6 minute read
CIAA Voice: Let’s keep it level
The Victorian Government’s proposal to introduce free camping in parks may sound like a generous, family-friendly initiative, designed to ease the burden of cost-of-living pressures. However, while the sentiment may sound altruistic, this move could have serious flow-on effects for the caravan park industry and broader regional economies across the state.
Without sounding cynical, it is hard not to see this type of move by governments as a grab for votes. In reality, we are looking at a scenario where the government is intervening in a market that is already mature and under incredible pressure due to regulation and rising costs.
Victoria’s caravan park industry is a critical part of the state’s tourism infrastructure, contributing significantly to both regional economies and employment. Nationally, the caravan and camping sector generates over $27 billion annually, and it continues to be a major contributor to the economy, with 60 million visitor nights recorded in 2023 alone. Victoria accounts for a significant proportion of these figures, with regional caravan parks playing a pivotal role in attracting both domestic and international visitors.
And it’s not just about the dollars. Caravan parks provide substantial employment opportunities in regional communities. These are real jobs for real people – park managers, maintenance staff, local cleaners, and service providers – many of whom depend on a steady flow of visitors to stay afloat.
The government’s plan to eliminate fees from 131 bookable campsites across state parks may seem like an innocuous step toward encouraging outdoor tourism, but it could create a significant imbalance in the market. Private caravan park operators, who already contend with rising operational costs –ranging from wage increases to skyrocketing insurance premiums – are now forced to compete with a state-subsidised free camping alternative. This creates an unfair playing field where private operators, who must invest in amenities, staff, and infrastructure to maintain competitive standards, as well as contend with a growing number of regulatory hurdles, are at a disadvantage.
The concept of competitive neutrality is well understood by the Victorian Government – the very premise of it, however, is that a financial transaction needs to occur. By virtue of removing the cost of camping, in effect, provides the government carte blanche mandate to avoid cost attribution and public benefit analysis in a market where the government in many cases is the regulator (and can impose double standards on its assets as opposed to those in the commercial market) as well as a landlord (with crippling conditions which discourage investment by commercial operators).
Don’t get me wrong – the underlying concept of providing access to Victorians (as well as interstate and international tourists) at a more competitive price is welcome. The health and relationship benefits of outdoor camping are well known, and national parks provide approximately 17 percent of all caravanning and camping nights in the state. They are important to the product mix for consumers wanting an outdoor experience, which the industry embraces. It is also acknowledged by virtue of their more primitive amenities and services that there can be a price differential for state parks versus the commercial operators depending upon the location. The caravan and camping industry is the lifeblood of regional economies, especially in areas where tourism may be the primary or sole economic driver. Many parks are located near attractions and activities that create additional spending in regional economies, supporting local shops, cafes, and recreational businesses. If visitors bypass private parks for free camping options, the economic chain reaction will be felt across a wide swathe of local businesses, further threatening regional sustainability. To quantify the magnitude of this, the average caravan park visitor spends around $180 per night on local products and experiences during their stay. By drawing visitors away from private parks and into free state park campsites, this initiative risks depriving small regional towns of vital tourism revenue.
It’s not just about the money either – caravan parks are deeply embedded in the social fabric of these communities. They often host local events, sponsor regional activities, and serve as meeting points for travellers and locals alike. These parks invest back into their communities, employing locals and buying from local suppliers. Their economic footprint extends far beyond the park’s boundaries, making them integral to the viability of many regional towns.
If state governments across Australia begin offering free camping en masse, it will likely stifle the growth of the private sector. Operators who were once able to invest in new facilities, upgrade their parks, and create more attractive offerings will be forced to scale back, reducing the overall quality and appeal of the industry. This would also lead to fewer jobs, lower investment in regional infrastructure, and, ultimately, fewer options for travellers.
While the Victorian Government’s plan to provide free camping may be well-intentioned, its broader impact on the caravan park industry and regional economies must be carefully considered. Nationally, the caravan and camping industry has seen remarkable growth over the past decade, driven by a desire for more affordable, flexible, and local travel options. During the pandemic, many Australians turned to caravan and camping holidays as a safe and socially distanced way to travel, and this trend has continued post-pandemic.
Rather than only offering free camping in state parks, the Victorian Government could consider other ways to support families while ensuring the continued viability of the private sector. One solution could be to provide subsidies or rebates to low-income families to make camping in caravan parks more affordable, maintaining fair competition. Another option is for the government to invest similar amounts, as would be lost in revenue, into partnerships with private operators to upgrade existing facilities, ensuring that both public and private parks can offer high-quality experiences without distorting the market.
Additionally, targeted government investment in regional tourism infrastructure would help enhance the overall visitor experience, benefiting both public and private camping sites. Programs that promote sustainable tourism, improve regional connectivity, and develop new attractions could encourage more people to travel and spend in regional areas, providing a win-win for both families and local economies.
A level playing field is essential to ensure the sustainability of this important sector. As we move forward, we must focus on policies that support families without undermining the vital contributions of commercial operations to Victoria’s tourism economy. It’s time for a more balanced approach that benefits everyone – families, businesses, and communities alike.
By working together, we can ensure that the entire caravanning and camping industry continues to thrive, providing affordable, enjoyable, and high-quality holiday options for Victorians for generations to come.
By Stuart Lamont, CEO, Caravan Industry Association of Australia
