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INTERNATIONAL TOURISM: A GLOBAL PERSPECTIVE
Editor: CHUCK Y. GEE Dean School of Travel Industry Management University of Hawaii at Manoa
Co-Editor: EDUARDO FAYOS-SOLÁ Head, Education and Training World Tourism Organization
World Tourism Organization in cooperation with
WTO Education Network at
University of Hawaii at Manoa, U.S.A. University of Calgary, Canada James Cook University, Australia
Copyright © 1997 World Tourism Organization Title: International Tourism: A Global Perspective 1st Edition: October 1997 ISBN: 92-844-0231-X
Published by the World Tourism Organization, Madrid, Spain All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system without permission from the World Tourism Organization. The designations employed and the presentation of material in this publication do not imply the expression of any opinions whatsoever on the part of the Secretariat of the World Tourism Organization concerning the legal status of any country, territory, city or area or of its authorities or concerning the delimitation of its frontiers or boundaries.
Printed by the World Tourism Organization, Madrid, Spain Design and layout: Salvador Ten Barrón - ARCA Design Revised by: Dana Gynther and Rosamond Deming
Table of contents
SECTION I: PERSPECTIVES OF TOURISM ................................................................1 Chapter 1: Introduction to Global Tourism.........................................................3 1.1 Introduction ......................................................................................................3 1.2 Defining Travel and Tourism ............................................................................4 1.2.1 The Need for Definitions .........................................................................4 1.2.2 Definitions .................................................................................................5 1.2.3 Forms and Categories of Travel ............................................................7 1.3 History of Travel and Tourism...........................................................................8 1.3.1 Early Ages.................................................................................................9 1.3.2 Middle Ages...........................................................................................10 1.3.3 The Renaissance ...................................................................................11 1.3.4 The Industrial Revolution.......................................................................11 1.3.5 Modern Tourism .....................................................................................12 1.4 Components of the Travel Industry .............................................................13 1.4.1 Transportation and Infrastructure........................................................13 1.4.2 Accommodations and Hospitality Services.......................................14 1.4.3 Travel Distribution Systems ....................................................................15 1.4.4 The Roles of the Public and Private Sectors in Tourism.....................16 1.5 Impacts of Travel and Tourism......................................................................17 1.5.1 Economic Impacts................................................................................17 1.5.2 Other Impacts .......................................................................................18 1.6 The Study of Tourism ......................................................................................19
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Chapter 2: Travel Patterns and Trends ..............................................................23 2.1 Introduction ....................................................................................................23 2.2 Tourism Growth...............................................................................................23 2.2.1 International vs. Domestic Tourism ......................................................24 2.2.2 Total International Arrivals ....................................................................24 2.2.3 World's Top Destinations and Tourism Receipts .................................25 2.2.4 Tourism Generators and Related Expenditures .................................26 2.2.5 Tourism Surpluses and Deficits..............................................................27 2.3 Regional Travel Patterns and Trends ...........................................................28 2.3.1 Europe ....................................................................................................28 2.3.2 Asia and the Pacific..............................................................................29 2.3.3 South Asia...............................................................................................31 2.3.4 Americas ................................................................................................32 2.3.5 Middle East ............................................................................................33 2.3.6 Africa ......................................................................................................33 2.4 External Factors That Affect Tourism ............................................................33 2.4.1 Changing Demographics ....................................................................34 2.4.2 Technological Advances .....................................................................34 2.4.3 Political Change....................................................................................35 2.4.4 Sustainable Tourism and the Environment .........................................36 2.4.5 Safety and Health .................................................................................37 2.4.6 Human Resource Development..........................................................37 2.5 Tourism Market Trends....................................................................................37 2.5.1 Changing Consumer Preferences ......................................................38 2.5.2 Product Development and Competition ..........................................39 SECTION II: TRAVEL AND TOURISM COMPONENTS AND SERVICES ..................43 Chapter 3: Transportation Services...................................................................45 3.1 Introduction ....................................................................................................45 3.2 Historical Development of Passenger Travel ..............................................46 3.2.1 Early Modes of Travel............................................................................46 3.2.2 Railroads and Ocean Liners ................................................................46 3.2.3 Automobiles and Airlines......................................................................47 3.3 Rail Service .....................................................................................................48 3.3.1 Significant Developments in Passenger Service................................48 3.3.2 Passenger Service Today .....................................................................48 3.4 Automobile Travel and Ground Transportation..........................................49 3.4.1 Automobiles ...........................................................................................49 3.4.2 Highway Systems ...................................................................................50 3.4.3 Other Ground Transportation ..............................................................51 3.5 Water Travel ....................................................................................................52 3.5.1 Cruise Ships ............................................................................................52 3.5.2 Other Water Travel ................................................................................53 3.6 Air Travel ..........................................................................................................53 3.6.1 Development of Commercial Passenger Service.............................53 3.6.2 Safety and Security...............................................................................54 3.6.3 Costs .......................................................................................................55
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3.6.4 Airports....................................................................................................56 3.6.5 Other Aspects of the Airline Industry ..................................................57 3.7 Regulation and Deregulation of Air Travel .................................................58 3.7.1 Basic Aspects of Regulation ................................................................58 3.7.2 Pressures on the Bilateral Regulatory System ....................................60 3.7.3 Economic Aspects of Regulation........................................................61 3.8 Challenges Facing Transportation...............................................................62 3.8.1 Fleet Planning ........................................................................................62 3.8.2 Congestion ............................................................................................63 3.8.3 Safety and Security...............................................................................64 3.8.4 Environmental Impacts.........................................................................64 Chapter 4: Accommodations and Hospitality Services .................................69 4.1 Introduction ....................................................................................................69 4.2 Historical Development.................................................................................70 4.3 Accommodations Classification..................................................................71 4.3.1 Hotels ......................................................................................................72 4.3.2 Resort Properties and Time Shares ......................................................74 4.3.3 The Casino/Destination Property.........................................................75 4.3.4 National Heritage Accommodations.................................................75 4.3.5 Bed and Breakfasts ...............................................................................76 4.3.6 The Emergence of the International Hotel ........................................76 4.3.7 Financing of International Hotels ........................................................76 4.4 Food and Beverage Establishment Classification .....................................78 4.4.1 Hotel-related Food Establishments .....................................................78 4.4.2 Independent Food Service Establishments .......................................79 4.5 Hotel Guests ...................................................................................................79 4.6 Food Service Clientele..................................................................................80 4.7 Ownership and Management of Accommodations................................81 4.7.1 Company-Owned and Operated Systems .......................................81 4.7.2 Franchising .............................................................................................82 4.7.3 Management Contract .......................................................................83 4.7.4 Management Measures for Hotels .....................................................84 4.7.5 Food Service Management and Operations....................................86 4.8 Hotel Operations............................................................................................87 4.8.1 Reservations...........................................................................................87 4.8.2 Marketing ...............................................................................................87 4.8.3 Hotel Staffing..........................................................................................89 4.8.4 Use of Technology.................................................................................89 4.9 Travel Industry Linkages.................................................................................90 4.9.1 Marketing Partnerships .........................................................................90 4.9.2 Hospitality-related Industry Organizations .........................................91 Chapter 5: Travel Distribution Systems..............................................................95 5.1 Introduction ....................................................................................................95 5.2 Historical Background ...................................................................................96 5.3 Types of Distribution Systems ........................................................................97 5.3.1 Direct Distribution System.....................................................................97 5.3.2 Indirect Distribution System ..................................................................99
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5.4 Travel Intermediaries....................................................................................100 5.4.1 Tour Wholesalers ..................................................................................100 5.4.2 Tour Operators .....................................................................................104 5.4.3 The Travel Agent..................................................................................105 5.4.4 Regulation of Intermediaries .............................................................107 5.5 The Impact of Technology on Travel Distribution Systems ......................109 5.5.1 The Link Between Technology and Tourism .....................................109 5.5.2 Computer Reservation Systems (CRS)..............................................110 5.5.3 Ticketing Automation..........................................................................111 5.5.4 The Internet ..........................................................................................112 5.5.5 The Future.............................................................................................112 Chapter 6: Special Services and Products ....................................................117 6.1 Introduction ..................................................................................................117 6.2 Special Segments of Leisure Travel............................................................118 6.2.1 Reasons for the Growth of Special Leisure Travel Services and Products ..................................118 6.2.2 Ecotourism............................................................................................118 6.2.3 Cultural Tourism....................................................................................120 6.2.4 Rural Tourism ........................................................................................121 6.2.5 Adventure Tourism...............................................................................122 6.2.6 Health Tourism......................................................................................123 6.2.7 "New Age" Tourism ..............................................................................124 6.2.8 Educational Tourism ............................................................................124 6.3 Special Segments of Business Travel..........................................................125 6.3.1 Meetings...............................................................................................125 6.3.2 Incentive Travel....................................................................................126 6.3.3 Expositions ............................................................................................127 6.3.4 Conventions.........................................................................................128 6.3.5 Major Components of the MICE Market..........................................129 SECTION III: TOURISM MARKETING AND PROMOTION....................................135 Chapter 7: Tourism Market Segments and Travel Psychology.....................137 7.1 Introduction ..................................................................................................137 7.2 Describing Tourists by Purpose of Travel ....................................................138 7.2.1 Leisure vs. Business Travelers ...............................................................139 7.2.2 Visiting Friends and Relatives (VFR)...................................................141 7.2.3 Special Interest Travel .........................................................................142 7.2.4 Group vs. Independent Travelers ......................................................144 7.3 Sociodemographic Factors and Life Circumstances .............................144 7.3.1 Age .......................................................................................................144 7.3.2 Gender .................................................................................................145 7.3.3 Education.............................................................................................146 7.3.4 Other Factors .......................................................................................146 7.4 Approaches to Tourist Motivation ..............................................................148 7.4.1 History of Tourism and Motivation .....................................................149
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7.4.2 Theories of Travel Motivation .............................................................149 7.4.3 Market Research and Motivation .....................................................153 Chapter 8: Tourism Marketing .........................................................................159 8.1 Introduction ..................................................................................................159 8.2 Marketing Concepts ...................................................................................159 8.3 Characteristics of Services Marketing.......................................................161 8.3.1 The Tourism Industry's Service Characteristics .................................161 8.3.2 The Tourism Industry's Unique Marketing Challenges .....................162 8.4 Market Segmentation .................................................................................163 8.4.1 Characteristics of Effective Market Segments ................................163 8.4.2 Bases for Market Segmentation ........................................................164 8.5 The Market Mix .............................................................................................165 8.5.1 Product.................................................................................................167 8.5.2 Place (Distribution)..............................................................................168 8.5.3 Price ......................................................................................................168 8.5.4 Promotion.............................................................................................170 8.6 Marketing Plans............................................................................................177 8.6.1 NTA Marketing Plans ...........................................................................177 8.6.2 Environmental Analysis .......................................................................179 8.6.3 Competitive Analysis ..........................................................................180 8.6.4 Market Trend Analysis .........................................................................180 8.6.5 Market Segmentation Analysis ..........................................................180 8.6.6 Strategic Goals and Objectives........................................................181 8.6.7 Action Plans .........................................................................................181 Chapter 9: Tourism Research and Forecasting..............................................185 9.1 Introduction ..................................................................................................185 9.2 Tourism Research .........................................................................................186 9.2.1 The Functions of Tourism Research....................................................186 9.2.2 The Tourism Research Process............................................................186 9.2.3 Sources of Information........................................................................189 9.3 Organizations Conducting Research........................................................192 9.3.1 Tourism Organizations .........................................................................192 9.3.2 Educational Institutions.......................................................................193 9.3.3 Private Organizations or Firms............................................................194 9.3.4 Consulting Firms...................................................................................194 9.4 Relationship Between Marketing and Research .....................................194 9.4.1 Destination Marketing Research as a Planning and Evaluation Tool .........................................................194 9.4.2 The Tourism Market Research Program ............................................196 9.4.3 Accountability Research for Destination Marketing.......................198 9.4.4 Making Research Understandable to Practitioners........................200 9.5 The Importance of Forecasting Tourism Demand ...................................200 9.5.1 How Tourism Demand is Measured...................................................200 9.5.2 Elements of Tourism Demand ............................................................201 9.5.3 Forecasting Tourism Demand ............................................................201
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SECTION IV: TOURISM IMPACTS ........................................................................209 Chapter 10: Contributions of Tourism to Economic Development ..............211 10.1 Introduction ................................................................................................211 10.2 Understanding Economic Impacts..........................................................212 10.2.1 Tourism in the Global Economy.......................................................212 10.2.2 Tourism in the National Economy....................................................213 10.2.3 Impact of Tourism on Employment .................................................213 10.3 Measuring Tourism Economic Impacts....................................................214 10.3.1 Identifying Tourism Activity ...............................................................214 10.3.2 Structure of the Tourism Industry .....................................................216 10.3.3 Supply-Demand and Price Elasticities ............................................217 10.3.4 Direct, Indirect and Induced Benefits.............................................217 10.3.5 Multiplier Model of Tourism Revenue Turnover ..............................218 10.3.6 Input-Output Analysis........................................................................220 10.3.7 Tourism Satellite Accounts................................................................221 10.3.8 Cost-Benefit Analysis .........................................................................221 10.4 Monitoring Economic Impacts.................................................................223 10.4.1 Indicators in Tourism Monitoring ......................................................224 10.4.2 The Assessment Process....................................................................225 10.5 Obstacles to Economic Development Through Tourism.......................225 10.6 Facilitating Employment in the Tourism Sector.......................................226 Chapter 11: Social and Cultural Aspects of Tourism.....................................231 11.1 Introduction ................................................................................................231 11.2 Sustainable Tourism....................................................................................232 11.3 The Sociocultural Impacts of Tourism ......................................................234 11.3.1 Defining Society and Impacts .........................................................234 11.3.2 Major Sociocultural Impacts ............................................................234 11.3.3 Cultural Change ...............................................................................235 11.3.4 Other Impacts ...................................................................................237 11.3.5 Factors Influencing the Sociocultural Impacts of Tourism ............237 11.3.6 Factors Related to Individual Perceptions of Tourism...................238 11.3.7 Factors Related to the Size and Nature of Tourism Development.......................................................239 11.4 Strategies to Manage Sociocultural Impacts of Tourism ......................239 11.4.1 Obstacles to Sociocultural Understanding ....................................240 11.4.2 Strategies to Manage Sociocultural Impacts................................240 11.5 The Relationship Between Culture and Tourism .....................................243 11.5.1 Culture Shaping Outbound Tourism................................................244 11.5.2 Culture Shaping Inbound Tourism ...................................................245 11.6 Interpretation for Sustainable Tourism .....................................................247 11.6.1 Principles for Enhancing the Effectiveness of Interpretation ...................................................248 Chapter 12: Sustainable Tourism and the Environment ................................253 12.1 Introduction ................................................................................................253 12.2 Sustainable Development ........................................................................254 12.3 The Physical Environment: A Core Component of Tourism ..................254
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12.4 The Impacts of Tourism on the Physical Environment............................256 12.4.1 Negative Impacts .............................................................................256 12.4.2 Positive Impacts.................................................................................259 12.4.3 Factors Which Influence Tourism Impacts ......................................259 12.5 Strategies for Managing Impacts ............................................................260 12.5.1 Planning Strategies ...........................................................................261 12.5.2 Marketing and Education Strategies..............................................268 12.5.3 Research and Monitoring ................................................................270 12.6 Tourism and the Physical Environment: Three Case Studies .................270 12.6.1 The Great Barrier Reef, Australia......................................................270 12.6.2 Venice, Italy........................................................................................272 12.6.3 Mt. Huangshan Scenic Area, People's Republic of China ...........273 12.7 Alternative Tourism.....................................................................................274 SECTION V: TOURISM POLICY AND PLANNING ...............................................279 Chapter 13: The Role of Government in Tourism Policy and Administration ..............................................................281 13.1 Introduction ................................................................................................281 13.2 Government Involvement in Tourism .......................................................282 13.3 Reasons for Government Involvement in Tourism and the Economy....................................................................283 13.3.1 Promoting Economic Development ...............................................283 13.3.2 Facilitating and Supporting Industries ............................................284 13.3.3 Raising Revenues ..............................................................................284 13.3.4 Creating a Stable Business Environment ........................................285 13.3.5 Pursuing Other Policy Goals.............................................................285 13.4 Roles of the Public Sector in Tourism .......................................................286 13.4.1 Policy...................................................................................................286 13.4.2 Planning..............................................................................................288 13.4.3 Development.....................................................................................290 13.4.4 Regulation..........................................................................................290 13.5 Levels of Government Involvement.........................................................292 13.5.1 International Involvement ................................................................292 13.5.2 National Involvement .......................................................................293 13.5.3 Local Involvement.............................................................................294 13.6 National Tourism Administrations (NTAs)..................................................295 13.6.1 Role of NTAs .......................................................................................295 13.6.2 NTA Structure .....................................................................................297 13.6.3 NTAs and the Issue of Public Sector Involvement in Tourism ...............................................298 Chapter 14: The Role of International and Regional Organizations in Tourism..........................................................303 14.1 Introduction ................................................................................................303 14.2 Types of Tourism Organizations.................................................................304 14.3 Purposes and Objectives of Tourism Organizations...............................305 14.3.1 Promotion of Industry Interests ........................................................305 14.3.2 Regional Marketing and Cooperation...........................................306
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14.3.3 Providing Data and Advice .............................................................306 14.3.4 Providing Direct Assistance ..............................................................306 14.3.5 Addressing Trade Issues ....................................................................307 14.3.6 Addressing Environmental and Social Issues .................................307 14.4 Important Tourism and Tourism-related Organizations..........................309 14.4.1 World Tourism Organization (WTO)..................................................309 14.4.2 Organization for Economic Cooperation and Development (OECD) ..............................................................310 14.4.3 International Civil Aviation Organization (ICAO)...........................311 14.4.4 International Air Transport Association (IATA) ................................312 14.4.5 World Travel and Tourism Council (WTTC) ......................................312 14.4.6 Pacific Asia Travel Association (PATA) and Other Regional Organizations .................................................313 14.4.7 International Bank for Reconstruction and Development (IBRD).......................................315 14.4.8 International Trade in Services and GATS ......................................315 14.5 Challenges for Tourism Organizations .....................................................317 Chapter 15: Tourism Planning and Destination Development .....................321 15.1 Introduction ................................................................................................321 15.2 The Forms of Tourism Planning..................................................................322 15.2.1 Tourism and Economic Development ............................................323 15.2.2 Tourism Master Planning ...................................................................324 15.3 The Need for Tourism Planning .................................................................324 15.4 Levels of Tourism Planning in the Public Sector......................................326 15.4.1 National Planning..............................................................................326 15.4.2 Local Planning...................................................................................326 15.4.3 Destination Planning.........................................................................327 15.5 Actors Involved in the Planning Process .................................................328 15.6 Organizing the Planning and Development Process ............................329 15.7 Elements of a Tourism Plan .......................................................................330 15.7.1 Demand Analysis...............................................................................330 15.7.2 Supply Analysis ..................................................................................331 15.7.3 Tourism Impact Analysis....................................................................333 15.7.4 Economic and Financial Analysis ...................................................336 15.7.5 Action Plan and Recommendations..............................................337 15.8 Factors Affecting Tourism Planning ..........................................................337 Chapter 16: Tourism Human Resources Planning and Development .........341 16.1 Introduction ................................................................................................341 16.2 Human Resources Planning......................................................................342 16.2.1 Assessing Labor Demand .................................................................343 16.2.2 Assessing Labor Supply.....................................................................343 16.3 Tourism Employment and Career Opportunities ...................................344 16.4 Quality of Service and the Work Force...................................................347 16.4.1 Service Expectations of Travelers....................................................347 16.4.2 Sustaining Quality Through Skill Standards .....................................347
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16.5 Tourism Education and Training Providers...............................................350 16.5.1 Formal Programs and Courses ........................................................351 16.5.2 Employer-based Education and Training .......................................353 16.5.3 Education and Training Providers and Skill Standards..................354 16.6 Issues Facing Tourism Human Resources Development........................355 16.6.1 Geopolitical .......................................................................................355 16.6.2 Economic ...........................................................................................356 16.6.3 Social ..................................................................................................356 16.6.4 Information Technology ...................................................................356 16.6.5 Constant Change .............................................................................357 Chapter 17: Conclusion ...................................................................................361 17.1 Tourism and Sustainability: Issues for 2000 and Beyond ........................361 17.2 The Challenges of Growth........................................................................362 17.2.1 Where Will Tourism Growth Occur?.................................................363 17.2.2 What Kinds of Tourism Experiences Will Meet the Market?..........364 17.2.3 Who Will Benefit from Tourism Growth? ..........................................364 17.2.4 What are the Human Resource Implications of Tourism Growth?......................................................365 17.2.5 Learning from Other Destinations ...................................................366 17.3 Sustainable Tourism and the Future.........................................................366 17.3.1 Growth Towards What? ....................................................................366 17.3.2 Sustainable Tourism ...........................................................................367 17.3.3 Cross-cultural Understanding and Peace......................................367 Glossary .............................................................................................................373 About the Authors.............................................................................................395 Bibliography ......................................................................................................399
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Section
1
Perspectives of Tourism CHAPTER 1
Introduction to Global Tourism CHAPTER 2
Travel Patterns and Trends
CHAPTER 1 Introduction to Global Tourism Learning Objectives
Learning objectives • To define the terms used in the travel and tourism industry. • To obtain an overview of the historical development of tourism. • To appreciate the scope and importance of international tourism. • To identify the major components of the travel and tourism industry. • To understand the impacts and contributions of tourism to the economic and social well-being of societies. • To understand the importance of the study of tourism. Key terms and concepts domestic tourism inbound tourism infrastructure international tourism mass tourism outbound tourism same day visitor tourism tourists transportation travel travel distribution systems travel industry components visitors
1 Introduction to Global Tourism Learning Objectives
1.1 Introduction The travel and tourism industry is the world’s largest and most diverse industry. Many nations rely on this dynamic industry as a primary source for generating revenues, employment, private sector growth, and infrastructure development. Tourism development is encouraged, particularly among the developing countries around the world, when other forms of economic development, such as manufacturing or the exportation of natural resources, are not commercially viable. The reasons people desire to travel are complex and varied. Contributing to the powerful growth tourism has experienced in a relatively short time frame has been the increased accessibility to the many components of the travel experience. Transportation to, from, and within parts of the world once considered remote has become more affordable for, and within the reach of, the majority of residents in many nations. Accommodations and restaurants in assorted budget categories are universally found in major cities, resort locations, adjacent to airports and thoroughfares, and in rural areas. Professional services provided by travel agencies and tour operators, marketing efforts by public sector tourism offices, advanced technology that rapidly brings the tourism components together in a flash for the potential traveler–all make today’s travel experience safe, comfortable, and enjoyable.
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Travel: easier and cheaper
Chapter 1: Introduction to Global Tourism Learning Objectives
This chapter will help students of the travel and tourism industry understand the many positive impacts travel and tourism have on countries throughout the world. The importance of tourism terminology is explained, and definitions for the most common terms are provided. Travel and tourism through a historical context is also treated. The role of tourism as a major contributor to the global economy is explored, as well as indicators which reflect the industry’s rapid growth. Other contributions of tourism are discussed, as is the concept of sustainable tourism. Key components of this multifaceted industry–tourism distribution, transportation, hospitality, tourism administration–are summarized. Finally, basic approaches to studying this dynamic industry are reviewed, bringing us to the 20th century and the mass tourism movement.
1.2 Defining Travel and Tourism 1.2.1 The Need for Definitions
Defining "travel"
The terminology used within this dynamic industry is worthy of discussion. The simple word travel, defined as “the act of moving” by most dictionaries, has a different definition within the context of the tourism industry. For the purpose of this book, travel is defined as “the act of moving outside one’s community for business or pleasure but not for commuting or traveling to or from work or school” (Gee, Makens, & Choy, 1989, p. 12). With respect to travel as an industry, there must also be the creation of economic value resulting from the travel activity. Understanding fundamental definitions and concepts used within the context of the travel and tourism industry provides an essential framework from which most discussions on the industry are based. Because of tourism’s intangible nature, common definitions of terminology benefit the industry in a number of ways. Standardized definitions help insure that all parties are speaking about the same term or concept with little or no room for variables. This is essential for tourism developers and executives from different regions or countries when they discuss travel and tourism matters.
Importance of standardization
In addition, having standardized definitions enables planners to use comparable data in which to make more informed business decisions. Exact definitions, however, cannot be taken for granted. For the first half of the 20th century, tourism visitor arrivals were barely recorded by many countries and, when they were recorded, methods varied by countries. It was not possible to effectively compare the total number
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Defining Travel and Tourism
of visitors from one country to another which defined visitors differently, usually counting arriving foreign passport-holding individuals. Finally, having standardized definitions enables tourism researchers to make scientifically valid assumptions about the tourism industry. This becomes increasingly important as travel and tourism researchers continue to enlighten public policy makers and private industry executives about the extraordinary role tourism plays in the world’s overall economy. As a relatively new academic discipline, the tourism field lacks the depth of research found in other forms of commerce. As standardized definitions become more accepted, researchers will have an easier time collecting comparable data and performing meaningful tourism studies.
1.2.2 Definitions The World Tourism Organization (WTO), the major intergovernmental body concerned with tourism, has led the way in establishing a set of definitions for general use. In 1991, the WTO and the Government of Canada organized an International Conference on Travel and Tourism Statistics in Ottawa, Canada which adopted a set of resolutions and recommendations relating to tourism concepts, definitions, and classifications. The following definitions are based on the WTO definitions and classifications and explain the various types of visitors (see Figure 1.1): • Tourism - The activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business, and other purposes. • Tourist - (overnight visitor) visitor staying at least one night in a collective or private accommodation in the place visited. • Same Day Visitor (Excursionists) - visitor who does not spend the night in a collective or private accommodation in the place visited. • Visitor - any person traveling to a place other than that of his/her usual environment for less than 12 consecutive months and whose main purpose of travel is not to work for pay in the place visited. • Traveler - any person on a trip between two or more locations (WTO, 1995b, p. 17). Unfortunately, there is still confusion over these very basic definitions. Even within the same country such as the United States, for example, different states may use different definitions for data gathering and statistical purposes.
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Definitions in research
6 Same-day visitor Business and professional
Visiting friends and relatives
Leisure, recreation and holidays
Other
Religion/ pilgrimages
Health treatment
For fhe purpose of:
Other travelers
Source: Adapted from World Tourism Organization, Concepts, Definitions, and Classifications for Tourism Statistics, (1995), p. 22.
Overnight visitor (tourist)
Visitors
Travelers
Figure 1.1: Visitors and Other Travelers
Chapter 1: Introduction to Global Tourism Learning Objectives
Defining Travel and Tourism
1.2.3 Forms and Categories of Travel Just as there are different types of visitors, there are different forms and categories of travel which take place, varying by traveler, destination, and motive for travel, such as international vs. domestic travel, intraregional vs. interregional travel, as well as inbound vs. outbound travel. International and Domestic Tourism According to the WTO, international tourism differs from domestic tourism and occurs when the traveler crosses a country’s border. Not every international traveler is a visitor, however. The traveler is a visitor only if the trip takes him or her outside the usual environment, e.g., workers who cross borders for employment are not considered visitors. The interest in international tourism has always been strong, primarily for economic reasons, as this form of tourism plays an important role in trade and monetary flows among nations. Domestic tourism has been overshadowed by the interest in international tourism, for it was thought initially to have little or no international impact, and statistics on the subject were felt to be a country’s own business. It has become clear, however, that international and domestic tourism do relate to each other. Travelers’ choices change depending on circumstances, and domestic tourism can be substituted for international tourism and vice versa under the influence of external factors, such as relative growth in real incomes, price differences between countries, and international political conditions. Over the past few decades, in many Western countries domestic holidays were largely replaced by outbound holidays, influenced by the rise in living standards and discretionary incomes, while developing countries have seen sharp increases in domestic tourism (WTO, 1995b, p. 34).
Relationship between international and domestic
Regional Travel Regions are geographically united subdivisions of a larger area characterized by definitive criteria or frames of reference. Three types of regions are used in tourism research. The first one refers to geographical location. Regions such as “the north” or “the west,” are examples of this type. The second type refers to administrative areas, such as “Province X.” The third combines criteria referring to location with criteria of a more physical nature. Examples of this type of region are “the lake district” or “the Pacific Basin.” Regions of functional type can also be constructed, such as “urban areas” or “coastal areas.” The term interregional travel refers to travel among various regions, whether in regions found within the same province or state, a country, or various
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Regional divisions
Interregional and intra-regional
Chapter 1: Introduction to Global Tourism Learning Objectives
regions throughout the world. Intra-regional, on the other hand, refers directly to travel contained within the same defined region, whether domestic or international such as travel between countries of East Asia. Inbound and Outbound Tourism There are three forms of tourism at any level, in relation to a given area, e.g., domestic region, country, or group of countries: • Domestic tourism, involving residents of the given area traveling (as visitors) only within that area; • Inbound tourism, involving non-residents traveling as visitors in the given area; • Outbound tourism, involving residents traveling as visitors in an area other than the given area. If a country is the area of reference, the terms “domestic,” “inbound” and “outbound” tourism can be combined in various ways to derive the following categories of tourism: • Internal tourism, which comprises domestic and inbound tourism; • National tourism, which comprises domestic tourism and outbound tourism; • International tourism, which consists of inbound tourism and outbound tourism. To avoid misunderstanding the terms “inbound,” “outbound,” “domestic,” “internal,” “national,” and “international tourism” are generally used with a country as the unit of reference. However, it should be recognized that there are political subdivisions which are less than countries and differ from states such as the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands, both part of the United States (WTO, 1995b, p. 27).
1.3 History of Travel and Tourism While the concept of travel and tourism is as old as civilization itself, history, reveals that travel was not always a pleasurable experience. A brief review of tourism’s historical development is in order to fully appreciate today’s modern tourism environment and to understand tourism’s challenges as the world’s population approaches the new millennium.
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History of Travel and Tourism
1.3.1 Early Ages Logical motivators for the earliest of peoples in prehistoric civilizations to travel focused on gathering food, avoiding danger, and moving to more favorable climates. As humankind’s skills and technologies increased, there was a decreased need in the nomadic existence, resulting in yet another travel motivator: the trade and barter of goods. As ancient world empires grew in Africa, Asia, and the Middle East, the infrastructure necessary for travel such as land routes and waterways was created and vehicles for travel were developed. The beginnings of official government travel were a direct result of rulers who sent their emissaries to observe the progress of wars throughout sprawling empires or to collect taxes from the citizenry. During the Egyptian dynasties, travel for both business and pleasure began to flourish, and hospitality centers were built along major routes and in the cities to accommodate travelers between central government posts and the outlying territories. During the height of the Assyrian empire, the means of travel were improved, largely for military use, and roads were improved, and markers were established to indicate distances. The Persians who defeated the Assyrians made further improvements to the road systems and developed four-wheeled carriages for transportation. The early Greeks advanced travel and tourism developments in two particular areas. First, through the development of a coin currency, replacing the need for travelers to carry goods to barter at their final destination for other goods and services. Secondly, the Greek language spread throughout the Mediterranean area, making it easier to communicate as one traveled. Since most of the Greek towns and cities were located along the coast, travel was primarily by sea. Travel for government business was kept to a minimum because of the independent nature of the city-state system, but the Greeks liked to visit other cities for pleasure, particularly Athens. They also enjoyed traveling to religious festivals, and events like the Olympic games held every four years at Olympia. At the height of the Roman empire, the ruling patrician class enjoyed their leisure during the periods of relative peace. Like the Greeks before them, they observed their own athletic and religious events and traveled to these sites. Sightseeing was also popular with the wealthy Romans, and many visited Greece. A ten-volume travel guide was published in 170 A.D. by the Greek, Pausanias. Entitled A Guide to Greece, the guide targeted the Roman tourist market and described the Grecian monuments, sculptures, and the stories and myths behind them. Romans also toured Egypt to see the Sphinx and the Pyramids. Alexandria was
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Early civilizations
The Greeks' contribution
Ancient Romans
Chapter 1: Introduction to Global Tourism Learning Objectives
a cosmopolitan oasis for Roman aristocracy, since many nationalities were represented there including Egyptians, Greeks, Jews, Ethiopians, Indians, and Syrians. Egypt’s weather was also a travel incentive for the Romans, as it offered a sunny, hot, and dry environment. The citizens of the Roman Empire also liked to shop when abroad, as most tourists do today. The practice of hiding purchases from custom officials probably originated with this class, a result of high duties, typically 25 percent, placed on imported purchases. Leisure travel in Asia
Asian civilizations also have a history of leisure travel to resorts, with known examples of second homes or seasonal retreats in China as well as in Japan. Chinese nobility and their guests retreated to the summer pavilions and villas in Suzhou, Hangzhou and other scenic areas.
1.3.2 Middle Ages
Christian pilgrimages
During the Middle Ages from about the 5th to 14th century A.D., trade and travel declined as roads fell into disrepair and overall travel conditions became difficult as well as dangerous. During this period, the Christian Church was the primary impetus for travel with the spreading of monasteries and the Christian religion. Monks and priests encouraged the public to go on pilgrimages, and by the 14th century, pilgrimages were an organized mass phenomena served by a growing network of charitable hospices with growing ranks of participants from most social classes. Christians went to Jerusalem and Rome, and even though the pilgrimages had a religious basis, they were also seen as social and recreational journeys.
Early travel accounts
In the latter part of the 13th century, Marco Polo explored the land routes from Europe to Asia. In China, Polo discovered a well-developed road system, the first having been built during the Chou dynasty (1122-1221 B.C.). Polo’s book on his travels was the West’s main source of information about life in the East during this period. Other travel books began to appear with the advent of the printing press, and Sir John Mandeville’s Travels in 1357 was printed in several foreign languages, with descriptions of travel to places as far away as southeast Asia.
"Modern" tourism in medieval era
By the 15th century there is a record of an actual package tour which originated in Venice to the Holy Land. For the price of the package, the tourist received passage, meals, accommodations, donkey rides, and the bribe money necessary to avoid red tape. Early versions of today’s
10
History of Travel and Tourism
convenience fast food stands popped up along heavily trafficked pilgrim travel ways. Roadside hawkers during high seasons would sell wine, fruits, fish, meats, bread and cakes from roadside tents.
1.3.3 The Renaissance Travelers between the 14th and 17th centuries used as their travel motivator the desire to broaden one’s experience and knowledge. In England, Queen Elizabeth I approved a form of travel to groom future diplomats, and the universities such as Oxford and Cambridge in England and Salamanca in Spain provided travel fellowships. England also issued a traveler’s license which was good for two to three years and it disclosed travel restrictions, how much money, how many horses, and servants (usually three) the traveler could take. Tourists also were issued passports, but surrendered them at exit posts, and picked up new ones for each country they visited. Little cash was carried, instead they used a line of credit which worked like the modern day traveler’s checks. The Elizabethan traveler usually went to Italy, by way of Paris and Frankfurt. The loosely organized Elizabethan tour later became more highly structured into what became known as the Grand Tour. The organized Grand Tour had its start in the mid-1600’s, and its popularity ran through the mid-1800’s. The desire to gain new knowledge and experiences were still the prime motivators of travel for participants of the Grand Tour; and the Grand Tour was seen as the capstone to educational and cultural attainment of the upper classes. Typically, sons of well-to-do families traveled to specific countries to visit historical sites and ruins as well as to study art, architecture and history. There was even a tour guidebook for the Grand Tour travelers, the 1778 bestseller by Thomas Nugent.
Travel for knowledge
Passports and traveler's checks
The Grand Tour
1.3.4 The Industrial Revolution The Industrial Revolution, which lasted from about 1750 to 1850 created the base for mass tourism as we know it today. This period brought profound economic and social changes as workers moved away from basic agriculture in rural areas into the manufacturing plants and urban way of life familiar to many people today. The Industrial Revolution also introduced new machinery powered by steam for trains and ships. Social changes brought on by changes in occupations led to the expansion of a new middle class, an increase in leisure time, and for many, a demand for recreational travel activities leading to a decline in popularity of the elitist Grand Tour.
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Groundwork for mass travel
Chapter 1: Introduction to Global Tourism Learning Objectives
Beginnings of vacations
Middle class market
Initially, recreation tourist trips were generally only day trips because most people still had only limited discretionary income and a five-day work week was not commonplace. Toward the end of the 19th century, workers began to get annual vacations. In order to escape congested and polluted urban areas, many turned to spas and seaside resorts for their holidays which set the tone more or less for the modern leisure tourist. Some destinations, until then visited primarily by the wealthy, were expanded, while others were newly established to capture this growing middle class market. To these destinations, the middle class represented a huge market compared with the small number of the earlier wealthy and aristocratic visitors. What the new tourists lacked in individual spending power, they more than compensated in terms of the total volume of arrivals.
1.3.5 Modern Tourism
Reasons for mass tourism
Growth and future prospects
It was the combination of desire, mobility, accessibility, and affordability that made mass travel possible. With the 20th century came new technologies such as aviation, computers, robots, and satellite communications, which have transformed the way that people live, work, and play. Modern technology is credited with the development of mass tourism for a number of reasons: it increased leisure time, provided additional discretionary income, enhanced telecommunications, and created more efficient modes of transportation. As the world looks ahead to the next millennium, there is little doubt that tourism will continue to be one of the most dynamic growth sectors of the global economy. Despite periodic recessions, political upheavals, wars, and uncertainties about the price and availability of fuel, international tourism is now the largest single item in the world’s foreign trade budget. It is three times bigger than world expenditures on defense. No longer an activity reserved only for the privileged few, tourism is now engaged in by millions of people who enjoy new places, seek a change in their environment, and look for meaningful experiences. As the new age of tourism evolves, it will be affected by a number of exogenous factors (see Figure 1.2) such as economic and financial developments, technological developments and innovations, environmental issues, and marketing factors affecting the structure of the travel and tourism operating sector and product development.
12
Components of the Travel Industry
Figure 1.2: Factors Shaping the Development of Tourism
Demographic and Social Change
Economic and Financial Developments
Political, Legislative, and Regulatory Changes
Transport Infrastructure
EXOGENOUS FACTORS
Technological Developments
Trading Developments
Safety of Travel
Destination Product Development
Marketing
Operator Product and Service Development
Structure of the Travel Trade
MARKET FORCES
Computer Reservations Systems and Destination Databases
Human Resources Development
Source: World Tourism Organization, Global Tourism Forecasts to the Year 2000 and Beyond, (Madrid: WTO, 1995), p. ix.
1.4 Components of the Travel Industry 1.4.1 Transportation and Infrastructure How visitors get to, from and within a given destination is the responsibility of the transportation component of tourism as discussed in Chapter 3. Whether travel is by air, sea, or ground transportation, adequate facilities and services must be in place for the development
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Need for facilities and services
Chapter 1: Introduction to Global Tourism Learning Objectives
of a successful destination. For existing tourist destinations, domestic and international tourism is dependent upon the maintenance and improvements of airport terminals, harbors, and road systems. Sufficient transportation is integral to the success of all other components of tourism. The various modes of transportation work to get visitors, for example, from the airport to their accommodations. From the hotel, the visitor needs transportation to various restaurants and evening entertainment, to attractions or convention sites the next day, and back to the airport when the departure date arrives. The infrastructure refers to components found on or below the ground level that provide the basic framework for effective functioning of development systems such as urban areas, industry, and tourism (Inskeep, 1991, p. 119). Infrastructure components such as water supply, electric power, sewage and solid waste disposal, drainage, and telecommunications are but a few of the more critical elements required for the various tourism dimensions to operate efficiently.
1.4.2 Accommodations and Hospitality Services Tourism facilities covered in Chapter 4 include the services which provide basic necessities, comfort, and aid to travelers. Because the visitor is away from home, basic needs–a place to stay, food and beverage, stores–must be accessible, safe, and convenient. Accommodations
Varieties of accommodations
Accommodations or lodging facilities and their related services are where tourists stay overnight during their travels, accounting for a good portion of the tourists’ total expenditure, typically 20 to 30 percent depending on quality of accommodation, destination, and purpose of trip. There are a wide variety of types of accommodations which meet the demands of various budgets, including bed and breakfast establishments, European style pensions, youth hostels, campgrounds, recreational vehicle parks, and cruise ships. The hotel, the most common type of accommodation, has its own categories, extending from luxurious urban or resort properties, to smaller budget-oriented motels or motor lodges. Most countries have classification or rating systems for accommodations, particularly between the hotels and motels, which help distinguish the level of service provided to the guests.
14
Components of the Travel Industry
Food and Beverage Restaurants, bars and other types of eating and drinking outlets, range in size and service levels from stand-alone operations, to a unit located within a hotel, to small food carts or stalls in a street market. Food and beverage are required by tourists and represent another large source of competition for visitor expenditures. The cuisine in itself can be a primary or secondary attraction for many visitors traveling abroad. Destinations such as Lyons, Paris, Rome, Hong Kong, San Francisco, New Orleans, among many others, are well known culinary centers. Some tourists are adventurous and will try many different kinds of foreign foods. A majority of tourists, however, want to have food and beverage available to them which are familiar to them. As a result, a range of cuisine offerings need to be accessible in a variety of price ranges in any popular tourist destination.
Attitudes towards food
Support Services Support services include shopping facilities and services at the destination which help fulfill the basic as well as supplementary needs of visitors. Stores which meet the varying demands of visitors include: souvenir shops, duty free stores, laundry facilities, grocery and department stores. Other support services which meet the needs of visitors include tour guide services, sports and recreation retail and rental shops, as well as entertainment facilities. All these support services not only make the travel experience more accessible, but fulfill basic needs in addition to the special extras which make the experience more enjoyable. An added benefit is that most of these businesses provide local jobs and opportunities for local entrepreneurship which helps keep money in the host community.
Beneficial for tourist and community
1.4.3 Travel Distribution Systems There are several ways to look at the various components and the services provided by the tourism industry including examining the tourism consumer, the tourism product itself, and the direct and indirect distributors of travel-related goods and services. As discussed in Chapter 5, a travel distribution system involves a process which begins with the buyer or customer. The customer typically requires a product–an airline ticket, a cruise booking, a hotel reservation or car rental. The direct distributor is the service or business that provides the product. The indirect distributor is the travel agency, tour wholesaler or operator, or specialty channeler, which may or may not be used as an intermediary to get the product to the customer. These distribution channels serve to link the tourism suppliers and the customers.
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Direct/indirect distributors
Chapter 1: Introduction to Global Tourism Learning Objectives
1.4.4 The Roles of the Public and Private Sectors in Tourism It was thought at one time that tourism was primarily a private sector concern, since the tourism-related business made the profits and reaped the rewards. It was considered the private sector’s responsibility to develop and produce services and products for visitors. The public sector, represented by government, saw little need to invest scarce resources and funds toward an activity that benefited private interests. However, once governments realized the great economic importance of tourism, especially as an “engine of employment” and source of tax revenue, this attitude changed. Today, there are many interests concerned with tourism’s growth and development from the private sector businesses, both large and small, to the various public sector government structures (e.g., national, regional, state, provincial, municipalities), and international, regional, and national organizations. Government and business interests
Tourism organizations
Tourism consists of both public and private goods based on the supply and allocation of tourism resources. While the private sector is likely to limit its activities to goods or services that can realize profits, the public sector represented by governments must look beyond profit motives to those which will benefit the society as a whole. Public goods might include natural, cultural, and historic attractions and resources which are maintained and protected by government for the benefit of society as a whole, and users are likely to benefit from these goods, such as visiting a national park, without paying for the benefit. Other public goods and services provided by government which affect tourism include regulation, promotion, and marketing of tourism resources. National tourism administrations or organizations, whether governmentsponsored national tourism offices or private associations, help promote and monitor tourism development within the context of a particular country, while state, provincial, and even municipal organizations promote and define the growth of tourism for a smaller area of influence. International organizations, some of which are regional or developmental in nature, provide forums for discussion as well as assistance in tourism marketing and research, the removal of barriers to travel, and a number of other functions. Foremost among intergovernmental organizations is the World Tourism Organization (WTO), a subagency of the United Nations representing 130 member states and over 300 affiliate members in 1996. The roles of governments and regional and international organizations are discussed in Chapters 13 and 14.
16
Impacts of Travel and Toursim
Because tourism has the ability to increase the public coffers and create employment opportunities, the public sector has actively assisted in the promotion of both international and domestic tourism. A series of government tourism offices for marketing purposes–national, regional, or at the state/province level–are found in most countries. The goals are to promote the region they represent and ensure sustainable tourism development. Tourism organizations are found in both the public and private sectors and are organized by: • Geography - international, regional, national, state or provincial, local; • Ownership - government, quasi-government, or private; • Function or type - regulators, suppliers, marketers, developers, consultants, researchers, educators, publishers, etc.; • Industry - transportation, travel agents, tour wholesalers, lodging, attractions; • Motive - profit or nonprofit (Goeldner, McIntosh, & Ritchie, 1995, p. 71).
1.5 Impacts of Travel and Toursim 1.5.1 Economic Impacts The travel and tourism industry is a group of economic activities which combined makes it the world’s largest industry, the number one generator of jobs, one of the world’s biggest exports, and a major stimulus for investment and growth. Since 1950, when international travel started to become accessible to the general public, international tourist arrivals have risen each year at an average rate of 7.2 percent and international tourists receipts by 12.3 percent (WTO, 1994a, p. 1). In 1995, international tourist arrivals exceeded 563 million worldwide and tourism revenues (excluding transport) exceeded U.S. $399 billion (see Table 1.1). The World Tourism Organization forecasts that by the year 2000, international tourist arrivals will reach 702 million, and by the year 2010, 1.108 billion arrivals. International tourism receipts grew faster than world trade in the 1980s, and now constitute a higher proportion of the value of world exports than all sectors other than petroleum products, and motor vehicles/parts/accessories. The contributions of tourism to economic development are covered in Chapter 10.
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Tourism: the world's largest industry
Chapter 1: Introduction to Global Tourism Learning Objectives
Table 1.1: International Tourism Activity 1950-1995.
Receipts ($Bn, excl. Transport)
Year
Arrivals (mn)
1950
25.3
2.1
1960
69.3
6.9
1970
165.8
17.9
1980
286.2
105.2
1990
459.2
264.7
1995
563.6
399.0
Period (% p.a. growth)
Average Annual Percentage Increase
Average Annual Percentage Increase
1950-1960
10.6
12.6
1960-1970
9.1
10.1
1970-1980
5.6
19.4
1980-1990
4.8
9.7
1990-1995
4.1
7.5
Source: World Tourism Organization, Yearbook of Tourism Statistics, 48ed., 1996 and 49ed., 1997.
1.5.2 Other Impacts
Sustainable tourism
The travel and tourism industry, however, contributes much more to the world than bolstering economies and providing employment opportunities. One of the major themes of this book is to explore how sustainable tourism can be accepted universally and applied to tourism development. The concept of sustainable tourism, loosely defined as the meeting of the needs of present tourists and host regions while protecting and enhancing opportunities for the future, will also be explored in this book. Tourism can have positive environmental benefits which include efforts to protect the Earth’s natural and manmade resources through the establishment of wildlife preserves, the restoration of historical sites and landmarks, and the preservation of pristine environments. It also has beneficial social and cultural impacts. It helps recognize and promote distinctive cultures and heightens local awareness of indigenous traditions. Tourism has assisted in the revival of the arts and handicrafts of some host communities, creating a demand for performance centers and cottage industry craft shops.
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The Study of Tourism
Among the tourism industry’s many supporters, it is believed that tourism can ease political tensions, and in effect, act as a catalyst for world peace. As foreign borders disappear, whether literally or figuratively, there is an emerging use of the term global village, making the world smaller and more intimate. The tourism industry and the countries which rely on tourism for overall development, must provide tourists a safe and secure atmosphere, as tourism can only prosper in a peaceful environment.
Benefits of tourism
1.6 The Study of Tourism The study of tourism can be approached through a variety of disciplines including economics, business, history, geography, and sociology, to name a few. The travel industry has made both positive and negative impacts on these disciplines and has become a global player in activities, organizations, and businesses. Throughout this book, many exciting facets of the travel and tourism industry will be explored, but it is important to realize that no one part is more important than the other. This industry is unlike any other as collaborative efforts are not only encouraged but necessary, due to the interdisciplinary nature of the tourism experience. Each of the key components required for a tourism destination to flourish–travel distribution, transportation and infrastructure, accommodations and other facilities, and tourism administration–requires the assistance of each other in combination with marketing, promotion, facilitation and other “software” aspects of travel delivery. The interdisciplinary approach to travel then provides students a means to study tourism, particularly as it has become an increasingly complex industry with sophisticated, informed, and demanding consumers. Rapid global changes and advancements in technology make the study all the more essential for today’s tourism managers and planners. Tourism leaders must be familiar with the challenges of meeting the escalating demands of today’s traveling public. Tourism providers know that if they cannot please or exceed their customers’ needs, the competition will be more than happy to fill that demand. To compound an already challenging environment, today’s tourism developers and management teams must work within the confines of an environmentally-sensitive and socially responsible approach to sustainable tourism. Careful attention to the earth’s finite natural resources, and a sense of social responsibility to host communities and cultures influenced by tourism will continue to be a major factor in what encompasses a prosperous tourism industry.
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An interdisciplinary field
The necessity of study
Chapter 1: Introduction to Global Tourism Learning Objectives
SUMMARY This chapter has presented the background on the travel and tourism industry as the largest service industry in the world. The growth of domestic and international tourism, the importance of tourism expenditures, and the contributions of tourism to gross domestic product and employment opportunities provide many positive effects. Travel and tourism, when properly planned and managed also bring other benefits than economic ones such as maintaining cultures, preserving the environment, and contributing to peace efforts. Travel and tourism is a multifaceted industry with many components including travel distribution, transportation and infrastructure, tourism facilities such as accommodations, food and beverage establishments, and support services. Both the private and public sectors are involved in the industry. The challenge for tourism planners and management in both sectors will be to meet the needs of a more sophisticated traveler, while balancing the precious resources of a finite world, preserving native traditions and cultures, and taking social responsibility for negative impacts on the host community. The next chapter will take a closer look at travel during the 20th century, travel trends of various countries, as well as regional and international travel patterns. External factors and their possible effect on tourism and other world trends will also be explored.
DISCUSSION
QUESTIONS
1. What are the tourism-related definitions for your state/province and country? Do they differ from the WTO definition? 2. Within a historical context, what have been some of the motives for travel? 3. Besides economic, environmental and cultural benefits, what are some other benefits of tourism development? 4. What are examples of the various travel industry components where you live? How are they interdependent? 5. List some reasons for studying the tourism industry, including your own.
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CHAPTER 2 Travel Patterns and Trends
Learning objectives • To understand the size and significance of international travel. • To understand the patterns and trends of domestic, regional, and international travel. • To describe the factors that affect the development of tourism. • To review top tourism trends which will have a significant impact on the industry’s growth worldwide. Key terms and concepts computerized reservation system (CRS) domestic travel global distribution system (GDS) international travel sustainable tourism tourism expenditures tourism generators tourism receipts travel deficit travel surplus
2 Travel Patterns and Trends
2.1 Introduction The previous chapter examined the broad-based travel and tourism industry and illustrated that through most of recent history, travel was often an exhausting undertaking. With societal and technological changes, travel transformed itself into a much desired and accessible leisure activity–tourism–which has provided enriching experiences to travelers. This chapter will direct its attention to the current state of modern tourism. International and regional travel trends such as visitor arrivals, tourism receipts, top destinations, and tourism expenditures will be examined, in addition to regional travel patterns, both inbound and outbound. The understanding of trends is important as they provide a clue to what is likely to occur in the future, thus providing a basis for destination and tourist product planning and marketing. External factors including political, demographic, social and technological changes must also be considered for their impact on tourism when trends are being analyzed.
2.2 Tourism Growth Both domestic travel or travel between two points in the same country, and international travel, where a person travels to a country other than his or her own country of residence, have experienced remarkable growth within a relatively short period of time. It was not until the 1960s that working-class Britons, for example, could enjoy leisure travel
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Importance of trends
Chapter 2: Travel Patterns and Trends
consisting of a greater distance than what a train could cover in half a day, for example from Glasgow, in Scotland, to Blackpool, in northwest England (Elliot, 1991). It was not until 1964 that Japanese were allowed to travel abroad for pleasure, and then they were limited to one trip a year. It was not until 1972 that more than one in two Americans had ever flown (and in that year, only one in five Americans boarded an aircraft).
2.2.1 International vs. Domestic Tourism
More domestic travelers
Geographical reasons
The World Tourism Organization estimates that the scale of world domestic tourism far exceeds that of world international tourism; in 1995 total domestic tourist arrivals numbered about 5.6 billion, whereas total international tourist arrivals numbered 567 million - a ratio of 10:1 (World Tourism Organization, 1996a). In some countries domestic tourism dominates often for geographical reasons. Because of the large size of their countries, residents of Canada and the U.S. are less inclined to travel to foreign countries in favor of domestic travel. In 1994, U.S. residents, for example, made over 1.3 billion trips away from home while remaining within the U.S. borders, in contrast to the 46 million trips U.S. residents made to foreign countries (U.S. Travel Data Center, 1995, p. 5). In other countries where geography is more conducive to trips outside national borders, international tourism is more important than domestic tourism. Those who live in regions of the world outside of temperate climates have different travel patterns from those who live in tropical climates. Sometimes, a nation’s resources provide ample attractions and destinations for its own citizens. The French, whose geography poses few barriers to international travel, spend perhaps ten times as many holiday nights in France as they do abroad.
Global importance
The size of domestic travel notwithstanding, the global industry is increasingly driven by international travel. Most countries that allow their nationals to travel abroad generally market their countries as destinations to nationals of other countries. This policy is based on the fact that the technology which makes foreign travel possible is within reach of the masses desiring to travel, and that international tourism represents an infusion of foreign currency and improves foreign trade.
2.2.2 Total International Arrivals The boom in international tourist arrivals around the globe is a relatively new occurrence. In 1950, 25 million people crossed an international border. In 1960, nearly 70 million international arrivals were recorded.
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Tourism Growth
By 1970, this figure had grown to 160 million. In 1980, international arrivals totaled well over 280 million. By 1995 international tourist arrivals in all destinations was over 563 million. The WTO projects worldwide tourism will grow to around 702 million arrivals in the year 2000, and over 1 billion by 2010 (WTO, 1996i; see Table 2.1). Table 2.1: WTO Forecast International Tourist Arrivals and Receipts
Year
Arrivals
Receipts
1995
563,641,000
US$ 399 billion
2000
702,000,000
US$ 621 billion
2010
1,018,000,000
US$ 1.5 trillion
Source: World Tourism Organization.
2.2.3 World’s Top Destinations and Tourism Receipts From an international perspective, the most popular destinations in the world in 1995 were France, followed by United States and the Spain (WTO, 1996c). It is important to note that an extremely high portion of travel is received, as well as generated, by relatively few countries. The top ten destinations account for 54 percent of the world volume of tourism flows, with seven of the top ten countries located in Central and Western Europe. Of the top ten receiving countries, seven are European nations (see Table 2.2), but this may be explained by the close geographic proximities and accessibility of countries (except for the Central Independent States of the former U.S.S.R.) within the continent–a sharp contrast to the wide geographic spread and distance among the countries of Asia. The pattern for tourism receipts is similar to tourism arrivals: the top ten earners represent 55 percent of the world total. The U.S. leads the world in tourism receipts, with France and Italy in second and third place, respectively. With the swift increase in recent years of international tourism to and within East Asia and the Pacific, two Asian destinations are among the top ten earner list (WTO, 1996d; see Table 2.3).
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Europe: top destinations
Travel receipts
Chapter 2: Travel Patterns and Trends
Table 2.2: Top Ten Tourism Destinations 1995 Rank
Destination
No. of Arrivals
1
France
60,110,000
2
United States
43,318,000
3
Spain
39,324,000
4
Italy
31,057,000
5
United Kingdom
24,008,000
6
Hungary
20,690,000
7
Mexico
20,162,000
8
China
20,034,000
9
Poland
19,200,000
10
Austria
17,173,000
Source: World Tourism Organization.
Table 2.3: Top Ten Tourism Earners 1995 Rank
Destination
International Receipts
1
United States
61,137
2
France
27,527
3
Italy
27,451
4
Spain
25,701
5
United Kingdom
19,073
6
Germany
16,221
7
Austria
14,597
8
Hong Kong
9,604
9
China
9,364
10
Singapore
8,733
Source: World Tourism Organization.
2.2.4 Tourism Generators and Related Expenditures Tourism generator countries is a category of information on outbound tourists, and is of great importance to countries seeking inbound tourism. Sources of these data include national tourism administrations (NTAs) as well as international tourism organizations. Sixty-seven percent of all international outbound travelers are attributed to nationals of only 10 countries, of which six are European countries (WTO, 1996k, p. 78).
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Tourism Growth
The U.S. and Germany usually lead the world as tourism-generating countries. The U.S. is responsible for generating 15 percent of the world total of international tourist arrivals. Until 1967, international outbound travel from Japan was limited. With the easing of currency restrictions following the build-up of a strong foreign exchange position, tourism has grown very fast. Japan has shown the highest average increase in number of tourists registered in foreign countries, and by 1995, had an outbound market of 15 million (WTO, 1996k).
Top tourism generating countries
Tourism generating countries are also closely linked with the volume of tourism expenditures. Tourism expenditure refers to the total consumption expenditure made by a visitor, or on behalf of a visitor, before and during his or her trip and stay at a given destination (WTO, 1995b). International tourism expenditures refer to the expenditures of outbound visitors in other countries. In 1995, Germany surpassed the U.S. in international tourism expenditures by generating 14 percent of the world total vs. 12.8 percent for the U.S., while Japan the third leading tourism generator, accounted for 10 percent of the international tourism expenditures (see Table 2.4).
Expenditures
Table 2.4: World's Top Tourism Spenders 1995
Rank
Country
International Tourism Expenditures (mm US$)
1
Germany
50,675
2
United States
45,855
3
Japan
36,792
4
United Kingdom
24,737
5
France
16,328
6
Italy
12,419
7
Austria
11,687
8
Russian Federation
11,599
9
Netherlands
11,455
10
Canada
10,220
Source: World Tourism Organization.
2.2.5 Tourism Surpluses and Deficits The most desired effect of international tourism is the inflow of foreign exchange. A travel surplus is achieved when foreign visitors spend more money in a particular country than the total spending of the
27
Chapter 2: Travel Patterns and Trends
Surplus example: U.S.
Deficit example: Japan
country’s own nationals when they travel abroad. The U.S., France, and Italy, as popular international destinations, are among the top countries which accumulate tourism surpluses. The United States has been running a travel surplus since 1990. In 1995, foreign visitors spent $58.5 billion in the U.S., compared with $45.3 billion spent by Americans traveling outside the country. Fluctuating foreign exchange rates have helped inbound travel to the U.S. grow twice as fast as U.S. outbound travel to foreign countries (WTO, 1996k, pp. 73, 78). A less desirable economic result, the travel deficit, occurs when total expenditures spent in foreign countries from a given country exceed the total tourism receipts earned by foreign inbound tourists. For example, Japan has experienced a travel deficit for some time, due to unfavorable exchange rates which have simultaneously enabled foreign countries to benefit from Japan’s yen-spending outbound tourists.
2.3 Regional Travel Patterns and Trends Regional international travel
Statistics on worldwide tourism arrivals are dominated by a high proportion of intra-regional as well as domestic traffic. More than three-fourths of international travel takes the form of short-haul travel, and more often than not, within and between the developed nations of Europe, North America, and Asia. Nationals of Canada, the U.S., and Mexico visit their neighboring countries more than they do any other countries of the world.
2.3.1 Europe As a region, Europe is the world’s number one destination. In 1995, this region attracted two-thirds of all international tourist arrivals (WTO, 1996a). Not surprisingly, it also is the leader in intra-regional travel for a number of reasons: • Europe contains several relatively small countries. • Much intra-regional international tourism within Europe takes place between neighboring countries with common land borders (or otherwise between countries that are fairly close to each other). • Modes of travel for smaller countries in close proximity comprise ground transportation, such as cars, trains, and motorcoaches, making more cost-prohibitive air travel unnecessary.
28
Regional Travel Patterns and Trends
It is estimated that 80 percent of all travel in Europe is intra-regional in nature. The Netherlands, for example, receives 85 percent of its visitors from other Western European countries. Over 90 percent of the visitors to Spain are other Europeans. Renewed promotional efforts to attract nearby markets, improvements in the tourism infrastructure in many of the tourist-generating and tourist-destination countries, and the ease of border-crossing between European countries are all factors favoring short-haul travel. Leading receiving countries for Europe are the leading destinations for the world–France, Spain, and Italy, among them–for 1995. Overall, however, there is a decrease in the growth rates of foreign arrivals and tourist receipts to these more established Western European destinations, which have been attributed to saturation levels and poor exchange rates. As a subregion within Europe, the Eastern Mediterranean countries–notably Israel and Turkey–led in tourism arrival growth, with the Eastern and Central European subregion countries following close behind in 1995 (WTO, 1996a).
Intra-regional tourism dominates
Changes in regional growth
Recent trends suggest that outbound long-haul travel from Europe is beginning to increase and is growing faster than intra-European travel. Overall outbound traffic from Europe is still projected to be low growth, however, as the countries’ nationals may have reached their ceiling on available free time and disposable income.
2.3.2 Asia and the Pacific The growth of travel in East Asia and the Pacific has been particularly rapid. From a region with known arrivals totalling fewer than 100,000 in 1950 to over one million a year in 1960, the totals for subsequent decade intervals increased exponentially–7.2 million in 1970, and 21 million in 1980–to a total arrival figure exceeding 47 million in 1990 (Gee & Lurie, 1993, pp. 49, 56, 61, 68). In 1995, there were 88 million international arrivals in the East Asia and Pacific region, of which 70 percent ended up traveling within the region (WTO, 1996j, pp. 1-2). Travel to, from and within this area of the world continues to surpass forecast figures. The WTO has had to revise its estimates for international tourism arrivals and receipts for 2010 because earlier estimates for tourism, primarily in East Asia and the Pacific, were too conservative. The revised forecast shows East Asia and the Pacific moving ahead of the Americas by 2010 ranking second to Europe with 229 million international arrivals anticipated (see Table 2.5). This growth is significant in light of the geographic characteristics of the region, where virtually all international arrivals arrive by air.
29
Exceptional growth and good future prospects
30 84.0 111.9 18.7 11.1 4.4
East Asia/Pacific
Americas
Africa
Middle East
South Asia 702
6
14
25
138
122
397
2000
1,018
11
21
37
195
229
525
2010
4.1
6.7
4.9
4.6
3.7
7.6
3.1
Average annual growth rate 1990-2010
Source: World Tourism Organization, WTO News, No. 2., May/June 1996, p. 3.
567.4
337.2
Europe
World
1995
Region
Table 2.5: International Arrivals by Region Forecast (in Millions)
Chapter 2: Travel Patterns and Trends
Regional Travel Patterns and Trends
Top destinations within the Asian region include Hong Kong and China, followed by Singapore, for 1995. Rapid tourism development in countries like Indonesia and Malaysia, as well as relatively new destinations, such as Cambodia and Vietnam, signal that growth will continue for the Southeast subregion. Since opening its doors to tourism in 1978, China has attracted millions of tourists who are interested in the country’s history, heritage, cultural diversity, and natural landscapes. The growth in tourism can be attributed to the extensive efforts of the Chinese government in promoting tourism and the removal of restrictions on the movement of tourists. With the increasing quality of tourism services and perceived value, inbound visitors exceeded all previous records with over 23 million foreign arrivals tallied for 1995. While visitors to China from compatriot destinations–Hong Kong and Taiwan–still dominate, Japanese visitors led the way for foreign visitors, the former Soviet Union placing second, followed by the United States. Future outbound travel prospects for Asian nations hinge on their continued economic progress, which has been, and should continue to be, a major catalyst to world economic performance. China has the potential to be a particularly rich source of outbound travelers, with its rapidly expanding economy. Overall economic growth rates for this region of the world should range between 4 and 5 percent each year, which bodes well for this region as an outbound generator.
Destinations
Tourism to China
Chinese travelers
2.3.3 South Asia Overshadowed by the size of tourism development of its neighbors in East and Southeast Asia, the South Asia region has made impressive gains in recent years starting at a smaller base. The region is comprised of India, Bangladesh, Maldives, Pakistan, Sri Lanka, Nepal, Bhutan, Myanmar, Afghanistan, and Iran. Between 1980 and 1992, the overall growth rate of international tourism arrivals averaged 3.6 percent a year, below the global average growth rate. Since 1993, regional economic growth has spurred tourism development, and in 1995, the region’s 2.1 million international tourism arrivals represented a 12.5 percent growth rate over 1994. This growth rate was three times higher than the world average and nearly matched the growth in the East Asian and the Pacific region (WTO, 1996j).
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Rise in arrivals
Chapter 2: Travel Patterns and Trends
Top destination: India
European visitors
Nearly four out of every five international tourists go to India, and strong growth rates have also been evident in the Maldives, based on its beach resorts, and Nepal which offers special interest tourism. Although much of the travel is intra-regional, the western European tourism market is quite steady especially for the beach resort segment. The growth in European tourism in the last decade is largely attributable to better air transportation access and increasing international trade in the region (WTO, 1994c, pp. 30-31). The prospects for growth are strong for intra-regional tourism, while the growth in long-haul, inbound tourism arrivals will be lower. Almost all countries in the region will share in the growth of inbound tourism including Bangladesh, Myanmar, and Iran. Japan is expected to be the leader in the major tourist generating markets to the region, followed by France, Germany, the U.K. and the U.S. With the expansion of trade and increasingly strong domestic economies, outbound tourism is also expected to experience steady growth (WTO, 1994c).
2.3.4 Americas
Intra-regional tourism dominates
Growth potential in South and Central America
Substantial growth was experienced in tourist arrivals across North, Central and South America, as well as the Caribbean. Overall tourism receipts to the region stagnated, however, as a result of the United States dip in both arrivals and receipts for 1995. The U.S. attributed this to declining numbers of Canadian and Mexican tourists, although overseas travel held up well. Of the total arrivals into the Americas in 1995, 75 percent were intra-regional tourist flows. Cuba and Mexico experienced the quickest growth rate of all the countries of the Americas. Arrivals into South American countries grew at twice the world average, with sustained increases from the U.S., Canada, and traffic from within the subregion. The Caribbean achieved marginal inbound tourism growth during this year, an outcome of the previous year’s hurricane although there was an increase in port-calls by cruise lines (WTO, 1996g). Forecasting the outbound tourism potential for the Americas varies by subregions. The U.S. and Canada, like Western Europe, is at a stage where the level of discretionary spending and time devoted for leisure have reached their peak, meaning that growth of outbound tourism will slow for interregional travel, while intra-regional traffic should hold up. As economic development and industry continue to make inroads in South and Central American nations, these two subregions show the most promise for increased outbound travel.
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External Factors that Affect Tourism
2.3.5 Middle East The Middle East was the fastest growing region for 1995. While arrivals to the Middle East represented only about two percent of international tourist arrivals, this amounted to an 11.8 percent increase, with receipts increasing by nearly 30 percent. Egypt, which captured four out of five of these Middle East tourists, increased its revenues by 95 percent as well as its arrivals by 27 percent. Other top destinations making gains in this region include Jordan, Bahrain, and Lebanon (WTO, 1996h). Rapid growth was attributed to a renewed interest in cultural tourism, but perceived safety and increased political stability played a large role as well.
Egypt: top destination
Prospects for outbound travel for Middle East residents are tied to the economic performances of the countries. When the national economies prosper, it typically implies that the citizens are enjoying a better standard of living and have the necessary resources to consider foreign travel, whether intra-regional or long-haul.
2.3.6 Africa Political instability and civil unrest have discouraged development in this resource-rich, but investment-poor continent. Political and military disturbances and health apprehensions in some sub-Sahara destinations have left a decidedly substandard image of Africa as a tourism destination. Inbound foreign arrivals grew only slightly in 1995, although South Africa enjoyed growth in both leisure and business travel. More stable political conditions and a decrease in civil discontent led to South Africa experiencing an increase in both foreign arrivals and tourist receipts for 1995 (WTO 1996f). The near future for Africa as an outbound generating region mirrors that of the Middle East. Much needed foreign investment, as well as improving political stability and education, could help the more developed African nations improve their productivity and efficiency, thus stimulating local economies, and creating an interest in outbound travel.
2.4 External Factors that Affect Tourism To acquire a deeper understanding of tourism and to better facilitate tourism planning, a number of external factors which have the ability to negatively impact the development of tourism must be considered. Factors confronting global, regional and domestic tourism which have
33
Problematic tourist destination
Growth in South Africa
Chapter 2: Travel Patterns and Trends
the potential to greatly influence tourism growth include: sociodemographic change, technological advances, political change, sustainable tourism and environmental issues, safety and health issues, and human resource development.
2.4.1 Changing Demographics
Young travel most
An important factor is the changing demographic profile of the world’s population. In light of the projected six billion people populating our planet by the year 2000, tourism product development and service delivery for the years ahead require the anticipation of demographic changes. Three well-defined groups of travelers, each distinct in its travel consumption and preferences, will be evident. The largest group, the 18-34 year olds, will continue to comprise much of the traveling public as singles or in groups. Whether traveling alone, with coworkers or with a group of friends, this age segment will continue to dominate much of the Asian outbound market.
Growth in retiree travelers
In developed western countries and Japan, however, the fastest growing population segments will be over the age of 50. Many will be early retirees due to the restructured job market of recent years. These “baby boomers” will have the financial resources and discretionary time to travel. However, their spending patterns will be quite mixed depending upon their retirement incomes. Longer visitor stays and greater overall visitor expenditures are expected from this group, who will be seeking physical adventure, intellectual enrichment and culturally rich destinations.
Family market
Finally, the family market will also be visible as families with children and two income households continue to increase. Travel will be used to provide quality time for parents and their children, resulting in greater demand for family-oriented attractions, facilities, and accommodations. Family structures, too, will change worldwide with the rising numbers of working women, single households, childless couples and non-traditional families. All have enormous implications for planning tourism destinations.
2.4.2 Technological Advances Transportation
Technology continues to impact on the travel experience and those who use or supply it. In particular, the linkage and interdependency between transportation, travel distribution systems, and customer information is receiving increasing attention. In aircraft development the technology is already available to transport passengers in a supersonic airplane from New York to Shanghai in under 3 hours, although it will be many years
34
External Factors that Affect Tourism
before economics make the technology feasible for marketplace adoption. The technology of high speed trains able to reach speeds in excess of 483 kmh (300 mph) are already in use in Japan, France and other parts of the world, and could become a preferred alternative to air travel as airport congestion and delays increase. Although train travel for pleasure has been growing in popularity in the U.S., it seldom receives adequate attention as a viable mode of transportation in tourism because of economic factors and withdrawal of public subsidies. Technology can be an ally, but also a threat. While new developments in technology can improve tourism services and product delivery, technology can also mean customer loss, job displacement, underemployment and a resulting negative impact on a local economy. Already the new generation of long-haul, fuel-efficient aircraft means the ability to overfly virtually any destination. Unless a destination can generate sufficient demand for air seats, the future of adequate air service to that destination may be in jeopardy. The services provided by airline computerized reservation systems (CRS) and telephone and cable companies, combined with the growth of electronic highways and on-line services, are dramatically altering the way travel products are marketed and distributed. Accessible and user-friendly global distribution systems (GDS), accessed by millions of individuals throughout the world, have the ability to do what the travel agent or tour operator has traditionally done: to create a vacation package for the consumer that can be “tailor-made” by the customer. The convergence of the television, telephone and the personal computer will continue to create new distribution channels for reaching the customer directly. The growth of video conferencing and creation of virtual reality technologies will enable people miles apart from one another to communicate in a very real sense without leaving their offices, and without buying an airline ticket or needing a hotel room.
Negative aspects of technology
Other advances
2.4.3 Political Change We will continue to see political changes which will have strong effects on tourism. The emerging Eastern European countries and Central Independent States, slowly establishing democratic governments and free market economies, are gradually having an impact on that region of the world’s travel trends. The impact of China–with its population over 1 billion–as both an inbound, but more importantly, an outbound tourism market, attracts the interests of economists, business and government policy makers in neighboring countries and beyond.
35
China's impact
Chapter 2: Travel Patterns and Trends
2.4.4 Sustainable Tourism and the Environment
Defining "sustainable tourism"
As tourism reaches maturity as an industry in many countries around the world, the question is one of sustainability. The term “sustainable tourism” is a relatively recent one with different meanings and interpretations. Sustainable tourism deals with the ability of a destination to remain competitive against newer, less explored destinations; to attract first time visitors as well as repeaters; to remain culturally unique; and to be in balance with the environment.
Development limitation
With the projected tourism arrivals figure of 1 billion by the year 2010, the potential strain on beaches, mountain resorts, historical city centers and small rural villages could leave their existence in peril. Accepting and implementing limits on tourism development is one way to counteract the potential overuse and exploitation of a destination’s natural resources and cultural heritage.
Combining development and protection
Environmental problems such as global climate changes, ozone loss, deforestation, and toxic wastes promise to stay at the top of the international agenda. The tourism industry will see the continued need to combine sound economic development with the protection of natural resources. There will be an increasing need to analyze the trade-offs between native cultural integrity and the benefits of employment, and the need to understand the impact of rapid climatic changes on prime vacations sites, such as coast lines.
Ecotourism
"Green" organizations and industry
Even ecotourism is not without its detractors. Ecotourism started out as a low-impact offshoot of the adventure travel industry. It represented the best intentions of an educated and affluent middle class to travel without despoiling the environment. However, the very presence of tourists can still threaten the fragile ecology of such areas as the Antarctic, tropical rain forests, or island destinations anywhere. The World Tourism Organization, the World Travel and Tourism Council, and the Pacific Asia Travel Association are among the many international and regional organizations to develop policies, codes, and guidelines regarding conservation and protection of natural resources. Every segment of the industry has been enlisted to support the environment movement. Lately, the hotel industry has moved aggressively in combating waste in the use of water and energy, reducing the use of hazardous chemicals in laundry and ground maintenance, and in recycling high use consumable materials, such as soap, paper goods, and plastic amenities in guest rooms.
36
External Factors that Affect Tourism
2.4.5 Safety and Health Health as well as security concerns are of major interest for international travelers. The reemergence of diseases such as cholera and malaria in developing countries, as well as the global threat of the AIDS virus, is making travelers more concerned with the sanitation standards applied to food, water, and medical supplies, and with human behavior and preventative measures practiced by host destinations. Safety has always been an important prerequisite for the attraction of international visitors. According to a 1994 survey, 66 percent of leisure travelers said crime is an important consideration in choosing a vacation destination, and 62 percent of travelers considering overseas travel had safety concerns as they made their plans (World Travel and Tourism Council, 1995). While the statistical odds of being harmed as a visitor are insignificant compared to injury from ordinary accidents, the publicity which follows the wrongful death of a tourist makes for sensational anecdotal stories and headline news around the world. As tourism grows, security becomes more important and travelers will expect safeguarding measures in transportation and accommodations while visiting foreign countries. The threat of international conflicts and wars, growing levels of crime, and terrorism not only deter tourism, but often place countries at political odds when they must issue travel advisories against otherwise friendly countries. Some countries possess the resources to handle security issues as they relate to tourists quite effectively. However, aviation safety problems continue to plague many countries as the rapid growth in airline service puts a severe strain on the countries’ aviation infrastructure, and are further exacerbated by personnel shortages and lack of experienced pilots, flight and ground crew.
Disease
Crime
Political problems
Aviation safety
2.4.6 Human Resource Development The travel and tourism industry continues to be a major source of employment in both affluent and poor countries, employing one out of every nine workers worldwide. Because of slowed population growth rate in industrialized countries, however, some nations will have to search for workers, including the importation of expatriates, and initiate work re-engineering for service industries. The lack of available workers will become especially hard-felt after the turn of the century as populations continue to age.
37
Need for workers in industrialized nations
Chapter 2: Travel Patterns and Trends
Need for training in developing nations
Education
Developing countries, by contrast, will be faced with burgeoning youth populations in need of work but without the necessary skills. The shortage of entry- level and skilled workers, plus the increased consumer demand for improved services, will pressure the industry to provide more education and training and greater incentives to work in the tourism sector. Some countries actively pursue human resource planning for tourism enterprises which is discussed in Chapter 16. Hospitality and tourism training and education have undergone rapid development in most countries which heavily rely on the visitor industry for revenues. Secondary schools provide training for students desiring semi-skilled, entry-level hotel and restaurant jobs. Post-secondary vocational programs offer special skill training for students interested in becoming supervisors or professional chefs. Higher education offers different programs at varying levels, including two-year certificate and diploma programs, as well as four-year Bachelor’s and Master’s degrees.
2.5 Tourism Market Trends Planning for the future
Unlike some of the external factors which can have negative affects on tourism if not addressed early or quickly reversed, trends represent developments or social movements that foreshadow what will happen in the future. Since a true trend is impossible to change, planners must anticipate it and determine a suitable course of action. The following represent a few of the top tourism trends which are having significant impacts on the tourism industry worldwide.
2.5.1 Changing Consumer Preferences More pleasure travel
Paid holidays
Today’s pleasure to business travel mix is approximately 60 percent/vs. 40 percent, a reversal of the trend prevailing in earlier decades which favored business travel. While business travel is expected to remain important due to the development of Eastern Europe and resource-rich South East Asian countries such as Malaysia and Indonesia, most of the growth will derive from pleasure traffic. Paid holidays, while common in developed countries, are not yet universal, but are increasingly seen as an entitlement, as an integral component of one’s lifestyle, and as an antidote to stress from overwork. For example, the Japanese government and industry are encouraging a policy of “jitan” or shortening work hours, with a goal of 1,800 hours or less for the average worker in a year. This translates into seven weeks of available time for leisure and travel.
38
Tourism Market Trends
The industry is seeing both a rise in length of stay, particularly from the older, affluent vacationers with discretionary time, as well as an increase in shorter holidays by the younger work force that want to catch their breath and take two- or three-night extended weekend getaways from the stressful urban pace.
Longer stays, more trips
2.5.2 Product Development and Competition New tourism destinations are rapidly emerging in the world. These include Vietnam, Cambodia, and Laos in Asia; the Central Republics of the former USSR; Chile in Latin America; and Southern African nations. In recent years, Vietnam has been particularly aggressive in seeking foreign expertise and investments for tourism. Even Japan–the Asian region’s most important tourist generating country–is beginning to stress the importance of a two-way flow of tourists. Some of these destinations already boast a high standard of service. Most of them also possess aggressive government assistance and incentive for tourism development and varied attraction resources, which bode extremely well for their potential success. For the more established destinations, however, these new destinations represent competition for regional and international travelers.
SUMMARY It is universally accepted that the travel and tourism industry is a growth industry. Many market factors have contributed to this explosive tourism growth, including more modern, convenient and accessible tourism products and services in a variety of price ranges. International visitors and their spending in other countries, moreover, make the international travel market a key economic development tool. As a result many countries have extensive tourism marketing campaigns geared toward making their country a worthy country to visit. This chapter provided information on basic international travel flows, outbound and inbound, as well as tourism receipts and tourism expenditures of the various countries. Regional tourism patterns were also reviewed, suggesting that proximity and land size play an important role in the foreign travel picture. Future outlooks for various regions were also offered. The positive relationship for developing nations between the status of a country’s economic development, increased inbound growth rates, and the likelihood for generating outbound tourism, was discussed. Developed nations, on the other
39
New destinations
Chapter 2: Travel Patterns and Trends
hand, revealed a stagnant relationship between continued economic growth and generating increased rates of outbound tourism, as the ceiling for leisure time and discretionary income has been reached. Finally, this chapter discussed the various external factors which can and should be addressed by tourism planners and developers to ward off potential negative impacts. While many of these external tourism trends cannot be modified or reversed, proper planning and ongoing awareness of their implications on travel and tourism will enable tourism planners to maintain a balance in the development process.
DISCUSSION
QUESTIONS
1. Describe some of the advances that have affected tourism growth. 2. What are some of the reasons why some countries run tourism surpluses and others run tourism deficits? 3. What is the difference between inter- and intra-regional tourism, and why are regional trends important? 4. Why do the countries with the largest proportion of international travel arrivals and receipts tend to have the slowest growth trends in international arrivals? 5. What advances in technology tend to aid tourism growth? What technological advances could stall tourism growth?
40
Section
2
Travel and Tourism Components and Services CHAPTER 3
Transportation Services CHAPTER 4
Accommodations and Hospitality Services CHAPTER 5
Travel Distribution Systems CHAPTER 6
Special Services and Products
CHAPTER 3 Transportation Services
Learning objectives
•
To understand the historical development of passenger transportation modes and their role in the travel industry.
• To identify the roles and important aspects of ground, sea, and air transportation. • To understand the basic aspects of international air agreements, airline regulations, and deregulation. • To identify challenges facing the transportation industry. Key terms and concepts bilateral vs. multilateral regulatory systems computerized navigation and traffic control computerized reservation system (CRS) five freedoms of the air ground transportation scheduled vs. charter air service yield management
3 Transportation Services
3.1 Introduction Transportation lies at the heart of the tourist industry. It is the link between home, destination, accommodation, attraction, and all other locales of the tourist trip. Its efficiency, comfort, and safety determine, to a large extent, the quality of the tourism experience. In many cases, its cost comprises the largest portion of a tourist’s total expenses. There is a direct relationship between advances in transportation and growth in the tourism industry. In particular, the automobile and the jet airplane have made travel accessible to a growing segment of the world’s population. As the demand for travel expands, the capacity of transportation modes will be a critical factor in facilitating or hindering the expansion of the tourism industry. For many destinations, the constraints posed by transportation and its infrastructure–such as airports and roads–constitute the biggest obstacles to growth. In the case of island destinations, the availability of air access is the sine qua non of tourism development; without such access, there is little or no touristic activity. This chapter will cover the basic aspects of passenger travel. The relationship between transportation and technology will be highlighted through a discussion of the various modes of travel. Air travel is covered extensively, given its importance to international tourism. The main issues facing the air travel industry, including the critical role of regulation, will be explored.
45
Expansion due to modern transport
Chapter 3: Transportation Services
3.2 Historical Development of Passenger Travel Different modes of travel have been dominant at different times in history. The evolution of passenger travel, from horse-drawn carriage to jet airplane, reflects the development of transportation technology. Understanding how passenger travel has changed over time is important because the development of other aspects of the travel industry, especially the accommodations sector, have been greatly influenced by those changes.
3.2.1 Early Modes of Travel
By land
By sea
Land travel did not progress much beyond horseback riding until the early 19th century, when improvements in roads and coach design made land travel more comfortable for passengers. These improvements included the use of better paving materials for roads, which prevented them from deteriorating into rough, pothole-filled paths, and the development of coaches with suspended rather than fixed carriages, which provided passengers with a much smoother ride. However, because road construction was arduous work, and because most major cities were port cities more easily accessible via water transportation, long distance land travel capabilities remained limited until the development of the railroad. Water travel was much more extensively used and developed at this time. Over the centuries, ship design had been improved by many accomplished seafaring societies, such as the Phoenicians, Romans, and Chinese. From the 16th through early 19th centuries, sailing ships such as the caravel and clipper dominated the seas. Steamships were developed in the early 19th century and began regular service across the Atlantic Ocean in the mid-1800s.
3.2.2 Railroads and Ocean Liners
Steam engine technology
The first transportation modes to be used extensively for passenger travel were the railroads and ocean liners, both of which utilized steam engine technology. Rail development began in the early 1800s and quickly grew through the 19th century. In 1835, the Great Western Railway linked London and Bristol, and in 1841 Thomas Cook pioneered the first rail tour. In the United States, the first transcontinental railroad was completed in 1869. By the late 19th century, rail dominated land
46
Historical Development of Passenger Travel
passenger movement and had greatly improved inland access from the major cities. The famous Orient Express linked Paris with Istanbul in 1883 and London with Istanbul in 1913. In the United States, intercity trains such as the Broadway Limited and the Golden State Limited were very popular. By the early 20th century, the train station had become the focal point of many established and new cities and towns, often surrounded by hotels, restaurants, and other facilities for travelers. Meanwhile, improvements in steamship technology in the late 1800s through the early 1900s led to the age of the great ocean liners, such as the Mauritania, the Queen Mary, and the Queen Elizabeth, which could make the trans-Atlantic voyage in less than four days.
Railway expansion
Ocean liners
3.2.3 Automobiles and Airlines Mass production of the automobile, pioneered by Ford Motors in the early 1900s, led to the decline of rail as the primary mode of land transportation. With mass production the automobile became affordable to a large segment of the population. As automobile ridership grew, so too did government commitment to road systems, such as the autobahns in Germany and the interstate highway system in the United States. In a similar way, the development of the airplane greatly diminished the role of the passenger ocean liner. Orville and Wilbur Wright’s famous first flight at Kitty Hawk took place in 1903. Passenger service in airborne vehicles began in 1910 with the dirigible in Germany. In 1914, the first scheduled airplane passenger service began in the U.S. It was not until after World War I, however, that airplane service became an established transportation mode. Europe took the lead in developing passenger service, while in the U.S., faster mail service was the focus for the development of air transportation. In the years between the world wars, there were significant advances in air transport technology, including the areas of weather forecasting, navigation equipment, aerodynamics, and management. Intercontinental air transport became established during World War II, and soon new, four-engine planes with pressurized cabins and advanced instruments made long-range flying more comfortable and efficient. With the introduction of commercial jet aircraft in 1958, air travel quickly gained dominance over rail and water travel modes. In 1970, the wide-bodied or “jumbo” jet was introduced, and the supersonic Concord began service in 1976. Since then other new aircraft have been introduced which have increased the speed, efficiency, and comfort of passenger travel.
47
Auto replaces trains
Popularity of cars
Plane replaces liners
Developments in passenger planes
Chapter 3: Transportation Services
3.3 Rail Service
Problems with rail travel
Expense of rail maintenance
Although railroads continue to be a major component of passenger and freight transportation, air and automobile transportation have greatly reduced the demand for passenger rail service in the decades since the end of World War II. Throughout its history, rail has suffered from several problems. One of these was the lack of standardization of the rail line gauge or width, especially in the United States, which required expensive transfers between different rails. In addition, the varying physical demands and requirements of passenger vs. freight service have caused problems for track design and maintenance, as have the effects of weather, soil, and erosion. The cost of track maintenance, along with the capital and labor requirements of operating a rail service, continue to make it an expensive mode of transportation. The combination of ridership decline and high costs has meant that most rail lines need to be subsidized by government.
3.3.1 Significant Developments in Passenger Service
Physical changes
Passenger service began in the early 1800s with railroad cars that measured about 4.6 meters (15 feet) long by 2.1 meters (7 feet) wide. Around 1830, the Baltimore & Ohio company in the U.S. began using a car that held about 60 passengers, and whose design remained basically the same for passenger cars over the next 100 years. The Pullman sleeping car was patented in 1864. By the early 1900s, cars made of steel began to displace the older wooden cars, and by the 1930s rail travel had become faster and more comfortable. Ironically, just as rail travel benefited from these advances, it began to lose its popularity to the automobile and, soon thereafter to airplanes. In the United States, the federal government responded to rail’s economic crisis by creating Amtrak, a private corporation, in 1971 which took over intercity rail service and revived ridership but required large public subsidies. In Canada, a similar service was established called Via Rail.
3.3.2 Passenger Service Today Japan and several European countries have led the development of modern rail systems which remain competitive with other modes of travel. Japan National Railways introduced high-speed service with its bullet trains in 1965 linking major metropolitan centers in the country. European rail service also remains popular because of widespread
48
Automobile Travel and Ground Transportation
access and convenience. The EuroCity network, which replaced the Trans Europe Express, serves over 200 cities in a dozen countries. International visitors from outside Europe can take advantage of the Eurailpass, which entitles them to unlimited ridership during a specified period of time. The much-anticipated Eurotunnel (also known as the Channel Tunnel or Chunnel) opened in 1994, creating a rail link between Great Britain and France. High-speed service and other advances continue to occur in the rail industry to stay competitive. In France, the train a grande vitesse (TGV) links Paris, Lyons, and other destinations, and travels at about 200 kmh (186 mph). In Japan, the shinkansen, or bullet train, reaches speeds of over 200 kmh. There has also been work on a rail system that uses magnetic levitation, or maglev, which enables trains to hover slightly above the tracks, thereby eliminating friction and noise. In Britain, railbuses–a combination of bus and rail car frame–utilize older railroad tracks and provide an economical alternative to short-range air service.
3.4 Automobile Travel and Ground Transportation 3.4.1 Automobiles The dominant mode of travel in the world today is the automobile. As automobile registration continues to expand, this dominance will prevail into the next century. The reasons for the popularity of automobile travel include: • Better vehicles. Today’s automobiles are high-precision machines, engineered for greater reliability, road stability, safety, and easier driving. Advances in fuel efficiency and better mileage as well as improved road and highway engineering offer an incentive for leisure travel by car. • Affordability. Relative to other forms of transportation, the cost of an automobile is low. Automobiles, therefore, are accessible to a much wider range of travelers. • Convenience. For a household that already owns an automobile, the decision to travel is as easy as loading the baggage. There is no need to work around a predetermined schedule, or to make reservations and possibly incur charges well in advance of the travel. Travel plans can be changed at will.
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Advantages to modern rail travel
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• Flexibility. The automobile allows for spontaneity and flexibility in travel. Extra time can be spent at a place of particular interest, and rest stops are always possible. In short, since the automobile is an individual mode of travel (vs. rail, bus, and airline, which are collective), it enables the individual traveler to freely make decisions during the trip without impinging on the travel experience of others. Automobile Rentals Earnings
Developments in industry
Incentives
The automobile rental business generates billions of dollars of revenue worldwide, most of which occurs at airports. In 1996, six of the major car rental companies–Hertz, Avis, Budget, Enterprise, Alamo, and National–each earned over $1 billion from their global operations. Hertz, the largest car rental company, operates a fleet of over 500,000 vehicles from approximately 5,400 locations in over 180 countries (Loverseed, 1996, p. 4). There have been several significant developments in the automobile rental business that have benefited tourists. One of those is the flydrive package which combines airline and auto rental expenses into a single product that is less expensive and easier to book for the traveler. Another ongoing development is in the area of computerized driving directions and other high-technology aids that make navigation in an unfamiliar destination simpler and safer. Rental companies are also offering a range of incentives, including mileage credit (similar in concept to the airlines’ frequent flyer programs), partnerships with hotels and airlines, and expedited check-in and check-out services.
3.4.2 Highway Systems
Safety and costs
An essential prerequisite of automobile travel is a system of roads and related infrastructure. The more extensive the roadway system, the greater the choices of destinations and routes. From the perspective of tourism, two of the key aspects of highways are their safety and cost. Because highways are often traveled at high speeds, they need to be designed for safety. Safety issues include the road construction standards, lighting, and signage. Well-maintained roads with good lighting and signage reduce costs resulting from repairs and accidents. The costs of building and maintaining highways can be met in a number of different ways, including taxes on fuel, tires, automobile and truck sales, vehicle weight, and vehicle registration as well as tolls collected directly from users of the highway.
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3.4.3 Other Ground Transportation The term ground transportation generally refers to travel by bus, limousine, van, and other modes for sightseeing and for transportation between hotels, attractions, and airports. Buses Buses (also referred to as coaches and motorcoaches) are a major mode of passenger travel. One of the key advantages of bus travel is that, like automobiles, buses are not limited to fixed or major routes of travel. Because of this, bus service is very flexible and can reach many more communities than either railroads or airlines. Buses serve an important niche in tourism by also providing service between air and rail terminals, accommodations, and attractions. One of the most popular types of bus service is the bus tour, which incorporates into one package transportation, attractions, meals, and sometimes hotel accommodations. Standard bus tours pick up passengers at their hotels and take them to various attractions, often at a discounted rate below what the tourist would otherwise pay on his own. On a per-passenger basis, bus transportation is very economical when compared with rail and air. Modern buses also have many of the amenities that tourists have come to expect, such as larger, more comfortable seats that can recline, air conditioning, and toilets. European bus service is especially well-developed, and provides many other amenities, such as bar service.
Flexibility
Bus tours
Economical and comfortable
Recreational Vehicles Recreational vehicles, or RVs, function like mobile motel rooms, enabling the traveler to integrate travel mode and accommodation facility into one unit. RV sales are increasing, and more destinations are providing the facilities for RVs to dock. These facilities, known as RV campgrounds, provide hook-ups for water, electricity, and sewage. Spaces at an RV campground may be reserved, much like a hotel. Demand for RVs has been strong in recent years. From 1991-1994, wholesale shipments of RVs grew by 50 percent.
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Transport and accommodation combined
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3.5 Water Travel 3.5.1 Cruise Ships
Transport and destination in one
Amenities
Fly-cruise packages
Growth in market
As discussed above, the use of large ocean liners for passenger transportation has been eclipsed by air travel. Today, the primary form of water travel is the cruise ship. Cruise ships differ from the other forms of transportation discussed in this chapter, however, because their primary purpose is not only to provide transportation, but to serve as a destination in and of itself. Although cruises often make stops at various ports to enable passengers to disembark and shop, sightsee, or do other activities, the central attraction of a cruise is the cruise ship itself and its various amenities. On modern cruise ships, these amenities can be extensive. A ship might include the following: exercise gym, swimming pool, movie theater, video game arcade, discotheque, retail shops, various restaurants and bars, and live entertainment. For example, a passenger aboard the 13-story, 2,934-meter (963-foot) Queen Elizabeth II can enjoy the following: five dining rooms (three of which seat over 500 persons), a health spa, life enrichment seminars, three swimming pools, a basketball court, a library, a computer center, and a shopping promenade. On most cruises, the quantity and quality of food is a primary attraction. Today’s cruise ships also include special design features, such as stabilizers, that reduce the ship’s movement in rough sea conditions. Some ships also have large garage spaces that can accommodate hundreds of vehicles, including RVs and buses. The majority of cruise vacations today are sold as fly-cruise packages. These packages include air and ground transportation to and from the cruise ship’s home port. In this way, a person is able to purchase a cruise vacation as a complete package, without worrying about scheduling conflicts between the cruise and the airline. The average length of a cruise is about six days. The size of the cruise market is substantial and growing in importance. For the North American cruise market, which dominates the total market, the number of passengers has grown at a rate of 7 percent per year during the period 1989-1994 to a total of 4.6 million. During the same period, cruise ship passenger capacity has grown by 7.8 percent per year. As of 1995, the most popular cruise destination by far was the Caribbean (including the Bahamas), which accounts for over 50 percent of the market. Other popular destinations include the Mediterranean
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Air Travel
(9.2 percent), Alaska (7.8 percent), and the Mexican Riviera (5.3 percent). It is expected that the growth of the Asia-Pacific region will spur the development of its own cruise industry with Singapore serving as a main port (Peisley, 1995).
Top destinations
3.5.2 Other Water Travel As with the cruise ship, most of the other forms of water travel are intended to provide more than just passenger transportation. On scenic rivers, for example, boats enable tourists to experience an older mode of travel while sightseeing. Ferries offer tourists a leisurely and often scenic route between inland points. Specialty craft, such as hovercraft and hydrofoils, provide quicker short-run travel than ferries, and can be attractions in themselves.
3.6 Air Travel From the perspective of international tourism, air travel is the most critical link between tourists and destinations. There are two basic categories of air service: scheduled service provides regular service to the general public, while charter service flights are privately contracted to provide service to a defined group, such as a tour group or association. Although charter service can be an important component of tourism (especially in Europe), most air travel statistics refer primarily to scheduled air service. According to IATA, in 1994 scheduled airline service exceeded one billion passengers for the first time, of which 328 million were on international routes, an increase of 8 percent over 1993. In addition, in 1994 airlines earned a collective net profit of U.S. $1.8 billion, reversing a trend of losses dating back to 1989 (International Air Transport Association, 1996). The top ten airlines in terms of international scheduled passengers carried are listed in Table 3.1. The discussion below briefly covers the history of passenger air travel and the basic aspects of the air transportation industry. The subject of air travel regulation is discussed in a separate section below, given its importance and complexity.
3.6.1 Development of Commercial Passenger Service The earliest passenger aircraft to provide economical passenger service was the DC-3, a two-engine propeller plane introduced in 1935 which had a capacity of 21 persons and flew at about 305 kmh (190 mph).
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Profit earning
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Jet expands industry
Concorde
Improvements in air travel technology proceeded rapidly during World War II and resulted in larger and faster passenger planes. The 1950s saw the introduction of jet aircraft, such as the Boeing 707 and the DC-8. These planes flew at 885 kmh (550 mph) with a load of over 100 passengers. With the jet aircraft, air travel became much more affordable and accessible, and the 1960s and 1970s saw a rapid expansion in the airline industry. Wide-bodied aircraft began service in the 1970s, inaugurated by the Boeing 747 which seated up to 500 passengers, and followed by planes such as the Lockheed 1011, DC-10, and the Airbus A300. The wide-bodied jets necessitated upgrades to airports and runways and spurred larger capacity for hotel accommodations, ground transportation, and other sectors of the tourist industry. In 1976, the Concorde, a supersonic transport (SST) plane, made its first commercial flights. However, the Concorde sustained large operating losses, and its noise impacts forced it to reduce its speed over populated areas. As a result, the SST has not been a significant factor in passenger air travel. Table 3.1: Top Ten IATA-Member Airlines, By Number of International Scheduled Passengers Carried, 1994.
Rank
Airline
Passengers (thousands)
1
British Airways
23,933
2
Lufthansa
17,507
3
American Airlines
14,893
4
Air France
13,762
5
KLM
11,644
6
United Airlines
11,286
7
Singapore Airlines
9,920
8
SAS
9,806
9
Cathay Pacific
9,743
10
Japan Airlines
9,376
Source: IATA, World Air Transport Statistics, p. 37.
3.6.2 Safety and Security Importance of regulations
Air travel is one of the safest modes of transportation in the world. This is due to the quality of the aircraft, the skill of pilots, maintenance personnel, and other persons involved with aircraft operation, and the control of airline traffic in the skies. In all these areas, regulation plays a critical role. Passenger aircraft must meet rigorous design and
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materials standards. Pilots and flight crew are required to meet experience and training standards, as do air traffic controllers. Airplanes are constantly inspected to ensure adequate maintenance. In these ways, regulations attempt to eliminate the risk of major accidents. Acts of sabotage and terrorism are a constant concern of airlines. The most important aspect of this concern is the security system of an airport. As discussed below, the security of an airplane from explosive devices, passengers with firearms, and other threats, is the most important responsibility of an airport security system. However, it is complicated by other security concerns and by the various different groups involved in enforcing airport security. Security technology is improving, but is often too expensive for widespread use. For example, while baggage scanners now exist that can detect plastic explosives, which are generally not detectable by metal detectors, in the near term their high cost will prevent their widespread use. This type of problem complicates overall airline security, which by its nature requires cooperation among airports. That is, a flight from airport A to airport D, that passes through airports B and C, is only as secure as the weakest security system among the four airports. Airline accidents, whether caused by safety violation or sabotage, can be extremely costly to an airline company. A number of prominent cases in recent years, including the Pan Am crash in Lockerbie, Scotland in 1988 and the Valujet crash in the U.S. Florida Everglades in 1996 are examples of incidents which have contributed to carrier bankruptcies or mandated shutdowns. Accidents can also force airline companies into expensive litigation, which can sometimes result in large damage awards in favor of the plaintiffs.
Security concerns
Cost of accidents
3.6.3 Costs As the frequent air fare “wars” among airlines indicate, ticket prices are a critical component of the flying public’s travel decisions. Besides an airline’s own capital and operating costs, it must pay a variety of taxes and fees to airports. These charges include ticket taxes, international departure taxes, customs fees, immigration fees, agriculture fees, and passenger facility charges. These taxes, landing fees, and other charges increase the total cost of airline operations, and can have a significant impact on the price of the ticket. A controversial aspect of airline costs is related to airlines that operate under bankruptcy protection. Deregulation of the industry, particularly in the United States, resulted in the bankruptcy of several major airlines. Those airlines that continued passenger service operations while in bankruptcy
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Taxes and fees
Bankruptcy protection
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were able to reduce their operating expenses while the courts oversaw the disposition of their debts. This, in turn, enabled these airlines to lower their ticket prices. Other airline companies argued that this created an unfair situation, since they were forced by the market to also lower their ticket prices to compete with the bankrupt airline, but without any corresponding reduction in expenses. Despite these objections, customers benefited from lower airfares and U.S. airlines such as TWA and Continental were able to emerge from bankruptcy with stronger balance sheets and viable operations.
3.6.4 Airports Operations The modern airport is home to a wide range of activities centered around the departure and arrival of aircraft. In addition to serving as a terminal for passenger air travel, airport operations also include: • Control of air traffic at and in the vicinity of the airport. • Automobile rental operations. Roughly 70 percent of automobile rentals occur at airports. Rental operations require large parking areas and shuttle services to transport people between the rental office and the airport terminal. • Baggage processing. The efficient handling of baggage is a critical component of airport operations. Increasingly, technology is being used to improve baggage operations. For example, after months of correcting initial design and engineering flaws, the new Denver International Airport in the U.S. has a sophisticated baggage system that is programmed to reduce mishandling of baggage and passenger wait time. • Cargo and mail. Most of the world’s mail, and much of its cargo, is transported via airlines. Although largely hidden from the typical airline passenger, cargo and mail handling are a substantial component of overall airport operations. • Customs and immigration operations. This function is related to safety and security operations, since both require personnel and technology to check outgoing and incoming passengers and baggage. Because international airports are major entry points for a nation, this function is a high priority of overall airport operations. • Restaurant and retail operations. The traveling public has come to expect a range of ancillary services at airports. These operations often represent a significant source of revenue for airports.
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• Safety and security. Monitoring and restricting the flow of persons and material through an airport is an extremely complex and demanding responsibility. Airport Capacity The volume of passenger travel through a major international airport is astonishing. In 1995, each of the top 35 airports worldwide processed in excess of 20 million passengers. This volume is straining many of the world’s airports. As a result, many countries are in the process of building or expanding terminals that can accommodate these high levels of traffic. Examples are the Kuala Lumpur International Airport, Phase I of which is scheduled to open in 1998 and handle 25 million passengers per year, the Chek Lap Kok airport in Hong Kong (scheduled for 1998), and the new Bangkok airport (scheduled for 2000 and to handle 55 million annual passengers). However, the expansion or new construction of an airport is becoming an increasingly difficult task for governments. The high cost of building an airport poses a major obstacle. Traditional public financing becomes riskier and more controversial as airports become more expensive; projects such as the Denver International Airport in the U.S. and Kansai International Airport in Osaka, Japan experienced well-publicized cost overruns. Airlines have become more aggressive in challenging landing and other airport fees and taxes that appear to place an unfair burden on their industry. Finally, the social and environmental impacts of constructing new airports have required lengthy and sometimes contentious entitlement processes, in which residents near the proposed airport sites have fought against their development.
High volume of passengers
Building new airports
3.6.5 Other Aspects of the Airline Industry Computerized Reservation Systems (CRSs) Computerized reservation systems such as Apollo, Sabre, Amadeus, and Galileo have had a dramatic impact on the industry. Although there were earlier concerns that such systems would give their owners a monopolistic advantage over rival airlines, regulations and competitive pressures have prevented such anti-competitive results. CRSs have also enabled customers to become more involved with and knowledgeable about air fares and reservations. Through the Internet, customers can search for the best fares and book reservations using CRSs that are adapted for public access and use. This subject is discussed further in Chapter 5.
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Customer advantages to computerization
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Computerized Navigation and Traffic Control Delays and even accidents can result from problems in navigation and air traffic systems. Technological advances in this area hold the potential to greatly improve the safety and efficiency of air travel. The air traffic system includes satellites, ground radar, air traffic control centers, and the airplanes. Problems can stem from several sources. For example, throughout much of Europe ground control centers use a multitude of different operating systems, adding unnecessary complexity to communications among the centers.
System improvements
Improvements are being made using Global Positioning Systems (GPS), a satellite-based method of positioning and navigation that is being adapted to a variety of uses (such as in rental cars and boats). FANS (Future Air Navigation System) uses GPS and existing ground radar to improve the precision of positioning and flight path, thereby improving overall communication between air traffic controllers and airplane personnel.
3.7 Regulation and Deregulation of Air Travel Reasons for regulations
Air travel has always been a highly regulated activity. The reasons for this are complex but revolve around the perceived importance of air travel to national pride and strength, the high costs of operating air service, the safety issues posed by air travel, and the international political aspects of flying to and over nations. Chapter 14 touches on international regulation from the standpoint of key air transportation organizations. This chapter provides further discussion of international issues, as well as on the economic and safety dimensions of regulation.
3.7.1 Basic Aspects of Regulation International airline regulation began with the Chicago Conference in 1944. The Chicago Conference resulted in the Chicago Convention, which created the International Civil Aviation Organization (ICAO, discussed in Chapter 14) and established four basic principles of international aviation. These principles are: • The sovereignty of each nation over its own air space. • The right of all nations to participate in air traffic.
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• Nondiscriminatory regulation of airline traffic. • The freedom of each nation to designate its own carrier to operate in its air space. The Chicago Conference also proposed the original Five Freedoms of the Air (there are now eight), by which each member, or contracting state, granted to the other contracting states the following freedoms: • The privilege to fly across its territory without landing. • The privilege to land for non-traffic purposes. • The privilege to put down passengers, mail and cargo taken on in the territory of the state whose nationality the aircraft possesses. • The privilege to take on passengers, mail and cargo destined for the territory of the state whose nationality the aircraft possesses. • The privilege to take on passengers, mail and cargo destined for the territory of any other contracting state and the privilege to put down passengers, mail and cargo coming from any such territory (Wheatcroft, 1994, p. 17). Adoption of these freedoms by the international community would have constituted a multilateral system of air regulation. The term multilateral as used here refers to a regulatory system in which all nations abide by an agreed upon set of rules. In fact, only the first and second freedoms were subsequently adopted by the signatory nations of the International Air Transport Services Agreement. The remaining freedoms, which are crucial for passenger transportation, are subject to bilateral agreements, or agreements between two nations. In effect, nations did not want to commit themselves in advance to these freedoms, and wished to retain the right to negotiate on a case-by-case basis.
Freedoms adopted
In 1946, the Bermuda Agreement, a bilateral air agreement, was reached between the United Kingdom and the United States. This bilateral agreement subsequently became the basic model for bilateral agreements. Bilateral agreements generally apply to scheduled passenger service and not to charter flights. Although each agreement is unique in its details, there are several major areas that all agreements must address:
Bilateral agreements
• Specification of the routes that may be flown by the carriers of the two countries. • Designation of the airlines that may fly the specified routes.
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• Restrictions on ownership and control of the designated airlines. • Fair opportunities for each country’s airlines to fly the specified routes. • Agreement on setting rates, which is normally delegated to IATA traffic conferences. In addition, many bilateral agreements are supplemented by confidential memoranda of understanding between the two countries, which often have the effect of superseding or modifying the terms of the bilateral agreement. An example of a bilateral agreement is one recently reached between China and the U.S. in 1995. With this agreement, the two countries allowed for the first time nonstop service between them.
Investment protection
Unlike a multilateral system, in which one set of rules applies to all participating countries, the existing bilateral system results in each country having to negotiate separate agreements with numerous other countries. The reason that a multilateral system has not been achieved, despite its apparent efficiency when compared with numerous bilateral agreements, is that the bilateral system enables each country to retain greater freedom in its negotiations with other countries. This freedom, in turn, is important because most countries have historically adopted a protectionist stance towards air transportation. Because air travel is perceived as a vital interest to a country, involving issues such as national defense and prestige, it is unwilling to let market forces determine control and availability. Thus, countries establish national airlines and, through bilateral agreements, ensure that those airlines retain market access and remain economically viable.
3.7.2 Pressures on the Bilateral Regulatory System The existing bilateral regulatory system has been criticized as being inefficient and detrimental to the growth of international tourism. Its inefficiencies are becoming more apparent due to changes and pressures in the air transportation industry. It is anticipated that the following pressures will significantly alter the existing system in the near future: • Tourism’s increasing importance in the world economy, which is alerting countries to the costs of maintaining protectionist policies. • The global trend towards deregulation and liberalization by the United States, Canada, Australia, and the United Kingdom, and especially by the European Union.
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Regulation and Deregulation of Air Travel
• The global trend towards airline privatization. • The recognition of the competitive advantages of very large airlines. • International mergers and alliances within the airline industry. • Developments in CRSs and communications, which are facilitating the globalization of the airline industry. • Increased acceptance of foreign ownership of airlines. • The global trend towards liberalization of trade as reflected by the European Union (EU), North American Free Trade Agreement (NAFTA), General Agreementon Trade in Services (GATS), the Andean Pact, the Australia-New Zealand Closer Economic Relations Agreement, and other similar trade agreements (Wheatcroft, 1994, pp. 27-38).
3.7.3 Economic Aspects of Regulation Whether an airline is owned by the national government or a private company, it represents a significant capital investment. Airplanes are expensive to acquire and to operate. Regulation has often been used to protect that investment by limiting competition and preventing the market from adjusting prices. In the United States, regulation also ensured that market pressures did not dictate routing, and forced airlines to maintain routes that were unprofitable. This kind of national regulation came to an end in the United States beginning in 1978 with the Airline Deregulation Act, and since then the deregulation movement has gained momentum in other countries. The Airline Deregulation Act’s primary impact was in granting the airlines greater freedom in setting air fares. The key provisions of the Act were in the following areas: • Airlines were able to set fares within a “zone of reasonableness” without having them nullified by the government as being anticompetitive. • Flights of equal distance, but with different market characteristics, no longer needed to be priced at the same level. • There was greater freedom in creating discount air fares. • The restrictions on the relative pricing of coach and first-class fares were removed, allowing the airlines to set fares for these different classes on the basis of market factors.
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Deregulation
Pricing
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• There was greater freedom in entering new routes for both established and new carriers.
Yield management
Consequences of deregulation
Greater freedom in pricing has been an important factor in encouraging leisure travel. Airlines have developed sophisticated yield management techniques that enable them to maximize their revenue on each flight. Yield management refers to the practice of pricing fares on each flight to take advantage of the specific demand characteristics of that flight. For example, a flight between two major cities that departs at 8:00 a.m. on each week day will have its seats allocated and priced to take advantage of the greater business travel demand at that specific time. Another flight that departs at 11:00 p.m. will be priced to attract leisure and other non-business travelers. In both cases, the airline uses pricing in conjunction with passenger demand to generate as much revenue as possible. In addition, yield management must account for passengers utilizing frequent flyer awards, airline employees flying fare-free, and other components of the flight’s overall revenue. Deregulation in the United States has had several consequences. The number of airlines has increased, largely due to the creation of smaller regional companies. However, the number of major airlines has decreased to eight as of 1996, representing a significant consolidation of ownership. Deregulation also has resulted in a route system known as the hub and spoke system, in which the major airlines concentrate on routes between hubs such as Los Angeles, Chicago, Dallas, and New York City, and regional airlines provide service from hubs outward along “spokes” to secondary areas.
3.8 Challenges Facing Transportation The growth of visitor traffic and the demands such growth places on transportation systems will pose significant challenges to governments, planners, engineers, and others in the foreseeable future.
3.8.1 Fleet Planning
Supply and demand
From the perspective of companies that provide transportation services, fleet planning is a constant challenge. Fleet planning refers to a company’s efforts to match its supply (of available seats) with passenger demand. Fleet planning is critical because of the nature of transportation supply; specifically, the inventory of seats available for sale must either be sold or lost at the moment they go unused. Thus, a bus that is carrying
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Challenges Facing Transportation
only 25 percent of its capacity loses 75 percent of its potential revenue; meanwhile, the bus’s operating costs, such as wages and fuel, generally remain fixed regardless of the number of passengers. Fleet planning is necessary to maximize the number of seats that are sold per trip. Maximizing ridership is important because the costs of providing transportation are usually high. These costs include the acquisition or lease of the airplane or vehicle, any debt service associated with the acquisition, facilities for holding and maintenance, and labor.
3.8.2 Congestion Congestion of roads, passenger terminals, and airports is a condition that most travelers face at one time or another, especially in urban areas. Inadequate facilities to handle growing demand is often the primary cause of congestion, but it can also result from traffic flow design problems, repairs and other construction-related activity, and tighter security procedures. Visa and customs procedures often require travelers to stay within the confines of the passenger terminal for longer periods of time, and contribute to the overall congestion of the terminal. Congestion can result in significant costs to the traveling public. For example, a tourist who misses a flight due to airport congestion may face additional costs relating to the rescheduling of his accommodations and rental car. Congestion also places a greater stress on a security system, especially where persons must be physically screened and where there are areas of controlled access. The quality of the visitor experience can also be diminished by overcrowded streets and terminals, as tourists are subjected to the very pressures that they wanted to get away from in the first place by taking the vacation. One cause of congestion is the fluctuation in traffic levels throughout the year. The volume of leisure travel, in particular, often varies greatly throughout the year due to factors such as the weather, school schedules, and work schedules. Besides congestion, these seasonal fluctuations cause other problems for transportation companies. For example, transportation providers must balance the need for capacity to handle peak traffic with the costs of maintaining that capacity through off-peak seasons. While seasonality affects all aspects of the travel industry, its effects on transportation businesses are pronounced because of the large costs associated with the industry.
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Causes of congestion
Problems of congestion
Seasonality
Chapter 3: Transportation Services
3.8.3 Safety and Security
Psychological effects of accidents
Tighter security lessens enjoyment
Providing for the safety and security of the traveling public will continue to be a central concern of transportation providers, especially for airlines. Although airline accidents and acts of terrorism are rare, when they occur they draw worldwide attention. The circumstances and images of such accidents tend to emphasize the vulnerability of air passengers, and can have a significant effect upon people’s willingness to travel by air. From the standpoint of international tourism, much of which requires air travel, an increase in the public’s fear of flying can have significant negative implications. Ensuring the safety of the traveling public can result in conflicts with other aspects of the travel experience, however. For example, as noted above, heightened security at an airport normally results in greater congestion and delays, thereby diminishing the quality of the visitor experience. The visitor will find himself subject to more extensive screening and search procedures, restricted to certain areas, or forced to fill out more detailed questionnaires. Safety measures also entail significant costs. These costs result from hiring additional security personnel, purchasing newer and better equipment, and mandating compliance with additional procedures. Balancing the costs of safety measures against those resulting from accidents and terrorism will continue to pose a challenge to the transportation industry.
3.8.4 Environmental Impacts
Use of fossil fuels
Construction
Transportation modes and facilities tend to have significant environmental impacts. All modes of travel require energy, most of which is provided by fossil fuels. The burning of fossil fuels contributes to a number of environmental problems, including air pollution and global warming. In addition, the petroleum industry on which transportation depends can be the source of practices and accidents that are environmentally destructive, including oil tanker spills, explosions at oil and gas wells, and offshore drilling problems. The building of transportation infrastructure–roads, terminals, airports–also has significant impacts. The construction of a major roadway, for example, necessitates excavation and paving of strips of land that can extend for many miles. A long road will likely travel through several different ecosystems, which in turn means that those ecosystems will be affected by the flow of traffic. The siting and
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Summary
construction of airports involves considerations of noise impacts and air pollution, and in some cases the destruction of existing flora and fauna. With the growth of ecotourism, rural tourism, and other alternative forms of tourism which bring the tourist closer to local cultures and environments, the role of transportation in providing access to ecologically vulnerable areas will be an issue. For example, advocates for the preservation and protection of marine life often criticize ocean transport businesses that bring tourists into the marine environment. This intrusion into the marine environment can inflict damage through engine noise, oil and fuel leaks, physical injury to ocean animals, and other such impacts. On the other hand, tour operators point out that through such experiences tourists gain a greater appreciation of the environment. These types of issues are not easily resolved, and have a direct bearing on the transportation industry.
SUMMARY As technology has evolved and improved, different modes of transportation have been dominant at different times in history. Today, from the perspective of international tourism, air transportation is the most important mode, having eclipsed ocean liners in the middle part of this century. When all types of travel are considered, the automobile continues to be the preferred mode, due to its flexibility and cost. Railroads and ships have lost their popularity as modes of passenger travel but remain important modes of freight transportation. Cruises are a unique combination of destination and transportation, and the cruise ship industry has grown with the advent of flycruise packages that are easily accessible to tourists. The airline industry has developed over several decades into a dynamic and highly competitive industry. Air travel costs and safety continue to be major issues of concern to the industry and the flying public. The regulatory environment of international air travel has been shaped by bilateral agreements between countries. Deregulation of airlines and increasing trade liberalization, among other trends, are exerting pressure on the existing bilateral system. However, a true multilateral system has yet to be implemented. As tourism moves into the new century, there are several key challenges that transportation will face. Congestion, environmental impacts, and safety and security concerns will be significant factors of the transportation environment of the future.
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Ecotourism
Chapter 3: Transportation Services
DISCUSSION
QUESTIONS
1. What are some of the major technological developments that have influenced the development of passenger transportation? 2. What are the advantages of automobile transportation vs. other modes of travel? 3. Discuss the key aspects of airline transportation. 4. Identify the major operations that occur at airports. 5. What are some of the issues that bilateral air agreements cover? 6. How has deregulation affected the airline industry?
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CHAPTER 4 Accommodations and Hospitality Services
Learning objectives • To understand the hospitality industry and its role within the tourism and travel industry. • To appreciate the historic development of the accommodations industry and related hospitality services. • To understand the structure of the accommodations industry. • To understand the role of the food and beverage industry within the hospitality industry. • To understand the various forms of managerial systems used in the accommodations industry. • To gain an international perspective of the hospitality industry. Key terms and concepts American plan (AP) average daily rate (ADR) bed and breakfast Bermuda plan European plan (EP) expatriate manager franchise management contract modified American plan (MAP) occupancy ratios rack rate time shares yield management
4 Accommodations and Hospitality Services
4.1 Introduction Hospitality is the term generally associated with hotels and restaurants. Today, the accommodations industry (also referred to as the lodging or hotel industry) and the food and beverage industry (also referred to as the catering industry) encompass a variety of facilities and are a dynamic part of the global travel and tourism industry. Everywhere the traveler goes, a place to stay and place to eat are necessities. The accommodations industry represents a wide array of lodging facilities from luxurious resorts to modest bed and breakfast establishments. This range of facilities reflects the different needs and preferences of travelers and market dynamics. Worldwide, the number of available hotel rooms has increased rapidly to keep pace with the growth in international and domestic tourism. The food and beverage industry has also expanded as tourism has boomed. While hotels and resorts provide much of the core food service facilities for travelers, restaurants and other food service outlets also serve travelers. Food service is offered at a variety of facilities including transportation terminals, airplanes, trains, ships, and attractions. Much like the accommodations industry, the food and beverage industry is emerging in the global tourism economy through worldwide chains, providing new opportunities for the hospitality industry’s growth and expansion. This chapter explores the accommodations and food and beverage industries and their role in tourism.
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Necessary part of industry
Chapter 4: Accommodations and Hospitality Services
4.2 Historical Development
Early times
Inns
First hotels and restaurants
Hotel innovations
Travelers have sought rest and refreshment at public houses and hostels throughout history. At the height of the Roman empire, inns flourished along major highways and other shelters were maintained along major highways, primarily for government officials and persons of importance (Gee, 1994, p. 27). In Asia, small shelters were placed at stops along caravan routes. Pilgrims looked to religious houses to give sanctuary, rest, and refreshment along the way. The term hospitality is derived from hospice, a medieval “house of rest for travelers.” Interestingly, even to this day some Alpine hospices in Europe continue the tradition of offering food and rest to weary travelers (Lattin, 1985, p. 15). Food service also can be traced back in history, perhaps as far back as 4000 B.C. when establishments began selling food and wine. Such establishments continued and flourished during the Greek, Roman, and Byzantine periods. It was not until the fifteenth century that commercial hospitality ventures made their appearance in Europe. The forerunner of the “bed and breakfast” type of accommodation was the spare bed in private homes offered to travelers for a small price. At the same time, freestanding inns appeared, often built by affluent landowners and named after them. In the sixteenth century, some inns and taverns in England began serving meals at set prices at regular meal times (Mill, 1990, p. 321). During this era, road development and coach travel spurred the growth of travelers and the number of inns to serve them. By the end of the seventeenth and the dawn of the eighteenth centuries, lodging facilities which could be called the early versions of hotels made their appearance. In 1774 the first hotel was opened in London; later in 1794 the City Hotel opened in New York City. In the late eighteenth century, the term “restaurant” was first used in Paris referring to a dining room, and in the United States, Delmonico’s opened in 1834 offering meals in the English fashion of fine dining (Coltman, 1989, pp. 326-327). In the United States, the first hotel equipped with modern amenities resembling today’s facilities is believed to be the Tremont House which was built in 1892 in Boston, Massachusetts. The Tremont House established a number of precedents with a lobby, indoor plumbing, private guest rooms with locking doors, and a complimentary cake of bath soap (Mill, 1990, p. 15). Elsewhere, hotels like the Ritz in Paris, France, the Savoy in London, England, and the Raffles in Singapore set standards for service and quality. In the twentieth century, many of the innovations in the
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Accommodations Classification
accommodations sector continued to take place in the United States. American hotelier E.M. Statler was among the first to upgrade the guest experience by offering larger guest rooms with private baths, running water, light switches, telephones, room service, in-room radios, and hotelto-hotel reservations systems. Further innovations in American hotels included central heating, air conditioning, passenger elevators, electric lighting, and sewage disposal systems. These innovations were quickly adopted by international hotels (Gee, 1994, p. 28).
4.3 Accommodations Classification Worldwide, the number of hotels is increasing rapidly, and in 1994, it was estimated that there were over 11 million rooms generating revenues of nearly U.S. $250 billion (International Hotel Association, 1996, p. 12). The accommodations sectors in Europe and North America are considered the largest and the most mature, followed by East Asia and the Pacific which has had the fastest expansion in the last decade. Yet there is ample room for growth in many of the emerging markets in other regions including South Asia, the Middle East, South America, Africa, and countries of the former Soviet Union (see Table 4.1). Table 4.1: Hotels Worldwide
Number of Hotels
Number of Rooms
Africa
10,759
343,347
Caribbean
5,290
155,253
Central America
1,160
41,221
North America
66,943
3,738,977
South America
14,578
487,787
Northeast Asia
10,192
719,480
Southeast Asia
13,211
453,657
South Asia
3,663
159,417
Australia/Pacific Islands
10,082
229,319
Middle East
4,735
162,178
European Economic Areas*
151,945
4,242,193
Other Europe
19,178
676,631
WORLD TOTAL
307,683
11,333,199
Source: International Hotel Association. Note: * The European Economic Area includes European Union and European Free Trade Association countries, except Switzerland.
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Hotel numbers and growth prospects
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Diversity
Classification difficulties
Governmental and private classification systems
Accommodations can be classified into various categories, illustrating the diversity of the industry. The wide array of available room types and amenities is a reflection of an industry that must respond to various consumer needs, including the social and business needs of the travel market. Any attempt to establish a uniform classification system faces problems of differing types of accommodations around the world. It might be unlikely to find a pousada (Portugal), an auberge (France), or a ryokan (Japan) in the United States, yet such accommodations are common in their own countries. As early as 1962, the International Union of Official Travel Organizations, a forerunner of the World Tourism Organization, attempted to establish a globally uniform hotel classification system. Various attempts have been made since then, but the obstacles to a uniform classification system include variations in definitions, facilities, service standards, management, and cultural influences on service which can differ dramatically from country to country (Gee, 1994, p. 391). What has emerged are different systems developed by countries and regions around the world, through the efforts of the private sector as well as governments. Nations which embark upon tourism usually as an economic activity to attract international travelers have recognized the advantages of a classification system that tourists will understand. Many have official, government-initiated classification systems which have been developed and widely used in the European Union countries based on both physical and qualitative criteria. In other countries, classification systems have been established through private sector efforts especially through commercial services such as Guide Michelin, AA Britain, and the American Automobile Association (AAA). The private sector classification systems have the support of the hotel industry largely because the industry often views the classifications and ratings as more of a promotional feature, which can be used in marketing campaigns. While many of the definitions used are similar in a global tourism market place, there are differences among countries between commercial and official classifications. Table 4.2 illustrates a comparison of hotel classifications.
4.3.1 Hotels Defining "hotel"
The term “hotel” has assumed a generic meaning around the world, applying to a wide range of property types. There is no one way to classify the different types of hotels that exist. In the United States, the key to the property’s type is based on its amenities identified by the descriptor preceding “hotel.” In general these descriptors identify the target markets that the property aims to attract such as airport hotel, convention hotel, commercial hotel, luxury hotel, budget or economy hotel, casino or resort hotel. Some subgroups within hotels include:
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anonymous inspections
Michelin; sale of guide books select hotels
Type of Monitoring
System Funded By
Hotel Classification System includes select hotels, motels
all hotels
government
anonymous inspections every 1-4 years
annual evaluations; over-night stays for high rated properties AAA; membership dues
Ministry of Tourism
AAA
1 star
2 stars
3 stars
4 stars
5 stars
5 star deluxe
physical features, quality of service
compulsory
Israel Official
all forms of professionally serviced accommodations
government
hotels with government subsidy all forms of accommodations
unregulated & dependent on regional policy
relevant regional community authority
1 star
2 stars
3 stars
4 stars
questionnaires, inspections
national tourist boards through regional tourist boards
listed
1 crown
2 crowns
3 crowns
4 crowns
5 stars
depends on regional authority
structural & operational requirements; quality optional 5 crowns
compulsory
Spain Official
voluntary
U.K. Official
Source: Adapted from Gee, International Hotels, Development and Management, p. 407.
Michelin
1 diamond
1 house
System Administered By
2 diamonds
2 houses
4 diamonds
4 houses 3 diamonds
5 diamonds
5 houses
3 houses
facilities, maintenance, service
structural and operational requirements; quality
Basic Criteria of Scheme
Symbols Used for Grade Bands
Inclusion at discretion of AAA
Inclusion at the discretion of Michelin
U.S. AAA
Type of Classification Scheme
France Guide Michelin
Table 4.2: Selected Classification Systems
Accommodations Classification
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Chapter 4: Accommodations and Hospitality Services
• Airport hotels: Located within ten miles of an airport with amenities for the air traveler including facilities for business meetings. • Convention hotel. Located in major cities, often near a municipal convention center. Major space dedication to meetings and exhibition area. Amenities for meetings and business travel. • Commercial hotels. Located in urban areas with business travelers as the primary target market, usually upscale or midscale. • Suite hotels. Apartment-style hotel rooms, generally offering more space and upscale amenities. • Motor hotels. Located close to a highway for automobile travelers with provisions for parking and amenities which may include swimming pool, coffee shops, and other family-oriented facilities. Budget motels
Hotels differ by amenities and the levels of service offered. At the lowest level, budget motels tend to focus on cost-conscious travelers as their target market. The overall goal of these establishments is to keep costs down and pass the operational savings on to the customer. The limited amenities offered vary from chain to chain, each attempting to establish a price-value relationship in the consumers’ minds.
4.3.2 Resort Properties and Time Shares Resorts are found worldwide, wherever people gather for activities as diverse as golf, tennis, spas, skiing, or a combination of similar recreational activities.
Hotel as part of attraction
Because the resort guest is typically a longer stay client, resort properties generally offer more activities and extended amenities than urban hotels. Although many resort properties are surf-and-sun destinations, resorts today are becoming more specialized. Theme parks, such as Disney World in the U.S., have capitalized on the resort concept by making these facilities a part of the entire Disney experience (Berkowitz, 1980, p. 114). The one-stop destination pioneered by Disney continues to expand around the globe. Singapore’s Sentosa Island, for example, is a popular attraction featuring a resort hotel and rides and attractions. Although the accommodations element is a core facility, restaurants, shops, and attractions are all part of one operation. Expansion into these ventures may be done more along the lines of alliances and partnerships than ownership, but destination resorts will continue to grow as the industry increasingly views itself as part of broader industries, namely recreation and entertainment.
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Accommodations Classification
Time shares, like resorts, tend to be located in popular tourist destinations. Time shares basically are individually owned “hotel room intervals” which allow the owner to access generally upscale accommodations for a usually fixed period of time each year. The attraction of time share accommodations is that they tend to be more apartment style and may be a part of a hotel, resort, or condominium. The arrangement is a permanent one unless the ownership share in the property is disposed of. Increasingly, the properties are managed by specialized management companies including several major international hotel management organizations such as Marriott, Hilton Hotels Corporation, and Disney (Travel and Tourism Intelligence, 1997).
Defining "time shares"
4.3.3 The Casino/Destination Property Perhaps no single city has had a greater impact on the casino lodging industry as Las Vegas, Nevada in the United States. The casino has long been recognized as a specialized property with gaming as the central activity, but in the past decade Las Vegas has spawned a new type of lodging which is a combination casino and destination property, not to be compared with the casino hotels of Monte Carlo wherein Monte Carlo, rather than the hotel, is the destination. This hybrid is often considered a variation of the theme resorts developed by the Disney Corporation. The concept has been used successfully elsewhere as in Sun City in South Africa, which is a well-known international destination which offers casinos, golf courses, a jungle theme park, and other entertainment attractions as part of the large resort complex. These properties function to a large degree as self-contained destinations which attempt to keep the guest, including family members, at the property as much as possible. To accomplish this, the resorts include extensive amenities and generally some type of theme park which is part of the property. Although gaming remains central, the extended amenities serve to capture more of the tourist expenditures from all members of the family unit.
Casinos with theme resorts
4.3.4 National Heritage Accommodations In many countries, historic buildings and structures such as palaces, castles, chateaus, monasteries, and convents have been converted to hotels. Some are privately run but others are part of a government-run chain such as the Parador hotels in Spain which are popular with both international visitors and Spaniards. Paradors are usually four- and five-star accommodations which have been modernized within but maintain their historical exteriors. They are often furnished with art treasures, antiques, or reproductions, and have reputations for good service and meals.
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"Paradors"
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4.3.5 Bed and Breakfasts
Private homes
This segment of the accommodations industry has grown steadily over the years and is now made up of thousands of privately owned homes and inns around the globe. Bed and breakfasts (B and Bs) run the gamut from luxury to economy-type accommodations. Today, the business of B and Bs has become more highly organized with many of the properties joining international reservations systems. Other modest establishments which offer breakfast and sometimes light meals include hostels and pensions which are often family-run operations.
4.3.6 The Emergence of the International Hotel
Airlines' associations with hotels
Historically hotel companies first focused on their own region and within their continental boundaries. However, as international travel increased in the late 1950s, more and more hotels began to look at expansion into international markets. One of the major catalysts in the international hotel development arena was the former Pan American Airlines. As air travel developed, Pan Am discovered that many locations did not have adequate hotel accommodations. In order to better serve international travelers, Pan Am formed the InterContinental Hotels Corporation (IHC) as a wholly owned subsidiary in 1946. Soon there after Pan Am acquired its first hotel in Brazil in 1949 (Gee, 1994, p. 30). Inter-Continental Hotels and others were established with the international business traveler as a primary market, and this segment remains important representing approximately 60 percent of Inter-Continental’s sales. Other airlines followed the Pan Am example including United Airlines which merged with Westin Hotels and Resorts in 1978. Although United Airlines has since divested itself of hotel ownership, many major airlines of the world continue with either ownership or arrangements to promote certain hotels through their reservation systems such as Japan Airlines with its international network of affiliated Nikko hotels. Although the hotel market generally is dominated by U.S. multinational corporations and chains, European chains such as Forte PLC, Club Mediterranee, Accor, and Meriden, and Asian chains such as the Taj Group, Oberoi, and the Mandarin-Oriental hotels have properties on more than one continent. Table 4.3 lists the 20 largest corporate chains in the world.
4.3.7 Financing of International Hotels The globalization of the business community has had noticeable impacts on the financing of international hotels. Increasingly, financing sources have come from non-domestic and non-traditional sources, and
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Accommodations Classification
foreign borrowing has become more common (Gee, 1994, p. 127). Many governments in developing countries have developed incentive packages to lure needed hotel and resort development. Such incentive packages often include government participation, reduced or deferred taxes, or assistance in securing investment capital. Many developing countries have also established governmental agencies to assist foreign investors deal efficiently with other governmental agencies and permits.
Developing countries
Table 4.3: Corporate Hotel Chains, 1994 Rank 1994
Organization
Company Headquarters
Rooms 1994
Hotels 1994
1
Hospitality Franchise Systems
USA
424,352
4,291
2
Holiday Inn Worldwide
USA
356,000
1,930
3
Best Western International
USA
280,144
3,409
4
Accor
France
256,607
2,265
5
Choice Hotels International
USA
247,069
2,827
6
Marriott International
USA
180,500
851
7
ITT Sheraton Corp.
USA
132,477
425
8
Hilton Hotels Corp.
USA
92,452
226
9
Forte Plc
England
88,153
888
10
Carlson/Radisson/SAS
USA
79,482
349
11
Promus Cos.
USA
78,690
570
12
Hyatt Hotels/Hyatt International
USA
77,882
170
13
Club Mediteranee SA
France
65,128
262
14
Inter-Continental Hotels
England
53,092
141
15
Hilton International
England
53,052
162
16
New World/Renaissance Hotels
Hong Kong
47,139
140
17
Grupo Sol/Melia
Spain
46,500
175
18
Westin Hotels & Resorts
USA
39,470
76
19
La Quinta Inns
USA
29,276
227
20
Societe du Louvre
France
29,120
468
Source: Somerset R. Waters, Travel Industry World Yearbook, The Big Picture 1995-96, p. 144.
Financial institutions worldwide at the same time have become more conservative in their approval of hotel and resort loans. Part of the reason has been oversupply conditions in several world markets in recent years which have resulted in loan defaults. Lenders today typically require market feasibility studies and reports as part of the loan request process. Other major considerations by lending institutions are the expertise and reputation of the management company that will operate the property, often with performance guarantees as part of the management contract.
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Loan approvals
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4.4 Food and Beverage Establishment Classification
Non-tourist industry
Economic factors
Like the accommodations sector, food and beverage establishments can be subdivided into many segments. However, unlike the accommodations sector, a large part of the food and beverage sector is not related to the travel industry. These include major sectors such as institutional food service in schools, colleges, and hospitals, military food service, and other establishments. The segments which are interrelated with the travel industry are commercial establishments which are primarily or partially tourism dependent based on their location, clientele, and seasonal traffic (Gee, Makens, & Choy, 1989, p. 324). In terms of total tourist expenditures, money spent on food and beverages is second only to airline transportation in terms of vacation costs. Food away from home is conservatively estimated at 18 to 20 percent of all tourist expenditures. However, it would be difficult to determine the percentage of sales attributable to the travel industry since food and beverage revenues are usually generated in restaurant establishments by both visitors and residents in the community. Food and beverage outlets are more sensitive to economic cycles than most other types of retail businesses and typically have high mortality rates. A restaurant’s profit margin is based on its ability to control food and labor costs, which may run as high as 60 to 65 percent of revenues while the ratio of profit to sales is very low. In the host economy, it is also important to consider the relationship with local suppliers of food and the availability of produce. For example, if food and beverages need to be imported to any great extent, much of the economic benefit gained by the industry will be lost due to leakage of revenues to pay for the imports.
4.4.1 Hotel-Related Food Establishments
Hotel eateries
Establishments which are tourism dependent are often owned and operated by a hotel, or located in space leased out to independent restaurant operators by hotels. Hotels may offer a variety of outlets including restaurants, dining rooms, coffee shops, room service, catering, and banquets. They also offer a variety of meal plans. Although the percentage of hotel income from food and beverage sales has gradually declined in the U.S. owing to changes in customer preferences and eating and drinking habits, full-service international hotels averaged approximately 30 percent of their revenues from food
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Food and Beverage Establishment Classification
and beverage sales in 1994 (PKF Consulting, 1994, pp. 5, 58). In some locales such as Singapore and Hong Kong, food and beverage sales are as high as 50 percent of hotel revenues.
4.4.2 Independent Food Service Establishments Many independent food service establishments rely on tourism business as well as local trade. These establishments may be individually owned and operated, part of a corporate chain, or a franchise. The vast majority of franchisees are fast-food outlets serving foods like hamburgers, pizzas, or fried chicken. Franchised restaurants are expanding worldwide such as the U.S.-based McDonald’s and Mövenpick in Europe. Mövenpick began in Zurich, Switzerland in 1948 and expanded into international activities in 1968. Since then it has expanded its operations to include packaged food products as well as hotels in countries in Europe, the Middle East, and Asia. Another major food service segment within the travel industry is transportation-related. Airlines, for example, spend billions of dollars each year on food and beverage purchases for inflight service. Some carriers have their own ground commissaries with secured and bonded areas for duty-free liquor; others contract out their food service with commercial caterers. In the U.S., the latter has become the more common practice while in Europe and Asia, carriers prefer to operate their own kitchens in order to emphasize the importance of onboard dining. Onboard food and beverage service is also a hallmark of sea cruises, which typically offer meal service around-the-clock, constituting one of the highlights of the cruise experience. With the revival of the legendary Orient Express in Europe and the Orient Express on the E & O lines traversing Singapore, Malaysia and Thailand, the glamour of luxury train travel during the 1920s and 1930s has been restored, a major part of which is based on outstanding dining cars and impeccable service.
4.5 Hotel Guests Hotel guests are divided into two general market segments, one being travel for business or government, the other for pleasure or leisure travel. As travel often straddles business and leisure, it is not always easy to differentiate the two categories. Business travelers worldwide are more likely to stay in urban hotels and use a higher percentage of upscale services than pleasure travelers, but this depends on the nature of their business, the type of companies they work for, the positions
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Transportation food service
Chapter 4: Accommodations and Hospitality Services
Business and leisure guests
they hold, and purpose of their trips. Some may be quite cost-conscious while others may be on liberal expense accounts. As such, business travelers are found in all price levels of the hotel business. To cater to the needs of business travelers, hotels have provided business-related amenities such as in-room computer connections and business centers in hotels. These centers offer such services as photocopying and fax machines, desktop publishing software, computer work stations, laser printers, video conferencing capabilities, and clerical staff on call. In contrast, it is estimated that about 40 percent of worldwide demand for hotel rooms, especially within the resort category, fall into the leisure or personal travel markets. The leisure markets are highly segmented by lifestyle are often more sensitive to economics, political situations, and price-value relationships. In general, the hospitality industry has found that these market segments tend to react positively to packaged travel, loyalty awards, and other travel incentives.
4.6 Food Service Clientele
Diversity in choice and reasons for choosing
Food service clientele in the travel industry are as varied as the general population. Cultural or national characteristics generally dominate taste preferences, especially at breakfast when people want familiar foods to start their day. For example, Asian travelers may prefer a rice porridge, noodles in broth or dumplings, while Americans may want pancakes or ham and eggs and Europeans, bread rolls and espresso coffee as the breakfast meal of choice. Many restaurants will cater to these diverse tastes, while others may feature local cuisine as part of the attraction of the locale. International hotels generally attempt to accommodate guests with different lifestyles and tastes, adapting their menus and dining styles to reflect these multicultural needs. Others emphasize menus and dining styles which are authentic in terms of their cultural or ethnic origin and reflect the location of the hotel (Gee, 1994, p. 359). It would be difficult to characterize the clientele of food and beverage services even among hotel guests, as many factors influence the choice of restaurants, including cost, time of day, convenience, menu and style of service. The guest who might choose the hotel coffee shop for breakfast, may eat lunch at a fast-food outlet while sight-seeing during the day, and have dinner at the hotel dining room or an outside specialty restaurant. Moreover, many hotels and restaurants also include a sizable local resident component in the use of their dining facilities.
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Ownership and Management of Accommodations
4.7 Ownership and Management of Accommodations It is important to understand that hotels are managed and operated under different systems around the world. There are many models, including: • Independently owned and operated properties. • Properties that are independently owned and operated with chain affiliation. • Chain-owned and operated properties. • Independently owned, chain-operated properties. • Franchised properties. • Referral group properties (Gee, 1994, p. 14). Independently-owned and operated properties outnumber chainaffiliated properties, but in terms of number of rooms, hotels owned and operated by chains are dominant worldwide. In different parts of the world, expansion has taken place differently. In Asia, equity investments are preferred, whereas in North America franchising and management contracts tend to be more popular. In reality, there are many combinations and arrangements for managing hotels. In each system or arrangement, there are benefits and disadvantages to the owners and managers. In terms of management arrangements, properties may be company-owned, part of a franchising system, or managed by contract.
4.7.1 Company-Owned and Operated Systems In this system, the property is owned by an individual or a company which can be a chain with multiple properties. The general advantages of this system are: • The owner has independence. • There is more flexibility with decision making and thus decisions are often reached more quickly. • Direct ownership allows the owner major, if not full, control of the operating policies and procedures. • Since the owner and manager are the same, this individual or entity obtains the full benefits of the profits.
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Chains dominate
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The disadvantages in an owner-operated system can include: • The owner has the full risk. In international settings, this can cause problems in unstable political environments. • When there is only one or a few properties, the reservations and referral system may not be adequate. • It is often more difficult to obtain capital for growth, especially if the chain is small.
4.7.2 Franchising
Defining "franchise"
A franchise is “an arrangement in which the owner of a trademark, tradename or copyright licenses others, under specified conditions or limitations, to use the owner’s trademark, tradename or copyright in providing goods or services.” Hotel franchising comes in many forms, but the basic premise is that the owner remains in control of the management and the property, yet has the advantages of a large chain in terms of trademark or tradename and marketing outreach. Most franchise systems are set up with the owner of the property, known as the franchisee, obtaining the right to use the name and to be part of the national or international chain, belonging to the franchiser. Rights given to the property owner include exclusivity of franchise rights to areas defined by the franchiser. Under contract, the franchisee agrees to abide by the operating policies and practices as defined by the franchiser in the agreement. In general, the franchisee will agree to pay a fee and in most cases some percentage of gross sales as defined by the specific contract. In general, the advantages to the franchise system for an owner include: • The right to use the brand name. • Being part of a reservations system which has international access. • The right to purchase supplies via the franchiser. In most cases this will afford savings to the owner. • Professional managerial assistance. This is of obvious benefit to an owner who may have limited experience in the hotel industry. Among the disadvantages to the franchise system are: • The franchisee does not have complete management control. In general the policies and procedures must be followed as set by the franchiser. • The franchisee must pay for the franchise rights and agree to pay monthly fees.
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• The franchisee is tied to the franchiser and how the brand name fares in the marketplace tends to affect all parts of the system (Gee, 1994, pp. 242-243).
4.7.3 Management Contract This arrangement is favored in many international settings as it allows a hotel chain to establish a presence often without the investment of ownership. The management contract allows for the separation of ownership and operation. With such an arrangement, the owners act as investors who allow someone else to manage the property. The exact arrangements vary greatly between chains and within chains. There are numerous factors which come into negotiation in a specific management contract. In general, the chain requires fees to be paid for their management responsibility. In the international setting, management contracts are used widely by owners. Financial institutions and lenders have historically favored management contracts because of the lower financial risk for properties which are managed by experienced hotel operators. At the same time, management contracts are a way for hotel companies to expand. The management contract system affords the following advantages: • The investors are not required to become involved in the management of the properties. • The brand name generally assists in the property marketing. • The management team is provided for the owners. • Financing is generally easier to obtain. A management contract has the following disadvantages: • Certain fees must be guaranteed by the owners. Thus, the operational risk falls more heavily on the owner than the chain. • Owners and chains often do not agree on daily management practices. Generally the owners have less impact on operations than the operator. • Chains operate by standard management practices. These are often not flexible enough in international settings. • Management contracts often result in strained relations between owners and operators. Perceptions and communications often are stumbling blocks between both parties (Gee, 1994, pp. 230-241).
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Separation of owner and management
Lower risk and expansion potential
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A brief look at these three systems of management underscores the varied issues of hotel management. There is no one type of management arrangement that is best. The individual arrangements that are agreed upon always involve the weighing of the advantages and disadvantages for a given situation.
Mega-chains
In recent years, the industry has seen the emergence of larger and larger chains. Beginning in the 1980s many hotel industry companies have sought to combine their resources to gain stronger positions in regional, national, and international markets. The emerging mega-chains have relied heavily on management contracts as one means of expansion, in combination with buy-outs, acquisitions, mergers, and joint ventures. Increasingly, a large percentage of rooms worldwide are in the hands a few corporations who market to multiple market segments. Smaller chains have also formed strategic alliances with the larger mega-chains which has allowed many to survive in a competitive global marketplace.
4.7.4 Management Measures for Hotels The hotel industry uses several key measures including room rates and occupancy ratios to evaluate the business success of individual properties and chains. These standard measurements are used by financial institutions and worldwide consulting organizations to hotels. Hotel Rates
Standard rates and discounts
Hotel rates can be one of the most confusing parts of hotel operational analysis. The officially assigned rate for each type of room in the property is called the rack rate. In reality, hotels have dozens of rates that are discounted off the rack rate. The rack rate, which is based on the investment cost and required revenues to cover fixed and variable operating costs, is generally the highest rate charged for a room. Discounted rates are part of the marketing plan to attract various market segments. Discounted rates can be offered to such groups as government employees, members of the military, tour groups, senior citizens, and many others. The most important measure regarding hotel rates is the average daily rate (ADR), which is calculated by dividing the total room revenue by the number of rooms occupied. Thus, heavy discounting will result in a lower ADR. In recent times, the ADR is more often referred to as sales per room occupied. The need to generate sufficient sales to get beyond the breakeven point has been a major factor in discounting by hotel management. Progressive hotel operators today use forms of yield
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management in room rate allocation. Yield management concepts were pioneered by airlines attempting to maximize the passenger revenue per seat mile, and the basic concept has been adapted to room sales by the hotel industry. A main goal in yield management is to get the maximum rate for each room given the existing demand at a given point in time. All discounted rate programs are reviewed in relation to the room supply and demand analysis. Airlines and hotels realize that airline seats and hotel rooms cannot be inventoried. Hence, any unsold airline seats or hotel rooms will “perish” once the day ends. Occupancy Rate The occupancy ratio or rate is as important an indicator of profitability as is the ADR. The occupancy rate is calculated by dividing the number of occupied rooms by the number of rooms available for sale. Thus, if the hotel has 300 rooms available for sale, and 200 rooms are occupied, the occupancy rate is 67 percent. Hotels rarely operate at 100 percent occupancy for an entire year, and depending on its ADR, may need as low as 50 percent or as high as 80 percent to achieve profitability. As a general rule, hotels require at least 65 percent occupancy for profitability. There are many variables that affect the level of hotel occupancy. It is important to know the occupancy rate of the hotel, but knowing how many people were in the rooms is another important factor. Multiple occupancy tends to increase the revenue for a hotel property. There are other variables such as the rate charged, but in general the higher the percentage of double occupancy the more revenue. As mentioned earlier, rates charged for rooms vary from the rack rate in accordance with marketing programs. The average rate per room occupied is an indication of discounting and multiple occupancy in the property. A Higher average rate per room will be achieved when there is less room price discounting and when there are more guests per room.
Occupancy needed for profitability
Guests per room
Other Revenue and Cost Concerns Although there are hotels which still provide rooms only, most properties and property types have other sources of income that become part of the revenue and cost picture beyond hotel rooms. Worldwide, room revenue does account for well over half of total hotel revenue but other sources of revenue are also significant. In 1993, room revenue accounted for 59.8 percent of the total hotel revenue flow while food and beverage revenue accounted for 30.4 percent of the total (PKF Consulting, 1994, p. 5).
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Meals included in rate
Hotel's cost
Hotel food and beverage revenue come from a variety of outlets including coffee shops, buffets, fine table service, room service, catering, and banquets. Hotels also offer a variety of meal plans. The American plan (AP), also known as full pension in Europe, means that all meals are included in the hotel room rate. Ironically, this rate is not often used in American hotels except perhaps for resorts where it may assist in marketing value vacation packages. By contrast, the European plan (EP) normally provides no meals. This is the plan that is most common in North American hotels, as opposed to the American Plan. There are many variations to these two basic plans. The Bermuda plan normally includes some type of breakfast. The modified American plan (MAP) normally includes breakfast and dinner but not lunch. While room and food and beverage revenues comprise the primary sources of income, labor is the industry’s single largest cost. In terms of hotel operations, food and beverage is the highest labor cost area followed by rooms (PKF Consulting, 1994, p. 58). Certainly any analysis of revenue and costs needs to be done by country and region, as many country-specific economic factors must be considered. Hotels are learning that attention to food service can be a good source of additional revenue, as many hotels have attempted to increase their revenue from food and beverage while keeping the expenses associated with food and beverage fairly constant.
4.7.5 Food Service Management and Operations
Restaurant success
Independent restaurants commonly owned and operated by individuals, partnerships, or families are found worldwide. Because of the low ratio of profit to sales, however, restaurants are especially susceptible to failure, with the majority going out of business within five years (Coltman, 1989, p. 23). Because the profit margin of a food outlet is dependent on food and labor costs, a number of critical factors need to be considered in managing and operating a restaurant. Since much of the success of a restaurant is dependent on the menu, menu planning is basic to a restaurant’s success. The menu is important not only in attracting customers, but also influences the financial investment that is needed to start a restaurant since the menu can dictate the needed equipment, food costs and labor costs. For example, a fine dining facility will require staff that is trained to prepare as well as serve food, and may involve other costs such as uniforms for the wait help. In contrast, a fast-food outlet or a cafeteria would have a limited menu, fewer staff, and less need for staff or space.
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Corporate-owned restaurants with multiple outlets or franchises also have additional advantages in terms of cost-savings that individuallyowned restaurants do not. These include cost savings that may come with limited menus, greater purchasing power and better market penetration through organized marketing efforts. For fast-food outlets especially, franchisers provide training to teach operators ways to control food cost through strict portion control, inventory control, avoidance of waste and controlling labor costs by standardizing procedures and emphasizing continuous training on the job.
Advantages to franchise restaurants
4.8 Hotel Operations 4.8.1 Reservations Although direct individual hotel reservations still account for more than one-third of all hotel bookings, technology is rapidly changing these reservation patterns. The worldwide, toll-free reservation systems and computers and the Internet are making it easier for individuals to arrange their own travel. Increasingly, hotels are part of reservation systems that link hotels by some common affiliation. The airlines’ computer reservation systems (CRS) are becoming interactive as travel companies invest in the hardware and software to link the systems together resulting in airlines, travel agencies, car rental companies, and hotel chains offering easy access to travelers. The CRS have increasingly evolved into global distribution systems (GDS) which link all parts of the distribution system electronically. In the future, clients will be able to view pictures and “tour” the property before a reservation is placed, and the worldwide reservation system that is currently emerging will become a major force for change in the lodging industry.
Customer's computer use
4.8.2 Marketing Marketing the hospitality facility today must be viewed in terms of a global market. The reservations systems are a vital part of that marketing system. But today’s hospitality operator faces a more complex marketplace. National tourism administrations (NTAs) are also important to the hotels in international marketing since they usually work with the local travel entities such as travel agents, travel wholesalers, and convention planners in large-scale promotions. The NTAs normally have a great deal of marketing information regarding major buyers that is of great value to hotels. Decisions to advertise to segments must be viewed
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in terms of markets, values, and cultural attitudes. The international marketing strategy of today requires that hotels also understand the role of travel intermediaries in predicting potential business.
Travel agent's role
Positioning
Marketing tools and promotions
One of the most important aspects of marketing for hotels is the travel distribution systems discussed in Chapter 5. It is important for the hotel operator to know how the products and services are sold to the ultimate buyer. In the United States, it is common for the travel agent to play a major role in the purchase of travel to foreign destinations. In Japan, travelers tend to be influenced by a handful of large tour operators while other Asians and Europeans tend to shop many sources for travel information before booking. The success of hotel marketing often will ultimately depend upon the relationship a hotel has with the appropriate and critical intermediaries. Hotel positioning also remains important in global marketing. Positioning is the way hotels differentiate themselves in the marketplace. Some hotels are positioned according to their price-value, such as economy or budget, moderate, or luxury; others, by the type of property such as resort, spa, casino, condominium; still others by the type of service provided, including conferences, conventions, and bed and breakfast. Hotels today must use detailed market segmentation tools to make certain that their positioning in the marketplace is communicated to the potential client. Given that it is the consumer who ultimately identifies the position of the product in the marketplace, the competition between hotels helps to define the position of the hotel in the broader marketplace. Advertising, promotion, public relations and personal selling are equally important marketing tools for the hotel. These are the ways that the messages get to the potential markets the hotel is seeking. The selection of the correct media is not an easy task. There is a vast array of communication media available including newspapers, television, radio, the Internet, and trade publications. These choices are further complicated by the fact that different cultures have different interpretations of various media and different media habits. Sales promotions are activities other than advertising, publicity, and personal selling. These can include a variety of special programs such as postcards, brochures and posters. One of the important promotions for global hotel marketing is the use of cooperative promotions or cooperative marketing. These include programs where the hotels cooperate in marketing a destination by pooling their marketing dollars. The positive effects are that these programs normally enlarge the pool of visitors to a destination, and thus tend to benefit all hotels in the region.
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Personal selling has long been important to the hotel industry. This involves direct contact of the sales force of the hotel with the potential client. These activities extend to direct contact with members of the travel trade. Personal selling tends to be effective but expensive. Combined with the expense is the reality that selling services in cross-cultural settings presents more challenges since in the international arena, the sales person must understand cultural patterns as well as the language.
Personal selling
4.8.3 Hotel Staffing The staffing needs for hotels range from executive level positions such as general managers to unskilled positions at lower levels. Jobs such as resident manager, front office manager, director of sales, catering manager, reservations clerk, housekeeper, doorman, chef, kitchen helper, and laundry worker represent only a few of the many levels of employment in hotels. International hotels may face additional challenges in the human resources area at all personnel levels. A new destination, for example, often does not have either the trained labor force for upscale properties or local management expertise. It has long been a custom of international hotel chains to recruit experienced managers beyond national boundaries. These expatriate managers bring with them the required hotel education and training. At the same time, ideally these individuals must have the ability to understand and work in the local culture. The successful expatriate manager can often help in the development of middle management recruited and developed from the local labor force. Equally challenging for the international hotels is having an adequate labor force. In general, an adequate labor supply for the hospitality industry is a global problem. The service industry also has historically been one of compensation based on a mix of pay (on the low side) and perquisites (on the high side), long hours, and high turnover. In the international setting, the rules of hiring, supervising, appraising, disciplining and training a hotel staff are also influenced by the local culture. For the international manager, there are often no clear-cut guidelines and success has often come through adaptation and integration of prior experiences with locational realities, different approaches based on local advice and best judgment.
4.8.4 Use of Technology The accommodations industry has often been criticized for lagging behind other industries in the adoption of technology. In the past decade, however, the lodging sector has adopted technologies at a fast
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Labor levels
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pace led by the major chains. In hotel operations, technology today spans from the front of the house to the back of the house. Computers handle reservations and room assignments and assist with security surveillance and key control. In the hotel kitchen, computers record orders, manage inventory and even automate some cooking functions. Indeed, virtually every part of the property involves the use of computer technology in one form or another, whether information or robotics. Technology increasingly free up employees so that they can provide more personalized service to guests. The many uses of computers in today's hotels
Computer reservations systems (CRS) for the lodging industry continue to expand and grow with advances in technology. A hotel chain’s CRS may now be linked with the home computer. These systems turn the reservation systems into a marketing vehicle for global distribution of the chain recording demographics, guest histories, and related information. Some hotel systems handle not only the CRS function, but virtually connect the entire property on one system. Functions include telephones, inventory, payroll, and energy systems that control air conditioning, light and power. Today’s traveling public, especially business travelers, also expect to find communications technology available in their rooms as an extension of their “office away from the office”.
4.9 Travel industry Linkages Working together
For tourism to succeed, the hospitality sector must work together with other segments of the travel industry. Over the years, the accommodations industry has learned to work with various industry segments such as airlines, travel agencies, and tour operators to assist in the marketing of the destination. During low season especially, joint promotions of special value tour packages involving the cooperation and contributions of different members of the travel industry, cooperative marketing campaigns, and travel agencies familiarization trips all help to fill rooms and airplane seats.
4.9.1 Marketing Partnerships
Award programs
Working as partners in travel, many major hotels and airlines offer awards that reward consumers for using specified hotels and air carriers. These arrangements have now expanded to rental cars, attractions, and upscale restaurants. The various award programs vary considerably within the industry. Frequent flyer miles and frequent stay point awards at hotels are very common. In addition, there are programs which reduce the price of rooms off the rack rate or the standard room rate by offering free
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accommodation for every two or more paid nights. The various programs are often confusing to both the consumer and the travel agents as programs are continually modified. These programs, nevertheless, generally build important partnerships within the industry and often develop important consumer brand name loyalties (Kaiser & Helber, 1987, p. 179).
4.9.2 Hospitality-related Industry Organizations In many countries, the members of the hospitality industry have organized business or industry organizations which provide a variety of services to their members. Among the services common to all such organizations is an organized approach to promoting the use and development of hospitality facilities and services for the traveling public. These organizations attempt to help negotiate favorable laws and regulations that affect the hospitality industry and tourism in general. They may also play a valuable role in the resolution of conflicts that may result from differences in goals and objectives with the public sector. For example, the American Hotel and Motel Association (AHMA) is a federation of hotels and motels whose membership accounts for well over 50 percent of all hotels and motels, and in terms of revenue reflects over 80 percent of the revenue for the entire U.S. hotel industry. The AHMA works for favorable laws that affect the industry including such issues as taxation, liability, and advertising. Other regional and international organizations which represent the lodging sector include the European Motel Federation in the Netherlands, the International Hotel Association in Paris, France, the International Organization of Hotel and Restaurant Associations in Zurich, Switzerland, and the Caribbean Hotel Association in Puerto Rico. Specialized sectors of the lodging industry also have organizations to represent them such as the International Youth Hostel Federation and the Bed and Breakfast Reservation Services World Wide.
SUMMARY The hospitality industry, representing the accommodations industry and the food and beverage sector, comprises a major part of the global tourism industry in terms of revenue and employment. The growth in global tourism has resulted in many changes to the accommodation and food service industry in recent years. Hotels and restaurants have increasingly become part of national, regional and international chains. Franchising has been used extensively in the accommodations industry as well as the food and service industry, which allows a more rapid
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Promotion of use and development
Different organizations
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penetration of the marketplace. However, the bulk of the global food service industry will likely remain with independent restaurants, where the customer seeks a special or different dining experience. New technologies, demographic changes, and economic and political shifts will continue to impact the management and operations of hotels and food outlets in the next century.
DISCUSSION
QUESTIONS
1. What factors have contributed to globalization of the lodging industry? 2. What are the sources of hotel revenue and what are the expenses? 3. What do ADR and occupancy rate mean? 4. List and describe the major classifications of hotels. 5. What are some of the major trends in the hotel industry? 6. What are the types of food service operations and how do they differ according to the markets they serve? 7. What are some worldwide trends in the food service industry?
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CHAPTER 5 Travel Distribution Systems
Learning objectives • To understand the travel distribution systems and their services. • To differentiate the roles of tour wholesalers, tour operators, and travel agents. • To understand the economics of tour wholesaling. • To be aware of the impact of technological change on the travel distribution systems. Key terms and concepts commissions computerized reservation system (CRS) distribution systems - direct and indirect electronic ticket delivery network (ETDN) global distribution system (GDS) group inclusive tour (GIT) or inclusive tour (IT) Internet land arrangements satellite ticket printer (STP) specialty channeler suppliers ticketless travel tour operators tour program tour wholesaler travel agent travel intermediaries
5 Travel Distribution Systems
5.1 Introduction We usually associate a product with its production and consumption stages, often overlooking an intervening process which moves the product from production to the consumption stage. This process is called distribution. Theoretically, the distribution of the tourist product resembles that of other industries. It involves the participation of wholesalers, retailers, and other intermediaries or middlemen, all responsible for bringing the product from the supplier to the consumer in a sales distribution system. In practice, however, two factors make the distribution of the tourist product unique. First, unlike agricultural or manufactured products which can be transported to the consumer, it is usually the consumer that has to be transported to the point of consumption for the tourist product. For example, to enjoy the use of a hotel room, a meal or a tour, the consumer must go to the destination. Second, unlike tangible products with a shelf-life, the tourist product is highly perishable. An unsold hotel room, meal or tour bus seat has no income value in the marketplace the day after. Collectively, these factors make the selling of the tourist product a challenging task. Thus, in order to better understand the mechanics of the tourism market and its economic significance, it is important to gain a basic understanding of the sales distribution systems and their role in influencing sales. This chapter describes the basic types of distribution
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Differences in distributing the tourist product
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systems and explains the roles of travel intermediaries, including tour wholesalers, tour operators, and travel agents. As an integral part of the travel distribution process, the role of technological advancements and their impact on travel distribution systems are also discussed.
5.2 Historical Background
Thomas Cook's tours
The hotel porter's role
Today’s travel distribution system can trace its origins to the 1840s when Thomas Cook, an Englishman, organized what could be called the ancestor of today’s tours. An ambitious entrepreneur and innovator, Cook also introduced several types of tours including the first pleasure tour to North America in 1866 and the first around-the-world tour in 1872. In the nineteenth century, tours were almost exclusively for the upper classes, but Cook tried to reduce the cost of traveling by chartering entire ships and booking blocks of rooms in hotels. In 1874, Cook was also the first to introduce circular notes to be used by travelers. These were accepted by foreign banks and hotels and relieved travelers from carrying large amounts of cash. They were a simple version of the traveler’s checks of today (Milne, 1991, p. 78). Before the introduction of the travel agencies at the end of the nineteenth century, it was common for hotel porters to make steamship and rail reservations on behalf of hotel guests. Hotels usually were built close to rail stations and ports where hotel porters were sent to make reservations and bring back the tickets in return for a commission by the supplier and a delivery charge from the client. To compete with the railroads, commercial airlines starting operations in the 1920s also used hotel porters as their agents, paying them a five percent commission. Later, airlines began establishing their own sales offices in hotels in an effort to avoid paying out commissions.
Modern travel
As international and leisure travel increased following World War II, the travel agency business expanded rapidly. Tours also dramatically increased in popularity with the introduction of jet aircraft in 1958. The advent of wide-bodied planes in the 1970s further reduced the price of air travel which increased the affordability of tour packages. The demand for tours also expanded as the disposable incomes of people in the U.S., Europe, and parts of Asia rose, and consumers became aware of the advantages of buying a complete tour package instead of organizing their own itineraries and bookings.
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Types of Distribution Systems
5.3 Types of Distribution Systems There are two broad categories of sales distribution systems, direct and indirect, which involve different variations and combinations depending on the number of intermediaries or middlemen used by suppliers in the distribution pipeline. Suppliers include hotels, airlines, cruise ship companies, car rental companies, railroads, and sightseeing operators. While most of the suppliers are part of the private sector distribution system, many destinations also have public sector distribution systems in tourism. Some governments run travel agencies such as Saigontourist and Vietnamtourist in Vietnam, railways, and hotels. African Tours and Hotels Limited, for example, is a leading quasi-governmental hotel management company which runs properties throughout Kenya. Each of the systems offer advantages and disadvantages, depending on the type of customers to be served.
Private and public distributors
5.3.1 Direct Distribution System In the direct distribution system, sales are realized through direct contact between the supplier and the customer without any intermediary (see Figure 5.1). An example is a prospective traveler who calls the reservation department of a hotel to book a room or who walks up to the airline ticket counter at the airport to purchase a ticket. The advantages of this method include: • Time Savings. There is a direct communication between the two parties and the transaction is a simple one. • Increased Profits. Suppliers are not required to give a commission to any middlemen resulting in greater profit per unit. • Flexibility. Direct communication with the supplier offers the traveler the option to make possible changes in the itinerary. This becomes more complicated or even impossible when, for example, the traveler buys a tour package from a travel agent where the itinerary is usually fixed. • Greater Control. For a number of customers, buying from the supplier and confirming a booking directly provide a feeling of comfort and security in the transaction. For the supplier, dealing directly with the customer provides an opportunity for recommendations and promotions of additional products.
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Without intermediaries
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Customer
Customer
Travel Agency Tour Operator Tour Wholesaler Specialty Channeler
Indirect Provider
OR
Figure 5.1: Tourism Distribution Channels
Hotel Restaurant Airlines Theme Park Retail Shops Cruise Lines Ground Transportation
Direct Provider
Direct Provider
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Types of Distribution Systems
There are also some disadvantages of the direct distribution system. First is the high cost that the supplier faces in order to maintain a permanent sales force. Another disadvantage is the possible reaction of the dissatisfied intermediary, since the supplier attracts customers that could otherwise be served by them. Finally, if the supplier uses this distribution method exclusively, it risks losing an opportunity to increase its revenues by selling to travelers who prefer to use an intermediary (Collier, 1994, p. 198).
Disadvantages
5.3.2 Indirect Distribution System In the indirect distribution system, the supplier makes use of one or more travel intermediaries in order to reach the consumer. For example, a travel wholesaler can book a large number of rooms for a certain period, and these rooms are made available by the wholesaler as part of a tour package. The customer can then book the tour package through the travel agent who serves as the intermediary between the supplier and the customer. Some benefits of this distribution method for the consumer include:
Using intermediaries
• Professional Consultation. Working through intermediaries or middlemen, the consumer can get a professional opinion about the comparative advantages of different options. The travel agent, for example, can provide the traveler with unbiased and personalized guidance, advice, and expertise. • Greater Variety. Dealing with a number of different suppliers allows the middlemen to offer a wider array of product options that the consumer might not have the necessary knowledge or resources to explore individually. • Lower Price. Travel intermediaries are often able to negotiate lower rates than otherwise would be available to the consumer. • Single Payment. The customer is charged in advance and pays for all different elements of the trip such as the flight, hotel, or car rental. This increases the convenience of the purchasing process and eliminates the need for the traveler to remit separate payments to different suppliers. The indirect distribution system benefits the supplier as well. The most significant benefit is the savings from not having to hire sales personnel since the intermediaries function as a sales team. The collection of sales
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Middlemen as salesmen
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revenues is also facilitated with the presence of middlemen, and cooperating with middlemen as “preferred” suppliers can help the supplier to generate additional business (Collier, 1994, p. 199).
Consumer benefits
Variations of indirect distribution may involve two or more intermediaries in moving the travel product from the supplier to the end consumer. Where there is a third intermediary, this is usually a specialty channeler. Various types of middlemen can fit under the term specialty channeler. These include, but are not limited to, meeting and convention planners, corporate travel offices, incentive travel agents, and hotel representatives. The added benefits to the consumer coming from the involvement of the specialty channelers are based on the easier flow of information, the provision of customized service (often to large groups of people), and a favorable price of the package.
5.4 Travel Intermediaries 5.4.1 Tour Wholesalers
Defining "wholesaler"
The tour wholesaler functions as a middleman between the supplier, also known as principal, of the tourist product and the travel agent who acts as the retailer. The tour wholesaler designs, prepares, promotes, and executes the sale of tour packages, buying large volumes of products from a variety of travel suppliers. These products may include air travel, accommodations, meals, entertainment, ground transportation, sightseeing tours, and special entrance fees for attractions. The products are grouped by the wholesaler to form attractive tour packages which are made available to travel agents for sale to the end consumer. The Role of Wholesaler
Bulk buying for discounts
Wholesalers generate a large part of the revenues in the travel industry since purchasing in bulk increases their buying power and ability to negotiate discounts. In this respect, larger wholesalers have a leveraged advantage over their smaller competitors. The cost savings is ultimately passed to the consumer by making tour packages available at prices lower than the sum cost of all components bought separately at retail. In addition, wholesalers provide advantages to the suppliers of tourist products who enjoy the financial security of having advance sales commitments for large blocks of rooms, seats, or other products. Wholesalers make a significant contribution to the travel agent and
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customer alike by developing and making available an array of tour packages to satisfy different travel customer tastes and income levels (Gee, Boberg, Choy, & Makens, 1990, p. 49). Some well-known wholesalers are Cartan and Maupintour in the U.S., Japan Travel Bureau (JTB) and Kinki Nippon Travel (KNT) in Japan, Thomson Travel in the United Kingdom, China Travel Service (CTS) in the People’s Republic of China and Deutschesreitsburo in Germany. Types of Wholesalers Tour wholesalers can be classified in various ways including the following: • The inbound wholesaler arranges tour packages for tourists visiting the country where the wholesaler is based. Inbound wholesalers do not necessarily operate only in the country where they offer tours and some maintain sales branches in other countries. • The outbound wholesaler arranges packaged travel for tourists who wish to travel to destinations outside the country where the wholesaler is located. Unlike the inbound wholesaler, the outbound wholesaler does not usually focus on a single destination, but may offer a wide variety of packages and destinations. However, both of these wholesalers tend to cater to the needs of the mass market in order to have the necessary volume leverage. • The domestic wholesaler designs and packages tours for local residents who travel within the country where the wholesaler operates. • The independent wholesaler represents the majority of wholesalers or about three-quarters of the industry. However, independents also experience the largest failure rate as they are not in a position to benefit from the financial support of a large company. • The airline wholesaler can be either a subsidiary selling the seats of a particular airline or a wholesale business that has formed a brokerage relationship with an airline. • The wholesale travel agent is a travel agent who puts together customized versions of tour packages to satisfy the needs of market niches within their customer base. These travel agents such as American Express Travel Related Services and Thomas Cook Travel often assume the retail and wholesaler roles at the same time. Similarly, the wholesaler may sometimes act as a travel agent by operating retail outlets.
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• The specialty wholesaler centralizes its business in making tours available for special-interest groups (e.g. retirees, singles) or focuses on particular destinations, accommodations, or alternative forms of tourism of interest to adventure travelers, culture seekers, or nature enthusiasts. • The travel clubs and incentive travel companies arrange travel packages in ways similar to the wholesalers. However, these packages do not become available for general consumption and are only offered to their individual members. The Economics of Wholesalers
Profits from markups
Necessity of high volume sales
Payment practices
In the U.S., the number of wholesalers more than tripled from 400 to 1,500 between 1970 and the mid 1990s. However, these numbers do not necessarily coincide with high profitability. Unlike travel retailers which benefit from commissions, wholesalers generate their gross profits using a 20-25 percent markup. The markup is applied only in the ground services portion of the tour. Although 90 percent of wholesale packages include air transportation, in general, wholesalers do not make any profit on this part of the package. This part, which represents almost 50 percent of the total price of the package, generates profits that go to the travel agent in the form of commission. For the wholesaler, after the subtraction of its operating expenses, there remains an average three percent before-tax profit out of the total price of an all-inclusive tour. Consequently, high volumes of sales have to be reached in order for a wholesale business to be profitable. Additionally, strong sales are required in order to reach the average break-even point of the industry. More specifically, before it starts generating a profit, a wholesaler must sell as much as 85 percent of its packages (Coltman, 1989, pp. 326327). In contrast to the low return-on-sales that characterizes the business, wholesalers benefit by a favorable return-on-equity ratio. This is due to the low requirements in initial investment. The travel wholesaler is not required to pay in full when booking from a supplier. For example, only a minimum deposit is necessary to secure the desired number of rooms of a hotel for a certain period. Next, the wholesaler can redeem his cash in the form of deposits and/or payments submitted to him by the travel agent when individual travelers buy the packages. It should be emphasized that while the customers pay the wholesaler for their trips in advance, the wholesaler does not usually pay off the supplier until after the trip is completed. Thus, the wholesaler can take advantage of the excess funds also called the “float,” before it actually pays the supplier in full.
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Travel Intermediaries
Despite this cash flow benefit, the wholesaler faces considerable risks as well. Factors such as changing preferences, unfavorable weather conditions, safety concerns, or political upheavals can destabilize markets and render destinations unsaleable. Moreover, when making a large number of advance reservations with a supplier, the wholesaler must enter into a sales contract for which he is bonded. Despite the inclusion of typical cancellation clauses in a contract, the wholesaler may still incur significant losses from forgone deposits and prepayments, and the closer the cancellation is to the departure date, the greater the reduction of the deposits.
Economic risks
Trends Affecting Wholesalers In the growing tourism market, wholesalers are likely to face increased competition coming mostly from the suppliers. For example, after the deregulation of the U.S. airline industry in 1978, airlines began arranging their own tours by combining their services with those of other suppliers. In addition, lower prices offered by various suppliers, such as discount airfares made available by airlines, have had an impact on the wholesale business. Lower airline ticket prices allow the option of creating a personalized tour with a total price that could be comparable to the one offered by wholesalers. Moreover, wholesalers may be affected by changes in consumer tastes as experienced travelers move away from the typical group travel that characterized the last two decades toward independent travel. In recent years, wholesalers have also been increasingly subject to lawsuits from consumers who are better educated and aware of their rights. False advertising has become a problem together with the growth of the tour business, largely attributable to the exploding demand for tours that has allowed the entrance of many new and inexperienced wholesalers. Sometimes, the claims and promises made by the advertising of wholesalers are in conflict with what the consumer ultimately receives. Other problems that wholesalers are sued for may be changes in the scheduled flights or the prices of packages or hotel rooms. Even though wholesalers might not be the only ones responsible for those changes, which can be the result of airline schedule changes, exchange rate variation, or hotel errors, they are the ones that consumers can usually hold liable. The future of the wholesale business will also be affected by the impact of the communication revolution in the travel industry which is discussed in a later section of this chapter. For example, information experts suggest that a good tour is one that can be booked quickly, preferably in four minutes.
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Competition and market changes
Lawsuits
The computer's impact
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Inevitably, computers become mandatory for the accomplishment of this task, and the hiring of more technical personnel by wholesalers has already been observed as a result of technological changes.
5.4.2 Tour Operators
Defining "tour operator"
Limited tours with service at destination
Specialization
In the travel world, the term wholesaler is often used interchangeably with the term tour operator. Even though these two terms describe similar types of intermediaries, a distinction should be made in order to avoid confusion. In general, the tour operator, also referred to as ground operator, can be thought of as a tour wholesaler with a smaller scale of operations. The word operator indicates the main function of tour operators which is to “operate” or run tour packages. In other words, tour operators are responsible for the delivery of the parts of a tour as promised to the buyer of the tour. To deliver services, operators may employ their own ground equipment and facilities, such as motorcoaches and accommodations, or rent these from other tour operators or individual providers (Gee et al., 1990, p. 50). In contrast to a wholesaler who designs and offers a large number of tours, the tour operator can offer only a limited number of tours on a yearly basis. These tours in combination are referred to as the tour program. While the wholesaler will typically include transportation to and from a destination, the tour operator offers his/her services only at a the destination itself. The tour operator’s defined business is to make the land arrangements at the destination encompassing hotel transfers, accommodations, sightseeing, prepaid admissions, and other special arrangements. Much like the wholesaler, the tour operators are free to design and offer their own packages which can be geared to all travelers. In some cases, however, operators have to comply with the specific preferences of the wholesaler interested in buying their services. In other instances, they compete with wholesalers who operate packages of their own. In recent years there has been a trend for tour operators to specialize. For example, companies might concentrate in incentive travel or others may focus on sailboat charters. The “group inclusive tour” (GIT) or “inclusive tour” (IT) sector whose customers buy a tour package that may include transportation, hotel rooms, airport transfers, and sightseeing, accounted for one-third of total travel expenditures in Western Europe in 1992. Group tour expenditures in 1994 reached U.S. $7.8 billion in the U.S. and U.S. $1.2 billion in Canada (Waters, 1996, pp. 141-142). Worldwide, UK and Japanese travelers are major markets
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for tour packages comprising 63 percent and 57 percent respectively of overseas holiday travelers in 1992 (World Tourism Organization, 1995d, p. 21). Due to a progressively higher segmentation and the sizable free and independent traveler (FIT) market whose customers travel independently of a group, the need for additional specializations of tour operators has increased.
5.4.3 The Travel Agent Traditionally, the role of the retailer in the travel industry has been played by the travel agent. The travel agent is the final link in the consumption process, connecting the receiver (the consumer) and the source (either the supplier or the wholesaler) of various tourism goods and services. The travel agent is also the visible intermediary in the distribution chain selling transportation, accommodations, meals, activities, attractions, and other travel elements directly to the public. These products can be sold individually, in various combinations, or as tour packages to the clients. It is the responsibility of the travel agent to act on behalf of prospective travelers and understand their desires in order to satisfy them by arranging the necessary parts of the trip (Gee et al., 1990, p. 48). Legally, the travel agent is a commissioned “agent” or an authorized representative who is approved to sell the products of a company in a certain geographic area. In terms of distribution, the travel agent maintains a delicate balance between serving the client and promoting the interests of the principal the agent represents. Above all, a travel agent has to use knowledge and expertise in responsible ways to successfully plan and secure a safe and enjoyable trip. This may involve carrying out numerous detailed activities including but not limited to preparing individual itineraries, informing about travel insurance, documents, and immunization requirements, as well as giving descriptions of destinations, hotels, and local customs. The demands on the agent have increased as the product mix has expanded. Even though almost every agent can sell the products of all sorts of suppliers, there are agents who choose to specialize in particular areas, and they play many different roles. In 1992, there were an estimated 67,000 travel agents worldwide of which 47 percent were in the U.S., 30 percent in Europe, the Middle East and Africa, 9 percent in the Americas outside of the U.S. and Canada, 7 percent in the Asia-Pacific region, and 6 percent in Canada. In 1994, travel agencies in Europe and the Americas produced about U.S. $170 billion in sales (Waters, 1996, p. 137).
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Travel Agents as Counselors The advising service
Specialists
Customer loyalty
The retail travel agent plays an important role in promoting the efficiency and the quality of the distribution of the various travel products. To the customer, the travel agent is the means for researching, organizing, securing, and realizing a desired trip. The agent’s goal is to understand what satisfies the traveler’s needs and try to provide it. That is why the term counselor is frequently employed to describe the advising service that the agent provides. Due to the increasing complexity of the reservation and pricing systems, a client would have to spend substantial time and money to arrange a trip or tour individually. Alternatively, the services of a travel agent may be used which are generally offered free of charge. The travel agent is a specialist who has developed an expertise in researching and collecting large amounts of appropriate and reliable information in very little time. In order to add value to the customer’s travel experience, the agent is required to know or have access, at least, to schedules, prices, different types and qualities of accommodations, airlines, and other travel components. Moreover, the agent has to personalize the results of this knowledge to fit the specific needs of the prospective traveler. Operating as a responsible and trustworthy professional is an integral part of an agent’s mission. The travel agent’s business depends greatly on repeat customers and is severely affected by word-of-mouth. The significance of customer loyalty for the industry is indicated by the fact that approximately 85 percent of an agent’s clientele consists of repeat customers. Travel Agents as Sales Representatives
Closing the sale
Supplier-AgentCustomer relationship
The travel agent carries out an equally important function as a salesperson. Ultimately, this is what determines an agency’s financial condition. Most people who seek the travel agent’s advice already know what they want. Because the value-conscious consumer does not hesitate to research and shop around, agents must not only service and sell what he or she requests, but be able to close the sale as well. Maintaining a harmonious relationship between serving a client and selling the products of preferred suppliers has always been a challenge for travel agents. The deregulation of the field has allowed agents to obtain different commissions and even overrides (commission rates that increase according to the level of sales) from different suppliers. To the supplier, the retail travel agent plays a critical role in promoting and selling its products to the ultimate consumer. The agent provides
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three basic elements that facilitate the suppliers’ business. These include a location where information can be obtained for the suppliers’ products, an outlet where a potential customer can purchase those products, as well as a place were payments can be collected. In the U.S. and elsewhere, airline deregulation and other developments in the industry have had a dramatic effect on travel agencies. In 1995, most of the major U.S. airlines adopted a cap policy limiting commissions in order to cut costs. For example, Delta Air Lines provides travel agents a 10 percent commission on U.S. domestic tickets as long as the total commission per ticket does not exceed the amount of $50. The average commission rates for domestic air sales have declined for travel agents placing increased pressure on agencies to move larger volumes of tickets to attain the same profit. Another concern is the low-fare trend for domestic tickets. When airline price wars are in effect, fares often become so low that the money an average agent makes selling a ticket may be less than what it costs to issue it. Even though this situation is not new, it comprises a serious burden, especially in combination with restricted commissions. Because of the commission cap, travel agents cannot balance losses incurred in selling cheap air tickets with higher fare tickets.
Commissions
5.4.4 Regulation of Intermediaries Travel Agents Historically, travel agents have been affected by regulations, especially from the airlines which restrict the number of agents because of concern over increased competition for their own sales offices. Until 1959, a travel agency could not be established unless it had the sponsorship of an airline and the approval of two-thirds of the members of the respective domestic or international travel conference. The subsequent rapid expansion of the airline industry forced airlines to rely more heavily on travel agents to reach and service their clientele. Although there has been a relaxation of restrictions since the deregulation of the airline industry in the U.S., even today an agency has to comply to certain regulations before and during the time it is in business. In the U.S., where a travel agency is not legally obliged to be licensed in many states, certification or accreditation consists of the approval from industry conferences. A conference is a regulatory body made up of transportation companies that impose requirements in order to promote certain standards. For the U.S., there are four major conferences: (1) The
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U.S. conferences' standards for agencies
Licenses
European and Japanese laws
Liability
Airlines Reporting Corporation (ARC) responsible for domestic tickets, (2) The International Airline Travel Agency Network (IATAN) responsible for international tickets, (3) The Cruise Line International Association (CLIA) responsible for cruises, and (4) The National Railroad Passenger Corporation responsible for domestic rail tickets (Mill, 1990, p. 321). An agency which is appointed by one group will usually receive an appointment by the rest of the conferences. Major requirements of ARC, for example, are that agencies carry a minimum bond to cover for the possibility of default and maintain a minimum cash reserve. There are also minimum experience requirements for agency management, and the agency must be accessible to the general public, actively sell tickets, and promote travel. Some states in the U.S. require a license. The license can be obtained by passing an examination given by the state licensing boards. Additionally, a city license and possibly a county license are required in order for a travel agency to be operational. Travel agents may also choose to follow the rules imposed by various trade associations which they have joined as members. The EC (European Community) Travel Directive was initiated in 1993 to eliminate differences in laws among member European states related to group or package travel. The Directive, however, does not replace national laws regarding ground travel, package holidays, tours, and tour operators and agents and leaves implementation to each state (Downes, 1993). Japan’s travel agency law is considered one of the most organized and advanced, and its 12,500 travel agents are divided into three classifications: general, domestic, and sub-agency. All agencies are required to register with the Ministry of Transport and are bonded (Travel Journal, Inc., 1995, p. 185). Travel agents have a legal obligation to perform in a professional manner. They can be held responsible for the quality of the service they provide. The provided service has to be in accordance to the promises made to the customer and consistent with the average industry performance. Agents have to take into consideration any special factors in the destination that may influence the customer such as political stability, health care, and other conditions. According to court rulings, agents can be even held liable in the event a wholesaler goes bankrupt before the trip. The American Society of Travel Agents (ASTA) in the U.S., the Association of Canadian Travel Agents (ACTA) in Canada, the Association of British Travel Agents (ABTA) in the U.K., and the
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Japan Association of Travel Agents (JATA) in Japan are some of the groups or organizations which set industry standards. International organizations include the International Federation of Travel Agents (IFTA) and the World Association of Travel Agents (WATA). Wholesalers For a new wholesaler to enter the industry, usually a local business license and compliance with governmental and airline regulations are required. Nevertheless, wholesalers may be subject to additional constraints, some of those monetary, if they choose to join certain professional associations. In the U.S., the tour operator industry is largely self-regulated, and most belong to the U.S. Tour Operators Association (USTOA). The USTOA requires an indemnity bond from its members. This goes toward the Consumer Payment Protection Program which helps refund the money to customers in case the wholesaler goes out of business.
Requirements and constraints
5.5 The Impact of Technology on Travel Distribution Systems In the field of tourism, technology represents a dynamic and powerful factor responsible for numerous changes in the past, present, and future of the travel industry. Technological advances especially in the last two decades have facilitated the distribution of travel services and will have a major impact on the future structure of travel distribution systems.
5.5.1 The Link Between Technology and Tourism Within the last two decades the tourism industry has experienced tremendous growth. During this period, a series of rapid and radical changes has been noted. The resulting evolution has made travel marketers realize that they are not only in the business of moving pleasure and/or business travelers, but also in the business of communication and information. Changes in consumers’ characteristics, preferences, and decision making, and continuous alterations in a highly competitive global environment have created an ever closer relationship between tourism and information technology. It is important to note that contemporary travelers have different characteristics from travelers of three decades earlier at the beginning of mass tourism development. The lack of travel experiences of earlier travelers and the complexity of the distribution systems favored the
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Changes in market and mentality
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Group vs. individual travel
Need for technology
creation of standardized travel packages for groups. By contrast, today’s consumers tend to be better educated with wider exposure to travel and strong preferences for unique travel experiences. Their desire for customized travel has influenced their decision-making process as well. To create memorable travel experiences, suppliers need to provide today’s prospective traveler with a full range of options. Here, the completeness and the clarity of the information offered to the traveler by the seller are essential variables of satisfaction. The complexity of the issue increases as the competitive global environment of tourism continuously generates more information. The combination of these forces and the need for high professionalism in handling the information provided to the consumer necessitates the use of technology to gather, manage, distribute, and communicate information. Technology surfaces as the “enabler” that allows tourism businesses to carry out all these functions in order to create products and services that address personal travel demands. Additionally, it helps satisfy the need for value which emerges as a determinant factor of consumer satisfaction. Technology, then, acts as a strong driving force which is reshaping the tourism industry and providing companies with a competitive edge.
5.5.2 Computer Reservation Systems (CRS)
Beginnings in the airline industry
Probably the most widely used technological tool in the travel industry is the computerized reservation systems (CRS). First introduced at the experimental level in the 1960s, the CRS was usually an internal airline system used for keeping track of the seats sold. In the following years, a number of different systems were developed by individual airlines. For example, TWA introduced PARS; United Air Lines, APOLLO; Delta, DATAS II; and American Air Lines, SABRE. Later, airlines realized that they could use the CRS to make their fares available to travel intermediaries with increased cost effectiveness. As a result, in the first half of 1970s, airlines tried to gain an advantage over their competitors by creating their own version of a reservation system. The move was based on the expectation that the airline with a more widely adopted CRS would be capable of providing its clients more timely information and thereby increase sales volumes.
Linking systems
Because of ownership and control factors, the different CRSs were not interconnected until 1976 when TWA, American, and United Air Lines gave access to each other’s systems in the first attempt to link systems. This event marked the beginning of the widespread use of the CRS. The advent of CRS directly increased both the effectiveness and the
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efficiency of airline reservations by enabling airlines to continuously update their databases in terms of seat availability and fare adjustments. It also increased the speed and the efficiency with which travel agents serviced their customers. Drawing from the example of the airlines, other suppliers such as hotels and car rental companies also adopted CRSs (WTO, 1995c, pp. 22-23, 29). In more recent years, there has been a trend for alliances at different levels of the tourism industry. These alliances have resulted as a response to intense competition, the need to capitalize on economies of both scale and scope, as well as on economies of networking (maximizing utility out of networks). An example was the cooperation of Delta Air Lines with Northwest and TWA for the introduction of WORLDSPAN, a reservation-only network. Different travel suppliers also linked their reservation systems. For example, SABRE started offering reservation capability to the Sheraton hotel chain and the Avis car rental company. Currently, after a series of alliances, mergers and acquisitions, the CRS has evolved into what is widely known as the global distribution system (GDS). In 1995, the leading GDS companies worldwide were AMADEUS, GALILEO, SABRE, and WORLDSPAN. Regional CRS vendors include ABACUS (Asia-Pacific), ACCESS (Japan), and GETS (Latin America, Eastern Europe, Africa). The main objective in the development of these integrated global systems has been to make a complete one-stop service possible. Using GDS, suppliers, intermediaries, and customers worldwide can now interlink to exchange information on a wide variety of tourist products including airfare, accommodations, ground transportation, and destination information.
Alliances within industry
5.5.3 Ticketing Automation Other technological advancements have facilitated the distribution of travel while cutting costs and increasing responsiveness. Satellite ticket printers (STP) now allow travel intermediaries to issue tickets directly. The electronic ticket delivery network (ETDN) is another form of STP. The difference between them is that the supplier collects a commission for the usage of ETDN, while only a printing fee is received in the case of the STP. Electronic kiosks, which are stand-alone computer terminals found in hotel lobbies, airport terminal, and tourist information offices, now allow travelers to perform a series of different functions such as hotel check-in, purchase of airline tickets, or receipt of information about what a destination has to offer. Another development in facilitating the distribution of travel are electronic travel documents, simply referred
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to as ticketless travel, where the passenger’s personal information exists in an electronic file with the airline. All the passenger is required to do is present personal identification to obtain a boarding pass (Gee, Makens, & Choy, 1997, p. 213).
5.5.4 The Internet
Both complement and substitute
Advantages and disadvantages
The increasingly widespread use of the global computer network known as Internet may eventually have the largest impact of all technologies on travel distribution systems. Currently, it can be viewed both as a substitute and a complement to the traditional distribution channels. Functioning as a complement, the Internet can be used by travel intermediaries and individual travelers alike to research available travel products and prices. Functioning as a substitute, it allows individual travelers to reserve and purchase travel products on-line, potentially eliminating the need for a middleman. A continuously larger number of travel-related businesses are turning to the Internet due to the benefits that it can have on customer service delivery and ultimately on sales volume. For example, in 1995, American Air Lines sold 1.6 million tickets on-line (Gunther, 1996). To many, the Internet provides a great opportunity for reaching new customers and targeting additional market segments. The greatest advantage of the Internet is its capability to make travel products globally accessible at a much lower cost than traditional distribution systems. Cost reductions become possible by eliminating the overhead costs of reservation departments, decreasing printing and mailing costs of company directories, and avoiding commissions to the travel agents. Despite the many benefits that the Internet brings, there are still some drawbacks that limit its immediate widespread adoption as an alternative distribution method. For consumers, these include the level of computer literacy, availability of necessary computer equipment, ease of use of software, confusion in organizing the enormous amounts of data, security of sharing personal information, slow response times, and image quality (Cho, Connolly, & Tse, 1995).
5.5.5 The Future
Elimination of intermediaries?
The single most important issue concerning the future of the travel distribution systems is the elimination of the intermediary or middleman (i.e. travel agent and even the wholesaler) from the distribution chain. Indeed, the two most powerful technological trends, ticketless travel and the Internet, tend to challenge the survival of travel intermediaries.
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Summary
Individual computer users with direct access to ample on-line travel information can make their own travel arrangements. This, in combination with the possibility of using an electronic instead of a regular ticket make traveling possible without the use of intermediaries. It is possible that travel intermediaries will shift their business on-line. This could involve collecting, managing, adding value, and redistributing information via the World Wide Web to computer users. They can also make use of upcoming technologies by providing on-line videos of vacation destinations and direct e-mail messages to update their customers on the latest travel bargains. However, one should keep in mind that competitors from fields not directly related to tourism, such as telecommunications and computer companies, possess technologies that can make on-line travel planning possible. These companies constitute a serious threat for travel intermediaries that plan to go on-line. No matter what the future developments may be, many insist that the value of the personal element of the travel intermediary business cannot be substituted by non-personal technological advancements. Additionally, it can be argued that many who do travel, such as corporate executives, cannot spend time on booking their own travel. What can be stated with certainty is that the structure of travel distribution systems is changing, and adopting new technologies to do business will be the single most important factor in the future survival of travel intermediaries.
SUMMARY Travel sales distribution systems provide the means by which the tourism product or service moves from the supplier to the customer. The distribution system can be direct or indirect depending on the number of intermediaries or middlemen–tour wholesalers, tour operators, travel agents–who play a role in the process. The use of intermediaries is a cost-effective method of distribution and each intermediary plays an important role. Tour wholesalers and operators generally create and provide the tour package while travel agents sell the tours and service the customer directly. Travel agents receive their income from suppliers and wholesalers through commissions and account for a major portion of reservations and bookings in the travel industry. However, the relationships within the travel distribution systems are expected to change in the future with the challenges posed by new technology. Direct booking by consumers through computers using on-line services and the use of ticketless travel which by-passes the need for the purchase and issuing of actual tickets are expected to
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Willingness to change
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reduce the demand for services from travel intermediaries. The travel sales distribution system will need to adapt to the new technologies as well as to changing consumer tastes and preferences in travel in order to maintain its major role in the travel industry.
DISCUSSION
QUESTIONS
1. What are the different types of travel sales distribution systems and how do they operate? 2. Who are the major suppliers of travel services? 3. What are the primary functions of the tour wholesaler? 4. What are the differences between the tour wholesaler and the tour operator? 5. What services does the travel agent provide to the customer? 6. How do each of the intermediaries derive income and revenue? 7. In what ways will technological changes affect the travel sales distribution industry in the future?
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CHAPTER 6 Special Services and Products
Learning objectives • To identify the changes in the leisure and business travel markets that have facilitated the development of special services and products. • To identify some of the major special services and products in the leisure and business travel markets. • To understand the MICE market and the various specialized roles that meeting planners, convention centers, events managers, and convention and visitors bureaus play. Key terms and concepts adventure tourism convention center convention and visitors bureau (CVB) cultural tourism ecotourism educational tourism event manager health tourism meeting planners meetings, incentive, convention and exposition (MICE) market new age tourism rural tourism
6 Special Services and Products
6.1 Introduction As the tourism industry has matured and tourists have become more knowledgeable and sophisticated, special types of tourism services and products have been developed to meet their travel needs. These special services and products have grown out of changes and pressures affecting tourism supply components (such as destinations and attractions) and the traveling public. Both the leisure and business travel markets are affected by these changes and pressures. As a result, special services and products serve certain niche markets. Special areas of leisure travel reflect the public’s diverse reasons and motivations for traveling. Chapter 7 discusses the many different reasons why people travel and the psychological aspects of their choices of destinations and activities. As greater numbers of people travel, and as tourists look for different travel experiences, those markets that were once considered too small to merit much attention by suppliers are now growing into substantial and profitable niches such as ecotourism, adventure tourism, health tourism, educational tourism and “new age” tourism dealing with people’s interest in spiritualism and metaphysics.
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Special markets
Business travel has also developed its own special markets. Meetings and conventions events now have professional planners to deal with the complex activities and needs that are unique to these events. In addition, destinations now compete vigorously to host these types of events. This chapter examines some of the main special services and products that have developed in both the leisure and business travel markets.
6.2 Special Segments of Leisure Travel 6.2.1 Reasons for the Growth of Special Leisure Travel Services and Products
Product development
Savvy tourists
In the area of leisure travel a significant and growing number of people, especially those who travel frequently, now approach tourism with different expectations. Rather than simply going on sightseeing tours and relaxing at pool side, these tourists search for more meaningful or intense experiences. Part of the reason for these newer expectations of travel lies in the development of the tourism industry itself. As tourism has grown and matured, it has become increasingly sophisticated and creative in the range of products and services it offers including destinations. Tourism suppliers are constantly innovating ways to differentiate themselves from other suppliers and stand out in the market. This innovation is part of the natural process of product development, where the accumulation of knowledge and experience enables suppliers to modify and improve their products. In addition, this need to innovate comes from the competitive pressures of the market. Today’s tourists are likely to be knowledgeable about the many different products in the market and concerned with getting the best value for their leisure dollar. Many tourists are seasoned travelers and are looking for new travel experiences. Thus, suppliers are under constant pressure to appeal to buyers who are becoming increasingly discriminating in their tastes and more conscious of value. The following special segments of the leisure tourism market reflect these factors.
6.2.2 Ecotourism One form of tourism which has gained much attention in recent years is ecotourism. Although there are several definitions of this term, there is general agreement that in ecotourism the physical environment is the focus of the touristic activity. For the purposes of this chapter ecotourism will be defined as any tourism which:
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• Provides a first-hand active experience of a place. • Provides an educational experience which develops visitors’ understanding and appreciation of the place visited and promotes both appropriate behaviors and a conservation ethic. • Is environmentally responsible and uses various strategies to minimize negative impacts. • Maximizes local economic returns (Bottril & Pearce, 1993; Scace, 1995). One of the difficulties in analyzing ecotourism is the problem of determining its size. Although it is believed that ecotourism is a substantial and growing activity, its contribution to the tourism industry can only be estimated because few countries or regions monitor the number of visitors choosing ecotourism options. Examples of countries whose tourism growth appears to be driven by ecotourism are Belize (with tourism growth of nearly 140 percent in the period 1981-1990), Kenya (115 percent), and Costa Rica (31 percent). Certain trends in tourism, such as the increasing experience and sophistication of travelers and the increasing desire for self development through travel, are believed to generate more interest in ecotourism experiences (Poon, 1993; Urry, 1990; Cater, 1994).
Growth estimations
Ecotourism activities typically focus on providing access to remote, rare and/or spectacular natural settings. Tours which concentrate on wildlife viewing are another major form of ecotourism. The following examples demonstrate the various characteristics of ecotourism: • In Costa Rica, a country which has been heavily promoted as an ecotourism destination, the operations of the La Selva Biological Station are a successful example of ecotourism. The station is run by a consortium of research institutions which is called the Organization for Tropical Studies (OTS). The primary activity of the station is scientific research, but the OTS offers access to tourists and the station is visited by approximately 13,000 tourists each year. Visitors are provided with accommodation in basic cabins and are allowed access to trails into La Selva, which is comprised of 2,000 acres of virgin forest, swamps, and abandoned plantations. The income generated by visitors supports the operation of the research programs. • An Australian company provides tours in many parts of Australia and in Indonesia that take visitors into more remote natural environments and provide interpretation of these places and the wildlife. The tours often involve visits to research sites and contact
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with local residents. A substantial focus of the tours is the education of tourists to encourage their appreciation of the visited places. All guides are trained in both conservation principles and in minimal impact behavior and travel techniques. The tours are run under a set of guidelines which include asking visitors not to collect artifacts, fossils or plants, removal of rubbish, restoration of campsites, and guidance for visitors on how to behave in cross cultural encounters. The tour company also offers employment to local people as guides and purchases local goods wherever possible. Example 3: Antarctica
• Cruises to Antarctica led by scientists with substantial experience with the Antarctic environment. These scientists give talks to passengers on the ecology, history, and geology of the antarctic region. Tourist behavior while onshore is strictly controlled, and visitors are not allowed to eat, smoke, or litter while off the boat. The cost of the cruise includes fees to government agencies, such as the New Zealand Department of Conservation, which are used to support environmental protection programs (Rovinski, 1991). As these examples demonstrate, ecotourism can be viewed as sustainable tourism for natural settings. In this way, ecotourism possesses the potential as a guide for the development of more sustainable conventional tourism discussed in Chapter 12.
6.2.3 Cultural Tourism
Activities in developed/less developed areas
Cultural tourism refers to a segment of the industry that places special emphasis on cultural attractions. These attractions are varied, and include performances, museums, displays, and the like. In developed areas, cultural attractions include art museums, plays, and orchestral and other musical performances. Tourists may travel to specific sites to see a famous museum such as the Prado in Madrid or the Louvre in Paris or to hear the Vienna symphony orchestra. In less developed areas, they might include traditional religious practices, handicrafts, or cultural performances. An example of the latter type of cultural tourism is the U.S. Amish community in Lancaster County, Pennsylvania. The Amish live a traditional lifestyle without modern conveniences such as electricity and telephones. Tourism provides the Amish with an important source of income, through the sale of quilts, small handicrafts, and baked goods.
Combination culture/ecology
Cultural tourism and ecotourism are usually closely related, and elements of each are often found in tours and destinations that appeal to this market. An example is Africatourism, a tourism program based
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on the cultural and environmental wealth of Africa. Among its features and benefits, Africatoursim: “recognizes the natural qualities of Africa and its people and upholds them as a source of pride and confidence, all the way from the grassroots level… implies responsibility and stewardship toward the environment and embraces everything environmental, from fauna and flora through cultures, traditions, art forms, architecture, engineering, agriculture, and industry… [and] can be found and experienced only in Africa (Open Africa, 1997). This last feature–that Africatourism is unique to Africa–is key to cultural tourism and ecotourism, as it emphasizes the importance of the destination’s place to the authenticity of the tourist experience.
Example: Africa
One of the issues facing less-developed destinations that offer cultural attractions is the potential impact of tourism upon the local culture and society. By its nature, cultural tourism can bring together people of vastly different orientations towards modern values, a cash-based economy, and traditional religious practices. The meeting between such different peoples in the context of a tourist experience can have significant impacts, especially upon the local, traditional society. For example, a tourist may see a local handicraft primarily as a souvenir to be purchased and displayed at home, and thus the purchase of the handicraft as simply a transaction, much like the thousands of other transactions he participates in on a daily basis. The traditional craftsman, on the other hand, may perceive the exchange of money for the handicraft as a symbol of his or her relationship with the buyer and the buyer’s society. The craftsman in this case may want certain customs to be followed in the exchange, or may expect the buyer to exhibit behavior that indicates that the exchange is a meaningful event. In this and many other ways, there are opportunities in cultural tourism for greater understanding and mutual enrichment between cultures, as well as for misunderstandings and disappointment.
Tourist impact on societies
6.2.4 Rural Tourism The primary tourism-generating markets are highly developed and urbanized areas. Many of the residents of these areas wish to escape from their modern urban and suburban environments, and visit simpler, less developed areas. For such tourists, rural tourism offers an ideal alternative. Like ecotourism, rural tourism is difficult to precisely define because it can take a multitude of forms (Lane, 1994). An example of rural tourism is farm tourism or agri-tourism as found in many countries in Europe. In Austria, for example, there were about 21,000 farms providing about 109,000 rooms to farm tourists in 1994.
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Urban escape
Farm tourism
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Rural hostels and inns
Farm tourism helps Austrian farmers diversify their income sources beyond traditional means such as cattle and timber, with the tourists’ payment of room rent and their purchase of farm-grown produce. Another example is the youth hostel found in rural areas, which has been a long-standing way for young persons to travel economically around Europe. In many parts of the United States, particularly in the northeast region, there are numerous small inns, often run as a family business, that provide guests with a small-town experience. One of the key aspects of rural tourism, and of several of the other special segments of leisure travel discussed below, is the experience of a way of life and environment that offer a sharp contrast to life in the modern city. For these segments of tourism, the environmental qualities of the destination are particularly important. Rural, adventure, and cultural tourism are often cited as the segments of tourism that hold the most promise of incorporating the principles of sustainability.
6.2.5 Adventure Tourism
Challenges
Extreme sport
Many tourists have the desire to participate in activities that provide them with a challenge, thrill, or intense experience. Some of these tourists want to test their physical skills in new or unusual ways, with activities like mountain climbing, hiking, or kayaking. Others want to face nature without the modern conveniences that make their lives safe and comfortable. Whatever their motivation, these tourists will seek destinations and products that can provide such intense experiences. In general, adventure tourism relies on natural, environmental features, such as mountains, rivers, forests, and the like. Unlike traditional tours, however, where such natural features are appreciated for their visual beauty, adventure tourism brings the tourist into close contact with the environment and makes it something to be challenged or wrestled with. In this way, adventure tourism, like rural tourism, takes the tourist back in time by providing dangerous or challenging situations that the modern tourists’ forefathers may have faced. Historically, one of the most famous examples of adventure tourism has been the hunting safari in Africa, which combined the thrill of pursuing wild animals, the challenge of living in an untouched environment, and the beauty of the African landscape. Another well-known form of adventure tourism is mountain climbing, where climbers risk their lives to pit their skills against nature. A growth area of adventure tourism is the extreme
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sports tour. Extreme sports include established activities that, like mountain climbing, have a high degree of danger such as rock climbing, skydiving, and new variations such as snowboarding.
6.2.6 Health Tourism Health tourism refers to travel to facilities and destinations for obtaining health-care services or health-related benefits. Health tourism thus encompasses many different types of activities which have in common an emphasis on the healthfulness of the tourist. The three main forms of health tourism include: • Medical care. Traveling to a facility or physician to obtain special treatment or a quality of treatment unavailable in the traveler’s home area. Examples of this would include hospitals or physicians that are world-renown for their treatment of certain diseases, or that offer experimental or unique treatments, such as the Mayo Clinic in the United States. • Fitness and wellness. Traveling to a destination or facility, such as a spa or weight-loss clinic, for the purpose of engaging in preventative health measures, such as dieting, weight-loss, relaxation, and exercise. Many hotels and resorts already include spa and exercise facilities,which indicates how widely fitness and wellness practices have been adopted in people’s lifestyles. • Rehabilitation and recuperation. Traveling to a destination or facility that offers special care, or is located in an area considered to be particularly beneficial to one’s health, to recover from illness. Health tourism is considered to be a segment with much potential. During the next decades, a generation of people who have become accustomed to modern medical care will be entering their retirement years. These people are expected to demand a level of health and comfort as they grow older that earlier generations could not expect. A large segment of this generation will also possess the economic means to pursue better health, including travel related to health tourism. Health tourism will also benefit from the world’s growing knowledge of, and concern with, good health. The past decades have witnessed significant increases in public awareness in areas such as diet, environmental dangers (air and water quality, pesticides), and lifestyle (the consequences of cigarette smoking, alcohol consumption, stress,
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and the benefits of exercise). This increasing awareness, along with well-publicized advances in medicine, will continue to raise public expectations for their own health and well-being.
6.2.7 New Age Tourism
Unconventional tourism
Spiritual healing
A growing number of tour operators are offering programs that focus on metaphysics and spirituality designed for travelers in search of life’s deeper meanings and wishing to escape from the excessive materialism of the world. New Age tourism includes elements of cultural tourism, health tourism and ecotourism. People who consider themselves part of the New Age movement share a belief in the importance of learning from ancient cultures, encompassing spirituality, metaphysics, yoga, meditation, natural healing, herbology and communion. The sites visited in New Age tourism are in their very nature sacred sites dating from the preChristianity era, such as Stonehenge, the Easter Islands, and the great pyramids in Egypt. These tours often take unconventional approaches to history and archeology. For example, the pyramids are seen as a powerful energy vortex that emit a grid of energy lines encircling the world. Another branch of New Age tourism centers on physical health, offering yoga, guided meditation, exercise, massage and organic vegetarian and other diets. Destinations such as Sedona, Arizona (U.S.), Bali (Indonesia) or Dominica in the Caribbean are chosen for their natural attributes and spiritual energy in healing. The premise is that a natural approach to physical health leads to spiritual health and fulfillment. As the concept of New Age tourism is relatively recent, there are no statistics currently available on the size of this market (Cogswell, 1996).
6.2.8 Educational Tourism
"Study abroad"
Although all tourism can be thought of as educational in the sense that the visitor learns about a destination’s culture, society, and other aspects, the term educational tourism generally refers to travel in which the learning occurs within a structured or formal program. A familiar and popular form of educational tourism is the “study abroad” program, in which students attend schools or programs (usually for a semester or academic year) in another location, often in a foreign country. Through such a program, a student has the opportunity to take advantage of the destination’s resources which might not be available anywhere else. One of the most popular reasons for attending a foreign school is to the opportunity to be immersed in the language and culture of the destination.
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Certain tours can also be considered as educational tourism. These tours are centered around significant historical, cultural, or scientific sites and are often led by a teacher with expertise in the sites. In contrast to sightseeing-only tours, educational tours often include books, lectures, and other supplemental materials to create a more formal learning experience.
6.3 Special Segments of Business Travel Business travel has also changed under the pressure of increased and divergent expectations of business travelers. One of the most important factors influencing business travel patterns has been the increasing cost-consciousness of corporations and other organizations. Because of pressure to reduce expenses, travel costs–including transportation, lodging, meals and entertainment–are increasingly perceived as unnecessary. Advances in communications technologies have also called business travel into question. The speed of e-mail and facsimile transmissions, and the capabilities of teleconferencing, have eliminated some of the reasons for earlier business travel. Increasingly, businesses are scrutinizing decisions to hold meetings by going through a needs assessment process. This process is designed to ensure that there is a shared understanding of the proposed meeting’s issues and objectives among all participants, and that there are clearly defined measures of the meeting’s success or effectiveness.
Changes due to cost and technology
Within business travel, however, there are special segments that are based on face-to-face interaction and often incorporate elements of leisure travel that are growing increasingly important. Collectively, these segments are often referred to as the meetings, incentive, conventions and expositions (MICE) market. This market accounted for 983,600 meetings, 77.4 million attendees, and U.S. $37.4 billion of business in 1995 (Braley, 1996, pp. 65, 72-73).
6.3.1 Meetings Meetings can be defined as events designed to bring people together for the purpose of exchanging information. Meetings can be held onpremise at one of the companies or organizations that is convening the meeting, or off-premise at other sites, requiring the rental of meeting facilities. It is the off-premise meeting market that is of primary concern to the tourism industry.
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Corporate and association meetings
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Meetings held by corporations and other businesses are classified as corporate meetings, while those held by associations are referred to as association meetings. Association meetings include activities of a variety of different types of groups, including social, military, educational, religious, and fraternal organizations, often collectively referred to as “SMERF.” Corporate meetings account for about 25 percent of the meetings market, while organization meetings account for 75 percent.
Different types of meetings
Functional categories
The term “meetings” includes various types of events that differ in their size, subject matter, and agenda. While the criteria used to distinguish among the different types of meetings are not clear-cut, the terms themselves are useful in distinguishing among the many different kinds of events that businesses and organizations hold. A clinic is usually a small, “hands-on” educational meeting that emphasizes participant involvement in the learning process. A forum is a larger gathering at which issues of interest or concern to the audience are discussed, often led by a panel and moderator, and with opportunities for comments and questions from the audience. A seminar is similar to a forum, but often smaller and more focused in subject matter. A symposium is much like a forum, but generally refers to meetings where the subject matter of the meetings is academic or technical in nature. A workshop is similar to a clinic, generally led by a leader or facilitator, and devoted to skills building or training. Meetings can also be categorized by their function. Major functional categories of corporate meetings are incentive trips, sales meetings, management meetings, training seminars, professional and technical meetings, new product introductions, and stockholder meetings.
6.3.2 Incentive Travel
Trip as reward
Incentive travel refers to the segment of business travel that uses the allure of a trip as an incentive or reward for achievement. A typical example of incentive travel would be a company-paid vacation to a resort for top-performing salespersons. Sometimes this type of vacation will include motivational seminars, morale-building activities, and other activities that build upon a gathering of employees. Incentive trips also can include business-related group activities, such as the introduction of new products or promotional campaigns, or training programs for employees. The incentive travel market has been showing strong growth in recent years: in 1995, 92,000 incentive travel programs were planned in the U.S. vs. 60,200 in 1993. The average number of attendees in 1995 was 95, with an average trip length of nearly 4 days (Braley, 1996, p. 72).
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Short-term trips at which participants devote themselves to a particular issue or problem, and which are held at sites that provide a sense of isolation and relaxation to encourage in-depth thinking and group interaction, are often referred to as retreats. Retreats can be held for a variety of problem-solving, motivational, or morale-building reasons. However the incentive trip is organized, it should result in specific results that benefit the company. These results include greater employee productivity, increased skills, improved morale, and higher motivation to achieve company objectives.
Retreats
As the incentive travel market has grown, organizations specifically dedicated to organizing incentive trips for companies have come into existence. These organizations, often referred to as motivational houses, function as specialized meeting planners, arranging travel, accommodations, transportation, and other aspects of the trip. Incentive travel planners are under increasing pressure to provide their clients with more than just travel plans. Rather, companies are viewing incentive travel more as a component of overall employee and business development. This trend towards performance marketing is part of changes in the incentive travel market, including:
Travel planners and performance marketing
• The decrease of pure leisure travel in favor of trips that include meetings and other business-related activities. • A greater emphasis on group, as opposed to individual, travel, to facilitate business-related activities (such as meetings and seminars). • Greater use of non-sales criteria in awarding incentive travel, including factors such as loyalty, spirit, and customer satisfaction. As a result of these developments, and of the changing business expectation of incentive travel, planners are getting more involved with the goals of their client organizations.
6.3.3 Expositions Expositions are generally large events at which vendors can display and market their products or services to a contingent of potential clients and buyers. The vendors or exhibitors pay a fee to set up their displays, usually based on the size of the area their displays require. Large expositions can cover hundreds of thousands of square feet of exhibition space. The goals of the exhibitors are to attract attendees, inform them of their product or service, and establish a contact that will lead to a sale.
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Display and market
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6.3.4 Conventions
Combination meeting/exposition
High expenditures
Public involvement
Economic impact
Prestige and media attention
The term convention refers to an event that combines both meeting and exposition. The conventions market can be divided into those that are sponsored by professional and trade associations, and those that are sponsored by corporations. Associations account for about 70 percent of the market, and corporations about 30 percent. Conventions have the reputation for generating high expenditures on a per visitor basis, as well as creating substantial economic impacts for the host economy. The many different segments of the tourism industry that benefit from convention expenditures include hotels, restaurants, car rental, ground transportation, entertainment, and retail. There are several reasons for the high level of involvement of the government or the public sector with the convention business. First, high development costs and limited potential for realizing operating profits generally require that the government either own or subsidize the center. With modern centers approaching 186,000 square meters (2 million square feet) of exhibition space, development of a center almost always requires some form of public financing. Furthermore, the actual convention operations generally lose money or, at best, break even. This is due to the high cost of running a center, and to the fact that competition among centers tends to keep rent rates low. From the government’s perspective, the financial risks posed by a convention center are outweighed by their larger economic impact on the host community and economy. It is the ability of a center to generate visitor activity and revenues for such convention supporting businesses as hotels, restaurants, entertainment, and the surrounding area that provides the main reason for its development. The visitor expenditures, in turn, generate employment, tax revenues, and generally boost the area’s economy, all of which serve to offset the center’s operating loss and create an overall net benefit to the area. To the government, the operating loss it sustains is a worthwhile cost in light of the jobs, taxes, and healthier economy it gains. Because of their size and the amount of visitor activity they generate, conventions are often perceived as serving an underlying public purpose. Secondly, large convention events bring prestige to a city. Large conventions or expositions are often covered in national and international news. For the duration of the convention, the host city may receive daily exposure and coverage from the media. From the standpoint of the host city’s visitor industry, this kind of media attention
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can amount to valuable advertising. Cities often use conventions and other large events to create a positive image for themselves. In this respect, conventions are often very desirable to government leaders.
6.3.5 Major Components of the MICE Market The MICE market has become a highly specialized and important segment of the tourism industry. As a result, there are several wellestablished components of the MICE industry, each of which serves a different function. These include: meeting planners, convention centers, convention and visitor bureaus, and event managers. Meeting Planners Planning a successful meeting requires a great deal of logistical coordination and oversight of many different areas. As a result, overall responsibility for a meeting is often given to professional meeting planners, many of whom specialize in different types of meetings. Some planners are independent businesses that perform their services for client organizations. Large organizations that hold meetings on a regular basis may employ their own planners on staff. The responsibilities of a planner will vary depending on the type of meeting being planned, facilities being used, sponsoring or host organization, and other variables. Responsibilities of a Meeting Planner Planning a large meeting is a complex and demanding task. A meeting planner is often responsible for both large issues such as the selection of a site and the arranging of transportation as well as smaller ones such as specifying each day’s menu. The primary areas of responsibility for a meeting planner include the following: • Selecting, or providing options for, a meeting site. • Devising a marketing plan for the meeting, if necessary. • Planning transportation to and from the site (including negotiating with airlines for discounted group air fares and arranging ground transportation). • Arranging for and reserving hotel rooms for the attendees. • Working with the meeting facility personnel to plan the layout of the meeting/exhibition room(s). • Organizing the exhibition, and working with exhibitors. • Ensuring that audio-visual equipment needs are met.
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Professional coordinators
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• Planning for the registration process, including any necessary requirements for accreditation of participants. • Arranging for various food and beverage needs. • Planning off-site tours and activities for nonparticipants and for attendees during nonmeeting times. As this list indicates, communication is vital to the planning process. Even a moderately sized meeting will require virtually hundreds of decisions, many of which require consultation among the sponsoring organization(s), the planner, and the meeting facility. Site selection
Site selection is a crucial part of the planning process. Planners must consider a number of criteria when choosing a site for an event. The most important criteria, in descending order of importance, are: • Availability of hotels or other facilities for meetings. • Affordability of the destination. • Ease of transporting attendees to and from the location. • Transportation costs. • Distance traveled by the attendees. • Climate of the location. • Availability of recreational facilities such as golf, swimming, and tennis (Braley, 1996, p. 73). Convention and Visitors Bureaus
Non-profit organization
CVBs' goals
A convention and visitors bureau (CVB) is a nonprofit organization that promotes the destination area it represents, usually a city, to travel buyers. A CVB’s mission is based on the premise that travel to the area will benefit all supply sectors, such as accommodations, entertainment, transportation, and food and beverage. As discussed in Chapter 10, tourist expenditures can have a positive “ripple effect” throughout the host economy. This is especially true of convention visitors. CVBs reach tour wholesalers, meeting planners, and organizations through several channels, including trade shows, direct sales, and branch offices in major cities. Because the goal of a CVB is to have the travel buyer make a commitment to the destination area as a whole, it will generally not take a direct role in promoting individual businesses. Rather, it will facilitate a coordinated effort by these businesses to gain the buyer’s travel business.
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The main responsibilities of a CVB are: • Developing a marketing strategy and destination image for the area. • Promoting the area to potential travel buyers and planners. • Facilitating the entire process of selling the area and hosting the event. • Promoting the area’s public attractions and amenities to the visitors. In the 1990s, Central and Eastern European countries have begun to open their own CVBs in an attempt to improve their economies and utilize the potential of their rich historical and cultural resources. The International Association of Conventions and Visitors Bureaus (IACVB), through an initiative called Partnership for Peace, is using the expertise of established CVBs to assist these countries in the areas listed above. In another case, the Philippine Conventions and Visitors Corporation conducted a campaign to attract more small- to medium-sized conventions (conventions with about 500-800 delegates). Convention City Manila, as this campaign was called, specifically targeted this size of convention in recognition of the resource and facility limitations of the host city. The Corporation worked with airlines, hotels, and tour operators to build attractive packages for prospective conventions.
Development of new CVBs
Convention Centers Convention centers are large facilities that accommodate many of the events discussed in this chapter. Newly constructed and expanded centers are extremely large, with some new and expanded centers providing nearly two million square feet of exhibition space. For example, McCormick Center in Chicago, which currently has 148,800 square meters (1.6 million square feet) of exhibit space, is in the process of expanding to over 186,000 square meters (2 million square feet) by 1997. Convention centers earn revenue from a variety of sources, including the rent of the facility, food and beverage service, and concession stands. One of the key aspects of a convention center is its location. Centers need to be within reasonable distance of a major airport, since most delegates will usually arrive by air. Centers should also be close to, or incorporate, adequate hotel accommodations. There should also be a variety of food, retail, and entertainment establishments in the vicinity of the center and the accommodations. These considerations are extremely important to an organization that is considering a convention site, because they are critical to the delegates’ attendance and enjoyment of the event.
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Profit-earning centers
Location
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Small meeting space
Conference centers
A newer development in the operation of convention centers is their use for smaller meetings, including those that do not require exhibit space. New centers are increasingly being designed to accommodate small meetings, so that space can be configured to provide a small meeting atmosphere and service. These smaller meetings enable centers to rent space during periods between major events, thereby increasing rent revenues. This additional rent is becoming increasingly important to convention centers. As discussed earlier in this chapter, centers often operate at a loss, with the expectation that the economic activity they generate will result in a net gain to the host community. However, as governments have come under increasing budgetary pressure, centers are being forced to sustain themselves without large governmental subsidies. Conference centers are smaller than convention centers, and are an important part of the business travel market. These centers vary in type from executive centers that are geared toward top management, with sophisticated audio-visual capabilities and quality amenities, to resort centers, where the availability of recreational facilities is most important. Event Managers
Link between center and client
Event contract
Once an event has been booked for the convention center, the center operator assigns it to an event manager. From this point forward, the event manager becomes the link between the center and the client, whether it be a planner or the sponsoring organization itself. One of the key responsibilities of an event manager is to ensure that the event contract is followed. The contract between a convention center and a client for a specific event contains provisions for all aspects of the event, including the client’s requirements for the event, the agreed upon rental, and the mutual responsibilities and obligations of both parties. The contract will also specify the consequences of cancellation of the event, nonperformance by either party, and other contingencies. As planning and preparation for an event move forward, adherence to the terms of the contract must be enforced to prevent disputes and last-minute problems.
SUMMARY The special travel segments discussed in this chapter represent some of the faster growing areas of tourism. They are the result of greater product differentiation in the industry, which in turn is being driven by changes in the traveling public. Given the rapid growth and change of the tourism industry, it should be expected that new services and products will continue
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Summary
to appear. The proliferation of special services and products will provide the tourist of the coming century with an array of travel choices. Perhaps these choices will enable tourists in the future to design their “perfect” vacations. The special leisure travel segments discussed in this chapter share a common goal of bringing tourists closer to the natural environment. The success of these travel segments points to the tourism industry’s role in leading the world’s efforts to protect and preserve its environmental and cultural resources. The business travel market is coming under increasing pressure from concerns over travel costs and the availability of new teleconferencing technologies. Despite these pressures, the special market segments covered in this chapter have shown strong growth in recent years. Recognizing the greater role of the MICE market, cities are developing and expanding their meeting and convention facilities at a rapid pace. As discussed, large meeting events create business and publicity that are extremely valuable for the host destination. As the MICE market grows, planners, convention centers, and other key components of the industry are becoming increasingly specialized and sophisticated. CVBs will play a vital role in the future, as destinations compete vigorously to fill their meetings and conventions facilities. With the growing availability of facilities and destinations, planners will have to ensure that they understand their clients’ needs in order to best match them with what the market has to offer.
DISCUSSION
QUESTIONS
1. What are several special segments of the leisure travel market? What are their main characteristics? 2. What are the changes in the leisure travel market that have facilitated the development of these special segments? 3. Can you identify the special business travel segments? How important are they to the overall business travel market? 4. What are some of the reasons for the development of these special business travel segments?
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Section
3
Tourism Marketing and Promotion CHAPTER 7
Tourism Market Segments and Travel Psychology CHAPTER 8
Tourism Marketing CHAPTER 9
Tourism Research and Forecasting
CHAPTER 7 Tourism Market Segments and Travel Psychology
Learning objectives • To describe different ways to segment tourism markets. • To provide information on travelers by purpose and style of travel. • To provide information on travelers according to basic demographic factors such as age, sex, and education. • To provide information on travelers according to life circumstances including family composition, income, and disability. • To review the key factors and main approaches to tourist motivation as a conceptual approach to segmentation. • To describe the links between tourist motivation and other topics in tourism study. Key terms and concepts allocentric anomic business travel ego-enhancement family life cycle market segmentation multimotive optimal arousal pleasure travel pull factors push factors psychocentric religious travel special interest travel travel career ladder Values Attitudes LIfestyle Segmentation (VALS) visiting friends and relatives (VFR) travel
7 Tourism Market Segments and Travel Psychology
7.1 Introduction Tourism places are settings for the behaviors and experiences of many different types of visitors. As the gates of any large North American theme park open, a variety of visitors begin their day’s entertainment: some are teenagers in small groups, others are young couples, while families and senior citizens also stroll through the gates. As intercontinental flights pull into the major European airports, a further variety of visitors begin their day’s travels: some attired in business clothes are met by colleagues, others in sports uniforms are greeted by tournament organizers, several are reunited with friends and relatives, while still others are escorted by tour leaders to their waiting ground transport. As the afternoon wears on and the lobby of a large Asian hotel fills with incoming guests, further differentiation among tourists can be witnessed: there are young Asian adults enjoying tea in the lounge, conventioneers wearing name badges on their way to function rooms, well-dressed European middle-aged couples, and a few Australian families with children already dressed for the swimming pool and impatient to get there. Clearly on a global scale, tourists fit into many possible categories, and it is the task of this chapter to describe these differences.
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Different types of tourists
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Characterizing tourists
In Chapter 2, some consideration was given to measuring the flows of international visitors rather than domestic visitors. Whether the intended destination is international or domestic is one of the many ways in which tourists can be categorized. This chapter will cover several other descriptive or segmentation approaches, all of which are valuable in characterizing tourists. Two preliminary points need to be made in relation to these descriptions and tourist categories. First, any individual tourist has a range of characteristics which may be useful in describing his or her behavior and travel experience. For example, a traveler who is a father, a businessman, a mountain climber, 35 years old, and affluent may not be adequately described by generalizations about businessmen. Characterizing a tourist by using only one factor is a limited approach and is unlikely to explain individual behavior adequately for marketing or in tourism planning. The second point is that the most appropriate segmentation approach or description depends on the purpose of the user. For example, if one is concerned with the development of tourism facilities in World Heritage Areas for children, then a description of visitors based on lifestyle and age will be quite useful. By way of contrast, for a tourism regional destination marketer knowledge about the preferred activities of potential visitors, rather than just their ages or gender, might be appropriate. The purpose of this chapter is to describe many tourist types and their psychological needs, and a full array of tourist descriptions will be presented.
7.2 Describing Tourists by Purpose of Travel The World Tourism Organization (WTO), the major intergovernmental body concerned with tourism, uses a formal definition of the term tourist that embraces several travel purposes: TOURIST: Any person who travels to a country other than that in which s/he has his/her usual residence but outside his/her usual environment for a period of at least one night but not more than one year and whose main purpose of visit is other than the exercise of an activity remunerated from within the country visited. This term includes people traveling for leisure, recreation and holidays; visiting friends and relatives; business and professional; health treatment, religion/ pilgrimages and other purposes (World Tourism Organization, 1996c, p. 24). Non-tourists
Note that this definition excludes day trip visitors (sometimes called excursionists) who may cross an international border, the crew of transport services (flight and cruise staff), nomads, military personnel, workers who
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cross international borders for employment reasons, long stay tourist workers who are away for more than one year, international students or trainees, backpackers, long stay budget travelers, and all domestic visitors. Among international visitors there is considerable variation in purpose or type of visitor. For example, if all international inbound tourism is considered, Switzerland and France receive almost the same total number of border crossings (about 130 million). For Switzerland, however, only 13 million of these are overnight visitors while for France the figure is 60 million. WTO collates figures for arrivals by purpose of visit into three categories: leisure, recreation, and holidays; business and professional; and other, which includes visiting friends and relatives, health treatment, religion, and pilgrimages and further unspecified groupings. Table 7.1 below provides some contrasts between select tourism destinations by purpose of travel as defined by the three categories.
Categories of visits
The figures presented in Table 7.1 indicate the variation in travel purpose among holiday-recreation dominated destinations, destinations where the holiday market is of modest importance, and low holiday-recreation destinations.
7.2.1 Leisure vs. Business Travelers Leisure comprises the core of what is commonly accepted as tourism. Among host communities, leisure travel is associated with people taking photos, buying souvenirs, having limited contact with the residents, and staying for short periods of time. The leisure travel market is so large for most destinations that broad generalizations about the market are difficult to make; thus, most of the efforts of marketers and researchers to understand this group involve subdividing the overall market into categories of people who share similar sociodemographic or psychological characteristics. This process is formally known as market segmentation. Business travel can be defined as including attending meetings and conferences, training and sales missions, and general promotional and professional contact work. For the U.S. market, about 25 percent of the total travel market is business-related. Business-related travel is usually organized by travel agents and involves a restricted schedule of activities and places visited. Pleasure travel, by way of contrast, is seen as either independently organized or organized through a travel agent and is likely to have a greater regional spread with more diverse destinations. In general, pleasure travel tends to be dispersed across destinations while business travel is concentrated in key economic centers.
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Necessity to subdivide market
140 82.6% 10.6% 6.8% 413
Leisure, Recreation and Holidays
Business and Professional
Other (includes VFR, health, religious pilgrimages)
Total Visits (000's)
Bermuda
6,326
9.2%
11.4%
79.4%
Hawaii
3,403
2.4%
23.2%
74.4%
Indonesia
2,996
24.0%
13.7%
62.3%
Australia
19,154
15.4%
30.5%
54.1%
Hong Kong
Table 7.1: Percentage Visitation to Selected Destinations by Purpose of Travel
8,938
30.2%
26.6%
43.2%
United Kingdom
379
51.7%
28.5%
19.8%
Pakistan
Chapter 7: Tourism Market Segments and Travel Psychology
Describing Tourists by Purpose of Travel
Conference and convention travel have been recognized internationally as core components of business travel. Many international destinations now compete for a share of the world convention and business meetings market. Many U.S. cities have set aside specialized areas adjacent to their convention centers as tourist zones so that the business traveler can enjoy a safe and distinctive urban recreational setting. The appeal of business travelers to the destination marketers lies in their high spending in hotels and concentration of activities such as shopping, casino gambling, and evening entertainment. One of the important developments in business travel is the rise of what might be called hybrid travel, which can be defined as combining traditionally different travel purposes in one trip. For example, hybrid travel exists when business travelers bring their spouses to a convention or when a family holiday is closely linked to or built around the business travel requirements of a parent. Another example is the special category of incentive travel which is business-related with respect to trip sponsorship and organization, but pleasure-oriented in terms of focus. The traveler receives the trip as a reward for outstanding performance (usually in sales) and aside from one or two motivation sessions, the trip is geared to fun and new experiences.
Conventions
Hybrid and incentive travel
7.2.2 Visiting Friends and Relatives (VFR) Tourism statistics indicate that visiting friends and relatives (VFR) travel is a large segment of international travel, and is linked to immigration between countries. For example, Barbados is a popular vacation destination for a large segment of the Afro-Caribbean community in London because of strong family ties between the two areas, and frequent VFR trips between residents of the U.S. and Canada are not uncommon. Travelers whose journeys are focused on their desire to be with friends and relatives are important because their visits are likely to be repeated, and because the economic impact of these travelers is substantial due to their longer lengths of stay in hotels than holiday and business travelers. The visiting friends and relatives trip purpose can be differentiated into subcategories. For example, those who visit friends have been observed to have shorter holidays whereas those who visit relatives have more long distance trips and longer length-of-stay patterns. VFR subcategories can differ significantly in their holiday planning, travel styles, and media usage. VFR travel can be encouraged in a number of ways, including using local residents as a source of promotion,
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Encouraging VFR travel
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providing incentives and information to local residents to invite friends and relatives, undertaking promotions in places where significant numbers of friends and relatives reside, staging homecomings or reunions for former residents or friends and families, and providing incentives for former residents or their families to return home. VFR tourism is important as a forerunner to more conventional pleasure travel between regions, and thus in promoting tourism more generally.
7.2.3 Special Interest Travel Another broad classification of travel purpose can be described as special interest, a term which embraces such diverse activities as gambling, adventure travel, sports-related travel, and cultural pursuits. Special interest travel can also be seen as a part of alternative or ecotourism discussed in Chapter 6. Recreational Travel
Hobbyists
Specialty Accommodation Guests
In contrast with other leisure travel, special interest travel tends to include a single or dominant focus to the tourist’s holiday taking and an enjoyment of specific on-site activities. The special interest traveler is likely to be an enthusiastic hobbyist, a club member, or a devotee of a particular product or experience. Yachting holidays are an example that illustrates the specific activities that characterize special interest tourism. The different yachting styles include bareboat cruising, skippered cruises, luxury yachting, and flotilla yachting. These variations provide greater access for more people of varying levels of skill and socio-economic status. Special interest travel also includes specialty accommodation styles which organize travelers’ experiences, such as health farms, coastal resorts, bed and breakfast inns, and backpacker hostels. One study noted that specialty accommodation guests appear to be better educated, have higher incomes, and occupy managerial, professional or executive positions. They spend more time planning their trips than conventional accommodation users, and pursue different activities while on holiday. They appear to favor nonbeach outdoor recreation activities including bird-watching, hiking, swimming in lakes or rivers, walking, and horseback riding (Morrison, Hsieh, & O’Leary, 1995). As noted earlier, special interest tourism is often associated with one dominant activity. In a study of visitors to the Rotterdam Museum park, a complex which includes a museum for modern architecture, a museum of
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natural history, a local art museum, a gallery for temporary art exhibitions, and a fine arts museum, over 50 percent of the respondents said that the fine arts museum was the primary reason for their visit to Rotterdam and 20 percent were motivated primarily by one of the other museums in the complex. For urban tourism in this part of Europe, museum visiting is a valued and primary special interest activity with respondents giving explanations of their motives with phrases such as a museum visit provides “food for thought,” offers opportunity “to learn something,” and “enriches their life” (Jansen-Verbeke & Van Rekom, 1996).
Dominant activities
Religious Travel Travel for religious purposes ranges across a spectrum of intensity. At the less intensive end of the spectrum certain religious sites may be visited as a part of the attractions of a region. European cathedrals, for example, may be appreciated for their physical splendor and their architectural beauty. At a more intense level the supposed healing powers of particular holy places such as Lourdes, France may be one of several points of interest of a travelers’ holiday in a country. At the most intensive level, pilgrimages to sites which define the religion of a particular group may be the sole purpose of the travel, and indeed for sites such as Mecca in Saudi Arabia or the Vatican as the center of world Catholicism, tourism is a major management concern. The Islamic pilgrimage (the Hajj) to Mecca, for example, is an activity of enormous significance in the contemporary world economy. It was noted in Table 7.1 that the “other” purpose of visiting for some countries was a large percentage of their total visitation. For a country such as Saudi Arabia, more than 55 percent of all visitors fall into this category and most of these are tourists motivated by strong religious concerns. Devout Muslims from nations such as Bangladesh, Chad, Mali, and Somalia may be using their full economic resources for this one significant act of international travel. There are also affluent Muslims staying in first class hotels who make regular pilgrimages to fulfill their spiritual needs. A further feature of the pilgrimage to Mecca is the concentration of the activity as the estimated two million visitors (approximately 50 percent of the total are domestic pilgrims) converge on a single site within a specific one-month period. A visit to Mecca is a contemporary example of the continued importance of religious travel as a major organizer of tourism and of the lives of the faithful.
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Levels of intensity
Pilgrimages to Mecca
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7.2.4 Group vs. Independent Travelers There are a number of terms used to describe the travel arrangements used by tourists. At the broadest level a distinction can be made between those who travel independently and make all their own arrangements and purchase decisions and those who travel in groups. Independent travelers, sometimes referred to as F.I.T.’s or free independent travelers, may use travel agents in organizing their holidays but do not participate in an organized group tour. Other terms for group travel include package tours, group inclusive tours, inclusive holidays, and guided tours.
Package tourism
Traditional and more flexible packages
Advantages to group travel
In the early years of tourism much of the leisure and holiday travel, particularly in Europe, was package tourism where the different parts of the total holiday were integrated into one product and sold at a favorable price. Much contemporary tourism from Asian countries to Western countries is still sold as package tourism. For example, the Japanese tourist who pays one price for a combination of airfare, accommodations, ground transportation, and admission to attractions is a true package tourist. In the 1990s, packages have become more flexible and it is possible for customers to buy an accommodation-only package and make their own arrangements for ground transport. Traditionally, package tourists traveled and stayed together and were managed by a tour leader, a role also described as a tour manager, guide, or courier. This individual usually stayed with the travel party for the entire duration of the holiday and assisted with such matters as currency exchange, dealing with residents, organizing the daily itinerary, and generally facilitating the travelers’ holiday experiences. The advantages of group travel include highly competitive prices and the elimination of many travel difficulties for the inexperienced traveler. Group travel is also popular with youth tourists as well as with senior citizens requiring special care. Guides can serve an important function by facilitating entry into special places and providing an ongoing source of information to interpret the visitor environment.
7.3 Sociodemographic Factors and Life Circumstances 7.3.1 Age Over 25 percent of the U.S. population is currently over 50 years old, and this figure is predicted to grow to 30 percent in another 50 years. This seniors market segment is generally wealthy and has more time to
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travel than ever before. It has been suggested that this market segment travels more frequently, goes longer distances, stays away longer, and relies more on travel agents than any other segment of the population. In fact, senior travelers tend to be highly social, and the resort complexes set up to provide for these travelers involve hectic schedules of physical and recreational pursuits. Much of the importance of the senior market is due to changing social role expectations and the availabilities of health care facilities, especially in countries such as the United States. These changes are removing the physical and psychological limitations that constrained the elderly in earlier eras. A particularly notable segment of senior travelers is the so-called snowbirds. These travelers, complete with their mobile homes or recreation vehicles, seek the winter sun in the southern part of the United States, in such destinations as Arizona, Texas, and Florida. Parallel examples of this sunseeking behavior of older mobile tourists take place in Europe and Australia. Another significant age segment of travelers is the long-stay budget traveler. These travelers are typically less than 30 years old and may spend up to 12 months moving in a circuit of Southeast Asian and Australian destinations where there are inexpensive “backpacker” hostels set up to support their budget and long-stay travel style. The total travel expenditure of these travelers, although spread over a longer period of time, is greater than most other international tourists and is focused on activities and tours, not accommodation purchases.
The senior market
"Snowbirds"
Young budget travelers
7.3.2 Gender An assessment of gender issues in tourism reveals that substantial changes have taken place in this market in the last twenty years. Motivations underlying women’s travel include escaping from a routine or domestic environment, changes in personal circumstances, such as a family death, a broken romance or a change in marital status, a desire to experience the thrill of danger, and a desire by women to demonstrate their own abilities, independence, and competence. Women also play an important role as facilitators of other’s leisure (particularly husbands, children, parents, and working colleagues) while considering their own leisure and travel needs as secondary.
Women's travel motivations
Women are also playing an increasingly important role in the business travel market. Over one-third of U.S. business travel is undertaken by women and the percentage of women travelers in general appears to be
Businesswomen
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growing. The travel concerns of businesswomen revolve around core features such as security and practical items such as ironing facilities and full-length mirrors.
7.3.3 Education
Tendency of travelers being educated
Aside from income, one of the most important factors in determining the propensity to travel is the strong link between travel and education. Numerous studies have demonstrated that as an individual’s educational attainment increases, so does his/her desire to travel. Even among youth travelers, the largest percentage will be associated with college students in search of new experiences and opportunity for self-discovery. So important is travel to this group that the majority feel that if travel were not individually affordable, it ought to be government subsidized.
7.3.4 Other Factors The family life cycle, a term originating from sociology, is a significant technique which assists the understanding of travel-related purchasing. Nine phases of the family life cycle are commonly recognized and are presented in Table 7.2. The family life cycle concept should not be confused with lifestyle. The latter term is a broad label for a group of market segmentation approaches based on activities, habits, and type of products purchased, such as a sports or health-oriented lifestyle. Alternative lifestyle groups represent important travel markets for some destinations due to their purchasing power and high levels of mobility. The usefulness of this approach, as with other broad differentiations of the tourism market, ultimately depends on how well the markets can be reached by the interested tourism operators.
Disabled travelers
Disabled or handicapped tourists represent another group whose life circumstances affect their travel behavior. Disability comes in many forms and physical and intellectual impairment require very different services and facilities. Traditionally, legislative and management efforts on behalf of disabled travelers have focused on providing wheelchair access, such as in national parks and within hotels and restaurants. Increasingly there is a recognition that the enjoyment of the environment such as trails for the partially sighted, sign language provision for the deaf, and other auxiliary services are valuable additions to the total tourism product. A study of Australian facilities noted that provision of services for the disabled may also serve the seniors market or be useful for young children at certain stages of development (Sproats & Murray, 1994).
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Optimum financial position. Strong vacation purchasing.
Youngest child under 6 Youngest child over 6 Older married with dependent children Older married - no children at home, still working Older married retired Still working Retired
Full nest - Stage 1
Full nest - Stage 2
Full nest - Stage 3
Empty nest - Stage 1
Empty nest - Stage 2
Solitary survivor
Solitary survivor
Source: Adapted from Lawson 1989.
Vacations just one part of the purchasing mix.
No children
Newly married
Package tour options - security sociability needs high
Purchasing power high - may travel
Vacations decline - depending on finances.
Finances improving - some family holidays.
Travel restricted.
Initially financially well off- more vacation purchasing.
Few financial burdens - some vacation purchase, highly recreation oriented.
Young: not living at home
Bachelor
Travel Consumer Behavior
Characteristics
Stage
Table 7.2: Consumption As It Relates to Life Cycle
Sociodemographic Factors and Life Circumstances
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7.4 Approaches to Tourist Motivation
Motivation vs. choice
Different reasons for motivation
The preceding discussion has considered a range of factors which help describe different kinds of tourists. In trying to understand visitors, researchers in tourism have developed travel motivation models. The aim of these models is to answer the question, “Why do people travel?” or, more precisely, “What drives or motivates people to undertake certain kinds of travel?” It is important to distinguish questions about travel motivation (why do people travel?) from questions relating to destination choice (why do people go to a certain place?) The first question seeks to understand the individual psychology of the traveler whereas the second question requires us to both describe the important features of a tourism destination and assess how well these features will satisfy the potential travelers’ needs. One widely used distinction is that between push and pull factors in tourist behavior. Push factors refer to forces arising from within the individual and from the individual’s social context. These are true motivational forces. Pull factors, by way of contrast, refer to features of a destination which are thought to be likely to attract people to a specific location. It is misleading to refer to these pull factors as motivational forces - instead they are properly described as destination attributes which may fulfil people’s motives for traveling. For example, a push factor may be a strong need for excitement and adventure. A destination may have white water rafting as an available activity but it is misleading to describe this as a motivating force in tourist behavior. The problem with assigning motivating power to activities or destination features (such as beautiful scenery or nightlife) is that any one activity can represent a mix of motives, and different tourists may value the same destination attributes for different reasons. Thus one individual may indeed find white water rafting suits a need for adventure and excitement while another may see it as suiting a need to become more skillful at physical activities, while a third may be interested in the rafting only for its social value and as an item for conversation and self-esteem. There are three sources of information on tourist motivation. At a general level there is the history of tourism itself and some valuable sociological commentaries on the changing needs of travelers in different eras. At a more specific level of analysis, there have been systematic and focused attempts to produce theories of tourist motivation, an area of study which draws on a long history of psychology and motivation. A third source of information resides in
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the practice of market research and survey studies discussed in Chapter 9. Such work is often conducted by consultants for national or state level tourism organizations and is a source on travelers’ needs.
7.4.1 History of Tourism and Motivation Chapter 1 described the history of tourism, particularly as it unfolded in Europe. From a motivational point of view, several broad trends or themes can be extracted from the history of pleasure travel. Rest, relaxation, escape from the heat, and curiosity are all reflected in the travel undertaken by Roman society. The original pilgrimages of the early Middle Ages added a religious and spiritual purpose to travel. The Grand Tours of Europe undertaken by young gentlemen of the seventeenth and eighteenth centuries were often rather indulgent adventures, but the practice gained favor as an educational event to acquire sophistication and worldliness for a certain social class of the period. Health and physical well-being were primary motives in the spa and mountain tourism of nineteenth century travel, and included an emphasis on relaxing and enjoying natural settings. In North America as well as Europe, the early twentieth century with large ocean-going liners, the use of the automobile, and the development of railways, grand hotels and resorts, generated many different options for tourists. The social value of certain kinds of holidays emerged as a force for social differentiation, and one’s travel style, as well as one’s possessions, became social status attributes. In the last half of the twentieth century, increasing diversity in destinations and travel products has permitted the flowering of all of these historically important motives. There are destinations which specialize in travel for escape, for health, for education, for spiritual renewal, for self-indulgence, and for developing skills. One additional motivation in current travel is nostalgia or comparison with earlier societies, such as when travelers join the Orient Express, cruise the Nile, follow Route 66 in the U.S. or trek along the Silk Road of Central Asia.
7.4.2 Theories of Travel Motivation The broad social trends evident in any review of the history of travel are refined by tourism researchers who study travel motivation. As presented in Table 7.3, a good theory of tourist motivation must organize research efforts, must be easy to explain and appeal to its users, must be suitable for objective studies, must consider the total needs of travelers and
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Theory requirements
not limit its focus to one need, must be able to manage dynamic changes within individuals and society, and must balance needs influenced by other people with those determined by individuals themselves. The discussion below considers five approaches to tourist motivation in light of the requirements for a sound theory outlined in Table 7.3. Table 7.3: The Core Requirements of a Sound Theory of Tourist Motivation
Attribute
Description
The task of the theory
Must be able to integrate existing tourist needs, reorganize the needs, and provide a new orientation for future research
The appeal of the theory
Must be appealing to specialist researchers, useful in tourism industry settings, and credible to marketers and consumers
Ease of communication
Must be relatively easy to explain to potential users and be universal (not country specific) in its application
Ability to measure travel motivation
Must be amenable to empirical study; the ideas can be translated into questions and responses for assessment purposes
A multimotive vs. single-trait approach
Must consider the view that travelers may seek to satisfy several needs at once; must be able to model the pattern of traveler needs, not just consider one need
A dynamic vs. snapshot approach
Must recognize that both individuals and societies change over time; must be able to consider or model the changes that are taking place continuously in tourism
The roles of extrinsic and intrinsic motivation
Must be able to consider that travelers are variously motivated by intrinsic, self-satisfying goals and at other times are motivated by extrinsic, socially controlled rewards (e.g., others' opinions)
Allocentric vs. Psychocentric
Plog's theory
The work of Stanley Plog represents an early attempt to classify people according to psychological types and to relate these behavior patterns to travel behavior (Plog, 1974). Plog devised a personality continuum ranging from psychocentric (inward orientation or small focus of concern) to allocentric (outward orientation, varied interests). For allocentric people travel is a way to express their confidence, inquisitiveness and curiosity. For psychocentric people, travel is focused on close destinations, participation in familiar activities, and cautious travel behavior. In Plog’s account of tourist motivation, exotic destinations fulfil the inquisitive curious motives of allocentrics and close-to-home destinations fulfil the motives of the less confident and more anxious psychocentrics. According to Plog, there are some people whose travel behavior fits the psychocentric pattern due to
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financial constraints but as their life changes (such as a college student who begins to earn a substantial income), they will gradually move to allocentric destinations. Weaknesses of this approach to travel motivation are its failure to consider multimotive behavior and unresolved questions of how to measure the underlying allocentricpsychocentric dimension. Nevertheless, in an era when psychological assessment of travelers was limited, Plog’s work highlighted the need for tourism managers to understand more about traveler motivation. Anomic vs. Ego Enhancement A sociologically based approach to tourist motivation developed by G. Dann advances two concepts, anomic and ego enhancement, which are viewed as more sophisticated explanations of the broad travel need of “escape” (Dann, 1977). In the study based on tourists to Barbados, Dann described as predominantly anomic those tourists who were from large mainland U.S. and Canada cities, lived in competitive, stressful work environments, and were occupied with the demands of nuclear families. On the other hand, the ego-enhancement tourists were frequently of lower socio-economic status, often female, and emphasized the status and social value of their Caribbean holidays. Dann conceived of these two tourist types as opposite ends of a single travel motivation continuum. While this work was innovative and useful in refining the concept of escape, like Plog’s work it is limited in its single trait approach to the rich variety which historical and psychological theories of motivation suggest are likely to be at work.
Another singletrait theory
Optimal Arousal A third tourist motivation theory argues that tourist and leisure behavior takes place within a framework of optimal arousal and incongruity (IsoAhola, 1982). Iso-Ahola suggested that while individuals seek different levels of stimulation, they share the need to avoid either overstimulation (mental and physical exhaustion) or boredom (too little stimulation). The study noted that leisure needs change during the lifespan and across places, thus introducing a potential dynamic element into his categorization of visitors. This theory emphasizes the participant’s feelings of selfdetermination and competence as the means of understanding tourist motivation, and on the experience in which travelers are engaged and on their actual participation in travel behavior rather than abstract assessments of life purposes. A weakness of this theory is the lack of specificity in measuring preferred stimulation levels or the relationships between selfdetermination, competence, and preferred stimulation.
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Values Attitudes Lifestyle Segmentation (VALS)
Consumer groups
A further approach is known as the Values Attitudes Lifestyle Segmentation (VALS) system. Broadly based on the pioneering work of the psychologist Abraham Maslow, the VALS system generally groups consumers into nine broad segments with labels such as “High Achievers” or “Emerging Activitists.” Different variations of VALS are used in North America, Australia, and Europe, principally as consultant tools to relate purchases of all sorts of products to a combined grouping of peoples’ motives for consumption, sociodemographic and occupation profiles, and existing consumer ownership. Its use in travel and tourism is growing but there are some concerns over its limited explanatory power for travel or holiday taking motivation, since profiles based on consumers of tangible goods may not apply to travel. Nevertheless market segmentation approaches using VALS style systems are in current commercial favor and may offer promise in the area of tourist motivation. Travel Career Ladder
A hierarchy of travel motives
An explicit theory of tourist motivation which has been developed is that of the travel career ladder (Pearce, 1988; Pearce, 1991). The travel career ladder approach argues that travel behavior reflects a hierarchy of travel motives (see Figure 7.1). Based on Maslow’s hierarchy of needs, the steps or levels on the travel career model may be likened to a ladder. By expanding and extending the range of specific needs at each ladder level, a comprehensive and rich catalogue of the many different psychological needs and motives can be realized. The travel needs ladder retains Maslow’s premise that lower levels on the ladder usually have to be satisfied before the person moves to higher levels of the ladder. Nevertheless, it is the total pattern of travelers’ motives which describes them rather than a focus on any one single motive. For example, a visitor to Orlando, Florida who goes to EPCOT center at Disney World might be motivated to do so by the pleasant, safe setting to entertain a child and develop family experiences of togetherness, and to acquire knowledge about American culture. In this way, several levels of the travel needs ladder are working together for a rich multimotive picture of travel motivation. This flexibility and variability recognizes that motivation may change over time and across situations. In the travel career ladder model, destinations are seen as settings where vastly different holiday experiences are possible, and where travelers select activities and holiday experiences among those offered to suit their personal psychological and motivational profile. In this
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way, the travel career ladder model is a dynamic, multimotive account of travel behavior that requires individual tailoring to specific situations. The context or setting helps frame the way in which the travel needs ladder questions are asked. Figure 7.1: The Travel Career Ladder
Fulfillment needs Need for self-actualization Need for flow experiences
People tend to ascend the ladder with travel experience
Self-Esteem/development needs Other directed Need for status Need for respect recognition Need for achievement
Self-directed Need for self-development Need for growth Need for curiosity/mental stimulation Need for mastery, control competence Need for self-efficacy Need to repeat intrinsically satisfying behaviors.
Higher level motives include lower level motives. One motive at a time tends to be dominant
Relationship needs
Overall pattern of motives is the important feature
Other directed Need to reduce anxiety about others Need to affiliate
Self-directed Need to give love, affection Overall pattern of motives is the important feature
Safety/security Self-directed Need for security
Other directed Need to reduce anxiety Need to predict and explain the world
Physiological needs Externally oriented Need for escape, excitement, curiosity Need for arousal, external excitement, stimulation
Internally oriented Need for sex, eating, drinking Need for relaxation (manage arousal stimulation level)
7.4.3 Market Research and Motivation A third contribution to tourism motivation studies lies in the work done by market research organizations. These studies typically consist of large scale surveys that look at travel motivation, destination attributes, characteristics of the type of trip undertaken or preferred, and sociodemographic characteristics. For example, the Pleasure Travel Market Survey, which consists of in-house interviews conducted in a number of countries for U.S. and Canadian tourism authorities, has a
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list of travel philosophies which are parallel to travel motives. The same survey also asks respondents to characterize trip attributes. In Table 7.4 the travel philosophies and trip-driven attributes are both listed, with motives represented in bold. Survey studies like those are integrated with other information to provide information of practical use for marketers and analysts. Table 7.4/1: Trip-Driven Attributes for Australian Outbound Travelers
Mean Importance Rating*
Item Going to places I haven't visited before
3.26
Outstanding scenery
3.16
Meeting new and different people
3.11
Opportunities to increase one's knowledge
3.10
Interesting rural countryside
3.10
Destinations that provide value for my holiday money
3.01
Personal safety
3.01
Arts and cultural attractions
2.98
Public transportation such as airlines
2.97
Experiencing new and different lifestyles
2.97
Having fun, being entertained
2.92
Standards of hygiene and cleanliness
2.89
Visiting friends and relatives
2.86
Historical, archaeological or military sites, buildings, and places
2.85
Just relaxing
2.85
Escaping from the ordinary
2.85
Being together as a family
2.84
Inexpensive travel to the country
2.79
The best deal I could get
2.78
Availability of pre-trip/incountry tourist information
2.78
Being able to communicate in English
2.72
Inexpensive travel within the country
2.71
Nice weather
2.69
Trying new food
2.67
Shopping
2.66
*4 = Very impoirtant; 1 = not all important.
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Table 7.4/2: Trip-Driven Attributes for Australian Outbound Travelers
Mean Importance Rating*
Item Ease of obtaining visa
2.61
Visits to appreciate natural ecological sites (forests, wetlands, etc.)
2.59
Talking about the trip after I returned home
2.55
Meeting people with similar interests
2.55
Getting a change from a busy job
2.47
Unique or different native cultural groups such as Eskimo and Indian
2.45
Ease of exchanging the currency
2.40
Getting away from the demands of home
2.36
Finding thrills and excitement
2.33
Exotic atmosphere
2.30
Unique or different immigrant culture
2.27
Ease of driving on my own
2.25
Advertised low cost excursions
2.24
Environmental quality of the air, water, and soil
2.24
Indulging in luxury
2.20
Visiting places where my family came from
2.19
Activities for the whole family
2.16
Going places my friends have not been
1.97
Being able to communicate in the foreign language
1.96
Outdoor activity
1.92
Experiencing a simpler lifestyle
1.91
Doing nothing at all
1.83
Exercise and fitness opportunities
1.55
Roughing it
1.50
*4 = Very impoirtant; 1 = not all important.
SUMMARY This chapter has suggested that there are numerous ways to describe visitors. Initially the focus of the discussion was concerned with key travel purposes, particularly as reflected in the collection of international tourism statistics. The categories of pleasure travel, business travel, visiting friends and relatives, religious travel and special interest travel
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were all considered and some defining features and illustrative studies of these groups were presented. Next, some sociodemographic descriptions of visitors were reviewed with attention being paid to senior and youth travelers and to gender-based studies in travel. Further consideration was given to independent travelers vs. package tourists. It was also noted that people’s life circumstances strongly influence travel opportunities and the concept of family life cycle was reviewed together with a brief discussion of lifestyle and disability. In order to provide a more advanced understanding of traveler differences, the topic of tourist motivation was considered. An important distinction was drawn between questions such as why people travel vs. why people go to specific destinations. The scope of travel motivation information was reviewed by considering three sources of material. A brief consideration of market survey work and historical records of traveler motivation was provided while a more extensive discussion of tourist motivation theories together with their strengths and weaknesses was undertaken.
DISCUSSION
QUESTIONS
1. What are some physical ways to categorize travelers? What are the limitations of these categories? 2. In what ways are business travel and pleasure travel coming closer together? 3. In what forms does religious travel still persist? 4. Distinguish between special interest travel and mainstream tourism. 5. What are some general family life cycle influences on travel? 6. What are some ways in which a theory of tourist motivation can be useful? 7. What approaches could be combined to measure travel motivation?
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CHAPTER 8 Tourism Marketing
Learning objectives • To understand the marketing process and general marketing concepts. • To understand the different marketing philosophies. • To understand the difference between marketing services and marketing goods. • To understand the purpose and major elements of the marketing plan. Key terms and concepts buyer readiness states competitive analysis environmental analysis market mix market segmentation market trends marketing marketing philosophies marketing plan marketing strategy product life cycle pull strategy push strategy service characteristics
8 Tourism Marketing
8.1 Introduction To compete in today’s tourism marketplace, organizations in both the public and private sectors must know who their customers are and what they want. They must also be able to communicate the availability of tourism products and services to potential customers and convince them to become actual customers–to travel to a destination or attraction that has been developed or to purchase the products and services such as a tour package or airline ticket. These activities are what marketing is all about. For countries that expect to gain from tourism activities, the marketing of the country as a unique travel destination may be undertaken by the national tourism administration (NTA). For communities that hope to compete for their share of visitors, the marketing of a distinctive culture, attraction or outstanding amenities might be the central theme. For firms in the private sector, success may be dependent on effective marketing and selling activities of the airline, hotel chain, or tour company. This chapter provides a broad discussion of marketing concepts as a foundation for understanding the importance of marketing to the tourism industry and the global tourism economy.
8.2 Marketing Concepts Marketing comprises all the activities and processes used to bring buyers and sellers together, including “creating, distributing, promoting, pricing and innovative ideas to facilitate satisfying exchange relationships in a dynamic environment” (Pride & Ferrell, 1995, p. 4).
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When marketing matches the right product or service with the right customer at the right place and the right time, the results are a profitable business and a satisfied customer.
Approaches to marketing
Price and availability
Service or product
Promotion efforts
How an organization approaches marketing may reflect any of several different basic marketing philosophies. As in any other field, theories and their application develop and change over time so that the marketing practices used by an organization in the travel industry today will differ from those used by a similar organization in the past. While practices may vary, they all reflect in varying degrees one of the following marketing concepts or philosophies. • Production Concept. This concept presumes that customers are mainly interested in price and availability. Management’s job is, therefore, to produce the service as efficiently as possible keeping costs low so prices, which are the main product feature, can be competitive. Too often, under this concept, management tends to adopt a “commodity mentality,” forgetting the customer’s shifting desires and needs. In the early stages of tourism development from the 1950s to the 1970s, for example, it was not uncommon to find hotels offering only a single type of accommodation or to find oneor two-item restaurants which greatly simplified business practices for owners and operators. Customers could take it or leave it; and in a noncompetitive environment, owners would do very well. Today’s markets, however, are based on the concept of choice and production must consider optimum ways of providing for choice while containing costs that are imposed by variety. • Product Concept. This concept is similar to the production concept, but focuses on the service or product itself. In this case, the goal is to produce someone’s, usually the inventor’s, dream of the product or service with the expectation that a market will follow. “Build it and they will come” best expresses this philosophy. The fast food industry is an applicable example of both production and product concepts–limited menus, controlled production, fast service and low prices–appealing to a wide market of consumers around the world. • Selling Concept. This concept maintains that intense selling and promotion efforts are needed to ensure sufficient sales. Should sales begin to drop, the response is to increase sales efforts and to allocate more money to promotion then to production. It is common, for example, for firms to offer discounts or special promotions when sales begin to decline without considering factors such as levels of customer satisfaction or revenue contribution. The fallacy is that if the cause of
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the decline rests with a product weakness that needs to be corrected, such as poorly maintained or worn-out facilities or poor service, or with an external event such as a change in foreign exchange rates, reducing prices may result in higher volume but lower profitability. • Marketing Concept. With growing global competition, the marketing concept has come into vogue. Marketing focuses on responding to consumer demands and competitive positioning. This requires the ability to create and maintain customer satisfaction and to channel all activities of the organization toward the successful production and delivery of goods and services as defined by customers and to attain this at a profit. This philosophy suggests that a successful enterprise is one that can not only determine the wants and needs of its target market but also deliver those things more effectively and efficiently than its competitors. • Societal Marketing Concept. This concept considers the importance of maintaining the consumer’s and society’s well-being in the marketing equation and product decisions. Broader issues such as the environment, scarcity of resources, social services, and population growth are incorporated in the marketing practices. For example, hotels applying societal concerns to their marketing have added nonsmoking floors, rooms or seating areas in restaurants, used recyclable supplies in operations, and practiced conservation methods throughout the property. These hotels may also have policies refusing to do business with suppliers that are known to discriminate against minorities. Societally-based marketing is often controversial as one person’s cause may be another’s bane.
Consumer demands and satisfaction
Consumer's and society's well-being
8.3 Characteristics of Services Marketing While the same marketing concepts apply to any industry regardless of the product or service being offered, there are important differences between products and services. The differences between a “product” and a “service” distinguish the tourism industry’s unique properties and characteristics.
8.3.1 The Tourism Industry’s Service Characteristics The tourism industry is involved primarily in selling services (a stay in a hotel, a trip on an airplane, or a tour of a visitor attraction), rather than a product (car, groceries, clothing, or a book). Understanding the unique characteristics of services, therefore, is important in understanding how these services are marketed.
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Customer participation
Perishability
Convenience
Labor
Intangibility
• In tourism the customer participates in the production of the service. Organized sightseeing offers a good example. Provision of guide services and consumption of the sightseeing occurs simultaneously. The greater the interaction between the tour guide and the visitor, the more pleasurable the service. • Services cannot be stored or kept in inventory. An airplane that leaves the airport with empty seats will never be able to sell those specific seats on that specific flight, and that income is lost forever. • Services must generally be provided where and when the customer wants (or needs) them at convenient times and locations. The vacationing family with hungry children is likely to stop at the most convenient restaurant that offers acceptable food at a reasonable cost; they cannot wait several hours for a specific restaurant to open. • Services tend to be labor intensive to produce. Because there is face-toface interaction between the service provider and the customer, there is a greater need for employees. A hotel must have enough service staff ready to work at each point of contact with the customers, such as check-in, concierge desk, restaurants, or lapses in service will result. • Services are intangible. Services are not objects that can be easily measured to determine if standards of production have been met. How the quality of the service encounter is judged depends on the customer’s perceptions and expectations. The same service may be evaluated differently by two different customers if they entered the encounter with different expectations. For example, a business traveler who must travel in the economy section of a full plane due to the flight being oversold may describe the trip as tedious and very poor quality. A vacation traveler sitting next to the business traveler on her first trip by air may describe the same trip as exciting and high quality.
8.3.2 The Tourism Industry’s Unique Marketing Challenges In addition to meeting the challenges faced by all service industries, the tourism industry has certain unique characteristics that create additional marketing challenges. Difficulty to change
• The supply of tourism services cannot be changed rapidly in response to changes in demand. For example, much time and money is needed to develop a resort destination, to build a hotel, or to
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develop a transportation system. Once built, the capacity of these facilities is difficult to change. Due to the inability to inventory supply, there is more pressure for builders, planners, and developers to forecast capacity correctly and for the operators of the facilities to keep them as fully used as possible. • Tourism demand is highly elastic. This means that a relatively small change in price or tourist income will result in a proportionately larger change in demand. Tourism also tends to be seasonal in nature and affected by a variety of subjective factors such as taste and fashion. Further, tourism services are often viewed by the customer as interchangeable between different service providers. • The tourism product is, itself, a combination of many different services. Each trip includes many different services–transportation, accommodation, restaurant meals, sightseeing, car rental, attractions–provided by different firms. A poor experience in any of these can affect customer satisfaction for the entire trip.
Elasticity
Service division
8.4 Market Segmentation An essential step in marketing is determining the actual and potential customers or the firm’s market. Market segmentation (discussed in Chapter 7) is the process used to group people with similar wants and needs to form target markets. Research (discussed in Chapter 9) also plays an important role in identifying the market segments. Specific products and services and different promotional strategies can then be developed to meet the needs of different groups.
8.4.1 Characteristics of Effective Market Segments Not all possible market segments are useful. For example, an airline could determine how many customers have blue eyes versus brown eyes, but since eye color does not affect the choice of airline, this would serve no purpose. To be effective as a marketing tool, a segment should be: • Measurable in terms of size and other variables. • Accessible through promotion with existing or potential distribution channels.
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• Substantial or large enough or profitable enough to serve as a target market. • Defensible in terms of sufficiently unique characteristics to justify a separate marketing effort or a program which can withstand the mass marketing approach of competitors. • Durable in terms of continuing over time. • Competitive in terms of providing an advantage over the competition by serving this segment.
8.4.2 Bases for Market Segmentation The variables that form market segments can be grouped into four major categories (see Table 8.1): • Demographic segmentation divides the market into groups based on aggregate population characteristics such as age, gender, income, and occupation. • Geographic segmentation divides the market into segments based on geographic characteristics, identifying those areas with the greatest number of potential customers. • Psychographic segmentation identifies personality characteristics, lifestyle, and motives. There are several different models that have been developed as described in Chapter 7. One is Stanley C. Plog’s model of psychocentric and allocentric characteristics. Another widely known model developed by SRI International is VALS, “Values, Attitudes, and Lifestyles” (Kotler, Bowen, & Makens, 1996, pp. 190-193). This model classifies consumers based on selfimages, aspirations, values and beliefs, and the products they use. • Behavioral segmentation divides buyers based on their knowledge, attitude, use or response to a product.
Identification of customer types
The attributes or benefits sought by a market segment can be used to attract that segment and also to identify customer types. Once a firm knows what their customers want and need, they are better able to meet those needs. At the same time, knowing the characteristics of current customers will help to identify potential customers. Marketing efforts can be directed toward segments with the greatest likelihood of becoming customers.
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Table 8.1: Bases for Market Segmentation
Category
Variables
Demographic
age, gender, marital status, race, ethnic group, income, education, occupation, family size, family life cycle, religion, social class, nationality
Geographic
region, city or metropolitan area size, population density, climate, terrain, market density
Psychographic
personality attributes, lifestyle, motives
Behavioral
occasion, benefit expectations, usage rate, brand loyalty, attitude toward product
8.5 The Market Mix Once a specific market segment or target market has been selected, a marketing strategy to meet the needs of that market can be developed. This strategy includes many factors that influence the marketing effort in the tourism industry: • Timing. Considerations include holidays, the school year cycle (when families vacation), high season, low season, and upward trends in the business cycle among others. • Brands. Names, trademarks, labels, logos, and other identification marks all assist the consumer in identifying and recalling information about a product. • Packaging. Tourism services such as transportation, lodging, amenities, and recreation activities can be packaged and sold together or separately. Family plans or single plans are other forms of packaging. • Pricing. Pricing affects sales volume and the image of the product. A multitude of pricing options exist, ranging from discount prices to premium prices. • Channels of distribution. To make the product accessible to the consumer, distribution channels must be developed including direct selling, retail travel agents, wholesale tour operators, or a combination of these methods. • Product. The physical attributes of the product help to determine its position against the competition and provide guidelines on how to best compete. • Image. The consumer’s perception of the product depends to a great extent on the important factors of reputation and quality.
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• Advertising. Paid promotion is critical, and the questions of when, where, and how to promote must be carefully considered. • Selling. Internal and external selling are essential components for success, and various sales techniques must be incorporated in the marketing plan. • Public relations. Even the most carefully drawn marketing plan will fail without good relations with the visitors, the community, suppliers, and employees (Goeldner, McIntosh, & Ritchie, 1995, pp. 427-429). The market mix consists of how the different elements are combined. Generally, these are grouped into four basic categories: product, place, price, and promotion. Figure 8.1 illustrates that all factors that impact the target market segment are an integral part of the market mix. Figure 8.1: The Market Mix.
Promotion Public Relations Product
Advertising
Brand
Selling
Image
Media Used
Packaging
TARGET MARKET SEGMENT
Place (Channels of Distribution) Direct Sales Retail Travel Agents Tour Operators Hotel Representatives
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Price Match, above, or below current market price
The Market Mix
8.5.1 Product The tourism product includes not only the physical product and service but also planning and development, branding, and packaging. The marketing concept and societal marketing concept discussed earlier in this chapter suggest that any new product development must meet the needs of some segment of the market and also be developed with the overall good of society in mind. In deciding on whether to offer a new product, there are several criteria that should be met. • There should be sufficient demand for the product or service to generate a profit for the organization. • The new product or service should fit in with the overall image and mission of the organization. • Sufficient resources should be available to offer the product or service including enough trained personnel. • The new product or service should contribute to the overall profit or growth of the organization or destination, even if the new offering may not bring in a profit by itself. Clearly, development of new products and services is a complex task. Consumer needs and wants constantly change and competitors continually offer new or improved products. Over time, a product that has been very successful is likely to become less so and eventually may be phased out completely. The product life cycle illustrated in Figure 8.2 provides a framework for describing the process of product development through various stages as follows: • Product development begins with an idea for a new product or service. There are no sales during this period although investment costs are incurred. • Introduction of the new product or service also reflects high investment costs to promote and advertise the new product with relatively low sales volume resulting in little or no profit. • Growth is a period of rapid expansion with increasing profit levels. There may be few or no competitors at the beginning of this stage, but as profits increase, competitors may begin to enter the market. • Maturity is marked by a slower rate of sales growth and a leveling off of sales. Increasing expenditures to hold off competitors will be needed with resulting declines in profits. • Decline sees a rapid fall off of sales and profit. The number of competitors will decrease as firms choose to withdraw from the market.
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Figure 8.2: Product Life Cycle Sales and profils ($)
Sales
Profits
Product Development
Introduction
Growth
Maturity
Decline
8.5.2 Place (Distribution) Multilevel distribution system
The choice of distribution channels must be compatible with other elements of the market mix. Essentially, decisions involve how to deliver the product or service to the consumer. The tourism industry generally uses a multilevel distribution system combining direct sales, wholesale operations, and retail travel agents. These travel distribution channels are discussed in Chapter 5.
8.5.3 Price Setting the price of a product of service is a complex process involving considerations both within and outside the organization. At the same time, setting the right price is critical as it is the only revenue-generating element in the marketing mix. Internal factors
a) Internal factors for consideration include: • Positioning or how consumers perceive the product relative to competition. Many organizations offer a variety of products targeted at different levels or positions which are reflected in the pricing strategies of the firm. • Survival for organizations struggling with economic recessions, overcapacity, and strong competition. If demand for hotel rooms in a specific location declines substantially, the response of a specific hotel may be to reduce prices and cut costs until demand recovers. Other properties may lower prices to match or may choose not to lower prices, losing the more budget-minded customers.
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• Current profit maximization may be an objective of organizations based on demand and costs at different prices choosing the prices that are expected to yield the highest revenue, profit, cash flow or other financial objective. The long-term performance of the organization is of much less concern. An organization that develops new concepts for chain restaurants, for example, will demonstrate the success of the concept with a smaller chain first. • Market-share leadership for some organizations is based on the belief that the largest player in the market will result in long-term profit. When entering a new market, a firm may offer low introductory prices to quickly gain a significant share of the market, raising prices as demand increases. • Product-quality leadership involves firms wishing to lead in terms of quality of product by charging an appropriately higher price for that quality. An internationally recognized hotel chain’s revenues may reflect the higher prices charged for its services and facilities, but it must also continually reinvest to maintain a well-trained staff and level of luxury to continue to lead in quality. • Marketing mix strategy which involves the coordination of product, place, and promotion strategies with pricing strategies. For example, a regional air carrier may promote a product which is no-frills, short-haul, point-to-point air travel, while an international air carrier may offer a much more luxurious flight environment. Pricing for each firm reflects the different products offered. • Costs which are a basic consideration in determining price since price is based on organization’s costs plus a specific profit margin. Each firm must charge more for their products than the cost to produce them in order to stay in business. However, sufficient attention must be paid to controlling costs so a firm does not charge more than its competitors. b) External factors include: • Demand which may vary based on price, season, or other variables. While changes in price by one competitor are often followed by similar changes by other firms in the same market because consumers may seek the lowest price, products aimed at the luxury end of the market do not respond in the same way. Changes in price, then, may have little effect on demand. Also, destinations that are primarily seasonal in nature, such as winter ski resorts, experience widely fluctuating demand at different times of the year with corresponding changes in price.
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• Consumer perceptions of price and value which influence the buyer’s decision. The buyer’s reasons for selecting one item over another and the expectations of the items or service received compared to the price paid affect the judgment of value. Each organization must know how customers perceive their products and services and what customers are willing to pay for them. Each segment of the market will have different standards by which it judges value. • Competition involving firms that operate in the same market segment. Price is one element consumers use to distinguish among otherwise similar firms. Therefore, each organization must be aware of what its competitors charge, what benefits and features are offered, and the quality of the product offered.
8.5.4 Promotion
Promotional objectives
Promotion is essentially communication with the goal of changing the behavior of the consumer, specifically to purchase a tourism product such as air travel, hotel accommodations, restaurant meals, tours, or a complete destination package. Before undertaking any promotional effort, the objectives of the campaign must be set. Effective objectives are quantifiable, measurable, specific, and realistically attainable within a specified time frame. Understanding where the potential buyers are in terms of readiness to buy is important in setting appropriate objectives and developing effective promotional materials. For example, in the selection of a travel destination for a vacation, a consumer must go through several stages in making a decision. These stages, illustrated in Figure 8.3, reflect the buyer readiness states: • Consumer awareness of the destination (or product) can range from total unawareness of its existence to knowing only the destination name to knowing a little about the destination. Promotion aimed at this stage will focus on providing critical information to increase the consumers’ level of knowledge. New York City’s promotion using “The Big Apple” theme in the early 1970s is a classic example of a successful destination promotion using a recognizable image. • Consumer knowledge about the destination is the target of promotion. A national tourism administration (NTA) may feature specific attractions or outstanding recreational facilities of different parts of the country as promotions targeted to the vacationer. • Consumer attitudes vary according to cultural, ideological, and other differences. For example, an advertisement for African safaris featuring a successful hunter posing with his trophy of a dead lion
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may be a positive image for hunters but would be negative for those interested in animal rights, environmental protection, and preservation of animal species. • Consumer preference is established in terms of liking one product over others in the marketplace. Each product must promote those features and benefits that will make a difference in the consumer’s buying decision. A destination like Hawaii or Bali may feature its climate, activities, beautiful scenery, or unique culture. Destinations and companies like tour agencies may choose to focus on quality, unique services, location, price–whatever it is that makes their products of particular value to their target audience. • Consumer conviction and purchase are the final steps and are usually closely linked. The NTA or other marketers want to create a firm intention to come to a destination or to purchase followed by the actual purchase of the product. Special pricing is commonly used to increase sales during off-season periods at many destinations. For example, airlines offer lower fares for advance purchases and for travel during non-peak hours and days. Figure 8.3: Buyer Readiness States
Awareness Knowledge Liking Preference Conviction Purchase
The Promotional Budget The objectives to be met by the promotional campaign and the steps necessary to achieve them should be the primary factors in setting the promotional budget. Frequently, however, organizations decide to spend a certain amount of money on promotion before determining the objectives. It is also common to set aside a percentage of sales for promotional efforts. Industry figures are generally available that
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frequently serve as a guideline for this decision. However, this fails to take into account any unusual circumstances of a particular organization that may want to introduce a new product or respond to other changes in their particular market. It also fails to recognize the relationship between promotion and sales. Additional investment in promotion should result in higher sales; falling sales may be a signal that more, not less, promotion is required. Message Content and Form
Choosing messages
Based on the marketing objectives, including the buyer readiness state of the target market, the specific content (what to say) and form (how to say it) of messages can be developed and tested. Different messages can be shown to sample members of the target audience and the results measured to determine which is the most effective. The Promotion Mix
Promotional tools
There are many different types of promotional tools available, and their selection depends on the product and the target audience as well as the amount of funds available. Promotional tools can be categorized into four groups: • Advertising has many different forms and uses and can be used to build an image over a long period of time, to stimulate a quick sales increase, and to reach a geographically dispersed audience at a relatively low cost. • Personal selling is effective when building buyer preference, conviction, and purchase. The personal interaction between the buyer and seller allows each to observe, communicate and adjust to the other’s needs and characteristics. • Sales promotions include special discounts, coupons, contests, or incentives to buy. These promotions add value to the product and encourage the consumer to respond quickly. • Publicity and public relations offer several advantages. The news story format is often more believable than advertising and reaches many readers. Table 8.2 provides a summary of the characteristics of each type. Within the tourism industry, all forms of promotion are used. An advertisement or sales promotion can be an effective way to influence the choice of a rental car for a weekend trip. However, when selecting
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a two-week vacation for a family of four, additional information through personal selling is often preferred. Personal selling is also required for larger, more expensive purchases and to sell customized products. For example, conventions and meetings tend to be both large and customized with the services of a professional convention services planner to organize a successful event.
Uses of tools
Table 8.2: Major Types of Promotional Tools
Advertising
A paid form of nonpersonal communication about an organization and/or its products that is transmitted to a target audience through a mass medium.
Personal sales
Personal paid communication that attempts to inform customers and persuade them to purchase products in an exchange situation.
Sales promotion
An activity and/or material that acts as a direct inducement to resellers, salespersons, or consumers; it offers added value or incentive to buy or sell the product.
Publicity (Public relations)
Nonpersonal communication in news story form, regarding an organization and/or its products, that is transmitted through a mass medium at no charge.
Trade shows deserve a special mention as they are important in promoting both destinations and suppliers products. Thousands of buyers and sellers come together at these shows which are held in various points of the world. The two largest shows are the ITB Berlin and the WTM (World Travel Market) in London. Other prominent travel shows are FITUR (Feria International de Turismo) in Spain and JATA (Japan Association of Travel Agents) in Japan. There are actually two different markets that must be addressed: the final consumer and the travel trade intermediaries. To reach these two different markets, two different strategies are used. A tourism service supplier such as a resort destination, a hotel, or an airline that is using the push strategy provides an incentive for intermediaries to sell their services. For example, a major hotel may offer travel agents an additional commission for bookings. Conversely, a pull strategy requires increasing consumer demand for a product. The goal is to directly increase consumer demand for the product. The same hotel may place an advertisement in a target city asking customers to contact their travel planner or the hotel for reservations. These two strategies are contrasted in Figure 8.4.
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Trade shows
Reaching intermediaries and consumers
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Suppliers
Suppliers
Demand
Supplier marketing activities (personal sales,sales promotions)
Supplier marketing activities (advertising, sales promotions)
Retailers and Wholesalers
Pull Strategy
Retailers and Wholesalers
Push Strategy
Figure 8.4: Push vs. Pull Strategy
Demand
Reseller marketing activities (personal sales, advertising, sales promotions)
Consumers
Consumers
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The Market Mix
Media Selection Once a decision has been made to advertise, selections must be made about the type of media to use to most effectively deliver the desired message. The most common choices are newspapers, magazines, television, radio, direct mail, and outdoor billboards. In selecting which media is best, several factors must be considered: • Reach measures the percentage of people in a target market that are exposed to the message during a specific period of time. For example, the advertiser might want to reach 75 percent of the market within a year. • Frequency is how many times the average person in the target market sees the advertisement. An advertiser might, for example, want the average person to see the message three times during the campaign. • Impact is the qualitative value of the message. This includes the source credibility, visual quality, and noise level of the particular medium. Newspapers, for example, have less visual quality than magazines, and certain media types and selections of media have less credibility than others. Noise level refers to the stimuli competing for the viewer’s attention while the message is shown. With radio, for example, the listener is often also carrying on conversations, driving, or completing some task while the radio is playing so the noise level is high. • Cost includes both the total cost and the cost per contact (cost of reaching one member of the audience.) Television, for example, has a low cost per contact but a high total cost. • Market selectivity is the ability to target particular groups whether by geographic region or another of the bases for market segmentation. Daily newspapers offer a great deal of geographic segmentation, but very little demographic, psychographic, or behavioral segmentation. Magazines offer more options for different types of segmentation, but may not offer as specific a geographic segmentation. • Timing flexibility is the lead time needed to place, remove, or change a message. Newspapers offer the most timing flexibility. Magazines and television require much longer lead times to produce the advertisement. The advantages and disadvantages of each are summarized in Table 8.3.
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176 Poor visual quality; short life-span; small pass-along audience (readers other than purchaser). Low timing flexibility; infrequency of publication; expensive cost per contact. High cost; high noise level; short exposure time; low market selectivity other than geographic. Audio presentation only with lower attention than visual media; fleeting exposure. Relatively high cost; low timing flexibility; less credible.
Timing flexibility; broad market coverage; high credibility; low cost per contact. High market selectivity; high credibility and prestige; high visual quality; long life; high pass-along audience. High visual impact; high geographic selectivity; high reach.
High market selectivity; low total cost. High market selectivity; personalization of message. High frequency; low cost.
Newspapers
Magazines
Television
Radio
Direct Mail
Outdoor
No market selectivity other than geographic; creative limitations; each exposure is very brief.
Disadvantages
Advantages
Medium
Table 8.3: Comparison of Major Media Types
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Marketing Plans
8.6 Marketing Plans Before any specific marketing activities are undertaken, it is crucial to complete a marketing plan. It is important that the marketing plans for tourism destinations be differentiated from tourism products and services. Whether the organization is a national tourism administration (NTA), national tourism office (NTO) or other governmental body, rather than an individual firm or a cooperative public/private association, the completion of a marketing plan will be of benefit. With increasing competition in the tourism industry as more destinations are developed, destinations with marketing plans will outperform those without, and the formulation of this plan is generally the responsibility of the NTA. All marketing plans focus efforts on attaining the goals and objectives of the organization over the short- and long-term and ensure that all key aspects of the marketing effort are included in formulating specific activities (see Table 8.4). Marketing plans may be strategic, operational, or include both components. Strategic plans are concerned primarily with long-term issues (three to five years), overall mission, goals and objectives. Operational plans focus on specific steps to be taken to reach the strategic targets within the short-term (usually one year). The marketing plan must support the organization’s overall strategic plan.
Necessity of marketing plan
Strategic/ Operational
8.6.1 NTA Marketing Plans In most major destinations, NTAs have developed marketing plans which may be strategic or operational in nature. NTA plans in Australia, India, Senegal, Italy, and Switzerland, for example, are primarily strategic, while others like the United States, have operational plans which set out specific actions to achieve given strategies. Because of the focus on strategic issues, measures of effectiveness in achieving objectives have been difficult to apply. NTAs, however, have become increasingly aware of the need for accountability in the use of public funds for marketing and promotion and are now tying their strategies to performance measures such as increasing tourist arrivals, overnight stays, revenues, and market share (World Tourism Organization, 1995a, p. 2-24). The responsibility for marketing a country or a region, sometimes referred to as “macro-marketing,” usually rests with the NTA of that country and is generally aimed at attracting international tourists to the destination. It should be understood that the NTA’s basic responsibility is to market the country as a whole. Any deviation from this, such as the marketing and promotion of a province, is usually undertaken as a cooperative venture with the province.
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Table 8.4: Rules for Drawing up a Marketing Plan
The following suggested rules were developed as an aid for National Tourism Administrations (NTA) that do not have marketing plans. They are designed to maximize the use of existing resources and avoid unnecessary expense. 1. Employ market expertise –either in-house or external– when drawing up the initial plans. 2. Develop a thorough understanding of existing offerings and of their absolute and relative advantages and shortcomings with respect to competing destinations. 3. Identify and study the competition in order to clearly identify any market gaps and capitalize on the main strengths that the country has. 4. Prepare a strategic plan for supply spanning several years, to improve deficiencies and strengthen advantages. 5. Thoroughly consider potential demand. Access to such information is relatively straightforward in view of the existence of numerous studies on demand in the main tourism source countries. 6. Set strategic goals in line with tourist arrival capacity, transport capacity and existing promotional resources. Goals should be defined in terms of market share in each of the main source countries, because large fluctuations in exchange rates make it difficult to forecast foreign exchange earnings. 7. Once the three-year strategic plan has been completed, the corresponding one-year operational plan can be drawn up. 8. Given the scant resources of most NTAs, yearly operational plans should concentrate on a few markets only; these need not be national but could be limited to certain regions or even cities. 9. Do not address the public in general until appropriate measures have been taken with opinion leaders; journalists, travel agents, specific interest groups. 10. Include the private sector in the preparation and execution of marketing plans from the very outset. Source: World Tourism Organization, Budgets and Marketing Plans of National Tourism Organizations (1995), pp. 2-23, 2-24.
Clear objectives
As discussed in Chapter 15, every destination needs to have a clear understanding of its objectives for tourism development and supply and demand factors regarding its comparative strengths in terms of available attractions, accessibility, and its competition before developing a marketing plan. The target markets are then determined based on the type and number of tourists the destination hopes to attract, the product development is prioritized, and the strategies or approaches to resolve problems are developed.
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NTA marketing strategies will be both short-term and long-term depending on goals or objectives which are laid out in the plan. To a great degree, the success of these marketing strategies will depend on the available budget for promotional programs and other activities. These promotional activities are often coordinated with private sector efforts on behalf of air carriers, hotels, and other firms as well as provinces or municipalities interested in joint promotion with the NTA. In many countries, the primary air carrier to a given destination may be a national, government-funded air carrier which will develop a coordinated promotional campaign with the NTA (Inskeep, 1994, pp. 45-48). The marketing strategies of the tourism master plan for the Republic of Uganda illustrates the marketing and product strategies in a marketing plan. In this plan, Uganda’s target markets are prioritized. Primary markets are the U.K., Germany, and the U.S. Secondary markets are France and Italy, followed by Australia and the rest of Europe. The plan identifies the image problems of Uganda and analyzes the need to position Uganda as a new destination emphasizing its scenic beauty and interesting wildlife. Strategies are developed for three distinct time phases with provisions for promotion mix and recommendations for an organizational structure to carry out the strategies (Inskeep, 1994, p. 197).
Program budgets
Example: Uganda
8.6.2 Environmental Analysis Tourism is highly sensitive to changes in the business environment. An analysis of the major factors in the environment should be completed early in the planning process. While the marketing plan cannot foresee all possible events, a careful analysis will identify current conditions, outline expected changes, and indicate how the identified challenges will be met. A careful assessment of the following major environmental factors will help to identify new market segments as well as to prepare for expected changes. • Social factors such as crime, disease, and changing demographics may have significant impacts on a destination and the firms located there. The relevant social factors and their importance will vary depending on the geographic location. The widely reported attacks on tourists in Miami, Florida in 1993, and the reported outbreak of plague in parts of India in 1994, had the potential for significant impact on the tourism industry in these destinations. • Political factors such as legislation regulating casino gambling, political stability within a country, and the international political arena are also of vital concern.
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• Economic factors including changing interest rates, international monetary exchange rates, employment, and income all affect the tourism industry. The lodging industry is especially sensitive to business-cycle changes.
8.6.3 Competitive Analysis
Comparing physical and intangible elements
Regardless of whether the marketing plan is for an entire destination or a single firm, a comprehensive analysis of the competition is needed to develop an effective marketing plan. The analysis will include a comparison of physical attributes such as climate, number of hotel rooms available, activities, and number and type of restaurants. However, the complete analysis must go beyond this level to consider the intangible elements of the tourism product. Differences in service levels, cleanliness, safety, and cultures affect the satisfaction of visitors. A sound marketing plan identifies those factors that are of primary importance to visitors in making their purchasing decisions and develop specific steps to improve areas of weakness while capitalizing on existing strengths.
8.6.4 Market Trend Analysis Market trends are closely related to the factors revealed in the analysis of major environmental factors and competition. There are many sources of market trend information including publicly available data from chambers of commerce, universities, government, and visitors bureaus as discussed in Chapter 9. Relevant factors include: • Visitor trends such as origin markets, length of stay, expenditure patterns, mode of transportation, and demographic profiles. • Competitive trends in terms of identification and location of major competitors, services and products offered by competitors, the competitive pricing structure, and assessment of the success of competitors. • Industry trends such as changes being planned by the transportation services to the location, new construction that will have an impact such as new hotels, shopping centers, visitor attractions, or convention centers, or new technologies being developed.
8.6.5 Market Segmentation Analysis In earlier sections, the importance of market segmentation and selecting target markets was discussed. As competition at all levels increases, this factor becomes even more important. The marketing plan should identify those segments of the market that will be the focus
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for marketing efforts through the life of the plan. Sound market research including analyses of market trends, competition, and environmental factors must be completed to select the best target markets. This will allow more effective and efficient marketing. In many cases this analysis will identify areas that must be improved before the objectives of the organization can be met. For example, a destination may decide that the market for conventions and meetings has strong potential for their location. A decision might be made to invest in developing additional convention facilities to attract this market. However, further analysis may reveal that there are too few hotel rooms or insufficient transportation access. A long-term investment strategy to improve all needed infrastructure would be needed in addition to investment in the convention center itself.
Planning example
8.6.6 Strategic Goals and Objectives The strategic goals and objectives of the marketing plan will guide the development of everything else in the marketing plan. These objectives must support the overall mission, goals, and objectives of the larger organization. Areas often addressed in marketing plans for destinations include: • Increase in employment • Improvement in the balance of payments • Preservation of cultural heritages and natural environments • Strengthening of competitive position relative to other destinations • Increase in the number of visitors, length of stay, and earnings from tourist activities Objectives should be as specific as possible with quantitative targets and specific time frames indicated, such as an increase in employment by a given percentage per year over the next three years. This enables the results to be measured throughout the duration of the plan and for corrective measures to be developed if necessary.
8.6.7 Action Plans Once objectives are clear and the target markets are selected, action plans can be developed. These must be as specific as possible and include each segment of the market mix as it relates to the particular objective. The plan should also indicate who is responsible for each action, what funds will be required, and the source of funds.
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SUMMARY Marketing includes all activities involved in bringing buyers and sellers together in an exchange relationship. Tourism products are almost exclusively services, and the supply of tourism services is often difficult to adjust rapidly because tourism demand is elastic, and the tourism product is actually a combination of many different products. Market segmentation is used to group people into categories based on demographic, geographic, psychographic, and behavioral characteristics. The market mix combines the various factors that influence the marketing effort into four main categories: product, place, price, and promotion. The product life cycle describes the various stages during a product’s development, while place represents distribution or how the product or service is delivered to the customer. Setting the price of a product or service is a complex process involving a variety of factors such as marketing objectives, the marketing mix strategy, costs, demand, consumer perceptions of price and value, and competition. Promotion is communication with the goal of changing the behavior of the consumer. The promotion mix involves the selection of promotional tools from four basic types: advertising, personal sales, sales promotion, and publicity or public relations. Marketing plans are essential to ensure that all efforts are focused on attaining the goals and objectives of the organization over the shortand long-term. Developing an effective marketing plan begins with an environment analysis including consideration of social, political, and economic factors. An analysis of the competition and market trends should also be completed. The marketing plan should specify how the market is to be segmented, the strategic goals and objectives, and provide action plans to reach the desired goals.
DISCUSSION
QUESTIONS
1. What are the differences between the different marketing concepts? 2. Are some characteristics of market segments more important than others, or are they equally important? Why? 3. A resort destination is considering adding a second golf course to its facilities. What factors should be considered in deciding whether to expand the resort in this manner?
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4. You have just been hired as the general manager of a downtown business hotel. The owner of the hotel wants you to raise the prices; you’re not sure this is a wise decision. Describe the factors that you would include in your report to the owner about factors that must be considered in setting prices for the hotel. 5. Apply the four tools available in the promotion mix to a resort destination by showing how each could be used. 6. What is the purpose of a marketing plan?
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CHAPTER 9 Tourism Research and Forecasting
Learning objectives • To understand the role and scope of tourism research. • To understand the research process. • To be familiar with the uses of primary and secondary data. • To be aware of who conducts tourism research. • To be familiar with the elements of a travel market research program. • To understand the importance of forecasting tourism demand. • To be familiar with the quantitative and qualitative approaches used to forecast tourism demand. Key terms and concepts accountability assessment Delphi Model Judgment-Aided Model (JAM) multivariate regression analysis nonsurvey techniques primary data propensities to travel qualitative forecasting methods quantitative forecasting methods resistances to travel secondary data time-series models types of surveys
9 Tourism Research and Forecasting
9.1 Introduction Tourism research is an objective, systematic, and logical investigation of travel-related problems. In response to the globalization of tourism activities and industry, tourism research has become increasingly important to assist decision making and planning for the tourism product, which is comprised of all the goods and services that are necessary to accommodate the visitor. In the fast changing international tourism environment, tourism planners and managers need to respond sufficiently to external challenges like new technologies and increasing competition, as well as internal factors like financial and human resource constraints. The interrelationships between research, marketing, and forecasting can be seen in some examples of everyday uses of tourism research in the industry including: • Hotels and resorts studying the impacts of new technologies such as the World Wide Web and video conferencing on the business travel market. • Airlines investigating attitudes and behaviors of leisure travelers in light of shifting global travel patterns and increased security measures.
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Importance of investigating problems
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• Tour operators conducting a market profile study on eco-tourists in order to provide tour packages that would attract this emerging market. • National tourism organizations using market profile data to identify target markets and develop a tourism marketing strategy. • Government planning offices assessing the probable impact of a new resort or attraction through the measurement of economic feasibility and environmental and social impacts. This chapter explores the research process and the applications and uses of research in the industry.
9.2 Tourism Research 9.2.1 The Functions of Tourism Research Identification and evaluation
Development
Risk reduction
Tourism research has many functions in the industry, especially in helping identify and evaluate significant problems. Tourism research can help organizations in the public sector or businesses in the private sector formulate policies and establish priorities that are appropriate for market shifts and community concerns. In the private sector, it is often used to help increase productivity through the use of a range of quantitative and qualitative techniques that allow decision makers to select and implement the most effective operational methods. Research is also invaluable for marketing and promotional campaigns and forms the basis for successful strategic marketing plans which use the results of studies of consumer attitude and behavior, comparative demand for the product, and marketing effectiveness (see Chapter 8). Tourism research can also be used to develop new resources by identifying new markets, new products, and new uses for established products. Research can be used to show destinations the type of activities, tourist facilities, and services that travelers are looking for based on factors such as demographics, psychographics, and consumption patterns. Finally, through the study and forecast of market and developmental trends, tourism research can reduce the risk of unanticipated changes and unforeseen events at the destination through the use of probable scenario development and alternative strategies.
9.2.2 The Tourism Research Process The research process involves a number of stages beginning with the identification of the problem and ending with the conclusions and recommendations of the study (see Figure 9.1). It is important to ensure
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that the tourism research process is well designed and pertinent to the defined problem. Although the benefits of a research study might be apparent, the need is often weighed against the expense of conducting the study, in terms of time, money, and opportunity cost. The research design will depend on the particular problem at hand, and the basic research study is focused as to its scope, relevant variables, and parameters. The identification of a problem may arise from observations of trends or behavior in visitors. In other instances, there may be a need to distinguish facts from observations or to test a hypothesis (Ryan, 1995; see Table 9.1).
Benefits vs. cost
Table 9.1: Major Tourism Research Issues
Forms of Tourism
Marketing Issues
Inbound international tourism
What are the volume, origins, and other characteristics?
Outbound international tourism
What are the volume, destinations, and other characteristics?
Domestic tourism
What are the volume and characteristics?
Tourism supply
What are the number and characteristics of tourism-related establishments?
Economic Impact Issues What are these visitors' expenditures? What are their net economic contributions? What are these visitors' expenditures? What are these visitors' expenditures? What are their net economic contributions? What are the economic contributions of these establishments?
Source: World Tourism Organization, Collection and Compilation of Tourism Statistics (1995), p. 9.
The value of the research process is in providing users with useful and relevant information that they can implement in their decision making process. Thus, the research must be clearly understood and disseminated to interested and concerned parties. Beyond answering immediate concerns, a well-designed study also has the potential for future benefits by establishing the groundwork for follow-up work. The application of the research results is the desired goal of any project. Hence, adequate planning and support are necessary in order to ensure practicable application. In this process, the interpretation of the statistical results and other findings into usable information provides one of the
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Practical application
most difficult and challenging steps in research. The conclusions which are reached then are used to assist in decision making or to help formulate policy. Finally, the dissemination of the results through appropriate channels is an important step in assisting in bringing about desired outcomes, and the implementation procedure might involve using existing structures or establishing new mechanisms. Figure 9.1: The Research Process
1. Recognize and define the problem
2. Specify data needs
3. Evaluate secondary data
4.1 Choose secondary data
4.2 Choose primary data collection
5. Plan primary data collection
6. Design data collection instruments
7.1 Collect desired data
7.2 Collect desired data
8. Process and analyze the data
9. Interpret results and draw conclusions
10. Formulate recommendations
11. Prepare and present findings
Source: World Tourism Organization, Collection and Compilation of Tourism Statistics (1995), p. 8.
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9.2.3 Sources of Information Data used in tourism research may either be primary, secondary or both. Primary data are original observations generated to solve the research problem at hand. If, for example, researchers conduct a survey of pleasure visitors to determine their attitudes toward ecotourism, the information gathered would be primary data. Secondary data, on the other hand, are data that have been gathered by someone other than the researcher or for some other purpose. These data may be available through public or private published sources (Goeldner, McIntosh, & Ritchie, 1995).
Original sources
Published sources
Secondary Data In recent years, there has been an overwhelming flow of information related to tourism, travel, recreation, and leisure. Low cost and convenience are clearly the biggest advantages of obtaining secondary data. Instead of printing data collection forms, hiring interviewers, editing, and tabulating the results, researchers may go to the library and take information from published records compiled by somebody else. Another advantage of secondary data is that they can be collected more quickly than primary data. While an original research project might take 60 to 90 days or more to complete, secondary data can be accessed electronically in hours or collected within a few days. In addition, if the data is part of a larger series, comparability might be an advantage. There are, however, limitations in using secondary data. For instance, the information may not fit the problem that is being researched, may be outdated, or in forms which do not answer the specific problem at hand. In evaluating secondary data, consideration is also given to the organization which collected the data and the purposes for which they were collected. Accuracy will depend on the application of objective and systematic methods of data collection. The reputation, experience, and degree of independence of the research organization are relevant considerations in assessing the reliability of the data, and reliable sources usually give a detailed description of their methods of data collection. In this regard, data based on mandatory reporting is often considered more desirable than voluntary compliance. An organization such as a national tourism administration (NTA) which regularly collects and publishes travel data as its chief function can provide invaluable data. In order to obtain current and reliable statistical data on tourism, standard definitions, classifications, and measurement methods and objectives have been established to assist NTAs. In June 1991, the
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Advantages
Disadvantages
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Standardization
World Tourism Organization (WTO) and the Government of Canada organized an International Conference on Travel and Tourism Statistics in Ottawa, which brought together representatives of NTAs, the tourism industry, national statistical offices and international and regional organizations to define the statistical needs of the industry for analysis, market research, industry performance and tourism forecasts. The recommendations of the conference included concepts, definitions and classifications covering the basic tourism unit, tourism demand, tourism supply and tourism expenditure. Primary Data
Gathering methods
Different types of surveys
When it is not possible to get the needed information through secondary sources, research organizations obtain primary data or original sources of information. There are various methods that are used to gather primary data, including the widely used survey method. Non-survey techniques include the observational method and the experimental method. Given the complex nature of travel and tourism and the challenges presented by a fast changing economy and marketplace, there is an increasing need to conduct primary research for the sake of developing marketing and planning strategies. Some types of surveys and their uses are (Goeldner etal., 1995): • Factual surveys which pose questions to the respondent allowing an accurate answer rather than an opinion. Factual surveys generally provide better results than opinion or interpretive surveys. • Opinion surveys which ask participants to express an opinion or make an appraisal. For instance, a respondent may be asked to rate the services provided by the resort as excellent, good, average, fair, or poor, enabling management to assess guest satisfaction. • Interpretative surveys which ask questions to gain insight into the subject’s psychological behavior, for example, why they chose a particular tour package. Results from interpretive surveys tend to be limited since they rely on self-reporting, and respondents may be unclear or unwilling to state why they made certain decisions. Surveys can be conducted by personal interviews, telephone interviews, self-completed questionnaires, focus groups, or electronic methods. A description of different methods follows: • Personal interviews or face-to-face interviews use a pre-structured questionnaire allowing the interviewer to exert a certain degree of control over the interview environment. In addition, the interviewer
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can generally gather more information by adapting to the situation and establishing a rapport with the respondent. • Telephone interviews also use a pre-structured questionnaire but are considered more cost efficient than personal interviews. However, compared to personal interviews, telephone surveys are limited in that they are briefer and less flexible. Industry guidelines recommend that the interview time not exceed 25 minutes (Rogers, 1991). However, depending on the market, even 25 minutes may be considered too long. • Self-completed questionnaires are mailed to carefully selected respondents or distributed on-site. Mailed surveys allow the respondent to chose the time and place for completion, and questionnaires can be longer than telephone surveys. It is an impersonal approach but a costefficient method of collecting information.
More surveys
• Focus group discussions are employed for researching complex attitudinal and motivational issues. Focus group discussions typically involve eight to ten representatives of some target market segment who are led through a discussion of perceptions, images, and beliefs by a trained moderator. Studies from focus group discussions have provided insights into travel, revealing that “many travel decisions have very little to do with the excellence of the destinations, but rather with the travelers emotional need to travel and his or her image or perception of the destination. The destination is often an excuse to go rather than the reason” (Davidson & Wiethaupt, 1989, p. 45). • Electronic surveys have become more common through user-friendly computer software programs and widespread use of electronic mail (email) and the Internet. Computer devices programmed with survey questionnaires and equipped with keyboards or touch screens are found in airports, hotels, or shopping malls to record consumers’ responses to surveys. Electronic surveying is less costly and time consuming because it is self-administered and tabulated automatically. Some nonsurvey techniques are as follows: • Observational methods involve primary data collection using personal or mechanical recognition and recording of people, objects, and occurrences instead of relying on the respondents for information. This method of collection reduces the bias effect of the interviewer, but the observation method is considered to be costly and does not have the ability to examine the motives, attitudes, or opinions of the visitors (Boyd, Westfall, & Stasch, 1977).
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• Experimental methods involve variables which are manipulated in an artificial condition. A test or model is used to simulate the real world and variables are manipulated to allow researchers to measure the variations and the cause and effect relationship between the variables (Boyd etal., 1977). While the complex nature of the tourism product makes the experimental method difficult to use, test marketing using simulation models to conduct pricing experiments has been successful in tourism research (Goeldner, etal., 1995).
9.3 Organizations Conducting Research Private and universal research
Tourism research is conducted by both public and private organizations. Proprietary (private) research refers to research that is being done to solve problems within the company, and results are often not revealed to other businesses. Universal research, on the other hand, is made public through technical journals or literature. Typically, universal tourism research is conducted by local, national, and international tourism organizations and educational institutions. Airlines, hotels, consulting firms, and advertising agencies, on the other hand, all engage in private research.
9.3.1 Tourism Organizations Available statistics
Sources
International tourism statistics are available through a number of sources. International organizations like the World Tourism Organization (WTO) publishes The Compendium of Tourism Statistics (annual), Yearbook of Tourism Statistics (annual), and Travel and Tourism Barometer (quarterly). In addition, the Organization for Economic Cooperation and Development (OECD) and Pacific Asia Travel Association (PATA) publish annual reports that include tourism statistics. Other sources for worldwide tourism statistics include: Travel Industry World Yearbook: The Big Picture (annual) by Somerset R. Waters; Travel and Tourism (annual) by the World Travel and Tourism Council (WTTC) sponsored by the American Express Travel Related Service Company, Inc.; The Tourist Review (periodical) published by the International Association of Scientific Experts in Tourism (AIEST); and World Travel and Tourism Review: Indicators, Trends, and Forecasts by CAB International. The Economic Intelligence Unit (EIU) publishes Travel and Tourism Analyst, International Tourism Reports, Travel Business Analyst (Asia-Pacific or European editions) and various country reports.
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Tourism research on specific topics can be located through several useful abstracts which index dozens of tourism and hospitality journals. These include: (1) Leisure, Recreation & Tourism Abstracts compiled by CAB International, United Kingdom; (2) Lodging, Restaurant & Tourism Index (quarterly, CD ROM) published by the Restaurant, Hotel and Institutional Management Institute at Purdue University; and (3) The Hospitality Index: An Index for the Hotel, Food Service and Travel Industries (quarterly, CD ROM) compiled by The Consortium of Hospitality Research Information Services (CHRIS). International statistics on the hotel industry are available through annual publications entitled Worldwide Hotel Industry by Horwath & Horwath and Trends in the Hotel Industry: International Edition by Pannell, Kerr, Forster. In addition, most national tourism administrations have the responsibility of compiling national tourism statistics and provide this information in regular reports. The World Tourism Organization has developed a series of technical manuals to assist in statistical data gathering including: Collection and Compilation of Tourism Statistics; Concepts, Definitions and Classifications for Tourism Statistics; Collection of Tourism Expenditure Statistics; Collection of Domestic Tourism Statistics; Tourism and the Balance of Payments.
Abstracts
Hotel statistics
Technical manuals
9.3.2 Educational Institutions Educational institutions, particularly universities and colleges with specialties in travel industry management and hotel, restaurant, and institutional management (HRIM), conduct applied tourism research studies. Tourism as a topic of research can also be found in academic disciplines like economics, geography, urban planning, sociology, anthropology, and business management, among others. These studies may be published in academic or trade journals or they may be proprietary in nature. Given the increasing concern about the environmental impacts of tourism, tourism research is extending into new areas such as environmental science and environmental economics. Tourism research by academicians has greatly contributed to the recognition of tourism studies as a legitimate field of academic inquiry through the use of improved methodologies.
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9.3.3 Private Organizations or Firms
Industry research
Many firms conduct proprietary tourism research in such areas as product development, feasibility studies, and market trends. In particular, large-scale industries such as airlines conduct on-going studies on their operations, customers, and the market. Carriers either have their own market research departments or contract with professional research firms or consultants. Similarly, hotels may use recent secondary and/or primary data to analyze product success, market trends, advertising effectiveness, and impacts of new technologies on human resources. Hotels also collect primary data such as occupancy rates, average room night, guest satisfaction and so forth. The ideal situation for tourism research at a destination is the collaboration between public and private agencies in providing tourism statistics.
9.3.4 Consulting Firms
Outside experts
There are a variety of consulting firms which conduct tourism research in such areas as market research, feasibility studies, impact studies, strategic planning, and destination development. These firms may specialize in accounting, architecture, market research, or tourism research itself. Often outside consultants are hired for their particular expertise. Other arrangements include the use of a team approach involving a partnership of both local and outside experts from start to finish on a research project.
9.4 Relationship Between Marketing and Research 9.4.1 Destination Marketing Research as a Planning and Evaluation Tool
Necessity of research
Marketing research is a necessary tool for both public and private decision makers to make effective marketing, planning, and management decisions within the tourism industry. Tourism-related data include information such as: (1) trip and traveler characteristics, (2) inventories of accommodations, transportation modes, attractions and facilities, (3) usage and load factors, (4) visitor motivation and satisfaction, (5) resident attitudes, and (6) impacts on environment. Because of the extensive and broad nature of the data, no single organization has sufficient resources to collect this range of data. The
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responsibility for the collection and dissemination of travel data is normally relegated to government or a quasi-governmental national tourism administration, and the information can then be used by both public and private organizations for planning or evaluative purposes. As discussed in Chapter 8, marketing research is used to develop competitive products and successful marketing strategies. Increased traffic counts and achievement awards from the industry are commonly used to justify advertising expenditures. However, there is a need to measure the effectiveness of marketing and advertising efforts beyond increased market share, and tourism marketing organizations are increasingly being asked to account for the effectiveness of marketing programs through objective measurements that show specific economic and social outcomes such as job creation, tax revenues, or investments. Moreover, because tourism marketing is partially or fully funded by public moneys, the demand for accountability will continue to increase. Government funding for tourism marketing is justified on the basis of the substantial government revenues accrued from the multitude of direct and indirect industries that receive tourism-related income. Government support for tourism marketing is also critical from the standpoint of presenting a coherent marketing strategy for the destination and fostering cohesiveness and collaboration within this broad and diverse industry. However, the support of tourism marketing through public funds is under scrutiny in some places due to declining sources of government revenue. Because of the unique nature of tourism, it can be argued that the management and marketing of tourism cannot be entirely separated from government support. The tourism product, which consists of all the goods and services necessary to accommodate visitors, is fundamentally different from other export commodities in that it is the consumer who travels to the product. Furthermore, the point of production is also a place of residence and thus the environmental and social impacts of tourism on the host community are of public concern. Hence, at every stage involving the production, distribution and consumption of tourism, government involvement is necessary to ensure conformance with community goals and priorities. This includes control mechanisms such as: (1) environmental impact statements to be included in feasibility studies for resorts or attractions, (2) location and development of transportation terminals and networks, and (3) government-sponsored conversion studies for tourism advertising campaigns.
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9.4.2 The Tourism Market Research Program
Accessibility of information
A sound market research program begins with support and commitment from top management. In the private sector, large firms are more likely to have a formal research program, but all firms use market information in some fashion (see Table 9.2). Continual advances in computer hardware and software have made it feasible for firms of any size to engage in interpretation and analysis of tourism market information. In fact, the strategic use of information technology is now regarded as a key determinant of competitive advantage. An organization’s tourism market research process involves the following (Davidson & Wiethaupt, 1989): • Setting goals which relate to some specific benefit such as more visitors, more revenue, or more tax dollars. More complex goals might be to match demand with supply, more efficient use of resources, or obtain a cleaner environment. Goals of the marketing effort reflect the influence of marketing variables such as price and promotion since changes taking place in a destination such as increases in the number of visitors may also be due to promotional efforts of the airlines. Goals of destination marketing also go beyond increasing the volume of visitors and may include obtaining more first-time visitors, increasing off-season travel, or persuading visitors to extend their length of stay. • Identifying target audiences which are defined by psychographic, geographic, and demographic characteristics as discussed in Chapter 7. This process facilitates the development of focused advertising or promotional programs, and this information can also be used to develop research programs which attempt to identify target markets more clearly to measure and assess behavior change. • Developing Strategies. A careful assessment of the strengths, appeals, and weaknesses of the travel product or service contributes to the effectiveness of any new marketing program. Much of the data is obtained from past market research efforts, and benchmarks are important in the development of strategies. Areas which are often included in the measurement process are: - Positioning. This type of analysis will point out whether any changes in promotion or the product are needed based on how the travel marketer would like the product to be perceived by consumers. - Competition. It is important to know who are the destination’s main competitors.
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- Pricing. This allows the consumer to obtain good value based on a product or service which is price sensitive, i.e., neither over nor underpriced. - Distribution. The product should be readily available to consumers and in a manner or form they prefer. - Promotion. Promotion and advertising programs are measured by their success in communicating new information, increasing awareness, changing the consumer’s mind, creating a new image, and giving a return on the investment that justifies the use of funds. Table 9.2: Major Types of Tourism Establishments for Tourism Marketing Research
Accommodations Hotels and motels Hostels and refuges Camping and caravan sites Health-oriented accommodations Other lodging Restaurants, bars and canteens Restaurants Bars and other drinking places Night clubs and dinner theaters Transportation Air transport Interurban rail passenger service Scheduled and long-distance tour buses Cruise ships Recreational, cultural, sporting activities Dramatic arts, music and other art activities Amusement parks Museums Historical sites and buildings Spectator sport facilities Gambling, betting operations, casinos Participant sport facilities Fairs, festivals and other special events Convention and conference centers Other services Travel agents Tour operators Guides and sightseeing services
Source: World Tourism Organization, Collection and Compilation of Tourism Statistics (1995), p. 88.
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An objective marketing research program that addresses these concerns may uncover weaknesses and strengths of the tourism program. As marketing and advertising budgets of destinations around the world continue to increase, it is important to realize that ultimately all destinations are competing for the same travel moneys. While marketing efforts may increase market share, maintaining or increasing the market share is a challenging task in an increasingly mature marketplace. Given the fact that most funds for marketing and advertising a destination are paid by the taxpayers, travel marketers have to be specific in assessing how well those funds were invested. In this environment, justification for continuous public support requires good accountability research study.
9.4.3 Accountability Research for Destination Marketing
Realistic goals
Accountability research
Accountability assessment or evaluation research has been defined as the “sound measurement of the degree or the extent to which stated goals of a specific marketing effort are being or were achieved” (Davidson & Wiethaupt, 1989 p. 44). In short, the statement of the goals themselves is the key to this definition. Travel marketers need numerical goals that are realistic, meaningful, and measurable. Accountability assessment measures more than performance and assists in the review of the adequacy of the goals themselves so that travel marketers can determine whether objectives are realistic and achievable. Accountability assessment also provides guidance for the improvement of future marketing performance. Conversion studies are commonly used in accountability research to evaluate media advertising by measuring how many inquirers were converted into visitors. Other ways to assess marketing effectiveness in addition to conversion studies include studies that examine the outcomes of familiarization tours/sales blitzes and trade missions, travel writer tours, consumer shows, direct mail, international welcome centers, outdoor advertising, visitor centers, media programs, and hospitality training (Perdue & Pitegoff, 1990, pp. 45-49). Accountability research generally should address four areas: • Is the campaign bringing about the desired change(s)? The objective of a marketing plan is to focus on bringing desirable changes in the target market. These changes may include increased consumer awareness of the destination, improved image, or increased
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visitation and require before and after measures in order to determine the degree of success of increased awareness created by the campaign. • Is the campaign changing the target market? Market segmentation is an essential component for the evaluation of tourism marketing, and target markets are defined geographically, demographically, or psychographically. If segmentation is used, accountability research can focus on the changes that occurred in the target market, rather than on the limited information provided by overall changes in the entire market. • Is the appropriate measure of change being used? Other measures of success exist rather than economic return on investment. A number of studies have indicated that 60 to 70 percent of the people who request travel information, have already made their trip decision. Other studies have shown that previous experience and positive word of mouth from friends and relatives dominate as key reasons for destination choice. Given these findings, studies have focused on visitor satisfaction, assessing how satisfaction depends on actors such as information packets, friendly employees, and others. • Is the measure of change sufficiently precise to adequately measure the projected campaign results? Accountability research is designed to adequately measure the projected change. Measures of success are sensitive to the level of expected change brought about by the marketing campaign. Given the direct correlation between measurement precision and research cost, it is important that the desired level of accuracy in evaluating the marketing effort be determined before designing the research process (Perdue & Pitegoff, 1990). For accountability assessment purposes, various aspects of the tourism promotional and marketing campaign are examined in addition to the overall campaign. For example, evaluation of a television campaign may include both an overall assessment of the campaign as well as assessments of different commercial formats and media schedules. Further, accountability assessment should provide clear guidance as to how future campaigns can be improved. Generally, such an assessment is not regarded as an end in itself but rather as “a series of insights” to help researchers do a more effective job in planning marketing programs in a highly competitive environment.
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9.4.4 Making Research Understandable to Practitioners
Gap between research and business
Importance of communication
The volume of tourism marketing research studies has increased greatly over the years, yet in many cases, this has not resulted in a corresponding increase in the use of these studies by tourism businesses (Taylor, Rogers, & Stanton, 1994). Reasons for the gap between the producers and users of research include such reasons as: (1) research that is not easily translatable into useable information because of unfamiliar terminology or methodologies, (2) valuable results that are not used due to user resistance, or (3) findings that are not sufficiently distributed to concerned parties. This gap highlights a problem of research use. In order for research to be translated into information that is easily interpreted and used by the practitioners, there needs to be good communication between the suppliers and users of research. Increasingly, mechanisms for collaboration between government, academia, and private industry are being established to accomplish this goal. These could be jointly funded projects by government and private sources, specific industry sponsored projects, industry association involvement in academic research, and private consulting by academics.
9.5 The Importance of Forecasting Tourism Demand
Predictions of future for longterm benefit
Tourism demand forecasting is the basic element that is needed by individuals, public or private organizations, and governments that are planning future tourism developments. Decisions to be made on prices, promotional or strategic marketing programs, distribution and allocations of human, natural, and capital resources all require reliable predictions of current and future demand trends. Forecasting the number of tourist arrivals, their service needs, and their seasonality are also crucial for planners to decide on allocation and distribution of infrastructure, accommodations, transportation, attractions, promotions, and other services. The goal is that well-planned tourism development based on reliable and valid tourism forecasts can bring about long-term success and benefits, while minimizing social and environmental problems.
9.5.1 How Tourism Demand is Measured Demand is affected and limited by supply. Operators of tourism businesses must make an effort to match demand with supply in order to prevent losses through either under- or over-supply. Tourism is
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ultimately an experience of travel for the sake of pleasure and cannot be stored like material products. Income that is lost from unsold airline seats or unoccupied hotel rooms cannot be recaptured at some future date. Thus, a successful tourism destination depends on linking supply and demand by attaining sufficient load factors for airlines and occupancy rates for hotels rooms. There are several measures of “actual demand”: (1) number of visitors, (2) visitor-days or visitor-nights, and (3) per capita spending. “Potential demand” consists of possible future visitations. The demand segments include international and domestic markets, as well as local residents.
Linking supply and demand
"Actual demand"
9.5.2 Elements of Tourism Demand The number of people who engage in travel depends on the factors that encourage or discourage travel at any given time and place. Factors that promote travel are called “propensities to travel” and include proximity of large populations with high disposable incomes, low travel costs, favorable exchange rates, attractive destinations, and a strong cultural tradition for travel. Factors that discourage travel are called “resistances to travel” and include poor accessibility, high costs, poor image of the destination, political instability, and concerns about safety or sanitation.
Factors that encourage and discourage travel
9.5.3 Forecasting Tourism Demand It is possible to forecast tourism demand by using quantitative or qualitative approaches. Quantitative methods rely on past statistical information that can be counted and measured, while qualitative methods depend on human judgements or opinions. Quantitative methods include: (1) causal and (2) non-causal methods, while qualitative approaches include: (1) traditional techniques, (2) the Delphi technique, and (3) the Judgment-Aided Model (JAM). These approaches will be briefly discussed. The best forecasts use a combination of both aspects.
Statistical information and opinions
Quantitative Approaches Quantitative approaches to demand forecasting can be divided into causal and non-causal (time-series) methods. Causal models attempt to explain changes in tourism demand in relation to one or more explanatory variables in order to forecast future demand. Causal models include econometric models that use: (1) multivariate regression techniques or (2) gravity and trip-generation models. • Multivariate regression analysis is the most popular causal technique used for demand forecasting. Multivariate regression models examine
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Econometric models
Propensities vs. resistances
the influence of selected factors such as levels of tourist income, travel cost to the destination, relative price levels, or the currency exchange rate on visitor arrivals. These sophisticated econometric models may be used to test for possible changes in demand due to variations in the causal factors, such as what would happen to tourist spending if tourist incomes or airfares rise by five percent, or exchange rates dropped by 10 percent. However, it is best to have fewer variables in order to cut down on costs and statistical complexity. • Gravity and trip generation models have provided useful results in examining the effects of propensities such as population and tourist income versus resistances such as distance and costs on tourism demand. Some limitations to using these models to forecast demand are the extensive data requirements and the problem of testing for how well the model fits the data. Non-causal models, or time-series methods, rely on past trends of a single variable like visitor arrivals or visitor spending in order to estimate future trends. Non-causal methods are used when causal models are inappropriate due to lack of data or incomplete knowledge regarding the causal structure.
Projecting historical data towards future
Similarity of accuracy
• Time-series models use historical data collected over time and project these trends toward the future. The assumption is that what happened in the past will influence the future direction and magnitude of tourism demand. This approach can adequately predict short-term demand, but poor forecasts can result due to unforeseen changes in trends. Although causal models are more theoretically sound, non-causal models are more frequently used because they generate acceptable forecasts at low cost. In comparing the two approaches, the causal approach requires substantially more data and considerably more user understanding than does the non-causal method. In terms of accuracy, a comprehensive study of modeling and forecasting tourism demand in Europe concluded that the more sophisticated and complicated econometric methods were not necessarily more accurate compared to the more cost-effective times-series models (Witt & Witt, 1992). The findings suggest that the value of causal models is limited to identifying how tourism demand changes in relation to price and income, rather than being used as a direct forecasting tool.
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Qualitative Approaches Qualitative forecasting methods are also designed to predict future demand and to assess the possible outcomes of events. However, in contrast to the more objective approach provided by quantitative methods, this approach seeks subjective inputs through the perceptions, judgments, and accumulated experiences from experts in the tourism field. In particular, qualitative methods can provide a valuable means to augment quantitative tourism forecasting models. In addition, qualitative methods are useful if past data are insufficient or inapplicable because the destination is experiencing new or unanticipated developments. For instance, a destination that is just starting to develop its tourism industry may not have historical data on market shares, seasonality, and visitor expenditures. Another destination might be contemplating expanding into new capital-intensive or controversial markets like conventions or gaming. Moreover, if a region experiences social and political unrest, an existing data base may no longer be valid for quantitative forecasting. Typically, these are situations where qualitative models could be useful in analyzing and predicting consumer behavior.
Perceptions and judgments
New developments
Examples of qualitative methods include market surveys, the Delphi method, and the Judgment-Aided Model: • Market surveys of actual or potential visitors are the traditional way of obtaining qualitative information. Visitor surveys, however, are expensive, and an alternative is to survey tourist service providers such as airlines, hoteliers, and tour wholesalers. For example, a national tourism administration could canvass hotels and tour wholesalers about expectations about advanced reservations and expected hiring for the following year. Depending on the extent and degree of industry collaboration, fairly accurate forecasts are possible. Speculations about the future from experienced and wellinformed tourism authorities can provide valuable insights, direction and rationale for decision-makers. • The Delphi Model technique is essentially a method to obtain consensus from qualified individuals about the likely occurrence of certain situations or events. A series of questionnaires are administered to a group of experts. Each participant answers the questionnaire independently from each other to prevent peer pressure or group dominance. Two or more rounds of questionnaires
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are necessary to achieve consensus or divergence. Expert opinion can yield valuable results that can supplement quantitative economic models for long-range tourism planning.
Seminar of experts
Disadvantages of quantitive forecasts
Australian example
• Judgment-Aided Model (JAM), or scenario writing, is similar to the Delphi method in that a panel of experts is assembled in order to reach a consensus on a particular matter. The difference is that participants meet in a seminar format to debate and explore ideas. A scenario includes a description of: (1) the current situation (baseline analysis), (2) potential future situations, and (3) future paths that indicate how the current situation could develop into a future image (Uysal & Crompton, 1985). This approach can prove valuable in obtaining short- to medium-range tourism forecasts by convening tourism and economic experts on a regular basis, at least once a year. These forecasts can also be fairly accurate and provide a wealth of information on expected occupancies, employment, construction, retail, and other business trends. In conclusion, quantitative forecasting requires numerical data series and assumes that past trends will continue into the future. Non-causal models have more utility for practitioners, while academicians are more likely to develop causal models. In general, quantitative approaches are more suitable for short-term forecasting. Major drawbacks of quantitative approaches include the need for accurate data series of the explanatory variables, inability to adjust to unforeseen trends or events, reliance on aggregated data, and their inability to incorporate an understanding of consumer motivations and behavior. In an industry as dynamic as international tourism, quantitative forecasts should only be used with extreme care. Probably no single forecasting method can be considered to be appropriate for all situations. For example, the Tourism Forecasting Council of the Australian Tourist Commission has developed its visitor arrivals forecasts through a combination of quantitative and qualitative techniques. Using econometric techniques, models were developed for each source market based on income and price variables. Qualitative adjustments are then made to the models based on a number of factors such as expected changes in consumer behavior, government policy, external political factors, or unusual events. The final forecasts represent a “most likely” outcome for arrivals based on these indicators. The forecasts are then used to assist in management decision making (see Table 9.3).
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Table 9.3: Forecasts At A Glance - Australia
INBOUND TOURISM TO 2005 General • International arrivals to grow by 9 percent a year to 8.8 million overseas visitors in 2005. • Growth to slow from the expected growth of 11.8 percent in 1996, except in the Sydney Olympics year. • Fastest growth to be from Asian countries other than Japan. Visitor Nights • Visitor nights to grow by 6.8 percent a year, reflecting a decline in average length of stay due to the changing composition of the international market. • Nights in hotels, motels and guest houses to grow more quickly, at 8.8 percent due to high use of commercial accommodation by visitors from Asia. EARNINGS • Real tourism export earnings to reach $30.6 billion in 2005, up from $13.1 billion in 1995. This represents average annual growth of 8.8 percent. TOTAL VISITOR NIGHTS TO 2000 • Total visitor nights (domestic and international) to grow by 3.7 percent a year to 346 million. • Total nights spent in hotels, motels and guest houses to grow by 5.1 percent a year to almost 75 million.
Source: Australia, Commonwealth Department of Industry Science and Tourism, Forecast, Vol. 2, No. 2 (June 1996), p. 3.
Forecasting tourism demand is a complex process that requires inclusion of all relevant factors and parties in some dynamic fashion. Decision support can now be provided via sophisticated computer software that facilitates the processes involved in both quantitative and qualitative analyses. It is possible for experts to meet in electronic meeting rooms that shortens the time and cost required to achieve a consensus in qualitative approaches. Moreover, expert computer systems can be designed to simulate management functions and decision making processes. It is suggested that the ideal situation would be a collaboration of both public and private interests in using some combination of both quantitative and qualitative approaches for tourism forecasting and planning.
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Computer aid
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SUMMARY Tourism research does more than just provide information for travel planners and managers to make better decisions. The value of tourism research is its potential for providing an ongoing and comprehensive means of decision support and proactive planning. Marketing research, which is an important part of tourism research, is a necessary tool for both public and private sector decision makers to determine effective strategies. Today, there is an increasing need to use sound marketing research in order to develop competitive products and successful marketing strategies. Well-planned tourism development must also be based on reliable and valid forecasting information, which attempts to anticipate the future and which is another important dimension of tourism research.
DISCUSSION
QUESTIONS
1. List and define the sources of data that are used in tourism research. 2. What types of organizations are involved in conducting tourism research? 3. Briefly describe what is involved in an organization’s tourism market research process. 4. What are the four areas that accountability research should address? 5. What are the reasons for the gap between producers and users of tourism research? 6. Compare quantitative methods versus qualitative methods in forecasting tourism demand.
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Section
4
Tourism Impacts CHAPTER 10
Contributions of Tourism to Economic Development CHAPTER 11
Social and Cultural Aspects of Tourism CHAPTER 12
Sustainable Tourism and the Environment
CHAPTER 10 Contributions of Tourism to Economic Development
Learning objectives • To examine the economic effects of tourism on a global, regional, and local level. • To understand the economic benefits and costs of tourism. • To examine several methods for measuring economic impacts. • To develop an understanding of indicators and monitoring impacts. • To examine some of the obstacles to obtaining economic benefits through tourism activity. • To consider some strategies for maximizing economic contributions. Key terms and concepts balance of payments cost-benefit analysis direct and indirect employment direct, indirect, and induced benefits indicators input-output analysis leakage price elasticity tourism multipliers tourism satellite accounts
10 Contributions of Tourism to Economic Development
10.1 Introduction There is a growing recognition that innovative approaches must be adopted in order to maintain the economic health of a number of countries, communities, and regions. While conditions vary from region to region, tourism has been seen as an important form of economic development. It has also been promoted as a somewhat benign agent of economic and social change, a promulgator of peace through interaction and dialogue, and a service-based industry capable of creating employment and income. However, in countries and states with burgeoning tourism traffic, there is also an awareness and knowledge of the more intangible and indirect economic costs of tourism. While it can be argued that tourism does offer an important alternative form of economic activity, it must be seen as only one component of a larger series of development initiatives within any economic system. That is not to say that tourism in selected circumstances cannot be the major source of income and jobs in a community or region, but rather that the impact and role of tourism will vary from region to region. Experience has shown that tourism may take many forms and meet a number of tourist motivations. Experience has also shown that destinations can rise and fall in popularity, driven by various factors in the destination’s internal
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Economic development and social change
Variable impact
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and external environment such as political unrest, natural catastrophe, and demand or supply-side problems. A destination that is entirely dependent on tourism is much more vulnerable to these shifts than an economy that is diversified and has tourism as one of its industries. This chapter provides an overview of the economic contributions of tourism through an examination of its economic benefits and costs. This chapter also discusses the measurement of economic impacts and the monitoring of economic activity. Obstacles to economic contributions and strategies to manage these issues are also explored.
10.2 Understanding Economic Impacts 10.2.1 Tourism in the Global Economy
Economic significance of global tourism
Statistics provided by the World Tourism Organization (WTO) emphasize the economic significance of tourism at the global level. In 1995, international tourist arrivals were estimated at 567 million tourists worldwide while total receipts from international tourism amounted to US$372 billion (World Tourism Organization, 1996c, p. 1). International tourism receipts grew faster than world trade (commercial services and merchandise exports) in the 1980s and now constitute a higher proportion of the value of world exports than all sectors other than crude petroleum/petroleum products and motor vehicle/parts/accessories (WTO, 1995d, p. 21). Travel and tourism is also the world’s largest creator of jobs in most countries, providing employment for over one hundred million people worldwide. International travel and tourism contributes about US$166 billion of tax revenues (WTO, 1993b). International tourist arrivals are forecast to grow to 660 million in 2000 and to 937 million by 2010 (WTO, 1994e, p. 36). The ability of a tourism destination to attract tourism revenues is influenced by a complex set of characteristics, including: • Political constraints and incentives (such as taxation policies regarding local and foreign investment and imports). • Resources, facilities, and conveniences (attractions, transportation, access, hospitality, medical and other services, pricing). • Market characteristics (visitor tastes and preferences, disposable income, propensity to travel, proximity to destination).
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• Political stability. • Expertise of human resources and ability of decision-makers (public and private) to market and promote the destination effectively.
10.2.2 Tourism in the National Economy Tourism is generally seen as a significant economic contributor to a nation’s gross national product (GNP) since international visitors are a valuable source of foreign currency. One source of economic data on the economic significance of tourism for a country is its balance of payments, which is a record of the international transactions of a country. Kenya is an example of a country where net foreign exchange earnings from tourism are a significant percentage of gross receipts (90 percent in 1989), indicating that from a balance of payments perspective, Kenya’s tourism industry is very important to the country. In contrast, in Mauritius tourism accounted for only 10 percent of its gross receipts in 1990 (The Economist Intelligence Unit, 1992). Other examples of tourism’s contribution to GNP in the early 1990s include six percent in Tunisia, 18 percent in the Maldives, and 32 percent in Barbados (Sustainable Tourism Development in Industry and Environment, 1992).
Contribution to GNP
10.2.3 Impact of Tourism on Employment The importance of the tourism industry both as an income generator and employer is often overlooked by those unfamiliar with tourism and its work force. Yet, human resources is likely to be one of the most important issues facing the tourism industry in the near future. WTO projects that by the year 2005, tourism jobs will increase faster than traditional industries by as much as 59 percent. The World Travel and Tourism Council (WTTC) has estimated that tourism employed 1 in 9 workers worldwide or about 212 million people, making it the world’s largest employer (World Travel and Tourism Council, 1993). For many countries, tourism is the main employer. Besides generating millions of jobs worldwide, the tourism industry in 1994 had a payroll of US $1.7 trillion, or 10.3 percent of total employee wages and salaries (Goeldner, McIntosh, & Ritchie, 1995). Tourism’s share of total employment compensation ranges from 4.9 percent in Eastern Europe, where tourism is in its beginning stages, to 18.7 percent in the Caribbean, where tourism is a mature industry. The image of tourism as a generator primarily of low-wage and low-skill employment is a misleading one, and underestimates tourism’s impact
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Human resources
Payroll
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on overall wages and salaries. In fact, many of the jobs at the technical, managerial, and professional levels require education and training which command compensation commensurate with these qualifications. In many cases, compensation in the tourism industry is competitive with high-technology industries.
Contact with tourists
Companies contact with industry
Tourism provides both direct and indirect employment. Companies that provide direct employment are those whose employees are in contact with tourists or directly affect the tourist experience. Companies that provide direct employment include hotels, food service operators, airlines, cruise lines, travel agents, attractions, and shopping outlets. Companies that provide indirect employment in the tourism industry are those that serve the direct employment companies. These indirect employment companies, which may be restaurant suppliers, construction firms that build hotels, and aircraft manufacturers, are dependent on the companies providing direct employment for their revenues. Overall, direct and indirect employment in tourism represent a sizeable portion of total employment. As shown in Table 10.1, both direct and indirect employment opportunities in tourism are expected to grow over the next decade. Table 10.1: Travel and Tourism Employment
Year
Direct Employment % of Total
Indirect Employment % of Total
TOTAL
1991
4.9
5.3
10.2
1994
5.1
5.5
10.6
2005
5.4
5.9
11.3
Source: World Travel and Tourism Council, 1993.
10.3 Measuring Tourism Economic Impacts 10.3.1 Identifying Tourism Activity One of the points that previous chapters of this textbook have emphasized is tourism’s complexity as an industry, encompassing private and public sectors– transportation, accommodations, retail, food and beverage, reception and convention centers, and so forth. Because of
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this, it has been difficult to statistically distinguish tourism activity from other economic activity and to measure its contribution to the overall economy. The International Standard Classification of Economic Activities, and other similar classification methods which provide categories of economic activity that nations use in compiling their statistics, traditionally have not included tourism. These difficulties are often cited as the reason why tourism’s importance to economic growth is consistently underestimated, especially by policymakers. The WTO has played an instrumental role in improving the way in which tourism activity is statistically identified and measured. Early efforts to standardize definitions and measurements of international tourism were quickly overtaken by the rapid pace at which the industry grew and changed, thus rendering many of the efforts inappropriate. At the same time, the demand for timely and accurate data has grown tremendously on the part of organizations and groups such as national tourism administrations, industry associations, interest groups, academia, and communities. These demands, in addition to the many existing sources of data which were often incompatible with each other, presented a situation where a common standard was vital. In 1991, the WTO and the government of Canada convened the International Conference on Travel and Tourism Statistics, known as the Ottawa Conference. Recommendations of the Ottawa Conference were then pursued with the leadership of a WTO-established steering committee. The committee’s resulting report on tourism statistical standards was adopted by the United Nations Statistical Commission in 1993. The WTO then published a series of manuals to assist countries in implementing the standards: Collection and Compilation of Tourism Statistics; Concepts, Definitions and Classifications for Tourism Statistics; Collection of Tourism Expenditure Statistics; Collection of Domestic Tourism Statistics; and Tourism and the Balance of Payments. Part of WTO’s effort has been directed towards a classification system of tourism activities. As noted above, traditional classification systems of economic activity have excluded tourism as an identifiable industry. Thus, in 1993, the WTO gained approval from the United Nations Statistical Commission on a Draft Standard International Classification of Tourism Activities (SICTA). SICTA provides a foundation for better analysis of the supply aspect of tourism. Better understanding of the demand aspect is also being pursued through work on a standard classification of tourism products. Together, improvements in supply and demand analysis will facilitate more accurate answers to the following questions:
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Difficulty estimating economic activity
Standardization
Statistical standard manuals
Classifying tourism activities
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• What are the products that tourists consume? • Who provides them and how are they produced? • What is the labor input necessary for the production of tourist goods and services? • What is the contribution of tourism to Gross Domestic Product (GDP)? • How do demand and supply in tourism interact? (WTO, 1995b, p. 71).
Difficulty measuring industry
Demand approach
Despite these advances in statistical methods, difficulties remain in measuring the tourism industry. A large part of the problem centers around the traditional method of defining an industry, which is from a supply or production perspective. For example, industries such as agriculture, manufacturing, and construction can be readily identified by the products and services they produce. For tourism, however, this method does not work well. Most tourism-related businesses do not devote all of their production to tourism. Restaurants and retail stores, for example, generally rely on sales revenue generated by both visitors and non-visitors for their business. To seek greater clarity and understanding in measuring the economic scope of tourism, organizations such as the WTO and the WTTC as well as individual countries have pursued a consumption or demand approach the subject. The underlying premise of this approach is that tourist activity is best defined by a demand characteristic: specifically, the consumption of a good or service by a tourist (see Chapter 1 to review WTO’s definition of “tourist”). This approach, along with the use of tourism satellite accounts (discussed below), enables governments to more accurately identify and measure their tourism industries.
10.3.2 Structure of the Tourism Industry Tourism consists of many different types of companies and organizations. In a particular destination, the services these companies offer combine to provide each tourist with a single touristic experience. Types of companies
While the types of companies that comprise the tourism industry vary widely, they can be grouped and classified by sub-industries or sectors. For statistical purposes, only major categories within classifications are separately certified. The main sectors, and some of the types of companies in each sector, are: • Lodging - Hotels, motels, resorts, bed and breakfast establishments • Food Service - Restaurants, institutional food service contractors
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• Passenger Transportation - Airlines, ground tour operators, car rental firms, cruise lines • Channelers - Travel agents, tour wholesalers • Tourist Activities - Attractions, gaming, recreation, entertainment, shopping establishments • Tourism Organizations - National Tourism Administrations (NTAs), local government tourism offices, tourism trade associations. In light of this structure, measuring the economic contribution of tourism to a community or region is complicated by a number of factors within and outside the destination. These factors include the wide range of impacts associated with tourism economic activity, the diverse number of participants in the activity, the complex interrelationships between various sectors, and the ignoring of small subcategories in the statistical counting.
10.3.3 Supply-Demand and Price Elasticities At a basic level, tourism economic activity can be understood within the framework of the concept of supply and demand. For example, as the price of a hotel room increases, demand should decrease as visitors seek other locations or accommodation sources, and the supply of available hotel rooms therefore increases. One way to measure the supply-demand relationship of tourism goods and services is to determine their price elasticity. When demand is price elastic, a lower price generates sufficiently higher demand to generate higher revenues. Similarly, if demand is price inelastic, a lower price does not result in a sufficient increase in demand, thus leading to lower overall revenues. Knowing the price elasticity of demand can aid tourism service providers in designing their product mix (Lundberg, Krishnamoorthy, & Stavenga, 1995).
Understanding economic activity
10.3.4 Direct, Indirect and Induced Benefits The economic benefits of travel and tourism can be derived directly or indirectly. Direct benefits are realized through direct tourist expenditures for goods and services in the destination, in the form of business receipts, income, employment, and government receipts from the sectors that directly receive the tourism expenditure. Indirect benefits are generated by the circulation of the tourism expenditure in the destination through inter-business transactions in the domestic economy. For example, indirect benefits can be generated from
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Tourist expenditures
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Domestic interbusiness transactions
Personal income spent
the investment and spending by the businesses which benefit directly from tourism expenditures. The direct business receipts, when re-funneled as investments or used to purchase other goods and services from domestic suppliers (who, in turn, purchase goods and services from other domestic suppliers), stimulate income and employment in other sectors. In addition, tourism spending within the destination can create induced benefits. As income levels rise due to the direct and indirect effects of the change in the level of tourism expenditure, some of the additional personal income (related to the change in tourism expenditures) is spent within the destination. This results in induced benefits, such as higher levels of income and jobs in the local goods and service sector. Hence, tourist spending creates direct benefits in tourism-related services and sectors such as accommodation, hospitality, attractions, events, and transportation, and indirect and induced benefits in other sectors such as agriculture, construction, and manufacturing. Indirect and induced benefits are also referred to as the secondary effect.
10.3.5 Multiplier Model of Tourism Revenue Turnover
Local product consumption due to tourism increase
Multipliers measure the effect of expenditures introduced into an economy. Tourism multipliers are used to determine changes in output, income, employment, business and government receipts, and balance of payments, due to a change in the level of tourism expenditures in an area. For example, if tourism expenditures increase by 15 percent due to attendance at a special event in the destination, some of this added revenue (first round of expenditures) may be used by the event to purchase food and other goods from the local economy, as well as on wages, salaries, and government taxes (second round of expenditures). The suppliers to the event may then spend the money received as a result of the event toward other goods, services, and taxes, generating yet another round of expenditures. This process continues, as the additional personal income derived from the direct and indirect effects of the increase in tourism expenditures go towards the consumption of local goods and services. Leakage Some of the added revenues from the increase in tourism expenditures may, however, undergo leakage. Leakage refers to the process through which tourism receipts leave the destination’s economy. Revenues may leak out of the local economy in the form of payment for imports or moneys saved
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(without re-investment). Import payments can take several forms, such as repatriation of profits to foreign corporations and salaries to non-local managers, as well as payment for imported goods and for promotion and advertising by companies based outside the destination. Tourism-related commodities and services purchased from within the destination reduce leakages through the creation of economic interrelationships among the goods and service providers in the destination.
Receipts leave local economy
Multiplier Effect The net effect of the successive rounds of spending and leakage of the added tourism expenditure is the multiplier effect. Tourism multipliers attempt to measure the relationship between the direct tourism expenditure in the economy and the secondary effect of the expenditure upon the economy. Some of the factors which affect the multiplier are the size of the local economy, the propensity of tourists and residents to buy imported goods or services, and the propensity of residents to save rather than spend (where saving reflects money kept out of circulation, and not re-invested). In mathematical terms, the multiplier can be shown as: Multiplier = 1/(1 - C + M) where C = marginal propensity to consume (the proportion of any increase in income spent on consumption of goods and services), and where M = marginal propensity to import (the proportion of any increase in income spent on imported goods and services). Some commonly used multipliers are: • The income multiplier, which measures the extra domestic income (primary and secondary) generated by an extra unit of tourism expenditure. • The employment multiplier, which measures the increased number of primary and secondary jobs created by an extra unit of tourism expenditure. • The government multiplier, which measures the government revenue created by an extra unit of tourism expenditure. Multipliers can be calculated for a country, region, or community. However, the information provided by tourism multipliers has to be evaluated with a great deal of care. Factors such as the size of the destination can affect the multiplier significantly. A smaller economy
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Spending and leakage
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Evaluations and comparisons
may have a much smaller multiplier than a larger one since more goods and services might be imported to meet the tourists’ needs, resulting in a greater leakage of revenues out of the destination. Hence, multipliers may vary greatly among communities within a country or region. Furthermore, since tourism multipliers can be calculated in a number of different ways, care must be taken when comparing the multipliers of different countries. Multipliers should be examined along with other measurements and indicators to determine the positive and negative economic impact of tourism on the community.
10.3.6 Input-Output Analysis
Linkages among economic sectors
Studies of the economic impacts of tourism generally include inputoutput analysis. This kind of analysis helps to demonstrate how economic sectors are related, the number of linkages among them, and the effect of these linkages. Input-output analysis is a means of analyzing interindustry relationships by tracking the flow of goods and services in an area’s economy through the chain of producers, suppliers, and intermediaries, to the final buyer. Input-output analysis commences with the development of a table that illustrates, in matrix form, how transactions flow through the economy over a given time period. The rows of the matrix indicate the sales of the total output by each sector to every other sector. The columns demonstrate the inputs required by every sector from the other sectors. For example, when assessing tourism accommodation, the rows in the table would demonstrate the output or revenues generated by each industry from the sale of products or services, including accommodation, meals, tour guides, and related services such as laundry, or medical services. The columns would indicate the inputs (goods, services, labor and capital) that go into the output of the accommodation sector, including food, utilities, paper products, advertising and promotion services, wage and salary levels, and other factors.
Input-output limitation
Using a combination of matrix manipulations, multipliers can be calculated to provide an assessment of the effects of different sectors on each other. While input-output tables are helpful in understanding the linkages of the sectors in the economy, they are limited to providing a snapshot of inter-industry economic actions at a single point in time (Archer, 1977; Archer, 1982, pp. 236-24; Fletcher, 1989, pp. 514-529).
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10.3.7 Tourism Satellite Accounts Satellite accounts provide comprehensive information on a field of economic activity, and are generally tied to the economic accounts of a nation or region. The tourism satellite account is a relatively new practice adopted by some countries. For example, the British Columbia Ministry of Development, Trade and Tourism (in the Province of British Columbia, Canada), has developed a tourism satellite account and a separate input-output model designed to display tourism’s contributions to the province, based on the overall input-output model of the province (Burd, 1994, p. 372). A tourism satellite account has also been developed by Statistics Canada in order to assess the significance of tourism to Canada. The account uses concise definitions of tourism and attempts to provide a clear and real measure of tourism-related economic activity. Both direct and indirect tourism activities are accounted for in areas such as demand, supply, employment, and taxes. This capability is helpful in determining the complex spending patterns of visitors and the goods and services that cater to their needs. A system of national accounts (SNA) has been supported by the United Nations to improve the quality of government statistics. The advantages of the tourism satellite accounts can be summarized as follows:
Real measure of tourism-related economic activity
• Tourism satellite accounts identify the amount of the benefit enjoyed by various sectors of the economy and the employment, income, taxes, and other benefits that flow from these sectors. • Tourism satellite accounts provide a comprehensive picture of the size and scale of tourism in the country, thereby helping governments and businesses assess the value of tourism to the economy.
10.3.8 Cost-Benefit Analysis By using a number of economic tools and methods, destinations are able to obtain a large array of economic information on tourism which can be used to make decisions. In assessing this information, analysts, planners, and managers have to determine not just whether jobs and wealth are created, but also how tourism’s benefits are distributed, what economic, social, and cultural impact costs result from the development process, and whether the benefits outweigh the costs. This analysis requires the integration of economic data with other data (such as environmental, social, and cultural) to provide a reasonable indication of whether tourism is a good strategy for the destination.
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Analyzing the distribution of benefits
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The potential economic benefits of tourism development include: • Increased income and standard of living from tourist expenditures. • New employment opportunities. • Increased tax base. • Increased community visibility leading to other economic development opportunities. • Improved infrastructure and facilities. • Increased resources for the protection and conservation of natural and cultural heritage resources. • Development of local handicrafts. The potential costs that need to be weighed against these benefits include: • Seasonal employment. • Increased cost of living for residents (e.g., land, housing, food, services). • Pollution. • Increased traffic and congestion. • Negative impacts on cultural and natural heritage resources. • Increased crime. • Increased taxes. • Leakage of revenues and dependence on imported goods and services. • Over-dependence on tourism as a prime economic activity.
Evaluation challenges
Cost-benefit analysis is an important activity to perform, but is also difficult to carry out, since a number of the costs are very difficult to quantify. How does one measure the “sense of place” or “spiritual happiness” of a population? How does one quantify the cost of habitat fragmentation? While advances are being made in developing full-cost, environmentallybased accounting, some measures may need to remain qualitative rather than quantitative. Another challenge in cost-benefit analysis lies in identifying the parties who benefit and those who pay the costs of tourism. Cost-benefit analysis does not have to be applied to the industry as a whole; often, it is more appropriate to conduct smaller cost-benefit analyses on specific issues to provide information on specific aspects of tourism.
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Monitoring Economic Impacts
10.4 Monitoring Economic Impacts The previous section discusses some of the challenges of evaluating the economic costs and benefits of tourism. Such an evaluation needs to be undertaken within the context of the overall economic development of the destination, and should also be integrated with an analysis of the social, cultural, and environmental costs and benefits of tourism which are covered in Chapters 11 and 12. This task can be facilitated by ensuring that proper indicators are established for evaluating and monitoring these costs and benefits. Many destination areas have been unable to monitor and evaluate the effects of their planning with the result that essential data is lacking in many areas. The setting of monitoring criteria and thresholds is becoming increasingly important in tourism, given the many ambitious claims that are made concerning the potential of tourism to satisfy a range of cultural and societal goals. Growing concerns for global environmental sustainability will force greater accountability for the economic impacts of tourism. In addition, in difficult economic times tourism benefits need to be well understood and documented if public and private sector funding is to be allocated for developmental purposes. The prospects for tourism development depend on more sophisticated understanding and documentation of the benefits and costs of using tourism as a tool in meeting the goals of a society. An example of the ways in which tourism can have indirect, long-term economic impacts can be seen in land value changes. In relatively undeveloped destination areas, land values often rise substantially as higher-priced projects replace traditional and less profitable land uses. If agricultural landowners choose to sell or develop their land for tourism purposes, the local economy may have to rely more heavily on food imports to feed tourists and residents. The intrusion of a marketbased system on traditional land values can also have an impact on the local heritage and sense of place. Conflict may occur between those landowners who wish to retain the traditional values and uses of land in their community and area, and tourism proponents. Such conflict could escalate as tourism pressures increase, and the resulting scars on the community might take a long while to heal. This short example helps to illustrate that understanding and measuring the full economic impact of tourism is more complex than measuring only its direct impacts.
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Evaluating overall costs and benefits
Land values
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10.4.1 Indicators in Tourism Monitoring
Measuring success and failure
One of the important first steps in ensuring quality monitoring and evaluation in tourism is to establish indicators which can be used to measure success and failure. Indicators are statistical devices that serve to measure or gauge conditions, such as the amount of air pollution in an area. Indicators are generally used to compare an existing condition to a base point. Thus, an air pollution index of 150 would indicate an increase over the air pollution measured in the base year, represented by an index of 100. Indicators for the tourism industry should include measures for the quality of visitor experience and for visitor satisfaction, in order to help gauge how future visitation may be impacted. Given the interdisciplinary and wide ranging impacts of tourism, it is impossible to deal with all variables, and therefore reliable indicators simplify the assessment process. Some of the factors to be considered in developing and using indicators include: • The development and use of indicators can be costly and time consuming and an early commitment must be made to the process. The process should be carefully assessed in order to ensure that the information being produced is accurate and useful in future decision-making. • Not all indicators are of equal weight and the use of a differential weighting system often must be instituted. • The process of assessing community economic impacts created by tourism may produce conflicting results. The assessment process must recognize the need to both consider and balance these conflicts. • The information gathering process should enable the utilization of data in varied situations. For example, data on the characteristics of visitors to a site might be used for assessing economic impacts as well as refining an interpretive program, and for guiding the development and assessment of strategic tourism plans. • The development of indicators will have to be undertaken as a serious first step in being able to make the case for the role that tourism plays in community economic development. • For indicators to be designed and used effectively, joint agreement on the nature of the information to be collected by a range of actors is necessary. This agreement is important to allow collective experiences to guide the process and ensure that the data is perceived to be legitimate by the scientific, public, and other stakeholders in the domain.
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Obstacles to Economic Development Through Tourism
10.4.2 The Assessment Process For the assessment process to have any influence, it has to be future oriented and tied into the policy and planning process. The impact management process will therefore require the following:
Future-oriented planning
• A planning and management development approach which requires ongoing assessment. • Coordination and cooperation among a wide range of actors (including specialists and government officials). • The training of existing and future personnel in monitoring techniques. • The establishment of an ongoing organizational structure to conduct monitoring activities.
10.5 Obstacles to Economic Development Through Tourism Market Obstacles Much of tourism activity–including the ability and interest of tourists to travel and the distance they are willing to travel–is dependent on a variety of market factors, such as income levels, cost of fuel, job security, physical condition and mobility, seasonal factors, as well as travel motivations. Most of these factors are beyond the control of the individual destination. Thus, the ability of a destination to attract tourists on a long-term basis requires planning and flexibility. The ability of a community to conduct a reliable market survey, identify a positioning strategy, and promote itself is essential.
Willingness to travel
Community Obstacles Negative perceptions of tourism are often found at the local level. Tourism activities, as a whole, are generally viewed as a collection of small business ventures, unlike a large factory that may be the main employer in many communities. Often, tourism work is viewed as a short-term or temporary activity until more appealing and profitable employment can be found, since many tourism positions are in fact, entry level jobs or seen as low status occupations. These perceptions act as a deterrent to greater local participation in tourism-related employment. Overcoming these negative feelings and providing for a hospitable host community is an important challenge.
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Perceptions of tourism work
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Environmental Obstacles
Problem of tourist numbers
The emphasis in much of tourism activity tends to be on attracting larger numbers of tourists to a region or site, which can pose problems for environmentally sensitive areas. It is clear that some environments may have to generate high-yielding tourist activities to generate sufficient income while protecting social and natural environments. This is difficult to accomplish in the highly competitive tourism market. Lack of Integration
Limited cooperation
There is limited integration and cooperation between many tourism businesses given that, for the most part, the local tourism industry tends to be fragmented or lacking in tourism expertise. Institutional Obstacles
Little public support
In some cases there is little coordinated governmental support and promotion for tourism initiatives. In addition, government can lack the proper structure to help plan and manage tourism. In other instances, political and ideological issues make tourism planning and management difficult to implement. Employment and Training Obstacles
Lack of equity in education/ employment
The availability and quality of training and education opportunities in tourism planning and management can limit growth. In order to be effective, training should address the broader context of tourism and the range of potential opportunities. The lack of employment equity and opportunities for women can be a serious obstacle in ensuring an equitable distribution of the benefits of tourism activity, as can limited access to education and training for disadvantaged groups.
10.6 Facilitating Employment in the Tourism Sector
Building development
The actual extent of employment generated by tourism is contingent upon a variety of factors. One of the primary factors is the quality and extent of the resources available in the destination area (such as heritage resources, the uniqueness of the landscape, and cultural traditions) and the nature of the market for these resources. Of equal importance is the ability and willingness of local tourism businesses, operators, and governmental bodies to develop plans, market effectively and reach an appropriate target audience.
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In order for countries, regions, and communities to take advantage of tourism as a form of economic development, a number of changes and programs are necessary. They include: • Better tourism planning and management practices. • Coordination of activities at all levels of government operations. • Improved cooperation between businesses and communities, as well as between public and private sectors. • Improved impact assessment and monitoring practices. • The design and delivery of a wide range of tourism educational and training opportunities. • The provision of marketing and promotional assistance. • More equitable access to employment, promotion, education and training for marginalized population groups. Better Planning and Management Tourism strategies and plans that are developed with local participation in the planning, implementation, and management stages and community economic development approaches empower residents to assume leadership and responsibility for tourism planning. This helps to increase local control over tourism activities and investments and local commitment to continuing tourism development, thereby reducing the potential of leakage and a diminished loss of quality of life. Tourism strategies and plans that are linked with a broader set of initiatives and community or economic development plans, and are afforded the same status and importance as other local plans, has a better chance of successfully achieving broader community goals.
Local control, local commitment
Coordination Coordination at both policy and action levels among the various agencies involved and among the different levels of government is vital to sound development. This is particularly relevant to the development and implementation of tourism and environmental policies, and in the provision of service such as transportation, parking, and water and sewer capacities.
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Cooperation
Making partnerships
Cooperation among local businesses and tourism operators stems from the interrelated nature of tourism, where one business or operation can be directly affected by the success or quality of another. Tourism partnerships in the areas of planning, management, marketing, and funding for tourism ventures by local financial organizations provide one avenue of cooperation. Public-private partnerships to support the development and funding of tourism initiatives and cooperation among neighboring regions and communities are forms of cooperation involving government. In many instances, it is not just one town or site that attracts tourists, but rather the larger area and its environs. A case in point is San Francisco, California where the nearby wine producing counties of Napa and Sonoma are important draws for many tourists. Cooperative arrangements enable communities to capture a range of benefits for the entire region, while independent efforts often result in a duplication of efforts and an inefficient use of limited resources. One area of particular importance is marketing linkages among operators at the local, regional, national, and international levels. Impact Assessment and Monitoring An area of great importance is the assessment of the impacts of tourism development proposals. Such assessments include consideration of the capacity of sites, in terms of their physical, natural, social, and cultural limits. They also include monitoring and evaluation of plans and operations.
Assessing efficient use of resources
Sustainable tourism may involve direct and indirect forms of government intervention to ensure the protection of natural resources and the equitable distribution of economic benefits from tourism development. Private sector incentive may encourage financial investment and reinvestment in developmental activity that adhere to the principles of sustainable tourism. Encouraging cooperation and collaboration among the diverse actors, as well as public-private sector partnerships can reduce potential and actual conflicts of interests and values. In addition, these actions should facilitate the more efficient use of resources and capabilities to achieve the destination’s economic objectives. As the global environment heads toward the 21st century, creative leadership will be required to develop and spread the economic benefits from tourism equitably, while minimizing economic and other related costs. Careful monitoring and assessment of the economic impacts of tourism will help destination planners and managers forward the vision of economic sustainability at the destination and global level.
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Summary
SUMMARY Tourism is becoming an increasingly important force in the world economy. Tourism’s contributions to total production and to employment are significant and growing. As the industry matures and as governments recognize its importance, there will be greater emphasis on the accurate measurement of tourism’s economic impacts. This measurement has been hampered by the unique structure of tourism which does not conform to the established norms of production-based industry analysis. Increasingly, however, better statistical approaches based on demand are yielding more accurate information on tourism’s direct and indirect benefits. At the same time, tourism’s costs are being studied more carefully and anticipated in policy and planning. The development of realistic indicators for tourism’s costs and benefits has played an important role in enabling the public and private sectors to maximize tourism’s positive economic benefits.
DISCUSSION
QUESTIONS
1. What are some of the costs of tourism development that could affect the economic benefits of tourism in a community? 2. How do tourism expenditures turn over (multiply) in the destination? 3. How can leakage be reduced? 4. What advice would you give a community’s destination manager regarding the use of multipliers for his community? 5. Why is cost-benefit analysis a useful tool in economic analysis? 6. What role do indicators play in economic analysis? 7. What are some of the obstacles to generating economic benefits from tourism? 8. As a destination manager, how would you ensure that tourism development generates employment in your community or region?
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Learning objectives • To understand the factors in tourism that contribute to social and cultural impacts, both positive and negative. • To understand the importance of culture as a tourist attraction. • To understand the direct relationship between sociocultural factors and sustainable tourism. • To be familiar with strategies suggested as ways to mitigate negative social and cultural tourism impacts and promote positive impacts. • To know what interpretation is and how it can be used to provide quality tourist experiences. Key terms and concepts cultural arrogance culture shaping inbound tourism culture shaping outbound tourism culture shock demonstration effect ethnic tourism interpretation sociocultural impacts of tourism urban tourism
11 Social and Cultural Aspects of Tourism
11.1 Introduction One clear lesson from the history of tourism is that not everyone has been happy to have guests. Tourism has attracted both praise and criticism–praise for its potential or real economic contributions; criticism for its sometimes adverse affect on places and host residents. The criticism of tourism has come not only from academic researchers and cultural commentators, but also from government officials and policy makers and from residents and host communities themselves. When criticisms are strident, the consequences for visitors range from indifference to outright hostility from the community to the denial of public investment in tourism infrastructure. The challenge for tourism managers, planners, and researchers is to find ways to develop tourism as an industry providing travel experiences which are rewarding and sustainable for both hosts and guests. This chapter describes some of the principles that have been proposed for ensuring that the tourism industry of the future is characterized by these rewarding and sustainable travel experiences. In particular, the discussion will focus on the interaction between sustainable tourism and social and cultural resources. The chapter will review the importance of social and cultural attractions in tourism, describe the negative and positive social and cultural impacts of tourism, and discuss practices
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and strategies for tourism planners and managers to alleviate the negative and encourage the positive impacts. Finally, the chapter will introduce interpretation as a tool to assist in the management of tourism and as a means of ensuring quality social and cultural tourism products.
11.2 Sustainable Tourism
Responsibility and respect
As the global community moves towards the twenty-first century, two major forces in tourism are gathering momentum. The first calls for greater responsibility to and respect for the host destination’s people and their culture. This pressure is the result of growing recognition that tourism can and often does have negative impacts on hosts and their environments. The second force calls for greater responsibility on the part of individuals who travel, reflecting new patterns of consumption which include a rise in independent travel and an increasing focus by tourists on education and self-development as motives for their travel. These two forces can be seen as coming together in the principles of sustainable tourism. Definitions of sustainable tourism emphasize three important features: 1. Quality. Sustainable tourism provides a quality experience for visitors, while improving the quality of life of the host community and protecting the quality of the environment. 2. Continuity. Sustainable tourism ensures the continuity of the natural resources upon which it is based, and the continuity of the culture of the host community with satisfying experiences for visitors. 3. Balance. Sustainable tourism balances the needs of the tourism industry, supporters of the environment, and the local community. Sustainable tourism emphasizes the mutual goals and cooperation among visitors, host community, and destination in contrast to more traditional approaches to tourism, which emphasize their diverse and conflicting needs.
Host community's needs
Table 11.1 provides the key principles of sustainable tourism. In sustainable tourism the needs of the host community are an important component to be considered in the planning and management of tourism. The need to ensure that tourism does not adversely impact on the culture and social structure of a host community is central to sustainable tourism. The quality of the tourist experience is also dependent upon the social and cultural features of a destination.
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Table 11.1: Principles for Sustainable Tourism
•
Tourism planning, development and operation should be part of conservation or sustainable development strategies for a region, a province (state) or the nation. Tourism planning, development and operation should be cross-sectoral and integrated, involving different government agencies, private corporations, citizens groups and individuals thus providing the widest possible benefits.
•
Agencies, corporations, groups and individuals should follow ethical and other principles which respect the culture and environment of the host area, the economy and traditional way of life, the community and traditional behavior, leadership and political patterns.
•
Tourism should be planned and managed in a sustainable manner, with due regard for the protection and appropriate economic uses of the natural and human environment in host areas.
•
Tourism should be undertaken with equity in mind to distribute fairly benefits and costs among tourism promoters and host peoples and areas.
•
Good information, research and communication on the nature of tourism and its effects on the human and cultural environment should be available prior to and during development, especially for the local people, so that they can participate in and influence the direction of development and its effects as much as possible, in the individual and the collective interest.
•
Local people should be encouraged and expected to undertake leadership roles in planning and development with the assistance of government, business, financial and other interests.
•
Integrated environmental, social and economic planning analyses should be undertaken prior to the commencement of any major projects, with careful consideration given to different types of tourism development and the ways in which they might link with existing uses, ways of life and environmental considerations.
•
Throughout all stages of tourism development and operation, a careful assessment, monitoring and mediation program should be conducted in order to allow local people and others to take advantage of opportunities or to respond to changes.
Source: Globe '90 Conference, Tourism Stream, Action Strategy for Sustainable Tourism Development, Vancouver BC, Canada. As quoted in WTO, Sustainable Tourism Development: Guide for Local Planners (Madrid: WTO, 1993), p. 40.
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11.3 The Sociocultural Impacts of Tourism The impacts of tourism are commonly categorized as being physical, economic, and sociocultural. However, because the consequences of tourism are often complex and interrelated, impacts usually fall into more than one category. This problem is also apparent in attempts to define social and cultural impacts.
11.3.1 Defining Society and Impacts Society is a multi-faceted term generally referring to the patterns of social organization of and within communities. Societies are the way groups of human beings locate, differentiate, and organize themselves into functioning communities. While a society is often thought of as having a common or dominant culture, many multi-cultural societies exist, and cultures may extend across national boundaries and regions of the world. While the term society may at times refer to a whole country, community is usually a more geographically focused term referring to settlements in specific locations.
Changes in people's lives
Social impacts, as a rule, refer to changes in the lives of people who live in destination communities, and are associated more with direct contact between residents and tourists. Cultural impacts refer to changes in the arts, artifacts, customs, rituals and architecture of a people, and are longer term changes which result more from tourism development. Because most tourism consequences involve changes to both daily life and culture, the term sociocultural impacts is used to refer to changes to residents’ everyday experiences as well as to their values, way of life, and intellectual and artistic products. This section will describe the major sociocultural impacts of tourism. Examples from a range of different places will be used to demonstrate how tourism can be a positive and negative force in the lives of people who live in, or near, a tourism destination. The section will also examine the factors which influence these sociocultural impacts.
11.3.2 Major Sociocultural Impacts Table 11.2 provides a summary of the most commonly described positive and negative sociocultural impacts of tourism. The table also links these impacts to specific factors associated with tourism such as the use of culture as a tourist attraction and changes in social roles which result from employment and economic opportunities provided by tourism. As may be seen in the table, the same factor can be associated with both positive and negative impacts.
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Table 11.2: Summary of Positive and Negative Sociocultural Impacts of Tourism
Factor Associated with Tourism
Positive Impact
Negative Impact
The use of culture as a tourist attraction
Increased support for traditional cultures and displays of ethnic identity. Revitalization of traditional arts, festivals and language.
Changes to traditional activities and arts to suit production for tourists. Disruption and crowding of traditional activities. Invasion of privacy.
Direct contact between residents and tourists
Breakdown of negative stereotypes. Increased social opportunities.
Enhancement of negative stereotypes. Increased commercialism. Introduction of diseases. Demonstration effects.
Changes in jobs and economic structure resulting in changes in social roles.
New economic and social opportunities which decrease social inequity.
Community conflict and tension. Increased social inequity. Loss of language.
Development of tourist facilities
Increased recreational opportunities.
Loss of access to places and recreational activities.
Increased population from tourists and associated development
Support for medical, educational and other facilities which enhance quality of life.
Crowding and congestion. Increased crime.
Source: Based on a review of the literature conducted by Pearce, Moscardo and Ross (1996).
11.3.3 Cultural Change Because culture can play an important role in attracting tourists to a destination, tourism offers both economic incentives and social support for the maintenance and revitalization of various cultural activities. Tourism researchers have often provided anecdotal evidence of how tourist interest in culture has resulted in a strengthening of artistic traditions and traditional activities such as festivals and processions, and in a stronger sense of identity for the resident population in some societies. The production of traditional arts and activities for tourists, however, has often resulted in changes in cultural products. For example, the demands for large quantities of arts and crafts and for cheaper prices tend to lead to mass production of goods of inferior quality or encourage importation of poor copies of cultural goods represented as authentic. Changes can also appear cultural such as festivals, ceremonies, and dances through the addition of fees or charges, the use of timetables, and modifications in the features of activities to make them more palatable to visitors. For some people, such changes are seen as destroying the authenticity and cultural meaning of the products or events. Tourist interest in cultural activities can also result in invasions of residents’ privacy.
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Changes in cultural products and festivals
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Alarde festival
Negative stereotypes
The Alarde festival in Spain’s Fuenterrabia is a commonly used example of how adopting a cultural activity to accommodate tourism can result in a loss of value for the local community. The Alarde is a ritual recreation of a seventeenth century battle which traditionally involved many residents in both its preparation and its enactment, serving as an opportunity for the community to celebrate its unity and history through pageantry. As the Alarde became a popular tourist attraction, problems with crowding began to occur. The solution proposed by the local government was to hold the reenactment twice. In changing the event from one held primarily for locals to one staged for monetary gain, a major backlash ensued with many residents withdrawing their support and refusing to participate (Greenwood, 1978). International tourists and destination residents often have very different cultural backgrounds, and it is not uncommon for residents to develop negative stereotypes of tourists from their direct encounters. Visitors sometimes break cultural taboos and engage in behavior which is seen by residents as offensive. In Thailand, for example, the Western practice of sunbathing on beaches is seen by Thai residents as both unwise (because of the potential health risks) and immoral (because of traditional taboos against body exposure). Such behavior sometimes generates hostility which can be expressed in crime against tourists. Negative stereotypes can arise even when visitors and hosts share a similar cultural background. Community Conflict
Differences in perceptions
Not all social exchanges between tourists and visitors are negative. Younger residents of tourist destinations sometimes express the belief that tourism is a positive force in creating a less rigid society. This loosening of traditional restrictions is often associated with a phenomenon called the demonstration effect. For example, local, and usually younger, residents who are exposed often to Western tourists are likely to emulate their dress and habits. While this may seem to be a positive impact for those residents who adopt the more relaxed standards, it can be seen as a dangerous and negative trend to older or more traditional residents. Such differences in perception can lead to conflict within communities.
Creation of jobs and opportunities
Tourism can further contribute to community conflict indirectly through the creation of new job and economic opportunities. Although new economic and employment options are given by residents as a major positive impact from tourism, such opportunities are not always evenly spread across communities. For example, tourism typically
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provides a large number of jobs for women in resort communities. While this work does provide women with improved financial and social prospects especially in developing areas, increased family tensions can occur as women struggle to maintain both their traditional roles and new jobs, and as men suffer from decreased self-esteem associated with a reduced role in maintaining and managing families. These types of situations have been studied in such places as Austria, Hawaii, Cyprus, Fiji, Panama, and Crete. It is important to note that such tensions are not always permanent and can be resolved.
Working women
11.3.4 Other Impacts Other sociocultural impacts of tourism, both positive and negative, include: • Competition for tourist business. • Increased economic inequity, where the people who are best placed to take advantage of tourism opportunities are those who already possess the capacity to invest in this industry. • Renewed interest in and opportunities for revival in the use of local languages. • The adoption by local residents of other languages to ease communication with visitors. • The development of facilities for tourists such as sporting complexes, restaurants, and entertainment, as well as increased support for medical, educational and other services. • Increased income and an improved quality of life for host communities. • Increases in population leading to problems with crowding, congestion and crime. • Pressure to provide facilities for tourists leading to reduced opportunities for local residents.
11.3.5 Factors Influencing the Sociocultural Impacts of Tourism Tourism can have both positive and negative impacts on the same social and cultural elements. In some instances an impact may be viewed or interpreted differently by different community members. One reason for this is that many sociocultural impacts are perceived impacts. The contribution of tourism to crowding, for example, may be
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seen as intolerable or nothing unusual to an Asian accustomed to crowding as a fact of life. Improvements to quality of life and changes to culture require value judgments, which depend very much on individual perceptions. Two sets of factors influence tourism’s social and cultural impact; one refers to factors which influence how individuals perceive tourism, while the other includes factors which are related to the size and nature of tourism development.
11.3.6 Factors Related to Individual Perceptions of Tourism The following list summarizes basic patterns of relationships among the various factors that influence host perceptions of tourism and its impacts: • In general, residents who are likely to benefit from tourism (either because they or family members are employed in tourism or because they believe tourism’s benefits outweigh its costs to them personally) are more likely to support tourism and report more positive impacts from tourism. • People with greater involvement in and knowledge of tourism tend to support the industry. People often consider community interests when thinking about tourism and will support it even in cases where they receive little personal benefit from the industry. • Host community perceptions of tourism are influenced by the social or cultural role assigned to tourists. For example, in the Trobriand Islands the only available category for tourists were soldiers (sodiya); in the Seychelles, tourists are seen as “tous riches” which translates as all wealthy; and in the West Indies tourism is associated with servility and colonialism. The use of each of these roles provides its community with a set of attitudes which may be used to stereotype tourists. • Communities which have had little contact with outsiders have greater difficulty dealing with tourism than those with a longer history of dealing with other cultures. • Media portrayals of tourism can influence host perceptions by providing information which is used in the social construction of reality and which influences public opinion. The mass media can influence people’s understandings of public affairs or issues by providing individuals with knowledge about tourism, and by presenting issues as conflict between different groups.
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In summary, it appears that several factors can influence residents’ perceptions of tourism and its sociocultural impacts. If residents are well informed about tourism, have a positive cultural role for visitors, have more experience with crosscultural contacts, and believe that tourism benefits themselves or their community, then they are likely to be positive about tourism. Residents are also more likely to be supportive of tourism if they feel they have some control over tourist developments. These three factors of equitable returns from tourism, knowledge about tourism, and control over tourism have been seen as important principles for the planning and development of a sustainable tourism industry.
11.3.7 Factors Related to the Size and Nature of Tourism Development The economic, sociocultural and environmental effects of tourism can also be viewed as outcomes related to sequential stages or the magnitude of tourism development. For example, one development model relating to tourism presents tourist areas as evolving through the stages of exploration, involvement, development, consolidation, stagnation, and then either decline or rejuvenation, with social impacts emerging in the consolidation stage. Negative tourism impacts are not, however, an inevitable consequence of growth. For example, visitation levels to Shark Bay, Australia, famous for its dolphins, have grown from 10,000 in 1984 to 150,000 in 1990, representing a change in resident-to-visitor ratios from 1:10 to 1:150 in six years. The size and rate of growth of tourism and the existence of serious environmental impact problems would clearly place the destination in an advanced stage of development. Yet residents are very positive about tourism and strongly supportive of its continued growth (Dowling, 1993). The apparent inconsistency in responses to tourism growth may be due to the fact that impacts are related to the style of development as well as, or instead of, the amount of development.
11.4 Strategies to Manage Sociocultural Impacts of Torusim Sustainable tourism refers not only to the economic viability of the industry and the biophysical resources on which much tourism is based but, further, applies to the sociocultural resource base. This section outlines ideas and strategies for maintaining the sociocultural and human resource components for ecologically sustainable development.
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Magnitude of development
Development style
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Two key terms, culture shock and cultural arrogance, are important in understanding the obstacles to sustainable sociocultural tourism.
11.4.1 Obstacles to Sociocultural Understanding
Confusion and frustration
Disregarding host community's perspective
Culture shock may be defined as the totality of reactions to new people and settings which result in ineffective behaviors. Culture shock may be experienced by either visitors or their hosts. Tourists, for example, may be confused by the language, signs and symbolism of the visited culture and unable to communicate clearly, resulting in frustration and confusion. Local people may also confront new behaviors and react when tourists break local cultural rules. While some rule breaking by visitors is unintentional and therefore likely to be forgiven by the hosts, if there is continued flaunting of local sensitivities, locals will see this as a display of cultural arrogance. Cultural arrogance is defined as the continued practice of following one’s own cultural rules while disregarding the feelings and perspectives of the host community. By way of illustration, tourists who invade the privacy of others by watching sacred ceremonies and taking photographs when requested not to do so are displaying cultural arrogance. Similarly, tourist behaviors which break known moral, religious or social codes such as wearing too little clothing or indulging in publicly intimate sexual behavior are examples of continuing arrogance on the part of the visitors. Cultural shock and cultural arrogance work against the principles of sustainable tourism in the sociocultural sphere. If left unresolved, negative sociocultural impacts can destroy local goodwill and lead to instances of community backlash such as hostility, rudeness, poor service, and organized anti-industry protests.
11.4.2 Strategies to Manage Sociocultural Impacts In attempting to limit culture shock and reduce cultural arrogance, different strategies are required for the various players in the culture contact situation, including visitors, tourism professionals, and the host community at large. Key strategies for managing sociocultural exchange include: • Pre-travel information. The need for tourists to prepare themselves for culture contact may be analogous to visitors who seek to undertake adventurous activities. No long distance cyclist or walker
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would think of undertaking such behavior without prior training and the necessary equipment. It is equally appropriate for culturally committed visitors, particularly those who seek high levels of cultural immersion, to prepare themselves for travel to places where the culture is known to be markedly different from one’s own. Just as Paris is not all of France, neither is a Parisian similar to French natives outside of Paris. Commercial guide books, advice to travelers, pamphlets and even structured training manuals such as the culture assimilators used by aid workers and diplomats are all appropriate information sources. The use of contemporary technologies such as the World Wide Web, CD-roms and in-flight videos can be seen as further mechanisms for empowering visitors and encouraging sensitive cultural behaviors. • On-site interpretation. The provision of appealing and informative interpretive strategies is a major element in any overall program for reducing sociocultural impacts of tourism. Interpretation takes many forms and may include signs, brochures, displays, visitor centers, guided walks, cassette tapes and posters. The critical importance of this strategy in the sociocultural sphere will be discussed in more detail following this broad review of a range of strategies. • Societal marketing practices. The community acceptance of the cultural images used in tourism promotion is an emerging issue in responsible marketing. The voice of the host community can be heard in tourism marketing by involving panels of local people or community representatives to examine the images being portrayed of the local culture or indigenous groups. Some tourism marketing embellishes cultural products or differences and reinforces stereotypes or images which are undesirable or taboo. Misleading cultural images may result in visitor disappointment which ultimately amounts to poor business practice as well as causing community offense. • Facility design. In some cases, the structure and layout of facilities encourages inappropriate behavior. For example, places for visitors to sit, walk, queue, get changed, and eat are all required to deal with large numbers at sites such as beaches, cathedrals, and monuments. Without adequate facilities for these activities, inappropriate actions which amount to cultural desecration may inevitably be committed. For several kinds of contact with indigenous groups, it has been argued that neutral or buffer zones where both tourists and locals can congregate on neutral ground prevents visitors from awkwardly converging on the homes and private spaces of the local people.
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Cultural preparation
Written information
Examination of cultural images
Tourist facilities
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Diversity of opportunity
Assessment of change and impact
Public information
Community involvement
• A range of culture contact opportunities. Because visitors are likely to have varying interests in the culture of the visited community, it is desirable, within the limits of profitability for the local tourism businesses, for a range of culture contact opportunities to exist, so that some visitors may have relatively brief involvement while others can enjoy sustained contact. For example, in Australia’s Northern Territory it is possible for visitors to experience Aboriginal culture by viewing a staged performance in a brief evening’s formal entertainment, or by participating in a guided tour of Aboriginal island communities, or by immersing themselves in a food and hunting experience with Aboriginal landowners. This diversity of opportunity is more likely to result in an appropriate match between visitor expectation and experience, and thus reduce sociocultural impacts. • Evaluation skills. One of the difficulties of managing sociocultural impacts lies in the monitoring and assessment of those impacts. A clear imperative is for tourism professionals to develop research and assessment skills so they can know what impacts are occurring and then, using this baseline level, assess change and the impact of their strategies over time. A tourism community attitudes survey may be one appropriate baseline measure but studies of income distribution, employment patterns and the success of cultural tourism businesses would also be valuable components in a monitoring study. • Explanation of tourism issues. There have been structured government-industry attempts to inform the public of tourism issues. These efforts address a need for tourism-related information in most communities which is at once more comprehensive and less sensational than media reports. Tourism, unlike many other industries, is particularly dependent on the use of community spaces and community friendliness, so industry-government initiatives to explain the value (both economic and socioenvironmental) are important. • Community involvement in tourism planning. This strategy involves an extensive array of issues which are partly considered in Chapter 15. The notion that communities need to be or should be involved in tourism planning (and tourism management) is not universally accepted. In some newly developing tourism destinations or in authoritarian societies, the concept of community involvement in tourism planning is not well established. In a number of Western countries, it is seen as a pivotal issue in the future of tourism. There are many levels of community involvement in tourism ranging from information
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exchange, to negotiation, to protest. The resulting involvement of the community in actual tourism may vary from manipulation, consultation, partnerships, and in some cases ultimate citizen control. • Developing conflict resolution skills. The involvement of the community in tourism planning, as noted above, varies from limited to intensive. In many situations some conflict over development issues is likely to occur. It is valuable for local community groups to develop good negotiation and bargaining skills so that disputes for sustainable sociocultural resource issues in tourism can be managed rather than avoided or exaggerated.
11.5 The Relationship Between Culture and Tourism The impact of tourism on the host culture and society discussed in the previous section represents one type of relationship between tourism and culture. Culture and tourism interact at two other levels. First, the cultural patterns of a society influence its citizens and their ability and desire to travel. Such influence may be described as culture shaping outbound travel motivation. Second, culture serves as an attraction in the tourism system. Cultural activities, events, or products are the inspiration for visitors and tourists to journey to the destination. This influence may be described as culture shaping inbound travel motivation. The term culture has a myriad of definitions. Rather than choosing one definition it is possible to depict three themes or emphases in the many definitional statements. These themes include: • Culture as a value system relating to intellectual, spiritual and aesthetic development. • Culture as summarizing the whole “way of life” of a people. • Culture as the works or products of intellectual and artistic endeavors. These three variants on the term culture are all useful in assessing the three levels of the tourism-culture relationship. When culture as an influence on outbound tourist motivation or the impacts of tourism is considered, the first theme (value system) of the term is most useful. On the other hand, when tourism as an influence on inbound tourism is at issue, the second and third themes (way of life and cultural products) are most relevant.
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11.5.1 Culture Shaping Outbound Tourism
South Korean example
An illustration of culture’s impact on traveler behavior is found in the history of South Korean travelers. In 1983 the South Korean government allowed only Koreans aged 50 years or over to obtain a single-use passport for travel purposes. This kind of political and governmental restriction on outbound travel is not uncommon, particularly among developing nations as well as in existing and former socialist regimes. These kinds of travel restrictions were accompanied, in the South Korean case, by a joint economic and sociocultural justification. While the South Korean travel restrictions were progressively eased in the 1980s and finally in 1987 all restrictions lifted, by late 1990 the Korean government embarked on an “anti-luxury” and “anti-consumption” campaign as a way of discouraging conspicuous consumption. According to the government, frugality or austerity was a traditional cultural value of Korean people and outbound tourists were advised to travel modestly so that social harmony within the country would be maintained and images of a nation divided into rich and poor effectively contained. The South Korean example illustrates how national priorities, justified and placed in the context of cultural behavior, create an agenda for travelers and may effectively shape individual motives on how to and where to travel. Other powerful cultural influences shaping outbound travel motivation include travel for religious purposes, such as the culturally sanctioned and approved pilgrimages to Mecca and the desire to travel to countries where there are long-established cultural ties (refer to Chapter 7).
Tourist's activities and their values
As well as having an impact on outbound travel motivation, particularly in terms of where and how to travel, cultural factors will influence the particular activities in which travelers participate as well as in how much such activities are valued. Golf, for example, is a leisure activity highly valued by wealthy Japanese and Korean travelers as it is an extremely expensive and high status sport in their home culture. By way of contrast, golf for Australians is an enjoyable but not particularly high status activity and the ready availability of golf courses in Australia means there is little international outbound tourism built on the sport. Other examples of the ways in which culture and nationality influence tourists include: • Arab tourists, as contrasted to Europeans, are markedly less active yet more socially gregarious in their vacation behavior due to the concept of “raha,” which can be defined as absolute relaxation.
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• Food service is a more important factor in choosing a vacation for Japanese or Chinese as opposed to Canadian or American tourists. Cultural differences generate a strong preference for their own cuisine among Chinese, French, Japanese, and Italian tourists while North Americans are more willing to experiment with the food of the visited culture. • Tour guides perceive various nationalities as having different behaviors. In particular, when asked to assess the characteristics of Chinese, French, Italian, American, and Japanese tourists the greatest differences were noted with the behaviors of interacting and socializing with other tourists and taking photographs. In particular the Chinese, Japanese and French tourists were seen as less gregarious towards other cultural groups than the Italians and Americans. • Japanese travelers were thought to travel in groups while the French were thought to be more individually oriented in their vacation behavior, preferring to travel alone and to mix less both with their own nationals and other cultures.
11.5.2 Culture Shaping Inbound Tourism The concept of culture as an attraction in the tourism system builds on the second and third themes identified in the definition of culture, effectively a consideration of culture as the whole way of life of a people and culture as the works or products of intellectual and artistic activity. When culture is seen as the motivating force shaping tourism, the term cultural tourism is increasingly used and can be defined as: the movement of persons to cultural attractions away from their normal place of residence with the intention to gather new information and experience to satisfy their cultural needs (Richards, 1996, p. 24). Increasingly, tourism experiences are no longer closely linked to well defined social scales of value and prestige. All places and items of cultural import are potentially rewarding topics and factors for “consumption” as people seek to learn about themselves and the host community. Accordingly, the culture of a society is not simply its art and architecture but extends to its everyday life, from shopping malls to sporting events. There are abundant examples of the power of cultural icons or major symbols in attracting tourists. The British Tourist Authority estimates that nearly 7 million people visit the British Museum while the Tower of London, the United Kingdom’s most visited historic property, receives 2.3
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Cultural icons
Specific and general cultural tourists
million visits. Even these substantial figures seem limited when compared with Europe’s most visited cultural attraction, France’s Pompidou Centre, with over 8 million visitors annually. At the broad and popular culture level, Disney World Florida with over 12 million visitors annually is arguably the greatest cultural icon in the modern tourism world. A transnational European study on cultural tourism found that museums (59 percent) and historic monuments (56 percent) were the two most popular categories of cultural tourism attractions, while heritage centers (37 percent), art galleries (24 percent) and the performing arts (22 percent) received moderate levels of interest. The study also found that there are two categories of cultural tourists: specific and general. Specific cultural tourists travel specifically to visit the cultural attraction, rating it as important or very important in their overall choice of the destination, while general cultural tourists have a more incidental or passing interest in cultural attractions. Based on this study, cultural tourism is growing at about or slightly less than the overall rate of tourism growth. Urban Tourism It was noted earlier that culture as a motivator for tourist behavior and as a force shaping inbound tourism is also concerned with the ways of life of a community and society. Two components of this broader and usually more “popular” view of culture include urban tourism and ethnic tourism. Urban tourism focuses on the mix of attractions which motivate travel to major population centers and while specific cultural icons are a part of this mix, qualities such as atmosphere, layout, and the friendliness of local residents are equally important cultural features of destination image.
New York
New York City can be seen as an example of urban tourism. Its cultural tourism base includes an extensive number and diversity of restaurants, museums, theaters, concert halls, visual arts, ethnic neighborhoods, and historic sites. In 1990 it was estimated that 25 million visitors, including day trippers, came to the city, of which 5.6 million were international visitors. The latter figure represents 14.4 percent or one seventh of all international visitors to the nation. The competitiveness of urban tourism destinations is reflected by the promotional efforts among cities for special events, festivals, and meetings and conventions. Culture and history are being employed as tourist attractions, but there is concern regarding the ways in which these reinterpretations of the past might distort or suppress community and visitor understanding.
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Interpretation for Sustainable Tourism
Ethnic Tourism Ethnic tourism, a second basic component of cultural importance, refers to tourism focused on a group’s traditions and lifestyle and is used principally to highlight tourism in developing communities or specialized enclaves. Ethnic tourism is sometimes described as motivated by tourists’ desires to see “the other” (van den Berghe, 1993). This motivation is consistent with the need to learn and to satisfy curiosity motives as depicted in the more generic definition of cultural tourism. Additionally, ethnic tourism may embrace motives of social comparison or even the development of relationships as people seek to understand their own lives in the context of how other groups and individuals organize human existence.
Developing communities' traditions and lifestyles
Ethnic tourism may take the form of viewing local festivals, of attending special ceremonies such as fire-walking, burials, weddings or initiations or more simply watching local activities such as fishing or handicraft manufacture. At times ethnic tourism may include eating with local families, touring villages, farms stays or traveling with community members on special walks or treks. The high level of contact between locals and visitors in ethnic tourism may produce a range of positive and negative sociocultural impacts which will be described in the following section.
11.6 Interpretation for Sustainable Tourism According to the Society for Interpreting Britain’s Heritage, interpretation is the process of explaining to people the significance of the place or object they have come to see, so that they enjoy their visit more, understand their heritage and environment better, and develop a more caring attitude towards conservation. At its simplest, interpretation can be seen as any activity which seeks to give tourists information about the place they are visiting. Interpretation is most commonly used to refer to things such as guided walks, signs and displays in museums, art galleries, zoos, historic buildings and national parks, and guide books or information sheets or leaflets. Interpretation can contribute to sustainable development by improving the quality of the experience for the visitor, by changing visitor behavior to avoid negative sociocultural and environmental impacts and by alleviating congestion, in the following ways: • Educating tourists about the nature of the host region and culture and informing them of the consequences of their behavior, thus encouraging them to behave in an appropriate manner.
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• Enhancing the quality of visitor experiences by adding value to tourism products. • Developing tourist support for both cultural and environmental conservation. • Relieving pressure on sites by controlling access, by distributing visitors more evenly throughout an area, by encouraging them to visit less crowded places and by providing them with alternative experiences which can act as substitutes for visiting sensitive areas.
11.6.1 Principles for Enhancing the Effectiveness of Interpretation If interpretation is to make a contribution to sustainable tourism it must be effective. It is valuable, therefore, to consider the following principles for enhancing interpretive effectiveness: • Interpreters must make a personal link with the visitor. The interpretation must be relevant or important to them. Providing direct contact or experience can be useful in establishing such a link. Credible and empathetic communicators can also create a personal connection to the visitor. • Interpreters should present a whole rather than a part. The use of stories or themes can assist in providing visitors with a complete picture. To develop a sense of place interpreters should present information on the physical setting, associated activities and significance of a place. • Interpreters must provide variety in interpretive experiences. Variety can include the use of different media, varied levels of required physical activity and the use of multisensory techniques.
Connections with the familiar
A basic principle is that “any interpretation that does not somehow relate what is being displayed or described to something within the personality or experience of the visitor will be sterile” (Tilden, 1977, p. 9). In short, the interpretation of what is being shown must fit with the visitor’s own frame of references. An example of how interpretation can make connections to experiences familiar to the visitors is demonstrated in the following exhibit label in a Texas museum: “Prehistoric mammoths were here in Texas just a few thousand years ago. They roamed the plains in great herds . . . The chances are that they browsed right where you are standing now.” Where you are standing now. With that statement the mammoths are not far away creatures of time or space but right under your feet (Tilden, 1977, pp. 13-14).
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Summary
Anecdotes, analogies and metaphors are also methods for making personal connections. Allowing visitors to interact by asking questions, by touching and using all their senses and by being able to pursue their own interests can also personalize an interpretive event. Presenting a whole story, rather than a series of isolated pieces of information, is the second principle for effective interpretation. Storytelling is a traditional method of teaching in many cultures and there is clear evidence to support the value of a story in the education of visitors. Providing variety in experiences is also a valuable principle in interpretation. Interpretive experiences can be varied along a number of dimensions including the degree of physical activity required (for example, listening to a storyteller vs. participating in a dance); the number of visitors involved in an activity (for example, sitting alone in a prison cell, as compared to being part of a large theater audience); the amount of technology involved in the interpretation (for example, writing your own experience of a building on a piece of paper for a visitor experience notice board vs. using an interactive computer to design buildings); the number of senses used (touching and smelling as well as looking); and the interpretive media used (signs, displays, audiovisuals and computers). Education fulfills a crucial role in sustainable tourism development. Interpretation has a major role to play in educating local populations, tourism staff and tourists, and thus is a central component of any new approach to creating sustainable tourism.
SUMMARY At the start of this chapter it was observed that tourists have not always been welcomed by their host communities. In reviewing the meaning and value of culture for tourism, in assessing the sociocultural impacts of tourism, and in reviewing strategies for managing sociocultural impacts (including interpretation), a strong positive message for the tourism-host community relationship emerges. Tourism does not inevitably cause guest-host conflict. With planning, information provision, and superior management, tourism can be a positive force for the preservation and revitalization of cultures. Many of the strategies and tactics recommended for tourists, hosts, and tourism planners to work towards sustainable tourism depend on developing effective communication pathways. Tourists need information to behave in sensitive and appropriate ways, they need a sound knowledge
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of host societies to select their travel wisely, and they need on-site communication to enhance their experiences. Hosts need information and can benefit from improving educational and communication technologies. Host communities need to understand tourism as a phenomenon, its benefits and costs, and learn from other societies how to ameliorate negative impacts. Tourism operators need to present their products so that quality experiences are both promised and offered, resulting in profitability through repeat visits and personal marketing. As the newer communication technologies become more widely available and as groups learn to use existing communication means more effectively, there is a strong promise that tourists and their hosts may interact harmoniously.
DISCUSSION
QUESTIONS
1. Is tourism changing cultures or merely exploiting them? Discuss with reference to the impacts of tourism in both developed and developing nations. 2. If culture is defined as the whole way of life of a group, what popular or general cultural factors might be used more to attract visitors to Western cities? 3. Explain how a skilled guide using good interpretive practices could provide a quality tourism experience of an ethnic community in a rural setting.
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Learning objectives • To understand the importance of the physical environment as a tourist attraction. • To understand the importance of environmental quality for the success of tourism. • To be able to list the different positive and negative environmental impacts of tourism. • To understand the factors that contribute to environmental impacts. • To be able to describe strategies that tourism planners and managers can use to alleviate negative environmental impacts. • To be able to describe the major elements of sustainable tourism. Key terms and concepts carrying capacity human-environment interaction categories LAC model site hardening sustainable development visitor management systems zoning
12 Sustainable Tourism and the Environment
12.1 Introduction The concept of sustainability arose from the recognition that the earth’s limited resources could not indefinitely support the population and industrial growth associated with existing approaches to development, and that existing development approaches were not working to reduce poverty or to increase standards of living across all countries. In Chapter 11 the principles and characteristics of sustainable tourism were described and the relationship between tourism and sociocultural resources was explored. This chapter will focus on the physical environment and its relationship to tourism. The role that the physical environment plays in tourism will be reviewed and the impacts that tourism can have on the physical environment will be described. Strategies and practices to effectively manage the tourism-environment relationship will be discussed, using examples of successful approaches to ensure that tourism is sustainable. Three case studies from various parts of the world will be used to demonstrate the importance of the physical environment for tourism to the area and as examples of the ways in which tourism can impact physical environments and the techniques available to manage these impacts. Finally, alternative approaches to tourism will be explored and evaluated.
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12.2 Sustainable Development
The principles of sustainability
In recent years, sustainable development has been put forward as a new approach to the way communities think about standards of living, social equity, and the maintenance of resources. The three main principles of sustainability are: • Ecological sustainability ensures that development is compatible with the maintenance of essential ecological processes, biological diversity and biological resources. • Social and cultural sustainability ensures that development increases people’s control over their lives, is compatible with the culture and values of people affected by it, and maintains and strengthens community identity. • Economic sustainability ensures that development is economically efficient and that resources are managed so that they can support future generations (McIntyre, 1993, p. 10). In its early history the focus of sustainable development was on manufacturing and extractive industries, which were seen as major sources of pollution. More recently, tourism has been targeted for consideration due to concerns about its negative consequences for communities and environments. Table 12.1 reviews the goals and characteristics of sustainable tourism.
12.3 The Physical Environment. A Core Component of Tourism
Historical environmental tourism
In tourism it is usual to distinguish between the physical environment (the land, air, water, vegetation, wildlife and the creations of people) and the sociocultural environment (the people and the social, economic, cultural and political forces that influence their lives). The physical environment is an important tourism resource, and since the time of the ancient Romans and Greeks travelers have been motivated by a desire to experience various aspects of the physical environment. Historical examples include holidays at Mediterranean coastal centers and visits to natural attractions and sites of historical and architectural interest, the observation of scenery and the experience of architecture and historic sites during the Grand Tours of the Renaissance, and with the Industrial Revolution and the beginning of modern tourism, visits to seaside and natural environments for restoration and recuperation.
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Table 12.1: Goals and Characteristics of Sustainable Tourism
GOALS To improve the quality of life of host communities To preserve intergenerational and intragenerational equity To protect the quality of the environment by maintaining biological diversity and ecological systems To ensure the cultural integrity and social cohesion of communities To provide a high quality experience for visitors
CHARACTERISTICS Tourism which is concerned with the quality of experiences Tourism which has social equity and community involvement and is mindful of residents' needs Tourism which employs locals and has local participation in planning and decision making Tourism which operates within the limits of the resource - this includes minimization of impacts and use of energy and the use of effective waste management and recycling techniques Tourism which maintains the full range of recreational, educational and cultural opportunities within and across generations Tourism which is based upon activities or designs which reflect and respect the character of a region Tourism which allows the guest to gain an understanding of the region visited and which encourages guests to be concerned about, and protective of, the host community and environment Tourism which does not compromise the capacity of other industries or activities to be sustainable Tourism which is integrated into local, regional and national plans.
Source: Derived from ESD Working Group (1991), Conlin and Baum (1994) and Owen, Witt and Gammon (1993).
Tourist products and the experiences sought by visitors differ widely in terms of how they are influenced by the physical environment. In understanding the role of the physical environment in tourism, it is useful to classify human-environment interaction into three categories: • In the first, the environment serves merely as a setting for an activity and is not directly relevant to the activity. Although not the central
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Environment as setting
Environment as pleasant backdrop
Environment as focus
focus of the activity, the physical environment can influence the activity. For example, although the physical setting of casinos is not of much importance to the activity of gambling, the design of casinos is, by centering on features which will encourage patrons to stay and to gamble. Further, even though the physical environment may not be the focus of the tourist’s attention, the tourist exerts an influence on the environment through his use of resources and the creation of waste. • The second category is where the qualities of the environment exert a general effect on the activity. Activities such as shopping, relaxing, playing tennis or golf, or dining, could take place in a number of locations, but are particularly enjoyable in the presence of a pleasant and/or exotic backdrop. Likewise, the environmental quality of a destination is critical to its success and destinations which are perceived to be polluted or congested will find it difficult to maintain tourism. Declines in European tourism after the Chernobyl nuclear accident and in Alaskan visitor numbers after the Exxon Valdez oil spill are examples of this phenomenon (Fridgen, 1991). • In the third type of interaction the physical environment is the focus of the activity. A substantial proportion of tourism falls into this category. Many tourists specifically travel to experience natural environments and heritage areas and to engage in activities such as walking, viewing wildlife, and touring scenic areas.
12.4 The Impacts of Tourism on the Physical Environment 12.4.1 Negative Impacts The negative environmental impacts of tourism have been studied extensively. Table 12.2 indicates tourism’s potential environmental impacts on protected areas. Environmental Damage
Example of the Mediterranean
The most obvious negative environmental impacts have been those associated with loss of, or damage to, physical environments. The Mediterranean has often been used as an example of how excessive and intensive hotel development can destroy the natural environment, crowd out beach views and result in the loss of historic sites. According to the United Nations Environment Program nearly three-quarters of the sand dunes on the Mediterranean coast between Gibraltar and Sicily have
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disappeared either as a result of having resorts built on them or through erosion resulting from land clearing for development (United Nations Environment Programme, 1992). In Kenya the demand for tourist resorts and hotels has resulted in the clearing of mangroves for building materials. The development of tourist facilities has also caused damage to coral reefs which have been blasted to provide further construction material (Visser & Njuguna, 1992). Many places which become sites for tourist buildings are the homes of threatened or endangered species.
Problems in Kenya
Table 12.2: Potential Environmental Effects of Tourism in Protected Areas: The Types of Negative Visitor Impacts That Must be Controlled Factor Involved
Impact on Natural Quality
Comment
Overcrowding
Environmental stress, animals show changes in behavior
Irritation, reduction in quality, need for capacity limits or better regulation
Overdevelopment
Development of rural slums, excessive manmade structures
Unsightly urbanlike development
Recreation: Powerboats Fishing Foot safaris
Disturbance of wildlife None Disturbance of wildlife
Vulnerability during nesting seasons, noise pollution Competition with natural predators Overuse and trail erosion
Pollution: Noise (radios, etc.) Litter Vandalism destruction
Disturbance of natural sounds Impairment of natural scene, habituation of wildlife to garbage Mutilation and facility damage
Irritation to wildlife and other visitors Aesthetic and health hazard Removal of natural features
Feeding of wildlife
Behavioral changes–danger to tourists
Removal of habituated animals
Vehicles: Speeding Off-road driving
Wildlife mortality Soil and vegetation damage
Ecological changes, dust Disturbance to wildlife
Miscellaneous: Souvenir collection Firewood Roads and excavations Artificial water holes and salt provision Introduction of exotic plants and animals
Removal of natural attractions, disruptions of natural processes Small wildlife mortality and habitat destruction Habitat loss, drainage Unnatural wildlife concentrations, vegetation damage Competition with wild species
Shells, coral, horns, trophies, rare plants Interference with natural energy flow Aesthetic impacts Replacement of soil required Public confusion
Source: World Tourism Organization and United Nations Environment Program, Guidelines: Development of National Parks and Protected Areas for Tourism (Madrid: WTO/UNEP, 1992), p. 14, as adapted from Thorsell, J.W., Protected Areas in East Africa: A Training Manual (Tanzania: College of African Wildlife Management, 1984).
Pollution Pollution is another major negative impact of tourism. Transportation is a major source of both air and noise pollution. It has been estimated that approximately 2 million tons of aviation fuel are burned each year producing 550 million tons of greenhouse gases and 3.5 million tons of the chemicals responsible for acid rain (UNEP, 1992). Water pollution
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Destination vulnerability
Effects of tourist density
from sewage and the use of pesticides, herbicides and fertilizers in resort landscaping are also major problems for many tourist destinations. For example, in the Caribbean untreated sewage results in ocean recreational areas with high bacterial levels. Tourist waste can also cause problems with overloaded waste disposal systems and litter, such as in England’s New Forest where thousands of empty bottles are collected each year. Many of these negative impacts are interrelated and result from the cumulative and long term impacts of tourist development, as can be seen in the experience of a ski resort in New Mexico, in the United States, where poor sewage treatment resulted in water pollution that changed the insect and fish populations throughout the area and reduced the flow of water to humans and wildlife that lived in the area. Tropical islands that are prime tourist destinations and possess fragile environments are particularly vulnerable to a range of negative environmental impacts from tourism, such as those that have affected the Maldives including beach erosion resulting from the construction of resorts, anchor and trampling damage to coral reefs, and depletion of coral, shell and marine animal stocks from collecting for tourist souvenirs. The pressure of increased numbers of people (living even temporarily in an area) on water, food and energy resources can be severe. It has been estimated that the average daily water consumption of tourists, including the water needs of golf courses, hotel gardens and swimming pools, is ten times the level seen as necessary for survival. Lobster and other marine animal populations are under threat in areas of the Caribbean because of the demand for seafood for tourists. In the Himalayas serious erosion has been the consequence of extensive tree felling to provide fuel for tourist camps and many species suffer from exploitation for use as tourist souvenirs. Tourist Activities
Damage caused by activities
Many tourist activities such as boating, diving, walking and skiing can have negative impacts on the physical environment. The pressure of numbers can result in the erosion of paths and the wearing away of historic buildings. Anchor damage to marine environments can be extensive and long lasting. The feeding of wildlife by tourists can lead to declining animal health and aggressive behavior which in turn can threaten tourists and residents. Visitors can also introduce non-native species which disrupt existing ecosystems. The mere presence of visitors can be harmful in sensitive environments. The tomb of Tutankhamen in Egypt has suffered severe damage from fungal growth
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which results from the moisture, dust and bacteria brought into the tomb by its 5,000 daily visitors. As in many tourism situations the damage is unintentional and not directly a result of the actions of any single individual tourist.
12.4.2 Positive Impacts Tourism can also work towards the restoration, conservation and protection of physical environments. Tourism can provide the incentives and the income necessary to restore and rejuvenate historic buildings and precincts and to create and maintain national parks and other conservation areas. The non-consumptive use of wildlife for tourism can replace other more threatening practices. In Canada, for example, a New Brunswick tourism group takes tourists to view and photograph the Labrador harp seals once slaughtered for their coats. Tourism can also be a force for the development of better infrastructure which can in turn improve environmental quality. The construction of waste water treatment plants in Cyprus provides an example where pressure and revenue from tourism has resulted in reduced water pollution and the provision of water for agriculture. Tourism’s positive environmental impacts are summarized below: • Development of tourist attractions. Conservation, restoration and protection of natural and built heritage can result from the perceived need to develop attractions for tourists and from the revenue provided by tourism. • Development of infrastructure. Improvements to roads, water supply and treatment and waste management systems can result from increased revenue from tourism. Such improvements may decrease pollution and improve environmental quality.
12.4.3 Factors Which Influence Tourism Impacts There are several factors which influence whether or not tourism will result in negative environmental impacts and the severity of the impacts. • The amount or volume of tourism (the number of actual tourists and the extent of development put in place to support tourism) and the concentration of tourism use, both at particular sites and at particular times. The more visitors who walk along a trail or through a church the more erosion that will occur, and the more visitors who
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Volume
Activities
Different sites
Planning
stay in a place the more waste there will be to manage. Developing ways to measure volume-related impacts presents difficult issues, however. Impacts usually depend on when and where the tourism is concentrated (the second factor). For example, a major disturbance to colonies of herons in New Jersey was only detected when visitors approached the bird colonies after hatching and/or when visitors actually walked through the colonies, whereas viewing from a distance and/or at other times in the breeding cycle had no discernible impacts on the herons. • The type of use or tourist activity that takes place at a destination. The example above of research into tourists and their effects on bird colonies also found that the type of tourist activity was directly related to impacts. Clearly, viewing a colony from a distance will have fewer harmful impacts than walking through a nesting site. Other variations in tourist behavior are less obvious. For example, people moving through an area at a constant speed or pace will often disturb the birds less than if people stop or slow their pace, because the birds’ attention is more readily drawn to changes in movement. • The type of environment being impacted. Environments differ in terms of their sensitivity and fragility. Antarctica, for example, is an especially fragile environment because of its harsh climate and isolation. Coral atolls are more fragile than continental islands as they are more easily eroded and exposed to the elements. Venice is more sensitive to tourist pressures than other European historic cities because its restrictions on pedestrian traffic results in waterways that are of necessity heavily used. • The management and planning of tourism. The environmental impacts of tourism are closely related to the types of planning and management associated with tourism. Many of the negative impacts of tourism have occurred in areas where there has been little control and either poor or no management of tourism development.
12.5 Strategies for Managing Impacts Because many of tourism’s negative environmental impacts have occurred in places with little or no planning or management, sustainable tourism development employs planning and management strategies to alleviate negative tourism effects and encourage positive impacts. Table 12.3 provides an overview of these strategies.
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Table 12.3: An Overview of Major Strategies for Managing Tourism Impacts Policy/Planning
Development plans which include tourism and which set out zones or sites for tourist use, determine rights of access to areas, and consider what sort of activities are suitable for the area. Develop and enforce regulations to control aspects of development and tourist activity. Require environmental impact assessments and monitoring for tourist developments. Use economic mechanisms such as subsidies to encourage more sustainable practices and user pays to control use and provide income for conservation and rehabilitation of the environment.
Development/ Construction of Facilities
Consider choice of sites and site design carefully to ensure minimal impact. Use minimal impact construction techniques. Use native species for landscaping and appropriate architectural styles.
Management of Resources
Conduct environmental audits. Develop and use recycling, waste minimization and energy efficiency programs. Use environmentally friendly products and technologies.
Management of Visitors
Design systems which control visitor flows. Use interpretation/education to encourage sustainable behavior.
Adapting the Environment
Harden sites for protection. Provide facilities which influence visitor activities.
Marketing and Promotion
Consider tourism concepts and products better suited to the environment. Provide accurate information in advertising to ensure that visitors have appropriate expectations.
Education
Use effective interpretation services to encourage visitors to engage in more sustainable behaviors. Provide environmental education for tourism personnel. Develop codes of conduct for tourist, staff, operators and other tourism sectors.
Research and Monitoring
Support research which seeks to improve understanding of the tourism-environment relationship. Evaluate the effectiveness of any programs and activities conducted. Monitor environmental quality.
12.5.1 Planning Strategies The development of local, regional, and national plans which incorporate or focus on tourism is a first and major step towards sustainable development. With regard to environmental impacts, such plans should consider the following questions or issues: Carrying Capacity • What sites or areas are most suitable for tourist development? Setting a numeral limit
• How many visitors should there be in any place? • What sorts of tourist activity or development are suitable? • What infrastructure is necessary for tourism?
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• Are there resource limitations which are relevant to tourism development? • What mechanisms are needed to control tourist operators and tourists? The first three questions are all concerned with limits to tourism or a concept referred to as carrying capacity. Carrying capacity can be defined as “the maximum use of any site without causing negative effects on the resources, reducing visitor satisfaction, or adverse impact upon the society, economy and culture of the area” (McIntyre, 1993, p. 23). There are three major components involved in carrying capacity: • Ecological/biophysical constraints, or how many people can visit an area before the water and air become polluted, erosion begins to occur and wildlife is disturbed. • Sociocultural constraints, or the number of visitors that are acceptable to the local residents. • Psychological/perceptual constraints, the number of people that can visit an area without feeling crowded or concerned about their impacts. Limits to Acceptable Change (LAC) It is difficult to determine carrying capacity in terms of the number of visitors that a site can accommodate before there are negative impacts. As noted earlier negative impacts are not caused by numbers alone, but by the result of interaction between numbers of visitors, what they do, when they visit, and the type of management systems which are in place.
Desirable conditions
An alternative to the concept of carrying capacity is the Limits to Acceptable Change or LAC model. The LAC model moves the planning focus away from attempts to set a numerical limit on tourism and towards describing a set of environmental conditions which are seen to be desirable. The process involves using local residents’ perspectives and scientific knowledge to design a set of environmental conditions which are appropriate for a place. Planners and managers can then consider any tourism activities or developments in terms of their impact on the conditions which have been chosen. For example, it may be possible to minimize the impacts of large numbers of visitors to a rain forest site by putting in place steps and boardwalks. In the LAC approach this would be an acceptable level of tourism use if residents and managers agreed that this management action was appropriate. If, however, residents and managers wished to preserve the area for wilderness experiences where little evidence of humans existed, then hardening the site would be seen as an unacceptable change.
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Zoning The decisions about the type and quantity of tourism which result from a process like that described in the LAC model are often incorporated into plans through the identification of zones. Zoning refers to a process where planners connect types of development or activity to specific areas. Table 12.4 provides an example of zones proposed to manage visitors to the Galapagos National Park. Zoning approaches usually include several zones that range from those with no access or very limited access for visitors (the Pristine/scientific zone in Table 12.4) to those where tourist facilities are allowed (the Intensive/recreational zone). A common feature of zoning plans is the clustering of tourist developments into particular areas where impacts can be dealt with more easily.
Table 12.4: Zones for Tourism Management: An Example of Zones Prepared for the Galapagos National Park
1.
Pristine/scientific zone For areas which are remote, uninhabited and which have relatively undisturbed ecosystems. Visits would be very limited and only allowed with a permit (required in advance) and with a specially trained guide.
2.
Semiprimitive zone For relatively remote areas where nonmotorized transport is required. There are limits to visitor numbers and entry requires a permit and a guide.
3.
Extensive/natural zone For sites of natural and cultural interest where group sizes are limited but no permit or guide is required.
4.
Intensive/natural zone For major sites of natural and cultural interest where moderate levels of use are permitted.
5.
Intensive/recreational zone For areas near established communities where tourist facilities and structures can be built. This zone allows for large concentrations of visitors.
6.
Rural zone For areas adjacent to the park where privately run tourist activities could be developed.
Source: Based on Wallace 1993.
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Permits and Licenses
Enforcing control with permits
Fees as funds
There are several other planning and policy mechanisms which are often associated with zoning. These include having permit or license systems, charges or fees, and environmental quality standards. Permit systems require tourist operators or tourists to apply for permits to conduct certain activities within an area. Often the application process requires evidence that the proposed activity will not have negative environmental impacts and in many instances there are limits to the number of permits which can be issued. These permits can take the form of contractual obligations, with the operator or tourist agreeing to many conditions in order to be issued with a permit. A tour operator, for example, may be required to have a permit to take visitors to a site in a national park. Such a permit will usually specify the maximum number of visitors the operator may take to the site, the type of vehicle to be used, the activities that are allowed and the actual physical areas that may be accessed. Permits can sometimes come with a fee and such revenue can be set aside for the provision of facilities for tourist use as well as for conservation, restoration and maintenance programs. Such programs can also be funded by other charges such as bed or guest taxes and entry charges. Environmental Standards
Regulations or legislation
Plans can also include sets of environmental quality standards which are supported by regulations or legislation to control various aspects of tourism. These standards can include maximum heights for buildings, restrictions on the use of construction materials and controls over architectural style and placement of buildings. In the Republic of Mauritius, for example, development of a resort in a coastal area is allowed only if it complies with requirements which include: • A restriction on resort size to a maximum of 200 rooms. • A restriction on the maximum height of buildings to 12 meters. • A requirement that hotels with over 75 rooms must install water and sewage treatment plants. • A recommendation that regional architectural styles be incorporated in the design of facilities. • A requirement that facilities have at least 60 percent of their area given to landscaping.
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Increasingly, the preparation of an environmental impact assessment is also included in the requirements for building tourist facilities. Such a process involves investigating and detailing the likely environmental effects of a proposed tourist development. An important part of the process is the adaptation of the proposal to minimize impacts which the assessment identifies. Design Standards There are numerous ways in which proposed tourist developments can be constructed to minimize negative and enhance positive environmental impacts. The English Tourist Board (ETB) offers the following suggestions for tourist developers when planning and constructing facilities: • Use local styles of architecture and where appropriate regional building materials.
Constructing facilities
• Incorporate features of the site into the design. Use existing vegetation and land forms as screens and features. • Think about design features which will minimize energy and other resource requirements. An example of how this can be done is the use of vegetation to provide shade and minimize air conditioning requirements. • Use construction techniques which have minimal impact on the environment. • Use recycled materials wherever possible. • Use native species in landscaping and encourage the use of the setting by wildlife (English Tourist Board, 1991). Table 12.5 contains a list of more specific suggestions to minimize the impact of tourist structures. An example of the use of the ETB principles can be found in the development of a Center Parc holiday village in Sherwood Forest in England. This development blended roads and facilities into the landscape to minimize visual impact and used existing pine trees as visual screens. The developers also created a lake and stream system which was stocked with plants from nearby areas and planted 500,000 new trees and bushes to revegetate the area. This new vegetation provides food and shelter for wildlife and the operators have supplied nesting boxes to encourage birds to use the area.
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England's Sherwood Forest
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Table 12.5: Suggestions for Minimizing Negative Environmental Impacts When Constructing Tourist Facilities
•
Avoid major trees and natural features when deciding on sites for structures.
•
Consider water flow through a site when placing structures and divert water from roads and paths to avoid erosion.
•
Do not intensively clear vegetation from lakes, beaches, streams or rivers.
•
Space buildings to allow wildlife to move through the area and for belts of natural vegetation to be established.
•
Restrict the use of vehicles both during construction and as a feature of the finished facilities.
•
Use boardwalks both during construction and for pedestrian traffic.
•
Pipes and cables can be placed under boardwalks to minimize excavation.
•
Use design features to control the intrusion of insects and rodents.
•
Use landscape features to enhance natural ventilation.
•
Include facilities for recycling and waste treatment.
Source: Based on Andersen 1993.
Audits
Existing tourist operations can also improve their sustainability by conducting environmental audits and using this information to create waste and energy management systems. Environmental audits are similar to environmental impacts assessments in that they are concerned with identifying a variety of environmental impacts associated with an operation. In particular, environmental audits usually concentrate on the products or resources used in an operation and the waste produced. Examples of mechanisms to minimize resource use and waste production are listed in Table 12.6. Visitor Management Systems
Controlling visitor flow
Another important set of strategies for managing tourism impacts is that concerned with the management of visitors. Visitor management systems are designed to control the numbers and flow of visitors as well as their activities. Visitor flow systems operate by restricting visitor access to certain areas, by establishing pathways through areas, and by controlling the times of visits. The two major goals of such flow control mechanisms are to keep visitors away from sensitive sites and
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to spread visitor use either spatially or temporally or both. At Seal Bay Conservation Park in South Australia, for example, visitors are only allowed onto the beach where sea lions congregate with a guide and in small groups. Tour groups must book in advance and the time of arrival of these tours is spread throughout the day. There are also boardwalks which keep visitors from damaging the dunes and beach areas.
Seal Bay example
Table 12.6: Mechanisms for Minimizing Resource Use and Waste Management Target Area
Ideas and Examples
Minimize Waste
Buy products in bulk to cut down on packaging. Use washable or reusable utensils. Separate rubbish and use recycling options. Pale Hall Hotel (UK) recycles menus into office note pads.
Minimize Energy Use
Use insulation wisely. Use low energy lighting options. Recycle energy. The Dome in Doncaster (UK) leisure center recycles heat from refrigeration units and uses it to heat pools. Consider solar power options. Use key-tag systems that automatically shut off lights and air conditioning when guests leave their room.
Minimize Water Use and Pollution
Install low flow shower hoses. Recycle water from sewage for use in gardens. Install tertiary sewage treatment plants. Encourage guests not to have towels laundered every day. Disney World (USA) uses a system which converts sewage into organic fertilizer which in turn is used in the theme park gardens.
Minimize air and noise pollution
Encourage guests and staff to use more environmentally friendly forms of transport. Consort Hotels (UK) offer staff and guests the use of bicycles. Change to using cars which run on unleaded petrol.
Minimize pollution in general
Avoid the use of pesticides in gardens. Use environmentally friendly cleaning products. Forte Hotels (UK) use biodegradable toiletries which are not tested on animals, and which are packaged in recyclable materials.
Source: Examples used in this table were taken from ETB 1991, Goodall 1992, and Harris and Lieper 1995.
Interpretation is another major visitor management tool. Effective interpretation can inform visitors of the range of activities or sites available in an area and assist visitors in choosing alternatives that best suit their interests. This can have the effect of easing congestion at intensely used sites. Interpretation can educate tourists about a place and inform them directly on how to behave in ways that will have minimal impact on the environment. Effective interpretation can also help tourists understand the significance of the place they are visiting and encourage them to support its conservation and care. Interpretation can play a role in the creation of tourist experiences that substitute for
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actually getting into the environment. For example, the Royal Tyrrell Museum of Paleontology in Drumheller, Alberta is an interpretive tourist attraction that is located several hundred kilometers away from the world heritage area, Dinosaur Provincial Park. This system results in very few tourists actually going to the park, which reduces intrusion into a very sensitive environment. Adapting the Environment
Adapting sites
The use of boardwalks at Seal Bay is an example of another tourism management option, adapting the environment. The most common adaptation of an environment is the addition of protective structures such as rock walls, boardwalks, steps, formed pathways and visitor facilities. This is usually referred to as site hardening. Such measures can prevent erosion and damage to vegetation and can also be used as a measure of protection for wildlife. At Seal Bay the boardwalks allow the sea lions to move into the sand dunes without being disturbed by visitors. The provision of facilities can encourage visitors to engage in activities which are less damaging, such as the use of hides to allow visitors to unobtrusively observe wildlife, and the provision of gas or electric barbecues to discourage damage to trees as a result of visitors seeking fuel for cooking.
12.5.2 Marketing and Education Strategies
Suitability
There are also marketing strategies which can encourage the development of sustainable tourism. The most important of these is in the development of tourism products or concepts which are suitable for the environmental resources that their destination region has available. For example, in the Norfolk Broads National Park in England a guide to the region contains information designed to heighten visitor awareness of the environment and encourage appropriate activities such as birdwatching and nature trails. It is also important to provide accurate information about the environment and environmental impacts in advertising. This ensures that visitors are matched to the experiences which are actually available.
Educating staff
The education of staff who work in tourism businesses can also make a valuable contribution to impact management. As with interpretation for visitors, education of staff can provide both information specifically about different actions, their impacts of the environment and measures to minimize these impacts, as well as information which can help staff
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appreciate the place in which they work. The use of codes of conduct or environmental ethics are currently a popular form of education for both tourists and tour operators. Table 12.7 is an example of one of these codes. Table 12.7: A Tourist Code of Ethics
The American Society of Travel Agents (ASTA) proposes the following commandments for travelers. Whether on business or leisure travel: 1. Respect the frailty of the earth. Realize that unless all are willing to help in its preservation, unique and beautiful destinations may not be here for future generations to enjoy. 2. Leave only footprints. Take only photographs. No graffiti! No litter! Do not take away “souvenirs” from historical sites and natural areas. 3. To make your travels more meaningful, educate yourself about the geography, customs, manners, and cultures of the region you visit. Take time to listen to the people. Encourage local conservation efforts. 4.
Respect the privacy and dignity of others. Inquire before photographing people.
5. Do not buy products made from endangered plants or animals, such as ivory, tortoise shell, animal skins and feathers. Read “Know Before You Go,” the U.S. Customs list of products which cannot be imported. 6. Always follow designated trails. Do not disturb animals, plants or their natural habitats. 7. Learn about and support conservation-oriented programs and organizations working to preserve the environment. 8. Whenever possible, walk or utilize environmentally-sound methods of transportation. Encourage drivers of public vehicles to stop engines when parked. 9. Patronize those (hotels, airlines, resorts, cruise lines, tour operators and suppliers) who advance energy and environment conservation; water and air quality; recycling, safe management of waste and toxic materials; noise abatement; community involvement; and which provide experienced, well-trained staff dedicated to strong principles of conservation. 10. Ask your ASTA travel agent to identify those organizations which subscribe to ASTA Environmental Guidelines for air, land and sea travel. ASTA has recommended that these organizations adopt their own environmental codes to cover special sites and ecosystems.
Source: American Society of Travel Agents, as contained in WTO, Sustainable Tourism Development Guide for Local Planners.
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12.5.3 Research and Monitoring
Understanding, evaluating, improving
Finally, there are actions relating to research and monitoring. There are three major types of research that are necessary to ensure that quality is preserved and encouraged in tourism development. The first area improves understanding of the relationship between tourism and environmental impacts. The second area improves techniques for evaluating actions and strategies. The gathering of systematic evidence of the effectiveness of any strategy is necessary for the widespread adoption of the strategy and in its further development. Finally, the third research area is aimed at improving the monitoring of various indicators of environmental quality to identify impacts before they become severe or irreversible.
12.6 Tourism and the Physical Environment: Three Case Studies The following sections describe three different destinations that reflect different types of tourism environments and different types of tourismenvironment interactions. These case studies demonstrate the interaction between various features of tourism and their impacts, and provides examples of the cumulative and indirect nature of many of tourism’s effects on the physical environment.
12.6.1 The Great Barrier Reef, Australia The north-eastern tropical coastal region of Australia is a major center for both international and domestic travel. The major attractions are a tropical climate, beaches and the world heritage-listed Great Barrier Reef and Wet Tropics Rain Forests. The Great Barrier Reef (GBR) is the world’s largest coral system, stretching almost 2,000 kilometers along the Australian coast. Nearly two-thirds of the region’s tourists are primarily interested in nature-based activities such as diving and day trips to the reef. A review of tourism impacts on the GBR suggested that all the following have occurred: GBR Problems
• Coral damage from infrastructure and tourist activity. • Collection of coral, shells and plants.
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• Accumulation of litter. • Disruption to habitats and changes in animal behavior as a result of feeding. • Water pollution from sediment disturbance, nutrient overload from the use of fertilizer, and sewage discharge. The GBR is an example of the way in which a comprehensive and integrated management strategy can be used to encourage the sustainability of tourism. The area is contained within a Marine Park and managed by the Great Barrier Reef Marine Park Authority (GBRMPA). The GBRMPA has produced both a strategic plan for the area as a whole as well as detailed regional plans which are updated on a regular basis. At the core of these plans are a series of zones which determine the activities that are allowed in various parts of the reef. Commercial tour operations are allowed in several of the zones with a permit. These permits require the proposed operator to provide a type of environmental impact assessment and permits are only given to operators who can demonstrate that their activities are consistent with the type of experiences seen as appropriate to the area and that they will have minimal environmental impacts. Operators who place major structures on the reef must also provide a bond to the GBRMPA to ensure that sites are rehabilitated if necessary. A variety of conditions related to numbers of visitors, places of anchoring, types of structures and types of activities allowed are attached to each permit. The GBRMPA also relies heavily on education as a management strategy and offers both training packages for reef operators and their staff but also numerous forms of interpretation for both staff and tourists. In conjunction with tour operators in the region the GBRMPA has developed a series of environmental best practice principles for a range of tourist activities. Table 12.8 contains two examples of these, one designed for operators feeding fish on tours and one for visitors who snorkel. Monitoring and research is also an important management strategy used in this case. The GBRMPA itself conducts research into tourism impacts and along with the recently established Cooperative Research Centre for Reef Research is continuing to investigate not only the impacts of tourism on the reef, but also visitor expectations and responses to interpretive programs, and the development of technology to minimize environmental impacts.
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Operators with permits
Education and research
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Table 12.8: Examples of Best Environmental Practices for Tourism on the Great Barrier Reef
Best Environmental Practices for Fish Feeding: 1. If you are feeding fish as a part of a commercial tourism operation, fish feeding should be well supervised and conducted only by staff. 2. Avoid feeding fish in areas where fishing takes place, to minimize conflict of use. 3. Fish should not be fed directly by hand, but by broadcasting food into the water. 4. People should not be in the water at the same time of fish feeding. 5. Feed fish only raw marine products or fish pellets. 6. Feed Fish no more than one kilogram of food per day per site on the reef. Best Environmental Practices for Snorkeling: 1. Where possible, practice snorkeling techniques away from living coral. 2. Be aware of where your fins are at all times and control your fin kicks, especially in shallow water. 3. Avoid touching anything with your fins and be aware of disturbing coral and sediment. 4. Do not rest or stand on coral. If you must stand up make sure it's on sand. 5. Where available use rest stations. These should be located adjacent to coral or sensitive areas. 6. Observe animals rather than handle them directly. animals may be dangerous.
Handling some
7. Do not chase or attempt to ride or grab free-swimming animals. Avoid blocking their path. 8. Do not poke or prod any plants or animals. 9. If you pick up anything under water, living or dead, always return it to exactly the same position. 10. Take the time to learn about the underwater environment.
Source: Great Barrier Reef Marine Park Authority, 1996, pp. 6 and 9.
12.6.2 Venice, Italy Italy's top destination
This historic center of this city is the most visited Italian tourist destination attracting 48 percent of international visitor nights spent in Italy. It is also a major center for domestic tourists and excursionists. In 1992, more than 1.2 million tourists spent at least one night in Venice and nearly 6 million people took a day trip to this city. These figures mean that there were 89
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times as many visitors to the historic center of the city than there were residents. Surveys of visitors to this destination indicate that the tourists come to experience the city’s “unique character, which combines heritage and important cultural events with the peculiar physical structure of the centre” (Costa, Manente, & van der Borg, 1993, p. 51). Venice suffers from high levels of both physical and social impacts from tourism. The major negative environmental impacts of tourism in Venice are water pollution, including sewage from hotels and litter, and air pollution from tourist buses and boats. In recent years the city has experienced algal blooms as a consequence of water pollution. These large growths of algae float along the surface of the water, choking oxygen supplies to fish and creating decay that results in foul smelling areas. It has been estimated that such occurrences can result in significant drops in tourist trade, and is a clear example of the importance to tourism of maintaining environmental quality. In addition, the large number of visitors at several sites has resulted in the wearing down of stone floors and stairs and damage to art work due to increases in humidity and temperature inside buildings. While Venice has no overall tourism strategy or plan, several management options have been proposed to alleviate the problems associated with tourism to Venice. The main focus of these proposals has been to deal with the number and flow of visitors to and through the city. A series of actions have been undertaken to encourage tourists to use alternative means of transportation to access the city, to use alternative routes to travel through the city and to visit in intermediate seasons. These include both actual restrictions on tourist movements, such as limiting the use of transport terminals by tour buses, and promotional campaigns advertising lesser known sites within the city and encouraging visitors to come at less crowded times. The city is also considering attempts to restrict numbers of visitors by offering a Venice Card or tour package which is booked in advance, is limited in number and which offers the holder discounts and advantages such as not having to wait in lines for entry tickets. The aim would be to make this package sufficiently attractive that it would be used by the majority of visitors.
12.6.3 Mt. Huangshan Scenic Area, People’s Republic of China This world heritage-listed area is a major domestic and international tourism destination because of its environmental features which include hot springs, pine forests, mountain scenery and historic
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Dealing with visitor flow
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buildings and sites. Tourism here has grown from 282,000 visitors in 1979 to more than 1.3 million visitors in 1990. Tourism focuses on the experience of the destination’s beautiful and exotic environment.
Environmental problems
Rapid growth in tourist numbers has been associated with various environmental impacts including reduction of animal and vegetation resources, urbanization of scenic areas, loss of balance of water distribution, and pollution. In peak periods, visitors can leave up to 1,000 tons of rubbish and 3,000 tons of sewage, much of which flows directly into rivers. These rivers have also been disturbed by the building of reservoirs to supply water for tourist developments. Developments constructed to take advantage of scenic views have created disordered urban landscapes in what were natural scenic areas. These developments have also cleared extensive areas of forest and many of the plants and animals of the region are now endangered. The following actions have been suggested to manage tourism to this world heritage area:
Regulations
• Develop a plan which includes regulations: controlling the construction of tourist facilities; creating a zoning system which restricts access to particularly sensitive sites and opens up lesser known sites to ease pressure on intensively used points; setting limits to the number of visitors allowed into particular places; controlling facility construction to encourage the use of traditional architectural styles; and effectively addressing the issue of waste treatment. • Provide better infrastructure such as site hardening and visitor centers and gardens. • Develop itineraries or routes which can ease the flow of visitors through the area and encourage visitors to follow these suggested paths. • Establish a monitoring program to “help in acquiring an exact knowledge of the changes in the ecological environment, and in tapping the tourism resource in a rational way” (Tiansheng, 1992, p. 30).
12.7 Alternative Tourism One of the responses to criticism of tourism based on its negative impacts has been a call for alternative forms of tourism to be created. A number of these alternative tourism forms have been offered using labels such as soft tourism, green tourism, responsible tourism, community tourism, and ecotourism. While these proposed alternative forms of tourism differ in various ways from each other, they share, in
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Summary
contrast to mass tourism, an emphasis on small scale development, an active experience for tourists, direct contact between hosts and guests, and local control over development. However, negative environmental impacts can also result from alternative forms of tourism, especially where it occurs in remote and sensitive environments. In addition, it is unlikely that alternative forms of tourism can be viable economic substitutions for conventional forms of tourism due to the fact that small scale operations are unlikely to provide the economic returns of conventional tourism. Despite these concerns and criticisms, alternative forms of tourism are valuable and appropriate in some situations in that they can provide a greater range of opportunities for visitors, thereby diversifying and strengthening the base for a region’s tourism. Alternative tourism can also demonstrate the value and practicality of practices and products designed to minimize negative impacts.
SUMMARY In many places the relationship between tourism and the physical environment has been one of conflict. Many examples can be found of the negative impacts that tourism has had on the physical environment. This chapter has described some of these impacts including the destruction of natural and cultural heritage to make way for tourism facilities, the creation of pollution, and pressure on resources. Unplanned and uncontrolled tourism can destroy its own assets as much of tourism is dependent upon environmental quality. The challenge for tourism planners, managers and developers is to move from a relationship marked by conflict to one of symbiosis. In a symbiotic relationship tourism depends upon the physical environment as a core feature of the products it provides and the physical environment benefits from tourism. This is the goal of sustainable tourism. This chapter has described the major characteristics of sustainable tourism and offered a range of strategies which can be used to achieve this type of tourism.
DISCUSSION
QUESTIONS
1. Consider tourism products in your local area and discuss the importance of the physical environment in those products.
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Criticisms
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2. Review the examples of negative impacts described in the chapter and suggest management strategies that could be used to deal with these impacts. 3. Describe some examples of positive impacts from tourism in your region and identify factors which have contributed to these positive outcomes. 4. Develop a behavior code for visitors to your country. 5. Design an ecotourism product relevant to your local area which meets each of the requirements for ecotourism listed in the chapter.
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Section
5
Tourism Policy and Planning CHAPTER 13
The Role of Government in Tourism Policy and Administration CHAPTER 14
The Role of International and Regional Organizations in Tourism CHAPTER 15
Tourism Planning and Destination Development CHAPTER 16
Tourism Human Resources Planning and Development CHAPTER 17
Conclusion
CHAPTER 13 The Role of Government in Tourism Policy and Administration
Learning objectives • To understand the importance of public policy and regulation in tourism at the national and international levels. • To understand the reasons for governmental intervention in a country’s economy. • To be aware of the ways in which government involvement in tourism benefits a country. • To understand the major roles of government activity in tourism. • To understand the goals and impacts of tourism policy and planning. • To appreciate the role of national tourism administrations and their importance to governments in creating and implementing tourism policy. Key terms and concepts government regulation national tourism administration (NTA) tourism policy tourism planning
13 The Role of Government in Tourism Policy and Administration
13.1 Introduction Tourism, like other forms of economic activity, takes place in an environment that is shaped by many different forces. One of the most important of these forces–if not the most important–is exerted by a complex web of policies, laws, regulations, and other actions of governments. As we have discussed in earlier chapters, tourism is comprised of industries and activities that stretch not only across nations and regions, but across traditional lines of business and industry as well. The businesses that provide tourism services, therefore, must contend with actions of different levels within a government, of many different governments, and of a variety of types of laws and regulations aimed at different industries. International tourism relies on a high degree of communication and cooperation among nations with respect to this complex network of laws, regulations, and policies. Consider, for example, something as basic as air travel to another country: the availability, frequency, and cost of the plane ride are subject to bilateral air travel agreements; the exchange of one currency for another is subject to rates and terms set by currency agreements and to the complex workings of the international currency markets; and entry into the destination country is regulated by visa and other immigration or
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Importance of public policy
customs-related agreements. The point is clear: the fundamental and necessary elements of international travel are largely determined by the actions and policies of governments. Or, to put it another way, even the most attractive destination will be of no consequence unless its host country can forge the agreements that will enable developers, airlines, banks, and immigration personnel, among others, to provide the services that will bring tourists to the area. Thus, public policy is critical to the success of international tourism and merits careful study and consideration. This chapter will examine the role of government in tourism policy and its administration. Chapter 14 will then take a closer look at the international and regional organizations that are involved in tourism policy issues.
13.2 Government Involvement in Tourism To illustrate the importance of the public sector to tourism, consider a hypothetical dream vacation an avid skier might take to a foreign country called Alpina, home to the world’s greatest ski slopes.
Hypothetical situation showing government impact
First of all, can the skier visit Alpina? The answer depends on Alpina’s policy regarding foreign visitors to its country, and on the skier’s own government’s policy regarding travel to Alpina. The answer also depends on the status of political and trade relations between the skier’s home country and Alpina. Perhaps the two are not on the best of terms, in which case a lengthy and extensive process may delay the trip. How will the skier get to Alpina? Ideally, she would board a plane and fly directly to the airport nearest to the hotel she will be staying at. But the availability of such flights would depend on the status of bilateral air agreements that the two countries may or may not have with each other. If the two countries do not have an agreement, she may need to fly to a third country first before boarding a plane destined for Alpina. Once there, where will the skier lodge and visit? She may have heard of several outstanding ski areas. Perhaps, however, the local or national government has been advised that these areas are being overused, and has therefore designated them as ecological preserves and will not allow any further skiing. Or perhaps the hotel at which the skier is staying is quite distant from the best ski areas, because the local government, for political reasons, has compelled developers to build hotels in areas that need jobs rather than those in proximity to the ski slopes. During her stay, our skier will have paid many direct and indirect taxes in the hotel, stores, slopes, and transportation that are also the prerogatives of governments at various levels.
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From this hypothetical example, one can see that the actions or inactions of government can have a great impact upon nearly every aspect of tourism. Tourism-related laws, regulations, and restrictions range from the broad and inclusive such as air traffic agreements that dictate the frequency and cost of airline trips, to the minute such as a local law that specifies the amount of indigenous material that an “authentic” souvenir needs to contain in order to be labeled as such. Governments are extensively involved in all travel experiences, even if the effects of their involvement may not be immediately apparent.
13.3 Reasons for Government Involvement in Tourism and the Economy Government intervention in a country’s economy has traditionally been thought to be a characteristic of command economies, in which the private sector is largely preempted by government-owned institutions and businesses. On the other hand, market economies, by definition, are supposed to be freer of government involvement. While significant differences in the levels of government intervention exist among countries, all governments, even those in nations characterized by relatively unfettered market economies, are deeply involved in their economies for a number of reasons.
Levels of control
13.3.1 Promoting Economic Development All governments have a vital interest in the health of their countries’ economies. A country’s strength and standing in the global community depend in large part upon its ability to sustain economic vitality, without which it would be forced into a cycle of debt and dependence on other nations. In addition, to the extent that poor economic health strains the domestic population, the government of an economically weak nation will be more susceptible to internal challenge and pressure.
Government interest in strong economy
In today’s global economy, the tie between government and economic vitality is a direct and essential one. Very few countries can pursue economic development without participating in the global economy. This participation involves issues such as currency exchange, foreign ownership, and consular relations. Thus development is highly dependent upon political and governmental actions. For example, a country’s textile industry may depend for its survival on restrictions and tariffs on foreign fabrics. The result of this interdependence is that political decisions can have a ripple effect throughout the entire national economy. Economic development often requires government
Global economic relationships
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initiative and capital. This is particularly important for the development of new regions or areas that require infrastructure. For example, foreign investors might be reluctant to finance a resort project unless the government demonstrates its commitment to the project by building or financing the necessary access roads and water lines, or by offering appropriate incentives such as a tax holiday during the early years when the resort is not expected to be profitable.
Monetary policy
Monetary policy is another important area of government involvement. Governments often use their ability to expand or contract the supply of money to stimulate or control economic growth. Governments also use a variety of methods to influence the value of their currency on the international market. Currency exchange rates among nations are particularly important to international trade and tourism. For example, if country A’s currency is inexpensive relative to country B’s, then visitors to country A from country B will likely increase their expenditures while in country A.
13.3.2 Facilitating and Supporting Industries
Government and industry
Closely related to overall economic development is the practice on the part of governments to support certain industries. Governments take different approaches to supporting sectors or industries. Some governments take a very activist approach to shaping their economies by creating industrial policies, which constitute integrated plans of action that can be quite detailed in setting goals and limits for a nation’s industries. Governments that want to avoid the degree of planning and control that an industrial policy requires often utilize various incentives and disincentives. Tax credits, for example, are often used to encourage investment in and development of certain industries that a government favors.
13.3.3 Raising Revenues
Taxation and fees
Much of government intervention in the economy results from its need to generate the revenue to maintain its agencies and activities. As governments grow more complex and are called upon to provide more services, their need for revenues increases correspondingly. Government operating expenses related to tourism include the costs to maintain the various departments responsible for tourism functions. Revenue-raising measures can be highly visible to the ordinary citizen, like the taxation of personal consumption and business income or the assessment of fees to obtain permits and licenses, or in more specialized forms as in the sale of
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bonds and other instruments of public finance. Taxation, however, is less apparent to tourists who have no vote on the matter or in local politics, and thus often becomes a source of choice for raising new revenues.
13.3.4 Creating a Stable Business Environment Governments have a vested interest in ensuring that certain standards of competence and conduct prevail in the marketplace. This is because governments are often drawn into, and are asked to resolve, problems and disputes that arise from economic activity. In order to set up these standards, governments establish regulatory agencies and laws. For example, a government may create a professional licensing board that requires that engineers pass certain tests and meet minimum standards of training in order to ensure that the hotels they design are structurally sound. Or a government may enact a law that defines the phrase “made from indigenous materials,” to ensure that visitors who are sold such items are not being deceived. To protect home industries and to encourage the consumption of local commodities, government may also attempt to impose high import taxes to discourage the purchase of foreign goods to resell in hotels, restaurants and other tourism-related businesses.
Regulations to maintain standards
Encouraging local spending
13.3.5 Pursuing Other Policy Goals Governments can use their power to intervene in business activity to achieve broader policy goals. Some of the policy areas that governments often address when considering tourism development include employment, human resources development, education and training (discussed in Chapter 16) and environmental protection (discussed in Chapter 12). Social equity and justice are important goals of some government intervention; where inequitable distributions of wealth are being created or conserved by structural problems in the economy, corrective government action is sometimes warranted. While these incentives and pressures integrally involve governments in their economies, public policy is not the sole determinant of a country’s economic direction. Other factors, such as a country’s climate and its natural resources, cultural and social factors, and the condition of the regional and world economies, also direct and constrain economic development in certain ways. Nevertheless, in today’s global business environment it is clear that public policy exerts a significant influence on the shape and vitality of a country’s economy.
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13.4 Roles of the Public Sector in Tourism In order to better understand how government involvement affects the tourism industry, we can classify public sector actions into four general categories: policy, planning, development, and regulation. In each of these areas governments play a unique and vital role in either facilitating or discouraging tourism.
13.4.1 Policy Goals and procedures
Importance of policies
Formal and informal policies
Policy and government structure
Policy generally refers to an overall, high-level plan that includes goals and procedures. Public policy, therefore, takes into account the desired end results of a government and the methods for attaining those results. For example, a government might pursue a policy of greater economic growth through tourism development by creating generous tax incentives for resort developers. Policy is meant to provide guidance by addressing the issues that are central to any effort to develop and sustain a tourism industry. Policies embody goals and strategies that a government has adopted with respect to tourism, economic development, employment, political relations, or, more likely, a combination of these and other areas. Because policy provides direction, of the four roles or functions of public sector involvement in tourism listed above that of policy formulation is probably the most important. Policies are generally found in formal statements, such as laws and official documents and speeches. However, policies can also be informal and unstated, and can be discerned from patterns or trends of governmental actions. For example, a government jurisdiction that consistently disapproves every application to build a hotel within its borders, but does not possess any formal statement on hotel development, may nevertheless be guided by a clear policy. In this respect, it is important to note that policy can be evident as much from government inaction as its actions. In general, a nation will have several broad policy areas, such as economic policy, educational policy, and social welfare policy. Often, these broad policy areas will coincide with the organizational structure of the government, with each ministry or department having the responsibility to formulate and administer its own policies. The actual names and formal relationships among the various government departments vary from nation to nation. Tourism policy is generally considered to be an area within a nation’s overall economic policy. Economic policy is concerned with the structure and growth of a nation’s economy and is often articulated in
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ten-year plans that project conditions in the coming decade and plan the nation’s economic growth within those conditions. Some of the key areas of concern in economic policy are labor force, investment and finance, important industries, and trade.
Interrelated policies
It is important to understand that a nation’s various policy areas are interrelated, reflecting the complex and dynamic nature of modern society itself. Impacts in one policy area will likely effect changes in other areas. Thus, tourism policy makers need to adopt a comprehensive perspective and consider all of the possible impacts and relationships that tourism will have with other areas of society. The formulation of tourism policy, therefore, is a crucial responsibility of a government that wishes to develop or sustain tourism as an integral part of its economy. Tourism policy articulates goals and direction, strategies and objectives, and by so doing enables the government to lead and actively pursue the kind of development its people want. Tourism policy thus requires that policy makers–legislators, administrators, business executives–consider the following issues: • The role of tourism in the economy. (How important is tourism to the overall economy? How important is tourism with respect to other industries?) • Control of tourism development. (What kind of tourism development is desirable and appropriate? Where should tourism development occur?) • Administration of tourism. (At what level should tourism be represented in the government’s organizational structure?) • Government support for tourism. (What amount of public resources should be directed to tourism’s support and growth?) • Tourism’s impacts. (What kinds of impacts, both positive and negative, will tourism have on the existing society, culture, and environment, and how will these be addressed?) As can be seen, these are issues which are likely to generate substantial debate. Different regions within a country may be at odds over the location of planned development, different segments of the population may disagree over the perceived impacts of tourism, and different businesses may struggle to direct development in a manner that favors them. The process that a government employs in order to arrive at its policy must account for the many competing constituencies that wish to be represented in the final product.
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13.4.2 Planning
Means of economic development
A site-specific industry
Young industry
Providing a structure for analysis
Tourism constitutes a means of economic development. On this point, all countries would agree, and, in fact, it is the primary reason that they seek to develop the industry. But economic development in today’s complex and global business environment is far from being a simple process. Tourism is a certain kind of industry that has its own unique requirements, impacts, and rewards. Fulfilling those requirements, minimizing the negative impacts, and reaping the rewards, are the primary goals of tourism planning. Planning is particularly important for tourism development because of two characteristics of the tourism industry. First, tourism is a complex industry that stretches across many different sectors and businesses; therefore, it is an industry which is often not formally recognized in statistical analyses of the economy. As a result, hard data and information about tourism tend to be fragmented among different subject areas. Complicating the first characteristic is the fact that tourism is a sitespecific industry. Two destinations may be comparable in terms of size and visitor market, but because of their unique circumstances–including the physical environment, availability of services, government and culture–their industries may take vastly different forms. Each destination will have different problems, or will need to address similar problems in different ways. Because mass tourism is a relatively young industry, even destinations that are considered established may be only 30-40 years old, and are still learning from their own experiences. In turn, newer destinations are trying to learn from the mistakes of others. Planning enables government and industry to compensate for these factors by providing a structure to collect and analyze information relevant to tourism development and a process to achieve it. The planning process requires policy makers to consider all aspects and impacts of the industry (which are discussed in Chapter 15). Those issues raise the following types of questions: • Marketing analysis and strategy: What kind of travelers should be appealed to and how can they be attracted? • Physical infrastructure: Are existing airports, roads, and utilities adequate for the level of tourism projected? If not, what needs to be improved and expanded? How will these improvements and expansions be financed?
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• Human resources: Can the local communities provide an adequate employment base for the industry? Will workers need to be imported? What kinds of skills are required, and how do they match with the existing base of workers? Will there be a need to develop education and training facilities? • Environmental impacts: How will tourism development affect the existing environment? What can be done to minimize the adverse impacts? What can be done to create a sustainable industry? • Sociocultural impacts: How will the commercial and marketoriented aspects of tourism affect the local culture? Will tourism employment disrupt existing family patterns? To what extent can existing cultural resources, such as arts, crafts, and music, be used as visitor attractions without damaging them? How will the presence of foreign visitors affect residents? • Economic impacts: What will the net economic impact be from tourism in terms of exchange earnings and tax revenues? To what extent must import goods be sold to visitors? What kinds of incentives, if any, must be offered to the private sector in order to attract capital investment? As can be seen from this range of issues and questions, the planning process can be essential in forcing a government to think systematically about the total impact of tourism. The importance of planning cannot be overstated, particularly for those destinations that are environmentally fragile or whose cultures have not been exposed to market-oriented activities. Because tourism development usually requires both the public and private sectors to undertake major capital projects (hotel accommodations, public works infrastructure, transportation links), a lack of planning can result in costly mistakes. For example, a comprehensive tourism plan usually includes a land use plan that directs and integrates the many uses of land for an area–such as visitor accommodation facilities, commercial activities, housing, recreational amenities–in a rational way that enhances the visitor experience while protecting the host community and environment. Without such a plan, haphazard development might occur, such as a hotel being built in an inappropriate place, resulting in mistakes that essentially cannot be corrected (or are extremely costly to rectify), and which the host community will have to endure for many years.
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13.4.3 Development
Government as developer
Project importance
Although development is often thought of as a private sector activity, there are circumstances in which the government can play a useful, and sometimes necessary, role. For example, in many cases the existing private sector may lack sufficient size and capital to undertake the development of a destination on its own. In these cases, government may get involved by taking the role of developer, or by taking on a partnership role as the provider or guarantor of capital, or in any of a number of other ways. Sometimes, in cases where certain areas have been designated and planned for tourism development, the government may wish to control the overall development by assuming the role of lead developer. In this way, the government can coordinate the construction of the actual visitor facilities with necessary improvements in infrastructure or other activities such as education and training. There are certain projects that, by virtue of their size and importance to the country or destination as a whole, almost always require a leading government role. Airports, major land transportation projects, and waterrelated projects that involve dredging are examples of such tourism-related projects. Governments have the ability to fund such projects by issuing bonds and other financial instruments, thereby providing an essential element of the development process that the private sector often cannot.
13.4.4 Regulation Consumer protection
The regulatory role of government is very important for the tourism industry, because so much of it is intended to protect the consumer. Government regulation plays a critically important role in protecting tourists and enhancing their travel experiences in many ways, including: • Consumer protection laws and rules that require travel agencies to deposit their customers’ advance booking deposits in a trust account, to ensure that the moneys will be used for the purpose of securing their reservations. • Fire safety laws that mandate a minimum number of exits and emergency lights on each floor of a hotel, in case of a fire. • Health and food safety regulations that require food service establishments to maintain minimum standards of safety and sanitation. • Competency standards that require bus and boat operators to possess requisite skills and knowledge.
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Regulatory actions often arise from a concern for a destination’s environmental and cultural resources. Certain protective regulations restrict activities on, or access to, vulnerable environmental areas. Examples of this would be a limit on the kinds and numbers of tour boats that could operate in a scenic waterway to prevent undue damage from overuse, or limiting hikers to only certain mountain areas to prevent damage to a rare plant species. Another type of law might limit the serving of alcohol or the performance of certain cultural displays to certain days to minimize negative effects upon local customs. To the extent that increasing numbers of destinations rely on environmental and cultural features to differentiate themselves from other destinations, these types of protective regulations will become more important. Perhaps the most critical area of government regulation with respect to international tourism is that of aviation. For most countries, tourism growth requires growth in airline service. Air service, in turn, is heavily dependent upon the bilateral agreements between countries that govern all aspects of air transportation between them. The airline industry has always been highly regulated, for two main reasons: first, air travel requires technical and operational standards to ensure the safety of air travel; and second, governments have generally tried to retain tight control over the economic and commercial aspects of air travel involving their countries. Air regulations have traditionally been protectionist in nature. Areas in which protectionist regulations have been used include the specification of air routes, restrictions on airline ownership and control, airline capacity, and tariffs. The complexity of the issues involved in air travel regulation, and the ways in which issues of international relations and national pride get tangled in air regulation, means that the negotiation of air agreements remains a highly contentious and political process. So far, efforts to create multilateral agreements–agreements that would apply to several countries–have been largely unsuccessful, even though they promise a simpler and more efficient system of regulation. More recently, as more countries take measures to deregulate and privatize their airline systems, and as they become more aware of the negative effects of airline regulation on tourism growth, there has been increased pressure for a more liberal air regulation. Air agreements are covered in greater detail in Chapter 3.
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13.5 Levels of Government Involvement Government involvement or intervention in the economy occurs at different levels of government. Although the exact structure and relationship of these levels will vary from one country to another, there are four basic levels that generally encompass all of the governmental jurisdiction and activity relevant to any given destination.
13.5.1 International Involvement
International political organizations
Multilateral trade agreements
Bilateral air agreements
International involvement can take several forms. First, there are international political organizations. These organizations differ from the economic and trade organizations discussed below by addressing a range of non-economic issues, including political disputes. The most wellknown of these is the United Nations (UN), which serves as a forum for the international community. The UN is unique in that its decisions can be supported with police powers, in the form of armed troops. Within the UN, there are organizations such as the United Nations Development Program (UNDP) and the United Nations Environment Program (UNEP), and the International Civil Aviation Organization (ICAO), which serve a variety of functions for the member nations. The world’s largest and most influential government tourism organization–the World Tourism Organization (WTO)–is an executing agency for the UNDP with over 130 government members. The WTO and its importance to world tourism are discussed in Chapter 14. Other examples of governmental organizations include the Association of Southeast Asian Nations (ASEAN) and the European Union (EU). Another important form of international government involvement is the multilateral trade agreement. These agreements contain principles and practices that guide the signatory countries’ economic and trade relations. The General Agreement on Tariffs and Trade (GATT), General Agreement on Trade in Services (GATS), North American Free Trade Agreement (NAFTA), and European Community (EC) are examples of efforts by countries to create greater efficiency and predictability in trade and commerce across national boundaries by forging comprehensive agreements. From the perspective of tourism, bilateral air agreements represent a special kind of international agreement. Bilateral agreements spell out the terms and conditions of air transportation rights between two countries, and are therefore critical for the success of international tourism. Because these agreements are bilateral, they apply only to the
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two participating countries; thus, a given country will negotiate and maintain a separate agreement with each country with whom it wishes to establish air transportation relations. A key point regarding international governmental involvement is the sovereignty of the national government. The sovereignty of the nationstate means that international governmental involvement is dependent upon voluntary cooperation. This is due to the fact that, with the exception of the UN noted above, international organizations generally do not possess the means to enforce agreements. Thus, it has historically been difficult for international bodies and agreements to address controversial or divisive issues. On these issues, nations prefer to reserve to themselves the discretion to act in their own interests, rather than relinquish it to a multilateral organization. This has been the primary obstacle to creating a multilateral air regulatory system. Thus, with respect to policy issues government involvement at the international level tends to be advisory in nature. An international organization may set certain goals for its government members, but it must lobby national governments to adopt and abide by them. The ways in which international bodies are involved in tourism is discussed in Chapter 14.
13.5.2 National Involvement Governmental involvement at the national level can be extensive, and is often critical to the success of the nation’s tourism industry. The primary areas of involvement include the following: • Entry and exit. It is the national government that bears the responsibility for controlling the most basic aspect of international travel, that is, access across its borders. In itself, this responsibility involves a wide range of issues and problems that need constant attention. Key responsibilities in this area would include regulating the issuance of visas, monitoring borders and airports, and enforcing customs regulations • Policy and planning. As this chapter and Chapter 15 emphasize, the policy and planning functions of a government are crucial to its tourism industry. Tourism policies can exist at various governmental levels, but it is at the national level that policy exerts its greatest influence. This is due to the fact that, at the national level, policy priorities are generally reflected in the nation’s political structure. A separate national ministry or department devoted to tourism would signal that the national government deems tourism to have a primary
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role in its economy. The ministry would have its own staff and would be included in the regular process of government budgeting and funding. In addition, it is likely that tourism would also be given a prominent place in master economic and development plans, tax and other economic incentive programs, physical plant and infrastructure plans, and other such important activities. National tourism planning generally involves the designation of regions or areas to be targeted for tourism development. • Infrastructure development. A national government’s involvement in tourism is also significant because of the resources that can be marshaled at the national level. Some aspects of tourism development, particularly the construction of the infrastructure and national parks necessary to accommodate both citizens and tourists, require tremendous amounts of capital, amounts that often necessitate the use of government financing capabilities such as taxes, bonds and loan guarantees. • Marketing. Many national governments take an active role in promoting their countries as destinations to the outside world. This kind of promotion can be particularly useful for countries whose tourism industry lacks sufficient resources to generate large marketing campaigns. As discussed below, national tourism administrations (NTAs) have traditionally been conceived and formed primarily as marketing bodies of the national government.
13.5.3 Local Involvement At the local level, government involvement can also be quite visible and significant. It is at this level that the government’s regulatory function becomes prominent. Key areas of local governmental involvement are the following: • Control of the land development process, including zoning laws and building design. • Enforcement of laws and regulations relating to health, safety, and employment, such as standards of cleanliness and safe handling for food establishments, service of alcoholic beverages and occupational safety and work conditions. • Licensing of persons and businesses, such as tour operators, travel agencies, hotels, restaurants, and others.
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13.6 National Tourism Administrations (NTAs) 13.6.1 Role of NTAs As we have seen, the nature of tourism is such that it is difficult to designate the tourism industry or sector with the same precision that can be applied to other industries and sectors. Because of this, governments have had a difficult time measuring the importance and impact of tourism upon their overall economies. Economists have created and improved models that can be used to gauge the effect of direct expenditures by visitors on hotels, transportation, and other goods and services. Multipliers are used to estimate the ways in which such expenditures exert a “ripple” effect throughout the economy. Nevertheless, these estimates depend on many different variables and assumptions and are often subject to uncertainty and dispute. According to some observers, this uncertainty regarding the measurement of tourism’s contribution to an economy leads many governments to either ignore tourism or to divide oversight for it among many different ministries, departments, or agencies. A government may direct its transportation ministry to address airline issues, its commerce ministry to address issues relating to hotels, restaurants, and other businesses, its energy ministry to consider fuel requirements of transport systems, and its labor or education ministry to monitor issues relating to tourism training and education. The effect of this kind of dispersion of governmental responsibility is often a set of confusing, and sometimes contradictory, laws, regulations, and policies. Often times the various departments will zealously protect their respective areas of responsibility and eschew collaboration with other departments in favor of tighter control. It is well known that bureaucracies are subject to these types of internal pressures that can hinder the effective administration of functions that cross departmental boundaries. National tourism administrations (NTAs), also referred to as national tourism offices (NTOs), are seen by some governments as providing a means to avoid fragmentation of tourism-related policy and practice. In general, NTAs are ministerial- or departmental-level bodies that pursue national tourism policies and goals. Beyond this broad definition, it is difficult to generalize about NTAs as there are many different structures and roles among them. Traditionally, NTAs were created and operated primarily as marketing entities. They enabled countries to
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NTA marketing
pursue broad-based promotional strategies, in order to supplement the marketing normally done by private industry. Traditional marketing activities of an NTA include: • Marketing and promotion of the nation, ensuring its tourism competitiveness and market share of visitors among other destinations within its region. • Encouraging private sector support and cooperation in promotional activities and participating in shaping national tourism policies and practices. • Representing its country in trade and consumer shows and expositions. • Producing and distributing brochures, videos, and other marketing materials. • Promoting and producing special events. • Performing or contracting for market research and analysis. • Maintaining overseas tourism information offices. In fact, marketing and promotion continues to account for most of NTA spending. In 1992, of the ten countries with the greatest NTA promotion expenditures, eight spent more than 50 percent of their entire NTA budget on promotion (World Tourism Organization, 1995a).
Expansion of goals
However, as tourism’s importance has grown and as governments expand their goals and expectations of tourism development, the policy issues that tourism involves have also become more inclusive and complex. NTAs, then, have been seen by many as the logical means of administering and overseeing the tourism policies of governments. While the scope of their functions varies from one NTA to another, the World Tourism Organization has classified NTA functions into five main groups: • General administration of travel and tourism • Tourism planning and development • Research • Education and training • Marketing and promotion
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13.6.2 NTA Structure NTAs vary in terms of their structure and relationships to other branches of government. The three basic forms of a NTA are: • The state tourism secretariat, which is a high-level office either on its own or within a ministry, with representation at, and access to, the highest executive levels of the government. An example is the Uganda Ministry of Tourism and Wildlife and Antiquities. • The government agency or bureau located within a department (such as a department of commerce or economic development), and reporting to that department. The Taiwan Tourism Bureau, for example, is located within the Ministry of Transportation and Communication. • The quasi-public tourism authority or corporation, which often includes representation of members of the private sector and receives private funding and which is run more independently of the government than the other types of NTAs. The Canadian Tourism Commission is one such example among the many countries now moving toward a quasi-public agency structure. In addition, there is also a type of governmental entity that, while not an NTA, fulfills a role similar to that of an NTA. This is a centralized coordinating body comprised of representatives of other departments. This type of body generally receives minimal funding and acts as a forum in which the major departments involved with a nation’s tourism industry (commerce, human resources, foreign relations) can address issues that affect them. Advocates of a NTA point out that a ministry or office of tourism has three important advantages. First, it enables policy makers to work from an overall perspective of tourism. This is important because government policy often has many varied effects, only some of which are anticipated. For example, a government may issue regulations restricting the importation of foreign beef to protect its domestic cattle industry without understanding that such a regulation may jeopardize the viability of thousands of restaurants featuring imported high quality beef as their main specialty. A centralized tourism office can often prevent or mitigate the problems that arise from such unintended results of policy. In a related manner, a central tourism office can provide leadership in
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government planning efforts. Transportation and resort development, for example, generally require large-scale planning due to their high cost and their impact on the communities in which they are placed. The second function that a centralized tourism office serves is to accord tourism a higher level of status and attention within the government administration. Generally, a higher status level enables the tourist industry to receive greater amounts of governmental assistance and funding. It also provides an institutional framework through which the industry and government can communicate. A high-level tourism office also serves to validate the importance of tourism to the overall economy and society and informs the public of this importance. Third, it should be kept in mind that only government can deal with other governments. As tourism rises in importance as an item of international trade, an effective NTA will be able to work with other NTAs to address issues that involve fair trade in tourism as well as removing impediments to travel among the sending and the receiving countries.
13.6.3 NTAs and the Issue of Public Sector Involvement in Tourism
Government role in tourism
One of the main issues that NTAs continually face is the proper role of the government in NTA activities, and particularly in NTA marketing and promotion efforts. Government involvement is seen by some as an unnecessary use of public funds for private purposes, while others emphasize the public good that NTAs serve. It is also noted that private industry, especially airline companies, are much more efficient and effective destination promoters than many NTAs. The WTO has suggested that government support of NTA activities may be seen as a function of the overall economic development of the country and has proposed the following categories: • Developed countries such as the United States and the United Kingdom, characterized by a dominant private sector with some public sector support. • Developed countries such as Italy, Spain, France, and Austria, characterized by a dominant public sector. • Developed countries such as Japan and Sweden, with limited public sector involvement.
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• Developing countries such as Cuba, Guatemala, and Morocco, where the public sector is dominant and private sector participation is minimal. • Developing countries such as India and Curacao, with leadership from the public sector but substantial involvement of the private sector. (WTO, 1995a) The debate regarding the government’s proper role in tourism will continue to engage both sides of the issue, especially as economic conditions force governments to carefully examine their spending priorities. The dissolution of the United States Travel and Tourism Administration (USTTA) in 1996, for instance, indicates the vulnerability of NTAs to budgetary constraints. It has been noted, however, that a lack of government involvement in tourism marketing can lead to an imbalance between demand and the infrastructure and resource limitations of a destination.
SUMMARY In today’s global economy, the relationship between industry and government is a close and vital one. International tourism, which by definition involves the movement of people across national borders, is heavily dependent upon governmental policies and actions. In addition, because tourism involves and impacts many different parts of society, it is subject to governmental involvement across a wide range of activities. At the international, national, regional, and local levels, there are important links between government and the tourism industry. The presence or absence of a national tourism policy is important in setting goals and directing development of the industry. Through policy, governments can articulate their objectives in pursuing tourism and their concerns regarding its impacts. Whatever its degree of involvement in the industry, government can fulfil a valuable role by emphasizing the long-range and comprehensive view of tourism’s place in the development of a country’s economy and society. As the industry grows, governments who turn to tourism development will have greater expectations of its contribution to the country. NTAs provide a means of preventing these expectations from conflicting with each other, and of managing the industry’s many different aspects.
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DISCUSSION
QUESTIONS
1. In what ways can government policy hurt the tourism industry of a country? 2. Compare and contrast the effect of international vs. national government involvement in tourism policy making. 3. Name the four general categories of the public sectors actions in the tourism industry. In what ways does one category impact another category? 4. This chapter discusses how government regulation protects the individual tourist. What are some ways in which government regulation may protect businesses within the tourist industry? 5. Define the function of a National Tourism Administration (NTA) and describe its three basic forms.
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Learning objectives • To understand the types of tourism organizations and their purposes and objectives. • To understand the different ways tourism organizations assist members of the tourist industry. • To understand how tourism organizations address international trade issues. • To understand ways in which tourism organizations address environmental and social issues in tourism. • To understand the challenges facing tourism organizations. Key terms and concepts Association of Southeast Asian Nations (ASEAN) European Union (EU) free trade General Agreement on Trade in Services (GATS) International Air Transport Association (IATA) International Civil Aviation Organization (ICAO) Organization for Economic Cooperation and Development (OECD) Pacific Asia Travel Association (PATA) protectionism World Bank World Tourism Organization (WTO) World Travel and Tourism Council (WTTC)
14 The Role of International and Regional Organizations in Tourism
14.1 Introduction The previous chapter examined the importance of government involvement in the travel industry, and discussed the various levels of policy and regulation ranging from the local level to the international level. The diversity of policy issues that affect tourism is evidence of the industry’s unique structure, which stretches across many different economic sectors and has various social impacts. Tourism thus requires a great deal of communication and cooperation among government, business, and host communities. Because of this need for communication and cooperation, many kinds of organizations, including ones of voluntary membership, have been established to serve travel and tourism-related interests. These organizations satisfy many different purposes, but they all provide a means by which the various sectors of the travel industry can articulate and pursue common goals. Nowhere is this need for communication and cooperation more necessary than in the international arena, where the structural complexity of the industry is compounded by different national priorities and policies. This chapter focuses on international tourismrelated organizations. Specifically, it discusses their roles and functions, and examines the concerns, purposes, and activities of these
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organizations and how they play a vital role in facilitating international tourism. Finally, it addresses some of the challenges facing these organizations as tourism moves into the new century.
14.2 Types of Tourism Organizations Different memberships and their goals
There are several ways of categorizing tourism and tourism-related organizations. Perhaps the most useful typology is based on the membership of the organization. The membership of an organization provides the clearest indication of its purposes and objectives, since it is the members’ interests that are being advanced by the organization. Public Sector Organizations
Government
As discussed earlier, tourism takes place within the context of governmental structures that include laws, regulations, agreements, and other actions. The issues that arise from this context require communication and cooperation among governments. Public sector organizations provide a forum for nations to address such issues. Public sector organizations are generally composed of government representatives (such as ministers, department heads, and directors) and tourism-related agencies. Private Sector Organizations
Business
In general, private sector organizations are comprised of businesses, companies, and associations with common goals or interests. Such organizations provide a forum for their members to identify and discuses issues of importance to them and to their industries. Often, the organization will address these issues by creating standards and guidelines, increasing public awareness, lobbying governments, and other such measures. In many cases, private sector organizations are devoted to changing or repealing laws, regulations, and other legal restrictions on their industries. Regional Organizations
Geographical organizations
Because tourism is tied closely to geography, many tourism organizations have been formed on the basis of regional proximity or affiliation. Such organizations often are formed initially for the purpose of marketing and increasing the travel market’s awareness of their respective regions. The rationale behind regional marketing is that potential visitors will be more attracted by the collective attractions of a region rather than by an individual destination, particularly when the region is not well known to
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the visitor. Regional organizations also enable destinations to pool their resources and mount more effective marketing campaigns. As regional organizations evolve, they often expand their goals beyond marketing to include such areas as travel facilitation and policy coordination.
14.3 Purposes and Objectives of Tourism Organizations Tourism businesses, destinations, and their governments face many challenges. As tourism becomes increasingly sophisticated, competitive, and global, the public and private sectors will be compelled to keep abreast of the rapidly changing market. International organizations provide one means for those involved in tourism to accomplish this. Through organizations, the members can create networks, pool resources, and benefit from efficiencies in scale and size that might otherwise be unattainable by them individually. In addition, organizations enable businesses and governments to address issues with the greater power and credibility that derive from collective action.
Advantages to organizations
Tourism organizations thus have many different agendas and purposes. The section below examines major areas of concern to international tourism organizations. Subsequently, these areas of concern will be illustrated by discussions of several prominent tourism-related organizations. The topic of trade agreements is also discussed, in light of their importance to the future of international tourism.
14.3.1 Promotion of Industry Interests Perhaps the most basic type of organization is an association of members representing the same profession or industry segment. These organizations are primarily oriented towards addressing issues that affect their particular interests. The activities of such organizations include: • Monitoring laws, rules, and other such legal decisions that may affect the industry. • Lobbying for or against such laws and rules, based on their potential impacts. • Setting standards for various aspects of the industry in areas such as operations, financial reporting, and statistics. • Appointing and regulating travel agents’ sale of international air tickets.
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Professional and industry organizations are an important part of the tourism industry. Examples of tourism-related professional organizations include the Association of Independent Tour Operators, the International Association of Convention and Visitors Bureaus, and the World Association of Travel Agents.
14.3.2 Regional Marketing and Cooperation
Creating regional awareness
For an industry like tourism, which is based on the movement of consumers to specific geographical sites, regional collaboration can provide competitive advantages especially in terms of marketing the region and its destinations. As the discussion in Chapter 8 makes clear, a first and crucial step for any destination is creating awareness. Regional organizations are important vehicles for creating greater awareness of a destination area because they enable destinations to participate in marketing campaigns that are larger than they could afford individually, and to create a regional identity which can appeal to a broader range of visitors.
14.3.3 Providing Data and Advice Benefiting from experience
One of the ways of improving the quality of international tourism is to enable new destinations to utilize and benefit from the experiences of more established ones and the expertise of industry professionals. This is particularly important to destinations in environmentally or culturally vulnerable areas, where mistakes can be costly and may damage the reputation of the industry as a whole. The provision of data and advice to both public and private interests constitutes a valuable service of many organizations. Examples include: • Providing data to support sound planning for new development. • Conducting studies for planners, governments, and other parties. • Providing consultants to assist local governments in planning and implementation. The provision of consulting and advisory services is closely tied to the need for tourism planning. As is discussed in Chapter 15, planning is a vital element of tourism development.
14.3.4 Providing Direct Assistance Tourism development can require capital investment in many different areas, such as infrastructure improvements, human resources education and training, and housing. These capital requirements are often beyond
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the means of local governments and industry. Nevertheless, it is recognized that proper attention and resources need to given to these areas because of their importance to the ability of the local population to benefit from tourism development. An important function of several organizations is to meet this need for funds for tourism-related projects.
Capital investment
14.3.5 Addressing Trade Issues As was discussed in Chapter 2, the flow of tourists across national borders will be an increasingly significant economic trend for most of the world community. As international tourism grows in importance, so too will the issues that are inherent in international trade. The world has long wrestled with issues related to trade and commerce among nations. Because of the close tie between economics and politics, international trade has always been, and will continue to be, a highly political activity. International tourism, as a major part of that trade, will be increasingly drawn into world politics. The political and commercial relationships of the world community will be a central theme of international tourism into the 21st century. The importance to international tourism of trade and commercial relations between nations cannot be overemphasized. Imagine, for example, the effect of a significant reduction of airline flights due to a dispute over air freight privileges, or a major change in laws regulating the ownership of tourist accommodations. Trade relations affect not only the flow of tourists, but the flow of capital that tourism generates.
14.3.6 Addressing Environmental and Social Issues As the tourism industry has grown and matured, larger issues of importance and concern to the industry have loomed to the forefront. Foremost among these are the following: • Tourism’s potential as industry through which sustainable development can be achieved. • The critical importance of environmental protection and enhancement to the success of the industry. • The importance of peace and security issues to international tourism, and the potential for tourism to advance greater understanding and peace among nations. • The promotion of equal access for all travelers, including the disabled, to the opportunities and benefits of travel.
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Tourism organizations provide a forum where these concerns can be discussed, and a collective voice and powerful vehicle by which actions can be taken.
Sustainable development
Recognizing the importance of the relationship between tourism and the environment, the industry has taken a leadership position in incorporating environmental priorities into its goals and practices. This is particularly evident in the industry’s emphasis on the concept of sustainable development. The term sustainable development is used to denote many different things, but generally it refers to strategies of economic development that promote the long-term viability of the destination in harmony with its natural and cultural environment. Increasing sensitivity to social and cultural impacts, especially upon traditional societies, is reflected in the concerns of many tourism organizations. Some organizations have also made sustainability and social awareness a central part of their overall mission and goals. Among the numerous examples of the ways in which sustainablity issues have been integrated into the goals of tourism organizations are the following three:
Examples of sustainability
• The European Commission, as part of its “Action Plan to Assist Tourism,” has provided financial support to several sustainable tourism pilot projects and established the “European Prize for Tourism and the Environment,” which defines “environment” to include cultural resources as well. In 1995, the Commission produced “The Role of the Union in the Field of Tourism,” which, among other topics, discussed the EU’s activities with regard to sustainable tourism. • Green Globe is one of several environmental initiatives begun by the WTTC. The Green Globe program seeks to involve all sectors of the global tourism industry in an effort to place environmental priorities at the center of the business agendas of tourism-related companies. • In September 1995, WTO, WTTC, and the Earth Council released Agenda 21 for the Travel and Tourism Industry, an action plan specifically for the industry. Through the identification of specific strategies and priority action areas, Agenda 21 for the Travel and Tourism Industry constitutes a means of integrating sustainable development principles, derived from the Rio Declaration of Environment and Development, into the decision-making processes of tourism professionals.
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14.4 Important Tourism and Tourism-related Organizations 14.4.1 World Tourism Organization (WTO) The largest and most significant governmental organization is the World Tourism Organization (WTO), headquartered in Madrid, Spain. Its membership is composed of 133 countries and territories, and over 300 affiliate members from the public and private sectors. WTO is an executing agency for the United Nations Development Program (UNDP) of the United Nations, and is headed by a Secretary-General. It is composed of three main bodies: the General Assembly, Executive Council, and Regional Commissions representing the Americas, Europe, Africa, Middle East, South Asia, and East Asia and the Pacific. WTO’s mission is to “promote and develop tourism as a significant means of fostering international peace and understanding, economic development and international trade.” To pursue its mission, WTO engages in a wide range of activities specifically designed to assist developing countries in the following areas: • Inventories of existing and potential tourism resources; national tourism development master plans; formulation of policies, plans and programs for development of domestic tourism. • Institutional framework of national tourism administrative structures; tourism development corporations; legislation and regulations. • Evaluation of the impact of tourism on the national economy and on the environment. • Statistics, forecasting, statistical analysis, market research, market analysis; promotion, publicity and public relations. • Training; feasibility studies for tourism and hotel schools; management development. • Planning and management of national, social and cultural goals of tourism. • Area development, development of new tourist sites, and development of particular tourism products.
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• Planning, location, operation and improvement of tourist accommodations; hotel classification systems. • Sources and methods of finance for tourism investments; preinvestment studies, feasibility studies of investment projects, cost/benefit analysis. • Safety of tourists and tourist facilities. Examples of the kinds of actual projects through which WTO assists developing countries are: • In Niger (1990-92): Establishment of a computer system to process tourism statistics and the creation of a tourism database, and staff training to support the new system. • In Uganda (1986-93): Preparation of tourism marketing strategies and an inventory of tourist attractions; training of tourism officials in planning and marketing; completion of a National Tourism Plan for Uganda, a strategic action program, detailed planning for priority tourism areas, cost/benefit analyses of development projects, and an implementation procedures manual. • In Oman (1989-91): Preparation of a comprehensive long-range national tourism development policy and 5-year action program, and training of tourism officials in planning, marketing, and implementation.
14.4.2 Organization for Economic Cooperation and Development (OECD)
General economic development
The OECD was formed in 1961 by the United States, Canada, and 18 European nations; as of 1996, there were 27 member countries. Unlike the WTO, the OECD is not exclusively concerned with tourism- related issues, but with economic development in general. Its main purpose is to facilitate world prosperity by helping nations create compatible and integrated domestic policies and practices. Thus, the OECD focuses on governmental policies and how they interact with those of other countries. Research and analysis is carried out through its directorates and services: Directorates of Agriculture; Development Cooperation; Education, Employment and Social Policies; Enterprises; Environment; Financial and Fiscal Matters; Science, Technology and Industry; Statistics and Trade; and the Economics Department, International Energy Agency, Public Management Service, and Territorial Development Service. Until recently, there was also a Tourism Directorate, but tourism issues are now taken up by other, appropriate
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directorates. OECD’S Statistics Directorate compiles and analyzes data in a manner that enables governments to assess and compare their policies and practices from a cross-national perspective. The areas in which statistics are collected include national accounts, labor force, foreign trade, prices, output, and monetary and financial measures. OECD’s annual publication, Tourism Policy and International Tourism in OECD Countries, contains important statistical analyses of international tourism. The OECD is based in Paris, France.
14.4.3 International Civil Aviation Organization (ICAO) The ICAO is an inter-governmental body devoted to cooperation in setting international aviation standards. The ICAO was established in 1944 by 52 nations, or Contracting States, through the signing of the Convention on International Civil Aviation. As of 1996, ICAO membership stood at over 180 Contracting States. In 1947, ICAO became a specialized agency of the United Nations through the Economic and Social Council. As is discussed in Chapter 13, air transportation is a unique industry by virtue of its direct and extensive involvement with governments, air safety concerns, equipment standards, training and political issues. The ICAO’s stated purpose is “that international civil aviation may be developed in a safe and orderly manner and that international air transport services may be established on the basis of equality of opportunity and operated soundly and economically” (International Civil Aviation Organization, 1996). ICAO’s main areas of activity are: • Establishing international standards, recommended practices and procedures covering the technical fields of aviation. • Developing a satellite-based system concept to meet the future communications, navigation, surveillance/air traffic management (CNS/ATM) needs of civil aviation. • Regional planning for nine distinct regions. • Facilitating air travel by reducing formalities and obstacles. • Providing advice and assistance to nations in planning safe and economical aviation systems. • Collecting statistics on airline accidents. • Promoting civil aviation in developing countries.
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• Facilitating the adoption of international air law instruments and the promotion of their acceptance.
14.4.4 International Air Transport Association (IATA)
Airline industry
IATA was formed in 1945 with 57 members from 31 nations, mainly representing Europe and North America. Since then, the airline industry has experienced tremendous growth, and as of 1995 IATA membership numbered 230 members from 130 nations worldwide. IATA’s mission is to represent and serve the airline industry. Its goals include: • Promoting safe, reliable and secure air service. • Achieving recognition of the importance of a healthy air transport industry to world-wide social and economic development. • Assisting the industry to achieve adequate levels of profitability. • Providing high quality, value for money, industry-required products and services that meet the needs of the customer. • Collecting statistics on airline accidents. • Developing cost-effective, environmentally-friendly standards and procedures to facilitate the operation of international air transport. • Identifying and articulating common industry positions and supporting the resolution of key industry issues. • Appointing and regulating travel agents’ sale of international airtickets. Among its efforts to facilitate air travel is IATA’s work to create greater efficiency in various logistical aspects of air travel, such as tickets, baggage checks, ground handling, and electronic data interchange. In conjunction with governments following the establishment of bilateral agreements, IATA also reviews air travel rates through IATA traffic conferences.
14.4.5 World Travel and Tourism Council (WTTC) The WTTC is comprised of executives from leading international companies in the airline, hotel, transportation, and travel agency industries and is located in Brussels, Belgium. As a private-sector organization, several of the WTTC’s primary objectives are concerned with making changes to the public sector, including:
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• Improving recognition of tourism’s importance. • Eliminating barriers (such as trade restrictions and airline agreements) that restrict the growth of tourism.
14.4.6 Pacific Asia Travel Association (PATA) and Other Regional Organizations Founded in 1951 to encourage travel to the region, PATA numbers over 2,000 members representing the public and private sectors of the travel industry. PATA’s central mission is defined in terms of a distinct region: “to contribute to the growth, value and quality of travel and tourism to and within the Pacific-Asia area,” an area which it defines as extending from North America (including Mexico) westward across the Pacific to South Asia and from Pole to Pole.
Encouraging regional travel
PATA has been an exemplar of regional tourism organizations. PATA’s primary objective and its strategies for pursuing that objective provide a clear picture of the range of activities that a regional organization can pursue on behalf of its membership: “To encourage and assist in the development of travel industries throughout the Pacific-Asia area in a manner which recognizes the urgent importance to practice an environmental ethic that supports responsible conservation and restoration of the Pacific Asia’s unique combination of natural, social, and cultural resources, by: a) Providing an instrument for close collaboration among the various territories, countries, and commercial interests concerned; b) Augmenting and assisting local promotional and development efforts of the members and encouraging sources of capital for tourist accommodation and recreational projects; c) Providing a liaison between the travel and transportation industries and all members; d) Carrying out advertising, promotional, and publicity measures calculated to focus the attention of the travel industry and traveling public upon Pacific Asia as one of the world’s outstanding destination areas; e) Encouraging the development of adequate passenger transportation services and facilities to and within Pacific Asia; f) Carrying out statistical and research work relating to travel trends and tourism development, and
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g) Negotiating with governments, whether directly or through the appropriate bodies, for an easing of monetary regulations and travel formalities tending to be barriers to tourist travel” (Pacific Asia Travel Association, 1995, p. 3). PATA's services
To support these strategies, PATA provides its members with a range of services, including: • Marketing and promotion, through an annual marketing convention, marketing conferences, and fairs and sales missions. • Product development, by providing member expertise to local and regional government entities to assist them in improving the quality of their products and services. • Research and information services, through a research center which generates a variety of reports, studies, and forecasts. • Human resource development, through work on jobs standards, distance learning, and train-the-trainer workshops. • Communication and public relations services. • Membership development.
Other regional organizations
EU formation and funding
Other examples of regional tourism organizations include the Caribbean Tourism Organization (CTO), Tourism Council of the South Pacific (TCSP), and the ASEAN (Association of Southeast Asian Nations) Tourism Association (ASEANTA). The CTO is comprised of national tourism administrations, while ASEANTA membership is based on ASEAN, an established regional governmental organization. Examples of major regional organizations not exclusively devoted to tourism, but whose actions with respect to the industry are important to its member nations, are the European Union (EU) and the Association of Southeast Asian Nations (ASEAN). Formed in 1993 by the enactment of the Treaty of European Union, or Maastricht Treaty, the EU represents the culmination of efforts over three decades to achieve greater economic integration. The EU provides significant funds to finance tourism-related investment and infrastructure projects, and to projects that upgrade cultural and historical resources. The funds were directed particularly towards tourism development in regions that are underdeveloped, suffering from economic decline, or concerned with the development of rural areas. ASEAN was founded in 1967 in Bangkok by the countries of Indonesia, Singapore, Malaysia, Philippines and Thailand. These original member
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countries were subsequently joined by Brunei (1984) and Vietnam (1995). One of ASEAN’s objectives is the promotion of economic, social, and cultural development of the Southeast-Asian region through cooperative programs. Tourism, as an increasingly important economic activity for this region, represents an area of importance for the organization. ASEAN holds both formal and informal meetings of the tourism ministers of its member countries, which address the following types of issues: facilitating inter-ASEAN travel through special immigration procedures at airports; increasing direct air links between destinations; facilitating leisure water travel; promoting conventions in ASEAN destinations; and improving tourism training programs.
ASEAN formation and objectives
14.4.7 International Bank for Reconstruction and Development (IBRD) The best-known international organization involved in direct funding for tourism-related projects is the IBRD or, as it is more commonly called, the World Bank. The World Bank was established in 1945 and is owned by the governments of 174 countries. It is a specialized agency of the United Nations. In general, the World Bank makes loans for tourism-related infrastructure projects rather than directly to tourism projects. Loan recipients are generally countries with developing economies (World Tourism Organization, 1993a).
A direct-funding organization
14.4.8 International Trade in Services and GATS Economic relations among countries have historically been tied to questions of national strength, pride, and prerogative. Different trade theories and practices have been adopted throughout history by nations as a means to greater national strength. Protectionist theories and practices basically attempt to protect a nation’s economy by restricting the ability of foreign goods and services to compete in the domestic market. Thus, for example, the steel industry of protectionist country A can be protected from the steel industry of country B by restricting the importation of B’s steel, by mandating that manufacturers in country A use a minimum percentage of domestic steel, and by a variety of other such measures. What this means in practice, of course, is that country B will very likely impose restrictive measures on certain products that country A would like to export. In this way, protectionist strategies are inherently double-edged in that they invite similar actions by other countries. Proponents of free-trade theories and practices have noted this fundamental problem of protectionism, and argue instead that the free flow of trade
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Benefits of free trade
International trade relations
Important multilateral trade agreement
ultimately benefits all nations. To continue the example cited above, while country A may indeed experience a decline in its steel industry in a freetrade scenario, a commensurate increase in its exports to country B (paid for by the earnings that B receives from selling its steel to A) will offset that decline and, in the long run, result in greater growth for both countries. Freetrade advocates note that each country–due to its natural resources, costs of labor and capital, and other factors–can be efficient only in certain areas. Because of this fact, free trade and open markets will enable the international economic system as a whole to benefit from these efficiencies. Country B may be able to produce steel for half the cost of country A, but A’s citizens will only be able to benefit from this efficiency–they can only have the benefit of paying less for steel and spending more on other things–if A and B are in an open trading relationship. One can quickly see how restrictive or free-trade practices will directly affect the cost of doing business in tourism, ranging from the cost of hotel construction to the cost of producing and distributing marketing material. Commercial treaties are formal agreements that establish rights and conditions of trade relations between the nations signing the treaty. These treaties cover areas such as the property rights of foreign nationals, taxation of foreign investments, debts owed to foreign entities, port regulations, commercial relations during war, and the jurisdiction of consuls. Nations that have significant economic relationships with each other often establish trade agreements, which are less formal and permanent than commercial treaties. Trade agreements cover such areas as tariffs, customs, copyrights, commercial laws and arbitration, and restrictions on specific products. The most important trade agreement of modern times is the General Agreement on Tariffs and Trade (GATT). GATT grew out of a recognition by many countries of the problems of protectionist policies, especially those that restricted trade during the period between the First and Second World Wars. GATT was signed in October 1947 by 23 countries, with its administration based in Geneva. As a multilateral trade agreement, GATT is dedicated to reducing tariffs and other obstacles to trade. Throughout its history, several rounds or trade conferences have been held to address various issues and problems. The latest round, begun in Uruguay in 1986, culminated in April 1994 with the dissolution of GATT and its reorganization as the World Trade Organization. The significance of the Uruguay Round for tourism was the formation of the General Agreement on Trade in Services (GATS). Unlike GATT, which did not address trade in services, GATS is specifically dedicated to the issues and problems of such trade, including those relating to
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tourism. GATS took effect on January 1, 1995, and is concerned with governmental measures (such as laws, regulations, and administrative actions) that affect services supplied in the following ways:
Concerns and goals of GATS
• Services supplied from one territory to another (such as tour operations and travel assistance). • Services supplied in the territory of one party to the consumers of any other (such as to international visitors). • Services supplied through the presence of commercial entities of one party in the territory of another (such as the establishment of a branch office abroad). • Services provided by nationals of one party in the territory of another (such as by consultants) (WTO, 1996b). The ultimate goal of GATS is for its signatory members to achieve full non-discrimination with respect to services trade among each other. Through GATS, then, there is a formal, global vehicle for pursuing the reduction of barriers and increased liberalization of trade in services. GATS represents a significant advance in facilitating international tourism. An important aspect of GATS is that its Services Sectoral Classification List includes a section for Tourism and Travel Related Services. In contrast to the International Standard Classification of Industries, which did not contain such a section, GATS addresses the key issue of statistical recognition of the tourist industry. However, because tourist services are diverse, the new section includes only the following subclasses: hotels and restaurants (including catering), travel agencies and tour operators services, tourist guide services, and other. Business areas such as transportation, hotel construction, car rentals, and computerized reservations systems are located under other headings (WTO, 1995e).
14.5 Challenges for Tourism Organizations Despite the importance of tourism in the world economy, and its growth prospects into the next century, tourism organizations face many challenges. • Financial viability. The activities of voluntary tourism organizations require substantial funding. However, when companies or public agencies face financial constraints, the payment of dues to a voluntary organization may seem to be an unnecessary expense. Organizations thus face a constant challenge in retaining their dues-paying members. Meeting this challenge requires that organizations continually
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demonstrate to their members the benefits of membership. One way that organizations have been meeting this challenge is by reducing their reliance on membership dues by utilizing other funding sources, such as the sale of research publications. • Meeting the needs of a diverse membership. To be successful, an organization must ensure that its mission reflects the needs and desires of its membership. Given the dynamic and competitive nature of the tourism industry, these needs are likely to change quickly from time to time in response to the current industry environment. Membership needs also change as the members themselves change and grow. However, when organizations adapt too quickly in the attempt to be relevant to the immediate needs of their membership, often the result is one of structural destabilization and loss of focus on long term strategies. • Duplication of efforts. In an effort to serve a diverse group of members whose needs may encompass many different areas of the industry, an individual organization will likely adopt multiple objectives or programs of work. Inevitably organizations then begin to duplicate each other’s efforts in the attempt to be as allencompassing as possible. For the members, such duplication means that their dues may be buying similar services from different organizations. Thus, tourism organizations face great challenges in trying to maintain a close fit between their central missions, objectives and activities and the needs of their membership.
SUMMARY As tourism expands, so too does the need for communication and cooperation among the many private and public interests that are involved in the industry. Tourism organizations–comprised of public sector members, private sector members, or both–fulfill this important role. They enable an industry that lacks broad-based recognition and support to pursue common goals through collective action. Tourism organizations such as the WTO, WTTC, PATA, CTA and many others play a valuable and vital role in world travel. They do this by serving not only the direct needs of their members, but by addressing the long-term, broader issues such as peace and environmental sustenance in the interest of the entire industry and the world community.
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DISCUSSION
QUESTIONS
1. What are the three major types of international tourism organizations presented in this chapter? 2. What are some of the different purposes and objectives of international tourism organizations? 3. What is the role and importance of the WTO? 4. What are some of the challenges that will face tourism organizations in the future?
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Learning objectives • To understand why tourism planning is important and necessary. • To understand the forces that shape the tourism planning process. • To identify the major elements of a tourism plan. • To understand the concept of master or comprehensive planning and its value for tourism development. Key terms and concepts action plan business and legal environment destination planning economic and financial analysis impact analysis master plan planning supply and demand analysis
15 Tourism Planning and Destination Development
15.1 Introduction As the economic bases of many countries are increasingly challenged by world markets and technology, many governments see tourism as a major opportunity for economic development and a tool for creating a better community. The reliance on tourism as a tool for development is based on such evidence as tourism’s effectiveness as an engine of employment, a means of wealth redistribution, and its potential in restoring blighted areas in a community. Communities and regions vary widely in their economic development life cycle. Some are thriving, while others are attempting to reverse the process of community and economic decline. In these latter instances, the physical environment of a community may be deteriorating and community spirit low; tourism therefore becomes a potentially attractive replacement for businesses that have shut down or moved away. Unfortunately, a great many communities have pursued tourism development either without planning or without considering larger planning or community economic development processes. This chapter will examine tourism planning approaches and discuss the role of tourism planning within the broader context of community economic development. Planning seeks to simultaneously prevent negative impacts and meet the goals and objectives of a community. The
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planning process discussed here is concerned with ensuring sustainable tourism development that respects local populations, creates appropriate employment, maintains the natural environment, and delivers a quality visitor experience. These sustainable development goals have made the planning process far more complex than earlier planning efforts, which were driven primarily by economic imperatives.
Planning a destination
This chapter also discusses the process and essential aspects of planning a destination. It looks at the elements of a plan and the context of creating one. Destination planning involves many parties with different perspectives, including governmental bodies and private investors and developers. In addition, governments are increasingly making an effort to ensure public participation through involving local communities or their representatives in planning. Given the diverse interests of all these parties, the range of different destinations, and the many types of possible development, the subject of planning is quite extensive. Because of the comprehensive nature of destination planning, there will be numerous occasions throughout this chapter for the reader to refer to other chapters in the text. In this way, the reader can better understand how the actual process of planning must similarly take into account the relationships among all elements of a destination.
15.2 The Forms of Tourism Planning In general terms, planning “is organizing the future to achieve certain objectives” (Inskeep, 1991, p. 25). However, there are many different forms of planning, including: • Economic development planning, which is primarily concerned with facilitating the development of various industries and sectors. • Land use planning, which structures the uses of land through tools such as zoning codes. • Infrastructure planning, which deals with roads, airports, and utilities such as power, water, and sewer. • Social services planning, which deals with issues such as employment, public health, education, and social welfare. • Safety planning, which addresses internal security problems, crime control, risk coverage, and special provisions for tourists who require speedy remedies.
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15.2.1 Tourism and Economic Development Tourism planning can be viewed as a form of economic development planning that is directed towards tourism-related objectives. Examples of tourism planning include: • A plan to increase the foreign exchange earnings of a nation by encouraging the growth of tourism. • A plan to designate specific areas for the development of resorts. • A plan to improve local employment through the tourism industry. The plans listed above generally involve public resources and objectives, such as the creation of land use controls, the construction of a network of highways, and the provision of affordable housing to residents. Consequently, most planning is done by the government. At the national level, government planning may take place within the individual ministries or departments that comprise the government, such as a ministry of tourism, or it may be assumed by a centralized planning department. Government planning is performed both by staff planners and by private consultants and specialists who are contracted to consider policy implications and the public interest. Private sector planning activities generally occur at the investment level with specialists in various aspects of product development, building, finance, marketing, management and operations providing technical information and expertise to the planning process. The research and study involved in a tourism plan can require the participation of many different specialists and professionals. Overall responsibility for the planning process generally is given to a planning specialist. Depending on the scope of the plan, the planner will use and coordinate the work of economists, marketing specialists, transportation specialists, ecologists or environmental specialists, sociologists, archaeologists, human resources specialists, and architects and engineers. Participation by such professionals can be particularly extensive in the production of master or comprehensive plans (see discussion below). The end product of planning is generally a formal document, or plan, that is intended to guide further activity. A plan is often targeted at persons involved in the policy making process, such as legislators and administrators. Such a plan might include model legislation, regulations, and other types of policy directives. A plan can also be designed to guide private sector activity such as development and financing with timetables or specific land use designations.
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WTO assistance
As discussed in Chapter 14, the WTO provides support and personnel to assist the tourism planning efforts of nations. This assistance can be both direct (as in the use of planners and other professionals to conduct the plans and studies) or indirect (by training personnel to conduct their own planning). Examples include: • A five-year promotional plan for Honduras. • A tourism master plan and six-year development program for Ethiopia. • Training for tourism officials in Uganda in techniques of planning and marketing. • Training for staff of the Rwandan national tourism administration and recommendations for legislative and regulatory initiatives. • Specific, medium-term programs and policies in various tourismrelated areas for incorporation into national and regional economic development plans in the Philippines. • Plans for the Sri Lankan Convention Bureau in the areas of membership development, financing, marketing, and manpower structure. • Training for tourism officials in Oman to effectively implement tourism plans.
15.2.2 Tourism Master Planning
Long-term development
The term “master plan” or “comprehensive master plan” has been used extensively in reference to tourism planning. In general, it defines a strategic plan that integrates all aspects of tourism development, including human resources, environmental impacts, and social and cultural impacts. The master plan considers the long term implications of decisions and their risk and return to a community or destination. Depending on the nature of the tourism master plan, whether it is one intended for tourism development in general or whether it is one whose purpose is more specific (such as to guide the physical development of a new resort area), the topics and levels of research will vary widely. All master plans are designed to cover the span of a development period (e.g., a five-year plan, a ten-year plan or other time frame) or an investment period when land acquisition, construction, operation and financing are laid out as critical points for guiding decisions at each step.
15.3 The Need for Tourism Planning Tourism planning has assumed a greater role in tourism development as governments recognize not only that tourism generates a wide spectrum of impacts, but also its potential for social and cultural
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expression and revitalization. As more governments expand their goals and expectations of tourism development beyond its economic benefits, planning becomes more important to the success of achieving those goals and meeting those expectations.
Importance to success
It is not only public goals and expectations that have brought prominence to planning, however. As the industry itself grows and matures, the travel market is becoming more sophisticated and discerning. This, in turn, places greater pressure upon developers to use planning as a means of creating quality destinations. It is no longer sufficient to simply build attractions and accommodations in today’s highly competitive market. As the number of destinations grows and visitors become more selective about choosing locations that offer quality and value, the market will shun poorly planned destinations. Thus, both public and private interests are converging towards a position that sees tourism planning as essential. Critics of planning are skeptical about its effectiveness and point to the numerous plans that were never consulted or used. In many cases, this skepticism derives from older planning practices which tended to focus on developing regulatory procedures instead of creating suitable mechanisms for achieving goals. In addition, planning tools such as master plans and land development control systems centered on zoning and development incentive systems. These tools were used without appropriate resident participation or recognition of the complexity of the tourism setting and the needs of the host community. In some cases, master plans attempted to freeze a destination at a particular time frame without taking into account the dynamic nature of economic and social systems. To avoid these problems, more dynamic and participative planning approaches are being used to achieve sustainable tourism development. Despite the difficulties of and resistance to planning faced by tourism planners, there is widespread agreement that tourism planning serves a valuable purpose by addressing the following issues: • The need to have a common vision, direction and commitment for tourism established through a participative process of involving many stakeholders. • Tourism’s sociocultural and environmental impacts, and the need for a long-term perspective in assessing those impacts. • Resource problems faced by communities that may not have the political framework or trained labor force to create a service based industry. • Destination survival in an increasingly competitive market, and the need to respond to changes in the travel market.
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• The rapid pace of change in the tourism industry in areas such as transportation and communications. • The need to provide the private sector, especially those parties providing investment funds, with a certain level of stability and predictability in the progress of the overall development.
15.4 Levels of Tourism Planning in the Public Sector
Levels of public planning
Tourism planning occurs at different levels within the government. The issues and concerns faced by tourism planners vary with the level of the planning activity. Generally, broader issues are treated at the national level, while local planning is directed towards more specific locations and issues. At the national level, for example, the goal might be to create a national tourism policy statement which designates broad regions or areas for future development, while local planning may involve building design standards for a specific resort area. In some cases there is competition among various levels of government for control over tourism development, and conflict between local planning and regional and national tourism goals. Although there are numerous international organizations concerned with tourism (as discussed in Chapter 14), planning activity tends to be country or community specific, mainly because it is at that level where sovereignty rights and the ability to take direct action lie.
15.4.1 National Planning
Policies and infrastructure
A primary function of national tourism planning is the development and administration of national tourism policies. As is discussed in greater detail in Chapter 13, tourism policy plays a key role in guiding tourism development according to the needs of the host community and nation. Creating a structure for the administration of policy is also a critical aspect of national-level planning. Other important tasks usually handled at the national level include: physical planning that identifies and designates major tourist attractions, regions for tourism development, and transportation lines; creating national standards in areas such as health, safety, and employment; and conducting research, statistical analysis, and forecasting.
15.4.2 Local Planning In general, as tourism planning progresses towards actual implementation, the lower levels of government become increasingly involved. This may involve provincial or state governments at a
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secondary level and local municipal governments at the lowest levels. However, it is important to note that there is often a close relationship between the levels of government. For example, the local government may be charged with the responsibility of imposing on tourism employers certain employee health and safety rules that have been formed at the national level. Examples of areas usually associated with local tourism planning include the following:
Implementation of plan
• Creating and enforcing zoning policies, including site planning and the design of buildings and landscaping. • Establishing and enforcing environmental regulations. • Facilitating the participation of all interest groups in tourism. • Local infrastructure planning, including energy requirements and allocation to tourism. • Providing public access to use amenities which are privately built. • Providing services for visitors and residents. • Education, training, and other human resources services. • Financing tourism development. • Marketing and promotion of the local destination. • Taxation issues. In many cases the degree of government involvement during the planning process will change over time. For example, when a local government determines a master planned area and acts as the main developer, its initial involvement will be significant and controlling. The municipality or state will hire the architects, engineers, and other such consultants and direct their work. As the project progresses, the government gradually withdraws into the background and encourages private sector companies to take the lead in arranging financing, hiring consultants, and ultimately building and operating the facilities.
Shifts in involvement
15.4.3 Destination Planning The term “destination planning” is generally used to refer to planning for a geographical region that possesses sufficient facilities, attractions, infrastructure and work force to attract visitors (Gunn, 1994, p. 27). Thus, depending on the nature of tourism development and the area in question, a destination may be regional in scope, encompassing many resort areas and communities, or it may be local. The term “development project area” can also be used to denote a destination.
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For example, the South Antalya tourism development project area in Turkey encompasses an area that includes seven villages and three ancient cities (Inskeep & World Tourism Organization, 1991). Whatever the size of the destination, its key characteristic is that it represents an integrated area, including the actual site of the tourism accommodations, visitor attractions, resident communities that provide employment, and the transportation links among them. Thus, in addition to the planning of a specific resort or resort area, destination planning also involves consideration of issues such as transportation, water and sewer infrastructure, and human resources development.
15.5 Actors Involved in the Planning Process Tourism planning is a challenging endeavor, considering the diversity of organizations and individuals that act as service providers of the tourism experience, and the complexity of the tourism system. In addition, there are differing levels of control over tourism related resources, many plans and planning processes in the private and public sectors, and public and common goods that are shared by residents and tourists that need to be managed fairly. To address these factors, individuals and groups who have a key “stake” in the tourism domain–those who are impacted by, or have the ability to influence the direction and outcomes, of tourism–are involved in the planning and implementation of tourism actions and activities. Some of the actors who are included in the planning process include: Key actors
• Residents of the host destination area. • Environmental advocacy groups. • Tourism-related and non-tourism-related businesses. • Politicians and other elected officials. • Major business interest and lobby groups. • Labor unions and other employee representatives. • Government officials involved with tourism regulation and development. Each of these actors brings a particular set of needs, knowledge, and perspectives to the decision making table. Their involvement at an
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early stage in the process is important in order to generate support and commitment to the process, and thus reduce the chances of later resistance by an actor who has not been involved.
Need for involvement
15.6 Organizing the Planning and Development Process An enormous amount of data and analysis goes into the planning and development process. While there are many ways of organizing the process, most planning generally adheres to the following basic steps: • Defining the Goals and Objectives of Development - This first step is important because the decisions made at this point guide the rest of the planning process. Current planning practice favors the inclusion of a broad spectrum of interests during this step of the process. The following questions are discussed and answered in order for the planning process to go forward: - Why do we want to develop tourism? - What kinds of benefits do we expect from tourism? - What kind of tourism and visitor do we want? - Do we want to place limits on tourism growth? - What is our time frame for development? • Gathering Relevant Data - In this phase, research, surveys, and other methods of fact-finding are pursued in order to accumulate all of the relevant data mentioned above. • Analyzing the Data - The data is then organized and analyzed and basic recommendations and parameters are set. For example, the analysis may show that any interference with shoreline access will likely be met with resistance by local residents. A recommendation can then be drafted which guides the site planning to ensure that such interference will not occur. • Preliminary Plan Draft, Review, and Revision - On the basis of the data and analysis, a preliminary plan is drafted. The plan will include site (land use) plans, development schedules, design sketches, and financial projections. The preliminary plan then goes through the process of review and revision, as it is further refined. Often, there will be opportunities for public review at this point.
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• Finalizing the Plan, Implementation, and Monitoring - After all of the revisions have been incorporated and approved, the final plan is drafted and becomes the working document guiding the implementation of the plan. The final plan will include all of the detail necessary to provide guidance to the developers.
15.7 Elements of a Tourism Plan Destination planning can vary from one project to another, due to factors such as the type of destination being developed, its current level of development, and the theory or style of planning being used. Regardless of the exact planning style adopted, a destination plan will generally include analysis of the following areas: tourism demand, tourism supply, tourism impacts, economic and financial issues, and an action plan.
15.7.1 Demand Analysis
Examination of intended visitor markets
Demand analysis examines the existing and intended visitor markets of the destination. It also includes regional and global travel patterns and trends, since these will also affect the ability and willingness of people to visit the destination. The basic premise of demand analysis is that the destination must be planned with the visitor in mind, and that it is no longer prudent to follow a supplier mentally, which takes a “build it and they will come” approach. Market Analysis
Matching visitor with destination
Increasing competition among destinations requires knowledge of changing trends in the visitor market. A destination that offers sun, sea, and surf now has a multitude of competitors, as do other types of destinations. Differentiating one tourism destination from another requires greater and more sophisticated marketing information and techniques to ensure a proper “fit” between what is offered and what visitors want. Market analysis is therefore crucial for planners and developers. Two key components of a market analysis include: - Tourist arrivals and characteristics, including information on a visitor’s place of origin, demographic and socioeconomic profile, travel itinerary, purpose of visit, length of stay, and spending patterns. These are discussed in Chapter 7. - Travel patterns and trends, which should place the destination and its visitor profile within the context of general travel patterns and trends which are discussed in Chapter 2. An assessment of the broad
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market includes historical travel patterns, recent growth markets, and changes in the industry that may have a significant impact (such as recent technological innovations which have affected how travelers make their reservations).
15.7.2 Supply Analysis Supply analysis examines the destination itself–its attractions, accommodations, and facilities. The goal of a supply analysis is to have a complete understanding of what visitors will be presented with from the moment they enter the destination area. Most importantly, this will involve a close look at what the destination intends to market as its attractions. In addition, however, it will also be necessary to examine areas such as transportation networks, infrastructure, and manpower, since these have a direct and large impact on the quality of the visitor experience. Supply analysis can also include a discussion of the business and political-legal environment of the destination area.
Examination of the destination
Site Selection If the purpose of the destination plan is to guide new development in an undeveloped area, a supply analysis would be oriented to the planned, rather than the existing, tourism product. Thus, rather than an assessment of existing hotel accommodations (which may be limited or nonexistent), such an analysis might look at various locations for the proposed hotels and commercial buildings. The following are criteria used to assess potential integrated hotel resorts: - Proximity of the site to tourist attraction features. - Desirability of the site’s micro-climate. - Attractiveness of the physical environment of the site. - Availability of land that can be feasibly developed. - Access to major tourist gateways and regional attractions. - Adequate transportation and utilities infrastructure. - Absence of environmentally vulnerable areas at the site. - Receptivity and feelings of the resident population to the industry. - Availability of a local work force and sufficient housing.
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Assessment of planned development
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Inventory of Existing Attractions
Assessing site's current capabilities
An attraction can be defined as a facility or location that is “planned and managed for visitor interest, activity, and enjoyment” (Gunn, 1994, p. 58). The purpose of this element is to make a comprehensive list of all of the attractions that the destination currently offers its visitors. The inventory would examine the types of attractions, their location and accessibility, their condition, and any other aspects that might be relevant to visitors. Attractions can be organized in a number of different ways, including ownership (public vs. private) and the type of visitor the attraction appeals to. Inventory of Facilities, Services and Infrastructure Although tourists are generally not attracted to a destination by its supporting facilities and services, they are nevertheless crucial to the overall quality of the visitor experience. The inventory notes specific details about support facilities and services, such as the number and location of places to make currency exchanges, in order to provide planners and developers with a complete picture of the destination’s current capabilities. The quality and scale of support facilities and services is closely related to projections of the destination’s capacity, or maximum volume of visitors its facilities and infrastructure can handle. Capacity problems often occur where the development of accommodations outpaces transportation and infrastructure improvements. With detailed information from the inventory, planners can avoid such problems by properly scheduling development phases. Major components of an inventory include: - Tourist facilities and services. These include entry and exit facilities and services such as airports, baggage handling, customs, and check-in procedures, the availability and quality of accommodations, dining, entertainment and shopping amenities and the destination’s ability to provide for the safety and security of its visitors, including the availability of medical facilities.
Supporting both visitors and residents
- Infrastructure. These are the facilities generally owned by the government or utility company that support tourism development and activities. There are two important characteristics of infrastructure: first, they tend to be large and capital-intensive, and second, they support both the visitor and resident communities. Because of these two factors infrastructure development raises difficult questions, one of which is how to allocate the cost of an infrastructure project
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between public and private funds. Elements that are generally covered in an analysis of infrastructure include facilities and services such as airports, harbors, roads, public transportation, water supply, power, sewage, solid waste disposal, and telecommunications. Business and Legal Environment The business and legal environment of a destination can have a significant impact on the development process. For this reason, there is a discussion of topics such as the existing structure of government, the existence and functions of any government tourism organizations, and current laws, policies, and regulations as they apply to tourism, development, and investment. In many destinations, a basic issue is the existing system of property rights. Can foreign entities own property? If not, how will ownership and control issues be addressed? From the private sector’s perspective, an important factor is the process by which a developer obtains all the necessary approvals and permits to start construction, and the approval process for businesses to start operations. Local politics can be a major factor in these permitting processes. Finally, the tax laws of the destination will have an impact on the financial aspects of the project. For example, many destinations place a higher tax burden on visitors by imposing hotel taxes and other types of additional fees.
Laws, policies, permits and approvals
15.7.3 Tourism Impact Analysis Anticipating the impacts of development is one of the most crucial functions of a tourism plan. An assessment of the environmental impacts of development has become a standard and, in many places, required part of the planning process. Equally important is a consideration of the sociocultural impacts (which was discussed in Chapter 11) of the development. These impacts are more difficult to anticipate and quantify, but the experience of many destinations has shown that the effects of tourism on a society’s culture and people play a vital role in its success. For many countries and areas, tourism constitutes one of the most environmentally friendly industries that can be realistically achieved. Tourism does not require the kinds of activities that have traditionally been associated with environmental degradation, such as large-scale excavation (mining and extraction), release of pollutants into the water and air (refining, manufacturing), or the use of pesticides and herbicides (agriculture). Like much of the service sector it is normally considered a part of, tourism is a relatively “clean” industry in terms of its environmental impacts.
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Environmental and cultural impacts
"Clean" industry
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Environmental concerns
Nevertheless, tourism has definite and measurable impacts. These impacts are perhaps even more significant when one considers that much of tourism’s appeal relies on the quality of the environment itself. The goal of sustainable development, which is discussed in Chapter 12, demands that destinations place a high priority on the environment. There has also been a trend toward expanding the definition of what constitutes an environmental impact. The following list reflects the areas covered in an environmental impact statement for a proposed convention center development: - Project description: physical characteristics; estimated cost; construction schedule. - Physical environment impacts: region; climate; existing land uses; project site; geology and topography; soils; flooding; water quality; hazardous materials and waste; botanical resources; terrestrial fauna; archaeological, cultural, and historic resources; air quality; noise; radio frequency interference; scenic and visual resources. - Socioeconomic impacts: social impacts; employment; economic and fiscal impacts. - Infrastructure and public facilities: traffic and transportation; wastewater; water supply; drainage; electrical power and communication; solid waste; police protection; fire protection; emergency services; education and child care; recreational resources; health care facilities. - Conformance with existing plans, policies, and controls: state level; county level; environmental regulations. - Alternatives to the proposed development. - Long-range and unresolved issues: irreversible resource commitments; long-term productivity; unavoidable adverse environmental affects (Nordic/PCL & Wilson Okamoto & Associates, 1995). Environmental assessments of this type require the services of many specialized consultants and professionals, including archaeologists and soils engineers, and highly specialized tests, such as traffic modeling and noise impact studies. With regard to the issue of the industry’s sociocultural impacts, the pressures and changes that tourism brings to bear upon population groups that have remained outside of the modern market economy can be significant. Again, as in the case of the environment, these pressures and
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changes become all the more important in light of the fact that a particular destination may base its appeal on the local population and its culture. The sociocultural impacts assessment begins with the collection of demographic data (birth and death rates, age profile, marriage patterns, family size), economic data (personal incomes, source of incomes, household sizes), health data (disease rates, life expectancy), social indicators (crime statistics, educational levels), and cultural beliefs and practices. Based on this data, the plan can address issues such as the following: - To what extent is the society dependent upon a more traditional economy (e.g., barter) rather than a cash-based market economy? - How will existing family structures and patterns fit with the possible employment of family members? This issue has proven to be particularly important in traditional patriarchal societies where women have entered the work force for the first time, and develop a social and economic network outside of the family. - How do the residents feel about the uses to which the land will be put (in particular, the construction of accommodations and commercial facilities)? Will the construction alter their access or use of shoreline and other areas? - How do residents feel about performing cultural practices before foreigners? About selling traditional artifacts and wares? - Is the local society relatively egalitarian, or are there clear divisions among various strata? How might this affect their willingness and ability to work in service-related positions? - How might the availability and use of consumer goods affect the local society? How might they react to visitors whose consumption patterns reflect a much higher standard of living? In recent years, the issues related to environmental and socioeconomic impacts have become more pressing as more destinations turn to ecotourism. Ecotourism (which is discussed in detail in Chapter 6) is intended to give the visitor a closer and more authentic experience of the destination. In so doing, however, it also places both visitor and the local environment and culture in much closer contact. In some cases, this has worked to the detriment of the local society, which by its openness to the visitor is now more vulnerable. The market for ecotourism continues to grow, however, and thus these impacts will continue to be important for both visitors and local societies to consider.
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15.7.4 Economic and Financial Analysis Tourism development must be financially feasible for both the host area’s government and the private sector in order for it to provide any economic benefits to the host community. Of particular concern to the government will be the extent to which the development will provide economic benefits, such as an increased standard of living and higher employment, to the host area. Economic benefits
Analyzing finances
For most destinations, the prospect of greater economic activity and strength is the first and primary reason for tourism development. Ideally, every dollar of visitor expenditures will be retained and extend throughout the local economy, creating spending, jobs, and wealth. In order to devise strategies to facilitate this outcome, the economic and financial aspects of the development, grounded in the information on demand and supply, is assessed. From the government’s perspective the industry’s ability to generate increased economic benefits for the local community is of central importance. Some of the questions that are important to the public sector in an economic and financial analysis include: - What kind (in terms of socioeconomic level) of visitor is tourism likely to attract? - What are the spending habits of this type of visitor? - Are there products and services that this visitor values and purchases? If not, will they need to be imported? What will be the likely cost of such imports? - Does the work force have the requisite skills and training to supply the industry with labor? How much will education and training cost? Will there be a need to import certain segments of the labor force? If so, what kinds of costs will be associated with that?
Risk and profitability
From the private sector’s standpoint, the risk and profitability of a project need to be carefully projected. Examples of questions that are important to the private sector are: - Are there sufficient local sources of capital for the planned projects? - Are there restrictions on foreign ownership or control of land? Will these restrictions affect the ability to obtain financing? - What are the prevailing wage rates of the local population? Is there a pool of managerial-level workers that can staff the facilities?
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Factors Affecting Tourism Planning
The funding requirements for destination development are usually addressed carefully in the planning process. Although government is often responsible for funding items such as infrastructure and education and training, while the private sector funds accommodations and other facilities, the actual funding will vary with the circumstances of each project. Less-developed areas with limited access to both public and private capital can apply for assistance from various regional and international organizations, such as the Asian Development Bank and the World Bank (see Chapter 14). These types of organizations also provide funding for the planning process itself.
Funding
15.7.5 Action Plan and Recommendations The action plan is the culmination of the planning process and will vary with the goals of the plan itself. The goal of this section is to synthesize all of the data and analysis into a viable plan of action for the various parties involved in the development. This section of the plan can include strategies, guidelines, recommendations, schedules, and even legislation and other formal documents. Often, the action plan will include a combination of some or all of these products. An example of an element that might be included in this section is a graph that represents a time-specific action plan, with details on the sequencing and timing of objectives. Another example would be development and design standards, or even model legislation, which a government could use to control the development of the destination area and covering areas such as building density, building height, building setbacks from property boundaries, shorelines, and roads, the allowable floor area ratio of buildings, the allowable building footprint or site coverage, parking requirements, and other requirements in areas such as landscaping (WTO, 1994e, p. 52). These types of development guidelines are important for undeveloped areas, many of which do not have zoning codes in place during the planning process. In this way, a plan can have an impact beyond its own project area and assist a destination area’s government in ensuring that the groundwork for tourism development is laid.
15.8 Factors Affecting Tourism Planning Tourism planning, as a complex activity that involves many different parties, is subject to a number of pressures and factors that can influence the planning process and the persons involved in it. These pressures can
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Synthesis of data
Guideline development
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Expectations and fears
Public skepticism and interest groups
be particularly numerous and forceful in cases where there is an expectation that tourism will solve a range of economic and social problems. Unfortunately, this expectation often occurs in communities that are economically depressed which in turn creates budget constraints that reduce the ability of government to fund and support the industry. In some communities, on the other hand, government planning efforts are constrained not by funds but by pressure to lessen planning regulation and to leave the development of tourism to the private sector. In these cases, often there is the fear on the part of individual businesses that cooperation and planning with others will lessen their individual competitiveness. Sometimes tourism planning must contend with skepticism of the need for and benefits of tourism on the part of residents. Residents may be wary of the negative impacts of tourism development. A common and often powerful factor in tourism planning results from pressure to protect the environment on the part of the public and, in particular, by environmental groups. Planners deal with public skepticism and interest group pressures by encouraging wide participation and input in the planning process. However, the complexity and cost of setting up a planning process and structure that provides for extensive participation and input can be quite high. Finally, the planning process must deal with the ongoing, market-related competitive pressures resulting from constantly changing technology, the emergence of new destinations, and changing preferences of visitors.
SUMMARY A successful tourist destination rarely happens by accident. Rather, it is the product of careful planning in a number of critical areas. In a comprehensive analysis of the development of a visitor destination, these areas range from the visitors themselves to the local infrastructure. The experience of many destinations has demonstrated that such a comprehensive analysis is necessary to anticipate the wide range of impacts that tourism brings to a society. In the past, tourism planning had often been reactive due to the inherent difficulties of dealing with the future and to the nature of the organizations in which many planners have worked. Because of the difficulties of forecasting and projecting the future, plans and policies often did not meet their stated goals and in many cases also brought about unexpected results. The resulting crisis in planning, as well as the accumulated experience in this area, has brought about a more realistic view of the limitations
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of planning, led to the development of planning mechanisms that deal with uncertainty and change, and produced a better quality of planning product and process. Experience has also shown that planning is critical to the long-term economic viability of the industry. Sooner or later, the problems of an unplanned destination will become apparent to its tourists, who, in today’s competitive market, will opt for other destinations. Planning a destination according to the principles discussed in this chapter can be time-consuming and contentious, as various parties–developers, government, the local population–press for their own goals. However, the process itself is designed to bring issues out before decisions are made, construction begins, and mistakes become costly or irrevocable.
DISCUSSION
QUESTIONS
1. Why is tourism planning important? 2. What are the levels of tourism planning? 3. Who are the actors involved in the planning process? 4. What are the major elements of a destination plan? 5. How is tourism planning usually organized? 6. What is the purpose of a tourism impact analysis?
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Learning objectives • To understand the importance of human resources in the global tourism industry. • To be aware of how human resources needs are assessed. • To understand the relationship between tourism human resources needs and human resources development through tourism education and training programs. • To understand the impacts of global political, economic, and social trends on human resources. Key terms and concepts academic programs advanced management programs certification cross-border labor flow cross-functional skills human resources planning skill standards vocational programs
16 Tourism Human Resources Planning and Development
16.1 Introduction Tourism is essentially a service business, and the many people whom a visitor encounters and relies on to provide for basic needs and entertainment are critical to the success of a tourism destination. Tourism is also the business of hospitality, therefore, when service is provided, the friendliness of the service delivery matters. It is an axiom that people don’t go where they do not feel welcomed. Thus the roles of host and guest define in large measure the memorableness of the visitor experience and determines whether there will be repeat business. Professionalism, effective skills, efficiency, and courtesy as service characteristics do not happen in a vacuum–they are the result of education and training investments. Recognizing that workers as providers of service are essential to the industry’s success, governments are working actively with industry to establish employment policies and skill standards to meet the needs of an increasingly competitive global environment. Education and training providers, who now deliver an array of programs and courses, are also examining their curricula in the context of real world skills and knowledge needs. This chapter will examine aspects of tourism’s human resources or work force, as well as the nature of service in the tourism industry. It will discuss the importance and methods of assessing human resources needs in the industry, for both new and existing destinations, and the role
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Workers: essential to success
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education and training providers play in human resources development. It concludes with a look at some of the global issues that will affect the tourism industry and tourism human resources in the future.
16.2 Human Resources Planning
Importance of planning
Human resources planning and development has been defined as “a systematic approach to ensure that the right people are in the right job at the right time” (Inskeep, 1991, p. 403). Because tourism is a service activity and depends heavily on the people who work in the industry, knowing how many people are needed to fill current and future positions and what attitudes, skills, and knowledge the people who fill those positions should possess is important in tourism development. Besides the quantification aspect, human resources development must also be sensitive to the sociocultural environments of the community and host society. In the past, human resources development was often neglected in tourism destination planning. The assumption was that once tourism projects were completed, it would be easy enough to find labor and to do intense, short-term training to prepare people for jobs. This view has proven to be shortsighted, and in countries with scarcity of either labor or skills or both, the success of tourism enterprises was put into jeopardy as solutions to import labor and skills were not only costly, but usually met with government opposition. Tourism is a growth industry for many countries and regions, and human resources planning is seen as essential in balancing labor supply and demand and in developing and sustaining a quality tourism product. The WTO-sponsored “Madrid Declaration on Human Resources Development” in 1996 noted the urgency in the need for qualified human resources in the tourism industry. Government strategies related to human resources development cut across a wide range of activities including education and training, immigration, wages, and other work-related incentives and controls. Human resources planning involves: • Evaluating the present utilization of human resources in tourism and identifying any existing problems and needs. • Projecting the future human resources needed by estimating the number of personnel required in each category of employment and determining the qualifications for each category of job. • Evaluating the human resources available in the future. • Formulating the education and training programs required to provide the requisite qualified human resources (Inskeep, 1991, p. 404).
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16.2.1 Assessing Labor Demand In assessing tourism human resources, all levels of tourism positions in every sector must be considered including managers and nonmanagers for hotels, food service, attractions, transportation, tour and travel operations, personal service, and government tourism administration. The information obtained includes job classifications, number of employees, and work force demographic information such as age, education level, residence, and national origin. Problem areas, if they exist, are identified and described such as the number of available workers, worker qualifications, high turnover, or lack of training. Projecting human resources demand can be done by using expected tourist arrivals and number of lodging units and other facilities to be used to meet this demand. A common technique to obtain gross human resources projections is to use ratios such as the number of jobs per lodging unit. For example, a ratio of 1.5:1 means 150 jobs for 100 rooms. Types of service will also influence different types of jobs. For example, sightseeing tourism requires more guides and drivers, while beach tourism, more lifeguards and diving instructors. An active government role in tourism will also create public service jobs linked with tourism, for instance, in marketing and promotion, research, convention bureau management and other areas.
Assessing all positions levels
Projecting demand
16.2.2 Assessing Labor Supply An accurate projection of human resources supply and demand can help reduce the need for migration of the work force to seek or fill jobs through better planning. Migration takes place when there are imbalances of seasonal demand or structural supply of workers for tourism. Cross-border labor flow often reflects the disparate needs of countries at different levels of development, with industrialized nations drawing immigrant labor to fill lower paid positions for which the host country has no available workers. These positions may also not be in line with the career expectations of resident workers of the host country. Developing nations often have to bring in expatriate managers to fill the top positions in the tourism industry because there is no local pool of management talent. Even for industrialized countries, filling management and professional positions may be difficult as other industries compete with tourism and draw employees from this pool. In planning an area’s tourism human resources, decisions need to be made regarding the number of people that are going to be brought in, the qualifications needed, and the social implications of having immigrant labor. Cross-border labor flows have been increasing, especially in Asia-
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Lack of skilled labor
Pacific countries. In such labor-short countries or locales as Taiwan, Hong Kong, Singapore and Malaysia, migrants provide a partial solution in meeting the demand for workers. By contrast, countries such as China, Philippines, Sri Lanka, India, and Bangladesh experience labor surpluses. Recent studies of travel and tourism industry human resources in AsiaPacific countries found more than half the employers surveyed indicated that they have a moderate to serious problem in recruiting management and skilled/semi-skilled workers, due in part to the rapid growth in the industry. They also reported that filling professional positions was also a serious problem. However, most employers had no trouble filling unskilled positions (American Express Foundation & the World Travel and Tourism Council, 1993, p. 8; American Express Foundation & the Pacific Asia Travel Association, 1994, p. 7). Similar results were found in a study on human resources for Latin America’s travel and tourism industry (American Express Foundation & the World Travel and Tourism Council, 1996).
16.3 Tourism Employment and Career Opportunities
Range of occupations
The employment and career opportunities available in tourism-related activities are as varied as the industrial sectors which comprise the tourism and travel industry. These diverse sectors (discussed in Chapter 8) provide a wide and varied range of occupations. Although there are no industry sectors which are entirely dependent on tourism, there have been numerous attempts to develop a classification framework to identify economic activities related to tourism. The World Tourism Organization (WTO) has developed a classication methodology called the Standard International Classification of Tourism Activities (SICTA) which categorizes businesses based on their principal activity. Within these sectors, tourism-related occupations can be readily identified. In the hotels, motels, and other provisions of lodging (SICTA codes 5510, 1, 2, 9) for example, jobs include general manager, resident manager, catering manager, executive housekeeper, director of sales, front office manager, and steward to name a few. Jobs in restaurants, bars and canteens (SICTA code 5520) include restaurant managers, cashiers, food service supervisors, chefs, waiters and waitresses, and kitchen helpers. The transportation sector may include jobs which relate to airlines (SICTA code 6210-1) including pilots, flight attendants, and aircraft mechanics; ground transportation (SICTA code 6021, 6010) such as bus companies, railroads, rental car companies which offer jobs as drivers, tour representatives, ticket agents; and sea transportation (SICTA code 61101) with jobs offered on cruise liners.
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Generally, the jobs in the tourism industry can be classified as service, clerical, managerial, or professional. In a hotel, for example, service workers are those who clean, serve food, carry luggage, and provide security; clerical workers are those who provide information, keep track of accounts, cash and stock, and operate the switchboard; managerial workers are those who supervise the activities of others; and professional personnel are those who provide legal and financial accounting services to the hotel. They are designated as professionals by virtue of their special training and credentials. For the hotel and other companies that provide basic and personal services to tourists, service workers generally comprise the largest group.
Kinds of jobs
Table 16.1: Standard International Classification of Tourist Activities (SICTA) Hotels and Restaurants 5510
Hotels, Camping Sites and Other Commercial Accommodations
5510-1
Hotels and Motels with Restaurants
5510-2
Hotels and Motels without Restaurants
5510-3
Hostel and Refuges
5510-4
Camping Sites, Including Caravan Sites
5510-5
Health-Oriented Accommodation
5510-6
Other Provisions of Lodging, N.E.C.
5520
Restaurants, Bars and Canteens
5520-1
Bars and Other Drinking Places
5520-2
Full-Service Restaurants
5520-3
Fast Food Restaurants and Cafeterias
5520-4
Institutional Food Services, Caterers
5520-5
Food Kiosks, Vendors, Refreshment Stands
5520-6
Night Clubs and Dinner Theaters
Source: World Tourism Organization, Framework for the Collection and Publication of Tourism Statistics (1991), pp. 62-63.
The projected growth in tourism worldwide ensures many opportunities to enter and advance in the industry. With many entry points for those desiring to begin a career in tourism, young workers may enter jobs that require minimal skills and acquire on the job training, while seasoned workers can obtain technical jobs that require some formal training and education. Job opportunities will usually increase with higher levels of education and training. Each sector has a career path or ladder for individuals entering the field and some representative occupations. Examples of advancement opportunities in hotels are provided in Table 16.2.
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Opportunities for advancement
346 Department
Front Office
Housekeeping Front Office Foodservice Sales Food and Beverage
Housekeeping
Food and Beverage Administration Administration
Title
Assistant Manager
Assistant Housekeeper
Front Officer Manager
Maitre D'Hotel
Director of Sales
Steward
Executive Housekeeper
Catering Manager
General Manager
Resident Manager
Resident Manager Restaurant Manager
Sells convention facilities for meetings, banquets and receptions. Purchases or supervises the food and beverage for the hotel.
Director of Food and Beverage Managing Director General Manager
Sells banquets and supervises banquet service. Supervises all activities within the hotel. Responsible for all the coordination of all departments. Takes over for manager in his absence. Usually handles special duties assigned by manager.
Supervisor of more than one operation or a corporate position
Director of Food and Beverage
Supervises the service of the public dining and banquet rooms.
Supervises all housekeeping personnel in charge of renovation and purchasing of housekeeping supplies.
Assistant Manager
Acts as liaison between the guest and the hotel for reservations, registration and information.
Executive Housekeeper
Resident Manager
Assists General and Resident Managers in discharging their duties. Performs specific assignments on their orders. Supervises the work of maids and housemen in assigned areas.
Advancement Opportunity
Description
Table 16.2: Job Advancement Opportunities in Hotels
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Quality of Service and the Work Force
16.4 Quality of Service and the Work Force While the many companies that serve tourists may form a distinct group, what do workers in these companies have in common? How is the tour driver like the hotel guest service agent? The thread that cuts across all sectors and companies–hotels, restaurants, travel agencies, airlines–is service. The experience tourists have is largely determined by the contact they have with the employees working in the tourism industry. Thus, the employees both create and deliver the tourism “product” at the point of consumption. The defining characteristic of the tourism work force is this core of knowledge and skills that enables the workers to provide quality service to the tourist.
16.4.1 Service Expectations of Travelers A traveler is by definition a person who is out of his/her own element and one who has only limited time to relate to a new environment, and therefore may choose to sample the best that a destination might have to offer. Travelers consider themselves as guests and expect to be treated as such. Moreover, as tourism suppliers raise their standards of service to remain competitive in the dynamic marketplace, they also raise the level of expectation of their customers as well. The implication of these greater expectations for service standards and service performance in the tourism industry is obvious–employees must be trained and educated to provide quality experiences with efficiency or destinations and companies will lose their market share. Providing this high level of service consistently to a demanding market is a challenge for the industry. For the long-term success of a destination or company, education and training can be critical because the tourist will often judge the trip experience by all of the individual contacts, or “moments of truth,” during a visit. Both defining a quality service from the tourist’s perspective and having tourism companies agree to a common service standard and training are important challenges for the industry.
16.4.2 Sustaining Quality Through Skill Standards A critical part of sustaining a quality destination is establishing standards of performance in tourism jobs and certifying workers who possess the skills meeting those standards. In tourism and in other industries, setting skill standards for each occupation is gaining importance as a means to increase employee productivity and provide
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a competitive edge in a global market. In the U.S., the push for skill standards is also based on the need to fight stagnating wages for 50-80 percent of the nation’s workers. In Europe, the European Economic Community (EEC) in 1990 launched the “Year of Tourism” which was organized to promote European tourism in the face of increasing competition from other destinations. However, it was recognized that a well-educated and trained work force was needed to accomplish this objective. Some European countries had cited a deterioration in service as a reason for the drop in their market share.
Occupational preparation
A skill standards system assumes that all productive workers need some occupational preparation. Developing a skill standards system involves three major groups: the employer, who sets the performance specifications that identify the knowledge and skills an individual needs to succeed in the workplace; education and training providers, who design and deliver the programs to raise worker skills to meet professional standards; and a government coordinating body, such as a board or commission, to ensure a centralized system of standards and assessments for certification. A description of the employer and government roles follows and the role of education and training providers will be discussed in a later section. The Employer
Seeking standards
Job profiles
The Institute of Policy Research at Johns Hopkins University defines skills as “marketable competencies,” reflecting the movement of many developed economies from a job-based to a skills-based economy (Shephard & Cooper, 1995). Employers seek work-related standards that are measurable and certifiable, providing them confidence that the workers will be qualified. In addition, because the impetus has been to develop a work force that can compete globally, countries and regions have sought common measures or benchmarks. In Canada, the U.K., and other European countries, industry with the support of education has created profiles of jobs based on competencies. The European Center for the Development of Vocational Training has conducted a survey to analyze key job functions and the knowledge and skills required (Sheldon & Gee, 1987). In the United States, the schoolto-work program focuses on critical skills, competencies, and knowledge needed by students to succeed in different occupations linked to these skills. Competencies and knowledge areas are defined by advisory councils which include employers, educators, and other experts.
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Similarly, in the Philippines, efforts to establish skill standards have focused on job specific skills, such as those for a cook or baker, rather than skills common to other jobs. Another broad approach in developing skill standards has been to focus on cross-functional skills or those that are common or similar across occupations and industry sectors. For example, the customer service agent position, which is found in many companies, requires the same basic skills regardless of type of business or sector. It is estimated that 70 percent of the basic skills of a position transfer across occupations and sectors, and up to 90 percent for management positions. In the U.S., the Occupational Information Network is being developed for all industries, which will replace the U.S. Department of Labor’s Dictionary of Occupational Titles. This network will, among other things, identify basic and cross-functional skills in occupations. For the tourism industry, certain skills have been identified as crossfunctional and critical to the tourism industry such as social or human relations skills. In a study of employer- and employee-perceived importance of skills in their jobs, human relations, communications, and courtesy ranked the highest (Ortiz, 1992). In studies of employers in the Asia-Pacific area, a positive attitude displayed by employees was judged to be of critical importance and in greatest need among six other skill areas. This human relations skill area is important to tourism to create a positive service experience for the tourist. Other skills that are considered cross-functional and important to the work force are critical thinking, initiative and problem solving, and computer skills.
Similiar basic skills
Critical skills
Government Coordination Many countries have established government coordinating bodies to centralize the skill standards and certification system and to serve as a means of communication between employer and education and training providers. Such bodies ensure that the system is responsive to changing economic conditions and need for skill types. Most countries also have industry training boards or national training councils that regulate and set policy for various work training programs. Traditionally, these boards have concerned themselves mainly with established industries such as those of mechanical, electrical, and construction trades, but tourism is beginning to be included in their purview. Examples of coordinating bodies for tourism skill standards include India National Board, Singapore Hotel Trade Advisory Committee, and the Philippines’ Hotel and Restaurant Industry Training Board Foundation, Inc. (Ortiz, 1992).
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Examples of standardization
Problems with tourism education
Regionally, the Association of Southeast Asian Nations (ASEAN) in 1990 initiated a project that developed skill standards for several hotel and restaurant occupations for cross-national use. This project evolved into the ASEAN Tourism Occupation Standards which prescribes curricula and training techniques and encourages their use throughout the region (SSRC, 1996). Singapore also has initiated National Tourism Education and Training Strategies, which are strategies to keep Singapore competitive and its tourism work force productive. The U.S. has been active in establishing a skills standards system as well by forming a National Skills Standards Board (NSSB) which has issued guidelines to employers and education and training providers for voluntary implementation (Sheldon & Gee, 1987). In 1996, the World Tourism Organization conducted a study of 100 public and private sector employers representing 12 subsectors of the tourism and hospitality industry in six WTO regions. The purpose of the TEDQUAL (Tourism Education Quality) study was to pinpoint factors to be addressed by tourism educational and training programs to meet the current and future needs of tourism employers. Among the problems identified were misconceptions of the tourism industry and the jobs offered, the lack of awareness of postsecondary education programs in tourism, lack of coordination in tourism education, and the lack of performance standards and credentialing processes (World Tourism Organization, 1996i).
16.5 Tourism Education and Training Providers As discussed above, more governments are becoming actively involved in tourism human resources development and are assisting employers in identifying skill needs. Education and training providers are also becoming involved in this movement by examining occupations and job functions in terms of skills needed, linking skill standards to the curriculum, and viewing certification of skills as a new role.
Range of programs
To meet the diverse skill and knowledge needs of the industry, a range of programs have developed over the years, from basic skills training to education for management. Education and training providers can be categorized in two ways: formal programs and courses, such as vocational programs and academic courses of study, and employerbased training, such as management training programs.
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16.5.1 Formal Programs and Courses Vocational Programs Many countries offer courses in tourism and basic tourism skills at the high school or secondary level. Students who take a vocational career path focus on practical skills that lead to immediate employment. In fact, the original vocational program was entirely based on apprenticeship training under the tutelege of master craftsmen. Many high schools have vocational programs that also apply the principles and theories of traditional academic areas, such as math and reading, to the field of tourism and other occupations. In most countries, the vocational programs at the post-secondary level are usually found at private training institutes, community colleges, or polytechnic institutions. These programs concentrate on providing skills training in such technical areas as food service, culinary arts, housekeeping, landscaping and ticket writing. The training usually spans from six months to three years with a certificate offered after completion of the program. Hospitality-related training has had a long history, especially in Western Europe–Switzerland, Austria, France, the U.K., among other countries. Travel and tour training, on the other hand, is comparatively new and has gained in popularity almost everywhere. Instructors in vocational training programs typically have extensive industry experience, which is a primary requisite. While the more common type of tourism-related programs and courses around the world are vocational in curricular makeup, there has been a trend to include more general education courses, for example, social studies, economics, languages, and business core courses in vocational program curriculum.
Focusing on practical skills
Post-secondary technical and travel training
Academic Programs The academic programs are usually found at universities, with students taking a core of general studies in the first two years of study and specific courses in the professional field in a four-year baccalaureate degree program. There is some variation in how these programs are structured. Most baccalaureate hospitality programs focus on hotel and catering management. These programs provide both general management, including business studies, and specific skills training in the hospitality field. Work experience in the form of internships of a semester or year length are usually a mandatory part of the curriculum. Besides hospitality programs, there are programs and
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courses that focus on tourism as an area of study. Tourism is approached from various perspectives, such as management, sociology, and geography. This approach to tourism studies is still relatively new with the courses usually offered by traditional departments such as geography rather than from its own program. Instructors for these programs often come from the traditional disciplines such as economics or sociology. In the U.S., tourism studies are usually integrated as an optional area of study within the hospitality program.
Graduate programs
Upgrading skills
Changes in perceptions
Graduate programs in tourism and hospitality are increasing, and their graduates are gaining acceptance by the industry. In Europe, the ERASMUS program, which encourages the link between European institutions, has developed the European Tourism Management Masters Programme, a cross-cultural Masters (MSc) program developed for tourism. Students can study for the degree in up to three of the five institutions located in five countries: the Netherlands, the U.K., France, Germany, and Spain. Over the past decade, the number of advanced management programs have increased for preparing private and public sector managers and executives. These programs have capitalized on the trend of lifelong learning, which encourages individuals to keep abreast of the rapid changes in the work environment through short courses or formal programs that upgrade skills and knowledge, such as supervision, tourism planning, and marketing. These advanced management programs also develop tailormade programs for the employer. A combination of academic courses, study tours, and on-the-job work/observations are arranged by the advanced management program, often drawing participants from overseas tourism employers and government tourism organizations. In spite of the many education and training opportunities, those working in tourism historically have been perceived as having low professional status. But this situation may be changing within the framework of tourism-related occupations. Formal programs such as two-year, fouryear, and graduate programs are important to preparing professionals competent in the field, and the educational institutions are developing knowledge that supports the professions. WTO’s TEDQUAL study indicated employers are also seeing the importance of formal programs as enhancing the professionalism of the field. In studies conducted in the U.K., more companies want not only “real world,” on-the-job training, which is still the prevalent mode of training, but also formal education and training that complements vocational training (see Table 16.3).
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Table 16.3: Employes Survey of Tourism Education. Percentage of Employers Indicating Degree Needed for Working in the Tourism Industry
Front Line Personnel
Supervisors
Mid Level Managers
High Level Managers
High School
36
34
12
6
Technical School
36
36
14
6
College or University
24
25
62
47
Post Graduate Institution
5
4
13
42
Source: World Tourism Organization, 1996i, p. 18.
16.5.2 Employer-Based Education and Training While tourism human resources planning and the delivery of education and training are often done at national or regional levels and through educational institutions, the larger companies such as the major hotel chains also do their own human resources planning and development. Some hotel chains–Hilton International, Inter-Continental, Meridien, Oberoi Hotel Company in India, the Dusit Thani hotel group in Thailand, among others–operate their own training schools. Because of the inherent diversity in the tourism industry, there is a tendency for each type of company to provide its products and services in its own way. In addition, although medium and small tourism companies employ the majority of the workers and have a need for qualified employees, they often are hesitant to invest in tourism education and training because of the additional costs involved. Companies use a variety of in-house resources such as special training facilities as well as support their employees’ outside learning activities. Companies with smaller training budgets may operate their own training programs as well, which include on-the-job training and the sponsorship of employees in special short courses, regular programs off-premise to learn about specific tourism topics or upgrade skills, and study tours to visit model tourism development and operations. A few in-house programs have their programs accredited by certain trade associations, such as for the catering profession, to ensure program quality. Other companies use innovative methods to provide training, for example, a hotel in South Korea allows employees to be a complimentary guest on property so they can better know the product and appreciate the elements
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of high quality service; a Southeast Asia airline links customer needs to staff development and training center activities and course offerings; an Australian hotel company recognizes existing skills of employees which allows them to compete for higher rank and position in various specializations (Inskeep, 1991). Generally, these company programs are designed to respond to changing work force needs and to enhance the company’s culture, mission, and standard of service.
Disadvantages of company training
Recently, there have been concerns that employer-based education and training programs may be too specific, narrow and appropriate only to a particular company’s requirements with the workers not being able to transfer their skills and knowledge to other sectors of the tourism industry. While many company programs are well-structured and comprehensive, others are understaffed and underbudgeted, and company trainers may not be providing the breadth and variety that an independent institution possesses. Moreover, few in-house programs are accredited or open to independent scrutiny (Shephard and Cooper, 1995). Training resources and funds also appear to be disproportionately spent on training for managerial-level workers, leaving relatively little for other workers who do the daily operational tasks. In some regions, companies expend on average one-half of their training budget on 5 to 10 percent of the employees (American Express Foundation & the World Travel and Tourism Council, 1993, p. 13).
16.5.3 Education and Training Providers and Skill Standards
Problems achieving standards
Today, interest in establishing a worldwide skill standards, certification, and accreditation system for the travel industry is mounting within the World Tourism Organization and other travel-related international and regional associations. As discussed earlier, establishing standards for a diverse industry is difficult, which has sometimes frustrated education and training providers and employers. The lack of regional or national occupation standards to which both employers and education providers may agree makes it difficult to achieve any consistency in curriculum design and occupational preparation. Programs in the hospitality and tourism-related fields tend to determine their own outcome goals, curriculum design, and teaching methods. In the absence of uniform standards and guidelines, they adopt well-known and long established schools as models for emulation. Educators are also faced with the dilemma of whether to focus their curriculum on specialized topics and skills and risk having graduates whose skills are quickly obsolete, or on
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general topics and skills and risk having graduates with no “hard” skills which are immediately applicable on the work environment. From the employer’s perspective, institutional education and training providers often seem too rigid and out of touch with the needs of the industry. From the educators’ viewpoint, industry seems not to know how to beneficially employ the trained skills that graduates have to offer. Despite these concerns, there has been gradual progress in establishing a partnership between education and training providers and the industry in developing skill standards and certification systems. In some countries such as Australia and Canada, skill standards have been established in certain occupational areas as well as a certification process by education and training providers. The establishment of government coordinating bodies in countries discussed earlier represents an important step in developing occupational profiles and assessing current education and training providers. The WTO has taken the lead in establishing a network of education and training centers to implement strategies and standards to increase professionalism in advanced tourism education and training. In 1997, there were 14 WTO centers distributed on a regional basis cooperating in the development of tourism education and training curricula and research. Cooperating institutions are also involved with the centers in the WTO Education and Training Network.
Progress
WTO's education network
16.6 Issues Facing Tourism Human Resources Development As with all individuals in the world community, the tourism work force is subject to the rapid changes occurring across the world’s political and socio-economic landscape. Even such basic functions as how we communicate, use, and store information have changed radically over the past decade and will continue to change in the future. These critical world changes will challenge the industry, governments and regional associations, and education and training providers in their effort to develop and maintain a quality tourism work force.
Global changes
16.6.1 Geopolitical With the end of the Cold War, major realignments in political affiliations are occurring. In Europe, there are increased business opportunities in the Central Independent States or CIS (part of former USSR and eastern Europe). An increasingly unified European regional economy has
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Labor migration
created labor shifts and increased demand for travel. In the Americas, the North American Free Trade Agreement (NAFTA) has made it easier to move businesses across borders. In the Asia-Pacific region, China and Vietnam are moving rapidly toward market economies, generating a need for capital, training, and labor. These changes will impact travel and tourism as more people will be traveling to developing countries and there will be a greater need for training of the work force, especially in cross-cultural skills and communications. In addition, the work force will be more apt to migrate, which means that more cross-border labor flows will occur, increasing the stratification of jobs. The need for skill standards and certification systems that cross national boundaries will be greater because of a transient work force; the work force has to be seen in regional and global terms rather than at company or country levels.
16.6.2 Economic
Need for creative managers
Global competition is increasing, and investors and bankers are becoming more aggressive in pursuing their return on investment from tourism companies. In the 1990s, management companies are no longer in the driver’s seat as they were during the 1980s and now must satisfy both the guests and owners. The implication of this trend is that management must work smarter and more creatively. Skills at a premium will be problem solving, commitment to the business, and being multi-skilled with the decentralization of authority in the new “power-sharing” styles of management.
16.6.3 Social
Career and lifestyle issues
Aspirations are rising as educational levels increase around the world. Workers want more from their careers. On the other hand, workers are now turning down jobs that offer more pay but a lesser quality of life. The implication for human resources development is that a skill standards system may address these career and lifestyle issues. Tourism occupations will gain credibility, attracting more talented individuals, as well as provide clear benchmarking for career growth.
16.6.4 Information Technology The information-knowledge age is accelerating. More companies are going on-line and state of the art computers will be sitting on every desk. All employees, management, and entry-level workers will need to
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master this constantly changing communications medium. For education, there will be a closing of the “head-hand” gap where the skilled or semi-skilled worker will be taking on more “head” work. Educators must redesign curriculum and pedagogy in which all students are educated to a higher level. Establishing skill standards will be one means of articulating these fundamental changes that will be occurring.
Computer age
16.6.5 Constant Change Global competition, new technology, and quick access to information have placed people in a permanent learning mode. It is predicted that workers will be spending as much or more time on learning new techniques or information than actually doing the activity of the job. The tourism curriculum can expect to be more process- than contentoriented. In this approach, it is not so much what is learned but how it is learned that is important. The focus will be on students developing transferable skills, such as critical thinking and communication skills. Students will be the center of learning, and they will need to take on more responsibility for their learning and be self-directed.
SUMMARY This chapter has emphasized the importance of human resources development, especially given the size of the tourism industry worldwide and the central role service plays in the industry. The projected worldwide growth of the tourism industry will increase the demand for labor. In addition, the labor-intensive, service-dependent, and widely diverse nature of the tourism industry makes it a priority to have a well-educated and trained work force. Also discussed was the need to first assess the skill, knowledge, and attitudes needed for the positions in the industry both for new and existing destinations. The establishment of skill standards and a certification system, with regular employer input and coordination by government, is one way to ensure that industry skills are made known in a consistent way and can be changed. The education and training providers deliver a range of programs and courses from vocational to advanced management to inhouse training. However, it was pointed out that more has to be done in meeting industry needs and that some countries are already taking steps to establish a comprehensive skills standards system and provide for the certification of skills. Finally, some broad global trends were discussed that might have an impact on the tourism work force in the future.
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DISCUSSION
QUESTIONS
1. Why is the tourism industry unique in its dependence on a quality work force for its growth? 2. Why is the tourism industry difficult to define as an industry? 3. What steps need to be taken to ensure work force quality in a tourism destination? 4. Discuss the roles of the employer, government, and education and training providers in developing and implementing skill standards and a certification system. 5. In light of current global trends, why are skill standards and certification systems important to tourism’s future?
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17 Conclusion
17.1 Tourism and Sustainability: Issues for 2000 and Beyond The historic phrase “all roads lead to Rome” when Rome was the center of the Western universe aptly describes the convergence of tourism concerns in the new millennium towards two fundamental issues: growth and sustainability. These two issues are at the heart of the anticipation that we have for tourism’s future within the economic, social, cultural, and environmental structure of communities, countries and regions of the world. With respect to growth, there is general agreement that the tourism industry will continue its rapid pace of expansion and development into the next century and beyond. Whatever theory of travel motivation (covered in Chapter 7) one believes best accounts for the reasons that people travel, it is clear that travel will continue to be a valuable and highly desirable experience for people around the globe. Advances in technology and planning will enable international travel to become affordable and accessible to more of the world’s population. Thus, for the foreseeable future, growth will characterize the travel and tourism industry. In this text, the authors have attempted to demonstrate that tourism growth is also a double-edged sword which, on the one hand, provides more jobs and revenues to help sustain a community’s economy, but on the other,
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Tourism: a double-edged sword
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Measuring success
Higher quality expectations
Long-term perspectives
may contribute to accelerated changes of cultural and natural environments of that same community. Nor can growth be taken for granted, as many mature destinations have discovered when new consumer trends favored other alternatives offered by competitors. The type and quality of growth, moreover, become fundamental issues in determining how tourism will or will not benefit the environment and people of a host community. As was discussed in Chapter 12, tourism’s success can no longer be measured purely by increasing numbers–whether they be visitor arrivals, tourist revenues, or marketing expenditures–but by its contributions to the quality of human life and the integrity of the physical environment. These are much more demanding goals, and achieving them will require that tourism professionals, especially those engaged in the policy and planning areas, must improve their methods of analyzing, anticipating, and managing the effects of tourism development. The issues of quality upon which the future of tourism depends lie at the heart of sustainability. In this regard, it is important to note that in the new millennium quality will be essential across all the elements of tourism that have been covered in this text–transportation, hospitality and lodging, attractions, and services. Tourists will expect an integrated experience of these elements characterized by high quality. In accomplishing this, tourism research will continue to play a critical role in creating the necessary knowledge base to address complex and interrelated issues. As the discussion of the resort destination life cycle (Chapter 15) makes clear, growth and success can be a transitory stage of development. Growth and success can create problems of overcrowding, overdevelopment, commercialism, community alienation, and so forth, that become the seeds of decline for the destination. Some experts in paraphrasing Karl Marx have noted that tourism uncontrolled contains within itself the seeds of its own destruction. Sustainable tourism avoids such problems in by reorienting the industry’s priorities and practices towards an acceptable balance between viable growth and environmental sustainability over the long term. Indeed, the adoption of this long-term perspective will be the key to survival for many popular destinations which have seen recent declines in the quality of their products and loss of visitor traffic to newer and better planned destinations which are unspoiled.
17.2 The Challenges of Growth As tourism enters a new millennium and the prospect of continued expansion and greater importance in the world economy, it faces numerous challenges. Policymakers will increasingly have to address
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fundamental issues related to the industry’s growth, direction, and effects. As there is more awareness of the many connections between the tourism industry and the future of communities, the public will also become more engaged with these issues. Fundamentally, the following questions reflect choices that government, private industry, and community leaders must collectively consider.
17.2.1 Where Will Tourism Growth Occur? Chapter 6 discussed the way in which the increasing sophistication of tourists has given rise to special market segments such as cultural, rural, adventure, and sports-related tourism. These segments provide consumers with well-defined choices in the type of visitor experiences they seek, often by basing those experiences on the unique characteristics of the landscape or culture in which they are situated. Because these special segments provide alternatives to the more familiar and commercial forms of mass tourism, they are by definition special or niche segments which direct tourism activity into less developed environments. Unfortunately, from an environmental and cultural perspective, lesser developed areas are potentially more vulnerable to the adverse effects of tourism activity. The question of where tourism growth will occur, then, requires thoughtful decisions about the extent to which tourism activity will take place in areas and communities that exist at or beyond the periphery of modern, market economies. As tourists demand more unique and unconventional experiences in the future, examples of the types of hard questions that policy makers will need to address more frequently are: Should nations place geographical limits on tourist activity? Are there certain types of environments (such as wetlands or rainforests) that should be protected from all forms of visitor intrusion? How will governments balance the competing demands for access to popular natural areas with their preservation and protection, and the larger debate between business interests and environmentalists? Growth issues will affect not only undeveloped or vulnerable areas, but also established population centers. For example, many governments are finding it increasingly difficult to build new or expand existing airports due to resistance from affected residents and businesses. Residents may see a new or expanded airport as a source of worsening traffic, noise pollution, and unattractive development. Businesses may object to the potential changes in land values that result from such development, or to new patterns and concentrations of commercial
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Special market segments
Balance and protection
Massive developments e.g. airports
Chapter 17: Conclusion
activity that threaten their established ones. There are few other developments that are as massive in scale, as costly, and as important to the economic vitality of an area, than a modern airport. Their very importance and impact means that planning an airport will be fraught with contention and complications that can delay the project for years.
17.2.2 What Kinds of Tourism Experiences Will Meet the Market?
Anticipating change
Visitor trends
Throughout this text, the importance of adapting to and meeting the tourism market has been stressed. The tourism market is dynamic. New visitor generating markets will arise, representing different cultures with their own unique preferences and patterns of expenditures. Visitor trends will change, as fads and fashions go through their inevitable cycles. To be successful, destinations and businesses will need to anticipate change and be flexible enough to adapt to it. As suppliers attempt to meet the changing desires of visitors, however, there are important issues that will need to be addressed. For example, two trends that are apparent in the development of the special market segments discussed in Chapter 6 are the increasing desire by tourists to actively and directly participate in sports, recreational, and cultural experiences, and their greater value on authentic experiences versus those that reflect commercial influences. Once established, however, these niche markets may prove to be difficult to adapt to changing consumer tastes. A destination cannot simply alter the physical features or cultural activities that it has used as visitor attractions throughout the years. Thus, destinations, particularly those that base their appeal on attractions and activities that are unique to their location and culture, face a delicate balance between building a sustainable industry that enables their communities to maintain their cultural identity and environment, and adapting to changes in the market in order to survive as a viable destination within a highly competitive industry.
17.2.3 Who Will Benefit From Tourism Growth?
Necessity of a fair distribution
As discussed in Chapter 12, the issue of equity is a central concern of sustainability. As tourism moves into the new century, this issue will become increasingly important. Citizens and communities around the world are becoming more sophisticated in their awareness and understanding of issues that affect them, and in their ability to influence decision making. Revolutionary changes in communications technologies are enabling people to gain access to information and to
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share information with each other. Given these conditions, it will become increasingly difficult for governments and businesses to support development that is not perceived to allocate its benefits and its costs in a fair manner. Communities in which tourism development occurs will demand answers to the following types of questions: Where will the profits from the operations go? Who will own and control the major businesses? Who will be employed by the businesses? What kinds of employment positions will be available to residents? What kinds of wages will be paid to tourism employees? In many destinations, the question will no longer be one of whether there will be adequate employment generated by tourism but whether tourism jobs will suit the aspirations of residents in the community. Local governments will also be interested in tourism’s anticipated benefits at a macro level. Will developers help to finance infrastructure improvements necessary to accommodate growth? What kinds of amenities will be accessible to the public? Will they provide the residents with the skills and training required by tourism employers? This last question centers on one of the key issues facing tourism, namely, the availability and competence of human resources.
Macro-level of benefits
17.2.4 What are the Human Resource Implications of Tourism Growth? As noted above, the issue of human resources is a key aspect of sustainable tourism development. One of the most important potential benefits of tourism development is its ability to generate employment. Often, it is the promise of jobs that proves decisive to public officials in their deliberations over whether or not to encourage tourism development. Yet there are many dimensions to the implications of tourism growth for human resources. For example, in some destination areas, the available pool of resident manpower is insufficient to staff the local industry. Such areas have often resorted to the importation of workers, both nationals and foreign, to provide the necessary labor. As can be expected, such measures can have a significant effect upon the communities involved. In some cases foreign workers are paid wages that are much lower than would otherwise be paid to local workers. In others, foreigners fill only the higher-paying positions, leaving a cultural gap between them and the staff and line workers. Another example is the large-scale movement of women out of the domestic sphere and into the myriad employment positions that tourism offers. The impacts of this shift include disruptions in traditional domestic economic arrangements, downward pressure on
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Complexity of the labor question
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wages, increased employment competition for men, and changes in child care, marital relations, and other aspects of family life. Worker importation and women’s employment are two examples of how the employment demands of the industry create new social and economic arrangements to which everyone must adjust.
17.2.5 Learning from Other Destinations
Learning from experience
To be certain, many communities and countries have already encountered these foregoing questions in the past and there are numerous case studies documenting the outcomes of those decisions. Some of those outcomes have been successful, and some less so. The relevant point to be made here is that each destination is unique and the application of another’s experience will not necessarily result in the same outcome. Drawing conclusions from the experience of another destination requires a careful assessment of the ways in which its various aspects–environment, development stage, social and cultural contexts, and so forth–are comparable.
17.3 Sustainable Tourism and the Future 17.3.1 Growth Towards What?
Benefits due to growth
Sustainability: a necessity
Fundamentally, economic growth is aimed at improving the living standards of people. As growth occurs, it is expected that more resources become available to more people. The effect of this greater availability of resources is not limited only to higher real wages or consumption. It extends also to more qualitative aspects of a community, such as its health, education, and arts and culture. Communities also benefit from the greater capabilities of a government that has increased resources as a result of economic growth. Governments can improve their services in areas such as social assistance and support, education, health care, environmental protection, citizen safety, and planning. The resulting improvement in these areas have direct and significant impacts on the quality of life for a community. However attractive these benefits of economic growth may appear, they can no longer be pursued without regard for the environmental and human resources on which growth is based. As the world enters a new era, it is clear that sustainability is no longer an ideal, but a necessity. Population and development pressures have placed the Earth in a delicate and vulnerable position. Species that have survived through centuries have disappeared as their habitats have been
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modified or eliminated by development. Biological and cultural diversity are under increasing pressure from the effects of urban expansion. And in spite of the fact that nations are becoming more productive and efficient, poverty and hunger afflict much of the world.
17.3.2 Sustainable Tourism The tourism industry has been at the forefront of efforts to reorient traditional priorities and practices that are destructive to environments and cultures. In recent years, these efforts have become more focused and concrete and have yielded encouraging results. The groundwork is being laid for a concerted effort on the part of the industry to achieve sustainability in the next century. In early 1997, for example, the WTO convened the Asia-Pacific Tourism Ministers Conference on Tourism and Environment in the Republic of Maldives. This conference intensively covered a range of technical issues related to sustainable tourism, and issued the Malé Declaration on Sustainable Tourism (see Exhibit 17.1). The Malé Declaration is indicative of a global trend on the part of tourism organizations to formally recognize the importance of sustainability and to encourage and facilitate the adoption of sustainable principles by the industry. In particular, there is a sense of urgency in efforts to protect those destination environments, such as small islands, for which adverse environmental and sociocultural impacts would be devastating and permanent. The Declaration also emphasizes the need for cooperation between the public and private sectors in fostering sustainability.
Laying the groundwork towards sustainability
Formal recognition of principles
17.3.3 Cross-Cultural Understanding and Peace In the post-Cold War era, culture and religion have replaced ideology as the dominant sources of international tension and conflict. It has been demonstrated all too frequently that when other societies are perceived as categories, rather than communities of humans who have much in common with other communities, the results can be tragic. International tourism, by definition, brings people from different parts of the world face-to-face with each other, enabling them to discover those things that make them unique as well as those that bind them together. Other societies, cultures, and communities thereby acquire a “face” and immediacy rather than remain abstract groups. This contact between cultures has been emphasized as critical to global survival on an increasingly crowded planet. Thus, there is tremendous potential for tourism to play a prominent and catalytic role in achieving one of the key tenets of sustainability: world peace.
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Link between tourism and peace
As the primary governmental organization devoted to world tourism, the WTO has recognized this potential and incorporated peace into its mission statement: the development of tourism “as a significant means of fostering international peace and understanding.” As the world moves into the new century and millennium, it can safely be said that without international peace, little else–from CRSs to NTAs–will much matter. As the world’s leading governmental organization in tourism, the WTO–along with governments and nongovernmental organizations interested in sustainable tourism–recognizes its role and responsibility in nurturing this vital link between tourism and world peace. It is a responsibility that WTO has directly and proactively met through its numerous activities and initiatives. It is hoped that this textbook has likewise made a small, but essential contribution towards global fellowship.
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Exhibit 17.1
MALÉ DECLARATION ON SUSTAINABLE TOURISM (adopted at the Asia-Pacific Ministers’ Conference on Tourism and Environment, in Malé, Maldives, 16 February 1997) WHEREAS the Asia-Pacific Tourism Ministers Conference on Tourism and Environment was held on 16 February 1997, in Malé, Republic of Maldives, convened by the World Tourism Organization with the participation of delegations of 27 states, affiliate members, international organizations, regional organizations and observers, to clarify and define the linkage between tourism and environment, as well as to consider the responsibility of states and the private sector for achieving a high degree of sustainable tourism development; and WHEREAS, the theme of the conference, “Tourism 2000-Building a Sustainable Future for Asia-Pacific,” attests to the unanimous sentiment on the part of the conference participants that tourism can and should promote environmental health and integrity, and that the substantial and ongoing investment of financial, human, and natural resources in tourism development requires a fiduciary responsibility to the sustainablity and continued viability of the industry for the benefit of communities and nations; and WHEREAS, there is recognition and appreciation for the uniqueness and the diversity of natural environments, peoples, cultures, and heritages of the AsiaPacific countries and their importance for tourism’s potential for cross-cultural learning, international understanding, and world peace; and WHEREAS, the conference participants have explored the many policy-related and technical issues involved in sustainability, with an emphasis on those of particular relevance to the public sector; now, therefore, BE IT RESOLVED by conference that the participants of the Asia-Pacific Ministers Conference on Tourism and the Environment agree in principle to: Pledge continuing support for the vision and goals of sustainable future, as conceived and articulated in the 1987 Brundtland Commission report, the 1992 Earth Summit, the Rio Declaration, and Agenda 21, and further extended to the tourism industry through subsequent efforts such as Agenda 21 for the Travel and Tourism Industry, the World Conference on Tourism and Heritage Management, encompassing the following precepts: • Fostering awareness of environmental ethics in tourism among communities and consumers; • Conservation and sustainable use of resources; • Public guardianship of the natural environment; • Reducing consumption of water; • Natural, social and cultural diversity;
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• Integrated tourism planning for sustainability; • Support for local economies; • Local community involvement; • Consulting tourism stakeholders and the public; • Human resource development; • Responsible tourism marketing; • Ongoing inquiry into sustainability issues; • Measurements to monitor tourism’s impacts on environment, culture and heritage; and • Use of environmental impact assessments in tourism planning. Commit resources to environmental protection and to improving the quality and professionalism of our human resources to create a valuable and meaningful visitor experience and to meet the needs of a competitive global environment; Emphasize the urgency of sustainability for the health of both the tourism industry and the world economy, and especially for vulnerable ecosystems such as small island states; Intensify efforts to make operational those policies and practices that promote sustainability, including further refinement of sustainable indicators to measure progress, realizing that research and technological advances have brought us to the point where sustainable action can now proceed; Strive to provide the leadership, training and technical support needed by communities to enable them to become fully aware of, and involved with, the processes by which tourism is planned and developed; Support an active and prominent role for governments at all levels–national, provincial and local–in planning and promoting sustainable development; Seek greater international and regional cooperation among Asian-Pacific nations in collaborating on sustainable tourism programs and sharing resources, expertise and information on best practices and experiences; Call on the WTO and other appropriate bodies to expand the base of knowledge on sustainability issues, problems, and solutions for achieving sustainable balance; Strengthen and promote cooperation with the many tourism-related businesses and organizations that comprise the private and nongovernmental sectors, in recognition of the costs and effort that sustainability requires for optimizing opportunities; and BE IT FINALLY RESOLVED that the participants urge their governments to use the principles of this Declaration as a policy tool to measure progress towards sustainability and to assist in the implementation of sustainable practices.
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accommodation expenditure: Includes the following: a) Cost of accommodation in collective tourist establishment; b) Rent paid in respect to accommodation in private dwellings; c) A proportion of on-going expenses such as government charges, and maintenance and repairs, pro-rated over each visit where a visitor’s vacation or summer home, caravan, camper, boat, etc., is used; d) Accommodation site expenses relating to caravans or other mobile homes, and mooring expenses for boats; e) Hire of caravan or mobile home (but not self-propelled vans, recreational vehicles etc.) accreditation: Approval by conferences or associations for allowing the sale of tickets and other travel services. agent: A person authorized to sell the products or services of a supplier. air traffic control: A service operated by appropriate authority to promote the safe, orderly, and expeditious flow of air traffic. air transport services agreements: Bilateral accords with respect to scheduled (and sometimes nonscheduled) air transportation services between nations. airbus (aerial bus): A jumbo jet carrying twice as many people as a 707 or DC-8 and specializing in short- and medium-length trips.
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all-expense tour: An inclusive tour that offers many included services for the stated price. It probably includes most, if not all, meals, sightseeing, taxes, tips, and extras. allocentrics: Individuals with a strong need for variety and new experiences; when traveling they seek destinations that offer an opportunity to experience different cultures and environments. American Hotel and Motel Association (AHMA): Lodging industry trade association. American plan (AP): Meal plan that includes three meals daily with the price of accommodations. attraction: Positive or favorable attributes of an area for a given activity or set of activities as desired by a given customer or market including climate, scenery, activities, culture. average room rate: Total revenues from room sales in a hotel, or collective room revenues of a destination, divided by the total number of available rooms. Average room rates may be computed on a daily basis for an individual property or an annual or seasonal basis for a destination. balance of payments: A statistical statement, linked to the national accounts, which provides a systematic record of a country’s economic transactions with the rest of the world. balance of trade: A practical definition of an economic concept. Each nation is assumed to be one business entity dealing with other nations/business entities. When a business (country) sells (exports) more than it buys (imports), it has a positive balance of trade. When it buys (imports) more than it sells (exports) it has a negative balance of trade. Tourism is a part of the balance of trade. bed and breakfast (B & B): A meal plan that includes breakfast with guest house or other lodging accommodations. bilateral air agreement: A treaty, or negotiated agreement, between two nations for reciprocal air services covering details of equipment, scheduling, specific air freedoms, taxation, landing privileges, and other factors of importance to each party in the agreement. bulk fare: Fare available only to tour organizers or operators who purchase a specified block of seats from a carrier at a low, noncommissionable price and then have the responsibility of selling the seats, including a commission in their marked-up price for the seats.
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business class: A class of service on airlines that is geared towards business travelers and is usually situated between first class and economy (coach) and offers such amenities as larger seats, free cocktails and headsets, and early check-in privileges. business travel: Travel that is the result of one’s occupation. In the case of conventions or where a side trip is added to what would otherwise be strictly business, pleasure may also be involved. Business travel involves a special market requiring some special services (typists, meeting rooms) and expectations that differ from those of the purely-for-pleasure tourist. cabin: A sleeping room on a ship. Also the interior of an aircraft. cargo liner (or freighter): Vessel principally engaged in transporting goods, which is licensed to carry a maximum number of passengers (usually 12). carrying capacity: The maximum use of any site without causing negative effects on the resources, reducing visitor satisfaction, or adverse impacts upon the society, economy or culture of the area. casino: Gambling establishment, usually part of a luxury resort complex. certified air carrier: One of a class of air carriers holding certificates of public convenience and necessity, authorizing the holder to engage in air transportation. This group consists of certified route carriers authorized to provide schedules service and limited nonscheduled service, and supplemental carriers authorized to engage in nonscheduled service. charter service: Nonscheduled air transport services whereby the party or parties receiving transportation obtain exclusive use of an aircraft at published tariff rates and the remuneration paid by the party receiving transportation accrues directly to, and the responsibility for providing transportation is that of, the accounting air carrier. This term also has general application to any other mode of transport; such as motorcoach, ship, and train, where the entire capacity or a minimum number of seats are hired by contract for exclusive use. classification of tourism activities: see SICTA coach service: Transport service established for the carriage of passengers at fares and quality of service below that of first-class and business-class service. Is also known as economy service. commercial carrier: Any form of transport carrier that sells its seats to the public.
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commercial rate: Special discounted rate offered by a hotel or other supplier to a company, group, or individual traveler on a qualified basis. commuter airlines: An airline that offers frequent roundtrip service to/from smaller communities and some larger airport hubs with a published flight schedule of such services principally to serve business commuters. computerized reservation system (CRS): An electronic information system connecting individual travel agencies to a central computer, making immediate inquiries and reservations on an airline, hotel, car rental, or other possible travel services. concession: A part of the hotel operation that is leased to and operated by another party. Some examples are a parking garage, newsstand, barber shop, and beauty salon. concierge: An individual who is professionally trained to handle special requests or services for guests, usually in a luxury-class hotel. conference: An association of air carriers designed in principle to provide a set of operational rules that are fair to operators and to prevent cutthroat competition among operators. A conference may establish and enforce agreed upon rules, ethical practices, safety standards, documents, and serve as a clearinghouse for information. It may also establish travel agency rules and regulations. conference center: Refers to establishments offering facilities for congresses, conferences, courses, vocational training, mediation etc. The sleeping accommodation in these establishments is generally only available to participants of the specialized activities organized in or by the establishments. continental breakfast: Usually a beverage with rolls, butter, and jam or marmalade. In Holland and Norway, cheese, cold cuts, or fish are sometimes included. Continental plan (CP): Bed and breakfast, meaning hotel accommodations as specified and breakfast according to the custom of the country. convention: Business or professional meeting, usually attended by large numbers of people. In Europe the more prevalent term for convention is congress. convention center: Specialized facility designed to meet the needs of large groups of people with ample parking, large and small meeting
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rooms, banquet facilities, audio-visual equipment, and so forth. Often publicly funded for the purpose of stimulating the business of nearby hotels, motels, restaurants, and attractions, none of which could afford to provide a facility of sufficient size. convention and visitors bureau: Municipal or state organization responsible for promoting tourism to the area. Often funded by a combination of public and private money. country of residence of a person: Consists of the country where s/he has lived for most of the past year (12 months), or for a shorter period if s/he intends to return within 12 months to live there. courier (tour escort, tour leader, tour manager): A professional travel escort. cruise ships: Ships used specifically for pleasure cruising, as opposed to point-to- point transportation. cultural attraction: Attractions that are based on the heritage and traditions of a destination’s people, past and present. cultural tourism: Tourism that focuses upon the heritage and culture of a country and its people, preserved and portrayed in monuments, historic sites, traditional architecture, artifacts, events, and cultural attainments in the arts. currency restrictions: Limitations established by a country to control the amount of money taken in, out, or exchanged within a country. customs: Formal procedure whereby all persons entering a country must declare their possessions of specific kinds of amounts of items purchased in another country under the jurisdiction of a government agency that has the right to inspect, restrict, seize, and/or impose taxes on goods brought into a country. Also refers to the normal manners or behavioral procedures of a country. customs duty: Tax on certain goods being imported. day rate: A special rate for a room used by a guest only during the day up to a specific hour, such as 4:00, 5:00, or 6:00 pm. demand: Quantity of tourism goods or services that buyers are ready to buy at a specified price in a given market at a given time. destination: The place visited by a visitor. In the case of domestic visitors, the destination is an area within the same country. In the case
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of international visitors, the destination might refer to the country being visited or to a region of that country. A destination is the basic geographic unit used for the production of tourism statistics. Within the reference country, the country might be split up into destination areas which represent homogeneous tourism regions or which may be groups of local government administrative regions. destination development: The conscious planning, developing, and marketing of a destination to attract visitors. destination planner: An independent professional who provides support services with regard to destination information and resources to assist meetings and convention planners. direct employment: Companies in the tourism industry whose employees are in contact with tourists or directly affect the tourist experience. Includes hotels, food service operators, airlines, cruise lines, travel agents, attractions and shopping outlets. domestic airline: Carrier providing service within its own country. domestic tourism: Comprises the activities of residents of a given country or other area traveling to and staying in places inside that country or other area but outside their usual environment for not more than one consecutive year for leisure, business and other purposes. Note that the term, “domestic”, used in this tourism context differs from its use in the System of National Accounts (SNA) context. “Domestic” in the tourism context retains its original marketing connotation, that is, it refers to residents traveling within their own area or country. In the SNA context, it refers to activities and expenditures of both residents and non-residents traveling within the reference region or country, that is, both domestic and inbound tourism. domestic tourism expenditure: The expenditure incurred as a direct result of resident visitors traveling within their country of residence. It includes spending while enroute and at the places visited as well as advance outlays necessary for the preparation and undertaking of the trip and travel-related outlays made in the place of residence when returning from a trip. duration of trip: The time spent during a visit measured from the standpoint of the generating country or place. Duration of stay refers to the time spent during a visit measured from the standpoint of the
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receiving country or place. Travel-time refers to the time traveled on a trip, adding the journey traveling to the distance destination and returning to the stays in each place visited. duty-free imports: Government specified list of item categories and their quantities that may be brought into the country free of tax or duty charges. duty-free stores: Retail stores in which merchandise is sold completely or partially free of the taxes and duties that would otherwise be imposed by the country in which the store is located. economy hotel: Hotel with limited facilities and services targeted at budget travelers. Also referred to as second class or tourist hotel. economy service: Transport service established for the carriage of passengers at fares and quality of service below first class and business class. Is also known as coach service. efficiency unit: Room that has kitchen facilities, similar to a one-room apartment. Also called a studio. electronic ticket delivery network: Another form of STP (see satellite ticket printers). entry requirements: The official documents required to enter a country, which may include a passport, visa, or document showing inoculations. escorted tour: A tour that includes the services of an escort. Also called a conducted tour. escrow accounts: Funds placed in the custody of licensed financial institutions for safekeeping. Many contracts in travel require that agents and tour operators maintain customers’ deposits and prepayments in escrow accounts. European plan (EP): Meal plan that does not include meals with the price of accommodations. excursion: Usually a side trip out of a destination city; may be used interchangeably with tour or sightseeing. excursionist: Temporary visitors staying less than 24 hours in the destination visited and not making an overnight stay (including travelers on cruises). exit restrictions: Restrictions enforced by a country to curb outbound travel.
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expatriate: Citizen of one country who resides for an extended period of time in another country. familiarization trips or tours: A trip or tour offered to travel agents, travel writers, and so on to promote a new product or destination and the services of the suppliers, usually at a discount price or FOC (free of charge). Also called a fam trip. fare: The amount per passenger or group of persons stated in the applicable tariff for transportation, including accompanying baggage unless otherwise specified. first-class hotel: Hotel offering a high standard and variety of services. In Europe a first-class hotel ranks below a luxury or grand luxe hotel. In Asia, first class may mean a four-star property where five stars denotes the top classification. flag carrier: Term usually referring to the national airline of a country. flat rate: Special room rate for a group negotiated in advance where all rooms in the property, which may or may not be subject to certain restrictions, are priced at the same rate. fleet planning: Refers to a transportation company’s efforts to match its supply (of available seats) with passenger demand. fly-drive: Package that includes airfare and car rental (and sometimes accommodations). free and independent travelers (FIT): Travelers who have made independent arrangements, versus travel with a tour group. franchise: The right to market a service and/or product, often exclusive for a specified area, as granted by the manufacturer, developer, or distributor in return for a fee; prevalent in the fast-food service industry. freedoms of the air: Basic traffic rights, as bilaterally arranged between nations or established by treaty. freight: Transported property, other than express mail, and excess passenger baggage. frequent flyer programs (FFP): A program whereby bonuses are offered by the airlines to passengers who accumulate travel mileage. gateway city: A city that functions as the first destination for visitors to the area, due to location and transportation patterns. GATS: General Agreement on Trade in Services
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GATT: General Agreement on Tariffs and Trade gross occupancy rate (GOR): Refers to the use of total accommodation in a given period, irrespective of whether or not a part is closed for the season or for other reasons. GOR = (total overnight stays) * 100% (total number of bed-places * number of nights) ground operators: A supplier that provides local transportation, transfer service, sightseeing, and other services to a client at a destination. group inclusive tour (GIT): Prepaid tour, with transportation, accommodations, sightseeing arrangements, and so on covered. Special air fares are provided to the group, requiring that all members must travel on the same round-trip flight and must travel together during their entire time abroad. guaranteed reservation: Used with hotel reservations to mean the room will be held all night in the case of late arrival of the passengers. With a guaranteed reservation, the traveler must pay for the room whether or not it is actually used. health (accommodation) establishments: Refers to health treatment and health care establishments providing accommodation, such as spas, thermal resorts, (mountain) sanatoria, convalescent homes, health farms and other similar establishments. health tourism: Tourism associated with travel to health spas or resort destinations where the primary purpose is to improve the traveler’s physical well-being through a regimen of physical exercise and therapy, dietary control, and medical services relevant to health maintenance. host community: The residents of a town, area, or nation who are influenced by the presence of tourists and who serve officially or accidentally as hosts by sharing their land, facilities, highways, and culture with tourists. hostel: Accommodations often for specific groups of users, such as youth, club members and so forth, where the facilities are shared, inexpensive, supervised and basic. hotels: Refers to hotels, motels, roadside inns, beach hotels and apartment hotels and similar establishments providing hotel services, including more than daily bed-making and cleaning of the room and sanitary facilities.
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hub-spoke concept: A concept involving the establishment of a particular city as a central point to which longer-haul flights are scheduled and which serves as a connecting point where other flights are deployed or made to smaller cities. The routing of schedules through a central connecting city ensures heavier passenger loads. IATA: International Air Transport Association IBRD: International Bank for Reconstruction and Development ICAO: International Civil Aviation Organization import restrictions: Government regulations regarding the type and quantity of goods returning residents are allowed to import after a trip abroad. inbound tourism: Comprises the activities of non-resident visitors in a given area that are outside their usual environment for not more than one consecutive year for leisure, business and other purposes. incentive travel: Travel provided as a reward for sales or work performed by employees, distributors, members of organizations, and so on. inclusive tour (IT): An advertised package or tour that includes the accommodations and other components such as transfers and sightseeing. indirect employment: Employment in companies in the tourism industry that serve the direct employment companies. May include restaurant suppliers, construction firms that build hotels, aircraft manufacturers. infrastructure: In a general sense, infrastructure applies to the physical necessities that must be supplied to tourists. This includes roads, electricity, water, telephone, airports and so on. input-output analysis: A type of economic analysis that helps to demonstrate how economic sectors are related, the number of linkages among them, and the effect of these linkages. international inbound tourism receipts: Expenditure of international inbound visitors, including their payments to national carriers for international transport. This should also include any other prepayments made for goods and services received in the destination country. international outbound tourism expenditure: Expenditure of outbound visitors in other countries including their payments to foreign carriers for international transport. This should also include any other prepayments made for goods and services received in any foreign country.
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Glossary
international tourism expenditures: The expenditures of outbound visitors in other countries including their payments to foreign carriers for international transport. They should also should include any other prepayments or payments afterwards made for goods and services received in the country of destination. international tourism receipts: Expenditures of international inbound visitors including their payments to national carriers for international transport. They also include any other prepayments or payments afterwards made for goods and services received in the destination country. international visitor: Refers to any person traveling to a country other than the one in which s/he has his/her usual residence, but outside his/her usual environment, for less than 12 consecutive months and whose main purpose of trip is other than the exercise of an activity remunerated from within the place visited. LAC Model (Limits to Acceptable Change Model): A model that moves the planning focus away from attempts to set a number or specific limit on tourism and towards describing a set of environmental conditions which are seen to be desirable. leakages: Decrease in real foreign exchange earnings caused by the need for importing goods, services or credit. May be applied to states, regions, or communities as well as nations. load factor: Percentage of carrier capacity based on the total number of seats available. management contract: An agreement between the owner(s) of a property such as a hotel, restaurant, convention center, or resort complex and a professional management company to develop and/or operate such property for a consideration, typically a set percentage of the gross operating profit. man-made attractions: Artificially created attractions such as theme parks, special events such as olympics, shopping, meetings and conventions, gambling, recreation and sports are significant motivators for potential visitors. mass tourism: Contemporary tendency to create mass demand for specific locations or experiences, as well as the accommodations and transportation to serve such demand.
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meeting and convention planner: A professional consultant who specializes in the planning and execution of conventions and business meetings. MICE: Meetings, incentive, convention, and exposition business travel market. midcentrics: Individuals who are in the midrange between allocentrics (those wanting to experience new destinations and cultures) and psychocentrics (those wanting to travel only to familiar, “tried and true” destinations). Midcentrics are not too adventurous, yet neither are they afraid to try new experiences as long as they are not too challenging. motorcoach: Bus designated to carry passengers for touring, frequently equipped with toilet facilities. multilateral: An agreement among three or more countries, the terms of which apply equally to the signing countries. multiplier effect: Concept that tourist expenditures in an area generate more expenditures, and thus more money, as the tourist income is spent by residents who receive it as wages or profits. The multiplier effect can be estimated statistically. national accounts: An integrated framework of accounts which provides a systematic summary of national economic activity. national tourism administration (NTA): A generic term used to identify the official government body responsible for tourism. This may be a ministry, part of a ministry or a semi-autonomous body. The organization, title and functions vary from country to country, but functions would typically include policy advice, promotion and research. This body is sometimes responsible for tourism statistical collection. national tourism office or organization (NTO): Also known as national tourism administration (NTA). The primary government agency charged with the implementation of national goals and public policy with respect to tourism. natural attractions: Attractions which are based on features of the native environment and include parks and wildlife conservation areas, sites with overall natural scenic beauty, beaches and marine areas, as well as environments with special features such as high mountains, unusual geological formation, caves, geysers, hot springs, mild forms of volcanic activity and desirable climate conditions.
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Glossary
net occupancy rate (NOR): Refers to the use of available accommodations in a given period. NOR = (total overnight stays) * 100% (total available bed-places * number of nights) nonscheduled air services: Revenue flights that are not operated in regular scheduled service, such as charter flights and all nonrevenue flights incident to such flights. occupancy rate: Refers to the proportion of the rooms or bed-places in a collective tourism establishment that is occupied over some period of time, such as a night, month or year. OECD: Organization for Economic Cooperation and Development origin (place or country of): For domestic visitors, the place of origin is the place in the same country in which the visitor has her/his usual residence at the time a trip is undertaken; for international visitors, the country of origin is the country in which the visitor has his/her usual residence at the time a trip is undertaken. outbound tourism: Comprises the activities of residents of a given area traveling to and staying in places outside that area and outside their usual environment for not more than one consecutive year for leisure, business and other purposes. overbooking: Refers to the practice of preselling more hotel rooms (or airline seats) than the hotel (or airline) has to offer. overflight: A scheduled flight that does not stop at an intermediate point in its scheduled route because (1) the point is certified as a flag stop, and there is no traffic to be deplaned or enplaned; (2) the carrier has received authority to temporarily suspend service to that point; (3) weather conditions or other safety and technical reasons do not permit landing; or (4) for any other reason. The aircraft need not fly directly over the point. overflight charge: Fee assessed to air carriers for the privilege of flying over another nation. overflight privileges: Permission granted by one country for an air carrier of another country to fly over its land. override commissions: Extra commission paid to travel agents by suppliers based on incremental quantity or volume of sales.
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PATA: Pacific Asia Travel Association package travel/holidays/tours: A “package” comprises two or more component products involved in a trip. Packages typically (but not necessarily) include some transport and accommodation, but may also include such items as meals, excursions, entrance to tourism attractions and souvenir items. Packages are sold to the consumer (i.e., the visitor) as a single product for a single price. Packages are usually marketed to the consumer by travel agencies, but may also be marketed by other tourism operators such as major airlines and accommodation enterprises. passenger miles: One passenger carried 1 mile; this is calculated by multiplying the number of miles traveled times the number of passengers. passenger ships: Ships whose primary purpose is to transport people from one destination to another as opposed to simply pleasure cruising. person-night: A statistical term denoting one paying guest staying one night at a destination. pleasure tour: Any prearranged tour associated with entertainment, leisure or recreation. positioning: A marketing concept which “summarizes” all of the qualities of a given operation that differentiates it from its competitors, both from the point of view of the guest and as a goal of a marketing strategy. protectionism: Theories and practices that attempt to protect a nation’s economy by restricting the ability of foreign goods and services to compete in the domestic market. psychocentrics: Individual with a strong need for consistency and the familiar or the tried and true in their lives; when traveling they prefer to visit “safe” destinations and do not experiment with accommodations, food or entertainment. pull factors/push factors: Tourism theory that identifies the “push” exerted on the tourist by factors such as employment, community and personal life–a force that impels him/her to seek change, challenge, recreation. This combines with the “pull” of attractive locations and activities. purpose of visit: Refers to a motivation of the trip, the reason in the absence of which the trip would not have taken place. The main purpose of visit refers to the reason in the absence of which the trip would not have taken place or the given destination would not have been visited.
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rack rate: The regular published rates of a hotel. When special rates are quoted, they represent a discount from the rack rate. rebate: The practice of sharing, demanding, collecting, or receiving less compensation for air transportation, or for any service in connection therewith, than the rates, fares, or charges specified in the air carrier’s currently effective tariffs. recreational vehicle (RV): A motorized self-contained camping trailer or a truck or van used for traveling. re-entry permit: Document allowing alien residents to return from trips outside the country. region: In the domestic context, “region” refers to any area within a country, usually a tourism destination area; in the international context “region” refers to a grouping of countries, usually in a common geographic area. regional carrier: A carrier serving a particular area only. residence: The place where the visitor resides. resident: A person is considered to be a resident in a place if the person: a) has lived for most of the past year (12 months) in that place; or b) has lived in that place for a shorter period and intends to return within 12 months to live in that place. resort: Geographic or business area offering a variety of facilities services and activities for the accommodation, use and enjoyment of the visitors. retail travel agent: A travel agent that sells travel products on a retail basis on behalf of his/her principals, airlines, cruiselines, hotels, car rentals, and so on, for a commission to the general public. rural tourism: type of tourism that bases its appeal and offered services on some aspect of the real or imagined rural, nonurban way of life; the vast quiet, unrushed countryside, varieties of trees and animals, and so forth. same day visitor: Temporary visitors staying less than 24 hours in the destination visited and not making an overnight stay. satellite ticket printer (STP): Free-standing computerized machine capable of accepting reservations and issuing tickets, boarding passes,
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and other documents as programmed. Located in an airport, a corporate office or a shopping center, the STP is leased to a host agency which oversees the machine and is responsible for the process. scheduled air carrier: Airline or carrier that publishes its transportation services timetable. seasonality: Change in the level and composition of tourism demand due to the time of the year. Seasons may be defined in terms of months or of groups of consecutive months with similar climatic conditions. shopping expenditures: Refers to all outlays made for and during a trip on consumer goods other than food and drinks. SICTA: the Standard International Classification of Tourism Activities (SICTA) is a classification of industry sectors comprising categories which are important to tourism or which are highly dependent on tourism demand. The SICTA does not define the tourism industry, but provides a framework for selecting appropriate industry sectors to be included in supply side tourism collections. side trip: An optional trip offered to participants of a tour. sightseeing tour: A tour within the city limits showing to clients the main places of interest, avenues, churches, museums, monuments, and so on. sightseeing company: A local company providing guided sightseeing in a city or town area. site hardening: The addition of protective structures in an attempt to protect the environment. snowbird: Colloquial expression that refers to persons residing in northern climates who tend to migrate south for a warm vacation in the winter. special fare: Other than normal fares, special fares have various restrictions, for instance, advance purchase, specified length of stay, limited or no schedule change privileges, and limited or no cancellation rights. special interest tour: Prearranged, packaged itinerary designed to appeal to or respond to a request by a group of persons who have a particular interest area of study or activity, for example, culture and the arts, sports, preservation and shopping. suppliers: One who offers the products or services as sold through the travel retailers or in some cases directly with the public.
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supporting documents: Those additional papers necessary to verify a transaction, such as a birth certificate, health certificate, passport, visa, voter registration card, and so on. survey: The major methodology used to collect tourism expenditure statistics. A survey typically involves selection of a sample of the units being measured, usually a group of visitors or business enterprises, and obtaining the required data from them by way of personal (face-to-face or by telephone) interview or by mail questionnaire. A census is, in effect, a survey in which the sample size is 100%. sustainable tourism: The ability of a destination to remain competitive against newer, less explored destinations; to attract first time visitors as well as repeaters; to remain culturally unique; and to be in balance with the environment. system of national accounts (SNA): A framework designed by the United Nations which provides a systematic summary of national economic activity, and which is adopted by many countries in the production of their national accounts. target market: Subset of some larger population identified as potential users of a product or service due to their income, location, lifestyle, ethnicity, previous use, or some combination of such factors. time sharing: Concept dividing the ownership and use of a lodging property among several investors; generally each time-sharing purchaser is able to use the unit for a specified interval (e.g., 2 weeks) each year at a specified period of time. total international tourism expenditures: Expenditures of outbound visitors in other countries plus their payments to foreign carriers for international transport. They should also include any other prepayments or payments made afterwards for goods and services purchased from other countries visited. tour escort: A person designed as the leader of the group usually for the entire travel experience, although he may be assisted by other guides. tour operators: An operator that provides services that include responsibility for the delivery and/or operation of all facets of the tour. Tour operators may also be wholesalers as well as local operators. tour package: A joint service that gives a traveler a significantly lower price for a combination of services than could be obtained if each had
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to be purchased separately by the traveler. Thus, the total price of a package tour might include a round-trip plane ticket, hotel accommodations, meals, sightseeing bus tours, and theater tickets. tour wholesaler: A person who contracts with hotels, sightseeing and other ground components to provide ground packages for sale to individuals through travel agents and direct air carriers to be used in conjunction with scheduled air transportation. tourism: Comprises the activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes. The usual environment of a person consists of a certain area around his/her place of residence plus all other places s/he frequently visits. tourism expenditures: Amount of money spent by tourists for their travel experiences. May be calculated as expenditures while at a destination or as a total, independent of where funds were spent. Includes transportation, lodging, food, gifts and incidentals, and entertainment. tourism policies: Generally refers to public policies designed to achieve specific objectives relevant to tourism established at the municipal, state or federal level. tourism receipts: Amount of money spent by tourists in a given area during a specific time period. tourism satellite accounts: A set of accounts, using national accounts concepts, which provides a picture of the place of tourism in the national economy. tourist (overnight visitor): A visitor who stays at least one night in a collective or private accommodation in the place visited. An international tourist is an international visitor who stays at least one night in a collective or private accommodation in the country visited. Domestic tourist refers to a domestic visitor who stays at least one night in a collective or private accommodation in the place visited. tourist accommodation: Refers to any facility that regularly or occasionally provides overnight accommodation for tourists. trade fair: An organized event to bring people to a specific location to view a display of products and services, to exchange information, and/or to buy and sell the products or services that are specific to a particular trade, business, or industry.
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Glossary
transfers: The services of transportation from an airport, railway station, or other terminal to the hotel of the clients. travel: The act of moving outside one’s community for business or pleasure but not for commuting or traveling to or from work or school. travel advisory: Caution issued by some authoritative body regarding the safety, changing conditions, or practices of a specific travel destination. travel agent: Person, firm or corporation qualified to sell tours, cruises, transportation, hotel accommodations, meals, transfers, sightseeing and all other elements of travel to the public as a service. travel agent commission: The payment by airlines and other travel supplier’s to a travel agent of specified amounts of money (usually a percentage) in return for the agent’s sales of travel products. travel allowance: Restrictions on the amount of foreign exchange that residents of a country may buy before departing on a trip and/or the amount of national currency residents of a country may take out of the country and convert into foreign currency. travel industry: The composite of organizations, both public and private, that are involved in the development, production, distribution, and marketing of products and services to serve the needs of travelers. travel industry distribution system: The process of moving travel products and services from suppliers to ultimate consumers. travel insurance: Regular insurance tailored to cover travelers and their personal effects. May be sold by a regular broker; however, most travel agents and tour carrier personnel are specially licensed insurance agents with the power to issue such policies and immediately bind the insurance company. traveler: Refers to any person on a trip between two or more localities. International traveler refers to any person on a trip between two or more localities in different countries. Domestic traveler refers to any person on a trip between two or more localities in his/her country of residence. traveler profile: Characteristics used to describe various travel market segments. trip: Used to describe tourism from the standpoint of the generating place or country (the origin) and covers the whole period that a person travels away from home.
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VALS (Values, Attitudes, Lifestyle, Segmentation): A tourist motivation theory that groups consumers into nine broad segments with labels such as “High Achievers” or “Emerging Activists.” VFR (Visiting Friends and Relatives): Classification of travelers whose purpose in traveling is visiting friends and relatives. visa: An endorsement on a passport or document used in lieu of a passport by a consular office indicating that the bearer may gain entry into the country of issue. visitor: Refers to any person traveling to a place other than that of his/her usual environment for less than 12 consecutive months and whose main purpose of trip is other than the exercise of an activity remunerated from within the place visited. voucher: Document to be exchanged for goods or services, confirming that payment has already been made. Also called an exchange order. WTO: World Tourism Organization WTTC: World Travel and Tourism Council wholesale travel agent: One who does not sell on a commission basis (as opposed to a retail travel agent) but contracts for large blocks of advanced reservations on airlines and other services such as hotels and tour packages at volume-based prices for resale. The wholesale travel agent assumes his or her own financial risk for all unsold products. wide-bodied aircraft: A generic and commonly used term applied to any and all of the newest generation of jet aircraft with a fuselage diameter exceeding 200 inches and whose per engine thrust is greater than 30,000 pounds (i.e., Boeing 747, McDonnell Douglas DC-10 and Lockheed L-1011). yield: Air transport revenue earned per unit of air traffic carried. May be calculated and presented several ways (e.g., passenger revenue per passenger-mile, per aircraft-mile, per passenger ton-mile, and per passenger). yield management: A system of calculating room rates, transport fares, or other prices which factors in actual and predicted sales for different time periods in an effort to obtain the highest possible percentage of profit given envisioned levels of supply and demand. youth hostels: Accommodations where the facilities may be somewhat similar to dormitories, usually associated with youth travel.
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About the Authors
Tazim B. Jamal is a Ph.D. candidate at the Faculty of Management, the University of Calgary, in Canada. She has an M.B.A. with a concentration in international business from the University of British Columbia, as well as a Bachelor of Science and a Bachelor of Arts from the University of Calgary. She has had several years of work experience in small business management and has also worked as a securities broker for a national investment house. Her research publications and interests lie primarily in the areas of multi-stakeholder collaboration for destination planning and management, communitybased tourism and sustainable tourism for developing countries. Walter Jamieson is a Professor of Planning in the Faculty of Environmental Design at the University of Calgary in Alberta, Canada. He holds a Ph.D. in Urban and Regional Studies from the University of Birmingham, England. Dr. Jamieson is also the Director of the Historical Resources Intern Programme, Director of the Centre for Livable Communities and Vice Chair of the World Tourism Organization Education and Research Centre. He is co-editor of Plan Canada and a member of the Journal of Sustainable Tourism’s editorial board. Dr. Jamieson has published extensively for various Tourism journals, publications and projects.
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George Kalaitzis is a graduate student at the School of Travel Industry Management at the University of Hawaii at Manoa. Mr. Kalaitzis holds a Bachelor of Science in Business Administration from Ohio State University. He is a candidate for a Masters degree in Professional Studies. Michael Kirk-Kuwaye is the former Internship Director and Assistant Specialist for the School of Travel Industry Management at the University of Hawaii at Manoa. He holds a Ph.D. in Educational Psychology from the University of Hawaii. Juanita Liu is Professor of Travel Industry Management at the University of Hawaii at Manoa. She holds a Ph.D. in Economic Geography from Simon Fraser University and a Masters degree in Regional Science from the University of Pennsylvania. Dr. Liu has researched and written extensively on tourism impacts as well as on tourism policy and tourism development. Her teaching and research interests lie primarily in the areas of the economic and environmental impacts of tourism, tourism development in island economies and the theory of tertiary activities. Robert Meyer is formes Assistant Professor of Travel Industry Management at the University of Hawaii at Manoa. He holds a Doctor of Philosophy in Business and Marketing Education from Michigan State University. Dr. Meyer was a Professional Fulbright Scholar in Tourism and International Business for the Government of Thailand. He has consulted widely on behalf of public and private sector organizations in Thailand, Costa Rica, West Indies and throughout the United States. Gianna Moscardo is Senior Research Assistant for the Department of Tourism at the James Cook University of North Queensland, Australia where she is working on Rainforest Tourism for CRCTREM and Market Survey Research for CRC Reef. She holds a Ph.D. from James Cook University and has published extensively for various Tourism journals and conferences. Philip Pearce is Foundation Professor and Head of the Department of Tourism at the James Cook University of North Queensland, Australia. He holds a Doctor of Philosophy from the University of Oxford. Dr. Pearce is the past Research Director of the National Centre for Studies in Travel and Tourism at James Cook University and is a member of the International Academy of Tourism Scholars and a member of the International Association of Scientific Experts in Tourism. Dr. Pearce has also extensively published research articles and consultancy reports in the fields of Tourism, Leisure, Recreation and Environmental Management.
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Mary Spreen is the formes Assistant Dean of Academic Services for the School of Travel Industry Management at the University of Hawaii at Manoa. She has an M.B.A. from the University of Hawaii at Manoa. Patricia Thompson is the formes International Programs Specialist at the School of Travel Industry Management at the University of Hawaii at Manoa. She holds a Masters degree in Travel and Tourism Administration from George Washington University. Russell Uyeno is a Junior Researcher at the School of Travel Industry Management at the University of Hawaii at Manoa. He has a Masters degree in American Studies and is pursuing a doctoral degree in education at the University of Hawaii. Mr. Uyeno’s professional experience includes real estate development and government policy analysis.
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