Gold Coast Hotel Industry: PEST and Porter's Five Forces
This report examines the Australian tourism industry with a focused lens on the Gold Coast region and its five-star accommodation sector. Drawing on industry data and academic research, the paper traces historical employment and revenue patterns in Gold Coast tourism, profiles key international visitor markets, and assesses competitive dynamics through Porter's Five Forces framework. A PEST analysis then evaluates the political, economic, social, and technological factors shaping the industry. The report concludes by identifying three foundational issues any destination strategy must address — market demand, competitive advantage, and community aspirations — and offers recommendations for sustainable tourism growth in the Gold Coast region.
- Introduction: Overview of Australian tourism and hospitality characteristics
- Industry Description: Gold Coast tourism employment, revenue, and visitor data
- Porter's Five Forces Analysis: Competitive forces shaping Gold Coast hotel market
- PEST Analysis: Political, economic, social, and technological factors
- Three Strategic Issues and Recommendations: Destination strategy fundamentals and policy recommendations
- Conclusion: Summary of findings on Gold Coast tourism trends
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What makes this paper effective
- Integrates two well-established analytical frameworks — Porter's Five Forces and PEST — into a cohesive industry report, demonstrating how each framework illuminates a different dimension of the competitive environment.
- Grounds abstract strategic analysis in concrete, quantitative data (room rates, visitor nights, employment percentages) sourced from peer-reviewed hospitality management journals.
- Maintains a clear report structure, signposted throughout, that moves logically from industry description to competitive forces to macro-environmental factors and finally to strategic recommendations.
Key academic technique demonstrated
The paper demonstrates effective use of secondary research synthesis: rather than relying on a single source, it assembles findings from multiple peer-reviewed studies (Cassidy & Guilding, Warnken et al., Sparks et al.) and triangulates them to build a multi-dimensional picture of the Gold Coast accommodation market. This layering of sources adds credibility and nuance to each analytical section.
Structure breakdown
The report opens with an industry overview, then provides a data-rich description of Gold Coast tourism employment and revenue. It applies Porter's Five Forces to assess competitive intensity across five dimensions, followed by a four-factor PEST analysis. A dedicated section addresses destination strategy fundamentals before a brief conclusion ties the threads together. This sequence — description → competitive analysis → macro-environment → strategy — is a standard and effective report structure for hospitality management courses.
Introduction
Driven by alterations in consumer trends and the shifting demography of the Australian population, the characteristics of tourism and hospitality are changing. Cassidy and Guilding (2010) assert that the complexity of the companies, organisations, and labour force that comprise the tourism industry today must be understood by modern marketers and policy makers in order to prevent a "one size fits all" reaction to industry output.
Cassidy and Guilding (2010) further assert that tourism and hospitality companies are at the frontline of Australia's economy — supplying consumer goods as well as private and leisure services to both domestic and overseas customers. These industries are affected by continual changes in national and worldwide consumer behaviours, needs, and expectations, in addition to the progressively global nature of the tourism market.
Chou and colleagues (2008) write that the events, tourism, and hospitality industries encompass a number of different sectors, including hotels, restaurants, local cafés and bars, local gaming venues, business centres, and recreational facilities such as parks, resorts, and natural or man-made attractions. Tourism also incorporates the use of tour coordinators, tour operators, tourist information services, and tour guiding services, among others. Marketplaces within the tourism and hospitality industries — for example, business travel, major occasions, and education travel — also offer substantial advantages for other industries by helping to market Australia and Australian products and services internationally.
Chou and colleagues (2008) further assert that tourism in Australia is a sector comprised of numerous industry participants. It is generally recognised as encompassing the complete tourism product, or the customer experience, which is supplied through an amalgam of services across an extensive range of industry participants — including, but not limited to, the sectors of hospitality, hotels, restaurants, tourism operators, tourist attractions, transport, retail, business and major events, entertainment, and academic and cultural services. This is especially true of the hospitality industry, which shares many of its service providers with the broader tourism sector.
Industry Description
D'Angella and colleagues (2009) conclude that a variety of tourist accommodation options exist in the Gold Coast City region, including hotels and motels, apartment models, caravan parks, and backpacker hostels. Tourism is a vital niche for the region in terms of employment. Around the Gold Coast, 19% of employment — or 27,690 full-time equivalent positions — during the financial year 1998–1999 was associated with tourism. In terms of the quantity of tourism-related employment in Queensland, the Gold Coast was recognised as the second largest source of the state's tourism employment (19%). Other primary contributing regions were the Sunshine Coast (20%) and Tropical North Queensland (16%).
In the same study, D'Angella and colleagues (2009) found that nearly half of the employees in tourism-related roles around the Gold Coast worked within the Retail and Wholesale Trade sector (11,873 personnel, amounting to nearly 43%). Another third of the tourism workforce was employed in the Accommodation, Cafés, and Restaurants sector (9,143 personnel, amounting to nearly 33%). In employment terms, this particular sector had the greatest reliance upon tourism, with more than two-thirds of full-time equivalent positions in the sector existing due to tourism (72%).
Research by Roberts and Jago (2006) and Johns and Lynch (2007) supports the finding that the primary industries driving tourism revenue on the Gold Coast throughout 1998–99 were Accommodation, Cafés, and Restaurants — which accounted for a quarter of the area's tourism revenue (a total of $355 million, or nearly 26%) — and Retail and Wholesale Trade, which accounted for nearly another quarter (a total of $311 million, or nearly 22%).
In a related study, Sparks and colleagues (2008) found that the Accommodation, Cafés, and Restaurants sector was by far the most dependent on tourism, with 73% of its revenue generated by tourism activity. The next most reliant was the Retail and Wholesale Trade sector, with nearly 26% of its employment generated from tourism. Additional findings from the same study included the following:
The total number of hotel, guesthouse, and serviced apartment guest rooms within the Gold Coast totalled over 13,175 by the end of June 2004. The number of room nights available on the Gold Coast by the end of June 2004 totalled 3,329,900, representing a rise of 4% over the figure recorded at the end of June 2003. The typical daily room rate for Gold Coast properties was $116.21 at the end of June 2004, which was $6.24 higher than at the end of June 2003. The Gold Coast's top five international source markets at the end of June 2004 were Japan (25% of visitors), New Zealand (19%), the United Kingdom (9%), China (8%), and Europe excluding the UK and Germany (7%). There were clear increases in visitation from China, the United Kingdom, and New Zealand between June 2001 and June 2004, with approximate annual growth rates of 16.9%, 3.6%, and 0.7% respectively. Conversely, there were decreases in the number of visitors from Japan and Europe (excluding the UK and Germany) over the same period (Sparks et al., 2008).
Warnken and colleagues (2008) further reported that in terms of visitor nights, the Gold Coast's top five international markets at the end of June 2004 were Japan (1,779,041 visitor nights), New Zealand (1,242,985 visitor nights), the United Kingdom (643,302 visitor nights), Europe excluding the UK and Germany (618,193 visitor nights), and the United States of America (408,853 visitor nights). The Gold Coast's top five international holiday and leisure visitor markets at the end of June 2004 were Japan (27% of international holiday/leisure visitors), New Zealand (16%), China (9%), the United Kingdom (9%), and Europe excluding the UK and Germany (6%). Consistent with overall international market trends, holiday and leisure visitors from China, the United Kingdom, and New Zealand grew between June 2001 and June 2004 at average annual growth rates of 18.5%, 5.3%, and 1.1% respectively. Declines in holiday and leisure visitation were recorded from the Japanese and European (excluding the UK and Germany) markets over the same period (Warnken et al., 2008).
Porter's Five Forces Analysis
The following analysis applies Porter's Five Forces framework to assess competitive dynamics within the Gold Coast hotel and accommodation market.
Yeaswich (2006) observes that despite the fact that entry barriers are high, as the market is growing and the region is increasingly being regarded as a tourism and business events destination, hoteliers will be encouraged to enter this segment — mainly in the high-end and budget categories. As major tourist destinations expand, newer operators may also choose to enter the market. The threat of new entrants is therefore assessed as moderate.
Yeaswich (2006) observes that five-star hotels cannot compromise on quality, and therefore their suppliers may hold considerable negotiating power. Budget hotels, by contrast, seek cost-effective supply strategies. The emergence of new and expanding suppliers into the growing hospitality market does dilute overall supplier bargaining power to some extent. However, switching costs from one supplier to another can be high, both financially and in terms of quality assurance. The bargaining power of suppliers is therefore assessed as high.
Yeaswich (2006) asserts that since there are many operators in the region, competition is intense. An increasing number of investors are expanding into the budget hotel segment to improve revenues and exploring secondary metropolitan areas for new revenue streams. The threat of substitutes is therefore assessed as high. Direct substitutes for hotel accommodation tend to be relatively limited and include alternative leisure accommodation options such as camping sites, portable homes, motor-homes, and staying with friends and family. Switching costs range from minimal to high (for example, the cost of purchasing a motor-home).
Yeaswich (2006) observes that customers have an extensive range of choices, and the internet has further empowered them by enhancing their ability to review and compare hotels and their services. Most clients and customers are also cost-conscious and will generally frequent the accommodation that offers the best value. The bargaining power of customers is therefore assessed as high.
Conclusion
This report was structured to analyse the Australian tourism industry — specifically the Gold Coast region — in a way that supports readers in assessing an industry-specific overview of current and future trends and growth within the tourism and hospitality sector, with particular regard to the Gold Coast five-star accommodation market. The report also addresses integral issues and provides contextual knowledge about observed trends, with the aim of contributing to the continual improvement of sustainable tourism in the region.
References
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Chou, T., Hsu, C., & Chen, M. (2008). A fuzzy multi-criteria decision model for international tourist hotels location selection. International Journal of Hospitality Management, 27(2), 293–301.
D'Angella, F., & Go, F. M. (2009). Tale of two cities' collaborative tourism marketing: towards a theory of destination stakeholder assessment. Tourism Management, 30(3), 429–440.
Exeter, M. (2009). Planning for effective strata titled tourist accommodation. Paper presented at the Strata and Community Title in Australia for the 21st Century Conference.
Johns, N., & Lynch, P. (2007). The self-catering accommodation market: a review of electronic and other resources. International Journal of Hospitality Management, 26, 293–309.
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Lockyer, T. (2005b). Understanding the dynamics of the hotel purchase decision. International Journal of Contemporary Hospitality Management, 17(6), 481–492.
Roberts, L., & Jago, L. (2006). Reinventing 3 and 4 star accommodation in regional Australia: the identification of innovative strategies to meet visitor needs. Sustainable Tourism CRC, Gold Coast.
Sparks, B., Butcher, K., & Bradley, G. (2008). Dimensions and correlates of consumer value: an application to the timeshare industry. International Journal of Hospitality Management, 27, 98–108.
Warnken, J., Guilding, C., & Cassidy, K. (2008). A review of the nature and growth of multi-titled tourism accommodation complexes. International Journal of Hospitality Management, 27, 574–583.
Warnken, J., & Guilding, C. (2009). Multi-ownership of tourism accommodation complexes: a critique of types, relative merits, and challenges arising. Tourism Management, 30, 704–714.
Yeaswich, P. C. (2006). Value still most desirable attribute. Hotel and Motel Management, 221(9), 14.
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