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Federal budget the toast of hospitality, tourism sectors

16 May, 2014

The hospitality and tourism sectors are two of the big winners to emerge from the 2014 federal budget, according to a number of leading industry spokespeople.

While the budget has predictably drawn criticism from some quarters, there has been cause for celebration among hospitality groups and related associations such as the Accommodation Association of Australia (AAA), Tourism Accommodation Australia (TAA) and Restaurant & Catering Australia (R&CA).
 
Accommodation sector receives "tremendous boost"

Speaking on behalf of the industry, the Accommodation Association of Australia said it was delighted that the Abbott government has shown faith in tourism by rejecting drastic recommendations made by the National Commission of Audit to halve funding for Tourism Australia and integrate into a government department. 
 
"The accommodation industry is set to receive a tremendous boost from the news that Tourism Australia will be retained as Australia's dedicated international tourism marketing organisation with its funding maintained," said the Association's Chief Executive Officer, Richard Munro. 
 
"While other sectors were targeted for cuts by the government, the budget outcome is clear recognition of the importance of tourism to the Australian economy.
 
"It enables Tourism Australia to continue to carry out the valuable task of increasing visitor numbers to Australia.
 
"The support for tourism from the Abbott government will directly benefit all tourism accommodation businesses, including major international hotels in Australia's capital cities, small motels in regional areas and B&Bs.
 
"At a time when Australia is facing increased competition from major Asian destinations for overseas visitors, the budget announcement about Tourism Australia is welcome news that should set the industry up for growth resulting in more jobs for Australians.
 
"The commitment to Tourism Australia has the potential to offset any drop in consumer sentiment which may occur in the coming weeks and months." 
 
"Sympathetic" budget for tourism

TAA welcomes "sympathetic" budget and applauds government for switching from individual tourism grants to State demand-driver infrastructure grants.

Tourism Accommodation Australia (TAA) has welcomed the federal government's handling of the tourism sector in the 2014 budget.

Managing Director of Tourism Accommodation Australia (TAA), Rodger Powell, said: "Following the release of the Commission of Audit report, TAA called on the government to ignore the recommendations relating to tourism marketing, and to increase net spending on tourism because of its potential to boost export earnings and create sustainable jobs.

"We are pleased that the government has maintained Tourism Australia's resources, as they have demonstrated considerable success in growing the inbound market in recent years. We also welcome the allocation of additional funding for marketing efforts in Asian growth markets, with Chinese visitors expected to generate over $13 billion in tourism revenue by 2020.

"The announcement of the new Tourism Demand Driver Infrastructure grants program with the States is particularly welcome.

"TAA did not believe that funding individual tourism and hospitality enterprises through the TQUAL and TIRF schemes was an equitable or efficient use of scarce funding. To provide funding for 'new carpets in old motels' was never going to drive demand, where as the Tourism Demand Driver Infrastructure Grants programme will benefit all operators through development of projects such as convention centres, port facilities, museums, galleries, theatres and other attractions.

"A positive example of this is the $150 million allocated to the Gold Coast to invest in infrastructure to host the Commonwealth Games. This will have a long term impact on all accommodation and tourism operators in the region as it will significantly increase the Gold Coast's ability to attract and create future major events.

"Scott Morrison is to be congratulated for saving over $2 billion through the stopping of illegal arrivals, and the creation of the new Border Protection Force will drive further efficiencies. We believe that some of these savings should be invested in upgrading the visa processing system and the efficiency of the overall arrivals experience to enhance Australia's global tourism competitiveness.

"The expenditure on road infrastructure will also benefit the tourism and hospitality sectors as some 70 per cent of tourism is domestic and a large percentage of that is self-drive holidays.

"While overall, we are happy with the budget and applaud Minister Robb for his efforts to support the sector, it is disappointing that the Australian Network TV service is being axed because that built awareness of Australia as a destination in our key growth markets in Asia.
It will mean that greater direct funding will be required for tourism marketing in the future if we are to maintain our visibility in these highly competitive markets."

Government 'understands importance' of hospitality

Maintained funding for Tourism Australia and industry development programs in the 2014-15 federal budget will ensure Australia's largest service export sector continues to grow, according to peak industry association Restaurant & Catering Australia (R&CA).
 
R&CA CEO John Hart says the increased funding for Tourism Australia announced in the budget along with commitments to Australia Week in China and the return the T-Qual Accreditation Programme to industry demonstrates the government's understanding of the economic importance of the sector.

"Australia's tourism and hospitality sector is the country's largest export services sector, contributing $128 billion to the economy each year. Tourism is tipped to be one of the world's fastest growing sectors by 2033, growing 10 percent faster than global gross domestic product. With an annual growth rate of 4 percent, the sector will more than double over the next two decades," said Hart.

"A 'build-it-and-they-will-come' model for tourism simply does not work – consistent and constant marketing is needed to turn intention to travel into bums on seats, particularly from our major source markets in Asia.

"Tourism Australia is a global leader in tourism marketing, and is world renowned for its creative and innovative campaigns. Without its efforts, the country would not see the influx of 6.5 million visitors spending $28.9 billion on our shores each year," said Hart.

Hart said he was pleased recommendations from the National Commission of Audit had not been adopted, which would have seen funding for tourism halved and residual functions of Tourism Australia moved into a commercial arm of the Department of Foreign Affair and Trade.

"Tourism Australia has the full support of industry because it remains commercially focused at arm's length from government. Its Restaurant Australia campaign is a key example of the global reach these campaigns can have when this organisation partners with the private sector and is left to innovate. This would not be the case if it was a puppet of the Department of Foreign Affairs and Trade," said Hart.

Hart said the decision to transition the T-Qual Accreditation Programme to industry was a sensible one in ensuring the sector continues to deliver quality tourism experiences to market.

"This is the premise of the There's Nothing Like Australia campaign of which Restaurant Australia is a key component – promoting the best tourism and hospitality experiences Australia has to offer. Industry needs to drive quality assurance if we are going to continue to deliver on this brand promise.

"The industry has received assurances tonight that we can get on with the task of growing the visitor economy, supporting jobs in tourism and hospitality businesses across regional and metropolitan Australia."

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