A recent survey by respected US magazine Travel + Leisure found Sydney had slipped to fourth place on the World's Best Cities list, behind Bangkok, Buenos Aires and Cape Town. The statistics paint an equally grim picture: visitor numbers grew by less than 1 per cent over the past year; China, by comparison, has averaged 5 per cent growth over the past decade.

Local reaction has been swift, urgent and emotional. Apart from sacking the boss of the state tourism body, the New South Wales state government announced an initiative to 're-brand' the harbour city.

John O'Neill, the man appointed to steer Brand Sydney, says the challenge is to create an image that goes beyond the harbour, the Opera House and Bondi Beach.

'It's an initiative that will, for the first time, deliver a definitive, research-based city brand for Sydney,' he said. 'A brand to set us apart from our competitors.'

Some media commentators were outraged by this use of taxpayer funds. 'Selling Australia, and Sydney of all places, should be simple,' fumed Piers Akerman in The Daily Telegraph. 'But the egotistical idiots in the marketing business cannot help themselves as they compete to stuff it up. Foreign tourists want to see koalas, kangaroos, the Opera House and the Great Barrier Reef.'

The peels of laughter had just about subsided when the federal government in Canberra announced its A$40 million (HK$271.2 million) budget for a new global marketing campaign built around Australia, the soon-to-be-released action movie directed by Baz Luhrmann, and starring Nicole Kidman and Hugh Jackman.

Tourism Australia's most recent promotional campaign featured a bikini-clad model and the tag line: 'Where the bloody hell are you?' Many people felt the commercials presented Australians as a bunch of unsophisticated half-wits. The word 'bloody' caused offence in Asia. The campaign was quietly axed.

Tourism chiefs hope Australia - a big-budget 1940s-style romance set in the Outback - can do the trick. Luhrmann is confident film-goers will soon be beating a path Down Under, desperate to walk in Nicole and Hugh's footsteps.

But there is scepticism the campaign, launching in 40 countries in October, can deliver the tourism bonanza achieved by The Lord of the Rings trilogy for New Zealand.

Travel analysts say the last time Australia rolled out a marketing campaign pegged to a film was in 2003 for the outlaw movie Ned Kelly, with Heath Ledger, Orlando Bloom and Naomi Watts. Sue Beeton, associate professor of tourism at La Trobe University, says the film, set in rural Victoria, had no impact on regional tourist numbers. 'I am concerned when I see government funds being put into promoting such ventures,' she said.

Sydneysiders are perplexed about how the themes of 'adventure and romance' will promote the cosmopolitan city.

Akerman believes that punting on an Outback-led tourist recovery is suicidal. 'Let's be realistic, there is nothing for most tourists to do in the Outback,' he said.

Strangely enough, that's exactly what Australians once said about New Zealand, now the No1 travel destination for Australians.