When global events remind us how exposed tourism really is
ATEC says For Australia’s tourism businesses felt the impacts of tensions in the Middle East quickly, with aviation networks shifting and booking patterns changing as travellers and the inbound industry responded to the situation.
Over recent weeks I’ve been speaking with many of our inbound tourism businesses about how global events are starting to influence travel to Australia.
Geopolitical tensions in the Middle East are being felt across the world, particularly through rising fuel prices and growing uncertainty. For Australia’s tourism businesses, the impacts were felt quickly, with aviation networks shifting and booking patterns changing as travellers and the inbound industry responded to the situation.
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ATEC surveyed inbound tour operators to get a sense of how this is playing out on the ground. The feedback shows disruption flowing through the international distribution system.
Around seventy percent of operators reported some level of booking disruption, with cancellations or postponements affecting mostly UK/European group and leisure travel. Now, a few weeks on, while the cancellations and re-routing of travel have been managed and travel arrangements have stabilised, there remains a significant level of travel hesitancy.
Australia sits at the far end of global aviation networks, so events thousands of kilometres away can quickly influence peoples plans to travel here. It is something our industry has long understood. Tourism is incredibly resilient, but it is also highly sensitive to global conditions. And all of this is happening as the industry continues the long-term process of rebuilding international markets after the pandemic.
In general, global demand for Australia is returning, and the long-term outlook remains positive, but recovery across tourism export businesses is still uneven as operators work to rebuild their international distribution networks in what is now a much more competitive global market.
The latest ABS Overseas Arrivals and Departures data shows there is still ground to recover. Holiday arrivals in January 2026 reached around eighty-four percent of the level recorded in January 2020. That is roughly where the sector has been sitting for much of the past year, suggesting that consistently surpassing pre-pandemic levels is still some time away.
At the same time, businesses across the sector are dealing with rising costs—labour, insurance, aviation and energy prices have all increased. Many operators are also investing heavily to reconnect with international wholesalers and rebuild the inbound sales channels that were disrupted during the border closures.
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Tourism also operates very differently from many other sectors of the economy. Unlike industries where economic activity is concentrated in a relatively small number of companies, tourism’s value is spread across the country. International visitor spending flows through accommodation providers, tour operators, attractions, restaurants, transport businesses and retailers in communities right across Australia.
In total the sector supports around 700,000 Australian jobs and more than 360,000 businesses, generating billions of dollars in government revenue through GST, company tax, income tax and aviation charges. But tourism ultimately succeeds when Australia converts global interest into actual visitation.
That means strong aviation connectivity, efficient visa processing and sustained international marketing that keeps Australia visible in an increasingly competitive global travel market.
Maintaining the strength of Australia’s national tourism marketing capability will be particularly important as destinations around the world intensify their efforts to attract visitors. Ensuring Tourism Australia remains well-resourced to compete globally will be critical in turning demand for Australia into real economic activity.
Situations like the current Middle East tensions are a reminder that tourism operates in a dynamic global environment. The more resilient and competitive we make the sector, the better placed Australia will be to navigate global shocks and capture the long-term growth opportunity that international travel continues to present.
This article first appeared in the Autumn edition of AccomNews. Click below to explore
