Australia needs to adapt for Asian tourism

The Tourism Forecasting Committee (TFC) is urging Australia's tourism leaders to update their product to match the needs of travellers from Asia, as visitors numbers from traditional markets in Europe and North America decline.
In a 2011 Forecast update, the TFC predicts that the number of international visitors will reach 5.9 million for 2011, a growth rate of only 0.4%. Previously, growth of 3.1% had been predicted.
According to the TFC, three of Australia's top five markets will decline by the end of this year, with arrivals from Britain expected to fall by 5.7%, US by 4% and Japan predicted to drop 18.1%.
Within the downgraded tourism forecast, the Committee forecasts that 3.2% more Asian-based travellers will arrive into Australia this year. It believes that Australia could attract more visitors from these key markets by ensuring the country offers "the right type of product".
TFC predicts that growth from Asian markets will offset the 2.4 million expected loss in arrivals from non-Asian travelers.
Contributing to the expected dip is the fall in domestic travel, with domestic nights expected to decline by 0.3% this year. Meanwhile the strong Australian dollar has fueled a 9.2% rise in Australians tourists heading overseas.
The Forecast also suggests that 7.8 million Australians will go overseas this year, a growth of 9.2%. This is expected to increase to 8.2 million in 2012.
The report reads "while there are a number of structural and economic factors behind the growing deficit, today's data also highlights the need to update, upgrade and upscale our tourism product.
"Specifically, TFC has recommended innovative tax strategies to incentivise new hotel development and stimulate reinvestment in existing accommodation stock."
The Tourism & Transport Forum (TTF) agrees that investment in new hotels and accommodation stock is vital for Australian tourism.
TTF believes that latest hotel occupancy figures, which reveal that beds in in Australia's capital cities to be scarce, underscores the need for new hotel construction.
TTF's latest Capital City Accommodation figures show occupancy rates in capital city hotels at a record 78.5% in the June quarter, with average room rates up 5.9% showing the strength of the business-focused CBD hotels.
Addressing the Federal Government's tax forum this week in Canberra, TTF's Deputy Chair Ann Sherry, put forward some specific proposals to re-gear the tax system through a capital works deduction incentive.
Sherry also outlined TTF's proposal for swifter depreciation for furniture, fittings and equipment to stimulate the refurbishment of current hotels, stating "the Capital City Accommodation Index show there is clearly a need for new accommodation product in our cities. The current tax system does not encourage investment in both new hotel builds and refurbishments, which we think needs to be addressed."

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