Tourism, Travel & Hospitality. Environmental Scan 2014

Transcription

1 Tourism, Travel & Hospitality Environmental Scan 2014

2 Acknowledgements This Environmental Scan has been produced by Service Skills Australia with the assistance of funding provided by the Australian Government through the Department of Industry. While this Environmental Scan is published by Service Skills Australia (the Industry Skills Council for the tourism, travel and hospitality industries), it is endorsed and owned by these industries. Service Skills Australia would like to acknowledge the significant contribution of its Tourism, Travel and Hospitality Industry Advisory Committee in the preparation of this document. March Web:

3 About Service Skills Australia Service Skills Australia is the Industry Skills Council for the service industries, one of 11 not-for-profit, independent organisations funded by the Australian Government Department of Industry to support skills and workforce development. The service industries encompass the following sectors: Wholesale, Retail and Personal Services (wholesale, retail, hairdressing, beauty, floristry, community pharmacy and funeral services) Tourism, Travel and Hospitality (travel, tourism, meetings and events, accommodation, restaurants and catering, holiday parks and resorts) Sport, Fitness and Recreation (sport, fitness, community recreation and outdoor recreation). Service Skills Australia s roles and responsibilities are to: 1. Provide integrated industry intelligence and advice to government, the Australian Workforce and Productivity Agency (AWPA), industry and enterprises on workforce development and skills needs for the service industries. 2. Actively support the development, implementation and continuous improvement of high quality training products for the service industries, including training packages. 3. Engage in workforce development activities and services for the service industries. The Environmental Scan: Context, Purpose and Audience Rapid advances in technology, seismic shifts in global demography and rise of the conscientious consumer are just some of the factors that have left economists and policymakers recognising the limited relevance of historical trends and data as a reliable indicator of the future. Attempts to predict industry s future workforce and skill development needs can be particularly fraught as industries continue to evolve, converge or re-locate and as new job roles emerge while others become obsolete. Leading developed nations are establishing early warning systems to quickly detect the onset of trends and building agile vocational training systems capable of responding to issues once identified. Environmental Scans have been conceived on this basis. Specifically, the Environmental Scan identifies the macro and micro factors currently impacting on the skill needs of the workforce and its composition, it considers how well the national training system, its products and services, and industry itself are responding. Grassroots evidence and real-time intelligence from across Australia are what sets the Environmental Scan apart from other reports in the national training system. It captures intelligence gathered from on-going visits and conversations with industry, key stakeholders, regulators and critically, the people doing the jobs across the sectors, and who experience firsthand the impact of change. It also draws on a range of topical sources such as the latest industry, enterprise and government research, and international developments. The Environmental Scan does not seek to capture every issue within every sector. It is a snapshot of a continually evolving story that is intended to alert and inform a wide audience and enhance their capacity to act. The Environmental Scan s formal audience is the Department of Industry, the Australian Workforce and Productivity Agency and the National Skills Standards Council although its relevance extends far beyond and continues to be used extensively by state and territory governments, industry bodies, enterprises and many other stakeholders involved in skills and workforce development. Environmental Scans are produced annually by Australia s Industry Skills Councils as part of their broader role in gathering industry intelligence and undertaking high-quality analysis of the skills needs and profile of the current and future workforce. Tourism, Travel and Hospitality Environmental Scan

4 Contents Key Messages 4 Sector Overview 6 Latest Intelligence 10 Industry Performance 11 Cafés, Restaurants and Catering 11 Clubs 12 Hotels, Motels and Serviced Apartments 13 Caravanning and Camping 14 Travel Agencies and Tour Arrangement 15 Cruising 16 Industry Trends 18 Drivers of Growth: The Visitor Economy 18 Social Media and E-commerce 21 Environmental Sustainability 22 Changes to the VET Market 22 Workforce Development Needs 28 Occupation and Sector Employment Forecasts 29 Cafes, Restaurants and Catering 29 Accommodation Services 30 Travel Agencies and Tour Arrangements Services 31 Events 31 Workforce Issues 32 Seasonal Demand 32 Attraction 32 Retention 33 Identified Skill Gaps 34 Management Skills 34 Governance 35 Digital Capabilities 35 Customer Service 36 Asia-Readiness 36 Foundation and Employability Skills 36 2 Environmental Scan 2014 Tourism, Travel and Hospitality

5 Approaches to Workforce Development 38 The National Workforce Development Fund 39 Workforce Futures 40 Alternative Labour Sources 41 Mature-age Workers 41 Workers from Overseas 42 Other Alternative Sources 42 Tourism, Travel and Hospitality Occupations in Demand 43 Current Impact of the SIT12 Tourism, Travel and Hospitality Training Package 46 Hospitality Enrolments and Completions 48 Food Trade Enrolments and Completions 50 Tourism and Travel Enrolments and Completions 52 Holiday Parks and Resorts Enrolments and Completions 54 Events Enrolments and Completions 56 Future Directions for the SIT12 Tourism, Travel and Hospitality Training Package 58 Appendices 60 Appendix A: Report on Continuous Improvement of the Tourism, Travel and Hospitality Training Package 61 References 64 Tourism, Travel and Hospitality Environmental Scan

6 Key Messages The future success of the tourism, travel and hospitality sectors is contingent on addressing longstanding labour and skills issues.

7 Key Messages Given the importance of the tourism, travel and hospitality industries to Australia s economy and their significant role in future job creation, this Environmental Scan is a timely reminder of the importance of targeted skills and workforce development strategies. The Department of Employment s forecasting shows that the restaurant and catering sector will be the greatest source of job growth across the economy in the next five years. 1 Within other tourism and hospitality sectors, employment growth is expected to be at least 10 per cent. These increases are being driven by promising levels of growth in the visitor economy, coupled with growing local demand for hospitality and travel services. However, these sectors continue to experience significant skill shortages and recruitment difficulties. Chefs, cooks and pastrycooks have been in shortage for over a decade, while recruitment difficulties are currently also reported for bar attendants, baristas, waiters and hotel managers. These sectors also struggle with stubborn skill gaps in customer service, digital capabilities, governance and management skills. Given the challenges of seasonal demand and poorly understood career pathways, simple solutions to these problems are all the more elusive. The future success of these sectors is contingent on addressing these longstanding labour and skills issues. The industry has made some headway through effectively deploying the National Workforce Development Fund (NWDF) and strong industry engagement with the Workforce Futures program. But more needs to be done. This is especially so when these gains are put at risk by a constrained vocational education and training funding environment. The ongoing challenges and new factors drove the need to revise the workforce development strategy for these industries. This revised strategy outlines a series of priority areas for action: increasing labour supply, building capability, improving training quality and making high-quality workforce data available to industry. Addressing these areas in the future will go a significant way to strengthening the industry in order to take advantage of the continued and growing demand for its products and services, and subsequently meet the Australian Government s Tourism 2020 targets. Tourism, Travel and Hospitality Environmental Scan

8 Sector Overview This Environmental Scan pertains to what is commonly described as the tourism, travel and hospitality industries. These are covered by the ANZSIC divisions of Accommodation and Food Services, Scenic and Sightseeing Transport, Administrative Services, Amusement and Other Recreational Activities and Casino Operation.

9 Sector Overview This Environmental Scan pertains to what is commonly described as the tourism, travel and hospitality industries. The hospitality industry encompasses businesses that provide accommodation, food and beverages. This includes restaurants, cafés and takeaway food, pubs and bars, hotels, motels and other accommodation, and hospitality clubs. These businesses make up the entirety of what is classified under Accommodation and Food Services in the Australian and New Zealand Standard Industrial Classification (ANZSIC). 2 The travel industry encompasses businesses acting as agents to sell travel, tour and accommodation services, as well as businesses that mainly arrange, assemble, wholesale and retail tours. This is captured in the classification of Travel Agency and Tour Arrangement Services in the ANZSIC. Tourism, in the context of the Tourism, Travel and Hospitality Training Package, focuses upon tours, guiding and visitor information services. These activities are captured in Scenic and Sightseeing Transport and Other Administrative Services n.e.c. Finally, event coordination and management services are classified under Other Administrative Services in the ANZSIC. However, tourism is generally defined differently. Global statistical collections, including Australia s Tourism Satellite Account (TSA), define tourism as the sum of each of the industries in which visitors consume a substantial proportion of their products or services. a A significant proportion is made up by the accommodation and food and beverages services, but it also involves a portion of industries such as retail, transport and arts and recreation services some of which are relevant to Service Skills Australia s other industry Environmental Scans and Training Packages. Given that the available tourism statistics follow this definition, this should be kept in mind when these statistics are referenced. It should also be specifically noted that even for industries highly identifiable as being part of tourism such as hospitality only a portion of this industry is counted in tourism statistics. Overall, the breadth of what can be collectively considered as tourism, travel and hospitality can be defined in the ANZSIC with the subdivisions, groups or classes of Accommodation and Food Services, Scenic and Sightseeing Transport Administrative Services, Amusement and Other Recreational Activities and Casino Operation, as indicated in Figure 1 (over). a The TSA measures tourism by summing a portion of each of the tourism characteristic and tourism connected industries. Tourism characteristic industries are the industries in which visitors consume 25 per cent or more of its output and would be significantly affected if tourism were to cease. Tourism connected industries are those in which consumption of goods by visitors is significant (but below 25 per cent). Tourism, Travel and Hospitality Environmental Scan

10 Figure 1. Tourism, Travel and Hospitality Industries Aligned to the ANZSIC Framework Tourism, Travel & Hospitality Industries Division H Accommodation and Food Services Division I Transport, Postal and Warehousing Subdivision 44 Accommodation Subdivision 50 Other Transport Subdivision 45 Food and Beverage Services Group 501 Scenic and Sightseeing Transport 8 Environmental Scan 2014 Tourism, Travel and Hospitality

11 Sector Overview Division N Administrative and Support Services Division R Arts and Recreation Services Subdivision 72 Administrative Services Subdivision 91 Sport and Recreation Activities Subdivision 92 Gambling Activities Group 722 Travel Agency and Tour Arrangement Services Group 729 Other Administrative Services Group 913 Amusement and Other Recreation Activities Group 920 Gambling Activities Class 7299 Other Administrative Services n.e.c. Class 9201 Casino Operation (Event Management and Tourist Information Centre Operation) Source: Adapted from Australian Bureau of Statistics (ABS), 2008, Australia and New Zealand Standard Industrial Classification (ANZSIC), Cat. no Tourism, Travel and Hospitality Environmental Scan

12 Latest Intelligence 68% increase in the average amount spent on meals in restaurants, hotels and clubs since The cruise sector GREW 13% between 2007 and 2012 International visitation is forecast to GROW BY 4% p.a. to

13 Latest Intelligence Industry Performance Given the diversity within the sectors that comprise tourism, travel and hospitality, it is unsurprising that each have varying degrees of recent and expected employment and turnover growth. The following section uses the most recently available data to provide an insight into a range of discrete sectors. It is important to have an understanding of current and future market performance as these have a direct impact on the labour and skill requirements for the tourism, travel and hospitality industries. These implications are dealt with throughout the Environmental Scan. Cafés, Restaurants and Catering The cafés, restaurants and catering services sector continues to experience exceptional growth. As Figure 2 shows, in the decade to July 2013, there has been a substantial and sustained increase in turnover. This is also reflected in the findings of the Australian Bureau of Statistics (ABS) Household Expenditure Survey, which found that the average amount spent on meals in restaurants, hotels and clubs increased by 68 per cent compared with Data from Restaurant and Catering Australia also shows that the average person visits restaurants and cafes 2.8 times a week, up from 1.8 a decade ago. 4 Credited as the cause of this growth is an increasingly time-constrained society seeking the convenience of eating at cafés and restaurants, alongside increasing disposable incomes. 5 This is compounded by a burgeoning foodie culture and a growing appreciation for quality food and beverages. Figure 2. Turnover in Cafes, Restaurants and Catering Services, July 2003 July 2013, Trend Data 1,800 1,600 1,400 1,200 Millions $ 1, Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Year Source: ABS, 2013, Retail Trade, Australia, Jul 2013, Cat. no , Canberra. Tourism, Travel and Hospitality Environmental Scan

14 On a state-by-state basis, however, the rate of growth over the twelve months from July 2012 has been variable. Table 1 shows there have been large increases in the Australian Capital Territory, South Australia and Northern Territory; smaller gains in Victoria, Queensland and Tasmania; while turnover declined in New South Wales and Western Australia. Leaving aside recent growth in turnover, industry consultation has identified generally high levels of churn in the number of businesses operating in this sector. Particular mention was given to the fine dining hubs of Sydney and Melbourne, where there have been numerous reports of higher-end restaurant closures, with many operators stating that they are transitioning to the mid-level market. 6 It is believed that the spike in closures reflects falling and mild consumer confidence between 2009 and Clubs The latest National Club Census prepared by KPMG indicated that there are 6,577 licensed club venues nationally, which generated a total of $9.6 billion in revenue in KPMG s research found that approximately equal shares of clubs expected improved, neutral or deteriorated conditions over the next year. 9 Despite $4 billion of planned investment into club facilities over the next three years, 51 per cent of clubs are in some form of financial distress. 10 These contrasting performance levels could indicate that the market is fragmented, possibly due to factors such as the degree of reliance on gaming machines and local demographics. Table 1. Percentage Change in Restaurant, Café and Catering Services Turnover by State and Territory, July 2012 July 2013 NSW VIC QLD SA WA TAS NT ACT Source: ABS, 2013, Retail Trade, Australia, Jul 2013, Cat. no Environmental Scan 2014 Tourism, Travel and Hospitality

15 Latest Intelligence Hotels, Motels and Serviced Apartments Following three years of strong growth, the accommodation sector has experienced an overall slight decline in occupancy rates over the year to June 2013, as evident in Figure 3. Compared with June 2012, the room occupancy rate is estimated to have decreased by 1.2 percentage points. b,11 However, occupancy rates are significantly divergent by region. The decrease occurred in all states and territories, except the Northern Territory and Victoria, which increased by 2.1 percentage points and 1.1 percentage points respectively. These differences by state and territory can be seen in Table 2 (over). The increases in the Northern Territory have been attributed to the major gas projects in the state. At a more regional level, Deloitte Access Economics has noted that occupancy rates have increased for the Gold Coast, Melbourne, Tropical North Queensland and Darwin. 12 The Gold Coast and Melbourne have benefited from growth in domestic visitor nights, while Tropical North Queensland has benefited from international visitation. In contrast, there have been reductions in the occupancy rates in the major mining-related cities of Brisbane and Perth due to the resource-related construction boom reaching its peak, while Adelaide has experienced a decline due to low levels of domestic holiday visitation. 13 Figure 3. National Room Occupancy Rates, Hotels, Motels and Serviced Apartments with 15 rooms or more, December 2009 June Room Occupancy Rates (%) Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Source: ABS, 2013, Tourist Accommodation, Australia, June 2013, Cat. no (Trend data) Year b This applies to hotels, motels and serviced apartments with 15 or more rooms. Tourism, Travel and Hospitality Environmental Scan

16 Table 2. State and Territory Room Occupancy Rates, Hotels, Motels and Serviced Apartments with 15 rooms or more, June 2012 and 2013 State and Territory Room Occupancy Rates (%) NSW VIC QLD SA WA TAS NT ACT Australia Year ended June Year ended June Source: ABS, 2013, Tourist Accommodation, Australia, June 2013, Cat. no These occupancy rates are determined by the competing effects of the supply of rooms and customer demand. Between 2012 and 2013 there was an increase of 1,598 rooms, which partially offset the increase in domestic and international visitor nights. 14 Tourism Research Australia (TRA) and Deloitte Access Economics believe that future increases to the supply of accommodation will be insufficient to meet the forecast increases in visitation, resulting in further expected increases to the room occupancy rate. 15 Consequently, while the expected rises in the room occupancy rate are mostly indicative of an increase in demand for accommodation services, the lack of accommodation supply is also a contributing factor. In recognition of this, the Tourism 2020 strategy identifies a room supply target of between 6,000 and 20,000 rooms by Caravanning and Camping The caravanning and camping sector is dominated by domestic visitors, which comprise 91 per cent of the sector s nights. This sector is also largely regional, with 90 per cent occurring outside capital cities. 16 In 2011, this sector represented about 10 per cent of all visitor nights. 17 However, by segment, it accounts for approximately half of all travel by year olds and approximately 25 per cent of all travel by those aged 50 and over. 18 A report by BDO, which was commissioned by the Caravan, RV and Accommodation Industry of Australia (CRVA), noted that caravan and campervan registrations across Australia increased by 14.5 per cent between 2008 and 2011, demonstrating the increased appeal of the sector as a whole. 19 The research conducted found that for every $1.00 of park income, another $1.38 of local economic activity is generated by the individual park. Of the commercial caravan parks included in the study, 14 Environmental Scan 2014 Tourism, Travel and Hospitality

17 Latest Intelligence it was found that each contributed, on average, in excess of $1.26 million to their local region per year. 20 The study also noted that commercial caravan parks act as visitor information centres, organise tour bookings and encourage expenditure within the local community. This demonstrates the importance of this sector to local economies. A more recent KPMG study commissioned by CRVA noted that the sector s future growth potential lay with attracting greater numbers of domestic tourists, particularly parents between the ages of Asian visitors were identified as a further source of potential growth, particularly given current low levels of participation by this group. The report noted that it was critical to tap into these target markets as the sector s traditional largest source of visitors, active seniors, is expected to experience slower rates of growth in the next decade. 21 In terms of business needs, the report for CRVA found that caravan holiday parks placed greatest emphasis on marketing, capital investment and sales skills. However, in the same survey, only 16 per cent of businesses indicated that they would concentrate on staff training. This suggests a need to educate businesses on the benefits of training and raise awareness of industry co-contribution funds, such as the NWDF, as mechanisms to assist them to meet their business goals. Travel Agencies and Tour Arrangement The travel agency and tour arrangement sector has experienced only minimal annual revenue growth, which is estimated to be 1 per cent over the five years to This is believed to be due to the intensified competition resulting from the continued growth of online booking facilities. However, while this has been the case for the sector overall, the market leaders of Flight Centre Limited and Jetset Travelworld Ltd have seen record profits in recent years. 23 The future is expected to be somewhat more positive, with IBISWorld predicting annual revenue growth to reach 2.5 per cent over the five years to This is based on the expected improvement in global economic conditions and expected improvements in inbound and outbound Australian tourism. The major development for the travel sector in recent decades Global Distribution Systems continue to dominate and shape the way in which tourism and travel principals sell their services. Alongside the increased consumer preference to engage with e-commerce, this has particularly contributed to the continual increase in online directselling and the development of a greater number and more sophisticated online travel agent (OTA) websites. The sector reports that the effect of these developments has been an increase in just-in-time purchasing of services. Tourism, Travel and Hospitality Environmental Scan

18 Meanwhile, traditional distributors which make up the majority of the workforce in the travel sector continue to enjoy growth through servicing the growth areas of outbound bookings and the emerging cruise sector. Traditional distributors are also increasingly focusing on the quality of the information and advice that they can provide to customers, as well as offering a greater breadth of services, such as visa couriering. The growth of the cruise sector has led to the development of a new cruise specialist unit, SITTTSL314 Provide specialist advice on cruises, which ensures that travel agents are equipped with the appropriate skills to effectively provide advice on products in this segment. In addition to the changing nature of travel distribution, reforms have recently been made to the regulation of travel agents. On December , state and territory Ministers for Consumer Affairs approved the Travel Industry Transition Plan (TITP), which involves the removal of the Travel Compensation Fund, the repeal of travel agents legislation and a shift to a reliance on Australian Consumer Law. The TITP commenced from 1 July 2013, with a view to full implementation in Alongside these changes, the Australian Federation of Travel Agents (AFTA) has been appointed as the organisation responsible for the development and management of a new voluntary industry accreditation scheme, the Australian Travel Accreditation Scheme (ATAS). One of the key criteria for accreditation under the ATAS is for at least 20 per cent of workers in the enterprise to hold a Certificate III in Travel (or equivalent). This represents a higher benchmark for the industry than under the Travel Compensation Fund, which only required that SITTTSL013B Construct normal international fares or SITTTSL310 Construct normal international airfares be held by the person in charge. Cruising As indicated previously, the cruise sector is one of immense growth. After nearly 13 per cent growth per annum in the five years to 2012, the growth has continued into As a result, there has been a ramping up of investment in port infrastructure to keep pace with growing demand. Through a Regional Development Fund Grant from the Australian Government, there will be a major upgrade to the port of Eden, resulting in an anticipated increase in cruise ship visitation of between 10 to 50 per cent. 26 In Sydney, the new White Bay cruise ship terminal received its first passengers in April 2013 and will soon be receiving approximately half of all cruise ships operating in and out of the city. 27 Other ports in Melbourne, Geelong, Robe and Exmouth are also expecting an expansion of their port facilities and a commensurate increase in visitation. 28 With the massive injection of tourists into these ports there is a critical need to develop the skills of the local tourism workforce to capitalise on potential expenditure through ensuring and improving the quality of the visitor experience. As mentioned previously, travel agents equally require upskilling to adequately advise on the sale of cruising products, available through completion of the unit of competency, SITTTSL314 Provide specialist advice on cruises. This transition to a new regulatory environment will also require a workforce development response for the travel industry to ensure that these changes are adequately understood. The training package will also reflect these changes given the references to consumer protection law in certain units. 16 Environmental Scan 2014 Tourism, Travel and Hospitality

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20 Industry Trends Drivers of Growth: The Visitor Economy It is estimated that, in , domestic and international visitors accounted for 30.9 per cent of the demand for food and beverage services, for 96.7 per cent of accommodation services, and for 96.4 per cent of travel agency and tour operator services. 29 Needless to say, the growth or decline in international and domestic visitation is a major factor influencing the demand for these services, and hence, the demand for employment and skills in these sectors. Conversely, an adequate supply of labour and skills has been recognised as an important enabler of the growth of the visitor economy, as evident in its inclusion as an action area in the Tourism 2020 strategy. 30 In order to achieve tourism expenditure between $115 billion and $140 billion by 2020, the Tourism 2020 strategy sets out that an additional 56,000 to 152,000 jobs will need to be filled. 31 The sections below provide an outline of the previous and, more importantly, forecast trends in international and domestic visitation and the related skill and labour needs. International Visitation The latest international visitation figures show that arrivals increased by 5 per cent and expenditure increased by 5.9 per cent over the year to June This was underpinned by record increases in visitation from China (17 per cent increase), Singapore (13.6 per cent increase), Malaysia (10.3 per cent increase) and India (up by 8 per cent), alongside improvements to the traditional markets of the United States and the United Kingdom for the first time in five years, largely driven by a strong recovery in the backpacker market (up by 7 per cent). Comparatively, this was a strong result, with Australia s international visitor expenditure growing at 1.8 per cent above global growth. 33 Over the next five years, the Tourism Forecasting Committee expects to see an average increase of 4 per cent per annum to in international visitation. 34 The upward revision to this estimate is largely due to an increase in air capacity expected from the Asia-Pacific region, and partly due to higher expectations of economic growth for 2013 and 2014 in some of the Asia-Pacific countries, including China. The connection between growth forecasts and conditions in Asia is reflective of the dramatic change to the composition of international visitation in recent years, which is expected to intensify in the future. China is now Australia s second largest source market for international arrivals after increasing by 17 per cent from the previous year and arrivals from India also increased by 8 per cent. It should be noted that this growth has not come at the expense of Australia s traditional source markets, with increasing visitation from the United States and most European markets. 35 However, the share of inbound arrivals from Asia is expected to continually increase, with the share expected to increase from 42 per cent in to 46 per cent by The changing composition of international visitation towards Asian visitation has considerable implications for the skill needs of Australia s tourism and hospitality workforce, with the key needs being language, culturally appropriate service and business development skills. Some of these skill needs have been addressed with a new skill set in the SIT12 Tourism, Travel and Hospitality Training Package, SITSS00025 Service for International Visitors. This includes the units of competency of SITXCOM201 Show social and cultural sensitivity, SITXCCS303 Provide service to customers and SITXLAN21 Conduct basic oral communication in a language other than English. Tourism operators have also been targeted for up-skilling across these areas through the Australian Government s Welcoming Chinese Visitors Program as part of the Tourism 2020 strategy Environmental Scan 2014 Tourism, Travel and Hospitality

21 Latest Intelligence The language skills needed to adequately service this market are causing particular difficulties for the industry. The quality of group travel is reportedly suffering due to the difficulty associated with sourcing tour guides and other frontline service staff with Mandarin or Cantonese language skills. Feedback to Austrade suggests that, as a result of this shortage, duty-free shopping outlets are providing inbound tour operators with guides, often at no charge, in return for preferential access for the shopping outlet to the tour participants, which compromises the quality of the experience. Austrade is currently investigating ways this shortage can be addressed and to also raise the level of training and accreditation for tour guides. Domestic Visitation Despite the importance of international visitation, the fact remains that domestic visitation still accounted for 73.5 per cent of Australia s overnight tourism expenditure in the year to June Therefore, the level of growth in this market is an important factor in determining the demand for tourism and hospitality services. Analysis by Deloitte Access Economics suggests that the first half of 2012 broke the preceding decade of weak domestic visitation, whereby domestic tourism experienced a sharp decline in In the year ended June 2012, domestic overnight visitor expenditure had increased by 9.1 per cent and domestic day travel expenditure grew by 15.7 per cent. 40 While the following year did not experience the same rates of growth, the year to June 2013 still experienced an increase of 3 per cent in domestic visitor nights compared to the year to Unlike the previous year in which business travel was the key driver of growth in domestic visitation, domestic holiday travel underpinned the June 2013 figures. The period saw the highest number of domestic holiday overnight trips and nights since 2008, while business nights remained similar to figures. 41 Over the next five years, the Tourism Forecasting Committee expects to see annual growth of 1.5 per cent per annum for domestic overnight trips and 1.4 per cent per annum for domestic day trips. 42 As shown in Figure 4, the domestic tourism market will reach and exceed its previous heights by Recent and projected future growth is being supported by significant growth in domestic air capacity, as well as strong marketing activities by government and industry alongside consecutive interest rate cuts. Tourism, Travel and Hospitality Environmental Scan

22 Figure 4. Historical and Forecast Domestic Tourism Visitor Nights, to , , ,000 Visitor NIghts ( 000s) 290, , , , , , Source: Tourism Research Australia (TRA), 2013, National Visitor Survey; TRA, 2013, Tourism Forecasts 2013, Issue 2. Year While the recent increases in domestic travel have been positive, the muted growth over the longer term is largely due to Australians choosing to travel internationally. The degree to which Australians have increased their international travel in the last decade is evident in Figure 5. The increased outbound travel by Australians can be attributed to a range of macro factors, such as additional and more affordable international aviation supply, the relative strength of the Australian dollar compared to other countries and Australia s continued economic growth and rising levels of wealth. While this contributes to the demand for travel agents, it can detract from the number of domestic travel trips taken by Australians, which would generate demand for other tourism services and products. 20 Environmental Scan 2014 Tourism, Travel and Hospitality

23 Latest Intelligence Figure 5. Historical and Forecast Outbound Trips from Australia, to ,000 12,000 Outbound Trips ( 000s) 10,000 8,000 6,000 4,000 2, Source: ABS, 2014, Overseas Arrivals and Departures, Australia, Nov 2013, Cat. no ; TRA, 2013, Tourism Forecasts 2013, Issue 2. Year Social Media and E-commerce With 65 per cent of Australians owning a smartphone and 12.2 million internet subscriptions, technology is increasingly becoming entrenched in the marketplace. 43 In 2010, TRA found that 62 per cent of international visitors and 37 per cent of domestic visitors used the internet for research prior to their trip, representing an increase of 11 per cent since Among the younger age group of between 15 and 34, nearly 70 per cent reported using the internet for information prior to their trip. 45 However, this trend goes beyond research and it is increasingly common to purchase online. Among the two-thirds of internet users who indicated that they had purchased goods or services on the internet, the most popular item was travel goods and services at 56 per cent. 46 Despite this significant trend, many tourism businesses have not yet created an online presence, or have websites with limited capability. In particular, only: 66 per cent of the dining sector had their own website per cent of tourism businesses had a website that provided regularly updated information for availability and price per cent of tourism businesses have a website that allows for online payment per cent of tourism businesses have a website that allows for instant online booking and confirmation. 47 Tourism, Travel and Hospitality Environmental Scan

24 While these numbers are an improvement on the results of the previous Tourism Operators Digital Uptake Benchmark Survey in 2010, there is still significant scope for improvement. 48 Several organisations from both government and industry have developed programs to assist tourism, travel, hospitality and events businesses capitalise on the opportunities offered by digital technology these are detailed further in the Workforce Development Needs section. The proliferation of weblogs and online reviewer forums has also been a new factor for the industry in recent years. The industry is increasingly aware of the need to manage this consumer-generated content because of the potentially significant damage to reputation given the over-representation of negative feedback. Consequently, it has become common practice for businesses to systematically respond to individual posts on sites such as Eatability and TripAdvisor to ameliorate dissatisfied customers. Industry representatives also report using the feedback to inform training needs, as well as a tool to understand which areas require improvement. Environmental Sustainability Feedback from industry indicates that there are growing numbers of businesses wanting to brand and market themselves as environmentally responsible in response to consumer preferences. This has led to the launch of industry-led initiatives such as the First Star rating system, which acknowledges environmentally sustainable practices within hotels, ECO Certification for eco-tourism products through Ecotourism Australia or Green Table for restaurants, cafés and catering businesses. Some enterprises also make use of the global certification program for sustainable tourism, Green Globe. In 2010, the Australian Government mandated that all training packages needed to be reviewed to identify skills gaps concerning sustainability. As a result, the SIT07 Tourism, Hospitality and Events Training Package was updated to ensure that relevant sustainability skills were referenced in all required units of competency. Within tourism and hospitality units, approximately 40 units in each had sustainability skills embedded, while units of competency in events qualifications had approximately 15 units embedded with sustainability skills. More recently, the SIT12 Tourism, Travel and Hospitality Training Package Version 1 Review included a review of all units for sustainability, with a focus on the cross-sector units. Changes to the VET Market Since agreeing to a revised National Agreement for Skills and Workforce Development at the Council of Australian Governments (COAG) meeting of 13 April 2012, nearly all states and territories have embarked on reforms to their training systems, with some jurisdictions already well progressed. One of the core elements of the reform agreement is the National Training Entitlement, which guarantees government subsidised training places to individuals up to their first Certificate III qualification. In 2011, Victoria fully implemented its entitlement scheme the Victorian Training Guarantee with mixed results. In 2012, enrolments in publicly-funded qualifications from the SIT12 Tourism, Travel and Hospitality Training Package in Victoria increased by 29.6 per cent from 2010 levels. For all other states and territories, enrolments actually declined by 1.1 per cent (see Figure 6). The rapid increase in Victoria placed strain on the state s training budget, leading to the implementation of new arrangements that applied different subsidy rates for courses and qualifications based on areas of greatest public benefit and future jobs growth. 49 From 1 July 2012, the new fee arrangements grouped qualifications into five subsidy bands, with subsidies ranging from under $2 per to in excess of $10 per. 22 Environmental Scan 2014 Tourism, Travel and Hospitality

25 Latest Intelligence Figure 6. SIT12 Tourism, Travel and Hospitality Training Package Enrolments, , , ,000 Enrolments 80,000 60,000 40,000 20,000 Victoria Other States and Territories Year Source: NCVER VOCSTATS (ncver.edu.au/resources/vocstats/intro.html), extracted on 05/09/2013. Victoria is unique in its approach, with other jurisdictions using priority skills lists and caps to determine the funding of VET qualifications. However, South Australia announced in December 2013 that it would also commence applying subsidy bands to qualifications listed in its Version 8 Funded Training List, which will be released in January The Northern Territory currently has a skills list, with training places directed towards qualifications in priority areas of study. The Australian Capital Territory released a draft Skills Needs List on 28 June Queensland has announced which qualifications it will fund though the Great Skills. Real Opportunities reform plan. Western Australia s Future Skills WA scheme commenced in January 2014, offering guaranteed subsidised places in apprenticeships, approved traineeships, high priority industry qualifications and selected foundation skills. For all else, there will still be funded places available, but a place will not be guaranteed and will have higher student fees. In New South Wales there will be a capping system, with only foundation courses and qualifications up to and including Certificate III listed on the state s Skills List to be funded. For other training, such as skill sets, pre-vocational training and full qualifications from Certificate IV to Advanced Diploma, a limited number of places will be offered in priority skills areas. As at December 2013, Tasmania has not announced which qualifications it will fund under the entitlement system for its Skills for Work program. The complete list of funding in 2013 for tourism, travel, hospitality and events qualifications across the jurisdictions that have implemented VET reform programs is shown in Table 3. Additionally, at the federal level, the August 2013 decision to cease standard completion incentive payments for employers engaging existing worker trainees in non-priority occupations is likely to have a significant effect on the training effort for these industries. Currently, the only occupations included on the National Skills Needs List (NSNL) relevant to the tourism, travel, hospitality and events industries are the occupations of cook and pastrycook. 50 Tourism, Travel and Hospitality Environmental Scan

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27 Latest Intelligence Table 3. Funding of Tourism, Travel, Hospitality and Events Qualifications under VET Reform ProgramS c Qualification Certificate I in Hospitality Certificate I in Hospitality (Kitchen Operations) ** Certificate I in Tourism (Australian Indigenous Culture) Certificate II in Tourism Certificate II in Holiday Parks and Resorts Certificate II in Asian Cookery Certificate II in Kitchen Operations Certificate II in Hospitality Certificate III in Guiding Certificate III in Patisserie Certificate III in Events Certificate III in Tourism (Retail Travel Sales) ** Certificate III in Tourism (Visitor Information Services) ** Certificate III in Holiday Parks and Resorts Jurisdiction VIC SA d NT ACT QLD WA NSW $1.50 per $1.50 per $6.50 per $3.00 per $6.50 per $1.50 per $1.50 per $1.50 per $3.00 per $10.50 per $1.50 per $3.00 per $3.00 per $7.00 per FF Capped FF Capped,TGSS, FF FF FF Capped, TGSS, FF Capped, TGSS, FF (Priority) Draft inclusion Provisional priority c As at December d TGSS refers to the Training Guarantee for SACE Students. This means that qualifications listed as TGSS on the Skills for All Funded Training List will be fully-funded for South Australian students who are 16 years or over and who are enrolled and working towards completing the South Australian Certificate of Education (or equivalent). Full eligibility criteria are available at the following website: skills.sa.gov.au/for-training-providers/training-school-students/training-guarantee-for-sace-students. FF denotes fee free. Tourism, Travel and Hospitality Environmental Scan

28 Qualification Certificate III in Catering Operations Certificate III in Hospitality (Catering Operations) ** Certificate III in Commercial Cookery Certificate III in Tourism Certificate III in Travel Certificate III in Hospitality Certificate III in Asian Cookery Certificate IV in Commercial Cookery Certificate IV in Holiday Parks and Resorts Certificate IV in Hospitality Certificate IV in Guiding Certificate IV in Asian Cookery Jurisdiction VIC SA d NT ACT QLD WA NSW $3.00 per $3.00 per $9.00 per ($11.50 Apprentice) $3.00 per $5.00 per $1.50 per $5.00 per ($10.50 Apprentice) $5.00 per $7.00 per $3.00 per $7.00 per $5.00 per (Priority) Draft inclusion Provisional priority TGSS Capped, TGSS Draft inclusion Capped (Priority) (Priority) Draft inclusion Provisional priority Provisional priority Certificate IV in Patisserie $10.50 per Provisional priority Certificate IV in Travel and Tourism $7.00 per Certificate IV in Tourism ** $7.00 per Certificate IV in Catering Operations $3.00 per Diploma of Hospitality $2.00 per Capped (Priority) Draft inclusion 26 Environmental Scan 2014 Tourism, Travel and Hospitality

29 Latest Intelligence Qualification Diploma of Events Diploma of Holiday Parks and Resorts Diploma of Travel and Tourism Diploma of Tourism ** Advanced Diploma of Events Advanced Diploma of Travel and Tourism Advanced Diploma of Tourism ** Advanced Diploma of Hospitality Jurisdiction VIC SA d NT ACT QLD WA NSW $4.00 per $4.00 per $4.00 per $4.00 per $4.00 per $4.00 per $4.00 per $3.00 per Provisional priority Capped Capped Capped Draft inclusion Provisional priority ** Denotes superseded qualification Tourism, Travel and Hospitality Environmental Scan

30 Workforce Development Needs Chefs and cooks have been in shortage for over a decade and many other occupations are experiencing recruitment difficulties. Gaps in management, governance, digital, customer service and foundation skills are affecting these sectors.

31 Workforce Development Needs Occupation and Sector Employment Forecasts For a complete list of occupations in demand, see page 43 for the Tourism, Travel and Hospitality Occupations in Demand Table. Cafes, Restaurants and Catering Strong domestic demand and a growing tourism base are expected to lead to phenomenal growth in employment in the café, restaurant and takeaway food sector over the next five years, making this sector an important source of jobs in the future. The Department of Employment forecasts that employment growth in this sector will exceed any other in the Australian economy, with expected growth of 42,700 workers, or an increase of 8.1 per cent. 51 Figure 7. Top 20 Industry Sectors Ranked by Projected Growth to November 2017 ( 000s) e Cafes, Restaurants and Takeaway Food Services Child Care Services School Education Other Construction Services * Building Completion Services Medical Services Other Social Assistance Services Legal and Accounting Services Allied Health Services Industry Computer System Design and Related Services Public Order and Safety Services Building Cleaning, Pest Control and Gardening Services Tertiary Education Hospitals Specialised Food Retailing Pharmaceutical and Other Store-Based Retailing Supermarket and Grocery Stores Sports and Physical Recreation Activities Electrical and Electronic Goods Retailing Residential Care Services Employment Growth ( 000s) Source: Department of Employment, 2013, Employment Outlook to e* Other Construction Services includes brick paving, landscaping and construction machinery hiring with operator (except earthmoving equipment), while Other Social Assistance Services covers a wide variety of social support services, including aged care assistance, disabilities assistance, youth welfare, adoption and welfare counselling. Tourism, Travel and Hospitality Environmental Scan

32 This expected growth is likely to intensify the existing shortages found among chefs, cooks, pastrycooks and recruitment difficulties for bar attendants, baristas and waiters. Shortages of the above food trades have now been found to be in existence for over a decade by the Department of Employment s skill shortage research. The Department also forecasts that shortages are likely to persist in the future, particularly for specialist chefs, cooks and pastrycooks. 52 The Department of Employment s survey of employers in December 2011 found recruitment difficulties for waiters were particularly found in high-end establishments, due to the requirement for experienced staff with specific skill sets. It also found regional shortages for bar attendants, due to the small field of applicants for advertised positions. 53 These findings complement those of the Deloitte Access Economics Report, which found that chefs, kitchen hands, waiters, and café and restaurant managers will be the tourism and hospitality occupations in the greatest demand to Other Food and Beverage Sectors In the remainder of the broader food and beverage sector, strong employment growth is expected in pubs and bars, but is offset by weak growth in the clubs sector. In the clubs sector, employment is expected to grow by a muted 4.6 per cent, or 2,300 workers. 55 However, employment within pubs and bars is expected to parallel that of the accommodation sector, with an increase of 11,200 workers, or an increase of 10.9 per cent, expected. 56 This growth is likely to also intensify the aforementioned regional shortages found among bar attendants. Accommodation Services While the shortages are less pronounced, and the Department of Employment is yet to rate any occupations in this field as officially in shortage, employers at recent industry forums have noted substantial recruitment difficulties in this sector. Industry representatives have indicated that there are particular difficulties for frontline management and senior management roles. There is also forecast growth in the next five years, particularly relative to the experience of the past five years, in which growth in employment in accommodation services was only 1.6 per cent. 57 This compares with projections for the five years to November 2017, in which growth of 10.7 per cent, or 11,300 workers, is expected. 58 Over the longer term of the 25 years to , TRA expects that strong employment growth will be generated in the accommodation sector. 59 However, as shown in Table 4, forecast employment growth varies significantly by state, with particularly strong growth expected in Victoria and the Australian Capital Territory. This contrasts with milder results in Tasmania, South Australia and the Northern Territory. Table 4. Tourism Employment in Accommodation by State, Cumulative Percentage Growth Between and (%) NSW Vic Qld SA WA Tas NT ACT Accommodation employment Source: TRA, 2013, Tourism Employment in Australia: 2013, to , Canberra. 30 Environmental Scan 2014 Tourism, Travel and Hospitality