Grants, levies and local love: How to fund tourism in regional communities
When it comes to developing tourism in regional communities, the common (and big!) question is usually:
“But how will we pay for it?”
Tourism can deliver powerful social and economic benefits — but without a clear funding model, even the best-laid plans can stall. Fortunately, there are more options than you might think.
In this article, we explore the main ways to fund tourism development in regional areas — from traditional grants to creative community-led models.
Why funding matters
Tourism doesn’t just “happen.”
It takes planning, coordination, promotion, signage, experiences, training, servicing… — and people to deliver it all.
That means funding is essential, not just to kick-start a strategy but to maintain momentum and achieve long-term impact.
6 smart ways to fund tourism development in regional communities
1. Tourism and Economic Development Grants
Government and philanthropic grants are often the first place people look for funding. These can support:
Infrastructure (product development e.g. trails, signage, and visitor hubs)
Experience development
Event attraction and development
Training, upskilling and the adoption of new technologies
Top Tip: Grant applications are more successful when they align with state or national priorities — such as climate resilience, First Nations inclusion, sustainability, or regional development.
2. Visitor Levies and Bed Taxes
Some regions have introduced visitor levies (often as a small percentage added to accommodation bookings), with funds collected then reinvested into local tourism.
This model is widely used overseas and gaining momentum in Australia, especially where councils are feeling the pinch from increased wear and tear on local infrastructure by visitors who don’t contribute to the infrastructure they use otherwise.
3. Council Investment
Local governments invest in tourism — by directly resourcing visitor centres, destination marketing, visitor-attracting events, the development of tourism strategies, and business support.
It’s not a cost. It’s an investment.
Every dollar invested in destination development has the potential to return much more in local economic activity, jobs, and community pride.
4. Industry Collaboration and Buy-In
Tourism is everyone's business in rural communities — and some of the best funding models are co-invested.
This might look like:
Operator membership models (e.g. local tourism association fees)
Co-operative marketing campaigns where businesses chip in
Business contributions toward events, signage, or ambassador programs
This builds ownership and collaboration, making the local tourism ecosystem stronger and more self-sustaining.
5. Sponsorships and Partnerships
Partnering with businesses, regional development organisations, or even universities can unlock funding for specific tourism projects — especially those aligned with education, environment, or health outcomes.
6. Community Crowdfunding and Support
Never underestimate the power of local pride!
Some small towns have funded events, signage, and even visitor centres through donations, working bees, or crowdfunding campaigns.
If the community sees the benefit, they’ll often get behind it.
Case study: Grant success in action
Tilma helped Narooma Mountain Bike Club secure $3.9 million in funding to build a trail network that delivered more than $70 million in economic benefit to the region in its first year.
Smart planning, a strong business case, and alignment with economic development goals = major impact.
Final thought
If tourism is going to grow, it needs funding — but that doesn’t have to mean relying on just one source.
Whether it's grants, levies, co-investment, or community love, regional communities can fund tourism development in creative and sustainable ways.
The key? Start with a clear destination development strategy, align it with broader goals, and match the right funding model to your community's needs.
Need help identifying the right funding pathways for your regional tourism project?
At Tilma, we help communities craft strong strategies and successful grant applications.
Get in touch and let’s talk funding.
Note: This article was written with the support of AI.
