Peak industry body Accommodation Australia (AA) has raised concerns over cuts to Victoria’s tourism marketing budget, saying the move will impact visitation to the state and ‘sends the wrong message’ to hotel investors.

AA said that Visit Victoria typically receives AU$32.5 million for marketing each year, but according to the State Budget, revealed on Tuesday May 7, this figure will be spread over four years.

AA said the decision is likely to damage the way Victoria is promoted to intrastate, interstate and international visitors.

“These funding cuts are significant and come at a time when inbound international travel into Victoria has plateaued at around 70% of pre-pandemic levels,” said Accommodation Australia (Victoria) General Manager, Dougal Hollis.

“Budget reductions on this scale, with just $15.5m available over the next three financial years, will significantly restrict the brand campaigns Visit Victoria is able to activate with airline and accommodation partners, as we enter the slower off-peak winter season of trade.”

Accommodation Australia National Chair, David Mansfield, said the move will have a direct impact on hotels.

“Victoria has had the strongest new hotel development pipeline of any state/territory over the past five years, but investor confidence comes from a strong and continually growing level of in-bound tourism demand,” said Mansfield.

“Investors have required returns, stemming from expectations [that] increased demand across the city will help fill this new hotel room supply.

“Key Melbourne hotel metrics (Average Daily Rate and Revenue Per Available Room) still lag significantly behind Sydney and if we don’t adequately promote Victoria, it will only get worse.

“In a further blow to the city’s visitor economy, the Victorian Government has acknowledged that Melbourne’s long anticipated Melbourne Airport Rail Link project is “now at least four years delayed.”