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Proposed Marketing Levy –
  Case for Whitsundays
The Introduction of a
         Marketing Levy?
Common throughout the USA, Canada &
Europe (in the range of 2-14%)

It sits on top of a GST or VAT

All accom taxes in Australia deemed irrelevant
with the introduction of the GST in 2000

A marketing levy of 2%pa in the Whitsundays
Regional Council would yield $2.5m and
10%pa would yield $12m on current
accommodation turnover
Marketing Levy - Advantages
It does not burden the normal income tax
collection system but are a tax on
consumption
It does not drain state or local operating
budgets
It can be applied to the specific problem area,
i.e. marketing of tourism by directing
collections into relevant tourism authorities
Marketing Levy - Disadvantages
 Any new levy is generally opposed on
 principle, but this is not a levy on all
 taxpayers, rather it is user-pays
 There are additional administrative costs, as
 with the GST
 It can create market distortions if too large
 and not widely applied
Marketing Levy in Florida
                    (introduced in1967)
                   Tax                                 Percent
Municipal Resort                                          2%
Food & Beverage                                           2%
Tourist Impact                                            2%
Convention Development                                    2%
Tourist Development                                       1%
Total                                                    11%

 Enacted legislation to be used for:

 • The creation and maintenance of convention centres, cultural/arts centres

 •The enhancement and promotion of tourism

 •Appropriate signage installation and maintenance
Accommodation Levies Around
         the World

Location          Levy
Fiji              5%
Hawaii, USA       9%
California, USA   10%
Florida, USA      11%
Bali              15%
Australian Industry Size – Annual
        Turnover 2007-08
 Food & Beverage               $72bn    9.0%

 Tourism                       $75bn    9.4%

 Retail                        $150bn   18.8%

 Motor Vehicles                $173bn   21.6%

 Manufacturing (Incl Mining)   $250bn   31.3%

 Other – Education/Govt etc    $80bn    10.0%

 Total GDP (Approx)            $800bn
Annual Council Funding for
   Tourism Marketing
  Local Council    Budget     $ per capita

  Brisbane         $16.6m           $8.00

  Gold Coast       $10m            $16.80

  Sunshine Coast   $8.5m           $25.50

  Cairns           $4m             $21.60

  Whitsundays      $750,000        $21.40
Annual Federal Funding for
   Tourism Marketing
       Country           Budget      $ per capita


       New Zealand       AUD$190m*        $45.25


       Bali              AUD$43m          $31.70


       Fiji              AUD$29m          $27.65


       Australia         AUD$169m          $8.45


* Air New Zealand contributes $90m
Return on Investment
     Business Type (AUST)              ROI 1998-2004
     Tourism Businesses                   11.8% pa
     All Businesses                       14.9%pa


    (AEC Group, National Tourism Investment Strategy, 2006)


The tourism industry has been saved by
technology and innovation
  Low cost airfares and accommodation
  packaging
  Online booking and virtual tours
Whitsundays Accommodation
                Rooms Avail   Room Nights
                                 Sold       Occupancy %   Takings $m   $ Av Nightly Rate      RevPAR     Income per room
      Qtr
                     2009        2009          2009         2009             2009               2009          2009


                                               Whitsundays
Mar                2,937        124,008        46.9          27.9           224.46         $ 10,527.17   $    38,424.19

Jun                2,939        119,924        44.8          24.7           205.25         $ 9,195.20    $    33,562.48

Sep                2,911        152,202        56.8          30.5           200.28         $ 11,375.90   $    41,522.05

Dec                2,906        153,176        57.3          35.7           233.34         $ 13,370.38   $    48,801.89

Calendar 2009      2,923        549,310        51.5         118.8           215.83         $ 11,104.58   $    40,531.72




Whitsundays = Regional Council boundary including Bowen and
Hamilton Island (28% market share)
Hamilton Island has 823 beds with approximately 80% occupancy

Source: ABS 8635.0
Whitsundays Accommodation
                Rooms Avail   Room Nights
                                 Sold        Occupancy %   Takings $m   $ Av Nightly Rate      RevPAR     Income per room
      Qtr
                   2009          2009           2009         2009             2009               2009          2009


                                          Great Barrier Reef Islands
Mar                2,632        114,996         49.1          32.6           283.46         $ 13,917.89   $    50,800.28

Jun                2,608        104,120         43.9          27.6           264.14         $ 11,595.75   $    42,324.47

Sep                2,562        141,135         60.0          36.3           256.92         $ 15,415.20   $    56,265.48

Dec                2,560        148,622         63.1          43.1           289.91         $ 18,293.32   $    66,770.62

Calendar 2009      2,591        508,873         54.0         139.6           273.61         $ 14,781.65   $    53,953.00




      Source: ABS 8635.0
Website:
www.midwoodaustralia.com

  Annual Subscription:
     $375 (incl.GST)
  Includes four quarterly
reports and on-line access

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Tourism Marketing Levy - Case for the Whitsundays

  • 1. Proposed Marketing Levy – Case for Whitsundays
  • 2. The Introduction of a Marketing Levy? Common throughout the USA, Canada & Europe (in the range of 2-14%) It sits on top of a GST or VAT All accom taxes in Australia deemed irrelevant with the introduction of the GST in 2000 A marketing levy of 2%pa in the Whitsundays Regional Council would yield $2.5m and 10%pa would yield $12m on current accommodation turnover
  • 3. Marketing Levy - Advantages It does not burden the normal income tax collection system but are a tax on consumption It does not drain state or local operating budgets It can be applied to the specific problem area, i.e. marketing of tourism by directing collections into relevant tourism authorities
  • 4. Marketing Levy - Disadvantages Any new levy is generally opposed on principle, but this is not a levy on all taxpayers, rather it is user-pays There are additional administrative costs, as with the GST It can create market distortions if too large and not widely applied
  • 5. Marketing Levy in Florida (introduced in1967) Tax Percent Municipal Resort 2% Food & Beverage 2% Tourist Impact 2% Convention Development 2% Tourist Development 1% Total 11% Enacted legislation to be used for: • The creation and maintenance of convention centres, cultural/arts centres •The enhancement and promotion of tourism •Appropriate signage installation and maintenance
  • 6. Accommodation Levies Around the World Location Levy Fiji 5% Hawaii, USA 9% California, USA 10% Florida, USA 11% Bali 15%
  • 7. Australian Industry Size – Annual Turnover 2007-08 Food & Beverage $72bn 9.0% Tourism $75bn 9.4% Retail $150bn 18.8% Motor Vehicles $173bn 21.6% Manufacturing (Incl Mining) $250bn 31.3% Other – Education/Govt etc $80bn 10.0% Total GDP (Approx) $800bn
  • 8. Annual Council Funding for Tourism Marketing Local Council Budget $ per capita Brisbane $16.6m $8.00 Gold Coast $10m $16.80 Sunshine Coast $8.5m $25.50 Cairns $4m $21.60 Whitsundays $750,000 $21.40
  • 9. Annual Federal Funding for Tourism Marketing Country Budget $ per capita New Zealand AUD$190m* $45.25 Bali AUD$43m $31.70 Fiji AUD$29m $27.65 Australia AUD$169m $8.45 * Air New Zealand contributes $90m
  • 10. Return on Investment Business Type (AUST) ROI 1998-2004 Tourism Businesses 11.8% pa All Businesses 14.9%pa (AEC Group, National Tourism Investment Strategy, 2006) The tourism industry has been saved by technology and innovation Low cost airfares and accommodation packaging Online booking and virtual tours
  • 11. Whitsundays Accommodation Rooms Avail Room Nights Sold Occupancy % Takings $m $ Av Nightly Rate RevPAR Income per room Qtr 2009 2009 2009 2009 2009 2009 2009 Whitsundays Mar 2,937 124,008 46.9 27.9 224.46 $ 10,527.17 $ 38,424.19 Jun 2,939 119,924 44.8 24.7 205.25 $ 9,195.20 $ 33,562.48 Sep 2,911 152,202 56.8 30.5 200.28 $ 11,375.90 $ 41,522.05 Dec 2,906 153,176 57.3 35.7 233.34 $ 13,370.38 $ 48,801.89 Calendar 2009 2,923 549,310 51.5 118.8 215.83 $ 11,104.58 $ 40,531.72 Whitsundays = Regional Council boundary including Bowen and Hamilton Island (28% market share) Hamilton Island has 823 beds with approximately 80% occupancy Source: ABS 8635.0
  • 12. Whitsundays Accommodation Rooms Avail Room Nights Sold Occupancy % Takings $m $ Av Nightly Rate RevPAR Income per room Qtr 2009 2009 2009 2009 2009 2009 2009 Great Barrier Reef Islands Mar 2,632 114,996 49.1 32.6 283.46 $ 13,917.89 $ 50,800.28 Jun 2,608 104,120 43.9 27.6 264.14 $ 11,595.75 $ 42,324.47 Sep 2,562 141,135 60.0 36.3 256.92 $ 15,415.20 $ 56,265.48 Dec 2,560 148,622 63.1 43.1 289.91 $ 18,293.32 $ 66,770.62 Calendar 2009 2,591 508,873 54.0 139.6 273.61 $ 14,781.65 $ 53,953.00 Source: ABS 8635.0
  • 13. Website: www.midwoodaustralia.com Annual Subscription: $375 (incl.GST) Includes four quarterly reports and on-line access