Productivity Commission report recognises the strong growth of Australia's tourism industry

A recent report from the Australian Productivity Commission recognises the strong growth of Australia's tourism industry over the past two decades and highlights the need for investment for continued growth.

Introducing the research paper, which set out to examine trends, drivers and barriers to growth in Australia's international tourism industry, Productivuty Commissioner Warren Mundy explained that “while there has been strong growth in international tourism over the past two decades, the tourism industry will need both further innovation and adaptable regulators if it is to respond to vigorous global competition to attract visitors.”

The paper finds that more could be done to allow the tourism industry to adapt to changing consumer preferences and emerging digital technologies. More travel is being researched and booked online and the tourism industry needs to keep pace with these developments.

The paper points to a number of reforms that would benefit the tourism industry and the economy more broadly.

The paper notes that poor development approval processes for tourism related infrastructure investments are not only costly to developers, but to businesses and communities.

Dr Mundy added “while there have been some reforms to development systems, implementing the reforms previously recommended by the Commission would enable the tourism industry to innovate and invest in a timely manner.

The paper also counsels that assessments of government support for international destination marketing and major events often overstate the net benefits of these activities to the community.

Dr Mundy continued “it is critical that rigorous and transparent economic analysis is undertaken before government funding is provided to these activities.

“Many national parks are hampered by tired infrastructure and persistent funding shortfalls. Well-chosen improvements to user charging and quality private investment would showcase one of Australia's most attractive tourism products, provide an additional source of funding and facilitate innovation in the provision of tourism related infrastructure.”

The effect of international air services arrangements on international travel is also considered in the paper. The paper notes that although Australia's international aviation policy settings have served Australia well, there is scope to allow carriers to increase services for all Australia's major gateway cities - but particularly Brisbane, Melbourne and Perth.

Released to little fanfare in February, Federal Minister for Trade and Investment, Andrew Robb welcomed the research paper.

Minister Robb said this important work not only reinforced the value and strength of Australia’s tourism industry, but also provided confidence that the government’s policy priorities were targeting the right areas.

The Minister explained “tourism generates over $100 billion of revenue, directly and indirectly employs one million Australians and is our largest services export.

“Tourism is one of Australia’s strengths and as a government we are determined to back our strengths.”

In addition to recommendations on the aviation sector, the report underscores the crucial need for investment in high quality tourism infrastructure, accommodation, and recreational, cultural and heritage assets.

Minister Robb added “I (am) particularly pleased to see the emphasis the Commission placed on tourism investment; one of five priority areas for investment identified by the government.

“It is critical that we review and reform development approval frameworks at all levels of government and remove unnecessary barriers to new investment.”

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