Investment and Financing

The ability of businesses to source and secure adequate funding and investment is essential to the long-term sustainability of a business in implementing their strategic direction. Businesses require investment in new developments, redevelopment and refreshment of tourism products, services and facilities to ensure that a destination and individual businesses can maintain and enhance market appeal and provide exceptional tourism experiences. Investment in tourism can be generated either from investment by existing business owners into expanding / developing their operations, from new investors (including external funding and loans) or from grant funding programs.

 

Whether it is investment by existing businesses or new investors, investment decisions need a strong business case to ensure investor confidence. Investment and financing research has shown that:

• There are a wide range of investment and funding models that can be adopted by a business. Identifying the right model for a business depends on the business’s stage of development, financing needs and the characteristics investment opportunity.
• Attracting investment or finance needs to be based on a clearly demonstrated positive return on investment (ROI) forecast based on visitor market research, projected market growth and supply / demand comparisons.
• Third party consultants can assist businesses with identifying an appropriate funding model and undertaking pre-feasibility and ROI assessments for business opportunities. For more information on assessing the feasibility of a tourism project, please visit the section on ‘Product Development’.
• Strong community and industry support for potential investment opportunities should be sought before promoting ideas to the investment community;
• Investors may choose a particular opportunity based on visitor demand, destination image and branding, stakeholder support for tourism, planning and regulatory environment and supporting infrastructure within and close to the destination when developing a project concept.
• Business loans are also an option to source the required funds for tourism development. The Australian Government has developed a Business Loan Finder to assist small businesses compare business loans and identify credit options;
• Regional, State and National funding and grant initiatives offered for individual tourism businesses can be an alternative source of finance for a business eg. the Australian Government’s TQUAL program. As part of the actions arising from the ‘National Long-Term Tourism Strategy’ in Australia, the Investment and Regulatory Reform Working Group have documented the funding and investment assistance programs available in Australia for tourism development.

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