Tourism industry cautiously optimistic of new spending targets but warns Government must commit to spending

The tourism industry has enthusiastically welcomed a new plan from Tourism Australia to double overnight expenditure in the industry to $140 billion by 2020, but says it will require a substantial investment and commitment from the Government.

Tourism Australia set new growth goals yesterday, targeting an increase in the tourism industry’s contribution to GDP from 2.6% to 3% by 2020, along with increasing jobs growth by up to 32%.

The new goals come as a report commissioned by the Government has found demand has slumped over the past decade and industry growth will remain low over the next 10 years.

But Tourism and Transport Forum national policy director Evan Hall says the goals will require a substantial amount of Government coordination, including the possible fast-tracking of building approvals for hotels.

“If we were to double the value of expenditure, that is going to take a massive investment, and right now, we don’t have the flights to sustain it. We certainly don’t have enough expenditure in areas such as convention exhibition space, performance space and hotels.”

“The potential for demand is there, certainly, but it requires a massive investment, and especially in the hotels area where there isn’t enough room here to accommodate that sort of demand.”

Tourism Australia yesterday announced the new strategy, which will aim to double “overnight” expenditure to $140 billion by 2010. Managing director Andrew McEvoy says the strategy is designed to simply grow the amount of tourists reaching Australian shores.

“The industry, in the last decade, has really underperformed and lost market share. Now, there are a lot of reasons for that, but Australia hasn’t done as well as it could, or should, and we need to make it more competitive.”

“The industry really needs to get behind this to move forward on these plans, and spending in key areas like infrastructure needs to be emphasised.”

The plan was launched yesterday by Tourism Australia, in conjunction with tourism minister Martin Ferguson, who said Australia has managed to wade through the financial crisis with a stronger tourism industry than most nations, but more work is needed.

“Australia has successfully negotiated a difficult trading environment, and now emerges in a stronger position than many of our rival destinations,” he said.

In response, minister Ferguson says progress has already been made on certain projects, and says the skills shortage is a “first order priority” for the Government.

“The Australian Government is supporting skills development through a range of key initiatives including the roll out of Trade Training Centres and the National Trade Cadetship initiative,” he says.

Tourism Australia says the strategy will increase the industry’s contribution to GDP from 2.6% to 3%, and increase tax revenues from tourism to $14.5 billion from $9.3 billion. It also wants to see day trip expenditure increased to $160 million.

Tax revenues under the plan will hopefully increase to $14.5 billion, net exports will grow to $6.7 billion, and growth in aviation capacity is being targeted at between 40-50% for international flights and between 23-30% for domestic.

The group also targets up to 70,000 new hotel rooms, three-quarters of which will need to remain occupied. Hall says the targets give the industry and Government a common goal to work towards.

“The industry has been asking Government for a long time to work towards an agreed target, and this has massive implications.”

“This means Governments can work on bilateral agreements and so on, it means they can work on 50,000 hotel rooms and such. There is a huge role for Government here in regulating investment so we can get the infrastructure we need.”

But Hall says spurring Government into action can often become a problem.

“The problem is that the Tourism Minster is very happy to support this kind of thing, but hotels need approval and so on, and we need the Government to propose more visitor facilities in certain areas.”

Hall points out hotels can take many years to be approved, and McEvoy agrees, saying the Government needs to invest in making approvals as easy as possible.

“Another big problem in infrastructure is investment. We need tens of thousands of new hotel beds in Australia, and we need to get moving on those.”

Ferguson says in response that the Government should not be about “intervention or fast-tracking leading to short-cuts…this is about establishing the right environment for hotel developments to compete”.

McEvoy also says the other major problem is “labor and skills”.

“I believe this is the most important challenge and that is where Government can really assist. This investment is going to require a lot of new skills,” he says.

Ferguson says the Government will work to develop a skills development strategy to assist the tourism and hospitality sectors.

The tourism industry has suffered two major problems over the last few years – declining tourist numbers and a severe skills shortage. The hospitality industry, closely linked with the tourism industry, has also suffered. McEvoy says more training is needed for younger workers.

“I think the state governments are doing some good things around training. We do have good programs like the working holiday visas, but we also need to provide short-term labour for areas that need it in peak times,” he says.

“I think we do need some critical investment in areas like infrastructure and training, especially for occupations such as chefs and so on. That will be important.”