Tourism Investment Monitor 2016

Overview

The fifth in the series, Tourism Research Australia’s (TRA) Tourism Investment Monitor 2016 (Monitor) estimates the number and total value of large-scale projects in Australia’s tourism investment pipeline in 2015. Results in this year’s monitor reflect a consistent methodology used in previous editions of the report and provide benchmarks for growth comparisons.

  • There were 173 projects in the tourism investment pipeline in 2015 – up by a net 6 projects from 2014
  • They were valued at $59.8 billion – up $6.5 billion (or 12 per cent)
    • Aviation projects accounted for the majority of the pipeline – $37.6 billion (mainly in new aircraft orders)
    • Arts, recreation and business services infrastructure projects were valued at $14.6 billion 
    • Accommodation projects were valued at $7.6 billion – providing a potential 15,900 new rooms to accommodation supply.

Growth in the pipeline was supported by strong investor appetite for projects in each of the sectors:

  • The arts, recreation and business services pipeline saw strong interest with 15 new projects worth $1.6 billion entering the pipeline in 2015. Many of these projects are in regional Australia and once completed will help drive dispersal of international and domestic visitors into the regions.
  • The value of the aviation pipeline increased largely as a result of the devaluation of fleet orders (after a 17 per cent decline in the value of the Australian dollar against the US dollar in 2015). Three airport projects worth $480 million were completed in 2015, while 6 new aviation infrastructure projects worth $495 million were added to the pipeline.
  • The value of the accommodation pipeline declined. However, there has been a shift in investor focus to increasingly pursue mixed-use developments, rather than typical ‘standalone’ hotels. These types of developments offer increased returns and diversification of risk across a variety of complementary uses, making them attractive to investors. Mixed-use projects are very common in Asia and many developers in Australia now see them as the future for real estate development.
  • In addition to the $59.8 billion tourism investment pipeline, this year’s monitor identifies very strong growth in mixeduse developments. These developments were valued at $35.1 billion (up $1.5 billion, compared to 2014) across 79 projects (up by a net 10 projects). They have the potential to generate a total of around 24,000 new rooms if realised (up by an additional 5,700 rooms). When combined with the anticipated additional 15,900 rooms from standalone accommodation projects, accommodation supply could grow by around an additional 39,900 rooms, if all projects are fulfilled in their publicised forms.

The current strength of the tourism investment pipeline is supported by continued investor appetite for Australian tourism infrastructure investment projects. Demand for tourism services also continues to go from strength to strength, increasing the importance of the industry’s contribution to the Australian economy. Combined, this places Australia’s tourism industry in a good position to attain its goals set under Tourism 2020.

Specific targets of Tourism 2020 include: growing overnight visitor expenditure to between $115 billion and $140 billion; growing accommodation supply by up to an additional 20,000 rooms; growing international aviation capacity by between 40 and 50 per cent; growing domestic aviation capacity by between 23 and 30 per cent; and growing the tourism labour force by up to an additional 152,000 workers to meet demand.

Influences on 2015's Investment Environment

Solid Economic Contribution by the Tourism Industry $ (2014–15)

  • Direct tourism GDP – $47.5 billion, or 3.0 per cent of totalGDP
  • Direct employment – 580,800 persons, or 5.0 per cent of total employment
  • Total exports – $30.7 billion, or 9.6 per cent of total exports – this makes the tourism industry one of Australia’s largest export industries (ABS, 2016b).

Record Breaking International Visitor Arrivals & Spend

For Year Ending Dec 2015 (ABS, 2016a):

  • International arrivals reached 7.4 million – up 8.1 per cent on the previous 12 months
  • China remained a very strong driver of growth in arrivals – up 22 per cent to 1.0 million arrivals, with strong growth also coming from India (up 18.6 per cent to 233,600 visitors)
  • Arrivals continue to be driven by leisure travel (holiday and visiting friends and relatives – VFR, combined), and now account for almost three-quarters of all international visitors (74 per cent) – holiday arrivals were up 9.6 per cent and VFR was up 7.7 per cent
  • International visitors travelling for education purposes saw very strong growth over the period – up 18.4 per cent.

For Year Ending Dec 2015 (TRA, 2016a):

  • International visitors spent a record 248.1 million nights in Australia – up 11.3 per cent – representing an average length of stay of 36 nights per trip in Australia. Nights spent in hotels, motels and serviced apartments grew 6.7 per cent to the highest level since 2005.
  • International visitor nights spent in a rented house or apartment, or the property of a friend or relative continued to increase in share, accounting for 39 per cent of total nights and 31 per cent of total nights, respectively.
  • International visitor spend reached $36.6 billion – up 17.7 per cent.
Please click here to download the full report.
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Source

Australian Trade Commission

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