Op-Ed: What’s holding back our inbound tourism recovery
ATEC's Peter Shelley explores the challenges facing the visitor economy as Australia struggles with outbound spending and recovery post-pandemic.
The latest Annual Benchmark Report from Tourism Research Australia gives us plenty to consider as we navigate the recovery of Australia’s visitor economy. While international arrivals are growing, and international spend has reached a record $32.9 billion, the inbound holiday market is still sitting around 20 percent below 2019 levels.
This gap has been consistent for the past year, and for many regional tourism businesses, it’s not just a statistic but a challenge to the recovery of their businesses. Cost pressures, staffing shortages, and limited air access continue to restrict growth where it’s needed most.
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Meanwhile, Australians are heading offshore in record numbers, with 6.9 million outbound holidays taken in 2024. That’s billions in spending leaving the country while our inbound sector struggles to regain ground. The imbalance is clear and highlights the urgency of supporting export tourism operators who are still rebuilding.
China has reclaimed the top spot for visitor spend, but volumes remain well below pre-pandemic levels. While the rebound is encouraging, the full recovery will take time. Other markets like South Korea, India, and Japan are showing strong growth trends, offering a pathway to diversify and future-proof the sector.
Regional Australia has a key role in unlocking the next chapter. Destinations that offer some of the country’s most compelling tourism experiences, including nature, food and wine, and Indigenous cultural tourism, remain under-visited due to high costs, access issues, and limited workforce capacity.
One major barrier is domestic airfare affordability. While connectivity has improved, many regional routes remain expensive for visitors, at times even higher than the cost of the international fare to get here. With Australia’s airlines posting record profits, now is the time to invest in fare structures that prioritise access over margin. Supporting dispersal isn’t just good for regional communities, it strengthens the entire visitor economy.
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Workforce shortages are another critical issue. Tourism businesses, especially in regional areas, struggle to recruit and retain the staff needed to deliver high-quality experiences. Working holiday makers (WHMs) have long been vital to this labour mix, but recent visa changes for WHMs from the UK have reduced incentives for WHMs to travel into regional areas or take up tourism roles.
This shift is concerning, especially given the numbers. More than 220,000 WHM visa holders are currently onshore, with another 100,000-plus granted visas and yet to arrive. That’s a huge potential workforce, but without an incentivised policy framework, many won’t move beyond the east coast.
The government’s migration review presents a real opportunity to get this right. Introducing new regional work incentives for key markets, offering better support to employers, and recognising tourism’s unique geographic and seasonal needs would help align WHM policy with where industry demand lies.
Tourism recovery is about more than just arrivals. It’s about spreading benefits across communities, building resilience, and delivering on the promise of a uniquely Australian experience. That won’t happen unless we fix the structural barriers still holding us back, including airfare affordability, workforce access, and business support.
With the right mix of coordinated action, we can grow stronger and contribute to the economy in a way that benefits all Australians.
This article first appeared in the Winter edition of AccomNews. Click below to explore.
