After decades of growth, Australia's tourism industry is shaken by the aftershock of Asia's financial crisis

By SUSAN HORSBURGH

n a good day, 50 coaches would rumble out of the driveway of Wayne Nelson's Sydney bus depot. That was last year, when Transit Scenic Tours was taking hundreds of Asian tourists on trips to Canberra and the Blue Mountains. The depot now looks more like a bus saleyard, with only a dozen on the road each day. Nelson has worked in his family's coach company for more than 20 years--ever since he was a teenager washing buses at the Arncliffe depot--and he's never seen a downturn like this: turnover has plunged more than 60% and six drivers have resigned. "Business went down 100 mile an hour when the Koreans bit the dust," says Nelson.

According to figures issued by the Tourism Forecasting Council last month, the number of Asian travelers to Australia is expected to drop by 22% this year. For the first time since a protracted pilots' industrial dispute in 1989 crippled the tourism industry--worth $A16.5 billion in export earnings--there will be no growth this year; tourist numbers overall are expected to shrink by 8%. Says Len Taylor, head of the Inbound Tourism Organization of Australia: "What took six months to collapse will take five years to rebuild." The industry has been caught off-guard by the slump, groping for new arrivals with a $A150 million advertising campaign. While no one predicted the Asian crisis, some claim the sector had fallen for its own hype and failed to make contingency plans. "It's an ugly 12 months we've had," says Christopher Brown, chief of the industry lobby group Tourism Task Force. "But maybe it's the shot in the arm the industry needed. Maybe we were getting too complacent."

The tourism industry has had every reason to be confident. Since 1960, tourist numbers have grown every year bar three; in the past decade, they have more than doubled, to more than 4.3 million in 1997. Two years out from the Olympics, there are 49 hotels under construction around the country, 19 of them in Sydney, while 154,000 people are enrolled in tourism training courses. Says Brown: "It's been going gangbusters for 15 years, and for the first time the industry has to recognize the glory days are gone."

For a sector used to growing at a rate twice the world average, it's a bitter pill. "I don't think there have been too many people in the industry who've taken a long-term strategic view," says Tony Griffin, tourism management lecturer at the University of Technology, Sydney. "[There was] this feeling that the gravy train would continue to roll." Even the government forecasts, he says, were unreasonably optimistic. (Only two years ago, they were predicting 5.8 million visitors in 2000; that estimate's now been slashed by 1.2 million.) Academic Michael Hall, author of Tourism in the Pacific Rim, argues that investors have failed to see through the marketing hype of bodies like the Australian Tourist Commission, the federal agency marketing Australia overseas. "Small-business people hear the statements about growth and make investment decisions on what is basically not very sound advice," says Hall.

John Morse, managing director of the ATC, says the "extreme optimism" has been justified: in 1991 there were 390,000 Asian tourists; in just six years, that figure more than tripled to 1.35 million. "Nobody predicted what was going to happen in Asia," he says, "not even the World Bank." Last week the Public Accounts and Audit Committee told federal parliament the ATC could not prove that its promotions had boosted tourist numbers, and called for better measurement of its marketing success and a greater focus on North America and Europe.

That push has already begun. The commission has announced a four-year television ad campaign for the United States, Europe, New Zealand and Asia, celebrating what it sees as the free-spirited personality of Australia. Modern, sophisticated travelers want rejuvenating experiences, says Morse, not just natural beauty. "It's about cultural immersion--almost people becoming Australians for a week," he says.

But some doubt the campaign is enough to lift Australia above the international tourism competition. "[The ATC] has to be seen to be doing something and doing it now," Hall says. "Whether it's necessarily the right approach perhaps needs to be debated." Hall questions the cost effectiveness of expensive television commercials; he recommends more niche marketing, such as magazine ads aimed at backpackers, who spend more money than the average tourist and tend to stay in cash-strapped rural areas. Jon Hutchison, former head of the ATC and managing director of the Sydney Convention and Visitors' Bureau, says Australia faces tougher competition now than it did in the early '80s, when actor Paul Hogan urged Americans and the British to throw a shrimp on the barbie. The time was right to sell Australia: the country had won the America's Cup, Hogan was wrestling crocodiles on cinema screens and Men at Work were racing up the music charts. "We were the first to do [a high-impact ad campaign] and we had it to ourselves for quite some time," he says. "Now others have picked up their act."

The 2000 Olympics, of course, gives Australia a head start. But it's the long term that counts, says Brown: "It's got nothing to do with the two weeks of the Games--it has everything to do with the two years before and the 20 years after." Last year Wayne Nelson pulled down his main bus shed, planning to put up a new one. He's waiting for the recovery that will let him go ahead. The length of that wait will be determined by forces far beyond his depot.