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Economic Tourism in Australia Report


Australia is experiencing an influx of tourism from other nations, which is boosting its economy year after year though at a lower. As a result employment opportunities have been created for the locals in the hotels, on beaches and as tour guides. According to the Australian Bureau of Statistics (2009), the period between 1997 and 98, tourism was at its highest peak whereby it created the highest number of job opportunities totaling to 551,000 and earned the country high levels of revenue.

However, it has just decreased recently between the financial years 2009-2010 due to the volcanic eruptions that adversely affected parts of Europe. The inbound tourism travel is estimated to grow at an average rate of 1.9% per year compared to the 4.0% outbound what translates to more tourists preferring to visit other nations although creation of employment is experienced but it is at a lower rate what means most people are left unemployed (World Travel and Tourism Council 2010).

This is a result of lack of some of the unique tourist attraction sites readily available in the country that leads even to the locals to travel abroad to enjoy leisure whereby it has been noted that the number of locals traveling outweigh that of foreign tourists visiting their country and this impacts negatively the local economy (Coalter 2001, Dwyer, Forsyth and Spurr, 2007).


With the decreased travels it directly reflects that the income is hampered with, and this was experienced by the depreciation of the dollar by US$0.86 by the year 2010 (Kulendran and Dwyer 2009). In a bid to regain the lost revenues, the air travel agencies in line with the government sought ways of increasing aircraft passenger seats in order to double the number of visitors flying in the country thus impacting positively on the economy.

Also it lowered air flight fares to attract more people as much as little will be gained on the part of traveling more will be earned on tourist consumption and therefore curb the deficit incurred. The government will gain more revenue and in so doing stabilize its economy. (Dwyer & Forsyth 1996, Bureau of Tourism Research 1995).

Inflation occurs in a number of ways common one being increased circulation of currency on the financial market and these affects both the supply and demand. To deal with this kind of inflation the central; bank is forced to increase the interest rates on loans so as to reduce the number of lenders and stabilize the financial market (Tribe, 2005, Van et al. 2007).

Exchange Currency:

Exchange rate varies with the demand and supply dynamics of the market so with decreased number of tourists it means the exchange of currency will be higher thus affecting the economy negatively.

With the increased outbound of tourists the government can encourage more spending on leisure, and to aid the low currency exchange rates will see more of the leisure commodities being exported to foreign countries where the tourists are visiting thereby increasing the national gross domestic product.

When the number of foreign tourists is high the government can increase the exchange of currency so as to gain from the tourists at lower taxes on some products mostly used by the inhabitants what will lead to increased consumption and hence growth of the economy.

Disposable Income:

The government usually expects to gain more from the inbound tourists from the taxes paid by the visitors and from the goods consumed. For example, increase in taxes for all the goods bought by the tourists and the two percent taxation on all the alcoholic drinks will gain more revenue thus boosting the economy (Dwyer & Forsyth 1993, Bull 1995).

Individuals will further be earning some income, for instance a taxi driver carrying the tourist, buys fuel from a petrol station and some car spare parts. The tourist buys some snacks what increase the demand and supply that leads to creation of industries that make the snacks and their by products. From this long chain the government stands to be the final gainer as it earns a tax from every level that the tourist affects.

Interest Rates:

This vary with the variation in demand and supply in a way that if the inbound tourist rate is low, their will be extensive lending by the banks thus leading to increased circulation of currency on the market or inflation so increasing lending rates will regulate the number of loan seekers thereby stabilizing the currency dominancy on the market. But if the outbound rate is low and the inbound high, the interest rates can be lowered so that the banks can be able to earn some interest (Seetaram and Dwyer 2009).

Global Economic:

Leisure contributes a lot in the global economy through brands recognition, advertisements, business interactions and has played a role in development of globalization (World Tourism Organisation 2000, Martin and Mason 1998, Leiper 1999).

For instance, when tourists visit countries where companies manufacture products, which they buy in their home countries as imports, they tend to buy them in bulk either for personal use or sell in their countries back at home. This is one way of advertising such products to other people who will also develop an interest in buying them thus boosting the economy both of their country and that of others.

Reference List

Australian Bureau of Statistics (2009). Australian National Accounts: Tourism Satellite Account, 2007-08. Australian Bureau of Statistics. Retrieved from:

Bull, A. (1995). The economics of travel and tourism, 2nd ed. Melbourne, Australia: Longman.

Bureau of Tourism Research (1995). Australian Tourism Data Card. Canberra: Bureau of Tourism Research.

Coalter, F. (2001). Realising the Potential of Cultural Services: the case for tourism. Edinburg: Centre for Leisure and Research at the University of Edinburgh.

Dwyer, L., & Forsyth, P. (1993). Assessing the benefits and costs of inbound tourism. Annals of Tourism Research, 21(3), 512-537.

Dwyer, L., & Forsyth, P. (1996). Economic Impacts of Cruise Tourism in Australia. The Journal of Tourism Studies, Vol. 7, No. 2, 36-43.

Dwyer, L., Forsyth, P. and Spurr, R. (2007). Contrasting the uses of TSAs and CGE models: measuring tourism yield and productivity. Tourism Economics, Vol 13, No 4, December pp. 537-551.

Kulendran, N. and Dwyer L. (2009). Measuring the Return from Australian Tourism Marketing Expenditure in Asia. Journal of Travel Research, vol 47, pp. 275-284.

Leiper, N. (1999). A conceptual analysis of tourism-supported employment which reduces the incidence of exaggerated, misleading statistics about jobs. Tourism Management, 20, pp. 605-613.

Martin, W. H. and Mason S. (1998). Transforming the Future Quality of Life. Rethinking free time and work. Sudbury: Leisure Consultants.

Seetaram, N and Dwyer L. (2009). Immigration and Tourism Demand in Australia: A Panel Data Approach. ANATOLIA: an International Journal of Tourism and Hospitality Research, Vol 20, (1) pp. 212-222.

Tribe, J. (2005). The economics of recreation, leisure & tourism. New York, NY: Butterworth-Heinemann.

Van, H. L. et al. (2007). Indirect Economic Contribution of Tourism to Australia and to Australian States and Territories 2003-04. Gold Coast, Qld: Sustainable Tourism Cooperative Research Centre.

World Tourism Organisation. (2000). Tourism Highlights 2000. Madrid: World Tourism Organisation.

World Travel and Tourism Council. (2010). Tourism Economic Research 2010. World Travel & Tourism Council, London. Web.

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IvyPanda. (2019) 'Economic Tourism in Australia'. 17 September.

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