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Plotting the future. Keynote address to Australian Tourism Research Institute Conference, Sydney.



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Speech The Hon Joe Hockey MP Minister for Small Business and Tourism

16/10/2002

"Plotting the Future", Keynote Address to Australian Tourism Research Institute Conference, Sydney

Ladies and gentlemen…

Thank you for inviting me to give the keynote address to the Australian Tourism Research Institute conference for 2002.

The theme of your conference, "Plotting the Future", is very apt…

The timing is important, too…

Because more than ever before, the industry needs to focus on research issues.

Industry state of play

Unfortunately, many tourism businesses are still doing it tough in the wake of September 11 and the Ansett collapse — particularly those that depend on international travellers.

The preliminary data for August shows a 7.4 per cent decrease in international visitor arrivals compared to the same month last year.

From September 2001 to August 2002, international arrivals have dropped by 7.5 per cent, or around 380,000 visitors compared to the same period a year earlier.

And of course, current international uncertainties continue to dampen travellers’ interests in overseas travel.

In this environment, sound data, analysis and forecasting are vital.

Tourism White Paper

Back in February, I announced that I would develop, in partnership with the Australian Tourism industry, a far-reaching, whole-of-government, long-term strategy to restructure Australia’s tourism industry.

In May, I delivered a discussion paper as the first step in developing that strategy. And I invited submissions from stakeholders.

The discussion paper certainly captured the imagination of the industry… the media… and the Australian public.

The discussion paper posted on my website received 30,000 downloads — that’s downloads, not hits.

And 7,000 hard copies of the discussion paper were distributed.

As well, I received over 270 written submissions, all of which I have read myself, including submissions from many of you here today.

The submissions presented a wide range of views.

But several messages came through loud and clear.

One of those messages was that the research, statistics and forecasting the industry uses for decision-making, to put it diplomatically, need a lot of reform.

By the time people get the data it’s out-of-date. For example, we’re still waiting for final overseas arrivals and departures data for 2000 and 2001. In other words, we can’t yet make a final analysis of the effects of two recent world events — the Sydney Olympics and September 11.

The deficiencies in data collection were driven home to me personally on a couple of fronts. The first was as I threw myself headlong into the reform of the industry with the assumption that I would have sufficient baseline data on which I could test the assertions in the submissions sent to me.

I could be forgiven for that assumption as in my previous portfolio I drove extensive reform of the financial sector. That reform was based on the rock-solid and up-to-the-minute data that is the hallmark of that sector.

This assumption proved to be wrong for tourism — and one of my greatest frustrations in developing the Tourism White Paper has been delay caused by the fact that data has simply been inaccessible.

The second area where the data deficiencies were driven home to me was in my role as the industry’s ultimate spokesman. The Bureau of Tourism Research often supplied me with excellent research papers that they suggested I release to the media. It only took a couple of journalists' inquiries to me as to why I was releasing research based on data that was two or three years old for me to end the practice.

Had I, as Financial services Minister, released research based on two-year old data to say, the Australian Financial Review or the markets, I would have been laughed out of my job.

This lack of data affects the efficiency of marketing expenditure. And makes it difficult to track the results of promotional campaigns, many of which are funded by the Government.

As well, data on various industry segments and on regional tourism is poor. One of the great challenges of the White Paper is how we can collect meaningful accommodation data for smaller operators without over-burdening them with red tape.

Another issue is the structure of the industry’s research network.

Currently, research and forecasting are provided by a plethora of different organisations.

Like the CRC for Sustainable Tourism, which was set up with $15 million from the Federal Government… the Bureau of Tourism Research… and the Tourism Forecasting Council… not to mention the Australian Bureau of Statistics.

In mentioning the CRC, I would like to commend the team for the work they're doing.

Earlier, I bemoaned the lack of data and research in the context of the development of the White Paper.

It is, however, important that we keep things in perspective. We’ve been herding sheep and digging up coal for well over 200 years now, and making widgets for about 150, since the industrial revolution. In that time, each of these sectors has enjoyed the development of major supportive institutions — in the shape of bureaucracies, faculties and industry associations.

The weakness in data and research in the tourism sector is largely a function of its youth — and I hope the White Paper will be able to stimulate a bit of rapid growth, a "coming of age" in the industry’s research.

Leaving aside the White Paper, however, I am delighted in the work that the CRC is doing in terms of identifying and closing some of the gaps in our industry’s fundamental research. I am particularly pleased with the role that the CRC is playing in fostering many of the industry’s leaders of tomorrow — many of whom, I am informed, are in this room today.

It is for this reason that I have written to my colleague, the Minister for Science, Peter McGauran and also met with both Peter and the Minister for Education, Brendan Nelson, to support the CRC’s bid for a second round of funding.

The tourism industry has two fundamental research needs. To that, I would add from the Government’s point of view, a third.

The first industry need is for hard data for informed, long-term planning. The second is short-term business intelligence.

The Bureau of Tourism Research and the Australian Bureau of Statistics meet the first need, providing the hard data. This is the kind of research you just can’t do on a short-term basis.

But the second part of the equation — the immediate market intelligence — is largely missing.

And this is the kind of information which business is so well equipped to produce.

Other industries conduct and disseminate their own research.

For example, look at the property industry.

Like tourism, the property industry needs long lead times for investment.

But unlike tourism, the property industry invests heavily in market intelligence.

For example, some of the major property advisory companies produce their own market intelligence which they make freely available to the public.

The Property Council of Australia combines this information with data from other key sources to provide comprehensive statistics, forecasts and leading indicators. Users can compare results across markets and sectors — free and online.

My question for you to ponder over the next couple of days is — why can’t tourism industry bodies do the same?

I mentioned that the Government has a separate need in terms of industry research.

ATRI is a commendable organisation which aims to align the commercial needs of the industry with its youthful and developing research institutions.

However, the Government has a need for research beyond the merely commercial. Believe it or not, we do make decisions based on things other than strict commercial value. And it is here that the White Paper has, again, exposed significant gaps.

I’m talking about essentially social research into things like the benefits that travel brings to our family life, our public health, our functionality as a community and our understanding of other communities and diverse cultures.

In my short time as Minister I have read plenty of flowery and well-intentioned speeches and articles on these issues, but with the exception of some of the See Australia research, have found it hard to obtain that social research data.

And I assure you — the Howard Government takes these issues very, very seriously indeed.

Tourism R&D

According to the Australian Bureau of Statistics, in 2000-01, R&D with a tourism objective carried out by businesses, universities and government totalled less than $20 million.

I should point out that this figure includes only "hard" R&D. It doesn’t include "soft" R&D like market research and surveys, so much of the work of the ABS itself, the Australian Tourist Commission, the CRC for Sustainable Tourism and the Bureau of Tourism Research isn’t included.

Obviously, there’s no "right" figure for tourism R&D.

But it’s interesting to compare the $20 million the tourism industry spends on R&D against the $2.3 billion spent by the manufacturing sector and the $1.5 billion spent by the health sector.

And is $20 million on R&D enough for an industry worth directly and indirectly approximately $71 billion to the Australian economy each year?

On this issue, it’s interesting to look at what they’re doing across the Tasman. The New Zealand tourism industry invests heavily in research and product development. And their inbound figures have increased over the past 12 months — unlike ours.

Conclusion

Before I conclude, I’d like to support the work of the Australian Tourism Research Institute.

ATRI is playing a vital role in bringing researchers and industry together. We need interaction between the two groups, to ensure research is relevant to the real needs of industry.

And forums like this conference are valuable in giving researchers the opportunity to discuss their work, which all helps to improve the quality of research.

For a while now, I’ve been saying that the Australian tourism industry needs a more businesslike approach.

And that’s one of the main thrusts of the Tourism White Paper.

One important aspect of that businesslike approach is getting the fundamentals right — the sound data and research the industry needs for informed decision-making.

And that’s an area where everyone in this room can make a contribution.

Thank you.