Understanding your target markets

Visitors from different countries have different needs and travel in different ways to domestic visitors. Not all destinations and products will be suitable for all international markets.

There is extensive research available on international visitors, their travel styles and the experiences they are looking for on an Australian holiday.

Looking at the research available can help you build a profile of inbound visitors that may be interested in your product. Use it to help you identify which are the key markets to target for your business.

When establishing which markets are right for your business you will want to consider the geographic source market or where they come from and how they travel or what market segment they fit into.

Market research and analysis can help you understand:

  • Which markets are currently visiting your destination?
  • How long do they stay?
  • What do they like to do?
  • Who do they travel with?

Visitors from different countries travel in different ways. When selecting your target markets, you will need to consider not only the country visitors are coming from, but also their travel style and market segments. A backpacker from Germany and a luxury visitor from China will both make very different choices about products and destinations and will require different services. Understanding how these visitors travel and what they like to do is crucial.

How do you find out about them?

Destination NSW regularly releases information on international source markets. Refer to the Destination NSW research.

Information is specific to NSW and currently includes:

  • Overseas arrivals and departures data, showing international arrivals into NSW
  • Travel to NSW Snapshots with key figures at a glance, comparing international and domestic visitation
  • International market profiles detailing 15 key international markets, including where they go, what they do and how they travel throughout NSW
  • International market time series data, showing changes in the market over the past 10 years. These are available for 15 key international markets
  • International market segment factsheets, providing insights into the needs of different types of visitors including Chinese FIT, USA Luxury, Indian Leisure and international Baby Boomers.
Lord Howe Island. Credit: Destination NSW

Other Research Sources

  • Tourism Australia: As the national body responsible for tourism in Australia, Tourism Australia offers a wealth of information in the fields of marketing, research, resources and news. Tourism Australia produces detailed market profiles of visitors from 16 core markets and consumer demand research, which give insight into key travel areas that consumers travel to experience: coastal & aquatic experiences, consumer events, food & wine and nature.
  • Tourism Research Australia: Tourism Research Australia conducts the National and International Visitor surveys (NVs and IVs) which give insights into where visitors go, what accommodation they use, how long they stay and how much they spend. They also produce a range of forecasts, expenditure statistics and research reports.
  • Australian Bureau of Statistics: Australian Bureau of Statistics collects data on overseas arrivals and departures as well as accommodation statistics.

What are market segments and travel styles?

Within each market there are a range of segments or travel styles or visitor types. Each segment has different needs and requirements. It’s important to understand which segments your product will appeal to within each market. Some examples of segments include:

  • Free Independent Travellers (FIT)
  • Group Inclusive Travellers (GIT)
  • Partially Packaged
  • Visiting Friends & Relatives (VFR)
  • Self-drive
  • Semi-FIT or assisted FIT
  • Luxury
  • International students
  • Over 55
  • Incentives
  • Families
  • Business travellers
  • Couples / Honeymooners
  • Special interest
  • Youth travel

Each travel style and segment have different needs. For example, tour groups will require different accommodation to an older couple. Self-drive visitors might be happy to start your tour at a pre-arranged meeting point, whereas luxury visitors would likely expect door to door transfers and have higher service expectations.

Group Inclusive Travellers (GIT) have everything organised for them including flights, accommodation, activities and meals. They could be a big coach group, part of a series of groups or a smaller more boutique group tour.

Free Independent Travellers (FIT) are at the other end of the spectrum, they will book a few key elements of their trip like flights, accommodation or transport booked before they arrive, the rest they work out along the way. Semi FIT or assisted FIT is a segment you’ll find in some Eastern markets, where a translator or multilingual guide may accompany the FIT visitors.

It is a good idea to understand which segments of the market your product might appeal to and the refinements that you can make to meet their needs. See Perfect Match: Refining Your Products for tips.

Click here for more information on market segments.

Tropical Fruit World, Duranbah. Credit: Destination NSW

Choosing international target markets

With all this research in mind, you need to identify which markets are suitable for your business and plan your approach to target them.

Starting with a small number of target markets with the best potential for your business is the best approach. This allows you to focus limited resources more effectively on providing market-matched products and trade marketing activity.

Very few businesses can successfully target all markets at once.

A phased approach will allow you to build international business incrementally and will improve your chances of success. A suggested approach is:

Phase one: Markets already visiting

Consider targeting markets representing the ‘low hanging fruit’ – that is, markets that already visit your destination and/or have an interest in your experience or product.

For example:

  • If your business already attracts inbound visitors from the UK, this is a good indication it’s appealing to the market, so working actively with UK distribution partners may grow visitation to your business.
  • If your tourism manager or Destination Network is actively targeting visitors from Singapore, research this market and find out if it is suitable for your business, then discuss opportunities to work collaboratively with them.

Phase two: New markets

Once your phase one markets are well established and growing, consider targeting new markets that your product might appeal to. This could include markets not yet familiar with your destination, or those that involve cultural or language barriers that your product is not yet ready for.

For example:

  • You may have identified that Chinese FIT couples could be a good fit for your business, but after reading the China Ready Toolkit, you recognise that this market has specific language needs and cultural considerations which you are not equipped to handle.

A phased approach does not need a set timeline, the first phase might simply be done when you are well established in those inbound markets with steady business but see capacity for growth into new markets. Phase one could last a year, or three, or 10.

Tips for choosing target markets

  • Review your customer data: Use your current customer data to see if any international markets are already interested in your product.
  • Talk to Destination NSW and your regional tourism network: Find out about target markets for the destination and any existing trade marketing opportunities.
  • Learn how markets differ: Interest in particular destinations and experiences will vary from market to market. Some markets are still relatively unfamiliar with Australia and less willing to travel far from the major cities, so may prove more challenging to attract. Others are keen to explore and go off the beaten track.
  • Have realistic expectations: Be realistic about your target markets and how your product might appeal to them. Be prepared also to refine your products to better meet their needs, if required.

Research your target markets

Take the time to review the research available from Destination NSW, Tourism Australia, and Tourism Research Australia, talk to your regional and local tourism organisation and other operators that are already working in the inbound market. The more you know, the better prepared you will be to maximise your opportunities in the inbound market.