The Growing Hospitality and Tourism Sector in Australia
Question:
Discuss about the Hotel & Hospitality Management.
Hospitality and tourism sector is one of the fastest growing industries across the globe. The highly growing industry has some opportunities, which are needed to be captured. On other hand, it has also posed enormous challenges to the hospitality & tourism industry. This is because of the fact that the highly expanding growths of the tourism industry do require sufficient resources such as skilled workforces. Nevertheless, finding skilled workforces is very challenging in modern times (Riley 2014). The main purpose of the assignment is to analyze the possible challenges, which the hospitality and the tourism industry of Australia are facing. Nevertheless, the assignment would also provide some possible solutions to fight against the rising challenges.
The rising demand for tourism sector in Australia is expanding on a highly incremented rate. The rising tourism industry has attracted several opportunities to the country. On other hand, it has also provided some potential challenges to the country. The biggest challenge to respond to the rising urgency in Australia needs the recruitment of new and skilled workforces in big numbers. However, this is becoming a challenge to find suitable and skilled workforces, which could respond to the rising challenges. Several of factors have contributed in creating such situations. Some of the most dominating reasons behind the fact are as follows (Brotherton 2012):
- The fall in the Australian dollar
- Highly incremented expansion of Aviation industry
- Growth of domestic events
The problem has raised the urgency for the country that it finds some solutions to the rising opportunities in the form of Australian Aviation Industry. The rising Aviation industry and the above-mentioned factors have created the necessity to accommodate a large number of major hotels in the country. Nevertheless, the investors have responded to the rising urgency as they are engaged in many new and upgraded projects of hotels. The upgrading of hotels and the construction of new hotels in large number has created ample pressures on the HRM of the country. They have tough challenges in front of them to fight against the rising deficiency of skilled workforces. The rising demand for more new hotels is a good and healthy sign for the economy of the country. However, the relevant scarcity of skilled employees is a big concern for the country. According to a government report, the current progress of recruitment rate would only accommodate to 38,000 positions in future. However, another 123,000 new workforces would be required by the tourism industry by 2020. The skilled workforce shortages would be around 30,000. The above-mentioned report also highlighted one most heartening conclusion that it is becoming an outright challenge for the country to find sufficient skilled labours (staff, 2017). The country has sufficient people who are unemployed and the rate are increasing rapidly compare to 2016. However, the biggest problem is the availability of skilled workers, which is tough to fig from those unemployed figures. The situation has been worsened as if there are labours but not useful for the rising demand. The rising urgency demands the recruitment of professional graduates (Brotherton 2015).
Scarcity of Skilled Workforces
Figure 1: Rising number of unemployed people
Source: (Abs.gov.au, 2017)
Rapid growth of the Aviation Industry
Figure 2: Rapid Short-term arrival & departure
Source: (Abs.gov.au, 2017)
The above graph clearly shows the growing number of frequent flying in and from Australia. The number of frequent flying from and in Australia has grown tremendously. This is very clear that the aviation industry in Australian is expanding rapidly with the passage of every year. The growing numbers of flights have put a good pressure on the aviation industry to have sufficient numbers of Airlines and they have exactly responded in the same line (Ayeh et al. 2012). The country is an island, which is why approximately around 90% visitors come to this country by means of air. The highly incrementing numbers of visitors to this country have questioned for the requirement of a large number of airlines in this country. The investors and the local government have responded to the rising urgency. This is because of the fact that the country at present has approximately around 49 international airlines. The highly incrementing aviation industry in Australia did also question for an alternative growth for the hotel industry. This is because of such reasons that the investors have responded by investing in upgrading and bringing many new hotels in the country. However, the upgrading and development of several new hotels did also question the requirement of sufficient number of skilled employees, which could efficiently perform the hospitality services to the visitors. Nevertheless, this is the one sector, which is continuously creating enormous pressures on the HRM of the country (Goeldner and Ritchie 2012).
Never before in Australia there was such a strain on the hotel industry in this country. The earth shattering numbers of scheduled hotel group’s development have put enormous pressures on the HRM of this country to provide the sufficient amount of skilled employees. Nevertheless, approximately around 100 hotels are in the pipeline for the development. The hotel industry in this country is likely to fly in the coming two years as the tourism sector is growing like never before. The tourism industry would attract approximately around $167 billion tourism spending by 2025. The highly incrementing tourism industry is playing an enormous role in the growth in economy of the country. Approximately, more than 8,000 hotel rooms are under construction. However, the potential pipeline could be anywhere around the mark of 30,000 rooms. Nevertheless, they are even uncertain that the development of such a large number of hotel rooms would not be able to accommodate the highly incrementing visitors fall. Some of the major hotel projects include but are not limited to such as Ritz Carlton Hotels in Melbourne and Perth, Lendlease’s new Sofitel Hotel. Some other long-term projects include James Packer’s Crown Resorts Hotel and Casino at Barangaroo (Hotelmanagement.net, 2017). The large numbers of major hotel construction have created the necessity to have sufficient number of skilled employees who can actually handle the projects. However, the Australian HRM has so far achieved no significant success in finding the required number of skilled employees (Jauhari 2014).
Demand for Skilled Employees in Hospitality and Tourism Industry in Australia
Some of the highly emerging markets for the Australian Tourism Industry have attracted the attention of the local government of Australia and the investors towards attracting the bulk participation of tourists from such countries. This is because that the Australian government is joining its hands with the tourism industry for three-year promotional campaigns in those emerging markets. The major part of the Asian countries is in target such as China, India and Singapore. The advertisements would be available on the different social media platforms and the television commercials also. The television commercials are targeted on a high-end market. The promotion would be done by highlighting some landmarks of the country such as Sydney Harbour Bridge, the Great Barrier Reef, Kangaroo Island and Uluru. The China is selected for the initiation period, as it is mostly responsible for the highly growing Australian Tourism Industry (Radioaustralia.net.au, 2017). The emerging markets for the Australian Tourism Industry are posing enormous challenges for retaining the interests of visitors in those parts. Nevertheless, the country had the reputation of being an expensive place for having luxury accommodation and nicest foods. The highly incremented visiting from around the world and especially from the Asian countries have forced the local government think of cutting down on the prices of different things such as Airlines, hotels and Foods (Altinay, Paraskevas and Jang 2015).
Australia is often seen as a comparatively expensive country for the visitors than other parts of world such as UK. It is widely unfair also. It is a highly wage country, which makes it a comparatively costlier country for accommodation and eating out. In addition to this, the recent strength of the Australian dollar has forced the consumers in building a perception that Australia is an expensive country. However, the country has started considering the reduction in some core sectors of the tourism industry such as Airlines, tour operators and hotels. This is because of the fact that the country has now realized the strength of the tourism industry on the local economy of the country. The highly incrementing numbers of visitors have reshaped the perceptions of the local government (Legohérel 2013). The local government of Australia is now expanding its tourism industry, supporting this with utmost cares, which is easily evident in major hotel constructions and increasing number of international airlines. Nevertheless, the country is now offering discounted pricing for the accommodation facilities. The opening of numerous latest hotels, new services for air such as Air Ambulance and a promising dining scene have added other attractions in the feather of the Australian Industry. The wide range of adventurous places in Australia is added attractions for the international visitors. Nevertheless, the highly growing educational standard of the country is another asset, which is attracting bulk participations of foreign students. The potentiality of the tourism sector has forced the local government in cutting down on the prices on some highly expensive offerings such as hotel rooms, airlines fares and foods. The highly incremented tourism industry is highly effective for the local economy of the country. This is because that it contributes in the enhancement o GDP per capita. The highly incremented tourism industry is beneficial for the tourism companies, the local government and the local public. The growing tourism industry would bring high economy growth. Moreover, this would also bring numerous jobs opportunities in the country. This is highly commendable for Australia as the country is experiencing an elevated graph for the unemployment rate provided if the country succeeds in positioning the valuable assets to the most suitable resources (Buhalis and Crotts 2013).
Rapid Expansion of Aviation Industry in Australia
The rising number of visitors every year and the construction of high number of hotel rooms to accommodate such high numbers of visitors is a healthy sign for the economy of the country. The hotel and the aviation industry are related to each other in some respect such as the aviation industry is responsible for carrying high numbers of visitors to the country. In other words, the aviation industry is contributing hugely in the grooming of the tourism industry. This is because that an incapable air services can never attract bulk participations of visitors. Nevertheless, being an island approximately around 90% of the visitors use airlines services for coming to this country. However, they overlap each other in terms of revenues generation, as those are directly proportional to each other. Moreover, this means that high number of visitors coming to the country would certainly mean that they would also enhance the business of the airlines industry. On other hand, the high number of airlines would accommodate high number of foreign visitors, which is very important as in coming few years there would be elevated number of visitors to this country (Nickson 2013).
Following are some of the recommendations for the staffing issues in the Australian Tourism Industry:
- Attracting young graduates towards the industry by highlighting the career prospect in the industry
- Using several social media platforms to publicise the bright career prospect in the industry
- Students have comparatively less passion for the industry because of less salary packages and stagnant career, they should be attracted by means of highlighting the rising opportunities in the industry
- Salary packages should also be on a competitive level as it is very important to create a revelation and attract bulk participation in the recruitment processes
- Recruiting fresh pass outs by doing several on campus selections in numerous hospitality management colleges and universities and train them accordingly as per the industry’s requirement. This is a potential recommendation for the recruiting issue, as this would regenerate the desire for entry into the industry because the entry would then be easy and encouraging
Conclusions
The Australian Tourism Industry needs to undergo a small restructuring in their recruiting system. This is very much required to respond to the rising challenges of low numbers of skilled workforces. The normal selection process and less attractive salary packages would certainly make things difficult for the HR in the coming days. It is necessary that the HRM gives their best shot and ensure some changes as per those, which are depicted in the recommendation section.
References
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Abs.gov.au. 2017. Employment and Unemployment – Australian Bureau of Statistics. [online] Available at: https://www.abs.gov.au/employment-and-unemployment [Accessed 4 May 2017].
Altinay, L., Paraskevas, A. and Jang, S.S., 2015. Planning research in hospitality and tourism. Routledge.
Ayeh, J.K., Leung, D., Au, N. and Law, R., 2012. Perceptions and strategies of hospitality and tourism practitioners on social media: An exploratory study. na.
Brotherton, B. ed., 2012. International Hospitality Industry. Routledge.
Brotherton, B., 2015. Researching hospitality and tourism. Sage.
Buhalis, D. and Crotts, J., 2013. Global alliances in tourism and hospitality management. Routledge.
Goeldner, C.R. and Ritchie, J.B., 2012. Tourism: principles, practices, philosophies (No. Ed. 12). John Wiley and Sons, Inc.
Hotelmanagement.net. 2017. Australia to see increase in hotel construction | Hotel Management. [online] Available at: https://www.hotelmanagement.net/development/australia-to-see-increase-hotel-construction [Accessed 4 May 2017].
Jauhari, V. ed., 2014. Managing sustainability in the Hospitality and Tourism Industry: Paradigms and Directions for the Future. Apple Academic Press.
Legohérel, P. ed., 2013. Revenue management for hospitality and tourism. Woodeaton: Goodfellow Publishers.
Mark Chipperfield 2017. Australia on a budget. [online] The Telegraph. Available at: https://www.telegraph.co.uk/travel/destinations/oceania/australia/articles/Australia-on-a-budget/ [Accessed 4 May 2017].
Nickson, D., 2013. Human resource management for hospitality, tourism and events. Routledge.
Radioaustralia.net.au. 2017. Australian tourism targets emerging markets. [online] Available at: https://www.radioaustralia.net.au/international/2012-06-05/australian-tourism-targets-emerging-markets/955350 [Accessed 4 May 2017].
Riley, M., 2014. Human resource management in the hospitality and tourism industry. Routledge.
staff, T. 2017. Time to address key issues facing the Australian hotel industry: attracting and growing quality staff – AccomNews – Australia. [online] AccomNews – Australia. Available at: https://www.accomnews.com.au/2016/05/time-to-address-a-key-issues-facing-the-australian-hotel-industry-attracting-and-growing-quality-staff/ [Accessed 4 May 2017].
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