Small businesses have had a rough ride in recent months, with recent Dun & Bradstreet data revealing that 21 percent of insolvencies in the June quarter were firms with one to 20 employees.

This figure does not bode well for a tourism sector that relies largely on small to medium enterprises to survive, particularly in light of the widening gap between incoming tourists to Australia and Australians flying overseas for holidays.

According to figures published in The Australian, the number of international visitors in September dropped 9 percent to 432,000 while the number of Australians jetting abroad rose by the same amount to 790,600.

The deficit hit a record of 360,000 during the month, and according to Tourism & Transport Forum chief executive John Lee, the deficit for the nine months to 30 September was more than 1.5 million.

"This is slowly but surely going to mean that thousands of jobs are going to be lost in this country," said Mr Lee.
Furthermore, many of Australia's inbound markets fell over the period, including Malaysia (down 28 percent), Japan and New Zealand (down 21 percent), the Americas (down 4 percent) and north-west Europe (down 3.5 percent).

Mr Lee remains bearish about the state of the industry and has called for a government-led emergency meeting of Australia's tourism industry leader to develop a 'rescue plan'.

However, tourist numbers from China and India grew strongly during this period, up 19 percent and 12 percent respectively, indicating a large, extremely tappable market that SMEs should be focusing their efforts on.

Mr Lee has urged more attention to be diverted to promoting Australian tourism within China, a sentiment echoed by Tourism Australia's Managing Director Andrew McEvoy.

"Australian tourism is strategically well placed to benefit from the Asian century, being a one stop flight within the same time-zone," said Mr McEvoy.

According to Tourism Australia's State of the Industry report, tourism contributes around $72 billion to Australia's economy each year and is 5.6% of national GDP, providing around 876,000 direct and indirect jobs.

However, numbers visiting Australia from traditional Asian tourism market Japan have dropped in recent years, after hitting a high of 812,000 in the year to August 1996. Fifteen years later, the number was at 350,000, after the Japanese economy fell into an extended slump.

Australian tourism - particularly leisure-based destinations such as Cairns and far north Queensland - are now turning to new markets such as China and India.

Small businesses should do more to take advantage of the Chinese tourist dollar, but some commentators believe that Australia's existing offering is simply not what mainland Chinese particularly want.

"At present, easier visa requirements for Chinese visiting Australia compared with the US are working in our favour, but that might not last. There is a challenge to both educate the top end of the Chinese market about Australia's charms and to give the Chinese market more of what it wants here," said Sydney Morning Herald's Michael Pascoe.

So what can the government do to attract more visitors and stimulate the SME tourism industry?

The National Long-Term Tourism Strategy, operated in partnership with state and territory governments, focuses on providing the sector with tools needed for practical growth and aims to increase overnight tourist spending to $140 billion by 2020.

Tourism Australia has also indicated it remains on track to achieve this goal and recognises that the Chinese market is critical to the future of Australian tourism.