How do you get a country excited about tourism?

1. Tourism is super important, accounting for 10 per cent of Australia’s export earnings.

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Services are our second biggest export sector and tourism is Australia’s largest services export.

2. Tourism’s moment has come.

Source: Yahoo Finance
Australia: on special. Source: Yahoo Finance

3. International tourism is understood to have public good aspects (e.g. brand Australia) that warrant some public spending on attracting visitors. Tourism is also a public policy issue because regulations around immigration and customs, aviation and airports can determine the cost effectiveness of a trip to Australia.

But at this crucial moment for the industry, government funding for Tourism Australia has gone from $132 million in 2012 to $129 million in 2014.  That’s a fall from $21.29 per visitor to $19.64.

sydney

4. The Government does not have a minister holding the title of Minister for Tourism (they do have a Minister for Sport). The Trade minister has tourism in his portfolio. But he has been accused of “neglect” for the sector.

5. There have been no data released on overseas arrivals since September 2014. The Department of Border Protection changed the arrival cards and completely screwed up the system that had delivered excellent monthly data for the previous 14 years. The timing of this mistake, at a likely inflection point in inbound tourism, is truly remarkable.

6. To make matters worse, right now the Productivity Commission is trying to put together a major report on tourism, in the absence of that data.

I have written before about the best way to invest to take advantage of the coming tourism boom, with AirBnB seeming like the safest bet. But as well as dispersed individual actions, we need a big coordinated push, and that doesn’t look like happening yet. Services industries remain a side-show to the “real” economy of tangible things in too many people’s minds.

Can the PC report shock the government into doing more? Or will the government remain focused on issues like foreign purchase of agricultural land?

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thomasthethinkengine

Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

2 thoughts on “How do you get a country excited about tourism?”

  1. The Federal Government seems so fixated on cutting spending in order to reduce the deficit that they’re forgotten the other half of the equation – finding means to increase revenue. However, I’m not sure what Tourism Australia can do to attract more overseas visitors. More advertising blitzes? Funding for tailored holiday packages for the increasing number of Chinese tourists? I don’t know the effectiveness of these campaigns, or at least how beneficial they are compared to a drop in the $A

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