The tourism industry currently employs over 37,500 South Australians in direct jobs and many more in indirect employment. In March 2017 tourism was worth $6.3 billion to the South Australian Economy.
The South Australian Government has set a goal to grow our visitor economy to $8 billion and 41,000 jobs by 2020. Tourism has been identified as one of the top 5 key economic growth areas. It is a great employer and jobs can be created quickly, the more the State is marketed the more visitors we get and the more jobs we create. It is a sustainable industry that will always need people to work in it.
Tourism matters because much of the economic benefit it brings to the state flows to regional communities, regions are only 22% of the population but provide 42% of the income. The visitor economy has a positive flow on impact on other industries such as agriculture, wine, retail, education, real estate and transport.
Now is not the time for complacency we need to unlock our full economic potential in the visitor economy. We are on the cusp of amazing growth.
We can unlock that potential with the following key policies:
1. Tourism Cabinet Committee
Chaired by the Minister of Tourism and attended by the Premier, the Treasurer the Ministers for the Environment, Small Business, Transport and Infrastructure and Regions. The tourism committee to meet monthly and to work together for the whole of the visitor economy and no longer work in silos. The tourism cabinet committee should work together to reduce bureaucracy and deliver better outcomes faster.
2. Annual Forum
The current tourism agenda does not go beyond 2020.
The tourism cabinet committee in cooperation with the South Australian Tourism Industry Council should hold an annual forum with key tourism associations and the rest of the visitor economy including but not restricted to the Australian Tourism Export Council SA, Australian Hotel Association. Restaurant and Caterers Association, Education Adelaide.
This forum will set the agenda for the visitor economy in the short medium and long term. This agenda for growth should be formalised by a partnership agreement between the South Australian Government and the South Australian Tourism Industry Council. This agreement should be transparent, measurable and set clear goals for growth. This agreement to be reported on at the annual forum.
3. The Re-establishment of a Tourism Development Fund
The Tourism Development Support Program (TDSP) fund, decommissioned in 2014 must be reinstituted. This grant funding was critical to ensuring accommodation upgrades, supporting the development of new tourism products and experiences and encouraging the private sector to invest in new and/or existing tourism investment opportunities. It has been identified that South Australia is 20 per cent behind the national average for quality 4-star accommodation in regional areas with an oversupply of dated 2 and 3-star accommodation properties. The State’s occupancy rate is also below the national average with Victoria’s occupancy highest at 68.7 per cent and South Australia seventh at 61.6 per cent. To reach visitation targets, research has identified that 1,075 rooms need to be upgraded from 3-star or below to 4-star and above, and 1,155 new rooms need to be built in regional South Australia.
The grant funding will speed up the decision-making process by operators to upgrade their rooms and to expand the number of rooms. The reinstatement of the TDSP fund can play a crucial role in ensuring this gap is closed. Closing this gap will drive up yield, assist in achieving expenditure targets for each region and contribute significantly to achieving the $8 billion 2020 tourism expenditure goal and beyond.
$4 million should be allocated from the SA-BEST's Royalties for Region program.
4. Workforce Development (Training and Education)
The Industry Development Program (Service IQ) must be maintained to provide tourism businesses with training and mentoring covering customer service, quality standards and digital marketing.
We must invest in workforce development. We need a highly skilled and passionate workforce who see a career in tourism as a desired choice. Continual investment in building business expertise and capacity so our visitors get amazing experiences and services is fundamental to our State being a destination of choice; and product development, providing new experiences to the ever-changing marketplace are all critical elements.
As the visitor economy grows we need a skilled workforce or our experience delivery will not be maintained. It is vitally important that our visitors receive an exceptional experience and that we encourage people to enter the tourism workforce and provided them with the skills needed.
SA-BEST will ensure that the Government allocates $500,000 annually to partner with the industry to ensure we deliver on the marketing promise.
Both business and leisure have significant impact on hotel occupancy and the accommodation sector in CBD and regional areas. The state government investment of $57.3 million since 2014 in the event bid fund allocated to bring more events, business and leisure to the state has had phenomenal impact and is critically important to the accommodation sector. 54 leisure events have been successfully secured with a potential economic impact of $245 million. Case in point is the impact of the Ashes and the Pacific School games in Adelaide in Dec 2017.
These events resulted in the accommodation industry recording the highest occupancy for the year at 99 per cent on Dec 6, 2017. The average takings for December 2017 was $1.2m up 37 per cent on December 2016 according to STR. An even more telling example is the ICC Cricket World Cup 2015, India versus Pakistan match on Feb 15. Adelaide saw an increase of 56.1% in occupancy, +103.6% in ADR and +217.7% in RevPAR. The overall event resulted in more than 70,000 interstate and international visitors here during the event spending $75 million in South Australia.
According to latest figures from the Adelaide Convention Bureau, the Convention Bid Fund has secured 73 conventions and conferences which will attract around 89,000 visitors to our state. This in turn will generate 437,388 bed nights and an economic benefit of $431 million (Jan 2018). Events like Perfect China with 3000 international delegates, World Routes with 3,000 delegates from major airlines, airports, tourism and aviation businesses and ATE with 2,500 delegates have all been secured through this funding. Business events help fill hotel rooms in non-peak season and are critical to the accommodation sector.
The event bid fund must continue to be funded and we will commit to the Liberal pledge of an additional $5 million over 4 years and recognise the commitment to the regions to establish exciting business and leisure events which increase the length of stays in the region and this is vital to their future economies. This is not only critical to the existing hotels and accommodation providers, but also to future private investment in the State. A healthy occupancy rate will result in investment in new properties as well as the upgrade of existing properties in Adelaide and the regions.
6. Funding for Marketing
Northern Territory announced a $103m package to turbo charge their tourism industry over the next 2 years. By any comparison, be it population, SGP, or the size of the economy the NT is less than a third of the size of South Australia. They recognise the importance of tourism to their economy. Their package will take their marketing budget to something over $50 million per year compared to the South Australian Marketing budget of $36 million. We are competing against the other States and Territories as well as other destinations around the world. Visitors will not come to South Australia unless they know about us.
If SA-BEST is in a position to influence our next Government, one of our conditions will be for an immediate increase of funding for marketing of $15 million per year taking the marketing budget to $51 million per year. This will be specifically for marketing and not for any other purpose.