The Local Industry

Measuring the Value: The Tourism Impact Model

Few councils, if any in Australia, are able to be absolutely accurate about the role and contribution of tourism to their local economy. In recognition of this the federal Department of Industry Resources and Tourism, have after five years of laborious ‘drilling down’ and using information gathered from Tourism Australia, ABS and BTR, created a Tourism Impact Model (TIM) to assist councils Australia wide to measure their tourism contribution. This model will at least, offer a starting point that is the same for everyone, and based on the same calculations.

CoPP will use this model as the basis for calculating the contribution of tourism to the area, and thus the number of jobs, and the reduction in economic activity (services and infrastructure etc.) were tourism not a part of this local economy.

TIM: ‘Default’ data for CoPP

The TIM uses default data to set up the model. This is the statistical information about the area, its population, the estimated visitation, spend and length of stay, together with information taken from the council budgets and expenditure.

It provides a starting point to measure from. When viewed in its raw form, the default data showing the economic impact on CoPP, without visitation, the loss of economic activity is noteworthy.

As CoPP is part of a metropolitan economy, characterised by large scale commuting between council areas and inter-area trade, the default estimates in TIM are potentially inaccurate because:

1. The distribution of visitor accommodation may be a limited guide to the distribution of visitor spending.

2. The flow-on employment effects may be heavily diluted by the leakage of the spending stimulus to other parts of the metropolitan economy.

3. Given large scale commuting between council areas, a portion of the additional jobs within a council area may be filled by non-residents.

It would be particularly important for CoPP to replace the default estimates with council estimates. The following is an extract from TIM that provides a simple base snapshot of the tourism impact on CoPP.

Economic of impact of City of Port Phillip without Tourism

According to the work of the Department of Industry Resources and Tourism TIM Model, CoPP without tourism would have :

• 3,733 million less day visitors and visitor nights per year
• $438M dollars‘ less visitor spending
• Nearly 5,000 less jobs (attributable directly and indirectly to tourism)

In all it would reduce the population in CoPP by 18% (13,488) and this could mean a significant reduction in council’s ability to deliver services and amenity, to the same level, to its residents, ratepayers and businesses.

The need for CoPP to better manage tourism relies in part on a better understanding of the tourism component of its activity. This will be addressed by improving our information about visitation, forecasting and trends through comprehensive data gathering and analysis, some of which may be achieved in collaboration with other inner metropolitan councils (IMAP), Tourism Victoria and Destination Melbourne (DML).

Understanding Our Strengths

Industry Alignment

CoPP enjoys many natural strengths in its appeal to visitors. In particular, the waterfront, public open space and lifestyle buzz of the villages and the local people.

However, it is also important to understand that visitors, regardless of origin, do not recognise council boundaries or lines on a map.

For example on any one visit to Victoria, any interstate visitor might also visit the City of Melbourne (CoM), City of Yarra (CoY) and City of Stonnington (CoS), and often for similar reasons (cafés, buzz, shopping). Thus visitors to CoPP are also visitors to other metropolitan LGA’s, and in this way, a visit to CoPP may be viewed by these people part of their visit to Melbourne.

For CoPP, this means the need to continually build upon, and communicate, existing product strengths, rather than the creation of new ones.

It also means that care is taken to understand the State Tourism strategy and to ensure the CoPP locations, destinations and strengths continue to be seen by Tourism Victoria (TV), and CoM, as a critical as part of the Melbourne offer.

The table that follows seeks to show the product offers that CoPP has, the strength (or proof) of the offer and its fit with the current state tourism strategy. The final column shows which of the many visitor audiences each product offer might attract.

Who are our Visitors?

Tourists are generally thought of as those who come from interstate and overseas. If all visitors are viewed as ‘tourists’ important opportunities are lost, because visitors and tourists may not want or need the same things. For example, there are vast differences between a backpacker tourist from Sweden, and his behaviours and wants within the CoPP, and a day visitor from Doncaster.

For example:
• The Gay and Lesbian travel market is a niche, and their wants and needs both coincide with some audiences, yet differ greatly from others.
• Backpacker behaviours are changing rapidly and are no longer defined by age or budget.
• Older people are increasingly active and often have a very youthful attitude to their leisuretime and seek more adventurous and interactive pursuits.

For us to be successful, it will be important to distinguish between the various audiences for CoPP. Careful data gathering and analysis together with insightful and segmentation of audiences is critical to the performance of villages, festivals, events and even accommodation offers and infrastructure development.

Our Competitive Advantages

As a destination, CoPP enjoys worthwhile competitive advantages.

In many ways, tourism is a “natural condition” for CoPP, and awareness of it locally and beyond Victoria is quite high, due to its history as a metropolitan playground and past Tourism Victoria campaigns. Anecdotally, competitive research conducted by Tourism NSW also supports this.

The range and depth of the offer to visitors is strong, covering niches, lifestyle and culture and the opportunity to engage with locals; all very high on the list of visitor wants.

An attractive waterfront, lifestyle buzz, good food and wine, interesting bars and pubs, cultural depth and creativity, welcoming and proud locals, proximity to the CBD and excellent public transport access make this a very competitive locale and indeed, a jewel in the Melbourne crown.

Overall, there is a natural fit with the TV strategies and the quality of most of the product is in keeping with the image of Victoria (and Melbourne) as a vibrant, sophisticated and diverse destination.