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Melbourne Retail and Hospitality Strategy 2013–2017 Year 4 Report 2016–17 Contents

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Melbourne Retail and Hospitality Strategy 2013–2017 Year 4 Report 2016–17 Contents MELBOURNE RETAIL AND HOSPITALITY STRATEGY 2013–2017 YEAR 4 REPORT 2016–17 CONTENTS Foreword 3 Vision 4 City of Melbourne snapshot 6 Calendar 10 Background 13 2016–2017 Highlights 14 Year 4 Objective Highlights 19 Objective 1: Business Development and Innovation 25 Objective 2: Positioning and Activation 35 Objective 3: Business Diversity 39 Objective 4: Sustainability 43 Cover middle photo credit: QT Melbourne Disclaimer This report is provided for information and it does not purport to be complete. While care has been taken to ensure the content in the report is accurate, we cannot guarantee it is without flaw of any kind. There may be errors and omissions or it may not be wholly appropriate for your particular purposes. In addition, the publication is a snapshot in time based on historic information which is liable to change. The City of Melbourne accepts no responsibility and disclaims all liability for any error, loss or other consequence which may arise from you relying on any information contained in this report. To find out how you can participate in the decision-making process for City of Melbourne’s current and future initiatives, visit melbourne.vic.gov.au/participate FOREWORD With thriving retail and hospitality industries, Melbourne City of Melbourne also supported 12 small businesses, continues to evolve as an internationally-renowned culinary providing over $286,000 worth of grants to innovative and shopping destination. From our quirky boutiques to iconic companies such as E-stralian, the first company in Australia designer brands, to hole-in-the-wall cafes and world-class to offer e-bike leasing; Little Lon Distilling Co, the first craft fine dining, our city offers a diverse range of shopping and distillery in the city centre and Chroma Coda’s The Music dining experiences. Room, a collection of virtual instruments. All up, this round of grants is anticipated to generate 82 new jobs, $7.1 million in This Year Four Report is a key action from the Melbourne gross turnover and $2.7 million in equity investment. Retail and Hospitality Strategy 2013-2017, created in partnership by City of Melbourne and Victorian Government. City of Melbourne provided almost $500,000 to our seven The report highlights our key marketing, events and business precinct associations. This funding boosted the development initiatives, along with year-on-year growth. of businesses and improved delivery of key events. We partnered with a range of major shopping centres and From 2016 to 2017, international visitor spend in the retailers to present Melbourne Fashion Week, an event that Melbourne region reached $7 billion, while domestic visitor included support for Vogue American Express Fashion’s Night expenditure tipped in at $7.4 billion. Our booming tourism Out and generated a total economic impact of $8.19 million. industry is a significant driving force behind this growth. In this same period, we welcomed 12.4 million visitors – an City of Melbourne will continue to work closely with the retail almost 10 per cent increase on the previous year. There was and business community, and the Victorian Government to a 17 per cent increase in domestic overnight visitors and an ensure these industries continue to grow and prosper. 8.8 per cent increase in international overnight visitors. At 2.7 per cent, vacancy rates in Melbourne’s central city remained low. We’re proud that nearly 140 international retailers – that’s more than double the 2012 figure – have chosen our city to establish a retail presence. This reflects Councillor Susan Riley our position as Australia’s shopping capital. Chair, Small Business, Retail and Hospitality Portfolio In 2017, iconic UK brand Debenhams opened their doors in St. Collins Lane, while luxury goods brand Burberry launched their much-anticipated flagship boutique at Emirates House – evidence of Melbourne’s international reputation and retail investment opportunities. James Martellenetti (Hava), Melina Chan (Startup Evangelist), Anthony Burgo (City of Melbourne). Photo: City of Melbourne/That Startup Show Photographer: Wren Steiner 2 3 VISION MELBOURNE WILL CONTINUE TO EVOLVE AS A VIBRANT, GLOBALLY SOUGHT-AFTER RETAIL AND HOSPITALITY DESTINATION, INSPIRING BOLD INNOVATIONS THAT ENGAGE RESIDENTS, WORKERS AND VISITORS ALIKE. 4 5 CITY OF MELBOURNE SNAPSHOT VISITORS AN ESTIMATED 12.4 MILLION* PEOPLE VISITED THE CITY OF MELBOURNE DURING 1 JULY 2016–30 JUNE 2017 9.5% QUICK FACTS 1.8 MILLION* 4.9 MILLION* 5.7 MILLION* ^ INTERNATIONAL 455,800 # DOMESTIC OVERNIGHT VISITORS DOMESTIC DAYTRIP TOTAL 159,992 OVERNIGHT VISITORS 8.8% VISITORS EMPLOYMENT † RESIDENTIAL 17% Primarily from China, 4.1% 1.2% 928,000 POPULATION New Zealand, United Kingdom and USA. WEEKDAY POPULATION 8.1% INCLUDING RESIDENTS 18,829~ † 2.4% 663,000 ° TOTAL BUSINESSES WEEKEND POPULATION AN ESTIMATED 94.8% OF ALL INTERNATIONAL OVERNIGHT VISITORS 0.5% INCLUDING RESIDENTS TO VICTORIA VISITED MELBOURNE IN THE YEAR ENDING JUNE 2017 1.9% VISITORS FROM CHINA EXPENDITURE IN MELBOURNE VISITOR EXPENDITURE IN MELBOURNE REGION RETAIL MARKET INDICATORS 436,000* VISITORS TO THE CITY 2^^ ‡ LARGEST CONTINGENT 1,550,000M 33.5% OF MELBOURNE OF CITY OF MELBOURNE $7 FROM CHINA * $7.4 VISITORS IN 2016-17 * TOTAL RETAIL SPACE IN THE OF CITY CENTRE RETAIL TENANTS 3.8% BILLION BILLION CITY OF MELBOURNE (2016) SPECIALISE IN CLOTHING RETAIL INTERNATIONAL DOMESTIC OVERNIGHT OVERNIGHT VISITORS FROM CHINA EXPENDITURE IN VICTORIA Average spend per night Average spend per night for DEVELOPMENT ACTIVITY AVERAGE MONTHLY for international overnight domestic overnight visitors IN CITY OF MELBOURNE ± GROSS RENT PRICES 2‡ visitors is $117. Average spend is $313. Average spend per YEAR ENDING JUNE 2017 per visitor for international visitor for domestic overnight 37,400m² of retail space Rental super prime overnight visitors is $2657. visitors is $853. under construction. 3% RETAIL VACANCY SPACE (street frontage on Bourke St Mall) . 10.7% 12.5% 104,000m² of retail space approved IN MELBOURNE CBD $8000–$10,000 per m for construction. 38.5% Rental prime (street frontage CBD). AVERAGE AVERAGE ‡ $1500–$5000 per m SPEND PER $2.6 2700 hotels and serviced apartment ˆ SPEND PER TRIP INTERNATIONAL EXPENDITURE rooms under construction. 150% 2.7% Rent in CBD arcades. NIGHT BILLION for overnight for overnight * $1600 per m overnight visitors from visitors from China 5350 hotels and serviced 0.3% visitors from China $5.7 BILLION apartment rooms approved Rent in CBD shopping centres. ˆ China expenditure $4547ˆ for construction. 6.4% $800–$2000 per m $146 in Victoria INTERNATIONAL EXPENDITURE ON FOOD AND DRINK IN AUSTRALIA 16.1% 9.1% Sources: ~City of Melbourne annual report 2016-17. ^City of Melbourne CLUE 2016 Report. †City of Melbourne daily population estimates forecast Sources: *International and National Visitor Surveys, June 2017, Tourism Research Australia. °Victorian Government: Department of Economic 2004-2036, 2017 update. #Australian Bureau of Statistics, Region Data Summary, Melbourne City (LGA), Year Ending June 2017. Development, Jobs, Transport and Resources, Melbourne Regional Tourism Summary, Year Ending June 2017. ^Victorian Government: Department of ^^City of Melbourne and Geografia 2016. ±City of Melbourne Development Activity Monitor, May 2017. ‡Knight Frank, June 2017. Economic Development, Jobs, Transport, and Resources, International Expenditure in Victoria and Regional Victoria, Year Ending June 2017. Note: The above numbers have been rounded so the listed percentages may differ slightly. 6 7 RETAIL AND HOSPITALITY CITY OF MELBOURNE MUNICIPALITY (2016) $11.2 BILLION* $5.7 BILLION* RETAIL AND HOSPITALITY ECONOMIC OUTPUT RETAIL AND HOSPITALITY GROSS LOCAL PRODUCT RETAIL ECONOMIC RETAIL GROSS $3.9 OUTPUT $2.1 LOCAL PRODUCT BILLION* BILLION* $7.4 HOSPITALITY ECONOMIC $3.5 HOSPITALITY GROSS BILLION* OUTPUT BILLION* LOCAL PRODUCT * THE HOSPITALITY * THE RETAIL TRADE 2997 SECTOR PROVIDES 2153 SECTOR PROVIDES HOSPITALITY * RETAIL * ESTABLISHMENTS 46,284 JOBS ESTABLISHMENTS 20,380 JOBS • 10.2% of total • 4.5% of total in the City in the City employment in the employment in the of Melbourne. City of Melbourne. of Melbourne City of Melbourne. *THE RETAIL AND HOSPITALITY SECTORS CONTRIBUTED $5.7 BILLION / 6.1% TO CITY OF MELBOURNE'S $92.1 BILLION ECONOMY IN 2016. (Gross Local Product or GLP); a 3.5% increase from $5.5 billion in 2015) CHRISTMAS RETAIL SPENDING DIGITAL RETAIL MARKET RETAIL TURNOVER ONLINE RETAIL EXPENDITURE IN AUSTRALIA December 2016 Year Ending June 2017 $25.7 $6.5 Growth on the previous year. BILLION~ BILLION~ $22.7 7.6% + NATIONAL VICTORIA BILLION Victorian percentage of Annual Online Retail Expenditure. 3.2% 3.2% 24% Sources: *City of Melbourne and Geografia 2016. Gross Local Product (GLP) is the same general concept as Gross Domestic Product (GDP); it’s a measure of the size of the City of Melbourne economy, taking into account the market value of all final goods produced in the region over a given time period – typically one year. It is the sum of employee compensation, business profits and taxes, minus any subsidies on products and production. There are several ways to estimate GLP, and the City of Melbourne Economic Profile uses the expenditure method. All values are in current prices, with a base year of 2011. ~Australian Bureau of Statistics Official Retail Turnover Figures, December 2016. +NAB Online Retail Sales Index, June 2017. Note: The above numbers have been rounded so the listed percentages may differ slightly. 8 9 CALENDAR OVERVIEW OF KEY STRATEGIC ACTIONS
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