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Regional Tourism and Aviation

Regional Tourism and Aviation

Deliver positive outcomes for the sector to drive visitation and improvements in regional social connectedness and deliver economic benefits to the region.

Content accurate as of July 2020.

Tourism

The tourism economy in North Queensland is worth $6.4 billion annually and supports 37,400 direct jobs. North Queensland’s tourism industry makes up 25% of the state’s tourism economic contribution despite having only 15% of the population.

The Townsville Tourism and Events annually contributes $1.2 billion to the local economy and supports more than 7,000 jobs.

The COVID-19 pandemic has hit the tourism and hospitality sector hard. Across tourism in North Queensland (Mackay to Mount Isa to Cairns), it is estimated that $91 million has been lost each week that the industry has been shut down. With the shutdown lasting for 3 months so far, that is a total of over $1 billion lost to date.

While the easing of restrictions and the re-opening of the Queensland border on 10 July 2020 will provide some demand from leisure travellers, the traditional peak season is likely to be missed – particularly given the cancellation of a number of major event drawcards for the region such as NAFA and the multisport festivals.

The occupancy rates for accommodation in Townsville for March, April and May 2020 compared to the same months in 2019 were down 43%, 72.5% and 66.1% respectively.

The biggest challenge for businesses in the industry now is managing cashflow and forward planning. Businesses are required to significantly reduce their capacity; demand has also reduced and costs of operating and being COVID-19 safe has increased significantly.

Visitors in Australia have dropped to zero following the closure of the international border in March, where for the same time last year there was more than 800,000 visitors (Figure 1). Of the visitors who arrive into Australia, for April 2019, more than 148,000 of those intended to visit Queensland. For the same time in 2020, this had dropped to 640 people (Figure 2). This shows the devastating impact being felt by the tourism industry.

Figure 1: Arrivals to Australia

Line graph of arrivals to Australia from January 2019 to June 2020

Figure 2: Visitors intended destination

Line graph with the visitors intended destinations from January 2019 to April 2020

Re-allocate Funds for Cancelled Events
Current Policy

Funding from Tourism and Events Queensland supports events across three major program groups – Queensland Destination Events Program, Major Event Investment and Business Events. Funding parameters currently focus on attracting external visitation from interstate and overseas.

Proposed Policy

As many events that were going to receive funding from TEQ would not have proceeded due to COVID-19, it is suggested that any funding not used, be re-allocated as well as any new funding rounds for the foreseeable future (20/21 financial year).

This could be done by re-evaluating the funding parameters that are set by Tourism and Events Queensland (TEQ) to gain intrastate and then interstate visitation and redirect that money directly into an acquisition fund for events in North Queensland.

Change TEQ funding framework and key performance indicators to reconsider local and regional visitor weighting for the 20/21 financial year.

The North Queensland region is seeking $3 million for 20/21 financial year to support these intrastate events.

Responsibility
  • Queensland Government
Tourism Operator Commissions
Current Policy

There is no regulation currently around commission requirements that tourism operators have to pay.

Currently, some operators are having to pay between 25-30% commission for international inbound travel. This creates a major disadvantage for operators that having pricing structures in place for international supply chains.

Proposed Policy

Establish an ACCC Inquiry into the commissions requirements that tourism operators have to pay, with the intention to change the system to reduce the commission requirements of tourism operators.

Responsibility
  • Australian Government
JobKeeper
Current Policy

JobKeeper to due to finish at the end of September 2020.

Proposed Policy

Due to the ongoing impacts to the tourism, hospitality and aviation sector, it is recommended that the JobKeeper program be extended by a minimum of 3 months to assist businesses with surviving until international tourism can re-commence and increase domestic tourism.

Responsibility
  • Australian Government

Funds redirected into event acquisition will enable North Queensland to secure events that will provide significant economic, social and community development opportunities for the region.

A focus on creating new and re-imagining existing community, sports and exhibition events targeted for intrastate travel will create jobs and increase awareness of the region, providing North Queensland with a good foundation for tourism recovery moving into 2021.

Policy

Policies that lower costs will go towards assisting the tourism sector to recover, including:

  • Insurance
  • Taxation/revenue
  • Energy
  • Jobs and industrial relations
Programs
  • NQT-1173 – $1 million annual tourism marketing campaign
  • NQT-1011 – COVID-19 safe Northern Australian Festival of the Arts model development
Projects

Investing in new tourism products is essential and shovel ready projects include:

  • NQT-1171 – $80 million for the Reef HQ Upgrades
  • NQT-1168 – $9 million Museum of Underwater Art – Stage 3
  • NQT-1170 – $35 million for Paluma to Wallaman riding and walking trail experience
  • NQT-1167 – Magnetic Island trail development
  • NQT-1018 – $292 million North Australia Cultural Precinct
  • NQT-1162 – $25 million Drive It NQ
  • NQT-1164/NQT-1163 – Dungeness Marine Access Upgrade Stage 1 and 2
Initiatives
  • NQT-1012 – Creation of Townsville Events Corporation/Board
  • NQT-1014 – Host school aged festival of sports event
  • NQT-1013 – Endurance, adventure and school camp destination development

Aviation

Townsville Airport’s catchment area extends from Tully to the north, Charters Towers to the west, and Bowen to the south. As the regional hub for North Queensland, Townsville is also a key transit and destination port servicing inland cities such as Mount Isa and the mining and residential communities of the Gulf of Carpentaria. The catchment area draws from a population of around 250,000 with approximately 160,000 people living in the immediate Townsville CBD area. At the end of the 18/19 financial year, Townsville Airport had received 1.63 million passengers.

The North Queensland economy is reliant on affordable air travel.

Capacity at Townsville Airport is sitting at about 30% of normal capacity, which includes a reduction from around 10 – 12 daily flights to Brisbane down to 3 daily flights, and only 3 direct Sydney flights a week where there are normally 12.

Limited regional services are operating to Cairns, Mount Isa, Mackay and western routes as well as 2 services a week to Darwin and Toowoomba. Based on forecasts by the airport, they will only be at 50% capacity by the end of September 2020 if restrictions keep being relaxed domestically.

Due to the downturn, around 400 people employed in the airport precinct are on JobKeeper currently. The airport redevelopment being funded by NAIF is currently on hold due to the significant change in revenue generation capacity of the airport.

Townsville International Airport
Current Policy

Townsville International Airport is designated as an international airport in accordance with section 9 of the Air Navigation Act 1920 while there are no current international services on offer.

Proposed Policy

Maintain Townsville Airport’s international airport classification, given that prior to COVID-19, the airport was actively pursuing a range of international routes with good prospects of being realised within the medium term.

Responsibility
  • Australian Government
Northern Australia Infrastructure Facility
Current Policy

NAIF funding is unable to be accessed as the airport is unable to draw down against any loans given the significant financial downturn.

Proposed Policy

Create bridging grants and/or change covenants to allow projects being funded under NAIF to proceed without proponents having to draw down against a loan.

Alternatively, re-purpose un-allocated NAIF funding for COVID-19 recovery given a large amount of the funding is yet to be allocated to projects but many regional areas have shovel-ready projects that could assist greatly in recovery.

Responsibility
  • Australian Government
Security Support
Current Policy

Aviation security measures set to increase on 1 January 2021.

The Northern Horizon – Unleashing our Tourism Potential Report produced in June 2018 recommended that the Australian Government work with state and territory governments to implement measures to reduce security costs at regional airports.

Proposed Policy

The increased security measures mean the costs for the airport of meeting these new requirements will go up and be passed through to passengers at a time when demand will still be recovering. As this cost would equate to a doubling or more of current charges for each passenger, it is recommended that the Australian Government cover the cost of the increased security and health measures for a 6-12 month period to ensure that
these costs don’t deter travellers.

Responsibility
  • Australian Government
International Departure Charge
Current Policy

The current International Departure Charge is set at $60.

Proposed Policy

This charge is one of the most expensive in the world and can represent up to 20% of the cost of a short-haul international airfare.

It is proposed the charge be amended to reflect the sector length and aircraft size to make it more equitable. In addition, the charge could be waived altogether for a short period for new international services established into regional international airports.

Responsibility
  • Australian Government

Policies to support regional aviation will help the tourism sector to survive in North Queensland and help strengthen North Queensland as a place to live that is well connected to major capital cities and overseas destinations.

Policy
  • Regional FBT exemption for flights that hub out of Townsville, rather than Brisbane or major capital cities.
Programs
  • NQT-1158 – Re-establishing aviation including establishing new international routes
Projects
  • NQT-1101 – Townsville Airport Re-Development.