Victoria tourism spend hits record $37.8 billion

Business, corporate and incentive events in Melbourne. Skyline.

Latest National and International Visitor Survey data to year-ending December 2023 released last week showed total tourism spend in Victoria has hit a record $37.8 billion, 117 per cent of total spend by visitors at the same time in 2019 ($32.5 billion).

(Lead Image: Melbourne Skyline)

Victoria also led the pack again with Melbourne being the most popular destination for interstate visitors, seeing 6.1 million visitors spend $7.9 billion in our capital city, compared to Sydney which received 5.2 million visitors who spent $6.1 billion.

Victoria Tourism Industry Council CEO Felicia Mariani said Victoria’s current performance is remarkable when you consider that, in March 2021, Victoria’s total tourism spend fell to its lowest point of $9.8 billion, from a record high of $32.5 billion at the same time in 2020.

“These achievements are testament to the vibrant and exciting major event calendar that has really fuelled the recovery of our capital city, with record attendances in 2023 at our Australian Open and Australian Grand Prix. These events support key staples on our enviable hallmark event calendar like the Melbourne Cup Carnival, the Melbourne Food & Wine Festival, Melbourne Fashion Festival, Rising, Melbourne Comedy Festival, and the list goes on,” she said.

“To now sit at $37.8 billion in total spend from visitors to our state is an achievement we should be proud of, but the job is not done, and Victoria cannot afford to take its foot off the pedal as we revel in the glory of what has been achieved.

“We are still sitting in the number three spot overall for total tourism spend in the country, relinquishing our number two position behind NSW to Queensland during the pandemic, and we are unlikely to regain that spot without significant investment from the Victorian Government to go hard at driving demand for our destination.”

Currently, NSW has achieved $51 billion in total spend from visitors, QLD has hit $41 billion, and Victoria is sitting at $38 billion. Market share is a similar story, with NSW holding a whopping 30 per cent share; QLD sitting at 24 per cent market share, and Victoria occupying 22 per cent.

Victoria’s growth has stagnated in recent quarters and the gap between Victoria and Queensland will not be closed unless Victoria delivers higher growth rates, Mariani said.

“Over the last three consecutive quarters, Victoria’s growth has flatlined around the billion-dollar mark, compared to an average growth rate of $4-5 billion per quarter from March 2022 to March 2023, which is a worrying sign as we look to regain our pre-pandemic national position,” Mariani said.

Victoria’s visitor economy has the potential to grow a further $16 billion to $53 billion by 2028, according to recent projections from Tourism Research Australia.

“Let’s celebrate our success that in the year to March 2023, Victoria’s visitor economy more than doubled in value from the same time in 2022, growing from $16.4 billion to a record $35 billion – an astounding achievement that occurred 18 months ahead of recovery plans outlined in 2022. We must not, however, take our eyes off the $16 billion prize available to us,” Mariani said.

VTIC’s 2024/25 Victorian State Budget Submission focuses on the growth opportunity that exists for the state, pushing the government to invest in the continued escalation of the critical contribution that tourism can make to the state’s fragile economic position.

VTIC convened multiple sessions over the past six months to engage with more than 100 industry members in framing its submission, which adopts a very pragmatic approach to the asks, recognising the challenging fiscal position that the state is working to overcome.

“With the next two budget years projected to be very lean, and the reality that there will not be significant dollars to invest in the major infrastructure projects the industry needs, we must go full throttle on driving demand for the state,”  Mariani said.

“The next two years of the forward estimates must invest in pushing hard to keep demand high for Victoria on a global level. That’s why we are seeking $40 million per annum over the next two years for Visit Victoria’s discretionary marketing budget so they can do the job they were created to do in taking Victoria to the world.”

VTIC’s State Budget Submission includes 26 recommendations across Five Growth Levers:
1. Shaping policy reform to encourage growth
2. Investing in growth with an eye to the future
3. Investing in our workforce and industry to support growth
4. Investing in tourism infrastructure to maximise growth
5. Supporting legacy development for growth in Metro Melbourne

With Victoria’s international recovery significantly lagging the national performance at 73 per cent of prepandemic levels, compared to NSW at 96 per cent and QLD at 94 per cent, coupled with a slowing in visitation to our regional areas in Victoria, the Government must address this shortfall by driving demand.

“Victorians, particularly Melburnians, are increasingly travelling to overseas destinations which is why the new ‘Every bit Different’ campaign initiated by Visit Victoria in January is so important,” Mariani said.

“We need to be growing demand from interstate visitors to regional Victoria, as Victorians choose to satisfy the pent-up demand for overseas holidays. Only through investment and commitment from the Victorian Government, coupled with the investment and passion of the industry to succeed, will Victoria achieve the projected growth over the next four years and fully realise the $16 billion prize on our horizon.”

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