The effects of restrictive business practices on Australian inbound package tourism

Abstract

International visitors to Australia on package tours have expressed concern about aspects of their holiday experience. These aspects relate to restrictive business practices on the part of inbound tour operators. The origin markets most affected are China, Korea and Taiwan in particular, and, to a lesser extent, Japan. This paper first sets out the nature of the restrictive business practices and then discusses their underlying causes. It then estimates their effects on visitor satisfaction and the impact of this on future package tourism flows to Australia from the identified markets. Finally, some estimates are made of the economic costs of the practices. It is argued that Australia will benefit from the development of quality tours rather than persisting with the price driven tours currently on offer within these markets.