Measuring the Return from Australian Tourism Marketing Expenditure

Abstract

Tourism Australia, the primary agency responsible for marketing Australia as a destination internationally, spends around 32% of its total marketing expenditure in Asian markets. Asia contributes around 40% of the visitor arrivals to Australia. When Tourism Australia invests public money to promote Australia as a tourist destination, there is a need to estimate the return per dollar investment. This article estimated the return per dollar investment in Asia using a dynamic modeling approach and cost-effectiveness analysis. The study found that the return per dollar investment is 17:1 for Asia and 8:1, 36:1, 3:1, and 7:1 for Japan, New Zealand, the UK, and the United States respectively. The results have implications for targeting the highest yield markets to increase the economic returns to Australia from its destination marketing activity. It is argued that the cost-effectiveness approach is a useful tool for destination managers to ensure the effectiveness of their marketing expenditure.