A STATISTICAL LOOK INTO THE VARIABLES OF TOURISMS EFFECT ON AUSTRALIA

A Statistical Look into the Variables of Tourisms Effect on Australia

Aron Allen & Erva Kan
University of Texas at Dallas

A STATISTICAL LOOK INTO THE VARIABLES OF TOURISMS EFFECT ON AUSTRALIA

Abstract
This study is an in depth search into the facts regarding a branch of the hospitality industry, in
this case tourism, in the Australian Economy and the different ways it has been utilized in recent
years to leverage a multitude of variables in order to increase Australias standing in the world
competition. A specific emphasis has been placed upon the type, size, and location of these
variables in the tourism industry that are being leveraged. The findings of this document present
statistical data that shows how the variety of businesses and cultural attractions in Australia are
profoundly utilized in an effort to individually impact the countrys culture, GDP, and growth in
recent years. The data utilized in this document was collected using secondary sources that have
been peer reviewed. The documents used will be cited throughout and listed at the end of the
study. This study is original in that it agglomerates statistical data from many different sources to
exemplify a purpose that could be applied in various fields besides that of the tourism industry.

A STATISTICAL LOOK INTO THE VARIABLES OF TOURISMS EFFECT ON AUSTRALIA

Tourism is an industry of environmental, sociocultural, and commercial consequence.

The entire planet benefits from tourism as an industry. Western societies in particular find
themselves with growing leisureliness, relative prosperity and mobility. The amount of tourism is
aggregating so that for various parts of the world it has developed into a substantial creator of
income and a valued source of employment (Ferguson, 1987). To exemplify this, in 2013, Travel
& Tourisms overall contribution to the worldwide economy rose to 9.5% of global GDP, not
only outperforming the broader economy, but also rising faster than other substantial areas such
as fiscal and commercial services, transport and industrial (Divisekera, 2010). In total, nearly
266 million jobs were supported by the Travel & Tourism industry in 2013, in fact 1 in 11 of
employment in the world were part of the Travel & Tourism industry (Divisekera, 2010). The
demand for the Travel & Tourism industry, together with its capability to produce great levels of
employment, continues to prove the worth of the segment as an instrument for economic growth
and job conception. Tourism is one of the world's main and fastest-growing businesses. As
stated by the United Nations World Tourism Organization, a sum of US$1075 billion in
intercontinental tourism records were produced by 1035 million worldwide tourism arrivals in
2012, the highest numbers ever documented (Divisekera, 2010). The industry's direct influence
to worldwide GDP is expected to rise and to develop faster in the wider economy and other
industries such as marketing and public facilities (Tajeddini, K. 2012). Intercontinental tourists
are estimated to reach nearly 1.8 billion by the year 2030 (Divisekera, 2010). Thus, the tourism
industry is a tool for economic development in many countries.
The influence of tourism to Australia's economy is momentous and growing. In 2010
2011, the tourism business employed approximately 514,000 people, 4.5% of the labor force
(Divisekera, 2010). That year, internal and incoming tourism both accounted for 2.5% of overall

A STATISTICAL LOOK INTO THE VARIABLES OF TOURISMS EFFECT ON AUSTRALIA

GDP while expenditure by global visitors embodied 8% of total exports (Morse, 1989). With
intercontinental tourists projected to rise at 3.3% per year between 2010 - 2011 and between
2020 - 2021, the incoming section of the industry looks set to continue its significance to the
national economy. Likewise, the amount of internal trips is expected to rise gradually, at a yearly
percentage of .5% between 20102011 and 20202021 (Morse, 1989).
Tourism activities within Australia differ throughout the time of year and location.
Australia is not only one of the biggest countries in the world--the worlds sixth largest to be
specific--its also one of the most impressive due to its landmarks and natural attractions. Its
uniqueness and the irresistible attractions continue to draw more tourist, thus making Australia a
perfect location for tourism. Location wise, intercontinental tourists have a tendency to visit
relatively limited destinations, most especially Sydney and Melbourne. Brisbane, the Gold Coast,
Perth and Tropical North Queensland are also some of the other greatest most visited areas in the
beautiful country (Morse, 1989). Sydney, Melbourne, Brisbane and the Gold Coast also top the
list of the most visited destinations by domestic leisure travelers.
Australia has a lot to offer. Australia inhibits what is considered to be one of the most
pristine places in the entire world; the Daintree National Park. This park not only contains a 110million-year-old forest, which makes it one of the oldest ecosystems in the world, it is also home
to thousands of plant species, some of which are over 2,500 years old. Although it is one of the
many attractions of Australia, some tourists come from far away just to observe these
untouched lands (Harmon 2011).
The tourists that come in from New Zealand compose a very large portion of the
Australian tourism segment, frequently taking smaller bundle visits which concentrate mostly on
the famous places of interest and observing Australian natural animal habitats. An additional key

A STATISTICAL LOOK INTO THE VARIABLES OF TOURISMS EFFECT ON AUSTRALIA

source of tourists to Australia contains backpackers, regularly younger individuals incoming

from Western European nations as well as North America. Since they spend more time in
Australia than most other visitors, these backpackers have a tendency to to discover significantly
more of the nation. Much of these backpackers partake in working holidays permitting them to
vacation for an elongated period of time in the nation. The visas for working holidays in
Australia are obtainable for people in the age range of 18 to 30 for the majority of Western
European inhabitants, as well as the inhabitants of Canada also a couple industrialized East Asian
countries.
Regardless of its significance, the tourism industry does present a couple difficulties for
economic investigation. Tourisms constraints are somewhat problematic to describe and its
objectives are varied. On that token, the job of the tourism industry in the economy is not always
viewed in a similar manner by all and the word tourism most definitely has been conveyed as a
way to measure a variety of items. Nonetheless, devoid of a bit of valuation of its economic
impact, the choices concerning tourism on different scales, and at the public and private level,
should be made in a vacuum. Distribution of wealth to tourist businesses by governments,
stockholders, specialists, or developers is far too significant to base purely on instinct, or on
value judgments that tourism is a beneficial thing. In the unforgiving atmosphere of commercial
risk-taking and in the distribution of civic resources, economic value must be established, not
purely concluded. The definition of tourist industry should be understood as a broad expression
instead of indicating a consistent body. Thus, it would comprise accomplishments which are
evidently of key significance to the tourism industry, housing (another hospitality branch) and
the entertainment industry, as well as other businesses where the amount of contribution with the
traveling public is indirect (Cooper, 1984).

A STATISTICAL LOOK INTO THE VARIABLES OF TOURISMS EFFECT ON AUSTRALIA

Many argue that tourism only benefits certain individuals, not including tourists. Some
believe their countries are being taken advantage of. There are certain governments that provide
more financial support to the attractive areas of the country rather than the country as a whole.
Yes, indeed, the presence of tourists helps with a countrys economy, however, it is also
important to note that often times the government neglects its own people to spend more to make
the country more appealing to the tourists. Some might say it is a matter of priorities, which begs
the question, what is more important; the country or the tourists?
In the midst of modern society, corporations need to be ever more competitive,
particularly in information businesses as in tourism, where information technologies have an
incredible influence (Altinay, 2012). In this modern showground, consumer approval and
pleasing the customer is definitely some of the key intentions for corporations, as these main
factors create loyalty between the consumers and the corporations. Thus, they try and do their
best to acquire ideal lasting outcomes (Safn, 2011). In the case of the tourism industry,
consumer approval is vital as it is directly correlated with the consumers choice to take a trip and
it is also their choice to return home (Safn, 2011). In order to acquire optimal consumer
approval and keep customers happy, both interior wealth and competencies (Wagener, 2010) and
exterior variables have to be taken into consideration. A huge amount of writings bear witness to
the significance of the wealth and competencies accessible within each business.
To prove some of the variable involved in this analysis and their effect on Australian
economy, providing some statistical evidence is necessary. The tourism industry is quite large; it
is comprised of roughly 267,000 companies, or 13 percent, of the total 2.1 million companies in
Australia in June 2013 (Strobl, 2013). The main segment, which is about 95 percent, of the
tourism industrys companies were owned by freelance, micro or small companies, which is

A STATISTICAL LOOK INTO THE VARIABLES OF TOURISMS EFFECT ON AUSTRALIA

constant with most other industries (Strobl, 2013). This collection, however, has only subsidized
32 percent of all tourism proceeds (Strobl, 2013). On the other hand, the remaining intermediate
and big companies subsidized more than two-thirds of all the tourism industrys proceeds in
Australia, despite only owning a 5.0 percent and 0.3 percent segment of tourism companies,
correspondingly (Strobl, 2013).
As measured in June 2013, 80 percent of the companies in the tourism industry in
Australia were located in these three states: New South Wales, Victoria and Queensland (Strobl,
2013). The influence of these states to the Australian tourism industrys GDP was 78 percent in
2012 - 2013. Regardless of a greater percentage of tourism companies being positioned in capital
cities, tourism industry proceeds was not produced equivalently in the capital cities. Overall, 38
percent of tourism companies were positioned in local areas, however they were able to produce
44 percent of all tourism proceeds in 2012 - 2013. These statistics are very important and
relevant to the Australian economy as it goes to exemplify the significance of emerging strategic
policy and asset initiatives to assist the business progression in local regions.
In the years of 2009 - 2010 and 2012 - 2013, the tourism business went through a
progression of organizational amalgamation, when 19,000 idle and micro companies withdrew
from the business and, at that time, over 2,000 small, intermediate and big companies arrived
into the industry (Chen, 2013). Though might seem insignificant, after all Australia is quite large,
this process had a detrimental impact and caused a total loss of 17,000 companies (Chen, 2013).
Nonetheless, this development permitted the overall tourism business to strengthen fiscally, with
the typical yearly proceeds development percentage of small, intermediate, and big companies
growing by 2.6 percent, 1.1 percent, and 3.9 percent over this time, correspondingly (Chen,
2013). This transformation has underwritten a bit to an enhancement in the tourism industrys

A STATISTICAL LOOK INTO THE VARIABLES OF TOURISMS EFFECT ON AUSTRALIA

efficiency; with greater size, companies able to create more with their capitals, thus increasing in
size, which also increases profits. The tourism industry labor production had developed 0.6
percent per year over the period 2009 -2010 to 2012 -2013 (Chen, 2013).
On the other hand, Australias economic development is still remaining beneath its
historical trend. In the year of September 2013, progression slowed marginally to 2.4 percent and
highlighted the continuing robust development in non-dwelling investment, but slow progress in
domestic consumption and government expenses (Chen, 2013). The Australian dollar has
devalued abruptly during 2013. After being more valuable than the US dollar at the beginning of
the year, the Australian dollar descended abruptly (to US$0.89), right before experiencing a
slight climb back up to trade about US$0.93 to US$0.98 (Chen, 2013). Although currency is
expected to fluctuate due to the state of the economy, the Australian dollar still has not reached
its previous value. On the whole, during the beginning three quarters of 2013, the Australian
dollar devalued 5.1 percent counter to the US dollar, in contrast to the 2012 average. It also
devalued against the Euro, the Renminbi, and the New Zealand dollar, but by a smaller total.
Although the Australian dollar has appreciated slightly against the UK Pound, the strong
monetary stimulus that is occurring in the Japanese economy has led to the Yen falling sharply
against all currencies, including the Australian dollar so far in 2013. Latest information for
supply is available for aviation and shows that domestic and international seat capacities
continue to expand at a solid rate.
Some of the most recent publications of the Tourism Satellite Account confirms that the
amount of individuals in employment in the tourism industry grew by 2.2 percent, or more
specifically, by 11,500 jobs, to 543,600 jobs in 2012 -2013 (Chen, 2013). As progression in
tourism industry jobs was approximately twofold that of all jobs in Australia, the tourism

A STATISTICAL LOOK INTO THE VARIABLES OF TOURISMS EFFECT ON AUSTRALIA

industrys segment of Australian careers rose from 0.1 percent to 4.7 percent. While careers
growth in the tourism industry fortified in 2012 - 2013, this was largely obtained from an
intensification in part-time employment. It increased by 4.6 percent, while tourism industry fulltime employment remained fundamentally unaffected (Strobl, 2013). On the whole, there was a
moderate 1.0 percentage progression in the amount of hours worked in tourism industry
employment. However, this was still far greater than the low 0.2 percent rise in all hours worked
by people employed in Australia.
Other sales trades, Caf industries, eateries, and takeaway food facilities comprise the
majority of the companies in the tourism industry; 48.6 percent and 22.0 percent (Strobl, 2013).
Of the previously stated 95 percent of self-employed, micro businesses; slightly less than 19
people are employed (Strobl, 2013). As juxtaposed to June 2010, all transportation businesses
and Recreation facilities, including cultural and gambling facilities, were the two businesses that
experienced the most substantial relative decrease in tourism industry statistics. Because holiday
travel generates demand for certain tourism services and transport facilities required by holiday
travel tourists, a possible reason could be accredited to the nature of the mining boom; in which
commercial tourism crowded out all holiday travel tourism.
Over the 2009 - 2010 and 2012 - 2013 time period, the amount of visiting people
increased by a yearly rate of 2.9 percent, while tourist nights rose by about 3.9 percent (Strobl,
2013). A larger amount of tourists, both native and transnational, assisted in the rise to
consumption of tourism industry merchandises increases of nearly $12 billion, from $98 billion
then to $110 billion (Strobl, 2013). Tourisms impact to the Australian economy rose by 11.3
percent in this segment of time, from $38 billion to $42 billion (Strobl, 2013). As previously
stated, the tourism industry, similar to most other businesses in Australia, is controlled mostly by

A STATISTICAL LOOK INTO THE VARIABLES OF TOURISMS EFFECT ON AUSTRALIA 10

self-employed, micro businesses. However, this percentage in not without the balance of 5
percent distributed between intermediate and big businesses (Strobl, 2013). Studies estimate that
said 5 percent of tourism businesses accounted for around 68 percent of the total revenue
generated by tourism companies in Australia.
Again, the notable, significant transformation between 2010 and 2013 was the
steady rise in the amount of small, intermediate and big companies, which in terms of the
economy, offset the total drop of 8.5 percent in self-employed and micro industries (Strobl,
2013). This amalgamation, from seemingly less practicable micro industries into other more
sustainable, bigger business sizes, could deliver the business with the resilience it needs to
upkeep sustainable amounts of development that is occurring in the tourism industry at present
and is expected in the future. Some of the most recent estimates anticipate transnational tourist
consumerism to increase by 6.0 percent and to reach $33 billion (Strobl, 2013). It is also
expected that native tourist consumerism increase steadily by 0.5 percent to $72 billion in 2014 2015 (Strobl, 2013).
Even though the tourism industry companies were more focused in capital cities
rather than in local regions, the circulation of tourist industry proceeds was not proportionate to
the industry locations. On the whole, 38 percent of the tourism industry companies were
positioned in local regions, however they produced 44 percent of all tourism industrys proceeds
in 2012 - 2013. This exemplifies the requirement for planned growth of infrastructure to expedite
tourism facilities in local regions.
The Australian tourism business deals with a variety of travel selections that
exemplify the range of Australia's cultural resources, and native principles. The tourism related
with the Great Barrier Reef, for instance, was estimated to have provided a $5.1 billion impact

A STATISTICAL LOOK INTO THE VARIABLES OF TOURISMS EFFECT ON AUSTRALIA 11

on the domestic economy. The future of the tourism industry in Australia will highly be subject
to confirming that the industry delivers captivating and sustainable experiences to tourists, which
will be mentioned in depth. The value of the domestic and cultural resources is to be expected to
develop progressively as tourists currently are looking for sustainable and genuine tourism
experiences. The economic importance of these resources is noteworthy. In 2008, 23 million
tourists visited Australias culturally appealing localities, containing 70 percent of the total
transnational tourists and 27 percent of native visitors (Wagener, 2010). Cultural impact on the
tourism industry is a developing market, containing 37 percent of world travels and increasing by
about 15 percent per year (Wagener, 2010).
A couple of suggestions for future research for Australias strategy to enhance
growth and competitiveness in the world industry are to focus on six strategic areas in which to
research. These six strategic areas are; the increasing Demand from Asia, national digital
competency, investment and governing reform plan, tourism transportation facilities, the supply
of labor, native skills and indigenous contribution, and the tourism industrys resilience,
efficiency and authenticity. These scattered but thought out suggestions for future research
highlight the strengths of Australia that could be compounded upon in order to utilized
Australias self-employed, micro business dominated tourism industry as well as the rapidly
growing larger business models.
As Asia is definitely one of the top visitors from abroad for Australias tourism industry, a
unique opportunity to research this demand from Asia is now at hand. Estimated for the future,
Asia is expected to comprise more than half of the estimated development in transnational
visitation with 42 percent of that development estimated to originate in China (Wagener, 2010).

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Researching robust and proficient digital advertising and transactional proficiencies is

critical to remain in the competition. It is very important to utilize technology to move forward
and advance as an industry. As of now, merely one third of Australias tourism industry workers
have online booking and payment facilities, limiting their ability to service customers both
domestically and overseas. Tourism currently faces a disproportionate regulatory burden that
impacts negatively on investment, so quite a bit of research in this field would optimize growth.
The tourism industrys transportation volume and infrastructure should allow for growing
amounts of tourists to venture to, from and in the interior of Australia.
The tourism industry has an employment deficiency of 36,000 and a job vacancy
percentage more than four times the domestic norm that is inhibiting portions of the industry
from efficiently attending international consumers. Research and planning with the governments
involvement could help to alleviate this burden. Some research about why the industry output is
low in the aforementioned terms compared to the remainder of the Australian economy and to
tourism businesses in competitor countries would be lucrative.

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