Tasmania: A surge in tourism is changing the economy

One of the things Tasmania has tended to be famous for, throughout history, is an economy that has often looked rather bleak. There was no gold rush in Tasmania and many other industries failed to flourish there. However, the fortunes of this island have been changing over the last decade and continue to do so. In particular, it is an increase in tourism that is helping the economy to finally thrive.

The importance of a growing tourism industry in Tasmania should not be underestimated. Tasmania has economic woes that are centuries old. The state has never received any significant foreign investment and the Tasmanian economy has often been described as erratic. This erraticism has largely been attributed to the constantly fluctuating population level, which has, even at its peaks, never been high enough for many industries to really take off. Whilst a significant amount of Tasmania’s youth has often left for employment in mainland Australia, Tasmanian immigration schemes have usually been somewhat lacking. Consequently, Tasmania has an aging population. Pensioners account for a large proportion of the 34% of Tasmanian’s relying on welfare payments as a primary source of income.

Yet June 2013 brought confirmation that one of the island’s main industries, tourism, was showing signs of significant improvement. Newly released statistics revealed that tourism increased by a staggering 10% in the period between March 2012 and March 2013. This meant that the island had reached record numbers of visitors, with more than 930,000 people visiting the island in a year. Crucially, the expenditure of visitors had increased by 6%, up to $1.464 billion. Tourism Minister Scott Bacon chose to emphasise the importance of additional flights to the island in boosting tourism, when he spoke to the press.

“The government invested a million dollars last year to make sure we could continue to work with airline partners to make sure those record number of flights are sustainable,” Mr Bacon said.

So, who are Tasmania’s tourists? Many are interstate visitors from Australia, but there has been increasing interest in Tasmania from Asian countries. Mr Bacon revealed that attracting Asian visitors was “a real focus of the government”.

The state government’s marketing of Tasmania to potential Asian tourists has begun to pay off. Between March 2012 and March 2013 there was 54% increase in Chinese tourists. It has also been announced that a film crew from South-East Asia’s Life Inspired television channel will be filming a documentary on Tasmania’s natural assets. Presenter Jason Godfrey said that Tasmanian food, in particular, would be focused on. This gives an indication of what kind of tourist offer the island can be marketed with.

These latest statistics are encouraging, but tourism has been providing a much-needed boost for the Tasmanian economy since 2001. Though the good economic climate in mainland Australia is partially responsible for Tasmania’s recent fortunes, cheaper air fairs and additional ferries to the island have bolstered tourism figures, leading to increased economic growth since the early noughties.

The effects of tourism on the state’s employment are clear. After local government, one of the next major employers in Tasmania is the Federal Group, which owns several hotels and two casinos.

Tasmania has begun to redefine itself as a liberal state; a fact many are claiming has helped with tourism levels over the last decade. Though the island did not decriminalise homosexuality until the 1990s, many expect Tasmania to be the first Australian state to legalise same-sex marriage. It is also anticipated that Tasmania will introduce various other liberal reforms to its state laws later this year.

Tasmania’s increasing popularity can also be explained by the fact that it has a tourism offer distinct from Australia, despite its proximity to the mainland. The Tasmanian climate can change dramatically in a short space of time. This erratic weather has resulted in vast rainforests and breath-taking landscapes filled with unusual wild flowers. Tourists can seek beaches, mountains and large rivers. There is still intrigue surrounding the thylacine, otherwise known as the rare Tasmanian tiger. The equally famous Tasmanian devil also draws visitors. Though colonisers landed in Tasmania in 1803, the island retains a lot of Aboriginal heritage. In the Tarkine region, a site of Aboriginal huts still exists, as do stone engravings that are 6,000 years old. To widen Tasmania’s offer beyond natural beauty and history, in 2011 the Museum of Old and New Art was opened.

As much as Tasmania may be appearing more attractive to potential visitors, relying on tourism for economic growth comes with risk. There are of course the concerns that excessive tourism can come to dominate local cultures and the island could see the commodification of many of its charms, for the benefit of visitors.

Tourism from abroad puts Tasmania’s fortunes in the hands of other economies. Any fall in the disposable income of Tasmania’s targeted tourists could result in falling demand for Tasmanian holidays and, consequently, falling employment in Tasmanian tourism. Similarly, nearby competition for tourists could knock Tasmania off the destination list.

If the employment opportunities in tourism did start falling, a significant segment of the workforce could potentially move to mainland Australia. This was the case after the 1990s decline in manufacturing work on the island, when many workers moved to Melbourne and Sydney. Another similar exodus now or in the near future would mean that Tasmania’s population takes another tumble and the problem of an aging population becomes intensified.

Should tourism decline, for whatever reason, the other existing industries that Tasmania has to rely on are limited. Wool and mineral economies faded away in the Nineteenth Century. Agriculture has always been a main industry in Tasmania, but was hard hit during the last century when crops traditionally produced on the island fell out of favour. However, the Tasmanian Institute of Agricultural Research has more recently invested in developing the production of new products, such as wine and saffron.

Mining had been a major industry in Tasmania, but the fluctuations in population levels (and opportunities for mining elsewhere) means that mining in Tasmania had been inconsistent in the past. More recently, however, the state government actually prioritised the interests of mining over the interests of tourism, when a decision was made about the land in the Tarkine region.

Originally, concerns about logging meant that, in 2004, Prime Minister John Howard created a “protected area” in the Tarkine rainforest. In 2013, the Australian Heritage Council requested that Julia Gillard list Tarkine as an Australian National Heritage. This would have helped Tasmania further promote itself to tourists. However, it has instead been decided that Tarkine, rainforest included, will be used for mineral exploration and an ion ore mine will be located in Tarkine’s protected area. There are 50 other applications for mining and exploration in the same region.

As these mining plans are at such an early stage of development, they do not yet provide an alternative to tourism for employment and economic growth. Obviously, there are huge environmental concerns surrounding the use of such land, especially as so much of Tasmania’s forests have already been cleared.

Opposition to such mining activities needs to be balanced against need for further economic growth in the region. Despite the role tourism has played in improving the economy over the last decade, Tasmania still faces many economic struggles. The national housing boom saw house prices rise substantially and there is now a significant shortage of rental accommodation, a particular concern amongst the low-income earners in Tasmania. There are also high levels of poverty prevalent throughout the island. This, combined with an aging population and limited workforce, means that Tasmania is by no means a buoyant economy yet. The latest publicity surrounding the island should not overshadow the economic struggles facing many of the island’s inhabitants. However, it is to be hoped that tourism, for the time being at least, will provide more employment opportunities within the state.

For the moment, these latest tourism statistics provide some good news for Tasmania to enjoy. John Fitzgerald of Tourism Tasmania summed up the current mood, when he said: “there’s a light shining on Tasmania at the moment but it’s important that we maximise it.”