International tourism leader Taleb Rifai has a confronting message for Australian tourism: step out of the comfort zone or bow out.

The secretary-general of the World Tourism Organisation says Australia needs to ditch the "island mentality" that has bred complacency and a misplaced belief that international holidaymakers would beat a path to its door.  "Australia has lived for a long time . . . happy with its isolation," Dr Rifai says. "That's not going to work any more."

The Jordanian-born tourism boss was one of the star turns at a recent international conference, Tourism Futures, that ran the ruler over what had gone wrong with Australian tourism and how it could recover.

The industry's woes were underlined this week when the quarterly Consumer Price Index recorded the sharpest fall in two decades in domestic holiday and accommodation costs, down 6%

It highlighted the impact of heavy discounting by airlines and domestic tourism operators to keep the industry afloat during the global financial crisis.  The GFC delivered a double blow, smashing inbound tourist traffic from overseas as the combination of cheap international deals and a high dollar enticed more Australians than ever to holiday abroad.

Since its 1980s heyday when tourism challenged coal mining as a national income earner and the winter-sun destinations of Cairns and Port Douglas were thronged with Japanese tourists, the industry has lost its lustre.

Today, unemployment in once-booming Cairns is in double figures, nudging twice the national average.

Australia now exports vastly more in tourist dollars than it earns, with industry body the Tourism and Transport Forum predicting that the negative balance of trade for 2010-11 will approach a record $9 billion.

Some 6.58 million Australians travelled overseas in the year ending April, up 13 per cent and comfortably surpassing the 5.65 million international visitors who entered the country over the same 12-month period.

Tellingly, there was daylight between the 1.11 million New Zealanders who landed on our shores and the next biggest source of arrivals, the British, accounting for 656,300 entries.

The big-spending Japanese continued to stay away. After plunging 23 per cent last year, Japanese arrivals fell to just 356,000 Japanese arrivals for the year ending April, a drop of 15.8 per cent, according to the TTF.

Brisbane-based industry consultant Tony Charters, convener of the Tourism Futures conference held earlier this month, says: "No one is taking the New Zealand market for granted, but the fact is we have the best part of three billion people living in China, India and (East) Asia, basically within our time zone and eight to 10 flying hours (away)."

On Port Douglas's famous Four Mile Beach yesterday, basking in the 25C warmth, the Briggs family of Roseville, on Sydney's north shore, agrees that holidaying at home is worth it.  "We wanted some warmth and some sand," says Justine Briggs, playing with children Simone, 2, and Robert, eight months.

British-based designer Nick Talbot says it is easy to recognise the potential of tourism from China and India, but quite another thing to cater for it. "The source of new tourism for the world is going to be India," Mr Talbot says. "It is coming."

Editors comments:  This article has hit a nerve with me!  It sounds very similar to the history of Port Douglas.  We had our heyday in the 80s when holidaymakers flooded in but we haven't done much to move ourselves into the new 2000 millennium let alone the 2010 decade.  Is it not time to re-invent ourselves. Mr Rifai said above, "It's time to move out of the comfort zone or bow out".  In our case it should be "It's time to stop pretending we are still a fishing village and realise that in the year 2010 it's time to adapt or bow out".  What do you think?