Australian Tourism Industry - Importance and Challenges (Essay Sample)

THE IMPORTANCE AND CHALLENGES OF THE AUSTRALIAN TOURISM INDUSTRY
Name
Course Name
Instructor
Date
THE IMPORTANCE AND CHALLENGES OF THE AUSTRALIAN TOURISM INDUSTRY Introduction
Tourism and hospitality industry is a major contributor to the Australian economy with an average contribution of 3 percent as recorded in 2014. Tourism and hospitality industry employs around 7 percent of the overall Australian labor force making it a significant part of the economic development. The advanced technology and globalization of cultures have promoted the growth and development of the industry in the country. Domestic tourists contribute more at least 70 percent of the total revenues generated by the tourism and hospitality industry. Porter five forces and Pest analyses are vital tools that are used to show the importance and challenges of tourism and hospitality industry.
Pest Analysis of Australian Tourism and Hospitality Industry
Political Factors
Australia has enacted policies that simplify the processes of foreign tourists’ documents making the destination preferable to the foreign tourists. Some policies have been enacted to protect the welfare of local and international tourists. Tourism and hospitality industry has followed the protection act of the tourists by ensuring that tourists enjoy their freedom and get what they request (Cairncross & Buultjens 2010). Additionally, the country enjoys a long run of peace and political stability stabilizing the tourism and hospitality sector. According to the Australian Bureau of Statistics (2016), the political stability of the country has boosted the industry making Australia a famous tourist destination in the world whereby it received more than 7 million foreign tourists in 2015 alone.
Economic Factors
Australian is one of the developed countries in the world with all its sectors being developed as well. Tourism and hospitality industry received a world class status of development having met all the requirements set in the world standards. Australian federal government usually allocates the budget to fund the industry. The availability of the funds enables the tourism and hospitality industry to ensure that all the facilities and services required by tourists are available at their disposal. Moreover, the appreciation of the Australian dollar has lowered the prices of the commodities and services in the tourism and hospitality making the charges affordable to various clients (Australia 2011). One challenge is that the appreciation of the Australian dollar increases the cost of the tourists from the countries using the currency less powerful than the Australian dollar.
Social Factors
Australia is a multicultural nation 40 percent of the individuals coming from other countries. The government has enacted a law that exercises a balance between different cultural groups. The tourism industry embraces multiculturalism hiring workers from different cultures, which has improved the level of the performance of the industry. Moreover, the tourism and hospitality industry has a high level of hospitality attracting tourists from diverse regions (Cairncross & Buultjens 2010). The industry is renowned for protecting clients against harassment and discrimination making tourists prefer the country. Different entertainment strategies such as sports and music among others are used by the Australian tourism sector to please its clients (Australia 2011a). A major challenge in the tourism and industry sector is the shortage of workers, which make it difficult for the current workforce to cater for the rising number of clients.
Technological Factors
Australia is one of the most technologically advanced countries in the world and has ensured that both private and public sectors have used the latest technology to enhance their performance and the effectiveness to serve their customers. The tourism and hospitality sector a few hotels and destinations that have attained the world standards due to the technology used in the sector (Australia 2011a). Most of the bookings are carried out through online means to ease the congestion of the tourists. Therefore, tourism and hospitality industry has been keen in promoting the use of the latest technology to enhance the level of the productivity of the sector.
Porter Five Forces Analysis of Australian Tourism and Hospitality Industry
Threat of Competition
The level of the competition of the tourism and hotel industry is high due to a large number of the independent players. Chouhan (2014) stated that the high level of the competition has improved the quality and diversity of the services offered by the industry. Different organizations in the industry have made sure that they adequate facilities and services to provide to their clients and enhance their competitive edge.
Threat of Substitute Products
The threat of substitute products to the industry is fairly high due to the rising interests in sporting activities. Sporting activities have become a challenge to the development of the tourism sector because of the loss of tourists (Chouhan 2014). Consequently, the Australian tourism industry is experiencing a reduction in the profitability, which is an increasingly significant challenge to the Australian tourism and hospitality sector.
Bargaining Power of Buyers
The bargaining power of the buyers is low to medium, but it has been increasing due to the increasing number of substitute products. Tourism and hospitality industry has been losing its clients to other sectors such as sports and entertainment, which are affordable. Additionally, the Australian population is aging, which will shrink the demand of the local tourists in the coming years (Australia 2011a). Moreover, since the Australian economy is growing, clients are becoming wealthy too and can consider going for holidays in other countries, which will reduce...