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The Impact of Working Holiday Makers on the Tourism Economy of Mildura 2010. Dr Jeff Jarvis National Centre for Australian Studies ‘Results Preview 2010” Halls Gap BOAV Tourism Workshop 28 April 2010. Backpackers in Australia 2009 v 2005 Visitor Numbers: Source IVS 2009.

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The Impact of Working Holiday Makers on the Tourism Economy of Mildura 2010

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The Impact of Working Holiday Makers on the Tourism Economy of Mildura 2010

Dr Jeff Jarvis

National Centre for Australian Studies

‘Results Preview 2010”

Halls Gap

BOAV Tourism Workshop

28 April 2010


Backpackers in Australia 2009 v 2005Visitor Numbers: Source IVS 2009

  • (1) UK 128, 274+0.3%

  • (2) Germany 57,013+32.6%

  • (3) Other Europe 50, 196+16.7%

  • (4) USA 49,804+8.8%

  • (5) France 36,778+102.6%

  • (6) Scandinavia 29,832+12.9%

  • (7) New Zealand 29,087- 0.4%

  • (8) Korea 26,879+15.4%

  • (9) Canada25,147+39.1%

  • (10) Japan21,516-31.2%


Backpackers in Australia 2009 v 2005Nights

  • (1) UK 8.7 million+1.8%

  • (2) Germany4.5 +83.5%

  • (3) Other Europe4.3+46.1%

  • (4) Korea4.1+82.4%

  • (5) France3.2+170.7%

  • (6) USA 2.4+10.3%

  • (7) Japan2.1-22.3%

  • (8) Canada2.0+65.5%

  • (9) Scandinavia1.9+28.1%

  • (10) Taiwan1.9+4088%

  • TOTAL43.8+37.2


Backpacker Varieties in AustraliaJarvis 2007 (Segmentation based on how they found the time to travel)

  • (1) Holiday Backpacker

    • Short-term backpacker on paid holidays. Older, mid 20s, repeat visitation. Strong recent growth. Have $$ to spend

  • (2) Gap Year Backpacker

    • Gap between school and university. 18-19 y.olds

    • ‘Party backpackers’ & ‘Volun-tourism’. Use WHM visa

  • (3) University Gap Traveller

    • (a) End of year and (b) end of course travel. 20-24 y.olds

  • (4) Career breaker (Flash-packer)

    • Break from established career, (financial resources)

    • 26 +, Social, quality accommodation (Design Hostels)

    • Can use WHM visa (under 31). Boutique hotels, 5 star

  • (5) Study Backpacker

    • Study in Australian university and backpack in the breaks

  • (6) Grey Nomad

    • Over 55 mature traveller, Self drive popular, boutique hotels, Retired or on extended trip.


  • Backpackers in Australia: The 10 year boom segment* WHM visa changes took effect 2005

    • Between 1999 – 2009 backpacker arrivals have grown by 40% to 570,000, nights up 66.5%

    • Total backpacker arrivals 99-09 5.48 million

    • Non backpacker arrivals have grown by 23.3%

    • Backpacker arrivals growth since 2004* – 18.3%

    • Non Bp arrivals growth since 2004* – 6.7%

    • Nights have increased by 17.4 million nights to 43.8 million nights in Australia (24.7% of all international visitor nights)

    • 2009 ‘backpacker industry’ worth $3.48 Billion

    • Average 2009 length of stay 76 nights

    • Average spend $6114


    Backpackers Major Market* performance 2005 -2009Over 10,000 arrivals 09Japan -31% and Switzerland -14%

    • Market% growth Number 2009

    • (1) Taiwan317%12,383

    • (2) France103%36,778

    • (3) Italy 80%11,896

    • (4) Canada 39%25,147

    • (5) Germany 33%57,013

    • (6) Holland 19%15,934

    • (7) Other EU 17%50,196

    • (8) Korea15%26,879

    • (9) Scandinavia 13%29,832

    • (10) USA 9%49,804

    • (11) UK 0%128,274

    • * Market concentration around UK & Nth Europe is diminishing


    Why is backpacking booming???…..

    • (a) Socio-Cultural

      • Gap year phenomenon (Especially ex UK)

      • Career breaks (Changed work environment)

      • Globalization (travel = investment in future career)

      • University Internationalisation (Exchange programs)

      • The rise of the New 30s (Delaying children, marriage)

    • (2) Economic

      • World GDP growth over recent years, GFC

      • Declining ‘real’ costs of travel eg: STA $A1399 RTW

    • (3) Political

      • Visas (eg: Expansion of WHMs) or visa free travel

    • (4) Travel Industry

      • Specialist agents (Eg: STA Travel)

      • Airline alliances & Round the World (RTW) airfares

      • Global-budget airlines (Cut costs of travel)


    Backpacker Arrivals 1999/2000 – 2008/09


    WHM Visas issued 1999/00 – 2008/09


    WHM Visas issued 1983/84 – 2008/0927.3% of the Backpacker Market in 2007/08(34% in 08/09) 2008/9 +21.7% Growth over 2007/8 (79.8% growth since 2004/5)


    Backpackers and the Working Holiday Maker (WHM) Visa

    • Australia permits young people 18-30 from 19 (23) countries to work for 12 months in Australia

    • Encourages cultural exchange and closer ties to permit an extended holiday supplemented by short term employment

    • In 2005 significant changes were made

      • Maximum of 6 months in one employer (up from 3 months)

      • A second visa of 12 months was made available if 90 days were spent working in regional Australia on the first visa. Eg: Fruit picking

        Dept of Immigration and Citizenship study 2007/08:

        Estimated each WHM spends over $13,200 in Australia = market value at $1.8 Billion

    • For every 100 WHMs that arrive, 6.3 additional jobs are created in the domestic economy


    WHMs are a fast growing segment

    From 2004/05 to 2008/09 the number of WHM visas issued increased by over 79.8%, from 104,000 to 188,000.

    Estimated to account for 23.4% of the backpacker market in 2004/05 and 33.6% in 2008/2009

    Over the same time, international visitation to Australia increased by just 4.5% 1]

    This growth in the popularity of the WHM visa runs counter-cyclical to the sluggish international arrival trends evident in the Australian tourism industry in recent years.

    [1] Tourism Research Australia (TRA), International Visitor Survey. Superweb data, 2004/05 – 2008/09


    Monash Research on WHMs

    • (1) Mildura - Vic: February 2009

    • (2) Bundaburg - Qld: October 2009

    • (3) Mildura - Vic: February 2010

    • (4) Byron Bay - Nsw: March 2010


    Key findings and observations on researching the WHM market 2009 - 2010

    • WHMs are becoming a more valuable segment in the overall backpacker market – Longer stay and higher yield

    • WHM visa acts as a clear motivator to drive visitation to Australia

    • WHM visa changes have altered the dispersion patterns of travellers to ‘work’ destinations (Regional dispersion)

    • WHM visa changes have motivated travellers to increase their length of stay

    • WHMs behave differently to leisure backpackers ( Travel – Work – Travel)

    • Industry has not fully responded to their needs (Working hostels)

    • Information issues – Work destinations – how to find work

    • Exploitation issues

    • Negative WOM generation - Reduction in work opportunities

    • Integration of international travel while in Australia (Budget Airlines to Asia-Pacific)


    WHMs in Mildura (The Study)

    • Why Mildura?

    • 214 WHM visa holders sampled

    • February 2010

    • Researchers lived in a hostel as WHMs

    • Face to face, quantitative study, judgemental sampling

    • WHMs surveyed in hostel or caravan park accommodation (blanket coverage attempted)


    Nationality of Backpackers in Mildura* Percentage of visas issued by nationality July 1 – Dec 31 2008 in brackets

    • Nationality2009%2010%

    • United Kingdom28.0 23.8

    • Germany19.0 17.3

    • Ireland16.7 12.1

    • France11.9 15.4 (top 4 = 68.6%)

    • Italy4.8 4.2

    • Sweden4.2 5.6

    • Canada4.2 4.2

    • South Korea2.4 2.3

      • Others: Belgium, Netherlands, Hong Kong (China) Estonia, USA* (Work & Travel Visa) Japan, Taiwan, Norway, Thailand


    Who are the WHMs in Mildura?NB: Older travellers in the 2010 sample


    Yield to Mildura 2010

    • Average daily Spend = $60.95

    • Average length of stay in Mildura = 65 nights

    • Value of each WHM = $3961.75

    • 45.5% will have friends from home visit them while in Australia on the WHM visa (VFR stimulation)


    Expenditure in Mildura 2010


    WHMs Impact on Mildura 2010

    • The majority of this expenditure was spent on accommodation (33.6%) and food and drinks from supermarkets (16.1%) or food and drinks from cafes/restaurants (11.7%).

    • Observational evidence suggested that few if any ‘backpacker style’ leisure products were promoted to the segment within the hostel environment.

    • The paucity of WHM travel to outlying regions is exhibited in the high percentage who stay in Mildura (91.7% 2009 & 88.8% 2010)


    Motivations to go travelling 2009 - 2010


    WHM Segmentation: How they found the time to Travel


    Information Sources on Australia


    Information sources used to find out about Mildura.


    WHMs Impact on Mildura 2010

    • Mildura is clearly identified as a ‘work’ destination by the market with 97% (2009) and 96% (2010) of the sample visiting the town only to secure employment.

    • On average the WHM visa holders in the sample were long stay visitors, planning to stay in Mildura for 56 nights (2009) and 65 nights (2010), with an average planned stay in Victoria of 93 (2009) , 92 nights (2010) nights.

    • WHMs are estimated to make a significant contribution to the domestic economy of Mildura, spending on average $57.31 per night (2009) $60.95 (2010)

    • With the average stay being 9 weeks (2010), each WHM in Mildura is estimated to be worth just over $3961 to the region.


    Information Sourced used to find out about Mildura 2010 (% used as a significant or main info source)

    • Word of mouth from travellers53.8%

    • Information from Harvest line website32.2

    • Information sourced at a hostel23.8

    • Travel guidebooks21.5

    • Information from Social Networking20.6

    • Mildura visitor Info Centre16.3

    • Tourist Information office (outside Mildura)14.9

    • Mildura Tourism website12.1

    • Tourism Victoria Websites10.7


    Activities participated in (and participation intention) during their Mildura stay


    Mildura: Potential new product activities

    • Beach party on Mildura beach69.6

    • Sunset BBQ in the outback59.8

    • Overnight camping trip in outback37.9

    • Wild kangaroo and emu spotting34.6

    • Visiting a wildlife park31.3

    • Attend a local cricket/ football match29.0

    • Aboriginal tour27.6

    • Winery Tour27.1

    • Renting a boat (tinny)25.7

    • Fishing tour23.4

    • Mountain bike rental22.9

    • Voluntary conservation work21.0

    • Day trip to Broken Hill16.8

    • Paddlesteamer on Murray14.5


    Mildura 2010: What WHMs enjoyed most

    • Socialising with other backpackers71.5

    • The weather38.8

    • I can earn good money here34.6

    • The hostel environment29.4

    • Swimming in the river23.5

    • Travelling around the region 7.5


    Mildura 2010: How could their stay be improved (%)

    • More information on finding work 54.2

    • More things to do on days off 52.8

    • Improve employers attitude to WHMs48.1

    • Improve the quality of working hostels37.9


    Positive Attitudes to Mildura

    • Lots of work, parties and a nice atmosphere

    • Very well paid jobs

    • Good amount of hostels, local amenities, laidback lifestyle and easy to get farm jobs

    • Not too small a town and easy to get work

    • A good place to save money

    • People are unbelievably friendly and a good place to meet people from all around the world

    • Easy to make money and its easy to get to from big cities


    Negative attitudes to Mildura

    • The work is minimal and the pay is not good

    • The work is low paid and there is not a lot to do in your time off

    • They lie about the job situation

    • Very bad accommodation and low pay

    • Only contract work so hard to save money


    Attitude to Mildura

    • Well its really f***ing boring, I mean my time here has been ok, I take it back, it was a joke, kind of. I think its because we work here and its hard work and we have our own backpacker group to hang out with which is awesome.

    • But everyone still wants to see more of Australia. I’m going to miss the people and experiences with them, but compared to Ayr, Mildura is bigger with more things to do, the cinema to go to, just go to town, cafes, just to get out of the hostel.

    • Annika, 27, Estonia


    Mildura 2010: Transport used to arrive

    • Bus-coach48.1

    • Train-bus connection24.7

    • Private car (owned)16.8

    • Air 7.5

    • Private Car (friends) 2.9


    Mildura 2010: Accommodation used in Australia (other than BP hostel)

    • Rented house or apartment36.0%

    • Camping/Tent31.8

    • Caravan park28.5

    • Friends house27.6

    • Sleeping in the car 22.0

    • Campervan20.0

    • Motel-Hotel16.8

    • Employer accommodation 9.8

    • Couch surfing 9.3

    • 4-5 star hotel or resort 7.0


    Mildura 2010: Travel patterns pre-post Mildura

    Pre %Post %

    • Melbourne45.856.1

    • Sydney30.814.0

    • Adelaide13.115.9

    • Brisbane 4.2 3.7

    • Swan Hill 0.9 0.5

    • Shepparton 0.0 0.9

    • Halls Gap 0.0 0.5

    • Other 5.6 8.4

    • Others: Perth, Byron Bay, Gold Coast, Darwin, Bundaburg, Hobart, Noosa, Narrandera, Canberra, Griffith, Hay, Echuca, Batemans Bay


    Desire to visit neighbouring destinations whilst on their WHM visa in Australia

    • New Zealand65.5%

    • Thailand51.8%

    • Bali45.4%

    • Fiji44.8%

    • Malaysia24.8%

    • Vanuatu16.4%


    Intention to visit (or have visited) Victorian Destinations (Mildura 2010)

    • Melbourne 86.4%

    • Great Ocean Road42.5

    • Phillip Island13.6

    • Grampians 8.4

    • Yarra Valley 7.9

    • Wilsons Prom 1.4

    • Byron Bay56.1


    Attitudes to the WHM visa?

    • Around one third 2009 (36.1%) and (32.2%) 2010 felt strongly that Australia’s WHM visa offer was a significant inducement to take an extended trip from home.

    • 66% intended to extend their visa and 11% had already applied for a second WHM visa (71% in total) 2010

    • This finding indicates that the lure of a second visa is encouraging backpackers to seek work in Mildura and regional destinations and thus stimulates greater dispersion.


    Modifications to the WHM visa

    • Qualify by undertaking voluntary work69.1

    • Qualify for second year WHM visa by retail café jobs in regional Aust67.3

    • Provide more assistance for WHMs to find jobs66.3

    • Improve the quality of working hostels61.7

    • Qualify for a second, 2 year visa after returning home for 2 years58.9

    • Increase the upper age limit to 3557.0


    Attitude to travelling as a WHM


    How they searched for work 2009 - 2010


    Opportunities

    • Mildura is increasingly developing as a year round WHM destination

    • Knowledge and intent to visit other regional Victoria is limited

    • Limited interaction and promotion of the backpacker industry in Melbourne

      • Eg: Promotion of the Mildura – Grampians – Great Ocean Road – Melbourne route


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