The Effects Of The Fluctuations Observed In The Australian Dollar On The Tourism Industry

Research Problem

What Are The Effects Of The Fluctuations Observed In The Australian Dollar To The Tourism Industry?

What Are The Factors Which Have Caused The Rise In The Australian Dollar?

What Are The Social Impact Of The Australian Dollar To The Tourism Sector?

What Are The Economic Effect Associated To The Rise Of The Australian Dollar On The Tourism Industry?

What Are The Impact Of The Exchange Rate On The Socioeconomic Construct To The Tourism Industry?

What Are The Business Issues In The Tourism Industry That Are Associated To The Current Strong Australian Dollar?

The tourism industry is a major key growth sector for the economy of Australia. With the rise of the Australian dollar the tourism sector would be greatly affected. In any country the economic systems as well as the financial have continue to be governed by their currency as well as the trends which are seen in the rise along with the fall of the currency.  This rise in the Australian dollar has led to the growth of the tourism industry. This has led to the cheap local tourism which has been exhibited in the country. Some of the international economic researcher as well as the political analysts to predict when the country would become one of the economic power.  According to the experts on the analysis they have carried out they believe that Australian dollar is expected to continue on this trend. This will have some implications on the country. Currently there has been steer excitement as well as optimism among the locals as the local are expected to enjoy cheaper shopping options and tourism. In this research proposal it intends to highlights the economic, social and the business issues in the tourism industry in Australia. The proposal will focus on the ethical considerations, literature review, the aims and objective of the research as well as the research design to this research. The design will focus on the methodology for carrying on this research on the trends and the movement to Australian dollar rise and the impact it has on the tourism industry.

In this research it will find out the repercussion of the climb of the Australian dollars over the recent years. The research will highlight the effect of this increase to the tourism industry in Australia. Moreover, it will highlight the social and economic repercussion of this climb (Caruana, 2016).

Hypothesis

Over the recent years the Australian dollar has been in a sharp rise.  This dollar is at present higher over that of the US dollar. In this research to understand the dynamic of which causes this rise it is important to understand some aspects such as the economy, business as well as the social factors (Cooper, Schindler and Sun, 2006). The rise of this dollar has also caused an excitement as well as optimism to the local individuals in Australia since they would likely get cheap import and cheaper tourism.

The problem which this research intend to answer would be what are on the repercussion of the rise of the Australian dollars especially to the tourism industry which is the main focus sector in the research (Caruana, 2016). To be able to carry an in-depth analysis of this research there are various research question and hypothesis as highlighted below.

These research questions will discuss on the problem of what this research will seek to answer and there are also hypothesis that have been drawn from the research as highlighted as follows.

1. The repercussion of the climb of the Australian dollars over the recent years to the tourism industry.
2. The economic, social and the business issues as well as the trends and movement of Australian dollar impacts to the tourism industry.

The economic systems as well as the financial of the tourism industry can largely be governed by the currency as well as the trends which are associated with both the rise and the fall of the currency (He, Fayman and Casey, 2014). In any country any changes in the currency leaves an effect to the economy, social as well as various sector of the countries (Henderson, 2014). Over the recent years it has been observed that the Australian dollar has risen and it has been higher than the US dollar (Fedoseeva and Werner, 2016). Based on the experts they have highlighted that this trend is expected to continue to rise and this will have implication particularly to the tourism sector which bring foreign exchange to the country Gooroochurn and Sugiyarto, 2005).  For one to understand on the dynamics that governs the GDP and the social implication of an industry it is important to understand various aspects in details such as the economy, the business as well as the social factor that have contributed a lot to the Australian dollar (Henderson, 2014). This rise of the Australian dollar has caused some excitement as well as optimism to individuals who dwell in the country as they are able to get cheap import and local tourism would be cheaper.  According to the researchers they have highlighted that as the dollar rises there could be decrease in the level of investment especially to the tourism industry as the cost of these investment would likely go up and the profitability margins very low. The low level of investment would have serious impact to the economy.

Background

The tourism industry is a major key growth sector for the economy of Australia. With the rise of the Australian dollar would not be so good for the tourism. It would act as the brake to the economy. The financial pressure from the Australia dollar’s rise has been felt by the backpackers when it comes to the budget who have made the lucrative segment for the tourism sector [Henderson, 2014]. This would led to even the cost of living in Sydney to go high. Moreover, it has been observed that as the Australian dollar increases it has caused the increase of the interest rate which has made the tourism industry to cramp and downsize the economy. Moreover, it will continue to hamper the local as well inbound tourism. An example of this was observed back in 2009 when more than ninety thousand tourist were leaving Australia than they were arriving during the month. The tourist arrivals rose about five percent over the year while the departure had increased by more than twenty percent which was the biggest annual rise over five year period. Individuals were travelling overseas for the holidays as it was much cheaper.

The ethical consideration provides a major element to the research. In this research it will adhere to the ethical consideration in promoting on the aims of the research which impact authentic knowledge, truth as well as prevention of the error (Henderson, 2014). Some of the ethical consideration which will be observed in the research are as follows;

One of the ethical consideration is that this research will promote authentic, original and true knowledge whereby I will avoid errors (Ito and Chinn, 2014).  In most of the cases this could happen when there is misrepresentation of the data that could be altered from a real scenario therefore, this research will intend to avoid these aspect and present a true degree of the knowledge on the research.  Secondly, the research will promote value of collaborative work (Ito and Chinn, 2014). This will be through maintaining of the intellectual property rights of the fellow researcher whereby the information which will be borrowed from the secondary resources especially on the literature I would acknowledge on the true source of that information. This is an important aspect since the research would maintain a proper credential to their contributing research in this particularly area.

Another ethical consideration which will be observed in the research will be to maintain of the quality and integrity along with the moral social value such as the legal compliance. Additionally, the research will preserve the participant’s anonymity and confidential (Gabaix and Maggiori, 2015). In the information sheet which will be provided by the respondent I intend to keep their data confidential (Ito and Chinn, 2014). When it comes to anonymity is that I do not need to know who the participant are. This will be achieved through having the organization in the research to distribute on the survey to the employees. Additionally, the information which will be provided I intend to keep it confident and never reveal the identity of the individuals in the research.

Ethical Considerations

2.1 This chapter review on the repercussions of the climb of the Australia to the tourism industry. The literature comprise on the previous studies which have conducted by some of the other scholars.

According to Cathy (2009), highlights that the exchange rate impacts negatively to the tourism industry as there would be issue of the pricing changes as the tourists would be required to spend more to exchange the currency.  The tourism operators are very cautious in regards to the impacts of the rise of the Australia dollar (Eichengreen, 2014).. According to the Queeenland tourism and industry council they highlighted they were concerned in regards to the further rise. There was the issue of pricing changes in order to deal with the changing exchange rate. There is a higher exchange rate which would be expected to contribute in subduing on the price pressure to the economy of the country (Kiely, 2015). The appreciating exchange rate would result to slowing up of the tourism sector and there would be a likely an inflation which is higher than the current forecast. When the domestic rates becomes high they become more attractive to the foreigners who look in purchasing the Australian dollar to invest into the Australian market.

In terms of the philosophy an adjustment to the valuation on the dollar could raise or even lower on the cost of foreign investment, therefore lowering the number of individuals who are visiting Australia such as the tourists (Kiely, 2015). Moreover, there have been numerous economic studies that have demonstrated that whether the Australian dollar may fluctuates against the foreign currencies (Kiely, 2015). The relationship between the exchange rates and Australia import prices is important to recognize on the nature of the Australia import flow in addition to the behaviour of the Australia consumer prices (Eichengreen, 2014). When there is a weaker dollar it usually contemplate to be the key aspect for the trade (Ivashina, Scharfstein and Stein, 2015).

According to Jennifer and David (2002), according to the review they have done on the exchange rate they have recognized the significance of this to trade. The rise in the Australian dollar has been a major culprit in the low prices of the products (Mathews, 2017). They have majored their work on theories such as economic theory. According to Schuh (1975), he found out that the high point of the subsidies has no much correlation to the magnitude to which the subsidies as well as the degree of overvaluation (Schuh, 1974). This individual found out that the shift to the flexible exchange rate has a great significant to the emergence of the well-integrated international capital markets (Eichengreen, 2014).

The research on the exchange rate can influence on the yielded varying results. Some of the researcher found that the exchange rate provides relatively miniscule role when it comes to the Australia price of the commodities. Based on Kost (1976), he reviewed that the theoretical framework that was used in accessing on the trade effect of the devaluation or perhaps the appreciation to the country currency on any commodity. He has traced the impacts of the changes to the exchanges on the commodity production, trade levels as well as the prices for any trading partners (Eichengreen, 2014). There are many researcher who have examined on the impact of the exchange rate movement for a given countries trade, but there have been disagreement which have persisted on the magnitude of this effect. The rise of the dollar has had an adverse impact on the Australian trade while the decrease or fall has aided on the increase of the Australian exports (Hirst,Thompson  and Bromley, 2015). The prices of the products tend to be affected equally by the change which is exhibited in the exchange rate, when one considers the cross price impacts. Nonetheless, there are gaps from this research as it does not show how the rise will impact on the exchange rate. The author did not do an in-depth analysis of the same as they have focused on generalized concept on this aspect.

According to research done by Jacob (2008), on the impact of the rising of the Australian dollar to the various industry, it has highlighted that this rise has not been able to benefit every individual. It can be observed that that the tourism industry has been suffering on the back of this dollar strength and the jobs of many of the workers are up in the air (Hirst, Thompson and Bromley, 2015). Nonetheless, as much as this author has examined on the winners and the losers of the dollar rise, he does not clearly examine on what has made these changes to occur and the effects which will be experienced in this sector (Burnside, Eichenbaum and Rebelo, 2016). The research of this author has been limited to a little scope particularly to the tourism industry. The researcher needed to compare the other business sectors which also plays a major role in the economic development of this country (Hirst, Thompson and Bromley, 2015). The analysis which has been done on this resource the author has generalized on the benefits which are enjoyed on the rising dollar, he does not show how these occur and the ill-effect it has brought to the tourism industry (Kiely, 2015). It is also important to note that the research has tried to map the effect of the rise of Australian dollar it has to tourism industry.

According to Ashvini (2010), on his review on appreciation of Australia real exchange rate on causes and the effects he has highlighted there are numerous social as well as economic implication when it comes to the tourism industry (Liamputtong, 2013). The impact are both diverse as well as extensive. It is worth noting that majority of the main implication has been in the improvement in regards to the terms of the increase in the exchange rate which has brought decrease in the number of the tourists since it becomes cheaper to take vacation to other countries compared to Australia (Mathews, 2017). This is a social implication to which this rise of the dollar has caused to the tourism industry. The rise has been in regards to the exchange rate interest as it has increased therefore individuals end up spending more to get the services (Best and Kahn, 2016). From his research he has highlighted that the main implication when it comes to the increase of the exchange rate has been the structural changes within the tourism sector (Hutton and Kent, 2016). From the summary of this research it has found that the major causes of the rise of rise of the dollar over the past decade has been associated to the resource boom, high product prices as well as the high interest rates along with the increased financial inflows (Leiper, 2004). Nonetheless, there is research gap in that the research has not examined on the expansionary effect of what the rise of the Australian dollar it would bring to the tourism industry in the long run and the other effects it would have in the sector.

The aim of this research is to carry out the climb of the Australian dollars in the recent years and the effect it has had to the tourism industry. The in-depth analysis would provide the social as well as the economic repercussions of the rise to the Australia dollar (Robinson, Nguyen and Wang, 2017).

This research study has various objective which will be discussed in the research study. The following are the research objectives that the study will examine.

1. To ascertain how the changes in the exchange rate of the currency are impacting on the tourism industry in Australia and how the profit and the losses associated with this sector affect the economy of the country.
2. To determine how the fluctuations of the Australia dollar exchange rate impact on the flow of the tourism industry and how the fluctuations in tourism could affect the economy of a country.

In this chapter of the research it will discuss on the research design, the population, and the sampling approaches which will be used in this study. Moreover, in the research methodology will highlight the instrument of the data collection, as well as the data collection procedures and methods (Hirst, Thompson and Bromley, 2015). The aspect of the data analysis and the presentation approaches will also be discussed.

The research design can be regarded as the plan, structure as well as strategy of investigation which conceived in order to obtain the answers to the research questions as well as the control variance. It is the procedure which offers answers to the various issues for example the techniques to use in gathering of the data, the type of sampling approaches along with the tools which are used and how time and the cost constrains could be dealt with.

The descriptive research usually determine and also reports on the way to how thing they are. The descriptive data is collected by means of the questionnaire survey, interview or the observation (Prasad, 2016). On the other hand, the exploration design entails to address on the need which certain inquires focus to the questions which require answers to be able to understand individual, events as well as the situations. The descriptive research design has been the preferred in this research to the others design (Benigno, Chen, Otrok, Rebucci and Young, 2016). The reason is that it will report on the status of the study variables. For this research study, the design will entails determining on the effects of the effect on the economy as well as the business organization. Moreover, it will ascertain on how the changes of the exchange rate could affect these business.

In the study, a populace continues to be understood to be the general selections of all the components in relation to which inferences are created and represents all the possible situations which are of great interest for the study. A population as a result describes all the instances or perhaps people which match in particular to becoming the source of the data that is required in addressing on the research issue which has been pointed out in the study (Frieden, 2014). The target population continues to be pointed out as the population that I am going to generalize on the outcomes of the study. I am going to obtain the samples from an obtainable population, which represent a feasible population. The population of this study will be employees of forty five companies which are operating in the tourism industry in Australia. The data will be drawn for a period of five years from 2012 to 2017.

Strata		Sample
marketing managers		45
Finance managers		45
Total		90

The sample of this study will be ten percent of the workforce that will comprise of nine hundred workers from the forty five companies that are in the tourism sector.  The sample of ninety will be generated by use of purposively sampling of two workers from every organization (McCauley, McGuire and Sushko, 2015). One of the worker in the research will be the manager from the department of finance while the other workers will be a manager from marketing department.

As a researcher I intend to collect the primary data with the help of use of the questionnaire. The questionnaire will have a close ended questions and it will be formulated with the use of the Likert scale methodology. In the use of the Likert scale, the respondent will be expected to neither indicate on their level of the agreement through use of a five point scale which is strongly Agree, Agree, Neither Agree nor disagree, strongly disagree as well as Disagree. There will be use of the secondary data which will be from the articles, books as well as the websites.

In this research proposal, the primary data will be collected through use of the structured questionnaire, as it will be much easier to administer, analyze as well as economical when it comes to time and the money which will be involved (Pevzner and Gaynor, 2016). The questionnaires will be issued to the respondent through the formal self-introduction. Moreover, they will be sent to the respondents under the questionnaire forwarding letter that will be accompanied by an introduction from the University (Pevzner and Gaynor, 2016). There will be follow up which will be undertaken and the questionnaires that are completed will be picked from these respondent from the later date. The secondary data on the information about the rise of the Australian dollar and the economic or the social impact it has on the country from the existing records of the various institutions.

There will be conducting of the test of reliability as well as the validity of the data collection instrument which are the questionnaire (Vang, 2016). Validity will be enhanced through engaging of the supervisor as well as the experts in the industry as to whether the questionnaire was accurately measured (Warnock, 2017). Reliability of the questionnaire will be achieved through subjecting of the questionnaires to the various managers in the industries in the research.

The process of the data analysis will entails the data clean up as well as explanation (Cole and Nightingale, 2016). The primary data which will be obtained from the questionnaires will be summarized as well as analyzed by use of the descriptive methods.

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