4-6 nights and 1 week+ have all remain static overthe past few years

Intrastate overnight trips by activityIntrastate overnight visitors take short breaks (typically one or two nights) in thestate for R&R or VFR purposes. These two purpose of visits account for amassive 86% of reasons for intrastate travel. The strength of the R&R purposewould suggest that there is significant opportunity to convert these travellersinto the paid accommodation section, especially on the NW Coast as there isstrong preference for the region.



Intrastate day trips

Intrastate preference & appeals

Intrastate preference (defined as interest or intent to travel with next 12months) peaked in late 2006 and has recently been falling. This does not bodewell for overall intrastate travel numbers nor expenditures in the short term.This is possibly being impacted by the recent strength of the Australian dollar(>USD$0.80) triggering increased overseas travel.

At the cluster level:

• Freycinet remains in a commanding position and strengthening

• Hobart, Cradle Mountain and the West Coast are showing decliningpreferences to travel

• Launceston, North West Coast and Tasman are showing relativeimprovements

• The NE Coast and Huon are exhibiting weakening trends.



Intrastate day trips

Intrastate trips by lifestage & tour type

Intrastate visitors primarily travel for social purposes – to take short breaks and visitfriends and relatives. This result is consist with the stated reason / purpose of travelbeing R&R and VFR. Special events, getaway, beach and touring are all relativelyminor reasons for travel in the big picture.

Within these two groupings, there has been a structural shift in the mix betweenLower Old (declining) and Young (growing strongly). The Young group appears tobe growing at a rate likely to overtake Lower Older in the short to mid term…withimportant implications for the types of holidays they are likely to take.




Intrastate profile

Whilst summer and autumn are the preferred break times, there is relativelystrong demand (in comparison to interstate and inbound visitors) across thespring and winter seasons.

Unsurprisingly, accommodation preferences are dominated by VFR withapartment and standard hotel / motel featuring strongly and some strong gainsby 4 star properties.

In terms of destinations two tiers have emerged with the popular groupcomprising Hobart, Launceston, Freycinet and the NW Coast, and the othergroup comprising Tasman, West Coast Cradle and Huon a distant second.

The challenge for the Cradle Coast region and its two clusters is to lift itsperformance from the second tier to become a first tier player. Freycinet hasproven that Tasmanians will take short breaks in Tasmania.




Intrastate day tripsDay trips represent a significant component of the value of the intrastatemarket in terms of spend and activities.

Day trips declined from a peak in mid 2000 to a low point of less than 3 milliontrips annually by late 2004 - with a steady recovery to late 2003 numbers inMarch 2007. The rate of the recovery is accelerating to more than 5% pa in thelast quarter - suggesting that the recovery is well established.

Unsurprisingly, total day trip expenditure mirrored the decline in total numbersin late 2003 and has demonstrated a strong recovery to more than $230M byearly 2007.

The most notable feature of the day trip market has been the strongimprovement in the yield (spend per trip) from about $70 in 2000 to about $90in 2007. The yield figures peaked in 2006 and have been flat since, but totalexpenditure continues to rise as the total number of trips increases.



Intrastate trips

SummaryThe intrastate visitor market is significantly smaller in size and value than theinterstate market.

The intrastate market is growing in spend / yield terms and there has been asteady recovery in numbers. The key strength of this market is the base demandacross all seasons - without the high seasonal variation inherent in the interstatemarket.

This market is particularly attractive as it has a strong preference for travel to theNW Coast from all major regions and clusters.

Implications for the TarkineThe lack of regional intrastate data constrains the implications that can be drawndirectly from the available data sets.

However, there are some conclusions that can be made:

• There is a strong trend to 1 and 2 night stays by intrastate travellers to the NWCoast

• These visitors are primarily visiting for R&R and VFR reasons and taking ShortBreaks and staying with friends and relatives (at least for part of the time)

• The activities most of interest to intrastate visitors are strongly biased towardsTarkine-like activities, specifically visiting: wildlife (21%), National Parks (19%),bushwalking (15%) and wilderness (15%). They also want to shop and take in arestaurant.

This combination of interests and activity preferences suggests that any majordevelopment that delivers this combination would be highly attractive to theintrastate market. Developments that achieve accessibility and activities withsupporting shopping, dining and accommodation experiences in close proximity tothe Tarkine would be likely to attract an increased share of this intrastate market.

Section 4Section 4The The TarkineTarkine


The Tarkine

Tarkine Background ResearchThere has been very little specifically commissioned research tounderstand potential responses to the Tarkine as a tourism product ordestination.

There are a number of related studies and reports:

• Forestry Tasmania Visitor Surveys were prepared in 1992 and 2005. Themost recent study was conducted by Myriad Consulting to gain someinsight into visitor composition and reactions to the South Arthur ForestDrive. The study suggested that there are about 4,000 to 6,000 visitors tothe area each year with about 50% of them from interstate or overseas -and that most were spending at least one night in the NW Coast region.

• Tarkine National Coalition prepared the Protecting Forest, Growing Jobsreport in 2004 based on a survey of tourism businesses in the region.Industry respondents overwhelming agreed (>85%) that a well promotedTarkine would lead to increased visitation. The report suggested thedevelopment of more walks, guided tours, attractions and public facilities.

• Cradle Coast Authority prepared a regional development strategy and, inconjunction with Tourism Tasmania, branded it the “The Great NatureTrail”. This strategy was based on the assumption that touring styleholidays would remain the core holiday type in Tasmania - and that theTouring Routes Strategy could be extended. With hindsight, theseassumptions are now questionable given the fragmentation of the Stateinto clusters.

• Stanley Tourism Precinct Study was prepared in 2005. It recognised thatif the Stanley sub-region were to progress towards evolving as a cluster, itsstrength would not be based on wildlife, wilderness and bushwalking. Asubsequent report by The Inspiring Place suggested that these gaps couldbe an opportunity for the Tarkine.

• Forestry Tasmania prepared (unpublished) a pre-feasibility study on itstourism development concepts in 2007. The draft report providedbackground information on two concepts - the Tarkine Drive and thePhantom Peak eco-wilderness experience.


The Tarkine

Tarkine Specific ResearchThe only primary research conducted on the Tarkine to date wascommissioned by Forestry Tasmania (FT) in July 2006 and prepared byInstinct & Reason entitled “Scoping the appeal of new forest tourismexperiences in Tasmania”.

This is a commercially confidential report not available for public release,but FT has kindly made it available to the consultants to review as part ofthis desk study. We are grateful for their assistance and co-operation.

The findings outlined in the remainder of this Section of the report rely oninformation extracted from the Instinct & Reason consumer research thatused focus groups in Melbourne and Sydney. The participants wereTasmanian preferrers - travellers who indicated their interest in Tasmaniaa a holiday destination. The key points in the research have beenparaphrased by the consultants and these extracts have been reviewed foraccuracy and relevance by FT.

The reader should be aware that the consumer research referred to in thisSection was based on general ‘unaided’ probing about forest experiencesfollowed by the use of stimulus material. When shown the stimulusmaterial, particularly for the existing experiences such as Tahune, a verystrong and positive response was provoked.

General FindingsThe general findings and conclusions drawn by Instinct & Reason inrespect to forest based tourism experiences in Tasmania were:

• A Tasmanian forest experience is not considered by interstate visitorsegment to be the key part of a Tasmanian holiday. Awareness andinterest are low, but when probed, respondents were ‘intrigue’ by thepossibilities.

• Currently, there are no visitor segments that could be ‘triggered’ toconsider or take a Tasmanian holiday simply because it contained ageneralised forest based experience. The Tarkine may be able to be sucha trigger if the accommodation, attractions and activities are able to createa critical mass of awareness.

• Most importantly, any forest based experience would need significant‘awareness building’ communication to generate visitor interest. Thisawareness raising represents a significant on-going cost that will largelydetermine the commercial viability (or otherwise) of any forest basedexperience in the Tarkine. The research makes it very clear that anyenterprise or collection of enterprises would need to spend well aboveindustry averages to provoke increased visitor traffic.

• Visitation would be most likely amongst repeat visitors to the State,hence, Victoria is likely to be more ‘prospective’ than any other State.


The Tarkine

Key Findings

The key findings and conclusions drawn by Instinct & Reason in respect topotential forest based tourism experiences in the Tarkine were:

• Potential visitors expect a high level of differentiation that will capturetheir interest in any forest based experience. This differentiation comesfrom both location and the mix of activities (not one or the other). It is theinteraction of location with activities that is the key differentiator.

• There would be widespread interest once visitors are within the State andwithin the Cradle Coast region in visiting Tahune, Tarkine and PhantomPeak. However, only one site would be visited on each visit to Tasmaniaas there is a perception that there would be insufficient differentiation towarrant multiple forest experiences within a single visit to the State. Thereare two important implications that flow from this finding:

– Firstly, for the touring visitor segments, they would choosebetween the three forest based experiences and select the oneconsidered to be the most ‘unique’ and compelling

– Secondly, for those short duration, non-touring visitorsaccessing a single cluster, it would suggest that all thosevisitors to the Cradle Coast region would consider a Tarkineexperience IF they were to be made aware of it.

• Based on recent research by Tourism Tasmania that indicates that theTasmanian holiday destination is increasingly being ‘cut up into bite sizepieces’ by visitors, there would appear to be a reducing reliance on touringsegments to Cradle Coast. There are two important implications that flowfrom this finding:

– Firstly, potential visitors increasingly see Tahune as a Hobartcluster / southern region product and the Tarkine as a NorthWest region product.

– Secondly, there will be little cannibalisation between thedifferent forest based experiences throughout the State as thedominance of touring type holiday diminishes over time.


The Tarkine

Current Perceptions

The current perceptions of nature and forestry within holidays as they mayrelate to any Tarkine developments include:

• Expectations are about trees, green, wilderness, remote, isolated - withactivities that may include walking and effort

• Tasmania ‘owns’ this space for those segments that can conceptually link‘forests’ and holidays’

• However, there are some challenges

– Forests are seen as ‘passive’ and ‘seeing’ more than doing– Forests must be strongly linked with a specific activity that

incorporates a sense of adventure.

Understanding the Demographic Segments

Based on the BDA demographic life-stage segmentation, the researchidentified responses to forestry based experiences as follows:

• Affluent Young - time is the greatest obstacle with ease of access from amajor gateway being a key determinant of the destination in Tasmania thatis selected. The ferries are not an option for this segment and the airportgateways either unknown or frequency is a barrier. Therefore this isconsidered to be a low prospective segment.

• Families - appeasing everyone is the greatest obstacle with the potentialfor bored children and major holiday risk. Activities need to be fun andexciting and trees and forests simply ‘don’t cut it’ unless there are relevantactivities that attract and engage the visitor.

• Older Affluent - are seeking to be rewarded for their efforts through afeeling of achievement. The content of the activity is therefore the key toturning on this segment.

• Older Lower - physical limitations represent a mental barrier for some ofthis segment, however, this segment also contains Active Adventurers whowill seek out activities.

Overall, this life-stage segment analysis suggests that there are verysignificant perceptual barriers to the development of any forest basedexperiences in the Tarkine. Any developments would need to address thesegments to create a meaningful set of activities within the context of theTarkine (ie integrating the location and activities). This appears torepresent a significant challenge.


The Tarkine

Relative Appeals

In the research, the ‘relative appeals’ of the Tarkine and Phantom Peak in particular‘connected’ with the target segments. The Tarkine was considered to have broad appeal,subject to the actual type of activities to be developed in the location.

As a guide, 35% of research respondents indicated that they would be likely to visit theTarkine unprompted - and a massive 72% responded positively after being exposed topossible development options.

The relative appeals are displayed in the following diagrams prepared by the Instinct &Reason’s researchers to reflect the different expectations of the demographic segments.The diagram suggests that there may need to be multiple product offers to address eachdemographic segment within the context of the Tarkine.

Basis of appeal of the Tarkine Region

High level of adventure

Low level of adventure

Social based

appeal

Achievement

based

appeal

Freedom Stimulation

StatusDiscovery

Affluent Young

Affluent Older

Affluent Families

Lower Older

The Tarkine



Social based

appeal

Achievement

based

appeal

Freedom Stimulation

StatusDiscovery

Affluent Young

Affluent Older

Affluent Families

Lower Older

The Tarkine

Holiday anchors



Social based

appeal

Achievement

based

appeal

Freedom Stimulation

StatusDiscovery

The Tarkine

Phantom Peak

Great Tarkine Drive


The Tarkine

Imagery

The current key word associations with the Tarkine as a destinationincluded (not in ranked order):

• Unique

• Remote

• Intriguing

• Authentic wilderness

• Significant contrast

• An area of significance

• Mineral springs.

However, these are insufficient to be drivers of growth or triggers of focusfor prospective visitors. To be a viable regional destination, the Tarkinewould need to be more than a wilderness forest.

Accommodation

The key qualifier from all segments was that the “style and quality ofaccommodation on offer at each location would be a key differentiator andwould be key to dispersal and length of stay”.

The research discovered that the role of accommodation would be pivotalto the successful development of the Tarkine as a major drawcard withinthe Cradle Coast region.

A range of accommodation would be required to service the Tarkineincluding:

• Indulgence and wellness possibly based on minerals springs

• Isolated wilderness self contained cabins

• City locations to meet the expectations of those expecting night timeactivities such as dining and entertainment.


The Tarkine

SummaryThe current interstate perceptions of the Tarkine - based on customer research -suggests that the Tarkine already holds brand equity in the form of definite word-associations. However, this brand equity is presently insufficient to trigger anincrease in visits to the region.

The Tarkine would require substantial marketing support to build awareness andinterest - and this would have to be supported by relevant visitor experiences.These experiences are well beyond trees, forests and wilderness. A totalexperience is required - according to the research - that encompasses thegateway, the cluster and the related visitor accommodation, transport andactivities.

Implications for the TarkineThe Tarkine already represents a destinational concept that comprises anenvelope with no content…at least in the visitor’s mind (prior to experiencing thedestination). This is a huge potential canvass that can be painted, but it wouldrequire the Tarkine to move from a concept to a tangible experience.

There must be clarification of what the Tarkine offers, where it’s positioned andwhich of the two clusters it is associated with. It must also have ‘buy-able’experiences including appropriate accommodation.

Section 5Section 5Visitor SegmentsVisitor Segments


Visitor Segmentation

Visitor SegmentationSegmentation methodologies provide an understanding of the customer profileand an insight into their perspectives.

There are many ways of segmenting Tasmania’s visitors - with each approachproviding a different level of understanding and insight. There are three broadapproaches to segmentation and all have been used to some extent over timein an attempt understand and evaluate visitor trends and behaviours.

The three approaches involve:

• socio-demographics - the BDA ‘life-stages’ are typical of this approach

• consumption behaviour - the BDA ‘holiday types’ are typical of this approach

• needs based including perceptions and desired experiences - limited use hasbeen made of this approach to date.


Visitor Segments

SummaryEach of the segmentation approaches outlined provides a different level andrichness of ‘insight’ into the visitor market place.

The demographic approach provides an overview of the key characteristics ofthe visitor population - a very macro high level approach.

The Tour Types defines visitors by the type of holiday taken - key informationabout the changing popularity of different holiday preferences.

The motivational / behavioural approach would provide an understanding of what‘turns on’ particular visitor types and what is important to them if they are toconsider visiting Tasmania. At this point in time, the is no public domainbehavioural segmentation available for Tasmania - although there are a numberof variants being used by larger private and public sector organisations.

Implications for the TarkineNo segmentation analysis has been performed for this report.

Existing BDA data and tools could be used specific to the NW and West Coast -but these are of limited value in understanding the motivations and behaviours ofprospective visitors to the Tarkine.

SectionSection 66ConclusionsConclusions


Conclusions

SummaryThe Market and Customer Analysis contained in this report clearlydemonstrates a market undergoing fundamental structural change - largelycaused by cheap air and sea fares.

This changing dynamic suggests that the Cradle Coast region, including theNW and West Coasts, will require a fundamental shift in focus if it is to addressthe structural changes in the visitor market that are already well advanced.

For the region, the rapid decline of the touring holiday type and its replacementwith short duration single destination visitors will mean that the region must:

• Strengthen the role of the gateways and ensure their visibility andcompetitiveness

• Provide greater clarity and focus on the competitive advantages of the regionto each priority visitor segment

• Shift the marketing effort and communications focus to single destinationvisitors who can be attracted to the region and progressively de-emphasis thetouring routes.

For the Tarkine, the key issues are:

• Strengthen the role of the gateways and ensure their viability

• Clarify the brand positioning and key offer messages including theassociation with a single cluster

• Develop experiences that must include activities and accommodation that willbuild on the image values of the area.

Next Steps

This report provides an overview of the region and the potential of the Tarkineas a visitor destination - based on available data sources. The lack of credibledata sources severely limits the conclusions and implications to be drawn.

The next steps to better understand the potential of the Tarkine would involvethe development of:

•A baseline visitor model with key assumptions about future trends likely toimpact the region over the next 5 years

• A ‘latent demand’ forecast for the next 5 years based on the key scenarios -including but not limited to the key proposals currently being considered

• Identification of key triggers that could create ‘critical mass’ to supportsubstantial regional / cluster based visitation.

Documents

Tarkine - Market Customer Analysis v3.1