The immediate future looks bright for the Australian tourism industry, according to tourism forecasts released today.

Tourism Research Australia (TRA) reports international visitor arrivals are forecast to grow 5.8 per cent in 2013?14, to 6.6 million. Domestic visitor nights are forecast to increase 2.0 per cent in 2013?14, to 293 million.

“The fall in the Australian dollar is expected to lead to increased inbound tourism and reduce the growth in outbound tourism, which should benefit the domestic market”, Chief Economist for Tourism, TRA, Dr Leo Jago said.

Visitor arrivals from China, the United Kingdom and New Zealand are expected to grow 13.5 per cent, 5.8 per cent and 4.9 per cent respectively in 2013?14.

The reduced strength of the Australian dollar has also led TRA to downgrade forecasts of Australians’ overseas trips.

Total visitor expenditure is forecast to increase 2.7 per cent to $98 billion. Driving this growth is an increase in inbound expenditure of 5.2 per cent to $29 billion in 2013?14. Domestic expenditure is expected to grow 1.7 per cent to $69 billion in 2013?14.

In more good news for the industry, tourism businesses contribution has strengthened over the past two years, despite a slight fall in counts.

Tourism Research Australia’s report Tourism Businesses in Australia, June 2010 to June 2012, released today, shows that there were approximately 280,000 businesses in Australia’s tourism industry in June 2012, representing over 13 per cent of Australia’s total 2.1 million businesses.

“While the number of tourism businesses fell by 2,900 (or 1 per cent) in June 2012, their contribution to tourism’s gross value added per business increased by around 13 per cent”, Dr Leo Jago, Chief Economist, Tourism Research Australia, said.

“In tourism more than 90 per cent of businesses are small (with 0 to 19 employees). While medium and large businesses share less than 10 per cent of the total business count, more than two thirds (68 per cent) of total revenue is generated by this group. This reminds policymakers and industry that tourism businesses — large or small, play a significant role in the economy.” added Dr Jago

Tourism, like many high labour cost, trade-exposed industries is finding that increasing profitability is an ongoing challenge as they compete for investment funding. However, increasing profitability is vital in terms of improving productivity and progressing innovation.

Key findings from the report include:

• In June 2012, around 80 per cent of tourism businesses were located in three states — New South Wales, Victoria and Queensland.
• Between June 2010 and June 2012, growth in the number tourism businesses was mainly limited to Melbourne and Sydney, while regional areas in all states suffered a decline.
• Output generated per person in tourism as measured by Gross Value Added was lower than that of the all-industry average — $65,000 compared to $119,000.

Both reports can be accessed at http://www.tra.gov.au.