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Current state of the Australian tourism sector

See all articlesCurrent state of the Australian Tourism Sector
Corporate advisory
Kieran Ellis
Kieran Ellis
June 19, 2024
minute read

Economy is on track to fully recover to pre-pandemic levels

Nash Advisory participated in the 2024 Australian Tourism Exchange (ATE) Conference in Melbourne this May. We saw unprecedented participation with over 2,600 delegates, including 1,500 Australian sellers and 714 global tourism buyers. During the conference, it was revealed that Australia’s tourism economy is on track to fully recover to pre-pandemic levelsby the end of this year, driven by steady increases in international visitation across most markets.

In 2023, Australia welcomed over 7.1 million international short-term arrivals, reaching 76% of 2019 levels and nearly double the number from 2022. By March 2024, inbound arrivals had reached 91% of 2019 levels, with Vietnam, the Philippines, Korea, India, New Zealand and Indonesia exceeding their pre-pandemic numbers​. Crucial to the continued international arrival recovery will be an increase in arrivals from key source markets.

The positive economic outlook is further supported by the Australian Government’s THRIVE 2030 strategy, which aims to return visitor expenditure to pre-COVID levels of $166 billion by 2024 and grow it to $230 billion by 2030. This strategy focuses on collaboration, modernisation, and diversification of the tourism sector, ensuring sustainable growth. Additionally, investments in tourism infrastructure and targeted marketing campaigns are expected to bolster the recovery, making Australia an even more attractive destination for international visitors​.

Phillipa Harrison, Tourism Australia Managing Director

“We are confident this is the year we will return to those 2019 levels so we can stop referring to that benchmark and once again focus on the sustainable growth of our industry which we experienced in the decade leading up to the pandemic.”

Key source markets expected to reach pre-pandemic levels in 2024 and 2025

Inbound arrival statistics as of March 2024 show that key markets including India and South Korea are exceeding pre-pandemic numbers. Crucial to the continued recovery will be recovering rates of arrivals from key source markets including:

  • China - YTD international arrival numbers for March 2024 are at 59% of pre-pandemic levels, with 194,006 fewer arrivals compared to YTD March 2019.
  • United Kingdom - YTD international arrival numbers for March 2024 are at 93% of pre-pandemic levels, with 16,413 fewer arrivals compared to YTD March 2019.
  • Japan - YTD internationa larrival numbers for March 2024 are at 82% of pre-pandemic levels, with 23,279 fewer arrivals compared to YTD March 2019.
  • Singapore - YTD international arrival numbers for March 2024 are at 82% of pre-pandemic levels, with 15,972 fewer arrivals compared to YTD March 2019.
  • Hong Kong - YTD international arrival numbers for March 2024 are at 79% of pre-pandemic levels, with 15,731 fewer arrivals compared to YTD March 2019.

International arrivals from China to Australia have recovered to 59% of pre-pandemic levels, with the potential for an additional 260,000 visitors annually if numbers recover fully. The slow return is due to China's prolonged COVID-19 restrictions, economic uncertainties, and logistical challenges like limited flight availability and higher travel costs. Despite geopolitical tensions and China's cautious reopening strategy continuing to present ongoing challenges, the outlook is positive. China's economy is rebounding, consumer confidence is rising, and travel restrictions are easing. Chinese tourists are increasingly interested in experiential travel, cultural exploration, and wellness tourism, which should drive a significant increase in international travel. These factors are expected to restore arrival levels to pre-pandemic numbers by the end of 2025.

Source: Toursim Research Australia

Recent strategic acquisitions and investments in the Australian tourism market reflecting investors renewed confidence in the sector

The recent surge in strategic acquisitions and investments in the Australian tourism sector indicates a confident market poised for growth and consolidation.

  • Hornblower Group, the parent company of Journey Beyond, is undergoing a significant recapitalisation. Strategic Value Partners (SVP) is acquiring a majority stake in Hornblower, while Crestview Partners retains a significant minority position and becoming the sole owner of Journey Beyond.
  • Experience Co Ltd is set to unveil a strategic review led by E&P, aiming to evaluate its business operations and explore opportunities for growth or restructuring. This review comes as the company seeks to optimise its performance and strategic direction amid the evolving travel industry landscape​.
  • Qantas has acquired 100% of Tripadeal, a travel package booking company, to capitaliseon the booming demand for travel packages. This acquisition is part of Qantas’s strategy to expand its offerings in the travel market and enhance its customer value proposition​.
  • Travel + Leisure Co. is acquiring Accor Vacation Club, the vacation ownership business of Accor, for USD 48.4 million. This acquisition includes 24 resorts and nearly 30,000 members, enhancing Travel + Leisure's portfolio and expanding its presence in the AsiaPacific region​.

The increasing confidence in the recovery of the Australian tourism sector has also been displayed in the recovery of share prices of key listed industry players since the COVID pandemic, reflecting an optimistic outlook and the sector's preparedness to seize growth opportunities, and as such are well-capitalised and poised to deploy resources for acquisitions.

This resurgence reflects the broader recovery of the tourism industry, driven by pent-up travel demand, increased consumer confidence, and strategic adaptations by businesses across the sector.

Australian listed companies share price change Jan-19 to Feb-24

“Despite recent cost and inflationary pressures, many of the operators that we are speaking with are forecasting strong FY25 trading.

There looks to be continued acquisition activity within the tourism sector as valuations of the key acquirers in the Australian market recover as their own trading strengthens as these pressures stabilise”. Kieran Ellis - Nash Advisory.


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