victoria's geothermal and natural mineral water ... - Tourism Victoria

v i c to r i a’ s g e ot h e r m a l a n d n at u r a l m i n e r a l 

water tourism investment opportunities 

september 2007

1 Executive Summary ...................................................................................................................................................................................................4 

2 Tourism Opportunities ..........................................................................................................................................................................................6 

Domestic and international market positioning .....................................................................................................................................................6 

Who is investing in natural spa tourism? ....................................................................................................................................................................6 

Why invest in natural tourism? ..........................................................................................................................................................................................7 

International development ...................................................................................................................................................................................................7 

What’s on offer in Victoria – Potential for growth ..............................................................................................................................................7 

3 Existing Spa Tourism Market Nationally .........................................................................................................................................9 

Age ......................................................................................................................................................................................................................................................9 

Gender ..........................................................................................................................................................................................................................................10 

Geographic profile .................................................................................................................................................................................................................10 

Visitation .......................................................................................................................................................................................................................................10 

Accommodation and travel preferences ..................................................................................................................................................................11 

Potential for market growth ............................................................................................................................................................................................11 

4 Victoria’s Geothermal Water Resources ......................................................................................................................................12 

History of geothermal water use .................................................................................................................................................................................12 

Current and potential use .................................................................................................................................................................................................13 

Victoria’s geothermal provinces .....................................................................................................................................................................................13 

5 Victoria’s Natural Mineral Water Resources ..........................................................................................................................19 

History of mineral water use ..........................................................................................................................................................................................19 

Current and potential use .................................................................................................................................................................................................20 

Victoria’s natural mineral water provinces ..............................................................................................................................................................22 

6 International Development Examples .............................................................................................................................................26 

Europe............................................................................................................................................................................................................................................26 

Japan ................................................................................................................................................................................................................................................30 

USA .................................................................................................................................................................................................................................................31 

South East Asia ........................................................................................................................................................................................................................31 

New Zealand .............................................................................................................................................................................................................................32 

7 References...........................................................................................................................................................................................................................34 

Further reading .........................................................................................................................................................................................................................34 

Footnotes .....................................................................................................................................................................................................................................34 

Maps and figures .....................................................................................................................................................................................................................34 

Key organisations .....................................................................................................................................................................................................................35 

8 Terms and Definitions ..........................................................................................................................................................................................36 

Appendix A Statutory considerations .......................................................................................................................................................................37 

Appendix B Planning and design ...................................................................................................................................................................................39 

Disclaimer 

Cover image: Peninsula Hot Springs 

contents 

This document has been created as a source of information on tourism development potential in Victoria. Parties investigating these opportunities must 

seek specialist hydrogeological advice on natural mineral and geothermal water occurrences. In relation to mineral water proposals, it is important that investors 

also work closely with the Victorian Mineral Water’s Ministerial Advisory Committee and the Department of Sustainability and Environment (DSE) which have 

responsibility for the protection and management of these valuable and naturally occurring assets. Further technical data on specific sites can be found on the 

Victorian Mineral Water Committee and DSE website. Tourism Victoria is available to assist investors with development and research inquiries. 

2 

victoria’s geothermal and natural mineral water tourism investment opportunities

Victoria is very fortunate to have ready access to natural mineral springs and geothermal waters. 

These springs and water reserves present Victoria with a fantastic opportunity to further 

develop as an international destination for natural spa tourism. 

Geothermal water and mineral springs have long been associated with improving mental 

and physical health through therapeutic bathing, relaxation and drinking enjoyment. 

Internationally there are many popular tourism developments built around these natural 

resources, as demand for lifestyle destinations and experiences grow. 

These guidelines have been developed at a time when the spa and wellness industry is 

experiencing rapid growth. In Victoria, this sector has the potential to provide significant 

economic and social benefits. 

They describe the key characteristics of Victoria’s geothermal water and mineral spring resources, providing an insight 

into the demand for services and the development potential of new and existing facilities in regional communities. 

It is hoped they will increase awareness of Victoria’s geothermal water and mineral spring resources and help to better 

coordinate investor inquiries to state and local government. 

The Victorian Government has a keen interest in this sector, and is committed to working with local government, 

community groups and investors who wish to explore the exciting opportunities presented by Victoria’s natural 

advantages. 

TIM HOLDING MP 

Minister for Tourism and Major Events 

message From the minister 

3 


1. executive summary 

Victoria’s geothermal and natural mineral water resources are naturally pure products. Formed by hydro-geological 

processes, they contain varied and unique concentrations of minerals that cannot be artificially replicated by heating 

or treating normal ‘fresh’ surface or reticulated water. 

Geothermal water and natural mineral water have long been associated with mental and physical health benefits 

whether for therapeutic bathing or enjoyment from drinking. Around the world there are many popular tourism 

developments built around these natural resources, which are experiencing increasing demand from people for 

improved health and as lifestyle destinations and experiences. 

Figure 1 Victoria’s geothermal and natural mineral water occurrences 

4 

Portsea 


1. executive summary 

Continued 

Spa visitation in Australia is growing at a rapid rate; nationally there were 225,000 domestic overnight visitors to health 

spas in year ending June 2006 1 , an average annual increase of 12.7% since year ending June 2004. This outperformed 

the annual average growth rate of total domestic overnight visitation. Victoria’s market share of Australian domestic spa 

visitors is 27% making it the third largest market after Queensland and New South Wales. In the year ending June 2006 

there were 100,600 international spa visitors 2 , an average annual increase of 25.4% since year ending June 2004. It must 

be noted however that due to the lack of existing product, most of these statistics are based on spa experiences that 

do not necessarily involve natural geothermal or mineral water. 

Victoria is uniquely positioned in Australia with significant geothermal and natural mineral water resources with the 

potential for greater development to attract local, interstate and overseas visitors. With a population of more than 

3.6 million, Melbourne is Australia’s second most populated city and gateway to a variety of popular regional destinations 

within 1.5 hours by road. In the year ending June 2006 Victoria attracted 1.4 million international overnight visitors, 

17.3 million domestic overnight visitors and 31.8 million domestic daytrip visitors. 3 

Increasing demand for authentic health and lifestyle experiences based around geothermal and natural mineral water 

resources such as hydrotherapy, massage, mud packs and natural saunas provide attractive tourism and economic 

opportunities in regional Victoria, particularly when complemented by the provision of ancillary accommodation, 

restaurants and conference centres. 

Based on their strong popularity, the development of a geothermal complex on the Mornington Peninsula with a 

Japanese theme and the popular natural mineral water at the Hepburn Mineral Springs Bathhouse (currently undergoing 

redevelopment), provide evidence of the potential demand and profitability of authentic facilities. A new mineral water 

spa facility at the Lake House, Daylesford known as Salus Spa is also proving popular. Overseas resort comparisons 

demonstrate the potential to expand and establish a greater number of these facilities throughout Victoria which will 

provide wider economic and social benefits to local communities. 

This paper provides a broad insight into the demand for services and facilities, location and characteristics of Victoria’s 

geothermal and natural mineral water resources, the opportunities available to expand and establish new facilities and 

an indication of the success of overseas developments with the potential to be replicated in Victoria. 

Lake Daylesford Salus Spa, Daylesford 

5 


2. tourism opportunities 

Geothermal and natural mineral water has long been associated with mental and physical health benefits, be it 

by bathing or consumption, and there are many examples where major tourism attractions and resorts have been 

built around these resources. 

Victoria’s opportunities from a tourism perspective lie in several areas. 

Domestic and international market positioning 

In 2005, Tourism Victoria launched Victoria’s Spa and Wellness Tourism Action Plan 2005–2010 aimed at enhancing 

the offering of Victoria’s spa product for the domestic and international markets. 

Tourism Victoria’s marketing programs are intended to position Victoria as Australia’s preferred destination for 

high yielding major sporting and business events, food and wine, and road touring. Road touring takes advantage 

of Victoria’s relative compactness and landscape diversity across 11 tourism product regions. 

Geothermal water and natural mineral water resources 

Victoria’s geothermal water and mineral spring resources are widespread, largely accessible for tourism purposes, 

and under developed. In several instances, these groundwater resources are already recognised for their therapeutic 

values, thus providing further opportunity to build on an established destination or brand. 

Increasing demand for health and lifestyle destinations and experiences 

There appears to be increasing demand for authentic health and lifestyle products such as hydrotherapy and 

associated therapies (eg: massage, mud wraps, saunas) as well as complementary services including accommodation, 

cafes, restaurants, and conference centres that are built around natural groundwater sources. Wider opportunities 

also arise in terms of natural mineral water bottling, merchandising and sales. 

Who is investing in natural spa tourism? 

Investors in the natural spa tourism industry are varied. In Australia it is a relatively new industry, and the 

current track record shows that State and Local Governments are commonly involved with spa developments, 

such as the Hepburn Mineral Springs Bathhouse and the potential development at Geelong’s Eastern Beach. 

The Hepburn Mineral Springs Bathhouse is owned by Local Government and will be leased to a private operator 

(following the current redevelopment). 

There are some private investors actively pursuing potential spa development sites in Victoria, and it is expected 

that a number of private businesses will open in the near future on private land. 

Currently, the only geothermal spa facility in operation in Victoria is the Peninsula Hot Springs. Private developers 

who owned land on the Mornington Peninsula financed this venture. A geothermal bore was installed to provide 

water to the spa facility. Another geothermal resort facility is currently under construction on Victoria’s west coast 

in Warrnambool. 

Overseas the investor base is similar but more widespread and on a much larger scale. There are the private 

owner/operators of smaller scale spas, and large scale developments where investors include local governments, 

private/public joint ventures, health and wellness companies and large hotel chains. Hanmer Springs in New Zealand 

is a successful example of a local government solely owning, operating and expanding a geothermal spa facility. 

In Europe, spa developments have often been supported by governments that recognise their contribution to the 

tourism industry. In the United Kingdom there are coordinated efforts to promote spa heritage towns and ensure 

that the United Kingdom remains on the list of spa locations to visit. 

6 



Continued 

Why invest in natural spa tourism? 

In Australia, spa tourism is in its infancy and enjoys an expanding market. Upcoming years will provide a window of 

opportunity for astute investors to gain a significant share in the market and a long-term foothold. Being early days, 

market research figures for existing and potential natural spa visitor statistics are limited. Recent research has been 

completed by Tourism Victoria into the spa industry in Australia. 

Further information on tourism statistics is available from the Australasian Spa Association and Tourism Victoria. 

International development 

Spa tourism is flourishing on the world-wide stage. Internationally there are hundreds of successful spa developments, 

based on both geothermal and natural mineral water supply, and the market continues to gain momentum. 

Renowned spa development areas are featured in Chapter 6, of this paper. 

What’s on offer in Victoria – Potential for growth 

Since the early 1980s a renewal of interest in natural healing and relaxation has bought hydrotherapy to the forefront, 

and rejuvenated the tourism industry in central Victoria. The Hepburn Mineral Springs Bathhouse was renovated 

and re-opened in 1986 to meet the renewed tourism demand for spa therapy. Currently there are developments 

underway that will double the size of the complex, which reflects increased demand in the last decade for mineral 

springs tourism in the region. Prior to its recent closure (for redevelopment) the bathhouse was servicing around 

90,000 visitors per annum. In addition to this development there are over 25 recognised mineral springs in central 

Victoria that are visited on a regular basis and natural mineral water has been bottled commercially in a number of 

locations. 

Despite Victoria’s relatively small size it offers a range of tourism attractions that more than rival its neighbouring 

states. The results of the International and National Visitor Surveys, undertaken by Tourism Research Australia, 

indicated that in the year ending June 2006, 17.3 million domestic overnight visitors and 1.4 million international 

tourists visited Victoria, of these 62% visited regional locations. Victoria’s abundance of natural and historic 

attractions and major events ensure a range of activities to meet a variety of visitor’s needs. 

The Australian spa market has not taken full advantage of this growing trend to date. Relative to Australia’s major 

tourism competitors its share of the market is small, which is primarily attributable to the lack of high quality facilities 

and awareness. 

Victoria’s share of Australia’s domestic overnight spa market is strong, having four of the top ten spa regions 

representing 24% of Australia’s total spa market. 4 Victoria’s market share of domestic daytrip spa visitors (67%) 

is significantly higher than its market share of total domestic visitors (24%). 5 

Four of the top ten destinations for domestic overnight spa visitation in Australia are in Victoria, these are the: 

• Daylesford and the Macedon Ranges region (received 8% of total national spa visitors and 30% of Victorian 

domestic spa visitors. 6 It is important to note that in this same period, 5.6% (65,000) of domestic daytrip visitors 

to the Daylesford and the Macedon Ranges region visited a health spa (this represents 69.9% of domestic daytrip 

spa visitors to Victoria). 7 

• Melbourne region (received 7% of total national spa visitors and 18% of Victorian domestic spa visitors). 8 

• Great Ocean Road region (received 5% of total national spa visitors and 18% of Victorian domestic spa visitors 

for year ending June 2006). 9 

• Murray region (received 4% of total national spa visitors and 15% of Victorian domestic spa visitors). 10 

7 


There is significant potential for additional domestic spa customer growth. A potential spa tourist is classified as a 

person who has paid for personal services to increase their wellbeing and include health services (e.g. massages, 

naturopathy), grooming services (e.g. facials, manicures) and personal fitness training. 

Peninsula Hot Springs 

The Peninsula Hot Springs represents a case study of a successful new tourism investment built to meet spa tourism 

opportunities. The facility is set on a 42 acre site in Melbourne’s Mornington Peninsula. It offers a Japanese spa 

experience with geothermal waters providing spa temperatures of up to 50°C. The spa was opened in 2005, 

and has directly generated around 70 jobs in the region, ranging from catering staff to massage and beauty therapists. 

In its first year of operating it attracted around 4,500 visitors. Guests have the option of selecting from a range of 

indoor and outdoor hot geothermal water spas in either a public or private setting. 

Figure 2 Peninsula Hot Springs 

Public Pools 

Private Pools 

Public Pools 


Indoor 

Public 

Pools 

Spa Dreaming 

Continued 

Cafe 

Therapies on offer include a range of traditional massages, steam rooms, and salt or mud baths. To keep up with visitor 

demand, Peninsula Hot Springs is already developing expansion plans that will see the facility more than double in size. 

8 


The nature and number of visitors to spa facilities, on a global level is growing. Underpinned by the increasing affluence 

of western society, the spa phenomenon is making its presence felt in every westernised nation and in many non-western 

countries, particularly those with a strong tourism industry and a culture of health and wellbeing. 

The following data has been gathered from a Holiday Tracking Survey conducted by Roy Morgan Research 

between 2003 and 2006. 

Age 

The comparative age profiles of the total population, total domestic visitors and domestic spa tourists reveals 

that interest in spas is wide spread amongst all age groups and in particular younger people. 


3. existing spa tourism market nationally 

Figure 3 Age profile of domestic spa tourists in Australia 

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year ending June 2003–06 

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9 

Wilsons Promontory National Park 


Gender 

Further analysis indicates that the majority of domestic spa visitors within Australia are female, comprising 62% of visitation. 

Figure 4 Gender profile of domestic spa tourists in Australia 

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Source: Holiday Tracking Survey, Roy Morgan Research, 

year ending June 2003–06 

Continued 

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10 


Geographic profile 

While no specific data has been collected regarding the geographical dispersion of spa visitors, there is an awareness 

of the general catchment size of such facilities. A spa visitor is typically prepared to travel up to 150 kilometres for a 

treatment at a high quality spa complex. A Victorian development, within 150 kilometres of Melbourne’s CBD, could 

expect to appeal to a domestic visitor market of 3.8 million people. 11 

It is expected that domestic spa visitors and local residents would make up a significantly larger proportion of the 

spa tourists market than international visitors. Domestic tourists and local residents are expected to make up 25% 

and 65% of all spa visitors respectively. 12 

Visitation 

Local residents are more commonly repeat visitors to spa complexes. They normally would attend twice per year 

compared with non-locals who rarely visit more than once a year. 



Continued 

Accommodation and travel preferences 

Fifty-two percent of domestic spa tourists to Victoria stayed at a hotel or motel on their last trip. A relatively high 

proportion of spa tourists to Victoria stayed at a bed & breakfast (26% compared with 12% of overall domestic 

spa tourists and only 3% of overall tourists). 13 The largest proportion of total domestic tourists stayed with friends 

or relatives, highlighting the potential of word-of-mouth to generate greater awareness and conversion. 

The general transport preference of spa visitors is by car, caravan or campervan indicating mobility to travel to spa 

destinations (87%). 14 

Fifty-three percent of domestic spa visitors are classified as Big Spenders 15 , defined as undertaking significant 

personal expenditure. On average the domestic spa visitor spent $120 per person per night on their last spa trip. 

Potential for market growth 

Since 2004 the Australian spa market has experienced above average growth, both from domestic and international 

visitors. Spa visitation in Australia is growing at a rapid rate of 12.7% p.a. for domestic overnight visitors and 25.4% 

among international visitors over the period June 2004–2006, considerably outperforming the national average 

tourism growth in both markets. 

Figure 5 Growth in domestic spa visitation in Australia 

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Source: International and National Visitor Surveys, 

Tourism Research Australia, year ending June 2004–06 

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11 


If these growth rates can be sustained in the coming years through increased development and investment in spa 

facilities, the Victorian spa market has the potential to become a significant international attraction. 


4. victoria’s geothermal water resources 

High geothermal temperature reservoirs contain naturally pressurised steam and hot or boiling water, stored in porous 

rock or sand, which has been heated by energy associated with recent volcanism. 

In some areas of the world, hot rocks exist very close to the surface and hot water or super heated steam can be 

conveyed to the surface through fissures or vents. In this terrain hot springs, boiling mud pools or geysers may be 

present. They can only be found in certain areas of the world, for example Japan, New Zealand and other countries 

in which there are active volcanoes and magma that is relatively close to the surface. There are also geothermal 

‘hotspots’ in places like Hawaii, Iceland, Italy, Yellow Stone (USA) and the Rift Valley of East Africa. 

Victoria’s geothermal waters are of much lower temperature and have been formed by the circulation of groundwater 

in deep sedimentary basins where temperatures of up to 60°C are present as the result of normal thermal gradients 

in the earth’s crust. These resources can be sourced by drilling into saturated porous sand aquifers lying within the 

sedimentary basins (this is also the case for many of New Zealand’s geothermal resorts). 

History of geothermal water use 

The utilisation of geothermal water dates back many thousands of years. There is evidence that the Japanese used 

hot springs for bathing and cooking from 11,000 BC, and also that the Native American Indians settled near hot 

springs in North America around 7,000 BC and that they used them for bathing and medicinal purposes. 

The Roman Empire’s use of geothermal water for bathing spread across most of Europe and was well established 

by the first century BC. 

Electricity generation from geothermal resources dates back to the early Twentieth Century when the first small 

scale facility was developed in Tuscany, Italy. Since then, geothermal power stations have been constructed in many 

countries including New Zealand, Japan, the USA, Indonesia and Kenya. In Australia a small geothermal plant has been 

operating since 1992 at Birdsville in Queensland. This plant uses water at about 100°C from the Great Artesian Basin 

and generates about a third of the town’s energy needs. 

Despite the size and potential of Victoria’s geothermal groundwater resources, to date their use has been limited. 

The popular Peninsula Hot Springs provide a wide range of bathing and treatment options which have been developed 

with a Japanese theme. 

A new hotel development under construction in Warrnambool will include a new bore and geothermal day spa 

and is due to open September 2007. The Deep Water Geothermal Baths will include a large indoor pool and 

hydrotherapy spas on the Warrnambool waterfront. 

Deep Water Geothermal Baths, Warrnambool 

12 



Continued 

More recently, Local Governments have commissioned studies to examine the potential viability of new hot spring 

bathhouse facilities in Metung and Port Fairy. 

To facilitate the harnessing of this potential green energy resource, the Victorian Government has introduced 

legislation to support investment in geothermal energy. The Geothermal Energy Resources Act 2005 puts in place 

a framework that: 

• gives secure title to the resource, 

• provides efficient and effective allocation processes, and 

• establishes transparent, fair and efficient land use and environment planning and land access processes. 

The legislation ensures that health, safety and environmental issues are considered as part of geothermal operations. 

The new legislation is designed to encourage major energy investment projects. Projects that involve bores at 

temperatures less than 70°C or where the heat source is less than one kilometre below the earth’s surface, will not 

require an exploration permit. The developer will however be required to obtain a licence from the controlling 

water authority approving installation of the geothermal bore and authorising extraction of water from the bore. 

Current and potential use 

Geothermal energy has several advantages over water that has been heated by the burning of fossil fuels. It can 

provide a sustainable supply of energy and water over long periods of time, and compared with most other energy 

sources, is safe and has minimal environmental impact. The operating costs of geothermal energy are relatively 

inexpensive compared with other energy sources, particularly after the initial capital outlay for infrastructure has 

been recovered. 

While high temperature geothermal resources can be used to generate electricity, the lower temperature resources 

commonly found in Victoria (typically between 35–60°C) are often used in spas, and in the heating of buildings, 

swimming pools, greenhouses, and fish farms. Other uses include the washing of wool, pasteurising milk, dehydrating 

fruit, production of paper and various industrial processes. 

Sometimes, geothermal water is piped to a number of buildings in a suburb or town where it is used for space heating. 

This is called a ‘district heating scheme’ and the best current example is the city of Reykjavik, capital of Iceland, where 

most homes are heated using piped hot water. Until recently, geothermal water was used to heat a number of public 

buildings and a swimming pool in Portland, Victoria. The bore has been decommissioned for repair. 

Victoria’s geothermal provinces 

Victoria has three geothermal basins. The coastal region is underlain by two major sedimentary basins: the Otway 

and Gippsland Basins. The basins contain thick layers of unconsolidated sediments and highly productive aquifers that 

possess waters at elevated temperatures. Inland Victoria is underlain by the Murray Basin which extends into South 

Australia and New South Wales. 

Lakes Entrance Beauchamp Falls 

13 



Continued 

Otway Basin 

The Otway Basin is one of a series of margin basins straddling the southern Australian continent. Several major 

structural units have been recognised within the Basin consisting of uplifted regions, such as the Dundas Highlands 

(south of the Grampians) and Otway Ranges. The sedimentary pile reaches a maximum thickness of some 2,500m 

along the coastal strip and in excess of 3,000m offshore where some 60% of the basin lies. 

The Otway Basin’s sand aquifers are highly transmissive and bore yields of up to 140L/sec have been attained in many areas 

across the basin. Groundwater salinity is lowest at locations flanking the Otway Ranges to the west and south of Hamilton. 

Groundwater temperature across the basin is variable, but mostly ranges between 30–70°C. Between Portland and 

Anglesea, temperatures vary 40–60°C. As a general rule temperatures are found to increase with depth. In the 

Otway Basin maximum depth of the sediments is about 2,000m at Portland and temperatures of 60°C are obtained. 

Figure 6 provides a summary of the geothermal temperature gradients throughout the Otway Basin. 

Stretching from the South Australian border, the Otway Basin covers approximately half of Victoria’s coast line, 

and contains a number of significant tourist destinations. Some of the major attractions include the greater 

Melbourne area, Mornington Peninsula and the Great Ocean Road. 

Portsea Twelve Apostles 

Just over an hour from Melbourne on the eastern side of Port Phillip Bay, Mornington Peninsula is one of Victoria’s 

premium wine regions. The region is also well known as a golfing haven featuring a number of world-class courses. 

The Mornington Peninsula is serviced by many stylish towns located along the coastline, many featuring established 

eateries, boutiques, markets and galleries. 

Victoria’s west coast is home to the Great Ocean Road. Known as one of Australia’s most spectacular coastal drives, 

the Great Ocean Road is visited by a large number of the State’s international visitors and culminates at the Twelve 

Apostles, a series of striking rock stacks that rise out of the Southern Ocean. The nearby Otway Ranges feature 

some of the best rainforest scenery in Australia and is home to an emerging nature-based tourism industry. 

14 



For the year ending June 2006, 10.0 million domestic overnight visitors, 18.3 million domestic daytrip visitors and 

1.5 million international overnight visitors collectively visited the Otway Basin region. 16 

Site Depth to Aquifer m Groundwater temp °C Salinity mg/LTDS Estimated Yield L/sec * 

Altona 120–200 20 3,000 10–20 

Anglesea 300 38 420 20–40 

Curdie Vale 600 41 3,500 75 

Geelong 50–100 21–26 7,500–11,000 2–10 

Mornington 500 50 3,700 20–40 

Narrawong 900–1,400 53–60 710 140 

Peterborough 1,400 63


Gippsland Basin 

The sedimentary Gippsland Basin covers a large portion of coastal South-east Victoria extending as far north as 

the Eastern Highlands. The basin reaches a maximum onshore thickness of 2,000m and almost 80% of the basin lies 

offshore. The basin contains thick beds of sand and gravel that form highly permeable aquifers that are separated by low 

permeability coal, clay and marl. The aquifers of interest for geothermal water are located in basal formations that extend 

over most of the Gippsland Basin. Groundwater temperatures are mostly in the range of 40–65°C with the highest 

on shore temperatures along the middle of the Latrobe Valley around Lake Wellington and along the coastal section 

between Seaspray and Metung. The highest temperature is recorded around Lake Wellington (70°C at 500m to 1,200m). 

At little over two hours from Melbourne, the Gippsland Basin includes a number of significant tourist locations, 

and attracts 1.6 million domestic overnight visitors, 2.2 million domestic daytrip visitors and 50,000 international 

overnight visitors annually. 17 

The Gippsland region hosts many natural attractions, mountain adventures and spectacular coastlines. Wilsons Promontory 

is one of Victoria’s best-known attractions. The 50,000 hectare national park features unspoilt beaches, cool fern gullies, 

spectacular rock formations, an abundance of wildlife and impressive views. Some of the other major attractions of the 

region include the Gippsland Lakes, 90 Mile Beach, Sale wetlands, East Gippsland Rail Trail, and Lakes Entrance coastal park. 

These locations provide visitors with the opportunity to partake in numerous activities including boating, fishing, resort 

relaxation, bushwalking and hiking. The popular Sydney to Melbourne coastal touring route cuts through this region and 

provides a wonderful opportunity to capture the growing road touring market. The potential development of a car ferry 

service from Cowes to Stony Point could extend the coastal touring route through to the Great Ocean Road. 

16 

Degrees Celcius 

per 100m of 

bore depth 


Golden Beach 750 45 1,200 50 

Loch Sport 1,080 59 1,300 75 

Metung 500 44 2,000 15 

Paynesville 600 59 1,597 10 

Sale 980 65 491 60 

*Bore yields are indicative, and will vary depending on bore construction. 

Continued 

Figure 7 Gippsland Basin geothermal temperature gradients 

Table 2 Gippsland Basin geothermal characteristics 

victoria’s geothermal and natural mineral water tourism investment opportunities 

15 

14 

13 

12 

11 

10 

9 

8 

7 

6 

5 

4 

3 

2


Murray Basin 

The Murray Geothermal Basin stretches from the west of Echuca to the South Australian border and covers 

a significant proportion of the State. Only a small amount of existing bore information is currently available 

for this region. 

Groundwater temperatures are mostly in the range of 35–50°C with the highest temperatures being in 

the Mallee region to the west of Mildura. The highest recorded temperature is at Gunamalary (near Jeparit), 

(60°C at 718m). 


Big Desert 1,250 42 

Gunamalary 718 60 1,180 50 

Mildura West 598 50 

Echuca 150 23 Unknown 30 

*Bore yields are indicative, and will vary depending on bore construction. 

Continued 

Figure 8 Murray Basin geothermal temperature gradients 

Table 3 Murray Basin geothermal characteristics 

The Murray Basin covers a significant portion of Victoria’s north western region, and many existing tourist attractions. For 

the year ending June 2006, the region attracted 1.4 million domestic overnight visitors, 1.1 million domestic daytrip visitors 

and 29,300 international overnight visitors. 18 Visitors to the region enjoy wine and food based activities and national parks. 

The Murray River itself forms the border between New South Wales and Victoria and attracts significant visitation, with 

house boating and paddle steamers among the more popular activities. The Murray region enjoys great climate, historic 

towns, superb food and wine and endless opportunities for outdoor activities. The region boasts an abundance of 

Aboriginal art and heritage, as well as picturesque camping, fishing and camping grounds. 

17 

Degrees Celcius 

per 100m of 

bore depth 


50 

45 

40 

35 

30 

25 

20 

15


Continued 

Paddle Steamer Emmylou, Echuca. Photographer: Holger Leue Mildura 

Mildura is serviced by regular flights from Melbourne and is known for its fresh local produce, wineries and the 

World Heritage listed Mungo National Park with its spectacular sculpted sand hills and ancient Aboriginal history. 

Further along the Murray River is the historic town of Echuca with its rich riverboat history, it is home to the 

largest paddle steamer fleet in Australia. 

18 


5. victoria’s natural mineral water resources 

Virtually all the natural mineral water resources in Australia are found in Victoria with the majority found in the 

Hepburn and Daylesford region. A surprising number of historic springs have been documented in other locations 

throughout the State – from Geelong and Clifton Springs in the south to Yea and Mansfield in the north. The Geelong 

site at Eastern Beach however is the only site outside of central Victoria that has a working spring and hand pump that 

is accessible for tasting. 

The natural mineral waters of central Victoria evolve as groundwater moves through deep persistent fractures and 

faults in bedrock. Rainfall infiltrates the fractures along the elevated ridges of the Great Dividing Range. Groundwater 

may circulate to great depths of up to 5 kilometres before returning to the ground surface. Natural mineral water 

discharges at springs in low-lying areas. Compared with Victoria’s geothermal waters, Victoria’s natural mineral waters 

have higher mineral concentrations. 

The flow rate from individual mineral springs is generally low, in the order of 0.01 to 0.4L/sec. Natural mineral 

water is generally crystal clear and effervescent. The water chemistry is variable; the total dissolved solids content 

of Victoria’s natural mineral water resources falls in the range 380 to 10,000 mg/L. The surface discharge of mineral 

water in Victoria is generally cool. 

There are over 100 recognised natural mineral springs in Victoria, by far the highest number of mineral springs in Australia. 

The Victorian Mineral Water Committee (VMWC) has the responsibility for the protection and management of the 

State’s natural mineral water assets. 

Mineralised groundwater is typically many thousands of years old and formed by the infiltration of rain and surface 

water into the ground and its subsequent percolation and accumulation in permeable geological units known as 

‘aquifers’. During the groundwater migration, minerals are absorbed from the aquifer giving the water distinct chemical 

characteristics for which geothermal and particularly natural mineral waters are renowned. Different flow paths and 

geology produces variations in groundwater temperature and chemical composition, which may have a bearing on its 

potential therapeutic properties. 

History of mineral water use 

Mineral water has been used for therapeutic purposes around the world for many thousands of years, there is 

archaeological evidence of mineral springs in Asia during the Bronze Age (circa 3,000 BC), and biblical references 

allude to the practice of bathing and drinking. 

In ancient Greece, springs were believed to have supernatural powers, and to be the dwelling places of gods. 

Therapeutic centres called Asclepieia, after Asclepius the mythological God of Health, were built at mineral springs 

throughout the Greek realm. The Romans followed the practice, establishing baths across their empire, perhaps 

the most well known of those being in Bath, England, still operating today and profiled in a later chapter. 

The natural mineral springs and mineral waters of Victoria were recognised from the early to mid 1800s and their 

commercial development followed soon after European settlement. The history of the discovery of natural mineral 

springs pre-dates the discovery of gold. In 1836 Captain Hepburn found and named the Hepburn Mineral Spring. 

During the 1850s gold rushes, many natural springs were found in Central Victoria as the forests, creeks and gullies 

were explored and dug over for gold. Gold seekers, many of whom were familiar with the mineral springs of their 

European homelands, relied on the pure spring waters for drinking. It wasn’t until the early 1900s however, when 

gold had all but disappeared, that the therapeutic qualities of natural mineral water was popularised. 

The commercial development of Victoria’s natural mineral water resources has followed several different paths 

including bottling, carbonation, recreational facilities and bathhouses. 

19 



Continued 

The period from the 1890s to the 1930s was the golden era of natural mineral water in Victoria. The bathhouse at 

Hepburn Springs was developed, and although bathing and consumption of the water was the main attraction of the 

springs, socialising formed an integral part of the attraction of the area. Since this period the Central Victorian Spring 

Region has been referred to as the ‘Spa Centre of Australia’. 

A similar history occurred at Clifton Springs located along the Bellarine Peninsula. A grand hotel was constructed at 

the springs in the 1880s to provide a range of treatments, as well as providing public baths on the foreshore. Later, 

the spring water was piped directly into the hotel to twelve bathing rooms from which a range of therapies, including 

massage and electro-hydro baths, were provided. The water was bottled at the site with over 32,000 bottles sold in 

1888 in a profitable operation. Sadly, little evidence remains of the hotel or the springs at this site. 

While some of Victoria’s natural mineral springs are located on private land, many are protected by public land 

reserves. Reserves were declared at Hepburn Springs in 1865, at Blackwood in 1879 and at Kyneton in 1913. 

Current and potential use 

Today, Daylesford and Hepburn are the most popular natural mineral water destinations where several quality 

resorts provide a wide range of hydrotherapy treatments. Demand for balneotherapy (treatment of injuries and 

physical ailments by bathing and consuming natural mineral waters), at the Hepburn Mineral Springs Bathhouse, 

continues to exceed the capacity of the existing facility at peak times. In response to growing demand, a $10 million 

redevelopment of the Bathhouse is underway. 

The Hepburn Mineral Springs Bathhouse redevelopment, will include the refurbishment of the existing heritage 

building to include relaxation, therapy, and massage rooms, and the development a new building to replace the 

existing pools facility. The Bathhouse is due to be reopened in early 2008. 

Mineral Spring Rotunda, Kyneton Lake Daylesford 

20 



Hepburn Mineral Springs Bathhouse Redevelopment Plan 

Extraction of natural mineral water for beverage production at Hepburn peaked in 1988 at 63ML. The commercial 

extraction of natural mineral water for drinking has since declined to 18.5ML (2003–04) reflecting the rise in 

popularity of heavily marketed bottled still water products. 

There has been a renewed interest in natural healing and relaxation, which has brought hydrotherapy to the forefront, 

and increased interest in other areas of Victoria. Currently, the City of Greater Geelong is undertaking an appraisal of 

the merits of establishing a bathhouse facility at Eastern Beach on the shoreline of Corio Bay. 

Geelong Mineral Springs Bathhouse concept 

Continued 

21 



Continued 

Victoria’s natural mineral water provinces 

The Central Highlands of Victoria hosts a high concentration of natural mineral water resources. 

Figure 9 Location of Victoria’s Mineral Springs 

22 

Sturt Street, Ballarat 

Central Victoria 

There are 141 recorded natural mineral springs in Central Victoria, each with differing mineral constituents. 

The majority of the recorded springs are on public land. Figure 9 shows the location of mineral spring reserves 

in Central Victoria. 

The Central Victorian region offers a well established spa and mineral spring tourism market. Located only one hour 

north-west of Melbourne, Daylesford and the Macedon Ranges include the towns of Daylesford and Hepburn Springs. 

In the year ending June 2006 the region attracted 1.2 million domestic daytrip visitors, 412,000 domestic overnight 

visitors and 9,600 international overnight visitors. 19 

Daylesford is known as Australia’s premier spa and wellness centre where visitors can rejuvenate in the natural mineral 

water, explore antique shops and galleries and relax at one of the many cafés and restaurants. The historic town 

of Hepburn Springs is located only a few kilometres from Daylesford and is home to the Hepburn Mineral Springs 

Bathhouse and is located amidst the largest concentration of natural mineral springs in Australia. 

Dining in Daylesford Relaxing in Daylesford 



Source: Victorian Mineral Water Committee 2006 

Continued 

Figure 10 Natural Mineral Water Resources of Central Victoria 

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Vaughan-Glenluce Mineral Springs Reserve is a Crown Land reserve situated about ten kilometres south of 

Castlemaine on the Loddon River and adjoining the Chewton Castlemaine Historic Reserve. The reserve contains 

many natural mineral springs and has been a popular recreational site for about 100 years. The reserve was 

expanded several times after 1914 and now at almost 100 hectares is the largest natural mineral water reserve 

in Victoria. It contains numerous natural mineral springs, most of them in their natural state but several with hand 

pumps. Visitors can try at least three different types of natural mineral water. Although the reserve has undergone 

many changes in the last 140 years, it has a more natural feel than other larger mineral spring reserves. Its picturesque 

setting in the steep-sided Loddon River Valley creates a shady and refreshing haven in the hot summer months. 

The natural mineral springs at Kyneton, once known as the Boggy Creek mineral springs, are located in the Kyneton 

Mineral Springs Reserve. The reserve dates back to 1887 and features an Edwardian rotunda that was built over 

the springs in 1913. There are also several documented springs on private land in the Kyneton area. 

The Blackwood Reserve has two natural mineral springs approximately 50 metres apart. Surprisingly, the mineral 

content taste of each one is different. A rotunda was built over the iron spring in 1891 and another over the soda 

spring in 1914. The reserve was extended by nearly three acres in 1933 and again by 14 acres in 1940. A public 

caravan park was constructed in the reserve in 1955. 

Geelong and Clifton Springs 

There are eight known natural mineral springs in the Geelong region including three in Corio. The discovery of 

Clifton Springs in 1804 is attributed to the escaped convict William Buckley. In the 1870’s a resort and bottling 

works (to replace inferior imports) was developed. Local Government has recently commissioned a feasibility 

study into the development of a natural mineral springs bathhouse on Geelong’s Eastern Beach foreshore. 

Western Beach Baths, 1954, Geelong Historic Records 

Continued 

24 



Geelong Eastern Beach 

Continued 

Geelong is Victoria’s largest regional centre and also one of the closest natural mineral spring locations to Melbourne. 

This waterfront city offers a diverse range of food, wine, cultural and recreation attractions and colonial history 

evident in the city’s 100 National Trust listed buildings. It is the gateway to the Great Ocean Road, and a number 

of popular coastal tourist destinations such as Torquay, Lorne and Apollo Bay. 

In the year ending June 2006 the Geelong region attracted 970,000 domestic overnight visitors, 2.2 million domestic 

daytrip visitors and nearly 34,000 international overnight visitors. 20 

The Geelong Mineral Spring Bathhouse Feasibility Study (completed in May 2006), identified that a bathhouse at 

the Eastern Beach site had the potential to attract between 200,000 and 250,000 visitors per year and potentially 

generate revenues of between $1.85m and $2.9m per annum. 

The City of Greater Geelong is currently undertaking further work on the concept design of the facility. Further 

information regarding this development opportunity can be obtained by contacting the City of Greater Geelong 

(details in reference section). 

Geelong Waterfront Cunningham Pier, Geelong 

25 


The following section provides an overview of a variety of international natural spa developments, offering an insight 

into the range of development opportunities available, and the varying level of market maturity globally. 

Europe 

6. international development examples 

Baden-Baden – Germany 

Baden-Baden is an internationally famous health resort town, 180 kilometres south of Frankfurt. The history 

of the mineral water at the town dates back to 213AD when the Roman Emperor Caracalla visited the town 

to ‘take the waters’ and bathhouses were subsequently built. There are two main spa complexes in Baden-Baden 

(Caracalla Spa and Friedrichsbad), each with a different theme and are aimed at different market segments. 

Both are operated by Carasana Baderbetriebe GMB. 

The Caracalla Spa was opened in 1985. This spa offers something for everyone from general indoor thermal 

baths to outdoor whirlpools. The visitor can start in the cooler thermal pools at 28°C and move up to the 

hottest pool at 38°C before jumping into the cool immersion pool. The complex’s wide variety of baths and spas 

covers a water area of more than 900m 2 . Under cover is a number of bathing pools, a rock grotto with hot and 

cold water, a regenerated aroma steam bath, a saltwater inhalation pool and neck showers. Outside are two 

marble pools, a counter-current pool, a waterfall and two whirlpools. There are manicured gardens and an 

area for sunbathing, as well as a children’s play area. 

Complementary services include the Roman Saunascape, which consists of 11 different saunas, varying from the 

sauna of silence to the fire sauna. The Blue Space liquid relaxation room is a new technology, utilising pale blue 

colours and soft vibrating beds for physical and mental relaxation. There is a bistro and bath shop in the complex. 

The cost for a single adult entry is €12–16, for a 2–4 hour session. 

The second major spa complex in the town is the Friedrichsbad, referred to as the Roman-Irish bath. 

Originally constructed 125 years ago, the building retains striking architecture whilst incorporating modern 

spa facilities. These baths are aimed at the higher end of the market with numerous health and beauty services 

offered. There is a 16 step ritual bathing sequence aimed at regenerating the mind, body and soul. Increasing 

water temperatures are experienced in the thermal pool, the kinotheraputic pool and the whirlpool, followed 

by immersion in the cool water bath. This is followed by massage and relaxation. A single admission ticket 

costs €21. There is an extensive range of health and beauty treatments offered at the wellness centre based at 

Friedrichsbad. A speciality is the Thalasso-Thermal Therapy, which involves body peeling with seaweed products 

followed by thermal water baths and hydro massage. There is also a range of packages on offer combining the 

thermal baths and the health and beauty treatments. 

26 


Bath – England 


Continued 

Much like the rest of Europe the spas of England date back to the Roman Empire. The town of Bath, built around 

the original Roman baths, Thermae Bath Spa is about an hour and a half out of London and is the only location in 

Britain where hot mineral water can be found. 

Despite the abundance of mineral water resources and historical bathhouse facilities, until recently, the town was 

without any mineral spa facilities for over twenty years. The restoration costs associated with the heritage listed 

buildings in the spa precinct had been too costly and severely delayed redevelopments. In 1997 the town received 

£7.7 million in lottery funded charity money to develop a new facility. The total development cost came to 

approximately £45 million when the Thermae Bath Spa opened to the public in 7 August 2006. 

The new facility offers a wider variety of state of the art wellness services. The new spa development has been 

structured around a design that combines the rich historical character of the site with new spa technology and 

modern architecture. The facility offers a wide range of bath and treatment options that are reasonably priced. 

A patron has the option of booking either an all day spa entry pass or a two or four hour entry ticket, at a cost 

of £50, £20 and £30 respectively. The bathing options on offer include thermal baths, steam rooms, an open-air 

roof pool, four aroma steam rooms, and a waterfall shower. Spa treatments available include vichy showering, 

hot stone massage, kraxen stove, body cocoons, facials, body care, and a wide range of massage options. 

27 


Karlovy Vary, SKM 


Karlovy Vary – Czech Republic 

Continued 

More than 30 spa towns are dotted throughout the Czech Republic. These towns and their bathhouses hold a 

reputation for outstanding service, beauty, elegance, curative properties and value for money. One of the most 

popular and well developed spa towns is Karlovy Vary. The curative properties of the hundreds of springs which 

service these spa towns were first discovered by monks in 1528. However they were difficult to access and not 

developed until the early 1800s. 

The Nove Lazne is an iconic 5 star spa hotel, providing the benchmark for the spa industry in the Republic. It is 

located in the town of Marienbad which is surrounded by forested hills, and retains the 19th century spa atmosphere 

through its historical architecture. Created in 1896, and recently re-opened after upgrading in 2005, the hotel is 

famous for its health treatments although the grand architecture, peaceful surroundings and value for money are 

attracting increasing numbers of tourists from around the world. The upgrade included a conference centre as well as 

the introduction of new treatments and pools including sauna, steam bath, hot spring bath and underwater massages. 

The Nove Lazne Spa Hotel has a grand Roman Spa complex including Jacuzzi pools, mineral baths with or without 

additives (including Dead Sea salt), whirling baths, and a range of hydrotherapies. The Royal and Imperial Cabins 

provide specialist bath experiences with the total water area of the complex being 1,660m 2 . The spa treatments 

are focused on treating motor system disorders and improving blood circulation. 

A holistic approach to health is of significant importance at the spa hotel, with an emphasis on diet and 

complementary treatments. A new client will undertake medical examination by in-house doctors and specialists 

if required before an individual cure plan is developed. 

Nove Lazne offers numerous spa packages either to provide relaxation or relief for a particular medical condition. 

A daily classical package involving four cure treatments and the use of pools in addition to accommodation, 

meals and medical examinations range from €144 – €250 per day (entry only for a mineral springs visit is €13. 

Guests are recommended to stay a minimum of seven days in order to enjoy the health benefits of the therapies 

although three week stays are common. Additionally, there are one or two week ‘wellness and beauty’ programs 

aimed at relaxation and holistic healing. 

28 



Adler Thermae – Italy 

Continued 

The Adler Spa Resort is a family owned resort in Tuscany, that’s been in operation for almost 200 years, and 

has recently been registered as a UNESCO World Cultural Heritage site. The facility offers a range of services, 

that use globally accepted techniques whilst leveraging off a unique range of traditional Tuscan products including 

red grape, olive oil, sheep’s milk and honey. The facility employs a full time doctor, who offers a range of medical 

assessment packages and self improvement programs for visitors. The geothermal mineral waters used at the 

facility range in temperature from 28°C for the sports and activity pool, up to 36°C for the thermal pools. 

The range of pools on offer include a whirlpool, wild river, children’s play pool, herbal steam room, Etruscan 

salty steam bath, sauna on the travertine lake, steam baths, Rasul mud baths, and underground salt baths. 

Entry is typically via a package deal; however entry to use a mineral spa costs €36 for 20 minutes. 

Blue Lagoon – Iceland 

The Blue Lagoon in Iceland is a unique facility offering warm geothermal seawater, where patrons can bath in pools 

of hot water in a setting surrounded by snow. The facility’s unique services are not limited to its geothermal seawater, 

guests are able to swim in a geothermal beach, lava caves, silica mud baths and a geothermal steam bath. The facilities 

on offer at the Blue Lagoon include an indoor lagoon pool, a conference centre, and a restaurant with spectacular 

views overlooking the lagoon and premises. The geothermal water is pumped from a 2,000m deep bore, at 160°C, 

it is then cooled to a comfortable bathing temperature of 36–39°C. Admission is charged at €15. The facilities were 

first developed in 1992 and attract 350,000 visitors annually (70% international). 

29 


Japan 

The mineral spa market in Japan is among the most mature markets in the world. Visitation to hot mineral baths, 

known as Onsen, is a very popular practice given the large number of low cost, high quality facilities. There are 

currently over 3,000 spas and 5,000 bathhouses using geothermal waters (according to 1998 data from Japan). 

There are both indoor and outdoor facilities that are either publicly run by a municipality, or privately owned 

often by a local inn or bed and breakfast. Entry fees for spas range from free for public facilities such as Kakujusen, 

up to ¥2,000 at Suginoi Palace the most expensive onsen in Japan. The average entry fee for a mineral spa in 

Japan is ¥200. 

Onsens are typically found away from major cities, in the countryside, and are major tourist attractions for Japanese 

couples, families, or corporate groups. Traditional onsens are located outdoors, and use only naturally hot water 

from geothermally-heated springs. These should be differentiated from sentos, which are indoor public bathhouses 

in the major cities filled with heated tap water. Much like European cultures, the Japanese believe that the natural 

mineral waters have healing powers, which are derived from the mineral content. 

Onsens are a part of everyday life in Japan, and deeply entrenched in the culture. It is not unusual for television 

celebrities to interview onsen owners and discuss the history and developments of their facilities. There is even 

a certification program run by the Tourism Bureau for ‘Hot Spring Masters,’ which is achieved after an individual 

has had their ‘Spa-port’ stamped at 88 different onsen. 

Whilst accommodation, food, massages and therapies do play an important role in the Japanese bathhouse 

experience, the primary reason for local visitation is to enjoy the baths. Unlike Europeans whose typical spa 

visit occurs annually and lasts for several days (or several weeks in some cases) the Japanese prefer to visit 

more regularly and partake in a quick soak. Usually these quick soaks last for only an hour and do not involve 

any other therapeutic services. 

There is a unique etiquette one must follow when entering a Japanese mineral spa. Prior to entering the hot 

pools a guest must first wash and rinse themselves thoroughly. Swimsuits are not allowed at traditional onsen, 

found in the countryside, rather guests are given a towel to wear when walking between the wash areas and 

the baths. With the exception of some of the more traditional facilities, most have gender-based pool separation, 

or at the very least offer a female only pool option. Modern onsen facilities found in larger towns have adopted 

a water park atmosphere and actively encourage the use of swimsuits. 

Kannawa-en Inn 


Continued 

Kannawaen is a traditional Ryokan style bathhouse with eleven guest rooms in two main buildings. There are 

also six private guest residences. Kannawaen is by no means the largest of Japan’s bathhouses, as some of these 

are able to cater for up to 1,600 guests, but is regularly referred to as one of Japan’s most authentic. Kannawaen 

provides a traditional, and private experience, with decorative gardens, and a rare colour-changing outdoor bath. 

There are also indoor pools and an excellent assortment of traditional Japanese cuisine available to guests. 

30 


USA 

The mineral waters of North America have been a point of much interest to scientific researchers since they were 

discovered in 1807. Much of today’s modern understanding of the chemical makeup of mineral waters, and their 

geological behaviour was derived from research undertaken from the springs of Saratoga, and their comparative 

qualities to the traditional European springs. Significant research was also undertaken to replicate this natural 

occurrence in a laboratory setting to develop a ‘make at home’ mineral water supplement. 

The city of Saratoga is the focus point of much of North America’s geothermal water interest. Saratoga is 

48 kilometres north of Albany, New York. At its peak in 1910, there were 163 springs and wells spread over an 

area of 1,000 acres. This land was fully acquired by the State of New York by 1912 who subsequently closed all but 

19 springs in an attempt to preserve the resource from depletion. The Saratoga Springs area has the only active 

spouting geyser east of the Mississippi River in the United States. Two of the most visited springs today are Island 

Spouter and Orenda Spring, along Geyser Creek. Island Spouter, which sends a narrow plume of water 3–5 metres 

into the air, first emerged in the early 1900s. 

Saratoga Springs 


Continued 

Crystal Spa is the second and newer of the two operational bath facilities in Saratoga. The Crystal Spa offers 

a wider range of treatments than the Lincoln and is aimed at a more exclusive market. The facility offers 

aromatherapy, sauna, private mineral baths, skin care treatments, waxing and beauty therapy, body wraps and 

exfoliation scrubs, and a variety of massages. Spa entry costs $21US. 

South East Asia 

The South East Asian mineral spa market is relative young. The mineral spas of this region do not hold the same 

social or historical significance as those in other markets, and have been developed recently for their tourism 

potential. These mineral spas have good success despite the lack of cultural depth. They leverage off designs that 

have been strongly influenced by their own local culture to achieve annual visitation rates in excess of Australia’s 

leading facilities. The spas of this region have effectively adopted mineral spa culture and given it their own unique 

branding. 

The mineral spa facilities of Thailand appear to be aimed at a more affluent market, offering a more luxurious 

experience compared with Vietnam. Generally facilities offer a large hot mineral water pool for communal use in 

association with accommodation, massages and other relaxation and beauty therapies. Both countries generally 

use geothermal water collected at temperatures ranging between 50–55°C, that have been cooled to bathing 

temperatures between 40–45°C. 

Tao Gardens – Thailand 

The Tao Gardens resort in Northern Thailand is a health and wellness centre situated at the foot of the 

Himalayan mountain range. The facility was opened in 1995 and is currently used as a health retreat and training 

centre. The facility offers a range of services, and treatments derived from a variety of techniques including 

Taoism, Tai, Ayurvedic Medicine, Chinese, and Western Holistic medicines and technologies. Mineral water 

treatments include underwater massage therapy, either in a public or private pool setting. Admission to Tao 

Gardens is charged on a weekly basis starting at $750AUD. 

31 



Continued 

New Zealand 

The Australian mineral spa market is currently led by the large facilities operating in New Zealand’s North 

and South Islands. The history of New Zealand’s mineral spas is not dissimilar to that of Australia’s, with mineral 

springs being discovered and facilities erected towards the end of the 19th century. Maori legend suggests that their 

knowledge of the spiritual significance of these waters predates this by some time. The New Zealand market has a 

good mix of private and publicly owned facilities that are generally family friendly with a fun park atmosphere. 

Polynesia Spa 

The Polynesian Spa, near Rotorua in the North Island is a good example of how privately owned spas are effectively 

operated in the region. Up until 1972 the site was a Government complex, at which time it was leased to the 

Polynesian Spa group. Since then the facility has been significantly modernised and developed into an attractive spa 

complex that attracts over 400,000 visitors annually. There are also a number of very successful privately owned 

facilities in New Zealand, such as the Taupo Hot Springs Spa, situated in a volcanic crater, which offers a holistic 

range of services capable of catering to a variety of requirements and budgets. 

32 



Hanmer Springs Thermal Pools and Spa 

Continued 

Hanmer Springs is located approximately 90 minutes drive north-west of Christchurch. It is one of New Zealand’s 

oldest commercial mineral springs operations, being discovered in 1859 by European explorers. In the 1990s 

up to $3.3m was spent on upgrading the buildings, pools and gardens. Hanmer is owned and operated by Local 

Government. 

Hanmer has a large bathing capacity and offers visitors the choice of outdoor public mineral pools, sulphur pools, 

private baths, sauna and steam rooms, a freshwater heated pool, a family fun pool with two waterslides, a picnic 

area and a café restaurant. Hanmer also offers a full range of therapeutic beauty and massage services. General 

entry for an adult costs $12NZD. 

Hanmer Springs is the primary tourist attraction of the region with 89% of visitors to the region also visiting the 

complex. The thermal pools and spas at Hanmer Springs are one of the premier spas in New Zealand, attracting 

more than 520,000 people in 2004 (24% were international visitors with substantial increases occurring within the 

past five years). The increasing popularity amongst tourists has lead to further development with the first stage of 

a $1.5 million expansion started in 2005 and include two new thermal pools, extension of the café and an upgrade 

of the bore. 

In line with an increase in tourism numbers of 19% over the past five years, financial performance of the complex 

has also improved, with an increase in turnover of 90% and a 166% increase in pre-tax earnings. The facility is the 

second largest employer in the region with 24 full time and 29 part time employees. The facility has a significant 

impact on the local tourism industry, which consists of 40 accommodation providers with 2,400 beds as well as 

22 restaurants and cafes (most have developed in response to tourism growth over the last 10–15 years). 

Careful financial management and market research has provided the basis for successful planning and redevelopment. 

Profits are either re-invested into the operation as required or redirected for investment in other regional reserves. 

Around $400,000 was spent on parks and reserves last year. In addition, Hanmer Springs runs a community 

sponsorship program, donating $10,000 per year to schools, clubs, individuals and community groups. 

Hanmer is a good example of how a single low capital development has the potential to make a large contribution 

to a local region. 

33 


Further reading 

• Daylesford - Hepburn Springs Mineral Water Investigation, Geological Survey of Victoria Report, 

Laing A.C.M., 1977 

• Geothermal Prospectivity of Onshore Victoria, Australia, Geoscience Victoria Energy Geoscience, 

J. Driscoll, 2006 

• Geothermal Resources of Victoria, Department of Industry, Technology and Resources and the 

Victorian Solar Energy Council, R. King, A. Ford, D. Stanley, P. Kenley, and M. Cecil, 1987 

• Geothermal Resources of Victoria, Sustainable Energy Authority Victoria, SKM, 2004 

• Mineral and Spring Water Resource Protection Discussion Paper, Department of Natural Resources 

and Environment, A. Shugg, 1996 

• Mineral and Thermal Groundwater Resources, A. Albu, D. Banks, and H. Nask, 1997 

• Salons and Spas: (The Architecture of Beauty), Julie Sinclair Eakin, Rockport Publishers, 2005 

• Spa and Health Club Design, Encarna Castillo and Ana G Carnizares, Te Neues Publishing Company, 2005 

• Spa and Wellness Hotels, Cristina Montes, Te Neues Publishing Company, 2002 

• Spa Business Strategies: A Plan for Success, Janet M D’Angelo, Milady, 2005 

• The Spa Country, A Field Guide, Spa Publishing, E & M Wishart, 1990 

• Wombat Mineral Water Management Guidelines, Department of Sustainability and Environment, SKM, 2004 

• 100 Best Spas of the World, Bernard Burt and Pamela J Price, Globe Pequot; 2.00 edition, 2003 

Footnotes 

Maps and figures 

1, 6, 7, 8, 9 SKM 

2 Peninsula Hot Springs 

3, 4, 5 Tourism Victoria 

10 Victorian Mineral Water Committee 

7. reFerences 

1 National Visitor Survey, Tourism Research Australia, year ending June 2004-2006. 

2 International Visitor Survey, Tourism Research Australia, year ending June 2004-2006. 

3 International and National Visitor Surveys, Tourism Research Australia, year ending June 2006. 

4, 6, 8, 9, 10, 13 Holiday Tracking Survey, Roy Morgan Research, year ending June 2003-2006. 

5, 7 National Visitor Survey, Tourism Research Australia, year ending June 2006. 

11, 12, 14 Geelong Mineral Springs Bathhouse Feasibility, City of Greater Geelong, May 2006. 

15 

These segments are derived by Roy Morgan Research based on income, purchasing habits and intentions, credit card details and travel and 

entertainment expenditure. 

16 

International and National Visitor Surveys, Tourism Research Australia, year ending June 2006. The Otway Basin includes Melbourne, Peninsula, 

Geelong and Western Sub-regions. 

17 

International and National Visitor Surveys, Tourism Research Australia, year ending June 2006. The Gippsland Basin includes the Gippsland 

and Lakes Sub-regions. 

18 

International and National Visitor Surveys, Tourism Research Australia, year ending June 2006. The Murray Basin includes the Mallee and 

Central Murray Sub-regions. 

19 

International and National Visitor Surveys, Tourism Research Australia, year ending June 2006. Central Victoria includes the Macedon and 

Spa Country Sub-regions. 

20 

International and National Visitor Surveys, Tourism Research Australia, year ending June 2006. The Geelong and Clifton Springs region includes 

the Geelong Sub-region. 

34 


Key organisations 

Australian Bottled Water Institute 

Suite 4, Level 1, 6-8 Crewe Place, 

Rosebery NSW 2018 

Phone: 02 9662 4822 

Facsimile: 02 9662 2899 

Email: abwi@bottledwater.org.au 

Web: www.bottledwater.org.au 

Australian Bureau of Statistics 

GPO Box 2796Y 

Melbourne VIC 3001 

Phone: 1300 135 070 

Facsimile: 1300 135 211 

Email: client.services@abs.gov.au 

Web: www.abs.gov.au 

Australian Drilling Industry Association 

Suites 6 & 7, 85 Bardia Avenue, 

Seaford VIC 3198 

Phone: 03 9770 4000 

Facsimile: 03 9770 4030 

Email: adia@adia.com.au 

Australian Market & Social Research Society 

Level 1, 3 Queen Street 

Glebe NSW 2037 

Phone: 02 9566 3100 

Facsimile: 02 9571 5944 

Email: mrsa@mrsa.com.au 

Web: www.mrsa.com.au 

Australasian Spa Association 

PO Box 267 

Nichols Point VIC 3501 

Phone: 03 5024 6519 

Facsimile: 03 8648 5626 

Email: admin@auspa.com.au 

Web: www.australasianspaassociation.com 

City of Greater Geelong 

PO Box 104 

Geelong, VIC 3220 

Phone: (03) 5227 0857 

Facsimile: (03) 5227 0860 

Email: swright@geelongcity.vic.gov.au 

Web: www.geelongaustralia.com.au 

Department of Primary Industries 

Phone: 136 186 

Email: customerservice@dpi.vic.gov.au 

Web: www.dpi.vic.gov.au 

Department of Sustainability & Environment 

80 Collins Street 


DSE Customer Service Centre 

Phone: 13 61 86 

Email: customer.service@dse.vic.gov.au 

Web: www.dse.vic.gov.au 

7. reFerences 

Continued 

Environmental Protection Authority 

Herald & Weekly Times Tower 

40 City Road 

Southbank VIC 3006 

Phone: 03 9695 2722 

Facsimile: 03 9695 2785 

Web: www.epa.vic.gov.au 

Goulburn-Murray Water 

40 Casey Street 

Tatura, VIC 3616 

Phone: (03) 5833 5500 

Facsimile: (03) 5833 5501 

Email: reception@g-mwater.com.au 

Web: www.g-mwater.com.au 

International Association of Hydrogeologists 

The Atrium, 168 St Georges Tce 

Perth WA 6000 

Phone: 08 6364 6895 

Facsimile: 08 6364 6525 

Email: sandie.mchugh@water.wa.gov.au 

Web: www.iah.org.au 

Murray Darling Basin Commission 

Phone: 02 6279 0434 

Web: www.mdbc.gov.au 

Email: info@mdbc.gov.au 

Southern Rural Water 

88 Johnson Street 

Maffra VIC 3860 

Phone: 03 5139 3100 

Facsimile: 03 5139 3150 

Email: srw@srw.com.au 

Web: www.srw.com.au 

Sunraysia Rural Water Authority 

741-759 Fourteenth St 

Mildura, VIC 3500 

Phone: 03 5051 3400 

Facsimile: 03 5051 3480 

Email: lmw@lmw.vic.gov.au 

Web: www.srwa.org.au 

Sustainability Victoria 

Level 28, 50 Lonsdale St 

Melbourne 3000 

Phone: 03 8626 8700 

Facsimile: 03 9663 1007 

Web: www.sustainability.vic.gov.au 

35 

Tourism Alliance Victoria 

Level 3, 114 Flinders Street 

Melbourne, VIC 3000 

Phone: 03 9650 8399 

Facsimile: 03 9650 8543 

Email: info@tourismalliance.com.au 

Web: www.tourismalliance.com.au 

Tourism Australia 

Level 4, 80 William Street 

East Sydney 

GPO Box 2721 

Sydney NSW 2001 

Phone: 02 9360 1111 

Facsimile: 02 9361 1388 

Email: corpaffairs@tourism.australia.com 

Web: www.tourism.australia.com 

Tourism Research Australia 

PO Box 1110 

Belconnen ACT 2616 

Phone: 02 6228 6100 

Facsimile: 02 6228 6180 

Web: www.tra.australia.com 

Tourism Victoria 

GPO Box 2219T 


Phone: 03 9653 9777 

Facsimile: 03 9653 9722 

Web: www.tourismvictoria.com.au 

Victorian Groundwater Database 

(www.dse.vic.gov.au/waterdata) 

Victorian Mineral Water Committee 

PO Box 1067 

Bakery Hill VIC 3354 

Phone: 03 5333 7770 

Facsimile: 03 5333 7717 

Email: philip@issltd.com.au 

Web: www.mineralwater.vic.gov.au 


8. terms and deFinitions 

Aquifer: a geological structure or formation permeated or capable of being permeated permanently or intermittently 

with water. 

Artesian: is a confined aquifer containing groundwater that will flow out of a well without the need for pumping. 

Balneotherapy: is the treatment of diseases, injuries, and other physical ailments by bathing in and drinking of natural 

mineral waters. 

Geothermal water: is water heated by the natural heat of the Earth. 

Groundwater: any water occurring in or obtained from an aquifer. 

Hydrotherapy: is the treatment of physical disability, injury, or illness by immersion of all or part of the body in 

water to facilitate movement, promote wound healing, and relieve pain that is administered under the supervision 

of a trained therapist. 

Mineral spring: a point where natural mineral water flows out of the ground. 

Mineral spring reserve: a natural mineral spring reserve is a portion of land, containing a mineral spring, which is 

gazetted as a special Crown Land Reserve. These areas are managed by local government, Parks Victoria or the 

Department of Sustainability and Environment (DSE). 

Mineral water: as defined by the Water Act, is groundwater in its natural state containing carbon dioxide and other 

soluble matter in sufficient concentration to cause effervescence or impart a distinctive taste. Alternative definitions 

may apply in other countries. 

Spa visitor: is any person who visited a health resort or went on a spa holiday on their last trip for one or more nights 

within Australia. 

Sub-regions: are nationally agreed definitions of Statistical Local Area (SLA) boundaries. 

Henty Park bore wellhead, Portland Water circulation pumps. Courtesy Stephen Read, Geoscience Australia 

36 


appendix a. statutory considerations 

The extraction and use of groundwater resources in Victoria is controlled by legislation enacted by the State 

Government, (the Water Act (1989). The use of geothermal and mineral waters for commercial bathing and drinking 

purposes falls under this legislation. Recently enacted geothermal legislation, the Geothermal Resources Act (2005), 

is aimed at encouraging major energy investment projects (it does not apply to projects where the temperature is 

less than 70°C or the depth of drilling (extraction) is less than one kilometre below the earth’s surface). It therefore 

does not apply to most tourism ventures. 

Groundwater management 

The licensing and administration of the groundwater resources is the responsibility of Victoria’s four Rural Water 

Authorities (RWA); Goulburn Murray Water, Southern Rural Water, Grampians Wimmera Mallee Water and Lower 

Murray Water. To assist in the administration of groundwater licenses, the RWAs have defined a number of Groundwater 

Management Areas (GMA). Each GMA has a prescribed Permissible Consumptive Volume (PCV) which is considered 

to represent the sustainable yield of the aquifer. License applications are considered in light of the PCV and current levels 

of allocation to assess whether a new license application can be sustained by the aquifer. In GMA where the demand for 

groundwater is substantial in comparison to the PCV, a Water Supply Protection Area can be declared by the Minister 

and a Water Management Plan prepared to help manage the resource. 

If the proposed development falls within an existing GMA then a new groundwater extraction license will be issued 

on the provision that the allocation remains within the prescribed PCV. In some locations groundwater resources 

are already fully allocated and water entitlements may need to be traded or reallocated from existing license holders 

(if allowable). The current status of the various GMA (i.e. current levels of allocation in relation to the PCV) can 

be obtained from the Department of Sustainability and Environment website. 

Natural mineral water resources are an exception to these arrangements. These reserves are separately managed 

by the Victorian Mineral Water Committee (VMWC). The VMWC was formed in 1992 to advise and support the 

development of the State’s mineral spring reserves, and to encourage the commercial development of natural mineral 

water and the therapeutic use of mineral water. The VMWC is currently funded by the Victorian Government and a 

mineral water levy is collected. 

The relevant licensing authorities are summarised as follows: 

Relevant licensing authorities 

Resource Basin/Region Licensing Authority 

Geothermal Gippsland Southern Rural Water 

Otway Southern Rural Water 

Murray Goulburn Murray Water, Grampians Wimmera Mallee Water, Lower Murray Water 

Mineral Water Southern Rural Water, Goulburn Murray Water 

Bore construction and groundwater extraction license 

Obtaining the relevant permits and approvals from government authorities is a key step. The following section will 

provide a description of the general processes required to obtain planning approval and a bore construction license. 

1. Prepare and Submit the Bore Construction Licence (BCL) Application: The applicant must contact the relevant 

RWA, complete the BCL application form and pay an application fee. This application will include details of the 

proposed bore design and depth, bore use, location and the estimated annual extraction volume in mega litres 

(ML) and proposed extraction rates (ML/day). 

37 


apendix a. statutory considerations 

Continued 

2. RWA Review: The RWA will consider the application in the context of existing GMA and their PCV and may 

request a hydrogeological assessment to investigate the potential impacts of the proposed extraction on neighbouring 

groundwater users, surface water features and nearby GMA. 

3. Application Advertised: If required the application may be advertised in order to notify adjacent property owners 

via public notices (e.g. newspaper). People affected may object. The application may also be referred to other relevant 

authorities including the Department of Sustainability and Environment, the GMA and local governments, etc. 

4. RWA Assesses and Determines Application: The RWA will consider objections and can conduct a community meeting, 

if needed. The authority will also consider any comments from the referral agencies and, if necessary, negotiate any aspects 

of the application further with the applicant. Following the process the RWA will make a decision to issue or reject the 

license application. If accepted there will be a number of conditions which the applicant must adhere to (i.e. metering, 

pumping periods, etc). Appeals are dealt with by the Victorian Civil and Administrative Tribunal (VCAT). 

5. Review by VCAT (if necessary): Challenges from the applicant or third parties to the RWA decision in relation to 

the license and its conditions are made through an appeal to VCAT that must be made within 28 days of the date of 

determination. If no appeals are made within the 28 days period, the RWA will issue the: 

• Bore construction license (to drill the bore), and; 

• Groundwater extraction license (issued following the receipt of a hydrogeological assessment based on the results 

of drilling and testing of the bore). 

The extraction volume may be modified at this stage depending on the actual yields of the completed bore 

recorded by the driller or from a pumping test. 

Fees 

A range of fees and charges apply for groundwater licenses and ongoing water use. 

Application Fees: Each RWA has a different cost structure and the proponent should confirm these fees at the time 

of application. Costs can vary according to the location of the bore, and nature of the site. As an example, based on the 

Southern Rural Water 2005/06 fee structure, an application for a 400 ML bore would cost in the order of $6,000 (this 

assumes a hydrogeological assessment report and advertising is required). This does not include other costs such as fees 

for consultants to prepare a hydrogeological assessment report that will be required for a license application. 

Annual Water Charge: Charges vary between each of the RWA. As an example, Southern Rural Water has an 

annual fee of $200 per bore license and annual charge of $2.25 per ML of licensed volume. 

Mineral Water Surcharge: A natural mineral water surcharge applies for commercial use of natural mineral water, 

the mineral water levy is currently 1.5c per litre, i.e. $15,000 per ML. 

Groundwater Trading: Groundwater trading is a relatively new concept and is determined by market demand, 

location, and whether the transfer is temporary or permanent. As a guide, purchase costs can vary from $200 

to $1,000 per ML. 

Above ground consent 

Planning approval for development 

A development will require planning approval from the relevant local government authority. The following section 

provides general information on the planning process to gain approvals for a spa development. Further information 

on development considerations for a new tourism proposal (including town planning, business planning and design) 

can be found in Tourism Victoria’s Your Guide to Tourism Investment in Victoria. 

38 


appendix b. planning and design 

Bore Installation and Yield Testing 

Once a BCL license has been obtained from a RWA, a bore can be installed and the sustainable bore yield assessed. 

The drilling and construction of bores must be undertaken by a licensed drilling contractor. The VMWC can assist in 

providing information about suitably qualified drilling contractors. If a hydrogeological consultant is engaged then they 

may also be able to recommend suitable drilling contractors. 

For more complex drilling, such as for deep geothermal bores, the drilling costs are high i.e. hundreds of thousands 

of dollars. As an indicative guide a 500m bore is likely to cost between $210,000 – $375,000, a 1,000m $390,000 

– $700,000, and a 1,500m $525,000 – $975,000. It is wise to prepare a detailed specification, obtain quotes from a 

number of drilling contractors, and have a contract in place to ensure agreed costs and liability. 

Hydrogeological consultants can be engaged to assist with management of the bore installation process, particularly 

for deeper and more complex bores. These services would cover: 

• Completion of specification and contract documents. 

• Assessment of contract tender documents based on set criteria. 

• Onsite supervision of drilling, sediment and groundwater sampling to assess bore potential. 

• Assistance with production bore design, such as finalisation of screen depths, bore diameter, screen aperture. 

(A correctly designed production bore will maximise groundwater yields and temperature, and minimise pumping 

costs over the long term). 

• Onsite supervision to ensure the bore is constructed as per its specification and the screens are placed in the 

required position. 

Planning and Design Issues 

There are a number of issues that should be addressed in consultation with the relevant local government authority. 

Some may be of a minor technical nature others may be central to the success of the development. Local government 

support and commitment to spa tourism may be a key factor in the project’s success and it is recommended that you 

liaise with councillors and staff when ever necessary, especially in the early stage, to resolve any issues. 

Groundwater Treatment and Disposal 

The groundwater pumped from the bore may need some form of treatment to ensure it is clear and clean for public use. 

Treatment to the water from the bore may include sand filtration to remove any sediment or settling tanks to remove 

iron precipitate. Ozone or UV treatment will remove any micro bacterial forms from the bore, and chlorination may be 

required in the facility. Provision for these types of treatment should be made in the design, based on the groundwater 

quality analysis. 

Depending on the groundwater quality and the development location, disposal of the groundwater following use may be 

an issue. If the site is sewered a trade waste agreement with the relevant authority should be sought and may be granted. 

However, the developer must liaise with the local authority, as in some cases the wastewater from the site may not be 

accepted due to the salinity, flow rates or temperature. The limitation may be the size and current capacity of the regional 

treatment plant. 

Other alternatives that may need to be investigated include a package treatment plant, re-injection of the groundwater 

back into the aquifer system or re-use of the water (i.e. irrigation, wetlands, aquiculture, etc). Each alternative would 

require permission from the relevant licensing authority. 

39

victoria's geothermal and natural mineral water ... - Tourism Victoria

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