IBISWorld estimates that the tourism industry's revenue grew by 0.3% over the five years to 2009-10. This marginal growth is the result of unfavourable exchange rates, high fuel prices and interest rates creating a challenging operating environment.
A lack of new industry vision, leadership and new investment has also impeded this industry's revenue over the performance period. Slower economic growth, associated with the global financial crisis, is leading to a shortening of the length of stay away and trip expenditure by travellers. This has led to significant discounting of tariffs and fares. A marginal increase in international visitors is expected through these five years, relating to the significant devaluation of the Australian dollar against many currencies.
Industry employment will grow by a small amount due to industry revenue posting a positive growth rate. There has been little investment in tourism-related products, which has impeded employment growth. There has been a shift towards the use of casual and part-time staff, and staff working split shifts to cover peak customer service periods and special events.
Profit margins have grown smaller over this period, continuing industry consolidation is expected, which should improve profit margins for the remaining operators over time.
IBISWorld forecasts that this industry's revenue will grow by 1.6% over the five year period to 2014-15. This industry requires a more concerted effort and strategic focus to be taken by internal operators. Expanding low-cost flights and the arrival of super jumbo jets provide opportunities for growth for airline firms, however continuing fragmentation of the accommodation industry will occur, as travellers shift their preferences over time towards serviced apartments and other smaller, more hospitable styles.
Online travel information, booking and payment will become much more popular, resulting in fewer travel agencies in operation. There is expected to be an increase in both the number of trips and per trip expenditure over the outlook. International visitor arrivals will improve, particularly from the UK and New Zealand.
This industry is generally expected to experience positive revenue growth over the five years due to improving domestic and international economic conditions. However, the speed by which the industry becomes more strategically focused and competitive with emerging tourism markets will determine the momentum of growth and positive performance.
Gaming-linked operators will experience only slow growth over the next five years as proportions of household disposable income allocated to gaming falls. The increasing use of casual and part-time staff to cover peak customer service periods will result in a marginal growth in employment.
Key success factors for operators in the industry:
- Ability to quickly adopt new technology. Ensures cost efficiencies and better linking to guests through internet linked information, bookings, reservations and payment systems.
- Proximity to key markets. Ensuring that the tourism product is linked to key markets and their needs will lead to many satisfied guests and repeat visits.
- Access to multi-skilled and flexible workforce. For most operators there is a necessity to have access to skilled workers - many employed on a casual and permanent part-time basis - to ensure quality service can be provided to guest at peak times. This will maximise revenue and satisfaction levels.
- Receiving the benefit of word-of-mouth recommendations. Satisfied guests ensure many good word-of-mouth recommendations and repeat visits, therefore future revenue growth and bookings.
For the full IBISWorld report on the hairdressing and beauty salon industry click here.
Robert Bryant is the general manager of business information firm IBISWorld.
