The Tourism and Transport Forum said the ACT's tourism growth was falling behind the rest of the country.

Domestic overnight trips to Canberra had increased at an average 1.2 per cent a year over five years, well behind the national figures of 2.9 per cent and making the ACT the second worst performer in the country, behind the Northern Territory.

In a submission to the coming ACT budget, the forum, which represents accommodation groups, aviation and other transport groups and the tourism sector, said ACTION was one of the last wholly government-run networks in the country and should be franchised to the private sector.

"The private sector has stronger incentives to use infrastructure more efficiently, deliver better operational performance and improve the customer experiences," it said, pointing to the ability of private operators to "attract and retain high quality staff". Financial incentives could be used to drive efficiencies.

"In contrast, public operators in monopoly markets tend to lack strong incentives to improve services for customers and increase efficiency," it said.

The future of ACTION buses is under review, as Chief Minister Andrew Barr tries to rein in rising costs, and he has held out the possibility of a private operator - or private companies running some parts of the network.

The Tourism and Transport Forum also urged a boost to tourism funding in the budget.

It strongly supported the tram and urged the government to continue its push for direct international flights from Singapore and New Zealand. The ACT Government should push Canberra as a testing ground for "lightweight border processing" - using fewer customs and security personnel than at other international gateways. "The biosecurity and immigration risk for arrivals from New Zealand is very low and, as such, a very small team of cross-trained officers equipped with mobile devices could be deployed to process both outbound and inbound passengers," it said.

The Government has offered airlines help with marketing flights into Canberra, but so far none has taken the bait.

The Government put its City to the Lake project on hold with the announcement of the Fluffy buyback last year, but the forum said halting the project would hit tourism, the economy and private sector confidence. Planning should continue to make the project investment ready, it said, also supporting a new stadium and convention centre in the city.

While domestic visitor numbers were well behind other states, international visitor arrivals were doing better, at an average 3 per cent growth a year, although still behind the national average of 4 per cent. And in the year to June 2014, the international numbers had also slipped, with visits from Asia in particular falling back. Nationally, visitor numbers from Asia were up 10.4 per cent in the year, but in Canberra numbers were down 1.9 per cent.

Visits for education and business were especially poor, with business visits up from 20,000 to 24,000 in five years, and education visits down from 15,700 to 15,300 over the same period. The strongest area was people visiting friends and family, up from 34,000 five years ago to 59,000 last year.

Forum chief executive Margy Osmond said the ACT had some of the best tourism assets in the country.

"Asian visitors in particular are drawn to these sorts of cultural institutions, not to mention Canberra's reputation as a safe and welcoming destination," she said. Tourism already supported 17,000 local jobs but there was great potential to "increase overnight visitation and improve the visitor experience", she said.

Major events were a real trigger for overnight travel, she said.