Tourism Planning Taskforce Report - Western Australian Planning ...

Chapter 6Term of Reference 3system. This causes that visitor someconfusion and disappointment on return visitswhen another unit has only a standardtelevision and no stereo system. A similarreaction occurs when two visitors in adjacentunits compare their respective units fit-outs,one with the expensive equipment, the otherwith a standard television and no stereo.Inadequate management arrangements thatallow unit owners to elect to leave their unitsempty for the time they are not residing inthem may result in a resort that looks halfempty and lacks atmosphere and vitality. Onceagain, this can reduce the visitor experienceavailable and the tourism value of the area. Italso has a detrimental effect on the ability tooperate the facility effectively, with consequentloss of tourism management.Tourism WA considers that there are severalexamples of poorly developed strata titledtourism facilities in Western Australia. Someare viewed as having been developer-realestate motivated, and tourism has been usedas the vehicle to gain the required planningand development approvals. This has resultedin some local governments seeking to limit theuse of strata schemes for tourismdevelopments, which has been acknowledgedby the taskforce as potentially of concern dueto the associated loss of the inherent financingadvantages of such schemes.The issues of tourism concern, as set out bythe Tourism WA, essentially arise from therights, interests and purchase intentions ofinvestors in schemes not effectively regulatedor managed for tourism purposes, reflecting aresidential as opposed to tourism investmentintention. While these issues are common tostrata schemes generally, they may beexacerbated in survey strata schemes withoutcommon management requirements. This canoccur as each lot (future tourism unit(s)) isdeveloped by individual owners and can resultin the lack of achievement of an integrateddevelopment.The appropriateness of the use of stratasubdivision also varies with the type ofdevelopments to which it is applied. The useof strata schemes for caravan park andcamping ground subdivision has beenprecluded through legislative change due tothe complex issues that this gave rise to. Thetaskforce also identified concerns in respect tothe use of strata subdivision within tourismzonings that provide for relatively low-densityforms of development, such as chalet/cabintype zones, due to the potential for suchschemes to promote real estate drivendevelopment, and facilitate residential holidayhome use, not tourism use.6.4 Strata schemes: generalissuesFinancing alternativesRestrictive policies of financial institutions, andpossibly the relatively low returns generallyachieved from the operation of tourismdevelopment over recent years (relative to theresidential sector), have resulted in restrictionson available capital for investment in thetourism sector. This is particularly evident inregional areas, with strata schemes employedby the development sector to overcome theseconstraints on development finance, which isthe most common and flexible mechanism offinancing tourism development. However, theyare only one of a range of schemes availablefor financing of tourism developments thatincludes:• syndication• vacation rental (time share)• private equity• (listed) property trustsEach alternative has advantages in specificcircumstances and is attractive to differentinvestment sectors. Correspondingly, eachpotentially could compensate for a restrictionin the use of strata schemes for tourismdevelopment. The taskforce; however acceptsthat under such a move, the level of tourisminvestment would be likely to decline, at leastin the short term, as the number of potentialinvestors is reduced.The need for a restriction on the use of strataschemes for tourism development, due to theissues outlined, was raised directly with thetaskforce. In consideration of this it was notedthat strata schemes are a legitimate tool forthe subdivision of tourism developments andcurrently are considered by the developmentindustry as fundamental to the financing of48 Tourism Planning Taskforce Report