Following one of the most challenging periods in the history of the global travel industry, fuelled by international political instability and the SARS outbreak, there has been a strong recovery in visitation numbers. Victoria ’s tourism industry displayed particular resilience throughout this period and forecasts indicate strong future growth. This addendum to Victoria ’s Tourism Industry Strategic Plan 2002-2006 has been developed to highlight major issues relevant to Victoria ’s tourism industry.
Tourism Victoria (TV), in partnership with relevant tourism and travel industry partners, will undertake several significant activities in 2004-05. These include implementation of the Statewide Tourism Infrastructure Strategy and the Regional Tourism Development Plans, strategic destination development for regional Victoria , and the continued roll out of Phase 7 of the highly successful Jigsaw marketing campaign. TV will also manage the implementation of the four year 2006 Commonwealth Games Tourism Marketing plan.
TOURISM INDUSTRY ENVIRONMENT
There have been a number of environmental factors that have influenced the tourism industry in the past year that will continue to have some effect into the future. These environmental issues are summarised under the following headings:
- Research
- Government Policies
A. RESEARCH
NB : Tourism Forecasting Council (TFC) data is based on environmental conditions at the time of forecasting. Therefore, forecasts will be revised as circumstances change.
International Visitation
The latest data indicates a strong recovery in international visitation to Victoria , following a period of stagnant growth associated with a volatile international climate including the outbreak of Severe Acute Respiratory Syndrome (SARS).
Although there was no growth in international visitation to Victoria between 2002 and 2003, the State outperformed all national competitors, with visitor numbers declining in all other states and territories. Additionally, international visitor nights for Victoria increased by 22% to over 26 million in this period, whilst total visitor nights for Australia fell by 2%. This result, created by significantly longer visits from the UK , USA , Chinese and German markets, saw Victoria surpass Queensland in terms of total international visitor nights. (For the most recent international research visit tourismvictoria.com.au)
In May 2004, the Tourism Forecasting Council released forecasts anticipating a significant improvement in the growth of global tourism activity compared to recent forecast results. These forecasts take into consideration the latest available tourism and economic data including macroeconomic variables such as the consumer price index, exchange rates and economic growth, in addition to travel concerns generated by war, terrorism and global health issues.
International travel to Australia is forecast to grow by 9.9% to 5.2 million visitors in 2004, after three years of consecutive decline. This positive figure reflects the strengthening of the world economy, as well as renewed confidence in travelling underpinning demand. This increase in international visitation sees export earnings from tourism forecast to increase by $500 million to reach $17.6 billion in 2004.
The forecast average annual growth rate of visitors to Australia for 2003-2013 is 6.2%, to reach 8.7 million visitors by 2013. This increase in international visitation sees export earnings from tourism forecast to reach $27.9 billion in 2013.
Assuming that Victoria maintains its current market share, it is estimated that the State will receive 1.3 million international visitors in 2004, with visitors to reach 2.2 million by 2013.
The chart below shows the changes to international forecasts over recent years. The forecasts for October 2001 were current at the time of the release of Victoria ’s Tourism Industry Strategic Plan 2002-2006. It is evident that the global economic slowdown and the specific impacts on the tourism industry and the travelling population of terrorism, war and SARS caused a reduction to visitor forecasts, although there is a recovery in the May 2004 forecasts.
Source: Overseas Arrivals and Departures, Australian Bureau of Statistics, 1989-2003 Tourism Forecasting Council
Key Markets
New Zealand
- There were 183,000 visitors from NZ to Victoria in 2003, a 6% increase over the previous year. Nationally, visitation from NZ to Australia also increased by 6%.
- NZ arrivals to Australia are forecast to increase by 14.8% in 2004 to reach 876,000 visitors.
- Victoria is expected to receive 253,000 visitors from NZ by 2013.
Japan
- There were 66,000 visitors from Japan to Victoria in 2003, a 17% decrease over the previous year, which is largely attributed to the SARS outbreak. Nationally, Japanese visitation to Australia fell by 12%.
- Japanese arrivals to Australia are forecast to increase by 12% in 2004 to reach 658,000 visitors. Growth in 2004 reflects the severe decline in 2003, the effect of “pent-up” demand as a result of weak outbound tourist activity in recent years and strengthened marketing campaigns.
- Victoria is expected to receive 96,000 visitors from Japan by 2013.
China
- There were 75,000 visitors from China to Victoria in 2003, an 8% decrease over the previous year. Nationally, Chinese visitation to Australia decreased by 6%. Chinese visitors spent over 2.2 million visitor nights in Victoria in 2003, an increase of 55% compared to the previous year.
- Chinese arrivals are forecast to be strong in 2004, growing by 25% to reach 211,000 visitors.
- Victoria is expected to receive 407,000 visitors from China by 2013.
Singapore
- There were 66,000 visitors from Singapore to Victoria in 2003, an 11% decrease over the previous year. Nationally, Singaporean visitation also decreased by 11%.
- Singaporean arrivals are forecast to increase by 8.8% in 2004 to reach 211,000 visitors.
- Victoria is expected to receive 106,000 visitors from Singapore by 2013.
United Kingdom
- There were 210,000 visitors from the UK to Victoria in 2003, a 3% increase over the previous year. Nationally, UK visitation increased by 4%. UK visitors spent over 4.9 million nights in Victoria in 2003, an increase of 57% over the previous year.
- Arrivals are forecast to increase by 4.5% in 2004 to reach 660,000 visitors.
- Victoria is expected to receive 319,000 visitors from the UK by 2013.
Germany
- There were 53,000 visitors from Germany to Victoria in 2003, a 2% decrease over the previous year. Nationally, German visitation increased by 2%. In 2003 German visitors spent over one million nights in Victoria , an increase of 20% over the previous year.
- Victoria is expected to receive 83,000 visitors from Germany by 2013.
USA
- There were 123,000 visitors from the USA to Victoria in 2003, a 1% decrease over the previous year. Nationally, USA visitation decreased by 3%. In 2003 visitors from the US spent over 2 million visitor nights in Victoria, an increase of 19% over the previous year.
- Victoria is expected to receive 226,000 visitors from the USA by 2013.
Strategic Response: Tourism Victoria is constantly reviewing and re-evaluating its marketing campaigns and will continue to monitor the situation in conjunction with Tourism Australia (formerly the Australian Tourist Commission), our key international marketing partner.
The longer-term strategic direction and priorities articulated in Victoria ’s Tourism Industry Strategic Plan 2002-2006 remain unchanged.
Domestic
Between 2002 and 2003 there was a national decline of 2.3% in total domestic visitor numbers. In this period, Victoria experienced a negligible decrease of 0.1%, with key competitor states of New South Wales and Queensland declining by 3.6% and 0.8% respectively. Tasmania was the only state to experience a positive result, with growth of 14.2%. (For the most recent domestic research visit tourismvictoria.com.au)
There were 54.9 million domestic visitor nights to Victoria in 2003, a decrease of 3.2% on the previous year and representing national market share of 19%. Assuming Victoria maintains its current market share of domestic visitor nights, there will be an estimated 55.4 million in 2004 and 60.7 million in 2013.
In 2003 Victoria received 12.8 million overnight intrastate visitors, representing a 2% decrease over 2002. In this period national intrastate travel declined by 4.9%, with New South Wales experiencing a decrease of 7.6%. Intrastate visitation appears to be returning to more sustainable levels after a strong year in 2002. The impact of SARS and Iraq acted as a deterrent for outbound travel in 2002, with intrastate travel being boosted as a consequence.
Tourism Victoria has been actively promoting regional Victorian destinations nationally throughout 2003, including a focus on the Yarra Valley and the North East regions. Although visitor numbers to regional Victoria were stable between 2002 and 2003, there was growth in the number of interstate visitors, driven primarily by Queensland (+74.8%) and New South Wales (+12.6%). Of particular note, there were 48,000 overnight visitors from New South Wales who visited the Yarra Valley , Dandenong and the Ranges region in 2003, a 78% increase on 2002 results.
The chart below shows the changes to domestic forecasts over recent years. The forecasts for October 2001 were current at the time of the release of the Victoria ’s Tourism Industry Strategic Plan 2002-2006. According to the May 2004 forecasts, domestic visitor nights in Australia are anticipated to grow at a steady rate over the coming years.
Source: National Visitor Survey, Bureau of Tourism Research, 1998-2003 - Tourism Forecasting Council
Strategic Response: As articulated in Victoria ’s Tourism Industry Strategic Plan 2002-2006, Tourism Victoria continues to focus on the most relevant high yield segments of the domestic market that will deliver sustainable growth in domestic tourism to all regions of Victoria .
B. GOVERNMENT PRIORITIES
The strategic direction articulated in Victoria ’s Tourism Industry Strategic Plan 2002-2006 is supported by current Government policy and priorities. Tourism Victoria is structured to meet the demands of both the private and public sectors. The Strategic Plan 2002-2006 provides a framework for major initiatives to be implemented.
Government Policy
To address Government priorities for 2004-05, the major initiatives Tourism Victoria will oversee include:-
- Develop additional marketing strategies for international markets.
- Secure additional international (and domestic) airline services.
- Develop strategies to enhance regional tourism.
- Support regional and major events.
- Promote investment in tourism infrastructure projects,
- Focus on food and wine tourism.
- Implement marketing projects for the 2006 Commonwealth Games.
- Assist in implementing the Commonwealth’s Tourism White Paper.
- Raise the profile of Tourism Victoria and develop strategies to communicate the value of tourism to a range of stakeholders.
- Undertake a review of international marketing strategies.
- Implement priorities identified in the Statewide Tourism Infrastructure Strategy.
- Progress implementation of ‘ Victoria ’s Tourism Industry Strategic Plan 2002-2006’.
Although environmental conditions impacting upon the tourism industry can be unpredictable, Victoria ’s Tourism Industry Strategic Plan 2002-2006 details a strategic framework that provides guidance in the pursuit of a long-term sustainable industry.
Some of the key strategies and initiatives to be undertaken over the last 12 months are outlined below:
REGIONAL TOURISM DEVELOPMENT PLANS
Victoria ’s Tourism Industry Strategic Plan 2002-2006 highlighted the need for comprehensive tourism development plans for Victoria ’s regions. Over the past two years, these plans have been developed under extensive consultation with various public sector and industry stakeholders from each of Victoria ’s regions. Tourism Victoria facilitated numerous workshops to ensure stakeholder input during the initial development phase of the plans, followed by forums held in the regions to present the key objectives, challenges and recommendations outlined in the draft plans.
One key recommendation of the Regional Tourism Development Plans is for Regional Victoria to be divided into seven campaign regions: Great Ocean Road , Grampians, Goldfields, Gippsland, Murray , North East Victoria and Melbourne Surrounds. Melbourne Surrounds’ structure will evolve over the life of the plans with an emphasis on a strategic marketing alliance between key destinations.
The Plans also outline key tourism infrastructure initiatives to be undertaken or explored over the coming years, as identified in the Statewide Tourism Infrastructure Strategy. This includes projects identified as infrastructure priorities for the State.
In addition to industry structure and infrastructure issues, specific recommendations have been made for each region in the areas of industry development, product development, marketing, events, professionalism and excellence, administration and distribution. The plans recognise the varied needs, level of maturity and vision of each region, and recommendations have been developed accordingly.
STATEWIDE TOURISM INFRASTRUCTURE STRATEGY
The Statewide Tourism Infrastructure Strategy has been developed concurrently with the Regional Tourism Development Plans and provides an independent assessment of key project priorities for the decade ahead, based on consultation with stakeholders and investor groups.
The Statewide Tourism Infrastructure Strategy recommends new projects that will be of net benefit to Victoria and which will help induce new visitation to the State.
State significant projects identified in the Strategy include:
- The Murray Outback Plaza , Mildura.
- The Kelly Story Centre, Glenrowan.
- Sovereign Hill Conference Centre and Hotel.
- Great Ocean Road projects including a visitors’ interpretative centre, redevelopment of Apollo Bay Harbour , and opportunities associated with the Angahook-Otway Park proposal.
- Mallacoota projects including blue water access, upgrading the coastal reserve, and a wilderness lodge opportunity.
- Melbourne Surrounds opportunities including projects for Geelong ’s waterfront and conference facilities.
- Melbourne projects at the ‘top end of the Bay’ at St Kilda, Beach Road , Station and Princess Piers, and Williamstown. CBD projects include elite training facilities at the Jolimont Sports Precinct, and new built attractions.
Additionally, the Strategy has also recognised twenty-five projects of regional significance, including four to five projects per region.
JIGSAW CAMPAIGN
Tourism Victoria ’s highly successful ‘Jigsaw’ marketing campaign continues to be rolled out, with Phase 7 of the campaign currently in the marketplace. Through a combination of television, cinema press and magazine promotions, Phase 7 (2003 - 2006) aims to increase awareness of regional Victoria’s key destinations, villages and attractions, as identified in Victoria’s Tourism Industry Strategic Plan 2002 – 2006. Phase 7 consists of two themes - Melbourne ’s Surrounds and Touring Regional Victoria - and includes ten regional campaigns.
In 2003, a television, cinema and press campaign was launched to position the Yarra Valley as the State’s key wine and food destination, whilst emphasising its proximity to Melbourne with the slogan ‘Melbourne’s Yarra Valley. You’ll Never Want to Leave’. The success of this campaign saw it extended from interstate and Regional Victorian markets to Metropolitan Melbourne. The campaign will re-run in interstate markets during the 2004-05 financial year. Campaigns for the Mornington Peninsula and Daylesford will also be developed to further emphasise the stylish sophistication of Melbourne’s surrounding areas.
Additionally, print magazine campaigns were launched for the Goldfields (2003), Great Alpine Road (2003 – facilitated by the Bushfire Recovery Fund), Great Ocean Road (2004), and Grampians (2004) and highlight the diverse touring opportunities available in Victoria . This strength will be further developed with campaigns for the Murray and Gippsland.
Through Phase 7 of the Jigsaw campaign, Tourism Victoria has been actively promoting regional Victorian destinations nationally, with a particular focus on the Yarra Valley . Although visitor numbers to regional Victoria were stable between 2002 and 2003, there was growth in the number of interstate visitors, driven primarily by Queensland (+74.8%) and New South Wales (+12.6%). Of particular note, there were 48,000 overnight visitors from New South Wales who visited the Yarra Valley , Dandenong and the Ranges region in 2003, a 78% increase on 2002 results.
AVIATION
Although the volatile international climate, including events in Iraq and SARS, severely affected the global aviation activity, there has been a surprisingly strong recovery for the Victorian aviation sector in recent months.
Over the period July 2003 to June 2004 an additional 7,800 seats have been secured into Melbourne , exceeding the 3,000 seats per week suspended due to the international crises. These additional seats are constituted by the reinstatement of triple daily services by Singapore Airlines, Emirates services increasing from 7 to 14 per week, the inauguration of Emirates services to Auckland and Christchurch , an increase in capacity by Malaysia Airlines and Thai Airlines, the inauguration of China Eastern Services and the reinstatement of Qantas Tokyo - Melbourne services.
Jetstar / Avalon Airport
In late 2003 the Victorian Government secured the headquarters of Jetstar for Victoria , with the carrier commencing services in May 2004. Jetsar, the low-cost subsidiary of Qantas, operates approximately 250 services a week from Melbourne Airport , with another 70 weekly services (35 return flights to Sydney and Brisbane) operating out of the newly established domestic airport at Avalon.
Avalon Airport has been developed as a key part of the Jetstar network, making Melbourne the first Australian city to have a second major domestic airport and confirms Victoria ’s strength as a domestic and international destination of choice.
Avalon Airport is located 55 kilometres from Melbourne and only 19 kilometres from Geelong and will provide a catalyst for growth in tourism and employment for Geelong and the south west of Victoria.
MELBOURNE CONVENTION CENTRE DEVELOPMENT
In April 2004 the State Government announced the $367 million convention centre development, as part of the Victoria : Leading the Way Economic Statement. The new convention centre, to be completed by 2008, will be Australia ’s largest convention and exhibition complex. It will be built on the banks of the Yarra River , adjacent and connected to the existing Melbourne Exhibition Centre. The entire development will result in a world-class, integrated conference precinct, and will include the development of surplus land in the area for compatible uses, such as a hotel, restaurants and retail outlets.
The development will make Melbourne the destination of choice in the global business event market. It is anticipated that the project will generate additional delegate spending of $129 million per year over 25 years, resulting in an increase in Gross State Product of $197 million per year over the same period. Additionally, the project is expected to create at least 2,500 (full-time and part-time) jobs each year.
