Flood hit tourism industry calls for one-off tax break

Australia’s crippled tourism industry is pushing for a share of the Federal Government’s flood levy to aid hotels and resorts in struggling regional areas.

Under a proposal by the Tourism & Transport Forum, applicants would be given a one-off tax deduction equal to 50% of the costs of eligible capital works to improve tourism accommodation and furniture, fittings and equipment.

The tax deduction would be limited to regional areas that are failing to attract enough tourists, such as north Queensland, the Whitsundays and the Gold Coast.

In NSW, the tax breaks would be available for hotel owners operating in the struggling northern rivers area, while Victoria’s Mallee, Wimmera and Great Ocean Road would also benefit.

Tourism & Transport Forum chief executive John Lee says a “potential catastrophe” is about to happen with tourism operators in north Queensland.

“We need to give people incentives to go there and we need the product to be fresh and enticing,” he says.

Lee says the problem is not limited to disaster-stricken areas, with Cairns hoteliers reporting occupancies of just over 50% last year while the Gold Coast reported occupancies of around 60%.

His claims are backed up by a Deloitte report showing city hotels are recovering strongly in the wake of the global financial crisis, while resorts around the country are struggling.

A spokeswoman for Tourism Minister Martin Ferguson says the industry has not been excluded from the Government’s disaster and recovery support efforts.

She says the $10 million Tourism Industry Support Package, announced last week by the Federal and Queensland governments, will provide a sufficient boost to the industry.

News of the TTF’s proposal comes as the Australian Bureau of Statistics releases figures showing domestic tourism is under threat as the strong dollar and cheap deals prompt more Australians to head overseas.

According to the ABS, the number of departures for international holidays rose 13% last year to 7.1 million, although the figures do not take into account the impact of the Queensland floods.

Industry representatives say it is also too early to assess the impact of US media mogul Oprah Winfrey’s Australian tour, which was televised to a US audience of 10 million last month.

A Tourism Australia spokesman says the agency is expecting to see the first signs of the “Oprah effect” within 12 to 18 months. Tourism Australia is forecasting an additional 300,000 visitors to Australia this year.

According to Lee, eight out of 12 of Australia’s largest tourism markets are in Asia, and six of those markets grew by more than 10% last year.

“China led the way, jumping 23.9% to more than 453,000 visitors in 2010 and [is] rapidly closing in on the United States; our third biggest international market,” he says.

This article first appeared on StartupSmart, Australia’s stop site for advice on starting a business.