The purpose of this paper is to examine the arguments publicly commented on in newspapers concerning whether Australia will gain maximum benefit from the influx of Japanese tourists and questioning the desirability of Japanese investment in the Australian tourism industry. The public's concern about loss of potential tourism benefits reflects the perception of the importance of international and domestic tourism to a nations economy. For this reason, various tourism impact studies are reviewed to assess the economic contribution made by tourism. An examination of the role played by foreign investment in the rapid growth of the Australian economy since World War II, reveals the main benefits and costs of such overseas involvement and provides a background for the assessment of Japanese involvement in Australian tourism. The major findings of this Report were:
To measure the impact of tourism on an economy, there has been no consistent methodology undertaken but rather a variety of approaches used.
Foreign direct investment in Australia has resulted in net benefits and provided finance for very large projects that domestic capital markets were unwilling to provide.
The issues focused upon by the media in general require urgent debate and research on the net benefits to Australia from Japanese involvement since Japan is expected to remain Australia's fourth largest market in terms of tourist expenditure; and since Australia is expected to receive Japanese investment 0 a massive scale than anything experienced previously. Furthermore, there has been a distinct change in Japanese investment in Australia, away from manufacturing industry to property and service type industries.
Due to the structure of existing statistical data gathering and definitional problems, it is not possible to gauge the extent of Japanese investment or the form which Japanese involvement has taken or the extent of vertical integration procedures. However, the number of instances of this practice appear to indicate an increasing trend in Japanese investment.
Some fear that Australia will fail to receive the full benefits of the Japanese tourist boom and that consequently, a strained relationship with Japan may develop.
Japanese investment has acted as a catalyst in encouraging domestic investment in Australian tourism.
The Japanese 'wholesaler' appears to have enormous ability to influence Japanese tourists' itineraries and to exert pressure on Australian hotels/tourist attractions for extremely competitive prices, possibly reducing the benefit to Australia.
Australia is in a weak financial position to reject foreign investment and therefore must attempt to maximize the benefits of such investment. Consequently, it could be an advantage to seek aggressively joint ventures with Japanese to ensure Japanese patronage of our tourism plant and a share of the long term benefits.
Lastly, the Federal Government might be advised to introduce incentives for Australians to save a higher percentage of their disposable incomes so that Australia reduces its high reliance on financing projects with overseas capital.