Table 1: Exchange rate Table: 16SITUATION ANALYSISIntroduction As per WTO (World Tourism Organization), Tourism is defined as ‘activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited’ (ABS 2004, 48). If the person stays longer than one year at a place, they are no longer regarded as a tourist. Holiday travel is the dominant sector of the international travel market though there are variety of reasons why people travel.
It could be plain holiday, visiting friends and relatives, business, employment and sports, academics etc. The tourism industry is one of the main sources of income in many countries (Williams and Shaw 1988, Coccossis and Nijkamp 1995). It is one of the fastest growing industry in the world and it accounts for about 10.7% of the world’s GDP It is growing at a rate of about 7% per annum. Since a range of factors influence destination competitiveness, including price and non-price factors, there is a need to develop indicators which reflect this.
These factors could be demographic, qualitative or price factors. The development of a set of competitiveness indicators would serve as a valuable tool in identifying what aspects or factors influence tourists in their decision to visit other countries. Demographic factors include factors such as population, income in origin country, availability of leisure time, education levels etc. As per Crouch (1992, 1995), the countries that have high economic growth show growth in outbound tourism as well. Qualitative Factors include image of the destination and quality of tourist services being provided, cultural similarities etc.
The strength of these factors usually reflect changing fashions and tastes (Crouch and Ritchie 1999) On the other hand, the Price Factors such as the transportation costs, accommodation, food and beverages, entertainment etc. determine the flow of visitors to the place. Obviously, if the place is higher priced than comparative destinations, tourist will not go to such a place specially since now-a-days, there are many good alternatives available to the tourists. There have been several studies on the price competitiveness of different destinations.
In one of these, it has been shown that an increase in relative costs is linked with a fall in market share in travel from every origin country. (Edwards, 1995) Thus there is evidence that international travelers are sensitive to price (Crouch 1992) Since price and exchange rate are linked together, it is important to study these parameters as well. Moreover it has been seen that destination competitiveness is also associated with the economic prosperity of residents of a country (Crouch and Ritchie 1999, Buhalis 2000). Ultimately, however, it translates to spending power of its residents which can be spent on tourism. Background information: Tourism is one of the world's fastest growing industries, and has been identified as a means of generating national income in less industrialized economies.
Like other countries, Australia has also promoted tourism as one of the major source of national income According to scholars, holiday travel to a destination is influenced by two major factors that is the attractiveness of the destination and the ability of tourists to travel to that destination in terms of situational constraints (Woodside and Lysonski 1989; Um and Crompton 1990 and 1992; Crompton and Ankomah 1993).
They defined the situational constraints income, travel prices, time and health as those critical factors. It was shown by Um and Crompton (1992) that ability of travelers to travel is more important than the attractiveness of the destination.