Australia / Analyst Insights
Well-Travelled: Rising Tourism Set to Benefit Arts Industries
by Nathan Cloutman
Oct 25 2018

Domestic arts and heritage industries have struggled over the past five years, due to limited government funding and strong competition from other entertainment industries. However, the fortunes of Australia’s arts and heritage industries are expected to improve over the next five years, as rising tourism and government investment boost revenue for art galleries, museums and nature reserves.

Government funding for heritage programs and the arts only grew slightly over the four years through 2016-17, due to the index freeze on grants paid by the Federal Government to local governments to cover expenses. Budgetary cuts, coupled with the increasingly competitive environment, put pressure on organisations in the Art Galleries and Museums industry. In response to mounting pressures, many art galleries and museums have attempted to raise interest in their exhibitions by reinventing themselves to appeal to a wider audience. Some museums and galleries have attracted younger audiences by becoming more interactive and distributing content across a variety of media channels. Art galleries and museums have also increasingly turned to special exhibitions, such as the National Gallery of Victoria's collaboration with the New York Museum of Modern Art, to boost demand and revenue.

These initiatives have provided some support to art galleries and museums, but rapidly increasing inbound tourism has been the main factor driving industry growth. According to Tourism Research Australia, 9.7 million visitors are expected to visit Australia in 2018-19, a strong increase from 6.7 million five years previous. Average tourist expenditure is also rising, as tourists from China, who spend more per visit than visitors from other countries, are visiting Australia in growing numbers. As tourism becomes increasingly important for the Australian economy, state and local governments are increasingly investing in arts and heritage programs to boost regional tourism numbers. As a result, revenue for the Art Galleries and Museums industry is projected to increase at an annualised 2.2% over the five years through 2023-24, to reach $2.0 billion.

Similar to other arts and heritage industries, the Nature Reserves and Conservation Parks industry has struggled over the past five years, due to changing federal and state government funding policies. However, the value of the Australian dollar is expected to remain relatively weak over the next five years, keeping Australia comparatively cheap to visit and providing a boost to inbound tourism. Rising tourism activity will boost revenue derived from admission fees.

Another avenue for growth for nature reserves and conservation parks is ecotourism. According to Ecotourism Australia, the total revenue for certified members in 2017-18 is $1.4 billion, up from $1.1 billion in 2014-15. More and more organisations are becoming certified ecotourism providers, as demand for sustainable travel and conservation experiences increases.  The rising popularity of ecotourism is encouraging state governments to renew their investment in national park facilities, and enact marketing campaigns to promote their state as an ecotourism destination. For example, The Western Australian Government pledged to invest $31.0 million for the Natural Resource Management Program, including $10 million to protect and create tourism opportunities in the Abrolhos Islands.

Industries mentioned in this report
Art Galleries and Museums in Australia
Nature Reserves and Conservation Parks in Australia

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