Corporate Sponsors 2009/10 Platinum Members 2009/10 Gold Members 2009/10 Airline Partners 2009/10 CONTENTS Notes Page Chairman’s Report 3 1. Performance Indicators 3 1.1 Membership 1.2 Revenue Sources 1.3 Expenditure Mix 1.4 Financial Strength 2. The Strategic Focus of 2009/10 3 3. The Next Stage of Our Strategic Focus 5 Chief Executive Officer’s Report 6 1. Domestic Market 6 2. International Markets 7 3. Aviation 10 4. Partners 10 5. Cairns Regional Council 11 6. Business Events 11 7. Events 11 8. Membership 11 9. Acknowledgements 12 Appendices 13 A Airport Arrivals Data 14 B Market Activity Reports 16 TTNQ Annual Financial Report June 2010 48 TTNQ Members 2009/10 83 Information is dynamic. Members can find the most up to date statistics on our destination's performance (updated quarterly), research, marketing plans, marketing calendars (updated monthly), past editions of In Touch and more, at www.ttnq.org.au. To assist in making sound and informed decisions, please make ttnq.org.au a favourite and regularly interrogate the information on the site. 1 NOTES 2 CHAIRMAN’S REPORT 1. Performance indicators 1.3 Expenditure Mix In the midst of some of the toughest trading conditions our Chart 4 highlights that in 2009/10 we increased the proportion industry has encountered, I am delighted to advise that your of funds invested in marketing activities to 80%. RTO has been able to achieve many of its KPIs due to the ongoing support from our members. TTNQ's 2009/10 Expenditure $7.117M 1.1 Membership Visitor Information Destination Centre Development 8% 4% Chart 1 illustrates the stability in our membership numbers Research Business 1% over the past three years, which was also reflected in our Tourism membership revenue that accounted for 10% of total revenue. 9% Operations & Tourism Awards 20% Membership numbers per category Digital & IT 4% 400 Western Markets 350 13% Marketing Communications 300 8% 250 Emerging 2007/2008 Markets 11% 200 Domestic & 20087/2009 150 NZ Markets Japan/Guam 12% 2009/2010 Markets 100 12% Chart 4 TTNQ Expenditure mix 2009/10 50 0 Supporter Bronze Silver Gold Platinum 1.4 Financial Strength Chart 1 Membership mix Which brings me to the financial performance where we 1.2 Revenue Sources recorded a small net profit in 2009/10 of $51,807, exceeding our budget plans. Our total revenue of $7.17m was an increase of 28% on the prior year. This increase of $1.561m was primarily a result of As an outcome of the above-mentioned activity and the significant increases from the Federal Government, the Cairns effective governance of the management team and the TTNQ Regional Council and industry contributions. Chart 2 outlines Board, I am delighted to report that the financial strength of the mix, whilst Chart 3 shows the trend over the past four the organisation is good and shows continued improvement. years. Equity, cash reserves, and total assets have all grown, as Chart 5 demonstrates. TTNQ's 2009/10 Sources of Revenue (Cash) $7.169M Financial Strength $3,500,000 Other Income LTO's $3,000,000 Industry support 2% 1% -Marketing Membership $2,500,000 activity 10% 15% Cairns Regional $2,000,000 Visitor Council $1,500,000 Information 14% Centre $1,000,000 4% CAPL - Operational $500,000 5% $0 Other State & 2008 2009 2010 Federal grants CAPL - Aviation Equity & reserves Cash Total assets 21% Destination Tourism Marketing Chart 5 TTNQ’s Financial Strength Queensland 20% 8% I would like to particularly recognise the fine work of our Chart 2 Sources of Revenue Finance, Audit and Risk Management Committee that was Total Revenue chaired by Ross Steele, and the support of our KPMG audit team headed by Graham Coonan. 8,000,000 7,000,000 2. The Strategic Focus of 2009/10 6,000,000 5,000,000 In Oct 2009 when I was appointed Chair of TTNQ it gave me 4,000,000 the unique opportunity of working closely with the Board and 3,000,000 management team to implement the findings of the TNQ 2,000,000 Tourism Repositioning report that I prepared in February 1,000,000 2009. - FY end 2007 FY end 2008 FY end 2009 FY end 2009 3 The TNQ report identified new strategies for TTNQ to drive In the coming six months we will see the addition of a further changes aimed at stimulating growth and rebuilding our 230,000 incoming domestic seats, as well as the boost of industry, following the tough economic conditions created by moving to daily services from Hong Kong with Cathay Pacific the GFC and the tourism downturns. It also challenged the and an extra 56,000 seats from New Zealand. organisation and industry to accept that change was needed in how we did many things. Overall this will return us to a total of more than 6 million inbound and outbound international and domestic seats, the The TTNQ Board embraced the report and more than 12 best capacity we have had since 2005, and well on the way to months ago committed to the following key strategic ensuring we will have the capacity to meet the growth objectives. demand from key markets. Boost international and domestic aviation capacity The support and confidence in the region shown by the Increase marketing activity in the domestic market airlines, and in particular Jetstar, together with Cairns Airport A new online/web presence to reach the consumer management is a heartening development. TTNQ is pleased to Target of high yield segments have such a strong partnership with them and I can assure you Launch a new brand campaign that we will continue to play our part in growing and protecting our aviation capacity by generating promotional I am pleased to report that we have been successful in funds to support their campaigns. achieving many of these objectives. In terms of arrivals, we are forecasting that international On the aviation front the region has secured 374,000 new arrivals will grow in the second half of 2010, with Japan and airline seats in the past 12 months. International aviation China leading the way. capacity has increased by 24% or 3200 seats per week, whilst domestic capacity is up by 14%, providing an additional 4000 On the domestic front, we saw arrivals increase by 6% in the seats each week. year ended March 2010, the fastest growth rate in the state, and in the month of June 2010, the biggest increase in airline Chart 6 shows the domestic capacity trends whilst Chart 7 passengers in Australia was on the Melbourne-Cairns route focuses on the international capacity. which increased 25.4% over the June 2009 loadings. Domestic Seat Capacity This domestic growth was driven by not only increased 390,000 capacity, but also increased investment in marketing activities, 370,000 from consumer advertising to online campaigns, plus 350,000 consumer shows targeting the drive market and the weddings 330,000 market. 310,000 290,000 We launched a new online web presence in November 2009. 270,000 It has been receiving record hits and continues to provide enhancements for the region’s tourism product to promote their services. By year’s end, the new TTNQ corporate website had joined the new consumer website, providing members online access to research, images and tourism FY2008 FY2009 FY2010 statistics. Chart 6 Domestic capacity trends A new events strategy has been developed with the support of Cairns Regional Council, and TQ, and increased funding International Seat Capacity support for events has been secured from the Queensland 160,000 State Government to help attract high participation major 140,000 events that will drive increased visitation to the region. Events 120,000 such as the Yellow Pages Cardiac Challenge in September 100,000 2010, The National BMX Championship 2011 through the 80,000 Cairns BMX Club, The Cairns Blues Festival, The Coral Coast 60,000 Triathlon and the 2011 Adrenalin Film Festival are some 40,000 examples where this support will help us develop some keystone events. A national media campaign was launched promoting our FY2008 FY2009 FY2010 destination for the high yield meeting, conferences and incentives market, with the support of TA and the Federal Chart 7 International capacity trends Government. Encouraging as all this is, and gratifying that the hard work by the region’s industry and partners is being rewarded, there is still much more to do in the coming 12 months. 4 3. The Next Stage of Our Strategic Refocus A challenge we will face is ensuring this region achieves sustainable and competitive funding allocations from all In essence, we have only completed stage 1 of our stakeholders to ensure we can continue to compete for repositioning plan, and there is now a need to refocus on the domestic and international markets as aggressively as some of new strategies and action plans we need for stage 2 of our the southern Queensland regions, such as the Sunshine and program to simulate growth. Gold Coasts. In stage 2 we will address: Our opportunity to compete requires a solid base of funds that we can use to leverage up through partner investments in Ongoing aviation development our activity. TTNQ has historically been successful in achieving Development of the China market strong leverage and in 2009/10 we converted our core Maximising the opportunities and redefining the scope of revenue of $7.17m to an overall spend of $16.998m. That is study tourism an incredible leverage multiplier of 2.37. Making sports tourism a key part of the region’s product Improving our profitability through better yield So every dollar invested via TTNQ converts to $2.37, management conversely every dollar directed to other bodies can mean a Attracting new major events to the region and capitalising loss of this magnitude to our region.