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Slow and steady wins the race

Top Deck director of global sales and strategy Lance Batty says it’s not all doom and gloom out there, but businesses must continue investing in their product ready for the day the dollar starts to fall.
After reading all the dire press out there recently, I wanted to share some good news. Our new season trips started operating post April 1. The inaugural departure of our new City, South and Outback trip headed south on April 3 from  Melbourne to Adelaide and on to Coober Pedy and Alice Springs, with a respectable 12 travellers. Not too bad for our first trip as our maximum load is 20.  

Looked at another way, it puts an extra 108 traveller bed nights into Victoria, South Australia and the NT straight off the bat.

Over the last month we have been running a search engine marketing campaign in conjunction with Tourism Victoria and the South Australia Tourism Commission to promote this route. Both states have worked pragmatically to fund promotion of the shared route. The first 50 travellers booked in each direction received a free Neighbours Night ticket in Melbourne, and Taste Of The Barossa day tour respectively.

The good news is that forward loads on this route are ahead of expectations, and so we have decided to guarantee a range of departures every month right through to March 2012. Topdeck is the only dedicated youth operator on this route, so it is pleasing to break the mould a bit about where youth travellers want to travel.

A significant proportion of travellers on this new route are carrying on through to Darwin which is increasing our NT numbers, leading us to order brand new fleet for delivery next year.

A key plank in our strategy to increase our operating footprint in Australia and New Zealand has been to employ a dedicated sales manager for the backpacker sector. Kerry Tate has hit the ground running. One initial project Kerry spearheaded internally was to change our booking processes to allow domestic agents to effectively freesell our Australia and New Zealand trips, rather than have bookings go ‘on request’. This has been crucial in getting the local backpacker agents onboard, along with a dedicated backpacker brochure being released this week.

We are even seeing some sales of our Europe product from Website Travel associated agents already, which is an unexpected bonus.

With the strong Aussie dollar we have had our best selling season for Europe out of Australia/NZ on record, and if the local backpacker agents can grab that opportunity, great. If they have the sales staff and equipment there, why not become a ‘global travel desk’ catering to travellers preparing to fly home, or local Australian students?

We will be announcing new trip itineraries for 2012/13 in the near future taking in new locations across Australia and New Zealand.  The stronger A$/NZ$ is certainly hampering inbound bookings, but we want to keep creating our own luck. By leveraging off our global brand and distribution, we are still forecasting to grow our local business in the next year.

Our view is that if we can keep our local business just in growth, and keep investing some of the profits from selling outbound back into local routes and infrastructure, then we will be well positioned for when the currency cycle starts to turn.

Slow but steady!

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  1. Chris
    20 Apr 11
    12:07 pm
  2. Positive tones, regional dispersal, an operator who believes in their product and adapts to current distribution system trends. Great news!

    My only concern is the assumption the the A$ is bound to head south. Lance, do you know something we in AU/NZ don’t?

    As some economists are saying parity is the new norm and A$1.05 isn’t the top.

    The high $ is the single most important issue affecting inbound tourism today and the one we talk least about.

  3. Greg Cole
    20 Apr 11
    12:40 pm
  4. @chris, if Top Deck buying new fleet next year, and riding a wave of outbound success then they’re probably hoping the currency cycle has a flat tyre.

  5. Lance Batty
    20 Apr 11
    3:25 pm
  6. Hi Chris (and Greg C),

    Regards currency – I get across the same data/briefings/media that most of us do. My personal summation now is that the AUD is overvalued (due to inflows to take advantage of high deposit rates etc, not just the commodity boom), and that our key inbound currencies just can’t take a trick at the moment (look at the recent issues in Portugal and the flow on to the Euro, the US deficit weighing on the USD). I’m no banker, but I’d reckon you have to see the AUD weaken against inbound market currencies in the medium term as the Euro nations take their medicine, the UK moves through the initial pain of the austerity budgets and so forth and interest rates start to climb again in these nations.

    Greg, don’t get me wrong, we are making hay while the sun shines with outbound sales, but our aim is to be a robust, diversified business with a strong viable operating foot print across Aus & NZ – and that is why we are investing locally, probably against the trend. I’m happy to see the AUD move back towards the traditional middle ground.

    If there was a parable here…it was that operators can “make their own luck”, that might be selling outbound product from a travel desk, it might be diversifying into some offshore business, working more proactively with the STOs, seeing a new product opportunity domestically. I wrote in an earlier piece in thumbrella, that a great bit of advice I was given by a mentor was to focus on the business issues I could have an impact on, and don’t allocate time to those factors outside of my control. I guess our new City, South & OUtback trip, marketed in conjunction with the STOs is an example of that.

    Plus, life is more fun when you are an optimist!

    Cheers LB

  7. Greg Cole
    20 Apr 11
    5:53 pm
  8. A weakening commodity-driven dollar in the context of a booming commodity market? Maybe a 10-15 cent drop in a couple of years time? Who knows (and I wouldn’t be asking those naughty bankers, they’ve caused enough trouble in recent times).

    Show me a domestic operator who can afford to develop and grow new and innovative domestic products in this climate and I’ll show you a successful outbound operator.

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