An over-confident Australian tourism industry is starting to feel the compound effect of attracting fewer visitors and having Australians lured abroad from cheap airline offers.

Australia's 'island mentality' believes tourists will come to the country regardless of advertising campaigns or specific efforts by the tourist boards to lure them, a report by Tourism-Review said. Such complacency needs to be overcome if Australia is to resurrect its tourism exports.

The assumption is damaging to the profits of the travel and tourism industry, whose revenues have already been sapped by heavily discounted airfares that entice Australians abroad and reduce domestic tourism.

Furthermore, Australia is relatively more expensive for overseas tourists, as the global financial crisis saw the price of holidays drop by 5.1 percent on a global scale, compared to a mere 2.6 percent in Australia. As a result, there has been a greater 'outflux' of Australian tourists overseas than there has been an influx of foreign tourists to Australia.