Report on the economic contribution to Victoria of the Shipwreck Coast visitor opportunity

Report on the economic contribution to Victoria of the Shipwreck Coast visitor opportunity Introduction The Shipwreck Coast in partnership with the Great Ocean Road is Victoria s number 1 leisure tourism destination and marketing icon. Despite the Shipwreck Coast being around an eight-hour return drive from Melbourne more than 30% of international leisure visitors to Victoria visit this attraction. In practice, the access barriers to visiting the Shipwreck Coast from Melbourne imply that its visitors are highly motivated to see this attraction. This report provides the first comprehensive estimates of the value of incremental visitor spending to Victoria arising from visitation to the Shipwreck Coast. The Shipwreck Coast for this report is defined as the area of the Master Plan covering 28 kilometres of coastline from Princetown past the 12 Apostles to the Bay of Islands in the west. In total, as shown in Table 1., visitation to the Shipwreck Coast is estimated to have contributed between $712m and $782m in incremental visitor spending to Victoria in 2015. This represents between and 11% of total incremental visitor spending to Victoria in this year from international and interstate leisure visitors. Table 1. Estimates of incremental visitor spending to Victoria in 2015 due to visitors to the Shipwreck Coast Master Plan area Incremental spend from visitors who would otherwise not come to Victoria ($m) Incremental spend from visitors who ranked the opportunity to visit the Shipwreck Coast in their top 3 reasons to visit Victoria but who did not consider they would otherwise not come to Victoria at this time high and low range estimates ($m) Incremental spend from visitors spending extra days in Victoria even though their decision to visit Victoria was not influenced by the opportunity to visit the Shipwreck Coast ($m) International $334 $65-109 $18 $418-$461 Day trip visitors International $41 $20-33 $1 $62-$75 Overnight visitors to the Western (GOR) region Interstate Day $88 $9-14 $0 $97-$103 trip visitors Interstate $123 $11-18 $2 $136-$143 Overnight visitors to the Western (GOR) region TOTAL $586 $105-175 $21 $712-$782 Source: Decisive Consulting Pty Ltd Notes: In column 2-100% of estimated average trip spending is allocated to the number of visitors who indicated they would not otherwise come to Victoria but for the opportunity to visit the Shipwreck Coast In column 3 15-25% of estimated average trip spending from these visitors is assessed as incremental spending to Victoria In column 4 rather than use a share of estimated average trip spend, only the estimated value of additional nights spent in Victoria beyond those originally planned is included in incremental spending to Victoria To avoid double counting there is no consideration of the value of additional days in Victoria in column 2 or 3. Total ($m)

2 Study approach used The methodology of this study applies the well-established and robust method used by State Governments to value the total incremental visitor spend to the State due to major events. 1 From this methodology, it is clear-cut that all of the Victorian visitor spending should be included for visitors who would not otherwise have come to Victoria at this time, as per the practice used in valuing major events. However, a different approach is required when visitation to the Shipwreck is one of the top 3 reasons for visiting Victoria, but is not a sufficient motivator to decide whether or not to come to Victoria. This report takes the approach of including a range of estimates that are both set conservatively with a high (25% of spend) and low estimate (15% of spend) of trip spending in Victoria included in incremental spending to Victoria. These high and low percentages were influenced by a review of the expected impact on average trip spending of visiting the Shipwreck Coast. For day trip visitors these assumptions reflect that for most visitors the cost of a day trip to the Shipwreck Coast is around $120 per person and the 12-14 hours from their normal Melbourne base requires one to two extra days accommodation suggesting spending of around $400. For overnight visitors to the region, international visitors averaged 4 nights in the region and interstate visitors 7 nights in the region. As per the event methodology, only when visitors have extra days in Victoria than they planned in order to visit the destination is there any incremental value to Victoria for visitors whose decision to come to Victoria was not influenced by the opportunity to visit the Shipwreck Coast area. A key conservative assumption used in line with Victorian Treasury Department preference is that visitors from within Victoria would spend money used on trips to this area to buy other goods and services in Victoria. So under this approach this trip spending is not incremental to the Victorian economy. This ignores that many intrastate visitors choose to visit the Shipwreck Coast rather than travel interstate that would otherwise entail a net loss of spending to Victoria. In assessing the influence on the decision to visit Victoria and stay extra nights, it proved impractical for non-victorian visitors to separate the influence of the iconic elements of the Great Ocean Road to the east and those within the Shipwreck Coast Master Plan area (28kms long). To partly tackle this problem, the above estimates include conservative assumptions that reduce estimated contribution to incremental visitor spend to Victoria. This allows for visitation that only goes to other areas of the larger Great Ocean Road region but does not include visitation to the Shipwreck Coast. As a result, the estimates presented above represent the incremental visitor spending that accrues to Victoria from international and interstate visitors to the Shipwreck Coast area. The estimates recognise that part of the appeal of this destination relates to the adjacent and joint consumption of visitation to other areas of the Great Ocean Road to the east on the way to or from the Shipwreck Coast area. To develop these estimates it was necessary to: 1 Jago, L. and Dwyer, L. (2006), Economic evaluation of special events: a practitioner s guide, Cooperative Research Centre for Sustainable Tourism. This methodology focuses on deriving robust estimates of the incremental visitor spend to the destination due to the event. For example, the consultant recently applied this methodology to estimating the economic value of the November 2015 Speedway at Etihad event.

1. Collect estimates from a large visitor sample survey on the importance to the decision to visit Victoria of the opportunity to visit the Shipwreck Coast by international and interstate visitors; and 2. Use these estimates in parallel with the extensive data from the national tourism surveys from Tourism Research Australia (including use of more detailed special data services from TRA). Survey results were collected from 797 international and interstate visitors in mid April 2016. The detailed explanation of the derivation of the estimates used in this report including key survey findings that include a range of new profiling information on visitors to the Shipwreck Coast is provided in the attachment to this report. 3 Outlining the results The survey confirmed that international visitors dominate domestic visitation to the Shipwreck Coast area. Only 24% of the random survey intercepts were of intrastate Victorian travellers or locals, with a further 16% of the random survey intercepts interstate visitors and the majority international visitors (61%). Chart 1. The estimated share of incremental visitor spend to Victoria in 2015 by type of visitor Shares of es1mated incremental visitor spend to Victoria in 2015 due to the opportunity to visit the Shipwreck Coast area by type of visitor Source: Decisive Consul1ng Pty Ltd 13% 18% 59% Share of incremental spend due to interna1onal day trippers Share of incremental spend due to interna1onal overnight visitors to the region Share of incremental spend due to interstate day trippers Share of incremental spend due to interstate overnight visitors to the region International day trip visitors were nearly half the total sample of international and interstate visitors (48%). This type of visitor has a higher 59% estimated share of the value of incremental visitor spend to Victoria due to the opportunity to visit the Shipwreck Coast area. This result reflects in part that international holiday visitors have a much longer average stay in Victoria than interstate holiday visitors, even if spending less per day. Critical to understanding the origin of the incremental spending estimates are the estimated number of visitors in 2015 (as shown in Table 2). The spending estimates were split by whether: International or interstate; Day trip or overnight stayers in the Great Ocean Road (Western) region; and How strong was the influence on their decision to visit Victoria due to the opportunity to visit the 12 Apostles area. Table 2. Split up of international and interstate visitors by ranking of importance to visiting Victoria of visiting the Shipwreck Coast area Visitors who would otherwise not come to Victoria Visitors who ranked the opportunity to visit the Shipwreck Coast in their top 3 reasons to visit Victoria but who did not consider they would otherwise not come to Victoria at this time Visitors whose decision to visit Victoria was not influenced by the opportunity to visit the Shipwreck Coast International Day 183,000 246,000 94,000 523,000 trip visitors International 31,000 86,000 13,000 131,000 Overnight visitors to the Western (GOR) region Interstate Day trip 51,000 49,000 0 101,000 visitors Interstate 63,000 49,000 25,000 137,000 Overnight visitors to the Western (GOR) region TOTAL 329,000 431,000 132,000 892,000 Source: Decisive Consulting Pty Ltd Total

4 For visitors whose decision to come to Victoria was driven by the opportunity to visit the Shipwreck Coast, holiday visitor length of stay and average daily spend in Victoria is used. This reflects that the longer staying visiting friends and relatives (VFR) visitors normally have a different primary purpose for visiting Victoria. Other survey responses were valued using the length of stay and average daily spend of all leisure visitors (holiday + VFR). This approach slightly reduces the estimated total incremental visitor spend to Victoria. There was a different mix of nationalities for international day trip visitors than international visitors who stayed overnight in the local region the latter being more likely to be British or European and less likely to be Chinese or other Asian. The most common means of transport of international and interstate visitors was tour bus, which provided transport for 47% of these visitors. Rental cars were the next most common form of transport used (30%) by the combination of international and interstate visitors. While including the value in incremental visitor spending to Victoria of the Shipwreck Coast s influence on the decision to visit Victoria, could perhaps be questioned, not doing this would ignore the results from a large sample survey and the headline prominence of promotion of this area. This promotion recently includes being the lead attraction for Australia in the current Tourism Australia $40 million marketing campaign (see the front page of www.australia.com). Some people might also be interested in the value of the extra days in Victoria reported by survey respondents beyond those they originally planned for their trip to Victoria as due to their decision to visit the Shipwreck Coast area. In 2015, it is estimated from the survey that international and interstate visitors to the Shipwreck Coast provided incremental visitor spending to Victoria on this basis of $141 million. To avoid double counting economic benefits to Victoria this spending is not counted in total benefits except for visitors whose visit to Victoria was not influenced by the opportunity to visit the Shipwreck Coast. Finally, it is worth noting that this report does not value the promotional value to Victoria of the Shipwreck Coast where it encourages visitation to Victoria even though the visitor does not eventually take the long drive to the Shipwreck Coast. For example, in South Australia comparatively few visitors from interstate or overseas take the expensive journey to Kangaroo Island, yet this iconic attraction and Southern Ocean Lodge in particular provide key images that encourage visitation to this state. As this unknown influence is even more important to Victoria with respect to the Shipwreck Coast this report underestimates the incremental spending to the Victorian economy due to the Shipwreck Coast. Karl Flowers 9 May 2016

5 ATTACHMENT Estimating the incremental visitor spending to Victoria from the Shipwreck Coast area Introduction Victoria s economy is a major beneficiary from incremental visitor spending due to international and interstate visitors who visit for a leisure purpose (holiday or visiting friends and relatives). Tourism Research Australia estimates that in 2015 Victoria received a total of $7 billion in incremental leisure visitor spending comprised of: $4.0 billion in spending by leisure interstate visitors (holiday $2.7 bn and VFR $1.3 bn) $3.0 billion in spending by leisure international visitors (holiday $1.7 bn and VFR $1.2 bn) On Sunday 3 April and Monday 11 April 2016, visitor surveying was conducted at the 12 Apostles (on Victoria s Shipwreck Coast). The sampling period was chosen to avoid major public holidays and include a mix of weekend and weekday visitation, one day of Victorian school holidays and one day outside. On the Sunday five surveyors collected responses at the 12 Apostles car park (including one Chinese speaking surveyor). On the Monday two surveyors collected responses (including one German speaking surveyor) over a longer period on the stop beside the gantry over the Great Ocean Road just outside Torquay and at Lorne Pier but overwhelmingly again at the 12 Apostles car park. A total of 268 people from overseas and interstate were intercepted and reported on the travel planning and motivations of a total sample size of 797 overseas and interstate visitors. Comparatively few Victorians (89) were intercepted by the survey team, only representing 25% of the overall survey intercepts. A key conclusion of the survey was that Victorians are a minority of visitors to the 12 Apostles. Table 3. Sample size of international and interstate visitors to the 12 Apostles Intercept Survey Share of numbers Size Survey International Overnight Visitor 91 261 33% International Day Visitor 117 385 48% Interstate Overnight Visitor staying 44 116 15% Interstate Day Visitor 16 35 4% 268 797 On average each international or interstate person who completed the full survey reported on the travel planning of 3 people. Results International tourism Tourism Research Australia provides core data on international visitors to Victoria in 2015 as per the following table: Table 4. Length of stay, spend per day and trip for all holiday, VFR and leisure visitors to Victoria Source: TRA, State tables for Dec quarter 2015 IVS results

TRA staff also assisted by doing a special data service to estimate the length of stay in Victoria of holiday, VFR and leisure visitors who visit the Great Ocean Road (GOR) as a place of interest and either stay in the Western region or visit the GOR on a day trip. Table 5. Length of stay in Victoria by international visitors to GOR on a day trip or staying in the region Average nights in Victoria by visitors to GOR on a day trip Average nights in Victoria by visitors to GOR on a trip with overnight stays in the Western (GOR) region Holiday 15 10 VFR 25 19 Leisure 18 16 Source: TRA Special Data service, 29 April 2016 Similarly, TRA estimate the regional expenditure in Victoria of holiday, VFR and leisure visitors to Victoria at $125, $72 and $96 per day respectively (Source: State summary of December quarter International Visitor Survey results). International Day trip visitors In 2015, there were an estimated 630,000 international visitors who visited the Great Ocean Road but did not stay in the Great Ocean Road region. Of these visitors, 81% were leisure visitors either on holiday or visiting friends and/or relatives. Leisure visitors to Victoria who took a day trip to the 12 Apostles/Great Ocean Road, but did not stay overnight in this region had an average length of stay in Victoria of 18 nights compared to the 15 night average of all international leisure visitors to Victoria. The focus for comparison is on leisure visitors because the alternative of looking at all visitors would produce much longer average length of stay due to long staying education and employment visitors who have different major reasons for visiting Victoria than visiting the 12 Apostles. 2 3 Which countries do international visitors on day trips to the 12 Apostles come from and how do they travel to the area The survey interviewed visitors from 32 countries on day trips. This result was assisted by having a Chinese speaking surveyor on the Sunday and German speaking surveyor on the Monday. The split up of international day trip survey responses by nationality is shown in Chart 1 and shows a close but not perfect alignment to the share of international leisure visitors to Victoria by nationality. Chart 2. Survey respondents for day trip visitors by country of origin is a close match to the share of international leisure visitors to Victoria by nationality 6 35% Surveyed internajonal day trip visitors by najonality compared to total internajonal leisure visitors to Victoria Source: Decisive ConsulJng Pty Ltd 30% 27% 30% No. of survey responses 25% 20% 15% 16% 21% 8% 13% 11% 12% 20% 9% 7% 5% 0% China Other Asia NZ UK Other Europe USA+Canada South America +Mexico 2% It is not surprising that New Zealanders were under-represented in the sample, as they have on average been to Australia around nine times before and had more previous opportunities to visit this area. The under-representation of Chinese visitors may reflect that the survey was held away from their major holiday periods of New Year and Golden Week (May). The over-representation of South Americans was surprising, but these visitors are more commonly on their first trip to Australia and like the over- 2 For analysis purposes it is conservatively assumed that all international day trip visitors are leisure visitors, as otherwise the long stay and heavy spend of education and employment visitors would inflate the estimates. 3 Special data service from TRA, by Steve Matthews on 22 April, 2016.

7 representation of North Americans may reflect surveying held only a week after Easter when many take advantage of public holidays. Of importance to the implementation of the Shipwreck Coast Master Plan a large majority (83%) of the international day trip visitors arrived on a tour bus. Rental cars also provided a 12% share of this market. The clustered arrival of tour buses at the 12 Apostles car park in the early to mid afternoon each day puts pressure on the facilities there and resultant overcrowding at much higher levels than the average numbers of visitors suggest. Chart 3. Most international day trip visitors come on tour buses Travel by tour bus dominates interna7onal day trip visita7on to 12 Apostles Source: Decisive Consul7ng Pty Ltd 12% 3% 2% 83% Tour Bus Rental Car Own Car Friend or Rela4ves Car Expenditure on international day trips In the survey a question asked about estimated costs of the day s travel including: tours; food; beverage; helicopter flights; and fuel but not including any accommodation or rental car costs. Accommodation costs were often not relevant as day trip visitors often did not stay any extra nights in Victoria. Rental car costs were estimated at $80 per day for travel parties of less than 4 and $120 per day for travel parties of 5 adults. Average estimated spend per day by international day trip visitors (not including accommodation, but including an allowance for rental cars) was $117. Importance of a visit on a day trip as a motivator for internationals to visit Victoria Just over a third of international day visitors who visited the 12 Apostles only come to Victoria because of the opportunity to visit the 12 Apostles/Great Ocean Road area. This is a critical finding as it is a major driver of the total incremental visitor spend to Victoria that is due to the Shipwreck Coast area. For international visitors to take an arduous often 14 hour or more day-trip (allowing for hotel pick up and drop off) to the Shipwreck Coast on their visit to Victoria would normally be impractical for those visitors to Victoria spending less than 2 or 3 days in the State. The average length of stay for holiday visitors to Victoria in 2015 who visited the Great Ocean Road as a place of interest on a day trip was 15 days. A further 47% of international day visitors who visited the 12 Apostles responded that visiting the 12 Apostles/Great Ocean Road area is one of their top three reasons for visiting Victoria. Chart 4. Seeing the 12 Apostles area on a day trip is a major motivator of international visitors to come to Victoria Finally, 18% of international day visitors concluded that the opportunity to visit the 12 Apostles/Great Ocean Road area did not feature in their decision or was incidental to their decision to visit Victoria. In practice, international (and interstate) visitors were unaware of the boundaries of the Shipwreck Coast area. While 90% of the sample was intercepted at the 12 Apostles car park, these visitors commonly considered the 12 Apostles with the Great Ocean Road together as the reason for their day trip unable to separate the 12 Apostles area from the eastern parts of the Great Ocean Road in their thinking.

Extra nights in Victoria by international visitors due to the decision to visit the 12 Apostles on a day trip Respondents were asked whether in deciding to visit this area today as part of their trip, did they extend their originally intended stay in Victoria to allow them to visit the 12 Apostles area? There were 379 valid responses to this question from the 385 survey responses. The majority did not extend their stay in Victoria (227 or 60%), while a significant minority did extend their stay (152 or 40%). With many of the visitors to Victoria on package tours or having fixed holiday periods, it is not surprising that the majority of visitors did not increase their overall length of stay to visit the 12 Apostles on a day trip. Of the 40% of international day trip visitors who did extend their stay in Victoria as a result of the opportunity to visit the region, they spent on average an additional 2.1 visitor nights. Averaged across all international day trip visitors surveyed the average additional visitor nights is 0.8 visitor nights. Chart 5. Seeing the 12 Apostles area on a day trip is a common reason to extend the stay in Victoria A significant minority of interna5onal day trip visitors extended their originally intended stay in Victoria to visit the 12 Apostles/GOR area Source: Decisive Consul5ng Pty Ltd 60% 40% In deciding to visit this area today as part of our trip, we extended our originally intended stay in Victoria to allow us to visit this area? In deciding to visit this area today as part of our trip, we did not extend our originally intended stay in Victoria to allow us to visit this area? 8 Applying the survey results to estimate the value of incremental spending to Victoria from international day trip visitors to the 12 Apostles area There was an estimated 630,000 international day trip visitors to the Great Ocean Road as a place of interest in 2015 (Source: TRA Online, IVS). For this project it is conservatively assumed that 83% (5 in 6 visitors) on international day trips to the Great Ocean Road (523,000), visit the Shipwreck Coast area on their trip. Coincidentally, this is in line with the share of international day trip visitors surveyed at the 12 Apostles who arrived on tour buses, suggesting the assumption is appropriately conservative. 4 International visitors on day trips are estimated to have spent $61 million on their day trip to the Shipwreck Coast area in 2015 on the basis of an average spend of $117 each ($117*523,000). The survey found that 35% of international day trip visitors would not have visited Victoria but for the opportunity to visit the Great Ocean Road/12 Apostles area. In practice, the vast majority of these travellers are expected to be holiday rather than VFR visitors to Victoria who presumably come to Victoria primarily to see their friends and family. Tourism Research Australia estimate that in 2015 the spend (including packages but not international airfares) of holiday visitors in Victoria was $125 per day or a total spend in Victoria of $1,875 when on the average 15 day stay. Applying the 35% share of survey respondents to the estimated number of international day trip visitors in 2015 of 523,000 and an average spend in Victoria of $1,875, implies that visitors who only come to Victoria at all to see the 12 Apostles/Great Ocean Road contributed $334m in 2015 to incremental visitor spend to the Victorian economy. The survey found that 47% of international day trip visitors to the 12 Apostles area, have visiting this region as one of their top three reasons for visiting Victoria, but not as critical to visiting Victoria at all. The 47% share is applied to the estimated number of these visitors at an average spend for leisure international visitors to Victoria of $1,776 for the average stay of visitors to Victoria who visit the GOR as a place of interest on a day trip (18.5 nights at $96 per night). A conservative assumption was used to create a high and low range estimate by assessing that the opportunity to visit the Great Ocean Road/12 Apostles is worth between 15-25% of incremental spending of these visitors on their total visit to Victoria. This conservative assumption implies a valuation of incremental spending to Victoria of $65-109m in 2015. 4 The survey struggled to find international visitors to interview in Lorne and Torquay compared to their huge numbers on the same day at the 12 Apostles carpark. Those international visitors surveyed at the start of the Great Ocean Road near Torquay, were all travelling to the Shipwreck Coast area on their trip. It is nevertheless recognised that some international visitors on day trips visit Torquay, Lorne and other destinations along the Great Ocean Road outside the Shipwreck Coast area, including for events like the Bell Beach Classic and Cadel Evans Bike Race. Data in the survey also indicated that many international visitors did visit Torquay and Lorne on their day trip in addition to the Shipwreck Coast area.

9 Of the 18% of international day visitors to the 12 Apostles who reported that the opportunity to visit this area did not feature in their decision or was incidental to their decision to visit Victoria just over half (54%) nevertheless reported that they had increased their length of stay in Victoria in order to visit the 12 Apostles area. This class of visitor spent an average of an extra two days in Victoria. An extra 2 days for this share of international day trip visitors is worth $18 million to the Victorian economy in incremental visitor spending. The total incremental visitor spending to Victoria from international day trip visitors is estimated using this method at between $418m and $461m. A far less compelling method is to look only at the extra days reported by day trip visitors due to taking the opportunity to visit the 12 Apostles area. On this basis, the incremental spend to Victoria sums to $40m as the average international day trip visitor spends 0.8 extra days in Victoria. To avoid double counting this amount it is not added to the incremental visitor spending estimates derived from visitors whose trip to Victoria was significantly influenced by the opportunity to visit the 12 Apostles area. International overnight visitors to the GOR region who visit the 12 Apostles area In 2015 there were 189,000 international visitors who stayed in the GOR (Western) region. Of these visitors 92% or 174,000 visited the Great Ocean Road as a place of interest on their trip. This was the second largest category of visitors surveyed. As expected, there was a much higher share of UK and Other Europe in the international overnight visitors to the region who visited the 12 Apostles than in day-trippers or overall leisure visitors to Victoria. The share of Chinese and Other Asian visitors was much lower in overnight visitors to the region though visitors from Singapore, Thailand and Sri Lanka were better represented. Chart 6 Europeans dominate in visitors to the 12 Apostles who stay overnight in the region Of the 261 international visitors staying overnight in the region surveyed: 57% were travelling by rental car (the rental car sector is a significant industry beneficiary of this attraction); 19% travelled in their own vehicle (often longer staying students or employees); 12% travelled on a tour bus (on a multi-day tour); and 11% travelled in a friend or relatives vehicle. 35% 30% 25% 20% 15% 5% 0% 7% Comparing the nadonality of surveyed internadonal visitors to the 12 Apostles who stay overnight in the region with day trippers and leisure visitors to Victoria Source: Decisive ConsulDng Pty Ltd and TRA Online 16% 21% 17% 27% 30% 5% 8% 13% 31% 11% 25% InternaDonal overnight visitors to the region who visit 12 Apostles InternaDonal Day trippers to 12 Apostles Total InternaDonal Leisure Visitors to Victoria China Other Asia NZ UK Other Europe USA+Canada South America +Mexico 12% 13% 20% 9% 2% 7% 2%

Importance of a visit to the 12 Apostles as a motivator for internationals staying overnight in the region to visit Victoria Chart 6. Seeing the 12 Apostles area is a common reason to visit Victoria for internationals on an overnight stay in the region Within the sample of 261 visitors nearly a quarter only visited Victoria to visit this area while a further two thirds stated that one of their top three reasons for visiting Victoria on this trip as the opportunity to visit the 12Apostles. Only of respondents reported that the opportunity to visit this area did not feature in their decision or was incidental to their decision to visit Victoria. Interna.onal overnight visitors to the Great Ocean Road region normally have this as a major reason for visi.ng Victoria Source: Decisive Consul.ng Pty Ltd 66% 24% 10 Only visi)ed Victoria due to the opportunity to visit the 12As The opportunity to visit this area is one of their three top reasons to visit Victoria The opportunity to visit this area did not feature in your decision or was incidental to your decision to visit Victoria Extra nights in Victoria by international visitors due to the decision to visit the 12 Apostles on an overnight trip to the Great Ocean Road region Respondents were asked whether in deciding to visit the area today as part of their trip, did they extend their originally intended stay in Victoria to allow them to visit this area? There were 257 valid responses to this question from the 261 survey size. The majority did not extend their stay in Victoria (149 or 58%), while a significant minority did extend their stay (108 or 42%). With many of the visitors to Victoria on package tours or having fixed holiday periods, it is not surprising that the majority of visitors did not increase their overall length of stay to visit the 12 Apostles. The 42% of international overnight visitors to the region who did extend their stay in Victoria as a result of the opportunity to visit the region, they spent an additional 2.8 visitor nights. Averaged across all international overnight visitors to the region surveyed the average additional visitor nights in Victoria owing to their visit to the Shipwreck Coast area is 1.2 visitor nights. The of international visitors overnighting in the region who only visited the 12 Apostles as incidental to their decision to visit Victoria, they spent an average of an extra 1 night in Victoria due to the opportunity to visit the region. Applying the survey results to estimate the value of incremental spending to Victoria from international visitors to the 12 Apostles area who stay overnight in the Western (GOR) region There were an estimated 174,000 international visitors to the Great Ocean Road as a place of interest in 2015 who stayed in the region (Source: TRA Online, IVS). For this project it is conservatively assumed that 75% of those who visit the Great Ocean Road and have an international stay in the Western region, visit the Shipwreck Coast area on their trip. This assumption reflects that international overnight visitors staying in the region have more time to visit the Shipwreck Coast while in the region but also that use of rental cars and other more flexible transport options than tour buses which commonly guarantee a visit to the Shipwreck Coast. 5 The survey found that 24% of international overnight visitors would not have visited Victoria but for the opportunity to visit the Great Ocean Road/12 Apostles area. Applying the 24% share of survey respondents to the estimated number of international visitors who visited the Shipwreck Coast while on an international stay in the Western (GOR) region in 2015 of 131,000 (174,000*.75) and an average spend in Victoria of $1,300 (10.4 nights at $125 per night), 5 The survey struggled to find international visitors to interview in Lorne compared to significant visitation on the same day at the 12 Apostles carpark. Those international visitors surveyed at the start of the Great Ocean Road near Torquay, were all travelling to the Shipwreck Coast area on their trip. It is nevertheless recognised that some international visitors on overnight stays in the region only visit Torquay, Lorne and other destinations outside the Shipwreck Coast area, including for events like the Bell Beach Classic and Cadel Evans Bike Race. Data in the survey also indicated that most international visitors staying in the region did visit either Torquay or Lorne on their trip in addition to the Shipwreck Coast area.

11 implies that visitors who only come to Victoria at all to see the 12 Apostles/Great Ocean Road contributed $41m in 2015 to incremental visitor spend to the Victorian economy. The survey found that 66% of international visitors to the 12 Apostles area who are staying in the region, have visited this region as one of their top three reasons for visiting Victoria, while not viewing this opportunity as the deciding factor in coming to Victoria or not. The 66% share is applied to the estimated number of these visitors at an average spend for leisure international visitors to Victoria of $1,526 for the average stay of visitors to Victoria who visit the GOR as a place of interest and stay in the larger region (15.9 nights at $96 per night). A high and low range estimate, was created by assessing that the opportunity to visit the Great Ocean Road/12 Apostles is worth between 15-20% of incremental spending on their total visit to Victoria. This conservative assumption implies a valuation of incremental spending to Victoria of $20-33m in 2015. The of international visitors to the 12 Apostles who are staying in the region but who reported that the opportunity to visit this area did not feature in their decision or was incidental to their decision to visit Victoria, averaged one extra night stay in Victoria in order to visit the 12 Apostles area. An extra 1 night for this share of international overnight visitors is worth $1.3 million to the Victorian economy in incremental spending. The total incremental visitor spending to Victoria from international visitors who visit the Shipwreck Coast and stay in the Western (GOR) region was estimated using this method to be between $62m and $75m. A far less compelling method is to look only at the extra days reported in Victoria by international visitors who stay in the region and also visit the Shipwreck Coast. On this basis, the incremental spend to Victoria sums to $15m as the average international overnight visitor to the region spends 1.2 extra days in Victoria. To avoid double counting this amount is not added to the incremental visitor spending estimates derived from visitors whose trip to Victoria was significantly influenced by the opportunity to visit the 12 Apostles area. Interstate visitors As noted in the introduction to this report, Victoria as a whole gains more visitor spend from interstate than international leisure visitors. That this did not prove to be the case for the Shipwreck Coast, may suggest a marketing opportunity for Visit Victoria and regional tourism businesses in seeking to attract more interstate leisure visitors to this area. Relevant TRA data on interstate visitors to the Great Ocean Road as a place of interest Tourism Research Australia provided core data on interstate visitors spending in Victoria from a special data service for this project as per the following table: Table 6. Length of stay, spend per day and trip for all holiday, VFR and leisure interstate visitors to Victoria 2015 Victorian interstate leisure visitor and regional expenditure data from TRA Length of Stay (nights) Spend per day ($) Spend per trip ($) Holiday 3.9 278 1,078 VFR 4.7 127 594 Leisure 4.4 200 871 Source: TRA, Special data service on 29 April using 2015 NVS and regional expenditure estimate results Similarly, TRA staff provided estimates of length of stay in Victoria by holiday, VFR and leisure visitors who visit the GOR as a place of interest as a special data service for this project. Table 7. Length of stay in Victoria by interstate visitors to GOR on a day trip or staying in the region By visitors to GOR on a day trip By visitors to GOR on a trip with overnight stays in the Western region Holiday 6 7 VFR 6 7 Leisure 6 7

12 Source: TRA Special Data service TRA estimate that in 2015 there were 345,000 interstate visitors staying overnight in the GOR region. Of this number, 205,000 (or 59%) visited the Great Ocean Road as a place of interest. This reflects that many interstate visitors visit other areas in the Western region such as the western areas of Portland, Warrnambool and Port Fairy or the northern areas of this region. TRA data also shows that of the 356,000 total interstate visitors who visited the GOR as a place of interest in 2015 the 205,000 or 58% were on trips that include an overnight stay in the Western region. Therefore, there were 151,000 interstate day trip visitors who visited the GOR as a place of interest in 2015 who did not stay in the Western region on their trip. TRA estimate that in 2015, the average length of stay of interstate visitors in Victoria for leisure purposes was 3.0 nights. In contrast, the average length of stay of interstate leisure visitors in Victoria who visit the Great Ocean Road as a place of interest is over twice as long at 6.8 nights. Interstate visitors on day trips from staying overnight outside the region In considering the economic contribution to Victoria of the Shipwreck Coast there has previously been inadequate attention to the value of interstate visitors on day trips to the region. These day trip visitors to the region are not measured by the official TRA data, which only comprehensively measures domestic day trips from a home base rather than from the overnight visitation base. Interstate visitors to Victoria have a shorter average length of stay than international visitors, so if they take the opportunity to visit the Shipwreck Coast on a day trip it is a larger share of the average visit. In addition, interstate leisure visitors on average spend just over double per night than do international leisure visitors in Victoria. The TRA data highlights that of interstate visitors to the GOR as a place of interest, 151,000 or 42% only visit this area as a day trip. It is assumed that the share of interstate day-trippers who visit the Shipwreck Coast area of the Great Ocean Road is the same two thirds share as the assumed share of interstate visitors to the Great Ocean Road as a place of interest who stay overnight in the larger region and visit the Shipwreck Coast. The survey found a higher than expected 60% of interstate day-trippers arrive at the Shipwreck Coast on a tour bus, as against 20% for own or rented vehicle suggesting that the two thirds visitation assumption is conservative. At the same time it is realised that a significant share of interstate daytrippers visit other areas of the Great Ocean Road such as Torquay, Bells Beach, Anglesea, Lorne, the Otways and Apollo Bay without also visiting the Shipwreck Coast area. This implies that 101,000 interstate visitors in 2015 visited the Shipwreck Coast area. While not as large a market as the international day trip market to the Great Ocean Road as a place of interest of over 650,000 day trippers, the interstate day trip market is also significant. On average the 35 interstate day-trip visitors surveyed indicated that they spent 1.4 extra days in Victoria in order to visit the Shipwreck Coast area. These visitors also spent an average of $117 per day on their day trip (not including accommodation costs but with an allowance for rental car costs). The survey found that 51% of interstate day trip visitors to the Shipwreck Coast only visited Victoria for the opportunity to visit this area. The remaining 49% of these visitors identified visiting this area as one of their top three reasons to visit Victoria. None of the 35 surveyed interstate day trip visitors to the Shipwreck Coast indicated the opportunity to visit this area did not feature in their decision or was incidental to their decision to visit Victoria. Applying the 51% share of survey respondents to the estimated number of interstate day trip visitors who visited the Shipwreck Coast in 2015 of the 131,000 and an average holiday spend in Victoria of $1,724 (10.4 nights at $278 per night), implies that visitors who only come to Victoria at all to see the 12 Apostles/Great Ocean Road contributed $88m in 2015 to incremental visitor spend to the Victorian economy.

13 The research found that 49% of interstate day trip visitors to the 12 Apostles area have visited the Shipwreck Coast as one of their top three reasons for visiting Victoria (while not viewing this opportunity as the deciding factor in coming to Victoria or not). The 49% share is applied to the estimated number of these visitors at an average spend for leisure interstate visitors to Victoria of $1,160 for the average stay of visitors to Victoria who visit the GOR as a place of interest on a day trip (5.8 nights at $200 per night). A high and low range estimate is created by assessing that the opportunity to visit the Great Ocean Road/12 Apostles is worth between 15-20% of incremental spending on their total visit to Victoria. This conservative assumption implies a valuation of incremental spending to Victoria of $9-14m in 2015. As no interstate day trip respondents reported that the opportunity to visit the area did not feature in their decision or was incidental to their decision to visit Victoria there is no addition to incremental value for extra days in Victoria from respondents. The total incremental visitor spending to Victoria from interstate day trip visitors who visit the Shipwreck Coast is therefore estimated at between $97m and $103m. A far less compelling method is to look only at the extra days reported in Victoria by interstate day trip visitors who visit the Shipwreck Coast. On this basis, the incremental spend to Victoria sums to $28m as the average interstate day trip visitor to the region spends 1.4 extra days in Victoria. Interstate visitors staying overnight in the region Survey results on interstate overnight visitors to the 12 Apostles The survey reported travel plans and motivation of 116 interstate overnight visitors staying in the Western (GOR) region. It is conservatively assumed that of the 205,000 overnight visitors who stayed in the region and visited the Great Ocean Road as a place of interest in 2015 that two-thirds (or 137,000) visit the Shipwreck Coast on their trip. Many interstate overnight visitors will stay in Torquay, Anglesea or Lorne and not visit the Shipwreck Coast area on their trip. Unlike international visitors, interstate visitors are normally using their own vehicle and this gives them greater flexibility to see more of the attractions of the overall region. Of these visitors the majority were using their own car (56%), while rental car use was also popular (26%) as was caravan use (14%). Use of tour buses (3% on multi-day tours) and hiking (2%) were less common means of transport for this trip. Importance of a visit to the 12 Apostles as a motivator for internationals staying overnight in the region to visit Victoria Nearly half the interstate visitors surveyed (46%) were only in Victoria because of the opportunity to visit the 12 Apostles area. The opportunity to visit the 12 Apostles area is a major reason for visi<ng Victoria of domes<c interstate visitors who stay overnight in the region Source: Decisive Consul<ng Pty Ltd 18% they would not have visited Vic on this trip without the opportunity to visit this area 46% the opportunity to visit this area is one of their three top reasons to visit Victoria 36% the opportunity to visit this area did not feature in your decision or was incidental to your decision to visit Victoria

Given the shorter average stay of interstate than international visitors it is not surprising that among interstate overnight visitors to the region whose decision to visit Victoria was not influenced by the opportunity to visit the 12 Apostles area, the increase in average stay in Victoria was only 0.4 of a night. Applying the 46% share of survey respondents to the estimated number of interstate visitors who visited the Shipwreck Coast while on staying in the Western (GOR) region in 2015 of 137,000 and an average spend in Victoria of $1,946 (7 nights at $278 per night), implies that visitors who only come to Victoria at all to see the 12 Apostles/Great Ocean Road contributed $123m in 2015 to incremental visitor spend to the Victorian economy. The survey found that 36% of interstate visitors to the 12 Apostles area who are staying in the region, have visiting this region as one of their top three reasons for visiting Victoria while not viewing this opportunity as the deciding factor in coming to Victoria or not. The 36% share is applied to the estimated number of these visitors at an average spend for leisure interstate visitors to Victoria of $1,500 for the average stay of visitors to Victoria who visit the GOR as a place of interest and stay in the larger region (7.5 nights at $200 per night). A high and low range estimate is created by assessing that the opportunity to visit the Great Ocean Road/12 Apostles is worth between 15-20% of incremental spending on their total visit to Victoria. This conservative assumption implies a valuation of incremental spending to Victoria of $11-19m in 2015. Of the 18% of interstate visitors to the 12 Apostles who are staying in the region but who reported that the opportunity to visit this area did not feature in their decision or was incidental to their decision to visit Victoria they averaged 0.4 of an extra night stay in Victoria in order to visit the 12 Apostles area. An extra 0.4 night for this share of international overnight visitors is worth $2 million to the Victorian economy in incremental spending. The total incremental visitor spending to Victoria from interstate visitors who visit the Shipwreck Coast and stay in the Western (GOR) region is estimated using this method at between $136m and $143m. A far less compelling method is to look only at the extra nights reported in Victoria by interstate visitors who stay in the region and also visit the Shipwreck Coast. On this basis, the incremental spend to Victoria sums to $58m as the average interstate overnight visitor to the region spends 2.1 extra nights in Victoria. To avoid double counting this amount is not added to the incremental visitor spending estimates derived from visitors whose trip to Victoria was significantly influenced by the opportunity to visit the 12 Apostles area. 14