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One way to Tokyo, via the east coast

LAST week’s decision by Qantas to re-route the direct Tokyo-Perth flight via Sydney – adding an extra six hours to the trip – has outraged the local tourism industry.

Estimates of the loss of business range from a conservative 35 per cent of all Japanese tourism business to 60 per cent of all business, with the economic impact on tourism alone put at almost $200 million per year.

The WA lobster industry exports 30 per cent of its catch to Japan via the Qantas flights, bringing in $US14 million.

Tourism Minister Clive Brown was baffled and shocked at the decision by Qantas.

“I find this decision extraordinary, particularly given that Western Australia continues to be the only State in the country to record an increase in visitors from Japan,” Mr Brown said.

WA has lured an increasing number of Japanese tourists (up 13.8 per cent in 1999/2000) over the past three years, while other states have experienced a drop in the number of Japanese visitors (national average down 3 per cent).

At an emergency meetings of the Tourism Council of Western Australia (TCWA), 200 members, many of which were small businesses, agreed that the time to stand-up to the big hitters had arrived.

Manny Papadoulis, the owner of local bus tour company Feature Tours, said the decision had made many small businesses involved in the tourism industry feel inadequate.

“In normal situations like this where the big boys flex their muscles we sit down and accept it,” Mr Papadoulis said.

“But tourism is about partnership. It’s about working together. We’ve worked in part with Qantas to develop this route, and we feel hard done by.”

He said the whole industry was united in its dedication to have this decision reversed, including the agreement to take a half-page advertisment in this week’s The Australian condemning the actions of Qantas as ‘un Australian’.

This action, according to the TCWA, is a first for any industry.

Taking such strong public action against such a large company must have its potential downsides, but Mr Papadoulis said people involved in the tourism industry would fight the decision as far as they could simply because many felt Qantas had left them with no alternative.

If the decision by Qantas is not reversed Mr Papadoulis will have to cut staff numbers at Feature Tours by between five and 10 people.

There are hundreds of Western Australian businesses, ranging from tour operators, both land and ocean, to restaurateurs who rely heavily or completely on the Japanese tourism market. It’s these businesses Mr Papadoulis said he, and the rest of the tourism industry, would fight tooth and nail for.

Even though Feature Tours many not close its doors, it certainly will take a financial loss, according to Mr Papadoulis somewhere in the vicinity of $10 million over the next five years.

Mr Papadoulis said many in the industry were hurt and offended at the way in which Qantas announced the closure of the direct route, consulting with neither government nor industry.

“You can’t make any other assumption other than they have a total disregard for WA, we can only assume that from the action they have taken,” he said.

“It’s either ignorance or arrogance. And with Qantas you’d like to think it’s not ignorance.”

Many members of the WA tourism industry have spent large amounts of time and money building up a solid tourism relationship with Japan.

According to Tourism Minister Clive Brown, the industry, along with Government and Qantas, have just finished a joint $1 million advertising campaign promoting the attractions of Western Australia.

General manager of Sheraton Perth, Craig Seaward, said he had spent a substantial amount of money dedicating the entire 13th floor to Japanese tourists.

“Personally I will lose about 730 rooms per year out of this. It is about a $1.2 million loss of revenue out of us at the (Perth Sheraton Hotel),” Mr Seaward said.

He said the loss of the direct flight was given a greater sting because of recent investments.

“It is (a lot of money to lose) when you consider that I’ve gone to the investment of putting in the Japanese floor, the Japanese TV along with the other investment in our facilities,” Mr Seaward said.

“We need to look for a replacement market – but there isn’t one so I have to take it on the chin as a straight loss of business.”

Like most in the WA tourism industry, Mr Seaward had no idea about Qantas’ plans to cancel the direct flight until he, along with the rest of the State, read about it.

“We received notification by reading in the paper on Monday morning,” Mr Seaward said.

“The industry is angry about the arrogant way that Qantas has handled it.

“There has been no negotiation or discussions with anybody in the industry or the Government prior to this decision being taken.

“Considering that it is a $102 million a year business to the WA tourism industry that suddenly just gets cut off I would expect them (Qantas) at least to advise what would happen in the industry.

“I don’t believe this problem will get up and go away.”

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1 year TSR5 year TSR
298thAmcor19%24%
310thLendlease17%20%
385thOrigin Energy4%-11%
489thQantas-9%19%
737 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
Source: Morningstar

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9th-Qantas$16,200.0m
10th-Lendlease$15,350.3m
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14th-Origin Energy$11,981.0m
77 listed non wa companies ranked by revenue.
Source: Morningstar

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