In 2015–16, international visitors, nights and expenditure continued their run of record highs. International visitors increased by 10.3%, which drove international spend up 14.1% to $38.1 billion. This was despite the average trip length falling by 4.6% overall. Declines in trip length were reported across most international markets and for most trip purposes.
Where do our visitors come from?
Asian markets continue to drive the growth in international tourism. In 2015–16, visitors from Asia increased 16.8% (to 3.4 million visitors), nights increased 10.9% (to 132 million nights) and spend increased 20% (to $20.1 billion). China, however, continued to help drive growth.
- SOUTH KOREA
- CHINA 1.1m 23%
- SOUTH KOREA 239,200 21%
- SINGAPORE 373,100 14.8%
- JAPAN 347,200 16.8%
- INDONESIA 140,800 2.8%
- CHINA 41.6m 13.2%
- SOUTH KOREA 1.5m 27%
- SINGAPORE 6.3m 16.3%
- JAPAN 9.1m 10.2%
- INDONESIA 4.7m 6.5%
- SOUTH KOREA
- CHINA $8.9b 27%
- SOUTH KOREA $1.5b 28%
- SINGAPORE $1.5b 19.5%
- JAPAN $1.5b 14.3%
- INDONESIA $698m 17.8%
New Zealand, the United States (US) and the United Kingdom (UK) continued to grow, but at a more modest rate than that of Asian markets. The US led the way, with visitors increasing 14% to 619,000, nights up 11% and spend up 20% to $3.6 billion. These results may have been influenced by the three-phase joint marketing campaign by Tourism Australia and Virgin Australia which targeted US visitors through The New York Times, Yahoo!, Facebook, Instagram and YouTube, as well as multiple advertising networks.
- The UK showed a continued recovery, with visitors increasing to 664,500 (up 5.6%) and spend increasing $3.8 billion (up 9.8%) – both at their highest levels since 2006–07.
- New Zealand continued to grow to record levels, and retained its top spot in terms of visitors (up 4.2% to 1.2 million visitors). Spend increased to $2.7 billion in 2015–16, up 6.6%.
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Why were they travelling to Australia?
In 2015–16, the main travel reasons of holiday (up 22%) and education (up 14.4%) showed the largest growth in visitors. These travel categories also continued to have the highest spend, contributing almost two-thirds of international visitor expenditure.
- Holiday visitors increased to 3.5 million visitors, with 81.6 million nights and $15.9 billion in total spend (up 23%).
- Education visitors increased to 475,100 visitors, nights increased to 62.5 million and spend increased to $9.3 billion (up 23%). Education visitors also had the longest average length of stay (131.6 nights per visit).
Trips for the purpose of visiting friends and relatives (VFR) – the second most common purpose for international visitors – grew moderately (up 2.7% to 1.9 million visitors). Spend increased 4.8% to $5.8 billion, driven by increased spend on education, airfares and entertainment.
Visitors travelling for the purpose of business or employment fell by 4.1% and 6.3%, respectively. Business declines may be partially attributed to record highs in 2014–15, when the G20 Summit was hosted in Brisbane.
What were their travel preferences?
Hotels, motels, guest houses and serviced apartments continued to be the most popular form of accommodation for visitors, with 54% (3.9 million) choosing this accommodation type (up 11.8%). However, shorter-stay holiday and business visitors were more likely to choose this accommodation, so the average length of stay was just 7.4 nights and only accounted for 11.6% of nights (28.7 million nights).
Rented houses or apartments attracted the most nights of all accommodation types, with 1 million visitors staying 96 million nights (or 39% of all nights). Driven largely by longer staying education and employment visitors, the average stay of 93.4 nights per visitor was almost double that of all other major accommodation types.
Dispersal to regional areas
Almost 300,000 more international visitors went to a regional area  in 2015–16 compared to 2014–15, with 37% (or 2.7 million visitors) venturing out of the capital cities. However, they continued to spend less time there with nights in regional areas only accounting for 20% of total nights.
New South Wales remains the most visited state, with visitation by 50% of international visitors. The popularity and ease of access through Sydney International Airport resulted in 42% of international visitors arriving in Sydney in 2015–16. This was significantly more than the international airports of Melbourne, Brisbane and Perth, which accounted for 25%, 13.7% and 10.0% of overseas arrivals, respectively.
Visitors increased to all states and territories except the Northern Territory, which fell by 2.9% to 279,500 in 2015–16. Average nights remained the highest in Western Australia at 31 nights, despite a 3.7% decline in total nights spent there.
Outside of social activities, outdoor and nature activities were the most popular, with 78% of international visitors participating. This high engagement with outdoor and nature experiences was beneficial in that more than half of international visitors were willing to recommend Australia as a holiday destination because of the quality of the natural environment.
 Regional areas are defined as all tourism regions outside of state capitals cities (Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart, Darwin and Canberra) and the Gold Coast.
What tourism activity is forecast for international markets?
FIVE YEARS TO 2020-21
Tourism Research Australia forecasts show that over the next five years to 2020–21, Australian will likely receive 10.2 million international visitors (at a growth rate of 5.3% p.a.). Growth in nights and average spend could see international spend increase by 9.6% per annum to $60.3 billion. Asian markets, particularly China, should drive this growth, with China expected to overtake New Zealand as our top inbound market in 2017–18.
Five years to 2020-21
- Visitors (p.a.)
- CHINA 2.1 million 13.5%
- SINGAPORE 505,000 3.3%
- MALAYSIA 450,000 4.8%
- Spend (p.a.)
- CHINA $20.6 billion 18.2%
- SINGAPORE $1.9 billion 6.0%
- MALAYSIA $1.7 billion 7.0%
While Asian markets are expected to remain the key drivers, current forecasts show more traditional markets should also continue to perform well. Spend from the United States is expected to overtake the United Kingdom in 2016–17, and visitors from the United States are expected to exceed those from the United Kingdom in 2020–21.
Five years to 2020-21
- Visitors (p.a.)
- NZ 1.5 million 3.1%
- US 813,000 4.3%
- UK 812,000 2.8%
- Spend (p.a.)
- NZ $3.5 billion 5.8%
- US $5.1 billion 7.0%
- UK $4.5 billion 3.2%
Holiday travel is expected to continue as the key driver of growth over the next five years, accounting for 51% of all visitors (or 5.2 million visitors) by 2020–21. The share of education visitors is also expected to remain similar at 6.5% of all visitors to increase to 665,000 visitors by 2020–21. Those who were visiting friends and relatives (VFR) are expected to reach 2.6 million, an increase of 5.3% per annum.