September 30, 2021
Attracting quality tourism investment is a key goal for many local government areas (LGAs). It is especially important for rural and regional areas where other economic sectors may be in decline and many of these LGAs spend significant time and effort to ensure that they are tourism ‘investment-ready’.
But what are the council and community-related factors influencing investment-readiness of LGAs and how can they be measured in the form of a Local Investment Readiness Index (LIRI)?
An effective overall index
An effective overall index plus the details of the underlying drivers of the index will allow tourism investors to compare regions of interest, whilst giving local governments a benchmarking tool to help identify individual strengths and opportunities for improvement.
Research to uncover these drivers was conducted in Australia as part of a larger government-funded project into the development of an integrated data platform - VisScope. The methodology involved a process of needs specification, data availability mapping and indicator relevance testing with stakeholders, including tourism investors, council associations and tourism data experts.
The key drivers
The key drivers that have been identified are:
- Concierge Service Available
- Tourism a Council Priority
- Destination Action Plan Available
- Plan for Tourism Region Available
- Community Engagement
- Local Satisfaction (Consultation)
- Influential non-permanent residents
An index was generated by applying the core drivers and research insights to a Bayesian ‘learning system’ process.
In applying this scoring process to 9 test LGA’s in Australia (6 in Victoria and 3 in Queensland), almost all were well aligned in terms of tourism planning. However, the notable differences were in the way the community is being engaged, with the results showing vast differences in engagement quality and satisfaction levels.
With each new application the system will ‘learn’ more about the key driver inter-relationships and how the core indicators should be modified or extended as circumstances change.
For investors, these indicators provide an insight into potential ‘red flags’ that should be investigated further. This does not mean that there is necessarily a problem but that there is a higher risk that a problem could arise.
For LGAs on the other hand, the indicators provide a benchmarking tool that can help with the monitoring of tourism investment-readiness and identify opportunities for increased competitiveness.
Applying the LIRI framework
The LIRI framework, or a more detailed 22-component analysis, can now be applied across Australia by councils that wish to have the index and its underlying data and insights available to assist in attracting quality tourism investment.