Is Australian tourism suffering Dutch Disease?

•Dutch Disease is analysed in a novel context with tourism as the declining sector.•Changes in Australian inbound, outbound and domestic tourism explained in terms of Dutch Disease.•CGE modelling confirms that Australian tourism is suffering Dutch Disease.•The discussion highlights the challenges presented to destination managers.•The findings are relevant to any destination which has a booming (non tourism) export sector.

As a result of Australia’s boom in exports of minerals to China and Asian economies, its currency has risen substantially against other leading currencies. The higher exchange rate has posed significant problems for traditional export and import competing industries, one of which is tourism. Computable general equilibrium modelling of the impacts of the mining boom on tourism confirms the Dutch Disease effect. The discussion highlights how recent changes in Australian inbound, outbound and domestic tourism can be explained from the perspective of Dutch Disease. Four different policy responses are then discussed, such as improving Australia’s competitiveness. The discussion has implications for destinations worldwide that are experiencing export booms in commodities other than tourism.