Tourism Investment Guidelines: Your Guide to - Tourism Victoria
Tourism Investment Guidelines: Your Guide to - Tourism Victoria
Tourism Investment Guidelines: Your Guide to - Tourism Victoria
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TOURISM INVESTMENT GUIDELINES<br />
your guide <strong>to</strong> <strong>to</strong>urism investment in vic<strong>to</strong>ria<br />
<strong>to</strong>urismvic<strong>to</strong>ria.com.au<br />
September 2008
Notice & Disclaimer<br />
Use of these <strong><strong>Guide</strong>lines</strong><br />
These <strong><strong>Guide</strong>lines</strong> are intended <strong>to</strong> provide general guidance only and are not intended <strong>to</strong> provide financial advice<br />
or <strong>to</strong> be used as the basis for investment decisions. Specialist advice should be obtained regarding each project specific investment.<br />
While endeavours have been made <strong>to</strong> provide reliable and accurate information in the <strong><strong>Guide</strong>lines</strong> based on data currently available,<br />
<strong>Tourism</strong> Vic<strong>to</strong>ria does not warrant the accuracy, currency nor completeness of the <strong><strong>Guide</strong>lines</strong> or any information contained in the <strong><strong>Guide</strong>lines</strong>.<br />
These <strong><strong>Guide</strong>lines</strong> have been prepared solely for the purpose noted above and must not <strong>to</strong> be utilised or relied upon for any other purpose.<br />
Anyone using the <strong><strong>Guide</strong>lines</strong> does so at their own risk and no responsibility is accepted by <strong>Tourism</strong> Vic<strong>to</strong>ria for any losses which might directly<br />
or indirectly result from any reliance on or use of the <strong><strong>Guide</strong>lines</strong>.
message from the minister<br />
“<br />
The Vic<strong>to</strong>rian Government is committed<br />
<strong>to</strong> working with local government,<br />
community groups and inves<strong>to</strong>rs who<br />
wish <strong>to</strong> explore the exciting opportunities<br />
available in Vic<strong>to</strong>ria.<br />
”<br />
<strong>Tourism</strong> is one of the fastest growing industries in Vic<strong>to</strong>ria,<br />
contributing $10.9 billion <strong>to</strong> our economy and employing 159,000 people.<br />
Under the 10 Year <strong>Tourism</strong> and Events Industry Strategy, the Vic<strong>to</strong>rian Government aims<br />
<strong>to</strong> grow <strong>to</strong>urism <strong>to</strong> an $18 billion industry, employing 225,000 people by 2016. To achieve<br />
this aim, we need <strong>to</strong> enhance our existing <strong>to</strong>urism infrastructure, attractions and events as<br />
well as facilitate the delivery of new projects that capitalise on the State’s <strong>to</strong>urism strengths.<br />
In an environment of strong international competition for the <strong>to</strong>urist dollar, partnerships<br />
between Government and industry, along with significant private sec<strong>to</strong>r investment,<br />
will be crucial for the ongoing success of <strong>to</strong>urism in this State.<br />
The new <strong>Tourism</strong> <strong>Investment</strong> <strong><strong>Guide</strong>lines</strong>: <strong>Your</strong> <strong>Guide</strong> <strong>to</strong> <strong>Tourism</strong> <strong>Investment</strong> in Vic<strong>to</strong>ria<br />
contains planning and development guidelines for <strong>to</strong>urism projects and is intended <strong>to</strong> assist in<br />
advancing projects from concept through <strong>to</strong> business planning and statu<strong>to</strong>ry planning stages.<br />
The Vic<strong>to</strong>rian Government is committed <strong>to</strong> working with local government, community<br />
groups and inves<strong>to</strong>rs who wish <strong>to</strong> explore the exciting opportunities available in Vic<strong>to</strong>ria.<br />
I strongly encourage you <strong>to</strong> take advantage of this booklet<br />
as you develop and enhance your <strong>to</strong>urism product.<br />
TIM HOLDING MP<br />
Minister for <strong>Tourism</strong> and Major Events<br />
<strong>to</strong>urism investment guidelines 1
2 <strong>to</strong>urism investment guidelines<br />
Buckland Studio Retreat, Buckland Valley.
contents<br />
Clyde Park Vineyard, Bannockburn. Pho<strong>to</strong>grapher: Mark Chew.<br />
Message from the Minister 1<br />
Introduction 4<br />
Project Process Summary 6<br />
Context For <strong>Tourism</strong> <strong>Investment</strong> 8<br />
Market Identification 15<br />
Concept Development 22<br />
Project Approvals 32<br />
Financing & Funding 48<br />
Construction 56<br />
Key Success Fac<strong>to</strong>rs 58<br />
Appendices 59<br />
A. Summary – 10 Year <strong>Tourism</strong> & Events Industry Strategy 59<br />
B. Sustainable Design 60<br />
C. Key Organisations 61<br />
Cover image:<br />
Brambuk, Grampians.<br />
Pho<strong>to</strong>grapher: Bindi Cole – Snap Happy.<br />
<strong>to</strong>urism investment guidelines 3
INTRODUCTION<br />
<strong>Tourism</strong> is a global growth industry.<br />
In Vic<strong>to</strong>ria, <strong>to</strong>urism activity has grown<br />
dramatically over the last two decades.<br />
Vic<strong>to</strong>ria’s principal <strong>to</strong>urism products –<br />
quality food and wine, events, natural<br />
attractions, cultural and heritage attractions,<br />
and retail diversity – have established a<br />
market identity and presence in Australia.<br />
Vic<strong>to</strong>ria has a number of critical competitive<br />
advantages in relation <strong>to</strong> <strong>to</strong>urism options<br />
and development – distinctive and consistent<br />
marketing, a wide range of lifestyle experiences,<br />
compactness and excellent accessibility<br />
(internationally and throughout the State)<br />
<strong>to</strong> diverse destinations and venues that host<br />
major events for sport, culture and business.<br />
<strong>Tourism</strong> is dynamic and competitive. Fac<strong>to</strong>rs<br />
affecting its performance and operation<br />
include technological change, market<br />
influences, societal influences (environment,<br />
security, transportation, communications),<br />
and consumer preferences and aspirations.<br />
Understanding how such fac<strong>to</strong>rs influence<br />
<strong>to</strong>urism choices made by consumers is<br />
essential for a successful and sustainable<br />
<strong>to</strong>urism industry. The full spectrum of<br />
fac<strong>to</strong>rs that influence consumer choice<br />
– from global <strong>to</strong> local – also need <strong>to</strong> be<br />
considered <strong>to</strong>gether with how those fac<strong>to</strong>rs<br />
affect different markets.<br />
Development and <strong>Investment</strong> in<br />
Vic<strong>to</strong>ria’s <strong>Tourism</strong> Industry<br />
Vic<strong>to</strong>ria has a comprehensive approach<br />
<strong>to</strong> <strong>to</strong>urism development and investment.<br />
The Vic<strong>to</strong>rian Government’s 10 Year <strong>Tourism</strong><br />
and Events Industry Strategy (Oc<strong>to</strong>ber 2006)<br />
establishes a strategic platform for <strong>to</strong>urism<br />
growth over the next decade.<br />
Vic<strong>to</strong>ria’s key <strong>to</strong>urism industry objectives are:<br />
• Build upon existing strengths.<br />
• Develop new strengths.<br />
• Focus on long-term growth<br />
opportunities.<br />
• Strengthen the partnership between<br />
Government and industry.<br />
Assisting <strong>Tourism</strong> <strong>Investment</strong><br />
This document aims <strong>to</strong> assist individuals<br />
and organisations <strong>to</strong> become part of<br />
the Vic<strong>to</strong>rian <strong>to</strong>urism industry and assist<br />
its growth through investment and<br />
development of a <strong>to</strong>urism project.<br />
It is a resource and procedure guide that aims<br />
<strong>to</strong> assist proponents with small <strong>to</strong> medium<br />
scale investment projects <strong>to</strong> conceptualise,<br />
plan and develop their projects.<br />
The guidelines will:<br />
• Provide key data on the recent<br />
performance of Vic<strong>to</strong>ria’s <strong>to</strong>urism<br />
industry and information on statistical<br />
resources available <strong>to</strong> help assess<br />
market opportunities.<br />
• Outline the vital considerations in<br />
identifying the market demand for an<br />
investment idea, selection of a location<br />
and a site and creation of a<br />
development concept.<br />
• Identify the processes and pitfalls of<br />
obtaining development approval for<br />
the concept.<br />
• Highlight local government’s central<br />
role in informing and assisting <strong>to</strong>urism<br />
inves<strong>to</strong>rs. It is also the primary approval<br />
body for development and its role in these<br />
processes are described in this document.<br />
• Provide advice on the special requirements<br />
that come in<strong>to</strong> play if you are interested in<br />
investing in a project on public land.<br />
• Describe the principal elements for<br />
business planning and obtaining funds<br />
<strong>to</strong> turn the concept in<strong>to</strong> reality.<br />
• Finally, the realisation of your investment<br />
is likely <strong>to</strong> require skill in the management<br />
of the construction phase <strong>to</strong> ensure<br />
quality and cost control.<br />
<strong>Tourism</strong> Vic<strong>to</strong>ria’s Role<br />
<strong>Tourism</strong> Vic<strong>to</strong>ria assists in the improvement<br />
of Vic<strong>to</strong>ria’s <strong>to</strong>urism assets by identifying<br />
economically and socially sustainable<br />
infrastructure opportunities, which will<br />
maintain the State’s competitive edge.<br />
<strong>Tourism</strong> Vic<strong>to</strong>ria’s strategic objectives include<br />
the expansion of private sec<strong>to</strong>r investment<br />
in <strong>to</strong>urism projects and the coordination<br />
of public infrastructure investment <strong>to</strong> gain<br />
optimum benefits for the <strong>to</strong>urism industry.<br />
This is achieved by providing data, new<br />
concept and investment ideas, information<br />
and facilitation of project approvals <strong>to</strong> both<br />
the public and private sec<strong>to</strong>rs.<br />
This guideline provides a broad overview<br />
of the <strong>to</strong>urism investment process in<br />
Vic<strong>to</strong>ria. Opportunities and information<br />
about specialised <strong>to</strong>urism areas such as wine<br />
<strong>to</strong>urism, golf <strong>to</strong>urism, nature-based <strong>to</strong>urism,<br />
spa and wellness <strong>to</strong>urism, alpine <strong>to</strong>urism,<br />
Aboriginal <strong>to</strong>urism and other sec<strong>to</strong>rs are<br />
also available at <strong>Tourism</strong> Vic<strong>to</strong>ria’s website<br />
www.<strong>to</strong>urismvic<strong>to</strong>ria.com.au. Similarly,<br />
also available on this website are Regional<br />
<strong>Tourism</strong> Action Plans and Concept Proposals<br />
for <strong>Tourism</strong> Development in Vic<strong>to</strong>ria 2005,<br />
which identify opportunities and directions<br />
for future <strong>to</strong>urism investment throughout<br />
the State.<br />
Twelve Apostles, Great Ocean Walk. Pho<strong>to</strong>grapher: Mark Watson.<br />
4 <strong>to</strong>urism investment guidelines
<strong>to</strong>urism investment guidelines 5
project process summary<br />
The following is a quick reference for developing new <strong>to</strong>urism projects<br />
from concept <strong>to</strong> reality.<br />
PROJECT STAGE required actions (The <strong>to</strong>-do list) what needs <strong>to</strong> be done<br />
Coming up with a<br />
<strong>Tourism</strong> Concept<br />
✓✓ Can a gap in <strong>to</strong>urism products be identified? If so, why?<br />
✓✓ Does the concept have a ‘point of difference’?<br />
✓✓ Identify the region/locality of the new <strong>to</strong>urism product.<br />
✓✓ Identify the project team and specialist advisors.<br />
• Preliminary assessment of products<br />
in selected locality.<br />
• Preliminary assessment of competition,<br />
quality and market strength.<br />
• Appoint architect, planner, and financial<br />
adviser as required.<br />
Market Assessment<br />
✓✓ Collect and analyse data on the performance of the proposed<br />
type of <strong>to</strong>urism product in the selected region/locality.<br />
✓✓ Identify the market segments likely <strong>to</strong> utilise the new product/<br />
service.<br />
✓✓ Are there opportunities in the region/locality <strong>to</strong> build on the<br />
<strong>to</strong>urism strengths of the area or <strong>to</strong> form strategic alliances<br />
with others?<br />
✓✓ Assess consumer expenditure levels and preparedness <strong>to</strong> pay.<br />
✓✓ Assess price competitiveness and marketing expenditure<br />
necessary <strong>to</strong> reach the market in both the start-up phase and<br />
once you are operational.<br />
✓✓ Determine the risks <strong>to</strong> the projected market performance of<br />
the project.<br />
• Market research, local and regional data<br />
collection.<br />
• Research activities <strong>to</strong> include: discussions<br />
with <strong>Tourism</strong> Vic<strong>to</strong>ria, local government, local<br />
and regional <strong>to</strong>urism bodies, and evaluation<br />
of national demographic and <strong>to</strong>urism data.<br />
Site Selection<br />
✓✓ Ensure that the site is accessible and appropriately exposed<br />
<strong>to</strong> the target market. Ensure that the site is suitable <strong>to</strong><br />
accommodate the intended use and all ancillary services<br />
and facilities.<br />
✓✓ Consider the statu<strong>to</strong>ry approval requirements – is the use and<br />
development permitted on the site?<br />
• Appoint planning advisor.<br />
• Speak with local real estate agents.<br />
• Discussions with local government<br />
planning department.<br />
• Discussions with servicing authorities.<br />
Concept Design<br />
✓✓ Assess the site attributes and limitations –<br />
enhance the attributes and minimise the limitations.<br />
✓✓ Prepare a functional layout that identifies the location, area<br />
and relationship of activities <strong>to</strong> be carried out on the site.<br />
✓✓ Prepare a preliminary architectural concept design for the<br />
project and proposals for services and facilities.<br />
✓✓ Ensure that the project concept includes sustainable design<br />
approaches and proposals <strong>to</strong> minimise adverse on-site and<br />
off-site impacts.<br />
✓✓ Assess the project cost and initial feasibility and ensure<br />
it is within the project budget.<br />
• Appoint architect. Consider various<br />
concept options.<br />
• Obtain reliable cost estimate of proposed<br />
development (appoint quantity surveyor <strong>to</strong><br />
obtain estimate).<br />
• Have preliminary discussions<br />
with potential financiers.<br />
Continued on next page<br />
6 <strong>to</strong>urism investment guidelines
project process summary<br />
PROJECT STAGE required actions (The <strong>to</strong>-do list) what needs <strong>to</strong> be done<br />
Consultation<br />
✓✓ Meet with the local government – planning department,<br />
economic development department, <strong>to</strong>urism services,<br />
infrastructure services and local councillor(s) <strong>to</strong> identify<br />
requirements and procedures.<br />
✓✓ Meet with neighbouring property owners and if required,<br />
more broadly with community and specific interest groups<br />
<strong>to</strong> minimise potential objections <strong>to</strong> the project.<br />
✓✓ Meet with service authorities and related government<br />
agencies <strong>to</strong> determine their requirements, including any special<br />
requirements that apply <strong>to</strong> public land and alpine resorts.<br />
Discuss concepts with:<br />
• Local government.<br />
• Adjoining landowners and the local<br />
community as required.<br />
• Service authorities.<br />
• Government departments including DSE<br />
or Alpine Resort Management Board for<br />
public land.<br />
Development Approval<br />
✓✓ Identify the scope of requirements under the planning<br />
scheme and other statu<strong>to</strong>ry provisions for planning permit<br />
approval, including a pre-application discussion with the<br />
local government.<br />
✓✓ Compile a planning application submission that responds <strong>to</strong><br />
the requirements of the planning scheme.<br />
✓✓ Consider an application for review <strong>to</strong> VCAT if the planning<br />
permit application outcome is unfavourable.<br />
• Planning advisor <strong>to</strong> arrange pre-application<br />
discussion with local government.<br />
• Meet with local government councillors if<br />
significant local community issues are likely.<br />
• Obtain advice from planning advisor<br />
and lawyer regarding VCAT application<br />
for review.<br />
Financial Feasibility<br />
& the Business Plan<br />
✓✓ Prepare a detailed Business Plan that includes business<br />
structure, management, marketing and operation.<br />
✓✓ Include a detailed financial feasibility analysis that contains<br />
a projection of longer term (say 10 year) cash-flow and<br />
profitability and considers changes <strong>to</strong> the project parameters<br />
with best and worse case scenarios.<br />
✓✓ Identify the potential staging of the development.<br />
• Obtain advice from financial advisor<br />
on Business Plan.<br />
• Discussions with accountant.<br />
• Discussions with legal advisor.<br />
Obtaining Funding<br />
✓✓ Prepare a detailed financial submission for the consideration<br />
of financial institutions and financiers.<br />
✓✓ Consider funding support that is available through State<br />
and Federal agencies.<br />
✓✓ Consider equity partners or project sponsors<br />
(not for profit proposals).<br />
• Identify potential financiers and identify<br />
preferred funding arrangements.<br />
• Meet with Regional Development Vic<strong>to</strong>ria<br />
and other State funding assistance agencies.<br />
• Contact Federal funding bodies.<br />
Project Construction<br />
✓✓ Appoint a construction phase project manager.<br />
✓✓ Detail the project design and confirm the project cost.<br />
✓✓ Ensure competitive prices are obtained from builders for the<br />
construction of the project.<br />
✓✓ Maintain tight management of the construction program,<br />
development quality and variations <strong>to</strong> costs.<br />
• Appoint construction project manager.<br />
• Obtain building construction quotes.<br />
• Refine design and specifications with<br />
architect <strong>to</strong> fit budget and quality<br />
outcome required.<br />
<strong>to</strong>urism investment guidelines 7
context for <strong>to</strong>urism investment<br />
Vic<strong>to</strong>ria’s <strong>to</strong>urism industry competes on<br />
a national and international stage. Our<br />
attractions, experiences, facilities and services<br />
are assessed by Vic<strong>to</strong>rians and visi<strong>to</strong>rs alike,<br />
against those available interstate and around<br />
the world. Internet access and cheap air<br />
travel have broadened the options for<br />
travellers and holiday-makers. The <strong>to</strong>urism<br />
market is experienced and discerning.<br />
Travel by Vic<strong>to</strong>rians within Vic<strong>to</strong>ria,<br />
constitutes the largest proportion of <strong>to</strong>tal<br />
<strong>to</strong>urism visitation in the State. Travel by<br />
interstate and international visi<strong>to</strong>rs within<br />
the State provides the greatest economic<br />
benefit <strong>to</strong> Vic<strong>to</strong>ria from <strong>to</strong>urism. <strong>Tourism</strong><br />
investment decisions must recognise the<br />
highly competitive nature of the industry<br />
and the need <strong>to</strong> provide services that meet<br />
the needs of all travellers – 5 star <strong>to</strong> no<br />
star, indulgence <strong>to</strong> no frills, for fun and for<br />
business. Our product offer will be judged<br />
against a much more diverse range of<br />
options than in the past.<br />
Performance & Importance<br />
<strong>Tourism</strong> is a key economic activity for Vic<strong>to</strong>ria.<br />
“In 2003/04 <strong>to</strong>urism and events contributed<br />
$10.9 billion or 5.3% of Gross State Product<br />
and employed 159,000 people or 6.6% of<br />
the State’s workforce. In the same year, more<br />
than 1.3 million international visi<strong>to</strong>rs spent<br />
more than $2.6 billion in Vic<strong>to</strong>ria. ” 1<br />
In regional Vic<strong>to</strong>ria, <strong>to</strong>urism contributed<br />
$3.4 billion <strong>to</strong> the regional economy in<br />
2003/04 and employed 61,000 people.<br />
This was 31% of the State’s <strong>to</strong>tal <strong>to</strong>urism<br />
output and 39% of the State’s <strong>to</strong>tal <strong>to</strong>urism<br />
employment. 2<br />
The State Government has invested heavily<br />
in the <strong>to</strong>urism industry and since 1999<br />
nearly $350 million has been invested<br />
in marketing and product development<br />
strategies. This investment has been targeted<br />
<strong>to</strong>wards achieving increased visi<strong>to</strong>r yield<br />
and also improving visitation <strong>to</strong> the State.<br />
Increasing visi<strong>to</strong>r yield requires <strong>to</strong>urism<br />
opera<strong>to</strong>rs <strong>to</strong> match consumer preferences<br />
and expectations. Today’s <strong>to</strong>urists<br />
increasingly seek better standards of<br />
service and new experiences.<br />
Figure 1: expenditure in vic<strong>to</strong>ria<br />
by purpose ($M) 3<br />
(includes domestic & international expenditure)<br />
*<br />
*<br />
*<br />
*<br />
*<br />
Holiday 6,012<br />
Visiting friends and relatives 2,505<br />
Business 1,488<br />
International education 1,045<br />
Other 600<br />
Mantra Deep Blue, Warrnambool.<br />
1 p. 6, 10 Year <strong>Tourism</strong> and Events Industry Strategy, Dept of Innovation,<br />
Industry and Regional Development, Oc<strong>to</strong>ber 2006<br />
2 p. 34, ibid<br />
3 International and National Visi<strong>to</strong>r Surveys, <strong>Tourism</strong> Research<br />
Australia, year ending December 2006<br />
8 <strong>to</strong>urism investment guidelines
context for <strong>to</strong>urism investment<br />
Tarrawarra Estate, Yarra Valley. Pho<strong>to</strong>grapher: Peter Dunphy.<br />
The 10 Year <strong>Tourism</strong> and Events Industry<br />
Strategy forecasts that overseas <strong>to</strong>urists<br />
are likely <strong>to</strong> account for 70% of overall<br />
<strong>to</strong>urism growth and almost 40% of <strong>to</strong>urism<br />
expenditure (currently 30%) by 2016 4 . It is<br />
expected that the economic importance of<br />
overseas students <strong>to</strong> <strong>to</strong>urism yield will be<br />
maintained over the next decade.<br />
“Asia is expected <strong>to</strong> be the primary sources<br />
of international growth, with China’s share of<br />
international visi<strong>to</strong>rs likely <strong>to</strong> increase from<br />
9% <strong>to</strong> 19% in that period” 5 .<br />
The <strong>Tourism</strong> Strategy estimates, based on<br />
the continuation of recent growth, by 2016<br />
<strong>to</strong>urism and events will be an $18 billion<br />
industry and one of the State’s leading<br />
exporters, contributing 7–8% of Gross<br />
State Product and employing 225,000<br />
Vic<strong>to</strong>rians 6 .<br />
“The predominant sources of <strong>to</strong>urism<br />
expenditure are international and interstate<br />
visi<strong>to</strong>rs, who account for only one third<br />
of Visi<strong>to</strong>r numbers but two thirds of<br />
expenditure. Increasing lengths of stay<br />
(international) and higher spends per night<br />
(interstate) have driven Vic<strong>to</strong>ria’s recent<br />
growth in visi<strong>to</strong>r expenditure.” 7<br />
Vic<strong>to</strong>ria has particular competitive<br />
advantages in relation <strong>to</strong> it’s:<br />
• Highly creative, consistent and<br />
well-targeted advertising campaigns.<br />
• Distinctive range of lifestyle experiences,<br />
particularly in relation <strong>to</strong> its art, cultural<br />
and heritage precincts, shopping, nightlife,<br />
car <strong>to</strong>uring and boutique food and wine.<br />
• Compactness and agreeable seasonal<br />
variations provide year round diversity<br />
and enhance the opportunities in<br />
Melbourne and regional Vic<strong>to</strong>ria.<br />
• Internationally recognised cultural,<br />
sporting and business events.<br />
• Ability <strong>to</strong> attract increasing numbers<br />
of international airlines flying directly<br />
in<strong>to</strong> Melbourne and increased<br />
passenger capacity.<br />
• Tertiary education institutions, which<br />
attract large numbers of international<br />
students (who represent approximately<br />
40% of present international yield).<br />
4 p. 14, 10 Year <strong>Tourism</strong> and Events Industry Strategy, Dept of Innovation,<br />
Industry and Regional Development, Oc<strong>to</strong>ber 2006<br />
5 p. 15, ibid<br />
6 p. 7, ibid<br />
7 p. 11, ibid<br />
<strong>to</strong>urism investment guidelines 9
context for <strong>to</strong>urism investment<br />
Silverwater Resort, San Remo.<br />
Current Issues<br />
At the national and international level there<br />
are several key influences on Vic<strong>to</strong>ria’s<br />
<strong>to</strong>urism future. They include:<br />
• Emergence of new markets – growing<br />
middle class in China, India and other<br />
parts of Asia (China and India provided<br />
70,000 visi<strong>to</strong>rs <strong>to</strong> Australia in 1996, which<br />
has grown by 500% <strong>to</strong>day). To maximise<br />
benefits from these emerging markets,<br />
potential local experiences, infrastructure<br />
and services must meet the cultural<br />
requirements of these visi<strong>to</strong>rs.<br />
• On-line <strong>to</strong>urism services available<br />
through the internet (the information<br />
source of choice for many travellers).<br />
Local <strong>to</strong>urism businesses need <strong>to</strong> provide<br />
comprehensive product information <strong>to</strong><br />
enable bookings <strong>to</strong> be made on-line.<br />
• Tourist demands and expectations are<br />
becoming increasingly sophisticated.<br />
Excellence in service standards is vital.<br />
There is a growing need for well trained<br />
and skilled <strong>to</strong>urism professionals <strong>to</strong> meet<br />
future expectations.<br />
• Convenient access <strong>to</strong> information and its<br />
widespread availability can also impact on<br />
attitudes and preferences when major<br />
natural, political or economic shocks occur.<br />
• Low cost air carriers provide a significant<br />
incentive for consumers <strong>to</strong> take interstate<br />
or international holidays.<br />
• The growing markets around the world<br />
for specialised <strong>to</strong>urism niches, including<br />
nature based and health and well being<br />
activities and experiences.<br />
• Global competition in <strong>to</strong>urism marketing<br />
is increasing and effective coordinated<br />
campaigns are required <strong>to</strong> maintain<br />
and grow market share. Marketing <strong>to</strong><br />
interstate and intrastate visi<strong>to</strong>rs must<br />
not be neglected if market share is <strong>to</strong><br />
be maintained.<br />
To ensure a competitive and responsive<br />
<strong>to</strong>urism industry in Vic<strong>to</strong>ria, the Government<br />
is committed <strong>to</strong>:<br />
• Giving higher priority <strong>to</strong> the <strong>to</strong>urism and<br />
events industry in infrastructure planning<br />
and investment attraction.<br />
• Creating a larger and more highly trained<br />
<strong>to</strong>urism workforce.<br />
• Strengthening the on-line presence of<br />
Vic<strong>to</strong>ria’s <strong>to</strong>urism products and services.<br />
• Integrating government decision-making<br />
on economic, social and environmental<br />
issues in relation <strong>to</strong> <strong>to</strong>urism activities.<br />
• Enhancing the reputation and<br />
performance of Vic<strong>to</strong>ria for<br />
environmentally sustainable <strong>to</strong>urism.<br />
These directions and an action program are<br />
detailed in the Government’s 10 Year <strong>Tourism</strong><br />
& Events Industry Strategy that was released<br />
in Oc<strong>to</strong>ber 2006. The principal features of<br />
this strategy are:<br />
• Building upon existing <strong>to</strong>urism strengths<br />
by improving the branding and marketing<br />
of Vic<strong>to</strong>ria; continuing <strong>to</strong> pursue major<br />
events and increasing aviation access.<br />
• Developing new <strong>to</strong>urism strengths<br />
by ensuring that public infrastructure<br />
development takes in<strong>to</strong> account <strong>to</strong>urism<br />
requirements; continuing <strong>to</strong> attract and<br />
facilitate investment; enhancing service<br />
skills and standards; and promoting<br />
greater use of on-line services.<br />
• Having a focus on long-term <strong>to</strong>urism<br />
growth opportunities and in particular<br />
targeting emerging international markets;<br />
expanding the acquisition of business<br />
events; developing regional destinations;<br />
and building the synergies between<br />
<strong>to</strong>urism and international education.<br />
• Strengthening the partnership between<br />
Government and industry through<br />
better coordinated decision-making;<br />
policy coordination and advocacy; and<br />
continuing communication of the benefits<br />
derived from the <strong>to</strong>urism industry.<br />
Further information on the key activities in relation <strong>to</strong> this<br />
Strategy is provided in Appendix A.<br />
10 <strong>to</strong>urism investment guidelines
context for <strong>to</strong>urism investment<br />
Peppers Springs Retreat, Daylesford.<br />
Overview of the<br />
<strong>Tourism</strong> <strong>Investment</strong> Process<br />
Successful development of a <strong>to</strong>urism project<br />
requires a coordinated and sustained process.<br />
A good idea, a desire <strong>to</strong> mix business and<br />
lifestyle in an attractive location or a stunning<br />
parcel of land may seem a reasonable basis <strong>to</strong><br />
launch a <strong>to</strong>urism venture. As illustrated (fig. 2),<br />
realisation of a <strong>to</strong>urism development requires<br />
the successful conduct and negotiation of<br />
several processes <strong>to</strong> that end.<br />
The following sections of the <strong><strong>Guide</strong>lines</strong><br />
provide details of:<br />
▶▶ How <strong>to</strong> take an idea <strong>to</strong> a realistic<br />
development concept.<br />
▶▶ The essential need <strong>to</strong> identify a market<br />
for the <strong>to</strong>urism product.<br />
▶▶ Selection of a suitable site, fitted <strong>to</strong> the<br />
market and <strong>to</strong> be targeted and suited <strong>to</strong><br />
the concept.<br />
▶▶ Fitting the concept <strong>to</strong> the site attributes.<br />
▶▶ Discussions/consultation that is required<br />
<strong>to</strong> inform the project in relation <strong>to</strong> legal<br />
requirements and avoid delays through<br />
community opposition.<br />
▶▶ The fundamental requirements <strong>to</strong><br />
demonstrate that the project is financially<br />
feasible and a sound investment.<br />
▶▶ The procedures <strong>to</strong> obtain development<br />
approval for the project.<br />
▶▶ Considerations in relation <strong>to</strong> obtaining<br />
finance and funding the development.<br />
▶▶ The detailed design, tendering and<br />
construction of the development.<br />
Various advisors are essential <strong>to</strong> this process.<br />
They may include a project manager, <strong>to</strong>wn<br />
planner, architect, civil and other engineers,<br />
landscape designer, marketing consultants,<br />
financial and legal advisors or other specialists.<br />
Each advisor will play a key role at particular<br />
stages of the project. Selection of experienced<br />
and suitable advisors should be undertaken<br />
with research and careful consideration. It<br />
is highly desirable <strong>to</strong> define their scope of<br />
work with a written brief. Most professional<br />
associations can provide information on<br />
potential advisors in these fields.<br />
Figure 2: <strong>to</strong>urism investment process<br />
PROGRESS<br />
Idea<br />
Concept<br />
Consultation<br />
Feasibility<br />
Approvals<br />
Financial<br />
Arrangement<br />
Construction<br />
TIME<br />
<strong>to</strong>urism investment guidelines 11
context for <strong>to</strong>urism investment<br />
<strong>Investment</strong> Opportunities<br />
Strategic studies by <strong>Tourism</strong> Vic<strong>to</strong>ria, regional<br />
<strong>to</strong>urism organisations and a number of<br />
local governments throughout Vic<strong>to</strong>ria have<br />
identified many investment opportunities in<br />
the State. They include:<br />
• Visi<strong>to</strong>r accommodation in Melbourne<br />
and throughout regional Vic<strong>to</strong>ria.<br />
Particular market niches have strong<br />
prospects including high yield high<br />
end accommodation, backpacker<br />
accommodation, bed and breakfast, alpine<br />
accommodation and cabins.<br />
• The provision of nature based<br />
experiences and accommodation,<br />
particularly supporting experiences in<br />
the Otway Ranges, Great Ocean Road<br />
Region, Grampians and East Gippsland.<br />
Similar facilities can be linked <strong>to</strong> trail<br />
networks or special recreation sec<strong>to</strong>rs<br />
such as bike <strong>to</strong>uring, mountain biking,<br />
fishing and hiking.<br />
• Food and wine products such as vineyard<br />
accommodation, cellar doors and facilities<br />
that showcase regional food.<br />
• Facilities that utilise Vic<strong>to</strong>ria’s extensive<br />
geothermal and mineral spring resources<br />
such as day spas and health resorts.<br />
• Aboriginal cultural heritage interpretation<br />
and experiences.<br />
• Golf based <strong>to</strong>urism and recreation<br />
establishments.<br />
• Water based attractions.<br />
<strong>Tourism</strong> Vic<strong>to</strong>ria’s web site provides details<br />
of plans and related research that describe<br />
current investment opportunities that<br />
support the strategic directions for Vic<strong>to</strong>ria.<br />
TABLE 1: plans and strategies<br />
that identify <strong>to</strong>urism investment<br />
opportunities in vic<strong>to</strong>ria<br />
• Vic<strong>to</strong>ria’s Regional <strong>Tourism</strong> Action Plan<br />
2008–2011 and earlier Regional <strong>Tourism</strong><br />
Development Plans 2004–2007 for all<br />
Regions<br />
• Concept Proposals for <strong>Tourism</strong><br />
Development in Vic<strong>to</strong>ria 2005<br />
• <strong>Investment</strong> <strong><strong>Guide</strong>lines</strong> for Wine <strong>Tourism</strong><br />
• Vic<strong>to</strong>ria’s Spa & Wellness <strong>Tourism</strong><br />
Action Plan 2005–2010<br />
• Vic<strong>to</strong>ria’s Geothermal & Natural<br />
Mineral Water <strong>Tourism</strong> <strong>Investment</strong><br />
Opportunities 2007<br />
• Vic<strong>to</strong>ria’s Nature Based <strong>Tourism</strong><br />
Strategy 2008–2012<br />
• Vic<strong>to</strong>ria’s Aboriginal <strong>Tourism</strong><br />
Development Plan 2006–2009<br />
• Alpine Resorts 2020 Strategy<br />
The Buckland Studio Retreat café, Buckland Valley.<br />
12 <strong>to</strong>urism investment guidelines
<strong>to</strong>urism investment guidelines 13
14 <strong>to</strong>urism investment guidelines
market identification<br />
Mt Zero Olives. Pho<strong>to</strong>grapher: Helen Hiscocks.<br />
If we build it, will they come? The likelihood<br />
of a positive response and subsequent<br />
action <strong>to</strong> invest must be based on a sound<br />
understanding of the magnitude, nature and<br />
characteristics of the market. A creative<br />
<strong>to</strong>urism concept must have access <strong>to</strong> its<br />
intended market and be executed in a<br />
manner that meets that market’s expectations.<br />
A thorough analysis of the market opportunity<br />
is the essential starting point <strong>to</strong> develop and<br />
test an investment concept.<br />
Opportunity Identification<br />
The identification of a likely market, the<br />
prospects for market growth and their<br />
critical price point (willingness <strong>to</strong> pay)<br />
underpins the creation of a concept<br />
for the project.<br />
“<br />
Is there likely <strong>to</strong> be<br />
demand for this <strong>to</strong>urism<br />
idea? What is the number<br />
and characteristics of<br />
Visi<strong>to</strong>rs who might want <strong>to</strong><br />
come <strong>to</strong> or use this facility?<br />
”<br />
Broad analysis should be carried out <strong>to</strong><br />
initially scope an opportunity. This can occur<br />
through informal discussion and observation,<br />
coupled with basic research – web based<br />
<strong>to</strong>urism data, real estate data, opera<strong>to</strong>rs in<br />
complementary fields, visi<strong>to</strong>r information<br />
centre resources and similar areas.<br />
Opportunities may be defined through<br />
research in<strong>to</strong> comparable geographic areas,<br />
from social and demographic trends or<br />
through data on economic or environmental<br />
change. Consider whether existing <strong>to</strong>urism<br />
facilities in the locality are performing <strong>to</strong> an<br />
optimum level – if not, what fac<strong>to</strong>rs might be<br />
contributing <strong>to</strong> that performance.<br />
Table 2: MARKET ESSENTIALS SNAPSHOT<br />
Identify potential market opportunities<br />
within the region:<br />
• Are there gaps in the current provision<br />
of services or facilities? If so, why?<br />
• Are there consumer trends that<br />
have not been recognised through<br />
development in the region?<br />
• Are there strategic alliances that<br />
haven’t been developed or are<br />
underdeveloped?<br />
• What is the delivery of complementary<br />
market products in the region?<br />
• What are the asset strengths of the region?<br />
• Identify what is driving <strong>to</strong>urism activity<br />
and demand in the region.<br />
• Are there particular market segments<br />
for which the locality has appeal?<br />
• Are there special interest groups that<br />
are not catered for?<br />
Market Intelligence & Data<br />
<strong>Your</strong> market assessment must be based on<br />
a well-founded analysis of the supply and<br />
demand for the product. It must assess<br />
questions like “What are the trends local,<br />
interstate and overseas?”, “What are the<br />
drivers for this product and what local<br />
characteristics does it hope <strong>to</strong> harness?”, and<br />
“Can the product be distinctively branded?”.<br />
For example, eco<strong>to</strong>urism is growing in<br />
popularity on a global basis. Australia<br />
has world-wide appeal for nature based<br />
experiences. Nature based <strong>to</strong>urism<br />
experiences appeal particularly <strong>to</strong><br />
international <strong>to</strong>urists and travellers with<br />
higher education levels. Higher levels of per<br />
capita average expenditure are generally<br />
recorded for eco<strong>to</strong>urism trips.<br />
Specific data on the eco<strong>to</strong>urism market<br />
can be obtained through the World <strong>Tourism</strong><br />
Organisation, The International Eco<strong>to</strong>urism<br />
Society, <strong>Tourism</strong> Research Australia and<br />
<strong>Tourism</strong> Vic<strong>to</strong>ria. Vic<strong>to</strong>ria’s Regional <strong>Tourism</strong><br />
Action Plan 2008–2012 identifies target<br />
markets and local development opportunities<br />
including nature based activities.<br />
Key data sources include the International<br />
Visi<strong>to</strong>r Survey, National Visi<strong>to</strong>rs Survey and<br />
Destination Visi<strong>to</strong>r Survey series produced<br />
by <strong>Tourism</strong> Research Australia. The majority<br />
of regional and State data is available for free<br />
on <strong>Tourism</strong> Vic<strong>to</strong>ria’s corporate website and<br />
includes regional and market profiles.<br />
Generally there is a time lag between the<br />
collection and publication of secondary data.<br />
It varies according <strong>to</strong> the nature of the data<br />
collected and it’s utility. There is a need <strong>to</strong><br />
refine his<strong>to</strong>ric analysis with more current<br />
information and indica<strong>to</strong>rs for the future.<br />
Local government may be able <strong>to</strong><br />
provide data on existing approved <strong>to</strong>urist<br />
development, not yet commenced or<br />
proposals being considered. Similarly the<br />
identification of infrastructure projects<br />
committed or planned will assist with an<br />
appreciation of public sec<strong>to</strong>r priorities that<br />
may impact on potential <strong>to</strong>urist activity.<br />
Local government is also frequently<br />
the organiser or coordina<strong>to</strong>r of major<br />
festivals and events in the locality. Data on<br />
programmes, attendance, target markets<br />
and plans for future development of these<br />
events may be of particular value. Where<br />
traffic data is available this can provide an<br />
indication of local activity trends and should<br />
be considered in the context of activities in<br />
the locality/region that may be contributing<br />
<strong>to</strong> observed traffic volume changes. Traffic<br />
data also provides an indica<strong>to</strong>r of passing<br />
trade exposure and opportunities.<br />
<strong>to</strong>urism investment guidelines 15
market identification<br />
The examination of this information should<br />
aim <strong>to</strong> provide an indication of the nature of<br />
the project opportunity, its target markets,<br />
potential scale and principal components.<br />
table 3: KEY DATA SOURCES<br />
<strong>Tourism</strong> Research Australia<br />
www.tra.australia.com<br />
• International Visi<strong>to</strong>r Survey<br />
• National Visi<strong>to</strong>rs Survey<br />
• Destination Visi<strong>to</strong>r Surveys<br />
Australian Bureau of Statistics<br />
www.abs.gov.au<br />
• Overseas Arrivals and Departures<br />
• Survey of Tourist Accommodation<br />
• <strong>Tourism</strong> Satellite Account and others<br />
<strong>Tourism</strong> Vic<strong>to</strong>ria<br />
www.<strong>to</strong>urismvic<strong>to</strong>ria.com.au<br />
• Regional Market Visitation and Profiles<br />
• Market Segment data<br />
• Visi<strong>to</strong>r statistics for international, domestic<br />
and regional markets and others<br />
Royal Au<strong>to</strong>mobile Club of Vic<strong>to</strong>ria<br />
www.racv.com.au<br />
• Accommodation listing<br />
Market Feasibility<br />
A market feasibility study assesses the demand<br />
for a project. While the preliminary market<br />
data assessment may indicate an opportunity<br />
or gap in the market, a full market analysis is<br />
required <strong>to</strong> prepare a detailed project concept<br />
for financial evaluation.<br />
The market feasibility study will:<br />
• Confirm and quantify potential markets<br />
• Assess the characteristics and requirements<br />
of markets.<br />
• Provide an analysis of the anticipated long<br />
term performance of the project in the<br />
market place.<br />
• Identify any barriers <strong>to</strong> successful<br />
establishment and operation of the business<br />
(local image or reputation, labour and skills<br />
availability, goods supply limitations etc).<br />
The primary elements in this assessment are<br />
existing product demand and supply, current<br />
performance and level of utilization, direct<br />
competi<strong>to</strong>r performance, anticipated change<br />
in supply and demand, initial and longer-term<br />
performance of the proposed <strong>to</strong>urism product.<br />
Data on existing supply and demand will<br />
be of variable availability, quality and detail<br />
and will depend on the nature of the<br />
business proposed.<br />
For example, data is available on<br />
accommodation establishments on a<br />
monthly basis for establishments with<br />
5 or more rooms. It provides an overall<br />
indica<strong>to</strong>r of visi<strong>to</strong>r trends, seasonal variation<br />
and the performance of particular types<br />
of accommodation establishments. Local<br />
government may have more generalised<br />
visi<strong>to</strong>r activity data and also particular<br />
statistics associated with attractions, festivals<br />
or events in a locality. The challenge is <strong>to</strong><br />
identify data that informs an understanding<br />
of the size of a specific market segment, how<br />
it is provided for at present, its potential <strong>to</strong><br />
increase and the price that consumers will<br />
pay for the service or attraction. Secondary<br />
data may not provide sufficient insight <strong>to</strong><br />
the potential performance of a concept<br />
and it may need <strong>to</strong> be supplemented<br />
with primary research in<strong>to</strong> matters such<br />
as visi<strong>to</strong>r characteristics, travel patterns,<br />
expenditure, motivation for and purpose of<br />
travel, performance of identified competi<strong>to</strong>rs<br />
and the like. Market research or <strong>to</strong>urism<br />
specialists should be contacted in relation <strong>to</strong><br />
the conduct of surveys and analysis of data.<br />
The market feasibility will also examine the<br />
external fac<strong>to</strong>rs influencing current demand<br />
and likely <strong>to</strong> influence future demand<br />
including the focus of marketing at National,<br />
State, regional and local levels, infrastructure<br />
development that will for example, enhance<br />
the attractiveness of a locality, its accessibility<br />
or improve the cost of operations.<br />
Market Penetration<br />
The broad market statistics will lead <strong>to</strong> an<br />
assessment of market size. The critical issue<br />
is <strong>to</strong> estimate the likely penetration, ie. the<br />
proportion that can be attracted <strong>to</strong> the new<br />
product. A realistic determination should<br />
inform on the scale of the facility and its<br />
supporting elements.<br />
These estimates may be derived from<br />
examining comparable facilities (relating daily<br />
visitation/occupancy <strong>to</strong> scale), examining the<br />
size of market segments and estimating share<br />
on a daily basis, consideration of the features<br />
or characteristics of the new product that<br />
will increase or impact on market share and<br />
consideration of competition for market<br />
share in the locality and what might be a<br />
reasonable proportion of that market likely<br />
<strong>to</strong> be captured by a new facility.<br />
Lyall Hotel, South Yarra. Pho<strong>to</strong>grapher: Mark Chew.<br />
16 <strong>to</strong>urism investment guidelines
market identification<br />
Novotel Melbourne on Collins.<br />
Mantra on Russell.<br />
The assessment of market penetration<br />
should be critically reviewed <strong>to</strong> evaluate its<br />
reasonableness. It is not a question of taking an<br />
arbitrary percentage; rather it assumes a realistic<br />
look at what actions will be taken <strong>to</strong> give the<br />
product an identity and <strong>to</strong> capture market<br />
share. Is it consistent or in contrast with the<br />
expected product quality in the locality?<br />
Competition & Alliances<br />
Existing developments need <strong>to</strong> be assessed as<br />
<strong>to</strong> their performance as a competi<strong>to</strong>r and as<br />
a potential ally in capturing visi<strong>to</strong>r interest. The<br />
presence of existing opera<strong>to</strong>rs of a similar kind<br />
of business in a locality can create a critical mass<br />
and enhance the reputation and attraction of<br />
that area for that particular service, eg. bed and<br />
breakfast operations, fishing or boating <strong>to</strong>urs,<br />
farm stays, golf courses and day spas.<br />
Analysis of the nature and performance of<br />
competi<strong>to</strong>rs will provide an indication of the<br />
market segments visiting an area, volume<br />
of business and yield. It will also provide an<br />
indication of prevailing standards of quality and<br />
service and assist in the definition of a point of<br />
difference for a new venture.<br />
The existence of other businesses in<br />
complementary fields in a locality can<br />
strengthen the <strong>to</strong>tal offer of a new business<br />
through the establishment of alliances, linkages<br />
and joint marketing. Research with existing<br />
opera<strong>to</strong>rs will help <strong>to</strong> expand the possibilities<br />
for a new business.<br />
Positioning / Brand<br />
Establishing the image and position in the<br />
market of a new venture is a crucial step.<br />
Key motiva<strong>to</strong>rs of consumer choice are a<br />
product’s image associations and confidence<br />
in a brand. Being part of an established<br />
brand brings with it market recognition,<br />
reputation and expectations of certain<br />
standards. Establishing an entirely new<br />
brand requires creativity in order <strong>to</strong> make it<br />
memorable. It demands a careful analysis of<br />
what will appeal <strong>to</strong> your target market and<br />
what local strengths might be harnessed.<br />
Identification of the aspirations and values<br />
of the market segments <strong>to</strong> be targeted<br />
is critical <strong>to</strong> deciding on the quality and<br />
content of the venture. The development<br />
of establishments with well-known or<br />
internationally reputed brands provides<br />
status <strong>to</strong> a locality – a region, a <strong>to</strong>wn or a<br />
city precinct. New brands should take in<strong>to</strong><br />
account the profile and market segment<br />
appeal of existing operations. Is the<br />
prevailing market attracted <strong>to</strong> a locality likely<br />
<strong>to</strong> support the proposed product image or<br />
position or will development of new markets<br />
be required?<br />
Branded accommodation has many<br />
advantages over independently operated<br />
properties. Branding accommodation<br />
requires payment for a licence (for a specific<br />
period of time) <strong>to</strong> trade under a particular<br />
brand’s name and use the associated name<br />
or logo. Branding is a way of distinguishing<br />
products from competi<strong>to</strong>rs. The benefits of<br />
aligning with a particular brand include:<br />
• Centralised reservation system – easier<br />
for consumers <strong>to</strong> make a reservation.<br />
• Collaborative marketing – global<br />
marketing/promotional alliances <strong>to</strong><br />
broaden exposure in the market<br />
(through brand recognition).<br />
• Brand image and reputation –<br />
identification of product and expectation<br />
of standards.<br />
• Managerial expertise – assures<br />
hotel inves<strong>to</strong>r of the strength of the<br />
management of the hotel and provides<br />
consistent quality and service with<br />
administrative guidelines.<br />
• Access <strong>to</strong> higher level of demand and<br />
lower costs – able <strong>to</strong> generate demand<br />
through brand loyalty.<br />
• Financing opportunities.<br />
<strong>to</strong>urism investment guidelines 17
market identification<br />
Market Assessment Risks<br />
The market assessment includes an appraisal<br />
of his<strong>to</strong>ric and contemporary performance<br />
of a locality and information on indica<strong>to</strong>rs<br />
of future performance. Projections on<br />
future performance are predicated on a<br />
range of assumptions. The analysis of future<br />
performance should be supported by an<br />
assessment of the fac<strong>to</strong>rs that may impact<br />
on those projections.<br />
The assessment should include alternative<br />
growth scenarios and enable the financial<br />
assessment <strong>to</strong> take such alternatives<br />
in<strong>to</strong> account.<br />
The fac<strong>to</strong>rs that influence targeted markets<br />
and the likelihood of change in market<br />
opportunity need <strong>to</strong> be examined, eg.<br />
improved air access <strong>to</strong> competi<strong>to</strong>r destinations<br />
and allowances made in the assessment.<br />
The assessment must also consider the<br />
establishment and development phases<br />
as well as ‘normal’ operations. Internal<br />
and external fac<strong>to</strong>rs that will influence<br />
performance of the business over time<br />
need <strong>to</strong> be considered in the assessment.<br />
The likelihood of change occurring in such<br />
fac<strong>to</strong>rs represents the level of risk in relation<br />
<strong>to</strong> the assessment of demand.<br />
Project Market Parameters<br />
The analysis conducted should provide:<br />
• Identification of target market segments<br />
• Assessment of market penetration with<br />
estimates for the product of annual<br />
demand and identification of any seasonal<br />
variation (with monthly estimates<br />
desirable <strong>to</strong> address seasonality).<br />
• Likely expenditure per capita on the<br />
services <strong>to</strong> be provided<br />
• The sensitivity of the product price<br />
• Estimates of growth over time based on<br />
various assumptions in relation <strong>to</strong> internal<br />
or external change.<br />
The analysis should provide a clear basis<br />
for the design of the concept – what it<br />
will contain, scale, complementary facilities,<br />
quality, image, setting and location.<br />
Preparing Market Assessment Studies<br />
Specialist consultants should preferably be<br />
engaged for market and financial analysis.<br />
Such experts may include market research<br />
and development consultants, appropriately<br />
qualified accountants, and specialist <strong>to</strong>urism<br />
business consultants. General advice can<br />
also be obtained at minimal or no cost from<br />
financial institutions and from organisations<br />
listed in Appendix C.<br />
RACV Cape Schanck Resort, Morning<strong>to</strong>n Peninsula.<br />
18 <strong>to</strong>urism investment guidelines
<strong>to</strong>urism investment guidelines 19
CASE STUDY 1<br />
sea melbourne<br />
Charter hire catamaran with capacity for up <strong>to</strong> 150 passengers.<br />
Business provides pre-booked cruises of Port Phillip Bay for<br />
corporate functions, weddings, parties.<br />
Docklands, Melbourne<br />
For more information go <strong>to</strong>:<br />
www.cruisevic<strong>to</strong>ria.com.au<br />
Success Fac<strong>to</strong>rs<br />
• Market research indicated that there was a gap in the provision of this type of service in Melbourne.<br />
• Inves<strong>to</strong>r had a sound working knowledge of boating operations and chartering for fishing.<br />
• Significant research conducted in<strong>to</strong> the design and construction requirements for the vessel,<br />
which enabled it <strong>to</strong> be delivered on time and within budget.<br />
• Existing development in Vic<strong>to</strong>ria Harbour and its promotion by the State Government as a <strong>to</strong>urist<br />
destination provided an opportunity for high visibility and accessible base of operations.<br />
• Delivery of a high quality service has been a priority with the benefit of significant additional business<br />
through word of mouth recommendations. Internet marketing has also been effective.<br />
• Approvals processes require persistence, careful planning and good research.<br />
• Important for inves<strong>to</strong>rs <strong>to</strong> be familiar with financing and tax issues in order <strong>to</strong> gain optimum benefit<br />
from advisors.<br />
20 <strong>to</strong>urism investment guidelines
CASE STUDY 2<br />
DOHERTY’S BALLARAT LODGE<br />
& CONFERENCE CENTRE<br />
Ballarat Lodge is an accommodation and conference complex located<br />
in Ballarat, opposite the nationally significant <strong>to</strong>urist attraction of<br />
Sovereign Hill. The 4½ star lodge provides 71 rooms and conference<br />
and meeting facilities that cater for 1,200 people. Other facilities include<br />
two restaurants, a bar and a health and beauty spa. Located in a major<br />
regional centre, this complex services an extensive regional population<br />
and is conveniently located within 75 minutes drive from Melbourne.<br />
Success Fac<strong>to</strong>rs<br />
• A limited conference facility existed on this site when acquired by the current opera<strong>to</strong>rs. A major<br />
opportunity for the expansion of this market was identified due <strong>to</strong> a limited level of competition in the<br />
region, excellent access <strong>to</strong> a major market in Melbourne and strong growth identified in the business<br />
sec<strong>to</strong>r. The opening of the facility has since provided access <strong>to</strong> a larger event and function market in the<br />
region than was originally projected.<br />
• The success of the conference centre has been in part due <strong>to</strong> its flexible design and versatility for a wide<br />
variety of events and functions and incorporation of high end audio visual technology and comprehensive<br />
kitchen facilities.<br />
• The comprehensive range of facilities on the site has provided access <strong>to</strong> diverse market segments –<br />
business, leisure, health, education and local.<br />
• The approvals process benefitted from local government assistance in relation <strong>to</strong> the lease of a portion<br />
of local government land. Successful consultation with local objec<strong>to</strong>rs enabled an extended approvals<br />
timeframe <strong>to</strong> be avoided.<br />
• Continued direct marketing is important in the conferences and events market.<br />
• Delivery of a high quality product at a competitive price has facilitated strong repeat business. A high level<br />
of staff retention with the required skills and outlook has been an important fac<strong>to</strong>r in this success.<br />
• Capacity <strong>to</strong> leverage off the existence of an established attraction in Sovereign Hill.<br />
Ballarat<br />
For more information go <strong>to</strong>:<br />
www.dohertyhotels.com.au<br />
<strong>to</strong>urism investment guidelines 21
concept development<br />
Figure 3<br />
Market Exposure and Access<br />
Mildura<br />
Portland<br />
Mildura<br />
Airport<br />
8<br />
Port<br />
Fairy<br />
11<br />
Horsham<br />
Swan Hill<br />
7<br />
Daylesford 2<br />
Ballarat<br />
Melbourne<br />
Airport<br />
Marysville<br />
Healesville<br />
MELBOURNE<br />
Avalon Airport<br />
1 3<br />
Geelong<br />
6<br />
Traralgon<br />
Queenscliff<br />
Warrnambool<br />
4<br />
Sorren<strong>to</strong><br />
Lorne<br />
Port<br />
Campbell<br />
5 Phillip Island<br />
Apollo<br />
Bay<br />
Bendigo<br />
1 Melbourne<br />
2 Daylesford & The Macedon Ranges<br />
3 Yarra Valley & Dandenong Ranges<br />
4 Morning<strong>to</strong>n Peninsula<br />
5 Phillip Island<br />
6 Great Ocean Road<br />
7 Goldfields<br />
8 Grampians<br />
9 Vic<strong>to</strong>ria’s High Country<br />
10 Gippsland<br />
11 The Murray<br />
Albury<br />
Airport<br />
Yarrawonga<br />
Echuca<br />
Rutherglen Albury Wodonga<br />
11<br />
Wangaratta<br />
Beechworth 11<br />
Nagambie<br />
Lake Eildon<br />
9<br />
Wilsons<br />
Promon<strong>to</strong>ry<br />
Bright<br />
Falls Creek<br />
Sale<br />
10<br />
Bairnsdale<br />
Gippsland<br />
Lakes<br />
Lakes Entrance<br />
Mallacoota<br />
travel time and distance<br />
locaTION DISTance (km) time (hrs)<br />
Melbourne <strong>to</strong>:<br />
Albury Wodonga 321 4<br />
Apollo Bay 194 3<br />
Bairnsdale 281 4<br />
Ballarat 115 1.5<br />
Beechworth 283 3.5<br />
Bendigo 150 2<br />
Bright 324 4<br />
Daylesford 114 1.5<br />
Echuca 230 3<br />
Falls Creek 385 5.5<br />
Healesville 65 1<br />
Horsham 301 4<br />
Lake Eildon 213 3.5<br />
Lakes Entrance 317 4.5<br />
Lorne 139 2<br />
Mallacoota 515 7<br />
Mildura 543 7<br />
Nagambie 135 1.5<br />
Phillip Island 142 2<br />
Port Campbell 226 3<br />
Port Fairy 300 4<br />
Portland 371 5<br />
Queenscliffe 105 1.5<br />
Rutherglen 292 3.5<br />
Sale 313 3<br />
Sorren<strong>to</strong> 112 2<br />
Swan Hill 336 4<br />
Traralgon 163 2<br />
Wangaratta 250 3<br />
Warrnambool 272 3.5<br />
Wilsons Promon<strong>to</strong>ry 215 3<br />
Yarrawonga 281 3.5<br />
Selection of a site for investment requires<br />
consideration of the physical area and setting<br />
that are required for the project, but also<br />
the regula<strong>to</strong>ry requirements that must be<br />
satisfied for approval. Local government<br />
plays a major role in decision-making and<br />
the achievement of successful outcomes.<br />
Site Selection (where <strong>to</strong> locate?)<br />
The identification of a suitable site for<br />
a <strong>to</strong>urism development needs <strong>to</strong> take<br />
in<strong>to</strong> account:<br />
• The site’s location in relation <strong>to</strong> the<br />
businesses potential market.<br />
• The setting of the site and the<br />
surrounding development context.<br />
• The particular characteristics of the site.<br />
Site choice must consider both macro<br />
and micro fac<strong>to</strong>rs.<br />
Site Macro fac<strong>to</strong>rs<br />
A large population base in close proximity<br />
<strong>to</strong> a site provides a significant market<br />
opportunity for the project. Sites within<br />
major centres or within easy access<br />
will potentially benefit from this market<br />
exposure (generally within 2 hours drive<br />
from Melbourne or 30 minutes <strong>to</strong> an hour<br />
from a provincial centre).<br />
22 <strong>to</strong>urism investment guidelines
concept development<br />
Proximity <strong>to</strong> a major population centre<br />
also brings with it the benefits of better<br />
access <strong>to</strong> labour and skills, cheaper goods<br />
and materials, more diversity in the services<br />
available and generally a higher order of<br />
available site infrastructure – water, sewerage,<br />
energy, and communications (fig. 3).<br />
The most suitable site for a particular type<br />
of <strong>to</strong>urism investment will vary according<br />
<strong>to</strong> the image desired and nature of the<br />
business. The type of businesses or land uses<br />
in the surrounding area should complement<br />
the project, eg. accommodation <strong>to</strong> support<br />
an attraction, cafes/restaurants <strong>to</strong> support<br />
accommodation, parkland/open space<br />
near cultural/heritage establishments. A<br />
resort-based project will benefit greatly<br />
from a dramatic or unique setting, or one<br />
providing privacy or seclusion. The presence<br />
of industrial development nearby or a poor<br />
quality urban environment will detract from<br />
the image sought for the establishment.<br />
Views <strong>to</strong> or from the site, attractive or<br />
identifiable vegetation or <strong>to</strong>pography and /or<br />
close proximity <strong>to</strong> a water body (pond, lake,<br />
creek, river coast) will enhance the site.<br />
The local climate and micro-climate of the<br />
site will influence both its use and design.<br />
From which direction are the prevailing<br />
winds? What are the minimum and<br />
maximum seasonal temperatures? How<br />
much sun exposure and rainfall? Will shaded<br />
or weather protected areas be required?<br />
The design will need <strong>to</strong> address these fac<strong>to</strong>rs.<br />
Similar establishments in the locality may<br />
be seen as competi<strong>to</strong>rs but they also bring<br />
the benefits of the development of a critical<br />
mass of businesses that enhances the<br />
market’s awareness and exposure <strong>to</strong> that<br />
particular product. It also brings the potential<br />
for collaborative marketing and greater<br />
opportunities for passing trade, for example<br />
Daylesford is known for spa <strong>to</strong>urism.<br />
A major highway / main road location<br />
is highly desirable for accommodation<br />
establishments. Travellers expect <strong>to</strong> be<br />
able <strong>to</strong> find a bed on the main road. Main<br />
road locations provide essential visibility<br />
and passing trade exposure for a variety of<br />
businesses. In regional areas constructed<br />
(bitumen sealed) roads prove generally<br />
more acceptable for travellers, while the<br />
product at the end of a gravel road or<br />
track will have <strong>to</strong> work harder <strong>to</strong> ensure<br />
that the trip is worthwhile. Consider<br />
road traffic volumes and the split in the<br />
traffic between locals / business / trucks<br />
/ visi<strong>to</strong>rs when evaluating the benefits of<br />
alternative sites. Good pedestrian access<br />
may also be essential for some businesses.<br />
Is the site within walking distance of other<br />
potential <strong>to</strong>urist destinations such as a public<br />
transport terminal or shopping precincts?<br />
Site Micro Fac<strong>to</strong>rs<br />
While there are numerous external fac<strong>to</strong>rs<br />
<strong>to</strong> consider in selecting a site, it must also be<br />
suited for the intended purpose.<br />
The site needs <strong>to</strong> be large enough <strong>to</strong><br />
contain the full range of development<br />
envisaged – allow for growth, consider the<br />
preservation of any beneficial features, allow<br />
for convenient access and site circulation,<br />
the provision of on-site car parking and also<br />
landscaping may be required.<br />
Experts may be required <strong>to</strong> advise<br />
whether there are attributes on the site<br />
of environmental, archaeological, heritage,<br />
cultural or scientific interest. The existence<br />
of a heritage building on the site may<br />
provide identity, character and a thematic<br />
base. There may also be heritage obligations<br />
regarding alterations <strong>to</strong> a building or site<br />
that need <strong>to</strong> be satisfied. Sites near the<br />
coast or water bodies are highly likely <strong>to</strong><br />
be of importance in relation <strong>to</strong> Aboriginal<br />
cultural heritage.<br />
table 4: site considerations for<br />
particular development<br />
• Visi<strong>to</strong>r Accommodation –<br />
Market exposure, visibility, access.<br />
• Resort – Special setting,<br />
distinctive site character.<br />
• Attraction – Market exposure, access,<br />
size of site.<br />
• Bed & Breakfast – special character,<br />
sense of privacy, access.<br />
The environmental state of the site also<br />
needs <strong>to</strong> be taken in<strong>to</strong> consideration.<br />
For example, is the site contaminated<br />
from a previous industrial use; is it subject<br />
<strong>to</strong> flooding; does it contain acid sulphate<br />
soils; or is it subject <strong>to</strong> geotechnical risks<br />
(subsidence, slumping, slope failure and<br />
the like). It is essential <strong>to</strong> assess whether<br />
there will be extraordinary development<br />
costs, eg. special foundations or earthworks<br />
are required, or if there are significant<br />
constraints on parts of the land, eg. periodic<br />
flooding in relation <strong>to</strong> tidal peaks or from<br />
nearby drainage lines.<br />
There is also a range of non-physical site<br />
fac<strong>to</strong>rs that must be identified such as<br />
planning scheme zoning (what are the<br />
land uses permitted and the requirements<br />
for development – see next section), title<br />
particulars (lease, freehold, encumbrances<br />
or restrictions), land value and local<br />
government rates. Whether the site or<br />
proposed use may be able <strong>to</strong> access any<br />
government incentives, eg. heritage grants,<br />
tax concessions or rate reductions, needs<br />
<strong>to</strong> be ascertained.<br />
<strong>to</strong>urism investment guidelines 23
24 <strong>to</strong>urism investment guidelines
concept development<br />
Otway Fly Tree<strong>to</strong>p Walk.<br />
Figure 4 : site analysis (example)<br />
Source: Meinhardt Infrastructure & Environment and<br />
MGS Architecture Planning Interior Design<br />
Concept Design<br />
The preparation of the concept design is<br />
informed by the market assessment and the<br />
site evaluation. The site has been selected<br />
on the basis of the functional requirements<br />
of the project and the market <strong>to</strong> be served.<br />
Fitting the project <strong>to</strong> the site in an optimal<br />
manner requires an examination of the site<br />
opportunities and constraints. Site analysis<br />
(fig. 4) – mapping of the site micro fac<strong>to</strong>rs<br />
as outlined will identify parts of the site well<br />
suited <strong>to</strong> arrival and principal building areas,<br />
service areas, access points and potential<br />
conflict zones, conservation areas, screening<br />
or landscaping zones.<br />
Site analysis should identify:<br />
• Topography<br />
(high points, steep land, flatter areas).<br />
• Drainage lines and susceptibility <strong>to</strong> flooding.<br />
• Vegetation type and quality.<br />
• Soil type and quality.<br />
• Wetlands or other areas of significant<br />
environment value.<br />
• Views <strong>to</strong> and from the site.<br />
• Suitability of roads that provide access<br />
<strong>to</strong> the site and access points on<strong>to</strong> the site.<br />
• Location of existing services (water,<br />
electricity, gas, sewerage, telecoms)<br />
and any extensions required.<br />
• Aboriginal and post-settlement<br />
heritage assets.<br />
• Unstable or erosion prone land.<br />
• Climatic effects (wind exposure, shade<br />
and sun exposure, precipitation).<br />
• External impacts (traffic noise, signage,<br />
night lighting, surrounding land uses).<br />
• Existing buildings on the site and their<br />
suitability for the proposed purpose<br />
or conversion.<br />
• Neighbouring buildings and land uses<br />
and in particular buildings used for<br />
residential purposes.<br />
The site analysis should provide a summary<br />
of the site opportunities and constraints.<br />
The concept should take advantage of the<br />
opportunities available (for example, attractive<br />
views from parts of the site, areas of flatter<br />
land that is less costly <strong>to</strong> develop, parts of the<br />
site that may be conveniently and efficiently<br />
serviced, areas of attractive landscape) and<br />
avoid or minimise the development of the<br />
parts of the site that are constrained by<br />
areas of high environmental or heritage value,<br />
unattractive outlook, steep or potentially<br />
unstable land and similar fac<strong>to</strong>rs.<br />
From the mapping of these constraints<br />
and opportunities a number of development<br />
options for the site may be developed.<br />
A ‘high level’ evaluation of these alternatives<br />
should consider the overall project objectives,<br />
development costs (including the provision<br />
of on-site services), external impacts and<br />
relationships, staging and meeting market<br />
requirements.<br />
<strong>to</strong>urism investment guidelines 25
concept development<br />
A matrix may be developed, for example<br />
that evaluates each option against criteria<br />
established for the project. Consider whether<br />
some criteria should be given greater<br />
importance (weighting) as part of this process.<br />
Determina<strong>to</strong>n of a building envelope or<br />
development area from this process should<br />
include a functional layout of the activities<br />
within the building, described for each level<br />
as they may vary. The functional layout will<br />
consider the scale and location of each part<br />
of the building and how it relates <strong>to</strong> other<br />
components, eg. point of entry, reception,<br />
access <strong>to</strong> public areas (such as restaurants and<br />
bars), access <strong>to</strong> private areas (accommodation),<br />
kitchens, service areas and administration areas.<br />
The functional layout should also address<br />
external relationships such as the protection<br />
of areas susceptible <strong>to</strong> amenity impacts, visually<br />
exposed parts of the site and unattractive<br />
neighbouring site attributes. The planning<br />
scheme requirements in relation <strong>to</strong> siting and<br />
works requirements should be addressed in<br />
the resolution of the project’s functional layout.<br />
Professional advice from <strong>to</strong>wn planners,<br />
landscape architects, architects, engineers<br />
and quantity surveyors would be advantageous<br />
<strong>to</strong> these processes.<br />
The architectural advisor should play a major<br />
role in the creation of the initial preferred<br />
conceptual layout for the project. Following<br />
the resolution of this fundamental layout,<br />
the architectural design concept can be<br />
developed. This will include detailed and three<br />
dimensional consideration of the bulk and scale<br />
of the buildings, overlooking, overshadowing<br />
and other neighbouring amenity fac<strong>to</strong>rs,<br />
architectural style and local character, car<br />
parking, on-site and off-site public spaces, entry<br />
and identity, signage and landscaping theme.<br />
The concept design will require refinement<br />
through consideration of the project objectives<br />
and discussion on the proposal with the approval<br />
authorities, particularly local government.<br />
From these processes, resolved concept design<br />
plans should be produced that include as a<br />
minimum, site layout (including any demolition,<br />
excavations or earthworks and vegetation<br />
removal), building layout (for each level),<br />
elevations of buildings and additionally include<br />
proposals for materials and finishes, site parking,<br />
service operations, signage and landscaping<br />
as may be applicable. These plans will form<br />
the basis for seeking development approval<br />
for the project. A preliminary cost should<br />
be estimated for the project at this stage <strong>to</strong><br />
ensure that it is within the set budget range.<br />
Milawa Cheese Fac<strong>to</strong>ry. Pho<strong>to</strong>grapher: Mojo Partners.<br />
Figure 5: preparation of concept design<br />
Site Data<br />
Site Analysis<br />
DEVELOPMENT OPTIONS<br />
Functional Layout<br />
Concept Design<br />
26 <strong>to</strong>urism investment guidelines
concept development<br />
table 5: <strong>to</strong>urism projects by the ‘not for profit’ sec<strong>to</strong>r<br />
Considerations for the establishment<br />
of a <strong>to</strong>urism project by ‘not for profit’<br />
organisations.<br />
Creation of the Concept<br />
• Is the project consistent with the<br />
organisation’s principles and objectives?<br />
• If it is based on a collection, how eclectic<br />
is the appeal of that collection?<br />
• What is the principal theme and what<br />
thematic interpretation will be used <strong>to</strong><br />
unlock the s<strong>to</strong>ries?<br />
• Research the experiences of other<br />
organisations with like concepts – identify<br />
the fac<strong>to</strong>rs for success and potential pitfalls.<br />
• How big is the market attraction – the<br />
specialist enthusiast, the connoisseur or a<br />
broader market?<br />
• Does the theme of the attraction/project fit<br />
the location?<br />
• An asset obtained for little or no cost may<br />
require high levels of capital <strong>to</strong> upgrade it or<br />
make it fit for use and substantial continuing<br />
maintenance expenditure.<br />
The Incorporation Phase<br />
• Obtain advice on the various forms of<br />
incorporation available and assess the<br />
statu<strong>to</strong>ry requirements.<br />
• Are there ‘champions’ of the project and<br />
are they committed long term? Are they<br />
prepared <strong>to</strong> demonstrate that commitment<br />
through donations and /or support for fund<br />
raising processes? Is the project likely <strong>to</strong> be<br />
attractive <strong>to</strong> partners on a ‘sponsorship’ basis?<br />
• Is the project likely <strong>to</strong> meet criteria for<br />
government financial support?<br />
• Are there impediments <strong>to</strong> the project gaining<br />
‘Tax deductibility Gift Recipient’ status?<br />
• Assess the availability and cost of Public Risk<br />
and Product Liability insurance for the project.<br />
• Assess the availability of Volunteers and<br />
the demands the project might make in<br />
terms of training, volunteer leadership and<br />
communication.<br />
The Business Planning Phase<br />
• Ensure the Business Plan contains a credible<br />
rationale for the projections of Visi<strong>to</strong>r<br />
numbers and revenue.<br />
• What is the level of likely profitability?<br />
Will it be profitable or at least cash positive?<br />
• Is the project likely <strong>to</strong> be independently<br />
financially sustainable or will it require<br />
on-going subsidy <strong>to</strong> meet operational costs<br />
and depreciation, asset replacement costs<br />
or upgrades?<br />
• Prepare a Risk Assessment Plan <strong>to</strong> identify<br />
potential financial risks and responses.<br />
• How will the project be marketed?<br />
Are there linkages available <strong>to</strong> other<br />
marketing programs?<br />
YHA Eco Beach, Apollo Bay.<br />
Role of Local Government<br />
The local government for the locality of<br />
the project plays a key role in providing<br />
information that will assist the preparation of<br />
the concept and later, approval of the project.<br />
There are several areas of local government<br />
management that can assist the preparation<br />
of a development concept.<br />
Local governments commonly have<br />
economic development groups – persons<br />
who are responsible <strong>to</strong> promote the<br />
investment opportunities within local<br />
government and facilitate investment. The<br />
economic development group may be<br />
able <strong>to</strong> provide statistics on development,<br />
information on new projects in the pipeline,<br />
advice on areas where certain investment<br />
opportunities are being promoted,<br />
employment profiles, demographic<br />
information, real estate information and<br />
contacts in State or regional agencies where<br />
further useful information and financial<br />
assistance may be obtained.<br />
Local government often carries out <strong>to</strong>urism<br />
management and promotion and many<br />
run Visi<strong>to</strong>r Information Centres. Local<br />
government may be able <strong>to</strong> provide advice<br />
on marketing campaigns, visitation statistics,<br />
visi<strong>to</strong>r profiles, market performance,<br />
significant and competi<strong>to</strong>r attractions,<br />
regional linkages and strategic plans for<br />
<strong>to</strong>urism in the local government or region.<br />
Local <strong>to</strong>urism groups work closely with local<br />
opera<strong>to</strong>rs and also with regional bodies and<br />
<strong>Tourism</strong> Vic<strong>to</strong>ria.<br />
<strong>to</strong>urism investment guidelines 27
concept development<br />
Before the development concept is resolved<br />
it is essential that preliminary discussions are<br />
held with the <strong>to</strong>wn planning department of<br />
local government. This is generally referred<br />
<strong>to</strong> as the ‘pre-application’ phase and the local<br />
planning department will be able <strong>to</strong> provide<br />
advice on:<br />
• Specific information requirements that<br />
must be provided with the application for<br />
a permit.<br />
• Information about the site and the<br />
relationship of the development <strong>to</strong> the<br />
surrounding land uses.<br />
• Identification of relevant policies of the<br />
local government in the planning scheme<br />
that must be addressed and assistance<br />
in the interpretation of those policies <strong>to</strong><br />
enable a suitable response <strong>to</strong> be made as<br />
part of the application.<br />
• The particular controls in the planning<br />
scheme that will affect the proposal and<br />
which will need <strong>to</strong> be addressed in the<br />
application.<br />
• The identification of local issues that need<br />
<strong>to</strong> be considered in the development of the<br />
concept and any external or community<br />
consultation that should be undertaken<br />
before the concept is finalised for approval.<br />
• The possible need for an Environmental<br />
Effects Statement (EES), a Cultural Heritage<br />
Management Plan (CHMP) or other<br />
specific statu<strong>to</strong>ry process.<br />
• Identification of Referral Authorities and<br />
other organisations <strong>to</strong> be contacted at<br />
the concept stage, eg. the Department<br />
of Sustainability and Environment, water<br />
and sewerage authorities, VicRoads, Liquor<br />
Licensing Vic<strong>to</strong>ria, Vic<strong>to</strong>rian Casino and<br />
Gaming Authority etc. as appropriate.<br />
• The time frame for the approval<br />
procedures <strong>to</strong> be carried out and steps<br />
in the process where the ‘clock s<strong>to</strong>ps’<br />
in terms of the statu<strong>to</strong>ry time limits for<br />
approval.<br />
The local government infrastructure or<br />
engineering department should be contacted<br />
<strong>to</strong> identify issues relating <strong>to</strong> roads, drainage,<br />
street tree planting, site access and similar<br />
matters. Discussions with this department<br />
will generally provide more specific technical<br />
information that will assist in the concept’s<br />
refinement. Information may also be provided<br />
in relation <strong>to</strong> compliance requirements for<br />
other legislation, eg. Health registration. Local<br />
government engineering departments are<br />
not responsible for services such as water,<br />
electricity, gas and sewerage (in most instances)<br />
but will be able <strong>to</strong> assist in directing enquiries<br />
<strong>to</strong> the local providers of these services.<br />
table 6: role of local government in relation <strong>to</strong> <strong>to</strong>urism projects<br />
Corporate Plan<br />
• Provide a strategic direction for <strong>to</strong>urism in the<br />
local government’s principal policy document.<br />
Economic Development<br />
• Identify investment opportunities, provide<br />
local economic and social data and identify<br />
opportunities for assistance and facilitation.<br />
• Economic development strategies for<br />
local government areas should address<br />
the interrelationship between <strong>to</strong>urism and<br />
other economic sec<strong>to</strong>rs, and their impacts<br />
on existing infrastructure; and explore<br />
opportunities for increasing economic benefit<br />
through improved linkages within other parts<br />
of the local and regional economy.<br />
<strong>Tourism</strong><br />
• Provide data on <strong>to</strong>urism activities, conduct<br />
marketing campaigns, prepare <strong>to</strong>urism<br />
development strategies, moni<strong>to</strong>r visitation<br />
and collect data.<br />
• Foster the establishment and facilitate the<br />
operations of local <strong>to</strong>urism organisations<br />
and interests.<br />
Planning<br />
• Local planning policies or zoning may provide<br />
specifically for <strong>to</strong>urism development.<br />
• Local government should link the Regional<br />
<strong>Tourism</strong> Action Plans 2008-2011 in<strong>to</strong> their<br />
MSS or Local Planning Policy Framework.<br />
• Identify <strong>to</strong>urism development objectives<br />
and policy guidelines within strategy plans <strong>to</strong><br />
influence the development and assessment<br />
of <strong>to</strong>urist proposals, and for use in marketing<br />
local <strong>to</strong>urism development opportunities.<br />
• Local government can actively encourage<br />
appropriate <strong>to</strong>urism development, by<br />
identifying precincts or individual sites<br />
appropriate for <strong>to</strong>urism development.<br />
• Facilitate consultation between project<br />
proponents and stakeholder (particularly<br />
communities).<br />
• Provide advice on statu<strong>to</strong>ry controls,<br />
information requirements and time frames.<br />
Infrastructure & Engineering<br />
• Provide information on requirements for<br />
roads, drainage and related infrastructure<br />
and provide details of proposed public<br />
works and related approvals.<br />
Other <strong>to</strong>urism related initiatives of local<br />
government might include:<br />
• Offering rate reductions or other financial<br />
assistance <strong>to</strong> attract investment likely <strong>to</strong><br />
generate long-term economic benefits for<br />
the local government.<br />
• Conducting seminars for developers <strong>to</strong><br />
identify opportunities on particular sites<br />
or precincts, and outlining available local<br />
government assistance, eg. provision of<br />
professional or design expertise.<br />
• Financial incentives.<br />
It is critical that decision making by local<br />
government in relation <strong>to</strong> <strong>to</strong>urism projects be<br />
effectively internally coordinated.<br />
28 <strong>to</strong>urism investment guidelines
CONCEPT DEVELOPMENT<br />
sustainable building design and construction<br />
Why is it Important?<br />
According <strong>to</strong> the Green Building Council,<br />
buildings consume one third of the world’s<br />
resources; they use 42% of Australia’s energy;<br />
12% of our water demand is consumed by<br />
buildings; up <strong>to</strong> 40% of waste going <strong>to</strong> landfill<br />
is from construction and deconstruction<br />
activities (predominantly the churn of<br />
refurbishments); and 40% of Australia’s air<br />
emissions are from buildings.<br />
With the exception of hospitals, <strong>to</strong>urism<br />
accommodation can have the greatest<br />
environmental impact of any commercial<br />
buildings: it consumes energy, water and<br />
other resources 365 days a year. Support<br />
services such as laundries, restaurants,<br />
swimming pools, energy-intensive heating<br />
and cooling systems, gardens and other<br />
recreational facilities consume large amounts<br />
of resources.<br />
Importantly, a number of recent international<br />
studies indicate a growing consumer<br />
awareness and concern of the environmental<br />
impacts of <strong>to</strong>urism. For instance, an April<br />
2007 TripAdvisor survey of more than 1,000<br />
travellers worldwide found that:<br />
• 40% take environmentally-friendly<br />
<strong>to</strong>urism in<strong>to</strong> consideration when making<br />
travel plans;<br />
• Just over a third (34%) said they would<br />
pay more <strong>to</strong> stay at an environmentallyfriendly<br />
hotel. When asked <strong>to</strong> specify how<br />
much extra they would be prepared <strong>to</strong><br />
pay for ‘green’ accommodation, 25% said<br />
they would pay a 5-10% premium, and<br />
12% would pay a 10-20% premium.<br />
For inves<strong>to</strong>rs and developers that are<br />
prepared <strong>to</strong> develop and promote<br />
environmentally sustainable <strong>to</strong>urism,<br />
there are obvious benefits.<br />
Benefits of Sustainable Buildings<br />
Sustainable buildings generally incur a small<br />
green premium above the costs of standard<br />
construction. But green buildings deliver a<br />
suite of financial and environmental benefits<br />
that conventional buildings do not. These<br />
benefits, such as energy and water savings,<br />
should be looked at through a whole of<br />
life or life cycle cost methodology, not just<br />
evaluated in terms of upfront costs.<br />
From a life cycle savings evaluation it is<br />
documented that savings from investment<br />
in sustainable design and construction<br />
dramatically exceed any additional<br />
upfront costs.<br />
International research has found that the<br />
average construction cost premium for<br />
green buildings is almost 2% – substantially<br />
less than is generally perceived. Increasingly<br />
the small green premium above the costs<br />
of standard construction is covered in high<br />
resale value of the asset, as a result of lower<br />
operating costs of sustainable buildings.<br />
Other Benefits include:<br />
• Net savings from lower running and<br />
maintenance costs;<br />
• Improved corporate image through<br />
a demonstrable commitment <strong>to</strong> the<br />
environment;<br />
• Lower carbon dioxide (CO2) emissions<br />
thanks <strong>to</strong> efficient energy use and the use<br />
of renewable energy technologies where<br />
this makes design and business sense;<br />
• Better opportunities <strong>to</strong> let or sell in a<br />
competitive market; and<br />
• Enhanced occupant comfort, improving<br />
productivity.<br />
Sustainable Design and<br />
Construction Principles<br />
A building’s life spans its planning, design,<br />
construction and operation; and its ultimate<br />
re-use or demolition. In the accommodation<br />
sec<strong>to</strong>r, often the entity responsible for design,<br />
construction, and initial financing of a building<br />
is different from those operating the building,<br />
meeting its operational expenses and paying<br />
employee salaries.<br />
As a result, decisions made at the first phase<br />
of building design and construction can<br />
significantly affect the costs and efficiencies<br />
of later phases.<br />
In a general context, sustainable design and<br />
construction principles for future <strong>to</strong>urism<br />
developments should:<br />
• Take in<strong>to</strong> account the climate;<br />
• Be subordinate <strong>to</strong> and aesthetically<br />
sympathetic with the natural environment<br />
and cultural context;<br />
• Reinforce and exemplify environmental<br />
responsiveness;<br />
• Enhance appreciation and awareness of<br />
the environment;<br />
• Minimise pollution of soil, air and water;<br />
• Use renewable indigenous building<br />
materials wherever possible;<br />
• Increase efficiency in the use of materials,<br />
energy and other resources;<br />
• Use life-cycle analysis in decision<br />
making about material and construction<br />
techniques;<br />
• Minimise the consumption of resources,<br />
especially non-renewable ones;<br />
• Maximise the use of materials with low<br />
embodied energy;<br />
• Identify opportunities for re-use and<br />
recycling; and<br />
• Identify opportunities for water<br />
conservation and re-use.<br />
Tips for Sustainable Design are detailed<br />
in Appendix B.<br />
Further information regarding sustainable developments<br />
can be obtained from The Green Building Council Australia<br />
(GBCA), The Royal Australian Institute of Architects (RAIA)<br />
and the Australian Sustainable Built Environment Council<br />
(ASBEC). (see contacts Appendix C).<br />
<strong>to</strong>urism investment guidelines 29
CONCEPT DEVELOPMENT<br />
sustainable building design and construction<br />
RACV Inverloch Resort, Inverloch.<br />
Case Study – RACV Inverloch<br />
As part of its commitment <strong>to</strong> environmental<br />
outcomes in the conduct of its business<br />
and <strong>to</strong> assist members <strong>to</strong> reduce their<br />
environmental impact, the RACV has<br />
developed and applied environmental design<br />
criteria <strong>to</strong> its building, construction and<br />
refurbishment projects.<br />
RACV’s new holiday facility at Inverloch has<br />
been designed <strong>to</strong> maximise the site’s natural<br />
attributes. The site is being revegetated with<br />
native grasses and trees – all indigenous<br />
species. The wetlands will provide habitat<br />
for birds and aquatic life while assisting with<br />
drainage and water quality management.<br />
Landscaping is being designed <strong>to</strong> minimise<br />
watering requirements.<br />
The Inverloch resort is an affiliate of<br />
Green Globe, an international sustainable<br />
travel and <strong>to</strong>urism program. Similarly,<br />
redevelopment of the RACV Healesville<br />
Country Club in 2007 encompasses<br />
ecologically sustainable design provisions.<br />
Of note is the unique geo-exchange cooling<br />
system which will use the earth’s natural<br />
thermal energy <strong>to</strong> regulate temperature.<br />
30 <strong>to</strong>urism investment guidelines
CASE STUDY 3<br />
eco beach YHA<br />
The Eco Beach YHA at Apollo Bay is a 24 room (72 bed) budget<br />
accommodation development, located one street back from the<br />
harbour and foreshore of this west coast village. This is a “green”<br />
project that incorporates a high level of energy saving and<br />
environmentally sustainable features in its design. Apollo Bay is in the<br />
heart of the Great Ocean Road region, an iconic <strong>to</strong>urism destination<br />
for overseas, interstate and domestic <strong>to</strong>urists.<br />
Success Fac<strong>to</strong>rs<br />
• Market opportunity was identified through the success of the Grampians YHA Eco Hostel,<br />
a similar YHA ‘green’ project in Halls Gap, and the high profile of the Great Ocean Road region.<br />
• The strong environmentally friendly design approach has been a major selling point with high appeal for<br />
youth hostel travellers, particularly international visi<strong>to</strong>rs.<br />
• Site selection met the needs of central accessibility for budget travellers (beaches, shops, bars); northern<br />
orientation that provided maximum solar benefit, attention <strong>to</strong> the amenity needs of adjacent properties,<br />
sufficient space for necessary on-site parking and circulation and views <strong>to</strong> the surrounding hills.<br />
• The architect was provided with a clear brief for the project design that required attention <strong>to</strong> energy and<br />
water conservation, passive heating and cooling elements that met seasonal variation and the use of energy<br />
saving technology without a reduction in guest comfort. These requirements were achieved through<br />
building orientation, planning and design, material and colour selection, fixture and fittings selection, site<br />
treatment and landscaping.<br />
• Marketing of the facility benefits significantly from the generic marketing of the Great Ocean Road,<br />
nationally and internationally, from the strength of the YHA hostel network and also from the local<br />
Visi<strong>to</strong>r Information Centre in Apollo Bay.<br />
Apollo Bay<br />
For more information go <strong>to</strong>:<br />
www.yha.com.au<br />
<strong>to</strong>urism investment guidelines 31
Project approvals<br />
Gaining approval for a project requires<br />
attention <strong>to</strong> the potential external impacts of<br />
a project and the statu<strong>to</strong>ry procedures that<br />
must be negotiated. Inves<strong>to</strong>rs will usually<br />
need <strong>to</strong> engage closely with neighbours, the<br />
broader local community, local government<br />
and service authorities if they are <strong>to</strong><br />
minimise the time frame and issues in the<br />
approval process.<br />
What types of Approvals are required?<br />
An examination of the planning scheme will<br />
have identified whether the proposed use<br />
and development is permitted under the<br />
planning scheme or not. The assessment of<br />
the planning scheme must identify whether<br />
there are parts of the development that are<br />
permitted and others that do not conform<br />
<strong>to</strong> the planning scheme requirements. In<br />
the event that an element of the use or<br />
development (or the proposal generally)<br />
does not comply with the planning scheme<br />
requirements then consideration will need<br />
<strong>to</strong> be given <strong>to</strong>:<br />
• Modifying the proposal <strong>to</strong> bring it within<br />
the scope of what may be permitted<br />
under the planning scheme.<br />
• Seeking an amendment <strong>to</strong> the planning<br />
scheme <strong>to</strong> provide for an alternative zone<br />
for the site, or other alteration <strong>to</strong> the<br />
planning scheme provisions that would<br />
enable the development <strong>to</strong> be approved.<br />
• Abandoning the site and seeking an<br />
alternative location for the development.<br />
If the concept is not consistent with the<br />
strategies and policies of the local government<br />
contained in the planning scheme it will be a<br />
significant task <strong>to</strong> achieve a modification <strong>to</strong> the<br />
planning scheme <strong>to</strong> enable the development<br />
<strong>to</strong> proceed. In this circumstance a decision <strong>to</strong><br />
proceed with the project should only be taken<br />
after detailed discussions with <strong>Tourism</strong> Vic<strong>to</strong>ria,<br />
Department of Planning and Community<br />
Development, the local government and any<br />
referral authorities, eg. VicRoads, Department<br />
of Sustainability & Environment, Country<br />
Fire Authority, <strong>to</strong> establish a basis for the<br />
amendment.<br />
table 7: summary <strong>to</strong>urism project approval checklist for developers<br />
✓✓ Come up with the idea and develop the concept.<br />
✓✓ Contact local government’s planning department <strong>to</strong> discuss the initial <strong>to</strong>urism concept and<br />
<strong>Tourism</strong> Vic<strong>to</strong>ria on compatibility with the State’s <strong>Tourism</strong> product regions, and for assistance options.<br />
✓✓ Identify what planning policies affect the land where the development is proposed,<br />
including the zoning of the subject land and the surrounding area.<br />
✓✓ Determine what issues, including design and siting issues, need <strong>to</strong> be investigated<br />
<strong>to</strong> refine the initial concept.<br />
✓✓ Determine whether there are any relevant referral authorities that should be<br />
consulted at the preliminary design concept stage.<br />
✓✓ Determine whether Councillors, local residents, or community groups should be consulted<br />
prior <strong>to</strong> the lodgement of the planning application.<br />
✓✓ If appropriate, appoint professional design and planning assistance <strong>to</strong> assist with<br />
concept development.<br />
✓✓ Refine the concept, in conjunction with local government officers and other relevant agencies,<br />
after having investigated the relevant issues.<br />
✓✓ Identify what information needs <strong>to</strong> be included in the planning application;<br />
this will depend on the location, scale and complexity of the proposal.<br />
On the basis that the proposed use and<br />
development may be permitted under<br />
the planning scheme an application for a<br />
planning permit needs <strong>to</strong> be prepared.<br />
Proceeding with a non-complying<br />
proposal would require a planning scheme<br />
amendment <strong>to</strong> be sought. These processes<br />
are described briefly. Information on the<br />
planning permit process and planning<br />
scheme amendment process is contained<br />
in Planning: a Short <strong>Guide</strong> (2005) which may<br />
be obtained from www.dpcd.vic.gov.au at<br />
the planning/planning permits/application<br />
process links.<br />
Planning Requirements<br />
Vic<strong>to</strong>ria’s Planning Framework<br />
The provisions of the planning scheme<br />
that applies <strong>to</strong> the locality determine<br />
the planning requirements for a project.<br />
Vic<strong>to</strong>ria’s planning schemes are governed<br />
by the Planning and Environment Act 1987,<br />
which regulates land use and development.<br />
Generally local government administers<br />
planning schemes in Vic<strong>to</strong>ria (except for<br />
alpine resort areas – see Chapter 4) and<br />
the local government is responsible for the<br />
approvals required.<br />
The planning scheme regulates the type of<br />
land use and the nature of development<br />
on all land. It may specify requirements<br />
that must be satisfied by the development.<br />
Throughout the State, planning schemes<br />
have a standard format and a number<br />
of standard provisions. There are also<br />
local provisions that are unique <strong>to</strong> that<br />
local government area and are applied <strong>to</strong><br />
specified areas, sites or activities.<br />
Information on all of Vic<strong>to</strong>ria’s Planning<br />
Schemes is available online at www.dpcd.<br />
vic.gov.au/planning. Information available<br />
includes all the planning scheme maps across<br />
the State and the details of the planning<br />
controls. A planning property report may<br />
be generated through this site that provides<br />
information on the planning controls<br />
applicable <strong>to</strong> a particular property.<br />
32 <strong>to</strong>urism investment guidelines
Project approvals<br />
Planning Schemes<br />
In Vic<strong>to</strong>ria a planning scheme has the<br />
following components:<br />
State Planning Policy Framework (SPPF)<br />
The SPPF is common <strong>to</strong> all planning schemes<br />
and describes State planning policy in relation<br />
<strong>to</strong> matters of State importance. These<br />
policies include important principles for the<br />
coordination of development, protection<br />
of the environment, housing, economic<br />
development and infrastructure provision.<br />
Municipal Strategic Statement (MSS)<br />
& Local Planning Policy Framework (LPPF)<br />
The MSS and LPPF are unique for each local<br />
government/municipality. The MSS succinctly<br />
describes the principal planning objectives<br />
and strategies for the municipality and is<br />
linked <strong>to</strong> the municipal corporate plan. The<br />
MSS provides an important foundation for<br />
decision making by local government on<br />
development proposals. The LPPF provides<br />
statements of planning policy and intended<br />
actions in relation <strong>to</strong> localities, uses or<br />
activities. The MSS and LPPF must be taken<br />
in<strong>to</strong> account by local government when<br />
making a decision on a planning permit or<br />
planning scheme amendment.<br />
Zones<br />
The planning scheme maps delineate the<br />
extent and nature of the land use zones<br />
that apply in each local government area.<br />
The zones are typically based on a primary<br />
land use (Residential, Business, Industrial<br />
etc) and the zone provisions describe<br />
the primary purposes of each zone and<br />
the controls in relation <strong>to</strong> land use and<br />
development. Within each land use zone<br />
the uses that are permitted without the<br />
need for a permit, require a planning permit<br />
or that are prohibited are detailed. Zones<br />
typically include decision guidelines, which<br />
are matters that the local government will<br />
consider when making a decision on a<br />
planning permit.<br />
table 8: planning data sources<br />
Information available on the website<br />
of the Department of Planning &<br />
Community Development –<br />
www.dpcd.vic.gov.au/planning includes:<br />
• Access <strong>to</strong> Planning Scheme Documents<br />
and Maps for all local governments.<br />
• Content and current status of all planning<br />
scheme amendments.<br />
• A guide <strong>to</strong> the Vic<strong>to</strong>rian Planning System.<br />
• Legislation and regulations that are<br />
applicable in the planning system.<br />
Overlays<br />
Overlays operate in addition <strong>to</strong> the zone<br />
requirements. They may be applied <strong>to</strong><br />
particular areas for a variety of reasons<br />
including special environmental, landscape<br />
or heritage values, particular physical<br />
constraints (flooding, land slip hazard for<br />
example) or specific design or development<br />
requirements. Overlays will influence how<br />
land may be used or developed and its<br />
requirements will be considered by the local<br />
government in deciding a planning permit.<br />
The number and type of overlay that applies<br />
will be particular <strong>to</strong> each parcel of land and<br />
across local governments. The specific details<br />
of all applicable overlays must be ascertained<br />
at the outset.<br />
Other Provisions<br />
All planning schemes contain a range of<br />
standard provisions that apply <strong>to</strong> specific land<br />
uses or development activities. They include<br />
advertising signs, access <strong>to</strong> main roads, car<br />
parking, multi-unit development and a range<br />
of other activities. These requirements may<br />
be relevant for some proposals and need<br />
<strong>to</strong> be checked in each instance. Planning<br />
schemes also contain information on<br />
procedures and interpretation, which affects<br />
the administration of the scheme and permit<br />
decision-making.<br />
• Planning permit processes, permit types,<br />
application forms and other resources.<br />
• Government policy information that applies<br />
for example <strong>to</strong> Green Wedge areas, coastal<br />
areas, Melbourne 2030, regional planning<br />
and other <strong>to</strong>pics.<br />
• Urban design objectives and considerations.<br />
• Environmental assessment processes and<br />
guidelines including current project status.<br />
• A comprehensive range of planning related<br />
publications including fact sheets, guidelines<br />
and advisory documents.<br />
table 9: planning/development<br />
approvals – identifying the planning<br />
requirements<br />
• Who is the planning authority?<br />
(Which local government?)<br />
• Does State or local policy provide<br />
support for the concept?<br />
• Are there specific local policies that<br />
apply <strong>to</strong> your type of proposal?<br />
• What zone is the land located in?<br />
Is the proposed use permitted?<br />
• Are there any overlay provisions that<br />
apply <strong>to</strong> the land?<br />
• Is the proposal affected by the general<br />
provisions of the planning scheme?<br />
<strong>to</strong>urism investment guidelines 33
Project approvals<br />
Pre-Application Consultation<br />
Considering the views of others about the<br />
impacts of development proposals is part<br />
of the formal planning approvals process.<br />
It is usually highly advantageous <strong>to</strong> discuss<br />
the concept with persons or organisations<br />
that may have an interest in a project<br />
(stakeholders) before the concept is finalised<br />
and the application is submitted. There may be<br />
several different points at which external views<br />
are fed in<strong>to</strong> the formulation and detailing of<br />
the development concept.<br />
Discussions with neighbours may identify<br />
potential impacts that can be eliminated or<br />
overcome with a variation <strong>to</strong> the design –<br />
moving a building, planting trees, changing<br />
the access point, earthworks, building design.<br />
Such modifications during the detailing of the<br />
concept may enable support for a project <strong>to</strong><br />
be obtained. Negative reactions and concerns<br />
need <strong>to</strong> be addressed in the context of<br />
(amongst other things) the overall project<br />
objectives (will they be compromised by<br />
change?), project budget and viability (how<br />
do changes affect <strong>to</strong>tal costs and revenue),<br />
outcomes sought in the planning scheme (State<br />
and local policy, zones and overlays) and lateral<br />
alternatives <strong>to</strong> address such issues. Discussions<br />
and communication that commences at an early<br />
stage in the creation of the project and continues<br />
will establish valuable relationships and the best<br />
outcome for all. Delays in the approval process<br />
and significant costs can also be avoided.<br />
More complex projects may require a strategy<br />
<strong>to</strong> ensure that accurate information about the<br />
project is provided and that key persons or<br />
organisations with an interest are informed and<br />
engaged at critical points in the project’s progress.<br />
Pre-application discussions should not<br />
be limited <strong>to</strong> neighbours or community<br />
organisations. It is essential that discussions<br />
be held with the local government, service<br />
authorities and similar statu<strong>to</strong>ry bodies. The<br />
discussions with local government should be<br />
held, as a minimum in the following stages:<br />
• Prior <strong>to</strong> the development of the concept.<br />
• Following analysis of the site and the creation<br />
of a preliminary concept.<br />
• Prior <strong>to</strong> the planning application being<br />
finalised.<br />
It is important <strong>to</strong> be well prepared for the initial<br />
and all subsequent meetings with the local<br />
government. It may be advantageous <strong>to</strong> provide<br />
information on the concept in advance <strong>to</strong> assist<br />
participants <strong>to</strong> prepare for the meeting.<br />
Planning Application Requirements<br />
Local government web sites will usually<br />
detail the information that must be<br />
submitted <strong>to</strong> support a planning application.<br />
There may be general information<br />
requirements and specific matters that are<br />
<strong>to</strong> be addressed for particular types of land<br />
use or development. A systematic planning<br />
application that properly addresses all<br />
issues with a comprehensive analysis of the<br />
proposal enables local government <strong>to</strong> make<br />
an informed decision. There are statu<strong>to</strong>ry<br />
forms and fees that must be submitted with<br />
each application. An incomplete application<br />
will prevent the processing of the application<br />
from commencing. If there is insufficient<br />
information submitted with the application<br />
a request will be made <strong>to</strong> supply further<br />
information and the ‘clock will s<strong>to</strong>p’ – the<br />
statu<strong>to</strong>ry time-frame for processing the<br />
application will be suspended.<br />
Information requirements will vary between<br />
proposals, but should generally include<br />
(where relevant).<br />
• Identification of the relevant State and<br />
Local planning policy frameworks of the<br />
local government planning scheme.<br />
• Site analysis, identifying site opportunities<br />
and constraints.<br />
• The expected social, economic and<br />
environmental impacts.<br />
• Detail of pre-application consultations,<br />
including discussions with local<br />
government officers, service agencies and<br />
local residents; with dates and discussion<br />
scope or outcomes.<br />
• Case studies relevant <strong>to</strong> the proposal.<br />
• A Site Plan, drawn <strong>to</strong> scale showing:<br />
–– site boundaries and dimensions;<br />
–– the location of existing buildings on<br />
the site, including identification of<br />
those proposed for retention and<br />
removal;<br />
–– areas of significant vegetation <strong>to</strong> be<br />
retained or removed;<br />
–– abutting land uses and buildings; and<br />
–– proposed setbacks of proposed site<br />
developments.<br />
Tarrawarra Estate, Yarra Valley. Pho<strong>to</strong>grapher: John De La Roche.<br />
34 <strong>to</strong>urism investment guidelines
Project approvals<br />
Figure 6 : POTENTIAL ISSUES FOR TOURISM PROJECTS<br />
project type<br />
potential issues<br />
car parking<br />
access &<br />
circulation<br />
traffic<br />
generation<br />
noise<br />
visual impacts<br />
other amenity<br />
impacts<br />
local character<br />
waste discharge<br />
public<br />
infrastructure<br />
impacts<br />
signage<br />
environmental<br />
impacts<br />
vegetation removal<br />
water supply<br />
public land impacts<br />
economic impacts<br />
aboriginal heritage<br />
hotel • • • • • • •<br />
motel • • • •<br />
camping / caravan park • • • • • • •<br />
<strong>to</strong>urist attraction • • • • • • • • • • • •<br />
museum • •<br />
heritage attraction • • • •<br />
nature based attraction • • • • • • • •<br />
cabins • • • • • • • • • •<br />
lodge / resort • • • • • • • • • • •<br />
health spa • • • • • • •<br />
cellar door • • • • •<br />
marina • • • • • • • • • • •<br />
golf course • • • • • • • • • •<br />
café / restaurant • • • • • • •<br />
recreation attraction • • • • • • • • •<br />
animal based attraction • • • • • • • • •<br />
• Elevations of proposed buildings and<br />
infrastructure showing:<br />
–– the elevations of every building and<br />
associated infrastructure (eg. car parks);<br />
–– the relationship of the elevation of<br />
proposed buildings and infrastructure<br />
<strong>to</strong> natural ground level, and showing<br />
any proposed cut and fill; and<br />
–– a schedule of finishes, detailing<br />
proposed building materials, and the<br />
colour of the main external surfaces<br />
including roofs and buildings.<br />
• A landscape concept plan showing:<br />
–– details of existing trees and shrubs and<br />
proposed modifications; and<br />
–– any proposed landscaping, including<br />
the type of trees and shrubs proposed,<br />
and their estimated heights at maturity.<br />
• Proposed signage or interpretative facilities.<br />
• Any management issues, for example<br />
the restriction of domestic dogs and cats<br />
on land, which abuts a fauna reserve or<br />
National Park.<br />
This is a general list of information which<br />
needs <strong>to</strong> supplemented and modified<br />
according <strong>to</strong> the particular development<br />
and specific requirements in the planning<br />
scheme as detailed in the zone, overlay or<br />
particular provisions.<br />
Professional assistance is advantageous<br />
in this process <strong>to</strong> enable complete and<br />
correct documentation <strong>to</strong> be provided and<br />
<strong>to</strong> minimize delays through the need for<br />
further information <strong>to</strong> be submitted. This<br />
documentation may be examined by referral<br />
bodies and the general public and so it needs<br />
<strong>to</strong> present a comprehensive response <strong>to</strong> the<br />
information requirements and also address<br />
potential issues associated with the project.<br />
Figure 6 illustrates the issues that are<br />
typically associated with various forms<br />
of <strong>to</strong>urism projects. The design should<br />
minimize the potential for such issues. The<br />
documentation that supports the project<br />
should address how such issues are <strong>to</strong><br />
be mitigated. Specialist advice on traffic,<br />
environmental impacts, noise, visual impacts<br />
and similar matters may be required in<br />
some instances.<br />
<strong>to</strong>urism investment guidelines 35
Project approvals<br />
Planning Scheme Amendment<br />
Careful consideration needs <strong>to</strong> be given<br />
<strong>to</strong> proposing a project on a site that is not<br />
permitted under the planning scheme. If<br />
after a close assessment of the planning<br />
scheme it is considered that a strong case<br />
can be made for a change <strong>to</strong> the planning<br />
scheme then it may be possible <strong>to</strong> have<br />
the planning scheme amended so that the<br />
project may be considered. Initial discussions<br />
should occur at this stage with <strong>Tourism</strong><br />
Vic<strong>to</strong>ria <strong>to</strong> inform this assessment.<br />
The essential step in this process is <strong>to</strong> obtain<br />
support from the local planning authority<br />
for the amendment. This may be possible if<br />
for example:<br />
• The project outcomes are supported<br />
by the local government corporate plan<br />
or State planning policy.<br />
• Significant economic, community<br />
or environmental benefits can be<br />
demonstrated.<br />
• The current controls on the land are<br />
inappropriate or anomalous.<br />
• The change would achieve a better<br />
strategic planning outcome.<br />
A critical test for local government in<br />
deciding on an amendment is whether it is<br />
consistent with the future strategic directions<br />
for the local government. A reference point<br />
for local governments and the Department<br />
in advising the Minister is ensuring that the<br />
amendment satisfies the matters set out<br />
in the Planning Practice Note – Strategic<br />
Assessment <strong><strong>Guide</strong>lines</strong> for Planning Scheme<br />
Amendments (see Department of Planning<br />
& Community Development web site<br />
www.dpcd.vic.gov.au).<br />
Figure 7 : planning scheme amendment process<br />
Proposed planning scheme change<br />
discussed with Planning Authority<br />
Authorisation of the amendment<br />
by the Minister<br />
Formal presentation<br />
of the amendment<br />
Consideration of submissions<br />
by local government<br />
Referral of submissions <strong>to</strong> a Panel<br />
(incl. Priority Development Panel)<br />
Submission <strong>to</strong> the<br />
Minister for approval<br />
Gazettal of amendment<br />
If the local government agrees <strong>to</strong> support<br />
the amendment it will then request that<br />
the Minister for Planning authorise the<br />
amendment. In deciding whether or not<br />
<strong>to</strong> authorise an amendment the Minister<br />
gives consideration <strong>to</strong> consistency of the<br />
amendment with State policy or interests<br />
and whether the modification is of a<br />
local significance only. The Department<br />
of Planning & Community Development<br />
provides advice <strong>to</strong> the Minister in relation <strong>to</strong><br />
the compliance of the proposed amendment<br />
with the objectives for planning in Vic<strong>to</strong>ria<br />
and strategic policy. Consultation with the<br />
Department on the proposed planning<br />
scheme change should be an early part of<br />
the amendment process. Authorisation by<br />
the Minister will enable a formal amendment<br />
<strong>to</strong> be prepared and the statu<strong>to</strong>ry<br />
procedures <strong>to</strong> be followed.<br />
Requires support of<br />
the Planning Authority<br />
Draft ammendment<br />
<strong>to</strong> be prepared<br />
Decision by local government <strong>to</strong><br />
adopt amendment for exhibition<br />
Public Exhibition of<br />
amendment and submissions<br />
Panel Hearing and report<br />
Final decision by local<br />
government on the amendment<br />
The amendment <strong>to</strong> the planning scheme<br />
may provide a change, which enables a<br />
permit <strong>to</strong> be applied for as a subsequent<br />
and separate process. Alternatively,<br />
amendments may also be structured <strong>to</strong><br />
enable a development <strong>to</strong> proceed subject<br />
<strong>to</strong> conformity with a particular plan or set<br />
of criteria. There are also procedures that<br />
enable the concurrent amendment <strong>to</strong> the<br />
planning scheme and grant of a permit for<br />
a specific development.<br />
These procedures will require expert<br />
assistance and it will generally take at least<br />
six <strong>to</strong> twelve months for an amendment <strong>to</strong><br />
be prepared, considered and approved.<br />
36 <strong>to</strong>urism investment guidelines
Project approvals<br />
Planning Application<br />
Submission & Assessment<br />
Pre-application discussions with local<br />
government will clearly identify the<br />
required documentation <strong>to</strong> be submitted<br />
with a planning application, including the<br />
statu<strong>to</strong>ry forms, fee, plans and supporting<br />
information. The initial assessment by local<br />
government will be <strong>to</strong> determine whether<br />
there is sufficient information <strong>to</strong> enable the<br />
processing of the application. This reinforces<br />
the need for comprehensive documentation<br />
at the outset <strong>to</strong> avoid delays as there will<br />
be no further processing of the application<br />
by the local government until the additional<br />
information is submitted.<br />
Satisfac<strong>to</strong>ry documentation will enable the<br />
local government <strong>to</strong> refer the application <strong>to</strong><br />
any statu<strong>to</strong>ry referral bodies (eg. VicRoads,<br />
Catchment Management Authority, and<br />
Water Authority) and determine the<br />
notification required in relation <strong>to</strong> the<br />
application. Notification may involve advice<br />
by letter <strong>to</strong> neighbouring property owners<br />
and occupiers or more broadly, on-site<br />
signage and public newspaper notices. A<br />
period of at least 14 days is given for any<br />
submissions <strong>to</strong> be lodged on the application.<br />
Pre-application consultation will assist in<br />
minimizing the formal objections <strong>to</strong> an<br />
application. When the notification processes<br />
have been completed the local government<br />
should be contacted <strong>to</strong> obtain information<br />
on any objections submitted. Local<br />
government will consider the submissions<br />
in making a decision on the application. If<br />
objections have been lodged the following<br />
courses of action may be appropriate:<br />
Figure 8: planning permit application<br />
Complete Planing Application Forms<br />
Further Information<br />
Referrals<br />
Assessment and report<br />
Local government decision<br />
– approval or refusal<br />
• Discuss with local government the<br />
planning importance of the issues raised<br />
and changes that may be desirable.<br />
• Amend the application <strong>to</strong> address<br />
the issues – further notification may<br />
be required if the changes made are<br />
significant.<br />
• Seek resolution of the issues through<br />
a mediation process facilitated by local<br />
government.<br />
• Directly discuss the issues with objec<strong>to</strong>rs.<br />
The content and impact of the objections<br />
will determine the most appropriate course<br />
and a combination of all of these processes<br />
may be desirable if there is an opportunity<br />
<strong>to</strong> resolve issues in order <strong>to</strong> achieve a direct<br />
approval and avoid the cost and delay of<br />
subsequent appeal processes through the<br />
Vic<strong>to</strong>rian Civil and Administrative Tribunal<br />
(VCAT). Agreement reached on changes <strong>to</strong><br />
the proposal and subsequent actions – such<br />
as a withdrawal of an objection should be<br />
confirmed through written documentation.<br />
Compile all supporting<br />
Documentation<br />
Lodgement and initial Assessment<br />
Public Notification<br />
Objections<br />
– consideration and mediation<br />
VCAT application for review<br />
– refusal or conditions, third parties<br />
Discussions as a result of objections will<br />
normally need <strong>to</strong> be concluded before the<br />
application is assessed and presented <strong>to</strong> local<br />
government for a decision. An officer of the<br />
local government will prepare a report on<br />
the application, which discusses the planning<br />
merits and issues including the proposal’s fit<br />
with policy and statu<strong>to</strong>ry requirements, the<br />
content of objections and any responses<br />
<strong>to</strong> those issues. The report will include the<br />
views of any referral bodies with an interest<br />
in the project.<br />
<strong>to</strong>urism investment guidelines 37
Project approvals<br />
Local government (or an appointed delegate<br />
in relatively straight forward cases) will make<br />
the decision on the application. An approval<br />
will contain a range of conditions that must<br />
be satisfied. These need <strong>to</strong> be examined and<br />
an application for a review of the decision<br />
may be made <strong>to</strong> VCAT if a condition is<br />
considered inappropriate, unnecessary or<br />
onerous. Similarly, a request may be made<br />
<strong>to</strong> VCAT for a review of a refusal of the<br />
permit. Where there have been objections,<br />
those parties also have the right <strong>to</strong> request<br />
a review of a decision by VCAT. Time limits<br />
exist for the right <strong>to</strong> request a review by<br />
VCAT for both applicants and objec<strong>to</strong>rs.<br />
The VCAT review is independent and public.<br />
VCAT is the final arbiter in disputed planning<br />
decisions. There is however the right<br />
for a Supreme Court review of the legal<br />
aspects of a VCAT decision. The process is<br />
conducted by State Government appointed<br />
legal practitioners and planning experts.<br />
VCAT hearings are less formal than normal<br />
court proceedings and legal representation<br />
is not essential. Advice should be sought<br />
however on the benefit of conducting a<br />
review case with legal representation and<br />
the need <strong>to</strong> engage other experts (<strong>to</strong>wn<br />
planners, traffic consultants, environmental<br />
experts and others) in relation <strong>to</strong> particular<br />
aspects of the case. A matter brought<br />
before VCAT is heard ‘de novo’ – essentially<br />
the whole matter is heard afresh and the<br />
Tribunal stands in the shoes of the local<br />
government. The risk of this aspect needs <strong>to</strong><br />
be recognised in deciding <strong>to</strong> refer a matter<br />
<strong>to</strong> VCAT.<br />
table 10: request for review<br />
of a decision by VCAT<br />
Legislation: see Vic<strong>to</strong>rian Civil and<br />
Administrative Tribunal Act 1998<br />
For information see VCAT web site<br />
www.vcat.vic.gov.au<br />
Procedures guidance: Practice Note<br />
Planning & Environment List (No. 1)<br />
– General Procedures, Practice note<br />
VCAT No. 2 – Expert Evidence.<br />
See also Planning & Environment List<br />
<strong><strong>Guide</strong>lines</strong> and other Practice Notes<br />
on the web site.<br />
Most hearings are conducted in Melbourne,<br />
but periodically cases are heard in major<br />
regional cities. VCAT hearings can be time<br />
consuming and costly for all parties and should<br />
be embarked on after due consideration.<br />
Decisions are normally provided several weeks<br />
after the hearing and local government is<br />
required <strong>to</strong> act administratively in accordance<br />
with the decision.<br />
Aboriginal Heritage<br />
Native Title<br />
The Commonwealth Native Title Act<br />
1993 provides for the establishment and<br />
protection of a range of native title rights,<br />
and future regimes and compensation, and<br />
for determinations over future grants and<br />
acts affecting native title <strong>to</strong> land and water.<br />
The Act requires notification of<br />
development on or uses of public land<br />
<strong>to</strong> claimants, potential claimants, or<br />
owners. Developers are strongly advised<br />
<strong>to</strong> seek clarification of the Act and any<br />
associated issues, during early consultation<br />
with Aboriginal Affairs Vic<strong>to</strong>ria and the<br />
Department of Planning and Community<br />
Development.<br />
Aboriginal Cultural Heritage<br />
The Aboriginal Heritage Act 2006 provides<br />
for the management and protection of<br />
culturally sensitive landscapes. The Act<br />
applies <strong>to</strong> all land in Vic<strong>to</strong>ria. Development<br />
and activities proposed for example, near<br />
the coast or adjacent <strong>to</strong> water bodies may<br />
affect areas of indigenous cultural heritage<br />
value. The Aboriginal Cultural Heritage Act<br />
2006 establishes a process <strong>to</strong> identify the<br />
potential for Aboriginal cultural heritage<br />
places and objects <strong>to</strong> be affected by<br />
development.<br />
Foxeys Hangour Winery, Red Hill. Pho<strong>to</strong>grapher: John De La Roche.<br />
38 <strong>to</strong>urism investment guidelines
Project approvals<br />
Brambuk, Grampians. Pho<strong>to</strong>grapher: Bindi Cole – Snap Happy.<br />
The Aboriginal Heritage Regulations 2007<br />
define areas of high cultural sensitivity and<br />
activities that may impact on Aboriginal<br />
cultural heritage values. A Cultural Heritage<br />
Management Plan (CHMP) may be required<br />
<strong>to</strong> protect places or objects of heritage<br />
value. Where there is a requirement for<br />
a Cultural Heritage Management Plan<br />
it is required as part of the planning<br />
permit application and approval process.<br />
A planning permit must be consistent<br />
with the provisions of a Cultural Heritage<br />
Management Plan.<br />
A Cultural Heritage Management Plan<br />
is required for an activity if:<br />
• All or part of the activity area is an area<br />
of cultural heritage sensitivity; and<br />
• All or part of the activity is a high<br />
impact activity.<br />
A high impact activity is an activity that is<br />
likely <strong>to</strong> harm Aboriginal cultural heritage<br />
and examples include:<br />
• Developments that require an<br />
Environment Effects Statement.<br />
• Larger scale residential or industrial<br />
subdivisions on areas of cultural heritage<br />
sensitivity, which have not previously been<br />
significantly disturbed.<br />
• Substantial infrastructure or resource<br />
development projects on areas of cultural<br />
heritage sensitivity, which have not<br />
previously been significantly disturbed.<br />
Other circumstances requiring a Cultural<br />
Heritage Management Plan are prescribed<br />
in the Regulations. Information on the<br />
requirements of the Aboriginal Heritage Act<br />
2006 is available at www.dpcd.vic.gov.au/aav.<br />
figure 9: cultural heritage management plan (CHMP) process<br />
The diagram is an example of the process a developer would follow<br />
when seeking approvals for a large scale subdivision/development.<br />
Developer decides that a CHMP<br />
is required after checking the<br />
Regulations and any published guidelines<br />
Developer notifies the Secretary,<br />
DVC and relevant<br />
Registered Aboriginal Party (RAP)<br />
RAP responds <strong>to</strong> developer<br />
(within 14 days)<br />
and elects <strong>to</strong> evaluate the CHMP<br />
RAP has 30 days <strong>to</strong> review CHMP<br />
and <strong>to</strong> notify developer of any decision<br />
Developer provides a copy of CHMP<br />
in support of application <strong>to</strong> Council<br />
for a Residential Subdivision Permit<br />
OR<br />
Developer engages Cultural Heritage<br />
Advisor <strong>to</strong> prepare the CHMP<br />
If RAP refuses <strong>to</strong> approve the Plan,<br />
the developer is able<br />
<strong>to</strong> appeal <strong>to</strong> VCAT<br />
Developer submits application<br />
<strong>to</strong> Local Council<br />
without an approved CHMP<br />
Council advises that it is a<br />
prescribed activity on sensitive land and<br />
that it cannot make a planning decision<br />
without an approved CHMP<br />
Developer prepares CHMP<br />
Developer submits finished CHMP and<br />
prescribed fee <strong>to</strong> RAP for evaluation<br />
Local Council able <strong>to</strong> decide<br />
whether <strong>to</strong> grant or refuse<br />
approval for subdivision<br />
<strong>to</strong>urism investment guidelines 39
Project approvals<br />
<strong>Tourism</strong> Development on Public Land<br />
Public land in Vic<strong>to</strong>ria is an extensive and<br />
valuable community resource comprising<br />
most of the coastal edges and foreshores of<br />
the State; National Parks, State Parks, State<br />
Forests and other reserves; river and lake<br />
reserves; our Alpine Resorts and a range of<br />
other special purpose public reserves such<br />
as flora and fauna reserves, gardens, cultural<br />
and his<strong>to</strong>ric sites. These areas contain<br />
approximately 8 million hectares and receive<br />
an estimated 130 million visit days from<br />
<strong>to</strong>urists and recreational visi<strong>to</strong>rs annually.<br />
The Minister for Environment and<br />
Climate Change is responsible for the<br />
management of this land, which is carried<br />
out by the Department of Sustainability<br />
and Environment and bodies such as Parks<br />
Vic<strong>to</strong>ria, Alpine Resort Management Boards<br />
and Committees of Management.<br />
The use and development of public areas<br />
for <strong>to</strong>urism and other purposes is generally<br />
provided for through Management Plans<br />
and similar policy documents. Management<br />
Plans identify the nature, location and level<br />
of <strong>to</strong>urism related facilities and services <strong>to</strong><br />
be provided on public land. Most facilities<br />
are provided by the State Government<br />
through the organisation responsible for<br />
the management of a particular area. There<br />
is however, a wide range of services that<br />
may be conducted by the private sec<strong>to</strong>r<br />
on public land. They may include services<br />
such as guided <strong>to</strong>urs and interpretation,<br />
boat hire and equipment hire services,<br />
skill development, recreation experiences,<br />
special events and other activities. These<br />
activities may only be seasonal and may<br />
generally require minimal built infrastructure<br />
investment. Opera<strong>to</strong>rs may be granted a<br />
business license and a short-term lease<br />
where a specific area of public land is <strong>to</strong> be<br />
used for the delivery of the service or as a<br />
base for such operations.<br />
table 11: <strong>to</strong>urism & recreation use<br />
of public land<br />
The provision for <strong>to</strong>urism and<br />
recreation use of public land must<br />
accord with the following principles:<br />
• The activity accords with the objectives<br />
of the relevant reservation legislation<br />
and related management plans and<br />
policies.<br />
• The activity is consistent with the<br />
National Ecologically Sustainable<br />
Development objectives and principles.<br />
• Meets demonstrated need and is<br />
dependent on the natural and cultural<br />
values of the area.<br />
• Risk levels are appropriate and<br />
manageable.<br />
• Community access is not unreasonably<br />
restricted.<br />
• Net public benefit is provided in the<br />
short and long term.<br />
‘Sustainable Recreation & <strong>Tourism</strong> on<br />
Vic<strong>to</strong>ria’s Public Land’, DNRE, 2002<br />
Opportunities for the development of<br />
major <strong>to</strong>urism facilities on public land,<br />
such as accommodation, boating facilities,<br />
cafes/restaurants, sports facilities are more<br />
limited but may be provided for as part of<br />
a management plan or master plan for a<br />
specific area. The preparation of such plans<br />
would identify the need for private sec<strong>to</strong>r<br />
development, its suitability, potential impacts,<br />
and examine alternatives <strong>to</strong> the use of public<br />
land for the proposed development.<br />
Current policy directs major new <strong>to</strong>urism<br />
facilities <strong>to</strong> service visi<strong>to</strong>rs in National Parks<br />
<strong>to</strong> locations outside of the declared park<br />
area. This policy is subject <strong>to</strong> a review <strong>to</strong><br />
enable developments satisfying criteria that<br />
include public need, benefit and ecological<br />
sustainable development principles <strong>to</strong> be<br />
considered.<br />
A license <strong>to</strong> conduct a <strong>to</strong>urism or<br />
recreation service on public land may be<br />
sought through the body responsible for<br />
the management of that land. Public land<br />
managers may also from time <strong>to</strong> time<br />
seek the provision of commercial services<br />
from the private sec<strong>to</strong>r through a public<br />
tender process. The provision of a major<br />
development on public land is also normally<br />
pursued through public tender processes.<br />
In addition <strong>to</strong> approval by the land manager<br />
a planning permit from the Responsible<br />
Authority, usually the local government, will<br />
normally be required. A planning permit and<br />
other required approvals would need <strong>to</strong> be<br />
obtained following approval of the proposal<br />
by the land manager and prior <strong>to</strong> the<br />
commencement of any development.<br />
Lease and license terms<br />
A license term of up <strong>to</strong> 10 years is available<br />
for opera<strong>to</strong>rs on public land who can satisfy<br />
sustainable <strong>to</strong>urism criteria.<br />
Lease terms for development on public<br />
land are generally limited <strong>to</strong> a maximum<br />
of 21 years, but vary according <strong>to</strong> the nature<br />
of the reservation and the proposed use.<br />
In Alpine Resorts lease terms of up <strong>to</strong><br />
99 years may be granted.<br />
40 <strong>to</strong>urism investment guidelines
Project approvals<br />
table 12: legislation and public land<br />
Legislation Purpose Agency<br />
Crown Land (/Reserves) Act 1978 To provide for the reservation of Crown Land. Department of Sustainability and Environment<br />
(DSE)<br />
Coastal Management Act 1995<br />
To plan for and manage the sustainable use of<br />
Vic<strong>to</strong>ria’s coastal resources.<br />
DSE<br />
National Parks Act 1975 To preserve and protect National and State Parks. DSE<br />
Alpine Resorts Act 1983 To provide for the reservation of Alpine Resorts. DSE<br />
Alpine Resorts (Management) Act 1997<br />
Planning and Environment Act 1987<br />
Provides for the establishment and functions of<br />
Alpine Resort Management Boards.<br />
Legislative framework controlling planning<br />
approvals and scheme amendments.<br />
DSE<br />
Department of Planning & Community<br />
Development (DPCD)<br />
Forests Act 1958 To protect and manage State forests DSE<br />
Local Government Act 1989<br />
Environment Effects Act 1978<br />
Environmental Protection & Biodiversity<br />
Conservation Act 1999 (federal)<br />
Controls local government functions and<br />
responsibilities.<br />
An Act <strong>to</strong> require the environmental effects<br />
of certain works <strong>to</strong> be assessed. This Act<br />
provides for the environmental assessment of<br />
development that has the potential <strong>to</strong> impact<br />
on the environment.<br />
Protect biodiversity and associated<br />
environmental issues.<br />
DPCD<br />
DPCD and DSE<br />
Federal Government<br />
Vic<strong>to</strong>ria’s Nature Based <strong>Tourism</strong> Strategy,<br />
2008–2012 (VNBTS) recommends<br />
provisions for longer leases commensurate<br />
with the level of investment for land that<br />
comes under the Crown Land (Reserves)<br />
Act 1978 and the Forest Act 1958,<br />
and licences for <strong>to</strong>ur opera<strong>to</strong>rs <strong>to</strong> be a<br />
maximum term of 10 years. The VNBTS<br />
encourages further development of nature<br />
based <strong>to</strong>urism accommodation projects<br />
in Vic<strong>to</strong>ria.<br />
table 13: information sources for <strong>to</strong>urism opportunities on public land<br />
• Vic<strong>to</strong>rian Coastal Strategy and approved<br />
Coastal Action Plans<br />
• Relevant National Park or Foreshore<br />
Management Plans<br />
• Approved Park Management Plans<br />
or concept plans.<br />
• Alpine Resorts 2020 Strategy,<br />
Alpine Planning Scheme.<br />
• Vic<strong>to</strong>ria’s Nature Based <strong>Tourism</strong> Strategy,<br />
2008–2012<br />
• Public land legislation (see above)<br />
• See Appendix C – Key Contacts for<br />
the Department of Sustainability &<br />
Environment and Parks Vic<strong>to</strong>ria for contact<br />
information.<br />
<strong>to</strong>urism investment guidelines 41
Project approvals<br />
<strong>Tourism</strong> Development in Alpine Resorts<br />
The Vic<strong>to</strong>rian Alpine Resorts at Falls Creek,<br />
Mt Buller, Lake Mountain, Mt Baw Baw,<br />
Mt Hotham, and Mt Stirling are subject <strong>to</strong><br />
specific arrangements for planning approvals<br />
and leases. Virtually all land in these Alpine<br />
Resorts is Crown Land.<br />
Development in all of these Alpine Resorts<br />
is administered under the Alpine Resorts<br />
Planning Scheme. The Minister for Planning<br />
is the Planning Authority and Responsible<br />
Authority for all planning matters. The<br />
Department of Planning & Community<br />
Development administers the Alpine Resorts<br />
Planning Scheme for the Minister.<br />
These alpine areas are managed by Alpine<br />
Resort Management Boards (constituted<br />
under the Alpine Resorts Management<br />
Act 1998) who have responsibility for the<br />
management of Crown Land in Alpine<br />
Resorts, the provision of a number of<br />
services and promotion of the Resorts.<br />
Alpine Resorts have been excised from local<br />
government boundaries, but the respective<br />
local government is consulted as part of the<br />
planning permit application process.<br />
The Minister for Environment & Climate<br />
Change is responsible for the granting of<br />
leases on Crown Land. The Alpine Resort<br />
Management Boards make recommendations<br />
<strong>to</strong> the Minister on the grant of a new lease or<br />
the extension of an existing lease.<br />
The procedures for planning permit<br />
applications are similar <strong>to</strong> those described in<br />
Section 4. The Alpine Planning Information<br />
Kit provides a comprehensive guide <strong>to</strong> the<br />
regulations, procedures and requirements for<br />
applications (www.dpcd.vic.gov.au).<br />
Some key differences that should be noted:<br />
• The Alpine Planning Unit at DPCD should<br />
be contacted <strong>to</strong> obtain advice on the<br />
applicable planning controls, information<br />
requirements and pre-application meetings.<br />
• As the cus<strong>to</strong>dian of Crown Land, the<br />
Minister’s consent is required for an<br />
application for a planning permit.<br />
• The application will be referred <strong>to</strong> the<br />
relevant Alpine Resort Management<br />
Board for its views and requirements and<br />
<strong>to</strong> the adjacent local government for its<br />
comments. Other authorities may also<br />
be contacted as part of the referral and<br />
notification processes.<br />
• Additional and specific information<br />
may be required for each application.<br />
This may include:<br />
–– A flora and fauna assessment<br />
(in relation <strong>to</strong> impacts on flora and<br />
fauna covered by the Flora and<br />
Fauna Guarantee Act 1988 and<br />
the Environment Protection and<br />
Biodiversity Conservation Act 1999).<br />
–– A geotechnical assessment of the site<br />
in relation <strong>to</strong> the stability of the land<br />
and design in order <strong>to</strong> avoid potential<br />
land-slip hazards.<br />
–– A Site Environmental Management<br />
Plan (SEMP) that identifies potential<br />
environmental impacts and provides<br />
for management measures <strong>to</strong> reduce<br />
impacts both during construction and<br />
ongoing.<br />
Alpine areas are fragile and highly sensitive<br />
natural environments. New development<br />
within these environments must be designed<br />
<strong>to</strong> minimise the environmental impact<br />
and be appropriate <strong>to</strong> the extremes of<br />
climate experienced – temperatures, wind,<br />
ice, snow load, and snow deposition. These<br />
matters must be thoroughly addressed in a<br />
development proposal within an alpine resort.<br />
The Minister’s decision on a planning permit<br />
application in an alpine resort is subject<br />
<strong>to</strong> the same rights of review by VCAT as<br />
are all other planning permit application<br />
decisions made under the Planning &<br />
Environment Act 1987.<br />
Huski, Falls Creek. Pho<strong>to</strong>grapher: Peter Bennetts.<br />
42 <strong>to</strong>urism investment guidelines
<strong>to</strong>urism investment guidelines 43
Project approvals<br />
Alpine Resorts Leases<br />
All Vic<strong>to</strong>rian alpine resorts are Crown land<br />
permanently reserved under the Crown<br />
Land Reserves Act 1978. The exceptions are<br />
three small parcels of freehold land within<br />
the Mt Hotham Alpine Resort. Dinner Plain<br />
is also freehold alpine land but is not within<br />
a declared alpine resort.<br />
The State Government approved the<br />
Alpine Resorts Leasing Policy in 2002.<br />
(See www.dse.vic.gov.au/dse/index.htm and<br />
go <strong>to</strong> Recreation & <strong>Tourism</strong>/Alpine Resorts/<br />
Projects/Alpine Resorts Leasing Policy).<br />
The policy provides:<br />
• The right for existing lessees <strong>to</strong> negotiate a<br />
new lease on the expiry of the lease term.<br />
• The value of the improvements <strong>to</strong> the<br />
land rests with the lessee.<br />
• A lease term that is commensurate<br />
with the proposed use of the land and<br />
the value of the investment. For major<br />
investment (in excess of $8 million) lease<br />
terms of up <strong>to</strong> 51 years are available.<br />
Lease terms longer than 51 years up <strong>to</strong><br />
99 years may be possible subject <strong>to</strong> an<br />
acceptable business case. <strong>Investment</strong> of<br />
$8 million or less will be provided with a<br />
shorter lease term as may be negotiated<br />
based on the levels and nature of<br />
investment and development.<br />
• The requirement for lessees <strong>to</strong> comply with<br />
uniform standards of occupancy – planning,<br />
environmental and building policies, repair<br />
and maintenance requirements.<br />
• Site rentals are determined on the basis<br />
of a market based site value reviewed<br />
each 3 years.<br />
• A standard lease document applies<br />
<strong>to</strong> all new leases.<br />
Alpine Resort Management Boards have<br />
been delegated the power <strong>to</strong> issue new<br />
leases in alpine resorts. Most <strong>to</strong>urism<br />
investment in alpine resorts occurs on the<br />
basis of the redevelopment of an existing<br />
leased site. A new lease appropriate <strong>to</strong><br />
the use and magnitude of investment is<br />
negotiated for the development in that<br />
instance. The subdivision of a lease site may<br />
occur with approval of the Minister. From<br />
time <strong>to</strong> time new sites for development<br />
may be released within an alpine resort.<br />
The responsible Alpine Resort Management<br />
Board would normally conduct an<br />
expression of interest, a public auction and/<br />
or public tendering process <strong>to</strong> ensure the<br />
best public interest outcome.<br />
table 14: <strong>to</strong>urism development<br />
in alpine resorts<br />
• Land in declared alpine resorts is almost<br />
exclusively Crown land.<br />
• Declared alpine resorts are excluded from<br />
adjacent local government areas and are<br />
administered by Government appointed<br />
Alpine Resort Management Boards.<br />
• The Vic<strong>to</strong>rian Planning Provisions<br />
apply <strong>to</strong> all alpine resorts, which are<br />
administered by the Department of<br />
Planning & Community Development<br />
(contact Alpine Resorts Unit, DPCD).<br />
The Minister for Planning is the<br />
Responsible Authority.<br />
• Development approval processes<br />
are similar <strong>to</strong> elsewhere in Vic<strong>to</strong>ria<br />
but details are available in the Alpine<br />
Planning Kit (see DSE web site).<br />
• Long-term standard leases apply <strong>to</strong> all<br />
new development within alpine resorts<br />
– see Alpine Resorts Leasing Policy on<br />
DSE web site for details.<br />
• See Appendix C – Key Contacts<br />
for the Alpine Resorts Unit and<br />
Department of Sustainability &<br />
Environment for contact information.<br />
Huski, Falls Creek. Pho<strong>to</strong>grapher: Peter Bennetts.<br />
44 <strong>to</strong>urism investment guidelines
project approvals<br />
Convent Gallery, Daylesford and the Macedon Ranges. Pho<strong>to</strong>grapher: Peter Dunphy.<br />
Vic<strong>to</strong>rian Water Authorities<br />
The Vic<strong>to</strong>rian water industry provides<br />
services <strong>to</strong> in excess of 4.6 million<br />
people encompassing 100% of the State’s<br />
population. Water business cus<strong>to</strong>mers<br />
continue <strong>to</strong> benefit from the improved levels<br />
of service and investment <strong>to</strong> protect public<br />
and environmental health.<br />
The Vic<strong>to</strong>rian water industry covers the<br />
metropolitan and regional sec<strong>to</strong>rs of the<br />
State. All Vic<strong>to</strong>rian water businesses are<br />
State Government Business Entities (GBEs).<br />
Water businesses are guided by skills based<br />
Boards of Direc<strong>to</strong>rs.<br />
The framework governing the conservation,<br />
allocation and supply of water in Vic<strong>to</strong>ria<br />
has undergone significant change over the<br />
last 25 years. As a result there are now 20<br />
water businesses in Vic<strong>to</strong>ria, 16 regional water<br />
businesses in Vic<strong>to</strong>ria that provide urban and/or<br />
rural services. Rural business regions include:<br />
Goulburn-Murray Water<br />
Goulburn-Murray Water manages waterrelated<br />
services in a region of 68,000 square<br />
kilometres, bordered by the Great Dividing<br />
Range in the south <strong>to</strong> the River Murray in the<br />
north, and stretching from Corryong in the<br />
east, downriver <strong>to</strong> Nyah. Goulburn-Murray<br />
Water also operates salt interception works<br />
on the Murray downstream of Nyah, manages<br />
Mildura Weir, delivers bulk water <strong>to</strong> supply<br />
points outside it’s region and is the Vic<strong>to</strong>rian<br />
Constructing Authority for the Murray-<br />
Darling Basin Commission. GMW also<br />
manages recreation and other public activities<br />
on and around our major water s<strong>to</strong>rages.<br />
Southern Rural Water<br />
Southern Rural Water is responsible for<br />
managing rural water resources across the<br />
southern half of country Vic<strong>to</strong>ria, from the<br />
Great Divide <strong>to</strong> the coast.<br />
Lower Murray Water<br />
Lower Murray Water’s area of operation<br />
extends from Kerang <strong>to</strong> the South Australian<br />
border taking in the municipalities of Mildura,<br />
Swan Hill and Gannawarra.<br />
GWM Water<br />
GWM Water is a government owned water<br />
business responsible for managing urban and<br />
rural water supply systems in the Grampians,<br />
Wimmera and Mallee regions of Western<br />
Vic<strong>to</strong>ria. GWM Water also own and operate 15<br />
major bulk water supply reservoirs and manage<br />
groundwater supplies and river diversions. They<br />
are also responsible for the implementation<br />
of the Wimmera Mallee Pipeline project, with<br />
construction already underway.<br />
Approval may be required from water<br />
authorities if your proposal requires access<br />
<strong>to</strong> a reticulated water supply and/or ground<br />
water reserves.<br />
<strong>to</strong>urism investment guidelines 45
CASE STUDY 4<br />
balgownie estate<br />
Balgownie Estate at Yarra Glen is a vineyard, which has established<br />
a 5-star conference venue (up <strong>to</strong> 250 persons), accommodation<br />
(65 suites and studio rooms), restaurant and bar, cellar door and day<br />
health spa. The business is part of a well reputed wine brand, originally<br />
established in the Bendigo region. The Yarra Glen <strong>to</strong>urism business<br />
employs 70 persons (excluding the day spa).<br />
Balgownie Estate, Yarra Valley.<br />
Yarra Glen<br />
For more information go <strong>to</strong>:<br />
www.balgownieestate.com.au<br />
Success Fac<strong>to</strong>rs<br />
• A market opportunity was identified in the Yarra Valley based on the high level of visitation, a large potential<br />
market within 1 hour drive and the burgeoning reputation of the region for high quality food and wine.<br />
• The site selected for the project provides high quality views and has been important<br />
<strong>to</strong> the establishment of the image and quality of the business.<br />
• Extensive pre-concept consultation was carried out with the local government, <strong>Tourism</strong> Vic<strong>to</strong>ria,<br />
neighbours and other local stakeholders. This process ensured that factual information was provided<br />
concerning the project and it benefited from a number of useful suggestions that were taken on board<br />
in the project’s development.<br />
• The planning approval was a complex process and appointment of a planning consultant was valuable in<br />
obtaining the required approvals.<br />
• The project business plan and financial backing was established at an early stage of the process.<br />
This provided a sound basis for the extensive approval process that was required.<br />
• Knowledge of the construction industry enabled detailed management of the design process,<br />
refinement of details during the building phase and attention <strong>to</strong> construction issues as they arose.<br />
• Partnerships have been formed with other <strong>to</strong>urism businesses in the region. This enables the visi<strong>to</strong>r<br />
experience offer <strong>to</strong> be broadened and is combined with joint marketing and packaging.<br />
46 <strong>to</strong>urism investment guidelines
<strong>to</strong>urism investment guidelines 47
financing and funding<br />
Crowne Plaza, Torquay.<br />
Profitability is a fundamental requirement<br />
for any sustainable commercial business<br />
investment. Some <strong>to</strong>urism projects are<br />
however, established and operated by not<br />
for profit organisations - trusts, foundations,<br />
associations. The planning, financing<br />
and continuing funding for all <strong>to</strong>urism<br />
investment requires a business plan that<br />
is based on a sound assessment of the<br />
capital outlay, operating costs, revenue and<br />
longer term considerations of maintenance,<br />
refurbishment and upgrade.<br />
Preparation of the Business Plan<br />
Business Planning is a process of thinking<br />
strategically and combining information<br />
about the future of a business. It requires<br />
consideration of:<br />
External fac<strong>to</strong>rs<br />
• the economy<br />
• the market<br />
• cus<strong>to</strong>mers and competition<br />
Internal fac<strong>to</strong>rs<br />
• internal organisation and management<br />
• product and market mix<br />
• facilities requirements<br />
• technology needs<br />
• finance<br />
The Business Plan enables full consideration<br />
of the proposal for a given time-frame,<br />
and is essential for obtaining finance from<br />
financial institutions.<br />
It also assists <strong>to</strong>:<br />
• Clarify many of the developer’s own<br />
questions and issues.<br />
• Provide a basis for future performance<br />
analysis and forward planning.<br />
A summary of Business Plan content<br />
requirements are discussed right (table 15).<br />
This discussion should be regarded only as a<br />
‘first-pass’ guide.<br />
table 15: business plan content<br />
A Business Plan scope should cover<br />
the following:<br />
• Executive Summary – brief summary of<br />
project, project investment return and<br />
strategic issues.<br />
• Venture Profile – product description,<br />
market opportunity, target markets,<br />
SWOT analysis, consideration of<br />
options, growth strategies, and project<br />
risks.<br />
• Business Structure and Management<br />
– management structure, employment<br />
details, project development<br />
management.<br />
• Operation Plan – financial feasibility<br />
analysis, cash-flow budgets, return<br />
on investment, potential government<br />
financial support.<br />
• Marketing Plan – target markets,<br />
communication <strong>to</strong>ols, media, collateral<br />
material, and budget.<br />
• Appendix – supporting information<br />
such as developer credentials, market<br />
research details, and product details.<br />
48 <strong>to</strong>urism investment guidelines
financing and funding<br />
Business plan – key elements<br />
Management and Business Structure<br />
Management Structure<br />
Early decision on the legal form for<br />
business management is important. This<br />
has important functional and financial<br />
implications. <strong>Tourism</strong> inves<strong>to</strong>rs are therefore<br />
strongly advised <strong>to</strong> seek professional legal<br />
and financial advice on the appropriate<br />
structures for their proposals. Common<br />
management options include proprie<strong>to</strong>rship,<br />
partnership (including limited liability<br />
partnership) and proprietary company.<br />
These options are summarised in Table 16.<br />
Other more complex structures include<br />
joint venture arrangements and trusts. It<br />
is a legal requirement for limited liability<br />
companies <strong>to</strong> identify the structure, direc<strong>to</strong>rs<br />
and any professional counselling <strong>to</strong> be used,<br />
ie. accountancy, legal, marketing, etc.<br />
One of the earliest decisions <strong>to</strong> be made by<br />
the inves<strong>to</strong>r is the legal form of the business.<br />
Each of the options has advantages and<br />
disadvantages. Legal and financial advice should<br />
be sought before deciding which structure best<br />
suits the ownership and management of the<br />
proposed business venture.<br />
Employment Details<br />
Registration of a company requires<br />
information <strong>to</strong> be lodged that details<br />
information about direc<strong>to</strong>rs and their<br />
qualifications, managers, staffing structure,<br />
and who the statu<strong>to</strong>ry officers are.<br />
Project Development Management<br />
Planning and implementing any development<br />
requires competent management. For<br />
larger projects, this may require a project<br />
management team. This will typically include<br />
the inves<strong>to</strong>r and other key stakeholders<br />
such as the landowner, architect builder,<br />
subcontrac<strong>to</strong>rs, quantity surveyors, the<br />
development company, and possibly the<br />
financier. Project management in establishing<br />
a project is a specialist task. Its effectiveness<br />
can ‘make or break’ the project prior <strong>to</strong> it<br />
commencing operation.<br />
table 16: business structure options<br />
Option 1 Option 2 Option 3<br />
Sole Proprie<strong>to</strong>rship Partnership Proprietary Company<br />
Advantages<br />
• Simplest legal structure<br />
• Low start up costs<br />
• Exclusive control of asserts<br />
and profits<br />
Disadvantages<br />
• Sole responsibility for all<br />
debts and obligations<br />
• Possible difficulties in<br />
raising capital<br />
Advantages<br />
• Simplicity of formation<br />
• Minimal start up costs<br />
Project Management companies exist <strong>to</strong><br />
manage the interests of inves<strong>to</strong>rs, and<br />
<strong>to</strong>urism inves<strong>to</strong>rs should seriously consider<br />
the need for such professional service.<br />
• Increased access <strong>to</strong> finance<br />
• Diversity of skills and<br />
expertise<br />
• Limited regulation and<br />
protection from public<br />
scrutiny<br />
Disadvantages<br />
• Unlimited legal liability<br />
• Public scrutiny<br />
• Divided authority<br />
• Potential for friction<br />
• Limitations on size<br />
Operation Plan<br />
The Operation Plan provides the financial<br />
‘nuts and bolts’ of the proposal for analysis<br />
by inves<strong>to</strong>rs or financiers. It is the most<br />
important component of the Business<br />
Plan and its professional development and<br />
presentation are essential. Its main elements<br />
are discussed below.<br />
Detailed and Realistic Cash-Flow Budgets<br />
All possible costs including taxes, and all<br />
assumptions used <strong>to</strong> predict cash-flows (cash<br />
in and cash out) need <strong>to</strong> be identified and<br />
explained. For example, predicted annual<br />
<strong>to</strong>urist numbers need <strong>to</strong> be substantiated<br />
by actual visi<strong>to</strong>r statistics <strong>to</strong> the area, and <strong>to</strong><br />
other attractions of similar type and scale<br />
in the region or State. Cash-flow must be<br />
distinguished from profit. Profit measures<br />
revenue less expenditure, but does not<br />
include one-off capital expenditures on<br />
items like site acquisition, development<br />
construction, equipment purchase and<br />
Advantages<br />
• Separate legal identity<br />
• Limited liability<br />
• Preferable management<br />
structure<br />
• Ready access <strong>to</strong> finance<br />
Disadvantages<br />
• Establishment costs<br />
• Increased regulation<br />
• More record keeping<br />
• Annual returns<br />
• Available for public scrutiny<br />
fit-out. It does however, include annual<br />
maintenance and depreciation as costs<br />
against the business. The period for which<br />
cash-flow projections need <strong>to</strong> be prepared,<br />
and their required level of detail requires<br />
discussion with professional advisers including<br />
prospective financiers. A business plan should<br />
normally cover no less than three years of<br />
operation, with at least the first year’s figures<br />
presented on a monthly basis.<br />
Financial Feasibility<br />
Financial feasibility assessment is needed,<br />
<strong>to</strong>gether with the market analysis, <strong>to</strong> gauge<br />
the developer’s likely return from the<br />
initiative, and whether its continuation is<br />
warranted. The analysis is also critical <strong>to</strong><br />
obtaining finance. Therefore, realistic and<br />
appropriately indexed profitability and cashflow<br />
projections need <strong>to</strong> be prepared for<br />
both the development and operational life<br />
of the project.<br />
<strong>to</strong>urism investment guidelines 49
financing and funding<br />
Business plan – key elements (continued)<br />
Key matters that should be included in the<br />
assessment (and which financial institutions<br />
would generally require <strong>to</strong> support a funding<br />
application) are:<br />
• Anticipated costs and contingency<br />
budgets, one-off costs such as capital<br />
investment, future ongoing operating<br />
costs including marketing, taxation and<br />
finance costs, and depreciation costs for<br />
plant and equipment.<br />
• Realistic estimates of short and long-term<br />
projected revenues.<br />
• Anticipated short and long-term profit<br />
and loss.<br />
• Expected rates of return on investment<br />
over a nominated period.<br />
• Projected discounted cash-flow analysis<br />
over the life of the project <strong>to</strong> indicate<br />
debt and project pay-backs.<br />
• Sensitivities of the project <strong>to</strong> fac<strong>to</strong>rs<br />
such as cost and timing overruns, higher<br />
inflation and interest rates, decreased<br />
patronage and occupancy rates, ie.<br />
maximum reasonable adversity analysis.<br />
• Other reasonable investment<br />
assumptions.<br />
• Benchmarking <strong>to</strong> similar projects<br />
undertaken in the industry, where<br />
available; and<br />
• Appraisal of project options, eg. staged<br />
development or other modifications,<br />
scaling down increased equity versus<br />
finance etc.<br />
The options appraisal is critical <strong>to</strong> enable<br />
investment assessment. Options covered<br />
need <strong>to</strong> include both:<br />
• Staged development of the project.<br />
• Alternative options available <strong>to</strong> achieve<br />
similar or comparable <strong>to</strong>urism outcomes.<br />
Overview assessment of the relative viability<br />
of each option is required, <strong>to</strong> assist financiers<br />
and/or equity partners <strong>to</strong> determine the<br />
relative merits of the proposal within a<br />
broader context. Reasons for the choice of<br />
the preferred option need <strong>to</strong> be clear.<br />
Return on <strong>Investment</strong><br />
The proposed investment’s profitability<br />
needs <strong>to</strong> be determined as accurately as<br />
possible, supported by financial feasibility<br />
studies. Where information is available, profit<br />
projections should be compared <strong>to</strong> those<br />
from other like investments. If the estimated<br />
profit margin is a little more or less than<br />
what could be earned in a traditional ‘safe’<br />
investment, proponents and inves<strong>to</strong>rs should<br />
carefully consider the wisdom of proceeding.<br />
Calculation of the Internal Rate of Return<br />
(IRR) provides a measure of the discount<br />
(interest) rate achieved by the initial capital<br />
investment and the anticipated future cashflows.<br />
This measure can be effectively used<br />
<strong>to</strong> compare the performance of different<br />
concepts or options and enables comparison<br />
with other known investment returns.<br />
Figure 10: assessment of project viability<br />
Project Design<br />
Capital Cost<br />
Development<br />
Sensitivity Analysis<br />
The financial feasibility assessment of the<br />
project should be tested as <strong>to</strong> the effect<br />
of a variation <strong>to</strong> key assumptions on the<br />
outcome – sensitivity analysis. This analysis<br />
can take the form of both negative and<br />
positive changes. In making changes <strong>to</strong><br />
the analysis assumptions, whether it be<br />
sales, pricing, cost of capital or <strong>to</strong> other<br />
major costs the impact will be seen on the<br />
traditional measures such as rate of return<br />
or net present value. To bring it back <strong>to</strong><br />
a more basic principle, this analysis will<br />
examine the effect on cash-flow and in turn<br />
the viability of the project.<br />
This analysis will also provide an insight <strong>to</strong><br />
the project’s sensitivity <strong>to</strong> market fac<strong>to</strong>rs<br />
and its viability in the prospect of changing<br />
market forces. The modeling will give further<br />
insight <strong>to</strong> what is required <strong>to</strong> ensure that the<br />
project is a viable proposition.<br />
Acceptable<br />
Unacceptable<br />
Review<br />
Funding<br />
Revenue<br />
Operating Cost<br />
Net Cash-Flow<br />
IRR<br />
50 <strong>to</strong>urism investment guidelines
financing and funding<br />
Business plan – key elements (continued)<br />
Availability of Government Support<br />
Federal, State and local governments can<br />
provide a range of support, particularly<br />
where the investment can demonstrate<br />
significant economic benefits in a regional or<br />
State context. Such support could include<br />
grants, marketing assistance, infrastructure<br />
provision or access <strong>to</strong> Government planning<br />
approval services and facilitation assistance.<br />
All possible areas of Government support<br />
should be investigated at Local, State and<br />
Federal levels.<br />
<strong>Tourism</strong> Vic<strong>to</strong>ria will assist inves<strong>to</strong>rs<br />
<strong>to</strong> facilitate their investment projects.<br />
Specifically, <strong>Tourism</strong> Vic<strong>to</strong>ria will assist with<br />
the coordination of State agency advice<br />
in the development approvals process.<br />
Regional Development Vic<strong>to</strong>ria and the<br />
Vic<strong>to</strong>rian Business Centre should be<br />
contacted in relation <strong>to</strong> a broad range of<br />
support and assistance that is available.<br />
Obtaining Financial Support<br />
Financial Submission<br />
The Business Plan discussed earlier in<br />
this section, provides understanding of a<br />
proposal’s expected business and operating<br />
environment <strong>to</strong> assist financiers and<br />
inves<strong>to</strong>rs ascertain debt servicing capabilities<br />
and requirements.<br />
Financiers generally also require a detailed<br />
Financial Submission containing additional<br />
information including a project financing<br />
proposal. This and other required information<br />
is listed in table 17 as an indicative Financial<br />
Submission ‘checklist’. Main elements are also<br />
discussed in this section.<br />
Early consultation with potential financial<br />
institutions is essential, <strong>to</strong> clarify their<br />
requirements.<br />
table 17: indicative financial<br />
submission checklist<br />
• Business plan<br />
• Track record<br />
• Financial standing<br />
• Finance and repayment proposal<br />
• Supporting documentation<br />
• Additional collateral security<br />
Developer’s Track Record<br />
Financiers need knowledge of the<br />
developer’s business track record,<br />
particularly in business related <strong>to</strong> the<br />
submission. Descriptions of past ventures<br />
and of management experience and<br />
credentials are essential. Developers with<br />
limited experience in the <strong>to</strong>urism industry<br />
may be advised <strong>to</strong> consider employing a<br />
manager experienced in the industry.<br />
Financial Standing<br />
Financiers assess a developer’s current<br />
personal and business financial positions, and<br />
past credit and financial commitment his<strong>to</strong>ry.<br />
Financial statements including balance sheets,<br />
profit and loss statements, management<br />
accounts and taxation returns will be<br />
required for current and recent past years.<br />
The Finance Proposal<br />
A viable finance proposal for the project will<br />
be needed. A financial consultant may be<br />
required for this task. The proposal will need<br />
<strong>to</strong> include at least:<br />
• The purpose of the required loan.<br />
• The amount of debt required, and the<br />
proposed loan term.<br />
• The amount of equity <strong>to</strong> be injected by<br />
the developer, and its proposed timing.<br />
• The proposed method of debt<br />
repayment, substantiated by cash-flow<br />
and other financial detail including<br />
guarantee information if applicable, and<br />
the proposed exit strategy for the lender.<br />
• Proposed debt servicing arrangements<br />
supported by expected cash-flow and<br />
abilities <strong>to</strong> meet repayments and interest.<br />
• Security offered over the development,<br />
which may include any land, leasehold<br />
interest, buildings, plant and equipment,<br />
goodwill and debts.<br />
Documentation <strong>to</strong> Support<br />
the Finance Proposal<br />
The <strong>to</strong>urism developer will also need<br />
<strong>to</strong> provide the following support<br />
documentation with the Finance Proposal:<br />
• The previously discussed Business Plan<br />
incorporating feasibility studies and<br />
management strategies.<br />
• An assets schedule, including valuations<br />
of property offered as financial security<br />
whether for the development site or<br />
collateral security.<br />
• Where construction would be needed, a<br />
quantity surveyor’s report substantiating<br />
design, construction and development<br />
costs.<br />
• Group structure charts detailing<br />
ownership shareholding and all connected<br />
entities.<br />
• A schedule of the developer’s legal,<br />
financial and other key advisers.<br />
• Details of planning and development<br />
approvals required and obtained<br />
(refer Project Approvals).<br />
• A summary of the developer’s<br />
individual or connected entities’<br />
financial statements, and explanations for<br />
any major fluctuations in trading<br />
and balance movements.<br />
• Summaries and reconciliations of key<br />
items in projected profitability and<br />
cash-flow budgets, <strong>to</strong> explain funding<br />
requirements.<br />
• Relevant corporation documentation<br />
such as Memorandum and Articles of<br />
Association, Trust Deeds etc; details of<br />
the developer’s accounting system and<br />
reviews by independent accounting firms.<br />
<strong>to</strong>urism investment guidelines 51
financing and funding<br />
• Current aged deb<strong>to</strong>rs and<br />
credi<strong>to</strong>rs listings and fixed asset<br />
depreciation schedules.<br />
• Realistic costs and timing fac<strong>to</strong>red<br />
in<strong>to</strong> project expense considerations<br />
such as lease payments, income tax,<br />
interest, superannuation contribution,<br />
insurance, trading expenses, fringe<br />
benefits tax, annual and long service leave,<br />
capital expenses and debt repayment.<br />
Availability of contingency funds should<br />
also be demonstrated.<br />
Additional Collateral Security<br />
Collateral is security pledged as a guarantee<br />
for repayment of a loan. While the security<br />
of a venture may be sufficient collateral,<br />
financiers may also require additional<br />
collateral <strong>to</strong> guarantee payment.<br />
Examples may include a mortgage over the<br />
family home, or direc<strong>to</strong>rs’ or shareholders’<br />
guarantees. Developers may therefore<br />
need <strong>to</strong> be prepared <strong>to</strong> risk foreclosure of<br />
mortgages if venture failure occurs.<br />
Financiers may also require additional<br />
security such as fixed and floating debenture<br />
charges over the business, or charges over<br />
specific property or leasehold mortgages.<br />
Details of the above will be subject <strong>to</strong><br />
individual circumstances and negotiation<br />
with prospective financiers.<br />
Credit Assessment Fac<strong>to</strong>rs<br />
In addition <strong>to</strong> financial security matters,<br />
financiers will generally assess the following<br />
credit risk fac<strong>to</strong>rs:<br />
• Financial institution’s lending policy<br />
for the type of business.<br />
• Proven market for the proposed venture<br />
product, benchmarked against the<br />
performance of existing clients in the<br />
same market.<br />
• Proponent’s experience, and business<br />
planning, and management skills.<br />
• Ratio of debt versus equity.<br />
• Professional standing of consultants,<br />
advisers and contrac<strong>to</strong>rs engaged<br />
by the proponent; industry trends<br />
and competition.<br />
• Insurance availability for high risk<br />
or unusual ventures.<br />
• Proponent’s track record and<br />
disclosure integrity.<br />
• Proponent’s analytical objectivity and<br />
rigour used in assessing adverse fac<strong>to</strong>rs<br />
impacting on cash-flow.<br />
• Quality of the proponent’s business<br />
reporting systems.<br />
Financing and Tax Considerations<br />
Equity versus Debt Finance<br />
Equity is the amount or proportion of<br />
the overall investment supplied by owners<br />
<strong>to</strong>wards the venture.<br />
The greater the inves<strong>to</strong>r’s equity in the<br />
venture, the greater the risk being taken<br />
on its success. Equity provides funding<br />
opportunities where conventional security<br />
is not available, and where cash-flows are<br />
uncertain <strong>to</strong> support debt financing.<br />
Some specialised capital venture companies<br />
offer equity partnerships. Costs, project<br />
control and ownership issues of such<br />
partnerships will require professional legal<br />
and financial assessment. Debt finance may<br />
be obtained from various institutions such as<br />
banks, building societies, finance companies,<br />
credit unions and professional groups such<br />
as solici<strong>to</strong>rs.<br />
In determining the correct mix between<br />
equity and debt finance for a development,<br />
fac<strong>to</strong>rs <strong>to</strong> be considered include:<br />
• Developer’s funds potentially available.<br />
• Project size and cost.<br />
• Taxation considerations.<br />
• Gearing ratios for other ventures<br />
of that type.<br />
• Prevailing and anticipated interest rates.<br />
• Degree of control over the project<br />
development and cash-flow stream.<br />
Where interest rates are high or expected<br />
<strong>to</strong> be high, restricted borrowing may be<br />
desirable <strong>to</strong> reduce the risk of failure due<br />
<strong>to</strong> sudden interest rate increases.<br />
Geelong Yacht Club, Geelong. Pho<strong>to</strong>grapher: Mark Chew.<br />
At the Heads, Barwon Heads. Pho<strong>to</strong>grapher: Mark Chew.<br />
52 <strong>to</strong>urism investment guidelines
<strong>to</strong>urism investment guidelines 53
financing and funding<br />
Also, debt financing conditions need <strong>to</strong><br />
provide for projected business cash-flow and<br />
development requirements. For example,<br />
the choice of short, medium or long-term<br />
debt finance, and whether on an interes<strong>to</strong>nly<br />
or progressive repayment, can impact<br />
greatly on business viability.<br />
Other considerations include:<br />
• Size of security sought by the debt financier.<br />
• Penalties potentially imposed against early<br />
loan repayment.<br />
• Consequences of late or non-payment<br />
of debt.<br />
• Financier’s flexibility in meeting<br />
the needs of the business venture.<br />
Taxation Considerations<br />
Taxation is a major and complex<br />
consideration in the financial structuring of<br />
projects, and in business planning generally.<br />
The apportionment of project, market and<br />
revenue risks between parties can impact<br />
greatly on a project’s viability. Most banks<br />
have finance project teams <strong>to</strong> develop<br />
cus<strong>to</strong>mised project financing structures and<br />
proposals. Also, sensitive taxation aspects are<br />
usually confirmed via legally binding private<br />
taxation rulings obtained from the Australian<br />
Taxation Office.<br />
Taxation law is constantly changing.<br />
It is, therefore, essential that prospective<br />
developers seek professional taxation<br />
advice in the early stages of concept<br />
development, for attention within business<br />
planning and associated feasibility assessment<br />
documentation.<br />
Some broad overview issues<br />
are discussed below.<br />
Types of Taxes<br />
Relevant taxes include income tax, the GST,<br />
pay-roll tax, fringe benefits tax, land tax, local<br />
government rates and charges (including<br />
water rates, environmental levies, and<br />
general rates), bank account deposits and<br />
withdrawals taxes, and other Government<br />
licence fees and charges.<br />
Taxation Deductions and Incentives<br />
Taxation deductions or incentives against<br />
legitimate business establishment or<br />
improvement expenses influence income<br />
tax liability and hence business viability.<br />
Operational expenditure is usually<br />
deductible in the year incurred, while ‘capital’<br />
or structural expenditure over $300 is<br />
generally deductible as depreciation over<br />
the approximated useful life of the asset.<br />
Some conditional tax incentives may be<br />
available <strong>to</strong> stimulate greater private sec<strong>to</strong>r<br />
infrastructure investment.<br />
Depreciation<br />
Accelerated depreciation rates may apply<br />
against business plant and equipment<br />
(including those installed on leased Crown<br />
Land). <strong><strong>Guide</strong>lines</strong> are available from the<br />
Australian Taxation Office.<br />
Infrastructure Bonds<br />
Infrastructure bonds may be applicable<br />
<strong>to</strong> the financing of land/air transport or<br />
seaport infrastructure facilities associated<br />
with a project. These would reduce project<br />
financing costs through concessional tax<br />
treatment of paid bond interest.<br />
Company, individual or superannuation fund<br />
inves<strong>to</strong>rs may apply <strong>to</strong> the Commissioner of<br />
Taxation for a tax rebate or tax exemption<br />
against positive taxable income, over 15 years.<br />
As with all aspects of project financing,<br />
it is important that professional advice be<br />
sought on infrastructure bonds and any<br />
associated implications, where they are<br />
potentially applicable.<br />
54 <strong>to</strong>urism investment guidelines
CASE STUDY 5<br />
the buckland –studio retreat<br />
The Buckland is an accommodation development of four studios<br />
complemented by a café/boutique function venue. The project is a 3½<br />
hour drive from Melbourne and is located at the foot of the alpine area.<br />
Each studio is designed for a couple and features a luxury fit-out.<br />
The retreat is set in the stunning landscape of the Buckland Valley with<br />
views <strong>to</strong> Mt Buffalo. The popular regional <strong>to</strong>urist destination of Bright is<br />
only 10 minutes away.<br />
Success Fac<strong>to</strong>rs<br />
• The project concept was based on extensive market research by the developer that initially looked broadly<br />
at the ingredients that made luxury accommodation establishments successful and then at suitable locations<br />
(environment, destination, and landscape) that provided a market opportunity and affordable property prices.<br />
Statistical analysis was combined with field research of comparable businesses.<br />
• The site selected fitted the product image and market appeal desired. The spectacular views provided a unique<br />
setting. The location provided seclusion yet convenient access <strong>to</strong> both adventure and commercial facilities.<br />
The site area was sufficient for privacy for each studio and also for longer term development of later stages.<br />
• A business plan was developed early in the project’s conception. Initially the level of detail provided was sufficient<br />
for an in-principle funding approval. The plan was further detailed at a later stage for financial commitment and<br />
execution. The high level of detail in the business plan was critical <strong>to</strong> obtaining finance for the project.<br />
• The development approval process was lengthy and the proponent benefitted from early consultation with<br />
neighbours and the local government. A pro-active approach was adopted in pursuing the approval through a<br />
close association with local government staff and promptly dealing with issues raised.<br />
• The opera<strong>to</strong>rs had a clear vision of the type of development that was desired. A close working relationship was<br />
established with the project architect who also managed the construction process. This relationship enabled the<br />
cost effective and timely translation of the vision <strong>to</strong> a reality. An environmentally sustainable design approach was<br />
incorporated in the concept. Control of the internal fit-out details remained with the opera<strong>to</strong>rs.<br />
• Strong business relationships have been formed with wine and food producers, restaurants and recreation<br />
services in the area. This expands the potential offer <strong>to</strong> the visi<strong>to</strong>r.<br />
• Considerable marketing was carried out before the project opened. Since opening, marketing has focussed on<br />
cultivating electronic and print media support, particularly outlets that are utilised by the target market.<br />
Buckland Valley, north east Vic<strong>to</strong>ria<br />
For more information go <strong>to</strong>:<br />
www.thebuckland.com.au<br />
<strong>to</strong>urism investment guidelines 55
construction<br />
Taking the project concept from approval <strong>to</strong><br />
reality requires the coordinated input from a<br />
range of professions and services.<br />
The appointment of a project manager for<br />
this phase is desirable <strong>to</strong> ensure:<br />
• Effective coordination of the completion<br />
of the detailed design phase.<br />
• Competitive prices for construction are<br />
secured.<br />
• The construction phase is managed<br />
efficiently and cost effectively.<br />
Figure 11 describes the main activities<br />
in this phase.<br />
Detailed Design<br />
Approval of the concept design enables<br />
the project <strong>to</strong> proceed <strong>to</strong> detailed design.<br />
A qualified Architect may be engaged <strong>to</strong><br />
co-ordinate the preparation of detailed<br />
documentation. Incorrect or inadequate<br />
documentation of the design can lead <strong>to</strong> a<br />
misinterpretation of the design intent and<br />
time and cost overruns. The design must<br />
meet regula<strong>to</strong>ry and authority requirements<br />
and local design standards. Preparation<br />
of the documentation may involve the<br />
appointment of sub-consultants, as required<br />
(eg. engineers, environmental scientists,<br />
heritage advisors, quantity surveyors,<br />
landscape architects, etc).<br />
The content of this phase includes:<br />
• Detailed architectural drawings, structural<br />
design, building services design (cooling<br />
and heating, electrical services including<br />
lighting, hydraulic services including fire<br />
protection, lift services, security, information<br />
technology systems), building materials<br />
(internal, external, finishes and colours).<br />
Figure 11: project delivery flowchart<br />
DETaILED DESIGN<br />
Appoint<br />
Project Manager<br />
TENDERING/pRIcING<br />
Appoint<br />
Construction Manager<br />
• Interior design, fixtures and fittings<br />
and furnishings.<br />
• Site works including earthworks, fill and<br />
excavation, vegetation retention and<br />
removal, erosion remediation and<br />
land stabilisation.<br />
• Civil works including roads, car parks,<br />
pathways, service connections and<br />
distribution throughout the site, service<br />
areas, drainage and s<strong>to</strong>rm water<br />
management, waste s<strong>to</strong>rage and disposal.<br />
• Site landscaping, plant maintenance<br />
systems, water s<strong>to</strong>rage, fire hazard<br />
minimisation.<br />
• Signage and external lighting.<br />
Prepare Construction<br />
Documentation<br />
Site Establishment<br />
Compliance of Works<br />
Obtain Construction<br />
Approvals<br />
Seek Builder Selection Process Establish Contract<br />
cONSTRUcTION phaSE<br />
Construction<br />
Contact Closure<br />
All detailed design should address access<br />
and facility requirements for disabled<br />
persons, energy efficiency and sustainable<br />
development elements – alternative energy<br />
systems, water conservation and recycling,<br />
heating and cooling systems, recycled<br />
materials, waste management and recycling<br />
(see Sustainability Vic<strong>to</strong>ria website –<br />
www.sustainability.vic.gov.au).<br />
The detailed design phase should also<br />
examine the construction program and<br />
phasing of the development stages according<br />
<strong>to</strong> funds availability, market demand or<br />
related fac<strong>to</strong>rs. Detailed design requires a<br />
further and more detailed cost assessment<br />
of the development by a quantity surveyor.<br />
This cost assessment may require further<br />
refinement of the detailed design <strong>to</strong> bring<br />
the project within a desired budget range.<br />
56 <strong>to</strong>urism investment guidelines
construction<br />
Construction Tendering / Pricing<br />
The most common method of engaging a<br />
builder (or other contrac<strong>to</strong>rs) <strong>to</strong> undertake<br />
the required works is through a tendering<br />
process. There are a number of ways in<br />
which this process can be undertaken<br />
including the following:<br />
1. Selective tendering – where 3 or more<br />
contrac<strong>to</strong>rs are invited <strong>to</strong> submit a<br />
proposal/fee.<br />
In this process, contrac<strong>to</strong>rs may be<br />
selected from a pre-qualification list –<br />
which includes organisations that have<br />
previously submitted general company<br />
information through a Registration/<br />
Expression of Interest process.<br />
Government departments generally<br />
utilise this method.<br />
2. Open tendering – where a general<br />
advertisement is placed in the paper,<br />
online and/or through an agency calling<br />
for a fee proposal.<br />
Project Construction<br />
Assuming all relevant approvals have been<br />
obtained, the key steps in the construction<br />
phase are:<br />
• Tendering – advertising, assessment/<br />
negotiations and awarding the contract.<br />
• Site establishment – contrac<strong>to</strong>r gains access<br />
<strong>to</strong> site and sets up office/amenities and<br />
materials start <strong>to</strong> be delivered <strong>to</strong> the site.<br />
• Contractual construction phase –<br />
supervisor/project manager oversees<br />
the works.<br />
Once the project is ready <strong>to</strong> proceed, a<br />
construction manager should be appointed<br />
<strong>to</strong> oversee the works. This person coordinates<br />
the construction team (including<br />
the architect and contrac<strong>to</strong>rs) on behalf of<br />
the client and is charged with the task of<br />
getting the project <strong>to</strong> a practical completion<br />
stage within budget and time limitations.<br />
Key roles may include:<br />
• Managing the selection and appointment<br />
of contrac<strong>to</strong>rs.<br />
• Planning and managing the various<br />
building activities – via phone calls, emails,<br />
faxes, site inspections and site meetings.<br />
• Managing contract variations.<br />
• Processing claims for payment.<br />
While the Project Manager is primarily<br />
responsible for the coordination of all<br />
construction activities, the Architect plays<br />
an important role in this construction<br />
phase, as it is their design and vision that<br />
is being implemented. The Architect<br />
should undertake regular inspections of<br />
the construction works <strong>to</strong> ensure that the<br />
design intent is being interpreted correctly.<br />
This also allows them <strong>to</strong> rectify any issues as<br />
they arise.<br />
The Construction Manager has a principal<br />
responsibility <strong>to</strong> ensure that all OHS<br />
Standards on the construction site are<br />
satisfied and that the project program is<br />
met. In some regional locations the timely<br />
sourcing of materials, specialist contrac<strong>to</strong>rs<br />
and delivery of specified fittings needs <strong>to</strong><br />
be realistically fac<strong>to</strong>red in<strong>to</strong> the<br />
construction program.<br />
The successful completion of the project<br />
construction phase can be influenced by<br />
a number of fac<strong>to</strong>rs, which include:<br />
• Getting good advice throughout the<br />
process, including planning, quantity<br />
surveying and financial.<br />
• Selecting good contrac<strong>to</strong>rs with a proven<br />
track record in the field. Do not select<br />
a contrac<strong>to</strong>r based on price alone.<br />
Undertake reference checks <strong>to</strong> verify<br />
prior experience and quality of work.<br />
• Having a realistic budget for the works<br />
that makes provision for unexpected<br />
cost increases.<br />
• Keeping design changes and variations<br />
<strong>to</strong> a minimum.<br />
• Following the correct processes and<br />
not cutting corners.<br />
table 18: what are the pricing traps that<br />
inexperiences inves<strong>to</strong>rs often fall in<strong>to</strong>?<br />
• Under budgeting, which may be due<br />
<strong>to</strong> a wide range of design (design<br />
complexity, unresolved details, selection<br />
of fittings, finishes or materials and<br />
other aspects) or site fac<strong>to</strong>rs (ground<br />
conditions, vegetation, demolition/<br />
remediation works etc).<br />
• Conservative quantity surveyor costs.<br />
• Cost escalation during construction,<br />
eg. fuel prices and materials, which may<br />
occur between the detailed design<br />
and construction phases or during<br />
construction. There are often many<br />
external fac<strong>to</strong>rs that have an impact<br />
on prices.<br />
• Selecting a contrac<strong>to</strong>r based on a<br />
low price – this will often be due <strong>to</strong> a<br />
contract with no contingencies included,<br />
and will generally lead <strong>to</strong> price variations<br />
throughout the construction stage.<br />
• Under estimating the construction<br />
period (eg. due <strong>to</strong> bad weather) – which<br />
can lead <strong>to</strong> delays and escalating costs.<br />
<strong>to</strong>urism investment guidelines 57
Key success fac<strong>to</strong>rs<br />
The conception and development of a<br />
successful and sustainable <strong>to</strong>urism project<br />
should have the following attributes:<br />
table 19: key success fac<strong>to</strong>rs<br />
Point of Difference ✓ The project should be based on a good idea<br />
Quantified Market Demand ✓ Comprehensively research the market opportunity.<br />
Location, Location, Location ✓ The location should suit the proposed use and enhance appeal.<br />
Sustainable Design ✓ Design for your cus<strong>to</strong>mers, the environment, the surrounds and the budget.<br />
Manage the Approvals Process ✓ Understand approval processes and consult broadly <strong>to</strong> minimise delays.<br />
Financial Feasibility ✓ Test the financial viability of the project and identify risk areas.<br />
Sound Business Plan ✓ To obtain financial support detail your plan for the business <strong>to</strong> succeed.<br />
Effective Construction Management ✓ Ensure management of all construction activities <strong>to</strong> deliver it on time and budget.<br />
Experienced Specialist Advisors ✓ Choose experienced specialists <strong>to</strong> advise and assist in the project throughout its<br />
various stages.<br />
Royal Mail Hotel, Dunkeld.<br />
58 <strong>to</strong>urism investment guidelines
appendices<br />
appendix A<br />
Summary - 10 Year <strong>Tourism</strong> & Events Industry Strategy<br />
objective<br />
A.<br />
B.<br />
Building upon existing strengths.<br />
Develop new strengths.<br />
C. Focus on long-term<br />
growth opportunities.<br />
D. Strengthen the partnership<br />
between Government and<br />
Industry.<br />
Actions<br />
1.<br />
2.<br />
3.<br />
4.<br />
5.<br />
6.<br />
7.<br />
8.<br />
9.<br />
Improving the branding and marketing of Vic<strong>to</strong>ria.<br />
Major events.<br />
Aviation access.<br />
Infrastructure development.<br />
<strong>Investment</strong> attraction and facilitation.<br />
Skills and service standards.<br />
Third generation cus<strong>to</strong>mer conversion services.<br />
Emerging international markets.<br />
Business events acquisition.<br />
10. Regional destination development.<br />
11. Building synergies between <strong>to</strong>urism and<br />
international education.<br />
12. Promoting better decision-making.<br />
13. Coordination and policy advocacy.<br />
14. Communication.<br />
key activities<br />
• Soundly researched based marketing campaigns.<br />
• Complement national campaigns effectively.<br />
• Respond <strong>to</strong> contemporary influences.<br />
• Target high yield markets.<br />
• Actively support and pursue the retention, acquisition, staging<br />
and management of major events.<br />
• Pursue further Network Development Agreements with high<br />
value carriers.<br />
• Strengthen efforts on international aviation policy<br />
development and access advocacy.<br />
• Ensure the <strong>to</strong>urism and events industry needs are considered<br />
in the planning of major infrastructure projects.<br />
• Expand private investment in<strong>to</strong> <strong>to</strong>urism assets, particularly from<br />
international sources.<br />
• Continue implementation of the <strong>Tourism</strong> Excellence Program.<br />
• Prepare a Workforce Development Plan for the <strong>to</strong>urism<br />
industry.<br />
• Maintain <strong>Tourism</strong> Vic<strong>to</strong>ria’s leadership in on-line services<br />
through innovation and new technology applications.<br />
• Assist the industry <strong>to</strong> develop its on-line capability.<br />
• Support development (infrastructure, skills, and products) that<br />
meets the needs of potential international markets.<br />
• Target emerging Asian markets, particularly China.<br />
• Strengthen the capacity of the Melbourne Convention and<br />
Visi<strong>to</strong>rs Bureau <strong>to</strong> capture business events.<br />
• Improve business event attraction<br />
in regional Vic<strong>to</strong>ria.<br />
• Continue implementation of the Government’s regional<br />
economic strategy – Moving Forward, Making Provincial Vic<strong>to</strong>ria<br />
the Best Place <strong>to</strong> Live, Work and Invest.<br />
• Convene a Regional <strong>Tourism</strong> Summit <strong>to</strong> address regional<br />
<strong>to</strong>urism issues.<br />
• Assist educational organisations in the promotion of Melbourne<br />
as an attractive study destination.<br />
• Promote a Destination Management approach <strong>to</strong> Vic<strong>to</strong>ria’s<br />
<strong>to</strong>urism and events industry through whole-of-government<br />
decision making.<br />
• Establish a Vic<strong>to</strong>rian <strong>Tourism</strong> and Events Advisory Council <strong>to</strong><br />
oversee implementation of the 10 year Strategy.<br />
• Strengthen the role of local government through expanded<br />
Regional <strong>Tourism</strong> Development Plans and acquisition of<br />
necessary industry skills.<br />
• Advocate Vic<strong>to</strong>ria’s interests at the Commonwealth level.<br />
• Continue programs <strong>to</strong> communicate the economic significance<br />
of <strong>to</strong>urism.<br />
• Develop a communications strategy <strong>to</strong> highlight the importance<br />
of the <strong>to</strong>urism and events industry.<br />
<strong>to</strong>urism investment guidelines 59
appendices<br />
appendix B<br />
sustainable design and construction for <strong>to</strong>urism development<br />
Tips for Sustainable Design and Construction for <strong>Tourism</strong> Developments<br />
Energy Conservation<br />
• Incorporate passive solar design principles<br />
<strong>to</strong> maximise day-lighting and passive heating<br />
opportunities.<br />
• Incorporate energy efficient design principles<br />
<strong>to</strong> minimise active heating and cooling<br />
requirements.<br />
• Specify energy efficient equipment and<br />
lighting systems.<br />
• Provide efficient control and effective<br />
maintenance systems, including moni<strong>to</strong>ring of<br />
energy consumption.<br />
• Optimise opportunities <strong>to</strong> use renewable<br />
energy sources and incorporate renewable<br />
energy technologies wherever possible.<br />
• Minimise embodied energy in construction<br />
materials.<br />
Water Conservation<br />
• Facilitate opportunities for on-site treatment<br />
and reuse of grey-water and black-water<br />
(sewage) streams<br />
• Minimise water consumption through practices<br />
such as:<br />
–– installing rain water and s<strong>to</strong>rm water<br />
collection tanks.<br />
–– installing reuse systems for grey water<br />
–– providing water efficient facilities and<br />
equipment.<br />
–– providing effective moni<strong>to</strong>ring and<br />
maintenance systems.<br />
Minimisation of Fossil Fuel Usage<br />
associated with Transport<br />
• Facilitate staff access <strong>to</strong> public transport.<br />
• Encourage cycling by providing showering and<br />
s<strong>to</strong>rage facilities.<br />
• Facilitate the use of appropriate<br />
communication technologies, such as tele- and<br />
video conferencing facilities.<br />
• Minimise on-site car parking facilities.<br />
• Minimise transport distances involved in the<br />
demolition, recycling, construction, fit-out and<br />
operational phases of the project.<br />
Preserve Natural Features of Site<br />
• Avoid development on sites or sections<br />
of sites of high ecological value.<br />
• Minimise disturbance <strong>to</strong> site and regional<br />
ecosystems during construction and operation.<br />
• Res<strong>to</strong>re land equivalent <strong>to</strong> the area disturbed<br />
by the building and where possible the<br />
ecological footprint associated with operational<br />
activities.<br />
Building Materials Conservation<br />
• Modify existing facilities <strong>to</strong> serve new<br />
requirements and reuse existing materials.<br />
• Minimise building materials produced from<br />
limited or ecologically unsustainable natural<br />
resources.<br />
• Minimise building materials that have<br />
damaging ecological effects during harvesting,<br />
manufacturing, and/or construction.<br />
• Minimise the use of building materials<br />
with high embodied energy.<br />
• Minimise life cycle costs through using materials<br />
and equipment requiring minimal maintenance<br />
and with maximised expected useful life.<br />
• Maximise the use of recycled content material<br />
where there is a cost difference<br />
of less than 5%.<br />
Waste Minimisation<br />
• Maximise building longevity through creation of<br />
flexible and readily adaptable designs.<br />
• Provide facilities <strong>to</strong> assist office waste<br />
separation in<strong>to</strong> reusable, recyclable,<br />
compostable and landfill components.<br />
• Minimise construction waste going <strong>to</strong> land fill<br />
through a material tracking system.<br />
• Incorporate organic and water-based site<br />
waste disposal systems in<strong>to</strong> landscaping design.<br />
Enhancement of Indoor<br />
Environmental Quality<br />
• Minimise all work spaces exposed <strong>to</strong> glare and<br />
excessive lighting.<br />
• Provide all building occupants with a view <strong>to</strong><br />
the outside.<br />
• Use air conditioning systems that allow for the<br />
supply of fresh outside air.<br />
• Shield all building occupants from<br />
Electromagnetic Radiation (EMR) sources.<br />
Appropriate Landscaping<br />
• Design landscaping <strong>to</strong> facilitate year round<br />
moderation of the internal climate.<br />
• Minimise erosion potential.<br />
• Plant indigenous flora, and where appropriate,<br />
food-generating plants.<br />
• Design landscaping <strong>to</strong> allow external meeting<br />
and break out areas.<br />
• Maximise the reuse on site of all rock and<br />
<strong>to</strong>psoil emanating from excavations work.<br />
• Maximise the use of recycled compost, soil<br />
conditioners and mulches.<br />
Enhance Community Life<br />
• Involve the local community appropriately in<br />
the design process.<br />
• Respect, reflect and integrate the development<br />
with the surrounding culture and activities of<br />
the district.<br />
• Create facilities that are accessible and available<br />
for community use.<br />
• Purchase local products and services where<br />
possible.<br />
Maintenance<br />
• Provide legal structures (building leases,<br />
maintenance agreements, strata titles and<br />
tenancy agreements) <strong>to</strong> preserve the<br />
environmental performance of the building.<br />
Adopted from DSE’s ESDC Principles and <strong><strong>Guide</strong>lines</strong> for Capital Works Projects<br />
60 <strong>to</strong>urism investment guidelines
appendices<br />
appendix C<br />
key organisations<br />
Aboriginal Affairs Vic<strong>to</strong>ria<br />
Department of Planning and<br />
Community Development (DPCD)<br />
GPO Box 2392<br />
Melbourne VIC 3001<br />
Phone: 1300 366 356<br />
www.dpcd.vic.gov.au/aav/<br />
Alpine Planning Unit<br />
Department of Planning and<br />
Community Development,<br />
North East Region<br />
89 Sydney Road<br />
BENALLA VIC 3672<br />
Phone: 03 5761 1611<br />
Australian Institute of<br />
Landscape Architects<br />
Level 1, 41 Exhibition Street<br />
Melbourne VIC 3000<br />
Phone: 03 9650 1898<br />
Fax: 03 9650 3360<br />
Email: aila@raia.com.au<br />
www.aila.org.au<br />
Australian Bureau of Statistics<br />
GPO Box 2796Y<br />
MELBOURNE VIC 3000<br />
Phone: 1300 135 070<br />
Fax: 1300 135 211<br />
Email: client.services@abs.gov.au<br />
www.abs.gov.au<br />
Australian Market<br />
& Social Research Society<br />
Level 1, 3 Queen Street<br />
Glebe NSW 2037<br />
Phone: 02 9566 3100<br />
Fax: 02 9571 5944<br />
Email: mrsa@mrsa.com.au<br />
www.mrsa.com.au<br />
Australian Sustainable<br />
Built Environment Council<br />
20 Bryant Street,<br />
FLEMINGTON VIC<br />
info@asbec.asn.au<br />
www.asbec.asn.au<br />
Business Vic<strong>to</strong>ria<br />
121 Exhibition Street<br />
Melbourne VIC 3000<br />
Phone 13 22 15<br />
Fax: 03 9651 9770<br />
Email: enquiries@iird.vic.gov.au<br />
www.business.vic.gov.au<br />
Consumer Affairs Vic<strong>to</strong>ria<br />
(Liquor Licensing)<br />
Level 2, 452 Flinders Street<br />
Melbourne VIC 3000<br />
Phone: 1300 55 81 81<br />
Email: consumer@justice.vic.gov.au<br />
www.consumer.vic.gov.au<br />
Department of Infrastructure<br />
GPO Box 2797<br />
Melbourne VIC 3001<br />
Phone: 03 9655 6666<br />
Fax: 03 9655 6762<br />
www.doi.vic.gov.au<br />
Department of Planning and<br />
Community Development (DPCD)<br />
GPO Box 2392<br />
Melbourne VIC 3001<br />
Phone: 1300 366 356<br />
www.dpcd.vic.gov.au/aav/<br />
Department of Primary Industries<br />
GPO Box 4440<br />
Melbourne VIC 3001<br />
Phone 03 9658 4000<br />
Email: cus<strong>to</strong>merservice@dpi.vic.gov.au<br />
www.dpi.vic.gov.au<br />
Department of Industry Innovation<br />
and Regional Development<br />
Invest Vic<strong>to</strong>ria<br />
GPO Box 4509<br />
Melbourne VIC 3000<br />
Phone: 03 9651 8100<br />
Fax: 03 9651 9531<br />
Email: invest@iird.vic.gov.au<br />
www.invest.vic.gov.au<br />
Department of Sustainability<br />
and Environment<br />
8 Nicholson Street<br />
EAST MELBOURNE VIC 3002<br />
Phone: 03 9637 8000, 13 61 86<br />
www.dse.vic.gov.au<br />
Environment Protection Authority<br />
Information Centre<br />
H&WT Tower<br />
40 City Road<br />
SOUTHBANK VIC 3006<br />
Phone: 03 9695 2722<br />
Fax: 03 9695 2785<br />
www.epa.vic.gov.au<br />
GBCA Melbourne<br />
Level17,<br />
500 Collins Street,<br />
MELBOURNE VIC 3000<br />
Phone: 03 8612 2000<br />
Fax: 03 9614 8338<br />
www.gbca.org.au<br />
GWM Water<br />
PO Box 481<br />
Horsham VIC 3402<br />
Phone: 1300 659 961<br />
www.gwmwater.org.au<br />
Goulburn-Murray Water<br />
PO Box 165<br />
Tatura VIC 3616<br />
Phone: 03 5833 5500<br />
www.g-mwater.com.au<br />
Heritage Vic<strong>to</strong>ria<br />
and Heritage Council<br />
Level 22, 80 Collins Street<br />
MELBOURNE VIC 3000<br />
Telephone: 03 9655 6519<br />
www.heritage.vic.gov.au<br />
Lower Murray Water<br />
PO Box 1438<br />
Mildura VIC 3502<br />
Phone: 03 5051 3400<br />
www.gwmwater.org.au<br />
Municipal Association of Vic<strong>to</strong>ria<br />
GPO Box 4326PP<br />
MELBOURNE VIC 3001<br />
Phone: 03 9667 5555<br />
Email: inquiries@mav.asn.au<br />
www.mav.asn.au<br />
Parks Vic<strong>to</strong>ria<br />
10/535 Bourke Street<br />
MELBOURNE VIC 3000<br />
Phone: 03 8627 4699<br />
Fax: 03 9629 5563<br />
www.parkweb.vic.gov.au<br />
Planning Institute of Australia<br />
60 Leicester Street<br />
Carl<strong>to</strong>n VIC 3053<br />
Phone: 03 9347 1900<br />
Fax: 03 9347 2900<br />
Email: vic@planning.org.au<br />
www.planning.org.au<br />
Property Council of Australia<br />
Level 7, 136 Exhibition Street<br />
MELBOURNE VIC 3000<br />
Phone: 03 9650 8300<br />
Fax: 03 9650 8693<br />
www.propertyoz.com.au<br />
Regional Development Vic<strong>to</strong>ria<br />
GPO Box 4509<br />
Melbourne VIC 3000<br />
Phone: 13 22 15<br />
Email: enquiries@iird.vic.gov.au<br />
www.business.vic.gov.au<br />
www.iird.vic.gov.au<br />
Royal Australian Institute<br />
of Architects<br />
1st floor , 41 Exhibition Street,<br />
Melbourne VIC 3000<br />
PO Box 18025<br />
Phone: 03 8620 3866<br />
Fax: 03 8620 3886<br />
national@raia.com.au<br />
www.architecture.com.au<br />
Southern Rural Water<br />
PO Box 153<br />
Maffra VIC 3860<br />
Phone: 03 5139 3100<br />
www.srw.com.au<br />
Sustainability Vic<strong>to</strong>ria<br />
Level 28, 50 Lonsdale Street<br />
Melbourne VIC 3000<br />
Phone: 03 8626 8700<br />
Fax: 03 9663 1007<br />
www.sustainability.vic.gov.au<br />
<strong>Tourism</strong> Alliance Vic<strong>to</strong>ria<br />
Level 3, 114 Flinders Street<br />
Melbourne VIC 3000<br />
Phone: 03 9650 8399<br />
Fax: 03 9650 8543<br />
Email: info@<strong>to</strong>urismalliance.com.au<br />
www.<strong>to</strong>urismalliance.com.au<br />
<strong>Tourism</strong> Australia<br />
Level 4, 80 William Street<br />
East Sydney NSW 2000<br />
Phone: 02 9360 1111<br />
Fax: 02 9361 1388<br />
Email: corpaffairs@<strong>to</strong>urism.australia.com<br />
www.<strong>to</strong>urism.australia.com<br />
<strong>Tourism</strong> Research Australia<br />
PO Box 1110<br />
Belconnen ACT 2616<br />
Phone: 02 6228 6100<br />
Fax: 02 6228 6180<br />
www.tra.australia.com<br />
<strong>Tourism</strong> Vic<strong>to</strong>ria<br />
32/121 Exhibition Street<br />
MELBOURNE VIC 3000<br />
GPO Box 2219T<br />
MELBOURNE VIC 3001<br />
Phone: 03 9653 9777<br />
Fax: 03 9653 9722<br />
www.<strong>to</strong>urismvic<strong>to</strong>ria.com.au<br />
VICROADS<br />
Head Office Administration<br />
60 Denmark Street<br />
Kew VIC 3101<br />
Phone: 13 11 74<br />
www.vicroads.vic.gov.au<br />
<strong>to</strong>urism investment guidelines 61