Tourism Businesses in Australia: June 2016 to 2021

This report provides statistics on Australia’s tourism businesses. It reports on changes from June 2016 to June 2021 in:

• business size
• numbers
• contributions.

By presenting information over this timeframe, this report shows the:

• strong growth in tourism demand prior to the pandemic
• severe disruption to Australia’s visitor economy in 2020 and 2021.

Tourism businesses snapshot

There were 334,532 tourism businesses in Australia as at June 2021. This means one in 7 Australian businesses (14%) were tourism-related.

Increasing tourism businesses

The number of tourism businesses increased by 2.9% (or 9,400 businesses) in 2020-21, compared to 2019-20. This increase in business numbers occurred despite the negative impacts of COVID-19 on visitor demand.

Reasons for this result included:

• governments delivered different support packages. This allowed businesses to operate on reduced turnovers
• a large increase in the number of small and micro businesses
• an increase in the number of:
  • retail trade businesses (especially online operators)
  • cafes, restaurants and take-away businesses.

However, some tourism businesses lost workers and others stopped operation.

About this report

In this report, we show changes:

• in tourism business numbers
• in tourism’s economic contribution
• by business size
• by state and territory
• by business turnover.

You can also see changes in these sectors:

• taxi transport
• accommodation
• cafes
• restaurants
• takeaways
• travel agency and tour operator services
• retail trade.

Business categories

This report categorises tourism businesses by employment size. This is to make it easier to understand growth patterns. The categories are:

• non-employing – sole trader with no other employees
• micro – 1 to 4 employees
• small – 5 to 19 employees
• medium-sized – 20 to 199 employees
• large – 200 and over employees.

Difficult operating conditions

The COVID-19 pandemic began to impact Australia from March 2020. This saw:

• governments closing international and state borders
• airlines grounding passenger fleets
• businesses shutting down and hotels going into hibernation.

Visitation and spend slumped as:

• global travellers cancelled plans
• travel restrictions stifled domestic tourism.

Impacts on the sector during 2020-21

No sector of the economy escaped the impacts of the pandemic. However, tourism was one of the industries most affected:

• Tourism Gross Domestic Product (GDP) fell 37% in 2020-21. This is compared with 4.3% growth for the economy during the same period.
• Tourism employment fell 20% (or 129,000 workers) in 2020-21. Australia’s workforce grew 1.1% over the same period.

Number of tourism businesses

The number of tourism businesses in Australia’s visitor economy continued to grow in 2020-21. This was despite a very difficult operating environment.

Australia had 334,532 tourism businesses at June 2021. This was:

• 9% higher than at June 2020
• 19% higher than at June 2016.

However, the rate of growth in tourism businesses slowed in 2020-21 compared with previous years.

Note: Totals may vary from actual estimates. This is due to a technique used at the Australian Bureau of Statistics to ensure data confidentiality.

Drivers of tourism business growth

Drivers of growth in tourism businesses in the previous financial year (between July 2020 and June 2021), were:

• 8,623 more retail trade businesses. 45% of new entrants were non-store retailing and retail commission base (online businesses)
• 4,970 more cafes, restaurants and take-away businesses. This was an increase of 5.7%. All growth came from micro and small businesses
• 1,749 more businesses providing creative services. This was up 5.5%. This category includes artists, musicians and performers
• 154 more motor vehicle hiring businesses
• 87 more accommodation related businesses
• 68 businesses related to air and water transport.

Tourism businesses in decline

Over the same most-recent financial year period there was a decline in:

• taxi transport and other road transport businesses. This was down 15% (or 6,156 fewer businesses)
• travel agency and tour operator services. This was down 1.6% (or 148 fewer businesses).

Business size

Tourism businesses are mostly small operations. At June 2021:

• almost half (45.1%) of tourism businesses had no employees other than the owner
• 33% had between one and 4 employees.

Compared with June 2019:

• the share of non-employing businesses decreased (down 3.4%)
• micro businesses increased by a similar extent (up 3.6%).

The concentration of smaller businesses with zero to 4 employees is greatest in:

• taxi transport (99%)
• cultural services (96%)
• motor vehicle hire (92%).

Shift in business number and size since 2019

There was strong growth in the number of tourism businesses in the years leading up to the pandemic (Table 2). This growth in activity was most evident among non-employing businesses. This was mostly due to emerging ride-share and car-share businesses.

Over this period there was also strong growth in large tourism businesses.

Since 2019 there have been more shifts in business sizes:

• Tourism businesses in 2021 were smaller on average than tourism businesses in 2019
• The growth in small and micro businesses only partly offsets the decline in larger businesses. This means there is an overall decline in the tourism workforce.

This employment decline is consistent with results of the National Tourism Satellite Account 2020–21. This reported a 25% fall in tourism workers between 2018-19 and 2020-21.

Turnover of tourism businesses

Turnover for most tourism businesses was low. At June 2021:

• over half (53%) had annual revenues of less than $200,000
• 10% had revenues greater than $2 million per annum
• 47% of businesses in regional Australia had revenues of less than $200,000 per annum. This was compared to 56% of those in capital cities and the Gold Coast.

Figure 2 shows that business turnover in 2021 on average was lower than in 2016. This is due to a greater share of businesses with turnover of less than $50k in the visitor economy.

Tourism business growth across Australia

Growth by state and territory

At June 2021, most tourism businesses (81%) were located in:

• New South Wales (NSW)
• Victoria (Vic)
• Queensland (Qld).

This is consistent with the State Tourism Satellite Account (STSA) data. The STSA shows these 3 states collectively accounted for 77% of:

• tourism GDP in 2019–20
• national visitor consumption in 2019–20.

Faster growth

Business numbers grew most quickly between June 2016 and June 2019 in the following states and territories:

• Vic average annual growth of 5.9%
• NSW average annual growth of 4.3%
• Australian Capital Territory (ACT) average annual growth of 4.0%.

Slower growth

The slower growing states between June 2016 and June 2019 were:

• South Australia (SA) (average annual growth of 1.6%)
• Northern Territory (NT) (average annual growth of 0.9%).

Growth between June 2019 and June 2021

Patterns of growth have changed between June 2019 and June 2021. States and territories showing stronger growth in business numbers in this more recent period were:

• Tas (up 3.0%)
• Vic (up 3.0%)
• Qld (up 2.2%)
• NT (up 2.1%)
• SA (up 2.0%)
• ACT and NSW (each up 1.8%)
• WA (up 0.8%)

Growth in Australia’s regions

The number of tourism businesses in regional Australia increased between June 2016 and June 2019. This was by an average of 1.8% annually. This was well below the 5.6% business growth rate for capital cities and the Gold Coast. The share of tourism business in regional Australia declined from 33.0% to 30.6% as a result.

More recent data shows regional Australia saw a 3.8% growth in tourism businesses overall between June 2019 and June 2021. This was compared to 4.5% in the capital cities and Gold Coast. The share of tourism business in regional Australia decreased further. This was from 30.6% to 30.5%, as a result.

Breakdown of growth in regional Australia

The growth in tourism businesses from June 2019 in regional Australia was not evenly spread (Table 3). This included:

• a large decline in medium-sized businesses (down 6.9%)
• slight declines in:
  • large businesses (down 0.6%)
  • non-employing businesses (down 1.3%)
• a slight increase in small businesses (up 3.8%)
• a large increase in micro businesses (up 12.5%).

Data tables

Find out more about tourism businesses in our data tables.