Australians are opting for overseas rather than local holidays but work trips and visits to family and friends have boosted domestic travel.
Domestic overnight travel to see friends and relatives increased by six per cent to 23.5 million trips during 2011, the latest National Visitor Survey figures show.
Business travel was up 6.5 per cent to almost 14 million trips but our domestic holiday travel was steady at 30 million overnight trips in 2011.
Minister for Tourism Martin Ferguson says it was a challenging year for domestic tourism with a persistently high Australian dollar, making overseas travel more attractive, and natural disasters such as floods and cyclone Yasi.
"This growth, not just in dollars spent by visitors but also the number of nights spent away from home is very welcome," Mr Ferguson said.
"It shows the resilience of the tourism industry and highlights the opportunities for the sector presented by business travel.
"These figures underline the need for tourism businesses to continue to refresh their range of products and experiences, giving Australians more reasons to holiday at home," he said.
Tourism & Transport Forum chief John Lee says Australians are preferring to take overseas holidays - up 9.4 per cent in 2011.
"That underscores the importance of investing in new tourism product to give Australians new reasons to holiday at home," Mr Lee said.
"With the Australian dollar tipped to remain strong for some time, significant investment in new accommodation and attractions is required to give Australia's tourism industry a competitive boost.
"Despite the forecast growth in international arrivals, especially from China, domestic travel accounts for around 70 per cent of tourism spending and will continue to be the mainstay of the tourism industry in the decades to come," he said.