City of Karratha - pilbararesearchonline.com.au report identifies the most suitable tourism products...

Tourism Ventures Feasibility Study

City of Karratha

Working Draft v0.2

Karratha Tourism Ventures Feasibility Study

City of Karratha

Final v1.4

December, 2015

Tourism Ventures Feasibility Study, City of Karratha

Final v1.4

i

Document Control Job ID: 18061BNE City of Karratha

Job Name: Tourism Ventures Feasibility Study

Client: City of Karratha

Client Contact: John Verbeek

Project Manager: Simon Smith

Email: [email protected]

Telephone: 0419 664 774

Document Name: Karratha Tourism Ventures Feasibility Final v1.4.docx

Last Saved: 7/12/2015 9:29 AM

Version Date Reviewed Approved

Working Draft v0.1 09/09/2015




Draft v1.1 05/11/2015 SS RP

Draft v1.2 05/11/2015 SS RP

Draft v1.3 26/11/2015 SS RP

Final v1.4 07/12/2015 SS RP

Disclaimer:

Whilst all care and diligence have been exercised in the preparation of this report, AEC Group Pty Ltd does not warrant the accuracy of the information contained within and accepts no liability for any loss or damage that

may be suffered as a result of reliance on this information, whether or not there has been any error, omission

or negligence on the part of AEC Group Pty Ltd or their employees. Any forecasts or projections used in the analysis can be affected by a number of unforeseen variables, and as such no warranty is given that a

particular set of results will in fact be achieved.

mailto:[email protected]


Final v1.4

ii

Executive Summary The City of Karratha is seeking to grow its tourism base to promote economic

diversification after many years of dominance by the mining and resources sector and, in

return, increase economic benefits to communities and the region alike.

This report identifies the most suitable tourism products and infrastructure that will

promote the uniqueness of the destination, encourage visitation and provide experiences

that will ensure repeat visits.

However, identifying opportunities is only one step in destination development; the prioritising of these opportunities to encourage their timely realisation is the next step.

The attraction of developing such tourism products (and ancillary services) undoubtedly

lies in their ability to generate a sufficient return on investment to encourage investor appetite.

Destination Karratha

Karratha was established in 1960s due to the tremendous growth of the iron ore

industry. Today, it is a busy, modern and well-serviced town and potentially a great base for exploring Millstream Chichester National Park, Karijini National Park and the 42

islands of the Dampier Archipelago.

Since 2010 the Pilbara Cities Initiatives, Karratha City of the North Plan and Royalty for Regions programmes have been instrumental in diversifying the economic landscape of

the region to support anticipated high levels of population growth.

Tourist visitation to Karratha is characterised as follows:

The number of visitors for the year ending in June 2015 was 425,000.

Of these day visitors (38%), domestic overnight (58%) and international (4%).

June to September being cooler months are peak visitation times.

Travel for business purposes makes up approximately 50% of visitation.

Karratha has a plethora of good attractions. These include natural attractions such as the

islands, beaches, waterways, reefs, marine life, national parks (e.g. Millstream), cultural

attractions such as rock-art, indigenous communities, heritage attractions such as Cossack and Roebourne. There are also great activities such as fishing, walking, touring,

sea-kayaking, food and wine, etc. The most unique opportunity in Karratha,

incomparable in any other Australian shire, is the proximity and access to the Resources sector infrastructure. There are two resources tours, however, these are not particularly

immersive or high touch experiences.

Tourism Opportunity Identification & Assessment

In consultation with stakeholders an initial list of tourism opportunities was identified. This list was categorised and the individual opportunities further described and subjected

to a high level assessment process. The assessment process allowed an independent

ranking of opportunities to facilitate a more focussed examination, prioritisation and further development of five opportunities.

The ranked assessment of all identified opportunities categorised by time scale and

theme is shown in Table E.1. Those opportunities which were identified as having a high potential to be implemented with almost immediate effect were weighted more positively.

In addition, opportunities for which the City of Karratha were considered to be more

readily able to provide funding assistance to, also received a more positive weighting.


Final v1.4

iii

Table E.1 Ranked Assessment of Identified Opportunities Categorised by Theme

Opportunity Weighted Average

Score

Total Score

Na

ture

He

rita

ge

&

Cu

ltu

re

Ad

ve

ntu

re

Ind

ustr

ial

Eve

nts

<1 year

Guided walks 1.60 9.30 X X X X

Outback experience tour 1.58 9.60 X X X

Indigenous cultural tours 1.58 10.60 X X

Resource tours 1.58 10.60 X

Rock art tour 1.58 10.60 X X

History tours 1.58 10.60 X X

National Park tours 1.58 10.20 X X X

Weekly market 1.56 8.50 X

Staircase to the moon activities 1.52 8.90 X

Mountain bike riding 1.50 8.50 X

Rock climbing & abseiling 1.46 8.30 X X

Sea kayaking 1.46 8.30 X X

Destination marketing program 1.42 9.10

Heritage trails 1.40 8.70 X X

Movie trails 1.40 8.70 X

Independent walks 1.40 8.30 X X

4 wheel drive safaris 1.38 8.20 X X X

Outdoor leadership groups 1.38 7.60 X X X

Photography tours 1.38 9.60 X X

Holiday homes 1.38 7.60

Events calendar 1.36 8.50 X

4 wheel drive trails 1.26 7.30 X X X

Volunteer/working holidays 1.18 6.60 X X

Pastoral and station stay 1.18 6.60 X X

Paragliding 1.18 6.90 X X

Quad bikes 1.14 6.70 X X

Land zoning 1.06 6.00 X X

Diving and snorkelling 1.02 6.10 X X

Charter/game fishing 1.02 6.10 X X

Investment attraction 0.82 4.40

Investment incentives 0.38 2.60

1-2 years

International air routes 1.58 9.90

Nature-based camping at Millstream 0.98 7.20 X X X

Free campground 0.86 5.60 X X

Improved road – Route 142 to Millstream 0.58 5.20

Expanded visitor centre 0.56 4.10

Island glamping facility 0.48 3.40 X X

Marina 0.38 2.90

3-5 years

Cruise ship tender wharf 0.96 6.10

Botanical garden 0.94 6.70 X X

Karratha Arts and Community Precinct 0.90 6.20 X X

Wildlife park 0.70 4.80 X X X

Aquarium 0.70 4.80 X X X

5 star tourist park 0.60 4.70

4 star hotel 0.52 4.60


Final v1.4

iv


Score

Total Score

Na

ture

He

rita

ge

&

Cu

ltu

re

Ad

ve

ntu

re

Ind

ustr

ial

Eve

nts

Luxury boutique spa resort 0.44 3.90

Backpackers hostel 0.36 3.50


Source: AEC

Opportunity Themes

The opportunity assessment highlighted several key themes that, whilst not unique in their presence, are unique in terms of what Karratha has to offer. Five recurrent tourism

themes were identified which, if thoughtfully created and packaged, will not only promote

the tourism offering in Karratha and encourage increased overnight from diverse leisure markets, but will also fit well with the overall product offering of the Pilbara and North

West regions generally:

Adventure Tourism

Description: Adventure tourism is a type of niche tourism involving exploration or travel

to remote areas, where the traveller should expect the unexpected. Adventure tourism is

rapidly growing in popularity as tourists seek unusual holidays, different from the typical beach vacation.

Karratha Vision: To develop an adventure activity tourism industry hub in Karratha with

the Dampier Archipelago being the primary destination for partaking in such experiences and supported by an accommodation, service and activity hub at a central and easily

accessible location.

Adventure tourism incorporates high-adrenalin activities that take place in a natural

environment, e.g. sea kayaking, mountain bike riding, quad biking, paragliding, diving, snorkelling, etc. Adventure tourism is central to positioning Karratha as the “Playground

of the Pilbara”.

Heritage & Cultural Tourism

Definition: Cultural heritage tourism is traveling to experience the places, artefacts and

activities that authentically represent the stories and people of the past and present. It

includes cultural, historic, and natural resources.”

Karratha Vision: To establish low-impact guided cultural tours in and around Karratha

that highlight the Aboriginal culture and history of the region and convey the historical,

cultural and natural stories of the region.

Nature-based Tourism

Description: Nature tourism is responsible travel to natural areas, which conserves the

environment and improves the welfare of local people i.e. it is tourism based on the

natural attractions of an area. Examples include birdwatching, photography, stargazing, camping, hiking, fishing, and visiting national/conservation parks.

Karratha Vision: Karratha, with the Dampier Archipelago and Millstream Chichester

National Park as its natural attributes, is well placed due to its natural and built assets to be developed as a hub for nature experiences such as bushwalking and geotourism.

Given that guided walks rank at the top our opportunity assessment exercise, we have

explored this opportunity within areas of special natural interest to yield maximum “wow” factor.

A series of well-promoted walks, most of which are less than two hours duration but also

featuring some longer, iconic walks, would contribute to positioning Karratha as a “Lost Wilderness Wonder” and complement the more adrenaline activities associated with the

proposed adventure hub. Tracks could be extended to walking, cycling and even

equestrian users.


Final v1.4

v

Industrial Tourism

Description: Industrial tourism is tourism in which the desired destination includes industrial sites peculiar to a particular location. The concept is not new, as it includes

wine tours in France, visits to cheesemakers in the Netherlands, Jack Daniel's distillery

tours in the United States etc. but has taken on renewed interest in recent times, with both industrial heritage sites and modern industry attracting tourism

Karratha Vision: To establish an interactive interpretation centre and tours that

communicate the importance and relationship of the mining and resource sector in

Karratha and allow visitors an immersive experience of the scale, nature and people in the various resources industries exposed in Karratha to day and overnight domestic and

international visitors.

Other Themes

The opportunity assessment has identified other opportunities that could be implemented

within a one-year timeframe including:

Destination marketing program. Position Karratha as a “new tourism destination” within the Pilbara and North West of Western Australia that will encourage increased

visitation and tourism spend from the day visitor and overnight domestic and

international market sectors.

Investment attraction and facilitation. To enhance the economic development of

Karratha by strengthening its role as a tourism destination and, in doing so, go

beyond its role as the mining gateway of the Pilbara and day trip destination. This will require significant investment in new attractions, infrastructure and supporting

facilities and amenities in order to attract and cater to overnight destination visitors.

Opportunities with Investment Potential

There is potential for further investment and fresh ideas that will lead to innovative new features that complement the natural, historic and cultural landscape of Karratha. To fully

realise this potential five opportunities were chosen that have potential to be creatively

explored further and developed into well-considered proposals that will encourage

increased visitation to Karratha and the wider Pilbara region. Please note that although our ranking assessment methodology yielded opportunities which were presented before

the TAG (as part of the short-list of opportunities), further pragmatic discussions between

Council and AECgroup resulted in identification of the following five projects which are considered to have immediate investment potential:

1. Island Glamping in the form of luxury-glamping or eco-camping on the Dampier Archipelago.

2. Watersports Hub that will develop Karratha as the water playground of the Pilbara.

3. Cultural Tour that further highlights the unique indigenous offerings of the Karratha region.

4. Karratha Events Unit dedicated to promoting, managing and delivering signature events to Karratha via a consistent monthly and annual calendar of events.

5. Mining Hall of Fame that will showcase the Pilbara’s rich, diverse and unique

resources sector to the public.

These five development opportunities have been considered further with respect to the overall vision of the tourism product, anticipated demand and market appeal, indicative

pricing points, estimated capital investment, operational costs, and likely involvement of

government agencies and other related industry bodies in realising these development

opportunities.


Final v1.4

vi

A Note of Caution

What Karratha is missing is the tour operators that allow visitors to connect with all of

these potential experiences, the accommodation and overall product quality, service standards and pricing that tourists expect, and the marketing and promotion to connect

tourists with those products. It was not within the scope of this project to provide a

critique of the current marketing and promotional efforts undertaken by the City of Karratha and associated tourism associations. Nor was it within the remit to provide an

assessment of the future marketing potential of the investment opportunities identified as

a result of our weighted ranking assessment methodology.

The quality and pricing issue is largely due to high demand from the mining sector and

minimal increase in supply. This has resulted in high priced accommodation and other

services and a low reinvestment in product quality. Short supply also tends to foster a

service culture where customers are expected by suppliers to modify their needs to suit the supplier.

These issues warrant consideration before new investment in products is sought to

provide leisure visitors with the unique Karratha experience.

It is AEC’s view that until, and unless, a range of contemporary, quality accommodation

at competitive prices is available in Karratha that, irrespective of new products

developed, visitors will continue to visit other regional destinations with more competitive accommodation and similar tours and attractions.


Final v1.4

vii

Table of Contents DOCUMENT CONTROL ........................................................................................... I

EXECUTIVE SUMMARY ......................................................................................... II

TABLE OF CONTENTS ......................................................................................... VII

1. INTRODUCTION ........................................................................................... 1

1.1 PURPOSE OF THIS STUDY ...................................................................................... 1

1.2 PROJECT METHODOLOGY ....................................................................................... 1

1.3 WHAT DO WE MEAN BY TOURISM PRODUCTS & INFRASTRUCTURE?....................................... 2

1.4 SUPPORTING STRATEGY & PLANS ............................................................................. 2

1.5 REPORT STRUCTURE ............................................................................................ 2

2. TOURISM IN KARRATHA............................................................................... 4

2.1 DESTINATION KARRATHA ...................................................................................... 4

2.2 GOVERNANCE & ORGANISATIONS ............................................................................ 4

2.3 KARRATHA VISITOR MARKET .................................................................................. 5

2.4 ATTRACTIONS ................................................................................................... 8

2.5 ACTIVITIES ...................................................................................................... 8

2.6 CLUSTER MAPPING ............................................................................................. 9

3. OPPORTUNITY IDENTIFICATION ............................................................... 11

3.1 OVERALL IMPRESSION ........................................................................................ 11

3.2 KEY ELEMENTS UNDERPINING THE IDENTIFICATION PROCESS .......................................... 11

3.3 SWOT ANALYSIS ............................................................................................. 12

3.4 IDENTIFIED OPPORTUNITIES ................................................................................. 13

4. OPPORTUNITY ASSESSMENT ...................................................................... 16

4.1 METHODOLOGY ................................................................................................ 16

4.2 OUTCOMES OF THE ASSESSMENT PROCESS ................................................................ 19

5. OPPORTUNITIES IN DETAIL ....................................................................... 22

5.1 EMERGING TOURISM THEMES WITHIN CITY OF KARRATHA .............................................. 22

5.2 OPPORTUNITY 1 NATURE-BASED EXPERIENCES ........................................................... 25

5.3 OPPORTUNITY 2 CULTURAL TOURS ......................................................................... 27

5.4 OPPORTUNITY 3 ADVENTURE ACTIVITY TOURISM HUB ................................................... 28

5.5 OPPORTUNITY 4 INDUSTRIAL TOURISM CENTRE .......................................................... 30

5.6 OPPORTUNITY 5 ENHANCING THE LOCAL EVENTS SCENE ................................................ 31

5.7 OTHER IDENTIFIED OPPORTUNITIES ........................................................................ 32

5.8 KEY BARRIERS TO REALISING IDENTIFIED OPPORTUNITIES ............................................. 34

6. DETAILED INVESTMENT OPPORTUNITIES.................................................. 36

6.1 OVERVIEW ..................................................................................................... 36

6.2 PRODUCT PACKAGING OPPORTUNITIES .................................................................... 38

6.3 ISLAND GLAMPING ............................................................................................ 40

6.4 WATERSPORTS HUB .......................................................................................... 45

6.5 CULTURAL TOUR OPERATOR ................................................................................. 48


Final v1.4

viii

6.6 KARRATHA EVENTS UNIT .................................................................................... 51

6.7 MINING HALL OF FAME ....................................................................................... 54

REFERENCES ...................................................................................................... 58

APPENDIX A CLUSTER MAPPING ........................................................................ 59

APPENDIX B ATTRACTIONS WITH GUIDED TOURS ............................................ 63

APPENDIX C COST BENEFIT ANALYSIS .............................................................. 64


Final v1.4

1

1. Introduction A destination cannot promote products and experiences it doesn’t have. Destination

development involves a continuous process of coordination and development of

amenities, facilities, products and services that support host communities to deliver quality experiences for visitors whilst simultaneously enhancing residents’ well-being.

1.1 Purpose of this Study

The City of Karratha (herein after referred to as CofK) currently finds itself in a position

where it is seeking to grow its tourism base to promote economic diversification after many years of dominance by the mining and resources sector and, in return, increase

economic benefits to communities and the region alike. The challenge presented is to

identify the most suitable tourism products and infrastructure that will promote the

uniqueness of the destination, encourage visitation and provide experiences that will ensure repeat visits. Identifying opportunities is only one step in destination

development; the prioritising of these opportunities to encourage their timely realisation

is the next step. The attraction of developing such tourism products (and ancillary services) undoubtedly lies in their ability to generate a sufficient return on investment to

encourage investor appetite.

1.2 Project Methodology

The following project methodology was adopted during the course of this study:

*outside the scope of this project

Source: AEC


Final v1.4

2

1.3 What do we mean by Tourism Products & Infrastructure?

The definition of tourism product and infrastructure in this study is wide ranging. It

covers both hard and soft elements that need to be in place to ensure that key visitor markets can access the experience that they are seeking or expecting in a destination. In

this regard the opportunities cover the whole of the visitor experience from arrival, stay,

activities and departure. The definition therefore relates to both tourism characteristic and tourism connected products, including goods and services, and infrastructure.

Table 1.1: Tourism Characteristic and Tourism Connected Products and Infrastructure

Tourism Characteristic Tourism Connected

Governance & Organisations Visitor Information Centres

Accommodation Food, Dining and Function Venues

Attractions (man-made and natural) Events

Retail Transportation and Tours Information and Marketing

Skills and Labour

Governance and Organisations Transport

Utilities Community Facilities

Other Services (Health, Police, Fire, Ambulance) Media

Source: AEC

Product development, whether it be the development of new products or refreshment of

existing products is the cornerstone for the success of a tourism business. Without

appropriate products or services relevant to visitor demand a business cannot survive. The identification of tourism products in this study considers a combination of the

situational analysis (supported by statistical research, analysis and interpretation) and

traditional marketing mix theory of product, price, place, promotion and packaging.

1.4 Supporting Strategy & Plans

There are a range of strategies and plans that provide the direction that the CofK and

Australia’s North West Regional Tourism are pursing relation to developing the tourism

potential of Karratha specifically and the Pilbara generally. These provide background for the product and infrastructure gap analysis. Those directly related to the CofK include:

City of Karratha Tourism Report 2014.

City of Karratha Tourism Profile 2014.

Pilbara Tourism Product Development Plan.

Those that are more widely focussed but still have relevance for CofK include:

Tourism WA Australia’s North West Tourism Development Priorities 2010-2015.

West Australian Caravan and Camping Action Plan 2013-2018.

WPAC Tourism Planning Guidelines 2014.

1.5 Report Structure

The report largely follows the requirements of the project, that is:

Section 2: Tourism in Karratha Outlines the demand and supply side of tourism in

Karratha and the broader tourism region of Australia’s North West.

Section 3: Opportunity Identification lists potential tourism opportunities identified through gap analysis, consultation and observation.

Section 4: Opportunity Assessment outlines the assessment methodology and applies

it to the identified opportunities to create a short list.

Section 5: Opportunities in Detail provides further detail and analysis on the top ranking opportunities that can then be used for investment attraction purposes.

Section 6: Detailed Investment Opportunities provides a formulated vision, identified

market appeal and detailed product offering of five projects, each with their own


Final v1.4

3

estimated cost benefit analysis that underpins their likely success and thus

investment attractiveness.

Appendices present more detailed information to support the analysis or techniques used

for the report.


Final v1.4

4

2. Tourism in Karratha The Karratha tourism market was analysed to determine visitor and non-visitor profiles

and motivations. An inventory of current tourism products was undertaken and a SWOT

Analysis was developed to evaluate strengths and weaknesses or gaps in the current market, and the potential opportunities and threats.

This section outlines tourism in Karratha including demand and supply. Further detail is

found in Appendix B.

2.1 Destination Karratha

Karratha is the youngest and fastest growing town in the Pilbara. Located 1,535

kilometres north of Perth on the North West Coastal Highway, it is situated right in the

heart of the Central Pilbara Coast.

Karratha was established in 1960s due to the tremendous growth of the iron ore industry. Today, it is a busy, modern and well-serviced town and a great base for

exploring Millstream Chichester National Park, Karijini National Park and the 42 islands of

the Dampier Archipelago.

Since 2010 the Pilbara Cities Initiatives, Karratha City of the North Plan and Royalty for

Regions programmes have been instrumental in diversifying the economic landscape of

the region to support anticipated high levels of population growth.

The execution of these regional growth strategies has been particularly well timed given

the recent slowdown in the resources sector fuelled not so much by a drop in demand for

resource exports, but rather a shift in project lifecycle phase from construction to operation.

2.2 Governance & Organisations

There are a number of Australian, State and local organisations that are directly

associated with tourism governance and organisation.

Figure 2.1 Entities involved with Tourism

Source: AEC

Australian Trade Commission:

The Australian Government department with carriage of tourism policy in Australia.

Tourism Australia

Tourism Western Australia

Tourism Western Australia - Pilbara Region

Australia's North West

City of Karratha

Other toursim bodies, associations, etc

Visitor Centres

Dept of Parks & Wildlife

Industry stakeholders

http://www.australiasnorthwest.com/en/Destinations/The_Pilbara/Pages/The_Pilbara.aspx

http://www.australiasnorthwest.com/Home/Destinations_of_the_North_West/The_Pilbara/Millstream_Chichester_National_Park

http://www.australiasnorthwest.com/Home/Destinations_of_the_North_West/The_Pilbara/Karijini_National_Park

http://www.australiasnorthwest.com/Home/Destinations_of_the_North_West/The_Pilbara/Dampier_Archipelago


Final v1.4

5

2.3 Karratha Visitor Market

2.3.1 Number of Visitors

For the year ending June 2015 (the most recently available statistics), the total number of visitors to CoK was estimated at just over 425,500, representing significant growth

over the previous years. International visitors accounts for only 4% of all visitors to CoK,

with day visitors and domestic overnight visitors accounting for 38% and 58% respectively (Figure 2.2). There is roughly an 80%:20% split of intrastate:interstate

visitation.

Figure 2.2 City of Karratha Visitation

Source: TRA (2015)

The significant upward trend recorded for CoK during the last year largely mirrors the

trend experienced by Australia’s North West (Figure 2.3).

Figure 2.3 North West Australia Visitation

Source: TRA (2015)

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Vis

ito

rs

Year Ending June

Day Trip Visitors Domestic Overnight Visitors International Visitors

0

100

200

300

400

500

600

700

800

900

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Vis

ito

rs ('0

00

)

Day visitors Domestic overnight visitors International overnight visitors


Final v1.4

6

2.3.2 Seasonality

Given the hot climate of the Pilbara, visitation to CoK is highly seasonal in nature, with the cooler months being more popular than the warmer months when temperatures

regularly reach above 40C and there is very little respite in the evenings (Figure 2.4).

Figure 2.4 Average Quarterly Visitations to CoK, March 2005 – June 2015

Source: TRA (2015)

2.3.3 Purpose of Visit

Demand from the business travel sector has not changed significantly over the last five

years (Figure 2.5). The majority of this demand has been driven by the mining and

resources sector as well as other infrastructure projects taking place in the region. However, with the slowdown in the mining and resources sector taking place as projects

move from construction to operational phases, it would be reasonable to assume that

demand from the business market will decline. However, this will not be immediately replaced by demand from other sectors. Therefore significant investment will need to be

made in destination marketing and product development to encourage demand from

other travel sectors (e.g. leisure market) so as to maintain current levels of visitation.

Figure 2.5 Visitation by Main Purpose of Visit, 2006 - 2015

Source: TRA (2015)

44,381

79,666

64,518

44,671

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

March June September December

To

tal vis

ito

rs

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sh

are

of

Vis

itati

on

Year Ending June Holiday/ Leisure Visiting Friends and Relatives Business Other


Final v1.4

7

2.3.4 Source of Origin of International Visitors

Figure 2.6 and Source: TRA (2015)

Figure 2.7 provides an indication of international source markets. While demand from

Europe has always been reasonably strong, there has been an increase in visitation from

New Zealand and Asia (particularly over the last five years) and with growing interest from the USA and Canada. On this basis, it is important that any future tourism product

developments take account of these markets and adapt their product offering accordingly

to maximise the tourist experience in an authentic and affordable manner by taking any

language and cultural idiosyncrasies into account.

Figure 2.6 Proportion of International Visitors by Source of Origin

Average, March 2005-March 2010 Average, June 2010 – June 2015

Source: TRA (2015)

Figure 2.7 Growth in Visitation from International Source Markets

Source: TRA (2015)

2.3.5 Age of Visitors

Overall, there is a fairly even distribution of age groups visiting CoK. The age group 20-

29 accounted for almost 50% of total visitor nights to CoK in 2015, with the age groups 30-34, 35-39 and 50-54 accounting for around 12% each. This trend has not changed

12.3%

22.7%

7.0%

1.2%

16.3%

37.3%

3.2%

NZ

Asia

US

Canada

UK

Other Europe

Other Countries

18.6%

27.9%

7.1%

3.4%

14.2%

26.1%

2.7%

NZ

Asia

US

Canada

UK

Other Europe

Other Countries

0%

10%

20%

30%

40%

50%

60%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sh

are o

f V

isit

ati

on

Year Ending June NZ & Asia US & Canada Europe Other


Final v1.4

8

much over the last five years, and is more likely to reflect the significant proportion of

FIFO construction workers to CoK than leisure tourists.

2.4 Attractions

CoK has numerous tourist attractions, however, most of these are based on the natural

environment and a general lack of attraction diversity exists. Industrial attractions (based

around resource developments) and cultural/heritage attractions also exist although we consider the industrial attractions to be underdeveloped. The main tourism attractions

include:

Natural Environment

National Parks.

Gorges, pools and swimming holes (many in National Parks).

Dampier Archipelago / Montebello Islands / Mackerel Islands.

Coastal/Beach destinations.

Striking landscapes and isolation.

Industrial Attractions

Mine/ harbour operations.

LNG operations.

Cultural/Heritage Attractions

Ancient rock art.

Fossils and ancient geology.

Historic settlements.

Aboriginal attractions.

Many of the natural attractions are world class and have the potential to compete

effectively (in terms of the experience) with numerous other locations across Australia.

Furthermore, a small number of these attractions provide a unique experience that can distinguish CoK specifically and Pilbara generally from other regions in Australia.

2.5 Activities

Given the strength and prevalence of the natural attractions, it is not surprising that the

majority of existing activities are related to the natural environment. For the most part, these activities are limited to a very small number of operators.

Natural Environment

Camping.

Bushwalking.

Fishing.

Tours into national parks.

Cultural/Heritage Attractions

Visiting historic settlements.

Visit ancient rock art sites.

General sightseeing.

Visit aboriginal art gallery / settlement.

Aboriginal/heritage tours.

Natural activities are very strong in CoK but present a basic/rustic outdoors or natural experience. There is a lack of sophistication in the development of the existing offering

and in particular the tours that are currently provided. The lack of sophistication in


Final v1.4

9

regards to these activities provides a genuine ‘outback’ experience and something that is

uniquely ‘Karratha’. A greater focus on high-touch, experiential, immersive, activities, as required by contemporary consumers, is required.

Many of the coastal experiences are not well established and lack current access (i.e.

organised tours and operators providing access). Only one operator could be identified across the entire region providing boat tours, island tours, fishing and heritage tours.

While the experience exists and the activity can be enjoyed, it has been identified that

the majority of ‘visitors’ enjoying these experiences are likely Pilbara locals. The lack of

access to these experiences (i.e. the lack of organised tours) is a significant weakness.

Some of the Aboriginal heritage activities are unique to CoK and the Pilbara, particularly

the rock art, which is in abundance in the region. However, without interpretation or a

guide, it can be difficult to locate the rock art and given the climate conditions and angle of the sun, assistance can be required to actually see the rock art. Other cultural/heritage

activities (i.e. museums, historic sites, etc.) provide interesting insights into the life in

CoK but these require significant investment to enhance the visitor experience to meet modern consumer needs and interests.

With the exception of Cossack Heritage Trail, we have not identified other products that

are of a sufficiently high standard of experience to competitively hold visitor interest, encourage overnight stays or inclusion within tour operator packages.

2.6 Cluster Mapping

2.6.1 Overview & Purpose of Exercise

In order to assist in the identification of future tourism opportunities we have used cluster maps to demonstrate existing strengths of activities (represented by purpose of

visit information) for CoK, versus growth in those activities in Australia. This tool allows

existing strengths as well as national trends to be “mapped” in order to identify potential areas for future expansion and development.

In order to prepare the cluster maps, we have analysed the type of activities undertaken

by visitors (day visitors and domestic and international overnight visitors) to CoK. The

results (indicated by circles) are an indication of the extent to which a local tourism market is specialised by examining the proportion of visitors (by purpose of visitor

activity group) compared to a larger market (Australian market). The location of the

activity on the cluster map is then used to highlight the relative strengths or weaknesses of a local tourism market (i.e. a natural competitive advantage or disadvantage).

Cluster mapping uses the location of the clusters by portraying them against national

market growth over time (2006 - 2015). By incorporating market growth, cluster mapping allows for the identification of growth opportunities in specific visitor sectors,

where a natural competitive advantage already exists against a backdrop of an expanding

market nationally.

What does this mean? We want to keep the well-represented, high growth activities

and enhance the under-represented high growth activities. At the same time we do

not want to ignore low growth or under-represented activities that visitors are

interested in and which may be critical to a particular market segment.

Outcomes of the tourism cluster maps and lifecycle group and product matrix are

included as Appendix A. While our focus has been placed on CoK, we have also

undertaken a cluster mapping exercise for Port Hedland and Broome (also provided in Appendix A) to further ascertain competition and product gaps for CoK. Any

opportunities that could be equally considered in CoK have been included within our

opportunity identification assessment methodology to assess their ranking for future development

2.6.2 Outcomes

It is not surprising that there are very few activities highlighted as being well-represented in CoK as there is currently limited choice. However, in comparably more established

tourism destinations in the North West, such as Broome and Port Hedland, the following

activities seem to be well-represented.


Final v1.4

10

Visit aboriginal site/community performance.

Experience aboriginal art/craft and cultural displays.

Snorkelling.

Cycling.

Visiting markets.

Whale or dolphin watching.

Go on guided tours or excursions.


Final v1.4

11

3. Opportunity Identification This Section lists the product and infrastructure opportunities derived through a literature

review, gap analysis, consultation and observation.

3.1 Overall Impression

Karratha has a plethora of good attractions. These include natural attractions such as the islands, beaches, waterways, reefs, marine life, national parks (e.g. Millstream), cultural

attractions such as rock-art, indigenous communities, heritage attractions such as

Cossack and Roebourne. There are also great activities such as fishing, walking, touring, sea-kayaking, food and wine, etc. The most unique opportunity is resources. There are

two resources tours, however, these are not particularly immersive or high touch

experiences.

What Karratha is missing is the operators that allow visitors to connect with all of these potential experiences, the accommodation and overall product quality, service standards

and pricing that tourists expect, and the marketing and promotion to connect tourists

with those products.

The quality and pricing issue is largely due to high demand from the mining sector and

minimal increase in supply. This has resulted in high priced accommodation and other

services and a low reinvestment in product quality. Short supply also tends to foster a service culture where customers are expected by suppliers to modify their needs to suit

the supplier.

3.2 Key Elements Underpining the Identification Process

From this understanding of the existing and potential tourism market and tourism assets, a set of selection criteria was established. Tourism ideas and proposals sourced from the

community, industry and stakeholders were considered and assessed against the

following general criteria:

Opportunities should ideally (in no fixed order):

Build on the uniqueness of the region.

Reflect community expectations.

Have minimal environmental impact.

Benefit CoK economy including tourism and other industries.

Contribute to goals of attracting more local, intrastate, interstate and international

visitors.

Fill a gap or build on a strength of the existing Pilbara tourism experience.

Add to the diversity of the Tourism North West tourism experience.

Meet or have a good chance of meeting regulatory and statutory guidelines.

Be feasible in terms of scale, economics and (given resource and financial

constraints) likely to attract required investment.

Contribute to tourism and recreational strategies and other strategic plans of stakeholders including CoK, Tourism North West, Department of Parks and Wildlife,

Tourism Western Australia, etc.


Final v1.4

12

3.3 SWOT Analysis

Table 3.1 Karratha Tourism Product Strengths, Weaknesses, Opportunities and Threats

Strengths Weaknesses

Strong cultural base reinforcing product integrity. Growing Aboriginal awareness and interest in

tourism.

Strong market overlap between environmental and cultural tourism.

Diverse array of natural attractions. Diverse heritage and history. Diverse arts and cultural attractions

Diverse events. Good public amenities.

Unique access to a diverse range of resources businesses (mining, oil, gas, salt, loading terminals.)

Economy has been dominated by mining and resource sector at the expense of other economic sectors.

Low quality and high cost of short stay accommodation.

Current lack of tourism products.

Access (both remoteness and seasonality). Lack of research into demand and needs of visitors.

Commercialisation compromising ‘authenticity’. Lack of business community awareness of the needs

and interests of contemporary tourists High priced accommodation and food and beverage

offerings

Accommodation dominated by business (mining) tourism – not conducive to shared use

Minimal tours and tour operators to make diverse

attractions accessible to visitors Inconsistent and low quality product and service

offerings Very small (May to Sept) tourist season High Labour cost

Opportunities Threats

Cultural diversity provides scope for development.

CoK commitment to tourism development. International and domestic niche markets

substantially untapped. Attract tour operators. Develop tours.

Add accommodation supply. Build Karratha reputation as a tourism destination.

Local legislation to develop/protect tourism only accommodation.

Improve accommodation quality and facilities in key tourism locations.

Build understanding of contemporary travel

consumer needs and demands Training for standards of service and quality.

Failure to address price.

Failure to address quality Return of the mining boom displaces tourism for

accommodation and labour Failure to build awareness and reputation of Karratha

as a Tourism destination.

Failure to build understanding of contemporary travellers needs and expectations.

Source: AEC


Final v1.4

13

3.4 Identified Opportunities

An initial list of opportunities has been categorised as follows:

Accommodation.

Activities/tours.

Attractions.

Access.

Awareness.

Ability/ Facilitation.

Each opportunity has a description and a timeframe of when it could realistically be in operation (<1 year, 1-2 years, 3-5 years).

Those opportunities which were identified as having a high potential to be implemented

with almost immediate effect were weighted more positively. In addition, opportunities

for which the City of Karratha were considered to be more readily able to provide funding assistance to, also received a more positive weighting.

Table 3.2 Initial Opportunity List

# Opportunity Description Timeframe

Accommodation

1 4 star hotel A full service, four star, internationally brand operated hotel 3-5 years

2 3 star hotel A full service, three star, internationally brand operated hotel 3-5 years

3 Backpackers hostel A high quality, international standard backpackers hostel with facilities

3-5 years

4 Island glamping facility Glamping on the archipelago islands. Locations established, suitable for Glamping site development.

1-2 years

5 Luxury boutique spa resort A five star, full service, Luxury boutique spa resort, with a reputable brand spa operator.

3-5 years

6 5 star tourist park A four to five star nationally branded tourist park with cabins, van sites and camp sites and family facilities such as pool, water

play park, jumping pillow, Kids club etc.

3-5 years

7 Free campground Free camping ground for motorhomes and caravans with dump

point and garbage facilities.

1-2 years

8 Marina Marina at Dampier could provide accommodation opportunities

aligned with the sailing club.

1-2 years

9 Pastoral and station stay Overnight stays on a traditional outback station eg Pardoo or

Indee station

<1 year

10 Nature-based camping at Millstream Tented camps at Millstream Chichester National Park 1-2 years

11 Volunteer/working holidays Working holidays through Dept of Parks & Wildlife, Earthwatch

or other such international organization.

1 year

12 Holiday homes Holiday homes with sufficient parking for a large boat (and

associated facilities) close to boat ramp facilities could encourage offshore game fishing activities.

<1 year

Attractions/Activities/Tours

Coastal Adventures

13 Charter/game fishing Half and full day or overnight Charter/Game Fishing tours to the

islands and reefs.

<1 year

14 Sea kayaking Sea Kayaking tours around the islands near to Dampier and

Karratha

<1 year

15 Diving and snorkelling Diving and Snorkelling tours to the islands and reefs. <1 year

16 Staircase to the moon activities Staircase to the moon activities schedule – event dinners, photography sessions etc.

<1 year

Nature and Wildlife

17 Guided Walks Guided Walks around the various parks and landscapes as well as in Millstream Chichester National park.

<1 year

18 National Park Tours National Park Tours to Millstream Chichester national Park with sightseeing along the way.

<1 year


Final v1.4

14


19 Botanical garden Naturescape Park as per Kings Park featuring and interpreting

unique local flora.

3-5 years

20 Wildlife park An Australian wildlife park featuring local animals, birds and

reptiles.

3-5 years

21 Aquarium Aquarium representative of Western Australian marine life and

marine environments specific/endemic to Dampier Archipelago. Size and scale broadly in line with Ocean Park Aquarium, Shark Bay

3-5 years

22 Independent walks Orienteering or geocaching activities within designated areas. <1 year

Outback Adventures

23 Outback experience tour Outback experience tour – interactive/interpretive – a guided tour featuring Outback WA lifestyle and points of interest.

<1 year

24 4 wheel drive safaris 4 wheel drive safaris. Guided 4 wheel drive tours – overnight camping.

<1 year

25 4 wheel drive trails 4 wheel drive trails. Self-drive tour trails and itineraries featuring points of interest.

<1 year

26 Quad bikes Quad bike tours of beaches and other areas of interest. <1 year

27 Rock climbing & abseiling Burrup Peninsula – extreme sports <1 year

28 Paragliding Burrup Peninsula – extreme sports <1 year

29 Mountain bike riding Sanctioned bike paths, routes, trails have the potential to create opportunities for future events and enthusiasts.

<1 year

30 Outdoor leadership groups This could be incorporated into adventure-related activities on the Burrup Peninsula.

<1 year

Art, History and Culture

31 Heritage trails Heritage trails – self guided interpretative tours (possibly with a multi-language app to provide detailed information of sites

visited.

<1 year

32 Movie trails Movie Trails (red dog etc.) self-guided interpretative tours

(possibly with a multi-language app to provide detailed information of sites visited, movies made, actor information etc.

<1 year

33 Photography tours Photography Tours. Guided tours run by a photography expert, featuring local places of interest and photography courses.

<1 year

34 Karratha Arts and Community Precinct Arts and Community precinct – to centralise and focus performing arts, arts and artists and be accessible to the public and visitors. Hosting art shows and exhibitions, plays and music

etc.

3-5 years

35 Weekly market A local market of arts, crafts, food stalls, entertainers. <1 year

36 History tours In addition to heritage tours, tours specific to different nationalities could highlight historical connections with the area

eg. Chinese pearling at Cossack, Vietnamese, etc.

< 1 year

Indigenous Tourism

37 Indigenous cultural tours Indigenous cultural tours – interactive/interpretive – a high

touch, immersive, tour of local Indigenous sites of importance and local communities.

<1 year

38 Rock art tour An interpretative tour to explore and understand the propensity of local ancient indigenous rock art.

<1 year

Other

39 Expanded visitor centre Expand Visitor centres to become paid attractions themselves.

Possibly featuring historical displays with holographic ‘actors’ entertaining visitors.

1-2 years

40 Resource tours - salt mine - gas

- oil - ore loading - port tours

This opportunity is a unique selling point for Karratha. Serious talks with resources operators to make these facilities more accessible and understandable to visitors would likely be a

unique and successful attraction.

<1 year

- mining Mining Tour/Mining Museum/Mining Town – e.g. Sovereign Hill

- NW shelf Expanded North West Shelf experience


Final v1.4

15


Events

41 Events Calendar - sports events

- arts & cultural events - Rodeo - Sailing regatta - Outback marathon

- Wildflowers

Important to build an annual calendar of events of multiple natures to consistently attract those people living in and around

Karratha to visit and/or stay longer.

<1 year

Signature event Creation of a region specific/unique event (something similar to Whale Festival, Exmouth etc. or other such events that currently take place in other regional centres)

Access

42 International air routes Establishment of International Air Routes to Singapore and other parts of SEA – needs a feasibility.

1-2 years

43 Improved road – Route 142 to Millstream With good road access Karratha could ‘own’ this National Park via the various activities listed above.

1-2 years

44 Cruise ship tender wharf Include a cruise ship tender loading and unloading wharf at Dampier Marina to facilitate visits by small/adventure cruise ships.

3-5 years

Awareness

45 Destination marketing program <1 year

Ability/Facilitation

46 Investment attraction Small business investment attraction/incentive program. <1 year

47 Investment incentives Incentives to attract investors – e.g. free land, rate holidays,

free headwork’s etc.

<1 year

48 Land zoning Land zoning for tourism precincts and tourism accommodation. <1 year

Source: AEC


Final v1.4

16

4. Opportunity Assessment Each identified opportunity is scored using an objective and subjective assessment

framework to deliver a short list of opportunities to take forward.

4.1 Methodology

The high level assessment approach adopted for this study used six dimensions:

1. Industry – assesses the uniqueness of the opportunity, strength of linkages to other

tourism product and the catalytic impact of the opportunity on further product

development in the tourism industry.

2. Financial – explores the capital cost (expenses), revenues and expenses of the

opportunity to the proponent within a general cost benefit assessment (CBA)

framework over a 20 year timeframe.

3. Social - discusses and prioritises each opportunity from different stakeholder perspectives.

4. Economic - examines the estimated demand for the opportunity (as a basis for

additional visitation and expenditure) and construction impacts and annual impacts from new visitor expenditure (known as operational impacts).

5. Environmental - examines each opportunity subjectively according to its impact on

the environment and its ability to mitigate that impact.

6. Risk - relates to the delivery and ongoing sustainability of the opportunity

Each dimension may have one or more measurement items and are described in detail in


Final v1.4

17

Table 4.1.

Each opportunity is given a score for each measurement item and these scores are then averaged (using equal or importance weights) to give an overall score to assist in a

priority ranking of opportunities. Those opportunities with a higher score are superior

based on their higher scores and are to be considered for further in-depth analysis.

Due to the large number of opportunities the assessment should be considered

preliminary and scoping in nature. Further, more detailed investigation and due diligence

would be required by entities seeking to invest in any of these opportunities. Not all

opportunities can be assessed under each measurement item.


Final v1.4

18

Table 4.1 Opportunity Assessment Criteria

Dimension Explanation Criteria Assessment Score

Industry

Uniqueness Considers the uniqueness of the opportunity to Karratha Found only in

Karratha

No

Yes

0

3

Linkages The strength of linkages of the opportunity with existing and potential opportunities.

The strength of linkages with accommodation,

attractions, access, awareness and amenity

None Low

Medium

High

0 1 2

3

Catalyst The catalytic impact of the opportunity on existing and potential opportunities.

Is the impact positive or negative?

The magnitude of the impact.

Positive or negative

Low Medium

High

-1 or +1

1 2 3

Financial

Capital Requirement

Considers the capital requirement. The more capital required the lower the score.

>1M $500k to $1M $50k to $500k

<$50k

Significant High

Medium

Low

0 1 2

3

Social

Visitor The impact on visitor satisfaction levels from the

opportunity.

Is the impact

positive or negative? The magnitude of

the impact.

Positive or

negative

Low Medium

High

-1 or

+1 1 2

3

Community The likely impact on community welfare e.g. jobs and incomes from the opportunity.

Government The impact on government policy outcomes from the opportunity?

Economic

Visitor Demand The % increase in the number of visitors generated from the opportunity compared over time with the base line.

0.0% <= 0.1% 0.1% <= 2.5% 2.5% <= 5.0%

> 5.0%

Negligible Low

Medium

High

0 1 2

3

Environmental

Land Use Does the opportunity take away from other land uses

perceived as having a higher use value, e.g. loss of agricultural land?

Is the impact

positive or negative? The magnitude of

the impact.

Positive or

negative

Low Medium

High

-1 or

+1 1 2

3

Energy Use What is the energy usage of the opportunity? This aspect provides a proxy for carbon emissions and can be mitigated by use of renewable energy sources or onsite

energy production.

Water Use What is the water usage of the opportunity? Can water use

be mitigated through rainwater collection or onsite reuse?

Waste Generated What is the waste created by the opportunity that needs to

be collected and disposed? Can some waste be mitigated through reuse or recycling?

Vehicle Use What are the number of additional traffic movements that will be created through visitation?

Risk

Funding How reliant is the opportunity on securing adequate funding or financing to commence and continue?

The magnitude of the risk.

High Medium

Low

1 2 3 Approvals How reliant is the opportunity on obtaining the appropriate

planning and licencing approvals?

Management How reliant is the opportunity on appropriate levels of management and skills being available?

Marketing How reliant is the opportunity on appropriate and adequate marketing and promotion?

Demand How reliant is the opportunity on levels of demand from visitors?

Source: AEC


Final v1.4

19

4.1.1 A Note on Risk Mitigation

Some of the identified risks may be mitigated by governments. For example:

Direct financial contributions (e.g. grants and subsidies).

Indirect financial contribution (e.g. fees & taxes waivers, land contribution, rent

holidays).

Provision of enabling infrastructure (e.g. utilities, airports, roads, wharfs, public

transport, signage, trails, BBQs).

Planning and approval facilitation (e.g. fast track approvals, condition waver).

Destination marketing.

4.2 Outcomes of the Assessment Process

All tourism proposals were scored against the assessment criteria and for their

compliance to the general criteria (refer to Section 3.2), with the overriding objectives

of this study specifically and in line with the vision, goals and guiding principles of the strategic tourism organisations of which CoK forms an integral part. The result was a

ranking of tourism proposals based on their weighted average score against the criteria.

Table 4.2 below provides a summary of the assessment results. These have been ranked (in descending order of weighted average importance) over the three different implement

time frames.

Given the significant linkages between several tourism opportunities, where it makes synergistic sense, we have grouped individual opportunities into themes/hubs for further

consideration, since the grouping of these activities is considered to have more of an

impact than the sum of individual components. That said, the application of our assessment criteria has also revealed some standalone activities/attractions that should

also be considered for future development in their own right. On this basis we have

identified the following five emerging themes that we consider to underpin and influence the future development of tourism in CoK:

Nature-based tourism.

Heritage and cultural tourism.

Adventure tourism.

Industrial tourism.

Events tourism.

Table 4.2 also provides a view of the linkages between each of the tourism opportunities and the five tourism themes of most relevance in CoK. Each theme – including a

definition, visitor profile and current trends influencing and shaping these segments of

tourism are discussed in more detail in Section 5.


Final v1.4

20

Table 4.2 Ranked Assessment of Identified Opportunities Categorised by Theme


Score

Total Score

Na

ture

He

rita

ge

&

Cu

ltu

re

Ad

ve

ntu

re

Ind

ustr

ial

Eve

nts

<1 year

Guided walks 1.60 9.30 X X X X

Outback experience tour 1.58 9.60 X X X

Indigenous cultural tours 1.58 10.60 X X

Resource tours 1.58 10.60 X

Rock art tour 1.58 10.60 X X

History tours 1.58 10.60 X X

National Park tours 1.58 10.20 X X X

Weekly market 1.56 8.50 X

Staircase to the moon activities 1.52 8.90 X

Mountain bike riding 1.50 8.50 X

Rock climbing & abseiling 1.46 8.30 X X

Sea kayaking 1.46 8.30 X X

Destination marketing program 1.42 9.10

Heritage trails 1.40 8.70 X X

Movie trails 1.40 8.70 X

Independent walks 1.40 8.30 X X

4 wheel drive safaris 1.38 8.20 X X X

Outdoor leadership groups 1.38 7.60 X X X

Photography tours 1.38 9.60 X X

Holiday homes 1.38 7.60

Events calendar 1.36 8.50 X

4 wheel drive trails 1.26 7.30 X X X

Volunteer/working holidays 1.18 6.60 X X

Pastoral and station stay 1.18 6.60 X X

Paragliding 1.18 6.90 X X

Quad bikes 1.14 6.70 X X

Land zoning 1.06 6.00 X X

Diving and snorkelling 1.02 6.10 X X

Charter/game fishing 1.02 6.10 X X

Investment attraction 0.82 4.40

Investment incentives 0.38 2.60

1-2 years

International air routes 1.58 9.90

Nature-based camping at Millstream 0.98 7.20 X X X

Free campground 0.86 5.60 X X

Improved road – Route 142 to Millstream 0.58 5.20

Expanded visitor centre 0.56 4.10

Island glamping facility 0.48 3.40 X X

Marina 0.38 2.90

3-5 years

Cruise ship tender wharf 0.96 6.10

Botanical garden 0.94 6.70 X X

Karratha Arts and Community Precinct 0.90 6.20 X X

Wildlife park 0.70 4.80 X X X

Aquarium 0.70 4.80 X X X

5 star tourist park 0.60 4.70



Final v1.4

21


Score

Total Score

Na

ture

He

rita

ge

&

Cu

ltu

re

Ad

ve

ntu

re

Ind

ustr

ial

Eve

nts

Luxury boutique spa resort 0.44 3.90

Backpackers hostel 0.36 3.50


Source: AEC

Top ranking opportunities are described in more detail in Chapter 5. From these opportunities for further assessment were selected based on the outcomes of the pass 1

process and further consultation with stakeholders as opposed to subjecting those top

ranking opportunities to any further detailed assessment.

These opportunities are described and further assessed in Chapter 6 and are subject to

a preliminary cost benefit analysis based on indicative costings, demand profiles and

potential revenues.


Final v1.4

22

5. Opportunities in Detail This section provides further detail on the top ranking opportunities from the assessment

process.

5.1 Emerging Tourism Themes within City of Karratha

The opportunity assessment has highlighted several key themes that, whilst not unique in their presence, are unique in terms of what CoK has to offer. Five recurrent tourism

themes were identified which, if thoughtfully created and packaged, will not only promote

the tourism offering in Karratha and encourage increased overnight from diverse leisure markets, but will also fit well with the overall product offering of the Pilbara and North

West regions generally:

Adventure tourism.

Heritage and cultural tourism.

Nature-based tourism.

Industrial tourism.

5.1.1 Adventure Tourism

Definition

Adventure tourism is a type of niche tourism involving exploration or travel to remote

areas, where the traveller should expect the unexpected. Adventure tourism is rapidly growing in popularity as tourists seek unusual holidays, different from the typical beach

vacation (GWU, 2010).

Visitor Profile

Adventure travellers often seek unique or new travel destinations and activities. It is

often believed that a percentage of this sector is willing to accept limited tourism

infrastructure with the promise of an exceptional, authentic experience. Given their penchant for exploring new destinations and seeking new experiences, they are

frequently coveted by emerging destinations at the early stages of tourism development

and also in more mature destinations that have protected and/or developed appropriate

product.

Current Trends

More people than ever intend to take adventure trips and these people intend to

spend more than they have on their previous vacation.

Adventure travellers are specialty travellers and thus spend more than the average

traveller on a trip.

Product development and branding has expanded to incorporate natural, cultural and active experiences which engage with local communities.

5.1.2 Heritage & Cultural Tourism

Definition

As defined by The National Trust for Historic Preservation (2011), “Cultural heritage

tourism is traveling to experience the places, artefacts and activities that authentically

represent the stories and people of the past and present. It includes cultural, historic,

and natural resources.”

‘Heritage’ and ‘Culture’ have become interchangeable and elastic terms. In the context of

the arts for example, the use of the term culture relates to how a society’s history,

beliefs, values, traditions and icons are manifested in an artistic format. The term often embraces Indigenous and natural culture, depending upon the perspective of the visitor

and promotor of the tour, attraction or site. Visiting heritage places can be part of a

range of activities undertaken by tourists or it can be the sole reason for travel for people with a high level of interest in natural and cultural heritage.


Final v1.4

23

Visitor Profile

Cultural and heritage visitors are primarily, but not exclusively “baby boomers” with

considerable time availability, discretionary income and personal interests.

Current Trends

According to the State Heritage Office (2006):

Heritage and historic tourism is one of the most rapidly expanding tourism segments

in terms of visitor numbers globally.

Visitor attendances, globally and within Australia, are consistently higher at historic places and heritage sites than at art galleries, museums, casinos, arts events and

Indigenous cultural activities.

Regardless of the number or primacy of travel motivations, there is a strong propensity for tourists to attend the historic places or events of the country, state,

region or town they are visiting.

Changing travel patterns such as weekends and extended weekends, packaged trips, local itineraries, business side-trips, fewer long breaks and more unplanned

vacations, stimulate and complement heritage tourism.

5.1.3 Nature-based Tourism

Definition

Nature tourism is responsible travel to natural areas, which conserves the environment

and improves the welfare of local people i.e. it is tourism based on the natural attractions of an area. Examples include birdwatching, photography, stargazing, camping, hiking,

fishing, and visiting national/conservation parks.

Visitor Profile

Nature-based tourists encompass a wide travel audience from youth tourists to families and grey nomads. Their motivations to travel include seeking new and different activities

and experiences that involve both natural and cultural resources. Tourists want a real,

authentic experience, and they want to immerse themselves in a rich natural, cultural or historical experience.

Current Trends

The most successful nature based activities/attractions are those that enable the visitor to experience the natural environment in a way that they could not experience

by themselves i.e. the activities/attractions enable visitors to see and experience the

environment from a different perspective such as walking above waterfalls, through treetops, ziplining, etc.

Best practice nature based facilitated activities tend to cater to smaller groups,

enabling visitors to feel as at one with nature as possible, and far away from their

busy lives and crowds.

At a functional level, activities that are all inclusive are most preferable.

In addition to offering standard packages, some nature based activity products can

be tailored to specifically match the desires and skills of the visitor to give the visitor maximum control over their experience and enable them to gain exactly what they

want from the activity.

Given that nature tourists tend to take time to research and plan their holidays, the need for nature-based operators to have a strong web presence is critical, including

the ability to make internet bookings.


Final v1.4

24

5.1.4 Industrial Tourism

Definition

Industrial tourism is tourism in which the desired destination includes industrial sites

peculiar to a particular location. The concept is not new, as it includes wine tours in

France, visits to cheesemakers in the Netherlands, Jack Daniel's distillery tours in the United States etc. but has taken on renewed interest in recent times, with both industrial

heritage sites and modern industry attracting tourism (Wikipedia, 2015).

Visitor Profile

The visitor profile for industrial tourists is wide and all-encompassing and includes well-travelled tourists, already saturated by the classic attractions (museums, churches) or

second time visitors, shift from pleasure travel to in depth experience and education.

Visitors may also be from the grey nomad market sector or retired workers and professionals driven by nostalgia and professional curiosity.

Current Trends

The largest source markets of industrial tourists are from mature outgoing markets (i.e. Germany, Netherlands, United Kingdom, and Japan).

There is increased curiosity about the manufacturing sector and industrial works from

the younger generation for which, due to the new technologies and globalisation, the domain is almost historic.

Presently, even in the mature markets (i.e. Europe and USA), there are relatively few

tour operators providing industrial tourism packages.

https://en.wikipedia.org/wiki/Tourism

https://en.wikipedia.org/wiki/Wine_tourism

https://en.wikipedia.org/wiki/France

https://en.wikipedia.org/wiki/Netherlands

https://en.wikipedia.org/wiki/Jack_Daniel%27s

https://en.wikipedia.org/wiki/United_States

https://en.wikipedia.org/wiki/Industrial_heritage

https://en.wikipedia.org/wiki/Industrial_heritage

https://en.wikipedia.org/wiki/Industry


https://en.wikipedia.org/wiki/Germany

https://en.wikipedia.org/wiki/Netherlands

https://en.wikipedia.org/wiki/United_Kingdom

https://en.wikipedia.org/wiki/Japan



Final v1.4

25

5.2 Opportunity 1 Nature-based Experiences

5.2.1 Vision

CoK, with the Dampier Archipelago and Millstream Chichester National Park as its natural attributes, is well placed due to its natural and built assets to be developed as a hub for

nature experiences such as bushwalking and geotourism. Given that guided walks rank at

the top our opportunity assessment exercise, we have explored this opportunity within areas of special natural interest to yield maximum “wow” factor.

A series of well-promoted walks, most of which are less than two hours duration but also

featuring some longer, iconic walks, would contribute to positioning Karratha as a “Lost Wilderness Wonder” and complement the more adrenaline activities associated with the

proposed adventure hub. Tracks could be extended to walking, cycling and even

equestrian users.

5.2.2 Demonstrated Need

Guided walks are the top ranking opportunity from our opportunity assessment

exercise.

Existing tracks cater only for walkers with reasonable levels of fitness and provide poor access for non-walking trail users and people with disabilities.

There are only a few nature guided tours in CoK (refer to Appendix B).

There are several walking trails in CoK and immediate surrounds, however, the majority of these are self-guided and provide little opportunity for visitors to learn of

the indigenous and endemic flora and fauna of the region.

5.2.3 Examples Elsewhere

National parks throughout Australia.

Bay of Fires, Tasmania.

Coastal Track, Victoria.

Six mile Track, New South Wales.

5.2.4 Benefits

Creates opportunities to showcase natural landscapes to visitors and grow awareness

and appreciation of the unique geological systems and landscapes of CoK and wider Pilbara region.

Millstream Chichester National Park is a popular destination for adventure travellers

and is ideally located along the self-drive route of Warlu Way, which links other popular attractions such as the Karijini and Cape Range national parks.

Guided and self-guided walking trails on the Dampier Archipelago have the potential

to offer a true wilderness experience in virtually untouched environments.

Has the potential to encourage overnight stays and support of local businesses and

services if a diverse network of trails can attract guided walking tours.

Aligns with the values of sustainable ecotourism insofar that it has minimal environmental impact.

Contributes to CoK economy through increased tourism expenditure brought about by

combining short walks with additional, same-day activities such as a cultural tour or

industrial tour.

Walking tracks are a valuable tourism attraction, especially if marketed well.

Adds to the diversity of the Karratha tourism experience.

Services the needs and interests of both locals and tourists, particularly for families in the North West.


Final v1.4

26

A feasibility for the development of an eco-retreat has already been undertaken and

ready to be taken to the next stage with investors being encouraged to develop new ecotourism ventures within Millstream Chichester National Park (DPAW, 2015).

5.2.5 Challenges

Creating routes and walking experiences for inexperienced or casual trail walkers (existing tracks require high levels of fitness).

Decisions regarding which trails should be created and which trails require further

investment could be difficult given the huge land area that CoK covers.

Constructing tracks or infrastructure is timely and labour intensive.

Cultural heritage and environmental assessments on tracks can be costly.

Funding for track maintenance and construction requires continuous commitment.

5.2.6 Target Markets

Local, intrastate, interstate and international visitors.

Families.

Recreational campers.

Bushwalkers and visitors to Millstream-Chichester National Park.

Special interest groups e.g. bird watching clubs, geology enthusiasts, star gazers, etc.

5.2.7 Recommended Products

Enhanced trail development in already existing locations to incorporate cycling and

horse riding.

Tour and activities businesses.

Nature based accommodation.

Creation of look-outs with interpretative signage at key points to photo opportunities.

This will indirectly enhance word-of-mouth promotion

Geology-based trips to areas of geological and geomorphological importance.


Final v1.4

27

5.3 Opportunity 2 Cultural Tours

5.3.1 Vision

To establish low-impact guided cultural tours in and around Karratha that highlight the Aboriginal culture and history of the region and convey the historical, cultural and natural

stories of the region.


Based on our cluster mapping exercise, visiting aboriginal sites, experiencing aboriginal

art, craft and cultural displays and guided tours and excursions are the most popular

cultural experiences, indigenous and historic experiences for visitors to the North West.


Koomal Dreaming, Western Australia.

Mungall Aboriginal Tours, Queensland.

Aboriginal Tours, South Australia.

5.3.4 Benefits

Encourages overnight stays in CoK and wider Pilbara region.

Adds diversity and authenticity to the Karratha tourism experience – the stories, histories, experiences and places that have created and shaped the region will

identify and help to identify and accentuate the local differences thereby creating

uniqueness and authenticity.

Creates a unique experience in CoK, with few direct competitors in the Pilbara, Coral

Coast and Pearl Coast tourism regions.

Cossack Heritage Trail is a high quality product with accommodation, interpretation and dining facilities.

Encourages product partnerships since historic and heritage themes and assets often

dovetail with other tourism products such as the arts and natural and indigenous elements that can create critical mass and cluster attractions.

Facilitate the creation of a “sense of place” by reflect the unique multicultural origins

which provide authenticity and flavour to the heritage product.

5.3.5 Challenges

Cultural heritage and environmental assessments as precursors to development

feasibilities can be costly.

Training and retention of staff with local knowledge to act as tour guides can be challenging and difficult to attract.

Developing a high-touch, immersive, experiential tour as required by contemporary

travellers has proven to be difficult.

Sourcing historical information to accurately interpret cultural, social and natural

heritage.



School groups and community groups.


Final v1.4

28

5.4 Opportunity 3 Adventure Activity Tourism Hub

5.4.1 Vision

To develop an adventure activity tourism industry hub in Karratha with the Dampier Archipelago being the primary destination for partaking in such experiences and

supported by an accommodation, service and activity hub at a central and easily

accessible location.

Adventure tourism incorporates high-adrenalin activities that take place in a natural

environment, e.g. sea kayaking, mountain bike riding, quad biking, paragliding, diving,

snorkelling, etc. Adventure tourism is central to positioning CoK as the “Playground of the Pilbara”.


Our cluster mapping exercise (supported by TRA statistics) attracts tourists to heritage,

indigenous and cultural experiences but does not have the volume or type of experiences appealing to adventure travellers aged 25-35. This market is CoK’s largest market

segment, accounting for 65% of all overnight visitors to CoK in 2015.


Life’s an Adventure, New South Wales.

Tiwi Island Adventures, Northern Territory.

5.4.4 Benefits

Involves creation of multiple locally owned businesses.

Is jobs-intensive and therefore potentially a significant employer.

Spreads financial investment and return throughout the local economy.

Encourages multiple night stays in CoK based around a critical mass of adventure

tourism attractions.

Adds to the diversity of the Pilbara and Tourism North West tourism experience.

Appeals to a sub-section of visitors to the Coral Coast who are already travelling to

the region for an outback adventure experience.

Has minimal environmental impact.

Builds on a strength of CoK insofar as it has a variety of natural features required for a hub within 30 minutes’ drive and in close proximity to the Dampier Archipelago.

Fills a gap in the CoK experience - having little to attract the under 35 visitor

demographic (as suggested by the TRA age category research statistics – refer to Section 0).

Services the needs and interests of both locals and tourists.

Avoids direct competition as it is a unique hub concept in the Pilbara.

Easy and relatively cost effective to implement within a short timeframe.

5.4.5 Challenges

Improving public transport from visitor entry points.

Establishing a collaborative network among operators to share resources such as

booking systems, promotions, staff, transport and administration to improve the

efficiency and viability of each operation.

Accessing public liability insurance for high risk activities.

Meeting statutory and occupational health and safety guidelines to undertake

activities in coastal, salt flats and wilderness areas.


Final v1.4

29



Adventure tourists.


Diving and snorkelling in the Dampier Archipelago.

Windsurfing, sailing and other water sports.

Sea kayaking tours.

Paragliding.

Quad biking tours.

Mountain bike trails.


Final v1.4

30

5.5 Opportunity 4 Industrial Tourism Centre

5.5.1 Vision

To establish an interactive interpretation centre and tours that communicate the importance and relationship of the mining and resource sector in CoK and allow visitors

an immersive experience of the scale, nature and people in the various resources

industries exposed in Karratha to day and overnight domestic and international visitors.


The Pilbara is well renowned as the epicentre/engine room of mining and resources in

Western Australia with a unique mix of resources industries, including salt, accessible from Karratha.


Central Deborah Gold Mine, Bendigo, Victoria.

Blackwater Coal Centre, Queensland.

5.5.4 Benefits

Builds on the current interpretation centre, static displays and information available

at the North West Shelf visitor centre.

Adds to the diversity and uniqueness of the Karratha tourism experience

Enhances visitor experiences with a holistic approach of the relationship between the

natural and man-made facets of Karratha.

Has potential for local business expansion in the form of guided tours,

accommodation, dining and retail.

Has potential for community and school group education.

Creates a unique experience in Karratha, with no direct competitors in the wider

Pilbara region.

5.5.5 Challenges

Conveying the uniqueness of the attraction to local industry stakeholders to

encourage future development.

Obtaining support from resources operators and addressing OH+S issues cost

effectively to assure an immersive experience.

Identifying and procuring an appropriate location(s) for industrial interpretation

centres that provide an authentic experience to visitors whilst maintaining private

sector intellectual property.



School groups and community groups.

Grey nomads and/or retired workers and professionals driven by nostalgia and

professional curiosity.


Simulators for visitors to have a “hands-on” opportunity at the controls of a dumper

truck for example, or something similar.

Interpretative centre with displays of machinery and equipment and depending on the

location you might be able to organise day trips out to an operating mine and show case the real thing as well.


Final v1.4

31

5.6 Opportunity 5 Enhancing the Local Events Scene

5.6.1 Vision

To develop a progressive, diverse and cohesive events industry, attracting significant additional visitors and revenue into the economy of CoK by capitalising on the heritage,

cultural and natural beauty of the region in a unique and authentic manner and by

building a promotable monthly and annual events calendar that highlights that there is always something on in Karratha.


CoK already has a successful year-round program of festivals and events, some of which are nationally significant. However, many of these are not well-known beyond

the Pilbara and the event participants.

There is an opportunity to invest more in the marketing and promotion and

programming associated with some of these events by attracting additional corporate sponsors and investors.


Staircase to the Moon, Broome.

Outback Trailblazer, Queensland.

5.6.4 Benefits

Increased expenditure leading to increased employment and job creation.

Spreading the benefits region-wide as visitors travel through the region to attend

events.

Highlighting local product.

Providing local communities and volunteers with the opportunity to be involved with

activities and events.

Bringing new visitors who would not have otherwise come.

Increasing the profile and awareness of CoK destination especially through increased

marketing and media.

Enhancing community pride.

Improving the profitability of local businesses.

Attracting new investment through event infrastructure and community facilities.

5.6.5 Challenges

Insufficient attendance at events to cover costs.

“Event fatigue” – events need to be continuously refreshed to encourage repeat

participation, renewed enjoyment and word-of-mouth promotion.

Pressure/strain on local infrastructure.

Attaining and retaining sponsorship.


Local communities.

Overnight visitors (domestic and international).

Speciality event participants and spectators.


Final v1.4

32


Staircase to the Moon – this is a popular activity in Broome but much more can be done in Karratha to promote this natural phenomena through moonlight markets of

local fayre, night-time photography tours, etc.

Art under Umbrellas – this could provide an opportunity to showcase local art alongside live entertainment. This could be a monthly recurring event.

Sporting events – e.g. mountain bike riding, 4 wheel drive rallies, desert challenge,

etc.

5.7 Other Identified Opportunities

The opportunity assessment has identified other opportunities that could be implemented

within a one-year timeframe including:

Destination marketing program.

Investment attraction and facilitation.

Whilst these have been considered as “opportunities”, they are absolutely crucial to the

successful realisation of any single (or combined) tourism venture. Furthermore, since

these “opportunities” require significant input from industry stakeholders, not just from within CoK but from other statutory bodies as well, we have not provided further

commentary regarding their demonstrated need, benefits, challenges, target markets,

etc. as we have considered with Opportunities 1 – 5, but rather provide an overview of the key objectives that should be achieved through the delivery and execution of well

thought out strategies, programs and campaigns.

5.7.1 Destination Marketing Program

Vision

Position CoK as a “new tourism destination” within the Pilbara and North West of Western

Australia that will encourage increased visitation and tourism spend from the day visitor and overnight domestic and international market sectors.

Key Objectives

Align CoK with the Tourism North West tourism and marketing strategy.

Promote CoK as a natural gateway to the Pilbara from the Coral Coast.

Encourage and promote the idea of “Stay another Day” in Karratha’s tourism

repositioning strategy.

Highlight the diversity of CoK attractions, particularly the natural, heritage, cultural and indigenous riches of the area.

5.7.2 Investment Attraction & Facilitation

Vision

To enhance the economic development of CoK by strengthening its role as a tourism

destination and, in doing so, go beyond its role as the mining gateway of the Pilbara and

day trip destination. This will require significant investment in new attractions, infrastructure and supporting facilities and amenities in order to attract and cater to

overnight destination visitors.

Key Objectives

Whilst we recognise that future tourism ventures in Karratha are likely to be realised by the private sector, there is a clear role for the public sector in facilitating this process. At

the highest level, we therefore consider the following objectives to be important:

Sophisticated investment communications, backed by feasibility studies, need to be targeted at and delivered to specialist prospective investors, tourism development

regulators and relevant public sector funding agencies.


Final v1.4

33

Actively identify sites where tourism development projects that align with the region’s

investment priorities will be entertained, on both public and private land and make zoning and land management plans accordingly.

Collaborate to ensure that the local community members and tourism development

regulators are informed of the benefits that prospective tourism projects might bring to the region, and that a supportive environment for investment is developed.

Collaborate to ensure that the relevant development approvals processes are clear,

robust and supportive of well-conceived tourism development proposals, and that

these processes are administered in a timely and transparent fashion.

Attract investors to develop one or more flagship attractions that will be draw cards

for visitors to CoK.


Final v1.4

34

5.8 Key Barriers to Realising Identified Opportunities

5.8.1 Quality & Affordability of Short-stay Accommodation

We consider that the quality of the short-stay accommodation market requires immediate attention as this provides the necessary infrastructure to encourage visitors to stay

overnight in Karratha.

At a broad level, quality and affordable bed and breakfasts, camping and caravan parks, self-catering accommodation units, holiday homes, pastoral stations and hotels could be

established across most towns/village in CoK. Through the stakeholder consultation

process associated with this project, we have become aware of several proposals, business cases and ideas for future accommodation facilities in the region. While it is

clear that one of the main obstacles in attracting investor interest in such projects is

related to the lack of tourism ventures to support the need for such facilities, we consider

that one of the more pressing issues is related to the low quality and high price of current accommodation. Simply developing tourism products that are best suited to CoK will not

necessarily encourage visitors to stay overnight in Karratha. The quality and range of

paid accommodation and services in CoK will need to match the quality and experience of any new tourism ventures elsewhere and in locally competing towns and regions. Against

the backdrop of other competing destinations, modern day tourists have come to expect

value for money and will chose to visit areas/region that meet these decision-making criteria.

5.8.2 Seasonality

Due to the seasonality of weather conditions in the North West, operators will need to diversify income sources during off-season periods or ensure that operating season

turnovers are large enough to sustain the business throughout the year. This highlights

the importance of operators running multiple activities. For example, a guided nature walk operator could offer walking tours in the winter months, and fishing, snorkelling or

sea kayaking in the summer season.

5.8.3 Attracting Tour Operators

There are a significant number of nature and cultural-based adventure tour operators based throughout Australia that package premier adventure holidays in Western Australia

However, it is clear that CoK is not even “on the radar screen”, despite the products that

are available in CoK and wider Pilbara region.

There are probably a number of reasons for this including being dramatically

overshadowed as a tourist destination by Broome, Coral Coast and the Kimberley’s, as

well as the commercial/industrial look and feel of Karratha which presently does not present the right image to leisure visitors. Although much has been done to develop

Karratha as a regional centre and the rise of new modern developments e.g. the

restaurant strip along Warambie Road, has done much to create a vibe and central hub for activity, other elements to support a developing still need to be addressed that will

encourage tour operators to establish a presence in CoK. Addressing the quality, price

and range of accommodation available is an important step which will encourage tour

operators to include CoK in their itineraries.

5.8.4 Business & Community Awareness

It is critical that local businesses and the community understand the needs and desires of

contemporary visitors and how to deliver on these needs effectively. The requirement for authentic, high-touch, immersive experiences has changed the nature of customer

expectations and must be matched by suppliers.

On-going training and support will be required as the region naturally grows and adapts to increasing levels of demand and increasing diversity and sophistication of tourism

operators. This on-going training will be an important effort to ensure that new tourism

operators can be successful and sustainable over time.


Final v1.4

35

We recommend attracting a range of educational resources (speakers, webinars etc.) on

a consistent calendar, to create and build awareness, understanding and the ability to successfully deliver, on the needs of contemporary visitors.


Final v1.4

36

6. Detailed Investment Opportunities

6.1 Overview

There is potential for further investment and fresh ideas that will lead to innovative new

features that complement the natural, historic and cultural landscape of Karratha. To fully

realise this potential, CoK has identified five opportunities that have potential to be creatively explored further and developed into well-considered proposals that will

encourage increased visitation to Karratha and the wider Pilbara region.

Although our ranking assessment methodology yielded opportunities which were presented before the TAG (as part of the short-list of opportunities), further pragmatic

discussions between Council and AECgroup resulted in identification of the following five

projects which are considered to have immediate investment potential:

1. Island Glamping in the form of luxury-glamping or eco-camping on the Dampier Archipelago.

2. Watersports Hub that will develop Karratha as the water playground of the Pilbara.

3. Cultural Tour that further highlights the unique indigenous offerings of the Karratha region.

4. Karratha Events Unit dedicated to promoting, managing and delivering signature events to Karratha via a consistent monthly and annual calendar of events.

5. Mining Hall of Fame that will showcase the Pilbara’s rich, diverse and unique

resources sector to the public.

Whilst these five development opportunities have been considered further in this section

with respect to the overall vision of the tourism product, anticipated demand and market

appeal, indicative pricing points, estimated capital investment and operational costs, and likely involvement of government agencies and other related industry bodies, we strongly

recommend that they be converted turned into prospectus style development

opportunities, backed by detailed feasibility studies, that can be pitched to potential investors with appropriate imagery and promotional language. Separate two page flyers

to this report provides a guide for what copy (and imagery) could be used as the basis

for such an investment prospectus. Please note that these have been developed as a

guide only; and any imagery used for future public presentation purposes would need to be purchased as they are subject to copy write restrictions.

6.1.1 Benefits

The realisation of the preferred development opportunities has the capacity to deliver the following benefits:

Support culture and leisure-based growth by harnessing the power of place and

quality of life to stimulate wider economic transformation and diversification.

Raise the quality and diversity of the offer to visitors; releasing the enterprise

potential of the creative industries, leisure facilities and the visitor economy and

expanding the cultural offer.

Create a spectrum of new jobs. This is particularly the case in the island glamping

and watersports tour/hub development opportunities which would create a variety of

jobs.

Construction jobs during its development phase as well as leisure related jobs in

areas such as catering, instruction, event management and customer service once

open.

Be a catalyst for inward investment.

Attract a new higher net worth tourist would have a positive flow on effect on local

businesses and result in increased spending in Karratha itself.


Final v1.4

37

Create a nicer place to live with the potential to attract unrelated lifestyle business.

6.1.2 Recommendations for Further Consideration

Creation of investment prospectus, backed by detailed feasibility studies, for each

opportunity that will generate market interest and investment appetite.

Distribute investment opportunities to appropriately researched target audiences and invite them to submit an Expression of Interest. AEC Group, Tourism North West

and/or Tourism Western Australia should be able to provide assistance in this

regard.

Develop a set of investment guidelines that are specific to the City of Karratha. While Tourism Western Australia, Tourism Australia and other state departments and

jurisdictions have developed investment guidelines, these are largely generic in

nature or not applicable to Karratha.

In all development opportunities, the principles of sustainable development must be

applied. While this is particularly relevant in the case of island glamping, watersports

and cultural tours, the location in which future events and festivals should be cognisant of environmental and social impact considerations.

Incentives for future development should be considered at the planning and pre-

development stages to assist and encourage the realisation of tourism projects. Any incentives should be considered against other pre-existing enablers for growth

including (Pilbara 2050 Region Pillars; Tourism WA's Regional Events Scheme (RES),

which is jointly funded by Royalties for Regions; Indigenous Capital Assistance Scheme, Australia’s National Landscape Programme, etc.).

The range, quality and pricing of Tourist accommodation in Karratha shire also needs

to be addressed so that visitors wishing to participate in these five opportunities are

able to find contemporary, quality accommodation at prices competitive with other like destinations with similar products to offer.

6.1.3 Other Considerations

Indicative Pricing

In the case of island glamping, watersports tour hub and cultural tours, any pricing/tariff

levels would need to be affordable and competitive with other like or nearby destinations

to maximise tourist take-up while still making the product offering affordable to the local community, whilst ensuring commercial viability.

Capital & Operating Costs

Financial estimates for the operation will depend upon the governance and management structure and management philosophy selected.

Additional detailed financial feasibility for each development opportunity identified will

be required to identify the potential operational viability and sustainability of

developing a watersports hub, island glamping facility and/or cultural tour operation in

Karratha that will enhance visitation to the region, encourage overnight visitation and

meet the community, activity and commercial objectives of its partners and

stakeholders. Furthermore, any business models adopted and implemented will be

dependent upon further discussions between potential partners to determine the

preferred contractual and operating arrangements and policies.

6.1.4 Note on CBA Terminology

Whilst the cost benefit analysis (CBA) approach is described in Appendix C, the following

terms will assist in the interpretation of the CBA tables.

Discount Rate = real % rate at which the value of money increases or decreases over

time.

PV Costs = todays value of the stream of costs projected into the future using the discount rate.


Final v1.4

38

PV Benefits = todays value of the stream of benefits projected into the future using the

discount rate.

NPV = PV Benefits – PV Costs.

IRR = The discount rate at which the NPV of the project equals zero. Not always possible

to calculate.

BCR = PV Benefits / PV Costs, ideally this should be greater than 1 for a viable project.

FTE = Fulltime Equivalent Employee, i.e. 37.5 hour week, 46 weeks of the year

(assuming 4 weeks annual leave and 2 weeks public holidays).

6.2 Product Packaging Opportunities

6.2.1 Overview

Packaging involves combining a number of product components together to form a

holiday experience for the consumer. Consumers (either through the trade or directly

with the airline or wholesaler) can tailor their own holiday experience either online or offline, selecting the product components of their choice. Before tour operators can

develop a package or packages, it will be necessary to communicate to the key target

markets that the product is seeking to attract. Under the section headings: “Rationale for Establishing [tourism opportunity]” and “Market Appeal and Potential Opportunities” we

have identified the possible target markets for each tourism opportunity. Sections 5.1

through 5.6 also identify potential target markets that will maximise product exposure. In addition, research will also need to be undertaken by the future operators of the tourism

products themselves to identify which wholesalers would be most suitable to package and

promote their product as part of a broader travel offering/experience.

Key benefits of packaging tourism products include:

Makes the product offering more appealing for wholesalers and travel agents to book,

especially if products are a single attraction.

Packages can assist in driving business to specific tourism products during low

seasons or off peak periods. Attractive pricing can drive consumers to book packages

during these times as well.

Packages can help drive new markets by offering products that appeal to a new market segment.

Promote customer convenience insofar as they reduce the time and money spent

looking for key product and booking information on a destination.

Packages reduce the cost of products and services and provide greater discounts and

better value for money.

Packages relieve travel anxiety for new and older travellers, satisfying their need for security, reliability and companionship.

6.2.2 Developing Trade Ready Tourism Products

In order to benefit from tourism product packaging, businesses need to be “trade ready”. This means that that the tourism offering is produced, packaged, priced and promoted in

such a way so that the product is both easy to find (ie through a website or other

presence) and that it needs to be attractively priced to attract potential customers.

As a starting point, it is recommended that focus be directed towards the domestic visitor market as this market is significant and easy to reach. Domestic packaging is less

expensive to compile than international packaging; it also requires fewer distributors and

generally achieves faster results. Modern packages that are flexible and good value for money will appeal both to groups seeking guided and unaccompanied itineraries, as well

as to the more independent traveller.

Domestic market groups include:

Clubs and associations - Members of clubs, such as RSL, community service clubs

and groups or associations catering to retirees, are a major market.


Final v1.4

39

Schools and educational institutions - Schools and other educational institutions

regularly conduct day and overnight excursions. If the tourism product has significant educational content, creating a package to suit this sizeable market can be a

profitable venture.

Families - The ability to purchase a complete package, which includes a number of components at a cheaper rate than if the items were purchased individually, will

appeal to families seeking value for money holiday options.

Special interest groups and individuals - Special interest markets should not be

overlooked. These include groups with a special interest in a particular recreation or experience, the arts, events, festivals, history and culture, fishing, bushwalking,

sporting and 4WD adventures.

6.2.3 Potential Distribution Channels

Whilst a significant proportion of potential visitors will be connected to products via

individual company websites and offline marketing tools, there are other distribution

channels that can be used to maximise product exposure. These include:

National wholesalers

Travel agents

Inbound Tour Operators

International wholesalers

National Wholesalers

Wholesalers select individual product elements and then link them with other complementary products to form packages. The wholesalers then communicate these

packages via their website, in their brochure and frequently through their marketing

communications channels. For this service suppliers pay a commission.

Some of Australia’s major domestic wholesalers include Qantas Holidays, Virgin Blue Holidays, Great Aussie Holidays, Travelpoint Holidays and Creative Holidays.

An example of a major wholesaler is Qantas Holidays. Qantas Holidays provides ground-

only content and packages that can be purchased as is or combined with airfares. They negotiate their product rates directly with suppliers and produce packages that are

distributed to retail travel agents or sold directly to consumers via their website.

Travel Agents

There are approximately 4,500 travel agencies in Australia. Travel agents are an

important part of the distribution chain as they gain customers via their shop fronts as

well as via their highly visited online websites such as flightcentre.com, harveyworldtravel.com etc.

The large retail networks in Australia include Harvey World Travel, Travelscene American

Express, Jetset, Flight Centre, Helloworld, STA Travel and Travellers Choice. Travel

agency groups work cooperatively with wholesale and airline partners to develop aggressive tactical marketing campaigns.

Inbound Tour Operators

Inbound tour operators (ITOs) devise and coordinate travel arrangements in Australia on behalf of overseas travel agents and overseas wholesalers. This usually involves

planning the Australian itinerary, negotiating prices, costing the various components in

the itinerary such as transfers, accommodation and tours, as well as arranging payment for the products. ITOs are paid commissions of between 25 and 30 per cent.

AOT Inbound is the leading Australian Inbound Tour Operator, handling over 120,000

visitors per annum in Australia and New Zealand from North America, the UK, Europe and South Africa. They also operate one of the most sophisticated travel trade booking search

engines in the world.

International Wholesalers

While Qantas Holidays is an example of an Australian-based wholesaler, there are also

overseas wholesalers who use the services of an Australian-based ITO to negotiate rates


Final v1.4

40

for and coordinate their Australian wholesale program. An example of a wholesaler

specialising in worldwide bookings is Saltours International. With a comprehensive online system, Saltours provides a range of services including airport transfers, car rentals

accommodation, tours and special packages.

6.3 Island Glamping

Similar to hotels, the standard of glamping accommodation can vary greatly from basic pre-erected tents with basic facilities through to midscale eco-camping tents with

restaurant and bar facilities through to all-inclusive high end luxury tents with a

sophisticated food and beverage offering and high-touch tailored guest experiences. In order to assess the development potential an anticipated return on investment of island

glamping we have considered two scenarios:

1. Luxury-glamping – high-end quality accommodation on an all-inclusive basis; and 2. Eco-camping – midscale, quality standard accommodation.

Whilst the basic premise of glamping involves a form of camping that involves some of

the comforts and luxuries of home, we have distinguished between luxury-glamping and eco-camping where necessary below as a means to separate the two different investment

opportunities available.

6.3.1 Vision

Ecotourism and glamping provide the perfect fit.

Luxury-glamping

Provide an all-inclusive, high-end, glamping accommodation that will provide guests with

the space, freedom and privacy to enjoy the unique island environment afforded by the Dampier Archipelago. The glamping site should aim to melt into the landscape and be as

environmentally friendly as possible and yet still provide unique and sheltered spaces to

pamper, relax, refresh, regenerate and inspire its visitors.

Eco-camping

Provide a midscale quality eco-camping experience on the Dampier Archipelago. The

glamping site should aim to melt into the landscape, be environmentally sustainable and provide an opportunity for guests to freely engage in the natural environment as much or

as little as they desire.

6.3.2 Rationale for Establishing Island Glamping Accommodation

There is a plethora of camping facilities available in the Pilbara, however, the majority of these are of a poor to midscale standard, with locations varying from road laybys to the

outskirts of town and are limited in terms of unique and memorable experience offerings.

Glamping as an alternative short-stay product, when combined with immersive and unique local experiences is growing in popularity as the search for authentic wilderness

experiences continues and stretches to varied audiences. Building with an impermanent

tent and a deck allows one to consider sites that are more remote and less serviced than with a built hotel.

Luxury-glamping

Glamping or “glamorous camping” pairs destinations with the intimacy of camping and luxury travel in unique destinations. Luxury tents are amongst the most popular trend in

glamping as they offer the nostalgic feel of traditional camping with luxurious amenities.

Eco-camping

Eco-camping as a distinguishable midscale quality glamping product is also popular

insofar it is more affordable in monetary terms, but in terms of facility provision, is more

in keeping with that provided at Australia’s top rated tourist parks, without the crowds.

That said, the ability for visitors to stay in a truly untouched natural environment is something that commercially branded and operated tourist parks are unable to provide.


Final v1.4

41

6.3.3 Market Appeal & Potential Opportunities

There's an authenticity of place at a glamping site that is not only a rarity but also touches guests on every level - spiritual, emotional and physical. Being in the wilderness

heightens the senses beyond anything that could ever be experienced at home. The quiet

of nature provides an ideal place for reflection and also encourages interaction in the best way, sitting around a fire, telling and listening to stories - and making new ones.

Luxury-glamping

The opportunity to enhance the visitor experience is huge, and could take on the form of:

Guided walks and birdwatching.

Guided kayaking and snorkelling tours.

Themed evenings.

Astronomy sessions and Dreamtime storytelling.

It is envisaged that these high-touch, immersive visitor enhancement experiences would

be delivered through appropriately trained staff. These staff may require on-site

accommodation that should be developed in conjunction with the glamping sites.

Eco-camping

By virtue of its midscale product offering, the eco-camping experience is all about a “no-

frills” experience without the high-touch element. Guests are left to immerse themselves in nature in their own time and on their own terms. Organised eco-activities that have

the potential to greatly enhance the visitor experience are simply not available at eco-

camp facilities.

6.3.4 Proposed Site

Given the proximity to Dampier, it is recommended that the development of a glamping

facility take place on East Lewis Island. However, when considering the location for a

glamping development, it is imperative that the site be sheltered and peaceful so as to reinforce the sense of environment and wilderness experience. This would require

positioning considerations with respect to noise from plant and equipment, staff

accommodation and visual barriers from resource activities, electricity generators, sewerage treatment works, etc.

6.3.5 Indicative Pricing

Indicative pricing for the proposed island glamping opportunity is based on other glamping operations in Australia that offer a similar accommodation offering, albeit in a

different environment. Given the location of the proposed glamping facility, we

recommend the following indicative prices:

Luxury-glamping

A full inclusive experience that includes: accommodation, meals, drinks, beverages, boat

transfers and all activities. An indicative range would be in the order of $400 per person

per night. This rate could be escalated upon further analysis of supply and demand dynamics once opened.

Eco-camping

A full inclusive experience that includes: accommodation, meals, drinks, beverages and boat transfers. An indicative range would be in the order of $285 per person per night.

Given the product offering, there is limited potential for rate escalation as an eco-

camping facility. Any scope for further rate escalation would require the provision of a significantly enhanced (luxurious) glamping product offering with higher staff:guest ratios

and a greatly enhanced high-touch guest experience.


Final v1.4

42

6.3.6 Cost Benefit Analysis

Table 6.1 Indicative Parameters – Luxury-glamping and Eco-camping

Item Description

Luxury glamping

Tented accommodation 20 large air conditioned canvas safari tents accommodating between two and four

persons per tent, with bedrooms portioned and configured as a double and a twin or a single King

Ideally the tent should be set on a raised wooden sea-facing platform with an

extended deck and flysheet at the front with day bed and outdoor lounging facilities

At the rear there could be an extended covered area housing a bathroom facility

with an outdoor shower. The main living space comprises a small table and chairs, fridge and comfortable

indoor and outdoor seating.

Food & Beverage Meals and beverages should be provided as part of an all-inclusive package all

served in a central facility. A commercial grade kitchen is required for cooking and meal preparation

activities.

Reception area A central reception area with guest amenities could also serve as an emergency

meeting point and a central facility for guest group activities and entertainment.

Eco-camping

Tented accommodation 24 large air conditioned canvas safari tents accommodating between two persons

per tent, with bedrooms configured as a double or twin. Ideally the tent should be set on a raised wooden sea-facing platform with an

extended deck and flysheet at the front with outdoor lounging facilities

At the rear there could be an extended covered area housing a bathroom facility with an outdoor shower.

The main living space comprises a small table and chairs, fridge and comfortable

indoor and outdoor seating.

Combined reception, food & beverage

A central reception area with guest amenities, restaurant and guest lounge. This communal space could also serve as an emergency meeting point.

Meals and beverages should be provided as part of an all-inclusive package all served in a central facility.

A commercial grade kitchen is required for cooking and meal preparation

activities.

Common Facilities

Storage This would be required for additional bedding, mattresses, emergency supplies

etc.

Transport Boat to transport staff, guests, perishables and other related items to and from the island on a daily basis.

The boat may either be contracted to a third party or owned by the glamping resort.

Embarking and disembarking facilities would also be required.

Water Running water is required for drinking, cooking and bathing purposes. A

treatment plant will be required for purification purposes.

Electricity/generator Supply of reliable source of electricity

Sewage Tertiary sewage treatment and fresh water disposal will be required

Staff 23 FTEs – luxury-glamping

10 FTEs – eco-camping

Marketing Website with online booking capabilities Brochures, flyers, advertisements with local tourism agencies and in relevant

magazine publications. Logo and branding

Insurance Public liability

Motor vehicle insurance Marine insurance

Source: AEC


Final v1.4

43

Table 6.2 Indicative Construction Costs – Luxury Glamping

Item Qty Unit Cost

Number Escalation Total

Min Max Min Max

Tents

Platform 60sqm $200 $300 20 1.30 $312,000 $468,000

Tents 30sqm $200 $300 20 1.30 $156,000 $234,000

Fitout 1 $20,000 $30,000 20 1.30 $520,000 $780,000

$988,000 $1,482,000

Lodge

Reception 40sqm $6,000 $8,000 1 1.30 $312,000 $416,000

Kitchen 60sqm $6,000 $8,000 1 1.30 $468,000 $624,000

Restaurant/Bar 100sqm $6,000 $8,000 1 1.30 $780,000 $1,040,000

Toilets 20sqm $6,000 $8,000 1 1.30 $156,000 $208,000

Laundry 20sqm $6,000 $8,000 1 1.30 $156,000 $208,000

Caretaker and staff 150sqm $6,000 $8,000 1 1.30 $1,170,000 $1,560,000

Plant/Storage 40sqm $6,000 $8,000 1 1.30 $312,000 $416,000

Decking 100sqm $200 $8,000 1 1.30 $26,000 $1,040,000

$3,380,000 $5,512,000

Other

Plant & Equipment (generator, water, sewer)

1 $2,000,000 $2,500,000 1 1.30 $2,600,000 $3,250,000

Swimming Pool 1 $872,000 $940,000 1 1.30 $1,133,600 $1,222,000

Service Boat 1 $800,000 $1,200,000 1 1.30 $1,040,000 $1,560,000

$4,773,600 $6,032,000

Total $9,141,600 $13,026,000

Source: AEC

Table 6.3 Financial Analysis – Luxury Glamping

Item Description

Costs Approximately $13 million construction cost ($ 2016). Cost excludes land purchase, infrastructure contributions and landscaping. Operating costs assumed at 75% of revenue.

Demand Based on 20 tents available 365 days per year, 35% occupancy, average of 2 visitors per room, minimum 3 night stay, number of visitor nights assumed at 5,110 or 1,703 visitors per

annum.

Revenues Accommodation & meals spend = $400 per person per night, $2.0M per annum.

Measures (over 30 years)

PV Costs = $25M PV Benefits = $17.5M

IRR = 1.1% BCR = 0.7 23 FTEs

Source: AEC

Based on current parameters this concept does not achieve an acceptable net benefit and

demonstrates the difficulties that first time investors have in generating financial returns

from island accommodation. To address this, the capital cost and therefore quality of product offering needs to be reduced, prices charged need to increase, or substantial

capital subsidies need to be acquired.


Final v1.4

44

Table 6.4 Indicative Construction Costs – Eco-camping

Item Qty Unit Cost


Min Max Min Max

Tents

Platform sqm 50 $200 $300 24 1.30 $312,000 $468,000

Tents sqm 20 $200 $300 24 1.30 $124,800 $187,200

Fitout tent 1 $20,000 $30,000 24 1.30 $624,000 $936,000

$1,060,800 $1,591,200

Lodge

Reception sqm 0 $6,000 $8,000 1 1.30 $0 $0

Kitchen sqm 50 $6,000 $8,000 1 1.30 $390,000 $520,000

Restaurant/Bar sqm 90 $6,000 $8,000 1 1.30 $702,000 $936,000

Toilets sqm 20 $6,000 $8,000 1 1.30 $156,000 $208,000

Laundry sqm 20 $6,000 $8,000 1 1.30 $156,000 $208,000

Caretaker sqm 120 $6,000 $8,000 1 1.30 $936,000 $1,248,000

Plant/Storage sqm 30 $6,000 $8,000 1 1.30 $234,000 $312,000

Decking sqm 0 $200 $8,000 1 1.30 $0 $0

$2,574,000 $3,432,000

Other

Plant & Equipment (generator, water, sewer)

1 $2,000,000 $2,500,000 1 1.30 $2,600,000 $3,250,000

Swimming Pool 25m 0 $872,000 $940,000 1 1.30 $0 $0

Service Boat 10m 0 $800,000 $1,200,000 1 1.30 $0 $0

$2,600,000 $3,250,000

Total

$6,234,800 $8,273,200

Source: AEC

Table 6.5 Financial Analysis – Eco-camping

Item Description


Demand Based on 24 tents available 365 days per year, 35% occupancy, average of 2 visitors per room, minimum 3 night stay, number of visitor nights assumed at 6,132 or 2,044 visitors per annum.

Revenues Accommodation & meals spend = $285 per person per night, $1.75M per annum.


PV Costs = $18.5M PV Benefits = $15M IRR = 3.5%

BCR = 0.8 10 FTEs

Source: AEC

Based on current parameters this concept does not achieve an acceptable net benefit and

demonstrates the difficulties that first time investors have in generating financial returns from island accommodation. To address this, the capital cost and therefore quality of

product offering needs to be reduced, prices charged need to increase, or substantial

capital subsidies need to be acquired.

Government Involvement

City of Karratha

Pilbara Regional Development Commission

Department of Parks and Wildlife

Department of Environmental and Conservation

National Parks Authority

Department of Fisheries and Wildlife

Department of Heritage


Final v1.4

45

Environmental Protection Agency

Tourism North West


6.4 Watersports Hub

6.4.1 Vision

The Karratha Watersports Hub will become an activity centre and meeting place for water sports activities that will encourage tourists to partake in water-based activities and

where the community can come to have some fun.

6.4.2 Rationale for Establishing a Watersports Hub in Karratha

The Karratha Watersports Hub will offer opportunities for tourists and newcomers to try

sports as well as more advanced sessions in sports such as kite-surfing, windsurfing etc.

Furthermore it also provides an opportunity for social cohesion amongst the local

community through non-water facilities such as the beach café and sand zones.

6.4.3 Market Appeal and Potential Product Offering

Potential opportunities and target audiences is diverse from families, to first-timers, to

watersport enthusiasts and adrenaline junkies. The proposed Watersports Hub could be linked to short beak packages throughout the year involving watersports instruction and

'have a go' sessions, sand sports, to enhance its holiday offering and to establish a

stronger profile of linking Karratha to the sea. The watersports hub could also cater for sports based events and competitions attracting competitors and spectators alike.

There are several options available to encapsulate the entire watersports experience:

Onshore activities: sand sports eg beach volleyball, fishing, café with wet and dry seating options, beach BBQ facilities.

In water activities: inflatable water playground.

Offshore activities: kayaking, stand-up paddleboard, windsurfing, sailing, kite surfing, pedal boat, paraflying, waterskiing, jetskiing.

Underwater activities: snorkelling and diving.

The inclusion of a sand sports area will help to attract a different type of visitor and

promote community cohesiveness through an organised and regular programme of activities. Sand sports such as beach volleyball, beach soccer and beach (tag) rugby

could all be included. Furthermore, depending on the facilities on offer, the watersports

hub, through the development of a beach café, would provide a year round attraction to visitors and extend the community offering in the town of Dampier, and potentially

enhance the utilisation of the Karratha Sailing Yacht Club. A future extension of the

product offering could include integral teaching and learning, coach education, work experience, practical and teaching experience, linked to the Pilbara Institute at the

Karratha Campus and other sports related courses offered as part of secondary school

education.

6.4.4 Proposed Sites

Dampier Marina (either as part of the existing facility, or integral with the proposed

redevelopment and extension), or

Adjacent to the Hampton Harbour Boat and Sailing Club.

Weather, wind and tide conditions on a daily basis will influence which activities can be

offered however, the diversity of activities will ensure that there is something for

everyone.


Indicative pricing for various hire items/activities is given below.


Final v1.4

46

Table 6.6 Indicative Activity Pricing

Item Price

Fishing rods Free – deposit to cover breakages

Inflatable water play

ground

$15/hour

Kayak rental $20/hour

Stand-up paddle board $20/hour

Sailing boat/dinghy/catamaran

$40/hour

Pedal boat $15/hour

Parasailing $100 per person

Waterskiing $175 per person per hour

Jetskiing $80 per person per half hour

Snorkelling tour $65 (adult) – 2 hour guided snorkelling tour (including refreshments, all equipment, boat). Maximum group size: 8-10. Day tour $150 (including refreshments, buffet

lunch, all equipment, boat)

Seakayaking tour $65 – 3 hour guided tour including refreshments. Maximum group size: 10-12

Diving $165 – 2 dives, equipment, light refreshments.

Source: AEC


Table 6.7 Indicative Parameters

Item Description

Air-conditioned shuttle bus One 12 seater air conditioned bus to collect/drop-off guests at accommodation facilities with logo and brand clearly visible.

Marine vessels Parasailing boat Dive boat.

Jet Skis.

Other equipment Life jackets. Kayaks, stand-up paddleboards, small sailing boats

Windsurfers, Kites Parasailing equipment.

Snorkelling equipment. Diving equipment (with air refilling facilities).

First aid and lifesaving equipment.

Dedicated office, shop, café, visitor amenities (not costed)

This could double as booking office, administration office. Area of shaded open space required for demonstration purposes, safety

information briefing sessions, etc. Shop watersports apparel and bait and tackle purchases. Shaded children’s playround.

Café serving coffee and light refreshments. Toilet, shower and changing facilities for guests.

Storage Lockable storage unit for watersports equipment.

Sand sports area Dedicated area for sand sports would be suitable for all ages and abilities

hosting a variety of sports and activities.

Wash-up facilities Freshwater wash-up facilities for snorkelling and diving equipment. Fish cleaning tables for game fishing activities.

Staff Experienced watersports guides with good knowledge of the local area. Qualified diving instructors and boat operators (coxswains etc.)

Basic salary and retention bonus. Ongoing training in customer service, knowledge, first aid, business, etc.

Staff uniforms Uniforms required for staff.

Catering equipment

(not costed)

Equipment required for preparation and serving of breakfast/lunch/tea.

Website Website with online booking capabilities.

Offline marketing Brochure, flyers, inclusion in relevant travel magazines and publications.

Signage.

Insurances Public liability, motor vehicle, marine

Registration fees Vehicle registration fees. Tour operator membership fees.


Final v1.4

47

Item Description

Other operating costs Utilities i.e. electricity, gas, water

Repairs & maintenance Telephone/mobile

Third party reseller fees/commissions Accounting, legal, bank fees

Source: AEC

Table 6.8 Financial Analysis

Item Description

Costs Minimum of $1.5M expenditure on 50 items of equipment (jet skis, kayaks, paddleboards, sail boats, etc.) also including $200k parasailing boat and $1M dive boat. Operational costs 60% of

revenue.

Demand Based on 365 days, 35% of equipment hired per day = 6,388 hires per annum.

Revenues Average hire of $80 = $511,000 per annum.


PV Costs = $4.3M PV Benefits = $4.8M IRR = 14.4%

BCR = 1.13 3 FTEs

Source: AEC

Based on the assumptions the opportunity appears to be viable. The viability is sensitive

to capital required for equipment, operating costs, hire rates and demand.

6.4.7 Government Involvement

City of Karratha




Department of Fisheries and Wildlife

Department of Sport and Recreation

Department of Water

Environmental Protection Agency

Tourism North West



Final v1.4

48

6.5 Cultural Tour Operator

6.5.1 Vision

Create an additional cultural tour that provides a high-touch, immersive and engaging travel opportunity that will enrich visitor lives with a new, memorable and authentic

experience in which they can learn something new and share with others.

6.5.2 Rationale for Establishing a Cultural Tour Operator in Karratha

Cultural tourism, done well, strengthens and promotes the unique cultures of the

destination, for the benefit of community members and visitors alike. It’s one of the

largest and fastest growing tourism markets worldwide and is particularly prevalent in the Pilbara which is rich in natural, archaeological, anthropological and historical

artefacts. Potential exists for an additional locally-owned and operated business, product

or service that authentically reflects a past or present Aboriginal Culture or aspects of the

culture to include lifestyle, heritage, food, music, dance, art, craft, architecture, and spiritual beliefs and that form a recognised and appreciated part of the tourism industry.

Whilst Karratha already has one such tour, other like destinations quite often have many

similar tours to provide variety in the offering and pricing to visitors as well competitive pricing opportunities.

6.5.3 Market Appeal & Potential Product Offering

More and more people are travelling to experience authentic attractions and services unique to each destination – thus presenting a great opportunity for Aboriginal cultural

tourism. Karratha has several competitive advantages to that will provide an opportunity

for the creation of a cultural tour product including: unique indigenous and historic artefacts; vibrant indigenous culture, inspiring locations; major highway access and

sealed roads; relatively untapped potential for Asian market and limited competition from

other operators. Ingredients for success will be dependent on the ability of the tour operator to deliver and communicate the following: meaningful, authentic experiences;

the ability to “participate” rather than “observe”, a chance to meet locals; unique

products and customised experiences.

The types of tours that could be offered are only limited by operators own imagination. There is scope to create authentic high-touch educational visitor experiences that are

focused on:

Rock art tours.

Pearling tours.

Indigenous culture tours.

Storytelling and folklore tours.

Indigenous food “bush-tucker” tour.

Within each tour, opportunity exists to provide visitor experiences that encapsulate:

Cultural demonstrations or events: Performances or festivals that allow guests to see traditional dress or regalia, watch and participate in dance, hear traditional music

and try drumming, meet local artists and performers, taste and smell local food, and

learn about local history and culture. Includes seasonal or annual events.

Arts and crafts: Experiences that feature authentic basket weaving, carving, paintings, and other visual art. Includes artist demonstrations, workshops on

production techniques, and sales of arts and crafts.

Learning programs and opportunities: Specialized educational programs where children or adults learn about Aboriginal history or culture.

Guided interpretation: Tours delivered by trained, appropriate cultural

representatives. Guides must be familiar with protocols for sharing cultural knowledge appropriately.


Final v1.4

49

Passive interpretation: Permanent or temporary displays or exhibits featuring

cultural information, audio for self-guided tours, video’s showcasing culture, and interpretive sign programs.

Cultural foods: Traditional foods promoted in a restaurant, food stand, catering

business, or for a snack to be included in a tour or packaged for sale.


Central office located in Karratha that could function as a meeting point, booking and

administrative office, area for learning opportunities.

Tours to the following areas could be offered:

Burrup Peninsula – Indigenous and Rock Art tours.

Cossack – Pearling and historic tours.

Murujuga National Park - Indigenous and Rock Art tours.


Indicative pricing for various hire items/activities is given below.

Table 6.9 Indicative Activity Pricing

Item Price

Day bushwalking tour

(full day)

$120 (adult) – including high-touch, educational 1.5 hour guided walk and lunch.

Sunset/night time tour

(full day)

$120 (adult) including high-touch educational campfire, digeridoo and bush-tucker

dining experience.

Source: AEC



Item Description

Air-conditioned tour bus 22 seater air conditioned bus with logo and brand clearly visible.

Dedicated office (meet & greet)

This could couple as booking office, administration office. Area of open space required for hands on learning experiences.

Small kitchen area to prepare light refreshments. Curio shop.

Staff Locally employed tour guides with intimate knowledge of local culture and

heritage. Basic salary and retention bonus.

Ongoing training in customer service, knowledge, first aid, business acumen, etc.


Catering equipment Equipment required for preparation and serving of breakfast/lunch/tea.


Offline marketing Brochure, flyers, inclusion in relevant travel magazines and publications. Signage.

Insurances Public liability insurance.

Motor vehicle insurance.

Registration fees Vehicle registration fees. National parks entrance fees.

Tour operator membership fees.

Other operating costs Utilities ie electricity, gas, water. Repairs & maintenance. Telephone/mobile.

Third party reseller fees/commissions. Accounting, legal, bank fees.

Source: AEC


Final v1.4

50


Item Description

Costs Annual cost of hire for a 22 seater bus with driver operation 8 hours per day, travelling 640km per day (40km per hour) for 365 days per year is approximately $400,000. Ticketing and administration costs of $100,000. Operational costs 80% of revenue.

Demand If tickets were $120 per passenger breakeven would require 11 passengers per day equating to 4,168 visitors which represents 2% of visitors per annum.

Revenues If tickets were $120 per passenger and 11 passengers per day revenue = $500,000.


PV Costs = $3.8M PV Benefits = $4.7M IRR = N/A

BCR = 1.3 2 FTEs

Source: AEC

Based on the assumptions the opportunity appears to be viable. The viability is sensitive

to operating costs, tour prices and demand.


City of Karratha




National Parks Authority


Tourism North West


6.5.8 Additional Support

A range of grants and funding programmes are available in the Pilbara to support the

establishment of a cultural tour operator and to expand the menu of experiences that

visitors can choose from. Funding is available through various local and State departments and the Commonwealth Government that seeks to accelerate business

growth and development in the Pilbara, identify and support the development of new

tourism products and build strategic infrastructure that will grow the value of tourism into the future.


Final v1.4

51

6.6 Karratha Events Unit

6.6.1 Vision

Events and festivals bring communities together to share ideas, values and experiences and to build a sense of belonging and identity. They also have an important and strategic

role to play in delivering the vision for the tourism in the City of Karratha and wider

Pilbara region. The creation of a dedicated Events Unit within the City of Karratha will be tasked with attracting, managing and delivering a monthly and annual calendar of

signature events that enhance community opportunities, strengthen social cohesion and

promote cultural celebrations. Making Karratha a place where intra state and local, regional visitors go “because there is always something interesting going on”.

6.6.2 Rationale for Establishing a Karratha Events Unit

The events industry in Karratha is underdeveloped and lacks leadership and strategic

direction. The establishment of a dedicated Events Unit (in partnership with the City of Karratha and supported by tourism-related agencies) is therefore required to grow and

optimise the benefits of the events industry both within Karratha itself and the wider

Pilbara region.

The Events Strategy as developed by the City of Karratha in the Shire of Roebourne

Events and Festivals Leisure Services Business Plan 2014/15 – 2016/17 endorses events

as a legitimate tool of celebrating community life, extending the tourism and leisure appeal of the area, and as a valuable form of generating economic impact to the

community. The Events Strategy is also aligned with the Draft Tourism Policy and

underpinned by the Operational Economic Development Strategy 2014-2016.

A dedicated Events Unit will deliver high quality, authentic event experiences that will

have broad regional appeal at the outset, and a longer term goal of attracting national

and international events. The creation of the Events Unit also represents an important catalyst that will encourage the future growth and development of Karratha’s tourism

industry, increase visitor numbers and economic spend and raise the profile of the City.

By virtue of its activities, the Events Unit will further encourage social cohesion of the

people of the Pilbara, help define a sense of place in towns and villages, connect communities and enhance their unique appeal. Authenticity, engagement and promotion

are all central to the success of the Events Unit.

6.6.3 Aspirations of Karratha Events Unit

Put City of Karratha on the map as a diverse events destination and showcase its

capability and expertise in delivering events that are “best in class”.

Develop a progressive, diverse and cohesive events industry, attracting significant additional visitors and revenue into the local economy.

Events will showcase Karratha and the wider Pilbara’s landscapes, character and

authentic experiences that will encourage increased visitation and attract further investment for tourism-related developments.

Events will also provide linkages between Karratha, Perth and other Australian States

thus providing further promotional opportunities via events media coverage.

Receive strong support from local, regional and State industry bodies thereby significantly enhancing its capabilities to develop and deliver authentic and

professionally coordinated events.

Create a culture of attending events.

6.6.4 Key Role of the Events Unit

The Events Unit will act as a provider, supporter, sponsor, bidder and facilitator of events

and in doing so, will consolidate the City’s position as the leader for coordinating, advocating, planning and delivering events in the region.


Final v1.4

52

Provider: The Events Unit will assume overriding responsibility for the delivery of the

Events Calendar throughout the City of Karratha and will engage with, and assist with the coordination of events that cross regional boundaries.

Supporter: The Events Unit will be committed to community engagement and will

work with community groups and organisations to ensure the events they deliver are safe, environmentally sustainable and have a positive impact on the community.

Sponsor: Bidding for the types of events that Events Unit will sponsor (through the

City of Karratha) will be events that showcase the region and bring increased

visitation.

Facilitator: The Events Unit will provide assistance to make events happen by taking

a coordinating, seed-funding, regulatory and advisory role through relationship

management.

The Unit will represent the first port-of-call for connecting parties involved in the events

industry together to ensure maximum success and will play a key role in attracting and

bidding for events eg AFL football games, Rodeo’s, Opera’s etc. At a minimum we would recommend efforts be directed towards securing one major and minor event per month

to ensure a full events calendar. One game from one round of the AFL for example has

the potential to attract a wide spectator audience and obtain national TV exposure for Karratha. One round of the A league has the potential to reap similar benefits. Both

would provide indigenous linkage opportunities.

6.6.5 Demand & Market Appeal

The City of Karratha is the largest regional town in the Pilbara, and is expected to grow to

around 41,000 by 2035. The City is currently home to approximately 27,000 residents

with 75% under 45 years and a growing number of young families. With the mining boom

bringing a multi-national mix to the region (predominantly from New Zealand the UK), the City of Karratha is committed to fostering harmony and encouraging full participation

of all communities in the social, economic and cultural fabric of the City. The Events Unit

will deliver against the following criteria:

Visitor focused

Increase visitor numbers

Generate spend

Drive the Pilbara brand

6.6.6 Types of Events that could be Attracted

Event venues range from community ovals to community halls/hubs, schools, sports clubs, the newly opened Leisureplex, redeveloped Karratha Country Club and other

private venues. The proposed Karratha Arts and Cultural Centre and the public open

space at The Quarter also provide opportunities to host events.

The diversity of events in the region includes art and cultural activities, sport and recreation, business expos, family festivals, music and fun runs. These events are likely

to have the following appeal:

High/broad mainstream appeal that can drive

overnight trips: music, food and wine, culture, spectator

sporting events.

Medium appeal that is likely to drive day-trip visitation:

garden/botanical, theatrical productions/shows, historical

events, art exhibitions,

agricultural shows.

Low mainstream appeal but high value niche appeal:

sporting events that require active

participation/competition

Events should meet the following criteria:

Promote social cohesion

Provide opportunities for unique experiences

Impart positive impacts on local community, charity or causes


Final v1.4

53

Encourage active participation and further personal interests

Offer a diversity of activities for the whole family/group

Promote other attractions / things to do in villages, towns and wider region



Item Description

Dedicated office

space

This could be incorporated within the Council offices for example.

Staff Locally employed (2-3 staff on start-up)Need to be expert and experienced in events

attraction and facilitation Basic salary (including superannuation, workers compensation, etc.)

Ongoing training

Website Website with online enquiry capabilities.

Offline marketing Brochure, flyers, inclusion in relevant travel magazines and publications.

Insurances Public liability insurance

Other operating costs

Utilities ie electricity, gas, water Telephone/mobile Accounting, legal, bank fees

Source: AEC


Item Description

Costs $300,000 per annum operations + $500,000 to seed and fund events for first 3 years. Costs include

salary, ICT and marketing materials. The position could operate out of Council or the Chamber of Commerce

Demand 25% of the potential increase in annual visitation commencing additional 500 in 2016 rising to approximately 7,500 within 10 years.

Revenues Revenues based on additional visitor expenditure.

Measures

(over 30 years)

PV Costs = $3.8M

PV Benefits = $67.2M IRR = N/A BCR = 17.5

2 FTEs (Event unit only)

Source: AEC

Based on and assumptions the opportunity will generate significant economic benefits for the community provided that additional visitors and expenditure can be attracted through

the staging and promotion of events.


The Event Unit should retain the position of overall leadership with respect to event

management, however it will need to work and form partnerships with the following

agencies to ensure a coordinated and consistent approach that facilitates best practice delivery:

City of Karratha

Tourism North West


Community groups

Sporting, cultural and arts groups

Industry groups

Event organisers


Final v1.4

54

6.7 Mining Hall of Fame

6.7.1 Vision

Experience the unique Engine Room of Australia and to serve as a gateway to the Pilbara’s resource industry by presenting its history, science and technology, promoting

appreciation for it, and providing learning opportunities to all visitors.

6.7.2 Rationale for Establishing a Mining Hall of Fame

The Pilbara is widely referred to as the “engine room” of Australia, with regional towns

such as Karratha, Newman and Port Hedland being recognised as important mining

centres during the height of the mining boom. Given the recent slowdown in mining-related construction activity, the importance of the resources sector in Western Australia

is undoubtedly still widely recognised and appreciated. Due to intellectual property rights

being protected by private companies such as Rio Tinto, Woodside Energy and BHP

Billiton, the public is largely unaware of the variety of resources mined in the Pilbara, the mineral extraction and processing procedures required to convert resources from a raw

to useable state and the economic contribution that these resources companies deliver to

the national economy. On this basis an opportunity therefore exists to develop a resources/mining themed attraction that would be of acute relevance to the City of

Karratha and offer an engaging, interpretative and educational value to locals and visitors

alike.

6.7.3 Market Appeal & Potential Product Offering

Market appeal for a Mining Hall of Fame encompasses a broad visitor base ranging from

local communities and school groups to domestic and international tourists. It is envisaged that the Mining Hall of Fame would be an interactive interpretation1

educational facility committed to increasing public awareness and knowledge about the

range of mineral resources available in the Pilbara. Tourists would come to the Mining Hall of Fame and experience the history, science, and technology of the resource base.

It’s the closest visitors will get without boots and a hard hat!

Some ideas for product offering include:

Engaging introductory film about the Pilbara and the important role that Karratha has played in the history, development and support of the West Australian resources

industry.

Exhibit hall where visitors can learn about the history, science and technology of the resources industry (encompassing a wide variety of minerals) through interactive

displays;

Control room simulators where visitors could have a go at driving a dump truck, driving a train, loading ore onto a ship, etc.;

Displays of machinery and equipment used for different mineral extraction and

processing processes;

Hands-on area / discovery centre to encourage learning and engagement;

Industrial Garden and Café featuring an outdoor display and children’s play area. It is

envisaged that the outdoor display area would feature relics of mining equipment

used in bygone eras. The children’s playground could incorporate themed functional, safe and practical play equipment that will extend their learning experience. Note:

1 Interpretation is more than signage and other written material about your products. It can be guided tours,

sound recordings, video displays, music and the general atmosphere within your attraction or tour. Visitor attractions are increasingly competing within a sophisticated market place, it is necessary to provide lively

interpretation that is relevant, targeted and engaging. Lively and sophisticated interpretation encourages repeat visits and good word of mouth.

The basic premise of the proposed thematic interpretation centre is that it will purposefully convey the story of Karratha and encourage visitors to explore the City as a destination, rather visiting individual attractions on a

disconnected basis. Sovereign Hill, City of Ballarat, Victoria represents a good example of how this has been successfully achieved.


Final v1.4

55

Special consideration should be given to the accessibility/touchability of the outdoor

displays, especially during the summer season due to risk of skin burns from touching metal objects and machinery. The café and playground should remained open year-

round however.

Gift/souvenir shop for geological related purchases;

Educational programmes, public programmes, special interest groups and special

events year round.

Function room that could accommodate meetings, conferences, mined-themed

weddings.

Alternative Product Offering

Rio Tinto has undertaken a costings and options feasibility study to develop an

interpretative railway museum – Pilbara Railway Centre - in Karratha for their existing collection of railing locomotives currently located of Dampier Highway (CODA, 2014). In

order to maximise the visitor experience and create a “day out” attraction, it would be

most beneficial to combine the proposed facilities and experience created through the Mining Hall of Fame with the Pilbara Railway Centre. However, we also consider there to

be scope to create each attraction as stand-alone tourism ventures, provided that cross-

selling opportunities are promoted in a mutually beneficial manner ie they should not compete with one another but rather be complementary with each other.


Given the potential opportunity to develop the Pilbara Railway Centre (pending a decision by Rio Tinto), there are essentially two sites for potential development:

1. Redevelopment and extension at the existing 6 Mile Museum, located off the Dampier

Highway between Karratha and Dampier; or

2. As identified by Rio Tinto, an alternative site could be the old Watercorp lay-down site.

If a decision is taken to develop the proposed Mining Hall of Fame as a separate

attraction to the Pilbara Railway Centre, then a site located either in Karratha or Dampier would be most suitable.

Woodside’s LNG Visitor Centre could continue to be promoted separately – or as a

combination ticket with the Mining Hall of Fame and/or Pilbara Railway Centre.


Indicative pricing for various admission prices/passes is given below.

Table 6.14 Indicative Admission Pricing

Item Price

Adult $20

Child $12

Family (two adults & four children) $63

Senior/Concession $12

Annual pass Adult $60

Child $30 Family $150

Group Booking 20% discount on admission when pre-booked

Events Based on room hire and catering

Source: AEC


Final v1.4

56



Item Description

Interpretation centre High specification interpretation centre

Technologically advanced interactive displays, lighting and audio-visual capabilities

Train and truck driving simulators

Shed Incorporating large mining equipment (trucks, dragline buckets, etc.)

Admissions desk, office

administration, etc.

This could double as booking office, administration office.

Visitor amenities. Start point for tours of the region

Café Café serving coffee and light refreshments but which could be extended further

to promote meetings and events.

Industrial garden Outdoor display of mining related machinery/equipment. Mining-themed multi-age playground

Car parking and landscaping

Car and coach parking facilities.

Indigenous planting and landscaping.

Staff Locally employed guides with geological knowledge and intimate knowledge of local culture and heritage.

Basic salary and retention bonus.

Ongoing training in customer service, knowledge, first aid, business acumen, etc.



Offline marketing Brochure, flyers, inclusion in relevant travel magazines and publications. Signage.

Insurances Public liability insurance.

Motor vehicle insurance.

Registration fees Tour operator membership fees.

Other operating costs Utilities ie electricity, gas, water. Repairs & maintenance.

Telephone/mobile. Third party reseller fees/commissions.

Accounting, legal, bank fees.

Source: AEC

Table 6.16 Indicative Construction Costs

Item Qty Unit Cost


Min Max Min Max

Interpretive Centre 1,000sqm $4,500 $5,000 1 1.55 $6,975,000 $7,750,000

Fitout 1,000sqm $1,250 $1,500 1 1.55 $1,937,500 $2,325,000

Shed 2,000sqm $900 $900 1 1.55 $2,790,000 $2,790,000

External Works 5,000sqm $80 $80 1 1.55 $620,000 $620,000

Car Parking 1,100sqm $120 $130 1 1.55 $204,600 $221,650

Total $12,527,100 $13,706,650

Note: Costing based on CODA (2014). Pilbara Railway Centre. Draft report prepared for Rio Tinto 31/07/2014. Source: AEC


Final v1.4

57


Item Description


Demand Assumes that 25% of existing visitors patronise the facility and that the facility attracts 50% of the potential increase in annual visitation commencing an additional 2,000 in 2016 rising to approximately 15,000 within 10 years.

Revenues Average facility spend $35 per person, $2.0M per annum. No additional revenue from external hire included.


Facility alone Facility with additional visitor spend

PV Costs = $23M PV Benefits = $17.5M BCR = 0.8

16 FTEs IRR = 0.7%

PV Costs = $42M PV Benefits = $116.4M BCR = 2.7

16 FTEs (Facility only) IRR = 41.6%

Source: AEC

Based on the capital costs the facility is unlikely to be viable by itself without significant

donations in capital. However, with the additional visitation to Karratha that may be generated by the facility, and associated visitor expenditure, the facility could be a

significant catalyst to boosting the tourism industry in Karratha.


City of Karratha


Department of Mines and Petroleum


Tourism North West


CSIRO Mineral Processing and Metal Production Sector, Division of Energy Technology

Pilbara Ports Authority

6.7.8 Opportunities for Private Sector Involvement

We envisage that the Mining Hall of Fame could be jointly funded through donations from resource-related private companies, individuals, and government agencies. Private sector

organisations could include:

Chamber of Minerals and Energy

Woodside Energy

Rio Tinto

Sino Iron

Other resource services companies


Final v1.4

58

References CODA (2014). Pilbara Railway Centre Karratha. Schematic Site Options (Draft 01).

Prepared for Rio Tinto.

Department of Parks and Wildlife (DPAW) (2015). Walk on the Wild Side with Ecoadventure Options. Accessed from: http://www.dpaw.wa.gov.au/news/media-

statements/minister-for-environment/item/1838-walk-on-the-wild-side-with-

ecoadventure-options

George Washington University (GWU) (2010). Adventure Tourism Market Report. The George Washington University School of Business, The Adventure Travel Trade

Association, and Xola Consulting.

National Trust for Historic Preservation (2011). What is Heritage Tourism? Accessed from: http://coloradopreservation.org/faqs/what-is-heritage-tourism/

State Heritage Office (2006). Heritage Tourism Strategy for Western Australia.

Tourism Research Australia (TRA) (2015). National and International Visitor Survey. Accessed from: http://www.traonline.com.au

Wikipedia (2015). Industrial Tourism. Accessed from:

https://en.wikipedia.org/wiki/Industrial_tourism

http://www.dpaw.wa.gov.au/news/media-statements/minister-for-environment/item/1838-walk-on-the-wild-side-with-ecoadventure-options



http://www.traonline.com.au/

https://en.wikipedia.org/wiki/Industrial_tourism


Final v1.4

59

Appendix A Cluster Mapping

Karratha

AEC (2015)


Final v1.4

60

Karratha – Insert

AEC (2015)


Final v1.4

61

Port Hedland

AEC (2015)


Final v1.4

62

Broome

AEC (2015)


Final v1.4

63

Appendix B Attractions with Guided Tours

Attraction/ Activity Entrance Fee

Natural

Millstream & Gregory Overnight Tour $440 (adult, 20% senior discount), $220 (child,

under 5 free)

Balla Balla Creek & Kangan Pool Overnight Tour $440 (adult, 20% senior discount), $220 (child, under 5 free)

Millstream Tour $220 (adult, 20% senior discount), $110 (child, under 5 free)

Gregory’s Gorge Tour $220 (adult, 20% senior discount), $110 (child,

under 5 free)

4WD Tag Along Overnight Tour $320 (adult, 20% senior discount), $160 (child,

under 5 free)

4WD Tag Along Tour $160 (adult, 20% senior discount), $80 (child, under 5 free)

Cultural

Murujuga Rock Art Tour $110 (adult, 20% senior discount), $55 (child,

under 7 free)

Dampier Archipelago / Burrup Peninsula /

Montebello Islands / Mackerel Islands, coastal/ beach destinations, e.g. fishing, diving, marine

life, kayaking, sunsets.

1 tour operator - $110 pp day cruise, $90 pp

sunset cruise, $60 pp resources cruise, $170 pp fishing charter, $30 Sam’s Island Tour, $120

whale watching, $240 pp overnight whale watching/ camping, $250 per day boat hire

Industry

Pilbara Resources Tour $50 adult, $40 concession, $20 child (7-16 years)

Source: Various


Final v1.4

64

Appendix C Cost Benefit Analysis

Overview

CBA is an analytical tool that identifies and attempts to quantify the relative costs and

benefits of a project and converts available data into manageable and comparable

information units. CBA uses a discounted cash flow (DCF) framework and applies this framework across the entire range of benefits and costs that may accrue as a result of a

project to a community or group of stakeholders. The strength of the method is that it

provides a framework for analysing complex and sometimes confusing data in a logical and consistent way.

CBA assesses the impact of a development by comparing the ‘with’ and ‘without’

scenarios, and is useful in assessing the net benefits accruing to society as a whole as a

result of a project. The CBA method considers the effect of real resource costs and benefits, and excludes, for example, taxes and subsidies, which are regarded as transfer

payments from one part of the economy to another.

A detailed overview of the steps undertaken in the CBA process is discussed below, and is consistent with accepted CBA methodologies as outlined in Campbell and Brown (2003),

Sinden and Thampapillai (1995), Australian Government Department of Finance and

Administration (DFA, 2006) and Queensland Government Department of Infrastructure and Planning (DIP, 2008).

Step 1: Define the Scope & Boundary

To enable a robust determination of the net benefits of undertaking a given project, it is

necessary to specify base case and alternative case scenarios. The base case scenario represents the ‘without project’ scenario and the alternative or ‘with project’ scenario

examines the impact with the project in place.

The base case (without) scenario is represented by line NB1 (bc) over time T1 to T2 in Figure F1 below. The investment in the project at time T1 is likely to generate a benefit,

which is represented by line NB2 (bd). Therefore the net benefit flowing from investment

in the project is identified by calculating the area (bcd) between NB1 and NB2.

Figure F1: With and Without Scenarios

a b c

d

T1 T2

Benefit

Time

NB2

NB1

Source: AEC

Step 2: Identify Costs & Benefits

A comprehensive quantitative specification of the benefits and costs included in the

evaluation and their various timings is required and includes a clear outline of all major

underlying assumptions. These impacts, both positive and negative, are then tabulated and where possible valued in dollar terms.


Final v1.4

65

Some impacts may not be quantifiable. Where this occurs the impacts and their

respective magnitudes will be examined qualitatively for consideration in the overall analysis.

Financing costs are not included in a CBA. As a method of project appraisal, CBA

examines a project’s profitability independently of the terms on which debt finance is arranged. This does not mean, however, that the cost of capital is not considered in CBA,

as the capital expenses are included in the year in which the transaction occurs, and the

discount rate (discussed below in Step 5) should be selected to provide a good indication

of the opportunity cost of funds, as determined by the capital market.

Step 3: Quantify & Value Costs and Benefits

CBA attempts to measure the value of all costs and benefits that are expected to result

from the activity in economic terms. It includes estimating costs and benefits that are

‘unpriced’ and not the subject of normal market transactions but which nevertheless entail the use of real resources. These attributes are referred to as ‘non-market’ goods or

impacts. In each of these cases, quantification of the effects in money terms is an

important part of the evaluation.

However, projects frequently have non-market impacts that are difficult to quantify. Where

the impact does not have a readily identifiable dollar value, proxies and other measures

should be developed as these issues represent real costs and benefits. Some commonly utilised techniques for valuing non-market impacts are outlined in Table F1.

Table F1: Valuation Techniques

Type of Valuation

Valuation Technique

Description

Stated Preference Valuation

Contingent Valuation (CVM)

This technique uses a simulated or hypothetical market to directly assess the willingness to pay (WTP) or the willingness to accept compensation (WTAC) for a particular environmental outcome. The survey-based approach can be

used to measure both use and non-use values, and is generally applied in assessing a dollar value to a change in or preservation of environmental quality.

Choice Modelling

(CM)

Similar to CVM, choice modelling (CM) utilises stated preferences of respondents to rank or rate different scenarios. Respondents must choose

between specific options presented to them. CM can produce independent values for the specific attributes of an environmental program.

Revealed Preference Valuation

(surrogate market based)

Hedonic Pricing

Hedonic pricing employs the use of surrogate markets to value environmental quality. Property and labour markets are widely used for this technique.

Travel Cost This valuation technique is based on the assumption that demand for an asset is revealed by a willingness to spend money and time travelling to the

particular site. It is also assumed that expenditure is higher for travel to more valuable sites. This methodology is best used in assessing amenity or recreational value.

Revealed Preference

Valuation (market based)

Factor of Production

The factor of production technique is limited to assets that are used in the production process of goods and services within the market, as it uses the

direct value in production as an indicator of the environmental worth.

Producer/

Consumer surplus

This technique is a calculation of both producer and consumer surplus.

Defensive Expenditure

This valuation technique is based on expenditure that is made on behalf of the public or specific industry in prevention or counteraction of environmental damage (such as pollution).

Source: AEC

One commonly used method of approximating values for non-market impacts is ‘benefit

transfer’. Benefit transfer (BT) means taking already calculated values from previously

conducted studies and applying them to different study sites and situations. In light of the significant costs and technical skills needed in using the methodologies outlined in the

table above, for many policy makers utilising BT techniques can provide an adequate

solution.

Context is extremely important when deciding which values to transfer and from where.

Factors such as population, number of households, and regional characteristics should be


Final v1.4

66

considered when undertaking benefit transfer. For example, as population density

increases over time, individual households may value nearby open space and parks more highly. Other factors to be considered include, depending on the location of the original

study, utilising foreign exchange rates, demographic data, and respective inflation rates.

Benefit transfer should only be regarded as an approximation. Transferring values from similar regions with similar markets is important, and results can be misleading if values

are transferred between countries that have starkly different economies (for example a

benefit transfer from the Solomon Islands to Vancouver would likely have only limited

applicability). However, sometimes only an indicative value for environmental assets is all that is required.

Step 4: Tabulate Annual Costs & Benefits

All identified and quantified benefits and costs are tabulated to identify where and how

often they occur. Tabulation provides an easy method for checking that all the issues and outcomes identified have been addressed and provides a picture of the flow of costs,

benefits and their sources.

Step 5: Calculate the Net Benefit in Dollar Terms

As costs and benefits are specified over time it is necessary to reduce the stream of

benefits and costs to present values. The present value concept is based on the time

value of money – the idea that a dollar received today is worth more than a dollar to be

received in the future. The present value of a cash flow is the equivalent value of the future cashflow should the entire cashflow be received today. The time value of money is

determined by the given discount rate to enable the comparison of options by a common

measure.

The selection of appropriate discount rates is of particular importance because they apply

to much of the decision criteria and consequently the interpretation of results. The higher

the discount rate, the less weight or importance is placed on future cash flows.

The choice of discount rates should reflect the weighted average cost of capital (WACC).

For this analysis, a base discount rate of 10.0% has been used to represent the minimum

commercial rate of return. As all values used in the CBA are in real terms, the discount rate does not incorporate inflation (i.e., it is a real discount rate, as opposed to a nominal

discount rate).

The formula for determining the present value is:

n

n

r

FVPV

)1(

Where:

PV = present value today

FV = future value n periods from now

r = discount rate per period

n = number of periods

Extending this to a series of cash flows the present value is calculated as:

nn

r

FV

r

FV

r

FVPV

)1()1()1( 22

11

Once the stream of costs and benefits have been reduced to their present values the Net Present Value (NPV) can be calculated as the difference between the present value of

benefits and present value of costs. If the present value of benefits is greater than the

present value of costs then the option or project would have a net economic benefit.

In addition to the NPV, the internal rate of return (IRR) and benefit-cost ratio (BCR) can

provide useful information regarding the attractiveness of a project. The IRR provides an

estimate of the discount rate at which the NPV of the project equals zero, i.e., it

represents the maximum WACC at which the project would be deemed desirable.


Final v1.4

67

However, in terms of whether a project is considered desirable or not, the IRR and BCR

will always return the same result as the NPV decision criterion.

Step 6: Senstivity Analysis

Sensitivity analysis allows for the testing of the key assumptions and the identification of

the critical variables within the analysis to gain greater insight into the drivers to the case

being examined.

A conservative approach has been used throughout the analyses. Inputs and assumptions

have been set at the lower bound so as not to overstate the anticipated financial benefits.

Despite this cautionary approach, it is important to recognise modelled outputs remain sensitive to changes in the inputs and assumptions used and to understand the potential

impacts of those sensitivities on project financial viability.

A series of Monte Carlo analyses has been conducted in order to test the sensitivity of the

model outputs to changes in key variables. Monte Carlo simulation is a computerised technique that provides decision-makers with a range of possible outcomes and the

probabilities they will occur for any choice of action. Monte Carlo simulation works by

building models of possible results by substituting a range of values—the probability distribution—for any factor that has inherent uncertainty. It then calculates results over

and over, each time using a different set of random values from the probability functions.

The outputs from Monte Carlo simulation are distributions of possible outcome values.

During a Monte Carlo simulation, values are sampled at random from the input

probability distributions. Each set of samples is called an iteration, and the resulting

outcome from that sample is recorded. Monte Carlo simulation does this hundreds or thousands of times, and the result is a probability distribution of possible outcomes. In

this way, Monte Carlo simulation provides a comprehensive view of what may happen. It

describes what could happen and how likely it is to happen.


Final v1.4

68

PAGE LEFT BLANK

City of Karratha - pilbararesearchonline.com.au report identifies the most suitable tourism products...

Documents

Transcript of City of Karratha - pilbararesearchonline.com.au report identifies the most suitable tourism products...