The Impact of Rising Australian Dollar on Tourism Industry

The proposed research aims to investigate the impact of the rise in Australian dollar on the tourism industry. A sample of ninety participants will be selected from two departments (finance and marketing) using a purposive sampling method. Primary data will be collected through questionnaires, while secondary data will be obtained from existing literature. The study will explore the economic and social implications of the currency change on the tourism sector, including its effects on employment, investment, and consumer behavior.

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Abstract
The tourism industry is a major key growth sector for the economy of Australia. With the rise of
the Australian dollar the tourism sector would be greatly affected. In any country the economic
systems as well as the financial have continue to be governed by their currency as well as the
trends which are seen in the rise along with the fall of the currency. This rise in the Australian
dollar has led to the growth of the tourism industry. This has led to the cheap local tourism which
has been exhibited in the country. Some of the international economic researcher as well as the
political analysts to predict when the country would become one of the economic power.
According to the experts on the analysis they have carried out they believe that Australian dollar
is expected to continue on this trend. This will have some implications on the country. Currently
there has been steer excitement as well as optimism among the locals as the local are expected to
enjoy cheaper shopping options and tourism. In this research proposal it intends to highlights the
economic, social and the business issues in the tourism industry in Australia. The proposal will
focus on the ethical considerations, literature review, the aims and objective of the research as
well as the research design to this research. The design will focus on the methodology for
carrying on this research on the trends and the movement to Australian dollar rise and the impact
it has on the tourism industry.

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Research problem
In this research it will find out the repercussion of the climb of the Australian dollars over the
recent years. The research will highlight the effect of this increase to the tourism industry in
Australia. Moreover, it will highlight the social and economic repercussion of this climb
(Caruana, 2016).
Over the recent years the Australian dollar has been in a sharp rise. This dollar is at present
higher over that of the US dollar. In this research to understand the dynamic of which causes this
rise it is important to understand some aspects such as the economy, business as well as the
social factors (Cooper, Schindler and Sun, 2006). The rise of this dollar has also caused an
excitement as well as optimism to the local individuals in Australia since they would likely get
cheap import and cheaper tourism.
The problem which this research intend to answer would be what are on the repercussion of the
rise of the Australian dollars especially to the tourism industry which is the main focus sector in
the research (Caruana, 2016). To be able to carry an in-depth analysis of this research there are
various research question and hypothesis as highlighted below.
Research questions
1. What are the effects of the fluctuations observed in the Australian dollar to the tourism
industry?
2. What are the factors which have caused the rise in the Australian dollar?
3. What are the social impact of the Australian dollar to the tourism sector?
4. What are the economic effect associated to the rise of the Australian dollar on the tourism
industry?

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5. What are the impact of the exchange rate on the socioeconomic construct to the tourism
industry?
6. What are the business issues in the tourism industry that are associated to the current
strong Australian dollar?
These research questions will discuss on the problem of what this research will seek to
answer and there are also hypothesis that have been drawn from the research as highlighted
as follows.
Hypothesis
1. The repercussion of the climb of the Australian dollars over the recent years to the
tourism industry.
2. The economic, social and the business issues as well as the trends and movement of
Australian dollar impacts to the tourism industry.
Background
The economic systems as well as the financial of the tourism industry can largely be governed by
the currency as well as the trends which are associated with both the rise and the fall of the
currency (He, Fayman and Casey, 2014). In any country any changes in the currency leaves an
effect to the economy, social as well as various sector of the countries (Henderson, 2014). Over
the recent years it has been observed that the Australian dollar has risen and it has been higher
than the US dollar (Fedoseeva and Werner, 2016). Based on the experts they have highlighted
that this trend is expected to continue to rise and this will have implication particularly to the
tourism sector which bring foreign exchange to the country Gooroochurn and Sugiyarto, 2005).
For one to understand on the dynamics that governs the GDP and the social implication of an

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industry it is important to understand various aspects in details such as the economy, the business
as well as the social factor that have contributed a lot to the Australian dollar (Henderson, 2014).
This rise of the Australian dollar has caused some excitement as well as optimism to individuals
who dwell in the country as they are able to get cheap import and local tourism would be
cheaper. According to the researchers they have highlighted that as the dollar rises there could
be decrease in the level of investment especially to the tourism industry as the cost of these
investment would likely go up and the profitability margins very low. The low level of
investment would have serious impact to the economy.
The tourism industry is a major key growth sector for the economy of Australia. With the rise of
the Australian dollar would not be so good for the tourism. It would act as the brake to the
economy. The financial pressure from the Australia dollar’s rise has been felt by the backpackers
when it comes to the budget who have made the lucrative segment for the tourism sector
[Henderson, 2014]. This would led to even the cost of living in Sydney to go high. Moreover, it
has been observed that as the Australian dollar increases it has caused the increase of the interest
rate which has made the tourism industry to cramp and downsize the economy. Moreover, it will
continue to hamper the local as well inbound tourism. An example of this was observed back in
2009 when more than ninety thousand tourist were leaving Australia than they were arriving
during the month. The tourist arrivals rose about five percent over the year while the departure
had increased by more than twenty percent which was the biggest annual rise over five year
period. Individuals were travelling overseas for the holidays as it was much cheaper.
Ethical considerations
The ethical consideration provides a major element to the research. In this research it will adhere
to the ethical consideration in promoting on the aims of the research which impact authentic

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knowledge, truth as well as prevention of the error (Henderson, 2014). Some of the ethical
consideration which will be observed in the research are as follows;
One of the ethical consideration is that this research will promote authentic, original and true
knowledge whereby I will avoid errors (Ito and Chinn, 2014). In most of the cases this could
happen when there is misrepresentation of the data that could be altered from a real scenario
therefore, this research will intend to avoid these aspect and present a true degree of the
knowledge on the research. Secondly, the research will promote value of collaborative work (Ito
and Chinn, 2014). This will be through maintaining of the intellectual property rights of the
fellow researcher whereby the information which will be borrowed from the secondary resources
especially on the literature I would acknowledge on the true source of that information. This is
an important aspect since the research would maintain a proper credential to their contributing
research in this particularly area.
Another ethical consideration which will be observed in the research will be to maintain of the
quality and integrity along with the moral social value such as the legal compliance.
Additionally, the research will preserve the participant’s anonymity and confidential (Gabaix and
Maggiori, 2015). In the information sheet which will be provided by the respondent I intend to
keep their data confidential (Ito and Chinn, 2014). When it comes to anonymity is that I do not
need to know who the participant are. This will be achieved through having the organization in
the research to distribute on the survey to the employees. Additionally, the information which
will be provided I intend to keep it confident and never reveal the identity of the individuals in
the research.
2. Literature review

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2.1 This chapter review on the repercussions of the climb of the Australia to the tourism industry.
The literature comprise on the previous studies which have conducted by some of the other
scholars.
According to Cathy (2009), highlights that the exchange rate impacts negatively to the tourism
industry as there would be issue of the pricing changes as the tourists would be required to spend
more to exchange the currency. The tourism operators are very cautious in regards to the
impacts of the rise of the Australia dollar (Eichengreen, 2014).. According to the Queeenland
tourism and industry council they highlighted they were concerned in regards to the further rise.
There was the issue of pricing changes in order to deal with the changing exchange rate. There is
a higher exchange rate which would be expected to contribute in subduing on the price pressure
to the economy of the country (Kiely, 2015). The appreciating exchange rate would result to
slowing up of the tourism sector and there would be a likely an inflation which is higher than the
current forecast. When the domestic rates becomes high they become more attractive to the
foreigners who look in purchasing the Australian dollar to invest into the Australian market.
In terms of the philosophy an adjustment to the valuation on the dollar could raise or even lower
on the cost of foreign investment, therefore lowering the number of individuals who are visiting
Australia such as the tourists (Kiely, 2015). Moreover, there have been numerous economic
studies that have demonstrated that whether the Australian dollar may fluctuates against the
foreign currencies (Kiely, 2015). The relationship between the exchange rates and Australia
import prices is important to recognize on the nature of the Australia import flow in addition to
the behaviour of the Australia consumer prices (Eichengreen, 2014). When there is a weaker
dollar it usually contemplate to be the key aspect for the trade (Ivashina, Scharfstein and Stein,
2015).

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According to Jennifer and David (2002), according to the review they have done on the exchange
rate they have recognized the significance of this to trade. The rise in the Australian dollar has
been a major culprit in the low prices of the products (Mathews, 2017). They have majored their
work on theories such as economic theory. According to Schuh (1975), he found out that the
high point of the subsidies has no much correlation to the magnitude to which the subsidies as
well as the degree of overvaluation (Schuh, 1974). This individual found out that the shift to the
flexible exchange rate has a great significant to the emergence of the well-integrated
international capital markets (Eichengreen, 2014).
The research on the exchange rate can influence on the yielded varying results. Some of the
researcher found that the exchange rate provides relatively miniscule role when it comes to the
Australia price of the commodities. Based on Kost (1976), he reviewed that the theoretical
framework that was used in accessing on the trade effect of the devaluation or perhaps the
appreciation to the country currency on any commodity. He has traced the impacts of the
changes to the exchanges on the commodity production, trade levels as well as the prices for any
trading partners (Eichengreen, 2014). There are many researcher who have examined on the
impact of the exchange rate movement for a given countries trade, but there have been
disagreement which have persisted on the magnitude of this effect. The rise of the dollar has had
an adverse impact on the Australian trade while the decrease or fall has aided on the increase of
the Australian exports (Hirst,Thompson and Bromley, 2015). The prices of the products tend to
be affected equally by the change which is exhibited in the exchange rate, when one considers
the cross price impacts. Nonetheless, there are gaps from this research as it does not show how
the rise will impact on the exchange rate. The author did not do an in-depth analysis of the same
as they have focused on generalized concept on this aspect.

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According to research done by Jacob (2008), on the impact of the rising of the Australian dollar
to the various industry, it has highlighted that this rise has not been able to benefit every
individual. It can be observed that that the tourism industry has been suffering on the back of this
dollar strength and the jobs of many of the workers are up in the air (Hirst, Thompson and
Bromley, 2015). Nonetheless, as much as this author has examined on the winners and the losers
of the dollar rise, he does not clearly examine on what has made these changes to occur and the
effects which will be experienced in this sector (Burnside, Eichenbaum and Rebelo, 2016). The
research of this author has been limited to a little scope particularly to the tourism industry. The
researcher needed to compare the other business sectors which also plays a major role in the
economic development of this country (Hirst, Thompson and Bromley, 2015). The analysis
which has been done on this resource the author has generalized on the benefits which are
enjoyed on the rising dollar, he does not show how these occur and the ill-effect it has brought to
the tourism industry (Kiely, 2015). It is also important to note that the research has tried to map
the effect of the rise of Australian dollar it has to tourism industry.
According to Ashvini (2010), on his review on appreciation of Australia real exchange rate on
causes and the effects he has highlighted there are numerous social as well as economic
implication when it comes to the tourism industry (Liamputtong, 2013). The impact are both
diverse as well as extensive. It is worth noting that majority of the main implication has been in
the improvement in regards to the terms of the increase in the exchange rate which has brought
decrease in the number of the tourists since it becomes cheaper to take vacation to other
countries compared to Australia (Mathews, 2017). This is a social implication to which this rise
of the dollar has caused to the tourism industry. The rise has been in regards to the exchange rate
interest as it has increased therefore individuals end up spending more to get the services (Best

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and Kahn, 2016). From his research he has highlighted that the main implication when it comes
to the increase of the exchange rate has been the structural changes within the tourism sector
(Hutton and Kent, 2016). From the summary of this research it has found that the major causes
of the rise of rise of the dollar over the past decade has been associated to the resource boom,
high product prices as well as the high interest rates along with the increased financial inflows
(Leiper, 2004). Nonetheless, there is research gap in that the research has not examined on the
expansionary effect of what the rise of the Australian dollar it would bring to the tourism
industry in the long run and the other effects it would have in the sector.
Aim/objectives of the research
General objective
The aim of this research is to carry out the climb of the Australian dollars in the recent years and
the effect it has had to the tourism industry. The in-depth analysis would provide the social as
well as the economic repercussions of the rise to the Australia dollar (Robinson, Nguyen and
Wang, 2017).
Specific objectives
This research study has various objective which will be discussed in the research study. The
following are the research objectives that the study will examine.
1. To ascertain how the changes in the exchange rate of the currency are impacting on the
tourism industry in Australia and how the profit and the losses associated with this sector
affect the economy of the country.

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2. To determine how the fluctuations of the Australia dollar exchange rate impact on the
flow of the tourism industry and how the fluctuations in tourism could affect the
economy of a country.
Research methodology
In this chapter of the research it will discuss on the research design, the population, and the
sampling approaches which will be used in this study. Moreover, in the research methodology
will highlight the instrument of the data collection, as well as the data collection procedures and
methods (Hirst, Thompson and Bromley, 2015). The aspect of the data analysis and the
presentation approaches will also be discussed.
Research design
The research design can be regarded as the plan, structure as well as strategy of investigation
which conceived in order to obtain the answers to the research questions as well as the control
variance. It is the procedure which offers answers to the various issues for example the
techniques to use in gathering of the data, the type of sampling approaches along with the tools
which are used and how time and the cost constrains could be dealt with.
The descriptive research usually determine and also reports on the way to how thing they are.
The descriptive data is collected by means of the questionnaire survey, interview or the
observation (Prasad, 2016). On the other hand, the exploration design entails to address on the
need which certain inquires focus to the questions which require answers to be able to
understand individual, events as well as the situations. The descriptive research design has been
the preferred in this research to the others design (Benigno, Chen, Otrok, Rebucci and Young,
2016). The reason is that it will report on the status of the study variables. For this research

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study, the design will entails determining on the effects of the effect on the economy as well as
the business organization. Moreover, it will ascertain on how the changes of the exchange rate
could affect these business.
Target population
In the study, a populace continues to be understood to be the general selections of all the
components in relation to which inferences are created and represents all the possible situations
which are of great interest for the study. A population as a result describes all the instances or
perhaps people which match in particular to becoming the source of the data that is required in
addressing on the research issue which has been pointed out in the study (Frieden, 2014). The
target population continues to be pointed out as the population that I am going to generalize on
the outcomes of the study. I am going to obtain the samples from an obtainable population,
which represent a feasible population. The population of this study will be employees of forty
five companies which are operating in the tourism industry in Australia. The data will be drawn
for a period of five years from 2012 to 2017.
Strata Sample
marketing managers 45
Finance managers 45
Total 90
Sampling procedures
The sample of this study will be ten percent of the workforce that will comprise of nine hundred
workers from the forty five companies that are in the tourism sector. The sample of ninety will

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be generated by use of purposively sampling of two workers from every organization
(McCauley, McGuire and Sushko, 2015). One of the worker in the research will be the manager
from the department of finance while the other workers will be a manager from marketing
department.
Instrumentation
As a researcher I intend to collect the primary data with the help of use of the questionnaire. The
questionnaire will have a close ended questions and it will be formulated with the use of the
Likert scale methodology. In the use of the Likert scale, the respondent will be expected to
neither indicate on their level of the agreement through use of a five point scale which is strongly
Agree, Agree, Neither Agree nor disagree, strongly disagree as well as Disagree. There will be
use of the secondary data which will be from the articles, books as well as the websites.
Methods of data collection
In this research proposal, the primary data will be collected through use of the structured
questionnaire, as it will be much easier to administer, analyze as well as economical when it
comes to time and the money which will be involved (Pevzner and Gaynor, 2016). The
questionnaires will be issued to the respondent through the formal self-introduction. Moreover,
they will be sent to the respondents under the questionnaire forwarding letter that will be
accompanied by an introduction from the University (Pevzner and Gaynor, 2016). There will be
follow up which will be undertaken and the questionnaires that are completed will be picked
from these respondent from the later date. The secondary data on the information about the rise
of the Australian dollar and the economic or the social impact it has on the country from the
existing records of the various institutions.

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Reliability and validity
There will be conducting of the test of reliability as well as the validity of the data collection
instrument which are the questionnaire (Vang, 2016). Validity will be enhanced through
engaging of the supervisor as well as the experts in the industry as to whether the questionnaire
was accurately measured (Warnock, 2017). Reliability of the questionnaire will be achieved
through subjecting of the questionnaires to the various managers in the industries in the research.
Method of the data analysis
The process of the data analysis will entails the data clean up as well as explanation (Cole and
Nightingale, 2016). The primary data which will be obtained from the questionnaires will be
summarized as well as analyzed by use of the descriptive methods.

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Appendices
INTRODUCTION LETTER
Name:
Address:
Date
Dear respondent,
REF: REQUEST TO FILL THE QUESTIONNAIRES
I hereby humbly request you to fill the questionnaires attached. I am a student at (name of the
school)... Where I am in a process of carrying out a research the effect of the rise of Australia
dollar to the economic and social impact in the tourism industry.
From the research the information collected will be confidential and it will only be used for
academic purposes.
Your help will be highly appreciated.
Yours faithfully,