As Australian Parliamentarians consider their voting positions on poker machine mandatory pre-commitment technologies, the impact on gambling on society, and a sensible and evidence based approach to fix the downsides to gambling, it’s important to consider what regulating this leisure activity will mean to inbound tourism over the next decade and beyond.
To maintain international competitiveness, many Australian casinos have been actively investing in new tourism infrastructure and upgrading existing properties. The total capital expenditure program across Australian casinos exceeds AU$4.4 billion with impressive upgrades to Crown Melbourne and Burswood in Perth, The Star in Sydney, and SKYCITY in Darwin amongst others.
Over the same time, there has been increasing competition from Asia, most notably in the emergence of ‘integrated resorts’ that offer unprecedented opportunities to grow international tourism. Singapore has overseen the construction of two integrated casino resorts at a combined cost of around AU$12 billion.
Resorts World Sentosa, a 49‐hectare development located on Singapore’s holiday island of Sentosa, is Singapore’s largest integrated resort. The complex cost approximately AU$6.9bn to develop and opened in January 2010. Singapore’s other gaming focused development is Marina Bay Sands, located immediately adjacent to the Singapore CBD.
The two properties have generated significant economic benefits for Singapore, helping to grow Singapore’s Gross Domestic Product (GDP) by 14.5% in 2011.
Contributions from the two integrated resorts in the first nine months was almost half of tourism GDP in the same period. GDP from Services Producing Industries grew 10.5% in 2010. Tourism‐related services sectors were bolstered by strong visitor arrivals as well as the opening of the integrated resorts.
Tourism revenue soared 49 percent to SG$18.8 billion dollars in 2010. Hotel Room Revenue was estimated at SG$1.9 billion in 2010, increasing 21.8 percent year‐on‐year.
Chairman of the leading political party in Singapore, Lim Boon Heng, acknowledges that the two integrated resorts have benefited the Singapore economy. Considered ‘Singapore’s Nick Xenophon’ Lim’s opposition to gambling as an industry during the casino debate in 2005 caused him to go through a “very difficult process” to accept the decision for the sake of jobs that the integrated resorts would create.
One year on, the integrated resorts have created thousands of direct jobs in operation but also spin‐offs for the tourism sector, particularly travel, food and beverage industries, boosting the Singapore economy.
The Singaporean Government has provided incentives to organisers of business events, meetings, conferences and exhibitions to hold events in Singapore, and even facilitates the ‘fast tracking’ through airport, customs and immigration of VIP visitors to the integrated resorts.
This stands in stark contrast to the Australian Government, where AU$34million was cut from the Customs and Border Protection budget in May this year. In Singapore, fast tracking of customs and immigration means passengers are met at the airbridge and are taken through a personalised immigration and customs process. In Australia, budget cuts equate to longer queues at our major airport arrivals halls.
The emergence of integrated resorts presents a huge challenge to the ‘business as usual’ model for Australian tourism.
And it’s not just Singapore leaving Australia behind in this regard. Currently, the existing integrated resorts in Asia are located in Macau and Malaysia as well.There is an emergence of new integrated resorts across the region, with planned developments in the Philippines, Taiwan, Vietnam and Japan.
Since the last federal election, Australia has dropped in travel and tourism competitiveness world rankings from 4th in 2008 to 13th in 2011, while Singapore has moved up from 16th to 10th over the same period.
China’s outbound travel market is one of the fastest growing in the world. Chinese visitors represent more than AU$3.2 billion to the Australian tourism industry and by 2020, that market will be worth AU$7‐9 billion, 60 percent more than the entire value of the tourism industry today.
In this context, Australian integrated resorts present an excellent tourism opportunity for the Chinese market. However, factors such as longer travel distances, language barriers, and the relative ease of obtaining visas may hinder Australia’s ability to effectively compete in this market.
Clearly, the proximity of Singapore to mainland China and having a shared language means it will always outperform Australia in capturing this segment of the Chinese tourism market. However, the size of the potential market means there remains huge potential for Australia to capture a decent portion of the expected growth.
That is, so long as we start to offer visas for longer time periods, provide simpler online visa processes for visitors from Asian countries (in languages other than English), and don’t regulate ourselves out of the market.
Independent MP Andrew Wilkie has signalled he expects the Gillard Government to introduce mandatory pre-commitment laws by May 2012. With initial drafting still in early consideration stage, the public debate has a long way to run before mandatory pre-commitment legislation is brought to the Parliament. However, when it does vote, our Parliament must ensure Australia doesn’t regulate itself out of billions of dollars in revenue.
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