The Impact of Macro-Environment on Australian Hotel and Tourism

This report delves into the Australian hotel and tourism sector, examining its performance and the external macro-environment that shapes it. The analysis begins with an introduction to the sector's significance in the Australian economy, highlighting its revenue generation and employment creation. It then proceeds with a detailed PESTEL analysis, covering demographic forces, economic conditions, competition, cultural and societal influences, legal and political frameworks, and technological advancements. The report explores how factors like age demographics, economic growth, competition from new entrants, cultural sensitivity, government policies, and technological integration impact the sector's operations and growth. The conclusion summarizes the key findings, emphasizing the importance of understanding the macro-environment for strategic decision-making in the hotel and tourism industry. The report also includes a comprehensive bibliography with academic and industry sources to support the analysis.

Running head: HOTEL AND TOURISM MANAGEMENT 1
Hotel and Tourism Management
Student’s Name
Institutional Affiliation
Date of Submission

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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,

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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

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improvement in local and international tourism is realized, Australia will experience an increase
in its nominal GDP per capita. On the same note, an improvement in domestic tourism will
positively influence international tourism too (Bradford, 2016). Therefore, it is important to
encourage the stakeholders both within the country and beyond to take part in tourism and
hospitality management processes to boost the economy of the country as well as the overall
success of the businesses in the industry. Apart from that, the Australian government must
endeavor in ensuring macroeconomic and socio-political stability (Daly, 2015).
2.3. Competition Forces
Competition forces refer to new market entrants. With new companies joining the industry, a
number of management issues arise and of which are supposed to be tackled (Blowers, 2015).
The hurdles include brand equity, the creation of economies of scale, management of capital
requirements, product differentiation, costs switching, government policies, access to distribution
channels, as well as the independence of scale with cost disadvantages as the determinant.
Australia’s tourism industry is currently booming (Bookchin, 2017). As a result, a number of
new companies are getting on-board. However, this industry faces a couple of entry barriers like
high investment amounts towards the erection of structures and national service network
provisions (Cunha, 2013). In this section, we have highlighted some of the factors that influence
hospitality and tourism growth regarding competitiveness. As argued in most cases under this
study line, firms are the ones that compete in the global market and not countries (Collard,
2015). Otherwise, Australian firms in the tourism sector will, therefore; depend on domestic and
global marketing factors to spur industrial growth. When companies fight for attention in the
market, they do whatever it takes to increase in size as well as expand their global market share
alongside overall profits (Buckingam–Hatfield, 2017). Therefore, the overall competitiveness of

HOTEL AND TOURISM MANAGEMENT 5
the sector will; by a large deal depend on the accumulation of organizational competitiveness
within and outside its operational boundaries. Apart from that, a firm’s strength is regarded as
the most vital criterion of global and national competitiveness (Daly & Cobb, 2017).
2.4. Culture and Societal Forces
The understanding of cultural difference, sensitivity, and creation of cultural awareness are
critical issues that affect the productivity of the tourism sector. In such a manner, it is worthwhile
noting that tourism and culture are interlinked because of their synergies as well as growth
potential (Christie & Warburton, 2017). In terms of cultural tourism growth, Australia has one of
the largest global tourism markets with creative and cultural industries that are constantly used to
promote touring destinations. Apart from that, the ever-growing Australian creativity and culture
market destinations result to differentiation of Australian global image and identity to those of
other countries within the context of hospitality and tourism (Cock & Hopwood, 2016).
2.5. Legal and Political Forces
The government of Australia, under the ministry of Hospitality and Tourism, has created
programs that would ensure that the sector increases its efficiency in terms of development and
research, promotion and marketing, classification of facilities, licensing, as well as optimizing
tourism benefits. The programs will also ensure that the sector practices sustainable tourism
concerning UN’s Sustainable Development Goals (Agyeman, Bullard & Evans, 2015).
According to the government of Australia, sustainable tourism will help the country reduce
environmental impacts caused by poor tourism management (Alier, 2016). The government,
therefore, intends to increase the exploitation of the country’s cultural aspects and generate
income as well as employment for the unemployed. This strategy of sustainable tourism would

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also create sensitivity towards the cultural and ecological participation of stakeholders (Beck,
2017).
2.6. Technological Forces
As mentioned before, the entire process of traveling is composed of facets like flight bookings,
hotel bookings, tourist destinations, car rentals, financial services, and healthcare access.
Therefore, to successfully sort these traveling bits and have a good experience, a proper platform
that engages customers and service providers needs to be created (Beck, 2017). Luckily,
technology has helped in the creation of such engagement platforms. With major technological
involvements, effective ways of booking for travels and hotels have been developed. Currently,
several online traveling agencies help individuals to plan and carry out traveling activities. As a
result, processes of creating holiday packages, booking flight tickets, and getting hotel rooms
among others have been made easy (Bennholdt-Thomsen & Mies, 2016).
2.7. PESTEL Analysis

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Figure showing PESTEL analysis of Australian Hospitality and Tourism Sector
3. Conclusion
In conclusion, this activity mentioned before that global tourism and hotel industry is a sector
that is fast growing compared to other sectors (Marin, 2015, pg. 11). However, according to
management studies in this sector, the growth of international tourism mostly influences local
tourism advancements. Particularly, the hotel and tourism sector of Ghana is the major source of
socio-economic activities in the country (Wiley, 2013).

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4. Bibliography
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Bennholdt-Thomsen, V., and Mies M. (2016). The Subsistence Perspective. Zed Press: London
Blowers A. (2015). The Time for Change. In Planning for a Sustainable Environment, Blowers A
(ed). Earthscan: London
Bookchin M. (2017). Remaking Society. Black Rose Books: Montreal
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