Reforms in Tourism Industry in Australia: Role of Government and Impact on Economic Growth

This essay discusses the reforms in tourism industry in Australia in the past ten years, the role of Australian government in reforming this industry, and the influence of Australia’s tourism sector on economic growth. It also provides recommendations to the Australian government regarding integration of new policies for improvement of this sector.

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Introduction
The purpose of this essay is to highlight ion the reforms in tourism industry in Australia
in the past ten years. The tourism sector of Australia is one of the important contributors to
economic development of this continent. This sector in Australia aims to enhance business
events visitation and international leisure by promoting this country as fascinating tourism
destination. This industry makes crucial contribution to the economic activity, employment and
GDP (Gross Domestic Product) of Australia. Over the last ten years, the Australian economy has
being benefiting significantly from this industry due to generation of more jobs and development
in communities throughout the nation. This industry’s contribution to this nation’s community
enhances demand as well as fosters sustainable tourism sector via partnership marketing to the
targeted worldwide consumers in international markets (Sharpley & Telfer, 2014).
According to the recent data published by Australian Bureau of Statistics (ABS), it
reflects that the tourism’s contribution to GDP grew by around 7.4% in the year 2015- 2016. In
the past ten years, both domestic and international tourism sector has increased strongly as the
total number of foreign and domestic visitors increased more than double. The rising tourist’s
income, relative tourism price and declining fare prices in this country has been lesser as
compared to other nations (Bahn, Barratt-Pugh & Yap, 2012). Despite rise in total number of
tourists travelling in this country, the market share of international visitors has decreased
marginally as compared to other developed nations. The Australian government however has
made specific investment and brought about reforms in this industry in order to increase the
share. This study however discusses about the role of Australian government in reforming this
industry. The influence of Australia’s tourism sector on economic growth is also elucidated in

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this study. In the last section, recommendations are given to the Australian government regarding
integration of new policies for improvement of this sector.
Discussion
Measuring tourism industry in Australia
Industries are generally classified based on its total production. The tourism sector is
unique among other sectors since its output is determined by total consumption expenditure that
includes- the expenditure of tourists as well as other visitors. According to Zealand, (2012),
tourism expenditure can be measured by identifying tourist visiting Australia and their way of
spending. This nation’s Tourism Satellite Account (TSA) has been generated by ABS since the
year 2000 in order to highlight the particulars on tourism sector. The total output of tourism has
been brought into national account framework by summing output of those industries, which are
consumed by the visitors. The tourism output measurement are mainly restricted to the leisure
activities spending and business travel expenditure. The TSA data reflects that the tourism
output was around 2.6% of this country’s GDP in the year 2009-2010. Recent facts reflect that
this share has increased steadily owing to increase in contribution of the domestic tourism. The
TSA data also revealed that the tourism industry’s contribution to Australia’s employment
increased in the past ten years. This sector has remained significant employer specifically in
those regions, which have high dependency on the tourism spending.
Important role played by Australian government in this nation’s tourism sector
The policymakers of this country plays significant role in introducing different reforms
within Australia’s tourism sector. The policymakers of this nation assures that their policies as
well as regulations do not impede the tourism sector from adapting to the changes in

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technologies and consumers preferences. They have implemented several tourism policies that
influenced tourist’s decision in travelling to this country. These policies involve- arrangements
that mainly govern air travel between other nations and Australia, support for sporting, business
as well as cultural events and different arrangements relating to visa procedure. In order to
promote Australia, the Australian government invest in cultural events and destination
marketing. The tourism agencies also takes the responsibility to administer various activities
relating to this Australia’s tourism. Even these agencies are mainly involved in various tourism
researches involving- compilation, data dissemination and so on. Moreover, the Australian
government supports such agencies by providing them certain amount that they utilizes for
conducting tourism research (Tsui & Balli, 2017).
The government of Australia also adopted new policies relating to border processing as
most of the international tourists arrive in Australia by air (Becken & Hay, 2012). They also
invested huge fund in certain tourism areas that involves-accommodation, transport
infrastructure in order to provide better facilities to the foreign visitors. They improved the
tourism infrastructure in the last ten years for assuring that regulatory structure does not cause
any barrier in the private investment. However, the policymakers of this nation acts as major
monetary contributor in the development of tourism sector. Apart from this, they also deals with
numerous problems occurring within the tourism sector, so that they operates in effective way.
Several studies also reflected that the policymakers also concentrated on funding in
tourism marketing in order to attract both domestic and international visitors. Through
identification of the accreditation schemes, the policymakers aims in removing licensing regimes
for improving the tourism sector. Reforms are even introduced in in CCA (Competition and
Consumer Act) to protect international tourist visiting this nation. In addition to this, the federal

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government of Australia also inserts liquidity in the tourism sector in order to enhance
development. They have also integrated digital marketing tool in order to promote tourism
business around the world. Thus, implementation of different policies or reforms by the
Australian government helped to enhance growth of this sector. This in turn enhanced economic
growth or GDP of this country in the last ten years.
The reforms introduced to the visa application procedure specifically those applying to
the tourists from vital tourism markets such as China also benefits this sector (Korez-Vide,
2013). The Commission also supports different steps taken by the government of Australia for
simplifying visa applications. The Commission also takes several initiatives in tourism research
project to examine trends of growth in the tourism sector of this country for understanding
different implications of government policies. Besides this, the commission also takes interest in
tourism industry of Australia for assessing the policies adopted by the government for improving
the infrastructure of this sector. They even takes into account if any barriers in this industry’s
future growth are amenable to the policy reforms.
Reforms in tourism industry in Australia over the last ten years
In the past ten years, numerous reforms introduced by the Australian government helped
in improving its GDP contribution of this nation. This industry’s contribution to the employment
of this country enhanced even though fluctuations occurred in the last ten years. One of the
major reforms that have occurred in this industry over the last ten years is increase in total
composition of international visitors. austrade.gov (2018) have found out that the increase in
composition of international visitors have been driven by numerous factors, which involves- low
airfares and rising household incomes in Asian countries. This in turn helped to provide more
and effective international travel to the tourists visiting to this nation. Moreover, this rise in total

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number of international tourists in this nation led to rise in national income and enhanced the
growth of this sector.
There have been several advancements in use of digital technologies in this sector. For
instance, now-a- days, most of the tourists are doing research about tourism products such as- air
packages through internet, accommodations in hotels before visiting this nation. According to
ABS data, the international visitors attaining tourism data on internet increased by around 60%
and foreign tourists booking tourism packages through internet also increased by about 50%.
However, increasing use of advanced technologies has brought about reforms in the way people
are booking tourism packages around the world. This growth in use of these digital technologies
have large impact on traditional service providers specifically- travel agents. This in turn
increased regulatory problems for the Australian government. Apart from this, many changes
have occurred in the tourism infrastructure in the last ten years, which in turn facilitated the
service providers of this sector to attract more international and domestic tourists around the
globe. Several studies highlight that the demand for tourism in Australia increased in the last few
years owing to improvement in visa application process (Stoddard, Pollard & Evans, 2012).
Historical facts reflect that visa procedure during the year 2005 has been cumbersome and
complicated. As a result of which, the growth of this industry was less as compared to other
industries in Australia. With the advent of China as the main gateway for international tourists,
the government of this country has integrated reforms in the visa procedure for attracting large
number of tourists. For promoting Chinese visitors, the policymakers of Australia has introduced
multiple entry visas mainly for business tourists from China.
Due to such change adopted for these tourism agencies, they have gained competitive
advantage against their competitors in the market. Apart from this, there are certain air service

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arrangements beyond open skies and capacity arrangements adopted by Australian government
for assuring accessibility to various parts of Australia.
The government adopted these reforms in order to enhance investors’ confidence in this
tourism industry. This in turn aid the Australian government to enhance funds for tourist spot
development. It also helps them to assure compliance with this country’s consumer law.
Furthermore, it also facilitated the policymakers to improve quality control and monitoring
systems in this industry. It also helped them to improve complaint handling system that can be
accessed over the digital platform, which in turn benefits them to be cost effective. The change
made in this industry motivated market rivalries for exploring more opportunities. Due to
openings of different regulatory measurement, it created new dimensions for all tourism agencies
in Australia. Integration of regulatory reforms also helped to protect rights of foreign visitors.
Overall, it increased transparency within the tourism industry of Australia over the past ten years
(Zaei & Zaei, 2013).
Impact of tourism sector on Australia’s economic growth
According to the data published by ABS, the tourism industry has increased the economic
growth of Australia in the last ten years (austrade.gov, 2018). The contribution of tourism to
GDP highlights internal expenditure on tourism and government spending. The contribution of
tourism industry in Australia’s GDP has increased by near about 6-7% during the year 2016 -
2017 (austrade.gov 2018). Over the last few years, the tourism contribution in this nation’s GDP
increased by around 23%. During this period, the growth of tourism outspaced that of economy,
thereby contributing to about $55 billion to GDP as well as employing 598,200 people of this
nation. When the indirect impact of tourism industry on GDP is considered, the total contribution

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of tourism sector to the Australian economy increases more than double to about 110 billion,
which is 6.3% of the nation’s GDP.
Figure 1: Tourism industry’s contribution in GDP of Australia
Source: (austrade.gov, 2018)
In context of employment, the tourism’s direct contribution to Australia’s employment
also increased over the past ten years. Influence analysis of community resident support for
sustainable tourism development. The employment rate in this country fluctuated marginally
during the past few years. In the year 2016, this industry generated 545,000 jobs but declined
slightly inn the year 2017 to about 524,000. The main reason behind this is that there have been
numerous vacancies in different sectors not filled up even after introducing reforms in the
tourism sector of Australia. In addition to this, the destination marketing which have been given
by this nation’s policymakers have led to economies of scope. Henceforth, advantages of
destination marketing have also flowed to other tourism related businesses. As per Hawthorne,
(2015), visitors exports is another vital component of direct contribution to tourism industry.

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Over the last ten years, the visitors exports also increased at high rate and thus the arrival of
international tourists also increased more than double.
Figure 2: Tourism industry in Australia contributing in employment
Source: (austrade.gov, 2018)
Figure 3: Foreign tourists arrivals and visitors exports
Source: (Bahn, Barratt-Pugh & Yap, 2012)

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Recommendations on policies to be implemented by the government of Australia
The recommendations are provided to the policymakers of this nation so that they can
maintain stable growth in the tourism industry. The recommendations are given below-
Firstly, as there has been shortage of skilled labor in the tourism industry, the Australian
government must formulate reforms for ensuring adequate recruitments of both skilled as well as
unskilled labor. Therefore, they should develop skilled laborforce to provide better service to the
tourists visiting Australia.
Secondly, the Australian government should change the policies regarding the funding
arrangement as well as project selection. This is because there are some circumstances where the
policymakers gets involved for tourism infrastructure provision involving the infrastructure that
is provided on public land.
Thirdly, the policymakers of this country and tourism service providers should collaborate with
each other to adopt workforce development plan that involves- demographic change, migration
and so on.
Fourthly, the government of Australia should mainly concentrate on supply side issues as well as
tourists demand for the long -term tourism growth.
Fifthly, the keyholders of Australia must develop research capability in order to determine
supply and demand side research requirements.
Conclusion
From the above discussion, it can be concluded that adoption of various reforms in the
tourism industry by the Australian government including- visa procedure, tourism infrastructure,

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air services and so on marked in this industry’s development. The rising Australians inclination
towards international holidays has increased demand for Australia’s tourism over the past few
years. Owing to these reforms in Australia’s travel behvaiour, tourism agencies concentrated on
increasing tourism exports in emerging markets. Moreover, the conditions in certain areas of
tourism sector involving traditional leisure market destination have remained slightly difficult
during this period. The reforms that have been introduced within this sector also led to increase
in both domestic and international visitors. This industry also made huge contribution in GDP
and employment of this country. Meanwhile, the Australian government integrating reforms
within tourism sector might aid to build relations with tourists. As a result, this can help the
industry to attract more international tourists in future. Thus, it has been predicted some
economists that these reforms would strengthen economic growth and improve structure of the
tourism sector in Australia in future.

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