Impact of Chinese flights

Pete has an interesting post at Conus on Chinese visitation with some additional data from the IVS: Details from the IVS show Chinese visitors to TNQ in sharp decline

Some of this relates to the comment in my previous post on a comparison with year to March quarter 2017. This period was a controversial failure around the Chinese New Year and charter flights with much finger pointing of blame. Pete’s numbers still show a decline for the year to this March despite that.

I thought it may be worthwhile to have a look at the direct flight data between Cairns and China. It’s almost impossible to keep up with the constant international route changes but BITRE do provide historical data for scheduled public flights (ex charter) on international routes in a thoughtfully compact 27MB excel file.

Year to March             Passengers
2013                          22,339
2014                          20,390
2015                          17,813
2016                          17,134
2017                            4,976
2018                          23,735

Direct scheduled flights from China have been stop-start and highly seasonal since they started in 2012. I hope I have sorted the BITRE data correctly which indicates there were no scheduled direct China – Cairns flights between May 2016 and December 2017? The sporadic history of direct flights must be a tourism marketers nightmare.

The 2018 scheduled flight data here is only for the 4 month period since direct flights recommenced in December. The direct flight numbers are only a small fraction of Chinese visitation and the significant majority of international visitors to Cairns arrive on domestic routes.

It could though go some way to explaining the anecdotal reports, such as Reef Casino, of a stronger Chinese New Year period in 2018 and how that fits with the IVS data. Something to watch.

Note: This is ex well established Hong Kong route where passenger numbers are much larger and grew by a third in 2016 but have been flat since.

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Double fail on IVS

The delayed International Visitor Survey from Tourism Research Australia was released today. There are two significant issues. The first fail is that TNQ and Queensland didn’t do very well: IVS is horrible for TNQ; falls to record low share of market

The second is that there was a fail with a critical part of the data which is not available:

Please note that the International Visitor Survey (IVS) results for the March quarter 2018 are preliminary and do not include any data relating to purpose of visit. This is because the quality of the main purpose of visit component of the passenger data supplied to TRA by the Department of Home Affairs has been identified as a concern. There are no issues with the survey collection.

To produce a purpose of visit measure for the IVS, Tourism Research Australia (TRA) uses data collected from the incoming passenger cards of international visitors to Australia. Work is currently in progress to resolve these issues and it is likely that a back cast of TRA data will be required. TRA will release revised estimates once a solution has been implemented.

Minister Potato Head’s new super Department of Home Affairs looks to have dropped the ball. We can only hope they are more competent in assessing purpose of visit when it really matters for national security.

The ‘purpose of visit’ data really is essential to any proper understanding of the IVS. This is broken down into categories Holiday, VFR (visiting friends & rellies), Business, Employment, Education, Other in that descending proportional national order. There are difference between states and regions in this mix obviously. The holiday proportion on the now most recent IVS data for year to December 2017 is Queensland 70%, NSW 59%, Victoria 54%.

Consequently, it’s really hard to judge what’s going on if this breakdown of the data is not available. However don’t think that’s going to alter concerns about the total trend decline in market share for both Queensland and TNQ as displayed in the previous link to Conus. This is the best context to look at what we have.

Always have to remember that just like all survey data there are increasing margins of error, or should that be lower confidence intervals, as we work down through the smaller regions. There are two things that stand out to me here in Queensland tropical regions.

  1. March quarter 2018 IVS data is annual for the year. This takes out the previous March quarter 2017 which is generally accepted as a complete flop on Chinese New Year for that period in TNQ. Consequently this negative result seems contrary to perceptions.
  2. Whitsunday was also unimpressive and flat for the year. However Cyclone Debbie did a dead hit right at the end of March 2017. Travelling south through there at the beginning of March this year the local ABC was discussing reopening of key island resorts a year later. Surprised IVS would have held up even that well. However this is where we get seriously into sample size and confidence levels with Whitsunday visitation less than a third of TNQ.

Cairns drops on airport ladder

While awaiting more contemporary monthly numbers from Cairns Airport in the meantime BITRE have updated their top 20 airport stats to April. This pretty much takes us through the period of early calendar months where lunar and climatic events make a mockery of any attempt at seasonal adjustment or trend analysis.

BITRE April 1

Cyclone Debbie continues though to play havoc with some of these numbers. The extraordinary 43.6% monthly growth for Rockhampton is because the airport was underwater for a period last April. The annual growth league table ex Proserpine which is also a Cyclone Debbie outlier.

BITRE April 2

Cairns has dropped two further places down the table since last month at 1.5% annual growth below All Australian Airports at 3.2%.

The table is also compressing from both ends so to speak with Sunshine Coast starting to nudge back while Karratha starts to pull up. Maybe I should go back and check my spreadsheet numbers but this looks like the first monthly growth number for Karratha since 2013 during which time passenger numbers have halved. Caution on that because changes in routes can make big differences for these kind of places as it has with Mt Isa and have no idea how this works over in the west.

Another point particularly to note is that it’s difficult to find anything significant in the Gold Coast Airport numbers around the Commonwealth Games for either March or April. The Games started immediately after Easter and ran from April 4 to 15.

Previous post: Debbie Destroys Data; Commonwealth Games: beyond hyperbole

 

 

 

Queensland regional real estate and lagging indicators.

Queensland regions make up most of the negative regional numbers in the latest CoreLogic report for the year to June 2018.

Corelogic regional

By its exclusion from the table Cairns pretty much by default becomes the top regional performer outside SEQ. However, this could be looking in the rear view mirror and a lagging indicator on an annual basis. If there is a surprise in some more recent data it is how fast some coal mining centres are turning around: Coal fires up.

I prefer Emerald as a Queensland regional coal bellwether perhaps because I spent 7 years there. Some lost, not all. In FNQ the mining activity is weighted to bauxite around Weipa. This hasn’t been on the coal and iron ore rollercoaster but has recently been a positive tailwind included in commentary from the Airport.

Note: This is not financial advice. Personally I wouldn’t touch a mining town. In the 1997 Asia financial crisis I suggested to BHP that they should just give up the entire CQ mining town of Dysart to settle a native title claim. I was wrong but not alone.