Examines the trends and drivers of growth in Australian international tourism with a view to understanding their implications for government policy.

Overview

Tourism is a significant contributor to the Australian economy

Tourism is important to Australia’s economy — people are travelling further, and more frequently for a range of reasons including leisure, business and education.1 In 2014, total tourism spending contributed almost 3 per cent of Australia’s GDP — about one-third of this ($11 billion) was by international visitors. International tourism’s share of total service exports was just over 60 per cent in 2014.

The number of international visitors to Australia has more than doubled over the past two decades

Demand for international tourism in Australia has grown strongly over the past two decades — the number of international visitors has increased from 2.5 million in 1992 to almost 6.7 million in 2014. Tourism is expected to continue to be important to the Australian economy, with strong growth projected in the number of international visitors travelling to Australia over the next decade.

Important drivers of demand for international tourism include foreign household incomes, the cost of travel and the relative price of tourism in Australia compared with other destinations. For example, rising real incomes, particularly in emerging countries in Asia, have given many more people the opportunity to travel for the first time. Globally, airfares have fallen significantly (by about 60 per cent in real terms) over the past four decades, which has contributed to an increase in demand for international air services.