18 Dec 2013
Words Tim Admin

Open for Business and positioned for prosperity

 Confidence rose widely in anticipation of what a new government would mean. But the task now is for us all to get to work attracting new business through our open doors, and welcoming it for a lengthy stay. Business confidence spiked immediately post-election, but has softened since. Still, analysts say overall confidence remains relatively high compared to the low levels of the previous three years. Anecdotally, the mood is certainly more upbeat. Of particular note for the tourism industry, NAB’s November business survey showed conditions stayed positive in the recreation, personal services, finance and property sectors. Low interest rates and an improving asset market helped. Consumer sentiment followed a similar pattern … sharp rise, followed by dip. But it has already rebounded, as people generally feel more optimistic about their finances thanks to home prices rising in resurgent residential real estate markets. Next wave of economic growth So, are we positioned for prosperity? Deloitte poses that very question in a report due for release in early 2014. “With the cooling resources boom, the falling Australian dollar, the new government and rebounding business confidence – what better time for Australian businesses to start thinking about where future prosperity will come from,” they say. Their focus is on finding our next waves of economic growth and, importantly, they name tourism among five new growth fronts – super sectors where Australian advantage can meet global opportunity to drive prosperity within a more diverse and stable economy. After a challenging few years in tourism, there is now good reason for confidence. We have a robust outlook on the international visitor front. Deloitte’s Tourism and Hotel Market Outlook half yearly 2013 update forecasts 4.5% per annum growth in arrivals over the next three years. A strengthening leisure market has seen the domestic market also rebound, with visitor nights now tipped to grow at an average rate of 1.6% per annum over the next three years. Growth in domestic holiday travel has seen occupancy rates climbing, particularly in key destinations like the Gold Coast. And, in our cities and regions like Tropical North Queensland, Australian’s growing popularity with Asia’s emerged and emerging middle classes is also reflected in higher occupancies. Encouraging infrustructure Broadly, the Coalition government has signalled that its plan for growth is centred around infrastructure. Treasurer Joe Hockey speaks of his determination to ‘remove impediments to private sector investment in infrastructure.’ Certainly new infrastructure will be vital to underpin tourism industry growth and prosperity. It is only with new infrastructure – transport, accommodation and major attractions – that we can really expand the industry. Promising signs are already evident, such as news that Sydney’s second airport is finally about to get off the ground, and Brisbane Airport Corporation has started building a new parallel runway. With increased capacity will come greater need for accommodation. Demand for new hotels is already outstripping supply. With Deloitte forecasting occupancy rates to grow by 2% and room rates by 3.5% per annum nationally for the next two years, hotel operators have put in place ambitious growth plans, while hotel development and conversions are on the rise. Tourism Australia, while remaining our peak tourism marketing body, has also expanded its focus. It has signed a five-year partnership with AusTrade to encourage developers to invest in tourism ventures. Tourism a good bet The other big-ticket item we need is new attractions. So far the most significant advances have been made on the casino front, with Queensland announcing up to three new casino licences will be available, and James Packer unveiling his new Sydney hotel and casino development at Barangaroo. At a recent tourism industry conference in Canberra, Trade and Investment Minister Andrew Robb reaffirmed tourism as one of our country’s great strengths. "The Government is committed to creating the right operating environment for the tourism sector by freezing the Passenger Movement Charge, scrapping the Carbon Tax and helping employers find workers with the right skills," Mr Robb said in a message to the Australian Tourism Directions Conference. "I plan to attract more international investment, create more jobs and strengthen Australia's prosperity. "Our role in Government is to support tourism businesses to do what they do best by creating the right operating environment." Tackling employment issues For many in the industry, the greatest challenge in their operating environment is employment-related. Operators of accommodation and hospitality businesses struggle with a workplace relations regime anchored in an old Monday to Friday, 9 to 5 world. While ensuring the system is fair for everyone, employers need more flexibility. To really declare ourselves open for business, Australia needs to tackle the difficult question of productivity and workplace relations in a 24-7 world. As Andrew Robb told the Tourism Directions conference, Tourism is important to the Australian economy. It is worth $107 billion, directly employs more than half a million Australians and is our largest services industry export, earning $26 billion a year. It accounts for a lot of doors that are open for business. And it will open many more doors, given the right conditions and encouragement.