Regional Travel is Booming

Australia's visitor economy began to recover in 2022 after the devastating impact of the pandemic. By the end of the year, demand for domestic travel had returned to around pre-pandemic levels.

Domestic overnight trips in 2023 were 4.1% higher than the previous year and 3.8% below pre-pandemic levels, while domestic overnight spending was 7.9% higher than the previous year and 35.4% above pre-pandemic levels. These elevated spending patterns reflected pent-up demand for travel experiences, elevated savings accumulated during the pandemic, and government travel vouchers.

Increased availability of international outbound travel, and cost-of-living pressures leading to reduced discretionary spending, are expected to have moderated domestic tourism growth over the course of 2024. Meanwhile, domestic overnight business travel and day trips are expected to continue their recovery trajectory after experiencing a slower pick-up following the pandemic than that of overnight leisure travel.

Looking forward, both growth in domestic spend and visitation are expected to return to solid growth as inflationary pressures ease. By 2028, Tourism Research Australia expects overnight trip expenditure will be 20% higher than 2023, while domestic overnight trips are expected to reach 128.9 million in 2028, 15% higher than 2023.

Regional tourism continues to perform strongly due continued support from various state government initiatives, aimed at stimulating demand. The recent lockdowns during the COVID-19 pandemic have also reintroduced Australians to the many natural and cultural attractions regional travel has to offer. Some of the trends that are driving that are the increased demand include nature-based experiences, growing popularity of Indigenous tourism, and the increased demand for food and wine experiences.

In regional NSW, expenditure on domestic travel in 2024 was 42.0% higher than pre-covid levels. This compares to expenditure on domestic travel in Sydney of 30.1% over the same period.