The forthcoming State Budget is an opportunity to boost the tourism sector by bringing some cost relief to tourism businesses at a time of declining visitor numbers, higher fuel prices and rising interest rates, says the Victorian Tourism Industry Council.

 

"While there are always pressures on the Budget, due consideration should be given to Victoria’s tourism industry", says VTIC Chairman, Jeremy Johnson.

 

"The tourism industry contributes an estimated $10.9 billion to Victoria’s Gross State Product, and is also particularly important to rural and regional areas, contributing $3.4 billion to the economy of regional Victoria.

 

"The industry in Victoria is currently facing a number of challenges. While the number of international tourists to Australia reached a record high of 5.5 million short-term visitors in 2005, the rate of growth has slowed considerably.

 

"Declines in domestic tourist numbers are a particular concern to the industry in Victoria at this time. For the year ending June 2005, Victoria received 17.2 million domestic overnight visitors, down from 17.8 million in 2004 and 18.3 million in 2003. The average length of stay for these visitors has also declined, as has the number of daytrip visitors. The fall in the number of domestic tourists is having a major impact on the tourism industry, both in Melbourne and in regional Victoria.

 

"In addition to this, several of Victoria’s regions have recently been adversely affected by bushfires, particularly those located near Grampians National Park. While VTIC welcomes the State Government’s formation of a taskforce, and acknowledgement of the impact of the bushfires on tourism operators, affected regions will require long-term support and assistance in order to recover.

 

"The rise in petrol prices has also caused tourism operators in Victoria considerable hardship, and has particularly affected the hotel-motel segment. High petrol prices have both raised the transport costs of operators, and lowered consumer spending, impacting on the profitability of the sector. Tourism operators in regional areas have been particularly hard-hit, with higher petrol prices deterring visitors.

 

"This has been compounded by the effects of an interest rate rise - the State Government can take immediate measures to counter the impact of these increases in business costs, for example reductions in payroll and land taxes, and a further reduction in WorkCover premiums.

 

"It is critical that Victoria continues to strengthen its competitive position in the national and regional tourism market. We can now seek to capitalise on the opportunities provided by the Commonwealth Games for the long-term growth of Victoria’s tourism industry, and ensure that the benefits of the Commonwealth Games are shared with the regions in the post-Games period. This includes building on the strength of Melbourne Airport as a 24 hour tourism entrypoint.

"The tourism industry in Victoria currently has enormous potential for growth, but this will require long-term support from the State Government - in particular, a strong State-based marketing strategy, supported by appropriate State Government funding, is critical to ensure the growth of tourism in Victoria", says Mr Johnson.