Case Study: Australian Tourism Industry Risks and Strategies

This case study analyzes the significant impact of COVID-19 on the Australian tourism industry, which previously contributed $120 billion to the economy. It identifies key functional risks for 2021, including changes in customer requirements, reduced customer numbers, and limited innovation due to economic setbacks. The study applies the demand forecasting and risk assessment model to justify its claims. It then proposes a mix of strategic approaches, such as the Blue Ocean Strategy, experimental marketing, and viral marketing, to mitigate these risks and enhance consumer retention. The analysis draws on secondary research and strategic approaches in service marketing to support its recommendations, providing a comprehensive overview of the challenges and opportunities facing the Australian tourism sector in the wake of the pandemic.

Tourism adds $120 billion to
the Australian economy
1

Table of Contents
MAIN BODY..................................................................................................................................3
Tourism industry in Australia has had a major hit.................................................................3
Different types of functional risks that will influence the tourism market in 2021...............3
Mix of strategies that can be used to pacify the identified risks............................................4
REFERENCES................................................................................................................................5
2

MAIN BODY
Tourism industry in Australia has had a major hit
COIVD 19 will have very deep impact on the tourism industry of Australia. As COVID 19 has
brought the variety of the restriction for the traveller all across the globe. Restrictions are
imposed by many governments all across the globe. This will eventually lower down the amount
of the customer seen by the tourism industry of Australia and will have variety of impact such as
lowering down of revenue (Faraji Sabokbar and et.al., 2016). Also, it has been analysed that
Australian tourism industry has to go through the same situation for coming 4 to 6 month in the
nation. This will also create a good sort of pressure on the economy of the Australia. As tourism
generally used to add $120 billion to Australian economy in the year 2016 (CVOID 19 impact
tourism industry. 2020).
Different types of functional risks that will influence the tourism market in 2021
Change in customer requirement: It is one of the biggest functional risks which have to
be seen by all the organization in the market. As it has been forecast that all customer will look
to consider more clean hygiene and also their will be good change in the preference of the food
desire as all the customer will look to have more healthy food. So there is a good chance of
enhancing the risk of not understanding the need and preference of customer in the market
(Lanier Jr and Hampton, 2016).
Reduce in number of customer: There is good possibility that Australian travel industry
used to see less number of the customer in their nation as compare to the past. As Forecast
shows that their is less number of transport facility will be available for the customer to reach
Australia. Also, forecast shows that market has to see a good number of the competitor market
who will be also attracting the customer toward their market. This will eventually increase the
scope of functional risk that the customer base of different tourism market organization can be
reduce in the year 2021 (Tseng and Wang, 2016).
Less amount of Innovation: It has been also forecast that their will be less amount of
finance availability in the market. Reason behind the same is the set back economy of Australia
will suffer due to COVID 19. This situation in Australia will eventually create the situation in
the market where their will be less amount of innovation. As organization will not able to get the
required amount of the capital to carry out different innovation activity in the organization. Not
3

only that their is highl possibility that customer repayment cycle and increasing bad debt in the
market will also result due to same (Smilansky, 2017)
.
Mix of strategies that can be used to pacify the identified risks
There are three type of the strategy which can be brought by the organization to reduce the
impact of different functional risk in the market. Strategies are as follows:
Blue Ocean Strategy: It is the best strategy through which organization can reduce the
impact of different risk in the organization. As Blue Ocean strategy will help the Australian
market in getting competitive advantage in the market. As this strategy will help the different
organization in the market to look at the different uncontested market space, this will eventually
make the different competition irrelevant in the market. Also this will help the organization in
creating and converting the variety of the new demand in the market. This will also help the
company in understanding the different need of the customer very easily in the market. As it has
been forecast that it will get difficult for the company to ascertain the different need of the
customer in the market (Sitinjak, Pramawijaya and Gunawan, 2018). Also, implementation of
this sort of strategy in the organization will eventually means that organization will able to see
the differentiation and cost leadership simultaneously in market. This will also help company in
maintaining the customer of an organization.
Experimental marketing: It is another strategy which can be used by the Australian
market organization. As Australian tourism industry also used to see good amount of domestic
customer in it. Providing good amount of Experimental marketing in the nation will help the
company in satisfying the need of variety of the domestic customer in the nation. As it has been
seen that there is very good demand of the same in the market. This will help the organization in
maintaining a good amount of finance in the market this may help the company in overcoming
the issue related to inadequate finance (Mebert and Lowe, 2017).
Viral marketing: It is another way through which different issue can be overcome by
tourism organization in the market. In this strategy organization has to make sure that they used
to target the large market in the nation through spreading message in the market. This will
eventually help the company in overcoming the issue of customer satisfaction.
4

REFERENCES
Books and Journals
Faraji Sabokbar, H and et.al., 2016. Risk assessment in tourism system using a fuzzy set and
dominance-based rough set. Technological and Economic Development of Economy.
22(4). pp.554-573.
Tseng, S.Y. and Wang, C.N., 2016. Perceived risk influence on dual-route information adoption
processes on travel websites. Journal of Business Research, 69(6), pp.2289-2296.
Sitinjak, M. F., Pramawijaya, K. and Gunawan, A., 2018. ICanStudioLive use of Blue Ocean
Marketing Strategy for Value Differentiation. Pertanika Journal of Social Sciences &
Humanities.
Mebert, A. and Lowe, S., 2017. Blue ocean strategy. CRC Press.
Smilansky, S., 2017. Experiential marketing: A practical guide to interactive brand experiences.
Kogan Page Publishers.
Lanier Jr, C. D. and Hampton, R. D., 2016. Experiential marketing: understanding the logic of
memorable customer experiences. In Memorable Customer Experiences (pp. 29-44).
Routledge.
ONLINE
CVOID 19 impact tourism industry. 2020 [ONLINE} Available through
https://www.weforum.org/agenda/2020/03/world-travel-coronavirus-covid19-jobs-
pandemic-tourism-aviation/.
5