The decline followed two years of strong growth.

According to the Tourism Research Australia report, growth until 2028 was expected to average 3.1 per cent a year.

The pent-up demand and “revenge travel” drove a spike in domestic leisure travel in 2022, and this temporary phenomenon has now largely run its course, resulting in a much smaller boost to growth in domestic leisure travel over the forecast period,” the report said.

It also warned that climate change could be a risk for Australian tourism.

“Global efforts to combat climate change and reduce carbon emissions will also affect inbound arrivals to Australia increasingly over time,” the report said.

“Negative consumer sentiment towards long-haul flights is expected to affect growth in arrivals from Europe, and regulatory and reporting requirements for businesses are expected to affect growth in international business travel.

“The forecasts do not include any estimated impact from major changes to policies or regulations on the aviation industry.”

The number of international arrivals into Australia was forecast to increase by 26 per cent in 2024 to reach 9.3 million (98 per cent of the pre-pandemic level).

Despite the upgraded outlook, total international arrivals are expected to remain below the level that had been projected prior to the pandemic (pre-pandemic forecasts) over the forecast period.

The number of short-term visitor arrivals was expected to surpass the pre-pandemic level in 2025 to set a new record of 10.2 million international visitors in the year. The number of international visitor arrivals is expected to reach 12.1 million in 2028.

“Total domestic visitor nights in Queensland are forecast to surpass the pre-pandemic level in 2025.

“Slower economic growth and household budget pressures are expected to continue to weigh on leisure travel growth into 2024. Business travel to Queensland is also expected to soften in 2023, but is forecast to rise strongly over the next five years, supported in part by the work and events leading up to the Olympics.”

Australia-wide, international travel to Australia was likely to exceed its pre-pandemic level in 2025, but international spending in Australia would exceed its pre-pandemic level in 2024.

Nationally, domestic travel would stabilise in 2023, after strong growth in 2022.

“Those states/territories that had experienced a surge in interstate holiday demand in 2022 are generally expected to see a pull-back in domestic leisure travel in the near-term – notably Queensland and the Northern Territory. This reflects the increased availability of overseas travel as well as the pull-back in discretionary household spending,” the report said.