Tourism 21 - A Strategic Business Plan 1997-2000

Issue 2 - Sustainable Investment in Quality, Export Ready Products

Goal 2

The second goal is to develop quality, export ready product, experiences and services for customers.

Tourism 21 has concluded that Tasmanian product must be substantially improved to achieve an export ready standard that will support a consistent quality brand and image.

A product will be export ready when it:

• complies with best practice and customer service standards
• meets market requirements
• and is competitive in interstate and/or international market places.

Export ready status will guarantee a minimum product standard appropriate for projection into current or new interstate and/or overseas markets.

The quest for quality does not mean developing only top of the range, five star product and service standards. The aim is to deliver a quality standard that represents value for money, meets or exceeds visitor expectations but is matched to the range and type of product being offered whether it be budget, three, four or five star.

Gaining export ready status is essential before tourism operators can incorporate their products in interstate and overseas marketing programs operated by Tourism Tasmania.

This complements the strategies for a market-led industry by emphasising developing and maintaining quality products and services that are customer focused.

In summary, the strategies involve the industry and operators making investments to:

• develop best practice standards and quality assurance;
• improve industry standards through operator and staff training and education;
• improve existing, and develop, new infrastructure and services to ensure a range and standard of experiences and services that not only meet customer needs but exceed them;
• and to build stronger community support and recognition of the value of tourism.

The long term future of the industry depends on these investments.

Each strategy and implementation action is detailed below.

Strategy 2.1 - Developing Best Practice and Quality Assurance

To develop best practice, customer service and quality assurance systems that will:

• identify export ready standards that operators must meet before they can participate in Tourism Tasmania marketing programs; and

• provide processes to enable tourism operators and their products to become export ready.

The 1996 Operators Survey identified that approximately 60% of all tourism businesses did not undertake training in the last 12 months and only 25% had participated in the basic customer service training program `Aussie Host'.

It is therefore a significant challenge for the industry to ensure consistent, high quality standards and a customer focused approach among all operators.

Strategy 2.1 - Priorities

2.1.1 Establish best practice, customer service and quality assurance standards

A high level of commitment is needed from the industry, individual industry operators and Tourism Tasmania to the concept of developing export ready product and establishing a system that identifies best practice standards and facilitates self regulation.

Industry must be disciplined to support changes that require operators to become export ready and meet best practice standards.

Tourism Tasmania, on the other hand, in its interstate and overseas marketing, must support only product that is export ready and suits specific market segments. Tourism Tasmania also has a key development role by providing market information on standards and trends.

2.1.2 Develop a industry based, self regulation system to ensure the development of export ready quality product

An independent industry based process is required to develop and implement this strategy. It will need financial assistance from Tourism Tasmania. The process should:

- establish export ready standards appropriate for interstate and overseas markets

- identify product which does and does not meet the required standards

- provide strategic guidance to assist operators whose product does not meet standards to take appropriate action

- recognise those Tasmanian tourism and related educational institutes and training bodies, and staff training and development programs, that will assist operators to achieve export ready standards

- establish close working relationships with Tasmania's educational institutes and training bodies to ensure that courses and programs are regularly reviewed and deliver best practice standards

- work closely with all industry stakeholders to ensure ongoing support for best practice and customer service standards

Strategy 2.1 - Implementation

Action By December 1997:

• TCA Tasmania and Tourism Tasmania [JTSIG], in consultation with other State Agencies, the Licensing Commission and the RACT, to review current arrangements and develop a self regulation, quality assurance process based on successful interstate models. The review is to clarify roles, responsibilities and relationships between the respective parties

Action By June 1998:

• Export ready, quality assurance system resolved and budget allocation made to ensure system is fully operational

Strategy 2.2 - Developing Industry Training and Education

To ensure training and educational opportunities meet the developmental and staffing needs of the industry

Education and training has a fundamental role in preparing people, especially our youth, with the skills and expertise to contribute to the development of Tasmania's industry.

Strategy 2.2 - Priorities

2.2.1 Establish close working relationships between the industry and Tasmania's tourism and related educational institutes and training bodies to ensure courses and programs meet industry needs

Tourism 21 received many comments from operators that current courses and programs are not providing graduate recruits with the right mix of skills and expertise needed by the industry.

Tourism Training Tasmania has a key role to address these issues. A mechanism is required to enable formal briefings from Tourism Tasmania and TCA Tasmania on changes in market and industry needs. This will enable Tourism Training to be fully aware of the needs of the industry.

2.2 2 Ensure tourism operators develop a sound understanding of distribution systems, pricing and yield management

A critical part of being export ready is for operators to understand how pricing works for the benefit of individual businesses, the industry overall and the generation of yield. A key aspect of this is how operators can develop a pricing structure and mix that covers the cost of distribution networks.

Tourism 21 identified a number of issues:

- While Tasmania is currently priced at a level that is competitive in the marketplace and affordable to customers, there are risks that some low priced packages leave the impression of a cheap destination. This could damage the quality of the brand image and seriously affect the yield potential of all operators. It needs to be recognised that this is, in part, driven by factors beyond the control of operators such as carrier pricing policies.

- Some operators price according to local competition in their area rather than the interstate and overseas markets in which they are competing. By trying to compete locally, there is a tendency for prices to be set too low without sufficient allowance for the costs of distribution.

- Some operators do not have a good understanding of distribution systems. Consequently, when pricing product, many do not develop a price mix which provides sufficient margin for the costs of distribution.

- Some operators are listing too many levels in their price structures which do not relate to the standard of product or service being offered.

Given Australia's competition legislation and the positive dynamics of competition, it is difficult to develop strategies in this area. Training and educational programs offer the best opportunity to broaden operator understanding of distribution systems, pricing, value adding, discounting and how they all impact on yield management.

Strategy 2.2 - Implementation

Action By August 1997:

• Tourism Tasmania and TCA Tasmania [JTSIG] to initiate a meeting with representatives of Tourism Training Tasmania and other educational and training bodies to establish a mechanism for joint half yearly meetings to exchange information on market trends, industry development, training needs, and training and education program development

Action By April 1998:

• A training seminar program, focussing on export ready product development, distribution and yield management issues, to be developed for implementation with industry operators

Action By January 2000:

• Educational and training programs to meet export ready product and service standards requirements

• Half yearly briefing meetings being held, and industry training needs being met by educational and training bodies, in accordance with agreed performance standards

Strategy 2.3 - Creating an Environment for Sutainable Industry Investment and Development

To create an environment which will encourage the private sector to invest to improve and expand the range and standard of products

The long term development of Tasmanian tourism depends on investment to upgrade existing and developing new export ready product and infrastructure to expand the capacity and depth of the industry.

Tourism 21 has concluded that there is potential to increase private sector investment from a relatively low base.

Strategy 2.3 - Priorities

2.3.1 Develop action plans for infrastructure and development priorities identified in Tourism 21

The aim is to:

- facilitate the provision of essential industry infrastructure that will enable and encourage industry operators to develop their own businesses;

- facilitate and encourage industry operators to continue to invest in their product; and to

- break through barriers that are discouraging investment.

Tourism 21 has identified the following priorities to be addressed in action plans.

- Road Signage and Touring Information

Significantly improving roadside directional and interpretative signage and on-site tourist business signage is a high priority. Signage and visitor information services must be fully integrated throughout the State. Without this essential infrastructure, Tasmania cannot develop its full potential as a touring destination.

Coupled with this is the need to ensure all touring routes are clearly identified as part of the State's tourist road network. The network has to be developed to accommodate the touring needs of visitors. Roads should be maintained to an appropriate standard and provide convenient links to service centres and amenities. A key aspect in planning the network is to minimise dual use of touring routes by major freight and heavy commercial traffic.

- Experiential Product

Increasing the depth and range of experience based product to produce more exiting and appealing activities and attractions consistent with Tasmania's competitive advantages is also a high priority.

- Upgrading Tired Product

Upgrading tired infrastructure and services was identified as an important issue in the consultation program.

The TTOS also identified that 42% of operators spent less that $5,000 on upgrading or expanding their businesses in the last twelve months while 19% spent more than $50,000 [TTOS 1996].

- Accommodation and Conference Facilities

There is a need to address a lack of accommodation capacity in some critical areas of the State, especially in natural areas. Priority development sites need to be identified and preparatory work undertaken to ensure infrastructure, environmental, tenure and other related development approval matters are completed without delay.

There is also potential for further expanding the association conferences and corporate market and, to a lesser extent, incentives with the development of additional, appropriate infrastructure.

- Transport Services and Infrastructure

The main priorities are:

• Continuing improvement in the capacity for air and/or sea services to and from key domestic markets, including direct services to and from Tasmania's gateways

• Full extension of the common rating of international airfares to include Tasmania

• Continuation of the Bass Strait subsidy

• Ensuring the proposed sale and future ownership of the Hobart and Launceston Airports meets the requirements of the tourism industry

• Expanding the cruise ship market and improving port facilities and services

• Improving the capacity and regularity of bus travel outside Hobart and Launceston especially for the backpacker market

- Industry Deregulation

The tourism industry is highly regulated. Deregulation is a high priority in key areas such as development approvals, licensing and transport.

- Critical Mass for Business Viability

A long term aim is to consolidate and focus tourism development in key areas and along core touring routes, as far as practical, to generate the critical mass of visitors to sustain year round viability.

2.3.2 Provide market intelligence briefings through regular [eg. quarterly] forums with tourism operators.

The research strategies noted in Issue 1 will provide valuable information and data on customer needs and market demand. By matching these with the current product inventory it will be possible to identify opportunities and gaps within the industry where product, infrastructure and services are needed.

To ensure that this information is acted upon, regular briefings are needed with operators to enable them to tailor their product packaging and to develop experiences and services to meet the demands of the market. The briefings should be held on a regional basis with the assistance and support of the Regional Tourism Associations. This should prove to be the most cost effective means for operators to participate and for Tourism Tasmania to organise.

2.3.3 Tailor regulatory systems and development approval processes to the specific needs of the tourism industry which do not generally accord with town planning requirements established for normal residential and commercial development.

The lack of appreciation of the special needs of tourism in Planning Schemes has often led to unnecessary complications and delays in obtaining Council planning approval. Regular briefings are required with Local Government to ensure Councils understand the particular needs of tourism and the development of export ready product.

Similarly, the requirement for Councils to refer planning applications to State Agencies needs to be addressed through the preparation of appropriate State Policies that facilitate tourism development.

2.3.4 Develop a `whole of Government' approach to sustainable development of tourism on state owned lands.

The current positioning of Tasmania focuses on the State's strengths as a natural area and heritage destination, yet 50% of the State, and almost all strategically important tourism assets, are in some form of public ownership and management control. In this situation, private sector development of natural area product is highly dependent on the policies and programs of the State Government and its individual land management agencies and corporations.

Land allocated for visitor/tourist services is largely at entrance points, picnic areas or scenic attractions. These areas represent less than 1 per cent of the total area of public land reserves.

Future expansion of tourism requires a more effective and efficient system for the development of natural area tourism product to meet the needs and expectations of visitors but in a sustainable manner that protects natural area and environmental values.

Currently, there are major difficulties in achieving private sector tourism development on public land especially in National Parks and World Heritage areas. The difficulties centre on obtaining secure land tenure agreements and open, timely and consistent planning and development approval processes.

The vast majority of Tasmania's touring visitors only want to `touch' nature, compared with a relatively small number, estimated at 20,000, who want to walk into natural areas and camp over night.

Tourism 21 has concluded that the strategy to facilitate sustainable product development in natural areas is to:

- establish a `whole of Government' approach to tourism in natural areas, especially through planning processes for:

• National Parks and State Reserves, Tasmanian Wilderness World Heritage Area, other major forest areas and public lands

• Regional Forests Agreements

• other natural resources, such as the wild trout fishery

- identify and establish visitor and product development nodes in strategic locations in natural areas to cater for the majority of visitors who simply want to `touch' nature and enjoy different nature based experiences

- introduce an integrated development approval system and land leasing system for public owned lands which complements the principles and provisions of State Planning and Environmental legislation

- adopt a land management approach which manages visitors and activities by design that meets required performance standards in preference to prescriptive regulation and policing

- consult with industry on land management policies and practices that may impact on visitors and the tourism industry consistent with the Tourism Protocol Agreement

- ensure that funding provided through Commonwealth and/or State Government programs such as the Natural Heritage Trust, are used to maximise opportunities for tourism

2.3.5 Facilitate and advocate investment opportunities and targeted developments to the private sector and appropriate levels of Government.

This covers the critical role of Tourism Tasmania and Tasmania Development and Resources in facilitating expansion and new development.

It also covers the role of industry, through TCA Tasmania, in supporting and advocating development opportunities and infrastructure requirements to not only industry operators, investors and developers but also to all spheres of Government. Both the private and public sectors need to be encouraged to be proactive in making investment resources available.

Strategy 2.3 - Implementation

Action By July 1997:

• Tourism Tasmania to have initiated a `whole of Government' tourism development policy for Cabinet approval including:

- a list of priority development prospects on both State owned and private lands, and actions needed to secure investment;

- proposals to improve approval processes, to address impediments and to facilitate tourism investment and development; and

- mechanisms, such as the Tourism in Natural Areas Advisory Group, to implement a `whole of Government' approach and to address infrastructure development such as integrated signposting and information systems.

Strategy 2.4 - Building Community Support for Tourism

To build community support for tourism through recognition of the value of tourism

In developing a foundation for tourism growth over the next three years, it is important to also recognise the need for strong community support for tourism.

Community based programs are needed to educate the community, community groups, local Councils, schools and educational institutes and other local organisations on the role and value of tourism and the contribution it makes to cultural and community life, employment and the economy. The programs should also focus on the positive role the community has in being part of the tourism industry and making visitors feel welcome and part of Tasmania's special way of life.

Strategy 2.4 - Implementation

Action By September 1997:

• TCA Tasmania and Tourism Tasmania have developed a joint industry and Government program, including community surveys to benchmark support levels, media and public relations campaigns and special initiatives such as open days for Tourism Tasmania and the industry