The election promise that gutted Destination NSW’s advertising spend
Three years ago, four months before the NSW state election, the Labor Party quietly unveiled a promise: cut the state government’s advertising spend by $90m over three years.
It was November 2022, NSW was still reeling from Covid‑19 lockdowns and floods, and the outgoing Liberal government faced a $15.3 billion budget deficit.
Three years on, Mumbrella analysis has revealed that Destination NSW, whose entire purpose is marketing NSW to the world, has taken some of the deepest hits to its ad budget.
Looking at the numbers after Labor’s March 2023 victory, the cuts came fast and deep.
Within a year, Destination NSW’s advertising spend fell from $51 million in FY2023 to just $17 million, a drop of two-thirds and lower even than its pandemic-era spend.
The graph below shows Destination NSW’s ad spend over the past decade.
While the post-pandemic spike in ad spend had been a partial correction, these figures aren’t adjusted for inflation. As such, in real terms, Destination NSW’s advertising budget is actually considerably smaller than it was a decade ago.
The dollar figures alone, however, don’t tell the full story. Advertising has been steadily squeezed as a share of the agency’s overall government funding.
In FY2016, the agency spent $30.7 million on advertising, roughly one in every five dollars it received from the Treasury. By its 2023 peak, that share had fallen to just 15% of a much larger $333.4 million budget.
Last year, ad spending edged up from its $17 million low to $23.6 million, but even then it accounted for only 7% of the total $323.1 million government funding, a much smaller slice than in the past.
That shrinking budget isn’t reflected in Destination NSW’s ambitions. Under the NSW Visitor Economy Strategy 2030, the government is targeting $65 billion in total visitor expenditure by 2030.
As part of this push, Destination NSW began rolling out the latest iteration of its long-running branding platform “Feel New,” designed to attract tourists and reinvigorate Sydney’s image in partciular from simply beaches and the Opera House.
Speaking shortly before her departure from Destination NSW, former general manager of consumer marketing Kathryn Illy suggested that the organisation had taken a new creative direction:
“We’ve pulled away from the traditional destination marketing, so the creative is quite bold, it’s quite different, but most importantly, it’s very distinct,” Illy told Mumbrella in June. “It’s purposefully designed to cut through the sea of sameness, and as I was saying about the unexpected, it’s very much designed to create intrigue.”
A Destination NSW spokesperson highlighted the agency’s “Feel New” and “Sydney Side of Summer” campaigns, along with partnerships with China Southern Airlines and Xiamen Airlines, but declined to comment on its advertising spend or whether the marketing budget had been redirected to other initiatives.
“In 2025, Destination NSW also launched the NSW Government’s Visitor Economy Strategy 2035,” a spokesperson said in a statement,” to Mumbrella.
“The strategy is a bold new roadmap to turbocharge the state’s visitor economy, with a clear target to generate $91 billion in annual visitor expenditure, 40,000 hotel rooms, 8.5 million new airline seats and an additional 150,000 jobs by 2035. It includes a range of marketing-focused activities that will help achieve the strategy’s goals.”
Yet the reality of funding pressures and a looming state election has already forced difficult trade-offs. Last month, the government axed SXSW Sydney, the Asia-Pacific edition of the famed Austin festival, invoking its break-fee clause to exit the five-year contract early.
Destination NSW has remained one of the state’s highest advertising spenders, alongside the Department of Customer Services (DCS), TAFE NSW, and Transport for NSW (TfNSW). Yet only DCS has faced cuts similar to its tourism counterpart: ad spend peaked at $49.6 million in 2021‑22 before plummeting to $17.9 million last year and just $5 million this year.
TAFE NSW has eased slightly, from $19.3 million two years ago to $13.8 million most recently. Meanwhile, TfNSW’s latest spend of $38.3 million mirrors its budget a decade ago—unchanged in nominal terms, though effectively smaller once inflation is factored in.
Destination NSW was among the state’s highest advertising spenders, along with the Department of Customer Services (DCS), TAFE NSW, and Transport for NSW (TfNSW).
Of these, only DCS has experienced cuts comparable to its tourism counterpart: its ad spend peaked during the pandemic at $49.6 million in 2021‑22 before falling to $17.9 million last year and just $5 million this year.
TAFE NSW has eased slightly, from $19.3 million two years ago to $13.8 million most recently.
Meanwhile, TfNSW’s latest spend of $38.3 million is almost identical to a decade ago—unchanged in nominal terms, though effectively lower once inflation is considered.
This is one to keep an eye on. For something like DNSW is it better to spend $50m on ads, or is it better to spend $50m on supporting events and infra that make Sydney more appealing in a specific way. States have so many levers to use to build interstate inflow, can advertising hold its position when politicians are making ‘either/or’ not ‘and’ decisions.