Tourism & Hospitality Industry in Australia

Australia’s tourism and hospitality industry is a mature, high-value visitor economy built around domestic travel, international tourism, accommodation, foodservice, aviation, events, business travel, education-related travel, nature-based tourism, First Nations experiences, regional destinations, cruise tourism, and major city hospitality.

Note: Unless stated otherwise, all monetary figures are in Australian dollars.

The country has a distinct tourism proposition. It is not only a long-haul leisure destination known for beaches, wildlife, landscapes and outdoor travel. It is also a major domestic travel market, a regional business and education hub, a food and wine destination, a sports and events market, a premium nature and adventure destination, and a growing platform for sustainable and accessible tourism. This breadth gives the sector resilience, but it also makes the industry sensitive to aviation capacity, labour availability, cost-of-living pressure, climate risk, regional infrastructure, and international demand cycles.

Australia’s visitor economy has recovered strongly from the pandemic disruption. The Australian Bureau of Statistics reported that tourism GDP reached $81.1 billion in current prices in 2024–25, while tourism filled jobs rose to 696,000. Tourism growth in that year was driven by increases in short-term international visitors, although domestic tourism growth slowed as fewer overnight trips were partly offset by more day trips.

The international recovery is now materially visible. Tourism Research Australia reported that international visitation reached 8.3 million trips in the year ending December 2025, with $39.2 billion spent in Australia, up 19% from December 2024 levels. International spend in Australia was also 25% above December 2019 levels, even though international trips were still 5% below December 2019 levels.

This is an important signal. Australia has not fully recovered international visitor volume compared with pre-pandemic levels, but it has recovered and exceeded international visitor spend. That suggests stronger yield per visitor, longer stays, higher prices, education-related spend, and a more valuable inbound mix.

But it also means the country cannot rely only on headline spend. Visitor volume, route capacity, business travel, regional dispersal, and affordability still matter.

Domestic tourism remains the foundation of the Australian market. In the December quarter of 2025 alone, Australians took 29.5 million domestic overnight trips and spent $27.3 billion on overnight travel. They also took 70.7 million domestic day trips, spending $12.7 billion. Tourism Research Australia noted that domestic overnight trips and nights were broadly stable, but spend was softer, reflecting continued domestic travel alongside more cautious consumer spending.

The overall picture is therefore positive but uneven. Australia has regained momentum in international tourism, maintained a strong domestic travel base, expanded accommodation and aviation capacity, and continues to benefit from strong destination appeal. But the industry is not risk-free. Cost pressures, labour shortages, domestic affordability, climate exposure, uneven regional infrastructure, high long-haul airfares, and global competition all affect performance.

A balanced assessment is this: Australia’s tourism and hospitality sector has returned to growth, but the next stage is not simply recovery. It is about quality, yield, sustainability, accessibility, workforce capability, aviation connectivity, international diversification, and regional dispersal.

The Market Size & Overview

Australia’s tourism economy can be measured in several ways, and the differences matter. The Australian Bureau of Statistics measures tourism through the Tourism Satellite Account, which focuses on tourism GDP, tourism consumption and tourism employment. Tourism Research Australia measures visitor behaviour, trips, spend, supply and demand trends.

WTTC uses a broader economic-impact model that includes direct, indirect and induced effects. These are all useful, but they should not be treated as interchangeable.

On the official national accounts basis, Australia’s tourism GDP was $81.1 billion in current prices in 2024–25. In chain-volume terms, tourism GDP rose 0.7%. Domestic tourism consumption rose to $168.8 billion in current prices, while international tourism consumption rose to $42.3 billion, both the highest levels in the ABS time series.

Tourism employment is also material. The ABS reported 696,000 tourism filled jobs in 2024–25, equivalent to 4.4% of filled jobs in the whole economy. The largest increases in filled jobs occurred in accommodation, education and training, and sports and recreation services.

The broader WTTC view shows the sector’s wider economic footprint. WTTC reported that Australia’s Travel & Tourism sector contributed $297 billion to the national economy in 2024 and supported 1.6 million jobs. It forecast that the sector would reach a record $315 billion in 2025, with domestic visitor spending forecast to approach $173 billion and international visitor spending forecast to reach $39 billion.

The practical conclusion is clear: tourism and hospitality are not peripheral sectors in Australia. They are significant contributors to GDP, employment, exports, regional development, small business activity, accommodation demand, foodservice spending, transport usage, and infrastructure investment.

Domestic travel is the base layer of the market. Australians continue to travel within the country, but recent patterns show more caution around spending. In the December quarter of 2025, domestic overnight spend was $27.3 billion, down 3% compared with the December quarter of 2024, while overnight trips remained broadly on par at 29.5 million. TRA specifically described the result as Australians continuing to travel domestically but remaining cautious with spending.

This matters for hotels, caravan parks, restaurants, pubs, attractions, regional destinations and airlines. When domestic consumers are under cost pressure, they may still travel, but they may shorten trips, choose cheaper accommodation, reduce restaurant spend, travel closer to home, or shift from overnight travel to day trips. This can preserve visitor numbers while weakening margins for operators.

Day trips are also commercially important. In the December quarter of 2025, Australians took 70.7 million day trips and spent $12.7 billion. Of these day trips, 36.6 million were for holidays, 21.5 million were for visiting friends and relatives, and 5.0 million were for business.

Day-trip demand supports restaurants, cafes, attractions, petrol stations, wineries, local events, retail, museums, galleries, beaches, parks and regional town centres. But it does not support accommodation in the same way as overnight travel. For destination economics, the quality of visitor mix matters as much as visitor volume.

International tourism is the higher-yield growth layer. In the year ending December 2025, Australia received 8.3 million international trips, up 8% from December 2024 levels. Visitors spent $39.2 billion in Australia, up 19%, and total trip spend reached $55.7 billion when spend outside Australia was included.

The purpose mix is important. Holiday travel accounted for 3.6 million trips and $12.9 billion in spend in Australia. Visiting friends and relatives accounted for 2.8 million trips and $5.4 billion. Business travel accounted for 758,000 trips and $1.9 billion, while education accounted for 540,000 trips and $14.5 billion in spend.

Education-related travel is a major differentiator for Australia. It connects tourism with universities, student accommodation, long-stay visitors, visiting family members, local transport, retail, foodservice and city hospitality. It can lift spending and nights even when pure holiday visitor volumes are still recovering.

Accommodation is another major pillar. Tourism Research Australia’s 2024 annual benchmark report recorded 335,300 accommodation rooms in establishments with 10 rooms or more, up 2.1% from 2023. Average accommodation occupancy was 71.4%, up 2.3 percentage points.

A 71.4% national occupancy level suggests a solid operating environment, but performance differs by market. Sydney, Melbourne, Brisbane, Perth, Adelaide, Hobart, Gold Coast, Cairns, regional resort areas and business-heavy markets do not behave the same way. Events, corporate travel, international arrivals, airline capacity, local supply additions and seasonality all affect room demand and pricing.

Aviation capacity is especially important for Australia because the country is geographically distant from many major source markets. In 2024, international aviation seats into Australia reached 25.9 million, up 14.7%, while international aviation load factor was 81.6%. Domestic aviation seats reached 74.3 million, up 1.9%, with a domestic load factor of 81.8%.

For a long-haul destination, aviation is not just transport infrastructure. It is demand infrastructure. If seat capacity is constrained, expensive or concentrated in a few gateways, international recovery becomes slower and regional dispersal becomes weaker. Strong aviation capacity supports inbound tourism, interstate travel, business events, regional access, and premium hotel demand.

Foodservice is also central to hospitality. In the ABS Tourism Satellite Account, takeaway and restaurant meals contributed $32.1 billion to tourism consumption in 2024–25, while food, alcohol and other beverage products contributed $25.7 billion. Accommodation services contributed $21.8 billion.

This shows why the tourism and hospitality industry should not be reduced to hotels alone. Restaurants, cafes, bars, wineries, pubs, takeaway operators, food markets, event catering, and regional food producers all form part of the visitor economy. They also serve residents, meaning foodservice performance reflects both tourism demand and domestic household pressure.

ABS retail data shows the café, restaurant and takeaway segment remained large but uneven in 2025. In June 2025, cafes, restaurants and takeaway food services fell 0.4% month-on-month in seasonally adjusted terms, with cafes, restaurants and catering services down 0.6% and takeaway food services down 0.1%. Restaurant & Catering Australia, using ABS Retail Trade data, stated that cafes, restaurants and takeaway food services recorded $66.273 billion in turnover for the financial year ending June 2025, up 2.5% year-on-year.

The foodservice reading is therefore mixed. Turnover remains large and still growing in nominal terms, but operators face pressure from wages, rents, energy, insurance, food costs, consumer price sensitivity and softer discretionary spending. Higher turnover does not automatically mean stronger profitability.

From a market-structure perspective, Australia’s visitor economy is strong but exposed to several constraints. Domestic tourism gives it resilience, but domestic households are cost-sensitive. International tourism gives it export value, but depends on air capacity and source-market sentiment.

Accommodation is expanding, but regional and event-period shortages remain possible. Foodservice is culturally central, but margin pressure is persistent. The next phase of growth will depend on productivity, destination quality and yield, not only volume.

Recent Developments

First, the visitor economy has shifted from recovery into a more strategic growth phase. Tourism Research Australia’s annual benchmark report stated that actions under the recovery phase of the THRIVE 2030 national visitor economy strategy helped set a sustainable growth path. In 2024, domestic trips remained high, international arrivals increased strongly, supply and capacity expanded, and the sector recorded high levels of tourism jobs and tourism businesses.

Second, international tourism is recovering strongly. International visitors to Australia increased by 15% in 2024 compared with 2023, although short-term visitor arrivals remained below the previous peak. By the year ending December 2025, international visitation had reached 8.3 million trips, with spend in Australia 25% above December 2019 levels despite trips remaining 5% below December 2019 levels.

That combination — lower trips than 2019 but higher spend than 2019 — is one of the most important industry signals. It suggests Australia is capturing more value per international visitor, but it also shows that the volume recovery is incomplete. For airlines, attractions, regional destinations, tour operators and some budget accommodation providers, visitor volume still matters.

Third, domestic travel is marked by growing spending caution. In 2024, Australians continued to prioritise travel, and domestic overnight trips rose by 2.4 million, or 2.1%, compared with 2023. But TRA also noted that travellers adjusted travel and spending patterns in response to cost pressures. The same caution appeared again in the December quarter of 2025, when overnight trips were broadly stable but overnight spend fell 3%.

This is a real operating issue for hospitality businesses. If consumers continue travelling but spend less per trip, operators may face higher traffic without proportional margin expansion. Hotels may see pressure in mid-market segments, restaurants may see lower average spend, and regional operators may need stronger packaging, events, and shoulder-season demand to protect revenue.

Fourth, accommodation and aviation capacity are expanding. In 2024, accommodation rooms increased to 335,300, occupancy rose to 71.4%, international aviation seats increased by 14.7%, and domestic aviation seats increased by 1.9%. These supply-side improvements are important because Australia cannot scale tourism purely through destination marketing. Visitors need rooms, flights, staff, transport, attractions and bookable experiences.

Fifth, workforce and skills shortages remain persistent constraints. TRA’s 2024 benchmark report noted that visitor economy supply and capacity expanded, but some supply constraints, including skills shortages, remained evident. It also reported 713,500 filled tourism jobs as of December 2024 and 13,400 tourism-related job vacancies advertised online.

Workforce is not a secondary issue. Hospitality is service-intensive. Hotels, restaurants, tour operators, event venues, attractions and regional operators require trained staff, managers, chefs, guides, cleaners, front-office teams, drivers and maintenance workers. Labour gaps directly affect service consistency, operating hours, guest satisfaction and profitability.

Sixth, major sporting events are acting as investment catalysts. TRA’s benchmark report noted that the 2032 Brisbane Olympic and Paralympic Games had already contributed to more investment activity in Queensland and added to the positive visitor-economy outlook. Major events can create hotel demand, restaurant traffic, aviation demand, destination visibility and infrastructure investment. But they can also expose accommodation shortages, transport bottlenecks and pricing issues if planning is weak.

Seventh, First Nations, sustainable, and accessible tourism are gaining mainstream focus. TRA’s 2024 report noted record-high engagement with First Nations experiences, improved environmental sustainability ranking, and record-high international visitor appreciation of Australia as a destination. These are not purely branding points. They affect Australia’s ability to differentiate itself in high-value global markets.

Eighth, international market diversification is reducing source-market risk. Austrade states that welcoming more visitors from Southeast Asia, China and India is central to the future success of Australia’s tourism industry. It is also supporting tourism ties with established and emerging markets, including Southeast Asia, China and India, while working on air routes, visa processes, and industry capability.

This matters because Australia’s inbound market must balance traditional source markets with high-growth regional markets. China remains important; Austrade states that China is Australia’s second-largest market for overseas arrivals and contributes about 25% of total international visitor spend. India and Southeast Asia are also strategically important because of demographics, aviation proximity, education links, business ties and rising outbound travel.

Ninth, sustainability is shifting from a policy goal to a commercial necessity. Australia’s tourism appeal depends heavily on natural and cultural assets. Austrade states that sustainable tourism is central to the future success of the visitor economy and that the National Sustainability Framework for the Visitor Economy aims for Australia to become a world leader in sustainable tourism.

This is not optional. Climate exposure, reef protection, bushfire risk, water stress, biodiversity pressure, coastal vulnerability and destination overcrowding are direct tourism risks. Australia’s best-known tourism assets are also environmentally sensitive. Growth without environmental discipline can damage the product.

Finally, accessible tourism represents a significant, underserved market. Austrade states that 18% of Australians, or 4.4 million people, have a disability, and that domestic travel by people with accessibility needs and those travelling with them was worth $6.8 billion in the June quarter of 2023, representing 21% of total domestic tourism spend in that quarter.

Accessible tourism should be understood commercially as well as socially. Better accessibility improves the visitor experience for people with disabilities, older travellers, families with prams, people with temporary mobility needs, and multigenerational groups. For hotels, restaurants, attractions and destinations, accessibility is a market-expansion strategy.

Overall, Australia’s recent developments show a sector moving in the right direction: stronger international spend, resilient domestic travel, expanding capacity, better sustainability framing, stronger focus on accessibility, and a credible long-term strategy. The risks are equally clear: domestic spending pressure, labour shortages, climate exposure, uneven regional capacity, dependence on aviation recovery, and the need to convert visitor numbers into sustainable yield.

Government Initiatives

Australia’s central tourism policy framework is THRIVE 2030, the national strategy for the long-term sustainable growth of the visitor economy. Austrade describes the strategy as industry-led and government-enabled, with a vision to provide world-leading services and experiences to visitors while delivering significant and sustainable benefits to the Australian economy and community.

THRIVE 2030 is built around three long-term themes: diversifying markets, experiences and destinations; modernising the visitor economy workforce, infrastructure and business practices; and improving collaboration between industry and government through high-quality data and insights.

The strategy’s core target is visitor spend of $230 billion by 2030, including $95 billion in regional Australia. Austrade notes that the $230 billion target now excludes spending by long-stay international students, making the target more closely aligned with international tourism measurement standards.

This target is commercially important because it shifts the discussion from arrivals alone to visitor spend. Australia is a long-haul, relatively high-cost destination. It should not compete only on visitor volume. Its stronger opportunity is high-quality, high-yield tourism that benefits cities, regions, First Nations operators, accommodation providers, restaurants, transport operators, events, attractions and local communities.

The first phase of THRIVE 2030 focused on recovery from 2022 to 2024. Austrade stated that the recovery phase produced record high visitor spend, record numbers of tourism jobs and tourism businesses, and more domestic overnight trips.

The next THRIVE 2030 Action Plan, published in February 2026, covers the period to 2030. Its five focus areas are to grow international visitation and expenditure from established and emerging markets; develop new experiences and events that improve visitor dispersal; support businesses to modernise and build resilience while attracting and retaining a skilled workforce; make the visitor economy more sustainable and accessible while embedding First Nations cultural heritage; and modernise data and insights to guide policy and investment.

These priorities are directionally correct. Australia’s constraint is not lack of global awareness. It is the ability to turn awareness into bookable demand, regional dispersal, quality experiences, skilled service delivery, sustainable operations, and commercially viable tourism businesses.

International market development is a major initiative area. Austrade is supporting efforts to attract and better service leisure, business and education travel, with Southeast Asia, China and India identified as central to the industry’s future success. It is also advising on destination marketing, distribution development, new air routes, visa processes and industry capability.

This is strategically important. Australia’s visitor economy cannot depend too heavily on a narrow group of traditional source markets. Diversification reduces exposure to economic downturns, geopolitical issues, aviation disruptions, currency movements and demand shocks. India and Southeast Asia are especially relevant because they combine population scale, rising middle-class travel, education links, business ties and relative geographic proximity.

Workforce and skills are another government priority. Austrade identifies growing a secure and resilient tourism workforce as a THRIVE 2030 policy priority and has supported workforce action planning, business capability resources, technical working groups and research into making the visitor economy a “career of choice.”

This is essential because tourism and hospitality cannot be upgraded through branding alone. A premium visitor economy requires skilled people: hotel staff, chefs, restaurant managers, tour guides, event teams, transport workers, multilingual service staff, sustainability professionals and digital operators. If the workforce is unstable, service quality deteriorates.

Accessibility is also embedded in the national strategy. THRIVE 2030 includes action items to develop tourism assets, infrastructure and experiences accessible to all people, and to improve promotion and information about accessible infrastructure at destinations, accommodation, venues and experiences.

The government has also supported accessible tourism through initiatives such as the $10 million Caravan Parks Grant Program, which supported eligible caravan parks with infrastructure upgrades, many related to accessibility, and the Reviving International Tourism Grant Program, which included digital accessibility upgrades.

Sustainable tourism is another core initiative area. Austrade states that the National Sustainability Framework for the Visitor Economy and the Sustainable Tourism Toolkit were developed with state and territory governments and Tourism Australia to support sustainable growth. The framework sets a goal for Australia to become a world leader in sustainable tourism, while the toolkit gives practical guidance to tourism businesses, especially small and medium-sized operators.

This is important because most tourism businesses are not large corporates with dedicated sustainability teams. They need practical tools that help them manage energy use, waste, water, procurement, accessibility, cultural respect, visitor behaviour and environmental impact without adding unmanageable administrative burden.

Tourism Australia’s “Green is Our Gold” initiative also supports the sustainability agenda by inviting tourism businesses to join the Green and Gold Promise and align with the National Sustainability Framework for the Visitor Economy.

First Nations cultural heritage is also increasingly central to the national visitor-economy strategy. The THRIVE 2030 Action Plan includes embedding Australia’s First Nations cultural heritage as part of making the visitor economy more sustainable and accessible. This is a major opportunity, but it requires care. First Nations tourism should be community-led, culturally respectful, commercially viable and protected from superficial packaging.

Data modernisation is another important initiative. The 2026 THRIVE 2030 Action Plan includes modernising data and insights to give a more holistic view of visitor-economy growth and guide policy and investment decisions. This matters because tourism investment is highly place-specific. Better data helps governments and operators understand where demand is growing, where supply gaps exist, which source markets are recovering, and which regions need infrastructure or product development.

The government also recognises regional tourism as a core growth objective. THRIVE 2030 targets $95 billion in visitor spend in regional Australia by 2030. Regional dispersal is commercially and politically important because it spreads tourism benefits beyond major gateways. But it requires practical execution: transport access, accommodation quality, digital distribution, workforce availability, foodservice capacity, visitor safety, signage, booking systems and destination management.

The 2032 Brisbane Olympic and Paralympic Games are another major strategic catalyst. TRA’s benchmark report noted that the Games have already led to more investment activity in Queensland and support a positive outlook for the visitor economy. The opportunity is significant, but major events do not automatically produce long-term tourism gains. Australia will need accommodation planning, aviation capacity, regional itineraries, workforce readiness, destination storytelling and post-event conversion strategies.

Overall, Australia’s government initiatives are relatively well-aligned with the sector’s real needs: international market growth, regional dispersal, workforce development, sustainability, accessibility, First Nations tourism, data modernisation and long-term investment. The main risk is not strategic direction. It is execution across a fragmented ecosystem of federal agencies, state and territory governments, local councils, tourism bodies, airlines, accommodation operators, restaurants, event owners, attractions and small businesses.

Australia’s tourism and hospitality industry has strong fundamentals: high destination appeal, a resilient domestic market, recovering international demand, strong aviation and accommodation capacity, globally recognisable natural assets, and a serious national strategy. The next phase will be harder than the recovery phase. It will require more than campaigns. It will require disciplined destination management, better workforce systems, stronger regional product, improved accessibility, credible sustainability, and a sharper focus on high-value visitor spend.

The opportunity is clear: Australia can remain one of the world’s most desirable long-haul destinations while building a more resilient, regional, sustainable and higher-yield visitor economy. The constraint is equally clear: reputation alone is not enough. The industry has to keep improving the actual experience visitors buy, not only the image they see before they arrive.