Discussion
The present essay provides an insight about the tourism sector in Australia. The study also intends to analyze reforms in tourism sector in Australia over the last ten years. The conditions in tourism sector mirrors several broad economic trends that has been observed in rest of the Australian economy because tourism spending is discretionary. As that of the trade-oriented sectors, this tourism industry has been exposed to various developments in international market and exchange rate movements (Ruhanen, Whitford and McLennan 2015). This sector makes major contribution to overall degree of this country’s employment and economic activity. The objective of this tourism industry is to increase visitation of business events, international leisure and national income by promoting Australia as captivating tourism destination. Even though tourism industry has generated considerable revenues in the country, it experiences difficult conditions of demand over the last ten years. This reflects combination of several factors that involves passive economic conditions and high exchange rate in vital export market. This nation has been benefitting considerably from this tourism sector owing to development of society and generation of jobs. Moreover, travel by the business industry has been highly cyclical, thereby reflecting variation in the business conditions. The contribution of this industry to Australian community increases demand and also fosters sustainable tourism industry through the partnership marketing to global customers in the foreign market (Korez-Vide 2013). Over the past ten years, the total number of domestic as well as international visitors to this nation increased at high rate. The increasing income of tourists, reducing fare prices and tourism price in Australia has been quite lower in comparison to other countries. Despite increase in number of visitors travelling to Australia, market share of the foreign visitors has declined slightly over the past few years. In order to improve the market share of Australia, the government of this country imposes several policies in order to bring about reforms in this industry. The study also explains about Australian government role in its tourism industry. Furthermore, recommendations on policy intervention are also given in this study.
The tourism industry of Australia has been unique as its total output has been determined by the consumption expenditure, which includes- tourists spending on hotels, tourism packages. In fact, the visitors expenditure patterns helps the tourist service providers to measure tourism expenditure. According to the ABS (Australian Bureau of Statistics), TSA (Tourism Satellite Account) is the tool that helps to estimate direct contribution of the tourism industry to Australia by summing total output of the sectors consumed by the tourists (Zealand 2012). It also provides accurate data regarding tourists travelling from one region or country to another within a year. Overall, this measure includes all expenditures on travel for education and business. The data published by the ABS shows that the output of tourism has been around $34 billion in the year 2009-2010, which increased to more than double in the year 2016-2017. Even its total share in Australia’s GDP (Gross Domestic Product) also increased at high rate over the past ten years. In the year 2009-2010, this industry also employed near around half million individuals, which represents 4.5% of the total employment in Australia. The data also reflects that during the period 2007-2017, this sectors contribution to Australia’s total employment fluctuated at high rate. The employment rate had declined during the period 2008-2013 but since the year 2014 this rate again increased and became more or less stable. This sector has remained significant employer especially in those areas that have higher dependency on the tourism spending. Thus, the high share of employment of this sector relative to its output share highlights labor- intensive nature of this industry.
Australia tourism sector
The vital role of the Australian government is to assure that the policies as well as regulation imposed by them do not impede the international tourism sector from adapting with the changes in the advanced digital technologies and consumer preferences (Komppula 2014). The policymakers of this country has integrated various policies that affects the decision making of the tourists service providers. These policy interventions include- support in regards to sports, different kinds of air transport arrangements, events relating to business or other cultures and various visa processes arrangements. In addition to this, the government of this nation also implements new policies related to the border processing as large number of tourists visiting Australia arrives via air. The government also invested huge amount of money in other tourism areas that includes- infrastructure of air transport, accommodations in hotels, promotional activities and offering several opportunities to the service providers of this industry, destination marketing, cultural and business events (Vila, Darcy and González 2015). Besides this, the policymakers also gives the responsibility to the tourism agencies for administering different activities relating to this sector. Furthermore, these agencies are also involved in doing different several researches relating to Australia’s tourism, which involves- dissemination of data, compilation of data and so on. These tourism agencies in turn ensures that the regulatory structure do not cause any kind of conflicts or hurdles in its private investment.
The Australian government also deals with several other issues that have been arising within this industry, which in turn leads to improvement in business operations. Apart from this, the Australian government also focuses on providing huge amount of fund to the tourism marketing for attracting large number of domestic as well as foreign tourists. The keyholders of this country also aims to eliminate any kind of licensing regimes in order to avoid conflicts and enhance the performance of this business (Seetaram 2012). The Australian government also injects huge amount of liquidity for enhancing development in this industry. Based on the CCA (Competition and Consumer Act), the government of this country also plays a vital role in protecting foreign tourists from any kind of harassment. In fact, integration of the digital marketing tool by the government of this country helps to promote business of tourism across the globe. Thus, adoption of policies helps to improve its financial performance and increase tourism growth of this nation. Tourism 2020 is the partnership between the tourism sector and Australian government for increasing overnight spending between $115 billion and $140 billion by the year 2020 (Ursache 2015). The present forecasts predicts that the overnight spending might reach to $131 billion in the year 2020 with the international spending growth outstripping domestic spending growth (Swanson and Edgell Sr 2013).
The researchers have also found out that the Commission also takes interest in taking initiatives in the tourism research project in order to assess the growth trends in this industry and acquire knowledge regarding application of proper government policies. They even focuses on the policies imposed by the government of Australia in order to improve tourism infrastructure and also considers whether any kind of hurdles in this sector’s future growth are agreeable to policy reforms. They take notice in any case if there occurs deficiency in funding of infrastructure of the tourism industry. In certain circumstances, they tries to encumber to the strategies adopted by the tourism service providers for helping them adapt to changes in digital technologies and visitors preference. In addition to this, they even assess the reason for market failure in tourism industry of this country (Coghlan 2012).
The Australian government role in reforming tourism industry
Tourism industry plays significant part in the Australian economy since it contributes to high percentage of this nation’s employment and GDP. Over the past few years, the tourism industry in Australia has undergone numerous reforms so as to increase its overall capability. Sharpley and Telfer (2014) opines that reforms in this sector are necessary due to proliferation in demand from various segments and need for innovation in regards to tourism services. Another objective of bringing about economic reforms has been to create transparency within this tourism sector. One of the key reforms that have occurred in this sector is the rise in total composition of the foreign and domestic tourists. The rise in total number of tourists visiting Australia has been mainly driven by several factors that includes- increasing income of households, lower airfares and so on. These factors in turn led to improvement in international and domestic travel for the tourists visiting this country (Forsyth et al. 2014).
The rising penetration of various digital technologies have significantly transformed the ecosystem where the tourism industry operates (Benckendorff, Sheldon and Fesenmaier 2014). Most of the visitors are now utilizing internet for planning as well as booking their trip. In fact, the visitors have been increasingly attaining information about the tourism products and booking as well as buying these products via internet. During the year 2006-2007 and 2013-2014, the total proportion of foreign visitors attaining information via internet enhanced from 50% to 60% while the total proportion of the foreign tourists booking their travel online part also increased from 22% to 50%. The low- cost carrier business model that involve direct online bookings with airline have improved due to diffusion of digital technologies. Besides this, growth in utilization of digital technologies also positively influenced the traditional tourism service providers particularly travel agents. However, increased use of digital technologies changed the way tourists travel (Dredge et al. 2013).
Several reforms have occurred in infrastructure of the tourism industry in Australia over the past ten years. Recent facts revealed that the Australian government tourism strategy has led to doubling of tourists spending. This in turn also attracts foreign direct investment (FDI) to Australia and thus upgrades existing tourism infrastructure. Thus, the change in government policies in infrastructure investment has attracted the global player’s interests in its tourism industry. For achievement of asset target under Tourism 2020, reforms have also occurred in the accommodation development of the tourism sector. The Australian government have revised their tourism strategy in order to assure that different projects are adopted within the time bound. Furthermore, owing to booming of real estate market, reforms have also occurred in the development of hotels. This in turn led to planning of host risk and increase in execution rate.
Recent studies reflected that the demand for tourism products in Australia enhanced over the past few years due to improvement in visa process (Vila, Darcy and González 2015). During the year 2007, the visa application procedure was highly complicated. Due to this, the growth of the tourism sector was low as compared to other sectors operating in Australia. Since China is the major gateway for the international tourists, the Australian government adopted change in visa process in order to attract large number of international tourists. The government of Australia has also introduced numerous entry visas especially for business and education visitors from China.
Reforms have also occurred in the regulation of foreign air services in terms of administration policy as well as policy design. This reform has significant impact on the price as well as availability of international air services to and from this country. This change has led to decrease in foreign airfares and availability of foreign flights, which in turn increases travel choices for Australians who wishes to travel overseas.
The reforms brought about by the Australian government has led to increase in confidence of global investors in this sector. Improvement in tourism industry of this country facilitates them to increase funds for the development of tourist spots. Apart from this, it also aids the service providers to ensure compliance with consumer law. This has also led to improvement in complaint handling system, which in turn improves accessibility over digital platforms (Buckley 2012).
Figure 1: Arrivals of international tourists in Australia
Source: (austrade.gov 2018)
Impact of reforms in tourism industry on economic growth of Australia
Pham et al. (2014) found out that the reforms in tourism sector has led to increase in economic growth of Australia for the past few years. The contribution of this sector in GDP of Australia reflects internal tourism expense and government expenditure on this industry. The data revealed by ABS shows that the contribution of the tourism sector in GDP of Australia has been more or less stable over the past ten years. During the period 2007-2017, the contribution of this industry to Australia’s GDP enhanced by about 23%. Stable growth rate of GDP led to increase in economic growth of Australia (austrade.gov 2018).
Dwyer et al. (2013) states that economic role of this industry is divided into three segments- direct, indirect and induced. The indirect contribution of tourism sector in the Australian economy involves- government investment and collective spending. The direct contribution of tourism sector on the Australian economy involve- spending sources. The induced contribution to this economy include- visitors expenditure. Over the past ten years, all the three segments of tourism industry contributed to higher percentage of Australia’s GDP during the period 2007-2017. The economic contribution of tourism sector in this country’s GDP recorded to around 11% in the year 2017, which was quite high as compared to the year 2016 that recorded to around 10.9%.
Figure 1: Total contribution of tourism industry in Australia’s GDP
Source: (As created by author)
The contribution of tourism industry to this nation’s employment enhanced even though it fluctuated slightly over the past few years. The employment rate remained below the target level that is set by the Australian government. The data revealed by ABS reflects that this sector has generated 545,000 jobs in the year 2016 and 524,000 jobs in the year 2017. This reflects that the industry’s contribution to Australia’s employment is more or less stable. Recent evidences reflect that expansion of tourism sector in Australia has created huge stress on workers demand including both skilled and semi- skilled workers. Owing to this, it has put huge pressure on prices on tourism products, thereby leading to higher inflation rate. Moreover, rise in demand of workers has led to increase in real wages, which in turn imposes huge cost burden on this sector’s profit. Thus, this leads to increase in competition within tourism sector (Zaei and Zaei 2013).
Figure 2: Contribution of tourism sector in employment of Australia
Source: (As created by author)
Firstly, the policymakers of Australia should liberalize policies regarding visa application procedure. This is because the present visa policies adopted by the Australian government creates huge restriction on entry of international visitors and thus decreases the total expenditure. However, liberalization of visa policies will also benefit the nation by enhancing trade.
Secondly, the Australian government should implement new policies regarding expansion of skilled labor force in this tourism sector. Moreover, they should impose tourism plans in order to create better infrastructure in the regional societies. In addition, the government must also collaborate with tourism service providers in order to improve business operations within this sector.
Thirdly, the policymakers must focus on supply side problems and tourists demand in order to increase economic growth in long run.
Conclusion
From the above discussion, it can be concluded that the growth of the tourism sector in Australia increased over the past ten years. This is because of the policies imposed by the Australian government that involves- restriction of tax, development in tourism infrastructure, improving visa process and so on. Furthermore, digital tourism marketing and advertising campaign also helps to promote tourism destination in Australia. Although certain conditions in tourism industry including traditional leisure market destination has remained difficult during this period, reforms in policies helps to mitigate the problems. Additionally, the contribution of this industry in Australia‘s employment also increased over the years.
References
austrade.gov 2018. Tourism driving economic growth. [online] Retrieved from https://www.austrade.gov.au/news/latest-from-austrade/2018/tourism-driving-economic-growth [accessed at 18th September 2018]
Benckendorff, P.J., Sheldon, P.J. and Fesenmaier, D.R., 2014. Tourism information technology.
Buckley, R., 2012. Sustainable tourism: Research and reality. Annals of Tourism Research, 39(2), pp.528-546.
Coghlan, A., 2012. Linking natural resource management to tourist satisfaction: a study of Australia’s Great Barrier Reef. Journal of Sustainable Tourism, 20(1), pp.41-58.
Dredge, D., Benckendorff, P., Day, M., Gross, M.J., Walo, M., Weeks, P. and Whitelaw, P.A., 2013. Drivers of change in tourism, hospitality, and event management education: An Australian perspective. Journal of Hospitality & Tourism Education, 25(2), pp.89-102.
Dwyer, L., Forsyth, P., Spurr, R. and Hoque, S., 2013. Economic impacts of a carbon tax on the Australian tourism industry. Journal of Travel Research, 52(2), pp.143-155.
Forsyth, P., Dwyer, L., Spurr, R. and Pham, T., 2014. The impacts of Australia’s departure tax: Tourism versus the economy?. Tourism Management, 40, pp.126-136.
Komppula, R., 2014. The role of individual entrepreneurs in the development of competitiveness for a rural tourism destination–A case study. Tourism Management, 40, pp.361-371.
Korez-Vide, R., 2013. Enforcing sustainability principles in tourism via creative tourism development. Journal of Tourism Challenges and trends, 6(1), pp.35-58.
Pham, T.D., Bailey, G., Marshall, J., Spurr, R. and Dwyer, L., 2013. The economic impact of the current mining boom on the Australian tourism industry. Canberra: Tourism Research Australia.
Ruhanen, L., Whitford, M. and McLennan, C.L., 2015. Indigenous tourism in Australia: Time for a reality check. Tourism Management, 48, pp.73-83.
Seetaram, N., 2012. Immigration and international inbound tourism: Empirical evidence from Australia. Tourism Management, 33(6), pp.1535-1543.
Sharpley, R. and Telfer, D.J. eds., 2014. Tourism and development: concepts and issues (Vol. 63). Channel View Publications.
Swanson, J.R. and Edgell Sr, D.L., 2013. Tourism policy and planning: Yesterday, today, and tomorrow. Routledge.
Ursache, M., 2015. Tourism–significant driver shaping a destinations heritage. Procedia-Social and Behavioral Sciences, 188, pp.130-137.
Vila, T.D., Darcy, S. and González, E.A., 2015. Competing for the disability tourism market–a comparative exploration of the factors of accessible tourism competitiveness in Spain and Australia. Tourism Management, 47, pp.261-272
Zaei, M.E. and Zaei, M.E., 2013. The impacts of tourism industry on host community. European journal of tourism hospitality and research, 1(2), pp.12-21.
Zealand, S. N. 2012. Tourism satellite account: 2012. Retrived from https://www. stats. govt. nz/browse for stats/industrv sectors/Tourism/tourism-satellite-account2013/summary-results. Aspx.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
