Get unique insights into the Australian tourism sector
Tourism is one of Australia's fastest growing industries, continually attracting strong local and foreign investment year after year. In the 2017 to 2018 financial year, the tourism sector recorded:
- $131.4 billion in spend from local and overseas consumers.
- $6.4 billion increase in infrastructure investment in projects over $20 million
- 3% increase in local employment
As local and foreign interest increases, Nash Advisory has been diligently tracking specific tourism deals in Australia. Contact us to learn more about the sector.
Public company trading and operation data
There are four notable companies that operate within the Australian tourism industry. These companies have a combined enterprise value of around $2 billion, and collectively make over $1 billion in revenue each financial year.
Two of the most prominent are Experience Co. Limited and Sealink Travel Group, who have recently benefited from fortuitous market trends. Thanks to the strength of the local tourism market, these businesses have:
- Followed an aggressive acquisition strategy
- Diversified their product offering
- Increased their geographic reach
Get the inside story on the acquisitions of operations of Australia's largest tourism businesses.
In summary: key sector insights
By analysing market trends, we can take a deep dive into the reasons why tourism is profitable in Australia. Several sectors stand out as growth pillars for the greater tourism industry, and favourable trends suggest that these will continue to prosper through 2019 and beyond.
1. Inbound tourism
Inbound tourism is growing substantially in the Australian travel industry. Market trends suggest that younger generations want to visit areas with distinctive cultural and natural heritage. Countries that benefit from this trend are the United States, New Zealand, and Australia.
There are several reasons why the Australian tourism market is increasing in popularity:
- Foreign tourists are being spurred to make the trip thanks to the falling Australian dollar.
- Cashed up youth are pushing trends towards a growth in experiential tourism.
- A burgeoning middle class in China and India has seen greater interest from Asian markets.
2. Adventure and adrenaline
Adventure, adrenaline, and experiential tourism companies are popular for acquisition. These businesses are typically geared towards consumers with greater budgets. They demand a higher price point, and have a wider range of product offerings.
Based on market data, Nash Advisory can make several predictions for 2019 and beyond:
- Booking agents will shore up long term future with control pricing and vertical integration.
- Private equity funds will continue to acquire landmark tourism operations.
- Adventure and adrenaline businesses will continue to be an appealing prospect to buyers with scale.
3. Budget youth backpacking
Youth travel accounts for a quarter of all international travel worldwide, and is one of the most popular segments of the Australian tourism industry. International youth travel is becoming increasingly popular for several reasons:
- Ease of access for work and travel visas for people under 30
- Competitive wages for those wishing to work while travelling
- Social media and the spread of experiential tourism
Worldwide cultural trends affecting youth tourism
The growth of youth travel reflects a wider cultural shift towards independence. Younger people are getting married later in life, and choosing to spend the money they would ordinarily save for a house and family on seeing the world. This shift has seen many other changing factors:
- More young travellers are living at home with their parents in order to save.
- Gap years are a popular rite of passage for Australian and European travellers.
- Young people will often work and travel until they can no longer afford to do so.
Australian youth tourism
In Australia, youth tourism is a key pillar of the wider tourism industry, and is expected to increase by as much as $10 billion by 2020. The youth tourism sector is so profitable because customers arrive in Australia ready to spend money, and ready to work to earn to spend more.
- Over 600,000 young tourists visited Australia last financial year.
- The average young tourist will stay for 63 nights and spend $7,900.
- 56% of young tourists will visit between 3 and 8+ destination in Australia.
Nash Advisory has all the tools you need to help you understand the state of the tourism industry.