Tourism is considered as one vital industry in Australian economy. Contribution of the sector in GDP is more than $40 billion. Tourism industry provides direct employment to approximately half a million people (dfat.gov.au 2017). This is the largest service export of Australia. The industry has gone through several reforms contributing to growth of the industry.
Reforms in Australian tourism industry
Government of Australia provides intense support to the tourism industry and undertakes necessary reforms to match changing preferences for tourists. Government provisioning of destination marketing for international tourists, strong support towards major sporting and different business and cultural event significantly influence tourism in Australia. Other policies facilitate by government promote development of tourism industry in Australia include arrangement governing air travel between Australia and several other nation. Reform in the visa process is another major step towards tourism reform. Additionally government attempt to make investment considered as major driver of international competitiveness. As a part of industry innovation and competitive strategy government announced to create Industry Growth Centres to remove existing barriers and identify key areas on growth (pc.gov.au 2018).
The current mining boom of Australia has long standing implication for different industries in Australia including the tourism industry. Followed by a strong growth, investment in mining sector increased from 8 percent to 31 percent between 2005 and 2012 (tra.gov.au 2017).
Figure 1: Mining investment and its share in total investment
(Source: tra.gov.au 2017)
The fast expansion of mining sectors need the mining companies to source skilled labor force around Australia. This results in a substantial increase in Fly-In/Fly-Out (FIFO) and Drive-In/Drive Out workers. The high prices of mining boosted national output and investment especially in business travel (dfat.gov.au 2017). The strong growth in mining also translated into a higher spending for leisure tourism particularly for those living in Australian Capital Territory and other states experiencing mining boom.
Impact of tourism reform on economic growth
The Gross Domestic Product in tourism increased to 7.4 percent as compared to that in the last year. The rate of growth in tourism is more than triple the rate of growth of nominal GDP. Consequently, contribution of tourism in aggregate output increases. In 2015-16, tourism constituted 3.2 percent of GDP recording a 0.2 percent increment from estimates in 2014-15 (tourismcouncilwa.com.au 2018).
Figure 2: Top ten market and all other market for Australian tourism
(Source: dfat.gov.au 2017)
Figure 3: Main reasons to travel in Australia
(Source: dfat.gov.au 2017)
Tourism is one major employer in the economy. In 2015-16, there were 580200 people employed in tourism industry. Another channel through which tourism impacts economic growth is its share in export growth. Share of tourism in Australian export increased to 11 percent in 2015-16 from 9.7 percent during 2014-15 (dfat.gov.au 2018).
Tourism industry being one of the significant contributor of economic growth has experienced several reforms in the last few years, Government initiated reforms in form of destination market, arrangements for business and cultural event and other regulatory reforms. Increased investment in mining also benefits the tourism industry. Reform and growth of tourism industry contributes to economic prosperity by raising GDP growth, employment opportunities and export expansion.
Department of Foreign Affairs and Trade., 2017. Growth in tourism a shining light for Australia. [online] Available at: https://dfat.gov.au/about-us/publications/trade-investment/business-envoy/Pages/august-2017/growth-in-tourism-a-shining-light-for-australia.aspx [Accessed 24 Aug. 2018].
Pc.gov.au., 2018. Australia's international tourism industry - what role should government play?. [online] Available at: https://www.pc.gov.au/news-media/pc-news/previous-editions/pc-news-may-2015/australia-international-tourism-industry [Accessed 24 Aug. 2018].
Tourismcouncilwa.com.au., 2018. Australian Chamber – Tourism’s 2017-18 Pre-budget submission to Treasury Economics. [online] Available at: https://www.tourismcouncilwa.com.au/sites/default/files/policy-pdfs/Tourism%27s%202017-18%20Pre-Budget%20Submission%20to%20Treasury.pdf [Accessed 24 Aug. 2018].
Tra.gov.au., 2017. The economic impact of the current mining boom on the Australian tourism industry. [online] Available at: https://www.tra.gov.au/ArticleDocuments/185/Economic_Impact_of_the_Current_Mining_Boom_on_the_Australian_Tourism_Industry_FINAL.pdf.aspx?Embed=Y [Accessed 24 Aug. 2018].