Tourism in Context

Tourism is a powerful driver of community prosperity.

Tourism exports (ie; foreign revenue earned in Australia) are larger than coal exports, wool exports and most other categories. It makes both a direct (tourism industry jobs and income etc.) and an indirect (retail, hospitality, goods and services etc.) contribution to the Australian economy.

The tourism industry represents the quintessential expression of the small business ethic of Australia, with a large number of small and medium-sized operators, including many that are family run businesses. Tourism is a labour intensive activity overall, employing proportionally more people per dollar of GDP than most other industries.

Chief beneficiary industries are transport, accommodation, cafes and restaurants, manufacturing, retail and property and business services. After the airlines, large hotel chains, big tour companies and major man-made attractions, most tourism business is small, and reliant on local support for its viability. This is especially true in the CoPP.

An Australian snapshot :

Tourism in Australia continues to trend upwards generally year on year at about 1%, despite periodic unforeseen spikes in the market occasioned by such factors as SARS or 9/11.

Between 2000-2001, tourism contributed around $59 billion to Australia’s GDP, which equates with 9% of GDP. Between 2004-05 tourism accounted for $18.3 billion in exports.

According to most recent available data, tourism in 2000-01 directly employed 549,000 people (6% of total employment). Indirect employment for the same 2000-01 period accounted for about 351,000 people, some 4.4% of the workforce.

When combined, in 2000-01 tourism accounted for the employment of around 900,000 people, or 10.4% of the Australian workforce.

A Victorian Snapshot :

According to the latest research, in 2003-2004, the combined direct and indirect contribution of tourism to Victoria’s Gross State Product (GSP) is estimated to be 5.3% or $10.9 billion (a 49% increase from $7.3 billion in 1997-1998).

Overall, The tourism industry contributes more to the Victorian economy than many traditional industries including agriculture, forestry & fishing; mining; electricity, gas & water supply; Government administration and defence; and Cultural and recreational services.

Victorian Employment in the Tourism Industry

In 2003-2004 tourism accounted for 159,000 jobs or 6.6% of all people employed in Victoria (a 19% increase from 134,000 in 1997-1998).

Visitation to Victoria

Sixty-four percent of overnight visitors to Victoria were sourced from the intrastate market, followed by 28% from the interstate market and 7% from overseas. 37% of domestic visitor nights to Victoria were sourced from the intrastate market, followed by 36% from the international market and 26% from interstate.

Domestic Overnight Visitation

Victoria received 17.3 million domestic overnight visitors for the year ending June 2006 and 53.0 million domestic visitor nights. The average length of stay for the year ending June 2006 was 3.1 nights.

Domestic Daytrip Visitation

There were 31.8 million domestic daytrip visitors to Victoria for the year ending June 2006.

Domestic Visitor Expenditure

Domestic overnight expenditure in Victoria in 2005 is estimated to be $7.6 billion, with visitors spending on average $148 per night and $454 per visit. Domestic daytrip visitors spent $2.9 billion in Victoria in 2005, spending on average $92 per daytrip. Domestic overnight visitors to Victoria spent most of their money on food and drink (26% of total expenditure) and accommodation (20%).

Domestic Forecast

Over the period 2006 to 2015, domestic visitor nights to Victoria are expected to grow by an average annual rate of 0.5%, to reach 52.9 million nights in 2015. Holiday/Leisure travel to Victoria is forecast to grow at an annual average rate of 0.5% over the period 2006 to 2015 to reach 25.5 million nights.

A Melbourne Snapshot :

In the year ended September 2005, Melbourne had almost 17.3 million visitors from all sources. Of those, nearly 5.9 million were domestic overnight visitors.

Total travel to Melbourne in the YE Sep 2006

Looking at travel to Melbourne overall, there were nearly 40.7 million visitor nights. Of these, International overnight visitors to Melbourne numbered 1.3 million and they stayed 22.7 million nights or 55.9% of all visitor nights.

New Zealand is Melbourne’s biggest international source market of visitors, with UK second, while China in third place, is the second biggest contributor of visitor nights in Melbourne. A significant proportion of the Chinese visitation is attributable to learning English.

A visit for ‘Holiday / pleasure’ continues to be the main purpose of visit for international overnight visitors to Melbourne, and ‘Education’ remained the biggest ‘purpose of visit’ contributor to international visitor nights in Melbourne. Because of people who come for education, and backpackers who use Melbourne as a work base, the average stay in Melbourne by international visitors is quite high at 18.1 nights (contributed mainly by education and backpackers). This makes sense of the notion that ‘Rented house / apartment / unit / flat’ remains the most popular accommodation type for international visitor nights in Melbourne.

Domestic visitors (from interstate and intrastate) made up 44.1% of Melbourne’s visitation, while another 58% were on a domestic day trip.

Together, these visitors spent an estimated $7.1 billion in Melbourne, and almost certainly, a good proportion of that spending took place within the boundaries of the City of Port Phillip.


Domestic overnight travel

In the year ended September 06 Domestic visitors staying overnight in Melbourne numbered 6.6 million, and contributed 19.6 million nights, an increase on the previous year of 11.9%

The biggest source of interstate overnight travel to Melbourne is still NSW. The main purpose of a visit is ‘Visiting friends or relatives’ , and the average stay in Melbourne by domestic overnight visitors is now 3.0 nights.

The most popular accommodation type remains a ‘Friends or relatives property’ and when here, eating out at restaurants’ continues to be the most popular activity for domestic overnight visitors.

The Local Snapshot

CoPP is a significant beneficiary of visitation to Melbourne. Beyond anecdotal experience, understanding exactly what the share is, is difficult to quantify other than to take a simple division of the Melbourne figures for visitation, and then apply those to CoPP.

It could be argued that on any given day or evening, many people dining in our restaurants and cafés, or gathering in our pubs and bars to listen to live music, laugh at a stand up comedian or meet friends are a mixture of local and inner Melbourne people. Added to this, the breadth of budget accommodation options within CoPP, means that additional visitors from elsewhere, including overseas might be numbered in the crowd, or staff behind the bar.

In addition, on weekends our local population swells considerably as leisure time pursuits are taken up within our city boundaries.

Measuring the impact of this visitation and the indirect economic impacts of tourism are difficult. Visitors do not recognise lines on a map, and in any given day, a single visitor from interstate, staying 2 nights and spending $500 may spend part of their time and money in several LGA’s.

Presently, best estimates suggest that most people staying more than one night in Melbourne will likely visit the City of Port Phillip as part of their itinerary.