By Sasha Lennon and Roger Gibbins
Many of Australia’s tourism icons are located in regional Australia and the visitor economy is a pillar of regional economic activity. Australia’s tourism industry continues to grow as new visitor markets emerge. In regional Australia, the visitor economy is on an upward trajectory, with the total number of visitors increasing on average by 3.4 per cent per annum over the past five years.
While this is good news for Australia’s regions, it begs the question, how can they capture a fair share of Australia’s growing visitor economy and, more importantly, how can they grab a bigger slice of the pie? The answer lies in the design and implementation of considered strategies which focus on the enablers of a vibrant visitor economy.
AUSTRALIA’S VISITOR ECONOMY – THE SIZE OF THE PIE
Australia’s tourism industry employs almost 925,000 people directly and indirectly, accounting for 8 per cent of Australia’s total employment.
The size of Australia’s tourism pie is growing, and international visitor trends suggest this will continue into the foreseeable future, with the emergence of new markets, particularly in Asia where the Indian, Malaysian and Chinese middle-class is driving much of the industry’s income growth. In response, international airlines have expanded their flight capacity to and from Australia on key Asian routes, which has allowed more visitors to come to Australia.
Over the past five years or more, historically cheap international airfares and a weaker Australian dollar have driven strong growth in inbound visitor numbers. Transport providers, retailers, accommodation providers, hospitality firms and other tourism players have all benefited from increased activity and spending from international visitors.
Tourism industry revenue growth has also been assisted by the Tourism 2020 program, which is a Federal Government strategy to improve tourism infrastructure and allow industry players to capitalise on rising demand for Australian tourism. According to IBISWorld, over the five years through to 2024, Australia’s tourism industry revenue is expected to increase by an annualised 2.8% to total over $154.3 billion.
While international tourism represents the fastest growing market for industry operators, domestic tourism still accounts for over 70% of Australia’s tourism industry revenue, and for many parts of regional Australia, the real opportunity to grow the local visitor economy lies in the potential for greater domestic visitation.
Domestic visitation to regional Australia increased by 4.6% per annum over the five-year period to 2017 and 62% of all visitors to regional Australia are domestic day-trippers. According to Tourism Australia, Australian tourism isn’t just about capital city tourism because many Australian icons and
‘bucket-list’ spots are located throughout the regions.
The ‘grey nomad’ drive tourism phenomenon is providing new income opportunities for many regions throughout Australia, which are taking full advantage of the growth in demand for drive tourism experiences by promoting touring routes and associated activities such as camping, ‘glamping’, food and wine tours and walking, and providing the facilities and services that visitors seek.
Key measures of success for regional Australia’s drive tourism market include the number of tourists embarking on self-drive journeys, the length of their journeys, the time they spend in particular places and the amount of money they spend. This market is expected to experience significant growth due to Australia’s ageing population and a corresponding increase in retirees who travel around Australia.
However, grey nomads are not the only ones driving demand for visitor experiences in regional Australia. With millennials being the next wave of travellers, demand for travel experiences that resonate on a deeper emotional level is also driving travel brands to develop product that is more adventurous, more personalised, and more attuned to local culture, inspiring consumers toward a path of self-discovery. Regional Australia is well-placed to capitalise on this trend.
So the race is on! Nationally, the tourism pie is growing, and Australia’s regions are well-placed to share in this growth. But with competition for the tourism pie being fierce, regions need to carefully consider what to do to ensure they don’t miss out. This takes us back to the enablers of a vibrant visitor economy.
HOW TO GRAB A BIGGER SLICE OF AUSTRALIA’S TOURISM PIE
Tourism Australia sets out a holistic process for preparing a Destination Management Plan for a region. Such a plan (or alternatively, a ‘Tourism Strategy’) may be framed around what we term the ‘enablers of a vibrant visitor economy’.
These enablers refer to the things that local and regional Councils, in concert with tourism organisations and other key stakeholders, including regional development organisations, may take strategic actions to influence key economic development outcomes.
Figure 2. The Enablers of a Vibrant Visitor Economy
1. A Conducive Environment: In order to attract and hold visitors there are three aspects of the environment that must be attended to:
- The natural environment must be as close to pristine as possible with appropriate management of all aspects of land, air and water – and habitats for flora and fauna;
- The built environment must be attractive and safe (i.e. liveable) and based on the principles of ecologically sustainable development; and
- The social / cultural environment must provide for educational, recreation, leisure, wellbeing and artistic pursuits, and efforts to promote a region’s social and cultural heritage must authentic.
2. Quality Infrastructure and Services
These include both private and public sector items that are essential for accommodating, entertaining, informing and transporting visitors. There are five aspects that must be attended to:
- Entertainment and cultural attractions (both natural and built) catering for a wide variety of needs;
- Hospitality services,which must be of the highest order to be competitive;
- The quality of accommodation and ‘value for money’;
- Events, which are the key to promoting a region and cultural diversity, attracting visitors who may not otherwise come; and
- Transport by road (including cycling), water, rail and air and reliable modern communications, particularly given the generally-held expectation of the 21st Century tourist that they be connected to the world 24/7.
3. Effective Information Management
With a conducive environment and quality infrastructure and services provided, the region concerned has something to offer to the visitor market, and this will need to be effectively promoted. There are four aspects that must be attended to:
- Research is an essential aspect of business development that is best carried out centrally. Up-to-date data on visitor preferences, wants and needs is essential in delivering appropriate services;
- Marketing must be directed at the relevant market segments in an effective way using the full range of media available, including, importantly, social media;
- Visitor Information must be readily available to prospective and ‘captured’ visitors to ensure they are able to access all of the attractions and experiences on offer that suit their needs; and
- Wayfinding is an important aspect that facilitates access to attractions and experiences.
4. Collaborative Governance
This is the glue that binds it all together. There are four aspects that must be attended to:
- Stakeholder co-ordination is normally a key public sector function that can assist stakeholders (public and private sector) to work together for mutual benefit;
- Business support is required, particularly for small to medium-sized businesses that make up the bulk of visitor service providers;
- Training is an important aspect of business support and it also enables greater workforce participation; and
- Investment attraction is a key aspect of enhancing the quality and range of attractions and services that can be targeted and this is most effective when undertaken in a strategic, informed and collaborative fashion.
By focusing on these ‘enablers’, action plans can be developed that are relevant and effective, resulting in sustainable growth in the regional visitor economy.
- Australian Regional Tourism Network (2018), Guide to Best Practice Destination Management
- IBISWorld (November 2018), Tourism in Australia
- Tourism Australia (August 2018), Tourism Investment in Regional Australia
- Tourism Australia (December 2011), Tourism 2020
- https://www.austrade.gov.au/Australian/Tourism/Policy-and-Strategy/labour-and-skills viewed 15th February 20149
- http://www.tourisminvestment.com.au/en/investment-opportunities/Regional-Australia.html viewed 15th February 2019
ABOUT THE AUTHORS
Sasha Lennon (B.Ec., Grad. Dip. Advanced Economics, M.Journalism, ACEcD) is a Brisbane-based consultant specialising in the preparation of economic development and tourism strategies. He is the Director of SC Lennon & Associates Pty Ltd. Go to www.sashalennon.com.au.
Roger Gibbins (Grad. Dip. Economics, M.Urban Planning, Dip. Applied Science (Town Planning) is a Melbourne-based consultant specialising in economic impact assessment and business case preparation including for tourism-related projects. He is an Associate with SC Lennon & Associates.