Macro environment, one of the three key elements of the marketing environment explains the influences of broader societal forces. These major external forces are not controllable, but being aware of the environmental factors and its changes will be of great advantage for growing the business (Angela, 2012). In the travel business, the operation does not depend only on the internal functioning but is also affected by external factors. Wotif is also affected by these internal and external factors. Macro environmental analysis is needed for Wotif to achieve their goals, increase their profit and improve their current strategies. Political factors:
Political factors hugely affect the tourism business. It is important to analyse the political factors in order for Wotif to increase its growth and keep its hold on the market. Australia is known to be one of the world’s largest capitalist economies. It has a politically stable environment. The Australian government is working towards increasing its tourism industry growth and potential by their Tourism 2020 strategy. Economic factors:
Purchasing power of individuals is affected due to economic factors. The Australian economy is dominated by the service sector and it contributes to 68% of the GDP. Australia's GDP in the first quarter of 2014 increased by 1.10 percent compared to the previous quarter. The inflation rate was at 2.5% in 2013 and is expected to rise to 2.7% in 2014. The unemployment rate increased to 6.4%, highest since June 2002. The retail market has been facing tough times since the past 5 years. Conservatism has been the trend among Australians. Also, RBA has kept high interest rates which means you can get good returns from depositing the money in the bank. Households have reduced their expenditure and they prefer to save rather than spend. The Australian dollar is weak compared to its peak period in 2011 against US dollar but still it has been strong over the past 6-7 years which has led to a decrease in inbound tourism. Although it is favourable for Australians to travel abroad. The number of short term visitors arriving to Australia has reduced and the number of short term residents departing has increased in the last 10 years. Despite the strong dollar, number of visitors from China has increased rapidly. China in Asia contributed to 17.3% of international expenditure in the financial year 2013-2014. Though, Wotif’s performance in the Asian market has been lacklustre. It posted a lower profit this financial year due its under performing Asian business continuing to drag on earnings (O'Sullivan, 2013) These economic factors will influence the tourism arena in the new financial year. Socio-cultural factors:
Australians are known for their love to travel and exploring new things. Australians are among the biggest-spending travellers in the world, second only to Saudi Arabians. Despite the fall of the dollar, Australians are showing no signs of changing their ''have passport, will travel'’ mentality (Upe, 2013) St George-Melbourne Institute reported that nearly 60 per cent of Australians nominated holidays and travel as a key motivation for saving money, ahead of a deposit for a house, renovating, retirement, education, repaying debts, buying a new car or an expensive item for the house (Upe, 2013)
During Christmas, Australians are now spending on Christmas holidays instead of buying gifts. Travellers are more inclined to head overseas at Christmas than they were last year (Swallow, 2013)
In 2014-2015, Australia will be seen hosting major events including the AFC Asian Cup Australia, Australian Open, ICC World Cup, F1 Australian Grand Prix. It will definitely have a great impact on the tourism industry.
In 2012-13, 76% of Australia’s 15.4 million users made a purchase or order over the internet. The most popular types of purchases were travel, accommodation, memberships or tickets of any kind (Statistics, 2014) In the...
References: O 'Sullivan, M. (2013, 06 25). Asia woes dent Wotif. The Age (Melbourne) , 1.
Upe, R. (2013, 09 01). Aussies the world 's second-biggest spending travellers. Retrieved 08 29, 2014, from The Sydney Morning Herald Traveller: http://www.smh.com.au/travel/travel-planning/travel-news/aussies-the-worlds-secondbiggest-spending-travellers-20130831-2sxe1.html
Swallow, J. (2013, 12 12). Trave Escape. Retrieved 09 01, 2014, from Herald Sun: http://www.heraldsun.com.au/travel/world/australians-splurging-on-christmas-travel-but-spending-less-on-christmas-presents/story-fnjjva7c-1226781240337
Statistics, A. B. (2014, 02 25). Household Use of Information Technology, Australia. Retrieved 09 02, 2014, from Australian Bureau of Statistics: http://www.abs.gov.au/ausstats/abs@.nsf/latestProducts/8146.0Media%20Release12012-13
Redzy. (2012). Travel Statistics for Tour Operators. Retrieved 08 28, 2014, from Redzy: http://www.rezdy.com/resource/travel-statistics-for-tour-operators/
Tourism Accommodation Australia. (2011). The Carbon Tax and Australia 's Accommodation Industry. Retrieved 09 03, 2014, from Tourism Accommodation Australia: http://www.aecgroupltd.com/files/images/taa_carbon_tax_document2.pdf
Please join StudyMode to read the full document