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IBISWorld research Australia's growing tourism industry

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by Media Team
Sep 26 2018

World Tourism Day 2018: Visitor numbers and tourist spending fly high while length of stay stalls

As World Tourism Day approaches, new IBISWorld research reveals Australia’s massive $125.9 billion tourism industry, which employs more than 600,000 people across the nation, is growing significantly.

In 2017-18, China overtook New Zealand to become Australia’s largest source of visitors, marking the largest change since China overtook the United Kingdom as the biggest spender on travel in Australia in 2010-11. Other sources of tourists, such as the United States, United Kingdom and Japan, continue to provide a growing source of demand for Australian businesses.

Increasing international tourism

International tourism to Australia increased by 8% over the year through March 2018, reaching a record high of 8.3 million visitors. Total spending by international tourists has also increased by 6% over the same period, to $42.3 billion. However, while visitor numbers and spending have risen, the average length of visitor stays has declined by 4%, to 32 days.

“This may present a troubling sign to rural tourism businesses, as longer visitor stays are more likely to lead to spending outside of metropolitan centres. Visitor numbers and spending increased in all states and territories, except for Western Australia and the Northern Territory,” said IBISWorld Senior Industry Analyst, Jason Aravanis.

Over the year through March 2018, China overtook New Zealand to become Australia’s largest source of visitors, with 1.29 million Chinese tourists spending a collective 54.8 million nights in Australia.

“In a positive sign for the Australian economy, spending by Chinese tourists continues to overshadow spending by any other tourist market. On average, each Chinese visitor spent almost $8,500 on Australian goods and services during their stay. In contrast, the average spend of New Zealand visitors was $2,100,” said Mr. Aravanis.  

IBISWorld analysts found several Australian industries benefiting from Chinese tourist spending, such as Watch and Jewellery Retailing and Personal Accessory Retailing, with Chinese tourists collectively spending almost $1 billion on these items to take home over the year through March 2018.

The analysts also noted that education continues to attract Chinese students to Australia, contributing an additional $3.0 billion in revenue for the University and Other Higher Education industry. Chinese spending on Australian education eclipses that of all other tourism markets, accounting for 48% of all education tourism in Australia.

“Interestingly, although China is Australia’s largest source of foreign tourists, it is only the sixth most popular destination for Australian tourists,” said Mr. Aravanis.

According to IBISWorld forecasts, close to 12.8 million international tourists are forecast to visit Australia in 2023-24, including 2.8 million visitors from China.

“New Zealand, the United States, and the United Kingdom are anticipated to continue being major sources of tourism demand, although none of these markets are expected to grow as quickly as China,” said Mr. Aravanis.  


International visitors to Australia by market


Visitors (17-18)*





New Zealand



United States



United Kingdom






*Year End March


Increasing domestic travel

IBISWorld analysts found domestic tourism to have also grown strongly over the year through March 2018. Total interstate and intrastate tourism spending increased by 5% to $65.1 billion, and visitor nights increased by 5% to 350.6 million.

“Notably, this growth occurred despite a decline in real household discretionary incomes over the two years through 2017-18. This may indicate that some households are forgoing expensive international trips in favour of cheaper tourism within Australia,” said Mr. Aravanis.  

One notable trend is the rising demand for nature-based domestic tourism. According to IBISWorld, demand for bush walking, park visits, and botanical gardens from domestic tourists increased over the year through March 2018. This rising demand has provided some growth opportunities to the Nature Reserves and Conservation Parks industry. Despite domestic tourism increasing across all states and territories, the number of domestic visits to the Northern Territory declined.

“Australia’s tourism industry is forecast to benefit from increased domestic tourism over the next five years. Domestic tourist visitor nights are projected to increase at an annualised 2.7% over the five years through 2023-24, to 425.5 million,” said Mr. Aravanis.  

The Australian dollar is anticipated to weaken over the next five years, making it more expensive for Australians to undertake overseas trips. According to Tourism Research Australia, Australians are projected to spend $112 billion on domestic tourism in 2023-24.

“This is a good sign for operators that generate significant revenue from domestic travellers. In 2017-18, the primary destinations for Australian tourists were New Zealand, Indonesia, the United States, and the United Kingdom,” said Mr. Aravanis

IBISWorld forecasts international travel by Australians to grow at an annualised 4.0% over the five years through 2023-24, to 13.3 million trips.

“Despite a weak Australian dollar, cheaper airfares and increased international airline capacity are anticipated to continue driving overseas tourism by Australians. Ongoing growth in tourism to Australia is projected to lead to significant growth across the tourism sector, with total revenue in the Tourism industry reaching $153.4 billion by 2023-24,” said Mr. Aravanis.


IBISWorld Industry Reports used in this release:


For more information, to obtain industry reports, or to speak with an analyst, please contact:

Kim Do

Strategic Media Advisor – IBISWorld Pty Ltd
Tel: (03) 9906 3641 Mobile: 0422 773 995