NSW VISITOR ECONOMY
On the Move Mid-Term Report Card
March 2017
A division of NSW Business Chamber Limited ABN 63 000 014 504.
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Introduction
In the lead-up to the 2015 State Election,
the NSW Business Chamber’s Tourism Division
released NSW Visitor Economy: On the Move.
On the Move articulated a positive agenda to
grow, invest, secure and engage in the tourism
industry in NSW.
With two years having now passed since the Coalition
was returned to Government. The time has come to
assess progress toward the priorities identified in On
the Move and set a strategic pathway for the remaining
two years of the current term.
This assessment is largely positive.
In overall terms, the performance of the NSW visitor
economy is relatively buoyant. Overnight visitor
expenditure reached $16.5 billion in September 2016,
an increase of nearly 3.5% over the year. NSW remains
the most visited state in Australia.
With over 93,630 tourism businesses in New South
Wales generating more than 269,000 jobs and $37.1bn
in consumption, tourism is a vital and fast-growing
sector of the New South Wales economy.
The Government has also delivered on a number of its
key tourism pre-election commitments. At this midstage in the term, key achievements that will directly or
indirectly benefit tourism in NSW include:
• Reducing red tape through Council reform
• Re-investing $20bn in asset sale proceeds in new
infrastructure including tourism infrastructure
• Delivering a robust calendar of innovative, attractive
events particularly in Sydney
• Building the cultural and tourism potential of Western
Sydney by moving the Powerhouse Museum to
Parramatta
There is, however, much more to be done. One of the
Government’s first priorities should be to foster a
‘joined-up’ approach to tourism bureaucracy. Right now,
the network of programs, funding streams and
government bodies involved in tourism is incredibly
difficult for business to navigate. The Government
should develop a simple ‘one stop shop’ source of
information to help tourism operators break through this
complexity and reach the support they need to grow.
Further, the Chamber has highlighted throughout this
report priorities from On the Move that are yet to
receive the action they merit, as well as additional new
strategies for the Government to pursue.
Tourism in NSW
• Contributes $30.96bn to NSW’s Gross State Product (GSP)
• Tourism investment in NSW in 2015 totalled $9.3bn - 15% of
tourism investment in Australia
• NSW #1 in overnight visitor spend and visitation
• In year ending Sept 2016 NSW attracted 3,760,000
international visitors (up 13%) and generated $9.3bn (up 16%)
As outlined later in this report, a significant missing
piece is the lack of clear, action-oriented planning to
boost tourism investment in regional NSW. While the
visitor economy in Sydney is booming and supported by
important infrastructure investment, regional
destinations need to build the depth of visitor
experience to stimulate long term growth.
One of the outcomes of the 2015 review of regional
tourism was the Government’s commitment to develop
an overarching Destination Management Plan (DMP). A
statewide Destination Management Plan (DMP),
involving mapping key products and experiences is
critical to ensure alignment across the three tiers of
Government and a pathway for industry investment.
While the Government has committed to a statewide
DMP, the document has not been published and
industry lacks the benefit a clear, coherent strategic plan
would bring.
The issue of skills also requires urgent attention.
Australia’s tourism and hospitality sector will require an
additional 123,000 workers by 2020. By that date it is
estimated there will be an accumulated national skills
shortage of 30,000 workers, over 10% of tourism’s
current skilled workforce. It is critical the Government
start now to boost participation in the existing
workforce as well as increase and encourage traineeship
pathways. This will ensure the industry secures a
sustainable pipeline of workers to meet future demand.
The remaining two years of this term are an opportunity
to continue the NSW Government’s positive agenda,
address the priorities outlined in this document and
identify new priorities in the Visitor Economy Industry
Action Plan to be updated in 2017.
Taking the steps the Division suggests will ensure the
NSW Government continues to grow, invest, secure
and engage the tourism industry.
Strengthen
What we asked for
The Division called on the Government to strengthen
tourism by:
• Reforming local government
• Developing a state-wide destination management
planning framework
• Realising the tourism potential of Western Sydney by
creating jobs closer to where people live
The Coalition committed to:
• Pursue reform of councils through voluntary
amalgamations
Progress since the election
NSWBC’s Red Tape Survey, consistently identifies local
government as one of the most complicated agencies
for business to deal with. While the Division has
welcomed commitment to structural reform of councils,
more needs to be done by the state government to
ensure councils have the tools to adequately support
business, employment and investment opportunities.
Securing bipartisan, State-Federal commitment to a
new airport at Badgerys Creek Airport was an important
achievement and it continues to resonate and drive
decision making. NSW Business Chamber estimated
that the airport would support up to 33 million
passenger movements and 30,000 additional jobs in
Western Sydney. The new airport will play a vital role as
both an infrastructure link for building the NSW visitor
economy and regaining lost aviation market share from
interstate
The Division welcomes steps taken by the NSW
Government to strengthen tourism strategy overall
through a new state-wide Destination Management
Plan. The introduction of six new Destination Networks,
each governed by a ‘skills based’ board, is another
move in the right direction. With the uniqueness of its
offering however, Western Sydney (including the Blue
Mountains) needs to be supported by a Destination
Network in its own right.
Destinations in areas such as the Northern Rivers and
the Riverina for example have unique experiences to
attract a larger overnight share of visitors from overseas
and interstate: a capability that has, by and large, been
untapped. Over the next two years the Government
should develop actions to increase major events in
regional NSW and stimulate industry investment
opportunities.
Building up the tourism potential of the regions must
also include specific strategies to increase overnight
spend and dispersal. Fast growing inbound markets that
largely stay in the capital cities, such as China, should
be of particular focus. Strategies should also identify
and clearly delineate opportunities to encourage
interstate visitors attending major events in Sydney to
disperse to regional locations and attractions.
A roadmap for the next decade of tourism in Sydney is
also lacking. Visitor attractions in Sydney CBD and
Western Sydney are encouraged by the Government’s
investment in the visitor economy over the last two
years. Nevertheless, a vision for future funding and
marketing to enable them (and other tourism operators)
to plan ahead is lacking.
Sydney is undoubtedly the crown jewel in NSW’s
tourism market. It is the largest city in Australia with
two major centres and points of economic activity. The
Division repeats its call to Government that Destination
Management Plans for both Sydney and Western
Sydney are not just desirable but essential to supporting
growth. Such an approach would mirror tourism
planning for other capital cities across the country.
Separate plans will ensure infrastructure; integrated
tourism & transport master planning; visitor servicing
and capital investment opportunities are maximised for
both centres and that their priorities are appropriately
balanced and interlinked.
The Division remains concerned that regional tourism
continues to lack an effective strategy to deliver on the
goals set out by the Visitor Economy Taskforce in 2012.
Unfinished business
• Continue local government reform
• Publish State-wide Destination Management Plan
New business
• Create standalone Destination Management Plans /
Tourism Strategies for Sydney and Western Sydney
• Develop action plans to stimulate dispersal and overnight
spend in regional NSW
• Establish a Destination Network West comprising of
Western Sydney & Blue Mountains funded from 2018
NSW Business Chamber. (2014). Economic Impact of a Western Sydney Airport, Sydney, accessed 2 March 2017 at <https://www.nswbusinesschamber.com.au/
NSWBCWebsite/media/Policy/Thinking%20Business%20Reports/Economic-Impact-of-a-Western-Sydney-Airport.pdf>
Invest
Before the 2015 State Election the Division
called for three strategies to boost tourism
investment:
• Lease the State’s electricity assets to focus
investment on infrastructure that supports tourism
Unfinished business
• Create a better environment for tourism investment by
simplifying the land planning use system
• Commit to infrastructure investment in both
metropolitan and regional areas
• Simplify the process for releasing crown land assets
for tourism use
The Coalition committed to:
• Privatise the State’s “poles and wires” electricity
assets
• Invest the sale proceeds in major infrastructure
projects
The Coalition’s decision to lease 49 per cent of the
State’s electricity assets has provided NSW with a
once-in-a-generation opportunity to address its
infrastructure backlog and invest for the future.
The leasing of the Transgrid and Ausgrid networks have
already realised $26.5 billion in gross proceeds for the
Government – $6.5 billion more than the initial forecast
with more to be added.
This immense windfall means the Government has the
funding available to transform NSW with productivity
boosting infrastructure. This will help drive connectivity
between major centres, grow the tourist market and
sustain economic growth in the long term.
The NSW Government has signaled it will make good
on this opportunity. There has been significant progress
in advancing detailed planning for the major
metropolitan infrastructure projects committed to under
the Rebuilding NSW program, including the critical
Sydney Metro, Western Harbour tunnel, and Parramatta
Light Rail projects which will go a long way toward
boosting connectivity between the critical Sydney CBD
and Parramatta centres.
Clear plans for regional infrastructure have, however,
been less forthcoming, despite the $6bn earmarked for
regional investment.
New business
• Develop, publish and deliver on clear plans for regional
infrastructure to support the visitor economy
The Government needs to fast track the outcomes of
consultation on regional infrastructure and deliver on
these plans. A whole of Government approach is
required to ensure at the planning and funding
assessment stage that linkages are made between
major infrastructure and tourism product development
funding proposals (via DNSW). This will join the dots
for destination development & visitor experiences in
regional NSW.
All of NSW must see the benefits of the unprecedented
‘infrastructure boom’ currently underway. Investment in
the development of cycle ways and rail trails for
example can help extend the length of stay and add
depth to the visitor experience in regional NSW.
The Government has begun to introduce clearer
processes for releasing crown land for tourism
purposes with the passing of the Crown Land
Management Bill 2016. This, however, is the first stage
in a longer term process to harmonise eight complex
pieces of legislation into a single piece of legislation.
The Government should fast track this effort, thereby
ensuring public land maximises its capacity to
contribute to tourism. Western Sydney Parklands is a
prime example of a visitor attraction that would benefit
from the legislation reform.
Secure
In 2015, key market-specific plans to secure
tourism had not been released. As a result, the
Division called on the NSW Government to:
• Release the NSW Regional Business Events Strategy
(promised in 2012)
• Publish and deliver the Cruise Development Plan
• Establish a Tourism Crisis Management Taskforce to
integrate planning and natural disaster preparedness
The Coalition committed to publish:
• A Regional Business Events Strategy
• A 10-year Cruise Development Plan (now a 20 year
Plan)
Destination NSW has marketed an outstanding calendar
of events in Sydney. More than 160 public events take
place each year, including major attractions such as
Vivid’. Vivid alone contributes more than $40 million to
the NSW economy each year, a significant highlight and
foundation for future growth.
More needs to be done, however, to boost both major
events and sector development of regional areas.
Business events unlock the most lucrative segment of
the mid-week and shoulder season overnight visitor
market. It is disappointing that the NSW Government
has not publicly released its plan to target more
conferences, meetings and incentive events to regional
NSW. The Division will continue to press the
Government to publish this strategy and ensure that
regional NSW does not miss out on the opportunity to
build its intra and interstate market share.
The industry is also awaiting publication of a Cruise
Development Plan. Despite the mid 2014
announcement that MI Associates would create the
plan with Destination NSW, the final document is yet to
be released. The fact that Australia’s cruise industry is
ranked number 1 in terms of market penetration and
growth is no reason to be slow in delivery . Urgent
action should be taken now to ensure clear industry-led
strategies are in place to plan for forecast growth in
passenger numbers, identify capacity and infrastructure
needs and – ultimately - capitalise on the opportunity to
increase overnight visitor expenditure. The
announcement in September 2016 of $12.7 million
funding by the State Government for a multi-purpose
cruise terminal at the Port of Newcastle is welcomed.
At the same time, the linkage between this
commitment and the statewide Cruise Development
Plan remain unclear.
The most important element in securing the future of
tourism in NSW is ensuring the sector is supported by a
skilled workforce. Tourism Research Australia
estimates that there will be a national skills shortage
equivalent to 30,000 tourism and hospitality workers by
2020. The problem will be very significant in NSW,
which attracts a lion’s share of these sectors and
already has a critical shortage of tourism and hospitality
skills. Skilled cookery, for example, sits at the top of the
current skills shortage list for NSW with accommodation
workers close behind.
The best way to address the shortfall of skills in tourism
is to boost participation in vocational pathways to work.
With this aim in mind, recent research by the NSW
Business Chamber advocates changes to strengthen
and modernise traineeships and apprenticeships. The
NSW Government should adopt these
recommendations to reignite the apprenticeship and
traineeship system, in addition to investing in strategies
to support continuing professional development. This
will ensure the tourism industry has the confidence that
the next generation of workers is equipped to meet
future demand.
With many tourism areas within areas of high natural
disaster risk, a more coordinated and integrated
planning and preparation framework needs to be
developed to support both operators and visitors. A
Tourism Crisis Management Taskforce would assist in
not only preparing for emergency events but also in
coordinating responses after an event to ensure
operators are able to welcome visitors back into tourism
areas as soon as practicable.
Cruise Lines International Association Australasia. (2013). Cruise Industry Source Market Report, p. 3, accessed 2 March 2017 at
https://www.cruising.org.au/Tenant/C0000003/00000001/PDF%20Documents/AU-CLIA-Annual-Report-2015.pdf
Noonan, P. (2016). Laying the Foundations for Apprenticeship Reform, NSW Business Chamber, Sydney, accessed 2 March 2017 at
https://www.nswbusinesschamber.com.au/NSWBCWebsite/media/Policy/Thinking%20Business%20Reports/POL-2342-Laying-the-foundations-report_final.pdf.
Unfinished business
• Deliver a Regional Business Events Strategy
• Publish and deliver the Cruise Development Plan
• Establish a Tourism Crisis Management Taskforce to
integrate planning and natural disaster preparedness
New business
• Adopt the recommendations of Laying the Foundations
for Apprenticeship Reform
Engage
Close engagement with industry is essential to
the development of effective tourism strategy
and planning. In the 2015 election lead-up the
Division called on Government to:
welcomed the December 2016 announcement of a
strategic review of the VEIAP. The review will result in
an updated NSW Government implementation plan for
visitor economy in New South Wales through to 2020
and beyond.
• Establish a Tourism Cabinet Sub-Committee
As part of the review, the Division has called
upon the NSW Government to take into
context the following factors to determine
future priorities:
• Arrange six-monthly meetings with Ministers,
Departmental heads and industry
• Publish a scorecard on the Visitor Economy Industry
Action Plan to keep Government and industry
accountable
The Coalition committed to:
• Assess performance against the Visitor Economy
Industry Action Plan
Despite the Government not taking up all the Division’s
proposals, there has been a marked improvement in the
degree of industry engagement since the 2015 election
At both a ministerial and departmental level industry has
been kept well informed concerning the performance of
the sector, its contribution to the economy and, at a
more practical level, of any expected changes in tourism
policy or strategy. The Division is well represented on
Government Committees, including the strategic review
of the Visitor Economy Industry Action Plan (VEIAP). It is
important however that Destination NSW builds closer
relationships with regional operators and stakeholders
with the support of the Destination Networks.
The VEIAP was developed in 2012 by industry
representatives and endorsed by the Coalition
Government with the primary aim of doubling overnight
visitor expenditure to $36b by 2020.
A process to assess performance and ROI against the
priorities in the Plan started recently in December 2016,
with excellent evidence of action: a total of 154 actions
(out of 167) in the Plan have been completed or are
actioned and ongoing.
It is important that the Plan is regularly refreshed and
opportunities to prioritise, consolidate and reduce the
large number of actions should be explored. The Division
• a dynamic marketplace fuelled with disruptive
channels to market and use technology
• integrated transport and tourism plans for Sydney
and regional NSW
• reducing barriers to the growth (e.g. red tape in land
use planning; employment penalty rates; flight caps
at Kingsford Smith)
• facilitating the dispersal of growth in international
markets and overnight spend in regional NSW
• more in-depth measurements orientated toward
visitor expenditure and qualitative insights into
customer satisfaction
• Increased focus on the Inclusive Tourism market
segment (taking into account aging population)
The updated VEAP must also identify actions that will
help address current and future skills shortages in the
sector. With more than 80% of the sector seeking to
employ staff locally the updated VEAP should also
highlight regional solutions to these challenges.
Unfinished business
• Refresh the Visitor Economy Industry Action Plan to
grow the visitor economy through to 2020 and beyond
NSW Business Chamber
Tracing our heritage back to 1825, NSW Business Chamber’s mission is to create a better Australia by
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succeed, because prosperity creates new jobs, social wealth, and better communities in which to live.
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Let the NSW Business Chamber team be an extension of your business so you can concentrate on
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