Table of Contents
About Australia
Australia is the 6th largest country in the world and the smallest continent. It lies between pacific and Indian ocean, about 3000 km from the mainland pf Asia. Australia is often called Down under because the whole continent lies south of the equator. All the world’s climates are found on the continent- from the tropical rainforest in the north to the cool temperate climates in the south and southeast.
The country is divided into 6 states and 2 territories. Australia is rated triple A by all three global rating agencies and has level of net public debt that are among the lowest in the OECD.
- Capital- Canberra
- Largest City- Sydney
- Government- Federal parliamentary constitutional monarchy
- Population – 25,519,100 (2019 estimate)
- Currency- Australian Dollar (AUD)
- GDP (PPP)- $1.2 trillion
- Unemployment-5.6%
- Inflation (CPI)-2.0%
- FDI Inflow-$46.4 billion
Service Industry of Australia
Service industry comprises over 70% of the GDP. It dominates the economy, which employs over 79% of the labor force. An indicator of this sector’s diversity employment ranges from high pay to low pay; the part time full time and little skill, semi-skill and low skill and also hold one of the most educated, multi-lingual and multi-cultural workforces globally. The industry also engages tourism, media and entertainment, healthcare, logistics, education, and finance sectors as described below.
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What are the Major Industries in Australia?
The service industry comprises of over 70% of the Australia GDP. It dominates the economy, which employs over 79% of the labor force. Other major industries include tourism, healthcare, media, finance, and mining.
Tourism
Australia is one of the most desirable travel destinations because of its beautiful natural landscape, coastal areas, red deserts, and rainforests. More than 7 million visitors came to Australia in 2018 attracted by beautiful sandy beaches, unique flora and fauna, the hospitality of the people and world-class food and wine. All this adds 38 billion AUD to the economy employing approximately one million people. The high number of tourists comes from China, Singapore, Japan, Great Britain and the United States.
Healthcare
Healthcare is Australia’s fourth most significant contributor to the GDP and was ranked the second-best healthcare system in the world. Currently, 13 percent of the workforce is employed in the industry and is projected to increase to 15 percent by the year 2020. Furthermore, 160,000 other full-time jobs will be added with the launching of the National Disability Insurance Scheme (NDIS). With the world-class medical research and healthcare infrastructure, Australia is regarded as one of the best places to conduct clinical trials and medical investigations.
Media and Entertainment
Media and entertainment industry accounts for $29.1 billion that is comprised of $17 billion in direct output. Seven percent of it is generated online, and $25.1 by offline media, which captures value added created by capital inputs and labor of about 45,000 full-time equivalent workers, are employed directly in the industry. Advertising is estimated to contribute $40 billion to the economy.
Finance
With a sophisticated modern financial sector, Australian Strong economic performance and experience makes Australia a preferred place to do business and a global commercial hub. In 2015, World Bank ranked Australia the fastest place to start a business. This business service sector is worth 1.7 trillion AUD and adds up to 11 percent of the national GDP equivalent to 118 billion AUD, which has attracted investors from within the country, Asia, and from all over the world.
Mining
Mining is a driving force for the exploration of remote Australian lands and industrial advancement with more than 120 billion AUD currently invested in new projects. GDP from mining increased to 26 billion AUD in the first quarter of 2018 from 24 billion AUD in the fourth quarter of 2017. The sector is maximizing on the plentiful of natural resources that are in exploration, extraction, and processing like coal, mineral sand, gold, copper, uranium, bauxite, iron ore, nickel, lead, zinc, diamonds, and natural gas. Australia is the world’s largest miners of bauxite, iron ore, lead, and zinc, which generates earnings of about 245 billion AUD in exports earnings. The mining industry has over six hundred publicly traded companies.
PESTEL Analysis of Tourism
Technological aspects
On the list of Chinese tourists, the Australia now ranked fourth instead of tenth as of last year. And major tourists are from Asian countries such as India and china. And as a result, the government of Australia tries to attract more & more tourist from various other places via its content platform, which offers a “try before you buy” experience that leverages the virtual reality and 360-degree images. But somehow, growth in digital world has raises policies and regulatory issues.
Innovative digital platform has also enabled tourism products, especially accommodation and transport, to be provided through non-traditional means. Sharing platform such as Airbnb and Stayz enable residential property owners to directly engage in short term letting. It is important for the government to monitor these types of innovation in tourism industry and ensure regulatory processes to keep pace with technological advances and consumer trends.
Political factors of Australia for tourism
Australia: Political stability index (-2.5 weak; 2.5 strong):
For that indicator, The World Bank provides data for Australia from 1996 to 2017. The average value for Australia during that period was 1.01 points with a minimum of 0.86 points in 2009 and a maximum of 1.4 points in 1996. See the global rankings for that indicator or use the country comparator to compare trends over time.
Environmental Analysis
Australia’s multi-billion tourism industry is under increasing threat from climate change with some of the nation’s top natural wonders in the firing line as the temperature and the sea-level rising at an alarming rate.
With the heavy usage of Coal-fired power and relatively small population, Australia is considered one of the world’s worst per capita greenhouse gas polluters.
“Without credible climate policy that cuts Australia’s rising carbon pollution level, the impacts of climate change will only intensify and accelerate across the country over the coming decades.” Climate Council chief executive Martin Rice.
According to the recent climate and geology trends in Australia, Australia’s continental average temperature has multiplied by close to o.8 degree since 1910. Most of this rise occurred once 1950, with 1998 being the warmest year, and therefore the Nineties and Nineteen Eighties being the warmest and second warmest decades, severally (Collins 2000). These trends square measure in step with those measured globally.
Climate council of Australia advised government of Australia to reduce the carbon emission harming Australia’s beaches, national parks and The Great Barrier Reef. Coastal areas are expected to face more frequent flooding in coming years, while Australia “Red Centre” region could experience more than 100 days annually above 35 degree Celsius by 2030.
Example of tourism affected by the climate change and global warming include ski tourism, which has seen as a trend of increasing reliance on artificial snow as seasons shortened over the past 25 years. A separate report last year from Deloitte Access Economics valued Great Barrier Reef as an asset worth Aus$56billion which includes its tourism revenues and its indirect value for the people who have not yet visited but they know that they exist and will definitely visit in a particular financial year.
Protecting the tourism industry by protecting the environment will ultimately protects the job and the Australia’s economic well-being.
Social factors in Australia for tourism industry
Demographic factor:
Australia welcomes the visitors aged 15 years and above for the year June 2019 with approximately 9 million arrivals i.e. 3% more than the previous year. This data supports the strong growth of 5% in total trip spend, which reached a record of $ 55 billion (approx.)
The growth of aged people as tourists for Australia force the tourism industry to develop more humanized infrastructure according to the needs of market.
Festivals and fun
Australia is a land of fun where you can feel alive and all these can be experienced with enrich joyful events in the Australian land which attracts most of the tourists of age 15 and above.
There are numerous festivals which are going on with specific seasons like winter festivals, spring festivals etc. music lovers come to Australia to feel the heat of the music festival like Brunswick music festival, Red Bull music festival (Melbourne).
Economic environment in Australia for tourism
Australian tourism industry is affected by interest rate change, government expenditure, foreign investment, and unemployment rate. In future, the economic factors will depend more heavily on environmental factors and sustainable tourism will grow because of worst state of environment.
Australia is ranked 18 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. And this is due to stable political environment in the country, and sound governance framework underpins its economic resilience.
Australia’s stable and transparent government help to provide such environment so that it can work with full safety measures and a proper business environment has been created. a robust regulatory system noted for its stable institutional frameworks and strong finance and banking regulations. Australia continue to rank highly in quality of living which attracts the tourist from other countries also.
Inflation Rate in Australia is expected to be 1.70 percent by the end of this quarter, according to Trading Economics global macro models and analysts’ expectations. The Australia Inflation Rate is projected to trend around 2.20 percent in 2020.
Slacken the influx of tourists but the other factor may overcome this point and hence, the tourism industry of Australia might face a boom.
Legal Factors
- Consumer Law
On 1 January 2011, Australia introduced one national law for fair trading and consumer protection—the Australian Consumer Law (ACL). Under the ACL, Australian consumers and businesses have the same rights and obligations wherever they are in Australia. The Australian government provide information on consumer rights to ensure that consumers are aware of their rights when purchasing products or services during a cisit to Australia. Travelers who thinl that they are treated unfairly by any business in Australia can lodge a complaint with a consumer protection agency in Australia.
- Copyright Act
copyright of western Australia tourism commission material resides with the western Australian Tourism Commission, trading as tourism western Australia (Tourism WA). Trademarks are not to be used in any form without prior written consent of Tourism WA campaign service manager.
However, if u wish to reproduce or to communicate the whole or some part of the material (like documents, images, videos, graphics etc.) u have to take specific permission from authority. Apart from the uses permitted above and any other use permitted under the Copyright Act 1968, all other rights are reserved.
- Tourism Employment Plans
Australian tourism sector employs nearly 926400 persons directly and indirectly in 2017-18. This accounts for 8% of Australian’s total employment at all time. However, this sector is facing substantial retention difficulties and skill deficiencies. In 2015, Delloite access Economics estimated 38,000 unfilled vacancies at that time, representing a vacancy rate of 7 percent.
Under Tourism 2020, the Australian Government has identified four key actions to address these challenges:
- Improving recruitment and retention for the industry
- Enhancing regional workforce planning and development
- Identifying education and training gaps and potential mechanisms to address them
- Facilitating workforce mobility and expanding the traditional workforce.
References
- https://www.howandwhat.net/pestel-analysis-australia/https://www.pwc.com.au/taxtalk/tax-rates.html
- https://www.rba.gov.au/publications/smp/2019/may/economic-outlook.html
- https://en.portal.santandertrade.com/establish-overseas/australia/legal-environment
- https://www.heritage.org/index/country/australiahttps://phys.org/news/2018-02-australia-tourism-industry-climate-threat.html
- https://www.austrade.gov.au/australian/tourism/Consumer-rights
- https://www.theglobaleconomy.com/Australia/wb_political_stability/
