What you need to know:

• Qantas CMO Jo Boundy says efficiency is the name of the game post-Covid as competitors scrap for every dollar.
• She and Tourism Australia boss Phillipa Harrison say risk of border closures now perceived by consumer as bigger drag than Covid risk.
• Nine/Kantar research finds consumers still want to travel and take holidays, though vast majority by car.

Border farce

Qantas is grappling with the new reality of virtually sealed borders, snap state closures and a new competitive set. CMO Jo Boundy says efficiency is the name of the game.

Until recently, the travel and tourism sector to employed about 5% of Australia’s workforce, some 660,000 people. In 2019, it generated close to $61bn, or 3.5% of GDP.

But that was pre-Covid, and Australians are now more worried about availability of flights and potential quarantine requirements than the risk of catching Covid-19, according to Tourism Australia MD Phillipa Harrison and Qantas CMO Jo Boundy.

The two said snap border closures are undermining already fragile consumer confidence, hamstringing the sector’s ability to get back up off the ground.

Qantas – and most other airlines around the world – have had to rethink fares, cancellations and refunds. That might be good for consumers in the long term, but only if they can actually fly.

“We’ve had to review our entire end-to-end customer experience because it’s critical that we instil a level of confidence around health and safety but also this growing issue of disruption,” Boundy told an event hosted by Nine.

“It’s been a fundamental shift in aviation and revenue management, especially when looking at our fare and class system.”

Resurgent competitors

Qantas isn’t the only airline doubling down on efficiency. Boundy said the business is also facing a “new competitive set” as Virgin returns and Rex eyes more metro routes. As such, Qantas must rethink how it approaches marketing and segmentation.

This week Rex went launched a discount blitz across the country that included business class seats.

Qantas quickly launched its own counteroffensive.

“We’ve got really great competitors out there with strong messages, offering some pretty cheap airfares at the moment,” Boundy said.

“With Tiger disappearing, Virgin back bigger and stronger and Rex competing in metro we’re facing a completely different segment. It’s now about looking at our three year recovery plan and being as efficient as we possibly can.”

APT boss Chris Hall also spoke at the event. A company with a history of strong TV spending and a current sponsor of the Australian Open, the cruise and tour operator is now constantly rebalancing operations and promotions.

“It’s so difficult to maximise [media] when you’ve got consumer confidence bouncing around and borders closing,” said Hall.

“We’re a broadcast sponsor of major events…so these constant changes are starting to also be reflected in the performance of those [investments].”

Sector insights

Nine Chief Sales Officer Michael Stephenson said media owners had a duty to support travel and tourism, usually some of the biggest spenders.

“I am absolutely confident they will bounce back. So we need to be able to provide them with the most effective channels to reach consumers when they are ready to get that message out,” said Stephenson.

“A part of that is providing them with insights through our own products but also through content opportunities."

Nine partnered with Kantar to launch an insights report into consumer confidence around the travel sector at the event. Based on a survey of 4,000 people (that visit Nine properties) it found as of February 2021:

• 63% of respondents are considering booking travel this year.
• 66% are considering interstate travel, 53% are considering intrastate.
• 87% are comfortable travelling by car, it was also the number one mode of transport.
• 55% are comfortable taking short flights, this was the second choice in transport.
• 38% will spend their travel budget or more short/frequent domestic trips.
• 22% will spend more than usual on travel in Australia.