Detailed Report: Economic Reforms in Australia's Tourism Sector

This report analyzes the reforms in Australia's tourism sector, highlighting its significant contribution to the nation's GDP and employment rates. It examines the reasons behind the commission's interest in these reforms, emphasizing the sector's potential to attract investment and generate revenue. The report provides an economic analysis, discussing direct, indirect, and induced economic contributions. It also addresses the impact of visa policies, infrastructure investments, and digital platforms like Airbnb. Furthermore, the report offers recommendations to key stakeholders, including liberalizing visa policies, monitoring tourism progress, expanding the skilled workforce, and innovating tourism infrastructure. The conclusion emphasizes the importance of these reforms for attracting visitors and boosting the Australian economy, with references to relevant academic literature.

Running head: REFORMS IN AUSTRALIA’S TOURISM SECTOR
REFORMS IN AUSTRALIA’S TOURISM SECTOR
Name of the Student
Name of the University
Author’s note

1REFORMS IN AUSTRALIA’S TOURISM SECTOR
Table of Contents
Introduction......................................................................................................................................3
Reason behind the interest of Commission in the reforms in tourism sector..................................3
Economic analysis on the tourism sector in Australia.....................................................................4
Recommendation to the keyholders regarding this issue................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

2REFORMS IN AUSTRALIA’S TOURISM SECTOR
Introduction
The study highlights on the reforms in the Australia’s tourism sector. The tourism industry in
Australia has developed over the last few decades. This industry has contributed to nearly 3.2%
in the Australia’s GDP growth of the economy. In addition, the sector has offered as good
platform for increasing the rate of employment of the nation (Amelung and Nicholls 2014). In
2015-2016, tourism sector has given employment to 580200 persons and thus increased by 4.6%
from last period. This study highlights on how this sector contributes to the GDP growth of the
economy and improved their economic performance. It also discuses about why the commission
takes interest in changing the tourism industry. Furthermore, the economic analysis and the
recommendation to the policyholders is also illustrated in this paper.
Reason behind the interest of Commission in the reforms in tourism sector
Tourism sector has potentiality in attracting huge investment. Recent statistics revealed that the
arrival of international visitors rose by 10% whereas domestic visitors increased by 9% in 2016.
Thus, it generated export revenue by nearly $34 billion in 2015-2016 (Moyle et al. 2013).
Moreover, this sector has gained success in drawing investment from the private sector in
destination advertising. The fragmented behavior of this sector and increase in visitors spending
compel the government needs in playing funding role in the industry. In addition, reforms in
Australia’s policies of aviation and visa procedure have led to liberalization in the economy.
Changing infrastructure investment by the federal government also benefits this industry.
Moreover, advancement in digital platforms including Airnb enhances the experience of visitors.
This is because this platform directly aids the visitors in short time booking of tickets.

3REFORMS IN AUSTRALIA’S TOURISM SECTOR
The Commission mainly takes interest in initiating any project related to international tourism in
order to analyze the growth in this sector. They also evaluate the policies implemented by the
government of Australia in order to avoid the growth barrier in future tourism policies. The
commission takes notice in shortfall in infrastructure funding in order to attain higher revenue
and improve its business growth (Seetaram 2012). They also concentrate on innovating new
tourism infrastructure including national park in order to make it more attractive to the visitors.
They also try to impede this sector in order to adapt with the changes according to visitors
preference and advancement of digital technologies. They also assess market failures that is
related to Australia’s international tourism.
Economic analysis on the tourism sector in Australia
Tourism industry is considered as the crucial economic activity as it increases the GDP growth
and rate of employment in the nation. GDP (Gross Domestic Product) relates with the production
of final goods and services in the boundary of the nation within a specified period. However, rise
in GDP facilitates in stimulating the growth of the economy (Ruhanen and Shakeela 2013). Rate
of employment measures the ratio of employed persons with respect to the total population.
Economic role of tourism is mainly divided into three parts including induced, direct and
indirect. The direct economic contribution involves commodities and other spending sources. In
2016, this sector directly contributed to 49.7bn in nations GDP and is predicted to increase by
4% in the year 2017 (Weiler et al. 2012) . The indirect economic contribution includes
Australia’s government collective and investment expenditure. On the contrary, induced
contribution involves the expenditure of employees in this industry. However, the economic
contribution of this industry to the Australia’s GDP recorded to 10.9% in 2016 and is forecasted
to rise by 11.0% in 2017.

4REFORMS IN AUSTRALIA’S TOURISM SECTOR
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2.6
2.7
2.8
2.9
3
3.1
3.2
CONTRIBUTION OF TOURISM
INDUSTRY TO AUSTRALIA'S GDP
CONTRIBUTION OF
TOURISM INDUSTRY TO
AUSTRALIA'S GDP
YEAR
Figure 1: Contribution of tourism sector to GDP of Australia
Source: (Author’s creation)
Australia’s tourism industry has contributed to 4.6% of employment in 2016 and is expected to
rise by 0.9% by 2027 and as a result the unemployment rate reduced by 5.6% in 2017.
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
4.2
4.4
4.6
4.8
5
CONTRIBUTION OF TOURISM
INDUSTRY IN AUSTRALIA'S
EMPLOYMENT
CONTRIBUTION OF
TOURISM INDUSTRY IN
AUSTRALIA'S
EMPLOYMENT
YEAR
Figure 2: Total contribution of tourism industry in Australia’s employment

5REFORMS IN AUSTRALIA’S TOURISM SECTOR
Source: (Author’s creation)
Expansion of Australia’s tourism industry has put enormous stress on the demand for workers
that includes skilled and semi skilled. This eventually increases pressure on commodities prices,
which reduces the purchasing power. Therefore, this is referred to as inflation rate of the
economy and is measured by CPI( Consumer price index). The rise in workers demand increases
the real wages that imposes cost burden on this industry’s profit. Thus, in order to attain higher
revenue, this sector strategizes to raise its prices. Hence, this leads to decline in cost
competitiveness of Australia’s tourism industry (Dredge et al. 2013). On the other hand, reforms
in Australia’s tourism sector aids in enhancing economy’s trade. Moreover, Australia’s service
trade in 2016 rose by 7.7% and this improved the economic performance of this nation.
Recommendation to the keyholders regarding this issue
Visa policy is one of the crucial government regulations that affects the tourism sector of each
economy. As Australian government implements tougher international visa policies, it restricts
the foreign visitors entry and lowers their spending (Chon 2013). However, the policy holders
must liberalize visa policies for stimulating country’s trade.
The performance of Australian tourism industry is also measured by the spending of
international visitors. Recent statistics reflects that overnight spending of foreign visitors
declined in 2016 from the last year. However, the key holders are recommended to monitor and
report tourism progress regularly. Moreover, Australian government must implement proper
strategy in order to improve their tourism framework.
The policyholders are also suggested to expand skilled workforce in this industry for improving
visitors service. They must also innovate new technology and integrate tourism plans for

6REFORMS IN AUSTRALIA’S TOURISM SECTOR
generating proper infrastructure in regional communities. They are also advised to crossly
collaborate within every level of the government for driving industries reform.
Conclusion
It is concluded from the above report, Australian government adopts certain strategies in order to
improve the growth of this industry. The strategies includes- tax restriction, developing tourism
infrastructure. Austrade also plays a crucial role in tourism sector reform as it helps in assessing
government’s role and administering infrastructure programs. Moreover, tourism-marketing
department focuses on indigenous advertising campaign in order to promote Australia as tourism
destination. Therefore, reforms in the labor force of tourism, aviation connectivity and policies of
visa procedure is recommended to the policyholders for attracting more visitors and boosting
growth in Australian economy.

7REFORMS IN AUSTRALIA’S TOURISM SECTOR
References
Amelung, B. and Nicholls, S., 2014. Implications of climate change for tourism in
Australia. Tourism Management, 41, pp.228-244.
Chon, K.S., 2013. Tourism in Southeast Asia: A new direction. Routledge.
Dredge, D., Benckendorff, P., Day, M., Gross, M.J., Walo, M., Weeks, P. and Whitelaw, P.A.,
2013. Drivers of change in tourism, hospitality, and event management education: An Australian
perspective. Journal of Hospitality & Tourism Education, 25(2), pp.89-102.
Moyle, B.D., Weiler, B. and Croy, G., 2013. Visitors’ perceptions of tourism impacts: Bruny and
Magnetic Islands, Australia. Journal of Travel Research, 52(3), pp.392-406.
Ruhanen, L. and Shakeela, A., 2013. Responding to climate change: Australian tourism industry
perspectives on current challenges and future directions. Asia Pacific Journal of Tourism
Research, 18(1-2), pp.35-51.
Ruhanen, L.M., Mclennan, C.L.J. and Moyle, B.D., 2013. Strategic issues in the Australian
tourism industry: A 10-year analysis of national strategies and plans. Asia Pacific Journal of
Tourism Research, 18(3), pp.220-240.
Seetaram, N., 2012. Immigration and international inbound tourism: Empirical evidence from
Australia. Tourism Management, 33(6), pp.1535-1543.
Weiler, B., Moyle, B. and McLennan, C.L., 2012. Disciplines that influence tourism doctoral
research: the United States, Canada, Australia and New Zealand. Annals of Tourism
Research, 39(3), pp.1425-1445.