The objective of this study is to quantify the effects of marketing
expenditure by the Australian Tourist Commission (ATC).
Cointegration analysis and a dynamic modelling approach are used
to estimate the elasticity estimates of income, price, price of
substitute, cost of travel and marketing expenditure for Australia’s
four major tourism markets, USA, Japan, UK and New Zealand.
ATC marketing expenditure has a positive effect on international
tourism demand and the magnitude of the effect varies from country
to country. In promoting international visitor arrivals to Australia,
not only ATC and non-ATC marketing but the word-of-mouth effect
and visitor satisfaction leading to repeat visits also play an important
role. The performance of the ATC marketing strategy measured in
dollar return per dollar invested in the international tourism
marketing is higher in the New Zealand market, followed by the
UK, Japan and US markets. The estimated overall average dollar
return per dollar invested in international tourism marketing is 8:1.