The Catholic church event, which featured a visit by Pope Benedict XVI, helped attract 531,600 overseas visitors to Australia over the month - the highest July figure ever recorded.

The Australian Bureau of Statistics (ABS) today reported short-term visitor arrivals to Australia rose in trend terms by 0.2 per cent, compared with June.

This followed monthly increases of 0.3 per cent each for May and June this year.

Trend estimates for arrivals are 1.4 per cent higher than in July last year.

The largest gains came from the Pope's home country of Germany, with visitor numbers spiking 17.8 per cent, and Italy, up three per cent. Countries with a strong Catholic community including Spain, Brazil and the Philippines also recorded big jumps.

But the ABS reported a sharp fall in Japanese visitors, down 19.5 per cent over the month.

Tourism & Transport Forum (TTF) national tourism manager Caroline Wilkie said the figures showed there was more mileage to be made out of the success of World Youth Day.

"Now we need to leverage off those increases and build on the increased awareness the event has given us," she said.

"This underlines the need for a successful Brand Sydney and for the establishment of a Brand Australia Council, to provide a coherent strategy to promote the country worldwide.

"It also shows the impact big events can have on tourism numbers."

Ms Wilkie said the July jump had made little difference to the overall outlook for the year, with a 4.7 per cent rise in Australians travelling overseas over the month.

"What this shows is that Australians are still spending money on travel, but they're going overseas to do it," Ms Wilkie said.

"This demonstrates the need for more investment in tourism infrastructure, attractions and marketing to encourage more people to spend their holiday dollars at home."