Australia is one of the best places for investing within hospitality sector. In addition to this, the foreign investments have great impacts on these segments of hotel industry of Australia. These impacts and benefits are analyzed within this report with respect to various consequences involved within the hotel industry of Australia (aha.org.au, 2013). Australia is one of the most famous organizations that is developing its industrial sector in order to increase their gaining over their target market and responsible heads of their own industry. Henceforth, the country needs to analyze the benefits and functional impacts of FDI (Foreign Direct Investments) (Alfaro & Charlton, 2013). As there are different foreign industries and organizations are participating within their hotel industry the country needs to find out the responsible consequences and functional requirements for managing their system architecture as well as organizational structure within Australian Hotel Industry.
Purpose statement of any research paper is very important for understanding aims of the paper in brief with respect to various functional and non-functional consequences that are being elaborated within this concerned paper. Henceforth, the purpose statement for this paper is also important to be studied in order to understand the discussion presented within this report.
Therefore, the purpose statement for this paper is as follows, Australia have great and distributed foreign distributed investments over their hotel industry and these investments may be beneficial or non-beneficial for this particular industry. This report is concentrating on finding the consequences related to benefits and impacts of this FDI within foreign direct investments within their hotel industry with respect to critical aspects.
The considerable discussion about the foreign direct investments and Australian Hotel industry, there are mainly two segments that are being highlighted within this report. These are benefits of FDI over the Australian Hotel industry and evaluation of the impacts of FDI over the Australian market place. These two aspects are mainly concerned within this report in order to identify the benefits of FDI within Australian Hotel industry with respect to their functional advantages and disadvantages (Anwar & Nguyen, 2014). These threads are being elaborated within this research with respect to different factors and their impacts on the Australian hospitality sector depending on different consequences involved within this research processes.
Foreign Direct Investments are not only making Australian hotel industry beneficial with their solutions and functional activities that is in terms increasing the gaining of Australia but also it is providing chances for expanding the business market for Australian Hotel Industry with respect to their objectives and goals. Therefore, following are the scopes for Australian Hotel industry with respect to FDI:
Limitations of research
In contrast with various functional segments, there are different limitations of the research present within the research process. These are being elaborated as follows:
Time consuming research processes: Analysis of the benefits and impacts takes time with respect to different consequences present within the research process.
Conflicts among resources: There are various functional discussions that needs to be incorporated within the evaluation of effectiveness of the FDI concept within Australian hotel industry (Buch et al., 2014). Therefore, in this case various resources raise conflicting situations for this type of discussions.
There are different gaps that are identified while conducting the impact analysis of FDI within Australian hospitality industry with respect to different consequences. These gaps are being elaborated as follows:
Lack of technological tools: Lack of technological tools imposes impacts on the foreign direct investments of Australian hotel industry (Chakraborty, Mukherjee & Lee, 2016). This aspect disturbs the functionalities of organizational structure and functional areas of operations within Australian target market.
Inefficient human resources: Inefficient human resources are another consequence that is impacting on the foreign direct investments within Australian hotel industry with respect to various consequences (Chandran & Tang, 2013). These make weak the infrastructure and organizational structure of hotel industry.
Governmental regulations: Governmental regulations are other impactful gaps that are recognized as the efficient fact of managing foreign direct investments within Australian hotel industry with respect to various consequences.
The research is conducted based on both the primary and secondary surveys within the Australian hospitality sector. The hospitality sector is generally consists of hotel and tourism industry within it. Therefore, researcher needs to put focus on one single sector in order to find and analyze the impact of FDI within Australia (Chung, 2014). The data collection will conveyed within different hotels and target locations related to these hospitality sector within Australia. These surveys are conducted in order to analyze the impacts of FDI within these sectors (Cui, Meyer & Hu, 2014). In addition to this, the secondary sources are used as articles, journals and government sites for collecting secondary data from these resources.
The researcher can easily manage and use these resources in order to evaluate the impacts and benefits of FDI within Hospitality sector of Australia with respect to different functional non-functional aspects involved within his research process. In addition to this, this research will accurately highlight the impacts and dependencies of FDI within Australian Hospitality sector (Cui, Meyer & Hu, 2014). Prior research processes and its funding will be helpful to the researcher in doing analysis within his own research process. The main factors will identified that has put the most effective impacts on the Australian hospitality sector by FDI concepts.
Foreign direct investment is nothing but the inflow of capital within the domestic economy of any country through the investment made by foreign companies and organizations with respect to their own objectives and goals within their competitive target market. In accordance with the definition of international monetary fund, direct investments are made for gaining interest in one economy by an organization which is located within other country (Farla, De Crombrugghe & Verspagen, 2016). Additionally, the multinational collaboration generally controls the foreign direct investments. Any MNC can make foreign direct investment within any other country rather than their home country and this requires them to create or making of an acquisition for one enterprise within their target country. In contrast with this discussion, creation of this kind of enterprise is known as Greenfield investment and the acquisition of a company is known as Brownfield Investment. In addition to these facts, the foreign direct investments have three main elements within it; these are equity capital, other direct investment capital and reinvestment earning (Farole & Winkler, 2014). The first element, equity capital comprised of equity potentials in subsidiaries and branches that are present in the form of machineries (Holmes et al., 2013). The second element includes debt securities, trade credit and the third element includes earnings from investor share which is not being distributed among other investment stakeholders.
The foreign direct investment can be done in different ways; this includes opening of subsidiaries or any associated company within foreign region. Apart from these methods, the MNCs can also acquire a controlled interest within existing foreign companies for managing their internal and external investments (Huang & Renyong, 2014). In addition to this, the threshold for the foreign direct investment enables a controlled measure for interest as per the guidelines established by Organization of Economic Cooperation and Development (OECD). This owns 10% ownership stake for the foreign based companies. This is mainly the representation for the investors those acquire foreign direct investment for gaining high benefits from foreign industries (Kabote et al., 2013). However, the definition is found to be flexible as there are chances of controlling interest rates over the established plan or view point of foreign direct investments.
The foreign direct investments are generally categorized as horizontal, vertical and conglomerate. A horizontal investment is referred to the investor establishing same format of business process within a foreign country as it operates in its home country. As an example, a cell phone provider in US opens a store in China (Kim et al., 2015). In case of vertical investments, this is quite different from business activities of the previous one but it is related to the acquisition of business policies and processes within foreign country. As an example, a manufacturing company acquires interest in foreign organization which supplies raw materials for manufacturing company for making its products (Kivyiro & Arminen, 2014). In addition to this, the conglomerate type of foreign investment standards is one which involves foreign companies for investing in business processes that is not related to their existing business processes within their home ground. This type of investment standards involves a investor who have no experiences before entering into such investment standards. This often includes joint ventures with any foreign company that has been operating within any foreign company previously.
Australia has always been chosen for foreign direct investments (FDI). Strategic location and healthy economy as well as strong presence of the country within the global market has made the organization strong in establishing records in investments coming from foreign countries all around the globe (Lee, 2013). All of these aspects make Australia one of the best suited place for foreign investments in comparison with other companies all over the world.
Companies situated all over the globe take this accurate decision for investing within Australia at a certain point of business lifestyle which benefits the urban communications and make the economic condition stable with respect to various functional areas of investments within the organizations within Australia (Neumayer, Nunnenkamp & Roy, 2016). Additionally, the geographical position of the country increases the opportunities of investments from foreign countries all around the world (Norman, 2015). This county is considered as the universal interface for business practices that incur foreign investment as it is considered as ideal platform for entering to Asia with time zone crossover to both Europe and America.
In the year of 2011, the entire FDI stock amounted to 6.6 percent in reaching a staggering AU$ 507 billion. This significant augmentation was nothing but the reflection of upturn within the global FDI activity happened in 2010 (Omri & Kahouli, 2014). Australia was in the backdrop of the global economy. In contrary with these facts, in the year of 2012, Australia experienced more than double investments though their FDI investments within their inward flow of investments. Henceforth, the country experienced god amount of growth within their investment records and this information is collected from their newest annual data collected from Unite Nations conference arranged on Trade & Development (UNCTAD) (Pinto & Zhu, 2016). Therefore, this was found that the overall investment stock that found to be invested within the significant business deals of Australia was about $2.5 trillion in the year of 2013.
In addition to this, in 2013, foreign investors made an inflow within Australia about $115 billion that was recognized as unswerving investments within Australia. This investment was mainly concerned with the foreign investment processes which were owned 10% of the regular shares or power to vote (Presutti, Holt & Camillo, 2015). Additionally, the major investments involved within the Australian market were about $35 billion from United States, $14 billion from Singapore and $12 billion from United Kingdom respectively. All of these foreign direct investments provided one crucial complement to the domestic funds required for the over all assumption of the country.
FDI within Australia has also provided help in finding jobs, specifically within the hospitality industry of Australia. This industry was effectively benefitted through this foreign direct investment patterns and functional measures taken by the country itself and their foreign partners (Ren et al., 2014). The stimulation of economic activities collected through appropriate research process highlights that the country has experienced 10% of augmentation through the foreign direct investment within the sector of hotel industry within Australia (Shi & Smyth, 2012). With respect to these foreign direct investment opportunities within the hospitality sector and other sectors of Australia the country is occupying best place within the list of countries that are developing their situational prospect with respect to the foreign direct investment within their market places for supplying growth to their concerned development sectors.
There are various significant advantages of the foreign direct investments that impacts positively within the hospitality industry of any country. Among all of these significant advantages of FDI within hospitality industry the most effective one is that it is considered as the crucial source of external capital which endows supports when there are shortages of capital within the domestic economy of any country (Sood, 2017). Henceforth, Foreign Direct Investment is considered to be the best suited source of investment within hospitality sector. Any MNS that is opening one new subsidiary within foreign country needs the resources such as labour, equipments and so many other things for supporting their business start up.
Henceforth, all of these requirement and needs generates the chances of employment within that foreign country. In contrast to these facts, Australia which has higher unemployment rate may increase the chances of employment through foreign direct investment within their hospitality sector. It is found that Australia has experienced competition within their domestic economy as the firms have competed with the foreign companies (Staples, 2014). This aspect makes their country more advanced with respect to various functional and non-functional measures taken by their domestic firms and organizations.
In the recent years, for the strategic moves taken into account by the foreign investors, FDI has become interesting investing method within worldwide. There is protest in the barriers of trade but at the same point of time the FDI is experiencing much higher growth than other trades within the global level of acquisition (Tang & Tan, 2014). With respect to the idea of globalization, the view or standards for hospitality or any other industry has been raised through the functional investment processes through the foreign countries within Australia (Tang & Tan, 2015). In addition to this, the globalization has made the concept of Foreign Direct Investment more powerful as it has made domestic economy of Australia stronger than ever before in comparison with other possible chances of investment within Australia.
According to Thorpe & Leitão (2014), the foreign country have to give tax to the host country for running their business processes within their economy. Therefore, the tax revenue collected from different sources makes the economy strong with respect to the demands of the hospitality sector. The hospitality industry have some disadvantages over other industry within Australia, the growth of FDI is putting good impact on the domestic economy of the country with respect to various functional advantages within the host country (Wilson, 2016). The financial condition of the country has been changed from previous recorded segments.
Australia have high amount of resources that supports the growth of the county with respect to their financial as well as other point of view of development. The support provided by the foreign direct investments provides chances of innovations and growth in the economic condition of the country. Therefore, Australia could increase their revenues not only through tax revenues but also through the investment standards that are invested through the foreign standards and developmental aspects of the country and its domestic firms (Wood, 2015). Up gradation of the country conditions will attract the tourists more than ever it had before and the objectives behind foreign direct investment will be successful.
Foreign direct investments are helpful in solving issues and functional problems involved within Australian economy. The money or financial support gained by these investment measures can easily manage domestic investment within the country. Additionally, the total saving that is gained by the country creates disparity among different zones of the country or different sector of the country is harmful to the country (Xia et al., 2014). In contrast with these facts, the foreign direct investments are helping the country in solving these issues with respect to various functional measures and conditional aspects involved within the country’s economy. Accordance with the records found in the year of 2015, this was found that Australia experienced an inflow about $424 million that comprised of #348 billion household savings and $76 billion investments from foreign direct investments within their country (Alfaro & Charlton, 2013). Therefore, these can be stated that the foreign direct investments can easily encourage the competitive nature of different sectors of Australia with respect to various consequences involved within the country itself. In addition to this, hospitality sector of the country is the one that can experience for managing investments within their country with respect to various functional measures. Now the government needs to support and understand the functionalities of FDI for managing the development of hospitality and other sectors of Australia. Therefore, this can be stated that the foreign direct investment is proved to be the best suited solution for improving the economic condition of the country with respect to different zones of investments and their approved standards for managing these investments within the country. In addition to this, this can be stated that not only the government is responsible for managing these investments but also the organizations and other functional firms involved within this investment processes are also equally responsible for managing economic growth of the country with the help of these type of investments within the country.
Conclusion
This can be concluded that foreign direct investment has crucial impact on the hospitality industry as well as its employability within any country. In contrast with these facts, this report has elaborated about the impact of FDI within the Australian hospitality industry with respect to various measures taken by the foreign direct investments involved within the significant areas of interests. The study has been focused on the growth of hospitality industry with respect to FDI concepts within Australian. In order to convey the research process surveys are undertaken for collecting data from different segments of country. This secondary survey is conducted within different segments of industrial sector within Australia. This foreign direct investment has been brought to various sectors of Australian market segments, though the maximum scope of improvement is noticed within the sector of hotel industry of Australia. Henceforth, this research paper is focusing on the issues and impact analysis of the Foreign Direct Investments within the hotel industry of Australia.
Australia experiences great amount of foreign direct investments within their hospitality sector as there are significant scope for improvement and development within this sector of Australia. The customer choices, accommodations, infrastructure and capacity of locations within Australia are great with respect to other tourist spots situated within worldwide. The Australian market is trying to the focus on the fact that why the hotel industry is lagging behind in attracting their customers within the country. Therefore, this research paper is elaborating about the consequences related to FDI within the country that indicates the functional and positive response from FDI for managing the customer attraction within Australia. It is very important for the country to understand the issues to find out its solutions. Therefore, Australia has found FDI to be beneficial for getting investments within their sector for managing significant attraction of the customers and clients that are involved within the foreign direct investments within Australia.
The hospitality sector of Australia has strong forward and backward linkages. FDI is used generally within this industry in order to enhance the capacity and other facilities involved within the hospitality industry of Australia. In contrast with this fact, government plays a great role in this fragment of discussion but still they are not only responsible heads to manage the economic condition of the country. Australian economy has chosen FDI to be the most effective element involved within their economic condition that can itself enhance their developmental aspect. In contrast with these discussions, it is found that this is very much essential for Australia for grabbing the opportunities to use the foreign capitals that are being invested within their economy. Foreign direct investments have the capabilities to incur potentials to the financial state of the country with respect to various consequences and functional areas of interests that will help the country to overcome various financial and domestic challenges that are incurred through poor domestic economic condition of the country with respect to their urbane conditions.
This report is considering the functional areas of investments such as opening of new subsidiaries within host country which is selected within this research paper as Australia. Now there are different industrial sector that takes foreign direct investments within their system architecture but there hospitality sector is considered as effective example of conditions that are effectively benefitting the economic conditions of the domestic firms as well as the economic condition of the country with respect to various investment options. The foreign direct investments have the power to invest good amount of money for the improvement of economic state of the country with respect to various functional non-functional aspects involved within the hospitality industry of Australia.
The Australian hospitality industry is getting benefitted through the investments coming from foreign direct investments throughout the world. In addition to this, there are various consequences and issues found within these investment standards and processes that are not elaborated within this research paper rather than the benefits and positive impacts of these investments are considered and elaborated within this paper with respect to various significant elaborations.
There are different significant descriptions that are discussed within this research paper that is highlighting the impact of foreign direct investments within the sector of hospitality within Australia. In addition to this, the methods of investments and processes are also elaborated within this research paper for identifying the benefits and significant impacts of FDI within the country and its competitive target market. In addition to this, this is also identified that the competency of the domestic market of Australia is also increased through FDI as the domestic firms faces competition through meeting up the expectation of the firms that are developed by the foreign investors within the country with respect to their objectives and goals within Australia.
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