caravan parks & camping committee item no: meeting … · management agreement – (current...

CARAVAN PARKS & CAMPING COMMITTEE ITEM NO: 4.2 MEETING DATE: 4th February 2016 SUBJECT: Council Commercial Operations- CONFIDENTIAL FILE NUMBER: 16.021.002.002 AUTHOR: Acting Chief Executive Officer, Joy Hentschke ATTACHMENT (S): Yes

BACKGROUND: The current management agreement of the Streaky Bay Foreshore Tourist Park is to expire at midnight on 30 June 2017. As the park is a major business undertaking of the Council it is prudent to review its status on a regular basis. At the November 5th 2015 Caravan Parks and Camping Committee Meeting it was determined that a Business Plan was required.

“4.2 Caravan Park Future Direction CPCC19/15 Moved: Cr Stephens Seconded: Cr Trezona The Committee recommend to Council that staff prepare a Business Plan for the

business undertaking of the caravan park including separation from the operations of DCSB covering a one to five year strategy.

CARRIED”

While it was proposed that a one to five year strategy be analysed it was deemed to be logical to look at 10 years. Recommendation 1. That the Committee resolve:

(a) Pursuant to Section 90(2) of the Local Government Act, 1999, the Section 41 Committee orders that all persons with the exception of the MJ Hentschke (Acting Chief Executive Officer), JL Brewis (Manager, Regulatory Services) PJ Williams (Acting Manager, District Services), RM Quinsee (Operational Supervisor), SK Brice (Acting Corporate Service Manager), RC Nottle (Regulatory Customer Services Officer) and JA Childs (Executive Assistant & Governance Officer/ /Minute Taker) to be excluded from attendance at the meeting for agenda item 4.2, relating to “Council Commercial Operations

(b) The Committee is satisfied pursuant to Section 90 (3)(b) of the Act, the information the

disclosure of which (i) could reasonably be expected to confer a commercial advantage on a person with whom council is conducting, or proposing to conduct, business, or to prejudice the commercial position of the council; and (ii) would, on balance, be contrary to the public interest ”.

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(c) The Committee is satisfied that the principle that the meeting be conducted in a place open to the public has been outweighed in the circumstances.

2. That Committee resolve to receive and note the Report of the Acting Chief Executive

Officer

3. That having considered the agenda item relating to ‘Council Commercial Operations’ in confidence under Section 90(2) and (3)(b) of the Local Government Act, the Section 41 Committee pursuant to Section 91(7) of the Act orders that the minutes, reports considered and discussed in relation to agenda item 4.2 be retained in confidence and not be available for public inspection until after the 17th February 2017

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Future Directions Business Plan Prepared by: Joy Hentschke, ACEO with the assistance of Sandra Brice, AMCS and Robyn Nottle, RCSO

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Table of Contents

Background .................................................................................................................................... 3 Assumptions and Disclaimers ....................................................................................................... 4

Scenario 1 – Status Quo (Council retains ownership, managed by a Management Group) ... 6 Management Agreement – (Current Scenario) Pros and Cons ................................................... 8

Scenario 2 – Market Rental (Council retains ownership, Business leased in total) ................. 9

Market Rental Agreement 3 years – ($210,000 p.a.) with 6 further terms each equating to 18 additional years and 21 years in total Pros and Cons ................................................................ 10

Scenario 3 – Sale of Business, Lease of Land (Including attached infrastructure) ............... 11 Sale of Business – lease of land 21 years, $2,100,000 sale of business, $210,000 lease figure per year Pros and Cons ............................................................................................................. 13

Scenario Comparison Report ..................................................................................................... 14

Summary....................................................................................................................................... 15

Appendices: ................................................................................................................................. 16 Responsibility Chart Eyre Peninsula Regional Tourism Profile December 2012-2014 Regional tourism Update January 2016 SATAC Tourism Barometer September 2015 Statistics supplied by the Caravan Industry Association of Australia Tourism Snapshots Tourism LGA Streaky Bay (DC)

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Background

The current management agreement of the Streaky Bay Foreshore Tourist Park is to expire at midnight on 30 June 2017. As the park is a major business undertaking of the Council it is prudent to review its status on a regular basis. At the November 5th 2015 Caravan Parks and Camping Committee Meeting it was determined that a Business Plan was required.

“4.2 Caravan Park Future Direction

CPCC19/15 Moved: Cr Stephens Seconded: Cr Trezona The Committee recommend to Council that staff prepare a Business Plan for the business

undertaking of the caravan park including separation from the operations of DCSB covering a one to five year strategy.

CARRIED”

A Masterplan for the park was prepared and adopted by council in August 2013. This has formed the basis of the capital works programs in the 2014/2015 and 2015/2016 Annual Business Plan of the District Council of Streaky Bay. However due to other considerations the capital works have largely stagnated.

The three scenarios that have been analysed are the following:

Scenario 1 – Status Quo (Council retains ownership, managed by a Management Group) Scenario 2 – Market Rental (Council retains ownership, Business leased in total) Scenario 3 – Sale of Business, Lease of Land (Including attached infrastructure)

In preparing Scenario 1 the concepts for capital works within the Masterplan have been incorporated over the next 5 years with borrowings anticipated to be for 15 years (based on the depreciation value and a lump sum of the surplus as a loan payment per year). The strategy may be adjusted so that some surplus funds can be returned to general revenue as has been the situation over the past few years.

Scenarios 2 and 3 have partial capital works implemented. These are works that the landlord (DCSB) would be required to do as part of a commercial rental/lease arrangement and to make the arrangement more attractive to a prospective tenant/lease holder.

While it was proposed that a one to five year strategy be analysed it was deemed to be logical to look at 10 years given that a 21 year lease was the advice received from outside consultants.

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Assumptions and Disclaimers

All options have not included minor plant and equipment upgrades

Fixed infrastructure remains the property of Council for all scenarios, however in the Business Sale- the following have been removed:

Ensuites Deluxe Ensuites Executive Cabins Standards All Plant and Equipment

All loans have been calculated with the following assumptions:-

At current rates- 2.5% Cash Advance Loan – not fixed Drawdown of loan has been less the depreciation costs Repayment amount to be paid out annual at the end of the year Market Rental Loan – 3 years Status Quo – 15 years Business Sale – 4 years

All capital renewals are costs are based on current trends

Impact of future competition has not been considered

Kiosk lease has been assumed to continue in current manner

Market Rental Income is only an indicative figure given by Maloney Field Services (National

Valuation and Land Access Solutions)

Business Sale and Annual rent are only indicative figures

Future income is based on current trends, when calculating income for new units, based the income on the following:-

Villas 50% Occupancy $ 150 per night Family 50% Occupancy $ 180 per night Studio 50% Occupancy $ 100 per night Ensuite Sites 80% Occupancy $ 40 per night Waterfront 90% Occupancy $ 33 per night Powered site removals 10% Occupancy $ 31 per night

Initial purchase price income has been calculated as an investment, and interest has been

reinvested. Interest rate used for calculation is $ 2%

In sale of cabins type accommodation, assumed each unit would sell for $10,000

In reporting Actuals for the last 5 years – all plans, appraisals and administration fees have been removed

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The following scenarios have been used in the Scenario 1 in relation to building and sale of infrastructure:-

No. Type Detail 8 Standard Cabins sold 31.10.17 6 Executive Cabins sold 31.05.18 1 Standard Cabin sold 31.10.18 2 Family Villas built 31.12.16 2 Villas built 31.12.16 1 Family Villa built 31.12.17 8 Villas built 31.12.17 1 Residence and Office built 31.12.17 5 Villas built 31.12.18 8 Ensuite Sites created 31.12.18 4 Studio units Built 31.12.19

Scenario Analysis:

Things that are standard across all scenarios

• Residence/Office Upgrade

• Renewal of road network

• Upgrade Eastern Amenities

• Boom gate relocation

• Physical Structures remain council’s responsibility

• Kiosk lease income remains consistent with all scenarios

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Scenario 1 – Status Quo (Council retains ownership, managed by a Management Group)

Between financial years July 2010 through to June 2015 the Streaky Bay Foreshore Caravan Park returned a total of $ 2,002,873 cash to the general revenue of DCSB.

Based on the capital improvements and borrowings required for the improvements the estimated cash surplus for the years July 2015 through to June 2020 is $ 1,186,818. As the accommodation is updated, particularly with a focus on the market demographics the revenue will increase.

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As of July 2020 with the capital works completed the cash surplus would steadily rise, total for the 5 years through to June 2025 estimated to be $ 1,828,932.

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Management Agreement – (Current Scenario)

PROS Council maintain control and monitor business Increase capital renewals means higher income is

generated and revenue Council collect can be retained for Council benefit.

Future profits derived from the caravan park can be utilised to fund tourism infrastructure, facilities such as toilets, boat ramps, the potential ownership and maintenance of the jetty platform removing these items from the Council budget.

This option produces the highest revenue for Council in comparison to other two options over a 10 year period.

The potential to increase income in the later 5 years is higher in this option than any other, as tenancy fees will not increase a great deal and potentially may reduce.

We believe the demand for family cabin type accommodation is increasing, this capital renewals in this option addresses this

Playground upgrade included in this scenario Creation of additional waterfront sites to meet

current demands. Providing upgrade for all traveller types – eg more

family type cabins, additional waterfront sites, increased upgrades for unpowered sites and ensuite powered sites

Entrance issues are addressed in this scenario Ability to plan additional capital upgrades,

including recreational facilities and camping facilities over a longer period.

Council still has an impact on future directions for the park under this scenario

Market competition can be monitored and managed

Retaining the business undertaking of the park shows council have the ability to generate own source income that hasn’t been generated from Rates and Service Charges. This alone puts council in a better position for future grant applications or borrowings they may wish to take.

The retention of the park as a business enables council to not have to look into alternate sources of funding as the park generates a large component of Council funds.

CONS Cabins and park facilities are deteriorating and

are in desperate need of upgrading immediately

Park infrastructure, including stormwater, CWMS, water mains and roadways are in need of an upgrade in the short term.

Council needs to undertake a larger loan for a 15 year period which means an increase in financial liabilities – but with the increased infrastructure it shows that Council will still be able to maintain a profit over the 1st five year period

Currently we don’t believe our cabin type accommodation meets the style standards of the current travellers.

Council is not keeping up with the travellers’ trends – facilities available for children.

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Scenario 2 – Market Rental (Council retains ownership, Business leased in total)

The concept of Market Rental is based on the advice from the report prepared by Maloney

Field Services. The rental value of $ 210,000 per annum has been utilised here and in Scenario 3.

Whilst DCSB retains the ownership of the business of the caravan park it relinquishes the cash surplus’s and based on the data it would be in deficit until June 2020.

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Market Rental Agreement 3 years –

($210,000 p.a.) with 6 further terms each equating to 18 additional years and 21 years in total.

PROS Council would only have to undertake a small

loan to cover capital renewal undertaken in the initial term, and the loan term would be up to 3 years.

Council retains ownership of the Park for the entire term.

Council staff involvement will be reduced –no day to day operations

Councillors Involvement/decision making will be reduced

CONS Initial capital outlay to improve premises to a

suitable standard to attract the rental amount projected in 12 months.

The chance of not securing a suitable tenant within the timeframe is a risk.

Council would receive a lot more pressure from the tenant to upgrade and repair structures

There is a risk that the upgrades indicated in the Moloney report to receive the true market value may require a longer period of time to achieve. This means that the value indicated may not be the value we a seeking and we could end up having to rent the park for even less than estimated.

Risk to Council and the community reputation if the tenant manages the park poorly – impacting the tourism market for Streaky Bay.

The market rental amount is only an indicative figure and until tenders are called then there is no certainty of the income generated in these reports will be match.

Timeframes are short to undertake all required legal, procurement and financial obligations.

No Guarantee that the tenant would upgrade any facilities and they may utilise current facilities and run them into the ground – eg: limited maintenance and capital upgrade

No onus on tenant to renew anything only maintain at current standard

If tenants wish to upgrade cabins Council will still have to source funds to upgrade, whether by taking out additional loans or reducing the agreement amount over the period of time meaning the park would have to draw funds from Council revenue or borrow.

Any capital upgrades undertaken at the request of the tenant would benefit them. Council won’t

recoup funds from capital renewals and the agreement would show this

Costings show that this scenario draws from Council revenue during the initial term.

Market competition could increase significantly in coming years and if the tenants are not proactive in provision of a quality service including maintenance and servicing then the park’s reputation could be damaged by the end of the term.

Market competition could reduce the agreement amount for park

This business can no longer be used by council as an independent revenue source for grant applications or loans

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Scenario 3 – Sale of Business, Lease of Land (Including attached infrastructure)

On sale of the business by June 2017 after capital works DCSB would be in deficit through to June 2020.

From July 2021 the cash returns to surplus, estimated to be $ 923,487 for the 5 years.

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The proceeds of the sale should be invested for the long term to minimise the possible lack

of funds available for the opportunity to repurchase the business of the park after lease or any other factors. This is calculated to reinvest the interest earnings (refer to the Assumptions).

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Sale of Business –

lease of land 21 years, $2,100,000 sale of business, $210,000 lease figure per year

PROS Council would only have to undertake a small

loan to cover capital renewal undertaken in the initial term, and the loan term would be up to 3 years.

Council staff involvement will be reduced –no day to day operations

Councillors Involvement/decision making will be reduced

CONS Initial capital outlay to improve premises to a

suitable standard in 12 months. The chance of securing a suitable owner within

the timeframe is a risk. Risk of securing the Sale Cost at projected

costs. Risk to Council and the community reputation if

the tenant manages the park poorly – impacting the tourism market for Streaky Bay.

The annual lease amount is only an indicative figure and until tenders are called then there is no certainty of the income generated in these reports will match.

The option to purchase the business in the future years, maybe higher than Council has invested the initial fee – increased financial burden for future ratepayers – calculations indicate at the end of 21 years, Council will only have 3.4k in reserve.

Council need to consider and make allowances for the potential cost to buy the business back for the community should the leasee become bankrupt or decide to on-sell the business at any point in time.

Timeframes are short, to undertake all valuations

Current investment percentage is low for cash If owners wish to upgrade fixed infrastructure

Council will still have to source funds to upgrade, whether by taking out additional loans or reducing the agreement amount over the period of time meaning the park would have to draw funds from Council revenue or borrow.

Any investment made by Council will not increase the owners lease fees.

This business can no longer be used by council as an independent revenue source for grant applications or loans

Market competition could reduce the annual lease amount.

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Scenario Comparison Report

This is a graph that illustrates the cash surplus/ (deficits) per scenario per financial year.

This is a consolidated graph illustrating the 10 year cash results, 2015 to 2025.

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Summary

Based on the information available the analysis suggests that from a financial perspective the District Council of Streaky Bay would be severely impacted in its delivery of other services to its community if it were to relinquish the business of the caravan park. The Streaky Bay Foreshore Caravan Park is the only business undertaking of DCSB that is not reliant on the ratepayer base for funds. Historically (the past 5 years) the injection into general revenue for use elsewhere has averaged $ 400,500 per annum after the park’s capital works. Projected (5 years) the cash surplus into general revenue for use elsewhere averages $ 237,360 per annum after depreciation (reinvested back into capital works for the park) and loan payments for borrowing to complete the Masterplan.

If Council invested in the business over the next 5 years it would place the park in a more favourable position. The current condition of the caravan park would not realize the funds (sale and/or lease) that were proposed by a consultant engaged by Council.

The Responsibilities Chart (Appendices) illustrates the differences between each scenario. The differences are minimal. Some of the current responsibilities could become part of the management agreement when it is due e.g. advertising including technology based services and provision of information technology. The management fee may rise incrementally to reflect the change of responsibilities.

Further to the above when Council applies for grants and borrowings it is often required to illustrate its own source revenue. If the only revenue is generated by rates, rubbish and user fees and charges then the ability to service either the capital projects maintenance or the loan payments is limited as the service delivery (operations) has to be maintained per the community’s

expectations. Grant applications may not be successful because of the future impacts on the ratepayer base.

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Appendices

Responsibility Chart Eyre Peninsula Regional Tourism Profile December 2012-2014 Regional tourism Update January 2016 SATAC Tourism Barometer September 2015 Statistics supplied by the Caravan Industry Association of Australia Tourism Snapshots Tourism LGA Streaky Bay (DC)

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STREAKY BAY FORESHORE TOURIST PARK RESPONSIBILITIES CHART

Status quo—remain under

management agreement

CAPITAL UPGRADES

STRUCTURAL REPAIRS AND

MAINTENANCE OTHER THAN

THE DAY TO DAY OPERATIONAL

MAINTENANCE OF:

BUILDINGS

STRUCTURES

UNDERGROUND INFRA-

STRUCTURE

ROADS

STORMWATER

TREE MANAGEMENT

PLAYGROUNDS

FENCING

BBQ’S

POWER HEADS

SITE MAINTENANCE

WASHING MACHINES AND

DRYERS

FURNITURE AND EQUIPMENT

WATER TANKS

COMPUTER EQUIPMENT

GROUNDS

OPERATIONAL EXPENSES IE

POWER, WATER, GAS, INSUR-

ANCE, SUBSCRIP-

TIONS,ADVERTISING

COUNCIL RESPONSIBILITY MANAGERS

RESPONSIBILITY

ALL MAINTENANCE AND

REPAIRS OF A NON

STRUCTURAL NATURE

DAY TO DAY PARK OP-

ERATIONS INCLUDING:

PHONE USAGE

STAFF

CLEANING

WASTE MANAGEMENT

PUMPING OF SEPTIC

TANKS AND FLUSHING

OF CWMS MAINS

Market Rental

COUNCIL RESPONSIBILITY

STRUCTURAL REPAIRS AND

MAINTENANCE OTHER

THAN THE DAY TO DAY

OPERATIONAL MAINTE-

NANCE OF:

BUILDINGS

STRUCTURES

UNDERGROUND INFRA-

STRUCTURE

ROADS

STORMWATER

TREE MANAGEMENT

PLAYGROUNDS

FENCING

BBQ’S

POWER HEADS

WATER TANKS

GROUNDS

Any permanent structure

ie structure that in secured

into the ground

TENANTS RESPONSIBILITY

ALL MAINTENANCE AND

REPAIRS OF A NON

STRUCTURAL NATURE

DAY TO DAY PARK OPERA-

TIONS INCLUDING:

PHONE USAGE

STAFF

CLEANING

ADVERTISING

WASTE MANAGEMENT

PUMPING OF SEPTIC

TANKS AND FLUSHING OF

CWMS MAINS

OPERATIONAL EX-

PENSES IE POWER,

WATER, GAS, INSUR-

ANCE

WASHING MACHINES

AND DRYERS

FURNITURE AND

EQUIPMENT

COMPUTER EQUIP-

MENT

SALE OF BUSINESS AND LEASE

OF PROPERTY

COUNCIL RESPONSIBILITY

STRUCTURAL REPAIRS

AND MAINTENANCE

OTHER THAN THE DAY

TO DAY OPERATIONAL

MAINTENANCE OF:

BUILDINGS

STRUCTURES

UNDERGROUND IN-

FRASTRUCTURE

ROADS

STORMWATER

TREE MANAGEMENT

PLAYGROUNDS

FENCING

POWER HEADS

Any permanent struc-

ture ie structure that in

secured into the ground

LEASEE RESPONSIBILITY

ALL MAINTENANCE AND

REPAIRS OF A NON

STRUCTURAL NATURE

DAY TO DAY PARK OPER-

ATIONS INCLUDING:

PHONE USAGE

STAFF

CLEANING

ADVERTISING

PUMPING OF SEPTIC

TANKS AND FLUSHING

OF CWMS MAINS

WASTE MANAGEMENT

SITE MAINTENANCE

WASHING MACHINES

AND DRYERS

FURNITURE AND

EQUIPMENT

WATER TANKS

COMPUTER EQUIP-

MENT

GROUNDS

OPERATIONAL EX-

PENSES IE POWER,

WATER, GAS, INSUR-

ANCE, ADVERTISING

BBQ’S

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Annual Visitor Summary December 2012 - December 2014

Intrastate Interstate Total Domestic International Total visits

Visits 273,000 89,000 361,000 13,000 374,000

% 76% 25% 97% 3% 100%

Nights 1,107,000 437,000 1,544,000 138,000 1,682,000

% 72% 28% 92% 8% 100%

Average Length of Stay 4.1 4.9 4.3 10.7 4.5

DAY TRIPS Average annual Day trips to the Eyre Peninsula 355,000

Holiday VFR Business Other Total

Visits 149,000 112,000 84,000 33,000 374,000

% 40% 30% 22% 9% 100%

Nights 775,000 478,000 298,000 131,000 1,682,000

% 46% 28% 18% 8% 100%

Average Length of Stay 5.2 4.3 3.5 4.0 4.5

EXPENDITURE Average annual Expenditure 283,000,000$

Average Annual Visitors

Regional Tourism Profile December 2012 - 2014

Regional Tourism

21%

25%

13%

16% 15%

9%

13%

17% 18% 18%

17% 18%

0%

5%

10%

15%

20%

25%

30%

15-24 25-34 35-44 45-54 55-64 65+

Age

Age of visitors to the Eyre Peninsula

InternationalDomestic

28%

17%

13%

19%

10% 12%

25%

20%

15%

27%

10%

3%

0%

5%

10%

15%

20%

25%

30%

1 2 3 4-7 8-14 15+

Nights

Length of visit to the Eyre Peninsula

InternationalDomestic

46% 50% 52%

57% 50%

45% 49% 50% 52% 51% 51% 49%

20%

30%

40%

50%

60%

70%

80%

J A S O N D J F M A M J

Monthly Occupancy Rates year end June 2014 - Eyre Peninsula

Source: ABS 2014

-

1,000

2,000

3,000

4,000

5,000

6,000

-

100

200

300

400

500

600

(00

0's) (0

00

's)

Total Visitation to the Eyre Peninsula and SA

Eyre Peninsula

South Australia

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54%

45%

33%

25%

24%

18%

12%

10%

8%

8%

Eat out at restaurants

Visit friends and relatives

General sight seeing

Pubs clubs discos etc

Go shopping (pleasure)

Visit national parks or State parks

Bushwalking

Go on a daytrip

Going to markets

Visit museums or art galleries

Domestic visitor activites - Eyre Peninsula


Friends or relatives

property 30%

Hotel, resort, motel or motor

Inn 28%

Caravan or camping 25%

Rented house, apartment, flat

or unit 10%

Other 9%

Own property 3%

Accommodation used on the Eyre Peninsula for domestic visitor nights



Other 7%

Other Europe 22%

United Kingdom 16%

Germany 15%

New Zealand 13%

North America 11%

Other Asia 9%

France 7%

Origin of international visitors to the Eyre Peninsula

Other 3%

Caravan Camping 51%

Hotels and similar accommodation

21%

Friends or relatives property

14% Backpacker or

hostel 11%

Accommodation used on the Eyre Peninsula for international visitor nights


Other SA 39%

Adelaide 36%

VIC 9%

WA 5%

NSW 5%

QLD 3%

Other States 2%

Origin of domestic overnight visitors to the Eyre Peninsula

Note: some listings have multiple categories of accommodation Source: Australian Tourism Data Warehouse

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Regional Tourism Update

Jan 2016

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Annual Tourism Expenditure $m

3 Year Average 2013-2015

0

50

100

150

200

250

300

350

400

450

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Regional Tourism Growth Trends

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Tourism Source Market Share

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Direct Tourism Employment 2013-14

Tourism employs more

than 8% of

Eyre Peninsula’s

total workforce

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Total Tourism Employment 2013-14

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So the news is positive but how

do we plan to keep the

momentum going…?

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Marketing Program

Visitor Resources & Tools

• www.exploreeyrepeninsula.com.au

• www.eventseyrepeninsula.com.au

• Eyre Peninsula Visitor Guide

• Nullarbor Map

• Eyre Peninsula Culinary Adventure Guide

• Eyre Peninsula Conference Planners Guide

• Eyre Peninsula Passport to Adventure

• Proposed Cruise Arrivals Guide

• Proposed Fishing and Camping Guide

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http://www.exploreeyrepeninsula.com.au

http://www.eventseyrepeninsula.com.au

Marketing Program

PR & Communications

• Eyre Peninsula Famils Program (Media & Trade)

• Trade & Consumer Shows

• Adelaide, Melbourne, Sydney & Brisbane

Caravan Shows, NZ Roadshow

• Eyre Peninsula Media Gallery

• Cross Sector Opportunities

• Seafood and Investment

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Marketing Program

Campaign Activity

• Fairfax Campaign (SATC)

• Social Media

• Council Film Project

• Visiting Friends & Relatives

• Nullarbor Campaign - Europe

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Local Government Engagement

Tourism Leadership & Representation

• SA Regional Chairs & Managers Forums (SATC)

• South Australian Tourism Industry Council Board

• Adelaide Convention Bureau

• Events SA

• Australian Tourism Export Council

• State and Federal Government Departments ie

DEWNR, DSD, PIRSA, Regions SA

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Strategy, Policy & Planning

• South Australian Regional Tourism Review

• SA Drive / Caravan Tourism Strategy

• SA Nature Based Tourism Strategy

• Whyalla Northern Coastline Masterplan

• Shark Cage Diving 10 year licenses

• Eyre Peninsula Coastal Access and Off-road

Vehicle Strategy

• Cleve Accommodation Project

• DC Franklin Harbour Tourism Roadmap

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Strategy, Policy & Planning

As tourism continues to grow in economic

importance there will be an increasing need for

councils to develop a tourism plan.

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Future Projects

• Visitor Services Network

(VIC Network)

• Connect EP

(WiFi, SMART)

• Caravan & Camping Strategy

(Managing market changes -Freedom v Park)

• Research and Statistics

(Consistent & Relevant)

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Infrastructure and Investment

• Regional Airports

• Signage

• Access & Management

• Foreshore Masterplan & Developments

• Marina and Wharf Infrastructure

• Technology

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Quality Tourism

• Far West Aboriginal Tourism Strategy

• Events Eyre Peninsula Project

• International Ready Support

• Training & Development

• Epbusinessbuilder

• Epworkforcebuilder

• SATIC

• TAFE

• Others

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Quality Tourism

Product Development and Investment

• Streaky Bay Seafood Safari

• Ceduna Sleepy Lizard Park

• Various Aboriginal Tourism Ventures

• Walking Oyster Tours Coffin Bay

• Direct Air Charters

• Tasting Eyre Peninsula Day Tours

• Various Accommodation Investments

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Quality Tourism

Corporate Partnerships

• Qantas / REX / SeaSA

• RAA

• Discovery / BIG4 / Top Tourist Etc.

• + A Travel Trade Partner to package

Qantaslink

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We have a very busy time ahead

but we are committed to growing

tourism in Eyre Peninsula…

QUESTIONS?

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1

South Australian Tourism Industry Council

SA Tourism Barometer – September Quarter 2015

Headline: Confidence up on change of leadership, lower dollar and events

The Business Outlook index for the September 2015 quarter was up by 30 points (26%) – increasing from 114 to 144 – following the

election of Malcolm Turnbull as Prime Minister in September. The improved confidence was associated with strong forward

bookings, events in Adelaide and elsewhere and the anticipated impact of the lower dollar and improved consumer confidence.

The Business Activity index for the September 2015 quarter was also up slightly – from 95 to 99 points – an increase of 4%.

The number of visitors to and within SA increased by 6% in the year ended June 2015 when compared with the previous year.

Interstate visitors increased by 11% while intrastate was up by 4% and international down slightly (< 1%).

Business Activity in the Last 3 Months

In the September quarter of 2015 the proportion of survey respondents experiencing improved business activity when compared to

the same period last year was 38% - up from 34% at the June quarter survey. The proportion experiencing weaker conditions was

steady at 39%.

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2

Factors underpinning performance were:

• Weaker dollar.

• Events – SALA Festival, Pirates in the Port, Liverpool soccer match.

• Cross promotion with DEWNR.

• Digital marketing strategy.

• Grey nomads / caravans.

• Blooming of Sturt Desert Pea.

Less positively:

• Cold winter.

• Lack of consumer confidence.

• School holidays down on last year.

• Drop in business from Convention Centre.

• Fewer backpackers.

Business Activity by Sector

The sector indexes were below the midpoint of 100 for each of the sectors. The sector indexes for holiday / leisure and festivals /

events were both down by 9% from the previous survey, the index for business travel was down by 7% to 82 points while the index

for conferences and business meetings was down by 19% to a low of 72 points.

The respondents were asked whether they expected business conditions to be stronger or weaker over the next three months when

compared to the same period in 2014.

Business Outlook for the Next 3 Months

In the September quarter 2015 the short term business outlook index was up by 30 points – an increase of 26%. The proportion

expecting improved performance was up from 37% to 58% while the proportion expecting a fall was down from 23% to 14%.

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Other factor influencing the outlook for the short term included the following:

• Bids for conferences, conventions up significantly. Stage 2 of Convention Centre underway. Hosting Dreamtime in

December, PCO Conference.

• Upcoming events – World Duathlon, Test cricket, Port Festival.

• Stronger forward bookings.

• Lower $A.

• Cruise boats.

• Digital marketing.

• More sharks (for viewing).

Less positively:

• Poor forward bookings.

• Hot weather.

• Oversupply of holiday house accommodation.

The outlook for the next 12 months was as follows:

Business Outlook for the Next 12 Months

In the June quarter 2015 survey, 17% of the respondents were ‘extremely confident’ regarding the prospects for the next 12 months

and 48% were ‘confident’. The proportion ‘confident’ or ‘very confident’ (65%) was consistent with the previous survey (64%).

Factors underpinning business confidence in the longer term were:

• Demand continues to be positive.

• Local businesses are working together to promote the town / improved promotion.

• Riverbank precinct, completion of Convention Centre Stage 2, ongoing development.

• Growth in demand for regional produce.

Less positive

• Locals less prepared to spend on ‘luxury’ items such as holidays and fine dining.

• More business events needed at the Adelaide Convention Centre.

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Employment

Respondents were asked whether the number of people employed in their business had increased, decreased or remained the same

when compared to the same period last year.

Employment Trends

In the September quarter 2015 survey 20% of the respondents had employed additional staff in their business – consistent with the

previous survey at 18%. The proportion that had fewer staff had increased somewhat from 13% to 20%. Further information

regarding employment trends from the ABS Labour Force survey follows.

Wages

The SATIC Barometer for the June 2015 quarter included a new question asking whether the respondent’s wages bill, when

compared to the same quarter last year, had increased or decreased.

Wages Bill

In the September quarter survey 28% of the respondents reported that their wages bill had increased – down from 40% at the June

quarter.

Where an increase in wages was reported this was due to, in most cases, an increase in the number of staff or the number of hours

worked associated with an increase in demand. One respondent reported a substantial increase in costs due to weekend penalty

rates while others referred to increase in wage rates generally. Lower wages were associated with lower demand / business

performance.

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Investment

In the September quarter survey respondents were asked whether they were planning more or less investment in their business

over the next 12 months compared to the previous 12 months.

Planned Investment

In the September quarter survey 39% were planning more investment in their business – down from 47% at the June quarter.

About The SATIC Tourism Barometer

The SATIC Tourism Barometer is a quarterly survey of SATIC members designed to measure recent activity levels and the outlook for

the future. The Barometer survey is conducted on-line and a total of 64 members responded to the September 2015 quarter survey.

The sample is generally around 90 respondents and the smaller sample achieved for the September 2015 quarter may have resulted

in an increased level of sample error.

Report prepared by independent research consultants – Greenhill Research and Planning.

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Annual Performance to June 2015

Information regarding travel demand in Australia is collected by Tourism Research Australia through two national sample surveys:

the National Visitor Survey and the International Visitor Survey.

Overview of Overnight Visitor Demand for South Australia

The number of interstate visitors to SA in the year to June 2015 was 2,046,000 – up 11% from the previous year – while the number

of intrastate visitors was 3,578,000 – up by 4%. The number of international visitors was 385,000 – down slightly (-0.8%) from the

previous year. Overall visitor numbers increased by 6% to 6,009,000.

International Visitors by State / Territory

Tourism Research Australia. http://www.ret.gov.au/tourism. International Visitors in Australia. International Visitor Survey

In the year ended June 2015 the number of international visitors to South Australia was down slightly – falling from 388,000 to

385,000 visitors (-0.8%). Nationally international travel demand grew by 7%. While coming from a low base Tasmania recorded the

highest percentage increase (up by 21%). The eastern seaboard states continue to experience strong growth with the number of

international visitors to Victoria exceeding Queensland.

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Interstate Visitors by State / Territory

Tourism Research Australia. http://www.ret.gov.au/tourism. Travel by Australians. National Visitor Survey

In the year ended June 2015 the number of interstate visitors to South Australia increased by 11% to reach 2,046,000 visitors.

Nationally interstate travel demand grew by 7%. SA recorded the third highest growth rate for the year behind Tasmania (up by

21%) and Victoria (up by 12%).

Intrastate Visitors by State / Territory

Tourism Research Australia. http://www.ret.gov.au/tourism. Travel by Australians. National Visitor Survey

In the year to June 2015 intrastate visitors in South Australia grew by 4% from the previous year to 3,578,000 overnight visitors.

Nationally the intrastate market grew by 4%.

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Other Indicators

Information regarding the performance of the accommodation sector in South Australia is published by the Australian Bureau of

Statistics. The data is now published annually with results for the 2013/14 fiscal year published in December 2014. See the

December quarter 2014 Barometer for the latest information.

Information regarding short term overseas departures by Australian residents is published by the Australian Bureau of Statistics.

Trend in Short Term Australian Resident Departures and $A - $US Exchange Rate

Source: Australian Bureau of Statistics Cat. 3401.0 - Overseas Arrivals and Departures.

Reserve Bank of Australia. http://www.rba.gov.au/statistics/frequency/exchange-rates.html The data is the specified point in time and does not represent the

interim periods.

In the year ended August 2015 there were 9.27 million departures – an increase of 2.5% from the previous year.

The Australian Bureau of Statistics also publishes information regarding employment across a range of industry categories. At State

level accommodation is combined with food services.

Employment in Accommodation and Food Services in South Australia

Source: Australian Bureau of Statistics. Cat. 6291.0.55.003. Labour Force Australia, Detailed.

The Labour Force figures for South Australia for the month of August 2015 indicated a decrease of 7% in the number of persons

employed overall in the accommodation and food services sector when compared with August 2014. Full time employment was up

by 5% while part time employment in the sector was down by 14%. Due to the seasonal nature of employment in the

accommodation and food services industries annual comparisons may vary depending on the point in time at which the comparison

is made.

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Adelaide Airport – Passenger Movements

Passenger movements through Adelaide Airport for the financial year 2014-15 and the previous year are presented below.

Pax (000s) 2014-15 2013-14 % change

Domestic 6,356 6,213 2.3%

International 936 908 3.0%

Regional 551 575 - 4.3%

Total 7,842 7,696 1.9%

Source: Adelaide Airport

International passenger movements were up by 3% while domestic movements were up by 2%.

Domestic growth is said to reflect increases in low cost capacity with an additional 263,000 (+3.4%) supply of seats in comparison

with the previous year.

International passenger movements slowed primarily due to the cancellation of Air Asia X’s Kuala Lumpur service of 25 January

2015.

International services will be boosted by a new service between Qatar and Adelaide that will be introduced from May 2016. The

service will contribute an estimated $41 million annually and an extra 228 jobs to South Australia.

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Statistic supplied by the Caravan industry Association of Australia:

90% of Caravanning & Camping occurs in Regional Australia. In 2010 campervans and motorhomes travelled approximately 607 million kilometres

(the equivalent of driving to the moon and back 790 times, or around the Earth 15,172 times!)

90% of caravanning & camping activity is undertaken by Australian domestic travellers. 67.8 million site nights were spent in the Caravanning & Camping sector in 2011,

45.3 million (67%) were in a caravan holiday park above 40 sites. Primary market is 35-49 year olds with approximately 50% of all travel in the sector. There were 556,884 caravans and motorhomes registered as of 31 January 2014, a

5.5% increase from the previous year. Registered vehicles are made up of Motorhomes 11% and Caravans 89%. 73% of all RV vehicles registered are below 1.5 tonne.

Contribution to their local economy

$72 per day Vs $ 53 per day

Domestic visitor nights spent in the caravan and camping sector

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TOURISMBUSINESSES

616

worth

$300m96% Domestic 4% International

323,000DAY TRIPS

of all Domestic Visitorsstay with

of all domesticvisitation is from

33% Hotel30% Friends22% Caravan

EYRE PEN INSULA - TOUR ISM SNAPSHOT

80%

SOUTHAUSTRALIA

VISITOR NIGHTS $40m

31%

FRIENDS &RELATIVES

STAY

of 65

OF ALLTOURISM

BUSINESSES

10%

worth


AV LENGTHINTERNATIONAL

Domestic Visitors International

Visitors

CEDUNA TOUR ISM SNAPSHOT

4,800

VISITOR NIGHTS

2.4 57,000

NIGHTS

AV LENGTHDOMESTIC

2.8

NIGHTS

16%40%

7% of 65

OF ALLTOURISM

BUSINESSES

4%

worth


AV LENGTHINTERNATIONAL

Domestic Visitors

InternationalVisitors

STREAKY BAY TOUR ISM SNAPSHOT

1,600

VISITOR NIGHTS

5.6

34,000

NIGHTS

9%

13%

5%

AV LENGTHdomestic

3.2 NIGHTS

of 65

57 34$22 $15 4.8 1.6

2.8 3.2 2.4 5.6

Visitor Economy $m

Domestic Visitors ,000

International Visitors ,000

Domestic StaysAv Nights

International StaysAv Nights

CEDUNA

STREAKYBAY

Tourism ComparisonCEDUNA / STREAKY BAY

of 65

91% Domestic 9% International

OF ALLVISITORS ARE

DAY TRIPS

20% Hotel37% Friends17% Caravan

PORT L INCOLN TOUR ISM SNAPSHOT

VISITOR NIGHTS 40%

STAY41% holiday28% friends25% business

WHY AV LENGTHDOMESTIC

4.1 NIGHTS

AV LENGTHinternational

7.1 NIGHTS

worth

$87m29%

TOURISMBUSINESSES

31%

Domestic Visitors

107,000

29%

International Visitors

5,400

45%

of 65


OF ALLVISITORS ARE

DAY TRIPS

21% Hotel56% Friends23% Other

WHYALLA TOUR ISM SNAPSHOT

VISITOR NIGHTS 52%



2.7 NIGHTS


22 NIGHTS

worth

$44m15%

TOURISMBUSINESSES

24%

Domestic Visitors

80,000

21%


2,200

18%

of 65

80 107$44 $87 2.2 5.4

2.7 4.1 22 7.1

Visitor Economy $m





WHYALLAPORT

LINCOLN

37 25

Business Travel%

Tourism ComparisonWHYALLA / PORT LINCOLN

of 65


OF ALLVISITORS ARE

DAY TRIPS

21% Hotel56% Friends23% Other

WHYALLA TOUR ISM SNAPSHOT

VISITOR NIGHTS 52%



2.7 NIGHTS


22 NIGHTS

worth

$44m15%

TOURISMBUSINESSES

24%

Domestic Visitors

80,000

21%


2,200

18%

of 65

57 107$22 $87 4.8 5.4

2.8 4.1 2.4 7.1

Visitor Economy $m





CEDUNAPORT

LINCOLN

Tourism Comparison

N/A 25

Business Travel%

CEDUNA / PORT LINCOLN

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MARKETING $

CONVERSION POTENTIAL

localcommunity

international

interstate

intrastate

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TALIA

MINTA

CARINATOOTLA

HASLAM

CARAWA

KALBRAECUNGENA

WALLALA

KOLBALLA

OAK VALE

COOLGRANA

WIRRAMBIE

MUDAMUCKLA

STREAKY BAY (DC), SOUTH AUSTRALIA

Non-employing1 to 4 employees5 to 19 employees20 or more employeesTotal

TOURISM IN LOCAL GOVERNMENT AREAS 2013

Visitors ('000)Visitor nights ('000)Average stay (nights)Spend ($m) Average spend per trip ($) Average spend per night ($) Average spend (commercial accommodation) per night ($)Reason (visitors '000) Holiday Visit friends or relatives OtherTravel party (visitors '000) Unaccompanied Couple Friend/relatives travelling togetherAccommodation (nights '000) Hotel or similar Home of friend or relative Commercial camping/caravan park Backpacker Other accommodation

1.68.85.60.2

96.717.1

np

1.4npnp

npnpnp

npnpnpnpnp

United KingdomGermanyNew Zealand

npnpnp

npnpnp

34.7 110.2 3.2

14.9 430.8 135.6

153.5

17.5npnp

npnpnp

npnpnpnpnp

np--

npnp

--

npnpnp

--- -----

np118.9

3.3npnp

126.9np

npnpnp

npnpnp

npnpnpnpnp

*Four year averages to 2013. 'np' = the estimate is unreliable and cannot be published. '-' = not available. Sources: ABS Population Estimates - Local Government Areas - Cat. No. 3235.0.ABS Count of Australian Businesses - Cat. No. 8165.0. International Visitor Survey and National Visitor Survey, Tourism Research Australia.

7 6 9 3

25

AREA POPULATION: 2,245

TOTALTOURISM BUSINESSES

TOP INTERNATIONAL MARKETS* VISITORS ('000) NIGHTS ('000)

INTERNATIONAL DOMESTIC OVERNIGHT

DOMESTICDAY TOTALVISITORS TO LOCAL GOVERNMENT AREA*

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caravan parks & camping committee item no: meeting … · management agreement – (current...

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