MPE781 Economics: Tourism Investment Monitor 2017 Analysis

This report provides an economic analysis of tourism investment in Australia, based on the Tourism Investment Monitor 2017. It examines the growth of the Australian economy, highlighting the significant investments in the tourism sector, including aviation infrastructure, arts, recreation, and business services. The analysis covers the impact of government taxation on the hospitality industry, deadweight loss, and tax revenue. It also discusses the advantages and disadvantages of tourism for the Australian economy, considering its contribution to GDP and job creation, as well as potential environmental damage. The report emphasizes the importance of investment in tourism infrastructure for sustained economic growth and regional tourism market development. Desklib provides a platform for students to access similar solved assignments and study resources.

Running head: ECONOMICS FOR MANAGERS
Economics for managers
Name of the student
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Table of Contents
Answer 1....................................................................................................................................2
Answer 2....................................................................................................................................3
Answer 3....................................................................................................................................5
Answer 4....................................................................................................................................7
Reference list............................................................................................................................11

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Answer 1
The Tourism Investment Monitor is the article which have examined the Australian
economic status which will be stating about the contributors of the economy which have also
contributed to the growth of the economy. As it has been found out that the economy of
Australia known to have experienced a huge growth in the last two decades. The article will
be evaluating the values of the large projects that have been invested in the tourism pipeline
of Australia. More than $30 billion have been invested for the Australian tourism industry.
On the other hand, the arts, business services and the recreation are known to amount more
than $10 billion. The infrastructure which is related to the aviation projects known to have
amounted more than ten billion where the projects were also known to be quite expensive in
nature. The investors which are not from Australia will be strengthening the investment
pipeline of the projects. A large sum of money had been put in to business services, projects
related to accommodation and the infrastructural projects. By the year of 2027 it is expected
that the tourism expenditure will be growing up at the rate of more than six percent for
reaching the value of $220 billion. The demand for the services related to the airline industry
will result sue to increase in the number of he visitors. the growth in the visitors will also lead
to increase in the demand for educational services and hotels. Therefore, it can be said that a
huge amount of investment is needed in the tourism industry of Australia for keeping the
market towards equilibrium. The tourism investment pipeline has been designed in such a
way in order to track the projects related to investments for moving towards the mixed-use
projects which basically combines the tourism accommodation with other companies that are
related to non-tourism. The places like Queensland and Victoria are known to be the favorite
destinations for the mixed used developments with the project’s availability. According to
some of the recent repots it have been found out that an amount of more than US$40 billion

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had been received by Australia as a foreign direct investment where the infrastructure of the
aviation industry in the year 2017 had been known to be worth ten billion which have been
known to spread across 19 projects. The Brisbane Airport domestic terminal along with the
Perth International are some of the projects related to the aviation infrastructure. The
Melbourne Airport Construction is also included in the aviation infrastructure. The under-
construction projects are known to be valued at $3 billion in 2017. The factors which will
lead to the rise in the demand for tourism includes arts, recreation and infrastructure of the
business service. The investments of the various kinds of infrastructure have been spread
across the different types of the projects. The pipelines that are related to the cultural facilities
as well as the arts are known to cost more than three billion for the fifteen projects. Although,
mostly the nine projects known to have valued more than $2 billion.
Answer 2
(a) According to the question it can be seen that the hospitality industry is known to be
perfectly competitive in nature and now the government decides for levying the tax on
the buyer for the hotel accommodation. The market which is known to be perfectly
competitive in nature will have a large number of buyers as well as large number of
producers in the market. the services or the products that is usually sold in the perfect

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competitive market is mostly homogeneous in nature which will be prevailing in the
market price. the perfect competition market comprises of both allocative efficiency
and productive efficiency. Perfect competitive markets will also not be very efficient
during the short run as output will not be taking place when the average and marginal
cost will be same. In this particular case it can be said that the demand curve of the
consumer should be shifting down in those cases when the government will be
imposing taxes on the buyers and not on the sellers. After that the demand curve will
be shifting down to the left at the rate on which the tax has been imposed. The point
of equilibrium will be shifting from E1 to E2 when the government will be levying
the tax. This will result in change in the quantity demanded by the consumers and a
decrease of the quantity demanded from Q1 to Q2. Therefore, it can be said that the
taxation system is basically the contributions which the businessman contributes for
supporting the governments of that particular state or country. The question suggests
that the tax had been imposed on the buyers and therefore, the consequences will be
faced by the buyers. For this reason, the producer surplus will be benefiting and the
producer will also earn profit by producing the goods at a particular price. tax in
general leads to deadweight loss which is the cost borne by the society in case when
the suppliers and the buyers will be leaving the markets due to the tax cost. With the
rise in taxation the surplus of the producer will be declining. It can also be said that
the tax which is levied on the producer is completely equal to the tax levied on the
buyers. Therefore, both results in the reduction of the quantity sold with the rise in
tax.
(b) The deadweight loss will be taking place when there will be decline in surplus of both
the producer as well as in the consumers which takes place dur to imposition of the
tax that is known to be inefficiency of the economy. Taxation will be leading to loss

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in the welfare of the society that will mean decrease in the economic wellbeing.
taxation will be also leading to rise in the level of unemployment, decline in the
wages of the labor and of the living conditions. The social welfare is the summation
of the consumer surplus and the producer surplus along with the revenue which
usually the government is known to collect. Therefore, the social welfare of the
economy will be taking place from either producing or consuming the particular
amount of consumption of services or goods.
(c) The tax revenue can also be stated as the income of the government which is collected
by taxing the people of the country. When there will be increase in the taxation, the
revenue from the taxation will also be going up. The method of taxation can also be
stated as the primary source of income which is derived from the particular place from
the various sources of the public enterprise and trade royalties. With the rise in the
rate of taxation it will be leading to the increase in the revenue of the government.
Therefore, rise in the rate of taxation will be leading to rise revenue in the long term
and this will lead to increase in the revenue of the government.

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Answer 3
Tourism as well as travel is known to be the significant economic activity of Australia
because of its presence in all parts of the world. The presence of the Australian competitive
advantage of tourism through the proximity to Asia because of the low-cost airlines. The
effect will be either having wither the direct or the indirect relationship. Because of this
reason, there is a requirement of huge amount of investment in the tourism infrastructure of
Australia for the economic growth along with the regional tourism market. for this reason, a
huge amount of money needs to be invested for continuing the tourism boom for the longer
period of time. According to the reports of 2017 it can be said that more than ten million
tourists have visited Australia. Tourism can be defined as the act of balancing that is present
between the demand creation and which also ensures supply of the development as well as
the investment incentives in order to develop accommodation. For this reason it is advisable
that the government of Australia should be investing a large sum of money for promoting the
careers in tourism and training them in both the vocational and educational levels. For this
reason, it can be said that there is a both advantage and disadvantage of tourism in the

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Australian economy. Therefor tourism can be very advantageous for the economy when
promoted every year in both the developing g and developed countries.
Both travel and tourism will be contributing to the large part of the gross domestic product of
the Australian sector as it is known to be the significant part of the economy of Australia.
More than five million people have received jobs as a result of tourism. According to the
economic experts, tourism is known to have a great potential of the growth in spite of the
different kind of economic instability of the world. With the decline in the mining sectors of
the economy tourism will be helping to prevent the Australian economy from going in to
recessions.
By approving the destinations of the visitors, the tourism industry of australia have
earned a large amount of profit. The biggest source of the inbound tourist of Australia are the
people from china. In the year of 2014, the relationship between Australia and the Chinese
tourists known to have strengthened a lot. Therefore, the Chinese tourists is likely to benefit
Australia for about $9 billion by 2020. As in the year of 2014, they have known to signed the
Free Trade Agreement and after that millions of Chinese tourists known to have visited
Australia. It is therefore expected to grow more in the future.
Huge amount of incentives can be earned from tourism and therefore tourism act as
providing incentives for the employees who are in this particular sector. Therefore, it will be
result in upkeeping the wildlife as well as the urban areas. Visitors will be help in promoting
the international links which will be providing the cultural as well as the business connections
for both the long term as well as the medium-term benefits. There will be increase in the
tourism since it will be increasing the profile of the place. Tourism will also help in showing
the outer world the positive aspects of a particular place. It will also help in providing jobs for

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the locals, hotels, transport and restaurants which requires a huge number of staffing and will
also help in proving the, much needed enjoyment for the people.
The disadvantages of tourism comprise of environmental damage which states that a rise in
the level of tourism will lead to various kinds of environmental damage that comprises of
pollution along with the forest fires. The various kinds of tourism activities which includes
hiking, bird watching or scuba diving will be having a harmful impact on the ecology of any
place. Most of the place es that includes beaches, monuments find it difficult to cope with the
huge number of tourists as they will be suffering from the wear and tear of the damage.
Therefore, most of the tourism activities will be negatively affecting the place. Another
disadvantage of tourism is that the jobs related to tourism are quite seasonal in nature and
therefore they are quite insecure with no extra benefits like those of health care benefits or the
payments for the sick people. There may be some cases where the visitors are only present in
the peak periods and the employees will be having jobs for that point of time and they will
remain deserted for about several months. There will be harmful effects of tourism with the
rise in the population of the tourists. The resource will be becoming unsustainable in nature
and then can also become exhausted in nature. The developmental stage of the tourism will
be including the negative impacts of the tourism.
Answer 4
The countries that are mostly visited by the tourists are Spain, Germany and Italy.

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Germany
Germany is one of the most visited places in the world where more than 60 million
tourists visited in the recent years. The majority of tourists usually comes from Netherlands,
Switzerland and the United Kingdom. According to the reposts published by the Travel and
Tourism Competitiveness it has been found out that Germany is known to rank third out of
the 136 countries in the year 2017 and is also considered to be one of the safest travel
destinations in the worldwide. In the recent year it has been found out that more than thirty
million tourists have known to visited Germany and brought an amount of US$38 billion in
the receipt of the international tourism of the country. Both international and domestic
tourism have known to contribute about EUR43.2 billion to the gross domestic product of
Germany. The tourism of Germany had also known to support more than 2 million jobs
worldwide. The ITB Berlin is also known to be the world’s leading trade fair of Germany.
The reason why most of the tourists visit Germany is because of the German culture, outdoor
activities and the beautiful cities of Germany. In the year of 2017, more than 178 million

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tourists have visited Germany. Among them Bavaria had most of the visitors. The highest
density of the tourists had been received in Mecklenburg-Vorpommern. The main winter
sport regions in Germany are the Bavarian Alps and Northern Limestone Alps, as well as the Ore
Mountains, Harz Mountains, Fichte Mountains and Bavarian Forest within the Central Uplands.
The most visited cities of Germany include Berlin, Munich, Hamberg and Dresden.
Spain
Tourism in Spain known to have contributed to most of the economic life of the
country. It is also known to be one of the famous destinations for the summer holidays where
huge number of tourists known to visits from Germany, Italy and the United Staet of
America. The foreign tourism industry of spain is famous in all over the world. Therefore,
Spain can be termed as the popular destination spot for the summer holidays. The Costa
Blanche had been the famous tourist spot for a large number of people. The large n umber of
festivals which are celebrated in Spain all throughout the year have been termed as some of
the major attractions of Spain. More than ten million tourists known to have visited through
the previous year in Costa Daurade and Costa Brava. The canary island s and the Baleraic
islands are some of the famous tourist destinations. Moe than ninety million tourists have
been known to visit Spain and is therefore one of the famous tourist destinations.
Italy
Italy is also one of the most visited places by the tourists where they mainly visit this
place for fashion, food, culture, and the beautiful coastlines. Tourism is one of the most
profitable sectors in Italy and it have brought a revenue of about €189.1 billion. Most of the
tourists that visits Italy are from Germany, America and France. The cities which are widely
visited by the tourists are Rome, Milan and Naples. Popular tourists’ attractions include
Colosseum, Pantheon and St Peter’s Basilica. Rome has always topped the list with the

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Vatican City, museums and the ancient monuments. The best months to visit Spain are the
months from April to June and September to October. The region that are famous in Italy are
the northwest Italy, northeast Italy, central Italy, southern Italy, Sicily and Sardinia. The
northeast Italy has several tourist attractions. Sicily is the largest island in the country with a
diverse as well as popular tourist island which is famous for archaeology, cuisine and
seascapes. Anther island named Sardinia is also quite popular tourist attraction in Italy.
As there is a rise in competition of tourism in different parts of world with the rise in the
Australian dollar, the industry of tourism is negatively affected in nature. The tourism of
Australia is known to be the significant industry which is known to generate more than ninety
billion to the gross domestic product of Australia. The shares of the market therefore are
known to all for quite a long period of time. These are the following ways by which the
Australian tourism can be increased like:
 The government of Australia is known to invest for bringing the tourists from the
Asian countries since this will act as a huge opportunity to the industry. For this
particular reason, the tourism industry will be strengthening the distribution,
developing he marketing campaigns and strengthening the distribution for attracting
the tourists from the other Asian countries.
 When compared to the rest of the countries, the productivity of the tourism industry of
Australia is found to be quite low. It has been found to limit the operators of the
tourism in Australia for providing the value of the money experiences. The
government of Australia therefore is needed to build the competitive advantage of the
country which will be helping in increasing the productivity, quality and innovation.
For this reason, the government should be building on quality, resilience and
productivity.

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 There is also a need of strong digital capability for marketing and distributing the
products. The govern ment need to invest a large sum of money in order to build the
competitive digital capability. The tourism industry therefore needs to work so that
the tourism enterprise should take advantage on the online services.

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