ENVIRONMENTAL ANALYSIS PAPER - Essay Example

Westthorp (2010) summarized the fact that some hostels observed a decline of nearly ‘40 % against last business year’ while others reported business of ‘just 30 % capacity’. Moreover, the appreciation of Australian Dollar against world’s major currencies such as British Pound, Euro, US Dollar has also hampered growth because foreign tourists receive much lesser after exchange than what they used to get last year. In simple, they are now unable to spend greater number of days in Gold Coast Backpackers amid inflation and exchange fluctuations.

In short, potential customers are now demand higher quality goods and services from administration in Gold Coast Backpackers industry sector at relatively lower prices. It is recommended that various Gold Coast Backpackers and resorts should also adopt a rational pricing strategy to entice maximum customers (Westthorp, 2010). The bargaining power of specific suppliers (raw materials and input providers such as furniture, hostel goods, food etc.) is reduced because of decrease in total business activities and surplus capacity of resorts and hostels.

Indeed, suppliers’ business is directly dependent on Backpackers’ business and failure of the latter would also adversely impact the sales of suppliers (Jamieson, 2010). Indeed, the steep fall in aggregate demand of backpackers by tourists and adventurists has compelled potential investors to forgo their aim of entering and investing in tourism and hospitality businesses. It should be highlighted that threat of potential new entrants in this sector is low because of relatively lower returns and weak consumer response because of decline in real income and purchasing power.

However, Backpackers have been facing increased competition from Asian Backpackers because of their cheap offers to tourists (Jamieson, 2010). The threat of substitute products is relatively higher because existing Gold Coast Backpackers and resorts