Tom Phillips and Peter Valerio

Tom Phillips and Peter Valerio

PART 1 - TOM Bottom line update: the importance of tourism South Coast LGA case study: Kiama PART 2 - PETER Digging deeper expenditure items at LGA level Tourism Value Framework PART 3 TOM & PETER Q & A

The Bottom Line: Value Update Tom Phillips

In 2010-2011 Tourism contributed $73.3 billion to the Australian Economy Direct and Indirect contribution It directly and indirectly employed 907,100 people This represents 7.9% of the workforce Tourism s direct employment share was 4.5% Higher than many other important industries Mining (1.9%) Electricity, gas, water and waste water services (1.3%) Wholesale trade (3.6 per cent).

DIRECT The direct economic contribution of tourism to the Australian economy is generated where a direct physical or economic relationship exists between the visitor and producer of the good or service For example, payment for accommodation has a direct effect in the form of payment of staff wages This example leads to a term you may not have come across: the Induced effect The Induced effect in this example is simply the fact that the wages paid are used to pay for day to day and other expenses. They are not tourists, but contribute to the economic value of tourism because of tourists.

INDIRECT The indirect economic contribution from tourism comes from other industries that are not in direct contact with visitors. However, they are required to produce goods and services to satisfy demand for tourism products. Continuing with the accommodation example, if a guest purchases a meal from the in-house restaurant payments flow to: Food supplier (number of sources) The food supplier may purchases these supplies from a farming company The farming company purchases labour and transport to deliver produce to market, etc etc etc. Even if no food is involved the accommodation house still purchases a wide range of other goods and services from industries that are not, using traditional industry classifications, in the tourism industry.

The tourism multiplier is real. It is a matter of fact and something your stakeholders should know. For Australia, tourism s multiplier is 1.92. This means that for every direct tourism dollar entering the Australian economy, another 92 cents are added to other parts of the economy which would otherwise not be there. Tourism s total multiplier of 1.92 is larger than other important industries such as Mining (1.67), Retail trade (1.81) and Education and training (1.38).

This job generation figure is taken from a report by Tourism Research Australia (TRA) for 2008-2009 published in February 2010. The relative figures for expenditure have been inflated by CPI for the years 2009 to 2013 inclusive. This gives for NSW in 2013 the average expenditure per direct person employed at $164,000

DNSW make this data readily available to us Total direct tourism expenditure is $26.7 Billion (Y.E 30 th June 2013) Domestic overnight International overnight Day trippers $14.5 billion $6.5billion $5.7 billion Using the figure from the previous slide this generates 300,000 jobs 163,000 people are directly employed and a further 137,000 indirectly employed

Useful to know the bottom line for Australian and your own State. Obviously need to do a little more in terms of geographical relevance. Australia has 84 tourism regions; each tourism region is made up of a number of Statistical Areas (SA s) of various levels. There is a correspondence between SA2 s and Tourism Regions Needless to say these regional tourism industries vary enormously and the value of tourism also varies enormously. Until Jan 2012 the underlying geographical units that made up the Regions were Statistical Local Areas (SLAs). This major change is not a problem at the Region level but present major challenge at a Local Govt Area level. Peter will cover this in more detail

Blue Mountains Capital Country Central Coast Central NSW Hunter Mid North Coast Northern Rivers New England North West Outback NSW Riverina Snowy Mountains South Coast Sydney The Murray Note: The differences between LGAs within the Regions has always been an issue. Whilst there may be a logic for the creation of alliances one of the side-effects of these are that the level of difference between the LGAs increases

SOUTH COAST TOURISM REGION AND ITS LOCAL GOOVERNMENT AREAS

The date we have is in good shape in terms of the availability of visitor volume and expenditure data. Actual numbers of visitors are Domestic overnight 3 million International overnight 103,000 Day trippers 6.116 million Total direct tourism expenditure is $2,070 million (Y.E 30 th June 2013) Domestic overnight International overnight Day trippers $1,420 million $116 million $532 million

But it is not in good shape when it comes to an estimate of the jobs related to the expenditure. One of the questions constantly asked is how many jobs does Tourism generate. It is up to SCRTO to work this out. Average expenditure per direct person employed is $201,670 (higher than State average escape spending to capital cities) 10,260 people are directly employed 9,440 people are indirectly employed Total for South Coast -19,700

SCRTO produces Statement of Tourism Economic Impact for each Local Government Area for each financial year. This includes LGA-specific visitor volume estimates for each main visitor category: Domestic Overnight Visitors Domestic Day Visitors International Overnight Visitors These LGA volume estimates are not published or available in the public domain. They can, however, be produced if you know how.

Visitor expenditure for each of these visitor categories is also calculated and provided to each LGA member Reminder not to go looking for your own LGA data on the DNSW, TRA or any other web site. It is neither measured or published. SCRTO had to initiate this LGA-specific work

Being provided with the expenditure by visitors to their specific LGA, and an estimate of the number of people who owe their livelihood to tourism Each Council are in a position to at least have an estimate of the economic importance of tourism in their own LGA

KIAMA

Kiama Council contributes approximately $306,500 a year to Tourism Kiama (Illawarra Mercury, 3 rd March 2014) $217,000 from a special levy $30,000 from their Caravan Park Operation $59,500 rental subsidy Tourism brought in $171,000,000 in the year ending 30 June 2013 And generated 1,600 jobs in a total residential population of 20,827 (30 th June 2012) ROI 570 times the investment and A huge return in social capital (jobs).

A number of references used in this part of the presentation to cover the National, State and Regional level. These include: Tourism s Contribution to the Australian Economy, 1997 98 to 2010 11 Tourism Research Australia (TRA) April 2012 Regional Tourism Employment in Australia for 2008-2009 (TRA 2010) Economic Importance of Tourism (TRA August 2011) Regional Tourism employment in Australia 2008-2009 (TRA February 2010) DNSW Travel to the South Coast Region. YE June 2013. There are NO published sources, however, for visitation and a Local Government Level (nor will there be) let alone its value. To achieve this, SCRTO engaged Peter Valerio. He able to data-mine the major tourism databases to produce LGAspecific visitor volume estimates and go on to model LGAspecific $.