Implication of LCCs to Melbourne Tourism Sector

Document Type:Thesis

Subject Area:Tourism

Document 1

Depending on the image that a country sells out to the visitors, a country is able to create more market for its products abroad as well as to attract more visitors. A more direct implication of international tourism is the boosting of the local economy through the amount of money spend by the tourists during their stay in the country. Moreover, the government is also able to promote cohesion between its citizens through local tourism. As a result, every other government in the world makes effort to improve the performance of their tourism industry. International and local tourism is therefore of great importance to the Australian continent, particularly to the Victorian city of Melbourne. The proliferation has sparked the shift of preferred modes of transport in Australia from rail, personal cars, and rail to air transport.

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The Low Cost Carriers have led to an increase in the use of air transport due to the low fare (Forsyth 224). One of the implications of the proliferation of the low cost carrier in Australia has been the creation of new tourist movements to popular tourist destinations as well as emerging tourist destinations in Australia (Koo et al. According to Crouch (1995) and Sinclair (1998), the low fares associated with Low cost carriers has led to an increased demand for tourism in Australia. For instance, the overnight tourist expenditures in Victoria amounted to $ 26 billion in the year 2017, with International tourists contributing nearly half of the amount (Business Victoria 2017). The increased air travel to Melbourne, which is one of Australia’s leading business destinations, has led to attraction of foreign aviation companies to the market.

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Companies such as Air China, Sri Lankan Airlines, Japan Airlines, and Air Canada launched new routes into the city back in 2017. A report produced by the Tourism Industry of Victoria in 2010 showed that education, holidays, business, and visiting of relatives and friends were the leading tourist attractions in the State of Victoria. Most of the international tourists came from Asian countries including Malaysia, China, New Zealand, and India (Koo et al. Other top sources of International tourists were the United States and the United Kingdom. The pie chart below provides a breakdown of the top nations from which international tourists in Victoria come from and the amount of revenue they generate for the Victorian tourism sector in terms of the amount of overnight expenditure.

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The Republic of China is the single leading source of the income generated by the Victorian Tourism sector in terms of overnight expenditure. The table below shows the performance of the different sectors in the Victorian Tourism goals set to be achieved by 2020 and their current performance. SERVICE ACHIEVED REMAINING Air capacity- International 106 -6 Room Supply 100 0 Air Capacity – Domestic 75 25 Domestic Overnight Spend 53 47 International Spend 40 60 As the data shows, the aviation industry performance has been exceptional. The exceptional growth can be attributed to the proliferation of the low cost carrier services. In other words, the tourism sector of Victoria would have fewer domestic and international tourists were it not for the convenience that came with the proliferation of the Low cost carrier services.

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Furthermore, most of the incoming tourists would spend less time and money in Victorian cities such as Melbourne due to the high cost of transport prior to the liberalisation of the civil aviation industry in Australia. Moreover, the liberalisation of the Australian civil aviation has seen the entry of several low cost carrier airlines into the market (Whyte et Al. The result has been a healthy competition which has resulted in cheaper and better air transport services. Implications for the Future The proliferation of the low cost carrier services has implications in the future of the tourism sector of the state of Victoria and the city of Melbourne. All in all, the Low cost carrier services have been to the benefit of the Melbourne tourism sector.

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