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Australia – the new England

Scotty’s Beach House owner Boyd Scott explains why Australia has become the new England and how operators must accept that it is now an expensive destination to travel.

Some recent news articles in our papers and on BTN got me into a ruminative mood that culminated in a minor Eureka moment of major portent. Those of us directly involved in the Australian backpacking industry need to change mental gears and get our head around the new paradigm ASAP: we are the new England.  

Australia – especially Sydney – has assumed the same role as London played for scores of thousands of young Antipodeans, Canadians and South Africans in the good old days of my backpacking youth. We are no longer simply a cheap rite of passage for adventurous young travellers as we had been from 1980-2009.

Thanks to more accessible WHVs, a depressed world economy and our strong currency, we are now” the island of earning” and the hub of the majority of adventure travellers` Southern Hemisphere experience.

Let me explain.

When the Aussie dollar was floated for the first time in 1983, its subsequent fall against major currencies sparked the start of the Australian backpacking epoch. With the success of Crocodile Dundee and the Paul Hogan tourism campaign in the mid to late 80`s, our popularity as THE major backpacking destination was guaranteed. The French Franc, West German Mark, Danish Kroner, English Pound,etc all fared very well against the ‘Pacific Peso’, as we called it back then, and, even though there were cash jobs available (only the UK,Ireland and Canada had working visas), the majority of travellers had enough in their kick for a 6-12 month stay in and around the Great Southern Land without having to seek work.

At the same time, we Aussies and Kiwis heading over to ‘do’ Europe had the opposite problem: flights across were dear as poison and then our savings evaporated rapidly once they encountered foreign currencies eg.$3 to buy 1 English pound. However, we could at least obtain a two-year working visa in the UK, allowing us to earn the mighty UK Pound to further our travels. The UK then became a base, allowing us to earn money to fund a cheap flight over to Spain for the Running of the Bulls or to Munich to guzzle beer at Octoberfest and then whip back over the channel to earn and save more money for the Greek Isles. That was the pattern until recent developments.

It would seem to me this pattern has now emerged over here.

The majority of backpackers arriving into Australia have less savings than ever before and need to earn money here to bolster their savings.

As usual, this is to allow more travel time and tour spending money. Nowadays though, the tours and travel are often in New Zealand, Laos, Thailand or Indonesia, rather than in Alice, Cairns or Byron. Cheap airlines allow them to work and save here, jet off to do Chang Mai or Phuket and then fly back to Oz to earn more.

I`ve now accepted the obvious truth. For the first time in almost 30 years, Australia, like London in the 90`s, is an expensive destination. I believe we have to adjust to this fact and put even more love into our product to ensure it is seen as value for money if we are to succeed in encouraging our travelling demographic to stay here longer, travel wider and experience all our wonders. Failure to accept and possibly even embrace this fact could be a fatal mistake for all our futures.

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  1. Greg
    7 Apr 11
    11:05 am
  2. You’ve hit the nail on the head Scotty. An American backpacker said to me the other day “There’s nowhere in the world where I can earn as much money as quickly as I can in Australia”. Needless to say while the work’s there, he’s sticking around

  3. Greg Cole
    7 Apr 11
    11:49 am
  4. I think we’ve all watched this happen. Scotty and Greg are both suppliers and are now hearing the chatter from customers that we really don’t want to hear. I’ve heard it from short-term upmarket travellers from all corners of the globe in recent times. We must act.

    This issue has been hidden in plain view: from 2000 to 2007 the GBP bought $2.48 AUD so the $5,000 funds requirement for the WHV cost £2,000 pounds; Jan-2010 it cost £2,800 pounds. It now costs £3,200 pounds. WHV countries are low-flight-risk countries, and as Scotty’s opinion piece says “we are now the island of earning”. Would it not then follow that the Federal Government should lower the funds requirement to $3,500 (or £2000 pounds; 2007 levels)? It may well stimulate WHV applications, and encourage work and travel. Is the $5,000 figure indeed relevant?

    2007 was the start of a slow increase in the strength of the AUD and a slow decline for many operators.

  5. Tony ( the real Tony. Not a 'Show Tony'. Or 'Phony Tony')
    7 Apr 11
    1:39 pm
  6. Scotty, the logic underpinning your comments seems bloody sound, but I want to see whether I understand what you mean by placing more “love” into the product. I’ll seek clarity from you c/- this post, to see whether I’m on the right track.

    My staff & I bust-a-gut to present the best possible face to our guests, 24/7 (which, as I guarantee you understand, can sometimes be: Very. (VERY). Bloody. Testing). So, when it comes to delivering “service” to our customers, I feel we do that for our typical customer in our hostel, typically. (And by typical customer, I mean s/he who’s a reasonably independent, youthful, ‘backpacker’ type). I feel we normally (with a ‘few’ exceptions…) tend to the wants/desires of our guests at a level that my gut feel tells me exceeds the typical service levels I’ve experienced in my travels around the traps.

    So, “love”… Is it ‘customer service’? Or, something else?

    As a way of explanation: From what I’ve picked up based on observation of the behaviour of a typical guest, most (again, there are exceptions) do not seem, or appear, to place as much credence on us providing “customer service” – as I think I understand CS to be – as they seem to place on gaining (or… ‘winning’) value for whatever it is they’ve purchased, be it something like a can of Coke (we can sell for AUD $1.00), or in having us wipe a couple of bucks off the price of their bed.
    From my perspective, it’s at those point-of-sale moments that I see what could be the ‘love’ bubble to the surface: the customer acquires a thing (a cheaper bed…a soft-drink at a price that didn’t require them to donate a kidney) at a price their behaviour suggested they were happy to pay.

    So, if that is the love – and I think it could be – then the simple (“simple”???) act of delivering what amounts to well valued products and services to our customers is conduct everyone in the sunburnt land could benefit from addressing.

  7. scotty
    7 Apr 11
    10:37 pm
  8. @Greg-yeah, we`ve always had higher base-figure pay rates than most other countries (now upward of $18 per hour minimum) which spent well in Oz but didn`t usurp the stronger currencies: the present favourable exchange rate has meant the conversion finally rates a huge thumbs up from every WHV visitor.

    @Greg Cole-your comment on what was happening in Melbourne with the illegal hostels reminding you of London in the `80s flicked the switch in my head. The reality of the WHV required $5K surging upward for intending visitors is another point that urgently needs consideration.

    @Tony: love comes in many forms and, when it comes to backpackers, money CAN buy you love,most times.

    However, what I`m alluding to is something you are probably offering already, Tony, and that is care factor, communicating directly with your guests, connecting with them and showing interest in their travel experience , trying to guarantee their facillities are clean, functional and well maintained. Anything that you can add to the experience, even down to explaining the origin of AFL footy or some of the history of the Shipwreck Coast, is love they`ll value.

    When backpacking Down Under was in it`s Golden Age , we were all owner-operators: our life revolved around our backpacker resorts and we dealt directly with our guests: thus, they met and had a chance to relate to Aussies doing our thing.

    Since the mid 90`s, there`s been way less of this owner-operator direct contact and most backpackers put on reception staff,80% of whom were/are international backpackers/ex-backpackers (We`ve done this at Scotty`s, sponsoring Canadian and English staff as well as Kiwis and Aussies).

    I don`t claim to meet all our guests but I`m lurking around, ready to bore them with some bizarre anecdote when least expected or take them on a tour or something. I know meeting me doesn`t knock you folks socks off but for many backpackers who pass through Scotty`s, meeting an Aussie, sober and reasonably conversant with their country of origin( “Swiss,eh? Aren`t you right next to Denmark…?”) is remarkable in itself, much less clapping eyes on the actual owner of a backpackers.

    Time for everyone to add value by realizing as many UPI`s (unique points of interest) as possible-even if that only involves those of you who, like me, are married reciting “The man from Ironbark” whilst wearing a Drizabone and Akubra; give them an Aussie experience,folks. It`s what they`re here for.

  9. Tony
    8 Apr 11
    12:10 pm
  10. … fair suck of the sauce bottle here, Scotty, me old mate.

    I mean, c’mon, cobber… I drive a Commodore (ute), love me dusty Blundstones and stained, blue, chesty bond singlets. I refer to my wife as ‘Shiela’, understand what girt means, believe Warnie’s still good enough to be in the Test team, and I hold a strong opinion about Trevor’s infamous “Underarm 81″ incident. I’m comfortable in me budgies (not caring one bit if lasses are offended by my moobs) and get by on my diet of 4 ‘n’ 20′s, tim-tams, and iced coffee.

    So, what’s next??? (Do I need to start supporting Collingwood???!!!!)

    Crickey! How much more Aussie can I make this?

  11. scotty
    9 Apr 11
    12:26 am
  12. As I`m not conversant with your Melbin accent, Tony, and your hostel rating is very good, I`d say your moobs aren`t putting off as many folks as you may worry about.,hey! Thank the stars you at least got the ‘suck” bit right…Ruddy and his ‘fair shake” was un-Australian… forgot the famous iced vovo in there too, sport.

    Make light of it as you please, most backpackers, when asked, will admit they have met bugger-all Australians during their travels. Don`t forget, I`m talking to most of them as they`re coming to the end of their East coast trip, so they`re a bit dumbfounded as to where they ( dinky-di Australians) all are (drunken yobbos in a few backpacker bars don`t seem to count as a meaningful “local” experience,I`m afraid.)

    Like it or not,the same travellers will also generally admit that the easy-going and open attitude of the few Aussies they`ve met is one of the main attractions of coming here (maybe less so now we`re “so bloody expensive”….bit early to tell yet.)

    Oh well, maybe cut-price coke is the way forward. I might give it a burl.

  13. Tony
    10 Apr 11
    8:34 am
  14. Just remember that the cut-price coke is of the brown, sticky, sweet liquid kind. Gut feel tells me you’ll bump into a few issues with Mr. Plod if you try to offer another sort of coke – the stuff that comes in the form of a white, powdery substance…

    And “iced volvo”? A new term for chilled Swedes???

  15. crobar
    12 Apr 11
    11:32 am
  16. It’s true, we are becoming a destination for working holidays but am not sure how much of the earnings are actually being spent in Oz.

    With backpackers rating Australia the least value for money destination on their typical world Tour (some research a few months ago, can’t remember who, just go with it) I certainly think that much of the money earnt is being saved for their return trips to bali and thailand.

    I think what our industry needs to realise is that we really have to start giving value for money – we’re not the cheap holiday option any more so if we are taking those hard earned backpacker dollars, we neeed to pull our socks up.

    We just can’t get away with what we used to be able to do in thedays of the South Pacific peso.

  17. Shawn
    12 Apr 11
    11:48 am
  18. @Scotty – you are 100% correct.

    I worked in London from 2000 to 2005 and after the initial shock of getting myself set up, earning GBP £’s was indeed fantastic when you converted it to the humble AUD $’s. London was the perfect base, as you said, to hit Pamps, Tomatina and Munich etc and then head back to London Town to save more for other trips. Whilst great for me, the UK Tourism Industry didn’t really benefit.

    I think that somehow the Australian Tourism Industry, in conjunction with the Fed Govt, needs to try and work out a way that travellers are ‘encouraged’ to spend more of their savings (and time) within Australia. Travellers by their nature want to explore the world so you are not going to be able to encourage them ALL to do so, but even if it resulted in an extra 10% of travellers being encouraged to spend more of their total savings in Australia wouldn’t it mean:

    a. Those “savings” would be spent (re-invested) directly back into businesses within the Tourism Industry without the need to ‘discount’ prices to remain competitive with other destinations
    b. Travellers may be encouraged to stay longer, share more experiences with friends and family back at home all via current Social Media platforms
    c. The traveller’s Social Media is then showing/telling friends who are back “home” that Australia is an amazing place to travel and also for a working holiday

    I don’t believe this can be done purely by more marketing campaigns, I think there needs to be a financial incentive of some description. We all know what effect the Home Owners Grant had on the Australian property market, so could some type of ‘Traveller’s Grant’ be set up?

    If we assumed for a moment that the avg traveller:

    * earns $25,000
    * pays tax of $5,000
    * cost of living is $10,000
    * leaving $10,000 as savings

    If a traveller was to spend $7,500 of that assumed $10,000 of savings within Australia (with approved Australian Tourism Operators), they would be able to get an extra $2,500 from the Fed Govt as a ‘Traveller’s Grant’ in the form of travel vouchers which could ONLY be redeemed with Australian Tourism Operators. If the traveller doesn’t spend the $7,500 of savings within Australia, then they don’t get the extra $2,500.

    On the face of it, the Fed Govt maybe taking a cut of $2,500 (50%) on the tax being collected to fund the scheme/incentive, but if that drives more travellers to spend $7,500 of their savings within Australia instead of Asia etc, is the Fed Govt really missing out (ie more tax being collected from Australian Tourism Operators and more Tourism businesses are encouraged to become licensed/accredited)?

  19. Paul
    12 Apr 11
    12:23 pm
  20. Tony, Supporting Collingwood would do it for me!

  21. Greg Cole
    13 Apr 11
    7:45 am
  22. @Shawn, govt policy is focusssed less on work and more on the holiday component of the WHV. These sort of ideas go against policy. But a change is needed so these ideas do need to be tabled and discussed. I think allowing working holiday makers to claim superannuation whilst in Australia may also help: your idea has someone earning $25,000. This equals $2,250 in super paid by the employer to a fund. Govt fees and other charges would eat into this prior to a refund, but maybe that’s where the govt incentive is: a no fee full onshore refund for international travellers. Currently they can only apply for the refund offshore.

    I also wonder how much of the 6-billion dollars of unclaimed super belongs to ex-working holiday makers.

  23. scotty
    14 Apr 11
    11:53 am
  24. I suggested this at last years Backpacker Conference and I don`t think anyone took me seriously but I truly believe TA and TNZ should put aside their differences and co-market the Antipodes.

    We are both Commonwealth Countrys that have similar working agreements and increasingly affordable air transport between us. Our climates vary and our indigenous cultures are unique and act as major tourism drawcards on their own, before we even consider jet-boating,snow skiing,bungee jumping,scuba diving,etc.

    Our education systems attract students from around the world and our language is similar enough (of course,as anyone who has seen Flight of the Conchords would agree,the Aussie accent has a slight edge in the easy comprehension stakes: “He may be dead” “”He maybe did what?”etc…)

    If our countries got together on promotion and offered some great joint holiday packages, with amazing experiences in NZ and across the ditch here in Oz, as a largish campaign,we could gain way more traction than we do presently.Throw in some job opportunities to earn the Aussie dollar as part of the package and,hey,presto,we could really get this party started!

  25. Andrew Smith, Antalya, Turkey
    22 Apr 11
    5:16 am
  26. Good comments, and highlights the need for flexibility, innovation and better marketing and cooperation with our region e.g. with NZ (why not destinations on way e.g. Singapore, Malaysia,Thailand, Vietnam etc.)?

    Visa conditons need to be relaxed and not be a “political football” in the ever present “immigration” or “population” debate (e.g. have 2nd year and longer term visitors like students dropped from population data)

    Airlines are very important in both marketing and vested in interest in getting bodies here, there was the joke some years ago that Australia’s favourite airline, Singapore Airlines, marketed Australia better than TA :)

    Regions need to do more (digital/community based) international marketing rather than deferring to capital city tourism bureacrats….

    Just to make you green with envy, Russia and Turkey have dropped visa requirements, accordingly Turkey is expecting 5 million Russian tourists in 2011…. where I am staying in Antalya fax machine is going like the clappers before May 1st holidays….. each Russian will spend from $50-500 per day……

  27. Jason
    6 May 11
    12:30 pm
  28. Well said Scotty, it’s time we all knuckle down, consolidate in these tough times and ensure we all work together and give backpackers great customer service so that the word of mouth srpeads overseas that Australia is still a great place to travel too with much to offer, e.g. jobs, great destinations and most of all a FUN place to be!

  29. Ross
    2 Jun 11
    1:24 pm
  30. Interesting comments by all and agree totally with Tony and Scott and Co.
    I just had 8 people leave last week who love Australia and all worked locally in cafes and restaurants. They all took flights to Asia for a period of 1 month to 2 months. Made their money here and went to Asia to spend it. They will all be coming back to Australia to do fruit picking in the warmer months.
    So the difference five years ago was they would spend a few days at our place, say “it’s too cold here in winter” and book a flight to Cairns and slowly head back down for the Sydney and Melbourne summers. This pattern would start in May and continue until September. They are taking their savings to spend elsewhere. Not in Australia.
    This is extremely worrying. What will happen is a lot of operators will have to leave the industry. There are just too many beds for the amount of travellers. The regional areas are being hit hardest as they are not typically known as working areas like Sydney and Melbourne and as they are taking their “holiday in a holiday” overseas, they are not travelling through the country and even if they travel in Oz the airfares are low and they often fly in to bigger destinations missing the little towns inbetween.

  31. scotty
    11 Jul 11
    11:05 am
  32. capricorn dave
    21 Aug 11
    2:14 am
  33. When i googled “backpacking Australia”, mostly it was the east coast beach destinations that came up. Why would a backpacker want to spend so much money seeing beaches in Oz when they are cheaper and better in thailand? The under promoted Outback is unique to Oz and travellers will pay the going rate to explore regardless, yet beyond the rock, it really isn’t promoted well at all.

    You can travel from Mebourne to Cairns without meeting an Aussie, without seeing a kangaroo…I challenge you to do the same from Adelaide to Darwin! Even though you know they come to Oz for that real aussie experience I can guaruntee when you guys “sell the next destination” to travellers it isn’t west to the real aussie experience they so desperatly want, it’ is either up or down the coast. We shouldn’t be suffering from a traveller exodus from Oz, just from the East Coast. But travellers have only been sold on the East coast experience, so thats all they know. Of course they work and head to thailand… because Thailands beach experience is cheaper and better….wouldn’t you?

    Australia the new England? NO!!!. There is no Outback in the UK, just that you east coast travel gurus got your heads so far up your bottoms you’ve forgotten how unique the rest of our country is, and you will sell a Peter Pans east coast package long long before you suggest a traveller buy a car and head to the guts of our country (The commision is better right????)

    If you are going to lobby TA for anything, lobby for massive hard core promo of our outback then….Sell. Move. Prosper. Beaches can be bought with baht, Outback is only sold in $au… regardless the exchange rate they will come, they will spend, they have no choice.

    This is the only country they can “do” the outback You are your own worst enemies and you will sacrifice the entire backpacking industry in this country and blame it all on exchange rates and government policy.

    Suggesting that Oz is the new UK is a cop out. Lazy pathetic and harmfull. Sydney to Cairns has been the “must do” for a long time, nothing lasts forever.

    Don’t sacrifice our entire industry because you are stale and as soon as the status Quo slips you feel you must fight for the status quo to remain intact.

    Bloody well wake up to yourselves you dopey bastards!

  34. scotty
    21 Aug 11
    11:36 pm
  35. I could have sworn when I went on your trip with my family you were operating on the East coast, Dave…..are there two Capricorn Daves or are you now “Kimberley” Capricorn Dave?

    I think you missed the point in a lot of what those of us who have posted on this (and what I was pointing to in my topic) were getting at: yes, we are as expensive now as England was to us when we went backpacking. We still went, to earn the mighty Pound and whip across to the Continent for the various adventures.I`m sorry if that doesn`t resonate with you but it does with many others.

    The reason the East coast remains as a major topic on here is vested interest: there is at least 5 times the population over this side of Oz and at least 5 times as much tourist infrastructure and industry here to support. It makes sense for the money paid to TA, QT et al to demand a certain level of representation in promotions as a result.

    And for crying out loud, Dave, are you really writing off the Great Barrier Reef off Cairns, sailing the islands of the Whitsundays, tropical rainforests of the Daintree, surf beaches of the NSW coast, Fraser Island, Blue Mountains, etc, etc as being unworthy of tourists attention??? I mean,that`s unrealistic and untrue (I don`t think it would be possible to NOT see a kangaroo/wallaby on an East coast trip, mate…drop bears are a bit harder to find, though….)

    No one has suggested Oz as a destination is a one-trick pony: I`m pretty sure those of us in this game are fully across the vast array of experiences awaiting the weary traveller who makes the long air trip here and it certainly AIN`T East-coast centric (however, until the number of international arrivals into Perth, Darwin and Broome equal those into Sydney,Melbourne, Brisbane and Cairns, there will still be many who DON`T make it all the way across the top and out West…)

    WA and the vast/remote areas of the Territory, SA and the Gulf of Carpentaria ARE wonderful and worth exploring but can`t as yet support huge numbers of visitors. Added to this is the huge distances between towns and camping/accommodation along the West Coast, in particular.They have come a long way in WA NT, SA and even Vic, as they got into the backpacking thang a fair while after those on the East side and they may, one day, attract similar negative comments for being “over-rated” when compared to, say, the last REAL frontier, Antartica.

    Finally, I defy you or anyone to prove to me that beaches in Thailand, or anywhere else in the world, are better than beaches in Oz. I KNOW they would fall short of 99% of ours in water quality, numbers of beach goers, bio diversity (especially size of fish) in the waters off them and in safety regulations. Yes, patrolled beaches in Oz as a percentage of beaches overall are few in number but do tend to take in the main tourist spots. And they have a pretty good safety record.

    As an American friend of mine said to me recently, the inlet of Cairns, looking back to Walsh`s Pyramid from the cafes that line the charter boat piers, is as good a view as you`ll find ANYWHERE in the world, and the fish and reef he saw on a half-day trip to Green Island surpassed what the best snorkelling beach in the Carribean offered that he`d just come over after visiting

    Same goes for soooo many O/S dive areas: they have great visibility, pretty coral and amazing amounts of fish but bugger all LARGE fish like we do in Australian waters. Don`t believe that? Ask a few diving instructors who have travelled and they`ll give you the good oil.

    While it`s good to hear from you again after so long, Dave, I really don`t think it`s a matter of protecting status quo: it IS about being realistic and recognizing we`re over-regulated and expensive and, therefore, getting back into hands-on dealings with the guests and making damn sure the service and experiences they get are “valued” and uniquely Ozzie, something you did so well out of Rocky all those years ago..

  36. capricorn dave
    22 Aug 11
    11:47 pm
  37. Scotty, thanks for the response and the call. Some calls to make before i repost but i want to clear up a couple of very worrying “mix ups” right away. No, I am not, as your suggested in your call “Katherine Capricorn Dave” (that would be my niece) nor as you suggested in your post am i “Kimberley Capricorn Dave” (that would be my other niece.) Also disappointed you left out my 36 cousins “the Olgas Capricorn Dave.”

    Talk soon, post sooner.

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