Australia SUBMISSION ON THE **************** South Australian Tourism Commission. Tourism Plan Month 2007 May 2008

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1 TTF Australia is a national member-funded CEO forum, advocating the public policy interests of the 200 most prestigious corporations and institutions in the Australian transport, property, tourism & infrastructure sectors. TTF TTF Australia Australia (Tourism (Tourism & Transport Transport Forum) Forum) South Australian Tourism Commission SUBMISSION ON THE **************** Tourism Plan Month 2007 May 2008 Contact Ms Caroline Wilkie National Manager, Tourism and Events TTF P E cwilkie@ttf.org.au

2 CONTENTS INTRODUCTION 2 TOPIC 1: DEVELOPMENT 4 TOPIC 2: AVIATION/ACCESS 22 TOPIC 3: DISTRIBUTION 30 TOPIC 4: CONSUMER COMMUNICATIONS 32 TOPIC 5: EVENTS 36 TOPIC 6: INDUSTRY PARTICIPATION 38 TOPIC 7: BUSINESS TOURISM 43 TOPIC 8: EDUCATION TOURISM 47 TOPIC 9: DEVELOPING EXPERIENCES 49 1

3 TTF (Tourism and Transport Forum) TTF (Tourism and Transport Forum) is a national, member-funded CEO forum, advocating the public policy interests of the 200 most prestigious corporations and institutions in the Australian transport, property, tourism and infrastructure sectors. Our Members and Partners in the tourism sector include Australia s leading: Accommodation & Gaming Resorts & Hotel Chains Owners & Investors Timeshare Serviced Apartments Casinos Tourism Infrastructure Precinct Managers Institutional Investors Infrastructure Owners Ports Airports Transport & Aviation Airlines Rental Cars Coaches Passenger Rail Cruise Lines Marketing & Attractions Theme Parks Cultural Attractions National Parks & Marine Parks Tourism Marketing Organisations Major Events, Retail & Hospitality Convention & Exhibition Centres Restaurants & Wineries Travel & Tourism Retailers Venues Professional Services Legal & Accounting Advertising & Public Relations Research & Education Technology & Solutions TTF undertakes research and policy development on the critical issues facing the tourism sector. Our tourism policy agenda encompasses climate change, labour and skills, marketing, infrastructure, product development and sustainability. For more information on TTF please visit our website at Introduction TTF welcomes the opportunity to provide input to the South Australian Tourism Commission s Strategic Plan for The review process that the South Australian Tourism Commission (SATC) is undertaking is appreciated by the industry members of TTF and clearly demonstrates that the SATC is responsive to ongoing and changing needs. Tourism is a key economic driver across metropolitan and regional South Australia, contributing to the development of many communities and regional centres across the State. In the year ending December 2007, South Australia (SA) received approximately 5.8 million visitors and 26 million visitor nights, generating $4.2 billion of expenditure for the state economy. South Australia s tourism industry makes an enormous contribution not only to Adelaide, but many rural and regional communities traditionally reliant on other employment sectors. The depth and breadth of tourism s job generation reinforces the need for the Government to strongly support the industry. Tourism employs 27,237.5 million people in SA and accounts for 3.9% of Australia s gross value added but 4.7% of total employment. As stated in the Australian Tourism 2

4 Satellite Accounts, The tourism share of total employment is higher than the tourism share of industry gross value added. This is because tourism tends to be more labour intensive than other forms of economic activity. 1 Tourism is a growth industry in South Australia. One area of significant growth for South Australian is in wine tourism where the State currently receives more overnight visitors than any other region in Australia. TTF understands that much of what has been included in this submission can not be acted on directly by the SATC. However we raise these issues to highlight the challenges faced by the industry in South Australia. TTF will continue to raise these issues within other relevant forums. 1 ABS Cat. No , Tourism Satellite Account,

5 TOPIC 1: DEVELOPMENT 1. What do you think is the overall challenge for development of SA tourism product? TTF believes the overall challenge facing SA tourism product is the need to capitalise on opportunities that exist for new product development. In January 2006, the SATC Board endorsed a State tourism industry performance target of $6.3 billion in tourism expenditure by December The SATC considers this tourism target to be ambitious but achievable. Based on current trends, however, the SATC will not meet this target, and the gap is forecasted to be $1.3 billion by The implication is that South Australia will require a lift in competitive performance by an average annual growth of 6 per cent. Major issues impacting on this forecast growth are: The drought and its long term effects; and The need to develop tourism infrastructure, nature-based products and development in the regions and aviation. Drought The tourism industry is extremely concerned about the drought and its impact on tourism in South Australia, particularly in the areas surrounding the Murray River. These areas require the assistance of the South Australian Government in the short term. As the worst drought on record continues to impact water availability in the Murray Darling Basin, the Murray-Darling Basin Commission (MDBC) recently warned that Murray operations are likely to pose further significant challenges for the communities and environments sustained by its waters. While there is enough water to sustain the Riverboat, houseboat and other water and land-based tourism ventures on the River, the consumer perception of no water has seen a decrease in bookings. Tourism along the Murray River provides substantial economic value to the South Australian economy. In 2006, domestic day trip and overnight trip expenditure was valued at over $124 million. 2 However, travel and tourism operators in the Murray regions across South Australia are being hit hard. From the years ending June 2001 to June 2006, the number of domestic visitor nights has shown a downward trend, declining 20.4% over the five year period. Domestic day trips have also shown stagnation over the same period, showing negative growth of -3.8%. 3 2 Travel Expenditure by Domestic and International Visitors in Australia s Regions, Tourism Research Australia, 2005 (includes day trips and overnight trips to Murraylands and day trips to Riverlands overnight data for Riverlands not available due to insufficient sample size). 3 National Visitor Survey, Tourism Research Australia, June 2007 (includes The Murraylands, and Riverland regions; does not include Coorong SLA due to insufficient sample sizes). 4

6 The impact of the drought on Murray River tourism A majority of tourism areas along the Murray are Exceptional Circumstances (EC) declared. Unfortunately for the tourism industry, the current drought assistance packages offered by the South Australian Government are restricted to farmers and those small businesses deriving 70% or more of their turnover from the provision of goods or services for farming activities in EC declared areas. However, it is not just the primary industry sector in need of help. Recreational boating within the River Murray system, particularly downstream of Lock 1 (Blanchetown) is facing devastation. In the last reach of the River Murray from Blanchetown to the Murray Mouth, (275 kms in length, incorporating the Lower Lakes Alexandrina and Albert), the water levels have never been so low, up to one meter below the normal pool level, since the placement of the weirs and locks. Some of the marinas on this lowest reach of the River are now facing the choice of extensive dredging or closing their businesses. This in turn is having an effect on the boats within the marinas and those travelling along the river that need to access the marinas for servicing. If water levels fall further this will impact on the tourism and leisure sectors. In this stretch of the river it is worth noting that: The Houseboat Hirers Association estimate that current booking levels are at around 40% occupancy compared with a normal situation of around 60-70% at this time of the year. In addition, the forward bookings later this year and into next year over the summer season are very weak; Murray cruises are maintaining only modest passenger numbers through price discounting; General boating activity has decreased in the Lakes and Coorong areas, as people anticipate no water on the River and Lakes or Coorong; Many snags that were deep below the surface are now presenting serious boating hazards; Marinas, slips and ramps are becoming unserviceable, particularly in the Goolwa area with the only public boat ramp available for use being at the Goolwa Aquatic Club; With these conditions and restricted movement through the locks at Goolwa, boats are re-locating from inland water marinas to coastal moorings; The boat sales/boat repair and boat service/boat hire and boat charter sectors have also been severely impacted. However, while these environmental issues are of immediate future concern to tourism operators along the Murray, the more pressing issue is the myth surrounding the drought and its impact on tourism. While there is the possibly that the drought will make tourism operations on the Murray difficult or impossible, there is a public perception that this has already happened. 5

7 Negative media is having a serious effect on the viability of the tourism industry in the Murray region. In the broader press, there is coverage about the perceived lack of water in the entire river system, when in reality many river-based activities can still operate normally. Drought assistance for the tourism sector TTF believes there are ample opportunities to stimulate Murray River tourism through positive campaigning, as for the most part, there is enough water for recreational pursuits. There is a need to combat the negative messages with positive ones, showing that the Murray River is still flowing and open for holiday business. Marketing Campaign After the July 2007 floods in the Hunter Valley region of NSW, similar negative media messages occurred, portraying the entire region as being closed for business, which had a serious affect on bookings. A campaign was launched which was jointly funded by the Federal and NSW State Governments. The campaign was designed to attract more tourists to the Hunter, helping to provide an economic stimulus to local tourism operators and small businesses. The Victorian Government announced a similar funding boost of $500,000 designed to increase visitation along Victorian Murray townships affected by drought. RECOMMENDATION A marketing campaign should be developed to inform the community that the Murray is open for business, stimulating business for tourism operators. Extension of drought assistance packages and tourism industry representation. TTF also urges the South Australian Government to consider extending the availability of assistance packages to drought affected areas beyond farmers. These packages should provide opportunity for compensation for tourism operators who have been hit hard by the drought. TTF also strongly believes that the tourism industry must be represented on any Government taskforces that are charged with dealing with drought issues. In conclusion, the Murray River is an incredibly valuable asset to South Australia s tourism industry, and operators are suffering difficult times. As high lighted, there are ample opportunities to turn this around and stimulate the regions tourism industry through Government assistance and positive marketing. RECOMMENDATION Drought assistance packages should be extended to include the tourism industry, and tourism industry should be represented in drought-related taskforces. 6

8 Infrastructure and Nature-Based Tourism Increased investment in infrastructure development by the South Australian Tourist Commission Investment in tourism product and infrastructure at both a state and national level is a challenge to sustained growth in the tourism industry. One of the greatest challenges facing the South Australian tourism industry is a lack of investment in new product development. As part of the Commonwealth Government National Tourism Investment Strategy, the AEC Groups estimated that approximately $86 billion ( dollars) in total tourism investment will be required over the next ten years for the accommodation and attractions sectors of the industry 4. Of the expected 63,000 additional rooms required nationally to meet tourism demand over the next 10 years, 36,600 of these are forecast to be outside capital cities 5. There are many potential impediments to sustaining or growing regional tourism including: unpredictability of demand; increased competition from alternative attractions; effectiveness of destination marketing; willingness to invest; ability or ease of obtaining approvals, and accessibility. Investment in new tourism product, particularly in regional areas, is challenging and prohibitive in many instances for private investors due to a lack of basic infrastructure such as access to water and electricity and even in some circumstances, substandard road access. Risk is regarded as greater in regional areas than metropolitan areas as the demand base is smaller and potentially more fickle. As an example, nature-based tourism (including eco-tourism) is a critical driver for domestic and international tourism in Australia and a key opportunity to disperse visitors and expenditure to regional South Australia. However, changing consumer preferences and a lack of investment in nature-based tourism product has the potential to limit the economic benefits of tourism to regional areas and our natural estate. Regional tourism is enormously diverse. This diversity will have a bearing on investment decisions in regional tourism, particularly as finance is more readily obtained where there is greater knowledge and certainty of the development e.g. the difference between expanding facilities in an already established and popular location and bringing product to a 'new' area such as a National park. In essence, diversity and uniqueness is not conducive to attracting finance. However, the Government can assist in addressing these challenges. TTF understands that the SATC currently has a budget of approximately $1 million to assist with encouraging infrastructure investment in regional South Australia. However, TTF believes that this level of funding is inadequate given the number of prospects the SATC has available to package potential investment opportunities for the market. 4 Australian Government, Investing for our future National Tourism Investment Strategy, March 2006, pg Australian Government, Investing for our future National Tourism Investment Strategy, March 2006, pg 3. 7

9 RECOMMENDATION The SA Government s investment in tourism infrastructure should be doubled. Nature-Based Tourism Nature-based tourism (NBT) attractions and experiences, particularly in National Parks, are a key driver of domestic and international tourism to Australia. Visiting national parks is the forth most popular activity for international visitors to Australia after eating out, shopping and visiting the beach. More visitors to South Australia visit national parks than: pubs, clubs, casinos, museums, art galleries, guided tours, wineries, festivals or fairs. 6 South Australian nature-based tourism and National parks are a critical tourism product for the State, attracting a higher proportion of visitors than any other state except the Northern Territory and Tasmania. The state s National parks as attractions are inherently unique, and are thus pivotal to South Australia s interstate and international competitiveness. National Parks are also the key tourism attractions driving visitors to regional areas. Additionally, international visitors who visit National Parks are a high yield market segment, who stay longer and spend more than other international visitors. 7 International Visitation 2006 State Total Nature-based National Park % Visitors Visitors Visitors % NT 372, ,038 93% 323,671 87% TAS 151, ,694 86% 109,381 72% SA 364, ,167 79% 239,960 66% ACT 153, ,879 79% 97,718 63% QLD 2,181,179 1,660,244 76% 1,237,260 57% WA 624, ,828 73% 350,925 56% NSW 2,784,825 1,999,614 72% 1,479,038 53% VIC 1,448,287 1,032,727 71% 763,190 53% In 2007 TTF released the Natural Tourism Partnerships Action Plan to create publicprivate partnerships for NBT and conservation in National Parks, which make an environmental and economic contribution to both the natural estate and regional communities. This research and analysis by TTF demonstrates the growing international and domestic demand for nature-based tourism experiences. However, increased international competitiveness and changing consumer preferences mean significant innovation in nature-based tourism product is needed to maintain and grow this valuable tourism market segment. The critical barrier to achieving increased sustainable nature-based tourism visitor numbers and expenditure is a lack of investment in: visitor infrastructure, 6 Tourism Research Australia, International Visitor Survey, TTF, Natural Tourism Partnerships Action Plan, Sydney July

10 attractions, innovative accommodation and competitive experiences in, or adjacent to, the State s Parks. 8 Park Infrastructure To address these barriers in South Australia, the Department for Environment and Heritage (DEH) needs to invest in basic park visitor infrastructure such as roads, power, water, sewerage, car parks and visitor gateways. This infrastructure investment is needed to trigger further public-private investment in value-added attractions and experiences such as: canopy walks, walking / mountain bike / 4WD trails, hospitality and retail experiences, eco-lodges and safari camps. RECOMMENDATION DEH and SATC should identify a priority list of park visitor infrastructure projects and DEH should be provided with an enhanced capital works budget to deliver the infrastructure projects over TTF believes that the private sector should work in partnership with government to fund, develop and operate nature-based tourism attractions in parks and adjacent Crown land. As well as a lack of basic park visitor infrastructure, current planning and approval processes are a significant barrier to private investment in value-added nature-based tourism attractions and experiences What should this State do to attract private investment? TTF believes that South Australia should make investment opportunities more attractive to private investment in two ways: by partnering with the private sector to develop tourism attractions in National parks and by packaging investment opportunities for investors. Landbank TTF believes that South Australia should work in partnership with the private sector to fund, develop and operate nature-based tourism attractions in parks and adjacent crown land. There is currently a lack of basic park visitor infrastructure and the planning and approval processes are a significant barrier to private investment in value-added naturebased tourism attractions and experiences. 10 To address these issues the Western Australian Government has introduced the Landbank Initiative, which TTF considers to be best practise policy for nature-based tourism development. Under this initiative Crown land sites are assessed for tourism and environmental suitability and identified sites are brought to the investor market in a 8 TTF Australia, Natural Tourism Partnerships Action Plan, Sydney July TTF Australia, Natural Tourism Partnerships Action Plan, Sydney July TTF Australia, Natural Tourism Partnerships Action Plan, Sydney July

11 predictable pipeline of pre-approved opportunities. The WA Landbank Initiative has cost an average of $230,000 per site. This budget funding has already attracted significant new investment, likely to be in excess of $120 million. TTF recommends the establishment of a South Australian Landbank to drive private investment in the State s Parks. The revenue returns from increased investment in National Park attractions should be fully hypothecated to the SA Park System to improve community acceptance of on-park development by funding the delivery of conservation objectives in National Parks. RECOMMENDATION SATC, DEH and other relevant agencies managing Crown land should implement a SA Landbank, supported by budget funding of $2.3 million over four years to release 10 sites by DEH is a major owner and effective operator of nature-based tourism experiences in South Australia but lacks the funding to develop and market innovative nature-based tourism product such as audio guides to walking trails, improved signage and interpretation in parks and long stay conservation volunteer experiences. As a result, the significant Government investment in conserving the State s Parks is not being realised in high yield, low impact tourism niche markets such as bird watching. RECOMMENDATION Nature based tourism in SA Parks should be enhanced by: SATC receiving program funding of $2 million over three years to provide grants for nature-based tourism product development projects by DEH or licensed park operator applicants. DEH to receive additional budget funding to upgrade their website to provide easy access to niche market experiences in National Parks, such as bird watching, and seamless connection with the Tourism Australia and Tourism NSW websites. SATC and DEH receiving an additional $1 million over three years to market SA Park visitor experiences. 3. How can the planning and policy regimes better facilitate investment? There are a number of planning and policy initiatives in the area of taxation that could be amended to facilitate better investment and growth across the tourism industry. Currently policy surrounding Payroll Tax, Land Tax and Stamp Duty disproportionately burdens the tourism industry in South Australia and dissuades investment. 10

12 Accommodation According to the latest ABS statistics 11, supply of accommodation in South Australia is contracting, and Revenue per Available Room (RevPAR) has grown strongly over the last year (by nearly 10%). Average room rates (ARR) have also shown growth in the year to December 2007 of around 5.8%. Occupancy rates in Adelaide have continued to climb, and now sit near the notionally full mark of 80%, at 78.8%. Adelaide hotels recorded a strong growth in yield of 12.4% in the December 2007 quarter, and full year yields recorded above forecast yields of 9.9%. Performance over the last two years has seen strong RevPAR growth, and the State is in a strong position to benefit from the ongoing resources boom in Western Australia and Queensland. An improvement in the economy will underpin already strong performance, and high yield and RevPAR is likely to drive new hotel investment. Significant concerns remain, however, regarding the ability of developers to access funding due to global constraints. Projects that offer lower risk in more established markets, in a mixed-use development, and with an agreeable management agreement will likely be progressed in the current environment over riskier development propositions. The proposed development of two new Adelaide hotels will add approximately 435 new rooms to the accommodation market in 2009, an increase in city room numbers of 10.8%. These developments will likely be absorbed without flooding the market, however, further hotel openings in the city must be staggered to ensure a continued smooth investment cycle. Reform of the SA Planning Regime The review into the South Australian planning system which is currently underway provides an ideal opportunity for the government to examine innovative ways to improve the system. Whilst significant improvements have been made to the system since 1993, there remains significant scope to streamline planning arrangements to facilitate greater investment in tourism. The ability to declare Major Developments is an important feature of the SA system, providing communities with an opportunity to have their say whilst ensuring significant development applications are accorded the consideration they need. However, further clarification of the major development declaration criteria will prove beneficial for investment proponents by providing certainty in decision making. The unclear criteria by which the Minister can enact a Section 46 assessment of the development proposal undermines the confidence of investors who often need more than an estimation of necessity to ensure enough confidence to trigger serious investment decisions. 11 Australian Bureau of Statistics 11

13 Finally, TTF recommends that consideration be given to the streamlining of minor development applications, such as residential improvements, through the introduction of certified compliant development. The removal of minor and trivial development applications from the planning assessment system will benefit all users of the system, ensuring a greater capacity of planning officials to properly assess significant, innovative or costly tourism-related developments. RECOMMENDATION That the planning system is reformed to ensure a streamlined approvals process for minor amendments, and that consideration is given to clarifying the Minister s powers with respect to Major Development declarations. Nature-Based Tourism and the Planning Regime Further, TTF believes that the private sector should work in partnership with government to fund, develop and operate nature-based tourism attractions in parks and adjacent crown land. As well as a lack of basic park visitor infrastructure, current planning and approval processes are a significant barrier to private investment in value-added naturebased tourism attractions and experiences. To address these issues the Western Australian Government has introduced the Landbank Initiative, which TTF Australia considers to be best practise policy for naturebased tourism development. Under this initiative crown land sites are assessed for tourism and environmental suitability and identified sites are brought to the investor market in a predictable pipeline of pre-approved opportunities. The WA Landbank Initiative has cost an average of $230,000 per site. This budget funding has already attracted significant new investment, likely to be in excess of $120 million. TTF recommends the establishment of a South Australian Landbank to drive private investment in the State s Parks. The revenue returns from increased investment in National Park attractions should be fully hypothecated to the SA Park System to improve community acceptance of on-park development by funding the delivery of conservation objectives in National Parks. RECOMMENDATION That a South Australian Landbank is established to drive investment is sustainable park tourism product, and that funds raised through the Landbank are hypothecated to the park system. 12

14 4. What top three SA holidays experiences will appeal most to high-yield consumers? Kangaroo Island Kangaroo Island is Australia is one the State s key attractions providing world class nature based and eco-tourism experiences and receiving over 178,000 visitors per year of which approximately 30 per cent are international visitors. 12 Eco-tourism is a fast growing holiday experience with destinations currently attracting about 15% of the world tourism market. 13 The Island is largely covered by national and conservation parks (approximately 30%) which make it ideal as a nature-based and eco tourism destination. Eco tourists usually come from households that have higher than average household income thereby have more expendable income to spend. A survey of consumers to Kangaroo Island revealed the island already appeals the to high yield market. The Southern Ocean Lodge development on the Island is a good example of an ecotourism attraction. Opened in March 2008, the lodge offers luxury accommodation to travellers looking for a nature-based holiday experience. Projects such as these can enhance tourism products already on offer, target fast growing markets and lift brand image, however, due to the sometimes remote locations of these developments, support in regards to areas such as funding and infrastructure maybe required. RECOMMENDATION Funding should be enhanced for tourism products that support private investment in high yield tourism attractions. Wine Tourism Wine tourism is associated with cellar door wineries and all business that are involved in tourism activities within a wine region for example accommodation, restaurants, tour operators and gift shops. Domestic wine tourism in South Australia is stronger than in any other Australian state. It currently attracts more overnight interstate winery visitors (238,000) than any other State Tourism Optimisation Management Model 13 SATC Newsletter, 14 SATC 2006/2007 Tourism Research Fact Sheet Wine Tourism, 13

15 Wine is a growing industry market with competition coming from NSW which receives the highest number of international visitors and Victoria which has the largest number of cellar door facilities. In 2004 domestic wine tourists spent $2.4 billion across Australia on accommodation, takeaways, meals, restaurants, and shopping. 15 In 2006 in the Barossa alone, spending by domestic overnight visitors was approximately $92 million with $167 per person per night spent. 16 Wine tourists are a high yield market due to the fact they are more likely to be 25 to 44 years old and in a relationship with no children. In SA, 85% of visitors to the State s wine regions were employed in professional occupations, while a further 39% were white collar workers. 17 They are more likely to have a higher expendable income. From , 44% of visitor to the Barossa were couples. 18 This market is still growing and there are many opportunities for further development and investment which would boost the wine tourism sector. RECOMMENDATION That SATC continues to support wine tourism within the State and develop strategies with the private sector for further development. 5. What projects are needed to help make SA more appealing? The development of iconic attractions will help to make SA more appealing. The definition of what is iconic in a tourism sense is based on the perception of the visitor and what they believe is unique to an area. Three projects that could be unique to SA are the development of an iconic hotel, the construction of an iconic viewing platform in Adelaide and the development of more New Zealand style lodge accommodation. Iconic Hotels The development of iconic accommodation is already underway in SA. The Southern Ocean Lodge on Kangaroo Island is an innovation in accommodation on the Island. The Lodge defines itself as a sanctuary of comfort, style and personal intimacy. The lodge provides an eco friendly tourism experience with 21 st century modern luxury. It is also the only accommodation of this type on the island making it unique. RECOMMENDATION That the SATC support the further development of iconic hotels in Adelaide and relevant areas. 15 Tourism Australia, Wine Tourism In Australia, 16 SATC, Regional Tourism Profile RegionalProfiles/PDFDocument/Barossa_Profile061.pdf 17 SATC, Wine Tourism in South Australia, 18 SATC, Regional Tourism Profile RegionalProfiles/PDFDocument/Barossa_Profile061.pdf 14

16 Viewing Platform A viewing platform or observation deck in Adelaide would provide an appealing drawcard to the City. Similar to other capital cities around the world, viewing platforms can create a distinctive city icon and provide an interesting attraction for tourists. Iconic viewing platforms, similar to Sydney Tower, offer opportunities to create a distinctive skyline, shopping and accommodation prescients. In the United Kingdom, the London Eye on the Thames was meant to be a temporary fixture for the New Millennium celebrations. However, its popularity has seen it become a permanent fixture and iconic landmark. It is currently London s most popular paid for attraction and similar style viewing wheels are being built around the world including in Melbourne and Perth. 19 NZ Style Lodge Accommodation SA would benefit from the development of New Zealand lodge style accommodation to benefit from growing visitor preference for eco- and environmentally-tourism options. International perceptions of New Zealand s 100% Pure campaign are backed by visitor infrastructure allowing experience seekers to become immersed in unique National park places. New Zealand s Department of Conservation manages a range of accommodation options throughout their National park system, including huts, campsites, lodges and cabins. Innovative planning and funding options offer a range development opportunities to increase visitation to South Australia s park system, improve and develop much-needed visitor infrastructure, and significantly increase international visitor yield. City of Adelaide As South Australia s capital city, Adelaide is the centre of business and also the first entry point for many visitors to the State. In December 2007, Adelaide received 336,000 visitors compared with 139,000 visitors to regional SA. 20 As South Australia s hub, appearance and perception are important for Adelaide reputation overseas and interstate. The City of Adelaide and (and surrounding municipal councils) need to become joint product champions with the SATC to make Adelaide a place where visitors feel welcome. The current ad hoc approach and in some cases lack of attention to tourism products in the City leaves visitors feeling confused. 19 London Eye, 20 Tourism Research Australia, 15

17 One area of the CBD that would benefit from a co-operative approach is the centrally located North Terrace which houses the Adelaide Convention Centre and many of the city s hotels making it a key tourism area within the City. A clear vision is required by the City of Adelaide for development of North Terrace and Victoria Square that takes tourism needs into consideration. Infrastructure is also important. Venue availability, accommodation and ease of travelling around a city key are infrastructure concerns for SA. For example, Adelaide Convention Centre is currently unable to host large conventions due to capacity issues in the convention centre. Adelaide already has many attributes that make it a desirable place to visit and host events. The challenge ahead is for the future management of the perception of the city outside SA. 6. How important is Green tourism now and in the future? And can SA gain a competitive advantage in this area? Green tourism now and into the future will be very important to South Australia and Australia as a whole. South Australia s unique environmental assets are the foundation of the South Australia tourism industry. Kangaroo Island is one of Australia s greatest pristine eco-systems and a haven for many species of wildlife including kangaroos, wallabies, possums, frogs, bandicoots, koalas, platypus, sea-lions and fur-seals. National parks in SA have a comparative advantage for international visitors. The Costs of Climate Change to Tourism Climate change will have a direct impact on South Australian tourism and the economic benefits that tourism generates. This will be the result of the loss or degradation of tourist attractions as a result of climate change as well as the costs of adaptation and the replacement costs for capital infrastructure. SA s tourism industry is particularly vulnerable to the impacts of climate change because it relies heavily on nature-based tourism. As such, South Australia along with the rest of Australia is likely to be a net loser in the changing patterns of international tourism as a result of climate change. The economic costs to South Australia of climate change can be estimated by identifying those tourist attractions that may be at risk from climate change, projecting impacts on visitor flows and modelling the costs to the economy as a result of reduced international tourism. 16

18 Climate Change Policies and Impacts on Tourism Tourism will likely be affected by the three main Australian Government policies aimed at reducing climate change: mandatory restrictions on greenhouse gas emissions, carbon taxes and the emission trading schemes. Few tourism firms, except airlines, are likely to participate in emission trading schemes. As a result, whilst most tourism firms will not receive free or discounted permits, they will still encounter input cost increases depending on how much of the permit value is passed on to the tourism firms by their suppliers. As a result, the cost base of domestic tourism will increase. However, modelling is needed to determine the extent of this increase. Since tourism is a footloose export industry, tourism will likely shift offshore as a result of the emission trading scheme depending on the extent to which emission trading schemes are introduced in other countries. The special arrangements which have been created for certain other industries do not cater to the tourism industry very well. The costs and benefits of alternative arrangements need to be determined. High carbon prices (such as over $50 per tonne) have the potential to raise the cost of international flights to Australia by between 6 23%, depending upon the route. High carbon prices would likely lead to the total cost of a trip to Australia rising by between 4 17%, depending on the route. The effect of carbon taxes on tourism flows will be determined by the level of carbon taxes, the extent of air fare increase and the price elasticity of demand for tourism. Changes in Australia s climate are unavoidable, presenting a significant threat to our biodiversity. The Commonwealth Scientific and Industrial Research Organisation (CSIRO) projects increased average surface temperatures for Australia by 2020 at: 0.1ºC and 1.0ºC for regions within 400kms of the coast; and 0.2ºC and 1.3ºC for regions further inland. This is an alarming projection given that the adaptive capacity of Australia s biodiversity is limited beyond 1.0ºC CSIRO (2007) also refer IPCC AR4 which found that between 20 to 30 per cent of plant and animal species are likely to be at increased risk of extinction with global warming of only 1.5ºC to 2.5ºC. The UNWTO (2007 unpublished) note that endemic species however are highly sensitive to change and therefore more vulnerable. 17

19 Typically countries with plentiful natural resources will have a comparative advantage in products using those resources. 22 The vulnerability of the tourism sector will therefore have significant consequences for the Australian economy. Over 94 per cent of TTF Members polled in last year perceived climate change as a threat to their business. Research by the Centre for Tourism Economics and Policy Research (CTEPR) demonstrates that a fall in tourism s contribution to economic activity due to climate change will result in a permanent cost to the Australian economy. South Australian Advantage South Australia can gain a competitive advantage in three ways: Supporting TTF s policy for an integrated whole-of-government approach to climate change; Devising strategies to address critical knowledge gaps; and Developing an education and marketing plan. Integrated whole-of-government approach TTF supports the need to build understanding and adaptive capacity as a key priority. Several strategies under this priority area have been recommended with decision-makers, sectors and end-users in mind. 23 Given the vulnerability of tourism and its economic impact, it is important that our sector is given special consideration in the development of these strategies. 24 TTF recommends development of these strategies ensuring that tourism is appropriately considered and in doing so, avoids any potential for duplication in the development of tourism s action plan. 25 This principle should also apply to reducing sectoral and regional vulnerability. Several sectors, other than tourism, have been identified under this priority area and will be developing their own actions. 26 Since these sectors indirectly impact tourism, the tourism sector must be involved in their development. Importantly, information should flow backwards and forwards between sectoral plans. 22 See Ricardo (1817) on the benefits of specialisation and international trade, and Crouch and Ritchie (2000) on the inherent connection between destination competitiveness and sustainability. 23 These strategies include establishing an Australian centre for climate change adaptation, improving regional climate change and vulnerability information, integrating regional vulnerability assessments and disseminating communication, information and tools. 24 For example, analysis of social/economic data and trends (see NCCAF 1.2a), social/economic costs of regional climate change (see NCCAF 1.2b) as well as proposed integrated assessments (see NCCAF 1.3a) should take into account impacts on tourism. 25 For example, if a national one-stop-shop website on climate change is established, the TMC should consider its implications for the development of a tourism specific web-site on climate change, as has been suggested. 26 Sectors other than tourism identified in the NCCAF include water resources, coastal regions, biodiversity, agriculture, fishing and forestry, human health, settlements, infrastructure and planning and natural disaster management. 18

20 RECOMMENDATION The Australian Government and TTF s Natural Tourism Partnerships Action Plan is a good example of how the tourism sector can add value to actions for biodiversity. Strategies to address critical knowledge gaps Tourism research is essential for the long run sustainability of the South Australian tourism industry and in addressing the knowledge gap that currently exists on climate change. RECOMMENDATION TTF strongly supports the need for further research into climate change and tourism and recommends further research and development in the following areas: Estimating tourism s Greenhouse Gas Emissions; Understanding the affect of climate change on visitor preferences, and its impact on Australian tourism; Evaluating the impacts of climate change policy on Australian tourism; Determining the vulnerability of Australia as a tourist destination and developing adaptation strategies; and Identifying best practice mitigation strategies, technologies and offset schemes. Develop an education and marketing plan RECOMENDATION Education of tourists and tourism operators: Develop an education campaign promoting environmentally responsible business practices for both domestic and international tourists as well as operators. Support the development of an Australian tourism industry carbon offset scheme. 27 Raise awareness and educate tourists on responsible tourism. Develop a best practice guide on responsible tourism for businesses across all sectors. 27 Such a scheme could include the purchase of land to expand national parks as recommended by the Natural Tourism Partnerships Initiative (NTPI). 19

21 RECOMMENDATION Marketing: Develop and implement a marketing strategy for South Australia, positioning the State as environmentally conscious and highlight the State's nature based experiences. Build and sustain co-operative alliances with local and international industry associations, environmental groups and scientific and educational institutions, to develop better communication and joint initiatives. 28 Support the development of a unified brand for the proposed Australian tourism industry carbon offset scheme to be used in the marketing of Australia as a tourism destination. 29 General Comments: Caravan and Camper Registrations The caravan and camping industry is one of Australia s fastest growing tourism markets. Caravan and camping has traditionally been one of the great Australian family holidays due to the location of parks, family-focused environment and the affordable nature of these types of holidays. The caravan and camping sectors are also important to the SA tourism industry and rural and regional SA. The most popular activity for both international and domestic caravan and camping visitors is eating out at restaurants and cafes while 88% of international visitors will shop for pleasure. Caravan and camping tourists spent $6.5 billion within Australia during Caravan and campers will also spend longer at a destination than other tourists. 30 According to Tourism Research Australia, the caravan and camping industry is one of the fastest growing tourism markets across Australia Through representation on the UNTWO, TTF has significant capacity to coordinate this. 29 Ensure the proposed scheme is targeted at inbound tourists enabling them to a) calculate the offsets necessary for a carbon neutral holiday in Australia; and b) pay into a government fund, on a voluntary basis, to offset the carbon cost of their holiday. 30 TA Snapshot Tourism Research Australia, A profile of travellers who used caravan or camping accommodation in Australia in 2003/04 p. 5, 20

22 Currently in SA the cost to register a caravan is in excess of the neighbouring states of Victoria and Western Australia. Below are some comparisons of registration costs for particular caravan types and brands: Jayco Sterling Registration Ultimate Off-Road Camper Registration VIC $48.80 VIC $48.80 SA $99.00 SA $99.00 WA $ WA $62.79 Windsor Rapid Registration Concept Pop Top Registration VIC $48.80 VIC $48.80 SA $99.00 SA $99.00 WA $75.41 WA $74.40 *Data provided by CCIA (NSW) State Comparison - Average $ $80.00 $60.00 $40.00 $20.00 $0.00 VIC SA WA Registration costs in SA are disadvantaging consumers by increasing the cost of maintaining caravan and campers within SA. RECOMMENDATION TTF recommends that caravan and camper registrations be brought in line with neighbouring states. 21

23 TOPIC 2: AVIATION/ACCESS 1. What is the overall challenge for access to and within SA? TTF Australia has identified four key factors in relation to access to and within South Australia including: maintaining unrestricted international air service arrangements; ensuring airport infrastructure growth; removing barriers to entry including stamp duty on airline insurance; and providing efficient passenger processing at the border. Maintaining unrestricted international air service arrangements Aviation access to Adelaide is critical in driving visitation to the state. Under the respective international air service bilateral agreements that provide for what is commonly referred to as the regional package, foreign international airlines enjoy unrestricted access to Adelaide. The Australian aviation industry has experienced record traffic levels in recent years and is operating at high load factors. Adelaide has capitalised on these trends with growth in international passenger arrivals outstripping the national average over the past 10 years. International airline operations increased an average of 7.9% per annum compared to the national average of 4.9%. In 2008, Adelaide airport serviced 28 international flights arriving each week up from 13 in Maintaining unrestricted international air service arrangements for Adelaide going forward, should remain a priority for the SA Government. Ensuring airport infrastructure growth Adelaide Airport has been outstanding in catering for air services growth and investing in airport infrastructure. This has been most notably demonstrated by the development of Adelaide Airport s State-of-the-art multi-user terminal (T1) at a total cost of over $260 million. Adelaide Airport plans to invest a massive $1.2 billion over the next 20 years. 22

24 In a recent study TTF estimated that each million dollars of capital expenditure at airports generates around: $3.5 million of gross output; $1.47 million of value added; and $0.8 million of wage and salary income to Australian workers. Adelaide Airport s $1.2 billion planned investment will therefore translate into over: $4.2 billion of gross output; $1.76 billion of value added; and $0.96 billion of wage and salary income to Australian workers. This is a significant economic contribution. The impact of this investment will also result in positive spillovers. TTF report estimates that the benefits of Adelaide Airport s forecast capital expenditure will typically spread across more than 109 industries, tourism included. This makes Adelaide Airport an important driver of the SA economy. Adelaide Airport has identified a wide range of aeronautical and non-aeronautical uses for the site as well as other developments off the Airport. The tourism industry has a heightened awareness of the effects of a highly volatile and risk prone aviation industry following events such as the collapse of Ansett, September 11, SARS and the ongoing war against terrorism. TTF Australia therefore considers both aeronautical and non-aeronautical uses at the Airport site to be vital in ensuring Adelaide Airport s growth in the future. Notwithstanding the economic multipliers associated with the planned investments at Adelaide Airport, growth in air services will also have significant economic benefits. TTF estimates the growth of air services at airports generates around: $4.7 billion of gross output; $2.15 billion of value added; and $1.18 billion of wage and salary income to 24,000 workers for each $1.7 billion in annual growth. Adelaide Airport s growth will therefore translate into more capacity, efficiency gains, and benefits for the entire community including visiting tourists and international travellers. 23