Reforms in Australia's Tourism Sector: An Economic Analysis

Running head: ECONOMICS FOR BUSINESS
Economics for Business
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Introduction
The present essay provides an insight about the tourism sector in Australia. The study
also intends to analyze reforms in tourism sector in Australia over the last ten years. The
conditions in tourism sector mirrors several broad economic trends that has been observed in rest
of the Australian economy because tourism spending is discretionary. As that of the trade-
oriented sectors, this tourism industry has been exposed to various developments in international
market and exchange rate movements (Ruhanen, Whitford and McLennan 2015). This sector
makes major contribution to overall degree of this country’s employment and economic activity.
The objective of this tourism industry is to increase visitation of business events, international
leisure and national income by promoting Australia as captivating tourism destination. Even
though tourism industry has generated considerable revenues in the country, it experiences
difficult conditions of demand over the last ten years. This reflects combination of several factors
that involves passive economic conditions and high exchange rate in vital export market. This
nation has been benefitting considerably from this tourism sector owing to development of
society and generation of jobs. Moreover, travel by the business industry has been highly
cyclical, thereby reflecting variation in the business conditions. The contribution of this industry
to Australian community increases demand and also fosters sustainable tourism industry through
the partnership marketing to global customers in the foreign market (Korez-Vide 2013). Over the
past ten years, the total number of domestic as well as international visitors to this nation
increased at high rate. The increasing income of tourists, reducing fare prices and tourism price
in Australia has been quite lower in comparison to other countries. Despite increase in number of
visitors travelling to Australia, market share of the foreign visitors has declined slightly over the
past few years. In order to improve the market share of Australia, the government of this country

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imposes several policies in order to bring about reforms in this industry. The study also explains
about Australian government role in its tourism industry. Furthermore, recommendations on
policy intervention are also given in this study.
Discussion
Australia tourism sector
The tourism industry of Australia has been unique as its total output has been determined
by the consumption expenditure, which includes- tourists spending on hotels, tourism packages.
In fact, the visitors expenditure patterns helps the tourist service providers to measure tourism
expenditure. According to the ABS (Australian Bureau of Statistics), TSA (Tourism Satellite
Account) is the tool that helps to estimate direct contribution of the tourism industry to Australia
by summing total output of the sectors consumed by the tourists (Zealand 2012). It also provides
accurate data regarding tourists travelling from one region or country to another within a year.
Overall, this measure includes all expenditures on travel for education and business. The data
published by the ABS shows that the output of tourism has been around $34 billion in the year
2009-2010, which increased to more than double in the year 2016-2017. Even its total share in
Australia’s GDP (Gross Domestic Product) also increased at high rate over the past ten years. In
the year 2009-2010, this industry also employed near around half million individuals, which
represents 4.5% of the total employment in Australia. The data also reflects that during the
period 2007-2017, this sectors contribution to Australia’s total employment fluctuated at high
rate. The employment rate had declined during the period 2008-2013 but since the year 2014 this
rate again increased and became more or less stable. This sector has remained significant
employer especially in those areas that have higher dependency on the tourism spending. Thus,

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the high share of employment of this sector relative to its output share highlights labor- intensive
nature of this industry.
The Australian government role in reforming tourism industry
The vital role of the Australian government is to assure that the policies as well as
regulation imposed by them do not impede the international tourism sector from adapting with
the changes in the advanced digital technologies and consumer preferences (Komppula 2014).
The policymakers of this country has integrated various policies that affects the decision making
of the tourists service providers. These policy interventions include- support in regards to sports,
different kinds of air transport arrangements, events relating to business or other cultures and
various visa processes arrangements. In addition to this, the government of this nation also
implements new policies related to the border processing as large number of tourists visiting
Australia arrives via air. The government also invested huge amount of money in other tourism
areas that includes- infrastructure of air transport, accommodations in hotels, promotional
activities and offering several opportunities to the service providers of this industry, destination
marketing, cultural and business events (Vila, Darcy and González 2015). Besides this, the
policymakers also gives the responsibility to the tourism agencies for administering different
activities relating to this sector. Furthermore, these agencies are also involved in doing different
several researches relating to Australia’s tourism, which involves- dissemination of data,
compilation of data and so on. These tourism agencies in turn ensures that the regulatory
structure do not cause any kind of conflicts or hurdles in its private investment.
The Australian government also deals with several other issues that have been arising
within this industry, which in turn leads to improvement in business operations. Apart from this,
the Australian government also focuses on providing huge amount of fund to the tourism