Australian tourism businesses are facing sky-high increases in marketing costs as the country struggles to regain its hold on a once strong export earner. While the flow of overseas holiday makers is yet to return to 2019 levels, Australian tourism businesses are spending up to twice their pre-covid budgets on marketing activities to lure international visitors back.
“We always knew the restart of tourism would be tough – shutting borders effectively closed many tourism businesses servicing international markets – and more than two years on we are still working hard to revive our visitor markets,” ATEC Managing Director Peter Shelley said.
“More recent headwinds have added to the challenge with geo-political, environmental, aviation and economic concerns putting pressure on decisions to travel.
“For Australian tourism businesses in particular, the costs of marketing their product in Europe or the US have increased significantly, and this is really showing in our ability to hold space in the international travel marketplace.”
A recent survey by ATEC found more than three quarters of export tourism businesses had seen increases in their marketing budget of more than 20% with a quarter now facing marketing budgets double their 2019 spend.
Businesses are sighting pressures including increased spending by competitor destinations, exchange rates, cost of attending trade shows, advertising costs and overall business travel expenses as major contributors to marketing budgets.
“While we are seeing pressures on individual businesses, the cost of marketing Australia to a global audience has also increased for our marketing agencies who are now needing to significantly increase their advertising spend to maintain ‘top of mind’ awareness for intending international travellers.
“As we move towards this year’s Federal Budget, we are seeing agencies such as Tourism Australia trying to do more with much the same budget, in real terms, they’ve been working with for the past decade.
“While many of our competitors have doubled down on their tourism marketing spend, Australia has seen state tourism budgets trimmed and the collective pool of marketing funds to promote Australia to high spending international travellers shrink in real terms.”
Mr Shelley hopes the Federal Government will recognise the return-on-investment export tourism creates by increasing Tourism Australia funding in next week’s budget.
“Failing to invest in tourism is failing to invest in an Australian success story. We should not forget that in 2019 tourism’s GDP grew by 3.5%, outpacing the national GDP and that is an economic benefit we are currently missing out on.
“We call on the Federal Government to support tourism, to support the economy by helping tourism businesses across Australia to get back to into the market and get back to doing what they do best.”
