Home' Hotel Management : HM FEB 2017 Contents Last year, 2016, was a year of unprecedented growth
in international visitation and expenditure with more
modest growth in domestic visitation and expenditure.
This is reflected in the recently released tourism satellite
account figures which show that tourism growth is in
fact outpacing the wider economy. Over the past two
years the GDP from tourism has increased by 17 per
cent, compared with 4.1 per cent for the economy as a
whole. In 2015-16 direct tourism GVA increased 7.5 per
cent to AUD$49 billion, representing 3.1 per cent of the
The Federal Government ’s recently released mid-year
economic outlook (MYEFO) recognised that the shift
away from strong resource investment-led growth to
broader based drivers of economic activity is continuing,
with tourism recognised as one of the government’s
five priority investment areas. To sustain this it will be
important that the Government fosters positive business
confidence levels and investment through cuts in company
taxes across the board and by working with the Opposition
and cross benches to create greater certainty in 2017.
Based on the current economics – continued low
interest rates and a lower Australian Dollar – 2017 is
expected to remain a strong year for the Australian
tourism sector, tempered mainly by declines in domestic
consumer sentiment and a subdued labour market.
International tourism to Australia is experiencing
record highs, with the latest IVS showing an 11.5 per cent
increase in visitation and expenditure. While international
visitor nights grew at a slower rate of 3.8 per cent,
pleasingly nights in hotels/motels/serviced apartments
(HMGSA) grew by 13.9 per cent, with all capital cities
and regional areas, with the exception of Perth, Western
Australia and Darwin, demonstrating positive growth.
The outlook has been strengthened by economic
recovery in traditional overseas markets and strong growth
from emerging economies, with fifteen of Australia’s 20
major source markets producing record visitor numbers
Favourable economic factors together with a focus
by governments on maximising airline capacity and
investment, both through increased free trade agreements
and bilateral air agreements (inclusive of the recently
Tourism Accommodation Australia
announced historic open aviation market arrangement with China), coupled with
improvements in visitor visa processing and accessibility, have driven this growth, which
is anticipated to continue into 2017.
The latest NVS results show more subdued domestic growth, with visitors increasing
by 4.8 per cent and nights increasing by 3.7 per cent. While current economic factors
have stimulated increases in domestic tourism, factors such as sustained subdued income
and employment growth are expected to moderate growth into 2017.
The overall economic and market trends indicate continued strong growth for
the tourism sector and this is demonstrated in the positive investor sentiment which
is fuelling the hotel building boom that is set to change the face of Australia’s hotel
industry. Currently there are some 120 hotel projects in the pipeline, which will increase
accommodation stock by 30 per cent between 2016 and 2021.
However, the headline growth figures mask significant disparities for the
Importantly while there has been welcome increases in domestic visitor nights spent
in hotels, motels and serviced apartments in regional Australia (with the exception of
Victoria), there has been little increase in supply and regional occupancies continue to
hover around 50 per cent, driven by seasonality, poor international dispersal and lack of
visitor economy infrastructure. While the performance is mixed across Australia we will
continue to reinforce the need for investment in long term growth in regional Australia,
not growth simply driven by the transient fall in the Australian Dollar.
The impact of the unfettered rise of unregulated short-term accommodation – under
the guise of ‘sharing’ – can’t be underestimated. There has been a significant rise in
commercial operators in this space who are not compliant with current regulation and
provide no contribution to taxes, jobs and promotion of the destination. Our focus
in 2017 will continue to be to advocate for transparency of supply with proportionate
regulation and a reduction of regulation in the commercial accommodation sector.
The issue of workplace productivity will dominate in 2017, particularly with current
shortages being exacerbated by the new supply pipeline. While the industry will continue
to focus on attracting Australians by highlighting the career opportunities in the sector
through initiatives such as the Hotel Career Expo, there is no doubt that we will need to
go overseas for the shortfall in the medium term. Unfortunately this is likely to become
more and more difficult as governments respond to political pressure by limiting access
to overseas skilled workers. A decision on excessive penalty rates will be handed down
during early in the year with the Fair Work Commission to make recommendation
about the future of weekend and public holiday rates and part-time provisions. We
will continue to support the strong industry case by the AHA, to ensure improved
productivity and thus economic outcomes for the sector.
The accommodation sector is in a good position to capitalise on the current economic
situation and government prioritisation of the sector. In 2017 we will be looking to
governments to maintain their support for the industry by promoting tourism and business
events, encouraging employment and training in the industry, easing access to overseas
skilled workers and cracking down on commercial unregulated short-term accommodation.
34 HM The Business of Accommodation
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