#JapanInAustralia

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Economic Contributions of Japanese Tourists on Australia

Economic Contributions of Japanese Tourists on Australia - The economic contribution of Japanese tourists to Australia is examined in a series of categories. Expenditure data by state reveal significant differences in the origins and patterns of tourism. Expenditure by Japanese tourists is concentrated in a relatively small number of destinations reflecting the needs of group travel. Where destinations become popular, the economic benefits to the local community are substantial. For instance, the presence of an average load of tourists throughout the year can provide gainful employment for a regional workforce, create a choice of budget or luxury residential accommodation, and satisfy the needs of a variety of recreational suppliers and essential services.

Japanese tourism generates close to $1.5 billion income annually between the transport, entertainment, and retail industry sectors from the purchase of transport and tour services and the acquisition of a wide range of consumer goods. In addition, hotels, catering, and public houses receive $0.7 billion income, which is used principally to pay wages to employees. These disbursements generate further economic activity residing in areas external to the leisure industry since the populations of Australian cities and resort centers can utilize their incomes to buy goods and services such as food, shelter, clothing, and transport.

The degree of economic resilience of Australia, cities, and resort centers is influenced by the fraction of profits arising from Japanese tourism that increase accumulations of Australian-owned capital or, alternatively, are repatriated to foreign investors. Australia, as well as the local communities of cities, has access to matters since significant participation in the ownership of hotel properties and tourism businesses can enhance economic benefits generated from a country's attention to the tourist needs of foreign visitors. The expansion of Australian ownership requires substantial risk and the allocation of financial resources. Although there is a shortage of quantitative information to indicate the current level of foreign investment in tourism facilities in Australia, it is inferred that a substantial level of such ownership is resident in the offshore captive funds of Japanese financial institutions that have specialized in hotel acquisitions around the world. The enhanced appeal of major Australian cities and resort destinations for the entertainment and recreation of Japanese visitors and the increasing desire of Australians to obtain exposure to Southeast Asian culture in order to reflect the present cultural dimension of Australasia provide a foundation for selected groups of international guests arriving at major convention and conference venues. However, the foreign presence of offshore real estate funds can expose domestic tax jurisdictions to potential tax avoidance by foreign nationals seeking to apply legal reduction definitions despite the availability of various international double tax treaty safeguard clauses.

Spending Patterns

Since the Japanese economy has been especially affected by the recession, with its attendant depreciation pressures on the yen, it is important to examine the factors that influence Japanese tourist spending. Overall spending patterns for Japanese tourists to Australia indicate that Australia is an expensive destination for the Japanese when it is considered that the distance is greater than for Hawaii, which is the most preferred destination in the Pacific. Also, Australia is a relatively higher-priced destination compared to Southeast Asia. Japanese tourist awareness of Australia is low, and they invariably come to see the animals and the Barrier Reef. On spending, the major components are visiting attractions, meals, and accommodation, as expected.

Japanese tourists are not shy about spending, displaying a more income-flexible pattern compared with other sorts of spending. It is important at the budget stage for Japanese tourist marketers to try and maximize the days tourists spend in Australia. Policies that leave spending to the discretion of the tourists while in Australia, such as relaxation of duty-free allowances, would be favored over direct income stimulus as a way of influencing budgets. The greater income flexibility is shown in the elasticity, which was found to be lower than -1.0 in relation to the visits. Factors encouraging a longer stay will act in synchrony to encourage further spending in Queensland (an average of 62.2 nights across all destinations), and so policies aimed at getting Japanese holidaymakers to see more will bear more fruit than they appear, at first sight, to be worth.

Job Creation in the Tourism Sector

In 1994, it was estimated that there was on average 1.14 jobs created from each Japanese visitor to Australia. Another estimate was slightly lower at 0.98 and up to a low estimate of 0.9. This would result in a total of around 31,000 to 35,000 jobs directly or indirectly supported by Japanese origin visitors to Australia. Once worker redistribution and other factors were taken into account, there was a net employment effect of between 21,000 and 27,000 jobs directly sustained by Japanese origin visitors in Australia. An analysis of the impact of tourists and their spending in Australia was then conducted. This analysis used input-output tables of the two major cities and tourist-dependent areas and determined that at least 23,300 jobs in Sydney and 15,700 in Queensland directly resulted from the visitors to those locations. These jobs had been calculated to be a result of the cash spent, which was $3.5 million and $2 million respectively.

It can be seen that both of these two sources have over 1 job created from each Japanese tourist. However, when the burden of new infrastructure and other outgoings on the general and state governments' budget is tallied, it can be seen that between one to three jobs are lost for every 9 or 10 new Japanese tourists. Some workers lament that the distribution of Japanese tourist cash is lopsided and that little is passed on to citizens residing in tourist areas. It was found that no new jobs could be attributed to Japanese tourism in the area that was being studied. Sister markets, especially Queensland, had received significant funding, support, and backing from their Japanese counterparts and had a high profile in Japan, which would have reflected negatively on the brother area.