New data from Tourism Research Australia (TRA) shows the tourism sector continues to play a critical role in Australia’s economy, with more than 361,000 tourism-related businesses operating nationwide as of June 2025.
Accounting for 13.2% of all Australian businesses – or nearly one in eight, the sector remains one of the country’s most significant and diverse industries.
The report highlights that tourism in Australia is overwhelmingly driven by small operators – more so than most other industries.
95% of tourism businesses employ fewer than 20 people
Around half operate with turnover under $200,000
50% are non-employing businesses, such as sole traders
Notably, tourism has a higher concentration of micro-businesses (0-4 employees) than the national industry average, reinforcing its role as a highly localised, people-powered sector.
This structure makes tourism both dynamic and accessible, but also more vulnerable to external pressures – highlighting the importance of collaboration, capability building and strong local networks.
Tourism business numbers have grown by 8% since 2020, recovering strongly from pandemic impacts.
However, growth has now stabilised, with total business numbers holding steady since 2022.
At the same time, the sector continues to experience higher rates of business entry and exit than many other industries, pointing to a dynamic but competitive operating environment.
This shift signals a move from recovery to consolidation, with businesses increasingly focused on sustainability, profitability and long-term resilience.
The report reveals uneven performance across tourism sectors:
Motor vehicle hiring has surged, increasing by 65% since 2020
Taxi transport has declined by 24% over the same period
These shifts reflect broader changes in visitor behaviour, including growing demand for flexible, self-directed travel and reduced reliance on traditional transport models.
Tourism business activity also remains heavily concentrated in hospitality and accommodation, reinforcing the sector’s strong link to food, beverage and place-based experiences.
While tourism remains a major economic driver, the report underscores the structural challenges businesses face.
Only 56% of tourism businesses survived four years (2021-2025), compared to 63% across all industries.
Hospitality businesses such as pubs, clubs and bars recorded stronger survival rates (70%), while taxi services were among the lowest (44%).
This reflects ongoing pressures including thin margins, seasonality, workforce shortages and rising costs – highlighting the need for adaptable business models and strong operational foundations.
While 70% of tourism businesses are located in capital cities, the 30% operating in regional Australia play an outsized role in supporting local economies.
Regional tourism businesses are often more reliant on visitor spend and contribute significantly to local employment, economic diversity and year-round activation.
For destinations like the Mornington Peninsula, this reinforces tourism’s role as a key economic pillar – supporting small business ecosystems, activating main streets and driving visitation.
The findings reinforce several important takeaways for local operators:
Tourism is a micro-business economy – collaboration and shared marketing are critical
The sector is dynamic but competitive – strong planning and adaptability are essential
Visitor behaviour is shifting – demand is growing for flexible, experience-led travel
Hospitality remains central – food, wine and produce-led experiences are key drawcards
Regional destinations are well positioned – particularly those offering nature-based and lifestyle experiences
With Victoria recording $46 billion in visitor spend and 117.5 million visitors annually, the opportunity for regional tourism businesses remains strong.
As the tourism sector transitions from recovery to long-term growth, the focus is shifting toward resilience, innovation and quality visitor experiences.
For Mornington Peninsula businesses, this presents a clear opportunity: to leverage the region’s strengths – coastal landscapes, food and wine, and immersive experiences -while building sustainable, future-ready operations.
Read the full report on Tourism Research Australia’s website.
