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Tourism Market Outlook 2023

Travel demand proves resilient in the face of economic headwinds

Four years since the onset of the pandemic, the global tourism landscape faces a new set of challenges. Like businesses in many other industries, Australian tourism operators are navigating challenging economic conditions while adapting to new and evolving consumer travel trends and behaviours post pandemic. Amid these challenges, there remains strong confidence in the continued growth of the travel and tourism sector as consumers continue to prioritise travel in their household spending decisions.

The Australian tourism sector has rebounded strongly, and while recent months have shown a softening in domestic travel, the return of international visitors has picked up pace with September data showing a recovery of 83% on pre-pandemic levels. The reopening of China earlier this year, and the return of Australia’s Approved Destination Status have given a boost to visitor volumes. Strong existing ties between Australia and Asia underscore the growth potential of travel within the region, with fast developing markets like Vietnam and India picking up momentum, offering opportunities for tourism and beyond.

While the recovery of tourism in Australia following the pandemic has been remarkable and demand has proved remarkably resilient in the face of increasing economic headwinds, some uncertainty now looms for the sector. A backdrop of slowing economic growth, tighter financial conditions and global uncertainty is expected to weigh on the tourism sector in the short-term. The future path of Australia’s tourism sector depends on the interplay of a number of macroeconomic factors – cost of living pressures are likely to linger in the face of high and persistent inflation and rising interest rates while the volatile geopolitical landscape adds further unease to consumer travel confidence.

All sectors of the tourism market look set to recover in 2024 and continue to grow at a faster rate than the broader Australian economy, with intention to travel remaining high despite persistent inflation and broader geopolitical uncertainties.

The data indicates that although Australians are cutting back on discretionary spending elsewhere, we’re simply unwilling to give up the share of our wallet we dedicate to travel. 

The forecasts which feature in the current publication, is developed from a combination of Deloitte Access Economics’ latest economic forecasts and sector specific inputs to project the outlook for Australia’s domestic and international tourism over the next three years.

About the Tourism Market Outlook

The Deloitte Access Economics Tourism Market Outlook provides insights into the issues facing the Australian tourism sector, including in-depth analysis of recent trends in the global and Australian economies and the implications of these trends for the domestic and international tourism markets.

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