WA inks $7m deal to join Qantas tourism push
The airline announced on Wednesday that it had signed a $7.65 million deal with the West Australian government to market the state overseas and within Australia.
The funding contributions will be split between the airline and the state over three years.
Qantas has inked similar marketing deals with NSW, Queensland and the Northern Territory, and plans to sign up Victoria, South Australia and Tasmania.
The airline's decision to funnel money to the states and territories rather than the country's peak tourism body, Tourism Australia, follows the breakdown in the once close relationship between Mr Joyce and Mr Dixon last year.
Mr Joyce has demanded his former mentor step aside as Tourism Australia chairman or dissociate himself from a group of high-profile investors who had been agitating for a change in strategic direction at Qantas.
Despite the group selling its small stake in Qantas in January for a tidy profit, neither the airline nor Mr Dixon and Tourism Australia have shown any sign of backing down.
Mr Joyce said the latest marketing deal would deliver large windfalls for Western Australia, particularly in encouraging foreigners to visit.
The agreement will focus on potential visitors from Britain, the US and Singapore, as well as domestic tourists.
WA Tourism Minister Liza Harvey said the deal would play an important role in the state's bid to increase the value of tourism in Western Australia from $7.5 billion to $12 billion by 2020.
The agreement will include international marketing campaigns.
So far, the states and territories have signed joint marketing deals totalling $56 million - about half of which is from the airline.
The largest agreement has been a $30 million deal between Qantas and NSW.
Tourism Australia has been making up for the loss of funds from Qantas by signing marketing deals with other airlines, including Virgin Australia, Etihad, Air New Zealand and Chinese carriers.
Frequently Asked Questions about this Article…
Qantas has signed a $7.65 million marketing deal with the Western Australian government to promote WA both overseas and within Australia. The funding is split between Qantas and the state and is staged over three years.
According to the article, Qantas decided to funnel marketing funds directly to states and territories after a public breakdown in the relationship between Qantas CEO Alan Joyce and Tourism Australia chair Geoff Dixon. That shift means Qantas is partnering with individual states rather than channeling the money through Tourism Australia.
Qantas has already inked similar joint marketing deals with New South Wales, Queensland and the Northern Territory, and plans to sign up Victoria, South Australia and Tasmania. The largest to date is a $30 million deal with NSW.
Qantas says the WA agreement will target potential visitors from Britain, the US and Singapore as well as domestic tourists. WA Tourism Minister Liza Harvey said the deal is intended to help grow Western Australia’s tourism value from $7.5 billion to $12 billion by 2020.
So far, the states and territories have signed joint marketing deals totalling $56 million, with about half of that funding coming from the airline. The article also notes Qantas has devoted about $28 million to publicising states and territories since the Joyce–Dixon dispute.
With Qantas redirecting funds to state-level deals, Tourism Australia has sought alternative airline partners to make up the shortfall. The article says Tourism Australia has signed marketing deals with other carriers including Virgin Australia, Etihad, Air New Zealand and various Chinese airlines.
The article only reports the marketing deals and amounts; it does not provide financial analysis. For investors, this type of targeted marketing is a strategic bet to stimulate travel demand—costs are shared with states—but the piece does not say whether these campaigns will materially affect Qantas’ profits or share price. Investors may want to monitor passenger demand trends and Qantas’ broader financial reporting for any impact.
Tourism Australia has been signing marketing deals with other airlines to replace some lost funding, including Virgin Australia, Etihad, Air New Zealand and various Chinese carriers.
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