The GFC. How We’ve Been Impacted - An Australian Perspective
Alec Gilbert
Australia -
So how bloody bad is it?
Recent Studies Indicate. . .
• Not technically in recession, but close to it;
• Unemployment on the rise – but only slightly;
• Downturn in tourism spending – inbound, outbound and domestic;
• Tourism demand downturn. Overseas arrivals: by 1.1%
No. Convention Visitors to Australia by Country of
Residence
05
101520253035404550
New Zealand
USA China Japan India United Kingdom
Korea Singapore Canada Thailand
Year Ended April 2008 Year Ended April 2009
-2%
-32%
-2%
-11%-6% -27% -26% -20% 18% -21%
Thousands
Convention Visitors
by 7% for year ending April;
by 28% for last 3 months
Why. . . .?
Number of Meetings Grown Slightly
Source: ICCA
International Meetings in Australia between 2007 and
2008
16%
Source: UIA
GFC Induced?
• Less meetings mean less visitors• No evidence of cancellations in
associations sector• Wash factor may contribute to
recent slump.
A Closer Look
Business Segments
• Association Business – holding its own– Associations need to meet– Associations do well in tough times – Little or no cancellations– Beware a second dip!– Numbers vary (-40% to +10%)
Projected Attendance Numbers at 2009 Events
Compared to 2008
Source: incon
• Corporate Business – the worst hit– 70% Corporate training – Cut back in travel, especially smaller end of
market, virtual conferencing
• Exhibition Business– 15-20% in terms of space take up– Consumer shows:
• as much as 30% in terms of attendance• Reduction in floor space• Cancellations
Business Segments
Client Reaction• Bid calls and announcements delayed• Later confirmation of all types of events• Payment variations requested• Cut the frills• Less add on costs, more inclusive pricing• Choice of destination more economic
than rotation driven• Recognition of increased buying power
Buying Power with Suppliers in 2009 Compared to 2008
Source: incon
Centre Responses
• Remove the financial pressure– Reduce cancellation penalties– Flexible approach to payment– Discounts– Subventions
• Assistance in maintaining numbers• Reduced yields
The ACC Experience
Adelaide•Regional capital, 1.4 million people•International Airport•Not an iconic destination but competitive and convenient•A very good Convention Centre!
Revenue by Type
GFC Impact
• 1.5% on last year’s record performance• No cancellation in association sector• Cancellation of 1 small consumer exhibition
and reduction in floor area of another• A few charity banquet/auctions cancelled
(but others have grown)• Little growth expected next year• An opportunity to rationalise and increase
efficiencies
Australia – The Lucky Country!
• Generally yields are lower but a sense of optimism prevails
• Impact greater in larger destinations due to business mix
• Second tier cities relatively unscathed• The ‘cocooning’ phenomena is
underway – regions losing out to population centres
Future Challenges
• GFC:– Postponement of ACC Extension– The impact of a second dip
• Other Factors:– Increasing competition– Subventions and their impact on
regional centres