Yarra Valley Regional Tourist Precinct & Railway Link Economic Impact Analysis & Stakeholder Consultation
REPORT PREPARED FOR YARRA RANGES SHIRE COUNCIL April 2013
In collaboration with
Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
Stakeholder Consultation and Economic Impact Analysis of Yarra Valley Regional Tourist Precinct and Rail Link
This project has been conducted by REMPLAN Project Team Matthew Nichol Principal Economist – REMPLAN
John Stevens Principal Consultant - Dench McClean Carlson
Hui Shi Economist - REMPLAN
April 2013 REMPLAN and Yarra Ranges Shire Council hold all rights in relation to this document. Reproduction or distribution of this document in part, or as a whole, requires the express permission of either of these parties.
DISCLAIMER All figures and data presented in this document are based on data sourced from the Australia Bureau of Statistics (ABS), and other government agencies. Yarra Ranges Shire Council has provided some background information in relation to the Yarra Ranges railway link in the region. Using ABS datasets, the regional economic modelling software REMPLAN, developed by REMPLAN has been applied to generate industrial economic data estimates. This document is provided in good faith with every effort made to provide accurate data and apply comprehensive knowledge. However, REMPLAN does not guarantee the accuracy of data nor the conclusions drawn from this information. A decision to pursue any actions based on information presented in the report is wholly the responsibility of the party concerned. REMPLAN advises any party to conduct detailed feasibility studies and seek professional advice before proceeding with any action and accepts no responsibility for the consequences of pursuing any of the findings or actions discussed in the document.
RESOURCES All modelling has been undertaken using REMPLAN™ software that has been authored by Principal Research Fellow (ret.), Ian Pinge, at La Trobe University Bendigo. Contact us: REMPLAN PO BOX 5006 SANDHURST EAST, BENDIGO, VIC 3550 TEL: 1300 737 443 Email:
[email protected]
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
Executive Summary The Yarra Valley Regional Tourist Precinct and Rail Link Project will create a link between Yarra Glen and Healesville and various tourism experiences that already exist in the Yarra Ranges region. This will provide improved opportunities for local businesses to collaborate in creating “packages” of experiences that will significantly grow the Yarra Valley’s attractiveness as a tourism destination and add value to the experiences already on offer including wineries, events, food, recreation and nature based activities. The Project will enable a significant increase in the number of people who can experience the Yarra Valley Rail and other tourism related experiences in the Yarra Valley. It is anticipated that, once the Yarra Valley Regional Tourist Precinct and Rail Link Project is completed and the services are fully operational the number of passengers can grow from some 20,000 to 200,000 per year. The greater linkages with existing tourism experiences will also attract many of these visitors to stay overnight in the Yarra Valley and use the Yarra Valley as a platform to access more experiences in the region and beyond. The increase in overall, and overnight, visitation will result in an increase in the goods and services purchased from businesses in the Yarra Range region, and beyond, in areas such as accommodation, retail, food and transport. The increase in overall, and overnight, visitation will generate a significant increase in employment within the Yarra Ranges region. The construction of the various elements of the project will create some 10 construction related jobs. The wages and income associated with this construction employment and the expenditure of local goods and services will generate a further 15 jobs and will grow the size of the local economy by more than 19 million dollars on an annual basis during this time. When Yarra Valley Rail is operating at full capacity the increased visitation is forecast to generate more than 170 additional jobs. These jobs will be spread across a range of businesses in sectors such as food and accommodation, retail, health and wellbeing and transport. The wages and income generated by this increased employment will also enable increased expenditure on goods and services from businesses throughout the Yarra Ranges region. In all, this increase in employment will grow the size of the local economy by more than 35 million dollars on an annual basis. Consultation with local business has confirmed that there is strong support for the project and a desire to collaborate with the Yarra Valley Railway. The businesses consulted include: • • • • • • •
Healesville Sanctuary (330,000 visitors in 2011/12) R.A.C.V. Country Club - Healesville Rochford Winery Yarra Valley Chocolaterie Yarra Valley Dairy The Yarra Valley Racing Club Yarra Glen Chamber of Commerce
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
These businesses have confirmed that they would be very willing to provide a formal letters of support for the project as required. The marketing of the Railway will benefit from collaboration with these important local businesses through cross promotion of the diverse range of existing attractions and tourism experiences.
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
Content
Disclaimer..................................................................................................................................................2 1.
2.
3.
4.
Introduction ..........................................................................................................................................7 1.1
Purpose and Aim ...........................................................................................................................7
1.2
Context ..........................................................................................................................................7
1.3
Constraints and Opportunities......................................................................................................7
1.4
Methodology.................................................................................................................................8
1.5
Regions ..........................................................................................................................................8
Regional Economic Profile ................................................................................................................. 10 2.1
Employment ............................................................................................................................... 10
2.2
Output ........................................................................................................................................ 11
2.3
Wages and Salaries .................................................................................................................... 12
2.4
Value Added ............................................................................................................................... 13
2.5
Tourism Contribution ................................................................................................................. 14
2.5.1
Tourism – Employment ...................................................................................................... 14
2.5.2
Tourism Contribution – Output ......................................................................................... 16
2.5.3
Tourism Contribution – Wages & Salaries ......................................................................... 18
2.5.4
Tourism Contribution – Value Added ................................................................................ 19
2.5.5
Tourism - Melbourne East and Greater Melbourne Comparison ...................................... 19
Tourism Market Overview ................................................................................................................. 20 3.1
Tourism Market.......................................................................................................................... 20
3.2
The role of Yarra Valley Railway in Regional Tourism................................................................ 20
3.3
Proposed Development ............................................................................................................. 21
3.4
Marketing of Yarra Valley Railway ............................................................................................. 22
3.5
Business and Community Support for the Project ..................................................................... 24
3.5.1
Stakeholder Consultation – Local Business ........................................................................ 24
3.5.2
Community Survey ............................................................................................................. 25
Economic Impact Analysis .................................................................................................................. 26 4.1
The Construction Phase ............................................................................................................. 26
4.1.1
Output ................................................................................................................................ 26
4.1.2
Employment ....................................................................................................................... 27
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
4.1.3
Wages and Salaries ............................................................................................................ 28
4.1.4
Value Added ....................................................................................................................... 29
4.1.5
Summary: Construction Phase ........................................................................................... 29
4.2
5.
The operational Phase ............................................................................................................... 30
4.2.1
Output ................................................................................................................................ 32
4.2.2
Employment ....................................................................................................................... 32
4.2.3
Wages and Salaries ............................................................................................................ 33
4.2.4
Value Added ....................................................................................................................... 33
4.2.5
Summary: Operational Phase ............................................................................................ 34
Summary of Findings.......................................................................................................................... 35
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
1.
Introduction
1.1
Purpose and Aim
This report has been prepared in response to a request from Yarra Ranges Shire Council to assess the likely economic benefits of The Yarra Valley Regional Tourist Precinct and Rail Link Project. Currently the Yarra Valley Railway is running from Healesville to Tunnel Hill. The Council is seeking the funding to extend the tracks to connect two popular tourist towns of Yarra Glen and Healesville. The Yarra Valley Regional Tourist Precinct and Rail Link Project is listed as a regional strategic infrastructure priority project. This project will develop historic Yarra Glen Railway Station precinct and rail infrastructure into a key tourist product, providing a community operated tourist rail service, information bureau and pedestrian links to existing community facilities.
1.2
Context
Tourism plays an important role in the Yarra Ranges economy. Yarra Ranges tourism is underpinned by attractions that include Puffing Billy (250,000 passengers per year), Healesville Sanctuary, many wineries, galleries, cafes and restaurants. Many of these attractions are situated along the corridor between the tourist towns of Yarra Glen and Healesville.
1.3
Constraints and Opportunities
While tourism makes valuable contributions to the economy there are constraints. For instance, there is a lack infrastructure and services linking Yarra Glen and Healesville and all the wineries and other attractions along this corridor. Also, Puffing Billy is close to full capacity. Yarra Valley Railway which is currently serving 20,000 passengers per annum is seeking funding to extend the tracks to connect Yarra Glen and Healesville. The link between the towns combined with a relatively short track / travel time will allow operators to create packages incorporating the two towns and the various attractions in between. There is potential to create a range of themed products for wholesale and retail markets - food and wine, jazz, photography, weddings, events and ghost trains are some examples. Yarra Valley Railway estimates the once the track is complete and the services are fully operational, that passenger numbers would increase to 200,000 per annum. This report details the unique economic structure of the Yarra Ranges economy in terms of employment, output, wages and salaries and value-added. The role tourism in contributing to the local economy is a key focus. A quantitative assessment of the direct and indirect economic impacts of the Yarra Valley Regional Tourist Precinct and Rail Link Project is also presented.
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
1.4
Methodology
Economic impact analysis in this report will been undertaken using the REMPLAN1 model of the Yarra Ranges economy. REMPLAN models are built on the latest available datasets sourced from the Australian Bureau of Statistics (ABS) and Tourism Research Australia (TRA). The main demographic and economic datasets used in this report include:
ABS, Place of work data from the 2011 Census of Population and Housing ABS, 2008/2009, ABS, National Input /Output Tables ABS, June 2012, Gross State Product ABS, 2010, Tourism Satellite Account 2011/2012, Tourism Research Australia, Regional Tourism Profiles; Weighted averages of Melbourne East & Upper Yarra Region
These datasets underpin the REMPLAN model of for Yarra Ranges which details the contributions made by each industry sector to the local economy, including tourism.
1.5
Regions
The Yarra Ranges Shire is located in the outer eastern and north-eastern suburbs of Melbourne extending into the Yarra Valley and Dandenong Ranges. Map 1-1 Yarra Ranges Shire (LGA)
Source: REMPLAN MapBuilder
Although the project is located in Yarra Ranges (LGA), the benefit will flow beyond the municipality to the broader region. The maps below show the broader region that the project could benefit. 1
www.remplan.com.au
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
Map 1-2 Melbourne East RDA Region
Source: REMPLAN MapBuilder
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
2.
Regional Economic Profile
This section presents the economic profile of the Yarra Ranges region in terms of employment, output, wages and salaries and value added for each industry sectors.
2.1
Employment
The employment data represents the number of people employed by businesses / organisations in each of the industry sectors in Yarra Ranges. In this report the employment data is place of work data and represents total numbers of employees without any conversions to full-time equivalence. In total, the Yarra Ranges (S) economy supports 35,836 jobs. Retail Trade employs the most people, followed by Education & Training and Manufacturing. Figure 2-1 Employment – Yarra Ranges (S)
Total = 35,836 Jobs
Source: ABS 2011 Census and REMPLAN Economy
When comparing with 2006 Census estimates, growth sectors include education & training, health care & social assistance and accommodation & food services. Industry sectors that have declined in the local economy include manufacturing, retail trade, and wholesale trade.
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
2.2
Output
Output data represents the gross revenue generated by businesses/organisations in each of the industry sectors in a defined region. Gross revenue is also referred to as total sales or total income. The total output for Yarra Ranges (S) is estimated at $9.94 billion. The Manufacturing sector is the largest contributor to the region’s output (29%), followed by Construction (12.8%) and Rental, Hiring & Real Estate Services (10.6%). Figure 2-2 Output – Yarra Ranges (S)
Total = $9.94 billion
Source: REMPLAN Economy
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
2.3
Wages and Salaries
Wages & Salaries in this report refers to the value of entitlements earned by employees from their employers for services rendered, includes wages and salaries received by employees in cash and in kind (e.g. provision of food, accommodation or motor vehicles), and employers' social contributions such as superannuation contributions and workers' compensation premiums. The wages and salaries paid by businesses and organisations in Yarra Ranges is estimated at $2.20 billion. The Manufacturing and Education & Training make the largest contributions in terms of wages and salaries paid to local workers. Health Care & Social Assistance and Construction are also notable sectors. Figure 2-3 Wages & Salaries – Yarra Ranges (S)
Total = $2.20 billion
Source: REMPLAN Economy
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
2.4
Value Added
Value Added represents the marginal economic value that is added by each industry sector in a defined region. Value-Added can be calculated by subtracting local expenditure and expenditure on regional imports from the output generated by an industry sector, or alternatively, by adding the Wages and Salaries paid to local employees, the gross operating surplus and taxes on products and production. Value-Added by industry sector is the major element in the calculation of Gross Regional Product (GRP)2. The total value added by industries in the Yarra Ranges economy is estimated at $4.19 billion. The top 3 sectors, Rental, Hiring & Real Estate Services, Manufacturing and Construction respectively contribute 17%, 13.7% and 9.4% of total value added. Figure 2-4 Value Added – Yarra Ranges (S)
Total = $4.19 billion
Source: REMPLAN Economy
2
GRP is the net measure of wealth generated by the region. GRP can be measured by using the incomes approach, where all incomes earned by individuals (wages and salaries), firms (gross operating surplus) and governments (taxes on products or services) are added. Alternatively an expenditure approach can be taken where all forms of final expenditure, including consumption by households, consumption by governments, additions or increases to assets (minus disposals) and exports (minus imports), are added. The expenditure approach does not include intermediate expenditure, as this would lead to double counting. e.g. the wheat and flour in a loaf of bread. These methodological approaches are the same as those used to calculate Gross Domestic Product (GDP) at a national level.
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
2.5
Tourism Contribution
Tourism is an amalgam of activities across various industry sectors such as retail, accommodation, cafes & restaurants, cultural & recreational services. According to Tourism Research Australia’s definition, tourism related visitation encompasses Australians and overseas visitors spending money in a region in which they do not usually live or work. This includes recreational tourists, people visiting friends and relatives, business travellers and also people visiting to access services such as retail, health, education and government services. In this section visitor activities and expenditure specific to Yarra Ranges have been aggregated into a separate ‘tourism sector’. The tourism sector’s contributions to employment, output, wages and salaries, and value-added have been detailed. 2.5.1
Tourism – Employment
Figure 2-5 Tourism Employment – Yarra Ranges (S) 3,059 4,807 1,182 845 4,280 4,379 1,035 1,395 1,763 1,615 514 3,295 278 527 90 311 1,860 3,455 1,146
Source: REMPLAN Tourism Analysis Module
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
In figure 2-5 above industry sector employment has been separated into two parts: the proportion of jobs servicing visitors (in orange), with the remainder (in blue) the proportion servicing local businesses and consumers. Accommodation and Food Services has the highest proportion of employees servicing demand for goods and services by visitors to Yarra Ranges. In total, the Yarra Ranges (S) economy supports 2,414 tourism jobs, representing 6.74% of total jobs in this region; compared to 4.7 percent for Victoria. The tourism (orange) component of figure 2-5 is presented below as a separate graph. Figure 2-6 Employment attributable to Tourism – Yarra Ranges (S)
Source: REMPLAN Tourism Analysis Module
More than half (55.7%) of Yarra Ranges tourism sector jobs are in Accommodation & Food Services. This is followed by tourism employment in Retail Trade (16.3%), Transport (9%) and Arts & Recreation Services (5.9%). These four sectors in total contribute 87% of tourism employment in the municipality.
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
2.5.2
Tourism Contribution – Output
Figure 2-7 Output with separate Tourism sector – Yarra Ranges (S)
Source: REMPLAN Tourism Analysis Module
Yarra Range’s tourism output is estimated at $407.5 million, this represents 4.1% of total regional output. A breakdown of the industry sectors contributing to Yarra Range’s tourism output is presented below.
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
Figure 2-8 Output attributable to Tourism (%) – Yarra Ranges (S)
Source: REMPLAN Tourism Analysis Module
Of the total tourism output of $407.5 million, $169.13 million or 41.5% is attributable to Accommodation & Food Services. The other top sectors are Manufacturing, Transport, Postal & Warehousing and Retail Trade, respectively contributing 14%, 12.5% and 9.1% to Yarra Range’s tourism output.
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
2.5.3
Tourism Contribution – Wages & Salaries
The total wages and salaries paid to the 2,414 people employed in the tourism sector in Yarra Ranges are estimated to be $96.76 million, which is 4.4 % of total wages and salaries paid to workers in Yarra ranges. Figure 2-9 Wages & Salaries with separate Tourism sector – Yarra Ranges (S)
Source: REMPLAN Tourism Analysis Module
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
2.5.4
Tourism Contribution – Value Added
The estimated value added by the tourism sector is $177.42 million, which represents 4.23% of total value-added for Yarra Ranges (S). Figure 2-10 Value-added with separate Tourism sector- Yarra Ranges (S)
Source: REMPLAN Tourism Analysis Module
2.5.5
Tourism - Melbourne East and Greater Melbourne Comparison
Table 2-1 Tourism Contribution Comparison Yarra Ranges (S)
Melbourne East RDA
Greater Melbourne3
Tourism Employment
6.74%
3.81%
4.40%
Tourism Output
4.10%
2.23%
2.60%
Tourism Wages & Salaries
4.39%
2.76%
2.94%
Tourism Value-added
4.23%
2.49%
2.73%
Relative to Melbourne East and Greater Melbourne, tourism plays a more important role in Yarra Ranges’ economy in terms of its contributions to employment, output, wages & salaries and valueadded. 3
http://remplan.co/14UlOwF
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
3.
Tourism Market Overview
3.1
Tourism Market
Yarra Ranges is part of the Yarra Valley and Dandenong Ranges tourism region. The region is renowned for its local produce and wineries. Based on Tourism Victoria’s market profile (to the end of 2011), the Yarra Valley and Dandenong Ranges region received an estimated 3.1 million domestic daytrip visitors, 630,000 domestic overnight visitors and 30,700 international overnight visitors. 74 percent of overnight visitors to Yarra Valley and Dandenong Ranges were sourced from the intrastate market, followed by 21 percent from interstate and 5 percent from international markets. The Yarra Valley Regional Tourist Precinct and Rail link project is located within the Yarra Valley which encompasses the upper regions surrounding the Yarra River. Major towns include Yarra Glen, Healesville and Warburton. The Yarra Valley’s high profile wineries and proximity to Melbourne and has made it an important destination for day trippers. According to the ‘Yarra Valley Visitor Profile and Satisfaction (VPS)’ project undertaken by Tourism Research Australia (TRA) in April – May 2011, the most common reasons for visiting the Yarra Valley are:
to visit specific attractions (48%) because it was an easy day trip from Melbourne (41%) the reputation for quality wine (24%) to experience a specific winery or restaurant (22%).
The TRA research highlights that the visiting motivations for day visitors and overnight visitors are different. Day visitors were more likely to choose specific attractions in Yarra Valley, whereas overnight visitors prefer a more relaxed holiday with family and friends. The survey shows that Healesville and Yarra Glen were the most common towns for respondents to stop overnight; 60 percent of overnight stops in the region were in Healesville, and 35 percent in Yarra Glen.
3.2
The role of Yarra Valley Railway in Regional Tourism
The Yarra Valley Railway is a heritage railway operating on a section of the former Healesville railway which operated between Lilydale and Healesville. On July 17, 2010 the official launch of the Walker Railmotor service occurred with the first passenger service to leave Healesville Railway Station in over 30 years. The railway is currently running a Walker Railmotor RM22 from Healesville to the Tarrawarra Winery, crossing the Watts River, under the Donovan's Road overbridge and through the historic tunnel, shown in Figure 3-1. The Yarra Valley Railway has become an important tourist attraction with a ride through the beautiful Yarra Valley to the 150 metre long brick tunnel. There are a variety of special events including the Heritage Festival, the Ghost Train and the Railway Show. (Source: www.yarravalleyrailway.org.au )
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
Yarra Valley Railway is currently serving over 22,000 passengers per annum with nearly half of the passengers from Melbourne due to its proximity. Table 3-1 Yarra Valley Railway Passenger Figures 2012 JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
ACT
30
15
2
18
3
0
3
4
2
10
1
11
99
NSW
363
178
255
496
165
83
142
99
312
304
157
160
2714
4
2
6
2
1
2
3
1
14
5
3
1
44
147
72
111
162
103
66
51
73
161
115
98
70
1229
SA
50
24
31
79
25
31
27
35
62
71
52
41
528
TAS
15
8
15
16
20
14
14
2
78
27
16
9
234
304
148
236
291
150
146
201
228
499
249
164
156
2772
1308
640
1012
1452
512
747
632
709
1201
860
712
605
10390
91
44
44
89
31
30
74
43
69
32
40
23
610
484
236
285
392
180
179
147
268
598
322
215
201
3507
2796
1367
1997
2997
1190
1298
1294
1462
2996
1995
1458
1277
22127
NT QLD
Vic Country Vic Metro WA Overseas Total
TOTAL
Source: Yarra Ranges Shire Council
3.3
Proposed Development
Yarra Valley Railway is seeking funding to extend the tracks to connect Yarra Glen and Healesville. The link between the towns combined with a relatively short track / travel time will allow operators to create packages incorporating the two towns and the various attractions in between. The development of the heritage train rides includes:
Restoration of the line between Yarra Glen and Simpson’s Lane/Train Track Winery. Railway rides from Healesville to Tunnel Hill with a new spate section from Yarra Glen to Simpsons Lane. Restoration of the line between Tunnel Hill and Simpson’s Lane (Healesville and Yarra Glen). Operate trains between Healesville and Yarra Glen. Steam Train tours through the Yarra Valley.
The current heritage train travels between Healesville and Tarrawarra Tunnel and the plan is to extend the service through to Yarra Glen. The extension of the service is part of the Valley Regional Tourist Precinct and Rail Link Project which is listed as a regional strategic infrastructure priority project. This project will develop historic Yarra Glen Railway Station precinct and rail infrastructure into a key tourist product, providing a community operated tourist rail service, information bureau and pedestrian links to existing community facilities. The link between Yarra Glen and Healesville combined with a relatively short track / travel time will allow operators to create packages incorporating the two towns and the various attractions in between. An important component of the project will be a turntable at the Yarra Glen Station. The turntable will allow heavier steam locomotives to be turned around for the return leg of a trip. The combination of the turntable and the heavier trains will greatly increase the passenger carrying capacity. The Yarra
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
Valley Railway estimates the once the track and supporting infrastructure is complete and the services are fully operational, that passenger numbers would increase to 200,000 per annum. Figure 3-1 Route of Yarra Valley Railway
Source: Yarra Valley Railway Website
3.4
Marketing of Yarra Valley Railway
The significant increase in the capacity and opportunities that the project will enable will be supported through effective marketing and promotion. To date the Yarra Valley Railway has attracted 22,000 passengers per annum with no formal marketing campaign or resources other than the YVR website. The marketing of the Yarra Valley Railway will support a growth in patronage with the aim of achieving up to 200,000 passengers per year upon reaching full capability. The marketing of the Yarra Valley Railway will leverage the significant number of people already visiting the region – i.e. approximately 630,000 domestic overnight visitors, 3.1 million domestic daytrip visitors of which it is estimated that more than 1.5 million visitors are within 60 minutes driving time of the precinct and Yarra Valley Railway. The marketing of the Yarra Valley Railway will also build the collaboration within the regional tourism industry through cross promotion with the diverse range of existing attraction and experiences. Consultation undertaken with the owners/operators of a number of significant local attractions has confirmed a high degree of commitment to such collaboration. These attractions include: • • • • • •
Healesville Sanctuary R.A.C.V. Country Club - Healesville Rochford Winery Yarra Valley Chocolaterie Yarra Valley Dairy The Yarra Valley Racing Club
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
The marketing of the Yarra Valley Railway will also leverage a unique element of the Railway’s experience, which will be a stop/station between the two key terminuses at Yarra Glen and Healesville. This creates an opportunity for passengers to be able to break their journey to access other attractions and experiences. A number of local tourism operators can also provide transport that will enable Yarra Valley Railway passengers to be picked up from and returned to a Railway stop. In addition, key local tourism operators the local commerce chambers have also indicated their willingness to promote the Yarra Valley Railway as they believe that the additional people it can attract will be highly beneficial for local businesses; this is confirmed by the economic impact analysis, see section 4 below. The nature of the development of Yarra Valley Railway experiences means there are ample opportunities to have passengers register their contact details and build a significant contact database. Given the above, the key elements of the marketing of the Yarra Valley Railway will be: •
YVR website The Yarra Valley Railway has an existing website; it is anticipated that the websites of many other local and regional tourism attractions will have links to the YVR website and vice-versa; there are also opportunities for linkages with a wider range of local businesses and traders
•
Direct marketing through growth of a Yarra Valley Railway database The Yarra Valley Railway already has an e-newsletter. The direct marketing will also include promotion of other local and regional attractions; who in turn will promote the Yarra Valley Railway through their respect databases
•
Experiences Packages This will involve the development, and provision of a range of “experience packages” which will involve the Yarra Valley Railway in conjunction with one other, or more, local tourism attraction and/or hospitality provider. It is anticipated that there will several such arrangements in place and that packages will also include transport from Melbourne or other key locations. It is anticipated that that packages will be promoted to the wholesale tourism product market for sale and distribution via various retail channels.
•
Social media Social media will be used to widen awareness of the Yarra Valley Railway and to direct people to the YVR website – the social media will also operate in conjunction with the development of the Yarra Valley Railway database
•
Events It is anticipated that there will be a number of events relating to the Yarra Valley Railway. These events may also include other operators. It also anticipated that the Yarra Valley Railway will leverage existing significant events in the region
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
The marketing development will be undertaken using the skillsets and resources available through the extensive network of Yarra Valley Railway volunteers. Finally, and very importantly, the marketing of the Yarra Valley Railway will also promote the opportunities for individuals and community groups to benefit from involvement with the Railway. This is consistent with the mission of Yarra Valley Railway in adding value to the community as much as the local tourism industry.
3.5
Business and Community Support for the Project
3.5.1
Stakeholder Consultation – Local Business
Consultation with local business confirms strong support for the project and a desire to collaborate with the Yarra Valley Railway. The following local businesses and business organisation were interviewed with respect to their support for the project
Healesville Sanctuary
R.A.C.V. Country Club - Healesville
Rochford Winery
Yarra Valley Chocolaterie
Yarra Valley Dairy
The Yarra Valley Racing Club
Yarra Glen Chamber of Commerce
All interviews confirmed that the business/organisation would be very willing to provide a formal letter of support for the project if required The marketing of the Yarra Valley Railway will benefit from collaboration with regional industry through cross promotion of the diverse range of existing attractions and tourism experiences. Many of the businesses/organisations interviewed are significant tourism operators in their own right – e.g. the Healesville Sanctuary received some 330,000 visitors in 2011/12 All of the interviews confirmed that there is universal enthusiastic desire to undertake such collaboration and:
Collaborate in cross-promotion – i.e. through links on websites
Develop “packages” of joint experiences with the Yarra Valley Railway – these may include other operators/providers as well
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Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
3.5.2
Community Survey
The community survey invited respondents to provide comments to the following questions; an analysis of the responses indicates that a percentage related to particular topics, as detailed in the tables below. What benefits will the project have for the Yarra Valley Community development? Tourism
32%
Ie. improved tourism capability – more attractive to visitors
Heritage
29%
i.e. – conserve/celebrate heritage
Transport
12%
i.e. – provision of transport options
Employment
18%
i.e. – creation of local employment opportunities
Community development
9%
i.e. – generate improved opportunities for the community, community groups and community connectedness
As a resident, do you think this project will have any impacts on the Yarra Valley region? Tourism
66%
Business growth
9%
Community development
7%
Transport
5%
Heritage
5%
Amenity
4%
i.e. – will see growth is size and number of local businesses
i.e. – improves amenity and functionality
As a business owner or worker in the Yarra Valley, do you think this project will have an impact on the Yarra Valley? Tourism
68%
Business growth
17%
Employment
9%
Community development
5%
Transport
1%
As a club or interest group member, do you think this project will have an impact on the Yarra Valley? Tourism
62%
Community development
22%
Heritage
8%
Business growth
4%
Employment
3%
Training
1%
Transport
1%
i.e. creates opportunities for skill development for employment and volunteers
25
Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
4.
Economic Impact Analysis
The Yarra Valley Regional Tourist Precinct and Rail Link Project will develop historic Yarra Glen Railway Station precinct and rail infrastructure into a key tourist product. This project connects businesses, community groups and tourist networks throughout the Yarra Valley and north eastern Victoria, which will boost the tourist numbers with flow on economic benefits and employment opportunities. The economic impact analysis of the project has been undertaken in steps: 1) construction phase, and 2) operational phase. The impacts have been assessed for Yarra Ranges (S) and the Melbourne East RDA region in terms of employment, output, wages & salaries and value added.
4.1
The Construction Phase
The Yarra Valley Regional Tourist Precinct and Rail Link Project includes:
Redevelopment of Yarra Glen Station Precinct including restoration of the station building and reconstruction of the original public toilets; Expansion of the Station Precinct to include car park and walking paths that link existing nature trails, community facilities and the Yarra Glen township; Reconstruction of 4 km of mainline trackage including rail bridges and rail yards from Yarra Glen to Tarrawarra.
The total cost of the project is $9.03 million over a 2.5 year timeframe from 1 July 2013 to 30 Dec 2015. The project cost has been modelled in the ‘Construction’ industry sector in Yarra Range (S) and the Melbourne East RDA region. 4.1.1
Output
The Yarra Valley Regional Tourist Precinct and Rail Link Project will boost construction sector output by $9.03 million. From this it is estimated that additional demand would be generated for goods and services with a proportion likely to be sourced from within Shire of Yarra Ranges and a wider region. These flow-on effects referred to as industrial effects continue with multiple rounds, as servicing sectors increase their own output and demand for local goods and services in response to the direct change to the economy. The industrial effects under this scenario are valued at $7.92 million for Yarra Ranges. The increase in direct and indirect output would typically correspond to the creation of jobs in the economy, resulting in an increase in the total of wages and salaries paid to employees. A proportion of these wages and salaries are typically spent on consumption and a proportion of this expenditure will be captured in Yarra Ranges (S). The consumption effects under this scenario are estimated at $2.48 million. In total, it is estimated that Yarra Ranges’ regional output would increase by up to $19.43 million over the 2.5 year period of construction. This represents a Type 2 Output multiplier9 of 2.15, which implies for every dollar of project related expenditure, it is estimated that a further $1.15 worth of economic activity would flow to the economy.
26
Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
This project will bring greater flow-on benefits to Melbourne East RDA; an industrial effect valued at $9.05 million and a higher consumption effect estimated at $4.32 million. The total output of Melbourne East RDA is estimated to increase by up to $22.40 million. These higher economic impacts for the Melbourne East RDA reflect the greater capacity of the wider geographic region to supply intermediate goods and services. Figure 4-1 Impact of Construction on Output – Yarra Ranges (S)
Total effect = $19.43
$9.03
$7.92
$2.48
Source: REMPLAN Economy Figure 4-2 Impact of Construction on Output – Melbourne East RDA
Total effect = $22.40
$9.03
$9.05
$4.32
Source: REMPLAN Economy
4.1.2
Employment
From a direct increase in output of $9.03 million, it is estimated that 10 direct jobs would be supported over the 2.5 year construction period. From this direct stimulus to the economy, flow-on industrial effects in terms of local purchases of goods and services are anticipated which would correspond to a further 10 jobs for Yarra Ranges (S). The consumption effects as a result of the wages and salaries paid during the construction phase are estimated to further boost employment by 5 jobs. Total employment for Yarra Ranges (S), including all direct, industrial and consumption effects is estimated at up to 25 jobs. This represents a Type 2 Employment multiplier of 2.50. That is, for every 10 direct construction jobs it is estimated that a further 15 jobs would be supported in the local economy once flow-on industrial and consumption effects are taken into consideration. The total jobs for Melbourne East RDA will increase by 29 from this project, which include direct 10 jobs, 11 jobs from industrial effects and 8 jobs from consumption effect. Figure 4-3 Impact of Construction on Employment – Yarra Ranges (S)
Total effect = 25
10
10
5
Source: REMPLAN Economy
27
Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
Figure 4-4 Impact of Construction on Employment – Melbourne East RDA
10
Total effect = 29
11
8
Source: REMPLAN Economy
4.1.3
Wages and Salaries
From a direct increase in output of $9.03 million it is estimated that direct wages and salaries would increase by $1.45 million in the Yarra Ranges economy. From this direct expansion in the economy, flow-on industrial effects in terms of local purchases of goods and services would result in a further increase in wages and salaries of $1.76 million. The consumption effects are expected to further raise wages and salaries by $0.56 million. Total wages and salaries, including all direct, industrial and consumption effects is estimated to increase by up to $3.77 million. For Melbourne East RDA, the total wages and salaries paid (direct + industrial + consumption effects) is estimated at $4.48 million. Figure 4-5 Impact of Construction on Wages & Salaries – Yarra Ranges (S)
Total effect = $3.77
$1.45
$1.76
$0.56
Source: REMPLAN Economy
Figure 4-6 Impact of Construction on Wages & Salaries – Melbourne East RDA
Total effect = $4.48
$1.36
$2.08
$1.04
Source: REMPLAN Economy
28
Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
4.1.4
Value Added
From a direct increase in output of $9.03 million in the construction sector, the corresponding increase in direct value-added is estimated at $2.79 million for Yarra Ranges (S). Indirect flow-on industrial effects would result in a further increase to value-added of $2.99 million. The indirect consumption effects are expected to further boost value-added by $1.31 million. Total value-added, including all direct, industrial and consumption effects is estimated at up to $7.09 million. The total value added by the construction of the Yarra Valley Regional Tourist Precinct and Rail Link Project for Melbourne East RDA is estimated at $8.39 million. Figure 4-7 Impact of Construction on Value-added – Yarra Ranges (S)
Total effect = $7.09
$1.31
$2.99
$2.79
Source: REMPLAN Economy
Figure 4-8 Impact of Construction on Value-added – Melbourne East RDA
Total effect = $8.39
$2.64
$3.52
$2.23
Source: REMPLAN Economy
4.1.5
Summary: Construction Phase
The estimated economic benefits associated with the construction of Yarra Valley Regional Tourist Precinct and Rail Link for Yarra Ranges (S) and Melbourne East RDA economy in terms of output, employment, wages & salaries and value-added are summarised in Table 4-1. All benefits have been estimated in the context of a construction period of 2.5 years. It is important to note that these benefits are short-term and limited to the period of construction. Table 4-1 Economic Impact of Construction Direct Impact
Yarra Ranges (S) Industrial Consumption Impact Impact
Total Impact
Direct Impact
Melbourne East RDA Industrial Consumption Impact Impact
Total Impact
$9.03
$7.92
$2.48
$19.43
$9.03
$9.05
$4.32
$22.40
10
10
5
25
10
11
8
29
Wages & Salaries($M)
$1.45
$1.76
$0.56
$3.77
$1.36
$2.08
$1.04
$4.48
Value-added ($M)
$2.79
$2.99
$1.31
$7.09
$2.64
$3.52
$2.23
$8.39
Output ($M) Employment (Jobs)
29
Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
4.2
The operational Phase
Yarra Valley Railway estimates that once the Yarra Valley Regional Tourist Precinct and Rail Link project is complete and the services are in full operation, the passenger numbers would increase to 200, 000 per annum. The increase of 178,000 passengers will bring flow-on benefits to local economies. Based on the data presented in table 3-2, and the experiences of heritage railways such as Puffing Billy in being drawcard for visitors and a primary reason for travel to the region, it is assumed that the additional passengers would also be additional new visitors to Yarra Valley. Once drawn to the Yarra Ranges it is assumed that the visitors would stay on to experience the broader tourism offering of the area. Based on the Yarra Ranges’ visitor expenditure profile sourced from REMPLAN Tourism Module4 that details the proportionate mix of domestic day, domestic overnight and international visitors and their estimated average expenditure, the total expenditure by the additional visitors to the railway and Yarra Ranges are detailed below. Table 4-2 Extra Visitors Expenditure Profile Visitors
Average trip expenditure ($M)
Total expenditure ($M)
Domestic Daytrip
150,074
77
11.56
Domestic Overnight
26,739
300
8.02
International
1,187
829
1.00
Total
178000
20.57
It is estimated that the project will bring an extra $20.57 million of annual visitor expenditure to Yarra Ranges (S). Tourism is an amalgam of activities with many industries contributing to the sector; the figure below details the breakdown of expenditure by visitors to Yarra Ranges5.
4 5
Based on Tourism Research Australia Regional Tourism Profiles for Melbourne East and Upper Yarra
The breakdown of expenditure by visitors to Yarra Ranges reflects the distribution of tourism related jobs and output across local industries. 30
Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
Figure 4-9 Distribution of Each $1 Spent by a Tourist – Yarra Ranges (S)
Source: REMPLAN Tourism Analysis Module
The additional direct visitor expenditure of $20.57 million has been distributed across local industry sectors based on figure 4-9 above, and applied to the REMPLAN model of the Yarra Ranges economy to estimate the likely indirect (flow-on) impacts in terms of output, employment, wages and salaries and value-added.
31
Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
4.2.1
Output
For $20.57 million of direct expenditure by visitors to Yarra Ranges (S), the local economy is estimated to benefit by a further $14.50 million once flow-on industrial and consumption effects are taken into consideration. Figure 4-10 Impact of Operation on Output – Yarra Ranges (S)
Total effect = $35.06
$20.57
$9.12
$5.38
Source: REMPLAN Economy
The total value (direct + industrial + consumption) of the additional visitor expenditure to the region’s economy is estimated at up to $35.06 million. This represents a tourism output multiplier of 1.705. That is, for every additional dollar of visitor expenditure under the scenario, the broader Yarra ranges economy is estimated to benefit by a further $0.71 once flow-on industrial and consumption effects are taken into consideration.
4.2.2
Employment
The increased visitor expenditure of $20.57 million is estimated to support 122 additional direct jobs in Yarra Ranges. Combined with the industrial and consumption effects, the additional visitors would support up to 176 jobs in total. Figure 4-11 Impact of Operation on Employment – Yarra Ranges (S)
Total effect = 176
122
32
22
Source: REMPLAN Economy
32
Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
4.2.3
Wages and Salaries
From a direct increase in output of $20.57 million and additional direct 122 jobs under this scenario, it is estimated that wages & salaries would increase by a total of up to $8.19 million, including all direct, industrial and consumption effects. Figure 4-12 Impact of Operation on Wages & Salaries – Yarra Ranges (S)
Total effect = $8.19
$4.89
$2.09
$1.22
Source: REMPLAN Economy
4.2.4
Value Added
The expansion in the Yarra Ranges’ economy associated with the Yarra Valley Regional Tourist Precinct and Rail Link project would boost direct value-added by up to $8.94 million. Flow-on industrial effects in terms of local purchases of goods and services and the consumption effects are expected to further increase value-added by $6.41 million. Figure 4-13 Impact of Operation on Value Added – Yarra Ranges (S)
Total effect = $15.35
$8.94
$3.58
$2.83
Source: REMPLAN Economy
33
Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
4.2.5
Summary: Operational Phase
The economic impacts associated with the operation of Yarra Valley Regional Tourist Precinct and Rail Link for Yarra Ranges (S) and Melbourne East RDA economy in terms of output, employment, wages & salaries and value-added are summarised in Table 4-3. Table 4-3 Economic Impact of Operation
Direct Impact Output ($M) Employment (Jobs) Wages & Salaries($M) Value-added ($M)
Yarra Ranges (S) Industrial Consumption Impact Impact
Total Impact
Direct Impact
Melbourne East RDA Industrial Consumption Impact Impact
Total Impact
$20.57
$9.12
$5.38
$35.06
$20.57
$11.29
$10.93
$42.79
122
32
22
176
125
38
44
207
$4.89
$2.09
$1.22
$8.19
$6.08
$2.63
$2.62
$11.33
$8.94
$3.58
$2.83
$15.35
$9.99
$4.53
$5.65
$20.17
The economic impacts are greater for the broader Melbourne East RDA region of which Yarra Ranges is a part of. This is a reflection of the region’s greater capacity to supply intermediate goods and service as inputs into the project vis-à-vis the Yarra Ranges local government area.
34
Yarra Valley Regional Tourist Precinct and Rail Link – Economic Impact Analysis and Stakeholder Consultation
5.
Summary of Findings
Tourism makes a valuable contribution to the Yarra Ranges economy supporting 2,414 jobs, representing 6.7% of total employment, compared to 4.7 percent for Victoria overall. With weakening local manufacturing, retail and wholesale trade sectors tourism is playing an increasingly important role. Yarra Ranges is part of the Yarra Valley and Dandenong Ranges tourism region. The region is renowned for its local produce and wineries and in 2011 received an estimated 3.1 million domestic daytrip visitors, 630,000 domestic overnight visitors and 30,700 international overnight visitors. The region is successful in attracting daytrip visitors, however is relatively less effective in enticing people to stay overnight. For the visitors who do stay overnight, Healesville and Yarra Glen are popular destinations for accommodation. The most common reasons for visiting the Yarra Valley are: • to visit specific attractions such as Healesville Sanctuary and Puffing Billy • because it was an easy day trip from Melbourne • the reputation for quality wine • to experience a specific winery Constraints limiting the potential of the tourism sector in the Yarra Valley include a lack infrastructure and services linking the popular tourist towns of Yarra Glen and Healesville and all the wineries and other attractions along this corridor. Also, Puffing Billy that serves 250,000 passengers per year is close to capacity. The Yarra Valley Rail is currently running a Railmotor service along a section of track from Healesville to the Tarrawarra Winery, crossing the Watts River, under the Donovan's Road overbridge and through the historic tunnel. The Railway is currently serving over 22,000 passengers per annum with nearly half from Melbourne. The current train travels between Healesville and Tarrawarra Tunnel and the Yarra Valley Railway plans to extend the service through to Yarra Glen. The extension of the service is part of the Valley Regional Tourist Precinct and Rail Link Project which is listed as a regional strategic infrastructure priority project. This project will develop historic Yarra Glen Railway Station precinct and rail infrastructure into a key tourist product, providing a community operated tourist rail service, information bureau and pedestrian links to existing community facilities. The link between Yarra Glen and Healesville will connect not only the two towns, but also the wineries, galleries, chocolate factory and other attractions along the corridor. These complementary points of attraction combined with a relatively short track / travel time will allow operators to create a variety of packages to sell into wholesale and retail tourism product markets. These packages would include experiences such as food and wine, jazz, photography, weddings, events and ghost trains. An important component of the project will be a turntable at the Yarra Glen Station. The turntable will allow heavier steam locomotives to be used and turned around for the return leg of a trip. The combination of the turntable and the heavier trains will greatly increase the passenger carrying capacity of the Railway. The total cost of the Yarra Valley Regional Tourist Precinct and Rail Link project is $9.03 million over a 2.5 year timeframe from 1 July 2013 to 30 Dec 2015. During the construction phase the project is estimated to support a total of 25 jobs in Yarra Ranges and provide a boast to economic output of up to $19.430 Million. Based on Yarra Valley Railway’s proven track record of servicing 22,000 passengers per annum; the strategic value of linking the accommodation and attractions at Healesville and Yarra Glen as well as all the attractions along the corridor; the increased passenger carrying capacity that the heavier locomotives and turntable at Yarra Glen would deliver; the potential to create a wide range of packages for wholesale and retail tourist markets; and Puffing Billy at close to full capacity, the Yarra Valley Railway estimates the once the project is complete and the services are fully operational, that passenger numbers would increase to 200,000 per annum. The expenditure by up to 178,000 additional visitors would, it is estimated, boost employment in Yarra Ranges with 176 new jobs, generating direct and flow-on economic output of up to $35.060 Million per annum.
35
