Factors Impacting The Hospitality Industry In Australia: An Essay.

Understanding Macroenvironmental Factors in the Hospitality Industry

Discuss about the Contemporary Hotel Marketing in Australia.

Australia commonly referred to as the Commonwealth of Australia is a nation that is composed of the mainland continent of Australia, the island of Tasmania and other numerous islands. Australia is ranked as the sixth largest country in the world based on total area.

The management of a hotel is a sophisticated affair since there many factors that are both local and global that are in force determining the success or failure of a hotel (Thrash Essays, 2012). This means that managers in top-level positions need to fathom variables in the external environment of a hotel. With a profound knowledge of the variables, the managers will be better positioned to formulate mechanisms and strategies that will facilitate maximization of returns and minimize the costs involved in operating hotels. The businesses of the modern world operate a borderless world where liberalization is encouraged in most countries. As such it is necessary that entrepreneurs understand the fundamental elements of the macro environment. Understanding the macroenvironment updates the managers of hotels with information and data that is relevant to the operation of hotels. The managers can thus alter some of their strategies to meet their optimal targets. This implies that enterprises need to conduct scans on the macro environment to understand and identify trends in both the domestic and international market.

The are several elements that explain the economic indicators and patterns relevant in scanning the macro environment of the hospitality industry. One of the elements is the income determinants such as the rate of interest, Gross domestic product, the rate of inflation and tax policies. These factors will determine the disposable income of potential customers and their ability to afford hospitality services. Cost factors also affect the cost of running hospitality industry for instance wage rates and cost of raw materials. They are crucial from the fact that they determine the profitability and sustainability of a given enterprise in the hospitality industry. Foreign exchange is yet another factor that impacts the hospitality industry particularly for enterprises dealing with international visitors. Most importantly, it is the foreign exchange rate that determines the preference and significance that foreign customers palace on a particular destination. For instance, the Australian dollar if the Australian dollar is highly valued then it means a foreigner from the UK will have to convert more sterling pounds in order to get the Australian dollar and as such Australia may not be the preferred destination for such a tourist.

Economic Indicators

The real gross domestic product of Australia was estimated to be more than AUD 1650 billion in 2016 whereas the nominal gross domestic product was around AUD 1690 billion (Market Research Report, 2017). The per capita GDP was approximated at USD 51000 whereas the purchasing power parity with regards to the GDP stood at approximately USD 1200 (Market Research Report, 2017).From the above data, it is evident that the Australian economy is a healthy one worth investing, the hotel industry can thrive in such an environment as the purchasing power of people is high enough to spend their income in the hotel industry.

The changes in the structure and the number of the population define and explain the level of operations in a particular market (Czinkota, Ronkainen, & Moffet, 2011). An increase in the number of people in a particular age bracket that a business is targeting means that the demand for services and products in that segment will increase. Thus, in the hospitality industry that targets business travelers and tourists, an increment in the number of working-class favors a demand of hotel industry. As per the Australian Center of Statistics, the population of Australia was estimated at more than 22 million in 2012 (Thrash Essays, 2012).The large population of consumers in Australia provides a ready market for businesses in the hotel industry.

Some of the cultural factors and trends define the habits and psychology in relation to hospitality facilities a society where saving is the norm, the hospitality industry is likely to be adversely affected (Dlabay & Scott, 2011). This is due to the fact that most savers will view accommodation as a luxury (UK Essays, 2015). Conversely, a culture that prioritizes the need for employees to take vacations and breaks such as Australia boost demand raising the number of visits made to hotels. As such Westernization in some regions of the world promotes the hotel industry. Safety concerns and the well-being of individuals is a major priority for most people in the 21st century as individuals are conscious of the food they consume more than ever. Also, the current patterns in the stream of violence and terrorism can brand a particular region as safe or unsafe.

These refer to policies by the government such as the extent of government intervention in the economy. Business in Australia has a high level of certainty as Australia is a haven for investment. Australia’s political and regulatory framework is stable and liberal giving investors the level of confidence needed and certainty required. This is particularly important in the hotel industry where the industry has many foreign investors willing to invest in the hotel industry. The strength of Australia as an investment hub stems from having a political system that is effective in addressing economic and policy challenges. It is such policies by the government that favor operation of businesses in the hotel industry.

Cost Factors

Development of new technologies facilitates the creation of new products and processes. Technology reduces costs and improves the quality of products (Business Queensland, 2017). The Australian government plays a critical role in global science and technology for instance in 1998 technology exports amounted to $ 1.5 million (UK Essays, 2015). The government of Australia as indicated in prime reports funds more than 50% of all research and technology development programs. The hotel industry in Australian is likely to succeed as technology in the past decades has revolutionized the way business gets conducted (TISOH, 2015). The hospitality industry requires the use of new tools that ensure satisfaction for leisure activities and business travelers and Australia offers a technology environment for enterprises in the hotel industry.

The hospitality industry is coupled with immense pressure as there are many hours involved in the preparation of food, management, and marketing (Taslim, 2016). The hospitality industry is however inseparable from legal frameworks and there are several issues in Australia that affect the hotel industry. First, food and beverage sector must operate with a liquor license that controls and regulates the sale of liquor to customers. The law is in place to ensure that customers drink responsibly and avoid undesirable effects.

Australia is one of the countries that has stiff competition in the hospitality industry due to many hotels that target both the local and international tourists. Competition has facilitated innovation in the industry through online services where customers can access information about hotels and the special delicacies offered. Thus, for hotel businesses to survive in the hospitality industry innovation and creativity in the service sector is fundamental.

Conclusion

The hotel industry is a component of the hospitality sector and economic and social factors determine the suitability of establishing a hotel in Australia as they reveal constraints and opportunities available. Such factors occur on three different platforms that are global, domestic and local level. This is because a good number of the hotels target foreigners and visitors from other communities. It is thus crucial for the hotel owners and managers to prioritize the needs and the demands of the international community. Also, local conditions should also be prioritized since they give guidelines responsible for attaining relevant standards in dealing with customers and other relevant stakeholders in the local fraternity

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