KI Traveller's Levy Economic Impact Assessment - Kangaroo Island ...

Commercial-in-Confidence
KI Traveller’s Levy
Impact Assessment
TABLE OF CONTENTS
EXECUTIVE SUMMARY ........................................................................................................ 1
1. Introduction and background ..................................................................................... 3
1.1 KI regional profile ................................................................................................................. 4
1.2 KI tourism industry profile .................................................................................................... 6
1.3 Why consider a Traveller’s Levy for KI ............................................................................10
1.4 Case studies and examples ...............................................................................................11
2. The economics of a Traveller’s Levy ....................................................................... 15
2.1 Efficient design criteria .......................................................................................................15
2.2 Efficient taxes and the elasticity of demand .......................................................................15
2.3 Principles of efficient cost recovery....................................................................................16
3. Design considerations .............................................................................................. 18
3.1 The elasticity of demand for tourism: a literature review ...................................................18
3.2 Design specifications .........................................................................................................21
3.3 Conclusions ........................................................................................................................23
4. Modelling and analysis ............................................................................................. 24
4.1 Establishing the revenue target .........................................................................................24
4.2 Model framework and parameters .....................................................................................24
4.3 Options modelled ...............................................................................................................27
4.4 Model results ......................................................................................................................27
4.5 Sensitivity analysis .............................................................................................................30
4.6 Discussion and implications ...............................................................................................33
5. Administration and implementation ......................................................................... 36
5.1 How would a levy be charged and collected ....................................................................36
5.2 Assessing the costs of administration and implementation ...............................................37
5.3 The feasibility of exempting locals .....................................................................................38
5.4 Potential impediments and barriers ...................................................................................38
5.5 Key factors in successsful introduction ..............................................................................39
6. Summary and conclusions ....................................................................................... 40
7. References ................................................................................................................. 42
Appendix A: KI Traveller Survey ....................................................................................... 43
Appendix B: List of consultations ..................................................................................... 44
Appendix C: Key consultation discussion points ............................................................ 45
Appendix D: Comparing TRA and TOMM data ................................................................. 47