Business travel is the fastest growing sector of the Australian outbound travel market. In the five year period to 1999, business and work-related travel grew at an average rate of 7.6 percent per year. Over the same period, holiday travel grew at an average rate of 5.2 percent per year. The Tourism Forecasting Council of Australia has predicted this strong comparative growth in the business travel market to continue. While business travel has grown in importance, the economic literature to date concentrates on leisure travel. Therefore, this thesis seeks to contribute to knowledge by using Australian outbound business and work-related travel data to:
1. Examine the life cycle travel patterns for business and work-related travel;
2. Examine the seasonality of Australian outbound business and work-related travel; and
3. Develop a demand model for international business and work-related travel.
This research is important as it enhances the current business travel literature in several ways. First, business travel is examined directly and then subsequently compared with other forms of travel such as travel for leisure purposes. This is necessary because a priori you would expect the nature and determinants to be different. Second, the travel life cycles and seasonality of Australian business travel are examined, which to the author's knowledge, have not been done before. Third, of the limited business demand models that have been estimated, the overwhelming majority focus only on inbound travel. As a result both the theoretical determinants and empirical analysis of outbound business travel remains weak. Therefore, this study proposes theories of outbound business travel and empirical analysis in the context of Australia.
There are three main findings that result from the empirical analyses. First, it is found that all purposes of travel have a unimodal life cycle pattern except holiday travel, which has a bimodal pattern. All travel purposes are differentiated, however, with respect to the age groups at which they peak. Furthermore, it is found that men tend to travel more often than women for business and work-related travel, but women travel more often for leisure purposes. Gender differences in the peak age of travel only exist in business and work-related travel, with women tending to peak earlier than travel for men. It is therefore concluded that both the purpose of travel and gender are important factors that need to be considered when predicting the long-term demand for travel.
Second, it is found that outbound business travel from Australia to relatively distant destinations follows a similar seasonal pattern to holiday travel, particularly to destinations like the UK. It is also found that Australian outbound departures to long-haul destinations like Japan, the UK and the US contain seasonal unit roots. This suggests that when seasonal data are used in tourism demand research, the researchers should be careful with the type of econometric procedure employed.
Third, an econometric analysis indicates that a long-term relationship exists between Australian outbound business and work-related travel and Australian business returns, but not with real Australian GDP. This suggests that when business confidence is high in the Australian economy, firms are likely to invest in international business travel at this time.