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Senator Nick Sherry's speeches

ADDRESS AT AUSTRALIAN TOURISM EXPORT COUNCIL MEETING PLACE CONFERENCE 

07 Dec 2011
 

Sydney, NSW

[Check against delivery]

Good morning.

Normally I would say thank you for the opportunity to speak here - but Felicia's original invitation does pose quite a challenge.

Her invitation was to "open the conference and set the scene for a day of innovation, creative thinking and challenging the norm of what we do".

Jokes aside, I do welcome the opportunity to elaborate on these points and on the Government's position on the future of our $34 billion tourism industry.

These points go right to the heart of what direction we need to take to meet the significant challenges facing the industry - not least of these challenges being increasing competition and the rise of the Australian dollar.

Australia's international market share has declined in recent years and domestic tourism expenditure has fallen since 2000.

We need to do something about this through investment in new product, boosting productivity, increasing uptake of digital technology and addressing labour and skills shortages.

Market conditions

These are not short-term solutions. That's why we have a National Long-term Tourism Strategy, or as it will now be known, Tourism 2020.

A problem for our industry is that while solutions to declining market share are usually long-term, detrimental impacts can happen quite suddenly.

At this same conference last December, I made mention of the fact a domestic recovery in Japan had translated to an upturn in visitor numbers to Australia.

Of course, four months later the devastating tsunami struck - an immense human tragedy which also changed the economic outlook for Japan.

In fact, the Australian tourism industry has been forced to deal with the aftermath of several natural disasters at home and abroad.

As well as Japan, another of Australia's top five inbound markets, New Zealand, was struck by earthquake.

Queensland experienced severe flooding in January, closely followed by Cyclone Yasi.

The local disasters alone combined with the weakening economic backdrop, resulted in a loss of around $1.4 billion in total visitor expenditure in Australia in the March quarter 2011, compared to the same period in 2010.

The Australian Government, in partnership with the Queensland Government, responded by delivering a $12 million Tourism Industry Support Package to provide assistance to Queensland tourism operators..

In June, flights into and out of Australia were disrupted by the volcanic ash cloud from Chile.

The grounding of Tiger Airways in July by the regulator and Qantas in October also impacted the industry.

Despite the challenging environment, however, arrivals from New Zealand, Australia's largest inbound market, still increased by 3.2 per cent in the January-July 2011 period, compared to the same period in 2010.

Inbound travel overall remained solid, with China and other large Asian markets underpinning the industry's growth.

Education tourism remains strong and business travel is recovering.

In addition, international aviation investment is still strong and Australia is regarded as an attractive market for international carriers.

Access to Australia

Increasing access to Australia continues to be a focus of the Government and industry, with capacity leading demand.

The Government has negotiated several new Air Services Arrangements in 2011.

Talks with China resulted in a 55 per cent increase in available capacity entitlements.

China Southern has commenced direct flights from Guangzhou to Perth and will increase services to other major Australian cities.

New arrangements have been negotiated with Japan to open up Tokyo's HanedaAirport to Australian flights and remove capacity restrictions between all Australian and most Japanese airports.

It also allows, for the first time, Australian carriers to fly beyond Japan to destinations such as China and Europe.

Talks have also resulted in an immediate capacity increase between Australia and Indonesia.

Indonesian visitor growth alone was about 32 per cent in the last two years and by 2020 we expect the market value to more than double to $1.1 billion.

Investing in quality

While Asia grows in importance to our industry, it is also growing its own tourism industry that will provide significant competition for our industry.

Australia can't compete with Asian destinations on price so we must continue to improve the quality of tourism experiences.

The Australian Government's major tourism programs support quality - these are T-QUAL Grants and the T-QUAL Accreditation Scheme.

One major type of funding available under the TQUAL program are Strategic Tourism Investment Grants of up to $1 million for a small number of larger scale projects to support Indigenous tourism, economic development and tourism employment.

The Australian Government has announced two of these Strategic Tourism Investment Grants.

One is the Indigenous Business Quality and Skills project, which aims to build a skilled tourism and hospitality workforce, assist the growth of an authentic Indigenous tourism experience and stimulate Indigenous tourism enterprise and product development.

The other is the Lifting Quality in the China Tourism Market project. It aims to:

  • Lift the quality of the products and services provided to the China market
  • Increase industry awareness of the needs of this market
  • Develop the capacity of industry to address these requirements to a high standard.

Investment and Regulatory Reform

New investment in tourism infrastructure and accommodation remains critical to ensuring Australia is a compelling destination.

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 big tourism developments.

In addition, Tourism Australia and the Department of Resources, Energy and Tourism are working closely with Austrade to help facilitate tourism investment opportunities overseas.

Labour and Skills

Addressing labour and skills demands across the tourism industry remains a key priority for all governments and industry groups.

By 2015 an additional 56,000 people will be needed to fill vacancies (including 26,000 skilled positions).

The Minister for Tourism held a Tourism Employment Roundtable to collaboratively work with industry on solutions to support training and education and improve employment outcomes to ease skills shortages.

The corner stone of the work program by Tourism Ministers is the selection of eight regional 'hot spots' (one per jurisdiction) to implement tourism regional employment plans to support the development of regional capacity and delivery of localised solutions to meet labour and skills needs.

Industry consultation has commenced for the roll out of the first two plans in Broome and the Red Centre.

The Government encourages ATEC to actively engage in this process to support their successful delivery.

Updated Tourism Strategy

The Prime Minister has committed to an update of the National Long-Term Tourism Strategy by the end of the year and I am pleased to note that Martin Ferguson launched 'Tourism 2020' yesterday.

Tourism 2020 focuses on:

  • Growing demand from Asia
  • Digital capability
  • Investment and regulatory reform
  • Tourism transport
  • Labour and skills
  • And building resilience, productivity and quality.

Under Tourism 2020, the Prime Minister has tasked me with the responsibility for ensuring tourism is ready to capitalise on the advantages that the NBN will bring.

One of the greatest challenges facing businesses is that, although nine out of 10 are connected to the internet, only about a third are using it effectively to their benefit.

Tourism Research Australia data shows more and more tourists are using the internet as a source of information and to make bookings.

It is vital to growth in the sector that tourism businesses capitalise on the National Broadband Network.

The NBN will make it possible for Australian companies to deliver more sophisticated techniques, marketing and content on their websites - to potential overseas and domestic customers.

Conclusion

The Government's strategic approach to supporting the Australian tourism industry is evolving to meet industry needs.

During its first phase, the National Long-Term Tourism Strategy has helped reposition the industry on a dynamic growth path for the future.

During these two years, the strategy has made a real difference.

Australia now has a policy framework to address barriers to growth and offer practical help to individual businesses.

 

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