The Opportunity Before Us: How Australia Can Capitalise on Declining US Tourism Demand
The United States is handing Australia a gift wrapped in tourism opportunity. As American travel demand falters with international visitor spending projected to fall 7% to under USD$169 billion in 2025, Australia sits positioned to capture an unprecedented share of the global travel market.
This isn't theoretical. It's happening now. And Australian tourism operators who move strategically stand to generate significant growth in an otherwise competitive global landscape.
The Macro Opportunity: Why Now Matters
International visitor expenditure in Australia hit a record breaking AUD$52.6 billion in the 12 months ending March 2025. But that's just the beginning. Federal Tourism Minister Don Farrell has forecast that international arrivals will hit a record 10 million in 2026, growing further to 11.8 million by 2029.
This growth isn't dependent on Australia being "the next big thing." It's happening because Australia has become the alternative. Travellers who were considering the US but are now deterred by border anxiety, surveillance requirements, political uncertainty, and the AUD$375 visa fee have to go somewhere. Australia is positioned as the obvious choice.
The question is: How deliberate will Australia be in capturing this demand?
"The US isn't failing to attract tourists because they lack attractions," says Sarah Colgate, Business Improvement Professional and Tourism Growth Strategist based on the Gold Coast. "They're losing market share because they've made the experience of visiting harder, not easier. Australia's competitive advantage right now isn't our beaches or our wildlife though those help. It's that we're making visitors feel welcome while competitors make them feel questioned."
The Strategic Positioning: Australia's Unique Advantages
Australia has several competitive advantages over the US in capturing displaced tourism demand:
1. Ease of Entry for High Value Markets
Australia offers three year, multiple entry visas for Indian travellers, direct flights from major Indian cities, and a streamlined visa process. India saw 402,200 visitors to Australia in the year ending January 2024 surpassing pre pandemic levels and up 102% compared to previous years.
Compare this to the US, where Indian travellers now face mandatory social media vetting, face to face interviews at US consulates, and heightened scrutiny.
The Data Point: Indians staying in Australia average 61 days, making them high value, long stay tourists. This is the exact demographic the US is making harder to attract.
2. Streamlined Visa Waiver Program Experience
Whilst the US is adding mandatory social media surveillance to its ESTA process, Australia's visa waiver program remains straightforward. Travellers from 42 countries can enter without complex vetting requirements. This alone positions Australia as more welcoming.
3. Authentic Experience Positioning
Australia's "Come and Say G'Day" campaign and focus on Indigenous cultural experiences, adventure tourism, and authentic food and wine offer what many travellers are seeking: genuine connection rather than mass tourism.
The campaign has shown impressive results: 10% increase in holiday consideration in key markets like the US, UK, and China. Flight searches surged by 22%.
"What's being lost in US tourism isn't just the infrastructure," Colgate explains. "It's the narrative. Americans used to believe they were welcoming. That story is breaking down. Australia can tell a different story one that's grounded in actual experience, not just marketing language."
The Tactical Opportunity: Capturing Specific Displaced Markets
Several distinct markets present immediate opportunities for Australian tourism operators:
Canadian Travellers: The Snowbird Reroute
Canadians spent USD$20.5 billion in the US in 2024, accounting for 25% of all international visitors. In 2025, that number collapsed. Canadian travel to the US was down 24 to 26%, with 70% of Canadians uncomfortable visiting.
But Canadians still want to travel. Many are rerouting to Mexico, the Caribbean, and increasingly, Australia.
The Opportunity: Winter is peak snowbird season (June to August in the Southern Hemisphere). Australian tourism operators in warm climate destinations—Queensland's Gold Coast, Northern Territory, Western Australia—can directly target Canadian "snowbirds" with:
Extended stay packages (30 to 180 days)
Rental accommodation targeting retirees and seasonal travellers
Community experiences and social activities
Cost comparisons showing Australia vs US value proposition
One Canadian market research firm, Approach Tours, found that 75% of Canadian respondents aged 55 and up are avoiding US trips. That's USD$300 million+ annually in spending looking for a new destination.
Link for Canadian tourism organisations: Discover Kalispell and other US border town tourism boards have begun offering Canadian specific promotions. Australia should mirror this strategy with dedicated Canadian marketing campaigns.
British Travellers: The Anxiety Factor
UK tourism to Australia has surged to 144% of July 2019 levels. British travellers represent 7.6% of total arrivals, up from 5.0% pre pandemic.
But more British travellers could be convinced to visit Australia if they understand the contrast: Australia welcomes them without social media vetting, without extended border interrogations, without the political uncertainty now associated with US travel.
A Holiday Extras survey found 17% of British travellers pledged to avoid the US specifically due to Trump's policies. This is the first time an overseas election has driven British travel decisions.
The Opportunity: Market directly to the hesitant British traveller. Position Australia as the politically stable, welcoming alternative. Emphasise:
Streamlined visa process
No social media surveillance
Political stability and predictable border experience
Longer stay options
Culinary and cultural experiences
Tourism Australia's "Come and Say G'Day" campaign featuring Nigella Lawson highlighting Australian food and wine has already resonated. Build on this by positioning Australia as the destination where you're welcomed, not interrogated.
American Travellers: Showing Them What They're Missing
Paradoxically, some Americans who might visit Australia haven't yet considered it as an alternative to staying within the US.
With the Grand Canyon, Yellowstone, and iconic US destinations facing declining international visitor numbers, there's an opportunity to position Australia as offering comparable natural wonders without the border anxiety or travel uncertainty.
Americans considering Hawaii which saw 18.5% increase in international arrivals in 2025 should be made aware that Australia offers similar tropical experiences with more diverse ecosystems, Indigenous cultural experiences, and lower risk of political complications.
"Position it as a luxury upgrade, not a replacement," Colgate advises. "An American contemplating $5,000 for a Hawaii trip can spend $6,500 and have an entirely different experience in Australia. Show them the value exchange, not just the cost."
Asian Markets: The Acceleration Play
India's growth to Australia is up 102%. Japan saw arrivals up 33.8% in 2025. Vietnam up 25%.
These markets are already growing, but they're growing even faster because they're receiving tourists who might have previously visited the US.
Australia should accelerate marketing in these regions because:
They're culturally positioned to travel to Australia
They're increasingly wealthy and represent high spend tourism
They're not particularly drawn to US destinations anyway
Australia offers proximity, ease of visa access, and cultural connection
Strategic Priority: Focus tourism marketing resources on India, Southeast Asia, and East Asia. These are markets with highest growth potential and lowest US competition.
Link: Tourism Australia is already focusing on this—their Australian Tourism Exchange (ATE25) brought together 1,600 Australian sellers and 700+ international buyers, with 60,000 meetings scheduled. This is where the distribution action is happening.
The Regional Opportunity: Spreading Visitor Impact
One of Australia's structural advantages is geographic diversity. Unlike the US, where international visitors concentrate in a handful of cities (New York, Los Angeles, Miami, Las Vegas), Australia's tourism can be distributed across regions.
This matters because:
Regional Tourism Operators Get Direct Benefit: Small hotels, attractions, and businesses in regional Australia benefit from international visitor spending, not just Sydney and Melbourne.
Capacity to Absorb Growth: Australia's tourism infrastructure has room to grow internationally without the overtourism problems plaguing traditional destinations.
Unique Positioning: Regional Australia offers experiences unavailable elsewhere, the Outback, Tasmania, Great Barrier Reef, Indigenous experiences.
The Brand Play: Positioning Australia as the Welcome Destination
Here's the core narrative Australia should be telling:
US Positioning: Suspicious, uncertain, surveillance heavy, expensive, politically turbulent.
Australia Positioning: Welcome, stable, affordable relative to spending power, politically predictable, authentically unique.
This isn't anti American messaging. It's pro Australian positioning grounded in what's actually happening in tourism markets.
Tourism Australia's $130 million "Come and Say G'Day" campaign with localised personalities for each target market is brilliant. But it needs to be amplified with explicit messaging about why Australia is the alternative to a less welcoming America.
"Don't run away from the US situation," Colgate advises. "Use it. When a Canadian sees marketing saying 'Come experience Australian hospitality,' the subtext is clear. You're not getting interrogated at the border. You're not having your social media reviewed. You're not uncertain about whether you'll be let in. Position it directly. Position it honestly. That's where the marketing opportunity is."
The Operational Opportunity: Preparing for Surge
If Australia captures even a portion of displaced US tourism demand, hospitality operators need to prepare:
Capacity Planning:
Hotel occupancy rates will increase
Regional attractions need to prepare for higher volumes
Staff will need training in handling increased international visitor numbers
Booking systems and online presence need to be optimised for international travellers
Quality Maintenance: More visitors means nothing if the experience suffers. Australia's competitive advantage is authenticity and genuineness. Scale must not compromise this.
Partnership Development: Tourism operators, airlines, accommodation providers, and attractions need integrated marketing. The "Come and Say G'Day" campaign works best when every touchpoint reinforces it.
Regional Distribution: Tourism bodies should actively market regional experiences to international visitors, spreading economic benefit beyond capital cities.
The Financial Opportunity: What This Means for Tourism Operators
Tourism Research Australia forecasts that international visitor expenditure in Australia will continue growing. Current forecasts suggest the market will reach roughly AUD$65 billion annually by 2028 2029, compared to AUD$52.6 billion in 2025.
Where does this growth come from? Substantially from displacement of US tourism demand.
For tourism operators:
Hotels: Higher occupancy rates and the ability to command premium pricing
Attractions: Increased visitor volume and international spending
Tour Operators: Demand for experiences, particularly adventure and cultural tourism
Regional Businesses: International visitors spending in regional areas previously dependent on domestic tourism
The key is recognizing this as a strategic window, not a permanent advantage. Other destinations will adapt. The US will eventually remove barriers and rebuild. Australia's opportunity is now.
"This isn't complicated," Colgate says directly. "The US made it harder to visit. Australia made it easier. Travelers moved. Australian tourism operators who recognize this as a market opportunity—not just a lucky break—will position themselves to capture sustainable growth. Those who don't will miss it."
Strategic Recommendations for Australian Tourism Operators
1. Develop US Specific Marketing Create campaigns directly targeting American travellers. Position Australia as offering equivalent natural wonders and experiences without the hassle.
2. Create Canadian Winter Packages Launch specific marketing campaigns targeting Canadian snowbirds. Partner with travel agents and tourism boards in Canada. Offer extended stay packages, community activities, and value propositions.
3. Amplify Regional Tourism Don't let all international visitors concentrate in Sydney and Melbourne. Actively market regional experiences, support regional tourism boards, and create distribution partnerships that put regional experiences in front of international travellers.
4. Emphasize Ease of Entry Position Australia's streamlined visa process and welcoming border experience as core differentiators. Use this in marketing explicitly.
5. Focus on Experience and Authenticity "Come and Say G'Day" works because it's grounded in reality. Australian hospitality and authentic experiences are genuine differentiators. Marketing should reinforce this, not work against it.
6. Build Asia Pacific Focus India, Indonesia, Japan, Vietnam, and South Korea are the growth markets. Allocate marketing resources disproportionately to these regions. They're growing faster than traditional Western markets and represent highest future potential.
7. Prepare Operations for Growth Don't get caught with inadequate capacity or degraded service quality. International visitor growth requires operational readiness: staffing, systems, quality control, and infrastructure.
The Bottom Line: Recognising the Window
Australia has a strategic window to capture displaced US tourism demand. This window won't last forever. Other destinations will adapt. US policies may eventually change. But right now, in 2025 to 2026, Australia is positioned to capture a meaningful and sustained increase in high value international tourism.
The operators who recognize this strategically, who actively market to displaced US tourism, who prepare operationally, who position Australia's competitive advantages explicitly, will generate significant growth.
Those who passively wait for growth to happen to them will miss it.
"The tourism opportunity in front of Australia is larger than most operators realise," Colgate concludes. "It's not just 'more Americans visiting because they're deciding to.' It's structured, policy driven, and measurable. It's Canadian snowbirds looking for alternatives. It's British families reconsidering their summer destination. Its travellers from around the world see Australia as a more welcoming alternative to an increasingly uncertain US. That's not luck. That's a market opportunity. And it's available to any operator willing to pursue it strategically."
Seize the Opportunity in Displaced US Tourism
At Exceptional Experiences, we help Australian tourism operators capitalise on the shift in global travel patterns. With US tourism demand declining and international travellers seeking alternatives, Australia is perfectly positioned to capture high-value visitors.
We guide operators to:
Strategically target displaced markets (US, Canada, UK, Asia)
Highlight Australia’s welcoming, seamless, and authentic experiences
Prepare operations, staffing, and infrastructure for growth
Amplify regional tourism to maximise economic impact
Book a call with Sarah Colgate to turn this unique market shift into lasting growth and competitive advantage for your tourism business.
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