Introduction
The Australian tourism industry offers one of the most lucrative businesses that continue to attract millions of local and international tourists (Oecd.org 2003). According to Tourism Australia (2013), the tourism sector generates about $94 billion annually. The sector also contributes about 2.7%, $34 billion to the Australian GDP (Tourism Research Australia, 2015). In addition, the tourism sector offers employment to about 534,000 people, and it accounts for about 10% of total export, hence, it is Australia’s major service export sector (Tourism Research Australia, 2015). Although Australians promote Australia tourism, international tourists from Europe, Latin America, Asia, and America constitute a significant percent of total Australia tourists. The decision for Britain to exit the European Union might cause a serious economic crisis if the pound was to depreciate; a shrinking of Britain economy might reduce the percentage of Britain (Dailymail.co.uk 2016).
Position Statement
As a Tourism Australia, Sydney agent, the rationale of preparing this discussion paper is to bring together relevant tourism stakeholders to form policy/plan that will promote the growth of Australia’s tourism efficiently amid Brexit crisis. Tourism Australia is a national agency whose mandate is to promote Australia tourism growth by attracting international tourists for leisure or business visits through the provision of detailed and current information, regarding Aboriginal tourism experiences. More so, this agency plays a critical role in global marketing, and it markets Australian tourism industry in key world markets to achieve tourism vision 2020. Tourism Australia operates in 17 key global markets, and it seeks to market Australia tourism by promoting unique traits that entice people to visit Australia (Tourism Australia 2013). The agency markets Australian tourism through media hosting, public relation, advertisement, online communications, and trade shows among others. Consequently, Tourism Australia provides consumers with updated market research about tourism, economic, and aviation analysis (Tourism Australia 2013).
The mission of this agency is to make Australia a tourist destination of choice. One of the values that have helped this agency excel in its work is being genuine and providing potential visitors with correct information to build mutual trust (Tourism Australia 2013). Additionally, Tourism Australia focuses on innovation, and it seeks to offer the best services to promote the growth of Australian tourism industry. Further, Tourism Australia strives to perform its work through its branches, and in conjunction with other agencies that seek to promote the Australia tourism industry. Tourism Australia is a key player in the Australian tourism sector, and it has had both direct and indirect influences on the industry. The objective of this policy issue is to discuss what Australia government can do to lessen the impact of Brexit to its tourism industry. The plan will address the above policy issue by showing the possible threats that might erupt and affect the national tourism planning if nothing is done.
Background Context
Opportunities and issues
Globally, Australia is one of the largest tourism markets, and it is ranked position eight (Commonwealth of Australia 2009). Australia is growing rapidly and it is an excellent business destination following its natural resource, and growth in the business and aviation industries. Tourism industries in many nations across the globe have been hit by the rise of terrorism that affects the security of a nation. However, Australia has succeeded in offering investors with a safe environment, and this continues to attract many foreign investors, and tourists. Research shows that Australia’s immigration is high due to peace and security. Hence, following political and economic security, the number of foreign investors and businesspersons continue to rise providing the economy with high skills and growth in several sectors (Font & Tribe 2000). By 2020, the Australian tourism sector seeks to provide about $51 billion to the economy; hence, this sector offers more economic opportunities (Tourism.australia.com 2013 & Tourism Research Australia 2015). The sector has about 280,000 enterprises offering tourism services such as travels, cafés, hotels, and casinos among others (Tourism Australia 2013).
One of the factors that stimulate growth of the Australian tourism sector is the growth in China and India as economic powerhouses, which has led to the huge supply of visitors (Tourism Australia 2013). More so, the digital revolution is a critical issue that is shaping the growth of Australian tourism since the rise of National Broadband Network has created better operator-tourists online connections, which further promote growth in the Australian tourism, creating new business opportunities (Kumar et al. 2015). The industry offers about half a million jobs, and this is an indication that Tourism industry is one of the largest employers (Pechlaner & Innerhofer 2016). According to Tourism Australia, the country seeks to work closely with other players in the tourism sector to grow the industry, and offer more employment opportunities by 2020.
Challenges
Like other nations, Australia tourism is facing financial volatility challenges arising from other countries (Morrison 2013). The recent recession affected many sectors such as the tourism industry since financial crisis causes low spending. The decision for Britain to leave the European Union might pose financial crisis that will affect Australian tourism both directly and indirectly. For instance, a decline in the pound value arising from Brexit will cut the number of Britain tourists visiting Australia due to low abilities of spending; last year, about 700,000 Britons visited Australia, but this number might decline due to negative effects of the Brexit issue (Financial Review 2016).
Also, the Australian tourism industry faces stiff competition from other tourism industries in both developed and developing nations. For instance, as position eight in global tourism sector, Australia tourism industry has to compete with many emerged and emerging players, and this is a serious challenge that continues to hinder high returns (Visser & Ferreira 2013). Additionally, due to financial instability globally, the Australia dollar is often volatile, and its rise continue to pose growth crisis; a rise in the Australia dollar attracts fewer international visitors due to high spending. Consequently, a rise in the Australia dollar is also hindering domestic tourism expenditure (Dfat.gov.au 2014).
Visitors’ number, income, and employment issues
The growth of Australian tourism industry depends on both local and international tourists. However, attracting and maintaining a high number of visitors’ is essential to ensure high return and GDP contributions. In 2013, Australia attracted about 6.7 million while in 2014-2015, the number of international visitors rose to 7.4 million, and the industry provided 534, 000 employment opportunities (Tourism Research Australia, 2015). Therefore, it is clear that every year, the number of international visitors is expected to rise following diverse marketing from several agencies that seeks to promote tourism both locally and internationally. Furthermore, research shows that there is a direct correlation between tourism growth and income. High-income means high spending power and more people are likely to go for holidays (Maguire et al. 2014). Hence, as global income increases, there is a growth high probability in the tourism sector, and following extensive marketing and promotions from Tourism Australia, the number of international visitors is bound to rise. Therefore, to ensure that the Australian economy thrives, the government has to promote economic growth, and income to boost local tourism. Additionally, the government has to offer better tourism taxation and visa application to attract more visitors (Maguire et al. 2014).
Key drivers
Several drivers drive the Australia tourism industry whereby all should work together to promote tourism growth. Economic stability is critical for the growth of the tourism sector anywhere across the world. Thus, economic driver is fundamental to sustain high growth in the Australia tourism industry (Visser & Ferreira 2013). In relation to the Brexit issue, financial experts argue that the departure of Britain from European Union might cause economic crisis following the depreciation of the pound (Theguardian.com 2016). In addition, political drivers are core to the success and growth of the Australia tourism industry since nations with unstable governments, like Syria, do not attract international visitors. Political drivers entail functioning governments where the rule of law is practiced, and international visitors feel free to visit or invest. Furthermore, environmental driver as promoted the growth of this sector since people are now environmental cautious, and tourist want to visit clean and safe environment; Australia has low greenhouse emissions. Technology driver is playing a relevant role in modern tourism since using the internet, tour operators can easily link up with potential tourists, and book vacations online. The growth of Australia tourism has increased due to the rise of efficient agencies such as Tourism Australia, and the friendly Australian people and culture. For instance, Melbourne is one of the friendliest cities in the world, and this social cultural driver attracts many visitors from across the world that come to love the Australian way of life. For example, Australia has a rich aboriginal culture and many people visit Australia to interact with aboriginals, and learn their unique heritage (Tourism Research Australia 2015).
The Brexit issue
Although Britain is million miles away from Australia, its decision to leave the European Union will affect Australia and other nations financially (Theconversation.com 2016). One of the reasons why Australia, should have a Brexit policy is to safeguard Australia’s economy since a decline in pound may have adverse effects on the Australia stock market. For years, Australia has been a trade partner with EU nations. Hence, the decision for Britain to leave EU will surely affect its trade relations with Australia since Britain will have to renegotiate trade agreements for at least two or more years. More so, Brexit issue should have policy since it will affect the Australian tourism sector and business both in the short and long-term if the pound declines (Abc.net.au 2016).
Statement of Need
A policy addressing the Brexit issue will help the Australian government protect the tourism sector since the decision for Britain to leave will adversely affect many tourism enterprises. The main objective of the policy is to protect the Australian economy, and in particular, the tourism sector that stands to lose greatly with the motion to leave EU. According to the Dailymail.co.uk (2016), Brexit issue will affect visa application, and it will affect the stability of Australian dollar. Although the impact of Brexit will not be relatively high in Australia since it will only affect British corporations in Australia, Brexit issue might lead to a sharp economic decline (2.7% in 2017), which will be felt globally (Financial Review 2016). It is imperative to note that the growth of Australian tourism industry has been promoted by high economic growth, and the ability to attract many foreign investors. However, the decision for Britain to leave EU will attract negative economic forces sine investors will be forced to withdraw their shares due to fear of an imminent financial crisis. Financial analysts argue that if the Brexit causes a decline in the pound, the Australian stock market will record high losses (Abc.net.au 2016).
With the passing of this policy to minimize Brexit impact, the government will safeguard its economy, and ensure that the Australian tourism is not affected. There are about 280,000 enterprises in Australia tourism sector, and some are subsidiaries of international corporations while others are local corporations that either trade in the Australian stock market or work indirectly with corporations in the Australian stock market. In both scenarios, a decline in the pound value due to Brexit issue may lead to the rise of another financial crisis, which might adversely affect global tourism sector. Therefore, this policy will ensure that all direct and indirect Australian tourism players are protected to ensure steady growth irrespective the condition of the pound. For instance, the policy will help secure about 534,000 employment opportunities, and create more jobs as the tourism sector grows.
There are many stakeholders in the tourism industry, and all have a key role in this policy to ensure that tourism enterprises are safeguarded within the Australia tourism industry. The government is the main stakeholder, and its mandate is to work closely with other stakeholders to ensure that Brexit issue does not halt the growth of Australia tourism. Private sector is another essential stakeholder since many tourism enterprises are privately owned (Pechlaner & Innerhofer 2016). Tourism also entails local communities and the Australian communities play a critical role in selling the image of Australia, and promoting domestic tourism. Several indigenous tourism agencies market Australia tourism, and produce several cultural heritage products for international customers (Font & Tribe, 2000).
Brexit issue has been triggered by what David Cameroon calls a trade bloc that infringes on Britain national interests sovereignty in spending, labor regulation, immigration and financial regulation (Bootle 2015). According to Britons, being part of the EU has promoted an influx of illegal immigrants who pose a threat to Britain economy due to terrorism, and loses of job opportunities for the Britons. Hence, the decision to leave the EU seeks to protect Britain borders from an influx of immigrants from the Middle East (Minford et al. 2015). Immigration (legal) is a positive element in any nation since it promotes skills migration, and provision of vast labor market. However, illegal migration is a serious problem affecting many developed nations as people illegally enter these economies in search of better jobs. A rise in illegal immigration in the European Union following unstable Arab states such as Syria, and Turkey has led to the Brexit vote (Minford et al. 2015).
Although analysts claim that Brexit effect will not affect Australia economy directly, it is essential to note any impact, direct or indirect will affect the tourism sector. Australia attracts millions of tourists from Britain and its decision to leave EU might temporary or permanently affects the economic strength of many Britons (Minford et al. 2015). Hence, if the pound encounters financial challenges due to the Brexit vote this means that Britons will have low spending, and many will not go for vacations. For Australia, this might result to a decline in the number of visitors indicating that the tourism sector is not recording upward growth, and necessary measures must be put place to mitigate the crisis.
Consequently, the decision to leave EU might affect the tourism industry since the action will force Australians to apply for extra visa to visit Britain. Traditionally, if an Australia went to Britain with a European visa, he or she could enter other EU nations freely, but with the Brexit issues, that will not be the case; rather, for Australians to visit Europe, they will need two stamps; one to enter Britain and the other EU (Dailymail.co.uk 2016). More so, Brexit issue might post business challenges since Australian companies will have to renegotiate trade policies to enhance strong economic ties (MacShane 2015).
Tourism Australia agency can respond to the Brexit vote by encouraging the government to pass a policy, which will ease border restrictions, visa application among other travel challenges that might erupt. Tourism Australia seeks to promote international tourism to Australia, and through this policy discussion, the agency will help the government and other stakeholders to provide better economic stimuli to grow the tourism sector. According to Oecd.org (2003) and Tourism Australia (2013), Australia tourism industry is one of the most lucrative sectors, and it greatly contributes to the GDP. Under vision 2020, the government plans to further grow this industry and rise the total spending to $115 to $140 billion and GDP contribution to $51 billion (Tourism Research Australia 2015). More so, this industry offers vast employment both directly and indirectly. Hence, it is imperative for the government to intervene in mitigating the Brexit issues to ensure that Australian tourism industry sustain a high growth.
The formation of a policy regarding the Brexit issue in Australia will yield high benefits following stability in the Australia economic. First, a policy will help stabilize economic growth by forming other business allies with economically stable nations like China and New Zealand. The policy will safeguard tourism enterprises economic growth through monetary assistance in case the Brexit vote lead to financial crisis. More so, the plan will help the Australia government renegotiate better tourism agreements to promote tourism.
Scope of the proposed plan
Several policy-making approaches can be used in the formation of a policy regarding the Brexit issue to safeguard the Australia tourism industry. One of the primary approaches that can used is the policy instruments approach that uses four basic tools to form a policy (Hallsworth & Rutter 2011). For instance, the government and other tourism stakeholders must take into consideration the element authority, nodality, treasure, and organization. Taking into consideration these tools can help the relevant policy makers conduct a thorough research, and succeed in policymaking. The use of a punctuated equilibrium approach can also be used since this element seeks to explain simple observation about political processes by analyzing the past to form better policies. To enhance success in policymaking, the government should adhere to using efficient policy tools such as economic and regulation tools (Hallsworth & Rutter 2011). For instance, the use of incentives tool will yield benefits and attract international tourists irrespective of the adverse impacts of Brexit vote. Consequently, the use of legal or voluntary instruments can help policy makers follow the right channels and laws in the formation of a policy that will safeguard Australia tourism from the Brexit effect. According to
The Australia government and tourism stakeholders can use information resource since the success of this policy will be due to efficient market study, and data evaluation. The Brexit issue is still young, and more financial analysis should be done to understand the issue efficiently. More so, time is required since inadequate research might lead to poor policy/plan. One of the merits of this policy will be economic growth in the tourism sector through opening more job opportunities. Like any other policies, this policy will help the government promote steady economic progress in the tourism sector by safeguarding tourism enterprises from volatile financial crisis that might arise.
Proposed process
Research shows that many policies fail if not all stakeholders are included (Hallsworth & Rutter 2011). Hence, to ensure that policy to safeguard Australia tourism is successful, the planning process must bring all the relevant players together to have a common voice. One of the elements of a planning process is agenda building, which seeks to solve an existing problem, and pass a policy to provide future directions. More so, policy-making process requires decision making regarding the issue at hand to ensure that stakeholders make informed decisions to promote the success of the policy (Hallsworth & Rutter 2011). Policy making process requires in-depth consultation with key people or organizations that have insight on the issue. For instance, British/Australia economists and tour agencies can be consulted to share their views on the impact on the Brexit vote on Britain/ Australian tourism both in the short and long term. The policy will be implemented using policy implementation matrix, which differs from one organization to the other, and then passed to the Department of Resource, Energy, and Tourism to be enacted into law. The policy will be assessed using assessment tools that evaluate the success or failure of the policy. For instance, economic growth statistics in the tourism sector such as 2020 vision will be a good element to determine whether the new policy is effective.
References
Font, X., & Tribe, J. 2000, Forest tourism and recreation: Case studies in environmental management. Wallingford, Oxon, UK: CABI Pub.
Hallsworth, M & Rutter, J. 2011, Making policy better; Improving Whitehall’s core business.
Kumar, S., Dhiman, M. C., & Dahiya, A. 2015, International tourism and hospitality in the digital age. Hershey, PA, USA: Business Science Reference, an imprint of IGI Global.
MacShane, D. 2015, Brexit: How Britain will leave Europe.
Maguire, K., Davies et al.2014, Wellness tourism: A destination perspective.
Morrison, A. M. 2013, Marketing and managing tourism destinations. New York: Routledge.
Oecd.org. 2003, National tourism policy review of Australia.
Visser, G., & Ferreira, S. 2013, Tourism and crisis. London: Routledge.
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