Australia’s tourism industry is booming. This was emphasised in early December when Minister Ciobo announced the end of the successful China Australia Year of Tourism, where Australia welcomed a record 1.33mn Chinese visitors in 2017.
According to the National Visitor Survey, Australian tourists spent a record $61.7bn for the year ending March 2017, an increase of $3.7bn. Combined with the record spending of international tourists for the same period, up five per cent to $39.8bn, total spending by tourists reached a new record of $101.6bn.
The impact of tourism
According to Austrade, almost nine million people visited Australia in 2016-17 – that’s almost half of Australia’s population visiting the country. It is clear the impact tourism has on Australia’s booming economy.
Tourism provides jobs to one in twenty Australians, helps support one in eight Australian businesses, and contributes one tenth of national exports. Tourism has positive impacts across the whole country, with almost half of all visitor spend going to regional Australia.
A growing industry
In 2016-17, the nominal GDP from tourism increased by 6.1%, and now accounts for 3.2% of national GDP. Tourism GDP grew faster than the national economy in 2016-17, growing by 23% compared with 10% for the economy as a whole. Tourism now accounts for 10% of total export earnings.
Spending by tourists
Tourism consumption in Australia increased by 5.3% to $136bn in 2016-17 – 27% of which came from international spending. Most interestingly for tourism exporters (those whose services are used by international tourists), international spend increased by 7.6%.
For every dollar international tourists spend, 15 cents is spent on accommodation, 16 cents on long distance transport, 13 cents on shopping and 12 cents on takeaway and restaurant meals. This is why international tourists are so important to the broader economy, and why small businesses in the tourism industry should be encouraged by the sustained growth in the sector.
Opportunity for small businesses
Australia’s tourism businesses are performing very strongly. The tourism sector as a whole is projected to continue to grow in the coming years, presenting excellent opportunities for small businesses to use this growth to their commercial advantage.
Many small businesses which operate in the tourism sector do not realise they are considered exporters – if you provide services for inbound / international tourists, then you are in fact an exporter.
As a result, tourism small businesses often don’t realise the support that is on offer to help grow their businesses from organisations such as Efic. Efic is the Australian Government’s export credit agency, and can assist tourism operators with access to export finance when their bank is unable to help. Efic works closely with tourism businesses to help them win business and grow internationally.
With the projected growth for tourism industries, Australia’s tourism small businesses have an excellent opportunity for growth in the coming years. Tapping into that growth potential will be crucial for the expansion of the industry. For small businesses whose services are used by international tourists, a helping hand could be on offer from organisations such as Efic.
By Andrew Watson, Executive Director, Export Finance, Efic