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

Commercial-in-Confidence
KI Traveller’s Levy
Impact Assessment
Visitor dissatisfaction with current road standards
The corollary of the high level of road usage by tourists is the importance of road quality to
the KI tourism experience. There is evidence that the value of the tourism experience is
diminished by the current state of the roads, with a large proportion of visitors identifying road
condition as a detractor from the tourism experience. Indeed, responses from visitors
leaving the Island suggest that road and road infrastructure are:
the number one source of dissatisfaction with their visit to Island; and
the number one suggested key improvement.
Visitor responses with regard to improved road standards
Visitor responses from the Kangaroo Island Traveller Survey provide insights into how
visitation to the Island might respond to a levy if it was associated with improved or bettermaintained
roads. Noting that at this stage the findings reflect the responses of 330 surveys
fielded over a relatively short space of time (the latter suggesting any seasonal differences in
visitor perceptions may not be captured), several key results emerge:
around 80% of visitors indicate that a modest Traveller’s Levy would not impact on their
decision to visit the Island;
around 20% suggest a modest levy coupled with improved/better maintained roads
would increase their likelihood of re-visiting; and
around 30% suggest a modest levy coupled with improved/better maintained roads
would increase their likelihood of recommending the Island to others.
4.5.3.1 MODELLING THE IMPACTS
Overall, there is a genuine likelihood that the improvement in tourism infrastructure that
accompanies a Traveller’s Levy may – coupled with adequate promotion and marketing – in
fact partially or wholly offset the price impact of a levy. This may be through increased revisitation
or – in light of the fact that for many, KI is a one-off experience – through positive
reputation impacts. Indeed if the improvement in infrastructure is perceived sufficiently
important to tourists’ decisions, it may in fact increase visitation. In this case, the Traveller’s
Levy scenario results in increased visitation and hence not only greater revenues for Council,
but greater tourism income for the Island as well.
Determining the magnitude of such impacts is hampered by limited quantitative information
on how visitation might respond to improvement in the quality of their tourism experience.
Though data from the Traveller Survey is instructive, it is insufficient to reliably undertake
such an exercise. The approach taken here therefore is largely illustrative, with the impacts
of an increase in visitation equivalent to the average decrease under Option 1 modelled (on
average, 2.8%). This is not to imply that a 2.8% increase is the likely outcome, but rather to
illustrate what the impacts of a change of this magnitude would be.
As Table 4.11 shows, this scenario results in an additional 4,300 visits annually, generating
$1.45 million in additional tourism expenditure, while at the same time raising greater levels
of revenue over time.
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