Economical Impact of Educational Tourism in Australia - Essay Example

Sur Economical Impact of Educational Tourism in Australia II. Literature Review Overview Foreign education visitors have been a key source of development for the tourism industry over the past decade. The market, worth $12.5B in 2007, is forecasted to remain having strong growth potential in the future. Tourism studies conducted in 2006 and 2007 documented two diverse segments, which were (National Centre, 7): Formal study visitors - those foreign education visitors aged 15 years and above who noted on their visitor arrival card that their primary reason for going to Australia was education; Non-formal / Informal study visitors - those foreign education visitors aged 15 years and above who noted on their visitor arrival card that their primary reason for visiting the country was for a purpose other than education but still did a course or studied during their visit. Per survey results, approximately 500,000 foreign education visitors studied in Australia in 2007. Of these foreign education visitors, 75% were formal study toursits and 25% were informal study tourists. Altogether, foreign education tourists stayed in Australia for 86 million nights and were worth around $7B to the tourism industry in 2007. This sum has not included yet the spending of friends and relatives that visited these foreign education visitors (National Centre, 11-13). Surname 2 Previous researches also revealed many important findings about foreign education visitors. These included (National Centre, 13): 1. Foreign education visitors on average stayed much longer in Australia than the average international visitor (151 nights compared to 32 nights). 2. On the average, they spent thrice more in total and four times more in the country than the average tourist did. 3. The largest source countries were China, India, South Korea, Malaysia, and Hong Kong. 4. Due to their longer stay, more expensive and formal course types, Chinese and Malaysians had the highest average trip expenditure while those from India and Hong Kong spent the most per night. Within these previous studies, the characteristics of formal and non-formal foreign education tourists were quite diverse as was the nature of the studies they took. FIGURE 1: Summary of Formal and Informal Study Tourism Market 2007: Characteristic Expenditure in Australia average per night average per visitor Length of stay Main source market Age Martial status Travel party Repeat visitation On a travel package Share of accommodation nights Main courses studied Length of course Educational institution Formal $90 $16,000 170 nights 16% Chinese 9% Malaysians 8% Koreans 50% are 20-24 years 20% are 15-19 years 18% are 25-29 years 88% are single 86% traveled alone 59% were return visitors 7% package Rental accommodation (65%) Undergraduate degree (36%) English course ((20%) Post-graduate degree (19%) 58% studied a course with a duration of 1 year or more University (62%) Informal $65 $7000 95 nights 26% Malaysians 20% Indians 10% Koreans 31% are 20-24 years 20% are 35-44 years 19% are 25-29 years 68% are single 80% traveled alone 51% were return visitors 11% package Rental accommodation (42%) English course (36%) Work-related course (11%) On-the-job / Internal training (8%) 82% studied a course with a duration of less than 3 months English language institute (31%) Source: Tourism Research Australia International Visitor Survey 2007 (National Centre, 14) Surname 3 Importance of the Study Tourism Market Foreign education market is known as a significant and growing industry for Australian tourism. In 2006, around 350,000 foreign education visitors stayed for approximately 44 million nights in Australia. In 2007, it grew to almost 500,000 education visitors. Although consisting of just 6% of all international tourists, foreign education tourists contributed around 30% of visitor nights and almost 30% towards total spend in Australia (National Centre, 14). Over time, the international education industry has shown continuous progress. Between 2001 and 2007, the average rate of increase per year was 9%. During 2006, foreign education tourists on average spent 137 nights in Australia, which was an increase of 8 nights from 2005. They also spent around $4B in Australia, which was an increase of over $825M on 2005. The year 2007 showed the highest rate of growth surpassing the value of regular tourism (National Centre, 16-17). FIGURE 2: International Education Visitors Trends in Numbers and Nights: Year Ending Dec 1999 Dec 2000 Dec 2001 Dec 2002 Dec 2003 Dec 2004 Dec 2005 Dec 2006 Dec 2007 Visitor Numbers (000) 158 181 213 261 267 279 285 328 500 Visitor Nights (000) 20, 376 24, 144 27, 610 33, 180 34, 257 36, 071 36, 932 44, 835 75, 500 Source: Tourism Research Australia International Visitor Survey Rolling annual databases (National Centre, 15) The Study Tourism Market Results from past surveys reveal that Australia has a considerable education market for short-term foreign tourists, which provides an extensive revenue for the tourism industry. In 2006, there were almost three million tourists to Australia, of which 7% had taken some form of study or course while in the country. These tourists Surname 4 contributed 33% of visitor expenditure and 35% of visitor nights within the country. Also in these previous surveys, it was shown that about 75% were formal study visitors and around 25% were non-formal study visitors. For the whole of 2006 and 2007, it was estimated that around 850, 000 international tourists had studied in the country. Of these, roughly 210, 000 were non-formal and 640, 000 were formal study visitors (National Centre, 18-20). FIGURE 3: Segmenting the Study Tourism Market for Two Years: Source: Tourism Research Australia International Visitor Survey in 2006 and 2007 (National Centre, 19) Per the previous researches, the majority of the non-formal study tourists said they had visited Australia for Employment (more than 10%), Business (around 30%), or a Holiday (more than 50%) (National Centre, 21). Study Tourist Average Expenditure Foreign education visitors were more likely to stay in Australia much longer than the average foreign tourist does. Consequently, they accounted for roughly 33% of all foreign visitors spending within Australia in 2006 and 2007. On average, foreign Surname 5 education visitors spent thrice more on their trip than the average foreign tourist does and four times as much in Australia. Overall, around 90% of their trip expenditure was spent within the country compared with around 60% for the average foreign tourist (National Centre, 21). Studies also show that prior to arriving in Australia, non-study and study visitors spent the same amounts of money on their international airfares and prepaid packages. Yet, a higher percentage of foreign education visitors pay for their own international airfare to the country (over 90% compared with around 75%). While in Australia, foreign education visitors were more probably to have spent money on (National Centre, 23-24): 1. Local public transport and taxis than non-study visitors (over 80% versus around 65%) 2. Paid for postage, fax, or phone than non-study visitors (over 75% versus around 40%) Foreign education visitors had a lesser average spend per night on living expenditure than non-study tourists had but were more likely to have paid for major expenses such as a car or their education. Their top three purchase items were (National Centre, 26): 1. Education (over $50 per night) 2. Motor vehicles (over $40 per night) 3. Accommodation, food, and drink (over $30 per night) In contrast, non-study tourists top three expense purchases were: 1. Accommodation, food, and drink (over $50 per night) 2. Take-home shopping / souvenir items (over $20 per night) 3. Rental vehicles (over $20 per night) Surname 6 Expenditure by Source Market Because of their more formal and expensive course types and longer stay, foreign education visitors from China and Malaysia --- all for around $21,000 --- had higher average trip expenditure than those from other source markets. Some foreign education visitors coming from New Zealand had the lowest average trip expenditure --- around $5000 --- due to a higher propensity to take on short trips that combine study and business, and cheaper airfares. Indians had the highest average expenditure per night, followed by other Asian countries. Formal international education tourists' average trip expenditure of around $17, 000 was more than twice that recorded for non-formal study tourists, which is around $8, 000. Within Australia, they spent on average $15, 000 (roughly $90 per night) compared with $6, 000 (around $65 per night) (National Centre, 25-26). Generally, formal foreign education tourists spent greatly more on their education fees than non-formal foreign education tourists did. In general, these fees accounted for roughly 45% of their trip expenditure versus 15% for non-formal foreign education tourists. Spending on items such as accommodation, food, and drink (over 35%), international airfares (around 20%), and organized tours (about 10%) accounted for a higher percentage of trip expenditure for non-formal foreign education tourists. Actually, with expenses on education fees removed, the non-formal international education market would be spending more per night on average than the formal international education market (around $55 compared to roughly $45) (National Centre, 27-29). Flow-on Impacts An additional benefit of the international education tourism market is that families and friends of those studying visit them in the country. Around 20% of foreign education Surname 7 tourists have family visit, while around 15% have friends visit during their stay. Formal foreign education tourists were thrice more likely than non-formal foreign education tourists to have been visited by family (23% compared to 7%). They were also twice as possible to have had friends visit (17% compared to 8%). Usually, friends or relatives only visited a maximum of two times. Of those foreign education visitors that were visited by friends or relatives on their trip, most stated they were visited once by relatives (over 75%) and friends (over 70%). So, based on these previous surveys, it can be stated that (National Centre, 28-29): - for every three formal foreign education tourists to Australia, one relative visits - for every 4.5 formal foreign education tourists, one friend will visit - for every 12.5 informal foreign education tourists to Australia, one relative visits - for every ten informal foreign education tourists, one friend will visit Also, per earlier studies, it was revealed that foreign education visitors stayed an average of over 150 nights in the country, which was far higher than the average international tourist (approximately 30 nights) and the non-study tourist (approximately 20 nights). Then, due to courses or studies taken, visitors stayed on average an extra 130 nights longer than those who did not take any course or study. Per these reports, Malaysian tourists had the highest average length of stay (approximately 230 nights), and those from the U.K. the lowest (approximately 40 nights). For the non-formal foreign education market, the longest average stay was for Asian visitors reaching approximately 260 nights (National Centre, 34-25). Surname 8 By applying the average expenses of all those visiting families and friends, it is estimated that these friends and relatives who visited foreign education visitors spent over $158M in Australia in 2006 and boomed to around $300M in 2007 (National Centre, 29). FIGURE 4: Flow-on Impacts of the Study Tourism Market for Two Years: Study visitors # of family visitors per study visitor # of study visitors who have friends visit Estimated # of family visitors Estimated # of friend visitors Estimated # of family and friend visitors Average visiting friends and relatives spend per visitor Total friend and family spend ($M) Formal Study Tourists 446, 250 0.3 0.2 140, 000 90, 000 230, 000 $1, 700 $391 Non-formal Study Tourists 148, 750 0.1 0.1 15, 000 15, 000 30, 000 $1, 700 $51 All Study Tourists 595, 000 0.3 0.2 155, 000 105, 000 260, 000 $1, 700 $442 Source: Tourism Research Australia International Visitor Survey in 2006 and 2007 (National Centre, 31) Additionally, tourists from Asian nations were the most likely to be taking courses or studies when visiting Australia. This compares with a much lower proportion for tourists from nations, particularly European ones. The greater probability of Asian tourists studying while in Australia shows their knowledge of the country as an education destination is high. Asian foreign education segments dominated both the formal and non-formal international study markets in Australia (National Centre, 36). Reference: National Centre for Vocational Education Research (Australia). Australian Vocational Education and Training Statistics: VET in Schools 2007 : Summary. Adelaide, S. Aust: NCVER, 2008. Read More