Lack of support for tourism a lost opportunity, they say

THE peak body for Victoria’s tourism and events industry, VTIC, the Australian Tourism Export Council (ATEC) and the National Party have raised concerns about the impact, or just as importantly, the lack of impact from the Federal Budget on the struggling tourism sector.

The Victorian budget was also a disappointment.

VTIC has given a mixed response to the budget, noting its positive investment in industry capability but marking it down over the increased cost of travel.

Meanwhile, the Australian Tourism Export Council (ATEC) has hit out at the budget after it revealed plans to strip more than $50 million from Tourism Australia’s budget over the next four years, while also chiming in on the $10 increase to the Passenger Movement Charge.

ATEC claims it “sends the wrong signal” on the value placed on tourism as a $40 billion export sector, at a time when inbound visitor momentum is softening and global travel is becoming increasingly uncertain.

“This Budget reduces support for an industry that is still stabilising post the pandemic, and facing growing pressure around traveller affordability, aviation costs and booking conversion as a result of the Middle East conflict,” ATEC Managing Director Peter Shelley said.

The National Party has predictably focused on the situation for regional tourism operators.

The National’s Shadow Minister for Emergency Management and Shadow Minister for Tourism, David Littleproud was critical of the government for the lack of progress on a digital Incoming Passenger Card (IPC) which he said was an essential measure that needed to be immediately prioritised.

“A digital IPC would effectively improve arrivals processing into Australia, harness the productivity of the aviation industry, strengthen border security, and boost our nation’s international tourism competitiveness,” Mr Littleproud said.

“This Budget was also marred by a woeful inability to urgently address the challenges facing regional, rural and remote tourism operators - who have been severely impacted by public anxiety over fuel supplies, which have been stoked by Labor’s misguided $20 million taxpayer-funded National Fuel Security Campaign.”

According to industry data, demand in recent weeks has significantly reduced in regions, especially those situated more than two hours from capital cities – with bookings down by 80 per cent in some areas compared with March and April last year.

Mr Littleproud urged Labor to provide immediate support for tourism businesses across regional, rural and remote Australia.

“Labor must decisively recalibrate the National Fuel Security Campaign’s public messaging campaign, they must urgently launch a dedicated domestic tourism campaign to restore public confidence, and they must establish a daily public fuel dashboard so that Australians can see supply levels in real time.”

The Nationals’ leader Matt Canavan added Labor had also removed $10 million per year from the Wine Tourism and Cellar Door grant program.

“This program helped with cashflow and profitability, but Labor’s decision to end it will only increase the pressure wine growers are already facing,” Senator Canavan said.

Speaking while attending the Australian Tourism Exchange (ATE26) trade show in Adelaide, Chief Executive Officer of Destination Phillip Island Kim Storey supported the responses from ATEC and VTIC.

“I’m actually at an international trade event in Adelaide promoting the region to international agents,” said Ms Storey.

“Whilst we haven’t endorsed a response, we certainly support the VTIC analysis and their concerns and also the ATEC comments regarding the reduction in Tourism Australia's budget by $50m over four years, and the increase in the Passenger Movement Charge of $10.

“Tourism is a major regional economic driver, and we are concerned about the reduction in investment and priority by both governments,” she said.

Expanding on VTIC’s response, they welcomed the Federal Government’s two-year funding extension of the Quality Tourism Framework (QTF), recognising it as an important investment in strengthening the capability, sustainability and competitiveness of tourism businesses across Australia.

The program has already supported more than 7000 operators across Australia to achieve national standards in sustainability, accessibility and emissions reduction, with further uptake expected under the extended funding.

“Improving quality standards and supporting businesses, particularly in regional areas, to enhance their visitor offering is critical to maintaining Australia’s reputation as a high-quality, sustainable and inclusive destination,” said a spokesperson for VTIC.

“VTIC supports initiatives that provide practical tools and pathways for operators to continue lifting standards and meeting changing visitor expectations.

“However, VTIC shares industry concerns regarding the increase to the Passenger Movement Charge (PMC), which will rise from $70 to $80 per departing traveller. This measure will increase the cost of travel for both international visitors and Australians, at a time when the sector continues to navigate ongoing cost pressures and a highly competitive global environment.

“The additional cost, particularly for families and group travellers, risks impacting demand and may undermine efforts to drive visitation growth. The absence of prior industry consultation on the increase is also concerning, particularly given the importance of policy certainty and collaboration in supporting tourism recovery and long-term investment.

“VTIC notes the broader industry view that revenue generated through the PMC should more directly support tourism, aviation and border infrastructure, including the delivery of more seamless and efficient visitor experiences at Australia’s international gateways.”

VTIC say they will continue to advocate for balanced policy settings that both support industry capability and avoid placing additional cost burdens on travellers.

“Targeted investment in quality, sustainability and accessibility, alongside measures that enhance affordability and international competitiveness, will be essential to ensuring tourism continues to be a key driver of economic growth for Victoria and Australia.”

ATEC MD Peter Shelley is calling for more support, not less, in the present global climate.

“ATEC is calling on the Government to recognise the growing pressures facing the inbound tourism sector and provide stronger support for international market recovery, aviation affordability and global competitiveness as the industry continues to rebuild momentum in a highly volatile operating environment,” Mr Shelley said.

“While ATEC recognises the Government’s broader efficiency measures across agencies and programs, international tourism marketing should be treated as a strategic export investment rather than a discretionary saving measure.”

Shelley said Australia’s inbound tourism sector is under pressure, with latest international arrivals data showing holiday visitation slipping backwards following the impact of the Middle East conflict.

“March arrivals have seen the impact of conflict in the Middle East suggesting the momentum seen earlier this year beginning to soften as international travellers become more sensitive to flight costs, global uncertainty and affordability pressures.”

“While international interest in Australia remains strong, the challenge our industry faces is converting that interest into actual bookings in an increasingly cautious and expensive global travel environment.”

VTIC’s response to the Victorian budget

VTIC is pleased to see funding to attract international and national business events to Victoria in the 2026/27 Victorian budget, however warns the vast majority of that funding is only for the upcoming year covering the election campaign.

In FY2027, $15.5 million will be part of more than $44 million allocated to support the visitor economy, including delivery of AFL Grand Final events and the Regional Business Events Program (RBEP), administered by Business Events Victoria and Melbourne Convention Bureau.

VTIC CEO Lisa Patroni said the budget maintained operating costs for the sector within a tight budget but did not enable long-term campaigns or initiatives.

Specific funding for regional tourism includes $7.9 million to restore the historic Cape Otway Lightstation, renew parts of the Twelve Apostles Precinct, and other upgrades within Great Ocean Road Coast and parks.

An additional $800,000 will support tourism in the High Country through the Ride High Country Marketing program supporting tourism operators in Porepunkah and Bright who were impacted in the high-profile security incident in August last year.

Zoos Victoria's ‘Kids go free’ has been extended for children under 16 to visit Zoos Victoria parks on weekends, public holidays and in school holidays, costing $15.5 million in FY27.

Funding for year 2 of the Victorian Tourism Conference, delivered in partnership with VTIC, will continue under Tourism Industry Development programs now funded under a rephase of regional packaging funding.

Other programs that will continue include:

• Young People in Tourism program, delivered by the Young Tourism Network
• Business Skills Mentoring Program, delivered by Small Business Victor
• Regional Tourism Network Industry Strengthening Program.

Programs that will not continue include Emerging Leaders Network Conference, Choose Tourism and Business Mentoring programs for tourism awards.

VTIC CEO Lisa Patroni said the budget maintained operating costs for the sector within a tight budget but did not allow for long-term campaigns or initiatives as it focused on just the upcoming financial year.

“This budget will ensure the status quo is maintained in the business events sector, but there is so much more potential in our sector that has not been acted upon,” she said. 

“At a time of ongoing uncertainty with rising fuel, supplier costs and cost-of-living the visitor economy needs to be supported. 

“Fuel prices and cost-of-living is having a real impact on the viability of businesses. When business is down it is the owners who are absorbing the cost and they can’t do it for much longer.”

“Without more support for small businesses, this budget is a kick in the guts and will not instill confidence for those business owners with their backs up against the wall.”

VTIC acknowledged the $481 million allocated to improve regional transport services – including $318 million for upgrades to the regional rail passenger rail network. The Portarlington Ferry will also continue passenger services at a cost of $3.9 million.

Other funding to support the visitor economy in Victoria includes $29 million to continue the Melbourne Arts Precinct Transformation project, including the Arts Centre Victoria and the National Gallery of Victoria, and $11.1 million to upgrade Hamer Hall.

Ms Patroni said with the right support, Victoria could develop the sector into a $70 billion visitor economy providing over 460,000 jobs for Victorians by 2037.

VTIC will be advocating for three key priorities in the lead-up to the State Election in November.

Priority 1: Long Term, Consistent Funding for Destination Marketing, which would enable Victoria to run multi-year campaigns or programs and attract private sector confidence and co investment.

Target outcome:

• $160 million over four years for Visit Victoria
• Support a $70 billion visitor economy by 2037

Priority 2: Develop a 10 Year ‘Team Victoria’ Visitor Economy Strategy by 2027, to restore confidence and align supply, demand, infrastructure and workforce planning.

Target outcome:

• A clear, enduring growth pathway insulated from political cycles
• A $70 billion visitor economy and over 460,000 jobs by 2037

Priority 3: Build a Skilled, Accredited Workforce for Tomorrow by increasing funding for workforce training, accreditation and business capability programs, delivering stronger career pathways and retention, particularly in regional destinations.

Target outcome: 

• 25,000 trained and accredited workers by 2028
• Improved service quality, stronger businesses and enhanced regional resilience.

Background

The Australian Tourism Exchange (ATE26) is the largest annual trade event for the Australian tourism industry, attracting international buyers and travel agents from around the world. The event was held in Adelaide (Tarntanya) from May 10 to May 14, 2026, at the Adelaide Convention Centre. It showcased Australia's tourism offerings, including food, wine, nature, and hospitality, with Gippsland and Phillip Island regions well represented.