4CA - Queensland's Home for Fake News

4CA - Queensland's Home for Fake News
4CA - Queensland's Home for Fake News Led by John "Cueball" Mackenzie

08 November 2013

SO WHAT'S THE DEAL WITH GUAM & CAIRNS?

Of all the international destinations directly serviced from Cairns, Guam is proving to have an enormous impact on Cairns in our key business of tourism.  Guam has over 1,500,000 arrivals a year, dwarfing arrivals to Cairns, with 90% of them being Japanese and Korean tourists.  This is similar to arrivals in Cairns for tourism (with some of our airport traffic being connection traffic only).
  
The Cairns Post recently interviewed Graham Poon, former Austrade representative to Guam and now self-employed business consultant, who (again) is flogging Guam as an "untapped opportunity" for Cairns businesses.

This has proven to be bullshit.  Time and time again.

Several trade missions have been sent to Guam by the Cairns Chamber, Advance Cairns, and Cairns (non)Regional Council over the last ten years.  And the GovGuam has been persuaded to visit Cairns on at least one occasion.  All of these missions start with the same high hopes for business with Guam.  And all have failed, for fairly obvious reasons.

Everything we have and do in Cairns is too goddamned expensive.

In 2008, the Governor of Guam (which is a non-chartered state territory of the United States) offered to explore sending their young people to the Cairns TAFE for hospitality training.  This effort failed as the Guam tourism industry discovered the low levels of service delivery in our restaurants and hotels.  Guam instead provides government-subsidised university-level hospitality training.  And even tour guides are required to attend classroom training as a condition of employment.  

Various vendors of fresh food, seafood, meat, and other perishables made presentations to potential customers in Guam - only to discover that these perishables, SHIPPED FROM THE MAINLAND USA BY AIR, are cheaper than what can be provided from Cairns.  MUCH CHEAPER.

United Airlines, which uses Guam as a major hub for their Asian services, would be thrilled to bits to provide freight service on the virtually empty airplanes.  

Even milk produced in Cairns is more expensive that the US mainland milk - US$1.50/quart (litre) vs the $2/ltr Coles and Woolies milk that the local dairies claim is unsustainably low.

Upscale restaurants in Cairns are double the price.  
And even professional services (engineering, architecture, etc) are overpriced as well.

An outreach to Cairns trades during the worst of the downturn (2006-2007) found not one tradie willing to work US hours on major construction projects underway there. 

So why is Graham Poon flogging the idea of ANOTHER trade mission to Guam?  He was spectacularly unsuccessful in getting any appreciable trade when he was employed by the Australian government.  

Hard to know. . . .

Guam has few visits from the Mainland Chinese yet, but not
for lack of trying.  The US government does not allow Mainland Chinese to travel visa-free to America, knowing full well that a large percentage use tourist visas as a pretext to illegally migrate there.  However Guam has proposed changes in their passenger documentation regime which would require Guam visitors transiting to Hawaii or the US mainland to have documentation rechecked before travel to those locations.

If Chinese were allowed to travel to Guam as easy as they can travel to Australia, we'll see travel numbers to Cairns fall.  With the more substantial beachfront hotel (not holiday-letting apartments that the Chinese abhor) infrastructure and cheaper pricing, the Chinese, like the Japanese and Koreans, will have even less reason to come to Cairns.

And if they should build a casino on Guam. . . .?


Oh, and the current Guam price for petrol?  AU$1.21/litre.  And the Guamanians find their petrol price very high because it comes from Singapore (like ours) instead of the US Mainland.


3 comments:

Anonymous said...

Tourism, and gambling are so fickle at the best of times in the best of places - and Cairns isn't one of them. Remember those heady days of when Daikyo owned Cairns and big spending Japanese tourists were laying golden eggs. Remember when the smart money in this town was falling over itself to get a share of Reef Casino. Remember when their one dollars shares plummeted to just a couple of cents? Remember Skase and Pixie? Remember when all those shonky high-flyers; CEC, Hedley, Glencorp et al floated their ill-conceived business models (aided and abetted by a complicit Byrne Unity administration), and the suckers lost their money again. Short memories in this town, must be a genetic redneck thing, they seem to make up the majority - judging by the way they vote that is.
Well, the shonks are at it again, and again the suckers are wetting themselves with excitement at the prospect of a easy riches compliments of the most speculative project ever to be proposed for Cairns. Not sure how this particular game will pan out, but know for sure we are going to lose big time again. And that old Yorkey's swamp land will likely still be there ready for the next pie-in-the-sky scam.

Anonymous said...

This HBW article is illuminating in that it shows how easily somewhere like Guam could pull the rug from under the Aquis business model and leave it a white elephant.
A couple of ifs.
If Chinese nationals are allowed visa upon arrival at Guam.
If Guam was to open a casino (or two).
Both are highly likely as an easy means to tap into a burgeoning Chinese middle-class. What does that then do for Aquis @ The Knob? Why would anyone fly several hours beyond an ideal destination with all the attributes they seek (tropical weather, shopping, casino/s, quality accommodation) to get the same (or inferior) experience in Cairns and pay a hell of a lot more for it.
The Aquis business model appears to depend on its casino and even if it were successful, it will still be at the expense of the existing Reef Casino (there's not room for two).
You should run a book on this Hillbilly, my money says it will never get off the ground.

Anonymous said...

The reason it is cheaper in Guam is that every time you cough in Australia someone has their hand out. Wages, license fees, and general bureaucratic stalling means that anyone serious about doing business goes elsewhere. Of course it is cheaper to produce stuff if he cost are lower! Question is how many, if any of our planning and environmental controls are we prepared to streamline or sacrifice to reduce red tape and costs? Are we prepared to lower wages, or will we continue to make almost everything more expensive by paying bullshit money?