Reforms in Australia's Tourism Industry: An Economic Analysis

This report focuses on the reforms that occurred in the tourism industry in Australia over the past few years. It analyzes the various measurements of Australia’s tourism sector and the role that the Australian government plays in bringing about reforms in their tourism industry. The report also provides recommendations to policymakers of Australia regarding improvement in their tourism sector.

Running head: ECONOMICS ASSIGNMENT
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Author’s Note

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Table of Contents
Introduction......................................................................................................................................2
Assessing tourism sector in Australia..............................................................................................3
The Australian government role in this nation’s tourism sector......................................................3
Reforms that occurred in the tourism sector of Australia................................................................5
Recommendations provided to the Australian government on adoption of certain policies.........10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
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. However, 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.

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Assessing tourism sector in Australia
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 role in this nation’s tourism sector
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

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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

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also introduced several initiatives in order to promote domestic tourism via online platform. In
addition 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.
Reforms that occurred in the tourism sector of Australia
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

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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

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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

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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

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government in order to resolve issues and increase opportunities in this industry. Tourism 2020
policy majorly concentrates on few areas, which are-
 According to this policy, the key holders are needed to bring about change in
tourism sector by knowing their customers preferences and implementing
effective marketing campaigns (Tourism.australia.com 2018).
 Even though there has been huge development in the digital technologies within
this sector, less portion of service providers uses these technologies for the
tourism related purpose. In order to remove these restrictions, the Australian
government introduced this policy.
 Recent facts also reveal that shortage of laborer occurs in this sector due to such
reforms. The key holders are henceforth needed to improve few reforms for
assuring that there has been adequate recruitment of skilled workers in this
specific industry.
 As few of the regulatory reforms are still now unequally dispersed, this policy
have been integrated in order to decrease barriers and ensure huge development in
infrastructure.
Recommendations provided to the Australian government on adoption of certain policies
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-

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 The funds that the Australian government and other regional government provides
should be conditional on the practice investment rules (Zaei and Zaei 2013)
 In some specific circumstances, the government of this country gets involved in
improving the tourism infrastructure mainly on public land. In this condition, the
Australian government must select the project and make funding arrangement
according to this.
 The Australian government should improve their research capability in order to
known about the overall demand and supply of tourism. These must mainly
involve- accommodation .
 The policymakers should mainly concentrate on effectively providing national
tourism strategy and goals. Moreover, they should refocus on the issues of supply
side as well as the demand of visitors in order to increase this industry long term
growth.
 The tourism industry must collaborate with Australian government in order to
adopt proper labor force development plan and also consider change in
demographic, migration of the tourist accounts and other workforce skills.
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

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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.

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References
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