Exchange Rate Volatility Co-Integration In Tourism - Free Samples

Question: Discuss about theExchange Rate Volatility Co-Integration In Tourism. Answer: Research Problem Before starting a report, the first steps that researchers are required to take is analysing the possible research problem in order to solve the problem which will occur in the study. The education industry, especially international students, contributes a major part in the Australian economy. But, with the growing value of Australian currency in comparison to US dollar will have a negative impact on the education industry which will reduce the number of international students who visit Australia for further studies. The primary objective of this research report focuses on studying and understanding the social, business and economic factors relating to strong Australian dollar and evaluates its impact on the economic and social sector of the country. The growing value of Australian dollar reduces the number of international students in the country. This research proposal analyse the decreasing rate of international students in Australia with the increase worth of Australia dollar. The Australia education sectors contribute more than $47.5 billion to the countrys economy. However, due to increase in Australian currency, international students prefer to study in the United States or any other country instead of Australia. Due to high currency rates, international students have to the high amount for everything including university payments, tuition fees, accommodation, and residential cost. These factors affect the decision of international students and their spending choice in Australia. It can be clearly seen that appreciating in the Australian dollar will result in reducing the number of international students in Australia which negatively affects their economy. Therefore, proper research is necessary to understand the situation and determining ways to address this issue which will assist in boosting countrys economy. This research proposal will evaluate the issues face by hotels in Australia and many others factors that are related to international students visit in Australia. Research Hypothesis What if the packages of hotels and accommodation centers are reduced for international students? What if promotional campaigns are created by concerned departments to address to increase the number of international students? What if discount offers are provided for the international student by educational institutes? What if cheap airfare packages are offered for international students? What if international students shift their destinations to other countries for further studies? Background In previous years, the Australian dollar has always remained less valued than compared US dollar. However, present trend in international markets showed that it is becoming stronger and equivalent to US dollar. The value of Australian dollar has increased recently, and many experts have provided that it is expected to rise even further in following days. Now, the currencys value has surpassed the ceiling limit of US$79, and it is showing possibilities of significant growth. This calendar year, the Australian currency reported a growth of 9.9 percent; it has reported an overnight increment of 1.5 percent which increased US$79.18 to its peak amount of US$79.43 (AFR, 2017). Continues and strong growth of Australian currency provide the weakness of US dollar, but, it owes a large amount to high-interest rates, international investors and prices of commodities (Conversation, 2017). The strong position of Australian dollar may lead to different social, business and economic consequences. After analysing the past three years trends of the Australian dollar, as provided in the figure below, the currency had reported many fluctuations over the year. The Australian dollar has reported its minimum value in the starting of 2016 financial year. Although, with time, the Australian dollar has slowly climbed to the top with many fluctuations and it reached its peak in the middle of 2017. Following figure present the value of Australian dollar in comparison with US dollar. The growing rate of Australian dollar provides that the revenue in US dollar or any other nations is valued lower than its previous rate; due to which it negatively influence different sectors. The products and service which are valued in the Australian dollar will be more expensive after converting to US dollar due to which the number of countrys exports will reduce. Due to high prices, the demand for Australian products will reduce in international markets which will negatively affect Australian producers. The Australian corporations which export their products will have to reduce their prices in order to export their products which will result in decreasing their profits. On the other hand, the prices of products and services of overseas companies will reduce which will increase the number of imports. Similarly, with the growth in the Australian dollar, the number of international students visiting Australia for further studies will reduce since it will be more expensive. However, for Australian students, it will be cheaper to study in foreign universities. Following chart was uploaded by Australian Financial Review which analyses the Australian dollars trend in comparison to US dollar. (Source: Trading Economics, 2017) The growth in Australian dollar negative affects the educational sectors in Australia which is one of the major contributors to its economy and national income. With the growing value of Australian currency, the number of international students will reduce because it will be more expensive to pay university and tuition fees. Also, it will be more expensive for them to live in Australia than compared to other countries such as United Kingdom or United States. The number of international students in Australia is only 700,000 in April 2017 which is significantly lower than compared to previous months. Further, the number of international students reduces to 600,000 in June 2017 which is a result of appreciated AUD value. The international students face high costs due to increasing Australian dollar rates, and they have to pay more amounts for education and tuition fees. Following is another graph which shows the link between Australian dollars and international students. (Source: Trading Economics, 2017) The above graph provides that link between increasing Australian currency rate and decreasing number of international students visiting the country for education purposes. In April 2015, the exchange rate for Australia dollar was 0.765 as compared to US dollar, and it increases in April 2016 and at the same time, the number of international students also reduces. The number of international students has declined since June 2016 because of high value of Australian currency. However, by the end of 2016, AUD reached its lowest point, i.e., 0.71642 and at the same time, the graph reflects an increasing number of international students. So, the graph shows that there is an adverse relationship between the number of international students visiting Australia and AUD. This relationship influences Australian economy because international tourists contribute to countrys economy. Ethical Consideration While performing any practice, ethical consideration is necessary to be taken. Therefore, the researcher should also fulfil the ethical behaviour while performing the activities of research. Following are various ethical considerations that are necessary to be fulfilled by researcher: Research is necessary to be completed with honesty, and it is obvious to provide information about the process used in the research and what results are obtained by the study. The research objectives must be free from biases which assist the researcher in avoiding any confusion in the report and focusing on key The research must not be biased. The research must be completed with transparency and reliability. The information used in the research must be straightforward to the public. It is necessary that the research must respect peoples privacy. The research proposal must avoid disclosing any sensitive or private information about public and client. Literature Review The literature review is a crucial part of a report which points out the issues of the research. In literature review section, the finding of various researchers and scholars are analysed through online sources in order to find whether there is an issue or not. Increased value of Australia dollar signifies that it will negatively influence the education industry and the number of international students that visit Australia for further studies. Various entities win or lose because of increasing value of AUD. The losers are the exporter corporations according to the article published in Courier Mail. The increasing rate of AUD has been negative for international students visiting Australia, but it is a positive factor for Australian students who want to go overseas for further study. Increased AUD value makes it easier for them to select the University of their Choice and choose the desired location for study since it will be cheaper for them. The Australian economy has significantly influenced by the increased value of AUD (Kohler, Monalo Perera, 2014). The movement in the value of Australian currency has a substantial influence on nations economy. The increasing rate of AUD has a negative impact on countrys economy which will result in reducing the investment in Australian businesses. Its natural for investors to invest in the Australian currency when it decreases. Many international students visit Australia each year because of its diversity, attractive places, and strong education system. For students, beaches seemed to be the more attractive point. Similarly, fireworks contribute is another primary reason due to which international students visit Australia. However, with the increase in the value of AUD, the number of international students has reduced substantially in Australia in the past few years. An article published by Phil Mercer during mid-2015 for BBC news, evaluate the influence of reducing AUD value towards countrys economy especially toward education industry. The article provided that there is 25 percent decline in the value of AUD from mid-2014 to 2015. At the same time, the number of international students visiting Australia increased by 2 percent as compared to students going out of Australia that was on 0.7 percent. The number of Australian students going in foreign countries for further studies reduced because people prefer domestic universities since they are a cheaper option as provided by Commonwealth Bank. According to IBIS world report, reduction in value of AUD has positively influenced the education sector in Australia since 2013. There is a high rate of inflow in international students because of the low value of AUD. This report clearly provided that increase in the value of Australian dollar will reduce the number of international students visiting Australia. The increasing rate of Australian dollar affects international students because it increases their university costs tuition fees and living expenses (Webber, 2001). The students have to pay more than they expected, therefore, they are more likely to change their mind about selecting a destination for further studies. David Taylor provided an article called the world today which shows the influence of increasing Australian dollars on backpackers. Backpackers are key contributors to the Australian economy, and they are one of the key income generating factors in the country. Therefore, increasing rate of the Australian dollar has caused a serious problem for backpackers since it increases their expenses which negatively influence Australian economys growth. So, the literature review provided a clear picture of the issue which provides that increasing rate of AUD will result in reducing the number international students visiting Australia for further studies which reduce the growth of nations economy. Research Proposals Aim and Objectives The research objectives focus on providing direction for research by identifying various variables relating to the research problem. The main aim of this research is to analyse the increasing value of Australian dollar and its influence on the number of international students visiting the country. The number of international students visiting Australia and value of AUD is directly related to each other. Therefore, any decrease or increase in value of AUD results in decreasing or increasing the number of international students in Australia respectively. Following are the key aims of this research proposal: Analysing the reducing number of international students in Australia. Evaluating various measures for increasing the education sector in Australia. Finding out whether the increasing value of Australian dollar decreases the number of international students in the country. Overall, the key objective of this report is to discover the relationship and impact of increasing value of Australian dollar over the number of international students visiting the country for further study and finding different measures for addressing this issue. Research Design Research design focuses on analysing the research problem by collected and evaluating the data in a systematic manner. The research design assists in meeting the key objective of the research. Generally, there are two types of research design used by researchers which include qualitative and quantitative research. This research proposal includes both quantitative and qualitative ways of data collection from different primary and secondary sources. Quantitative Research The quantitative research is also called secondary research method which is based on mathematical, numerical and statistical data that is collected for understanding and evaluating the research problem by reviewing documents, questionnaires, and analytical data. This method is one of the cheapest, easiest and quickest methods for conducting research. This method is useful for viewing and analysing large sample sizes and different views and opinions. In this research proposal, qualitative research methods are used to determine the fluctuating trends of Australian dollar than compared to US dollar and analyse its relationship with increasing or decreasing number of international students visiting the country. Every result is evaluated which automatically contributes to outlining the characteristics of different factors. Further, analysis can be done by controlling and exploring the gathered data which help in identifying correct patterns. This method is acquired to collect the data in relation to different viewpoints. Analytical data assist in identifying and analysing the existing data which is available on the topic. Questionnaire is used in order to collect data through checklists. This will assist in understanding peoples perspective on the subject matter. Survey monkey is used in order to create and send questions online. Documents review assists in providing an understanding of people true perspective about the issue. Qualitative Method Qualitative methods are known as exploratory research which focuses on collecting data and information on a specific topic. The collected data assist in developing hypothesis and ideas. The information linked with education sectors in Australia mainly related with international students will be researched. The collected data will be used in order to address the issue. Under the research, different methods will be used such as focus group, observation and in-depth interview to collect necessary data. Focus Group includes discussion between small groups of 6-12 people which is conducted by the help of trained professionals. It reduces the time, and multiple views are collected at once. Observations focus on collecting data by witnessing real-life situations. In-Depth interview referred to a face-to-face interaction which includes a detailed discussion with respondent regarding the same research problems. Depending upon nature of data requirement, either quantitative or qualitative method will be used in the research for data collection purposes. Quantitative methods are helpful if the research is conducted within a fix period. However, qualitative methods can be used if research problems are evaluated in detailed. Data Analysis Process After collecting the data from qualitative and quantitative sources, they will be analysed in order to obtain crucial information for the research. All the information collected during the process may not be significant or used in the research. So, effective data analysis process is necessary to be adopted to acquire only such information that is important for the research. The data analyses process is divided into different steps: Editing: The data collected from the qualitative and quantitative process will be raw which will be accumulated and analysed in order to collected necessary information for the research to ensure that it is easier for anyone to understand. This is known as editing. The data which had errors or incomplete information was edited with the help of in-house editing or field editing. After that, the edited data was further preceded for coding. The field editors performed the activities of data checking and editing at the same time. In contrast, editing in office is known as in-house editing. Coding: It is the process of assigning numbers and other symbols to edited data, and it is the second phase of data analysis procedure. Data Entry: After completion of coding process, the data is uploaded on the system which is called data entry process. In other words, it is defined as the process of transforming coded and useful data collected for the research and uploading into computers. In data entry process, optical scanners are used to marking sensed questionnaires. Data Analysis: Finally, after the stage of data entry in computers, the data is analysed by the researchers and conclusions can be obtained from the above findings. References Anon, 2017.[online] Tra.gov.au. Available at: https://www.tra.gov.au/ArticleDocuments/250/IVS_one_pager_June2017.pdf.aspx?Embed=Y Assessment 2, 2017. Background. Applied Business Research, Koi BBC News, 2017. [online] Available at: https://www.bbc.com/news/business-34504003 [Accessed 15 Sep. 2017]. KOI, 2017. Data Preparation - Part 1. [Online] Available at: https://moodle.koi.edu.au/moodle/course/view.php?id=858 Trading economics, 2017. Australia Tourist Arrivals. [Online] Available at: https://tradingeconomics.com/australia/tourist-arrivals Webber, A.G., 2001. Exchange rate volatility and co-integration in tourism demand.Journal of Travel research,39(4), pp.398-405.