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Framework Guide to Facilitate

Tourism Investment

June 2011

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Preamble

About this Guide

The National Long-Term Tourism Strategy (NLTTS) seeks to ensure that Australia moves up the international tourism value chain and remains competitive through quality tourism products and services. Greater investment in the tourism industry will drive long-term profitability, innovation and growth in the industry.

The Framework Guide to Facilitate Tourism Investment (the Guide) is designed to promote good practice in tourism investment facilitation. The Guide is an important resource for all levels of government in encouraging investment in tourism that will ensure Australian tourism product remains competitive in a global market place.

This Guide was prepared by the Allen Consulting Group on behalf of the NLTTS Investment and Regulatory Reform Working Group (IRRWG).

Acknowledgement

The Allen Consulting Group acknowledges the assistance of the IRRWG in preparing this Guide and the contributions of the businesses, stakeholders and government officials who provided input.

Citation

The Allen Consulting Group (2011) Framework Guide to Facilitate Tourism Investment, Melbourne.

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Contents

Preamble ii!

Why is a Guide needed? 1!State of the industry 1!Responding to this challenge 1!The evidence base for this Guide 1!How to use this Guide 2!What is tourism investment? 2!What is tourism investment facilitation? 3!When to use investment facilitation 3!Who should use this Guide? 5!Good practice 6!Authority rests with government 7!

1. Supporting good practice 8!1.1 ! Public interest principles 8!1.2 ! Risk management 11!

2. Government leadership 12!What this is 12!Why it is important 12!2.1 ! Make the case for a high level priority and government commitment to tourism investment 14!2.3 ! Ensure that tourism investment facilitation is in accordance with sound public interest principles 17!

3. Capacity building 18!What this is 18!Why it is important 18!3.1 ! Build a wide understanding of the benefits of tourism investment 18!3.2 ! Embed tourism expertise within government 19!3.3! Ensure that government agencies have the capacity to assess tourism proposals 19!3.4 ! Assist the tourism sector to understand government requirements 20!

4. Information 21!What this is 21!Why it is important 21!4.1 ! Provide comprehensive information online about available facilitation 22!4.2 ! Provide clear documentation on approval processes 22!4.3 ! Provide potential investors with information about opportunities 23!4.4 ! Provide market research to support investment proposals 23!4.5 ! Package tourism investment information for foreign investors 24

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!5. Partnerships 25!

What this is 25!Why it is important 25!5.1 ! Develop partnerships between levels of government to facilitate tourism investment 26!5.2 ! Develop networks with the investment community 27!5.3 ! Form partnerships with communities 27!5.4 ! Form partnerships with Indigenous communities 29!5.5 ! Identify international investors opportunities and work with Austrade, Tourism Australia and economic development departments to develop international investment 30!

6. Approval processes 31!What this is 31!Why it is important 31!6.1 ! Zone sites for tourism and streamline approvals 32!6.2 ! Align tourism investment strategies with local planning 33!6.3 ! Create mechanisms within government to facilitate decisions on tourism investment 34!6.4 ! Ensure timely decision making on tourism proposals 35!6.5 ! Assign investment facilitation specialists to facilitate major investment projects 35!6.6 ! Ensure that the appropriate level of government is dealing with each proposal 35!

7. Infrastructure and land provision 37!What this is 37!Why it is important 37!7.1 ! Make the provision of tourism infrastructure a condition of major developments 38!7.2 ! Identify and make available land and buildings for tourism investment 38!7.3 ! Government leases of land/buildings for tourism should be long term and at realistic cost 40!7.4 ! Recognise that some tourist facilities require government investment 41!7.5 ! Recognise that transport facilities (including regional airports and cruise ship terminals) are essential to tourism and need government investment 43!7.6 ! Assist with provision of access to, and utilities for, tourism facilities 43!

8. Next steps 45!Assessing your current tourism investment facilitation performance 45!What to do next 45!Monitoring and evaluation 46!Key contacts 47!

APPENDIX A: Further information on support available from jurisdictions 48!

APPENDIX B: Current performance: assessment tool 51!

References (includes web links) 55!

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Why is a Guide needed?

State of the industry

The Australian tourism industry is a significant contributor to the Australian economy. The tourism industry also contributes many social, cultural and environmental benefits.

The State of the Industry 2010 report by Tourism Research Australia identified that the tourism industry faces a number of challenges.

The non-tourism component of the Australian economy grew by 7.5 per cent a year, compared with 3.9 per cent a year for tourism from 2000-01 to 2008-09.

Tourisms share of GDP has fallen during this period from 3.4 per cent to 2.6 per cent. Australian domestic overnight visitor expenditure, the largest component of domestic tourism,

has declined by around 5 per cent in the past ten years. Internationally, Australias share of global tourist arrivals has declined from 0.7 per cent to 0.6

per cent. Low levels of private sector investment in new tourism products and upgrades to existing tourism products have contributed to these challenges.

Responding to this challenge

Australia needs to address the limitations and capacity constraints that the industry is currently facing. The Jackson Report (DRET 2009a) to the NLTTS steering committee concluded there is a need to enhance the supply-side capability of the tourism industry. In doing this, the appeal of the tourism offering must be improved as a basis for driving long-term profitability, innovation and growth in the sector. The NLTTS (DRET 2009b) recognised this as a priority. This led to the establishment of the IRRWG, which has commissioned this Guide.

This Guide will focus more attention and effort on the supply side of the tourism industry. The Guide provides a practical information resource that will assist governments to facilitate tourism investment and build Australias competitiveness as a tourism destination.

The evidence base for this Guide

The good practices outlined in this guide have been developed through a thorough evidence-based process. The good practices have been derived through extensive consultation with tourism industry representatives, developers and representatives of government at local, state and territory and Australian Government level. The project also obtained input from individual tourism operators through a survey. The good practices were further informed by a review of relevant documents from Australia and other countries. Additionally, a number of case studies showed that in each case, many of the good practices had been deployed to achieve successful tourism investment outcomes. More details of the evidence base underpinning this Guide can be found in the companion report (Allen Consulting Group 2011).

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How to use this Guide

This Guide will assist your organisation to undertake tourism investment facilitation. A summary of good practices is provided at the beginning of each of Section 1 to Section 7. In addition to the good practices detailed in these sections, Section 8 outlines the next steps that will assist you in implementing good practice. Appendix A details the resources available from jurisdictions in Australia including links to web sites. Appendix B is an assessment tool that can be used in conjunction with Section 8. The references includes web links to all of the documents referred to throughout the Guide.

While the Guide provides a menu of good practice, clearly the adoption of good practice needs to take account of the context of each organisational circumstance and investment process. Specific actions to implement each good practice are highlighted throughout the document, along with case studies and examples. The three levels of government each have areas of good practice for which they are primarily responsible and for which they have the appropriate tools at their disposal. Each level of government should focus on what it can do best. As a general principle, higher levels of government should not perform functions that can be performed effectively and efficiently at a lower level, while lower levels of government should work with higher levels to access support and expertise as appropriate.

What is tourism investment?

In this Guide, tourism investment refers to any investment that expands and upgrades Australias product, service and/or experience offered to tourists. It includes domestic and foreign private sector investment in infrastructure, products, services and experiences, used by, or related to, the Australian tourism industry as it is defined in the Australian Bureau of Statistics Tourism Satellite Account. This investment can be in both private and public land (crown land, national and state parks, reserves, Indigenous, cultural and historic sites), buildings, infrastructure, products, services and experiences. Investment is also considered to include issues at the development stage which would affect investment decisions.

For example, the investment may relate to products and services that include: short-term accommodation (e.g. hotels, guest houses, motels); tourist facilities (e.g. entertainment, recreation, information centres and cultural activities); and other ancillary services (e.g. retail, food and beverage, transport and other services used by both visitors and residents).

Some investment may be of a dual or multi-purpose nature, serving both tourism and non-tourism markets. Investment in tourism can be undertaken by both public and private entities (sometimes in partnership) and can relate both to completely new infrastructure and the expansion, upgrading and refurbishments of existing infrastructure. Tourism investment can include infrastructure that serves both residents and tourists.

Tourism investment can enhance the capacity of the industry to service a more diversified tourist base and offer more diversified tourist products (e.g. luxury resorts, eco-tourism), strengthen the quality of tourism offerings and increase capacity to better service tourists.

Foreign investment Access to investment capital in Australia is highly competitive. Overseas investors in the tourism sector can bring expertise and international networks to support their investment in Australia. It is difficult and may not be cost effective for states and territories, on their own, to seek foreign investment in the tourism sector. Working with Austrade, states and territories can leverage on that organisations networks and international connections. Good Practice 4.5 of this Guide discusses the need to package information for foreign investors. Good Practice 5.5 also discusses approaching international investor markets.

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What is tourism investment facilitation?

The Asia-Pacific Economic Cooperation (APEC) defines tourism investment facilitation as actions taken by governments designed to attract private sector tourism investment and maximise the effectiveness and efficiency of its administration through all stages of the investment cycle (APEC 2008). In an Australian context, this refers to activity that encourages tourism investment across the three levels of government. This activity may include:

informing prospective investors about development regulations; guiding investors through approval processes; negotiation with other portfolios; raising awareness of investment opportunities; sourcing or providing financial assistance; and providing advice on other issues as required.

Tourism investment facilitation may occur as part of a program or initiative specifically directed at tourism investment, or as part of a broader investment facilitation initiative, for which tourism investment is eligible.

Investment facilitation includes both the facilitation of private investment through government action, and government leveraging its infrastructure investments in ways that make private tourism investment more commercially attractive.

Some facilitation of infrastructure investment may, in part, serve the needs of tourism but not be specifically identified as tourism investment. In these circumstances, tourism agencies are advised to ensure that such investment appropriately meets tourism needs and liaise with the responsible agencies to achieve dual-purpose outcomes.

When to use investment facilitation

As Figure 1 shows, a successful investment will involve a number of stages. The industry survey undertaken for this project confirmed that for the purpose of tourism investment facilitation, most activity occurs in the planning stage. This stage begins with the initial idea, and includes the development of the concept, assessment of feasibility and the gaining of approvals and finance.

The Guide is predicated on maximising the likelihood of successful investment facilitation. Consequently, the Guide recommends doing all, or many, of the good practices described. The precise detail of what is done in each case requires judgement that will depend on the circumstances of each government and each investment proposal.

However, to assist users of the Guide in determining when certain good practices are most likely to be useful, the Guide has mapped good practices to an investment process. In doing this, the Guide recognises that some facilitation measures are relevant at multiple stages in the investment process and, on some occasions facilitation measures may be needed at an earlier stage than indicated.

The investment process used in the guide is adapted from the Victorian tourism investment guide, with the addition of a pre-investment stage. This has been selected because it reflects a generic process with a number of specific stages where investment facilitation is clearly most relevant to a successful project. The survey results showed clearly that investment facilitation measures were overwhelmingly seen as being most useful early on in the investment process. Figure 1 also indicates which level(s) of government are best placed to address investment facilitation and the accompanying good practices at each stage through the investment process.

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FIGURE 1 FACILITATION BY INVESTMENT STAGE

! Provide high level priority and government commitment to tourism investment 2.1 C, S L

! Adopt a whole-of-government approach to managing tourism projects 2.2 C, S L

! Ensure that tourism investment facilitation is in accordance with public interest principles 2.3 C, S, L

! Embed tourism expertise within state/territory and local government 3.1 C, S, L

! Build a wide understanding of the benefits of tourism investment 3.2 C, S, L

! Assist industry to understand government 3.4 C, S L

! Package tourism investment information for foreign investors 4.5 C S

! Publish information about forms of investment facilitation available 4.1 C, S, L

! Provide information about approval processes 4.2 C, S, L

! Appoint facilitation specialist (if appropriate) 6.5 C, S L

! Provide information about investment opportunities 4.3 S C, L

! Provide market research information 4.4 C S

! Identify international investors and work with Austrade, Tourism Australia and economic development departments to develop investment markets (if appropriate) 5.5 S, L C

! Zone sites for tourism and streamline approvals 6.1 C, S L

! Make tourism infrastructure a condition of major developments 7.1 S

! Identify and make land and buildings available 7.2 C, S C

! Facilitate through established consultative mechanisms 5.1 S

! Ensure timely decision making 6.4 C, S, L

! Facilitate through liaison with local government 5.1 S S

! Work collaboratively with other levels of government and investors to shape proposals 6.2 S, L C

! Assist through existing conversations with communities 5.3 S L

! Assist through partnerships with Indigenous communities (if relevant) 5.4 S C, L

! Ensure that government agencies have capacity to assess tourism proposals 3.3 C, S L

! Liaise with local government and planning agencies 5.1 S

! Support tourism proposals at planning tribunals 6.2 S

! Use across-government committees where appropriate to expedite approvals 6.3 S, C L

! Refer proposals to State government for approval (where appropriate) 6.6 S

! Ensure timely decision making 6.4 C, S, L

! Assist through established networks of investors 5.2 S, C

! Ensure that leases of government land and buildings are long-term and at reasonable cost 7.3 S, C

! Provide financial assistance and/or incentives where necessary 7.4 S, C

! Invest public funds where appropriate 7.5 S, C

! Assist with the provision of access and utilities 7.6 S, L

PRE-INVESTMENT

CONCEPT DEVELOPMENT

MARKET ASSESSMENT

SITE SELECTION

CONCEPT DESIGN

CONSULTATION

DEVELOPMENT APPLICATION

FINANCIAL FEASIBILITY & BUSINESS PLAN

OBTAINING FUNDING

PROJECT CONSTRUCTION

STAGE GOOD PRACTICE DISCUSSED

IN SECTION

PRIME RESPONS -IBILTY

SUPPORTING ROLE

C = COMMONWEALTH, S = STATE OR TERRITORY, L = LOCAL

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Who should use this Guide?

The prime audience is officials of government in agencies, departments and authorities involved in promoting tourism investment, at all levels of government. Although this Guide will be useful for people working in government and industry, it is likely to be particularly relevant to those in government especially state and local government.

Government officials will find the Guide a valuable resource because it provides advice on tourism investment facilitation options that may be offered, and the considerations involved in facilitating tourism investments. In particular, the Guide will be of value to people in the organisations and roles described below:

agencies at all levels of government working with tourism related industries; state or territory tourism offices, particularly people involved in destination development and

investment facilitation; Australian Government, state or territory agencies involved in investment attraction spanning

industries other than tourism; Australian Government and state or territory agencies involved in representing Australia

internationally on an ongoing basis or through trade missions; local government organisations, particularly people working in economic development and

planning roles; and regional tourism and economic development organisations.

Throughout this Guide, government is used as a generic term. Where this term is used, the good practice may be relevant to any level of government. Where a good practice is specific to a level or levels of government, then those level(s) of government are explicitly stated.

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Good practice

The Guide uses a good practice based approach. Good practice has been divided into seven areas, shown in Figure 2, with government leadership and capacity building being areas that are needed for each of the other areas to work effectively. In summary, governments at all levels need to:

support good practice by following public interest principles and managing risk; demonstrate leadership to actively facilitate tourism investment; build capacity related to tourism supply and investment; provide information to address information gaps that are prevalent in tourism investment; develop a range of partnerships, both within and between levels of government, with

investors and with communities; ensure that approval of tourism proposals are handled efficiently and appropriately; and take direct responsibility, in facilitating investment in infrastructure and land that underpins

tourism, leveraging private investment wherever possible.

FIGURE 2 TOURISM INVESTMENT FACILITATION: GOOD PRACTICE AREAS

Source: The Allen Consulting Group

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Figure 3 summarises the good practices under the seven areas. A section of the Guide is dedicated to each of the areas and the good practices are numbered correspondingly.

FIGURE 3 TOURISM INVESTMENT FACILITATION: GOOD PRACTICE FRAMEWORK

Supporting good practice (Section 1) 1.1 Public interest principles, 1.2 Risk management

Information (Section 4)

Partnerships (Section 5)

Approval processes (Section 6)

Infrastructure and land provision

(Section 7)

4.1 Provide comprehensive information online about facilitation offered

5.1 Develop partnerships between levels of government to share expertise

6.1 Zone sites for tourism and streamline approvals

7.1 Make the provision of accommodation a condition of major developments and licences

4.2 Provide clear documentation on approval processes

5.2 Develop networks with the investment community

6.2 Integrate tourism strategies with local planning

7.2 Identify and make available land and buildings for tourism investment

4.3 Provide information about tourism investment opportunities

5.3 Form partnerships with local communities

6.3 Create mechanisms within government to facilitate decisions on tourism investment

7.3 Ensure that government leases of land/buildings for tourism are long term and at realistic cost

4.4 Provide market research to support investment proposals

5.4 Form partnerships with Indigenous communities

6.4 Ensure timely decision making on tourism proposals

7.4 Recognise that some tourist facilities require government investment

4.5 Package tourism investment information for foreign investors

5.5 Identify international investors and develop relationships and work with Austrade, Tourism Australia and economic development departments to develop investment markets

6.5 Assign investment facilitation specialist to facilitate major projects

7.5 Recognise that transport facilities are essential to tourism and need government investment

6.6 Ensure the appropriate level of government has approving authority

7.6 Assist with provision of access to and utilities for tourism developments

Government leadership (Section 2)

2.1 Provide high level priority and government commitment to tourism investment

2.2 Adopt a whole-of-government approach to managing tourism projects

2.3 Ensure that tourism investment facilitation is in accordance with sound public interest principles

Capacity building (Section 3)

3.1 Build a wide understanding of the benefits of tourism investment

3.2 Embed tourism expertise within government

3.3 Ensure that government agencies have the capacity to assess tourism proposals

3.4 Assist the tourism sector to understand government requirements

Authority rests with government

The Guide recognises that priority setting and decision making is a matter for government authorities. While the Guide is intended as a practical and useful resource, no authority is bound by its advice.

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1 Supporting good practice

Good facilitation practices discussed in this section In reviewing any tourism proposal for facilitation, first establish the evidence that there are

market failures that justify the intervention. In considering what facilitation to provide, first establish that it is likely to provide value for

money, and there is a way of evaluating if the facilitation has provided value for money. When providing investment facilitation, make sure that it is proportionate to the size and

importance of each investment proposal. In most cases, the private investors are the main beneficiaries from an investment, so they

should take on most of the risk. A fair and equitable consideration of the relative merits of each proposal should guide the

type of investment facilitation offered. As much information about investment facilitation policies and processes should be

publicly available as is possible.

1.1 Public interest principles

This section of the Guide applies well-established principles of sound economic management and public administration to the facilitation of tourism investment. These principles apply to investment facilitation at all stages of tourism projects and to all levels of government. Readers can find more detail about these principles in relevant Better Practice Guides of Australian National Audit Office, Productivity Commission publications, Department of Finance and Deregulation guidelines, OECD reports and advice provided by state Auditors-General (see the references at the end of this Guide).

Base facilitation on evidence of market failure In reviewing any tourism proposal for facilitation, first establish the evidence that there are market failures that justify the intervention.

The existence of market failures indicates a possible need for government intervention in a market. The severity and impact of market failures varies significantly, and there are many possible policy responses to market failures across the spectrum of significance and cost. Market failure is a necessary pre-condition to government intervention but may not in itself justify such intervention.

Tourism investment facilitation should respond to an identified market failure or failures. The market failures affecting tourism investment are widespread across the sector and are outlined below. Because market failures in tourism are widespread, it is important that the investment facilitation response is targeted and proportionate. The response should also consider the expected economic, social and environmental benefits of tourism investment facilitation, which are described further in this Guide.

Positive spillovers the returns to tourism investment do not only accrue to the investor, but are distributed to other businesses and regions frequented by tourists (Urbis 2010). The existence of spillovers is likely to lead to under investment because the investor does not capture the full benefit of the investment.

Public goods public goods warrant pubic investment because the investment benefits the community as a whole. If left to the market there would not be sufficient incentive to invest in these goods because the return to the investor cannot be captured. Certain tourism assets (heritage sites, parks, landscapes and beaches) display features of public goods. Public private partnerships

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can be an effective way of undertaking investment in assets that have features of public goods, but which can also offer a commercial return, if investment is shared by the public and private sectors.

Coordination failure for tourism investment to succeed, a range of infrastructure, facilities and attractions must be in place to create destinations that people want to visit. It is beyond the ability of any one firm or agency of government to achieve this. Good coordination within and between governments, and with investors and communities, is needed to overcome this problem. Government, using a whole-of-government approach, is particularly well placed to support coordination efforts.

Information asymmetry investment in tourism assets is hindered due to a lack of information about the tourism industry and associated investment opportunities. Investors need sufficient information to inform their investment decisions, such as: research on risk/return attractiveness compared to related assets, investment opportunities, regulatory/approval processes and tax issues. Government can assist by providing this information. However, they also need to effectively disseminate the information to ensure that private investors know that it exists and can readily access it.

Natural or induced monopolies some tourist assets may have monopoly features. In particular, major transport hubs such as airports and seaports may have a monopoly in the market for interstate and international passenger transit. To ensure that airport owners are not engaging in monopolistic pricing, the Australian Competition and Consumer Commission regularly collects financial information from the major airports (DITR 2006). While price regulation may address monopolistic behaviour to an extent, there are other aspects not addressed by price regulation. For instance, price regulation will not address poor customer service (due to lack of competitors) or out-dated infrastructure (due to lack of incentives to undertake capital upgrades), and each of these may deter visitors.

Facilitation effort should reflect value for money In considering what facilitation to provide, first establish that it is likely to provide value for money, and a way of evaluating if the facilitation has provided value for money.

Tourism investment facilitation should represent good use of public money, measured by the benefits accrued as a result of the cost of directing public funds to this purpose. In devising investment facilitation programs and policies, a mechanism for evaluating effectiveness should be incorporated. Ideally, this will feature cost benefit analysis, where both the costs and benefits of the facilitation can be quantified or reliably estimated. For some initiatives, cost benefit analysis may not be possible because the benefits of the investment facilitation provided cannot be accurately estimated. Even in these instances however, it is necessary for the organisation undertaking investment facilitation to collect information that provides for reliable assessment of the results delivered through investment facilitation efforts.

The scale of facilitation effort should be commensurate with the size and significance of the project When providing investment facilitation, ensure that it is proportionate to the size and importance of each investment proposal.

Investment facilitation offered should be commensurate with the significance of the proposed investment. A project may be more significant because it is filling a clear shortage in the market, or because it is a high profile signature project.

A project can fill a shortage in the market across any number of market segments. For example, in some wine regions, there is a shortage of backpacker accommodation because the supply of budget accommodation has not kept pace with the increased number of backpackers picking grapes. Equally, in different regions of Australia there are shortages in luxury resort accommodation, high quality central business district hotel accommodation and eco-tourism infrastructure, among others.

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In the case of a signature project, larger scale investment facilitation will often be warranted, given the wider benefits that such projects can achieve. Signature projects can come to symbolise a regions offering as a destination. They can also set a foundation for other tourism investments.

Determining the scale of investment facilitation requires judgement based on the merits and circumstances of each proposal. However, the amount of assistance for individual projects should be such as to provide recipients with an incentive for the investment. Additionally, the investment facilitation should be sufficient so as to have a significant impact on the issue or shortfall that the assistance is addressing. Large-scale projects generally require state and territory government facilitation. Smaller projects are likely to be better addressed by local government.

Facilitation should ensure that the private sector takes an appropriate share of risk When undertaking investment facilitation, the relative exposure of government and private investors to the investment should be proportionate to their benefits from the investment. In most cases the private investors are the main beneficiaries, so they should take on most of the risk.

Tourism investment facilitation should represent an appropriate sharing of risk between private and public investors. The share of risk should be proportionate to the share of expected benefits. This means that generally, the risk should be borne primarily by the investor, because they will be the long-term beneficiaries. In the case of some forms of public infrastructure that benefit tourism, the government may be the lead investor and therefore, it could take on the major share of risk. However, the focus of this Guide is on investment facilitation rather than direct investment by government (although sometimes the boundary between these is blurred). Where direct government investment is required for a tourism related project, a public private partnership is likely to be an appropriate financing arrangement.

If government takes on too much risk in an investment proposal, this can expose the public to financial losses if the investment fails. When government takes on too much project risk, a project is less likely to feature innovation, because the developer has less incentive to be creative in order to give the development a competitive edge in the marketplace.

Tourism facilitation should be fair and equitable to all parties A fair and equitable consideration of the relative merits of each proposal should guide the type of investment facilitation offered.

Tourism investment facilitation criteria should be applied equally to all investment proponents, so as to ensure that high standards of probity are maintained. This will also protect the integrity of the investment facilitation process. This does not mean that government should provide the same level and form of investment facilitation to all proponents. Rather, it means that the appropriate form of investment facilitation should be provided based on the merits of each proposal. To achieve this, governments are urged to publish details of the types of investment facilitation they offer online. This will also explain how the government assesses the merit of proposals, along with the strategic objectives the government is seeking to achieve through investment facilitation.

Tourism facilitation should be transparent As much information about investment facilitation policies and processes should be publicly available as is possible.

Where the availability of facilitation measures is contestable (i.e. not all requests for assistance are met), there should be clear criteria by which proposals are judged and some recognised expertise on the part of those making the decisions. While negotiation of project specific facilitation arrangements will inevitably require confidentiality, the outcome should be made as transparent as possible given the use of public resources and the importance of public confidence in the process. Furthermore, the public disclosure of investment facilitation available, as described above, provides transparency regarding the governments priorities and approach. Although some matters are

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legitimately commercial in confidence, to the extent possible, details of investment facilitation offered and provided should be publicly available.

1.2 Risk management

If the principles described above are adopted in conjunction with the good practices described, those engaged in investment facilitation will be well placed to obviate or minimise the risks that may arise from tourism investment facilitation. A number of these risks are not specific to tourism investment facilitation they may be present in any form of investment facilitation and public investment. However, to ensure the completeness of the Guide, the most prevalent risks are described below. Corresponding advice on how adopting specific good practices can effectively mitigate these risks is also provided.

RISK MANAGEMENT

Risk Mitigation

Value for money the risk that the public resources directed towards investment facilitation will not reflect value for money measured by the benefits achieved as a result.

Consider whether investment facilitation is going to provide value for money. Public benefits from facilitation should exceed public costs of facilitation. To do this, governments need to be able to assess the costs and benefits of investment facilitation. Governments must plan to collect information that will enable value for money to be assessed over time. Governments need to avoid providing investment facilitation to poorly conceived projects, or providing a disproportionate level of facilitation relative to the benefits that projects will generate. The nature of some investments is such that there are sound reasons for government investment (because they are public goods), but even in those instances, opportunities for co-investment should be explored. Investment facilitation should always be focussed on maximising private investment in tourism.

Probity the risk that investment facilitation processes and outcomes negatively affect public confidence.

Be transparent and fair in all investment facilitation processes and dealings by applying tourism investment facilitation criteria equally to all investment proponents, so as to ensure that high standards of probity are maintained. Furthermore, information about investment facilitation offered should be published online in a clear and accessible way.

Capability the risk that governments lack the skills and resources to achieve successful investment facilitation outcomes.

Develop investment facilitation specialisation within the relevant department or team. Tourism investment facilitation requires a good understanding of the tourism industry, and the mechanics of investment facilitation. Specific resources need to be directed towards developing and maintaining this understanding.

Political the risk that undertakings made at a political level are not met due to changes in circumstances, which may have further undesirable consequences.

Work internally to ensure that representatives of government are well briefed on tourism investment opportunities. Once announcements have been made or negotiations commenced, those involved in investment facilitation need to work within government to maintain high levels of commitment to government undertakings and streamline decision making processes.

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2 Government leadership

Good facilitation practices discussed in this section Make the case for tourism investment as an economic development priority of

government. Develop effective networks with other areas of government that are relevant to tourism

investment. Establish and maintain robust coordination mechanisms and understand how to

appropriately work the system. Be clear about roles and responsibilities for tourism nationally and in your jurisdiction. Understand what government policies, programs and services are available and who

has carriage of them. Put systems in place to be able to screen and evaluate supply side issues and

opportunities. When considering a specific proposal, form an across-government project committee to

facilitate the proposal. Appoint a permanent across-government committee reporting to Ministers to drive and

coordinate tourism investment facilitation. Brief Ministers and their offices early and often on substantial new or emerging tourism

opportunities and their possible facilitation requirements. Undertake tourism investment facilitation in accordance with the principles described in

Section 1.

What this is

Government leadership involves: providing high level priority and government commitment to tourism investment; adopting a coordinated, whole-of-government approach to tourism investment; and ensuring that tourism investment is facilitated in accordance with sound public interest principles.

Government leadership is a precursor to the other areas of good practice. Hence it is depicted as a part of the pre-investment stage of the investment process. Government leadership intersects with the areas of good practice, as it is a necessary ingredient throughout a successful investment facilitation process.

Why it is important

From discussion with stakeholders, there was a strong consensus that government had to take a leadership role if tourism investment facilitation is to be successful. This was backed up by analysis of the case studies, which are described in this Guide. Every case study involved some form of leadership by government, often at the highest levels. Additionally, the government survey results indicated support for government playing a lead role in investment facilitation. The industry survey results showed strong support for government to do more, and pointed out that competitor governments internationally are often perceived as doing more. Finally, the analysis of market failure in tourism investment outlined in Section 1 shows that government is uniquely placed to respond to the multitude of market failures that exist, particularly coordination failure and information asymmetry, and there are significant potential benefits from doing so.

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Benefits of tourism investment Effective tourism investment:

Generates positive spillovers to other industries tourism is defined by what tourists spend money on. Tourists spend money on a range of goods and services that reside in other sectors of the economy (retail, hospitality, transport, entertainment etc.). Short-term accommodation receives less than 30 per cent of visitor expenditure (TTF 2010).

Stimulates visitor demand tourism investment has the proven ability to bring about an increase in demand for travel to a particular destination. The right types of tourism investment attract visitors who would not otherwise visit a particular location or region. When a location enhances its tourist offerings with the right investment, it will attract more visitors.

Creates employment opportunities tourism is labour intensive, consequently, tourism investment has the potential to generate a relatively high number of jobs relative to the level of investment. On average, every 10 accommodation rooms directly generate 4.9 jobs. When jobs created indirectly are included, the total employment effect on average is 18.2 jobs per 10 hotel rooms (Urbis 2010).

Diversifies the regional economic base tourism can broaden the economic base of regions that have traditionally been reliant on a small number of employers or industries. This makes these regions more economically self-reliant and less dependent on government support. It also softens the impact of industry decline or a particularly bad year.

Directly contributes to community development tourism investment can lead to the establishment of new activities and events. Such events can attract many visitors and provide an opportunity to raise the liveability of a region by bringing the community together and enhancing the social vibrancy of a city or town (NLTTS Steering Committee 2009). Hosting cultural and artistic events can enrich communities and generate tourist expenditure.

Despite these benefits, tourism investments are at a disadvantage compared with other forms of investment. Consequently, government needs to show leadership if tourism investments are to succeed and the benefits of these investments are to be realised.

Why tourism investment is different Stakeholders consulted in the preparation of this guide identified a number of reasons why tourism investment is different from investment in other industries. The reasons identified are broadly consistent with previous reports that have examined this issue, such as the National Tourism Emerging Markets Strategy Capability Audit (AEC Group 2006).

Low return on investment relative to comparable investments, such as residential or office accommodation.

Low or uncertain levels of profitability in the tourism industry compared to other investment options.

Lack of information on risk/return profile of the industry. Lack of awareness of opportunities on the part of potential investors. High proportion of small operators. Approval processes that are complex and difficult, and may involve multiple levels of

government and government agencies within those levels. Opportunities that are difficult to exploit because development either involves heritage or

conservation issues, or the cost and time involved in gaining approvals effectively may be preventative.

Tourism depends upon supporting infrastructure (such as railway, roads, air and sea ports), yet the investment in developing or upgrading such infrastructure is outside the control of tourism operators, such infrastructure does not solely support tourism and tourism may not be the most commercially attractive market that the infrastructure serves.

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Of the infrastructure that is used by both resident and tourism markets, there may be a lack of focus on serving tourists, and therefore investment to better serve tourists does not occur.

Tax disadvantages of tourism investments compared to similar investments (e.g. depreciation of residential assets).

2.1 Make the case for a high level priority and government commitment to tourism investment

To provide a solid foundation for tourism investment facilitation, ensure that tourism investment is an economic development priority of government. To do this, make a case based on the benefits of tourism investment, which are outlined in this Guide.

A high level of commitment means that tourism is viewed as an economic development priority. This is reflected in the importance of tourism investment and the role and importance of investment facilitation being recognised by senior personnel and ministers.

All levels of government need to show leadership if tourism investment projects are to have the best chance of succeeding (OECD 2008a and 2008b). In particular, at a state and territory government level, major projects with a significant tourism investment component generally need to be championed by the most senior representatives of government (i.e. Premier, Deputy Premier). Projects that are of a significant scale will invariably need the support of the Minister for Tourism and other key ministers, such as those responsible for Planning and Economic Development portfolios. Many of the projects described in case studies in this Guide demonstrate that commitment and drive from ministers and senior executives invariably feature in successful tourism investment facilitation.

There needs to be a willingness to bring significant tourism related proposals to the attention of senior officials and elected representatives. This includes briefing Ministers and their offices early and often on substantial new or emerging tourism opportunities and their possible facilitation requirements. The opportunity costs of the investment not proceeding need to be explained. Such proposals will have a better chance of receiving serious attention if tourism investment is an explicit economic development priority.

At a local government level, leadership will involve both councillors and senior council staff. Often, councils will be involved in lobbying other levels of government with regard to specific tourism related projects or planning amendments. Additionally, there are many instances within an investment process where council can show leadership through its actions, without relying on approvals from other levels of government.

Governments can further demonstrate commitment to tourism during international trade missions and similar activities. Attracting international investors is of key importance to the success of major tourism projects. Trade missions can be undertaken collaboratively, involving multiple levels of government. This is explored further in Good Practice 5.5.

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CASE STUDY

Southern Ocean Lodge

South Ocean Lodge is a luxury, multi-award winning lodge located in Kangaroo Island, South Australia. This is an example of a signature development, which took 18 months to complete and cost $16 million to develop. Signature developments such as these are high in strategic value as compared to run of the mill developments. They provide experiences, services and products that are unique to Australia. Currently, the lodge incorporates a main lodge building, self-contained accommodation suites and a spa retreat.

The South Australia Tourism Commission (SATC) has used the Southern Ocean Lodge in its international marketing initiatives, in conjunction with the owner, Baillie Lodges. This has created awareness of not only the resort itself, but of Southern Australia and Kangaroo Island. As an iconic and unique development, Southern Ocean Lodge is used to encapsulate South Australias destination brand.

The lodge faced many challenges in moving from idea to reality. The then head of the SATC advocated at the highest levels of government on behalf of the development. This resulted in the development being supported by the Premier and Deputy Premier, which was crucial at key points in the investment process.

The South Australian Government, through the SATCs Tourism Development Fund, provided $1 million over two years towards critical infrastructure. The government also invested in transport and access infrastructure, which made it feasible to develop the lodge in a remote area. Southern Ocean Lodge appointed a specialist policy manager to liaise with all levels of government, and deal with matters relating to approval and planning processes and expedite the development.

The policy manager was responsible for:

submissions to all levels of government;

regular meetings with the Kangaroo Island Council regarding the development and their approval;

regular contact with the (now) Department of Planning and Local Government regarding development approval;

attendance at several public meetings on the island to gauge concerns and answer questions;

liaison with fire authorities;

meetings, communications and submissions to Native Vegetation Council about the Native Vegetation Act; and

liaison with the Australian Government regarding the Environmental Protection and Biodiversity Conservation Act.

Without financial assistance and facilitation, this project would not have been feasible. Funding was directed towards essential services and infrastructure, such as an access road, water supply, electrical connection/generation, bushfire prevention measures and wastewater treatment. Government funding also supported the environmental sustainability of the development, by contributing $50,000 towards the costs of a solar power system.

2.2 Adopt a whole-of-government approach to managing tourism projects Those involved directly in tourism investment facilitation should develop effective networks with other areas of government that are relevant to tourism investment.

The appointment of a permanent across-government committee reporting to Ministers to drive and coordinate tourism investment facilitation will provide a focal point for these activities and demonstrate government commitment to this objective.

A whole-of-government approach means there is a common understanding across the many agencies with a role relevant to tourism investment, of the value and importance of tourism related investment. Furthermore, this understanding extends to agencies adopting a supportive and

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cooperative posture towards tourism investment proposals. Many of the case studies in the Guide show that while the tourism office may have a coordinating role, a great deal of the investment facilitation effort is undertaken by others, such as planning departments or central agencies.

As the OECD (2010) notes:

It is not just enough to develop and apply tourism-specific policies. Attention has to be paid both to the horizontal and vertical linkages within an economy that are occasioned by the tourism sector. This is because governments need to regard tourism as a cross-cutting sector that concerns a wide range of activities across economies. Addressing the major challenges faced by the tourism industry and maximising tourisms full economic potential require an integrated approach to policy development across many government departments.

In addition to a whole-of-government approach at a given level of government, good connections need to be established between levels of government, and between government and the investment community (both domestic and international investors). This is explored further in Section 5, Partnerships.

CASE STUDY

Darling Harbour

Darling Harbour was functionally obsolete in the mid 1960s a phenomenon common to many waterfront cities in the world. A critical element of Darling Harbour however, was that virtually the full spectrum of land uses became obsolete concurrently. In addition, there was no natural economic successor. The whole area (powerhouse, tram depot, woolstores, wharves, railway goods yard) came to an economic halt in the 1960s and 1970s.

A number of studies (City Council, Department of Planning, Premiers Department) were undertaken in the 1970s and 1980s to examine the redevelopment potential of the area. A major finding was that the sheer scale of obsolete physical infrastructure at Darling Harbour would inhibit regeneration by the private sector.

Darling Harbour was seen as a major opportunity for redevelopment as a result of its size, proximity to the CBD and its foreshore location. In addition, the government had become aware of Sydneys pressing need for custom-built exhibition and convention facilities. The advice to the government was that the scale of physical infrastructure put the project beyond the private sector and government would need to take the lead.

On 1 May 1984 the NSW Government announced Darling Harbour would be redeveloped as the states contribution to the Bicentennial program for 1988. The intent was to make Darling Harbour a place for people and create an entertainment, cultural, tourism, educational and recreational precinct.

The NSW Government direction was largely driven by the recognition that this could be a landmark development project of national and international significance. The decision to commit significant government dollars to the project was based on the assumption that private developers would then invest on the back of the public infrastructure.

Today Darling Harbour contributes more than $4 billion annually to NSWs economy. More than 180 tourism, retail and leisure businesses operate in the precinct. The area hosts some 28 million visitors each year.

Darling Harbour is an example of a state government driven renewal project delivering significant tourism, leisure, recreation and commerce outcomes. Private enterprise responded to the states initial investment into the tourism infrastructure of Darling Harbour through projects such as Sydney Aquarium, Wildlife World, Imax and several hotels. Private sector investment is ongoing as evidenced by the Darling Quarter project.

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2.3 Ensure that tourism investment facilitation is in accordance with sound public interest principles

Those involved in tourism investment facilitation should ensure that tourism investment facilitation is undertaken in accordance with the principles described in Section 1.

Government investment facilitation needs to be based on sound public interest principles. The recommended principles are described in Section 1. These principles are designed to ensure that investment facilitation leads to good outcomes while minimising risk. Adhering to the principles will ensure that high levels of public confidence in investment processes are maintained. This is essential to the successful adoption of the good practices described in this Guide. To take one example, the Guide stresses the importance of building community awareness of the value of tourism investment. This support will also depend on the community having trust in the integrity of the process.

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3 Capacity building

Good facilitation practices discussed in this section Share information within your organisation about the need for effective tourism

investment facilitation and your strategy to deliver it. If necessary, recruit people who provide tourism investment facilitation expertise. Hold workshops and provide reference and research material to explain your

organisations investment facilitation strategy and build the capability to implement it. Ensure that the person assigned to work with the proponent has sufficient seniority and

autonomy to provide guidance and feedback throughout the investment process. Where information is required from elsewhere, or the developer must be referred to

another department, be diligent in ensuring that information is provided in a timely manner.

For approvals, ensure that all relevant information has been provided and the approving body has suitable authority to make the approval decision.

Publish detailed information about the forms of investment facilitation that can be offered, and bring this to the attention of industry.

Publish investment guides.

What this is

Capacity building includes: understanding tourism investment; having tourism investment expertise; having capacity to assess tourism proposals at all stages of the investment planning process; and assisting in the development of both industry knowledge within government, and industry knowledge of government.

Why it is important

This area is described as capacity building because there is a general need to develop, and in some cases rebuild, a detailed understanding of the supply side of the tourism industry. This capacity building task relates to both government and to those areas of industry that may not be familiar with tourism developments, and the nature of investment facilitation that can be offered.

For government, capacity includes both a general understanding of the potential importance of tourism investment and the need for government to undertake facilitation, as well as specific expertise in carrying out facilitation. This capacity will also assist in the implementation of the good facilitation practices described in Section 2 as a whole-of-government approach requires a good understanding of tourism.

3.1 Build a wide understanding of the benefits of tourism investment

Those with knowledge and experience in tourism investment facilitation should brief others within their organisation about the barriers to and benefits of tourism investment facilitation.

Governments require an understanding of both the potential benefits of tourism investment and the barriers to tourism investment that exist. This includes an understanding of the diverse and particular characteristics of the tourism industry, particularly from a supply side perspective. This

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understanding is a necessary precondition to governments offering effective tourism investment facilitation. The benefits of and barriers to tourism investment are described in Good Practice 2.3.

3.2 Embed tourism expertise within government

Organisations undertaking tourism investment facilitation must ensure they have this expertise and if necessary, recruit people who provide it.

Hold workshops and develop documents to explain your organisations investment facilitation strategy, develop networks, and build the capability to implement it.

To enable the tourism investment facilitation to be implemented well, a pool of knowledge is needed regarding the specific form that facilitation should take and how investment facilitation should be implemented. This implementation expertise extends beyond the more general understanding of tourism investment referred to in Good Practice 3.1. Expertise extends to having a well-developed understanding of potential sources of investment, which is discussed further in Section 5, Partnerships.

A number of state and territory tourism offices or economic development departments have established teams with a dedicated investment facilitation or destination development focus. Western Australia is an example of note, as the restructure of the state tourism office featured a greater focus on investment facilitation. These resources should be available to assist local government. Local government also needs staff with specialist tourism knowledge. This may simply require the economic development unit to have a person assigned responsibility for tourism, exclusively or with another industry sector, depending on the size of the council.

Workshops and other forms of collaboration are suggested to develop a wider circle of people who understand the benefits of tourism investment facilitation and the specific strategy being pursued by your organisation and the wider government. These sessions are a good way to reach out beyond those who work in tourism agencies to include people from other parts of government. As tourism investment facilitation often requires a whole-of-government approach this network will be invaluable when significant investment proposals are being facilitated and considered by government.

3.3 Ensure that government agencies have the capacity to assess tourism proposals

For assessment other than formal approvals, the person assigned to work with the proponent requires sufficient seniority and autonomy to provide guidance and feedback throughout the investment process. Where they require information from elsewhere, or need to refer the developer to another department, diligence is needed in ensuring that information is provided in a timely manner.

For formal approvals, ensuring that all relevant information has been provided and the approving body has suitable authority to make the approval decision will assist in streamlining processes.

Proposals may be received at different points in the investment process. For instance, a proposal may be at a concept stage, at which point a developer is testing support for the concept among investors and government. Or, a proposal may be seeking formal approval to proceed. Regardless of the stage in the process, government needs to ensure that it has the capacity to deal with proposals. To do this, governments need to be attuned to tourism related investment in assessing the merits of proposals. Proposals need to be assessed in a timely manner, with feedback on proposals being provided to developers so that proposals can be improved, or in the case of approvals that have been granted, ensure that approval conditions are understood. An effective feedback loop will help to develop industry knowledge and capacity.

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3.4 Assist the tourism sector to understand government requirements

Publish detailed information about government policy regarding tourism investment

Inform industry of government requirements to access facilitation

Tourism stakeholders contacted during the preparation of this Guide complained about confusing and sometimes conflicting requirements involving multiple government agencies at different levels, and at the lack of clear information on how to proceed in some jurisdictions. A survey conducted in the preparation of this Guide found stakeholder awareness of available facilitation measures was low.

Government can help to develop the capacity of industry in a number of important areas. Improved industry knowledge complements government efforts to improve its own facilitation expertise.

Specifically, governments can inform investors about government policy related to tourism investment in the context of broader planning and economic develop priorities. This should include advice on how investment proposals can be designed to reflect a good fit with policy direction and priorities. As detailed in Good Practice 4.1, governments can also assist by providing clear information about decision making processes and timeframes, about the obligations of both government and investment proponents and about the requirements that are to be met for a proposal to be approved.

In developing industry knowledge on the above points, investment guides can assist. A number of jurisdictions and councils have developed investment guides, with Appendix A providing further detail. Investor workshops about government priorities and investment facilitation offered are another effective strategy to develop industry knowledge.

For example, the Victorian Tourism Investment Guide (Tourism Victoria 2008) is based on a seven stage tourism investment process (idea, concept, consultation, feasibility, approvals, financial arrangement and construction). The Victorian guide informs prospective investors of the role of local government in relation to tourism projects and has a summary tourism project approval checklist for developers. The guide also provides guidelines on how to prepare a business plan. There are several case studies, along with success factors, provided throughout the document.

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4 Information

Good facilitation practices discussed in this section Make available online comprehensive information about tourism investment facilitation

offered. Make available clear and easy to follow information about approval processes, including

what developers will be expected to provide and what they can expect. Ensure the tourism industry council understands facilitation offered. Provide specific details of current investment opportunities to make it easier for

prospective investors to locate potential development sites. Commission and make available market research and provide this directly to developers

to assist in preparing business cases and investment proposals. Undertake and make available region specific research in areas where tourism

investment is being actively sought. Provide information in support of investment facilitation in a way that suits potential

international investors.

What this is

Investment facilitation related to information includes: providing comprehensive information online about facilitation offered; providing clear documentation on approval processes; providing information about tourism investment opportunities; providing market research to support investment proposals; and packaging tourism investment for foreign investors. The good practices described in the section are most important in the early stages of tourism projects (concept development and market assessment).

Why it is important

There are significant information gaps in tourism, which tend to have a negative effect on tourism investment. Those within government who understand tourism investment are uniquely positioned to assist in bridging these gaps. These gaps include:

investors not being aware of investment facilitation offered by government; parts of government may not fully appreciating the spillover benefits of tourism investment;

and financial institutions not being willing to finance a tourism development because it is unique,

meaning there is a lack of precedent on which to base market research. The survey undertaken in preparing the Guide showed a low awareness of current tourism investment facilitation programs and opportunities among industry. This suggests that, even though governments are providing information through various guides and websites, the information is not penetrating the industry to the desired extent.

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4.1 Provide comprehensive information online about available facilitation

Make available online comprehensive information about tourism investment facilitation offered

Ensure the tourism industry council understands facilitation offered.

Some potential investors are frequently engaged in investment processes and liaising with government. However, many investors will have minimal experience in development proposals. For example, a tourism business operator who is planning to expand their current business may be experiencing the investment process for the first time. For these investors in particular, it is important that information about investment facilitation offered is easily accessed in a consolidated form. The state or territory tourism office website is a logical location for this.

Furthermore, the state or territory tourism agency should also ensure that the tourism industry council understands facilitation offered, as the industry council is a possible first point of contact for individual tourism operators seeking advice. For example, NSW has extensive information about investment facilitation offered online. Tourism Queenslands website provides information for tourism investors, including advice on approvals, available government assistance and examples of successful tourism developments. This good practice is most relevant during the concept development stage.

INTERNATIONAL GOOD PRACTICE EXAMPLE

Canada (Alberta)

The Alberta Tourism, Parks and Recreation Ministry offers potential investors three comprehensive and distinct guides online: the Tourism Funding Sources Guide; the Tourism Development Guide; and the Tourism Business Planning Guide.

The Tourism Funding Sources Guide provides information on funding programs offered at the federal, provincial and institutional levels. This broad guide includes information on various funding sources and details such as a description of the program, eligibility/criteria, amount of funding and relevant contact information.

4.2 Provide clear documentation on approval processes

Make available clear and easy to follow information about approval processes, including what developers will be required to provide and what they can expect.

Potential investors are likely to have many questions about the approval process related to a tourism investment proposal and the requirements that the project will be expected to meet. It is important that a person with tourism investment expertise is available to either provide this advice, or arrange for it to be provided. The nature of the questions and the advice will vary depending on the stage of the investment process and the experience of the investor. Large scale investors may have planning consultants who are expert in these matters, but small scale investors will probably be gathering information themselves. For these investors, the provision of clear, timely and accurate documentation and advice to facilitate the approval process is particularly important. This shows the potential investor that government is keen to encourage tourism related investment. Furthermore, it saves investors time, which helps to reduce cost. This good practice is most relevant during the concept development stage.

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INTERNATIONAL GOOD PRACTICE EXAMPLE

Singapore

The Singapore Economic Development Board (EDB) is responsible for promoting investment and developing strategies to create value for investors and companies. While Singapore has a different government system than Australias, the governments investment priorities are clear, and this is backed up by the strength of the EDB. The government is able to streamline approval of high priority projects, including projects with a major tourism emphasis, such as the recently opened Marina Bay Sands casino.

The key agency in this regard is the Singaporean Urban Redevelopment Authority, which provides a high level of assistance to developers seeking planning and construction approval. Investors in tourism projects in Singapore have access to planning approval guides and handbooks, online planning approval assistance tools, and a planning approval hotline designed to guide developers through planning application and approval processes.

4.3 Provide potential investors with information about opportunities

Provide specific details of current investment opportunities to make it easier for prospective investors to locate potential development sites.

State and territory tourism offices and local government authorities can assist by providing investors with specific details of investment opportunities. Both the Northern Territory and Western Australia provide examples of this approach on their websites. The investors page of the Tourism NT site1 includes information about properties for sale and development opportunities. The Tourism WA website page on investment opportunities lists a number of opportunities currently available under the Landbank initiative2.

This is closely related to good practice in the area of assisting investors during the development process. The matching of investors to potential investments must be combined with other forms of facilitation if investments are to succeed. Government sponsored and private sector conferences and other public events also provide opportunities for state and territory tourism officials to publicise tourism investment opportunities. This good practice is most relevant during the concept development and site selection stages.

4.4 Provide market research to support investment proposals

Commission and make available market research and provide this directly to developers to assist in preparing business cases and investment proposals.

Undertake and make available region specific research in areas where tourism investment is being actively sought.

The provision by government of high quality market intelligence to support tourism proposals can be of significant assistance to developers. Tourism investments often struggle to attract finance due to a lack of precedent developments. Consequently, a tourism development business plan will invariably be enhanced by government commissioned market research that a developer would not otherwise have access to. Most state and territory tourism offices provide market research information in some form, with many having market research data on their website. This usually includes links to data repositories such as Tourism Research Australia and the Australian Bureau of Statistics Tourism Satellite Account.

1 http://www.tourismnt.com.au/investors.aspx 2 http://www.tourism.wa.gov.au/Investment_Opportunities/Landbank/Pages/Landbank.aspx

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Government should make it easy for potential investors to access these sources as a matter of course. State and territory government agencies should work with Tourism Research Australia to ensure that its outputs are useful to potential investors. Information supplied by Tourism Research Australia, the Australian Bureau of Statistics and state and territory tourism agencies is generally pre-competitive and can therefore be disseminated via the internet. This makes it easily accessible to potential investors. This form of facilitation is likely to be of particular value to smaller scale developers who may be new to the range of information that is available.

Queenslands Tourism Opportunity Plans3 are an example of a detailed and evidence-based approach which has extended beyond the packaging of publicly available information, to provide a resource based on extensive scoping work by the state government.

There is a significant opportunity for increased tourism development in many regional areas of Australia, including many that have not had extensive tourism development in the past. Governments at state and local level seeking to actively encourage development in these areas should undertake market research that can be used to support development proposals. For example, data about potential visitation and market perceptions of a particular region or destination may assist in demonstrating the untapped potential of the region in question. As an example, Victoria has focussed on regional tourism investment as a specific priority and the Elloura Resort development described in this Guide shows this strategy achieving results. This good practice is of fundamental importance in the market assessment stage.

4.5 Package tourism investment information for foreign investors

Provide information to support investment facilitation that suits potential international investors.

Attracting the interest of a potential investor is an important step before facilitation. This involves getting the investor interested in Australia or a region of Australia. With this in mind, information directed towards attracting foreign investors needs to be packaged according to the investor being targeted. For instance, information may need to be provided in the language of a foreign investor or investment market that is being targeted. This should be done in consultation with Austrade as detailed further in Good Practice 5.5. Tourism investment facilitation websites should be developed with both a domestic and international audience in mind. International investors will generally undertake web-based research before approaching a potential investment market. This good practice is likely to be most relevant in the concept development stage.

3 These plans can be accessed for the various regions in Queensland at

http://www.tq.com.au/destinations/destinations_home.cfm

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5 Partnerships

Good facilitation practices discussed in this section Establish permanent consultative mechanisms involving different levels of government

to provide a basis for ongoing collaboration. Develop a detailed profile of investors and selectively target investors with specific

proposals to fill gaps in current supply. Develop an ongoing fact-based conversation with communities about the potential

benefits of tourism investment to build community support for investment. Identify opportunities to work with Indigenous communities to develop proposals that will

respond to visitor demand and be of benefit to traditional owners. Have an adequately resourced strategy specifically for engaging international investors. In relation to major projects, form partnerships with Austrade and Tourism Australia to

use their expertise in international markets in international investment attraction.

What this is

Investment facilitation related to partnerships includes: developing partnerships between levels of government; developing networks with the investment community; forming partnerships with local communities; forming partnerships with Indigenous communities; identifying and developing relationships with international investors; and working with Austrade and Tourism Australia to develop international markets. For specific partnerships, the good practices discussed in this section are particularly relevant from the mid-project stages. However in some cases they may be relevant in the early stages when government tourism agencies are proactive in identifying tourism opportunities. Furthermore, it is recommended that partnerships be formed that are not project specific, which enable an ongoing dialogue among stakeholders with a role in tourism investment and its facilitation.

Why it is important

Stakeholders emphasised the importance of working together effectively. The relationships emphasised included those within government, between governments, with the community, with investors and with Indigenous communities. A number of the case studies show that good investment facilitation outcomes can be achieved through meaningful partnerships. This is particularly the case for projects with a high level of community involvement and projects with Indigenous communities. The importance of partnerships reflects that tourism is an industry based on expenditure in other industries. The mix of public and private benefits from tourism investment makes government partnerships with the private sector almost inevitable. Partnerships are needed for tourism investment to develop and maintain a profile and for the benefits of tourism to other industries to be recognised.

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5.1 Develop partnerships between levels of government to facilitate tourism investment

Establish permanent consultative mechanisms involving state and local government to provide a basis for ongoing collaboration, based on the mutual benefits derived from tourism investment.

Where existing collaborative forums exist, work through these bodies and seek to provide impetus and leadership.

State government should develop constructive and collaborative working relationships with local governments, particularly those that either have, or are seeking to have, an extensive tourism investment profile. Additionally, state government has a role in developing the capability and profile of councils in areas which historically have not had a significant tourism economy but which have potential to do so. State and territory level government, and sometimes local government, should also leverage the expertise and networks of Austrade and Tourism Australia, as discussed in Good Practice 5.5.

More than one level of government will invariably be involved in considering proposals during the investment process. If levels of government have a shared view of the importance of tourism investment, this will greatly assist facilitation efforts. Regional tourism bodies often provide the focal point for these partnerships. Where such a forum is already established, it makes sense to work through this forum rather than establishing another. This good practice is likely to be most relevant in the development application and site selection stages.

CASE STUDY

Elloura Resort Development

The Elloura Resort Development involved more than three years of planning and was officially announced in April 2009. Located outside of Melbourne, Victoria, the $250 million resort at Lake Nagambie is currently under construction. Once completed, the resort will have numerous resort-style facilities and be a master planned community, including:

a retail and commercial precinct with restaurants, conference facilities, a waterfront cinema and chapel;

approximately 370 homes with many facing the Lake;

a 320 site tourist park with two bedroom cabins;

210 lifestyle/retirement home sites; and

various amenities such as tennis courts, a gymnasium, swimming pool, childrens play areas and an exercise circuit.

Approximately 300 people will be employed during the construction of the resort and over 100 people will be employed on a full time basis once construction is complete in five years. It is expected that the Nagambie township will benefit significantly from the Elloura Resort development through the proposed commercial centre that will include lakeside cafes, restaurants, retail shops hotel and conference facilities.

Tourism Victoria assisted with scoping the initial concept and advised the local council on the tourism merits of the project. The Victorian Government appointed a panel that assessed the planning scheme amendment. Regional Development Victoria supported complementary infrastructure at the development site by funding a pedestrian and cycling linkage around Lake Nagambie.

This facilitation succeeded because of the initiative of Tourism Victoria and the assistance that organisation provided in the planning stages of this project.

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5.2 Develop networks with the investment community

Develop a detailed profile of investors and selectively target investors with specific proposals to fill supply gaps in certain market segments.

Those responsible for investment facilitation should develop networks with the domestic and international investment community. The approaches used for these investment markets are however quite distinct.

For the domestic investment market, those involved in tourism investment facilitation should have a good awareness of the key investors, property developers and providers of finance in their region or jurisdiction. These investors should, in turn, know who in government they can approach on matters relating to tourism investment proposals. In some cases, a more active stance by government should be considered. For example, if a government would like to facilitate a boutique development in a destination which has high visitation but lacks high end accommodation, directly approaching investors who have undertaken such projects elsewhere is a recommended strategy.

For the international market, approaches must be research-based and well targeted. The international market offers huge potential for attracting investment in major projects. However, navigating this market requires considerable expertise and patience. Time and effort is needed to build up a profile of target investors, and understanding their strategy and motivations. For these reasons, it is advisable to work with Austrade in seeking foreign investment. Tourism Australia, through its Australian Tourism Exchange, should also be able to assist. In addition, there are specialised conferences organised by the private sector that can provide opportunities to meet potential investors.4

Regional tourism investment plans, guides and similar documents5 are important resources. These documents may be developed at a state, regional or town level. It is important that the tourism industry is fully engaged in the development of such plans. Governments will need to back up plans with facilitation support if investments are to become a reality. This good practice is likely to be most relevant to the financial feasibility and business plan stage.

INTERNATIONAL GOOD PRACTICE EXAMPLE

New Zealand

Tourism New Zealand works closely with the domestic investment community. An annual program of industry seminars is conducted in regional areas for tourism operators to exchange valuable information on the nature of the tourism industry. The seminars are attended by three agencies including Tourism New Zealand, the Tourism Industry Association and the Ministry of Tourism. The Ministry of Tourism uses these seminars as a platform to foster closer links with the domestic investment community, and to inform tourism operators of the research available to assist operators and potential investors.

5.3 Form partnerships with communities

An ongoing fact-based conversation with communities about the potential benefits of tourism investment is an effective way of building community support for investment.

If communities understand the benefits of tourism investment they are more likely to support proposals. An ongoing effort to build community awareness of the potential benefits of tourism related investment is required, particularly in locations with high tourism potential where there has

4 Examples include the Hotel Investment Conference Asia Pacific, and the Australia,

New Zealand and Pacific Hotel Industry Conference. 5 For example product gap audits, destination management plans and other resources available from state and territory tourism websites and Tourism Research Australia.

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been little recent investment or investment opportunities have not been fully realised. This activity needs to be seen as developing partnerships with local communities rather than just providing them with information.

As Section 2 described, the potential benefits of tourism investment are significant. While economic benefits are of key importance, the social and environmental potent