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Mount Wellington Cable Car – Economic Impact

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The Economic Impact document for the Mount Wellington Cable Car (MWCC) was prepared in 2016, and has only now been made available to the public. The Economic Impact document has many key figures redacted. The MWCC planning application with Hobart Council is currently open for a period of public consultation until 22 June. You can […]

The Economic Impact document for the Mount Wellington Cable Car (MWCC) was prepared in 2016, and has only now been made available to the public. The Economic Impact document has many key figures redacted.

The MWCC planning application with Hobart Council is currently open for a period of public consultation until 22 June. You can learn how to make a representation or simply use the online form

Executive Summary

There are several approaches to measuring the impact of major projects or business activities, which are
based on the contributions of specific sectors to the overall economy. Of the various approaches,
multipliers that measure the direct and indirect effects of additional expenditure on the broader economy,
based on published input-output tables, are appropriate for a study of a greenfield tourism project such as
the Mount Wellington Cable Car. While this is generally the best approach, there are a number of limitations
— such as the risk of overstating economic benefits and the impact of imported goods and services that
offset these benefits — that must be recognised in quantitative analysis.

In the context of these limitations, this study applies economic multipliers with appropriate degrees of
caution, and in some instances, a conservative approach to modelling parameters. The multipliers used in
this study are generally consistent with the lower end of estimates contained in a number of studies of the
economic impact of tourism in Tasmania and nationally, which suggest that, for every new dollar earned
directly in tourism, between 75c and 90c is also generated in other parts of the economy.

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Development of the MWCC will occur at a time of strong growth in the Tasmanian tourism sector, with
visitor numbers growing by 8 per cent per annum, the length of visits increasing and 11 per cent growth in
visitor spending.

However, the Tasmanian economy is very diverse, more so than is often recognised, and there are several
sectors that are in decline. Overall, Tasmania’s economy has entered a period of sustained, but modest,
growth over the past three years which is largely driven by the private sector instead of the public sector.
However, this economic performance is yet to translate into consistent employment growth.
In a longer term perspective, structural changes mean that there is a mismatch between the skills and
demographics of workers displaced from declining sectors, such as manufacturing, and those of growth
industries, such as hospitality and tourism.

As a consequence, tourism-focused projects such as the MWCC — particularly if they are able to induce
additional demand or longer stays — have the potential to grow local employment and improve youth
unemployment, although they are unlikely to address the state’s broader structural unemployment issues.

To analyse MWCC’s economic impact, this study separates the respective spending and multiplier effects
for the following key markets:
 local patrons riding to the pinnacle on the cable car
 free and independent travellers
 patrons who purchase tickets sold by MWCC through wholesale package channels
 mountain bike (MTB) enthusiasts
 other visitors (local, interstate and international) taking themselves to the Mount Wellington pinnacle,
mostly driving.

Instead of projecting future growth rates, three scenarios are presented in this report: an estimate for
year 1 — reflecting industry experience that demand is higher in that year due to a novelty factor,
particularly amongst local residents — and a low case and a high case that are both based on estimates for
a standard operating year.

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With this approach, the study implicitly assumes that a steady state exists after two to three years and three
key variables are constant — MWCC’s patronage, the number of visitors to southern Tasmania and MWCC’s
capture of these visitors. This assumption is likely to be highly conservative.

Read the full Economic Impact document.

See all the Planning Applications documents.


TASMANIAN CONSERVATION TRUST: ‘True Visual Impact’ of Cable Car.

Source: Tasmanian Times https://www.tasmaniantimes.com/2021/05/mount-wellington-cable-car-economic-impact/#utm_source=rss&utm_medium=rss&utm_campaign=mount-wellington-cable-car-economic-impact

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Finance Advice 2021