Impacts of Hotel and Tourism Sector on Australian Economy

Running head: HOTEL AND TOURISM MANAGEMENT 1
Hotel and Tourism Management
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HOTEL AND TOURISM MANAGEMENT 2
1. Introduction
According to world report on hotel and tourism management, global tourism is fast growing
compared to other sectors world economic drivers (Mahmoud, 2017). Statistics on the same
show that from December 2017 to May 2018, the sector had generated a revenue of $35.3 billion
to the economy (Jr Sidney & Hill, 2013). However, the growth of international tourism is
because of local tourism advancements, particularly for Australia. In this paper, therefore, we
shall discuss the impacts of the hotel and tourism sector on the Australian economy. Otherwise,
this sector is recognized as the major socio-economic activity source in the country. It is also
considered as one of the sectors in Australia that creates employment for many Australians (Lee
& Holland, 2013).
Information on hospitality and tourism is vital when it comes to the process of decision-making
in relation to monitoring, planning, evaluating, and marketing activities and programs at national,
regional, or even global level. Investors would then use such information to plan their business
schemes (Karniel, Reich & Yoram, 2017).
2. External Macro-environment Analysis
2.1. Demographic Forces
i) Age
It is observed that the total distance traveled by tourists varies according to the life stages of such
individuals. Owing to that fact, the probability of one’s distant destination concerning traveling
is a bimodal function linked to age (Hill, 2016). By analyzing the same fact using longitudinal
analysis concept, it becomes clear that the propensity to travel-to-distant destinations increases
until the age of 34 is hit. Afterward, a slight depression s exhibited as from 34 to 48 years of age,

HOTEL AND TOURISM MANAGEMENT 3
which is then followed by a subsequent ascent to another peak before the graph falls with a
further increase in age. Otherwise, Australia is an overseas destination for many individuals
worldwide regardless of their age (Hair, Et al., 2018).
ii) Agent population
The entire process of traveling is composed of facets like flight bookings, hotel bookings, tourist
destinations, car rentals, financial services, and healthcare access. To have all the traveling bits
sorted to attain a successful experience, individuals had to go through many processes and
hustles thereby spending lots of cash (Flyvbjerg & Budzier, 2017, pg. 602). However, with the
current evolvement of technology, an effective way of booking for travels and hotels has been
created. There are many travel agencies created to help individuals plan and carry out traveling
activities. The roles of travel agencies are to help travelers in creating holiday packages, booking
flight tickets, and getting hotel rooms among others. Agencies ensure that tourists have safe,
stress-free, fast, and convenient experience when they travel (Dobson, 2014).
2.2. Economic Conditions
The economic growth of a country relies on many variables. Economists believe that some of the
most important variables are nominal GDP per capita, variables, international tourism per capita,
and domestic tourism per capita. Therefore, the economic upkeep of Australia largely depends
on the sector of tourism and hospitality to improve its economic status (DETR, 2015). According
to reports on economic conditions of Australia, the aforementioned variables are directly
proportional to the growth or decline of the hospitality and tourism industry. For instance, both
local and international tourism may positively or negatively influence the country’s nominal
GDP per capita with impacts of the same being elastic (Devall, 2013). Otherwise, if an