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Victorian AHA general manager's lunch.



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Minister for Resources and Energy, Minister for Tourism

VICTORIAN AHA GENERAL MANAGER'S LUNCH Good afternoon ladies and gentlemen.

As some of you may know, I've enjoyed a long association with the hotel industry - not only in my time with the Miscellaneous Workers' Union and the ACTU, but of course in my capacity as a Shadow Minister and now a Minister who is a frequent traveller and customer of hotels.

I'd like to begin today by acknowledging the environment we are operating in - and note the pressures some

are facing while recognising the resilience, commitment and successes of the Victorian hotel and tourism

industry over the past 12 months.

Visitor expenditure in Victoria for the 12 months ending March 2008 rose more than 10 per cent; significantly

higher than the national increase of 6.3 per cent

Total international visitor expenditure in Victoria during this period increased 11.8 per cent.

Growth in domestic visitor expenditure for Victoria was also significantly higher than the national increase (up

5.2 per cent)

And overnight visitor expenditure increased 10.3 per cent.

Occupancy rates increased - albeit marginally (up 0.4 per cent) - to 64.7 per cent while revenue increased

solidly, up 8.5 per cent to $1.4 billion.

The Victorian industry can be very pleased with these very solid numbers.

But it is also important we acknowledge the challenges which exist and those which loom on the horizon.

The next 12 months will be very testing for both our domestic and international economic environment.

The fact is we still do not know what the full impact of the US sub-prime meltdown will be.

We know it is cutting into US economic growth, however we do not know how deeply this ripple will affect

demand across the world.

We do know the Subprime crisis has already had an effect on interest rates with many lenders in Australia

The Hon Martin Ferguson AM MP

The H

on Martin Ferguson AM MP

11 Aug 2008

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increasing their rates to reflect their higher cost of borrowing.

I appreciate the impact this is having on people who are thinking about having a holiday as well as operators

with loans outstanding.

As a discretionary spending item, tourism is a front-line industry affected by tough economic conditions. This

applies to both the Australian domestic and international markets.

This presents a unique challenge for the industry and policy makers alike.

I have been thinking about these challenges facing the tourism industry for many years. Now as a Minister I

am afforded the enormous privilege of enacting policies in the nation's interest and enacting policies to

strengthen the industry.

The industry has been demanding these policies for years.

Demanding, but seemingly never heard by the previous Government.

As Minister, I believe it is my responsibility to implement a proactive program which will increase industry

resilience and self-reliance.

Resilience means the industry will have the capacity to deal with shocks such as September 11, SARS,

economic downturns or currency fluctuations.

I should add that the industry has shown enormous resilience in the face of adversity.

I think it important to note that industry resilience will not be created through a marketing campaign.

Yes, we need tourists and travellers to come to Australia and to know what we have to offer.

And we are by no means neglecting marketing.

Moreover, I am providing Tourism Australia with the freehand to market Australia internationally without the

impediment of Ministerial interference.

The people running Tourism Australia today have a very clear understanding that they now possess the

freedom to capitalise on Australia's emerging opportunities as they deem appropriate. They are, after all, the

marketing professionals.

Baz Luhrmann's film Australia is proof of this.

In the coming months, Tourism Australia’s focus will be on maximising the global marketing and promotional

opportunities presented by Australia's release in November 2008.

This provides an opportunity for us to showcase Australia to the world - directly and proactively leveraging off

an unprecedented, global marketing event from Day One.

Tourism Australia has also spearheaded the National Landscapes Initiative with Parks Australia.

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National landscapes has been developed to identify and promote up to 20 of Australia's exceptional natural

experiences to the international 'Experience Seekers' market over the next two years.

I had the pleasure of adding Victoria's Great Ocean Road and Coastal Wilderness earlier this month to

existing National Landscapes such as the Australian Alps, the red Centre, Kakadu, the Blue Mountains and

the Flinders Ranges. I should add that the Australian Alps incorporates Victoria's wonderful alpine region.

Becoming a Landscapes destination means strong regional engagement and cooperative management …

and marketing in key countries by Tourism Australia.

Tourism Australia will create demand in key markets by promoting the locations while supply-side issues will

be addressed by stimulating regional tourism product development opportunities, and focusing investment

and infrastructure development.

I come back to supply-side issues again and again as they have been sadly neglected.

As just one tourism product in an increasingly-competitive international market, Australia must have the

capacity to make the most of the opportunity each visitor to Australia represents.

That's why I am driving the National Long-Term Tourism Strategy.

The primary focus of the Strategy is to strengthen the supply side of the tourism industry to ensure it remains

competitive and has the productive capacity to meet future challenges.

The Strategy will consider tourism investment, infrastructure, labour and productivity, and domestic tourism.

Your input is welcome because this is a partnership with industry.

The proof is in the Steering Committee.

With members drawn from both within and outside the tourism industry, it has been established to provide

input into the Strategy - not rubber stamp it.

I announced the development of the Strategy on 8 May 2008 and the Committee has already met twice, with

Margaret Jackson as Chair.

I expect the Steering Committee to act as a sounding board for industry views; I know you will not be

backward in letting your views be heard.

The Strategy will be developed by mid-2009 so don't delay.

Nor are we in Government delaying. The industry can't afford to wait and put off again what should have been

done years ago.

An Inter-departmental Committee has also been formed to guide the development and drafting of the Strategy

and to ensure a coordinated whole-of-government approach is adopted, particularly across the range of

reviews currently being undertaken by the Government in areas such as infrastructure.

I make sure you have a voice at the table when issues affecting the tourism industry are being considered by

the Government.

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We are progressing accreditation and had a very productive Tourism Ministers' Council in Melbourne last

month.

Other work underway includes Tourism Australia's audit of business events. I note that Melbourne's

Convention and Exhibition Centre is scheduled to open next year.

Likewise, I am conscious of the issues such as labour shortages that the industry is grappling with.

I understand issues such as escalating construction costs are an issue for those seeking to build new hotels

or renovate existing assets.

Aviation policy is a relevant example of a policy where I and my department are participating in the debate.

My Department is working with the Department of Infrastructure as the National Aviation Policy Statement is

being developed.

Melbourne and Victoria generally are well served by aviation links domestically and internationally and I know

Melbourne Airport is now A380 ready.

It has been a busy period in Government over the past 8 - 9 months and being August I know that your

industry will be busy in coming months with AFL finals followed by the Spring Racing Carnival, not to mention

upcoming business and cultural events.

Being Melbourne-based I generally don't stay in Melbourne hotels, however I experience enough breakfasts,

dinners and lunches like this one to appreciate the fine job your industry does in accommodating tourists.

Ladies and gentlemen, in the time available this afternoon I have tried to provide an insight to the

Government's initiatives aimed at strengthening the tourism industry … I trust your questions will fill any gaps

if there are areas you feel I have missed.

Thank you.

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