Australian Hospitality Industry Analysis

This assignment delves into the Australian hospitality sector, highlighting its rapid growth and examining the key factors shaping its development. It explores the impact of technology on communication and service delivery, analyzes the competitive landscape influenced by regulatory changes, and investigates how demographic trends influence tourist behavior. The analysis considers consumer demands, competition from other industries, marketing limitations, and personnel shortages as significant challenges facing the sector.

Running head: ISSUES IN AUSTRALIAN HOSPITALITY SECTOR 1
Issues in Australian Hospitality Sector
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Issues in Australian Hospitality Sector
The Australian Hospitality sector is made up of over 4,500 guesthouses, motels, and
hotels. In addition to this, there are over 220, 000 rooms in serviced apartments minus the
premises with under 14 rooms. Many of the properties are not so large and make up for most of
Australia’s unbranded business. Most industries are susceptible to different factors and the
hospitality industry faces many issues in Australia. From the changes in technology to the
dynamics in the government, all these elements bring about a variety of impacts on the sector.
Apart from this, demographic and economic conditions heavily affect the hospitality sector in
many ways.
According to Hsu (2015), the hospitality sector saw great improvements in 2016 because
jobs were added to the entire world including Australia. According to an analysis by Ramphal
(2016), 2017 is projected to be a good year for the hospitality industry because the jobs created
will improve the industry. However, there are many things which have brought about major
issues to the Australian hospitality sector in the last three years. Innovation in terms of
technology, political and legal issues, social and cultural factors, economic conditions and
demographics. In a study conducted by Legrand, Sloan and Chen (2016), many emerging
changes in the industry’s environment have been observed in the past 2 years and there is a
projection that the current changes will affect the hospitality sector in the years to come.
Political and legal issues are the major factors which have impacted the Australian
hospitality industry. From the changes in the regimes of governments to terrorism threats, the
industry is often the faced by the issues directly. Political stability is very important for the
hospitality industry. What is critical is that tourism as the major role of the Australian hospitality
sector flourishes in an environment which is peaceful (Ingram Tabari & Watthanakhomprathip,

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2013). Therefore meaning that it cannot survive in an environment which is full of terror and
conflict. Political issues are very important in ensuring that a significant influence is made on the
profits and revenue in the future of an organization. Even one terrorist act can bring about the
reduction of tourists for a long period of time.
Many sociocultural issues influence hospitality in terms of tourist behaviour and the
entire tourism business. The factors in this element include education level, income, gender, age,
culture, religion, social class and customs. In the hospitality sector, all these factors have a major
effect to both the tourist destination and the source of the market (Ozturk et al., 2015). Marketers
of tourism should have a clear understanding of the many different impacts this single factor can
have on the hospitality industry so that they can have the ability to have an effective management
of the issues when it comes to the interaction between the hosts and the guests. Customs are
mainly seen in terms of lifestyle and the traditions of one’s culture. Culture affects hospitality
directly because in its own sense, tourism entails travels in cross-cultural scenarios.
Legal issues are seen where the tourism industry is complicated due to the fact that public
and labor security are a major concern. Away from this, other laws are present to bring about an
influence to the sector regardless of the fact that the major concerns are the labor laws and the
public safety. Tourism brands should always have a focus on risk management because of there a
big challenges in the laws governing the tourism environment. To prevent issues, the training of
staff is very important.
Economic conditions are also the major issues behind the increasing demand in the
Australian hospitality sector in 2016. The labor market has seen continuous growth in the
consumer spending and in addition to this, there has been a continuous rise in the labor market as
well as the spending by the consumers. Apart from this, another economic factor is the rise of

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both hourly income and disposable personal income. The current situation in terms of the
economy clearly shows that the sector will continue to improve in the years to come. The
demand’s situation is healthy and many would reap benefit from the existing generation. The
global economy’s condition is an important element which ultimately affects the state of the
tourism industry in the world today. If an economy is flourishing, the consumers will have the
ability to spend more time and resources. However, if there is slow growth in the economy, the
employees will be affected financially and so will the industry.
Technology has grown to become the major facilitator of the need for the tourism in the
last 17 years (Farmaki, Altinay, Botterill & Hilke, 2015). This can be seen where technology is
utilized in booking airline tickets and even the marketing of goods and services. The transfer of
information and communication is facilitated by technology and it has gone a long way in
ensuring that all the people around the world can use it. By using technology, tourist can do
research on the best places to visit in Australia and from there they can book an airline ticket
through the internet. Many airline brands and big hotels are utilizing the use of technology to
serve their customers in the most professional ways possible.
Competition is a strong force in the hospitality sector. Competition is very high and no
player in this industry has no control over. For many hospitality businesses in Australia,
competition is influenced by regulatory factors. Changes which are observed in the United States
after 9-11 have mainly been because of the change observed in the regulatory environment, for
example, the changes in the bigger restrictions on plane travel and the airport check-ins which
has brought an impact in flying (Ozturk et al., 2015).
Demographics usually have a tendency of influencing the behaviors of tourists. The size
of the population determines a tourist’s market source and the potential of demand. Age is also

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related to tourism where the available time for leisure and this is seen where younger and older
age groups have much leisure. Physiological conditions which affect the tourism activities. For
example, youth prefer physical activities, unlike the older population who prefer to be more
relaxed (Becerra & Silvia, 2013).
In conclusion, the hospitality sector is the fastest growing sector in the world and it is an
indispensable as well as an integral part of the hospitality sector. This industry has exhibited very
little signs of slowing their business processes even during the economic recessions. The
demands of consumers keep on changing, competition from other industries, lack of sufficient
marketing and lack of trained personnel is what contribute to the issues mentioned above.All
these elements have a major impact on the supply and demand of the products and services
needed by tourist.
Reference
Farmaki, A., Altinay, L., Botterill, D., & Hilke, S. (2015). Politics and sustainable tourism: The
case of Cyprus. Tourism Management, 47, 178-190.
Becerra, M., Santaló, J., & Silva, R. (2013). Being better vs. being different: Differentiation,
competition, and pricing strategies in the Spanish hotel industry. Tourism Management,
34, 71-79.
Hsu, Y. L. (2015). The review of human resource strategies applying in hospitality industry in
South California. International Business Research, 8(3), 133.
Ingram, H., Tabari, S., & Watthanakhomprathip, W. (2013). The impact of political instability on
tourism: case of Thailand. Worldwide hospitality and tourism themes, 5(1), 92-103.

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Law, R., Leung, D., Au, N., & Lee, H. A. (2013). Progress and development of information
technology in the hospitality industry: Evidence from Cornell Hospitality Quarterly.
Cornell Hospitality Quarterly, 54(1), 10-24.
Legrand, W., Sloan, P., & Chen, J. S. (2016). Sustainability in the hospitality industry:
Principles of sustainable operations. Routledge.
Ozturk, A. B., & Hancer, M. (2015). The effects of demographics and past experience on RFID
technology acceptance in the hospitality industry. International Journal of Hospitality &
Tourism Administration, 16(3), 275-289.
Ramphal, R. (2016). A Quality Tool box for the Hospitality Industry.