06/05/24
Economic Contribution of the Hotel Industry 2024
In 2016 the AHA|SA commissioned the SA Centre for Economic Studies (SACES) at The University of Adelaide to analyse and prepare a report on the “Economic Contribution of the Hotel Industry in South Australia.” The study was led by the then Executive Director of the Centre Associate Professor Michael O’Neil. The findings of that report were significant in promoting the interests and concerns of the hotel industry to government and others. A summary of the findings of the earlier study are provided below, for your information.
Since the 2016 report the industry has continued to experience on-going competitive challenges, including the impacts of COVID19, and, like other sectors of the economy, is currently experiencing the various impacts of higher cost-of-living.
The AHA|SA has determined that the earlier report on the scale, state and the economic contribution of the industry to the South Australia economy needs to be updated to provide a platform/focus to address the current and future development of the industry. Accordingly, we are seeking your assistance to complete a survey in order report on and model the current state of play of the SA hotel industry.
This research will take a snapshot of the hotel industry and is vital in getting information to communicate to the State Government the critical role hotels play in the economy in SA. As you would well know this contribution includes employment and taxation as well as critical support to the live music, suppliers, and food and beverage companies.
The survey is the same format used in the 2016 study. It will enable comparisons with the earlier survey and a detailed assessment of the current state of play in 2024. To get the best information all AHA|SA members are urged to complete the survey.
Confidentiality: the results will be collated and only aggregated data will be referred to in the final report. No information which could be used to identify individual businesses will be provided to any person or any other organisation. Members of the AHA|SA will be provided with the results of the study.
2016 Economic Contribution of the Hotel Industry
The single research question in 2016 was:
“to quantify ‘the value’ of the Hotel Industry in all its forms in South Australia”.
Summary of survey findings
Employment
- there were 26,250 persons employed in the South Australian hotel industry in 2015;
- employment in metropolitan venues totalled 15,750 persons (60 per cent) and non-metropolitan 10,500 (40 per cent);
- solely in the hotel (“the local pub”) sector 24 per cent were permanent full-time or part-time employees and 75 per cent were casual;
- add in venues that principally offer accommodation then 39 per cent were permanent full-time or part-time employees, 61 per cent were casuals;
- average per venue employment in the hotel sector was 37 employees in metropolitan hotels, 31 in non-metropolitan and 33.2 overall;
Income and expenses
- total income was $3.63 billion, 46 per cent from the sale of liquor, 14 per cent accommodation, 17 per cent gaming revenue and 19 per cent from meals and food sales;
- metropolitan venues accounted for 65 per cent of income; non-metropolitan 35 per cent;
- the hotel industry paid $958 million in wages and allowances;
- purchases by the hotel industry were $1.23 billion, principally for liquor and beverages and foodstuffs for meals;
- the hotel industry paid $710 million in operating overheads.
Tax, capital expenditures and profits
- taxes, levy, rates and fees payments totalled $445 million;
- in the past five years South Australian hotels reported $664 million in capital expenditure, $503m (76 per cent) on venues in the metropolitan area and $161 million (24 per cent) on nonmetropolitan venues;
- South Australian hotels returned $288 million in profits.
Broader economic impacts (I-O analysis)
Direct impacts of the hotel sector
- directly generated $1,468 million Gross State Product;
- directly employed 16,465 on a full-time equivalent basis.
Flow-on production impacts and consumption impacts
- the combined direct, production and household spending impacts of the hotel sector are estimated at $4,025 million in Gross State Product and 33,120 full-time equivalent positions;
- total tax gambling liability in 2014/15 was $258.6 million which is equivalent to 5.9 per cent of total South Australian state government revenue for 2014/15.