Determinants of International Tourism

Question: Discuss about the Determinants of International Tourism. Answer: Introduction Tourism is an activity most important in an economy and it entails the movement of people from one place to another and stay in the new place for like a year. The explanation of the existence of tourism activities is because people need to carry out business, and so they travel to do business in the new areas. The other reason is leisure and sporting activities. There has been a massive growth in the Australian tourism industry owing to the attraction of many investors into this industry. According to the Tourism Investment Monitor (TIM) 2015, the growth in the tourism industry in Australia has created many employment opportunities and have expanded the economys national income ((Hooper and Zyl*, 2016 and Tra.gov.au, 2015). The growth has been attributed to the strong demand for Australian tourism services by the international and domestic visitors. The TIM also noted that there was a continued growth in the tourism investment pipeline in 2014. The report by Austrade.gov.au (2015) noted that the competitive advantage of Australia in tourism is raised by the Asian proximity, the safe environment, its appealing natural assets and the low cost services provided by the airlines (Deloitte Australia, 2016). The foreign earning from the tourism industry in Australia is huge (Hooper and Zyl*, 2016 and Gross, 2007). The report also noted that the spending of Australian visitors from China as per the year ending September 2016 was $9.1 billion which was an 18 % increase from the previous year (2015). The forecast of the Australian government for the spending of these visitors by 2020 will be over $18 billion. According to Sherry (2015), the potential for tourism growth in Australia is huge and is forecasted to add to the economy some $ 250 billion in some 20 years to come. The NWS receive many visitors as it supports over 90,000 businesses. In addition to foreign earnings, tourism also results in the flow of new skills and technology into the country (Scarpetta, 2003). The reforms on this sectors falls in many areas of improvement. Better accommodation services In Australia, there are many big hotels situated at places where most tourists would love to spend some time. For instance, many hotels have been established on areas near the major beaches. The booking of these hotels is also made easier since one only has to get online, choose the place he/she intends to visit, then search for the best affordable hotels near that area. A city like Sydney has a wonderful climate with fantastic beaches and parks. It also has top-class cultural institutions in the world (Sherry, 2015). The price offered in these hotels also differ and this cover the need for all income classes in the economy. The high income class go for the most expensive hotels where other extra services are provided. The hotels are also surrounded by security guards day and night which make the clients have a feeling of being in a secured place. Accommodation is an important factor in the tourism industry. The demand for houses for rent by tourism has gone up with the expansion of activities (Deloitte Australia, 2016). The price offered for accommodation by tourists is good. The government has therefore funded the improvement of accommodation places. Private investors has also established many places towards the same. Better means of transport and flights The booking of online in the past periods was not simple; it was a long process and therefore some potential tourists lost the interest of travelling to Australia. Now the process has been eased such that one can book a flight online today and still catch the flight on the same day. There is a scheme reform that allows tourists who travel from China to Australia to travel in guided groups; the scheme is the Approved Destination Status (ADS). The Chinese and the Australian government authorities has approved the outbound tour operators (OTOs) to organize tours and be the only means by which the ADS tourist visas are obtained. The Australian ADS status was granted in 1999 where it was the first grant in the western countries. Since then a higher proportion of tourist to Australia from China are ADS tourists. The number of ADS tourist received in Australia are over a million with 32 % being leisure tourists. The Australian government is also investing more on improving the tourist infrastructures (ABC News, 2016). More tourist are attracted to the country owing to the fact that its public transport, roads and amenities are better. This makes it easy and fast for them to move to different parts of the country. Singaporeans are also a good market for Australia (Lim McAleer, 2001) Good relationship with other nations In 2014, a free trade agreement (FTA) was finalized between Australia and China which was meant to promote economic benefits to both nations. The Australia-China relationship has left China to be an important Australian inbound tourism market. Improved security Security level in a country is a major determiner of the number of people who make and move to that given country (Eilat Einav, 2004). If the level of insecurity is very high, most people have the fear of risking their lives by carrying out any tourism activity with that country. Tourism Research There has a growth in the research for better ways to enhance the tourism activities in Australia governed by the Tourism Research Australia (TRA) which is a located within Austrade. It is a professional independent body for the Australian government, leading in tourism research and economics. Since the markets and economic conditions keep on changing, the TRA collects and analyze data that allows the formulation of policies that are in line with the changes; planning, investment and marketing is enhanced. Conclusion The tourism industry in Australia is growing strong and this is attributed by the roles of Austrades in this sector. The roles include the attraction on investment, formulation of policy and researching as a way to improve the Australian market share. Tourism has actually contributed to a higher proportion in the creation of employment where the number of people employed in this sector grow year by year. References ABC News. (2016). Regional tourism reform discussions underway. [Online] Available at: https://www.abc.net.au/news/2015-06-26/regional-tourism-policy/6574424 [Accessed 16 Dec. 2016]. Deloitte Australia. (2016). Tourism growth and outlook goes from strength-to-strength | Deloitte Australia | Consumer Business. [Online] Available at: https://www2.deloitte.com/au/en/pages/media-releases/articles/tourism-growth-and-outlook-goes-from-strength-to-strength-250216.html [Accessed 16 Dec. 2016]. Eilat Y., and Einav L. (2004). Determinants of International Tourism: A Three-Dimensional Panel Data Analysis. Applied Economics, 36(12): 1315-1327. Gross Stephan, 2007, Travel and Tourism: A Strong Economic Development USA, Booz Allen Hamilton. Hooper, K. and Zyl*, M. (2016). Australias Tourism Industry. [Online] semanticscholar.org. Available at: https://pdfs.semanticscholar.org/d1d0/3bb8dc6d3dd0995eea9c3b2b0893e894b3b9.pdf [Accessed 15 Dec. 2016]. Lim, C. andMcAleer, M. (2001), Modeling the Determinants of International Tourism Demand to Australia. Discussion Paper-Osaka University Institute of Social and Economic Research, 532. Osaka: The Institute of Social and Economic Research, Osaka University. Scarpetta, S. (2003). The sources of economic growth in OECD countries. Paris, France: Organisation for Economic Co-operation and Development. Sherry, A. (2015). Australia needs to think big about tourism. [Online] Dailytelegraph.com.au. Available at: https://www.dailytelegraph.com.au/news/nsw/australias-tourism-industry-needs-innovation-and-big-ideas-to-continue-to-grow/news-story/53078ef6405ad0c433612722c6fdbde7 [Accessed 15 Dec. 2016]. Tra.gov.au, (2015). Tourism Research Australia - All publications. [Online] Available at: https://www.tra.gov.au/research/Tourism-Investment-Monitor-2015.html [Accessed 15 Dec. 2016].