Deloitte report shows Australian domestic events help drive tourism industry recovery

The latest edition of Deloitte Access Economics’ Tourism Market Outlook shows Australian tourism is thriving - not just surviving - with events motivating domestic travel.

Australia’s tourism sector is set to recover to pre-pandemic levels in 2024 with international visitors returning and Australians continuing to prioritise travel spend in the face of broader economic pressures.

Domestic travel continues to power the industry’s recovery and is already almost equal to pre-pandemic levels, with Australians battling a cost-of-living crisis still willing to dig deep to see their own country, visit family and friends, or attend marquee events.

The report highlights that events such as concert tours like Ed Sheeran and major sporting events like the FIFA Women’s World Cup are driving visitation.

On the release of the Outlook report, Deloitte national tourism leader, Adele Labine-Romain said the number of domestic trips and international arrivals continues to grow while higher visitor expenditure has seen overall spend exceed pre-pandemic levels.

Labine-Romain shared “Australians are not willing to not travel, and international holidaymakers are returning. Domestic travel volumes and international arrivals are set to recover to, or exceed, 2019 levels next year and travel spend is already there.

“In fact, tourism’s reawakening in Australia in the last year has already seen overall visitor expenditure reach $175 billion, up 20% on 2019.

“While softening slightly in recent months, the number of domestic overnight trips in the September 2023 quarter reached 98% of its pre-pandemic level, while spending of $28.4bn represents 136% of 2019 levels,” Labine- Romain added.

“This is despite outbound overseas travel by Australians also completing a near recovery in 2023, showing Australians are not prepared to choose between domestic travel and overseas jaunts.

International travel has understandably been slower to return, though September 2023 quarter data showing a recovery of 80% on pre-pandemic trip volumes and spending recovered to 102% due to increased travel costs. This has been assisted by the return of international aviation capacity into Australia, which is set to reach 90% of pre- pandemic level by the end of 2023.

“International arrivals in 2023 are almost double what they were in 2022. Australia is still seen as an aspirational destination, so it is no surprise that the recovery of aviation capacity into Australia has seen a corresponding lift in international visitors,” Labine-Romain noted.

“The market has also been assisted by China’s reopening and the return of Australia’s Approved Destination Status, with arrivals from China increasing month on month.”

And the outlook?
All sectors of the tourism market look set to recover in 2024 and continue to grow at a faster rate than the broader Australian economy, with intention to travel remaining high despite persistent inflation and broader geopolitical uncertainties.

Labine-Romain continued “The data indicates that although Australians are cutting back on discretionary spending elsewhere, we’re simply unwilling to give up the share of our wallet we dedicate to travel.

“Intentions to spend on leisure travel or take a domestic or international flight has remained broadly consistent over 2023 even as the cost of living and higher interest rates has seen savings buffers built during COVID reduce.”

The number of domestic overnight trips booked is forecast to grow 5.5% to recover to pre-pandemic levels in 2024, before moderating slightly to grow at a rate of 5% each year to 2026.

Similarly, international arrivals are set to exceed pre-pandemic levels, with 9.7 million international arrivals forecast for 2024, growing at an average rate of 6.8% per annum to reach 11 million by 2026.

Labine-Romain said our enthusiasm for travel would be evident across the holiday period adding “As we head into the summer holidays, we expect travel momentum to continue as Australians dig deep into household pockets to make the most of the warm weather and reconnect with family and friends for the festivities.”

Image. Events have been motivating domestic travel with concert tours like Ed Sheeran driving visitation.