TiCSA Tourism Barometer
December Quarter 2024
No Lightat theEnd of theTunnel.
The 2024 December Quarter Tourism Barometer has fallen from the optimism demonstrated in the September quarter. The rising cost of living continues to dampen the tourism market and tourism operators face continuing increases in operating costs, which compounds the situation further.
Tourism businesses demonstrated that all market segments are down and while international visitors continue to grow (thanks to new international routes), the growth is not enough to make up for decreases in day trip and domestic overnight visitation. For the most part, yield ($/visitor and $/visitor night) and market share are down across the board.
Tourism business staffing levels remain largely unchanged, yet the wages bill continues to grow. Unfortunately, it may require a fundamental change in the economy before growth can return to the tourism industry in South Australia.
Business Activity (Last Three Months)
The main reasons for the positive performance in the December quarter were:
• High season / coming out of low season;
• Increased digital presence;
• Increase in interstate travel;
• Increased collaboration with other businesses; and
• Adaptive product, new markets and advertising.
”
“Wehavespentalotofmoneyon marketingandpositioningour business.
The main reasons for the negative performance in the December quarter were:
• Weaker economy;
• Decreased visitors to the area;
• Rising business costs;
• Decreased rates, prices or visitor spend in the business; and
• Lack of consumer confidence.
“Peoplejustarenotspendingas theyhaveinthepast.”
“Costoflivingpressures,people justdon’thavethemoneyto travel.”
Figure 3: Business Activity in the Last Three Months
Source: Tourism Industry Council South Australia
Business Activity by Market Segment (Last Three Months)
Consistent with the headline index, all market segments recorded a small net decrease in activity from the September quarter. Conditions were again weakest in the business segment, with just 10% of businesses within this segment reporting an increase in activity, compared to 28% of businesses reporting a decrease.
The holiday / leisure and ‘festivals and events’ segments also remained weak in the quarter, a sign of the times for what is traditionally a busy period
Figure 4: Business Activity – By Market Segment (December Quarter 2024)
Source: Tourism Industry Council South Australia
Business Outlook (Next Three Months)
The Business Outlook Index fell back below the neutral level in the quarter, as the optimism around Christmas travel waned The outlook index has now been negative for five of the last seven quarters, demonstrating how the cost of living, raising interest rates and economic uncertainty can severely impact the tourism industry
Figure 5: Business Outlook for the Next Three Months
Source: Tourism Industry Council South Australia
Business Outlook (Next 12 Months)
Results in the December quarter were broadly unchanged from the previous September quarter, with the proportion of businesses ‘extremely worried’ or ‘worried’ rising to 32% in the December quarter, up from 29% in the September quarter.
Pleasingly, the majority of businesses (53%) remain ‘extremely confident’ or ‘confident’ in the outlook for their business over the next year, which shows more confidence over the longer-term (compared to the next three months). However, it is important to note that this high level of confidence is well below the long-term, pre-COVID average of 67%.
Figure 6: Business Outlook for the Next Twelve Months
Source: Tourism Industry Council South Australia
Table 1: The Top Factors Influencing the Future Outlook Positive Factors Negative Factors
• Increased visitor numbers and forward bookings;
• Improved product and marketing;
• Current trajectory and confidence;
• Increased exposure; and
• Major events, festivals and new facilities.
Source: Tourism Industry Council South Australia
“Withnewinternationalflights arriving,therewillbemore internationalvisitors.”
“Ourfocusedmarketingisworking.”
“Wehavesecuredsignificantbusiness throughourtradepartner.”
• High cost of living and economic uncertainty;
• Increased competition and changing travel preferences;
• High costs of operation;
• Low consumer confidence; and
• Fewer bookings and less visitor spend.
“Economicuncertaintyandpending electionsareimpactingbusiness.”
Employment and Wages
While the vast majority of tourism businesses continue to report no change in their employment, there was an increase in those that are hiring (compared to those that are decreasing their staff). While staffing levels for most tourism businesses remain unchanged, the wages bill continues to rise with 60% of businesses citing an increase.
Figure 7: Employment Trends
8: Wages Bill
Tourism Industry Council South Australia
Data from the ABS Labour Force Survey showed total employment in the accommodation and food services industry fell 1,100 persons to 57,800 in November quarter 2024 Since peaking in November quarter 2022, employment in the industry has now declined for six of the past eight quarters, to be cumulatively down 7,500 persons (or 12%).
Figure 9: SA Employment, Accommodation and Food Services Industry
Source: ABS Labour Force, Australia, Cat. No. 6291.055.003
Key Challenges for Tourism Businesses in SA
The past two years have seen a consistent increasing of costs for tourism businesses. The Barometer has shown that businesses continue to increase their prices, however, in an environment of cost of living increases and decreasing disposable incomes, there will be a breaking point where businesses cannot increase prices and profits will fall.
Figure 10: Key Challenges Facing Tourism Businesses
Source: Tourism Industry Council South Australia
Investment Outlook
There has been a sharp decline in investment intentions. The proportion of businesses stating they were planning more investment over the next 12 months plummeted from 44% in the September quarter to 29% this quarter. This saw the Index level fall to 105, well below the pre-COVID average of around 129.
Figure 11: Planned Investment
Quarter ended Less No change More
Source: Tourism Industry Council South Australia
Statistical Note:
The TiCSA Tourism Barometer December quarter 2024 survey was conducted online 6-16 January 2025. A total of 135 responses were received, representing a margin of error of +/- 8.4% at a confidence level of 95%.
Airport Passengers
The Adelaide Airport has seen reasonably strong passenger numbers in September Quarter 2024 (latest data available), with 1.9 million domestic passenger movements and 237,000 international passenger movements seeing a total of 2.14 million, marginally up from 2.11 million in September quarter 2023. However, total passenger numbers remain below the pre-COVID level.
Table 2: Adelaide Airport Quarterly Passenger Statistics
Note: Domestic movements include regional.
Source: Adelaide Airport (2024)
Visitation and Expenditure
The strong rebound in visitor expenditure in South Australia appears to have stalled, with visitor expenditure falling $690 million (or 7%) to $9.6 billion in the year ending September 2024 from the prior year. The decline was primarily driven by a large fall in day-trip expenditure (down $425 million, or 19%). Meanwhile, international visitor expenditure grew marginally (rising $12 million, or 1%). However, at a national level international expenditure was up 27%. Across the board, visitor expenditure in South Australia well underperformed against the nation.
The drop in visitor expenditure comes amongst the backdrop of increasing prices from tourism operators, which shows the structural issues within the tourism market in South Australia. The cost of living increases have reduced disposable incomes and the rising cost of business (which has driven the increase in prices) compounds the situation making travel more expensive when people have less money to spend.
Note: Year ending September Source: Tourism Research Australia
Note: Year ending September % change is from previous year. Source: Tourism Research Australia
The latest visitor data for the year ending September 2024 shows total visitation fell 9% in the year to September 2024, with the decline entirely driven by a 16% fall in day-trip visitation
However, visitor nights rose a further 2% from the prior year, driven by the ongoing recovery in international visitor nights. Both domestic overnight intrastate (down 8%) and interstate (down 2%) visitor nights fell in the year.
While visitor expenditure has now stalled, total visitation remains well below pre-COVID levels (-18%) The fall in visitation compared to the pre-COVID level has been driven by significantly lower day-trip visitor numbers, down 26% (or 4.4 million visitors) over this period.
The increase in interstate and international visitors remain bright spots amongst a generally falling market.
4: Visitors and Nights by Type, South Australia (2024)
Note: Year ending September
Source: Tourism Research Australia
Expenditure fell across all visitor types except international visitors in the year ending September 2024. Yields ($/visitor and $/visitor night) were generally in decline across all visitor types. During the post-COVID era, there had been generally strong growth in expenditure and yields, resulting in considerable growth in visitor expenditure in South Australia and tourism’s contribution to the State’s economy.
However, as demonstrated through the Barometer, the escalations were largely due to tourism businesses increasing prices to address a range of rising business costs.
Now, the cost of living pressures have started to impact the industry significantly, thus the loss in yield and expenditure in many areas. This aligns to the subdued levels of activity identified in the Barometer.
More concerning is South Australia’s performance relative to the nation and other States and Territories. Market share (in terms of visitors) has fallen across the board, except for some marginal growth in interstate visitors. In terms of expenditure, market share is declining across all markets.
While the whole nation is grappling with the cost of living, the tourism industry in South Australia is faring worse than other States and Territories.
Table 5: Expenditure and Yield, South Australia, by Type (2024)
Note: NA – not applicable. Year ending September. Market share represents the historical market share currently, for the previous year and from three/ten years ago.
Source: Tourism Research Australia
Report prepared in partnership with Lucid Economics.
Tourism Industry Council South Australia (TiCSA)
25 Pirie Street
Ph: (08) 8110 0123
Email: info@ticsa.com.au
