Tourism one of the Nation’s Key Industries

Australia’s tourism industry is one of the nations key industries, contributing significantly to job creation, export earnings and regional development.

Australia has not been immune to the effects of the Global Financial Crisis, despite economically doing better than almost all countries; inbound tourism has been severely affected by both the GFC and higher fuel prices with visitor numbers back to the levels of the mid 1990’s. These negatives have been partially offset by the value of the Australian dollar which is almost equal in value to the American dollar (at December 2009).

Tourism Outlook

The forecast for the immediate future is much brighter with tourism numbers expected to

be on the rise with almost 5.5millon inbound visitors expected in 2010 and reaching 8 million by 2018.

Around 639,000 visitors from the United States are expected to visit Australia by 2018, representing an average annual growth of 5 per cent. 

Asia is expected to supply the bulk of the increased tourism numbers, growing at an average annual rate of 5.0 per cent to 2012, with 4 million visitors coming to Australia in 2010.  There will be a strong surge from emerging markets such as China, Korea and India.  China is set to become one of Australia’s strongest markets with annual growth rate forecasts of 14 per cent to 2012.  India is expected to increase 12 per cent a year to 2012.

It is forecast by 2018 inbound tourism will be;

n         India 500,000 visitors up from 116,000 in 2008

n         China 950,000 visitors up from 356,000 in 2008

n         Indonesia 245,000 visitors up from 94,000 in 2008

n         Singapore 362,000 visitors up from 271,000 in 2008

n         Malaysia 317,000 visitors up from 171,000 in 2008

n         South Korea 277,000 visitors up from 218,000 in 2008

n         Traditional markets will account for further increases

n         America 639,000 visitors up from 455,000 in 2008

n         UK 821,000 visitors up from 672,000 in 2008

Whilst the largest source of International visitors, New Zealand, will increase from 1,113,000 in 2008 to 1,288,000 in 2018, not bad for a country of 4.36 million.

The number of inbound tourists from Japan is predicted to decline from a peak of 715,000 in 2004 to 338,000 in 2018.

Size of the Industry

Formal recognition of the economic significance of Australia’s tourism industry took a big step forward with the launch of the Australian Tourism Satellite Account (ATSA) in October 2000.  Federal Government funding has been provided to develop a comprehensive snapshot of the industry.  The ATSA gives an official, first-time measure of tourism’s contribution to the Australian economy.

Data from the ATSA, show the size, structure and characteristics of Australia’s tourism industry, and will assist with planning and development within the industry by private and public sector organisations.  The main results from the ATSA for 2007/08 are as follows.

n         In 2007-2008, tourists consumed a total of $88 billion in goods and services nationally.  Of this total consumption, 74% ($65 billion) was by domestic visitors and 26% ($23 billion) was by international visitors.

n         Tourism’s economic contribution (3.6% value added) was higher than agriculture, forestry and fishing (3.3%), communication services (3.2%) and electricity, gas and water (2.7%), and slightly lower than mining (4.7%).

n         Tourism in Australia contributed relatively more to the economy than was the case in the United States or Canada.

n         The industry directly employed 497,000 persons, representing 4.7% of total employment.  While tourism is a relatively labour intensive industry many of the jobs are part-time.

Tourism Investment

Australia is the dynamic global investment destination in the Asia Pacific region.  Comprising just 0.3 per cent of the world’s population, Australia is the nineteenth largest economy in the world, the eleventh largest in the OECD and the fourth largest in Asia.

Driven by one of the best productivity growth ratios in the world Australia is well positioned to take full advantage of the electronic age.

Australia is an internationalised economy with a strong financial system, sound economic fundamentals, certainty, investment-friendly State, Territory and Federal Governments and a commitment to free trade.

There are few barriers to setting up a tourism business or investing in an existing business.  Australia has liberal laws governing foreign investment in tourism infrastructure.  Most restrictions on foreign investment in Australia relate to acquisitions of real estate for private residential purposes. 

In the case of tourism investment, the residential real estate restrictions are relaxed if the proposed residential investment forms part of a designated, integrated tourism resort.  One example would be investment incorporating tourist accommodation and recreational facilities such as golf courses.