An Evaluation of Economical Impact on Educational Tourism in Australia - Research Paper Example

Economical Impact of Educational Tourism in Australia I. Introduction Replacing tourism as the top services export and turning out to be the country’s third overall biggest export is international education as its value grew by 21% in 2007. Early this year, the Australian Bureau of Statistics released figures of the 2007 value of education exports totaling to $12.5B compared to $11.5B for tourism. In that same year, education was valued more than the country’s other export industries, with the exemption of iron ore that is worth $16B and coal that is worth $20.1B (National Centre, 5). II. Background of the Problem Recent reports on foreign students in Australia revealed the amount of their expenditures while studying in Australia. It is known that international students are not subsidized by the Australian government and pay full fees for all courses. This mandate is under the Education Services for Overseas Student (ESOS) Act under the Federal legislation. An examination of recent researches and data indicates that educational tourism revenue have been steadily gaining an upward strength and ultimately surpasses tourism as the top services export this year. Recent studies show that 40% of the total expenses of international students were spent on tuition fees, and the remaining 60% were spent on other goods and services such as food and accommodation (National Centre, 7). III. Problem Statement The research will aim to formulate conclusions as to the reasons for this large growth of educational tourism in the country. IV. Research objectives This paper will discuss the effects of educational tourism to skilled immigration and travel and tourism, and detail the business industries who greatly benefit from international education. The paper will also evaluate which five countries are the top sources for international students, and the possible reasons why these countries generate the most number of foreign students. V. Research question Why is Australia the top destination for foreign students? How great is the impact of this export sector to the country’s economy? VI. Theoretical and Conceptual Framework and Significance of the Study Since the number of foreign students in Australia is considered relatively high, it is fair to hypothesize that a large part of the country’s overall revenue is generated from the expenses of these population group. It is also important to keep in mind that these foreign students may be considered as an investment in the country’s future as numerous foreign students have acquired quality education in the country before, and that allowed them to gain significant qualifications that definitely created a difference in their lives. These graduates will be highly skilled in their careers and can be influential in their own countries in the future. Their past bond with Australia at a major point in their lives will aid Australia in creating bridges on people-to-people, cultural, and business ties with these nations. Those students who will gain permanent residence in the country will also definitely give positive impact on Australia. Since most of these students are taking up courses in the vocational education and training fields, these skilled people can make major contributions to Australia by filling skill shortages in some fields. VII. Scope and Limitation In this study, statistics of foreign student expenditures, foreign student country sources, and travel tourism linked to international education were collected and analyzed. One-on-one interviews were done in a limited range just so to support the claims of the statistical data gathered from legitimate sources. VIII. Methodology As every research problem is unique, a generally applicable research design does not exist, and the most appropriate approach for each research problem and its objectives must be selected (Burns and Bush, 116) to ensure that the undertaken research is valid and reliable (Polonsky and Waller, 84). In the research study at hand, the chosen design is quantitative method and not qualitative method. The reason for this is because per Bush and Burns (200, p. 211) the term qualitative research is interchangeable with exploratory research and refers to “research whose findings are not subject to quantification or quantitative analysis” (McDaniel and Gates, 128). Qualitative methods can be characterised as “interpretative”, “subjective” and “introspective” and the research findings are not conclusive or representative of the population of interest to the researcher due to small sample sizes (McDaniel and Gates, 130). Relevant secondary literature, such as journal articles about similar research topics and industry information, was reviewed in order to clarify and refine the research objectives and to specify the correct methodology (Polonsky and Waller, 85). The findings and methodology of the identified key literature provided essential information and served as a basis for the current research study. However, as other researchers have previously collected secondary data for some other purpose, it is necessary to assess the accuracy and relevance of these data to the current project (e.g. the data source, purpose of the study, data collection method, main findings, how current is the research and is it consistent with other information, etc.) (McDaniel and Gates, 94-95). Some secondary data was not relevant or applicable to the current research problem, because the findings were outdated and reporting units, measurement units and class definitions did not match (Tull and Hawkins, 103-104). The sample size was 25. The sampling method employed was non-probability sampling, specifically judgement sampling, as respondents were targeted specifically based on approachability, and only those with an active opinion were selected. IX. Research Instrument Nominal Scale The values are assigned to categories in no particular order. The assignment of the values is arbitrary and holds no particular meaning or order. The role of a nominal scale is to simply label objects (Burns and Bush, 276). In this research, the nominal scale involves four yes-no questions and one multiple choice question. It focuses on asking the respondent to tick a box. The questions are aimed to establish the bond of the foreign student to Australia and the possibility of the country to gain benefits from the student’s career in the future and the courses they take in Australia. Ordinal Scale An ordinal scale allows the respondent to rank-order the respondents or their responses with the higher the value assigned (Burns and Bush, 276), the higher the category, like personal annual expenses. Ordinal scales do not possess the distance or origin scale characteristic where distance demonstrates an absolute difference between objects and origin demonstrates that there is a particular starting point. 15 out of 20 questionnaire questions used ordinal scale to determine the total expenses of the foreign students in different industries. This was done to determine the industry that best benefits from foreign education. Descriptive Statistics Descriptive analysis of the data at hand was mainly used for the research. X. Sources and Sampling Method Sources used were from the answered questionnaires of the 25 respondents. Before the respondents were chosen, data from the Australian Bureau of Statistics were analyzed to ensure that proper representation of each student nationality will be done. Per the data from ABS, the tops five source countries for foreign students are (from least to most) Hong Kong, Malaysia, South Korea, India, and China. Thus, five foreign students from each country were selected as respondents. XI. Data Analysis (Questionnaire Data) Considering the numbers of foreign students in Australia is roughly 500,000 in 2007, then the 25 respondents consist of .005 of the entire populace of foreign students. The total of their responses will be analyzed and compared to the total statistics provided by the ABS to establish the validity of the data. The following statistics from ABS were as of February 2008 (National Centre, 12): Expenses: Annual Total: Expected Survey Total: Housing $3.5B $175,000 Food and groceries $2.5B $125,000 Other major expenses $1B $50,000 Course related expenses $952M $47,600 Telephone cost $812M $40,600 Entertainment and recreation $812M $40,600 Car costs $560M $28,000 Clothing $504M $25,200 Health costs $392M $19,600 Travel $336M $16,800 Utility costs $280M $14,000 Alcohol and cigarettes $280M $14,000 Transport $252M $12,600 Household goods $224M $11,200 Other minor expenses 196M $9,800 In comparison and contrast to the gathered survey data: Expenses: Expected Survey Total: Survey Total: Housing $175,000 $170,000 Food and groceries $125,000 $120,000 Other major expenses $50,000 $55,000 Course related expenses $47,600 $50,000 Telephone cost $40,600 $40,000 Entertainment and recreation $40,600 $40,000 Car costs $28,000 $30,000 Clothing $25,200 $25,000 Health costs $19,600 $20,000 Travel $16,800 $15,000 Utility costs $14,000 $15,000 Alcohol and cigarettes $14,000 $15,000 Transport $12,600 $10,000 Household goods $11,200 $15,000 Other minor expenses $ 9,800 $10,000 The Survey Total data were acquired through averaging. The responses of the respondents were established as accurate by the data from ABS. Data also shows that most of the expenses were spent on housing or accommodations and food supplies. These business industries benefit most from international education in Australia. Also, out of the 25 respondents, 12 students answered that they are taking up English courses in Australia, 9 answered they are taking up vocational training courses, and the remaining four answered they are taking up other courses. The first two courses were given emphasis on the questionnaire as they are considered the fastest growing study areas in the country. It can be inferred that these fields of study are on a steady upscale growth due to the large number of students coming from developing non-English speaking nations like Hong Kong, Malaysia, South Korea, India, and China. The four other questions using the nominal scale were on the probability of gaining business relations with these students in the future. All respondents answered positively. XII. Conclusion Therefore, with Australia’s total population of 21.5M (National Centre, 3), the foreign students compose roughly 2% of its entire population. Moreover, with the country’s GDP of $630B, the international education revenue of $12.5B is approximately 2% of its GDP. This is a successful feat as not every component of the nation is able to come up with a ratio of 1:1 in revenues. XIII. Recommendations From a purely positive economic standpoint, educational tourism has basically been a striking factor behind the progress of the country’s economy. In recent years as it provides considerable revenue to the nation’s GDP and produces broad employment opportunities in numerous areas from transport, accommodation, tour operators, theme parks, restaurants, museums, to souvenir stores. The consequences of the direct foreign income acquired from tourist expenses are important in the sense that they can be utilized to pay the nation’s requirements to sustain the basic demands of the country. Since a large part of the country’s income comes from international education, and a big part of the foreign students’ population are from emerging nations, it will be safe to consider creating more attractive incentives for these students and their families. Attractive international advertisements and campaigns can also be effective. XIV. Questionnaire Sample We are surveying foreign students who are currently enrolled in any courses in the country. Your help in completing this questionnaire is much appreciated. Please be assured that all your responses are confidential and will not be linked to you in anyway. A. How much are your estimated annual expenses on the following products / services? Please select only one: a. Housing $0-$2500 $2500-$5000 $5000-7500 above $7500 b. Food and groceries $0-$2000 $2000-$4000 $4000-$6000 above $6000 c. Other major expenses $0-$1000 $1000-$2000 $2000-$3000 above $3000 d. Course related expenses $0-$1000 $1000-$2000 $2000-$3000 above $3000 e. Telephone cost $0-$1000 $1000-$2000 $2000-$3000 above $3000 f. Entertainment and recreation $0-$1000 $1000-$2000 $2000-$3000 above $3000 g. Car costs $0-$500 $500-$1000 $1000-$1500 above $1500 h. Clothing $0-$500 $500-$1000 $1000-$1500 above $1500 i. Health costs $0-$500 $500-$1000 $1000-$1500 above $1500 j. Travel $0-$500 $500-$1000 $1000-$1500 above $1500 k. Utility costs $0-$500 $500-$1000 $1000-$1500 above $1500 l. Alcohol and cigarettes $0-$500 $500-$1000 $1000-$1500 above $1500 m. Transport $0-$500 $500-$1000 $1000-$1500 above $1500 n. Household goods $0-$500 $500-$1000 $1000-$1500 above $1500 B. What course are you taking up? Please select only one: _____ English Training Course _____ Vocational Course _____ Others C. This will serve to evaluate your affiliation with Australia. Please select the most likely choice you will have in the future: _____ I will apply for permanent residence in Australia after graduation. _____ I will go back to my homeland to work. _____ I am not yet sure but I will certainly like to work in Australia. _____ I am not yet sure but I do not like to work in Australia. Thank you so much for your time and cooperation! References: Burns, Alvin C., and Ronald F. Bush. Marketing Research. Upper Saddle River, N.J.: Pearson/Prentice Hall, 2006. McDaniel, Carl D., and Roger Gates. Marketing Research Essentials. Hoboken, NJ: Wiley, 2008. National Centre for Vocational Education Research (Australia). Australian Vocational Education and Training Statistics: VET in Schools 2007 : Summary. Adelaide, S. Aust: NCVER, 2008. Polonsky, Michael J., and David S. Waller. Designing and Managing a Research Project: A Business Student's Guide. Thousand Oaks, Calif: Sage Publications, Inc, 2005. Tull, Donald S., and Del I. Hawkins. Marketing Research: Measurement and Method : a Text with Cases. New York: Macmillan, 1993. Read More