State Tourism Satellite Accounts

State Tourism Satellite Accounts 2012 13

Acknowledgments The State Tourism Satellite Accounts series has been produced as part of a modelling program established and funded in partnership with the Australian Government and each of the state and territory tourism offices to enhance understanding of the economic dynamics of tourism. Tourism Research Australia thanks the state and territory tourism offices who have reviewed and contributed to this report. Authors Tien Duc Pham and Jai Kookana Other contributors David Osborne for compiling source materials Editing services Darlene Silec ISBN XXX (PDF) XXX (Word) Tourism Research Australia Austrade GPO Box 1564 Canberra ACT 2601 ABN 46 252 861 927 Email: tourism.research@ret.gov.au Web: www.tra.gov.au Publication date: March 2014 This work is licensed under a Creative Commons Attribution 3.0 Australia licence. To the extent that copyright subsists in third party quotes and diagrams it remains with the original owner and permission may be required to reuse the material. This work should be attributed as State Tourism Satellite Accounts 2011 12, Tourism Research Australia, Canberra. Inquiries regarding the licence and any use of work by Tourism Research Australia are welcome at tourism.research@ret.gov.au ii

Contents Acknowledgments... ii Foreword... v Executive summary... vi Introduction... 1 Trends in state tourism aggregates... 5 Tourism consumption... 8 Tourism GVA...11 Tourism employment...15 Conclusion...18 Appendix A Key tables... 1 Explanatory notes...39 Glossary...43 References...46 Tables Table 1: Comparisons of TSA framework and I-O modelling concepts... 2 Table 2: Direct tourism s share of national GVA and GDP... 5 Table 3: State/territory contribution to total tourism consumption, 2012 13... 9 Figures Figure ES1: Direct and total flow-on tourism GVA (national)... vii Figure ES2: Direct and total flow-on of tourism employment (national)... viii Figure ES3: Regional shares of GVA in total national GVA... x Figure ES4: Annual changes in regional tourism expenditure, 2012 13... x Figure ES5: State and territory tourism GVA, 2012 13... xi Figure ES6: State and territory tourism employment, 2012 13... xi Figure 1: Summary chart... 4 Figure 2: State/territory tourism GVA share of Australia s total direct tourism GVA... 6 Figure 3: Domestic and international travel s share of tourism consumption, 2012 13... 9 Figure 4: Domestic and international travel s share of direct tourism GVA, 2012 13...12 Figure 5: Contribution of segments to domestic direct tourism GVA, 2012 13...12 iii

Figure 6: Contribution of direct tourism GVA to each state economy, 2006 07 and 2012 13...14 Figure 7: Contribution of direct tourism employment to each state economy, 2006 07 and 2012 13...16 Figure 8: Contribution of industries to direct tourism employment, 2012 13...17 Appendix A - Key tables Table 1: Key direct tourism aggregate results, 2006 07 to 2012 13... 1 Table 2: Direct tourism output by tourism category, 2006 07 to 2012 13... 3 Table 3: Direct tourism GVA by tourism category, 2006 07 to 2012 13... 7 Table 4: Direct tourism employment, 2006 07 to 2012 13...11 Table 5: Tourism consumption by tourism category, 2006 07 to 2012 13...12 Table 6: Direct tourism output by industry basic prices and state share of total, 2011 12...16 Table 7: Direct tourism GVA by industry state share of total, 2012 13...18 Table 8: Direct tourism employment by industry and state share, 2012 13...20 Table 9: Tourism consumption by product purchasers prices and state share of total, 2012 13...22 Table 10: Indirect contribution of tourism, 2006 07 to 2012 13...24 Table 11: Total effects of tourism consumption, 2006 07 to 2012 13...28 Table 12: State totals of key economic aggregates, 2006 07 to 2012 13...32 Table 13: Key economic aggregates by state and tourism share, 2006 07 to 2012 13...33 Table 14: Industry shares of key economic aggregates by state, 2012 13. Error! Bookmark not defined. Table 15: Key direct tourism aggregate results, domestic, 2006 07 to 2012 13...35 Table 16: Key direct tourism aggregate results, international, 2006 07 to 2012 13...37 iv

Foreword Welcome to Tourism Research Australia s (TRA) State Tourism Satellite Accounts publication for 2012 13. The Australian Bureau of Statistics (ABS) produces the national Tourism Satellite Account (TSA), which is an expansion of Australia s national accounts. The TSA allows the economic aspects of tourism such as the size of the sector, and its contribution to the economy to be examined and analysed, for the benefit of the tourism industry and policy makers. However, the national TSA only focuses on the direct contribution of the tourism sector at the national level; it does not provide a complete picture of tourism s contribution to the economy of each state and territory. To bridge this gap, TRA produces a state-based TSA that covers both the direct and indirect contribution of tourism within each state. Over the period 2006 07 to 2012 13, the size of the tourism sector has decreased marginally relative to the whole economy. The share of direct tourism Gross Domestic Product (GDP) in total national GDP declined from 3.0 per cent in 2006 07 to 2.8 per cent in 2012 13. It is important to note that the reduced GDP share of the sector does not mean the tourism sector has been shrinking in absolute terms. Whilst tourism has grown over time, it has not grown as strongly as other sectors such as mining and professional, scientific and technical services. In 2012 13, total tourism consumption increased $4.2 billion over the previous year to $110 billion. Direct tourism GDP increased to $42 billion up by $1.5 billion from the previous year and this direct tourism GDP generated a total flow-on effect of $91 billion of GDP through all industries in the economy. The tourism sector employed 543,700 people directly, and through all other sectors, tourism generated a total of 929,000 jobs, or equivalent to 8.0 per cent of total national employment. Interestingly, data at the regional level for 2012 13 show that New South Wales regained its predominant position in terms of tourism contribution to the national total, after a slight decline in the previous year. Of the total $1.5 billion increase in tourism GDP for 2012-13, NSW's contribution was the largest ($712 million, 47 per cent), followed by Queensland ($448 million, 30 per cent) and Victoria ($176 million, 11.6 per cent). The remaining $180 million (12 per cent) of the increase in tourism GDP for the year was contributed by all other states and territories. Positive contributions from most of states and territories to the national tourism GDP in 2012 13 highlight the beginning of a new phase for tourism in Australia. This illustrates that, being one of the main service industries, tourism has a strong potential to make an equitable and sustainable contribution to the Australian economic growth. Dr Leo Jago Chief Economist Tourism Research Australia v

Executive summary Tourism Research Australia (TRA) supplements the national Tourism Satellite Account (TSA) published by the Australian Bureau of Statistics (ABS) with a similar set of TSA data expanded for all states and territories. The state TSAs go beyond the scope of the national TSA by providing state measures for both the direct and indirect contribution of tourism, and the resulting total contribution of tourism to the state and national economies. This provides a more complete picture of the contribution of the tourism sector to the Australian economy. Within Australia, TSA data vary from state to state, reflecting the different tourism offerings available across its regions. This makes compiling state-based TSAs particularly important, as they provide a clearer indication of the similarities and differences in how tourism contributes to each state s economy. Australia is one of only a few countries that compile a Tourism Satellite Account at the state level on a regular basis. This state TSA release extends the state TSA series to include 2012-13. Any minor changes to the time series estimates in this report are due to revisions in the underlying supply-use tables applied in the national TSA and the latest (2009-10) input-output tables used in the tourism s indirect contribution results at the national level. The TSA for 2012 13 shows the following results for both the tourism sector as a whole and Australia s states and territories: Australia s tourism sector Tourism consumption Tourism consumption in nominal terms amounted to $110 billion, an increase of $4.2 billion, up 4.0 per cent compared to 2011 12. Tourism Gross Value Added (GVA) and Gross Domestic Product (GDP) The total consumption directly generated $39 billion of GVA and contributed $42 billion of GDP to the whole economy. Compared to the level of GVA in 2006 07, tourism has achieved an annual average growth of 4.6 per cent in GVA, again in nominal terms. Combining direct and indirect contributions, the tourism sector contributed $80 billion of GVA and $91 billion of GDP. As seen in Figure ES1, although total flow-on tourism GVA (both the direct and total flow-on) has increased over the period 2006 07 to 2012 13, increases in tourism GVA were not as strong as the increases in national total GVA. Consequently, the shares of tourism GVA declined over the period. vi

Figure ES1: Direct and total flow-on tourism GVA (national) 90000 7.0 $ million 80000 70000 60000 50000 40000 30000 20000 10000 6.0 5.0 4.0 3.0 2.0 1.0 Per cent 0 2006 07 2007 08 2008 09 2009 10 2010 11 2011 12 2012 13 Direct tourism GVA Total flow on tourism GVA Direct TGVA Share in national total GVA (Right hand axis) Total flow on TGVA share in national total GVA(Right hand axis) 0.0 Sources: (a) ABS (2013) (b) TRA s estimates Tourism employment Direct tourism employment has increased gradually over the period 2006 07 to 2012 13 at an average annual growth of 1.4 per cent. Tourism created approximately 543,700 jobs in 2012-13. The contribution of tourism in terms of total flow-on tourism employment has grown at a higher average annual growth of 1.9 per cent over the same period, reflecting the growing impacts of the sector over time. Combining direct and indirect contributions, tourism employed 929,000 persons in 2012-13. In relation to the whole economy, the size of the tourism sector (direct employment) has decreased marginally (0.1 percentage points) as other non- vii

tourism related industries (mining in particular) grew at faster rates (Figure ES2). However, tourism s direct employment in 2012-13 was marginally higher than it was in 2011-12 (up 2.2 per cent). Figure ES2: Direct and total flow-on of tourism employment (national) Thousand persons 1000 900 800 700 600 500 400 300 200 100 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 Per cent 0 2006 07 2007 08 2008 09 2009 10 2010 11 2011 12 2012 13 Direct tourism employment Total flow on tourism employment Direct EMP Share in national EMP (Right hand axis) Total Flow on EMP share in national EMP(Right hand axis) 0.0 Sources: (a) ABS (2013) (b) TRA s estimates Australia s states and territories At the state level, there have been changes in the composition of the regional contributions to the tourism sector over the period 2006 07 to 2012 13. Figure ES3 illustrates the regional tourism GVA shares of total tourism GVA. On average, there are three distinct groups of states contributing to the aggregate national tourism sector with the largest being New South Wales, Victoria and Queensland, which collectively contribute more than 78 per cent towards total national tourism GVA. The second (medium) group includes Western Australia and South Australia, collectively contributing 15 per cent. viii

The third (small) group includes Tasmania, the Northern Territory and the Australian Capital Territory, with a combined contribution of the remaining 7 per cent. Over the period 2006-07 to 2010-11, the mining boom showed clear and similar impacts on the tourism sectors in Queensland, Western Australia and the Northern Territory, as competition for flights and accommodation between mining workers and tourists increased. Queensland was further impacted by the floods in 2010 11. The regional tourism GVA shares of total national tourism GVA declined in Queensland, Western Australia and the Northern Territory over the period 2006 07 to 2010 11, while the regional GVA shares of New South Wales, Victoria and South Australia increased over the same period. This is an example of the substitution effect, whereby tourists shift away from their usual destinations. In this case, the shift was most likely due to the combination of the higher costs associated with visiting Queensland, Western Australia and the Northern Territory, and the shortage in the supply of air transport and accommodation in these regions due to the mining boom. In 2011 12, both Queensland and Western Australia regained their respective shares. This suggests that the impacts of mining boom subsided during this period. The increases in their shares were offset by the reduced shares mainly from New South Wales and marginally from South Australia. In 2012-13, however, new trends in tourism growth in all states have started to emerge. A noticeable change in 2012-13, as compared to the 2011-12 pattern, was an increase in NSW s GVA share of the national tourism GVA, up by 0.6 percentage points from 2011-12. This was mainly due to a strong increase in tourism demand within the state (intra-state tourism). Of the three fastest growing tourism states in 2011-12 (Qld, WA and Vic), both Vic and WA experienced marginal declines in their shares of national tourism GVA in 2012-13 (-0.3 and -0.1 percentage points, respectively). QLD continued to strengthen marginally its share in 2012-13, up 0.1 percentage points, also mainly due to intra-state tourism within QLD. ix

Figure ES3: Regional shares of GVA in total national GVA 35.0 30.0 25.0 Per cent 20.0 15.0 10.0 5.0 0.0 06 07 07 08 08 09 09 10 10 11 11 12 12 13 NSW Vic Qld SA WA Tas NT ACT Source: TRA s estimates To put the state tourism demand changes into perspective, of the $4.2 billion increase in tourism expenditure in 2012 13, the majority (92 per cent) was contributed by New South Wales, Queensland, Victoria and Western Australia (Figure ES4). Figure ES4: Annual changes in regional tourism expenditure, 2012 13 $ million 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 200 NSW Vic Qld SA WA Tas NT ACT 50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 5.0 10.0 Per cent Tourism expenditure Regional share in total (second axis) Source: TRA s estimates x

In absolute terms, New South Wales, Queensland and Victoria are the largest tourism states. Figures ES5 and ES6 show the levels of direct effect and total flow-on effects for GVA and employment across all states and territories. Figure ES5: State and territory tourism GVA, 2012 13 30,000 25,000 20,000 $ million 15,000 10,000 5,000 0 NSW Vic Qld SA WA Tas NT ACT Direct tourism GVA Total flow on tourism GVA Source: TRA s estimates Figure ES6: State and territory tourism employment, 2012 13 300 250 Thousand persons 200 150 100 50 0 NSW Vic Qld SA WA Tas NT ACT Direct tourism employment Total flow on tourism employment Source: TRA s estimates xi

Introduction The tourism industry is an important contributor to the Australian economy. However, the System of National Accounts (SNA) does not capture tourism as a single industry, because of tourism s diverse products and services. Tourism Satellite Accounts (TSAs) bridge this gap by measuring the economic contribution of tourism and effectively supplementing the SNA. TSAs estimate the worth of the tourism sector by combining the contributions of various goods and services across the economy. By doing this, comparisons can be made between the tourism industry s economic contribution and that of conventional industries within an economy, or even between tourism sectors across different countries. Additionally, state-based TSAs play an important role in highlighting the diversity of Australia s tourism offerings, and how tourism contributes to each state s economy. The 2012 13 state TSAs are based on regional tourism expenditure data for 2012-13. This release also takes into account changes in inputs from the supply-use tables for the national TSA and the latest 2009 10 national Input-Output (I-O) tables used for TRA s national indirect contribution estimates. TRA continues to go beyond the scope of the national TSA by measuring the direct 1 and indirect 2 contribution of tourism, and the resulting total flow-on contribution of tourism to the state and national economies. The direct tourism contribution of the state TSAs can be lined up with the national TSA data published by the Australian Bureau of Statistics (ABS), while the indirect tourism contribution supplements the national TSAs by providing a more complete picture of the economic contribution that tourism makes to Australia s economy. Conceptual frameworks The TSA framework, as recommended by the United Nations World Tourism Organization (UNWTO), differentiates between goods and services that have direct physical contact with tourists (direct tourism output) and those that do not (indirect tourism output). For example, direct tourism output is best represented by hotels or restaurants, where tourists stay or purchase their meals. Indirect tourism output can be demonstrated by tourists purchasing petrol. The petrol was not produced by the retail petrol station, thus only the cost of running the petrol station as a retail margin is included in the direct tourism output, while the cost of petrol itself is an indirect tourism output. The introduction of such direct and indirect definitions in TSA has overlapped with similar terminology (not the concept itself) that has been historically used in I-O modelling. The table below shows the differences between the concepts. 1 Goods and services that have direct physical contact with tourists 2 Goods and services that do not come into contact with tourists 1

Table 1: Comparisons of TSA framework and I-O modelling concepts Direct tourism output Indirect tourism output TSA framework Goods and services that have direct physical contact with tourists (e.g. hotels, restaurant meals) Goods and services that do not come into contact with tourists (e.g. petrol purchase, as the petrol is not produced by the retail petrol station) I-O modelling Total initial consumption demand, regardless of whether tourists have direct or indirect physical contact with the producers of the goods and services. Measures the flow-on effect of the initial tourism consumption through the multiple rounds of input requirements when a product is sold. Using the petrol purchase as an example, the flow-on effects relate to the upstream demand for oil (oil industry) by the refineries (petrol industry) to produce petrol, and the electricity consumed by the petrol station. As the ABS apply the definition of direct contribution from the TSA framework in the national TSA, this report also adopts this definition to allow easy reconciliation between state and national direct tourism contribution. However, using direct tourism alone will under-estimate the total contribution of tourism to the whole economy because the amount of expenditure that does not have direct contact between tourists and producing industries is left out in the calculation of tourism contribution (petrol or shopping for example). To estimate the total contribution of tourism to the economy correctly, the consumptions of TSA direct and TSA indirect tourism output are combined again. This estimate of initial consumption is then used to calculate the flow-on effects using the I-O multipliers. Using the example of the tourist purchasing petrol, the indirect component (fuel cost alone) is then combined with the upstream effect of tourism contribution and presented as the indirect contribution of tourism. Strictly speaking, this is a mixed indirect contribution measure. The sum of the direct and (mixed) indirect is presented as the total flow-on contribution in this report, as shown in Figure 1. Total tourism consumption is measured at the purchasers prices, i.e. the price paid by tourists. However, not all of this payment is received by the producers, as part of this payment is contributed to the government as tax revenue. Part of it is also paid to imported sources that supplement the domestic producers to supply those goods and services to the tourism sector. The part paid to the domestic producers is defined as tourism consumption at basic prices sometimes referred to as farm gate prices, or factory prices. This reflects 2

the fact that tourism consumption at basic prices is smaller than total tourism expenditure. Consumption at basic prices is equivalent to domestic output, and it is from this domestic output that all other measures such as tourism Gross Value Added (GVA), tourism Gross State Product (GSP), employment, and indirect effects are derived. 3

Figure 1: Summary chart, 2012-13 Domestic inter state tourism consumption $27,657m Domestic intra state tourism consumption $35,992m Domestic same day tourism consumption $19,383m Inbound tourism consumption $26,963m Total tourism consumption at purchasers prices (internal consumption) $109,995m Net taxes on tourism consumption $8,713m Imported goods and services $6,850m Tourism consumption at basic prices $94,430m Direct tourism consumption $76,437m Indirect tourism consumption $17,993m Net taxes on indirect tourism consumption $5,241m Net taxes on direct tourism consumption $3,472m Direct tourism value added $38,783m Direct tourism employment 543,700 Direct tourism GDP/GSP $42,255m I O multipliers Total flow on tourism output $176,605m Net taxes on total flow on tourism consumption $10,620m Total flow on tourism value added $80,092m Total flow on tourism employment 929,000 Total flow on tourism GDP/GSP $90,712m 4

Trends in state tourism aggregates Over the whole period 2006-07 to 2012-13 in Table 2, there is a downward trend in the direct tourism share in the national totals of GVA and GDP. While tourism GVA share of national GVA seems to have stabilised at 2.7 per cent, there was an early sign of improvement (0.1 percentage points) for tourism share in national GDP in 2012-13, even though the share in GDP is still below the long-term average (Table 2). In terms of tourism s flow-on contribution, total flow-on tourism share in both GVA and GDP exhibited a downward trend over the same period even though there was a small increase for both variables over the previous year in 2012-13. The fall in tourism's direct and total share of GVA and GDP between 2006 07 and 2012 13 can be attributed to the stronger growth recorded in non-tourism related industries. Among all industries that contributed significantly to the overall average annual growth of national GVA in real terms over the same period include Mining (5.3 per cent), Construction (4.2 per cent), Professional, Scientific and Technical Services (4.8 per cent), and Health Care and Social Assistance (4.7 per cent). Table 2: Direct tourism s share of national GVA and GDP 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Average per cent Direct tourism GVA share (a) 3.0 2.9 2.8 2.9 2.7 2.7 2.7 2.8 Direct tourism GDP share (a) 3.0 3.0 2.8 2.9 2.8 2.7 2.8 2.9 Direct tourism employment share(a) 4.8 4.8 4.7 4.7 4.7 4.7 4.7 4.7 Total flow-on tourism GVA share (b) 6.4 6.3 5.8 5.9 5.5 5.5 5.6 5.9 Total flow-on tourism GDP share (b) 6.7 6.5 6.1 6.2 5.8 5.9 6.0 6.2 Total flow-on tourism employment share (b) 8.0 8.0 7.8 7.8 7.8 7.9 8.0 7.9 Sources: (a) ABS (2013); (b) TRA's estimates The direct tourism employment share has remained unchanged at 4.7 per cent for some time while the total flow-on (including direct and indirect contribution) tourism s share in the national total employment increased from 7.9 per cent in 2011-12 to 8.0 per cent in 2012-13, just slightly above the long term average growth by 0.1 percentage points. Compared to 2011-12, tourism in 2012-13 increased 2.2 per cent in direct employment and 2.9 per cent in total flow-on employment, which were both higher than the national employment growth of 1.3 per cent for the year. As can be seen in the following list, there was substantial variation in the employment growth rates among industries 3, with some growing and others declining. 3 The estimates derived from Australian Labour Force Survey, ABS Cat. No. 6291.0.55.003, Nov 2013. 5

Mining: +6.7 per cent Accommodation and food services: +4.0 per cent Transport Postal and Warehousing: +3.7 per cent Retail Trade: +1.3 per cent Education: +4.5 per cent Art and Recreation Services: +1.2 per cent Construction: -1.5 per cent Agriculture, forestry and fishing: -4.0 per cent Financial and insurance services: -2.2 per cent Electricity, gas, water and waste services: -5.0 per cent Those that are strongly connected to tourism include Accommodation and Food Services; Transport, Postal and Warehousing, and Retail Trade. Employment growth of these industries is the main driver of tourism employment growth overall, influenced by the proportion of employment devoted to tourism purpose that these industries service among other non-tourism related activities. Figure 2: State/territory tourism GVA share of Australia s total direct tourism GVA 35.0 30.0 25.0 Per cent 20.0 15.0 10.0 5.0 0.0 06 07 07 08 08 09 09 10 10 11 11 12 12 13 Source: TRA's estimates NSW Vic Qld SA WA Tas NT ACT In a diverse economic environment such as Australia that has a range of economic structures across its states and territories, the performance of tourism sectors can 6

move in different directions. Figure 2 shows the trends of the state/ territories tourism GVA as a share of Australia s total direct tourism GVA. Overall, there are three groups of tourism regions: Large tourism states - New South Wales, Queensland and Victoria; these three states combined contribute around 78 per cent of the total national tourism GVA. Medium tourism states - South Australia and Western Australia; these two states combined contribute around 15.2 per cent of the total national tourism GVA. Small tourism states Tasmania, the Northern Territory and the Australian Capital Territory; these three regions contribute 6.6 per cent of total national tourism GVA. For the period 2007 08 to 2010 11: Queensland, Western Australia and Northern Territory suffered declines in their regional shares of the national total (Figure 2). These declines were mainly due to a reduction in inter-state and inbound tourism demand caused by the mining boom in these states. Queensland also suffered from major floods in 2010 11 that added to the adverse impacts on its tourism sectors. Over the same period, New South Wales, Victoria and South Australia increased their (direct) tourism contribution to the national total. The opposite changes in the two groups reflected the substitution effect among tourism destinations in response to price sensitivity, and also a shortage of accommodation and air transportation due to the mining boom effect. In 2011 12 and 2012-13: Tourism markets in both Queensland and Western Australia showed signs of growth, and their growth was initially at the expense of NSW's market, but gradually balanced out by the reductions in Victoria and South Australia in 2012-13. 7

Tourism consumption Tourism consumption is the total value of goods and services consumed by domestic and overseas visitors in Australia 4. It is measured in purchasers prices the price the visitors pay, including taxes and subsidies. In 2012 13, tourism consumption totalled $110 billion, 4.0 per cent higher in nominal terms than in 2011 12. Domestic travel s contribution In 2012 13, domestic travel accounted for $83 billion (75 per cent) of total tourism consumption. Of domestic travel, intra-state travel was the largest contributor ($36 billion or 43 per cent of domestic travel), followed by inter-state travel ($28 billion or 33 per cent of domestic travel) and same-day travel ($19.4 billion or 23 per cent of domestic travel). Between 2006 07 and 2012 13 there was little change in the composition mix of how domestic travel contributed to total tourism consumption intra-state travel consistently accounted for 31 to 33 per cent of total tourism consumption, inter-state travel 25 to 28 per cent, and same-day travel 17 to 18 per cent. International travel s contribution In 2012 13, international travel accounted for $27billion (25 per cent) of total tourism consumption. Between 2006 07 and 2012 13, international tourism consistently contributed 23 to 25 per cent to total tourism consumption. Australia s state/territories contribution The contribution of New South Wales, Queensland and Victoria to total tourism consumption in 2012 13 (77%) was largely unchanged compared to the four preceding years. Over the same period, the combined share of the remaining states/territories was around 23% (Table 3). 4 This also includes imputed non-market transactions such as the estimated rental value of accommodation in selfowned holiday homes; the cost to households of food and alcohol in hosting visiting friends and relatives; and nonmarket services provided by governments, such as entry to museums and galleries. 8

Table 3: State/territory contribution to total tourism consumption, 2012 13 Contribution to total tourism consumption (national), 2012 13 (billion) Domestic travel s share of state/ territory tourism consumption NSW $33.0 (or 30%) 73% Qld $27.8 (or 25%) 79% Vic $23.9 (or 22%) 74% WA $11.3 (or 10.2%) 71% SA $6.3 (or 5.7%) 83% Tas $3.1 (or 2.9%) 86% NT $2.4 (or 2.2%) 70% ACT $2.2 (or 2.0%) 78% Australia $110.0 75% Sources: TRA s estimates (for states/territories) and ABS (2013) (for Australia) Between 2006 07 and 2012 13, the contribution of domestic tourism to total consumption declined in Western Australia (from 77 per cent to 71 per cent), South Australia (from 86 per cent to 83 per cent), Victoria (from 77 per cent to 74 per cent) and the Australian Capital Territory (from 85 per cent to 78 per cent). For all other states and territories, the contribution of domestic tourism has either increased slightly or remained relatively unchanged. Figure 3 compares domestic and international shares in individual states for 2012-13. Figure 3: Domestic and international travel s share of tourism consumption, 2012 13 Per cent 90 80 70 60 50 40 30 20 10 0 NSW Vic Qld SA WA Tas NT ACT Australia State / territory Domestic International Sources: TRA s estimates (for states/territories) and ABS (2013) (for Australia) 9

Contribution by tourism products At the product level, the tourism characteristic 5 products that contributed most to tourism consumption nationally in 2012 13 were: long distance passenger transportation ($17.2 billion or 15.7 per cent). takeaway and restaurant meals ($16.7 billion or 15.2 per cent). accommodation ($12.9 billion or 11.8 per cent). The tourism connected 6 products that contributed most to tourism consumption were: shopping ($14.0 billion or 12.7 per cent). fuel ($10.4 billion or 9.5 per cent). food products ($7.5 billion or 6.8 per cent). Among all tourism characteristic and connected products, the ones above had the highest state shares. However, the ranking varied from state to state for long distance passenger transportation, takeaway and restaurant meals, food products and fuel (Table 10). 5 As defined by the ABS, tourism characteristic products are defined as those products which would cease to exist in meaningful quantity, or for which sales would be significantly reduced, in the absence of tourism. 6 As defined by the ABS, tourism connected products are those that are consumed by visitors but are not considered as tourism characteristic products. 10

Tourism GVA Tourism GVA is considered the most accurate measure of tourism contribution to the economy. It includes the total labour income and capital revenue the industry receives, plus net taxes on production. Total direct tourism GVA was $39 billion in 2012 13, which is 3.8 per cent higher than the previous year in nominal terms. This represented 2.7 per cent of Australia s total GVA, which is below the 3.0 per cent share in 2006 07. This illustrates a downward trend in the tourism direct GVA share compared to other industries (such as mining) that experienced favourable conditions over the period. In 2012 13, total direct tourism GVA was made up of: domestic travel $28 billion (71 per cent of total tourism GVA). Of this figure, $13.0 billion (or 47 per cent) was for intra-state travel, $10.1 billion (or 37 per cent) for inter-state travel and $4.4 billion (or 16.1 per cent) for same-day trips international tourism $11.2 billion (29 per cent of total tourism GVA). The states that contributed most to total direct tourism GVA in 2012 13 were: New South Wales: $12.2 billion or 32 per cent; Queensland: $10.0 billion or 26 per cent; and, Victoria: $8.1 billion or 21 per cent. Domestic tourism travel plays a significant role in all states. The proportions of GVA generated by domestic travel vary across states. In 2012 13, domestic travel contributed the following to the state/territories total direct tourism GVA (Figure 4): Tasmania: $782 million or 81 per cent; South Australia: $1.6 billion or 78 per cent; Queensland: $7.5 billion or 75 per cent; Australian Capital Territory: $558 million or 72 per cent; Northern Territory: $563 million or 69 per cent; New South Wales: $8.5 billion or 69 per cent; Western Australia: $2.6 billion or 68 per cent); and, Victoria: $5.5 billion or 68 per cent. 11

Figure 4: Domestic and international travel s share of direct tourism GVA, 2011 12 Per cent 90 80 70 60 50 40 30 20 10 0 NSW Vic Qld SA WA Tas NT ACT Australia State / terrtory Domestic International Sources: TRA s estimates (for states/territories) and ABS (2013) (for Australia) Figure 5: Contribution of segments to domestic direct tourism GVA, 2012 13 80 70 60 50 per cent 40 30 20 10 0 NSW Vic Qld SA WA Tas NT ACT Australia Same day Intrastate Interstate Sources: TRA s estimates (for states/territories) and ABS (2013) (for Australia) In the domestic tourism segment, the share of total direct tourism GVA attributed to inter-state travel was highest for the Australian Capital Territory (68 per cent), the Northern Territory and Tasmania (55 per cent each) (Figure 5). The contribution of intra-state travel was highest in Western Australia (57 per cent), New South Wales (51 per cent) and Queensland (48 per cent). During 2012-13, total direct tourism GVA contributed most to total state GVA in the Northern Territory (4.3 per cent), Tasmania (4.2 per cent) and Queensland (3.7 per cent). The share of total state GVA ranged between 2 and 3 per cent for New South Wales (2.8 per cent), Australian Capital Territory (2.3 per cent), Victoria (2.6 per 12

cent) and South Australia (2.3 per cent). The direct tourism GVA made the smallest contribution in Western Australia (1.7 per cent). Between 2006 07 and 2012 13, tourism s direct share of total state GVA fell in all state and territories except Victoria and Tasmania where the share increased (Table 1 in Appendix A, and Figure 6). By industry, the tourism characteristic industries that contributed most to total direct tourism GVA nationally in 2012 13 were: accommodation ($6.9 billion or 17.7 per cent); air, water and other transport ($5.9 billion or 15.2 per cent); and cafes, restaurants and takeaway food services ($4.2 billion or 10.8 per cent). These tourism characteristic industries accounted for large shares of total direct tourism GVA in all states and territories but in New South Wales, Victoria, Western Australia, South Australia and the Northern Territory, ownership of dwellings was ranked ahead of cafes, restaurants and takeaway food services. Air, water and other transport ranked above accommodation in Victoria, South Australia, Western Australia and the Northern Territory as the top contributing industry to total direct tourism GVA (Table 7 in the Appendix). Indirect tourism GVA contributed a further $41 billion nationally in 2012 13. Combined with direct tourism GVA, this represented total GVA from tourism of $80 billion or 5.6 per cent of Australia s total GVA. Between 2006 07 and 2012 13 the contribution of indirect tourism GVA to total tourism GVA reduced marginally from 54 to 52 per cent. The states that contributed most to indirect tourism GVA in 2012 13 were: New South Wales ($12.8 billion or 31 per cent) Queensland ($10.4 billion or 25 per cent) Victoria ($9.1 billion or 22 per cent). 13

Meanwhile, the contribution of indirect tourism GVA to total tourism GVA was most important for Tasmania (54 per cent), Victoria (53 per cent) and South Australia (53 per cent). The indirect tourism GVA contribution was least important for Australian Capital Territory (49 per cent). The contribution for other states was around the 50 per cent level, Western Australia (50 per cent) and Northern Territory (51 per cent); and the same for New South Wales and Queensland (51 per cent each) (Tables 11 and 12). Figure 6: Direct tourism GVA share of state total GVA: 2006 07 and 2012 13 Per cent 8 7 6 5 4 3 2 1 0 NSW Vic Qld SA WA Tas NT ACT Australia State / territory 2006 07 2012 13 Sources: TRA s estimates (for states/territories) and ABS (2013) (for Australia) 14

Tourism employment The TSAs define tourism employment as the number of persons employed in tourism-related industries. Tourism (direct) employment is derived by multiplying the number of employed persons in each industry by the proportion of total tourismrelated output of that industry. There were 543,700 persons directly employed by the tourism industry nationally in 2012 13 (ABS, 2013). This represented a 2.2 per cent increase from the previous year and an average annual increase of 1.4 per cent since 2006 07, when there were 499,000 employed directly by the tourism industry (Table 4). The states that contributed most to the total number of persons employed directly in tourism in 2012 13 were: New South Wales (158,000 or 29 per cent); Queensland (140,000 or 26 per cent); Victoria (124,000 or 23 per cent); and, All other states together accounted for the remaining 22 per cent. Within each state, direct tourism employment share of total state employment varies from state to state, indicating different levels of importance of tourism on the individual state labour markets: Tasmania: 7.2 per cent; Northern Territory: 6.6 per cent; Queensland: 5.9 per cent; Australian Capital Territory: 4.7 per cent; New South Wales: 4.4 per cent; Victoria: 4.3 per cent; Western Australia: 4.3 per cent; South Australia: 3.8 per cent; and, Australia as a whole: 4.7 per cent Between 2006 07 and 2012 13, direct tourism employment share of total state employment increased marginally in the Australian Capital Territory, Victoria, and Tasmania (0.4, 0.3 and 0.1 percentage points, respectively). In all other states, except New South Wales, tourism s direct share to total employment declined (Figure 7). Reflecting this, direct tourism employment in the Australian Capital Territory and Victoria have increased their regional shares of national direct tourism employment over the same period (20.8 to 22.8 per cent and 1.7 to1.8 per cent, respectively). In contrast, New South Wales, Queensland and the Northern Territory reduced their shares (Table 4 in the Appendix). 15

Figure 7: Contribution of direct tourism employment to each state economy, 2006 07 and 2012 13 12 10 Per cent 8 6 4 2 0 NSW Vic Qld SA WA Tas NT ACT Australia State / territory 2006 07 2012 13 Sources: TRA s estimates (for states/territories) and ABS (2013) (for Australia) By industry, the tourism characteristic industries that contributed most to tourism employment nationally in 2012 13 were: cafes, restaurants and takeaway food services (148,400 employed persons or 27 per cent in national direct tourism employment); retail trade (102,000 employed persons or 18.8 per cent); and, accommodation (70,800 employed persons or 13.0 per cent). These tourism characteristic industries also accounted for the largest share of total direct tourism employment in all states and territories (Figure 8 and Table 8 in the Appendix). 16

Figure 8: Contribution of industries to direct tourism employment, 2012 13 Per cent 50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 NSW Vic Qld SA WA Tas NT ACT Australia State / territory Accommodation Cafes, restaurants and takeaway food services Retail trade Other industries Sources: TRA s estimates (for states/territories) and ABS (2013) (for Australia) Overall, a further 385,400 people were employed in a wide range of industries to support tourism demand indirectly in 2012 13. Combined with the direct tourism employment, this represented a total employment of 929,000 employed persons (or 8.0 per cent) of total employment in Australia in the year. At the state level, New South Wales (109,000 persons or 28 per cent), Queensland (101,000 persons or 26 per cent) and Victoria (79,000 persons or 21 per cent) contributed most to indirect tourism employment in 2012 13. Between 2006 07 and 2012 13, the contribution of indirect tourism employment to total flow-on tourism employment was between 39 and 43 per cent for all states and territories except Tasmania and the Northern Territory where its influence was greater (59 and 49 per cent respectively). At the national level, the contribution of indirect tourism employment to total flow-on tourism employment increased slightly from 40 to 41 per cent for Australia as a whole. 17

Conclusion State Tourism Satellite Accounts, 2012 13 presents a complete picture of tourism at the state and territory level, reporting results for key economic indicators for Australia s tourism industry. Tourism consumption 7 Tourism consumption totalled $110 billion in 2012 13, 4.0 per cent (or $4.2 billion) higher than in 2011 12 in nominal terms. o o All states except South Australia experienced an increase in visitor consumption. Tourism consumption in South Australia declined by 1.7 per cent. Most (92 per cent) of this ($4.2 billion) increase occurred in New South Wales, Queensland, Victoria and Western Australia. Tourism Gross Value Added (GVA) and Tourism Gross Domestic Product (GDP) Tourism contributed directly $39 billion of GVA and $42 billion of GDP to the Australian economy. Tourism contributed indirectly $41 billion of GVA and $48 billion of GDP. o All states and territories experienced growth in indirect GVA and GDP compared with 2011 12. The strongest growth occurred in New South Wales, Queensland, Victoria and Western Australia with moderate growth in other states and territories. Tourism employment The tourism industry directly employed approximately 544,000 persons and indirectly generated additional employment for approximately 385,000 persons. All states and territories except South Australia contributed to around 14,500 additional indirect jobs in 2012-13 compared with 2011 12. In South Australia, tourism indirect employment growth remained unchanged from 2011-12. Over the period 2006-07 to 2010-11, there was a range of external shocks that depressed demand for tourism. Most prominent factors were the mining boom and the GFC effects that actually lowered demand from within Australia and also from overseas countries. However, tourism demand (or tourism expenditure) seems to have picked up over the last two years, 2011-12 and 2012-13, more so for the inbound market across most states and territories, up 5.7 per cent in nominal terms in 2012-13, slightly stronger than 1.7 per cent for last year. In contrast, 7 See the Glossary on page 52 for definitions of Tourism consumption, GVA, GDP and employment 18

tourism expenditure for the domestic market in 2012-13 was up (3.4 per cent), but less than that of 2011-12 (7.7 per cent). The driver of changes to tourism expenditure for the most recent year seems to have originated from inbound stimulus, particularly from China as well as from the United Kingdom and the USA. Of the domestic markets, while the same day travel has remained constant at 23 per cent of the total domestic tourism expenditure, intra-state tourism increased its contribution to 43 per cent in 2012-13 (up 2.7 percentage points from 2009-10), squeezing the inter-state tourism down to 33 per cent (down 2.6 percentage points from 2009-10). Among all states, NSW attained the strongest share of intra-state tourism in 2012-13 (47 per cent) in the State s domestic tourism expenditure. Smaller states like Tasmania, Northern Territory and the Australian Capital Territory still rely heavily on inter-state tourism as their domestic tourism source, at least from 50 per cent to 70 per cent of total domestic tourism expenditure. All these positive developments highlight a new and positive phase for tourism in Australia. These changes also indicate that together with other non-mining states the mining states seem to have regained their momentum for tourism development to contribute to the growing economy. Further growth in all states should provide opportunities that enhance investment and diversification for the longer term potential tourism development. 19

Appendix A Key tables Table 1: Key direct tourism aggregate results, 2006 07 to 2012 13 NSW Vic Qld SA WA Tas NT ACT Total(a) LEVEL Gross value added $ million 2006 07 9362 5749 7705 1649 2953 773 836 567 29594 2007 08 10127 6348 8501 1741 3099 819 783 618 32035 2008 09 10314 6798 8361 1916 3049 828 866 572 32703 2009 10 11073 7260 8606 2117 3212 966 853 735 34821 2010 11 11715 7593 8539 2144 3301 881 778 665 35615 2011-12 11572 7920 9560 2112 3768 913 788 723 37355 2012-13 12237 8097 9973 2047 3867 961 821 781 38783 Net taxes on products $ million 2006 07 872 525 786 155 286 80 100 57 2860 2007 08 939 575 861 160 292 85 91 61 3065 2008 09 929 601 828 170 285 84 100 56 3053 2009 10 970 620 811 186 288 96 94 69 3134 2010 11 1046 649 816 189 297 86 87 61 3231 2011 12 1019 679 917 183 342 90 86 68 3384 2012 13 1066 678 951 174 348 93 89 72 3472 Total gross state product $ million 2006 07 10234 6273 8491 1804 3239 853 936 624 32454 2007 08 11065 6924 9362 1901 3391 904 874 679 35100 2008 09 11243 7398 9189 2086 3334 912 966 628 35756 2009 10 12043 7880 9417 2303 3500 1062 947 804 37955 2010 11 12761 8242 9355 2333 3597 967 865 725 38846 2011 12 12591 8599 10476 2295 4110 1003 874 790 40739 2012 13 13303 8776 10925 2221 4215 1053 910 852 42255 Employed persons '000 2006 07 146 104 131 31 53 16 10 8 499 2007 08 150 110 137 30 52 16 9 9 513 2008 09 150 115 132 33 50 16 10 8 514 2009 10 153 118 129 34 49 17 9 10 519 2010-11 162 123 127 34 51 16 8 9 531 2011 12 152 123 136 32 56 16 8 9 532 2012-13 158 124 140 31 57 17 8 10 544 SHARE OF STATE ECONOMY 1

Gross value added % 2006 07 2.9 2.5 3.9 2.5 2.3 4.1 6.7 2.7 3.0 2007 08 2.9 2.5 4.0 2.4 2.1 4.1 5.4 2.6 2.9 2008 09 2.8 2.6 3.4 2.6 1.8 4.1 5.5 2.3 2.8 2009 10 2.9 2.7 3.7 2.7 1.8 4.4 5.5 2.6 2.9 2010 11 2.9 2.6 3.4 2.6 1.5 3.9 4.7 2.2 2.7 2011 12 2.7 2.6 3.6 2.4 1.6 4.0 4.4 2.3 2.7 2012-13 2.8 2.6 3.7 2.3 1.7 4.2 4.3 2.3 2.7 Net taxes on products % 2006 07 3.0 2.4 5.0 2.6 3.5 4.9 13.7 3.8 3.4 2007 08 3.1 2.4 5.1 2.5 3.4 4.9 12.0 3.9 3.4 2008 09 3.3 2.7 5.4 2.8 3.9 5.1 12.0 3.9 3.7 2009 10 3.1 2.6 4.9 3.0 3.5 5.7 11.2 4.4 3.5 2010 11 3.2 2.5 4.9 2.9 3.8 5.2 10.5 3.7 3.5 2011 12 3.1 2.7 5.4 2.9 4.1 5.6 10.5 4.5 3.6 2012-13 3.1 2.7 5.5 2.6 3.6 5.7 9.9 4.6 3.5 Total gross state product % 2006 07 2.9 2.5 4.0 2.5 2.3 4.1 7.1 2.7 3.0 2007 08 2.9 2.5 4.0 2.4 2.2 4.2 5.8 2.7 3.0 2008 09 2.8 2.6 3.6 2.6 1.9 4.2 5.8 2.3 2.8 2009 10 2.9 2.7 3.7 2.8 1.9 4.5 5.8 2.7 2.9 2010 11 2.9 2.6 3.5 2.6 1.6 4.0 5.0 2.3 2.8 2011 12 2.7 2.6 3.7 2.5 1.7 4.1 4.6 2.4 2.7 2012-13 2.8 2.6 3.8 2.3 1.7 4.3 4.5 2.4 2.8 Employed persons % 2006 07 4.4 4.0 6.2 4.0 4.8 7.1 9.6 4.3 4.8 2007 08 4.4 4.1 6.3 3.9 4.6 6.9 8.0 4.4 4.8 2008 09 4.4 4.3 5.9 4.1 4.2 6.6 8.4 4.1 4.7 2009 10 4.4 4.3 5.7 4.3 4.2 7.4 7.7 4.8 4.7 2010 11 4.6 4.3 5.5 4.2 4.2 6.7 6.7 4.2 4.7 2011 12 4.2 4.3 5.8 3.9 4.4 6.8 6.6 4.4 4.7 2012-13 4.4 4.3 5.9 3.8 4.3 7.2 6.6 4.7 4.7 (a) National totals may differ slightly from those reported in the ABS Tourism Satellite Accounts due to rounding. 2

Table 2: Direct tourism output by tourism category, 2006 07 to 2012 13 NSW Vic Qld SA WA Tas NT ACT Total (a) LEVEL ($million) basic prices Same-day travel 2006 07 2379 1592 1553 417 578 198 82 147 6947 2007 08 2438 1677 1583 407 609 179 74 169 7137 2008 09 2477 1943 1623 454 599 189 101 121 7507 2009 10 2844 1980 1855 438 625 207 96 169 8213 2010 11 2740 1860 1816 467 584 212 76 145 7900 2011 12 2817 2130 2046 487 672 212 106 152 8621 2012-13 2878 2174 2143 520 633 224 98 167 8838 Intra-state (b) 2006 07 6432 3598 5303 1225 2408 419 363 202 19952 2007 08 6725 4026 5786 1287 2559 470 478 212 21543 2008 09 6716 3858 5684 1348 2478 456 473 179 21191 2009 10 7354 4180 5248 1344 2337 494 443 178 21579 2010 11 7779 4177 5597 1476 2490 504 442 185 22650 2011 12 7657 4666 6927 1440 2835 503 464 243 24734 2012-13 8297 4586 7298 1343 2970 502 495 233 25724 Inter-state (b) 2006 07 4392 3267 5270 1139 1545 791 932 649 17985 2007 08 4953 3609 5958 1164 1373 841 747 696 19342 2008 09 4639 3742 5191 1260 1242 787 806 658 18325 2009 10 4856 3836 5709 1509 1433 1013 829 842 20026 2010 11 5372 4222 5381 1373 1371 800 687 674 19880 2011 12 5230 4015 5717 1386 1698 863 717 717 20344 2012-13 5282 4097 5874 1315 1616 950 715 805 20656 International 2006 07 5896 3171 4441 603 1585 314 621 245 16877 2007 08 6171 3395 4459 724 1817 322 556 278 17723 2008 09 6424 3686 4747 706 1771 344 640 277 18597 2009 10 6336 3989 4711 818 1930 344 609 328 19065 2010 11 6775 4347 4571 879 2003 340 605 377 19895 2011 12 6741 4472 4681 810 2193 354 520 390 20161 2012-13 7055 4706 4899 831 2367 363 577 424 21222 Total 2006 07 19100 11628 16567 3384 6117 1722 1998 1243 61760 2007 08 20287 12708 17786 3582 6358 1812 1856 1355 65744 2008 09 20256 13230 17245 3768 6089 1776 2020 1235 65619 2009 10 21389 13985 17523 4109 6325 2058 1977 1518 68883 2010 11 22665 14605 17365 4196 6448 1856 1810 1381 70325 3