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Marshall promises “ambitious” tourism splurge following hotel warning

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Premier Steven Marshall says he is willing to match a “huge ambition” from tourism groups to grow South Australia’s visitor economy, following industry criticism that Adelaide’s luxury hotel market is at risk of oversupply.

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InDaily reported yesterday that the Government intended to grow the state’s visitor economy by $12.8 billion by 2030 – up from $7.2 billion currently – with 16,000 new tourism jobs to be created as part of a Government-facilitated 2030 Visitor Economy Sector Plan.

The plan follows warnings from the Australian Hotels Association (AHA) and SA Tourism Industry Council that Adelaide’s rapidly expanding hotel market could lead to a “glut” of empty rooms unless the State Government boosted its tourism spending.

Launching the plan this morning, Marshall said the Government was “absolutely” aware that it had to invest in the sector to achieve the targets.

But he wouldn’t reveal how much the Government would spend or when a funding commitment might be made, instead telling reporters that the Government would respond to industry demands in a “growth state agenda” to be released later this year.

“The starting point is having a strategy – an industry-led, government facilitated strategy – to grow the size of our economy,” he said.

“We absolutely accept what is in this document, and that is a huge ambition but it is one we will match, it is one that we will grow.

“Of course we’re going to be making an investment in that.”

Marshall brushed off comments that Adelaide’s hotel industry was at risk of becoming oversaturated, saying there was a “new confidence” being shown by the industry towards investment in the city.

The AHA told InDaily yesterday that up to 4000 new hotel rooms could be built in Adelaide over the next five years, with 21 luxury hotel developments either confirmed or on the cards.

That figure would grow Adelaide’s hotel supply by about 20 per cent by 2021 – a figure the AHA warned could lead to market saturation in a city that already struggles to fill hotel rooms year-round.

“They’re (hotel companies) now bringing their money to South Australia to grow the product that we have here in our state,” Marshall said.

“What we know is that people want to see an improvement in product, but also an improvement in marketing.

“We’ve already seen that recently with our support for bringing the Adelaide International (tennis competition) to Adelaide.”

Palumbo managing director Daniel Palumbo, whose company is currently building the five-star 257-room Sofitel Hotel on Currie Street, said he was not concerned that the Adelaide hotel market would become saturated.

“It’s one of those horse and cart things,” he said.

“If we look at the plan that just came out from the Adelaide Airport as well, their numbers really echo the growth that the Government is saying.

“I think that actually gives people like me the confidence.”

Palumbo said hotel companies assessed the viability of projects on merit, and undertook rigorous modelling before deciding to invest in new cities.

“If the owners of that construction have done their numbers I think they would have done them correctly and there will be enough room for everyone in the industry,” he said.

But Labor is not convinced, with Shadow Trade, Tourism and Investment Minister Zoe Bettison saying she was concerned about a risk of hotel room oversupply in Adelaide.

She also criticised the Government for reducing the SA Tourism Commission’s marketing budget “to a five-year low” and cutting the overall tourism budget by $12 million over four years.

“The private accommodation sector has decided to invest in South Australian tourism, and the Marshall Liberal Government has turned its back on them,” she said.

“The State Government needs to reverse its cuts to tourism and increase our marketing to the world.”

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