Reimagining the Visitor Economy Submission June 2021
NSW RDA Network’s Submission on Reimaging the Visitor Economy – Austrade
Thank you for giving RDAC the opportunity to provide practical advice and solutions on how the visitor economy can innovate, boost productivity and yield and build long term sustainable growth in the post-COVID-19 world.
RDAC consists of 15 organisations all delivering a common Charter focused on growing strong and confident regional economies that harness competitive advantages, seize economic opportunities, and attract investment. RDAs were established in 2009 and have been providing an active facilitation role within their regions by bringing together stakeholders around key issues and opportunities. RDAC represents all regions of NSW and the ACT.
The NSW Visitor Economy
The NSW Government recently released their new Visitor Economy Strategy for 2030 which has been developed against the backdrop of recovery from such events as bushfires and the spread of COVID-19.
The strategy has three phases, the Road to Recovery Phase (to 2024) – rebuilding business and industry, Momentum Phase (to 2026) – leveraging completion of major infrastructure such as the Western Sydney Airport and Accelerate Phase (to 2030) – increased capacity is achieved, and exponential growth occurs.
According to the Strategy the NSW Visitor Economy supports 107,115 businesses and 296,000 jobs, and anchors the economies of many regional areas of NSW, contributing $7 Billion to the NSW Gross Regional Product.
The Strategy has ambitious but achievable targets through a phased process.
The following submission will respond to relevant questions from the discussion paper from a regional NSW perspective as identified by RDAC Members.
According to Tourism Research Australia, in June 2020 there was a total of 34,729 Tourism Businesses in regional NSW (compared to 34,009 June 2019) of which 42% were non-employing businesses. So, it would seem that even post bushfires and in amidst of the COVID-19 pandemic that some regional areas of NSW were able to sustain or slightly grow their share of the visitor economy.
By February 2021 Regional NSW overnight spend increased 45% (up $331 million) to $1.1 billion. Visitors increased 23% to 2.0 million and the number of nights stayed were also up 27% compared with the same period last year. This could be attributed to the increased intrastate travel due to the threat of interstate border closures and the pre-existing international border closures.
The immediate focus for the regions is to leverage this once in a lifetime opportunity of expanded interest in visitation and experiences.
Responses to Questions
Focus: Industry-led, government enabled recovery
Where are the regulatory bottlenecks to the visitor economy?
- Development Applications and Zoning Laws at the Local and State Government levels create a huge barrier for the introduction or the expansion of new visitor experiences especially for the domestic market (e.g., Farm Stays, Farmgate Experiences, Mini Homes, B&B).
- Food Safety Regulations can be burdensome for smaller operators, although an essential component to the visitor economy, the means of receiving and interpreting information needs to be more user friendly for the business owner.
c. Disincentives for business operators to adopt innovative solutions to workforce and skill shortage issues, such as provision of accommodation incurring a FBT liability for the business.
Focus: Capturing the domestic travel opportunity
What needs to be done to encourage domestic visitors to travel for longer, spend more and diversify the destinations they visit?
- Supporting regions to fund and deliver an effective events strategy to drive ongoing demand through arts, entertainment, culinary, sports and other lifestyle themes
- Support the development of suitable accommodation for increased regional domestic visitor demand
- Support the development of available and affordable accommodation to house tourism workers across the tourism sectors. Housing and housing affordability is at crisis point within many NSW regions.
- We know that there is an underinvestment in tourism support services, content and marketing support. A funding framework that enables regional collaboration in these areas would be very welcomed with a balanced approach to funding program delivery that has a focus not only on metropolitan products and services.
Whilst the previously mentioned housing challenges may not necessarily be in the realm of the expert panel’s remit, they do present one of the greatest challenges in successfully meeting current and potential future demand for domestic travel.
All levels of government need to come together on this matter, if unaddressed the industry will be unable to leverage visitor demand as there will be no available housing to accommodate the workforce required or provide the necessary accommodation range required for the visitor.
What are the barriers to building new, and refresh existing, tourism infrastructure?
- The main barrier to investment in new tourism infrastructure is the outweighing of the risk versus the potential reward or Return on Investment. Risk vs Reward can be problematic in uncertain times, especially if the site/region is located in a seasonal/cyclical area (although very attractive in many cases to the visitor) or the infrastructure asset is Government-owned – is there a new operating model where shared ownership can mitigate the Risk vs Reward paradox, that is a PPP?
- Support investment in the renewal of existing aging tourism infrastructure through capital and tax incentives
- The lack of rolling stock takes of what is on offer in the NSW regions: investor funds may not be aware of investible and investor -ready opportunities in the regions when compared to more high-profile investment opportunities in metropolitan areas. This requires an increased and focused international and national investment attraction program coordinated at all three levels of government.
- During this time of COVID-19, there is a hesitancy for banks to lend to businesses who wish to expand. Is there opportunity to introduce a financing stream, as is the case for exporters with Export Finance Australia, that could fill this gap?
Focus: Diversifying our international customer base
How can Australia position itself for new international markets for holiday travel (including the luxury segment), business travel, events and international education?
- As the world opens its borders post-COVID, Australia needs to be at the forefront of welcoming international visitors to capture the early pent-up international travel demand. This can be done safely as whole populations are becoming vaccinated within the next year and new travel protocols can be put in place to ensure the health and safety of travellers, operators, workers, and local populations.
- Investment into new high value assets such as seven star accommodation and the development of infrastructure for super yachts are usually considered only in the context of metropolitan areas, however appropriate similar developments could also take place in regional areas and should not be excluded in considerations for such projects.
- Prior to Covid-19 China was Australia’s number one inbound travel market. Tourism demand driving activity should be diversified to other high value international markets and ensure a balanced portfolio approach.
- Leverage opportunities presented to position and maximise Australia’s regions as delivering an authentic, nature-based experience with wide open spaces.
- The previously mentioned NSW Strategy recommends the provision of incentives for Business Events which result in either satellite events occurring in the regions or pre or post visitation programs to the regions. We recommend that this approach be adopted at a national level.
Focus: Labour, skills and workforce
What does the visitor economy workforce of the future look like? How will the skills mix we need be different?
- COVID-19 has taught the industry that skills need to be first identified from local labour pools and that the visa and transient worker population is only a complementary workforce.
- Service-oriented, customer focused, well-trained professionals and career driven in the hospitality industry. Currently seen as unattractive to young Australians due to the unsocial hours, hard work, low (under) pay, challenging working conditions and lack of career pathways.
How can the sector develop and promote career pathways to make the visitor economy a career of choice?
- The key workforce challenge identified by local stakeholders was the attraction and retention of staff. While young people enter the sector for work, they do not stay for the long term. Often workers are transient and/or see job opportunities for defined periods rather than seeking them to build careers. This low retention rate is believed to be a result of the seasonal nature of work in the sector, and a perception that there are limited long-term career options with attractive salaries.
- Industry needs to work from school based apprenticeships and traineeships. Enticing advertising campaigns to attract entrants, clear pathways to management and competitive pay rates from semi-skilled jobs all the way through.
How can we attract and retain workers in the sector, especially in the regions?
- Ability to attract and retain workers in the sector is not aided by the perception (and reality) of ongoing under-Award payments to employees (‘Wage Theft’).
- Key issues for the industry in regions are:
- Recruitment of quality staff. More focus on recruitment of those who consider it a profession
- Retaining staff. Appropriate payment according to Awards
- Cost of staff – particularly chefs and weekend penalty rates
- Management of Staff – HR issues, induction, managing, dismissing etc. More training and support needed to help technically gifted workers become good, informed managers and supervisors.
- Clear employment pathways, increase the value perception of the sector job roles, affordable housing options and overcome barriers of travelling to work.
How do we build the skills we need for the visitor economy in the future through training and business support services?
- By investigating more collaborative approaches with key stakeholders to establish an agreed strategy and actionable workforce development plans even at the SME level.
- This needs a concerted effort by the industry, regional leaders, and TAFE. Opening up more options for trainee chefs/hospitality workers to carry out work experience in the regions would be a start, rather than losing them to metropolitan centres from the start of their careers.
How do we address labour shortages, including through skills/training programs and accreditation, and through changes to the migration program?
- Many industries are considering the same issues and a holistic approach at bringing on unskilled staff and then training for the future, centred on the employees skills and abilities rather than short term ‘fill a job gap’ attitude needs to be encouraged. Migration can definitely play a part in this but again needs to be complementary to local workforce development planning.
- Many of our hospitality workers (long and short-term employees) are from overseas and labour shortages are going to continue until the international borders reopen.
- Recognition at all levels of government that the hospitality industry has significant shortages could encourage migrants to apply for visas in hospitality-based occupations. A review of eligibility criteria for 491 Visas for current onshore migrants and international students may help resolve the labour shortages especially in the regions.
- There is no doubt a critical need to attract and retain workers in the visitor economy. This is especially true in relation to Chefs and Cooks. Currently businesses in the region are closing/not trading regularly due to an inability to attract Chefs and front-of-house staff.
- We recommend that a Centre of Excellence be established to coordinate these functions through:
- Improving high-value service offerings
- Addressing workforce skills shortages in the hospitality and tourism sector
- Offering local workers ‘careers’ rather than ‘jobs’ to create a pipeline of skilled workers
- Improving the resilience of local businesses during season changes and future economic shocks; and
- Strengthening and leveraging existing regional ecosystems.
Focus: Innovation: digital and new products
What are the barriers to the adoption of digital technologies for visitor economy providers?
It is extremely important to build the digital capability of the providers, who in many cases, are small business operators deeply entrenched in the day to day operations, to the point that they have very little time for anything else. The delivery of this capability building needs to be flexibly delivered so as to meet the needs of time poor providers. It is a case of ‘you don’t know what you don’t know’ so there needs to be a centralized communication portal that can demonstrate new or evolving platforms with live examples of how the technology will improve reach and productivity.
How can small businesses, including those in regional and remote Australia, be supported to take advantage of technological advancements and become digitally capable?
As indicated in the previous response small businesses need access to information about technological advancements, also crucially important, especially in regional and remote areas, is reliable connectivity to the internet and other communication channels. To bring the Visitor Economy to the next level for both regional and metropolitan areas there needs to be reliable digital connectivity with a capacity to adopt emerging technologies.
This issue is not unique to the Visitor Economy, so in addressing the ongoing issues regarding digital connectivity in the regions a broader community benefit is achieved.
What digital skills and capabilities are required in the visitor economy to support growth and innovation?
- In general, travelling to Australia from many international departure points involves a long haul flight and is a large investment in time and money by the visitor. The use of emerging technologies such as virtual reality, mobile applications and even social media could be integrated to introduce prospective visitors to Australia and its tourism offerings while they are still in their home countries and used to shift decision making toward Australia over other competing destinations.
- Business owners and workers in the hospitality industry need to be digitally savvy and experienced in digital technologies, especially marketing using social media. The rise and influence of social media and reviews / recommendations has, as one employer says, the ‘Power to make or break us’.
- Access to timely data is essential to identify trends, the design of appropriate offerings and seeking out new markets. Tourism Research Australia data is not sufficient, there needs to be greater emphasis on forward thinking about trends and patterns that can influence product and communication channels.
Final Recommendation: There is a need to have a consistent approach both at the national and state level in how we reimagine and implement strategy to kickstart and grow the Visitor Economy. RDAC recommends that the phased approach applied by the NSW Government be adopted including time frames and strategic focus at a national level.