Perth
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To my parliamentary colleagues, ladies and gentlemen, good morning and thank you for the invitation to address the 2011 Tourism Council WA Conference.
The number of delegates in attendance here this morning is testament to the importance of this event.
It provides us with the opportunity to reflect on progress, reform and opportunities in the tourism industry particularly here in Western Australia.
Tourism in WA
Western Australia has a strong reputation, domestically and internationally, for minerals and energy developments, particularly in the context of the current resources boom, however this state is also recognised for its exceptional tourism offerings – and rightly so.
WA's majestic landscapes and high quality food and wine – to mention but two examples – are world-renowned.
Long-term economic strength and resilience depends upon a diversified economy and WA's tourism industry is vital in this regard.
As you know, tourism is a major employer with significant direct and indirect economic benefits.
It is an industry that the Commonwealth Government has, and will continue, to help grow and to maximise its potential.
Some of you may recall that almost two years ago to the day, I unveiled the National Long-Term Tourism Strategy here in Perth.
The choice of location for that launch was no accident.
Nowhere else in Australia are the competitive tensions between the booming resources sector and the tourism industry more starkly highlighted.
And nowhere better understands the importance of supply-side reforms to increase our capacity to appeal to visitors.
Perth was the right place to release a strategy focused on increasing investment, cutting red tape, closing skills gaps and lifting product quality.
Here in the west, workforce shortages are not an abstract concept – they are a daily reality.
The Australian Tourism Labour Force report, commissioned under the National Long Term Tourism Strategy, showed the WA tourism industry job vacancy rate is five times that of the national average with a projected shortage of 6,000 workers by 2015.
To effectively address this issue requires a commitment by industry and government at all levels to skills and training.
That's why in this year's Budget the Commonwealth Government announced a $3 billion skills and training package.
But the acute nature of the shortages means that, particularly in the immediate term, temporary migration is also required to help fill these gaps.
My Department has been working with the Department of Immigration on the immigration needs of the tourism industry.
On Monday this week, the Department of Immigration hosted an information session here in Perth on how the tourism and hospitality sectors could better use the 457 (temporary skilled migration) visa to help address skills shortages.
I understand that some of you attended this session and I trust you found it valuable.
The other important breakthrough this year has been reaching agreement to expand the Pacific Seasonal Worker Pilot Scheme to include tourism operators in Broome.
This will strengthen ties with East Timor and help fill severe worker shortages in this part of WA.
The first group of Timorese hospitality workers will be on the ground in Broome by March next year.
Of course competition with the resource and energy sectors, both for workers and in terms of wage pressures, is one of the drivers behind the labour shortages in the tourism industry.
This morning I am releasing a new snapshot from Tourism Research Australia on the ‘The impact of the mining boom on tourism’.
It is the first part of a broader study of the complex interplay between these two vital sectors – tourism and resources.
The findings of this report highlight both the benefits and the challenges of the mining boom's impact on tourism.
Aviation and accommodation in mining regions are, unsurprisingly, the biggest beneficiaries of increased activity in the resources sector through growth in the lucrative business travel market.
Importantly, these benefits are being felt most prominently in regional areas, including in Australia's North West where, for example, business nights increased on average by 10 per cent per annum between 2000 and 2010.
This growth also presents challenges in terms of the potential "crowding out" of the leisure market that must be addressed but the average higher yield from business travellers and greater year-round consistency are, nonetheless, distinct advantages for the industry.
And, encouragingly, the report shows that despite the competition for workers tourism employment continued to grow over the last decade by an average 2.2 per cent per annum – with growth in Western Australian only slightly below the national average at 2.1 per cent.
The mining-led boost to the aviation sector is evident, for instance, in QantasLink’s recent addition of services to Geraldton, which commenced this week, as well as the additional services to Exmouth.
Skywest Airlines’ contract to provide charter flights to Chevron's recently sanctioned $29 billion Wheatstone LNG project near Onslow is another tangible example.
Accommodation takings across many mining-intensive regions in Australia have increased since 2005.
Australia’s North West, for example saw a 7.8 per cent per annum increase in accommodation takings between 2005 and 2010.
In short, business travel is booming.
The most significant increases in international business nights between 2000 and 2010 were in Western Australia – up on average by 15 per cent per annum.
In 2010, 23 per cent of domestic business nights were by fly-in/fly-out or drive-in/drive-out workers.
The Perth hotel market has seen the strongest sustained room-rate growth and occupancy of the ten major Australian hotel markets.
Indeed, Perth continues to enjoy double-digit growth in revenue-per-available room, and that’s likely to continue over the next five years.
And the pressure for additional supply of tourism infrastructure is growing.
A pipeline of some significant infrastructure improvements planned in the next few years points to exciting prospects for the industry.
The Perth Waterfront redevelopment will, in essence, bring the CBD closer to the Swan River and provide an opportunity for new hotel and tourism facilities.
Perth Airport, as you know, is investing $120 million in a new terminal, mainly to cater for the growing fly-in fly-out market.
And the Australian Government is also investing in necessary infrastructure to help lift productivity.
We have committed up to $480 million for the Gateway WA Project to create much needed traffic flow around Perth Airport.
This project, along with a cut in company taxation and new tax write offs for small businesses to help them purchase new capital equipment – something of great importance in the tourism sector – will all be possible through the Australian Government's resource taxation reforms, which passed the House of Representatives earlier this week.
These are reforms that I know have caused some concern here in Western Australia, but I reinforce to you again how vital they are if we are to address some of the economic pressures, including in the tourism industry, and maximise the potential, from the resources boom.
WA's $2.7 billion tourism industry is benefiting directly and indirectly from mining activity – the mining tax will only add to this equation.
And the timing of these reforms is right given the growth we’re seeing from Asia.
Asian opportunities
Emerging Asian economies with their growing middle classes are delivering opportunities for growth in both resources and tourism.
In tourism, Australia is increasingly gaining its share of these markets.
The latest Overseas Arrivals and Departures data shows an 18.6 per cent increase in arrivals from China while India also continued to grow solidly, up 12.1 per cent.
The average annual growth in arrivals from China to Australia is forecast to be seven per cent a year until 2020.
By then, we would have almost 1 million arrivals from China, contributing at least $9 billion to Australia’s economy.
More than 600 million people are within eight hours of Perth, in growth regions such as China, Indonesia and Malaysia and a further three billion are less than two hours further on.
China alone will account for 100 million outbound tourists by 2020.
WA needs to position itself to take advantage of this growth and capture market share – success in this endeavour in terms of the difference it will make to the industry and its contribution to the economy will be immense.
Successful air-services talks between the Australian and Chinese Governments will deliver a 55 per cent increase in available capacity phased in over twelve months.
China Southern’s launch earlier this month of direct flights from Perth to China is bringing WA even closer to Asia.
This will help to further open Perth to China Southern’s hub in Guangzhou connecting through to Beijing with flights three times per week.
To say Western Australia is a dynamic place for tourism is an understatement.
Last financial year visitors to WA spent $6.8 billion, a four per cent increase on the year before.
Here in WA, you are at the epicentre of a huge transitional shift, one that’s taking place right across the Australian tourism industry.
Tourism strategy
In the two years since I launched the National Long-Term Tourism Strategy here in Perth there have been many achievements and we have attained a number of key milestones.
During its first phase, the National Long-Term Tourism Strategy has helped reposition the industry.
The small business dominance of the tourism sector requires practical outcomes and appropriately targeted assistance.
That’s why just this month we extended Enterprise Connect services to the tourism sector nationwide.
This will provide firms with free independent business advisory services to help lift productivity, profitability and reduce costs.
I encourage Western Australian tourism businesses to use this program which has been successfully implemented by the manufacturing sector for a number of years now.
And we’ve delivered a tourism e-kit offering practical help on digital technology in recognition of the sharp and sustained increase in the number of visitors seeking travel information and making bookings online.
Other practical outcomes from the Strategy include:
- clearer tourism priorities for Australia’s bilateral aviation negotiations;
- a national tourism quality accreditation scheme and trademark;
- a National Tourism Planning Guide; and
- and a more effective disaster-communication plan, as enacted during the Qantas grounding.
That’s on top of the 13 tourism projects in WA that collectively have received almost a $1million in funding under the T-QUAL Grants program to date.
This is a good start but more work needs to be done.
That's why Tourism Ministers have committed to six regulatory reform priorities to unlock investment and cut red tape.
These include looking at a review of land-use definitions for planning and zoning, and a merit-based process to manage and escalate consideration of large tourism developments.
Tourism Ministers have also agreed to develop regional-employment plans to address labour and skills issues in target regions.
Conclusion
As the name implies, the National Long-Term Tourism Strategy has had – and continues to have – national reach.
It is providing new and more comprehensive data to enable better planning and decision making – to the benefit of industry.
I congratulate the WA Government on its package of incentives for hotel development – a practical example of where the Strategy has been of use.
These changes build on the Perth Waterfront Project with its much-needed additional hotel stock for Perth.
As I say, more work is needed.
The Prime Minister has asked me to update the National Long-Term Tourism Strategy by the end of the year and I will release that update shortly.
I appreciate the partnership with the WA Government and industry in progressing the Strategy over the last two years.
As we progress from the first phase of building an evidence base, we will now move to implementing further reforms and getting more outcomes on the ground.
Two years ago, we launched an ambitious plan for the industry’s future.
Two years on, we’ve made good progress on putting this industry on the road towards the 2020 Tourism Potential.
Challenges remain, but the Government will continue to work with you to address them, and harness opportunities for growth.
Thank you.