Reforms in Tourism Industries in Australia

Question: Discuss aabout theReforms in Tourism Industries in Australia. Answer: Introduction The tourism industry in Australia contributes significantly to economic development in Australia as well as offering employment opportunities to many. The tourism industry in Australia has grown strongly over the recent years. The number of visitors has increased from 2.5 million in the year 1992 to about 6.7 million in 2014 (Productivity Commission, 2015). The greatest international visitors come from New Zeeland, China, Asia and India. However, the source countries which supported the Australian tourism industry for many years such as United Sates, Japan and United Kingdom, has declined over the years. This has affected expenditure proportion as well as the overall number of visitors travelling to various regional parts of Australia. This has shown a 5% decrease over the period between 2006-2014 (Dobson Hooper, 2015). Specifically, in the Tropical North Queensland during this period, there was a decline from international travelers of about 20% and 40% decrease in real expenditure . Therefore, due to unexpected changes and to ensure successful tourism industry in Australia, various reforms need to be adopted and implemented. The government of Australia has a greater role to play in the implementation of the reforms especially based on the economic concepts so as to broaden the industry and the whole economy at large. Economic Analysis Tourism industry in Australia has a huge impact on the economy. In the year 2014, tourism industry contributed to about 3% of the total Australians GDP of which one-third was from international visitors. Demand for the tourism industry has been increasing and it has been estimated that over the next decade, the industry will have more strong growth (Dwyer et al., 2004). The reforms that show the demand increase include; cost of travel, foreign household incomes and relative price of tourism as compared to other destinations. For instance, they have reduced air fares which has shown an increase in demand for Australian air services internationally. The economic concept of supply and demand therefore comes in. The theory behind this concept indicates that every industry or organization should have a price point where the providers of a certain service meets or matches with the consumers. In tourism industry its important for the country to be prepared to meet the growing demand for the international visitors. A consumer preferences and tastes is key in relation to governmental reforms. The Australian government should be able to come up with regulations and policies that does not impede the visitors choice of where they want to travel. Australia has numerous tourist spots and therefore, the visitors should be free to visit any place they want. It should be able to come up with enough tourism-related businesses such as theme parks, casinos, resorts and restaurants accommodation (Prideaux, 2000). Policies to facilitate faster and convenience travel policies such as visa processing and favorable exchange rates should also be considered. Tourism sector is usually affected by increasing competition from different countries. To overcome the competition, a country should implement accommodative policies that are attractive to the visitors. Technological Reforms The concepts of opportunity costs and time value for money plays a pivotal role in consumers choice. No one wants to spend his or her money in something that does not pay off or does not give value of the money spent. The theory of tradeoff states that you have to give up something in order to receive something else. However, when you give up your money you expect to get something worth your money. Due to technology advancements, the travelers now days are doing their research so well before deciding to visit a certain place. Between the year 2006 to 2014, international visitors who booked their travel online increased from 22% to 50%. Therefore, it is important for the Australian tourism industry to invest more in improving their online services and other technological infrastructure (Stamboulis Skayannis, 2003) so as to meet the expectations of the visitors. Cooperation Rather than Competition There are various tourism agencies in Australia and cooperation between these agencies (territory and state agencies) is key in promoting tourism services. Maximum cooperation between these agencies from the Victoria, South Australia, Queensland, New South Wales, Western Australia and Northern territory ensures they speak one voice to the outside world. If the agencies compete against each other, there will be inefficiency in the destination marketing of the whole Australia as a whole (Whitford Ruhanen, 2010). Coordination however, ensures increase in net benefits due to coordinated marketing campaigns which improves the Australians international destination marketing. Recommendations to the Australian Tourism Imdustry Key Players Most of the national parks in Australia have poor infrastructure as well as persistent funding shortfalls. Undeveloped infrastructure can have a major negative impact on the tourism industry. Therefore, the government should encourage private investment in the tourism related infrastructure so as to increase the number of tourists in the country (Sakai, 2006) and also have added advantage over other countries. Approval processes for various investment in the tourism industry should be enhanced. The government should speed the approval processes and continually review them so as to make them more flexible and appealing to the investors. The government should also make the travel services more accommodative to the international visitors. Due to the ever increasing competition, proper reforms and strategic decisions on travel services should be implemented (Wray, 2015). Otherwise, the country will lose market or have limited number of visitors as compared to the resources they have to offer. If this happens, it would go against the economic concept of scarcity, where in many instances resources are scare as compared to the number of customers or what they are willing to spend on. Conclusion Tourism industry has impacted positively to the economy of Australia as well improving the living standards of the people by creating job opportunities. However, to maintain and expand the industry, the government and other stakeholders need to implement the major reforms discussed above. They also need to enhance provision of international destination markets and support other major activities. Once these reforms are implemented, the Australian tourism industry will stabilize its global tourism market and thereby increase its contribution to the Australian economic growth. References Dobson, C., Hooper, K. (2015). Insights from the Australian Tourism Industry. RBA Bulletin, March, 21-31. Dwyer, L., Forsyth, P., Spurr, R., Ho, T. (2004). The Economic Impacts and Benefits of Tourism in Australia. Technical Report Series, Sustainable Tourism Cooperative Research Centre, Gold Coast, Queensland. Prideaux, B. (2000). The resort development spectruma new approach to modeling resort development. Tourism Management, 21(3), 225-240. Productivity Commission. (2015). Australias International Tourism Industry. Australian Government. Sakai, M. (2006). 12 Public sector investment in tourism infrastructure. International handbook on the economics of tourism, 266. Stamboulis, Y., Skayannis, P. (2003). Innovation strategies and technology for experience-based tourism. Tourism management, 24(1), 35-43. Whitford, M. M., Ruhanen, L. M. (2010). Australian indigenous tourism policy: practical and sustainable policies? Journal of Sustainable Tourism, 18(4), 475-496. Wray, M. (2015). Drivers of change in regional tourism governance: a case analysis of the influence of the New South Wales Government, Australia, 20072013. Journal of Sustainable Tourism, 23(7), 990-1010. Reforms in Tourism Industries in Australia Question: Discuss about the Reforms in Tourism Industries in Australia. Answer: Introduction: The Daily Telegraph of Australia published a report on October 16, 2015 on the Australian Tourism Industry, by Ann Sherry. It stated that this industry needed innovation and big ideas to keep up the momentum of growth. The report discussed that, at the end of the resource boom era, the Australian tourism industry emerged as the new sector with immense possibility of growth. Earlier, mining was the biggest industry of growth in Australia in terms of employment and revenue, but, in the past few years, the tourism industry has been creating more jobs than the mining sector. The report showed that in 2013-14, more than 530,000 people were employed in the tourism industry than 270,000 in mining. This is the powerhouse sector, which has the potential to contribute around $250 billion to the economy in the next 20 years. The tourism and visitor economy added more than $11 billion to the States gross state product in 2013-14 (Sherry 2015). The government aims to double the visitor spending by 2020, and make Sydney a city where people would both live and visit. To do this NSW government is pushing the idea of improving the infrastructure in Sydney. Sydney is already a global city; however, it needs more innovation and big ideas to increase the number of tourists. The report states that the scope for improvement is huge, while it needs proper direction and proper strategies to take the right reform actions. Not only the tourists, but, the government as well as the tourism industry are interested to make it a tourist hub in the next few years (Austrade.gov.au 2017). Economic analysis of the tourism industry: Australia is worlds 6th largest country with a population of more than 20 million. Cultural tourism plays a significant role in the total tourism growth. International visitors are attracted by the cultural diversity of the country. All the economic sectors of Australia adopt a broad framework for reform policies. Tourism sector contributed 10.9% of GDP in 2016, which is around 183.2 billion AUD. The gross value added of NSW was $27.6 billion, with direct GVA $13.9 billion and indirect was $13.6 billion in 2014-15. The travel and tourism sector comprises of cultural services, accommodation, mode of transports such as air, water and on road, other retail trades such as cafes, restaurants. Exports of all goods and services include visitor exports also. Internal and leisure travel and tourism are all parts of the total tourism (Austrade.gov.au 2017). In the last 10 years, the contribution to GDP has increased significantly, as shown in the following diagram. (Source: knoema.com 2016) Overview of the travel and tourism business 2015 (Source: Tourism Businesses in Australia 2016) Tourism is an industry, which is demand driven. The type of products that the visitors consume during travelling defines it. However, the citizens also consume the same tourism products. Hence, location is an important factor in this industry as visitors as well the local citizens contribute equally for the growth of a particular tourist destination. In Australia, the regional tourism developments are more prominent in this industry. As per the government websites, in the past few years, there was a boost in employment, regional growth along with imports of foreign currency, improvement of transportation services and these all led to a growth in the travel and tourism industry (Pc.gov.au 2015). In a report published in ABC News, it has been stated that in the Tasmanian Island, national parks should be reformed for growth of the tourism industry (Aird 2017). Over the last 5 years, the increment of visitors grew at the rate of 2.2% on an average annually, visitor nights increased by 3. 8%. Tourism product consumption increased to $121 billion from $103 billion. This industry is dominated by small and medium businesses, which account for 66% of the total revenue (Tourism Businesses in Australia 2016). (Source: Tourism Businesses in Australia 2016) Reform policy: Tourism 2020: this is the policy introduced by the Australian tourism industry for handling the challenges and growing opportunities. It has a framework for growth; and will help the businesses to stay competitive in the future in a dynamic international market. The key policy priorities are to encourage the high quality tourism, reduce the regulations and rigidities of the industry, create innovative campaign strategies for driving the demand and support tourism infrastructural development. The target of doubling the local and global overnight tourist spending up to $140 billion, the industry requires the development of international standard rooms of 6,000 to 20,000 by 2020. Increase in the international flying capacity from 40% to 50%, and 23% - 30% in the domestic capacity, leading to addition of around 1.9 million inbound seats by 2020, employment of additional 152,000 persons and more efficient campaigning (Economic Contribution of Tourism to NSW 2014-15 2016). Recommendation: The government of Australia could adopt the following reform policies: Reforms in the visa policies should be done in a priority basis to make it more quicker and competitive. Especially the applications that come from a potential markets such as China, should be processed without much regulations and at a lower prices. The restrictions on the primary airports are also a discouraging factor for this industry. They should keep the restrictions on the secondary airports and not at the gateways. The nature of jobs should be made more permanent rather than part time or contractual. The cities should be made more easier to access. The tourism department can issue an Opal card to the visitors for easier sightseeing and city tours, which could attract more tourists. The amenities should be renovated and developed as per international standard in all tourist spots. When a city is made more livable for the citizens, then more tourists are also attracted. Skilled tourism workforce should be developed for better tourist service. Identifying opportunities and partnerships for enhancing the marketing scopes is important to attract more international visitors. The state and national tourism plans should be integrated for regional infrastructural development and better customer services. Finally, the collaboration of cross portfolio should be done by the Australian government for driving the reforms of the visitor economy (Hooper and Zyl 2012). Conclusion: It can be concluded from the report that, the travel and tourism industry of Australia has emerged as economic powerhouse in the last five years. The contribution of this industry in the total GDP, GSP and GVA has increased significantly. However, there are still some scopes to be reformed and improved. The government of Australia has formulated the plan Tourism 2020, which revolves around the reforms of this industry and increment of visitor footfalls. It also proposes plans for innovative and big ideas to make the cities more livable and attractive. Hence, to achieve the goals, the government and tourism department should work together and implement the plan formulations. References: Aird, H., 2017. Tasmanian tourism industry pushes for reform of 'outdated' parks and reserve legislation. ABC News. [online] Available at: https://www.abc.net.au/news/2017-01-28/tasmanian-tourism-wants-national-parks-act-updated/8219790. Austrade.gov.au., 2017. About Tourism 2020 - Austrade. [online] Available at: https://www.austrade.gov.au/Australian/Tourism/Policy-and-Strategy/tourism-2020. Economic Contribution of Tourism to NSW 2014-15., 2016. [pdf] Destination NSW. Available at: https://www.destinationnsw.com.au/wp-content/uploads/2014/04/economic-contribution-of-tourism-to-nsw.pdf. Hooper, K. and Zyl, M., 2012. Australias Tourism Industry. [online] Available at: https://pdfs.semanticscholar.org/d1d0/3bb8dc6d3dd0995eea9c3b2b0893e894b3b9.pdf. knoema.com, 2016. Australia Travel Tourism Total Contribution to GDP, 1995-2016. [online] Available at: https://knoema.com/atlas/australia/topics/tourism/travel-and-tourism-total-contribution-to-gdp/total-contribution-to-gdp-percent-share. Pc.gov.au., 2015. PC News, May 2015. [online] Available at: https://www.pc.gov.au/news-media/pc-news/pc-news-may-2015/australia-international-tourism-industry. Sherry, A., 2015. Australias tourism industry needs innovation and big ideas to continue to grow. The Daily Telegraph. [online] Available at: https://www.dailytelegraph.com.au/news/nsw/australias-tourism-industry-needs-innovation-and-big-ideas-to-continue-to-grow/news-story/53078ef6405ad0c433612722c6fdbde7. Tourism Businesses in Australia - June 2011 to June 2015, 2016. [pdf] Australian Government. Available at: https://www.tra.gov.au/documents/Economic-Industry/Tourism_businesses_2016.pdf.