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Attracting international tourists

The Good Oil by Rod Brown *

International tourism is a particularly important segment of the tourism industry, not just because there are almost five million overseas visitors arriving here each year, spending $11.5 billion (excluding airfares). We tend to forget that most foreign tourists return home as quiet ambassadors for Australia, with a heightened appreciation of our society, culture and general way of life. It softens the stereotypes put about in the international press about us as beer swilling racists, dodging crocodiles and sharks.

It is interesting to reflect on who visits our shores. The Kiwis are the most numerous (18% of the total) with well trodden paths to Sydney and the Gold Coast.

The Brits (14%), Japanese (1 %) and the Americans (9%) are the other main sources, and they comprise a complex set of niche markets – backpackers, packaged tours, family reunions, combined business-pleasure trips and so forth.

USA visitation actually continues to grow strongly, which is surprising given the tendency of US citizens to stay closer to home in troubled times – the so called cocoon effect.

And then there’s the intrepid travellers – the Germans, Nordics and Canadians – who love to hit the outback. All this is good news in the light of factors working against the industry, such as the lingering fears about SARS, the cost of aviation fuel, Iraq and security issues.

OVERSEAS VISITOR ARRIVALS IN AUSTRALIA, 2003

But what are the big issues for the future? How can we entice more international tourists? Joe Hockey’s Tourism White Paper (2003) provides a good walk through the issues, but I wanted the hot goss for readers of Local Government FOCUS. So I rang a good mate with years of experience in tourism policy. His reply was typically to the point. “Three things – industry accreditation, sustainable tourism and the Chinese!” he said. “Please explain,” I replied.

Well, on the first point, it seems that industry accreditation in terms of training and the quality of tourism accommodation and services is the big issue. While everyone agrees that getting a nationally consistent accreditation system is a good thing, my subsequent investigations suggest that there is a bit of patch protection holding things back.

This must be addressed if we are to get our tourism industry onto a truly world footing. On the second point – sustainable tourism – the big issue is how to reconcile and manage tourist access to national parks and protected areas.

This includes the upgrading of infrastructure, signage, visitor information and so forth. At this point I asked my colleague which region does this best, given that his job ensures that he sees all of Australia. While carefully avoiding those who fail the test, he offered up the south west of Western Australia, around Margaret River, as an outstanding example of getting it all together.

He explained that their agenda was kick started years ago when some smart operators, mainly out of Perth, moved there and developed world class wineries and tourism accommodation.

The Horgan family rings a bell with me, but this is probably doing a major disservice to many others. The vision and doggedness of local councillors were also important.

The guru’s third point relates to the steady growth of tourism numbers from China (including Hong Kong) due to the growth of structured tourism packages and the gradual freeing up of citizen movements.

In the last 12 months, the number of Chinese tourists to Australia has grown by 38 per cent. Although this is from a relatively small base, there is a huge potential market as disposable incomes in China rise. He added that India is another largely untapped market.

The Tourism White Paper notes that only 23 per cent of international visitor nights are spent in regional areas. However, it expects growth in regional tourism as people seek a ‘unique tourism experience’ not just a destination. This ties in with the prevailing wisdom that the Australian tourism market will become increasingly sophisticated and diverse.

Just as Japanese tour operators now have well established links with tourism venues and the suppliers of accommodation and transport on the eastern seaboard, similar niche markets could conceivably develop in other regions such as Danish tourists to Tasmania and Indian tourists to Western Australia.

The Tourism White Paper stresses the importance of building stronger tourism packages and upgrading the infrastructure associated with regional tourism venues. Indeed, this has happened in respect of Uluru, the Daintree Forest and the Great Barrier Reef over the last 15 or so years.

However, it is a trickier proposition in regions without the world heritage standouts. There will be a degree of ‘supply push’ required if a greater number of regional tourism initiatives are to achieve take off mode in terms of attracting international tourists. Examples of areas with this potential are the Yarra Valley, Barrington Tops, Gippsland Lakes, Northern Rivers and the Kimberley region.

In terms of delivering this supply push, the White Paper argues that Local Government has an important role in providing the infrastructure and public attractions. Well, herein lies the problem of course, Local Government in the regions simply hasn’t got the money to do it properly.

The answer must lie with the State Government loosening the purse strings, and government at all levels being more savvy about attracting private sector investment.

The problem with many regional tourism projects is that they cannot maintain strong revenue streams throughout the year, and they are susceptible to disruptions to transport services. Bundling up the tourism product and providing public infrastructure (within limits) to support the tourism industry are the most important ways of reducing these investor risks.

In this regard, the Prime Minister comments regularly that the States now have significant GST revenues feeding into their coffers. This is very true, and it should be noted that the Federal Government’s own regional tourism infrastructure program cannot do any more than provide top up funding for a limited number of tourism projects.

The Federal role will be to address the national accreditation, quality, training, immigration and branding issues, and to build a rapport with other national governments to promote international tourism.

* Rod Brown’s Canberra based consultancy group, Australian Project Developments Pty Ltd, specialises in industry/regional development and government liaison. For further information telephone (02) 6231 7261 or email apd@orac.net.au

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