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Hospitality, tourism and events 6

Hospitality, Tourism and Events

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Hospitality, tourism and events form one of the largest industries in Australia. The industry is dependent on various external factors such as government interventions, events, ecological changes and many more. The Australian industry like any other has experienced numerous challenges and opportunities as well. The effects global financial crisis of 2008-2009 for example affected the industry negatively. Other factors include global warming, government interventions, the Sydney Olympics, and technology. This paper will explore how such factors have had a positive or negative effect on the industry.

Positive Impacts

There has been rapid growth in the internet sector and according to Tourism Australia, tourism ranks highest in the category of products sold via the internet. By 2002 there were about 220 sites promoting regional tourism an increase from 118 in 2000. From these, 45.5% were already reaping high returns from online sales (Burgess, Parish, & Alcock, 2011, p. 349). The sites are offering ticket sales for events, accommodation bookings, and even online payment options. The web revolution has also encouraged new partnerships between industry stakeholders for example hotel and airline partnerships creating mutual links in their sites. Such partnerships are not only fostering tourism growth, but also national economic growth. As Buhalis (1998, p. 411) asserts technology is the new life line of the tourism industry and those that fail to adopt web technologies will suffer dire consequences.

According to Getz (2008, p. 403) events are a major tourism attraction and if well marketed they bring in high returns to the tourism and hospitality industry. Australia was fortunate to host the Sydney Olympics viewed as the greatest mega event. According to the Australian Tourist Commission (2001, p. 1), Australia is the first Olympic host to have successfully marketed its tourist attraction sites during and before the Olympics. The government contributed US $ 6.7 million to the Australian Tourist Commission towards promotion of Olympic generated tourism activities. The Olympic torch celebrations generated interest in local tours and the hospitality industry benefited through increased revenues from the over 4000 visitors (Brown, 2007, p. 317). The event also helped in refurbishment of some of the city’s attraction sites such as the Millennium Marquee which was re-designed to world-class status to cater for the high budget tourists.

The government has embarked on investment in the tourism sector and individual states have established local structures to market the tourism sector. Since the hospitality industry is directly dependent on the expansion of the tourism industry, it is gaining from such marketing in terms of increased guests seeking accommodation facilities. The Canberra government in particular provides several initiatives such as the Canberra and Capital Region Tourism Awards. Among the award categories is Excellence in Food Tourism Award. This offers hospitality industry stakeholders the opportunity to showcase their culinary expertise. The Award for excellence in Tourist Accommodation offers the hospitality industry an opportunity to market its accommodation facilities. Since these awards attract many guests, the industry is gaining form the positive publicity generated (Australian Capital Tourism, 2013).

Negative Impacts

USA, UK and Japan are among the top three countries that contribute to Australia’s inbound tourism. However the global financial crisis of 2008-2009 impacted the economy in these countries negatively and the number of inbound tourists from the countries have subsequently reduced. As a result, the Australian government had a decline of AUS 5 billion dollars between 2009 and 2010 (Yap, 2012, p. 113). Also, infrastructure development has been boosted on Bruny and Magnetic Islands however it has impacted the tourism numbers negatively. The government did not consult the locals adequately nor analyze the tourism appeal. Consequently the developments have pushed visitors away as many previously visited for the islands natural appeal and interaction with the local culture which is distinct from the rest of the country. Most of the infrastructures thus remain greatly underutilized (Moyle, Croy, & Weiler, 2010, p. 359).

Global warming is also impacting the Australian hospitality industry negatively. According to Pegg, Patterson, and Gariddo (2012, p. 659) the snow at the Alpine regions is dwindling and will not be sufficient to support skiing activities and the hospitality industry that depends on it by 2020. Currently the resorts are forced to close down during summer as the snow cannot last through the season. This has also affected the labor market. Due to the seasonal closure the industry is losing money on paying idle employees. Furthermore there is perception that seasonal employment is cheap and therefore the public is not looking for employment in such resorts (Pegg, Patterson, and Gariddo, 2012, p. 660).

The Sydney Olympics did not have positive impacts only. There were heavy financial implications on the event sponsors as they embarked on delivering world class hospitality services to guests. The hospitality sponsors booked accommodation in five star hotels, business class airline transport, and premium event tickets for the event. According to Brown (2007, p. 319) the hospitality sponsors spent over AUS$ 8 million in hospitality arrangements over the event period. Many hotels also expanded their room capacities while other apartments were converted to accommodation facilities in the buildup to the Olympics. They did gain from the increased room demand however the facilities are no longer in demand and thus there is idle capacity. Such idle capacity is a liability to the hotels as they have to maintain the rooms yet the rooms generate no income.


The positive and negative impact on tourism, hospitality and events will serve as an eye opener for future developments. The individual state governments are doing a positive job towards developing the industry by helping in the marketing. The governments have also used the internet positively for e-marketing. Some of the negative impacts such as global financial crisis will cease as the world economy is on a recovery. The defunct hotel rooms will also resume business if the Australian government manages to win a bid for other sporting events.


Australian Capital Tourism 2013, New categories for 2013 tourism awards, Canberra,

viewed 14 May 2013, < http://tourism.act.gov.au/industry-link/2013/05/new-categories-for-2013-tourism-awards/>

Australian Tourist Commission, 2000, International Olympic Committee (IOC)

Statement: Australian Tourism Program an Olympic Role Model, Australian Tourist Commission, Sydney.

Brown, G 2007, ‘Sponsor hospitality at the Olympic games: An analysis of the

implications for tourism’, International Journal of Tourism Research, vol. 9, pp. 315-327.

Buhalis, D 1998, ‘Strategic use of information technologies in the tourism industry’,

Tourism Management, vol. 19, no. 5, pp. 409-421.

Burgress, L, Parish, B & Alcock, C 2011, ‘To what extent are regional tourism

organizations (RTOs) in Australia leveraging the benefits of web technology for destination marketing and ecommerce?’, Electronic Commerce Research, vol. 11, pp. 341-355.

Getz, D 2008, ‘Event tourism: definition, evolution and research’, Tourism Management,

vol. 29, pp. 403-428.

Moyle, BW, Croy, G & Weiler, B 2010, ‘Community perceptions of tourism: Bruny and

Magnetic islands, Australia’, Asia Pacific Journal of Tourism Research, vol. 15, no. 3, pp. 353-366.

Pegg, S, Patterson, I & Garriddo, PV 2012, ‘The impact of seasonality on tourism and

hospitality operations in the Alpine region of New South Wales, Australia’, International Journal of Hospitality Management, vol. 31, pp. 659-666.

Yap, G 2012, ‘An examination of the effects of exchange rates on Australia’s inbound

tourism growth: a multivariate conditional volatility approach’, International Journal of Business Studies, vol. 20, no. 1, pp. 111-132.