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.
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.
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.
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.
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).
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.
Political factors refer to government policy and the degree of intervention throughout the economy. The hotel and tourism industries depend fundamentally on government support; without it, they would struggle to sustain themselves in a competitive global environment. Governments levy significant taxes on star-rated and luxury hotels and therefore exert considerable influence through political changes. Any legislative shift can seriously affect the hotel industry. At the same time, the accommodation sector benefits from substantial government incentives, and authorities support both the development and growth of hotels. As Cassidy and Guilding (2007) suggest, government stability and engagement are extremely important for this industry to prosper — particularly during periods of economic difficulty.
Economic factors include interest rates, taxation changes, economic growth, inflation, and foreign exchange rates. As observed in foundational economics literature, economic change can have a major effect on a firm's behaviour and strategic direction.
Hotels on the Gold Coast, according to Cassidy and Guilding (2007), seek to capitalise on international visitors who bring greater spending power, alongside a growing set of expectations about hotel quality. Historically, visitors have demonstrated willingness to pay for the services they receive, and higher visitor volumes translate directly into stronger performance for the accommodation and tourism sectors. The rise in visitor numbers has made demand for high-quality and luxury hotels increasingly significant. Australia's per capita income has also grown considerably over this period.
The Australian economy, Cassidy and Guilding (2007) note, experienced comparatively minimal impact from the global economic recession due to the region's tightly managed economic climate. This allowed hotels to maintain focus on local markets when international visitor numbers temporarily declined, providing a degree of stability for the tourism and hotel industry during an otherwise difficult global period.
Changes in social trends can affect demand for a firm's products and services, as well as the availability and willingness of the workforce to operate within an industry.
Australia's social structure is notably diverse. Regardless of a visitor's background, they are likely to find community connections within Australia, making it an attractive destination for international visitors. The country's strong security environment is also a key drawcard compared to many other regions. Warnken and colleagues (2008) note that tourism, unlike conventional industries, does not appear in national accounts or standard international classification systems in the same way. It is primarily a social phenomenon and must be treated as such. The United Nations World Tourism Organisation defines tourism as comprising the activities of people travelling to, and staying in, places outside their usual environment for no more than one consecutive year, for leisure, business, or other purposes not related to remunerated activity within the destination. It follows that the social structure of a destination must be one in which visitors feel welcome and secure.
Warnken and colleagues (2008) further assert that industries are typically classified by the product or service they provide; tourism, however, is defined by the consumer of that product or service, and may therefore be considered a social industry. Many companies in tourism, hospitality, and events operate across multiple industries simultaneously. Hotels, for example, depend on tourism to generate a portion of their business, while events and tourism mutually reinforce each other in promoting destinations.
Key visitor segment profiles identified by Warnken and colleagues (2009) include:
Large Tour — Approximately 12% of interstate visitors to the Gold Coast are inclined to take a large-tour holiday. There was some decline in this market from mid-2003.
Getaway — This holiday type accounts for approximately 15% of interstate visitors. There was a significant increase in leverage for this market type from September 2003.
Special Occasions — Around 9% of interstate visitors arrived at the Gold Coast for a specific event. The Lexmark Indy 300, held annually over one week in October, is the principal Gold Coast event attracting interstate visitors.
Intrastate Short Break — Approximately 41% of the Gold Coast's intrastate visitors are inclined to take a short break. There was some falling away in this market at the end of 2003. The Gold Coast's proximity to the rest of Queensland makes it an ideal short break destination for Queensland residents, with both coastal and hinterland stays being popular.
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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