Discuss About The Economics Of Tourism Destinations Practice.
The present report focuses on the reforms that occurred in the tourism industry in Australia over the past few years. Australia’s tourism industry is one of the major contributors of the economic activities as well as overall employment level in the nation. The tourism sector contributes to near around 11% in Gross Domestic Product (GDP) of Australia. Even this industry contributes to near about 5% of the total employment of this nation as recorded in the year 2014-2015. Domestic as well as international tourism is the main segment of this industry and hence it represents to about 73% of direct tourism segment. For the last few years, it has been seen that near about 7.4 million foreign and domestic tourists have contributed to around 8% in this nation’s export earnings (Cabiddu, Lui and Piccoli 2013). Recent study also shows that the number of international tourists visiting this country increased to double for the past few years. operations, the international tourism demand in Australia has enhanced considerably for the past few decades. Recent facts reflect that the rising number of tourists, price in tourism products and decrease in flight prices in Australia has been quite less with respect to other countries. Few researchers have found out that the total tourists share has decreased slightly in the last year in this nation. The government of Australia thereby increased their investment level and introduced change in this industry in order to improve their tourists total share. This report mainly highlights on the increasing tendency of the Australians to visit overseas and the compositional change that occurred in inbound tourist market. This report also analyzes on the various measurements of Australia’s tourism sector. Furthermore, the role that the Australian government plays in bringing about reforms in their tourism industry is also explained in this report. The recommendations to policymakers of Australia regarding improvement in their tourism sector are also elucidated in this study.
Zaei and Zaei (2013) cites that tourism sector is an unique sector where the total output is generally determined by total consumption spending of the visitors. Evaluation of tourism expenditure basically requires proper recognition of tourists and their spending patterns. The Australian Bureau of Statistics (ABS) published Tourism Satellite Accounts (TSA) for acquiring detail facts about this country’s tourism industry. The visitors under TSA are defined as the visitors touring to particular region of Australia during a year. TSA mainly estimates tourism industry’s contribution to the economy of Australia by summing up total output of each tourism segment that is consumed by the visitors (Buhalis, Darcy and Ambrose 2012). The Australian government however includes tourism output in national account framework as composition of defined industry’s total output. The estimation of total tourism output not only includes spending on the leisure activities but also includes spending on tour for other events and education. For the last few years, the output of this nation’s tourism industry has grown at a high rate as revealed by TSA data. This data also reflects that the total number of foreign visitors in Australia has grown more than local visitors during the last five years. Moreover, TSA data also reveals that this sector’s contribution to total employment level in Australia also enhanced over the past few years.
The Australian government plays the main role in introducing reforms in tourism industry of this country. It has been evident from recent studies that the Australian government has adopted several policies and activities in order to enhance growth of this country’s tourism sector. The policy makers of Australia provides huge support to the international tourism industry through provisioning destination marketing in order to increase promotion of this country and also by making huge investment in business events. The government of this nation plays crucial role in border processing as huge number of foreign tourist visit this country via flight. The Australian government also funds huge amount in certain areas of tourism industry which involves- infrastructure of transportation, accommodation in order to attract large number of foreign tourists in this nation. According to Vanhove (2017), the main reason behind the Australian government funding in tourism infrastructure is to provide them assurance that regulatory framework does not generate hurdles in the private investment of specific areas. Moreover, the policy makers of this nation act as the major monetary provider to development of the tourism sector in this country. Apart from this, few tourism agencies of Australian government namely “Tourism Australia” plays crucial role in administering several tourism allied activities. These agencies also get involved in doing tourism allied research that includes- collection, distribution and compilation of information (Productivity Commission research paper 2018). In fact, the total spending of these agencies is majorly funded by the government of Australia. Besides this, the Australian government also tries to solve numerous problems that occurs within the tourism sector and implements few policies in order to improve the business environment of this industry. However, these introduction of reforms over the last few years led to increase in GDP and decline in unemployment in Australia.
The Australian government also integrated array of reforms in the tourism industry with the target of encouraging regional tourism as well as attract foreign visitors in the regional areas of this country. The government of this country targets to remove several licensing regimes for improving the tourism and travel business entity. The policymakers of this nation also introduce several reforms in CCA (Competition and consumer Act) for enhancing protection of target demographics as well as foreign tourist to the highest standards. The government of this country also introduced several initiatives in order to promote domestic tourism via online platform. In auditing to this, the policymakers also introduced digital marketing instrument in order to promote the tourism business across the world. Moreover, new reforms have also been introduced by the government of Australia in the Travel agents Repeal Bill in order to promote several aspects of tourism across the regions of this country. Overall, it has been evident from the above facts that implementation of these new reforms has led to increase in growth of the tourism industry in this country.
It has been evident from recent studies that numerous reforms have been introduced in the tourism industry by the Australian government during the past five years. It has opined by Csapo (2012) that, these reforms in the tourism industry has increased the GDP growth rate and employment rate in this nation during the last five years although it reduced in the last year. Apart from this, the composition of foreign visitors in this country also changed during the past five years. However, several factors contributed to this change in total composition of the international visitors in this nation. These factors involved- rising income of households in Australia and other Asian nations, reduction in airfares and so on which in turn helped to provide more travel to this nation. In addition to this, few researcher also points out that rise in number of international tourists in this nation also led to rise in growth in Australian economy (Morrison 2013). It has been found out by some researchers that development in new technologies and integration of digital technologies in the tourism sector of Australia also improved the growth in this industry (Dwyer et al. 2013). It has been evident from recent studies that international tourists in the present years mainly do research on the destination and other tourism goods such as- ticket fares, hotel accommodation via internet. According to the data revealed by the ABS also highlights that the total number of international tourists obtaining information via internet raised from 50% to 60% while the total number international tourists booking the travel parts via online also increased from 22% to near around 45%. This highlights that increasing use of internet by the tourists has led to change in the method visitors tour around the world (Moyle, Weiler and Croy 2013). Furthermore, rise in use of the advanced technologies also have big implication especially for traditional tourism service providers, who are mainly the travel agents (Mistilis, Buhalis and Gretzel 2014). Some researchers have given the views about the fact that utilization of new technologies creates several difficulties for these traditional service providers relating to tourism. In order to reduce the difficulties of service providers, the tourism industry introduces training programs, which are mainly funded by the Australian government. However, adoption of this practice helps these tourism service providers to adopt with these digital technologies.
It has been cited by Char-lee, Becken and Watt (2016) that, the Australian government has also brought about reforms in the visa process. This in turn enhanced the overall demand of the tourism products of this country. Historical facts highlights that the visa application process in Australia was very complicated as well as less demanding over the last few decades. However, in the present years, the Australian government has introduced new policies regarding visa application process, which in turn relaxed the whole process. As a result, this led to increase in huge number of foreign visitors in this country. Recent evidences also reflects that as China is the major gateway for the international visitors to this country, relaxation in the visa application process of Australia facilitates the tourism sector to attract more visitors. Besides this, the reforms in this sector also opened huge opportunities of job for the Australians. The figures revealed by ABS also shows that the employment level in Australia provided by this sector accounts to near about 8% in the present years. Even though many vacancies of job have not been filled up after reforms in tourism industry, several jobs have been created due to this. Moreover, the provision of destination marketing offered by the government of Australia also led to big economies of scope. Additionally, it mainly benefits the enterprises by expanding their business operations across the globe.
Figure : Tourism sector contribution to Australia employment
Source: (Travel and tourism economic impact 2017 Australia 2018)
Figure1: Arrival of number of tourist in Australia
Source: (tradingeconomics.com 2018)
Implementation of these reforms led to creation of transparency in tourism industry and increase in level of confidence for the investors investing in the business of Australia. It also helped the government of Australia to raise the total amount of funds for the tourist spot development. Moreover, the policies that have been adopted by the Australian government for the tourist agents facilitate them to improve their business and gain competitive advantage over other rivalries in this sector. It has been cited by Seetaram (2018) that, these reforms also helped to administer flexible regulations of Australian government. Apart from this, it also helped the Australian government to improve complaint handling service that is mainly accessed through digital platform. This in turn benefits the Australian government to be coast effectual, user friendly and save their time. Knotková, (2010) opines that the reforms introduced by the Australian government have been mainly done after reviewing their tourism industry. In addition to this, these reforms that have been introduced by this nation’s government helps this tourism sector to improve their business performance and grow at high rate. Moreover, it also motivates the market rivalries for exploring several opportunities that occurred due to change in the tourism industry. It also helped to create numerous dimensions of improvement since regulatory measures becomes active. Implementation of these regulatory measures by the Australian government also aids them to reduce chance of deception, which in turn protects foreign tourist’s right. These change have also directs the tourism sector of Australia to improve their relationship with international visitors.
The government of this nation has introduced “Tourism 2020” policy in order to introduce reforms in Australia’s tourism sector. This policy has been introduced by Australian government in order to resolve issues and increase opportunities in this industry. Tourism 2020 policy majorly concentrates on few areas, which are-
It has been seen from the above fact that although the reforms integrated by the government of this nation have enhanced the tourism sector growth, it creates few difficulties in few areas. For this, certain recommendations have been provided by this nation’s commission, which includes-
Conclusion
It can be concluded from the above study that adoption of reform in this industry by the Australian government led to increase in total number of tourists in this nation. It led to rise in total demand of this sector and enhances the propensity of Australians to tour internationally. Additionally, it led to improvement in the business operations of the enterprise operating in this nation. As there has been change in travel behavior due to such reforms, this tourism industry concentrates on the exports to the emerging markets. Recent facts also highlights that these reforms also lead to improvement in business conditions of other industry, which in turn increases the overall growth of the Australian economy.
References
Buhalis, D., Darcy, S. and Ambrose, I. eds., 2012. Best practice in accessible tourism: Inclusion, disability, ageing population and tourism (Vol. 53). Channel View Publications.
Cabiddu, F., Lui, T.W. and Piccoli, G., 2013. Managing value co-creation in the tourism industry. Annals of Tourism Research, 42, pp.86-107.
Char-lee, J.M., Becken, S. and Watt, M., 2016. Learning through a cluster approach: lessons from the implementation of six Australian tourism business sustainability programs. Journal of Cleaner Production, 111, pp.348-357.
Csapo, J., 2012. The role and importance of cultural tourism in modern tourism industry. In Strategies for tourism industry-micro and macro perspectives. InTech.
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.
KNOTKOVÁ, J., 2010. Indigenous Tourism in Australia(Doctoral dissertation, Masarykova univerzita, Filozofická fakulta).
Mistilis, N., Buhalis, D. and Gretzel, U., 2014. Future eDestination marketing: perspective of an Australian tourism stakeholder network. Journal of Travel Research, 53(6), pp.778-790.
Morrison, A.M., 2013. Marketing and managing tourism destinations. Routledge.
Moyle, B.D., Weiler, B. and Croy, G., 2013. Visitors’ perceptions of tourism impacts: Bruny and Magnetic Islands, Australia. Journal of Travel Research, 52(3), pp.392-406.
Productivity Commission research paper (2018). [online] Available at: https://www.pc.gov.au/research/completed/international-tourism/international-tourism.pdf [Accessed 21 May 2018].
Seetaram, N., 2012. Estimating demand elasticities for Australia’s international outbound tourism. Tourism Economics, 18(5), pp.999-1017.
Tourism.australia.com. (2018). Tourism 2020 – About Us – Tourism Australia. [online] Available at: https://www.tourism.australia.com/en/about/our-organisation/our-performance-and-reporting/tourism-2020.html [Accessed 21 May 2018].
Tradingeconomics.com. (2018). Australia Tourist Arrivals | 1976-2018 | Data | Chart | Calendar | Forecast. [online] Available at: https://tradingeconomics.com/australia/tourist-arrivals [Accessed 21 May 2018].
Travel and tourism economic impact 2017 Australia (2018). [online] Available at: https://www.wttc.org/-/media/files/reports/economic-impact-research/countries-2017/australia2017.pdf [Accessed 21 May 2018].
Vanhove, N., 2017. The Economics of Tourism Destinations: Theory and Practice. Routledge.
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.
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