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Hunter Valley Wine Country a Market Overview

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Hunter Valley Wine Country a Market Overview 2004 Hunter Valley Wine Country A Market Overview HVS International – Sydney, Australia HVS INTERNATIONAL SYDNEY Level 1, 5 Elizabeth Street Sydney NSW 2000 Australia Tel: (61) 02 - 9233 1125 Fax: (61) 02 – 9233 1147 Email: [email protected] Web: www.hvsinternational.com September 2004 Sydney Singapore Hong Kong London Madrid New Delhi São Paulo Buenos Aires New York San Francisco Boulder Denver Miami Dallas Chicago Washington, D.C. Weston, CT Phoenix Mt. Lakes, NJ Vancouver Toronto HVS International - Sydney Hunter Valley Wine Country- A Market Overview 1 The Hunter Region is a sizeable area located ninety minutes’ drive from THE HUNTER REGION Sydney and renown for being the oldest vineyard region of Australia. It extends from Cessnock to the south, Barrington Tops to the North and Merriwa to the West. It also incorporates seven distinctive tourism sub- regions, each marketed separately: Barrington Tops, Lake Macquarie, Hunter River Country, Newcastle, Singleton, Hunter Valley Wine Country and Upper Hunter Country. Hunter Region The majority of visitors to the wider Hunter Region, including Visitation Newcastle, are domestic, with only 19.5% originating from international markets. In 2003, the Hunter Region received over 5.3 million domestic visitor nights, the majority of which originated from Sydney. The average length of stay was 2.9 nights, which confirms the Hunter Valley as a relatively short-trip destination. In 2003, approximately 24% of domestic visitor nights in the Hunter Valley were spent in hotel, motels or serviced apartments, up four percentage points compared with the year 2000. However, the share of domestic visitor nights spent in transient accommodation in the Hunter Valley is well below both Sydney and Australia ratio of 32.3% and 32.6% respectively. For the year ending December 2003, over 116.5 million international visitors nights were spent in Australia, of which 36% were spent in NSW. Of these visitors to NSW, 3% or 1.3 million visitor nights were spent in the Hunter Region. The largest inbound markets to the Hunter Region are the United Kingdom and Other Europe, each with 21% of the total market, followed by New Zealand, Germany and the USA. These results correlate with the established enthusiasm with wine for the people from those countries. Noteworthy, in 2003, a mere 5% of international visitor nights in the Hunter Valley were spent in hotel, motels or serviced apartments, down three percentage points compared with the year 2001. The share of inbound visitor nights spent in transient accommodation in the Hunter Valley is well below both Sydney and Australia ratio of 16.5%. However, it should be recognised that the Hunter Valley comprises a significant number of Bed & Breakfast and guesthouses, which are not included in the Hotel category. Purpose of Visit The main purpose of visit to the region is for holiday or leisure. Visiting friends and relatives is also an important market, followed by the business segment, which generated 11% of the total visitor nights for the year 2002. HVS International - Sydney Hunter Valley Wine Country- A Market Overview 2 Cessnock is the commercial centre of the Hunter Valley Wine Country CESSNOCK AND THE and is located 45 minutes’ drive from Newcastle, some 120 kilometres HUNTER VALLEY WINE north east of Sydney. Cessnock is situated at the junction of Wollombi COUNTRY and Maitland Road and is easily accessible via the F3. It has a small airport and is just 20 minutes from Maitland train station. During the 1970s, the labour force of the Lower Hunter Region was characterised by a significant proportion of jobs in mining, manufacturing, power generation and construction industries. Following a major restructuring period, there was an increase in tertiary and service industries such as health services, tourism and accommodation and retail trade. These increases led to a significant increase in the tertiary sector from 67% to 82%, whilst secondary industry employment fell from 23% to 12%, of total jobs. Overall, the sectors of mining, manufacturing, agriculture wholesale and retail, wine and tourism dominate the region’s industry structure, with the district particularly supporting tourism, wine, mining and agricultural businesses. The Cessnock district is anticipated to significantly benefit from the development of the Hunter Economic Zone (HEZ), which is expected to enhance the social and economic climate in the Hunter region. HEZ is a large site of 900 hectares of industrial land surrounded by 2,300 hectares of environmental buffer, located in the lower Hunter Valley, near the town of Kurri Kurri. HEZ is seen as a 20 to 30 year development, potentially generating 600 jobs per year throughout the period, with the first stage of industrial lots due for completion in 2006. Cessnock is well placed as a “service hub” due to its close proximity. Despite its importance as an administrative, commercial and residential centre, Cessnock is best known for its proximity to the Lower Hunter Valley - one of the most important wine-growing region of NSW. Population Cessnock has experienced a marginal growth in population over the last census period averaging 0.3% every year compared to the Hunter region increasing at 0.9%. Demographic trends in the region are moving towards middle and elderly age groups, with the median age of the population shifting from 34 to 36 years old and 64.5% of the population aged over 25. Overall, Cessnock’s population has a relatively low level of tertiary educational attainment as well as a lower median individual weekly income than the State average. Cessnock Population Estimates Annual Growth 2003 2006 2011 2003-11 Cessnock 47,842 49,002 50,239 0.6% Source: Cessnock City Council HVS International - Sydney Hunter Valley Wine Country- A Market Overview 3 Cessnock City Council forecast population to reach over 50,000 by 2011, resulting in a likely population growth of over 5,000 people between the two census of 2001 and 2011, compared with an increase of 1,300 people between 1991 and 2001. Tourist Infrastructure Cessnock’s convenient location allows easy access to a variety of recreational areas including Hunter Valley Wine Country, Singleton and the Port Stephens areas. In addition, since European settlers first planted wines in the land surrounding Cessnock, the area has become renowned for its vineyards, offering a wide variety of attractions to visitors. Hunter Valley Wine Country – Main Attractions Attraction Description Pokolbin Estate Vineyard Vineyard Tyrrell's Vineyards Vineyard Peppers Creek Antiques Arts, crafts and antiques on display Harrigan's Irish Pub Irish Pub Hunter Valley Hot Air Ballooning Scenic flights over the Hunter Valley The Oaks Golf & Country Club Golf course Hunter Wine Helicopters Scenic flights over the Hunter Valley Hunter Valley Aviation Scenic flights over the Hunter Valley Hunter Valley Gardens Recreation and Nature Park Hunter Valley Cheese Company Tasting of various local cheeses Hunter Valley Wine School Wine education Cessnock Rugby League Supporters Club Entertainment facilities Ken Duncan Galleries Art Gallery Les Indiennes de Provence Fabric and products from the south of France Source: Hunter Valley Wine Country Cessnock, in conjunction with the Hunter Valley Wine Country Association, hosts a number of events and festivals throughout the year, which generates a significant amount of visitation to the region. The major events held in the Hunter Valley Wine Country are as follows: • Wyndham Estate Signature Concert in February; • Hunter Valley Harvest Festival in March; • Ivanhoe Chocolate Festival in April; • Vintage Jazz in the Rothbury Estate in April; • Lovedale Long Lunch in May; • Mount View Autumn Festival in May; • Opera in the Vineyards in October; • Jazz in the Vines in October; and • Mount View Spring Festival in October. HVS International - Sydney Hunter Valley Wine Country- A Market Overview 4 The tables below present the performance of hotels in Cessnock for the HISTORIC HOTEL years 1990 through to 2003 in a rolling 12-month format, according to PERFORMANCE information from the Australian Bureau of Statistics (ABS). Room Occupancy Room occupancy in the Cessnock area hit bottom in June 2001 with an annual occupancy of 42%, as a result of strong supply increases since December 1998. Despite further increases in supply averaging 10% per annum since 1999, occupancy levels improved to reach 55.5% in 2003, as a result of strong growth in demand averaging 16.5% per annum over the last 5 years. Hotel Occupancy Performance Cessnock 300,000 58.0% 56.0% 250,000 54.0% 52.0% 200,000 50.0% 150,000 48.0% 46.0% 100,000 44.0% 42.0% 50,000 40.0% 0 1 2 3 1 3 9 9 9 9 94 95 96 97 98 99 00 0 02 0 9 9 9 19 c-19 c-19 c-19 c-19 c-19 c-19 -20 c-20 -20 c-20 e e e e e e ec-1 ec-1 ec-1 ec- ec e ec e D D D D D D D D D D D D D D Rooms Available Rooms Sold Room Occ% Source: Australian Bureau of Statistics Noteworthy is that the total supply of hotel rooms has remained virtually unchanged over the last three years, stagnating at around 800 rooms or 290,000 available room nights in the ABS sample. This indicates that the growth in occupancy is achieved entirely through real growth in demand. Average Room Rate The average room rate achieved in the Cessnock LGA is double that of other areas in the Hunter Valley such as Maitland, reflecting the high standard of available accommodation as well as the high-yielding segments visiting the region. Despite the growth in room occupancy, however, no growth was achieved in average room rates, which has remained at around $155 since June 2002, recovering from a sharp decline in June 2001.
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