Predominantly a long-haul destination, the recovery of Australia’s travel industry has been dependent on re-establishing air and sea transport links with key markets. It was slowed by the late opening of China’s borders but now international traveler numbers are forecast to exceed pre-pandemic levels by 2025.
It’s easy to understand Australia’s appeal. With the spectacular scenery, great weather, multicultural communities, laidback lifestyle with excellent food and wine, and congenial locals, not to mention access to one of the Seven Wonders of the World and a 60,000-year history; travelers choose Australia for an experience they’ll never forget and that doesn’t look like it will change anytime soon.
Flywire recently conducted a survey with 400+ accommodation providers, tour operators, and Destination Management Companies (DMCs), including 102 in Australia, about their experience of growth and their expectations for the future, as well as their views on sustainability in the sector and consumer trends.
Just over three-quarters of Australian travel providers said that compared to two years ago, they had seen bookings increase with nearly 3 in 5 saying their bookings have increased by around 50%. For a significant number, that growth has been seen in couples trips (75%), solo travelers (69%), and group travel (either friends & family or extended family). What’s more, almost all (97%) expect some level of growth in five years and most expect that growth to be between 5% and 20%.
Achieving growth will be supported if traveler numbers increase as forecast, but travel providers will still need to meet customer demands on many things including sustainability, remote working options, slow travel, and more to capitalize on them. But they also believe that improving business-critical processes such as payments will deliver cost and time savings as well as better client experiences resulting in the expected growth.
Sustainability critical to survival of key tourist attractions
Australia’s low population density means that much of the landscape is relatively untouched. But, over time, increased interest and footfall have had an impact. Many of the natural and historical wonders that draw tourists to Australia, the Great Barrier Reef and Uluru to name just two, are now under threat and if steps are not taken to preserve and restore them, future generations will not be able to enjoy them as past ones have.
Of course, it’s not only the environment and natural landmarks that need to be restored. In any Australian endeavor, it’s critical to honor the history, experiences, and traditional ownership of the Australian First Nations-Aborigines and Torres Strait Islanders-from whom much can be learned.
In addition to preserving culture and landmarks, growing numbers of consumers want to reduce their environmental footprint and give back as part of their travels as well. These travelers care about the impact of their tourism spend and this presents exciting opportunities for travel providers in the country. 83% of Australian travel providers say that sustainability is becoming more of a determining factor in how travelers are planning their trips and 8 in 10 say the importance of sustainability options to travelers has been increasing over the last few years.
98% of Australian travel providers have already implemented sustainability-focused policies or products, it just makes sense too. However, there is quite significant room for improvement; while over half have implemented some sustainability policies or products, only 1 in 4 have implemented a large number. A large proportion of Australian travel providers (9 in 10) agree that more needs to be done, both because it’s the right thing to do and because the opportunity for increased business cannot be ignored.
Slow travel key to making the most of Australian experiences
The experiences that Australia offers are what draws many tourists to its shores. From learning to surf on the Gold Coast, going walkabout to find ancient rock art and learn about aboriginal culture, encounters with the vast array of wildlife, vineyard tours, hiking, kayaking, climbing the Sydney Opera House, and more.
92% say they have seen an increase in consumer demand for experiential travel
One trend is helping travelers make the most of these experiences as well as minimizing their environmental impact and directing their spending to support local communities and the preservation of local culture and heritage. That trend is “slow travel” and it is something 3 in 4 Australian providers say they’ve seen an increase in demand for. 86% also say they think the demand will continue to grow.
Australia is the perfect country for slow travel. The sheer scale of Australia-the huge distances between states and territories-means it makes sense for travelers to spend a little longer in the locales they visit before moving on, and approach stop-offs with the mindset of quality over quantity. Traveling more mindfully, and at a slower pace is not only more relaxing, but it also allows travelers the time to become immersed in experiences, delivering a more meaningful and enriching vacation.
Solving payments pain to deliver growth, improved customer experience
The ease with which a guest can pay their travel provider, or not, is a critical factor in a client’s satisfaction level. It is sometimes the last interaction they will have with their travel provider before they set off on their vacation and, if it is a difficult one, it can make a lasting impression impacting their whole experience. Australian travel providers, like their compatriots in Italy, Japan, and South Africa recognize this - 87% agree that the payment experience they offer is an extension of their brand.
82% agree that the easier it is for customers to pay them the happier their customers will be
Interestingly while three-quarters of Australian travel providers say their payment capabilities are all or mostly digital, only 30% say this is definitely the case. Just over 40% say they are close but not there yet and a further 23% are about halfway to offering a completely digital payment experience. Similarly, 94% of Australian travel providers say they find it easy to accept payments from international travelers. However, two-thirds say it is only “somewhat easy” as opposed to “very easy”.
Most Australian travel providers acknowledged that their customers experience some kind of pain when trying to pay. The top pain points for them were:
- Concerns over payment security (47%)
- Unexpected fees and/or confusion about exchange rates (46%)
- Not being able to use their preferred credit cards (44%)
8 in 10 (82%) also said if it was easier for me to accept payments in my customer’s own currency, guests would be more satisfied. There is room for improvement.
83% agreed that if it were easier to accept payments in their customers’ own currency, their business would grow
The ultimate goal should be a seamless payment process, ideally so seamless that it happens almost unconsciously. This will be made possible only if travel providers seriously look to improve their payment process, solving customer pain points and streamlining the process both externally to improve the customer experience, and internally to underline growth. Most Australian providers (87%) agree that if there was a better way of handling payments, they would be able to make cost and time savings.
There is also a desire to improve outgoing payments; 87% wish it were easier to make outgoing payments to vendors and a similar proportion wish it were easier to make commission payments to agents too. Solving those payments would streamline the booking process, bolster critical relationships, and drive growth.
Flexibility in work is increasing demands for flexibility in travel, AI may help
The increased prevalence of remote working has reduced, if not removed, traditional barriers to travel for many; remote workers have more freedom to travel when they want, more often, and for longer. While paid time off is still limited, the ability to work from anywhere means that a two-week holiday can easily transform into a four-week extended break - all that is needed is facilities. For a country as vast as Australia remote working is a huge opportunity. While 10-14 days is considered enough time to see three or possibly four regions of Australia, the itinerary would likely only allow 2-3 days in each location. Now, remote working allows travelers to spend longer in each location, really immersing themselves in the Aussie lifestyle and making the most of their time in the country, or to visit more locations during their vacation - the choice is theirs.
9 in 10 (92%) of Australian travel providers say they have seen an increase in customers wanting accommodations to allow for remote work
Australian travel providers seem to recognize the opportunities presented by increased work flexibility. Half of them think it will encourage more trips that are planned in advance (51%), more solo travelers (49%), and more family vacations (48%), and over a third think it will encourage more couples vacations because of school requirements (39%) more back to back trips (37%) and more last minute trips (34%).
To take advantage, Australian travel providers are taking action. Here, more providers than in any other country have already made changes to their packages to accommodate remote working or a four-day work week (64% vs 25% (Italy), 54% (Japan), and 52% (South Africa)), and a further 56% are planning on making changes.
As travelers get used to increasing flexibility in their lives, the desire for flexibility is spilling over into the demands they make of their accommodation providers. At booking, providers are seeing requests for early check-in (61%), no fee cancellations and/or changes (53%) as well as late check-out (49%). The difficulty with offering more options to guests is that it increases complexity in the booking process, but one way to help is to leverage technology that employs Artificial Intelligence (AI).
One of the key strengths of AI is the ability to deal with complexity and offer personalization quickly and effectively utilizing existing data. The travel sector recognizes this strength, and many providers are keen to explore how it can be used to their advantage. In fact, 8 in 10 Australian travel providers think that there is a place for AI/ChatGPT in the sector as long as it is balanced with personal touches, and 37% think that AI will have the biggest impact on increasing personalization.
However, real-time communications is the area where AI could have the biggest impact on Australian travel providers. Many of Australia’s key international tourism markets are in time zones that make real-time communication difficult. For example, the UK is eight to ten hours behind, and the United States is 16 to 19 hours behind. AI, in the form of a chatbot, could help extend the hours within which real-time communication can take place.
Overall, the majority of Australian travel providers (90%) think that AI will have a positive impact. Across the globe, many larger travel providers are already using AI-driven chatbots, some of which can make or change bookings or answer more simple queries but others might be able to go further, using generative AI to help travelers shape their itineraries or recommend properties to travelers based on their preferences.
Despite a delay in recovery after the pandemic, Australia's travel industry is now primed for substantial growth. Key trends such as sustainability and slow travel are emerging. Travel providers across the country are adjusting their offerings to align with the preferences of travelers, who increasingly seek sustainable experiences and flexible accommodations. While there are opportunities for enhancement, solving payments to streamline processes and improve convenience, flexibility, and security will be crucial for driving the growth providers expect.