Australia's international tourism industry
Commission research paper
This paper was released on 26 February 2015 and examines the trends and drivers of growth in Australian international tourism with a view to understanding their implications for government policy.
The Commission has also assessed the role for government in the tourism industry, and considered whether there are significant barriers to future growth in international tourism in Australia that are amenable to policy reform.
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Australia's International Tourism Industry (PDF - 1547 Kb)
Australia's International Tourism Industry (Word/Zip - 1079 Kb)- Australia's international tourism industry has grown strongly over the past two decades - the number of international visitors to Australia has more than doubled, rising from 2.5 million in 1992 to almost 6.7 million in 2014. The composition of the industry has also changed.
- Markets in Asia, particularly China and India, have grown in importance as a source of international visitors to Australia, with China now the second largest source of visitors after New Zealand. Alongside this, there has been a slow down (and, in some cases, a decline) in growth in the number of visitors to Australia from some historically important source countries, such as the United States, the United Kingdom and Japan.
- Growth in the industry overall means regional visitation has increased, but the change in the composition of source countries has contributed to a decline in the proportion of expenditure and the proportion of international visitors travelling to regional areas of Australia (of about 5 percentage points between 2006 and 2014).
- There has been an overall decline in international tourism activity in some regions - in Tropical North Queensland there was a 20 per cent decline in the number of international visitors travelling to the region, particularly from Japan, and a 40 per cent decline in real expenditure between 2006 and 2014.
- The way businesses in the international tourism industry innovate and adapt to changing trends will largely determine how successful Australia is in continuing to attract international visitors. Governments also have a role, and a number of reforms would benefit the tourism industry and the economy more broadly.
- Many national parks are hampered by tired infrastructure and persistent funding shortfalls. Greater user charging and more private investment would provide an additional source of funding and facilitate innovation in the provision of tourism related infrastructure.
- Poor approval processes for tourism related infrastructure investments are not only costly to developers, but to businesses and communities. There is a need for governments to continually review and reform these processes so that they are flexible and risk based, and keep pace with innovations in the tourism industry.
- There can be a case for governments to be involved in attracting international visitors to Australia through the provision of international destination marketing and support for major events. However, assessments often overstate the net economic benefits of these activities - and consequently the basis for government support - highlighting a need for rigorous and transparent economic analysis to determine whether government expenditure is warranted.
- Although Australia's international aviation policy settings have served Australia well, it is expected that further liberalising access to Australia's major gateway cities - Brisbane, Melbourne, Perth and Sydney - would provide net benefits to the international tourism industry and the Australian community.
- It is difficult to see how restricting access to secondary airports serving the major gateways, such as Avalon and the proposed airport at Badgerys Creek, creates benefits for the Australian community. If any restrictions are to remain, the case for all restrictions, except those at Sydney Kingsford Smith Airport, is quite weak, and open access could be extended accordingly.
