You must review recent economic trends in the hotel industry in Sydney, Australia. You will need to show an understanding of the main features of these economic trends and to demonstrate your understanding of the "principles of economic analysis" in addressing the following instructions:
1. Examine the main economic features and trends in the hotel industry in Sydney, Australia. a Discuss occupancy trends between 2015 — 2019 and the occupancy forecast for 2020 b Discuss ADR trends between 2015 — 2019 and the ADR forecast for 2020 c Discuss supply trends between 2015 — 2019 and the supply forecast for 2020 2. Choose five different factors that could affect supply and/or demand in this market and use appropriate diagrams to explain their effect on this market.
You should structure this assessment in an academic report format which includes: executive summary, table of content, introduction, body, conclusion, recommendations, references and appendices.
Demand and Supply
Factor affecting the demand
The demand for the Sydney Hotel industry market.is affected by several factors. The demand of the Sydney Hotel industry market is affected by the consumer’s preferences, prices, and economic conditions as complementary areas. For instance, if the price of Sydney Hotel industry market decreases then the demands of the hotel rooms in Sydney would be increased (Wen, Aston, Liu, & Ying, 2020)
Consumer’s preference: It is defined as taste and preferences of an individual within given commodities thus, they rank their preferences from available goods/commodities in the market. It has the following number of assumptions: Howvver, below given images shows the consumer’s preferences. It suggests that every individual has preference for one commodity over other for instance For instance, if the advertisement or news about the Corona virus or bonfire is spread then the demand of the Sydney Hotel industry market would go down (Pham, & Pham, 2017). In addition to this, bushfire will also have negative impact on the Sydney Hotel industry market sales. Additionally, it can cost up to $5bn for the economic and social damages furthermore, it worsened the situation and caused serious harm to society in terms of health and the vast number of deaths which has negatively impacted the hotel industry sales in Sydney due to less inclination of the tourist in the country (Nur, Yulyanti, & Nur, 2017). -
Price of the related goods- In this case, the demand of the Sydney Hotel industry market would down if the rooms or home stay sold by the Airbnb is offered at very cheap rate. This shows that the price of the Airbnb has negative impact on the demand of the Sydney hotel industry. This reveals that substitute product’s price of the Sydney hotel industry would be negatively affected by the reduced price of products.
Source:- Consistency in consumer choice, (2019)
FACTORS AFFECTING THE SUPPLY:
Source:- Demadn and supply, (2019)
Case- coronavirus – Banned Chinese travel to Australia
The adverse effect of the disease affected the tourism sector adversely in terms of loss of income and business occurring overseas thus, disrupting the supply chain and economic support in Australia as well as decreased demand and supply in China with other countries due to disease widespread (Ranjbari, Chiu, & Hickman, 2017).