Condition Of Australian Hospitality Industry †MyAssignmenthelp.com

Question: Discuss about the Condition Of Australian Hospitality Industry. Answer: Introduction Over the bygone years there has been an extraordinary development across the business sector of Australia. Among the many segments, the hospitality industry is recognized to be one of the most influential economic drivers not only at a local and state rank, but also at a national level. As per Chen (2014, p. 431), with an employment of more than 300,000 personnel over 6,807 hotels, restaurants and bars, the Australian hospitality industry generates an annual income ranging between $10 billion to $14 billion. However, Bugeja et al. (2014, pp. 248-261) states that there has been a recent downfall of sales performance due to certain factors. This particular project focuses on the various issues that have greatly affected the hospitality business of the country. In order to identify and learn about the different characteristics, the report includes a literature review as well. Project Objective The major objectives for this project are as follows: To study the current condition of Australian hospitality industry To recognize and categorize factors that affects sales performance of the sector Project Scope Despite of being well developed, the Australian hospitality industry has been faced with some challenges that directly or indirectly impacts its sales volume and thereby revenue generation. This particular project along with studying the past conditions focuses on the present to be able to find out the most affecting elements. Further, the project also makes use of several primary and secondary data sources with a motive to develop an accurate report on the topic. Literature Review: Australian Hospitality Industry According to Chon et al. (2013, pp. 103-121), hotels, restaurants and pubs in Australia have acted as significant contributors to the economic prosperity and development of the nation. From the first pub built after European settlement to a spread of more than 6,500 set ups across the country, hospitality industry have undergone a long and tiring journey. However, it is noticed that among the growth of the sector, there has emerged certain factors that has not only impacted stability and efficiency, but also affected revenue growth and sales performance of the hospitality industry. As per Tar et al. (2014, pp. 1-12), the various elements that affect business can be typically divided into two parts, controllable and uncontrollable factors. In addition to certain internal characters, there exist a number of externalities that has changed the face of the segment. The different micro and macro component that put a pressure on the hospitality industry are the following: PEST Analysis Political Factors: 1. Legislative changes 2. Unplanned policy integrations 3. Government regulations 4. Wars and domestic conflicts 5. Internal trading Economic Factors: 1. Income rate changes 2. Tax fluctuations 3. Interest and exchange rate falls 4. Declining markets Social Factors: 1. Changing customer behaviour 2. Lifestyle trends 3. Demographical changes 4. Media opinions 5. Ethical issues Technological Factors: 1. Innovation growth 2. RD instalments 3. Technology incentives 4. Technology maturity 5. Market entry barriers 6. Automation needs 7. Digital economy 8. Technological rate change 9. Telecommunications Table: Macro and Micro Affecting Factors (Hospitality Industry) (Source: Assaf et al., 2017, pp. 270-279) Major Factors Affecting Sales Performance in Australian Hospitality Industry The hospitality industry of Australia has been booming for last few decades now. Although the sector produces a huge revenue, Kandampully et al. (2015, pp. 379-414) states that there has always certain factors that put a negative pressure on business. As compared to earlier situations, the present has felt a hardened pinch of the factors. In addition to a down fall of profits, the industry has also been confronted with lowered customer visits, employee complains and degraded trade volumes. The various factors that significantly impacts sales performance in the Australian hospitality industry are as follows: Intensive Competition: Being a high profit earning section, the section is subject to a large number of entrepreneurial ventures. An increase in the competition noticeably increases bargaining power of the customers, which in turn result in a downfall of income levels of companies. Based on the study of Jones et al. (2016, pp. 36-67), it can be noticed that a 59% of the sector believes that a rise of rivalry has affected their sales performances. Additionally, foreign intervention in the industry has also increased by 7.4% in the last two years (2015-2016). Degraded Customer Retention: An increase of organizations providing similar kind of services has provided consumers with innumerable options to choose from. Further, competitive prices set by every other firm acts as a major attraction for the people. On the other hand, almost 54% customers in the nation also prefer to try new restaurants or bars rather than being loyal to any one of them. Statistically, 60% companies have faced a stretched sales figure due to this problem (McManus, 2013, pp. 140-152). Changing Customer Perspectives: Modern hospitality businesses are not only based on high quality - cheap rate products, but also give a increased importance to ambience, service, infrastructure and many other factors (Cantallops and Salvi, 2014, pp. 41-56). The uncontrollable preferences of customers greatly tend to affect the sector. On other hand, with a change in the demographics of the Australian population there is a change in their likings as well. Increased Wastage: Wastage of products by companies have increased by 5.4% in the current year. It is noted that a progressive rise of competition levels have put a direct pressure on food and beverage firms. Further, improper planning and management have also contributed to the loss of the business in the sector. Employment Destabilisation: Surviving in the hospitality industry of Australia is a challenge for business organizations (Xie et al., 2014, pp. 1-12). In addition to a sustainable management system, presence of highly skilled and well trained employees helps to develop sales and revenue. However, employment of such workers is an issue for about 54% enterprises in the sector. Apart from hiring, poor retaining of staff gives to rise to performance disputes. Increase of Operating Costs: Among the several factors, one of the most directly impacting elements is the increase of operating cost. The presence of penalty rates and employment charges put a huge weight on the finances of a firm. Additionally, existence of a complex taxation system and GST obligations in the Australian hospitality industry play a major role in degrading sales profits. 72% of the business owners in the sector classify penalty rates to be among the top three hurdles for their firm. On the other hand, GST and taxes stress about 45% of the industry. Further, the increasing Eftpos and credit card charges also tend to cut down sales volumes (Chon et al., 2013, pp. 103-121). Conclusion Based on the above project it can be inferred that the Australian hospitality industry has been confronted with several hurdles in the modern years. With a growth and development of the nation there has been a rise of several factors that tend to affect smooth flow of business in the sector. Despite of being well developed, the segment is faced with numerous issues that need to be managed. It is noted that an increase of competition, loss of customers, change of perspectives, increase of wastes and employment problems have noticeably affected sales for organizations. Further, a rise of operating costs also puts a pressure on financial performance of firms as well. Lastly, it can be concluded that in order to regain sales health and maintain efficiency enterprises need to plan, control and thereby manage negativities. References Assaf, A.G., Josiassen, A., Woo, L., Agbola, F.W. and Tsionas, M., (2017). Destination characteristics that drive hotel performance: A state-of-the-art global analysis.Tourism Management,60, pp. 270-279. Bugeja, M., Lu, M., and Shan, Y. (2014) Cost Stickiness in Australia: Characteristics and Determinants.Australian Accounting Review,25,3, pp. 248-261. Cantallops, A.S. and Salvi, F., (2014). New consumer behavior: A review of research on eWOM and hotels.International Journal of Hospitality Management,36, pp. 41-51. Chen, J. S. (2014).Advances in hospitality and leisure: Volume 10. United Kingdom : Emerald, p. 431. Chon, K. S., Barrows, C. W., and Bosselman, R. H. (2013).Hospitality Management Education. Hoboken: Taylor and Francis, pp. 103-121. Jones, P., Jones, P., Hillier, D., Hillier, D., Comfort, D. and Comfort, D., (2016). Sustainability in the hospitality industry: some personal reflections on corporate challenges and research agendas.International Journal of Contemporary Hospitality Management,28(1), pp. 36-67. Kandampully, J., Zhang, T. and Bilgihan, A., (2015). Customer loyalty: a review and future directions with a special focus on the hospitality industry.International Journal of Contemporary Hospitality Management,27(3), pp. 379-414. McManus, L., (2013). Customer accounting and marketing performance measures in the hotel industry: Evidence from Australia.International Journal of Hospitality Management,33, pp. 140-152. Tar, J.J., Molina-Azorn, J.F., Pereira-Moliner, J., Lpez-Gamero, M.D. and Pertusa-Ortega, E.M., (2014). Quality Management and Performance in the Hotel Industry: A Literature Review. InAction-Based Quality Management. Springer International Publishing, pp. 1-12. Xie, K.L., Zhang, Z. and Zhang, Z., (2014). The business value of online consumer reviews and management response to hotel performance.International Journal of Hospitality Management,43, pp. 1-12.Bottom of Form