Fears Victoria’s tourism industry will be decimated by funding cuts

Tourism Industry sources say chronic funding cuts make it impossible for Victoria to market itself to the world, warning they will cripple the sector — and the regions are most at risk.

Victoria has lost its ability to market itself to the world amid chronic funding cuts industry sources warn will cripple the sector.

Despite the state failing to return to pre-Covid visitor levels, the Allan government this week slashed funding to its own tourism and events company, Visit Victoria.

It means the agency has the same amount of money to spend on destinational marketing over the next four years, $32.5m, as it was allocated for a single year in the last budget.

Industry sources said the move would threaten major advertising campaigns and make it impossible for Victoria to market itself globally.

And they have warned the effects would be felt most acutely in regional Victoria which relies on Visit Victoria and regional tourism boards to drive visitation.

Latest figures from Tourism Research Australia show visitation to Victoria remains 11 per cent lower than pre-Covid levels, with international visitation about two thirds what it was.

While spending is up, tourism operators say that is a result of the soaring cost of living.

Latest figures from Tourism Research Australia show visitation to Victoria remains 11 per cent lower than pre-Covid levels. Picture: iStock

Co-founder and CEO of Luxury Escapes Adam Schwab warned the funding cuts would decimate the industry.

“This will be devastating for hospitality and tourism workers,” he posted online.

“The shameful Dan Andrews/Jacinta Allan government prioritised lockdowns, forced Covid tests and getting themselves re-elected over the jobs of actual Victorians.”

Victorian Tourism Industry Council chief Felicia Mariani said she understood the government had to rein in spending, but said its short-sightedness risked long term consequences.

“It’s extremely disappointing and sobering … this is a clear indication that the government does not understand the sensitive and complex ecosystem that is destination marketing,” she said.

“Our industry is a highly competitive industry, a complex ecosystem that relies on so many different levers being in the intrastate arena, interstate and overseas, and if you upset that sensitive balance across those three streams of destination promotion, the implications can be far reaching.

“When you make these mistakes like this it could take years to recover, and you have to spend a lot more money recovering.

“This is our concern, because if we go backwards here, and if we lose the territory that we will inevitably lose, we’re going to have to spend more money to play catch up with what we lost than if we just would have made a decent commitment to destination promotion.”

Tourism spending in Victoria has hit a record high last year with visitors pouring an unprecedented $37.8b into the state economy in 2023.

Tourism spending in Victoria has hit a record high last year with visitors pouring an unprecedented $37.8bn into the state economy in 2023 — $5.4bn higher than pre-Covid 19 levels.

While Melbourne was the most popular destination for interstate visitors, Victoria sits in third place for total tourism spend in the country after Queensland and NSW.

Tourism executives have warned Victoria is unlikely to improve on that position without significant government investment from the Victorian government.

Tourism Research Australia has forecast Victoria’s visitor economy has the potential to grow a further $16bn to $53bn by 2028.

However, that would rely on significant investment to grow demand from interstate visitors.

“You’ll get people coming to Melbourne, because Melbourne has a reputation, and the major event calendar that we have in Melbourne is phenomenal,” Ms Mariani said.

“And you will get people coming to Melbourne, without a doubt.

“But the challenge will be, how long will they stay, how far will they disperse, and how much money will they actually spend while they’re here?”

Tourism Research Australia has forecast Victoria’s visitor economy has the potential to grow a further $16bn to $53bn by 2028. Picture: Supplied

After Sydney hosted the 2000 Olympics the Carr government slashed tourism funding in a move Ms Mariani said set the state back a decade.

Opposition tourism spokesman Sam Groth said Victoria’s global reputation was under threat.

“Labor’s financial mismanagement has completely hamstrung our ability to sell Victoria to the world,” he said.

“It’s clear that this government and the Minister for Tourism have no idea how destination marketing works.

“If they engaged with anyone in the sector, they would know that major events are only a small piece of the puzzle for attracting visitors to the state.

“It’s already clear that global visitors are not choosing Victoria as their preferred Australian destination, and with these cuts we will only fall further behind New South Wales and Queensland.”

Opposition tourism spokesman Sam Groth says Victoria’s global reputation is under threat.

A government spokesman said a new $170m Regional Tourism and Events Fund would boost regional tourism efforts. “We know our tourism operators are the lifeblood of so many communities across Victoria. That’s why we’re investing in experiences, attractions, industries and partnerships that make Victoria a tourism drawcard,” she said. “Our strong investment in Victoria’s visitor economy and blockbuster major events has generated a new record high of $37.8bn in tourism spending in Victoria in 2023 – $5.4bn higher than 2019 levels. “We’re proud of the great work by Visit Victoria to bring the best of global sports and entertainment to our state, while showcasing the best of Victoria to thousands of visitors from interstate and overseas – and supporting local businesses and jobs to thrive.”

Originally published as Fears Victoria’s tourism industry will be decimated by funding cuts