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The Economic and Social Importance of Tourism: Australia Essay

The contribution of the tourism industry to economic growth and employment is now being recognised although, in international terms, Australia still lags well behind in tourism receipts. In 1982, Australia’s relative share of the market represented only 1.4 per cent of the OECD total, placing Australia on a par with countries such as Sweden and Portugal but eight to ten times below the level of the United States, Italy or France.

A 1981-82 survey on the economic significance of tourism by the Bureau of Industry Economics (BIE), showed that tourism makes a considerable contribution to both national income and employment and warranted more recognition as a growth industry. The BIE study estimated that tourism contributes 4.8 per cent to Australia’s Gross Domestic Product (GDP) and is responsible for employing 340,000 people or 5.2 per cent of the workforce. By way of comparison, tourism’s contribution to GDP and employment is equivalent to the combined textile, clothing and motor vehicle industries.

During the 12-month period of the survey, it was estimated that the total gross expenditure by both domestic and international tourists in Australia was $12.7 billion. After deducting transfers, imports and indirect taxes, the expenditure amounted to $7 billion, 15 per cent of which was due to international visitor expenditure. The BIE report also estimates that on average $1 million of international visitor expenditure creates, directly or indirectly, 34 jobs.

Some insights are provided by the BIE report into characteristics of employment in the tourism industry. Most of the expenditure generated by tourism, for example, is channelled into industries with a high degree of labour intensity. These include the restaurant and catering trade, hotels and motels, transport and storage, and retail trading. Tourism also makes a major contribution to the provision of employment opportunities for some disadvantaged groups.

While women hold only 36.7 per cent of jobs in the workforce as a whole, they hold 40.3 per cent of jobs in the tourism industry. There is also a notable level of unskilled and semi-skilled employment in the industry. Tourism has proved to be a large supplier of part-time work (defined as less than 35 hours per week ) and in particular, of short weeks consisting of 24 hours or less. The industry therefore has considerable potential for providing employment for those groups which find more conventional working hours unsuitable.

During the period of the BEI’s survey, Australians undertook 52.3 million trips of one night or more away from home in Australia. The average expenditure per trip was estimated as $156 per person. In addition, there were a further estimated 89 million day trips taken with an average expenditure per person per trip of $20. At the same time, estimates by the Australian Tourist Commission indicate that 936,700 foreign visitors arrived in Australia and spent an average $1,121 per person per trip. The average duration of these trips was 31 days.

Since the BIE’s survey the levels of both domestic and international travel have increased. For the twelve months ended December 1983, a total of 54 million domestic trips were recorded while international visitors for the year totalled 943,900. The number of Australian residents departing for overseas trips in the same period was 1.25 million with an average expenditure of $1360 per trip.

The largest share of visitors to Australia has traditionally been from its closest neighbour, New Zealand. Currently, visitors from New Zealand account for around one quarter of all arrivals; other major markets include the United Kingdom and Ireland, the United States, Japan, Central Europe and the Asian region.

Both the large number of departures from Australia and the fact that Australians on average spend more on overseas trips than inbound tourists, account for the negative tourism balance of payment. Recent trends, however, indicate that the gap between travel credit and debit is narrowing.

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