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![Gilbert (1990) commented that what makes tourism difficult to define is the very broad nature
of the concept as well as the need for so many goods and services inputs. Tourism also envelops
other sectors and industries and therefore has no clear boundary due to the expansive spread of
activities it covers. With this in mind others have added supply-side aspects to the definition of
tourism so as to incorporate the visitor’s impact (economic, social, cultural and environmental)
on the destination (Goeldner and Ritchie, 2006; Lieper, 1979, 1990, 2008; Tribe, 1997, 2006).
Tribe’s view (1997) was that tourism is ‘the sum of the phenomena and relationships arising
from the interaction, in generating and host regions, of tourists [visitors], business suppliers,
government, communities and environments’.
Within an academic discipline, the benefit of having an overarching theoretical structure is
the methodological direction that it bestows. To put it simply, practice without theory is blind.
As a field of academic study, various writers, as indicated above, have noted that tourism lacks
the theoretical underpinnings that govern other social sciences, giving rise to conceptual weak-
nesses and lack of clarity. On the other hand many disciplines have their own imprisoning theo-
ries in which esoteric arguments have no known reality, thus rendering them sterile. Scientists
have found that the behaviour of natural systems do not conform to the doctrines of reduction-
ism that theoretical structures demand. They have shown that small simple actions could never
be counted on to have small outcomes and frequently they cascaded into multiple outcomes of
unsuspected intensity. Such systems are termed chaotic and chaos theory demands adaptive
management, continual learning and monitoring, and frequent reviews to deal with the uncer-
tainty arising.
Chaos theory has parallels in tourism, which has been subject to several disasters so far this
century, for example, the destruction of the World Trade Center on 11 September 2001, the wars
in Iraq and Afghanistan, the bombings of the London and Madrid railway systems, tsunamis on
the coasts of Sri Lanka, Thailand and Japan, the Global Financial Crisis, and the current trou-
bles in the Middle East, notably Syria, with their spillover effects in terms of refugees and ter-
rorist activity in other countries, particularly in some of the main capital cities of Europe. These
are events over which the actors had no control, which in turn have raised interest in chaos
theory and its relation to crisis management. Adaptability is the key, for chaos theory postulates
Tourism has become an increasingly popular area of study for many students
as the subject gains acceptability in the academic community.
Photograph 1.1
6 chapter 1 An Introduction to Tourism](https://image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-31-2048.jpg)
![distinguished from the everyday by their cultural, historic or natural significance (Rojek and
Urry, 1997). The ‘pull’ to visit destinations activates the whole tourism system and creates
demand for travel in the generating region. It is at the tourism destination that the full impact of
tourism is experienced and product innovation takes place, together with visitor management
and planning processes so as to take account of the effects on host communities. (These aspects
are discussed in depth in Part 2.)
The transit route region does not simply represent the short period of travel to reach the des-
tination, but must include intermediate places which may be visited en route, if it is to be regis-
tered as part of a visitor’s trip: ‘There is always an interval in a trip when the traveller feels they
have left their home region but have not yet arrived . . . [where] they choose to visit’ (Leiper,
1990: 22).
The issue as to whether tourism is an industry rests on the definition of an industry within a
country’s national accounts. These use internationally accepted classifications to produce output
measures in accordance with a country’s industrial structure. In these terms, an industry is a col-
lection of firms that use similar processes to produce relatively homogeneous goods and ser-
vices. On the other hand, the tourism product is an amalgam of a multiplicity of goods and
services that is configured to meet visitors’ demands and drawn from a range of industries, from
transport to retailing. In establishing the TSA, the UNWTO (2000 and 2001) decided to label
tourism as a sector made up of a number of industries as defined by international standards, and
these are listed fully in Table 1.1 so as to show the range of businesses directly included in tour-
ism. Yet on a practical level, those engaged in the tourism business and their trade associations
commonly use the term ‘tourism industry’ when representing their views to governments and
dealing with issues amongst themselves. Noting this, we will use the terms ‘tourism sector’ and
‘tourism industry’ synonymously throughout this text.
Tourism industries SIC2007 Description
Accommodation 55100 Hotels and similar accommodation
55202 Youth hostels
55300 Recreational vehicle parks, trailer parks and camping
grounds
55201 Holiday centres and villages
55209 Other holiday and other collective accommodation
55900 Other accommodation
68209 Other letting and operating of own or leased real estate
68320 Management of real estate on a fee or contract basis
Restaurants and similar 56101 Licensed restaurants
56102 Unlicensed restaurants and cafes
56103 Take-away food shops and mobile food stands
56290 Other food services
56210 Event catering activities
56301 Licensed clubs
56302 Public houses and bars
Railway passenger
transport
49100 Passenger rail transport, interurban
Tourism industries as defined by the UNWTO
Table 1.1
8 CHAPTER 1 AN INTRODUCTION TO TOURISM](https://image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-33-2048.jpg)
![future mainstream market trends. Youth travellers
opened many of today’s most popular destinations
and led the trend to independent travel that has now
spread through the industry.’
Importantly, David Jones emphasises the need to be
careful in classifying all youth travellers as simply
backpack carrying, Internet café visiting, solo adventur-
ers: ‘The youth market demand has been driven by the
growth of popular international activities. In the 80s
90s, demand was driven by a massive growth in “back-
packing” and in the 90s by the new student working
holiday opportunities. The biggest growth sector in
youth travel 2000–2010, was voluntary experiences.
Acts of community service are increasingly important to
young people, and the motivation to do some good in
the world created a massive demand for international
voluntary experience programs in the first decade of the
21st century. This is a demand that continues today.’
The WYSE regards those destinations that deliver on
the interests of the youth market, including the potential
for discovery, cultural interaction, heritage exploration,
and action, as ones that will be the protecting their
brands now and into the future.
In this spirit, the tourism sector needs to embrace the
invaluable contribution that youth travel makes to one of
the world’s fastest growing, and most widely beneficial,
economic sectors. Whether they are young, traditional
‘Wwestern’ (i.e., American, Canadian or European)
travellers carrying backpacks, or young Asian travellers
carrying Burberry bags, youth travellers are defining the
direction of our world on the move. With more than a
billion people travelling the globe, all types of travellers
and travel choices are needed to ensure that the power
of the tourism economy is leveraged across all seg-
ments and regions. Tourism needs the guided tours and
all-inclusive resorts as much as it needs the business
traveller hotels and backpacker hostels. There is no
‘right or wrong’, no ‘best way’, no ‘more authentic’, no
‘more valuable’. It is all about shaping the future through
enabling travellers to live out their travel dreams today.
Source: Updated from Anita Mendiratta, CNN Task Group/ETN, 1 March
2012, the publications of WYSE Travel Confederation and https://www.
wysetc.org/ (accessed 16 April 2017).
While the motivations of youth travellers change
slowly over the years, they go far beyond the quest for
sun, sand, sea, and stories. At the heart of youth travel
is a wonderfully personal, positively selfish, desire of
the traveller to be a more active participant in the world.
The travel is about them – their experiences, their learn-
ing, their time, their sharing (e- and otherwise). They
are travelling with purpose, choosing to put themselves
‘out there’ to be able to experience the world unvar-
nished, unpackaged, unedited, and unafraid.
For many travel segments, cultural and environmental
awareness and appreciation comes implicitly through
travel experiences chosen – locations, accommodation,
tours, transport methods. The youth travel segment,
however, is composed of hundreds of millions of indi-
viduals who explicitly seek to learn, to explore, to be
immersed, to be involved, and to make an impact. Youth
travellers view ‘Responsible Tourism’ as a verb, not a
noun. To travel the world with only a backpack is an
explicit expression of ‘I want to be a part of where I am
through how I travel, where I eat, where I sleep, who I
meet, and what stories we share.’ A backpack is an
overt statement of ‘I am open’.
The most obvious shift in youth and student travel in
this century has been the growth of social media and
mobile communications, which have revolutionised the
way that people interact with travel products and gather
information. Young travellers are now using more
diverse sources of information and are also beginning to
use new mobile media to search for information and
book travel products while travelling.
Same Planet, Different Worlds
One of the world’s strongest, most passionate advo-
cates of the power of the youth travel segment is
David Jones, the former Secretary General of WYSE
[World Youth, Student Educational Travel Confed-
eration]. He is clear in his belief that youth travellers –
travellers who distinctly do not wish to be referred to
as ‘tourists’ – provide a compass for future tourism
sector growth . . . : ‘Understanding the characteristics
and trends of the youth market offers an insight on
Major case study 2.1 39](https://image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-64-2048.jpg)
![Pizam, A. and Mansfield, Y. (eds) (2000) Consumer Behavior in Travel and Tourism, Haworth,
New York. A useful edited volume covering all the main elements of consumer behaviour.
Plog, S.C. (1974) ‘Why destination areas rise and fall in popularity’, Cornell Hotel and Restau-
rant Quarterly 14(4), 55–8.
Plog, S.C. (1990) ‘A carpenter’s tools: an answer to Stephen L.J. Smith’s review of psychocen-
trism/allocentrism’, Journal of Travel Research 28(4), 43–5.
Plog, S.C. (2001) ‘Why destinations rise and fall in popularity: an update of a Cornell Restau-
rant Quarterly classic’, Cornell Hotel and Restaurant Quarterly 42(3), 13–24.
Schmoll, G.A. (1977) Tourism Promotion, Tourism International Press, London.
Smith, S.L.J. (1990) ‘A test of Plog’s allocentric/psychocentric model: evidence from seven
nations’, Journal of Travel Research 28(4), 40–43.
Solomon M.R. (1996) Consumer Behavior, 3rd edn, Prentice Hall, Englewood Cliffs, NJ.
Swarbrooke, J. and Horner, S. (1999) Consumer Behaviour in Tourism, Butterworth Heinemann,
Oxford. Thimm, T. (2014) ‘The flamenco factor in destination marketing: interdependencies
of creative industries and tourism – the case of Seville’, Journal of Travel and Tourism
Marketing 31(5), 576–88.
Wahab, S., Crampon, L.J. and Rothfield, L.M. (1976) Tourism Marketing, Tourism Interna-
tional Press, London.
Woodside, A. and Lysonski, S. (1989) ‘A general model of traveler destination choice’, Journal
of Travel Research, 27, 8–14.
Major case study 3.1
Flamenco and Creativity as a Factor in Destination Image
Development
arrived at their destination, their perceptions are modi-
fied to adjust to reality according to their individual imag-
inary geography. Furthermore, the process of travelling
itself can be compared to participating in creative
events, such as plays or festivals, as they interrupt daily
routines (Hennig, 1999). In other words, creative events
and tourism are both liminoid regarding time and space –
that is, implying a state of transition, an escape from
everyday values, structures, and norms (Wöhler, 2001).
Creativity and Tourism in Seville
One of the associations Seville spontaneously provokes
is the image of being a flamenco city, if not the flamenco
city, in Spain – especially because Seville was one of
the birthplaces of flamenco in the mid-nineteenth cen-
tury. Flamenco itself can be regarded as a creative
industry in Seville, since flamenco dancing, singing and
guitar playing always served as a source of income for
the artists from the very beginning. The Sevillian Triana
district, in particular, inhabited by many gypsies at that
time, was one of the emerging centres of this new
hybrid art form, combining Indian, Arabian, Jewish and
Andalusian elements. Today, the city sometimes
Creative tourism can be seen as an extension, adjunct
or antidote to cultural tourism. In the field, destinations
have also capitalised on creativity, increasingly using it
in destination branding as a form of distinctiveness.
Creativity, being difficult to define in particular terms,
is often discussed via the concepts of creative people,
products, processes and places. Thanks to their own
activities, tourists co-create creative tourism. Thus, cre-
ative tourism is described by Richards as follows:
[. . .] it tends to involve more elements of everyday
life and the intangible, embedded culture of the
host community.[. . .] In the co-creation of creative
tourism experiences, conceptual authenticity is
arguably negotiated in situ by the host and the
tourist, each playing a role as the originator of the
experience [. . .] In view of this complexity per-
haps creative tourism is not a coherent ‘niche’ at
all, but rather a series of creative practices linking
production, consumption and place (Richards,
2011).
Tourists follow their imaginary geography (Gregory,
1993), carrying with them their inner pictures of a desti-
nation formed during their socialisation. Once they have
Major case study 3.1 65](https://image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-90-2048.jpg)
![segment in which the value per tourist is around one
third above the average figure. In total, however, it is a
small segment . . . Seville ranks third in the visitors
league table for Spain, after Madrid and Barcelona.
[. . .] While the flamenco industry contributes consid-
erably to how Seville is perceived and strategically used
in destination marketing, the industry itself is of minor
importance to the tourism industry at large . . . More than
600,000 of the tourists who visited Andalusia in 2004
had a primary interest in flamenco (Aoyama, 2009). In
this regard, flamenco-based tourism can be defined as
any tourism activity that is related to flamenco, like visit-
ing flamenco performances, participating in flamenco
courses, and buying flamenco accessories such as
CDs, clothes or instruments. Thus, flamenco-based
tourism is a special form of creative tourism – that is,
tourism activity related to creative industries, and the
members of the flamenco scene in Seville belong to the
creative class according to Florida (2002).
Flamenco and Image Marketing
in Seville
Given its attractiveness to tourists, flamenco is widely
used in the marketing channels of the Sevillian Tourism
Board, such as various tourism fairs (stand design, bro-
chures, and materials) and websites: www.visitasevilla.
es (and) www.turismosevilla.tv
Source: Adapted from Thimm, T. (2014) ‘The flamenco factor in destination
marketing: interdependencies of creative industries and tourism – the case
of Seville’, Journal of Travel and Tourism Marketing 31(5), 576–88.
Discussion Questions
1. From the concepts on consumer behaviour in this
chapter explain how a cultural activity such as fla-
menco can create benefits for tourism demand.
2. Provide examples and assessment of other destina-
tions where creative distinctiveness strengthens
brand images.
3. Discuss whether different age groups and segments
will be more or less interested in creative forms of
tourism. Then draft a table of the findings.
represents contradictory aspects, such as ‘Spanish-
ness for national unity’, ‘the Andalusian [. . .] regional
identity’, and ‘the gypsy influence as representing sub-
cultural, marginalized [and] bohemian’ (Aoyama, 2009).
Seville is mentioned alongside other ‘music cities’, such
as Bayreuth, Vienna, Salzburg, Liverpool, New Orleans,
Memphis and Nashville. These cities are characterised
as music tourism destinations. Music has gone from an
adjunct of tourism, and a pleasant background, albeit
often an important one, to a central element of much
tourism, at least for a minority. That minority, often seek-
ing both recreation and nostalgia, has produced a
largely new series of niches within the tourist industry,
that have had substantial cultural and economic signifi-
cance in a range of places (Gibson and Connell, 2005).
From 1940 to 1970, Franco’s government prioritised
low-priced, good-quality sun and beach tourism. From
1960 onwards, the country increasingly opened up to
foreign markets.
In the process, flamenco was gradually transformed
from a ‘regional tradition’ to an export commodity, from
cultural heritage of Andalusian suffering to exotic
cultural entertainment. Careers as flamenco artist-
entrepreneurs offered [to the gypsies] an important
alternative to agressive proletarianisation of their com-
munity (Aoyama, 2009).
The comparatively free life of a flamenco artist acting
partly in informal sectors corresponds to the gypsies’
way of life. Today, however, payos – that is, non-gypsies,
also perform as flamenco artists (Aoyama, 2009). Song,
music and dance are important aspects of the construc-
tion of Spanish gypsies’ identity (West, 2007). Due to
the clearly visible deteriorating effects of mass tourism
on infrastructure and natural beauty, the Spanish gov-
ernment now focuses more on higher income foreign
tourists and on world heritage attractions such as the
‘Alhambra and Generalife’ and ‘Mezquita’ (both 1984),
‘Cathedral, Alcázar Palace and West Indies Archives’
(1987), ‘Úbeda and Baeza’ (2003), and ‘Flamenco’
(2010). Some 80% of tourists in Andalusia are Spanish
nationals, followed by tourists from the United Kingdom,
Germany and France – the main foreign markets. Along-
side golf tourism, flamenco tourism is a high-value sub-
66 chapter 3 Tourism Consumer Behaviour](https://image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-91-2048.jpg)
![2015 UNWTO WTM Ministers’ Summit – Destination branding: new challenges in a
changing market
https://youtu.be/oejXydv9cAA
Destination marketing and economic development: creating a singular place brand
https://youtu.be/NGcwfatkwGY
Branding Nashville as ‘Music City’
https://youtu.be/Lfauq0zn4gI
Branding a city – Dubai
https://youtu.be/p9ZIMyQagLg
Youtube
Destination branding
networking consumer communication channels, and for key customer relationship strategies to take
place with the eventual development of mass customisation marketing and delivery capabilities.
Channels
Although there have been significant developments with regard to computer reservation systems
and global distribution systems, for the destination it is the growth of destination management
and marketing systems that are the principal competitive tools in their quest for gaining greater
control over the distribution of the destination product. Irrespective of the location, scale and
type of destination in question, the development of a suitable destination management system,
whether unilaterally or with other destinations, is a priority that can no longer be ignored.
Cyberspace
The emergence of the Internet and its application in the domains of tourism (most notably in
SMART Destinations[ED5]), travel and hospitality is significant. It has underpinned significant
changing patterns of consumption, and has affected the entire buying processes and the means
by which tourism, travel and hospitality products are packaged and sold. The complexity of the
destination product and the coordinating role practised by destination marketers clearly makes
the development, implementation and management of destination-wide websites particularly
challenging. However, as with the rest of the wider tourism industry, it is a challenge that desti-
nations cannot afford to ignore.
Consolidation
Greater consolidation has impacted significantly on the global tourism industry, most notably in
the domains of travel in the form of airlines, hospitality in the form of large international hotel
groups, and tourism in the form of intermediaries. For destinations this issue throws open a
number of challenges in their attempt to counter the power imbalance that often results from
such developments.
Collaboration
Destinations are difficult to organise as there are often numerous stakeholders involved, all
with their own aims, goals and motivations, which have to coexist. Whether one is referring
to intra-destination networks, inter-destination collaboration, relational brands or forms of
collaboration governance, this move towards the need for greater collaboration is referred to
by King (2002) as the ‘network economy’, in that DMOs will probably enter into strategic
relationships with industry partners who can together provide a seamless experience for the
customer. This is because it will be the ‘relevance of the experience they offer the customer,
rather than the destination they promote, which will be the key ingredient for success in the
Destination Trends 135](https://image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-160-2048.jpg)
![Scott, N., Parfitt, N. and Laws, E. (2000) ‘Destination management: co-operative marketing, a
case study of Port Douglas Brand’, pp. 198–221 in Faulkner, B., Moscardo, G. and Laws, E.
(eds) Tourism in the 21st Century, Continuum, London.
Wang, Y. (2008) ‘Collaborative destination marketing: roles and strategies of convention and
visitors bureaus’, Journal of Vacation Marketing 14(3), 191–209.
Wang,Y. and Pizam, A. (2011) Destination Marketing and Management: Theories and Applica-
tions, CABI, Oxford.
WTO (2002a) Thinktank, WTO, Madrid.
WTO (2002b) Tourism in the Age of Alliances, Mergers and Acquisitions, WTO, Madrid.
Major case study 6.1
Too much of a good thing – when mass tourism becomes over-tourism
these throngs is literally sinking the lagoon city. Mass
tourism packages, specifically those offered by behe-
mothian cruise liners, have created a dire scenario for
the once tranquil destination. Due to over-tourism,
Venice finds itself overrun with waves of day-trippers.
Iconic experiences like gondolier canal rides and
walking bridge strolls have become nearly impossible
during the Venice high season. The unsustainability of
this over-tourism has caused its local population to flee
at alarming rates. Once having a citizenship of 175,000
in 1991, Venice has now dwindled to a mere 55,000
residents. Further, there is the issue of the type of con-
sumer this type of mass tourism produces. For Venice,
they are of lower spending quality (Giuffrida: 2017).
Referred to as ‘the “nickel and dimers” or the “hot-dog
crowd”’ (Stone: 2014) these day-trippers are opting for
cheap, souvenir trinkets (Bellafante: 2017). This is in
extreme, stark contrast to a city with a rich heritage of
high-end luxury items, fine dining and premier lodging
(Horowitz: 2017).
The development of unsustainability and the
hedonistic tourist
With the advent of mass tourism is also manifested
the issue of throwing a destination out of sustainability.
Sustainability occurs when ‘a tourism product . . . is in
harmony with the local environment and community”
(Sharpley and Telfer, 2015: 153). When a destination is
in opposition to this sustainability paradigm, it is said to
become ‘unsustainable’ (Sharpley and Telfer, 2015:
153). Unsustainability ‘tends to change the social condi-
tions [and] create[s] various problems for the commu-
nity in the tourist destination’ (Tosun, 1998: 604). The
problems associated with the mass tourism construct
Venice: the over-tourism sinking a city
One of the most pressing issues currently facing the
tourism industry is the challenge of over-tourism. Over-
tourism occurs when ‘the objective of using tourism as a
stimulus for the urban economy and adding value to
urban life’ (Sharpley and Telfer, 2015: 162) does not
occur due to excessive usage. There are several precipi-
tating factors that are leading to the rise of over-tourism
globally. Specifically, airline ticket prices continue to drop
internationally as many emerging and industrialised
nations see a rise in middle class per capita income. This
combination of events has made tourism more affordable
as the world median or middle class has more spending
power for non-essential items and experiences. This
divergence of affordability and buying power has created
an ideal scenario for tourism expansion as an industry
(Crotti and Misrahi, 2017: 4–6). No longer an exclusive
luxury of wealthy patrons, tourism is now an achievable
reality for a large mass populace (Higgins-Desbiolles,
2006: 199). While the industry and the world economy
has greatly benefited from this trend, the explosion of
mass tourism is not without its problems.
More and more, popular destinations like New York,
Barcelona, Hong Kong and Paris are facing the difficult
transition now created by mass tourism. These major
cities are ‘finding it increasingly difficult to deal with the
growing number of tourists’ (Sharpley and Telfer, 2015:
162). These major cities are approaching, reaching
and, in some cases, exceeding their population capacity
limits. One of the worst examples of this problematic
phenomenon is the city of Venice, Italy. Venice, no
stranger to tourism, currently finds itself a city in crisis.
The numeric volume of its mass tourism now exceeds
20 million visitors annually. The sheer physical weight of
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![experienced almost one million visitors while only having
a year-round residency of about 28,000. This ratio, in
combination with the fortress city’s limited geographic
size, has created disastrous effects when cruise ships
dock. The steady stream of day-trippers often disem-
barks at 10,000 passengers all at once. This has created
a bottlenecking effect that warrants very few sustainable
rewards for the city (Foster: 2017).
However, just as Dubrovnik seems bound for destruc-
tion, redemption has begun. The wake-up call has come
as the city was informed in 2016 that it is now in danger
of losing its coveted World Heritage Site status (Foster:
2017). In response to this crisis, Dubrovnik elected a
new mayor, Mato Franković, in June 2017 with a primary
purpose of decreasing and enforcing passenger dock-
ing limits to a 4,000 at-once capacity limit. In September
2017, the new mayor went further and issued an open
letter to the Cruise Lines International Associa-
tion (CLIA) in a plea for help with the new restrictions.
While the CLIA has yet to respond, their reaction is
being closely watched by other major cities (Morris:
2017). If Dubrovnik’s mayor can get the CLIA to com-
ply, it may create a precedent that other major European
destinations can utilise. Moreover, this action by Mayor
Franković (Morris: 2017) could be just the opening nec-
essary to finally create ‘triangular interaction’ (Sharpley
and Telfer, 2015: 360) between tourist, industry and
destination, finally offering hope for ‘a balanced, symbi-
otic relationship [that] should exist between tourists –
and the satisfaction of their needs – and the
developmental needs and objectives of the destination’
Sharpley and Telfer, 2015: 360–61).
References
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create an unsustainability that leaves many municipali-
ties with piles of rubbish, destruction and unmanagea-
ble debris. One of the key factors that makes the mass
tourism paradigm unsustainable is the negative mob
mentality often created in sustained large gatherings of
non-natives. Further, a large draw of the cruise ship
industry is its ability to facilitate a hedonistic experience
for its customer (Stieghorst: 2014).
One of the key identifying markers of the cruise con-
sumer is their tendency for escapism preferences. This
type of tourist is often unsatisfied and/or overworked in
their daily life thus viewing vacations as an opportunity
to let loose and escape the drudgery of everyday living.
The hedonistic mentality often lends itself to a person
uncaring of the local rules and customs, creating ‘social,
cultural, economic and environmental havoc’ (Sharpley
and Telfer, 2015: 361). This leads to potentially negative
interactions with the local inhabitants of their vacation
destination. The city of Barcelona is a prime example of
the contentious relationship that can occur between
local inhabitants and the unsustainability of the hedonis-
tic tourist. In 2017, local residents became so frustrated
with the behaviour of visitors they began yelling at them.
Graffiti began to appear with the phrasing ‘Why call it
tourist season if we can’t shoot them?’ (Edwards, Bin-
nie and Zuvela: 2017). The aggravation of this type of
unsustainable tourism has caused actual violence to
break out in the city. ‘In one [neighbourhood] several
hooded individuals stop a tourist bus in Barcelona,
slashing the tires and spray-painting the windscreen’
(Edwards, Binnie and Zuvela: 2017).
Predictions for industry implications and
practical usage – the crisis of Dubrovnik and a
positive plea for change toward sustainability
‘Winter is coming’ (Connolly: 2017) is the phrase
made popular by the mega-hit Game of Thrones. It
serves as a dire warning to the characters of the fic-
tional lands of its inhabitants. Strangely enough, this
warning is becoming all to true for the real-life places
where the HBO television adaptation films. In looking at
the topic of over-tourism and the unsustainability of
mass tourism, it is important to consider the problem
from the axis of over-capacity (Connolly: 2017).
Such is the case for Dubrovnik, a busy port of the
Mediterranean Sea located in Croatia. Highly popular for
centuries, Lord Byron refers to it is as ‘the Pearl of the
Adriatic’ (Foster: 2017) in many of his most famous writ-
ings. Dubrovnik is best known for its reinforced, medieval
defence walls that are so iconic they appear in numerous
television and film productions like Star Wars and practi-
cally every version of Robin Hood ever shot. Ironically, the
walls meant to protect Dubrovnik for so many centuries
are now in danger of tearing it apart In 2016, the city
Major case study 6.1 143](https://image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-168-2048.jpg)
![Known for its green approach to tourism, not everything in the Cost Rican garden is green. How
can we avoid this type of development? Punishment affects a few, but this is the symptom of
something more fundamental. Discuss.
Commodification: does it always have to be bad?
https://www.youtube.com/watch?v=04JOkZ-F-rA
Butler, R.W. (1980) ‘The concept of a tourist area cycle of evolution: implications for mana-
ment of resources’, Canadian Geographer 24(1), 5–12.
Caiazza, R. and Audretsch, D. (2015) ‘Can a sport mega-event support hosting city’s economic,
socio-cultural and political development?’ Tourism Management Perspectives 14, 1–2.
Cohen, E. (1984) ‘The sociology of tourism: approaches, issues and findings, Annual Review of
Sociology 10, 373–92.
Cohen, E. (1988) ‘Authenticity and commoditization in tourism’, Annals of Tourism Research
15, 371–86.
Daldeniz, B. and Hampton, M.P. (2013) ‘Dive tourism and local communities: active participa-
tion or subject to impacts? Case studies from Malaysia’, International Journal of Tourism
Research 15(5), 507–20.
Deery, M. Jaogo, L., and Fredline, L. (2012) ‘Rethinking social impacts of tourism research: a
new research agenda’, Tourism Management 33(1), 64–73.
De Kadt, E. (ed.) (1979) Tourism: Passport to Development?, Oxford University Press, New
York.
Doxey, G.V. (1975) ‘When enough’s enough: the natives are restless in Old Niagara’, Heritage
Canada 2(2), 26–7.
Gill, A. and Williams, P. (1994) ‘Managing growth in mountain tourism communities’, Tourism
Management 15(3), 212–20.
Inskeep, E. (1991) Tourism Planning: An Integrated and Sustainable Development Approach,
Van Nostrand Reinhold, New York.
Kadt (1979) [to be supplied]
Kim, W., Jun, H.M., Walker, M., and Drane, D. (2015) ‘Evaluating the perceived social impacts
of hosting large-scale sport tourism events: scale development and validation’, Tourism
Management 48, 21–32.
Kim, K., Uysal, M., and Sirgy, M.J. (2013) ‘How does tourism in a community impact the
quality of life of community residents?’, Tourism Management 36, 527–40.
Mathieson, A. and Wall, G. (1982) Tourism: Economic, Physical and Social Impacts, Longman,
Harlow.
Plog, S.C. (1977) ‘Why destination areas rise and fall in popularity’, in Kelly, E.M. (ed.)
Domestic and International Tourism, Institute of Certified Travel Agents, Wellesley, MA.
Plog, S.C. (2004) Leisure Travel: A Marketing Handbook, Pearson Prentice Hall, Upper Saddle
River, NJ.
Prayag, G., Hosany, S., Nunkoo, R., and Alders, T. (2013) ‘London residents’ support for the
2012 Olympic Games: the mediating effect of overall attitude’, Tourism Management 36,
629–40.
Price, M.F. (1992) ‘Patterns of the development of tourism in mountain environments’, Geojour-
nal 27(1), 87–96.
Saraiva, G.L. (2016) ‘Globalization, tourism and sustainable development: the multifaceted
impact of tourism on development and poverty alleviation in Brazil’, CUNY Academic
Works, http://academicworks.cuny.edu/cc_etds_theses/601
Smith, V.L. (1989) Hosts and Guests: The Anthropology of Tourism, 2nd edn, University of
Pennsylvania Press, Philadelphia.
Stokowski, P.A. (1996) Riches and Regrets: Betting on Gambling in Two Colorado Mountain
Towns, University Press of Colorado, Niwot.
References and Further Reading
216 Chapter 9 The Socio-Cultural Impact of Tourism](https://image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-241-2048.jpg)
![Major Case Study 9.1
Norway is reaching breaking point because of Disney’s Frozen
growth in numbers of 7.5% in 2015. Last northern
summer, more than one million visitors flocked to the
Lofoten Islands alone.
It was good for a while, but some Norwegians are
starting to grow cold on Frozen fans. The Lofoten archi-
pelago’s public facilities are being exhausted, with prob-
lems plaguing local waste disposal, public toilets and
car parking. The environment is also taking a hit, with
locals concerned about the severe erosion of paths
leading to popular spots on the coastline. Residents on
the islands have even dubbed small woodlands near a
popular mountain climb ‘the forest of sh*t’ due to the
mess left by tourists, The Guardian reported. Fredrik
Sørdal, the mayor of the nearby town of Flakstad, said
the growth in tourism was ‘challenging’. ‘In Flakstad we
have, for example, become extremely unbalanced when
it comes to tourism this year, and need to take many
measures before next year,’ he told Norwegian broad-
caster NRK.
More than a million tourists were expected to flock to
Norway between April and September. ‘This will mean
more traffic,’ Mr Sørdal said. ‘Part of the road network
consists of narrow and complex sections. I fear that [a]
MANY of us can confidently say we’ve survived
the global juggernaut that was the 2013 Disney epic
Frozen.
Queen Elsa and Olaf merchandise has been squared
away out of sight, that damned theme song is finally out
of our heads, and it’s been at least a year since we’ve
heard someone say, ‘I mean, I know it’s a kids’ movie but
I actually really enjoyed it.’ But while we all relish in having
been unshackled from Frozen’s steely, all-conquering
grip, spare a thought for Norway. Specifically, Norway’s
suffering Lofoten Islands.
These remote islands, north of the Arctic Circle,
risk being overrun by tourists lured by the dramatic
snow-capped scenes that inspired Frozen as well as a
growing list of other Hollywood blockbusters filmed
there. And authorities say the islands are reaching
breaking point. Frozen, set in a fantasy kingdom
inspired by Norway, was released in 2013 with the
bacaking of the Norwegian tourist board and provided
a huge boost to the country’s tourism sector. After its
release, the film was attributed to a massive 20% rise
in foreign visitor numbers to the country. Those num-
bers are continuing to climb, with Norway recording a
The Norwegian city of Bergen inspired the setting for the Disney animated
film Frozen. Parts of the country now risk being overrun by tourists who still
haven’t shaken off Frozen fever.
Photograph 9.3
Major Case Study 9.1 217](https://image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-242-2048.jpg)
![of a disaster, when the government wishes to communicate internationally on the scale of the
damage as it goes in search of international aid, whereas the private sector may want the world
to know that it is ‘business as usual’ to kick-start the recovery process. There is a need for
proactive plans with respect to the release of information and those plans should include and
engage all stakeholders.
Following a terrorist attack in November 2015, France immediately brought a ‘state of emer-
gency’ into play to give police more power and place people under house arrest. A state of
emergency is when the government suspends the normal constitutional regulations and pro-
cesses in order to have greater control. The Bali bombings caused Indonesia to respond and
react quickly and appropriately. Increasing the security and arresting a number of suspects,
communicating emotionally positive details (see Mini Case Study 12.1) and providing assertive
signals to the world community:
We ask for the understanding and assistance of the world to come to the aid of the Balinese
people who love and cherish peace. It makes no sense to isolate them [the people of Bali].
If we compare, when the WTC [World Trade Center] was attacked no one issued a travel
ban on the United States, did they?
Metrojet Flight 9268 carrying 224, mostly Russian, tourists disintegrated above northern Sinai in Egypt,
23 minutes after departure from Sharm El Sheikh Airport.
Mini case study 12.1
Metrojet Flight 9268: Sharm El Sheikh International Airport,
Egypt
Photograph 12.2
288 chapter 12 The impact of negative events on tourism and destinations](https://image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-313-2048.jpg)
![Gilbert (1990) commented that what makes tourism difficult to define is the very broad nature
of the concept as well as the need for so many goods and services inputs. Tourism also envelops
other sectors and industries and therefore has no clear boundary due to the expansive spread of
activities it covers. With this in mind others have added supply-side aspects to the definition of
tourism so as to incorporate the visitor’s impact (economic, social, cultural and environmental)
on the destination (Goeldner and Ritchie, 2006; Lieper, 1979, 1990, 2008; Tribe, 1997, 2006).
Tribe’s view (1997) was that tourism is ‘the sum of the phenomena and relationships arising
from the interaction, in generating and host regions, of tourists [visitors], business suppliers,
government, communities and environments’.
Within an academic discipline, the benefit of having an overarching theoretical structure is
the methodological direction that it bestows. To put it simply, practice without theory is blind.
As a field of academic study, various writers, as indicated above, have noted that tourism lacks
the theoretical underpinnings that govern other social sciences, giving rise to conceptual weak-
nesses and lack of clarity. On the other hand many disciplines have their own imprisoning theo-
ries in which esoteric arguments have no known reality, thus rendering them sterile. Scientists
have found that the behaviour of natural systems do not conform to the doctrines of reduction-
ism that theoretical structures demand. They have shown that small simple actions could never
be counted on to have small outcomes and frequently they cascaded into multiple outcomes of
unsuspected intensity. Such systems are termed chaotic and chaos theory demands adaptive
management, continual learning and monitoring, and frequent reviews to deal with the uncer-
tainty arising.
Chaos theory has parallels in tourism, which has been subject to several disasters so far this
century, for example, the destruction of the World Trade Center on 11 September 2001, the wars
in Iraq and Afghanistan, the bombings of the London and Madrid railway systems, tsunamis on
the coasts of Sri Lanka, Thailand and Japan, the Global Financial Crisis, and the current trou-
bles in the Middle East, notably Syria, with their spillover effects in terms of refugees and ter-
rorist activity in other countries, particularly in some of the main capital cities of Europe. These
are events over which the actors had no control, which in turn have raised interest in chaos
theory and its relation to crisis management. Adaptability is the key, for chaos theory postulates
Tourism has become an increasingly popular area of study for many students
as the subject gains acceptability in the academic community.
Photograph 1.1
6 chapter 1 An Introduction to Tourism](https://crownmelresort.com/image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-31-2048.jpg)
![distinguished from the everyday by their cultural, historic or natural significance (Rojek and
Urry, 1997). The ‘pull’ to visit destinations activates the whole tourism system and creates
demand for travel in the generating region. It is at the tourism destination that the full impact of
tourism is experienced and product innovation takes place, together with visitor management
and planning processes so as to take account of the effects on host communities. (These aspects
are discussed in depth in Part 2.)
The transit route region does not simply represent the short period of travel to reach the des-
tination, but must include intermediate places which may be visited en route, if it is to be regis-
tered as part of a visitor’s trip: ‘There is always an interval in a trip when the traveller feels they
have left their home region but have not yet arrived . . . [where] they choose to visit’ (Leiper,
1990: 22).
The issue as to whether tourism is an industry rests on the definition of an industry within a
country’s national accounts. These use internationally accepted classifications to produce output
measures in accordance with a country’s industrial structure. In these terms, an industry is a col-
lection of firms that use similar processes to produce relatively homogeneous goods and ser-
vices. On the other hand, the tourism product is an amalgam of a multiplicity of goods and
services that is configured to meet visitors’ demands and drawn from a range of industries, from
transport to retailing. In establishing the TSA, the UNWTO (2000 and 2001) decided to label
tourism as a sector made up of a number of industries as defined by international standards, and
these are listed fully in Table 1.1 so as to show the range of businesses directly included in tour-
ism. Yet on a practical level, those engaged in the tourism business and their trade associations
commonly use the term ‘tourism industry’ when representing their views to governments and
dealing with issues amongst themselves. Noting this, we will use the terms ‘tourism sector’ and
‘tourism industry’ synonymously throughout this text.
Tourism industries SIC2007 Description
Accommodation 55100 Hotels and similar accommodation
55202 Youth hostels
55300 Recreational vehicle parks, trailer parks and camping
grounds
55201 Holiday centres and villages
55209 Other holiday and other collective accommodation
55900 Other accommodation
68209 Other letting and operating of own or leased real estate
68320 Management of real estate on a fee or contract basis
Restaurants and similar 56101 Licensed restaurants
56102 Unlicensed restaurants and cafes
56103 Take-away food shops and mobile food stands
56290 Other food services
56210 Event catering activities
56301 Licensed clubs
56302 Public houses and bars
Railway passenger
transport
49100 Passenger rail transport, interurban
Tourism industries as defined by the UNWTO
Table 1.1
8 CHAPTER 1 AN INTRODUCTION TO TOURISM](https://crownmelresort.com/image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-33-2048.jpg)
![future mainstream market trends. Youth travellers
opened many of today’s most popular destinations
and led the trend to independent travel that has now
spread through the industry.’
Importantly, David Jones emphasises the need to be
careful in classifying all youth travellers as simply
backpack carrying, Internet café visiting, solo adventur-
ers: ‘The youth market demand has been driven by the
growth of popular international activities. In the 80s
90s, demand was driven by a massive growth in “back-
packing” and in the 90s by the new student working
holiday opportunities. The biggest growth sector in
youth travel 2000–2010, was voluntary experiences.
Acts of community service are increasingly important to
young people, and the motivation to do some good in
the world created a massive demand for international
voluntary experience programs in the first decade of the
21st century. This is a demand that continues today.’
The WYSE regards those destinations that deliver on
the interests of the youth market, including the potential
for discovery, cultural interaction, heritage exploration,
and action, as ones that will be the protecting their
brands now and into the future.
In this spirit, the tourism sector needs to embrace the
invaluable contribution that youth travel makes to one of
the world’s fastest growing, and most widely beneficial,
economic sectors. Whether they are young, traditional
‘Wwestern’ (i.e., American, Canadian or European)
travellers carrying backpacks, or young Asian travellers
carrying Burberry bags, youth travellers are defining the
direction of our world on the move. With more than a
billion people travelling the globe, all types of travellers
and travel choices are needed to ensure that the power
of the tourism economy is leveraged across all seg-
ments and regions. Tourism needs the guided tours and
all-inclusive resorts as much as it needs the business
traveller hotels and backpacker hostels. There is no
‘right or wrong’, no ‘best way’, no ‘more authentic’, no
‘more valuable’. It is all about shaping the future through
enabling travellers to live out their travel dreams today.
Source: Updated from Anita Mendiratta, CNN Task Group/ETN, 1 March
2012, the publications of WYSE Travel Confederation and https://www.
wysetc.org/ (accessed 16 April 2017).
While the motivations of youth travellers change
slowly over the years, they go far beyond the quest for
sun, sand, sea, and stories. At the heart of youth travel
is a wonderfully personal, positively selfish, desire of
the traveller to be a more active participant in the world.
The travel is about them – their experiences, their learn-
ing, their time, their sharing (e- and otherwise). They
are travelling with purpose, choosing to put themselves
‘out there’ to be able to experience the world unvar-
nished, unpackaged, unedited, and unafraid.
For many travel segments, cultural and environmental
awareness and appreciation comes implicitly through
travel experiences chosen – locations, accommodation,
tours, transport methods. The youth travel segment,
however, is composed of hundreds of millions of indi-
viduals who explicitly seek to learn, to explore, to be
immersed, to be involved, and to make an impact. Youth
travellers view ‘Responsible Tourism’ as a verb, not a
noun. To travel the world with only a backpack is an
explicit expression of ‘I want to be a part of where I am
through how I travel, where I eat, where I sleep, who I
meet, and what stories we share.’ A backpack is an
overt statement of ‘I am open’.
The most obvious shift in youth and student travel in
this century has been the growth of social media and
mobile communications, which have revolutionised the
way that people interact with travel products and gather
information. Young travellers are now using more
diverse sources of information and are also beginning to
use new mobile media to search for information and
book travel products while travelling.
Same Planet, Different Worlds
One of the world’s strongest, most passionate advo-
cates of the power of the youth travel segment is
David Jones, the former Secretary General of WYSE
[World Youth, Student Educational Travel Confed-
eration]. He is clear in his belief that youth travellers –
travellers who distinctly do not wish to be referred to
as ‘tourists’ – provide a compass for future tourism
sector growth . . . : ‘Understanding the characteristics
and trends of the youth market offers an insight on
Major case study 2.1 39](https://crownmelresort.com/image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-64-2048.jpg)
![Pizam, A. and Mansfield, Y. (eds) (2000) Consumer Behavior in Travel and Tourism, Haworth,
New York. A useful edited volume covering all the main elements of consumer behaviour.
Plog, S.C. (1974) ‘Why destination areas rise and fall in popularity’, Cornell Hotel and Restau-
rant Quarterly 14(4), 55–8.
Plog, S.C. (1990) ‘A carpenter’s tools: an answer to Stephen L.J. Smith’s review of psychocen-
trism/allocentrism’, Journal of Travel Research 28(4), 43–5.
Plog, S.C. (2001) ‘Why destinations rise and fall in popularity: an update of a Cornell Restau-
rant Quarterly classic’, Cornell Hotel and Restaurant Quarterly 42(3), 13–24.
Schmoll, G.A. (1977) Tourism Promotion, Tourism International Press, London.
Smith, S.L.J. (1990) ‘A test of Plog’s allocentric/psychocentric model: evidence from seven
nations’, Journal of Travel Research 28(4), 40–43.
Solomon M.R. (1996) Consumer Behavior, 3rd edn, Prentice Hall, Englewood Cliffs, NJ.
Swarbrooke, J. and Horner, S. (1999) Consumer Behaviour in Tourism, Butterworth Heinemann,
Oxford. Thimm, T. (2014) ‘The flamenco factor in destination marketing: interdependencies
of creative industries and tourism – the case of Seville’, Journal of Travel and Tourism
Marketing 31(5), 576–88.
Wahab, S., Crampon, L.J. and Rothfield, L.M. (1976) Tourism Marketing, Tourism Interna-
tional Press, London.
Woodside, A. and Lysonski, S. (1989) ‘A general model of traveler destination choice’, Journal
of Travel Research, 27, 8–14.
Major case study 3.1
Flamenco and Creativity as a Factor in Destination Image
Development
arrived at their destination, their perceptions are modi-
fied to adjust to reality according to their individual imag-
inary geography. Furthermore, the process of travelling
itself can be compared to participating in creative
events, such as plays or festivals, as they interrupt daily
routines (Hennig, 1999). In other words, creative events
and tourism are both liminoid regarding time and space –
that is, implying a state of transition, an escape from
everyday values, structures, and norms (Wöhler, 2001).
Creativity and Tourism in Seville
One of the associations Seville spontaneously provokes
is the image of being a flamenco city, if not the flamenco
city, in Spain – especially because Seville was one of
the birthplaces of flamenco in the mid-nineteenth cen-
tury. Flamenco itself can be regarded as a creative
industry in Seville, since flamenco dancing, singing and
guitar playing always served as a source of income for
the artists from the very beginning. The Sevillian Triana
district, in particular, inhabited by many gypsies at that
time, was one of the emerging centres of this new
hybrid art form, combining Indian, Arabian, Jewish and
Andalusian elements. Today, the city sometimes
Creative tourism can be seen as an extension, adjunct
or antidote to cultural tourism. In the field, destinations
have also capitalised on creativity, increasingly using it
in destination branding as a form of distinctiveness.
Creativity, being difficult to define in particular terms,
is often discussed via the concepts of creative people,
products, processes and places. Thanks to their own
activities, tourists co-create creative tourism. Thus, cre-
ative tourism is described by Richards as follows:
[. . .] it tends to involve more elements of everyday
life and the intangible, embedded culture of the
host community.[. . .] In the co-creation of creative
tourism experiences, conceptual authenticity is
arguably negotiated in situ by the host and the
tourist, each playing a role as the originator of the
experience [. . .] In view of this complexity per-
haps creative tourism is not a coherent ‘niche’ at
all, but rather a series of creative practices linking
production, consumption and place (Richards,
2011).
Tourists follow their imaginary geography (Gregory,
1993), carrying with them their inner pictures of a desti-
nation formed during their socialisation. Once they have
Major case study 3.1 65](https://crownmelresort.com/image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-90-2048.jpg)
![segment in which the value per tourist is around one
third above the average figure. In total, however, it is a
small segment . . . Seville ranks third in the visitors
league table for Spain, after Madrid and Barcelona.
[. . .] While the flamenco industry contributes consid-
erably to how Seville is perceived and strategically used
in destination marketing, the industry itself is of minor
importance to the tourism industry at large . . . More than
600,000 of the tourists who visited Andalusia in 2004
had a primary interest in flamenco (Aoyama, 2009). In
this regard, flamenco-based tourism can be defined as
any tourism activity that is related to flamenco, like visit-
ing flamenco performances, participating in flamenco
courses, and buying flamenco accessories such as
CDs, clothes or instruments. Thus, flamenco-based
tourism is a special form of creative tourism – that is,
tourism activity related to creative industries, and the
members of the flamenco scene in Seville belong to the
creative class according to Florida (2002).
Flamenco and Image Marketing
in Seville
Given its attractiveness to tourists, flamenco is widely
used in the marketing channels of the Sevillian Tourism
Board, such as various tourism fairs (stand design, bro-
chures, and materials) and websites: www.visitasevilla.
es (and) www.turismosevilla.tv
Source: Adapted from Thimm, T. (2014) ‘The flamenco factor in destination
marketing: interdependencies of creative industries and tourism – the case
of Seville’, Journal of Travel and Tourism Marketing 31(5), 576–88.
Discussion Questions
1. From the concepts on consumer behaviour in this
chapter explain how a cultural activity such as fla-
menco can create benefits for tourism demand.
2. Provide examples and assessment of other destina-
tions where creative distinctiveness strengthens
brand images.
3. Discuss whether different age groups and segments
will be more or less interested in creative forms of
tourism. Then draft a table of the findings.
represents contradictory aspects, such as ‘Spanish-
ness for national unity’, ‘the Andalusian [. . .] regional
identity’, and ‘the gypsy influence as representing sub-
cultural, marginalized [and] bohemian’ (Aoyama, 2009).
Seville is mentioned alongside other ‘music cities’, such
as Bayreuth, Vienna, Salzburg, Liverpool, New Orleans,
Memphis and Nashville. These cities are characterised
as music tourism destinations. Music has gone from an
adjunct of tourism, and a pleasant background, albeit
often an important one, to a central element of much
tourism, at least for a minority. That minority, often seek-
ing both recreation and nostalgia, has produced a
largely new series of niches within the tourist industry,
that have had substantial cultural and economic signifi-
cance in a range of places (Gibson and Connell, 2005).
From 1940 to 1970, Franco’s government prioritised
low-priced, good-quality sun and beach tourism. From
1960 onwards, the country increasingly opened up to
foreign markets.
In the process, flamenco was gradually transformed
from a ‘regional tradition’ to an export commodity, from
cultural heritage of Andalusian suffering to exotic
cultural entertainment. Careers as flamenco artist-
entrepreneurs offered [to the gypsies] an important
alternative to agressive proletarianisation of their com-
munity (Aoyama, 2009).
The comparatively free life of a flamenco artist acting
partly in informal sectors corresponds to the gypsies’
way of life. Today, however, payos – that is, non-gypsies,
also perform as flamenco artists (Aoyama, 2009). Song,
music and dance are important aspects of the construc-
tion of Spanish gypsies’ identity (West, 2007). Due to
the clearly visible deteriorating effects of mass tourism
on infrastructure and natural beauty, the Spanish gov-
ernment now focuses more on higher income foreign
tourists and on world heritage attractions such as the
‘Alhambra and Generalife’ and ‘Mezquita’ (both 1984),
‘Cathedral, Alcázar Palace and West Indies Archives’
(1987), ‘Úbeda and Baeza’ (2003), and ‘Flamenco’
(2010). Some 80% of tourists in Andalusia are Spanish
nationals, followed by tourists from the United Kingdom,
Germany and France – the main foreign markets. Along-
side golf tourism, flamenco tourism is a high-value sub-
66 chapter 3 Tourism Consumer Behaviour](https://crownmelresort.com/image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-91-2048.jpg)
![2015 UNWTO WTM Ministers’ Summit – Destination branding: new challenges in a
changing market
https://youtu.be/oejXydv9cAA
Destination marketing and economic development: creating a singular place brand
https://youtu.be/NGcwfatkwGY
Branding Nashville as ‘Music City’
https://youtu.be/Lfauq0zn4gI
Branding a city – Dubai
https://youtu.be/p9ZIMyQagLg
Youtube
Destination branding
networking consumer communication channels, and for key customer relationship strategies to take
place with the eventual development of mass customisation marketing and delivery capabilities.
Channels
Although there have been significant developments with regard to computer reservation systems
and global distribution systems, for the destination it is the growth of destination management
and marketing systems that are the principal competitive tools in their quest for gaining greater
control over the distribution of the destination product. Irrespective of the location, scale and
type of destination in question, the development of a suitable destination management system,
whether unilaterally or with other destinations, is a priority that can no longer be ignored.
Cyberspace
The emergence of the Internet and its application in the domains of tourism (most notably in
SMART Destinations[ED5]), travel and hospitality is significant. It has underpinned significant
changing patterns of consumption, and has affected the entire buying processes and the means
by which tourism, travel and hospitality products are packaged and sold. The complexity of the
destination product and the coordinating role practised by destination marketers clearly makes
the development, implementation and management of destination-wide websites particularly
challenging. However, as with the rest of the wider tourism industry, it is a challenge that desti-
nations cannot afford to ignore.
Consolidation
Greater consolidation has impacted significantly on the global tourism industry, most notably in
the domains of travel in the form of airlines, hospitality in the form of large international hotel
groups, and tourism in the form of intermediaries. For destinations this issue throws open a
number of challenges in their attempt to counter the power imbalance that often results from
such developments.
Collaboration
Destinations are difficult to organise as there are often numerous stakeholders involved, all
with their own aims, goals and motivations, which have to coexist. Whether one is referring
to intra-destination networks, inter-destination collaboration, relational brands or forms of
collaboration governance, this move towards the need for greater collaboration is referred to
by King (2002) as the ‘network economy’, in that DMOs will probably enter into strategic
relationships with industry partners who can together provide a seamless experience for the
customer. This is because it will be the ‘relevance of the experience they offer the customer,
rather than the destination they promote, which will be the key ingredient for success in the
Destination Trends 135](https://crownmelresort.com/image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-160-2048.jpg)
![Scott, N., Parfitt, N. and Laws, E. (2000) ‘Destination management: co-operative marketing, a
case study of Port Douglas Brand’, pp. 198–221 in Faulkner, B., Moscardo, G. and Laws, E.
(eds) Tourism in the 21st Century, Continuum, London.
Wang, Y. (2008) ‘Collaborative destination marketing: roles and strategies of convention and
visitors bureaus’, Journal of Vacation Marketing 14(3), 191–209.
Wang,Y. and Pizam, A. (2011) Destination Marketing and Management: Theories and Applica-
tions, CABI, Oxford.
WTO (2002a) Thinktank, WTO, Madrid.
WTO (2002b) Tourism in the Age of Alliances, Mergers and Acquisitions, WTO, Madrid.
Major case study 6.1
Too much of a good thing – when mass tourism becomes over-tourism
these throngs is literally sinking the lagoon city. Mass
tourism packages, specifically those offered by behe-
mothian cruise liners, have created a dire scenario for
the once tranquil destination. Due to over-tourism,
Venice finds itself overrun with waves of day-trippers.
Iconic experiences like gondolier canal rides and
walking bridge strolls have become nearly impossible
during the Venice high season. The unsustainability of
this over-tourism has caused its local population to flee
at alarming rates. Once having a citizenship of 175,000
in 1991, Venice has now dwindled to a mere 55,000
residents. Further, there is the issue of the type of con-
sumer this type of mass tourism produces. For Venice,
they are of lower spending quality (Giuffrida: 2017).
Referred to as ‘the “nickel and dimers” or the “hot-dog
crowd”’ (Stone: 2014) these day-trippers are opting for
cheap, souvenir trinkets (Bellafante: 2017). This is in
extreme, stark contrast to a city with a rich heritage of
high-end luxury items, fine dining and premier lodging
(Horowitz: 2017).
The development of unsustainability and the
hedonistic tourist
With the advent of mass tourism is also manifested
the issue of throwing a destination out of sustainability.
Sustainability occurs when ‘a tourism product . . . is in
harmony with the local environment and community”
(Sharpley and Telfer, 2015: 153). When a destination is
in opposition to this sustainability paradigm, it is said to
become ‘unsustainable’ (Sharpley and Telfer, 2015:
153). Unsustainability ‘tends to change the social condi-
tions [and] create[s] various problems for the commu-
nity in the tourist destination’ (Tosun, 1998: 604). The
problems associated with the mass tourism construct
Venice: the over-tourism sinking a city
One of the most pressing issues currently facing the
tourism industry is the challenge of over-tourism. Over-
tourism occurs when ‘the objective of using tourism as a
stimulus for the urban economy and adding value to
urban life’ (Sharpley and Telfer, 2015: 162) does not
occur due to excessive usage. There are several precipi-
tating factors that are leading to the rise of over-tourism
globally. Specifically, airline ticket prices continue to drop
internationally as many emerging and industrialised
nations see a rise in middle class per capita income. This
combination of events has made tourism more affordable
as the world median or middle class has more spending
power for non-essential items and experiences. This
divergence of affordability and buying power has created
an ideal scenario for tourism expansion as an industry
(Crotti and Misrahi, 2017: 4–6). No longer an exclusive
luxury of wealthy patrons, tourism is now an achievable
reality for a large mass populace (Higgins-Desbiolles,
2006: 199). While the industry and the world economy
has greatly benefited from this trend, the explosion of
mass tourism is not without its problems.
More and more, popular destinations like New York,
Barcelona, Hong Kong and Paris are facing the difficult
transition now created by mass tourism. These major
cities are ‘finding it increasingly difficult to deal with the
growing number of tourists’ (Sharpley and Telfer, 2015:
162). These major cities are approaching, reaching
and, in some cases, exceeding their population capacity
limits. One of the worst examples of this problematic
phenomenon is the city of Venice, Italy. Venice, no
stranger to tourism, currently finds itself a city in crisis.
The numeric volume of its mass tourism now exceeds
20 million visitors annually. The sheer physical weight of
142 Chapter 6 Destinations](https://crownmelresort.com/image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-167-2048.jpg)
![experienced almost one million visitors while only having
a year-round residency of about 28,000. This ratio, in
combination with the fortress city’s limited geographic
size, has created disastrous effects when cruise ships
dock. The steady stream of day-trippers often disem-
barks at 10,000 passengers all at once. This has created
a bottlenecking effect that warrants very few sustainable
rewards for the city (Foster: 2017).
However, just as Dubrovnik seems bound for destruc-
tion, redemption has begun. The wake-up call has come
as the city was informed in 2016 that it is now in danger
of losing its coveted World Heritage Site status (Foster:
2017). In response to this crisis, Dubrovnik elected a
new mayor, Mato Franković, in June 2017 with a primary
purpose of decreasing and enforcing passenger dock-
ing limits to a 4,000 at-once capacity limit. In September
2017, the new mayor went further and issued an open
letter to the Cruise Lines International Associa-
tion (CLIA) in a plea for help with the new restrictions.
While the CLIA has yet to respond, their reaction is
being closely watched by other major cities (Morris:
2017). If Dubrovnik’s mayor can get the CLIA to com-
ply, it may create a precedent that other major European
destinations can utilise. Moreover, this action by Mayor
Franković (Morris: 2017) could be just the opening nec-
essary to finally create ‘triangular interaction’ (Sharpley
and Telfer, 2015: 360) between tourist, industry and
destination, finally offering hope for ‘a balanced, symbi-
otic relationship [that] should exist between tourists –
and the satisfaction of their needs – and the
developmental needs and objectives of the destination’
Sharpley and Telfer, 2015: 360–61).
References
Becker, E. (5 August 2017) ‘Only governments can
stem the tide of tourism sweeping the globe’, The
Guardian, retrieved 25 September 2017 from
https://www.theguardian.com/commentisfree/
2017/aug/05/only-governments-can-stem-tide-of-
tourism-sweeping-the-globe?CMP=share_btn_fb
%28.
Bellafante, G. (29 June 2017) ‘How much tourism is too
much?’, New York Times, retrieved 25 September
2017 from https://www.nytimes.com/2017/06/29/
nyregion/how-much-tourism-is-too-much.
html?smprod=nytcore-iphonesmid=nytcore-
iphone-share %28.
Burgen, S. (1 August 2017) ‘Barcelona anti-tourism
activists vandalise bikes and bus’, The Guardian,
retrieved 25 September 2017 from https://www
.theguardian.com/world/2017/aug/01/barcelona-
anti-tourism-activists-vandalise-bikes-and-
bus?CMP=Share_iOSApp_Other %28.
create an unsustainability that leaves many municipali-
ties with piles of rubbish, destruction and unmanagea-
ble debris. One of the key factors that makes the mass
tourism paradigm unsustainable is the negative mob
mentality often created in sustained large gatherings of
non-natives. Further, a large draw of the cruise ship
industry is its ability to facilitate a hedonistic experience
for its customer (Stieghorst: 2014).
One of the key identifying markers of the cruise con-
sumer is their tendency for escapism preferences. This
type of tourist is often unsatisfied and/or overworked in
their daily life thus viewing vacations as an opportunity
to let loose and escape the drudgery of everyday living.
The hedonistic mentality often lends itself to a person
uncaring of the local rules and customs, creating ‘social,
cultural, economic and environmental havoc’ (Sharpley
and Telfer, 2015: 361). This leads to potentially negative
interactions with the local inhabitants of their vacation
destination. The city of Barcelona is a prime example of
the contentious relationship that can occur between
local inhabitants and the unsustainability of the hedonis-
tic tourist. In 2017, local residents became so frustrated
with the behaviour of visitors they began yelling at them.
Graffiti began to appear with the phrasing ‘Why call it
tourist season if we can’t shoot them?’ (Edwards, Bin-
nie and Zuvela: 2017). The aggravation of this type of
unsustainable tourism has caused actual violence to
break out in the city. ‘In one [neighbourhood] several
hooded individuals stop a tourist bus in Barcelona,
slashing the tires and spray-painting the windscreen’
(Edwards, Binnie and Zuvela: 2017).
Predictions for industry implications and
practical usage – the crisis of Dubrovnik and a
positive plea for change toward sustainability
‘Winter is coming’ (Connolly: 2017) is the phrase
made popular by the mega-hit Game of Thrones. It
serves as a dire warning to the characters of the fic-
tional lands of its inhabitants. Strangely enough, this
warning is becoming all to true for the real-life places
where the HBO television adaptation films. In looking at
the topic of over-tourism and the unsustainability of
mass tourism, it is important to consider the problem
from the axis of over-capacity (Connolly: 2017).
Such is the case for Dubrovnik, a busy port of the
Mediterranean Sea located in Croatia. Highly popular for
centuries, Lord Byron refers to it is as ‘the Pearl of the
Adriatic’ (Foster: 2017) in many of his most famous writ-
ings. Dubrovnik is best known for its reinforced, medieval
defence walls that are so iconic they appear in numerous
television and film productions like Star Wars and practi-
cally every version of Robin Hood ever shot. Ironically, the
walls meant to protect Dubrovnik for so many centuries
are now in danger of tearing it apart In 2016, the city
Major case study 6.1 143](https://crownmelresort.com/image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-168-2048.jpg)
![Known for its green approach to tourism, not everything in the Cost Rican garden is green. How
can we avoid this type of development? Punishment affects a few, but this is the symptom of
something more fundamental. Discuss.
Commodification: does it always have to be bad?
https://www.youtube.com/watch?v=04JOkZ-F-rA
Butler, R.W. (1980) ‘The concept of a tourist area cycle of evolution: implications for mana-
ment of resources’, Canadian Geographer 24(1), 5–12.
Caiazza, R. and Audretsch, D. (2015) ‘Can a sport mega-event support hosting city’s economic,
socio-cultural and political development?’ Tourism Management Perspectives 14, 1–2.
Cohen, E. (1984) ‘The sociology of tourism: approaches, issues and findings, Annual Review of
Sociology 10, 373–92.
Cohen, E. (1988) ‘Authenticity and commoditization in tourism’, Annals of Tourism Research
15, 371–86.
Daldeniz, B. and Hampton, M.P. (2013) ‘Dive tourism and local communities: active participa-
tion or subject to impacts? Case studies from Malaysia’, International Journal of Tourism
Research 15(5), 507–20.
Deery, M. Jaogo, L., and Fredline, L. (2012) ‘Rethinking social impacts of tourism research: a
new research agenda’, Tourism Management 33(1), 64–73.
De Kadt, E. (ed.) (1979) Tourism: Passport to Development?, Oxford University Press, New
York.
Doxey, G.V. (1975) ‘When enough’s enough: the natives are restless in Old Niagara’, Heritage
Canada 2(2), 26–7.
Gill, A. and Williams, P. (1994) ‘Managing growth in mountain tourism communities’, Tourism
Management 15(3), 212–20.
Inskeep, E. (1991) Tourism Planning: An Integrated and Sustainable Development Approach,
Van Nostrand Reinhold, New York.
Kadt (1979) [to be supplied]
Kim, W., Jun, H.M., Walker, M., and Drane, D. (2015) ‘Evaluating the perceived social impacts
of hosting large-scale sport tourism events: scale development and validation’, Tourism
Management 48, 21–32.
Kim, K., Uysal, M., and Sirgy, M.J. (2013) ‘How does tourism in a community impact the
quality of life of community residents?’, Tourism Management 36, 527–40.
Mathieson, A. and Wall, G. (1982) Tourism: Economic, Physical and Social Impacts, Longman,
Harlow.
Plog, S.C. (1977) ‘Why destination areas rise and fall in popularity’, in Kelly, E.M. (ed.)
Domestic and International Tourism, Institute of Certified Travel Agents, Wellesley, MA.
Plog, S.C. (2004) Leisure Travel: A Marketing Handbook, Pearson Prentice Hall, Upper Saddle
River, NJ.
Prayag, G., Hosany, S., Nunkoo, R., and Alders, T. (2013) ‘London residents’ support for the
2012 Olympic Games: the mediating effect of overall attitude’, Tourism Management 36,
629–40.
Price, M.F. (1992) ‘Patterns of the development of tourism in mountain environments’, Geojour-
nal 27(1), 87–96.
Saraiva, G.L. (2016) ‘Globalization, tourism and sustainable development: the multifaceted
impact of tourism on development and poverty alleviation in Brazil’, CUNY Academic
Works, http://academicworks.cuny.edu/cc_etds_theses/601
Smith, V.L. (1989) Hosts and Guests: The Anthropology of Tourism, 2nd edn, University of
Pennsylvania Press, Philadelphia.
Stokowski, P.A. (1996) Riches and Regrets: Betting on Gambling in Two Colorado Mountain
Towns, University Press of Colorado, Niwot.
References and Further Reading
216 Chapter 9 The Socio-Cultural Impact of Tourism](https://crownmelresort.com/image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-241-2048.jpg)
![Major Case Study 9.1
Norway is reaching breaking point because of Disney’s Frozen
growth in numbers of 7.5% in 2015. Last northern
summer, more than one million visitors flocked to the
Lofoten Islands alone.
It was good for a while, but some Norwegians are
starting to grow cold on Frozen fans. The Lofoten archi-
pelago’s public facilities are being exhausted, with prob-
lems plaguing local waste disposal, public toilets and
car parking. The environment is also taking a hit, with
locals concerned about the severe erosion of paths
leading to popular spots on the coastline. Residents on
the islands have even dubbed small woodlands near a
popular mountain climb ‘the forest of sh*t’ due to the
mess left by tourists, The Guardian reported. Fredrik
Sørdal, the mayor of the nearby town of Flakstad, said
the growth in tourism was ‘challenging’. ‘In Flakstad we
have, for example, become extremely unbalanced when
it comes to tourism this year, and need to take many
measures before next year,’ he told Norwegian broad-
caster NRK.
More than a million tourists were expected to flock to
Norway between April and September. ‘This will mean
more traffic,’ Mr Sørdal said. ‘Part of the road network
consists of narrow and complex sections. I fear that [a]
MANY of us can confidently say we’ve survived
the global juggernaut that was the 2013 Disney epic
Frozen.
Queen Elsa and Olaf merchandise has been squared
away out of sight, that damned theme song is finally out
of our heads, and it’s been at least a year since we’ve
heard someone say, ‘I mean, I know it’s a kids’ movie but
I actually really enjoyed it.’ But while we all relish in having
been unshackled from Frozen’s steely, all-conquering
grip, spare a thought for Norway. Specifically, Norway’s
suffering Lofoten Islands.
These remote islands, north of the Arctic Circle,
risk being overrun by tourists lured by the dramatic
snow-capped scenes that inspired Frozen as well as a
growing list of other Hollywood blockbusters filmed
there. And authorities say the islands are reaching
breaking point. Frozen, set in a fantasy kingdom
inspired by Norway, was released in 2013 with the
bacaking of the Norwegian tourist board and provided
a huge boost to the country’s tourism sector. After its
release, the film was attributed to a massive 20% rise
in foreign visitor numbers to the country. Those num-
bers are continuing to climb, with Norway recording a
The Norwegian city of Bergen inspired the setting for the Disney animated
film Frozen. Parts of the country now risk being overrun by tourists who still
haven’t shaken off Frozen fever.
Photograph 9.3
Major Case Study 9.1 217](https://crownmelresort.com/image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-242-2048.jpg)
![of a disaster, when the government wishes to communicate internationally on the scale of the
damage as it goes in search of international aid, whereas the private sector may want the world
to know that it is ‘business as usual’ to kick-start the recovery process. There is a need for
proactive plans with respect to the release of information and those plans should include and
engage all stakeholders.
Following a terrorist attack in November 2015, France immediately brought a ‘state of emer-
gency’ into play to give police more power and place people under house arrest. A state of
emergency is when the government suspends the normal constitutional regulations and pro-
cesses in order to have greater control. The Bali bombings caused Indonesia to respond and
react quickly and appropriately. Increasing the security and arresting a number of suspects,
communicating emotionally positive details (see Mini Case Study 12.1) and providing assertive
signals to the world community:
We ask for the understanding and assistance of the world to come to the aid of the Balinese
people who love and cherish peace. It makes no sense to isolate them [the people of Bali].
If we compare, when the WTC [World Trade Center] was attacked no one issued a travel
ban on the United States, did they?
Metrojet Flight 9268 carrying 224, mostly Russian, tourists disintegrated above northern Sinai in Egypt,
23 minutes after departure from Sharm El Sheikh Airport.
Mini case study 12.1
Metrojet Flight 9268: Sharm El Sheikh International Airport,
Egypt
Photograph 12.2
288 chapter 12 The impact of negative events on tourism and destinations](https://crownmelresort.com/image.slidesharecdn.com/tourism-principles-and-practicecompress-241117151743-e896e2f0/75/tourism-principles-and-practice_compress-pdf-313-2048.jpg)
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- 1. TOURISM PRINCIPLES AND PRACTICE JohnFletcher Alan Fyall David Gilbert Stephen Wanhill Sixth Edition
- 2.
- 3. At Pearson, wehave a simple mission: to help people make more of their lives through learning. We combine innovative learning technology with trusted content and educational expertise to provide engaging and effective learning experiences that serve people wherever and whenever they are learning. From classroom to boardroom, our curriculum materials, digital learning tools and testing programmes help to educate millions of people worldwide – more than any other private enterprise. Every day our work helps learning flourish, and wherever learning flourishes, so do people. To learn more, please visit us at www.pearson.com/uk
- 4. Harlow, England •London • New York • Boston • San Francisco • Toronto • Sydney • Dubai • Singapore • Hong Kong Tokyo • Seoul • Taipei • New Delhi • Cape Town • São Paulo • Mexico City • Madrid • Amsterdam • Munich • Paris • Milan Tourism Tourism PrinciPles and Practice sixth edition John Fletcher Alan Fyall David Gilbert Stephen Wanhill
- 5. Pearson Education Limited KAOTwo KAO Park Harlow CM17 9NA United Kingdom Tel: +44 (0)1279 623623 Web: www.pearson.com/uk First published 1993 (print) Second edition published 1998 (print) Third edition published 2005 (print) Fourth edition published 2008 (print) Fifth edition published 2013 (print and electronic) Sixth edition published 2018 (print and electronic) © Chris Cooper, John Fletcher, David Gilbert and Stephen Wanhill, 1993 (print) © Chris Cooper, John Fletcher, David Gilbert, Rebecca Shepherd and Stephen Wanhill, 1998 (print) © Chris Cooper, John Fletcher, Alan Fyall, David Gilbert and Stephen Wanhill, 2005 (print) © John Fletcher, Alan Fyall, David Gilbert and Stephen Wanhill, 2013 (print and electronic) © John Fletcher, Alan Fyall, David Gilbert and Stephen Wanhill, 2018 (print and electronic) The rights of John Fletcher, Alan Fyall, David Gilbert and Stephen Wanhill to be identified as authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. The print publication is protected by copyright. Prior to any prohibited reproduction, storage in a retrieval system, distribution or transmission in any form or by any means, electronic, mechanical, recording or otherwise, permission should be obtained from the publisher or, where applicable, a licence permitting restricted copying in the United Kingdom should be obtained from the Copyright Licensing Agency Ltd, Barnard’s Inn, 86 Fetter Lane, London EC4A 1EN. The ePublication is protected by copyright and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased, or as strictly permitted by applicable copyright law. Any unauthorised distribution or use of this text may be a direct infringement of the authors’ and the publisher’s rights and those responsible may be liable in law accordingly. Pearson Education is not responsible for the content of third-party internet sites. ISBN: 978-1-292-17235-4 (print) 978-1-292-17239-2 (PDF) 978-1-292-17236-1 (ePub) British Library Cataloguing-in-Publication Data A catalogue record for the print edition is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Fletcher, John (John Edward) Title: Tourism : principles and practice / John Fletcher, Alan Fyall, David Gilbert, Stephen Wanhill. Description: Sixth edition. | Harlow, United Kingdom : Pearson, 2018. Identifiers: LCCN 2017030217| ISBN 9781292172354 (print) | ISBN 9781292172392 (pdf) | ISBN 9781292172361 (epub) Subjects: LCSH: Tourism. Classification: LCC G155.A1 F57 2018 | DDC 910—dc23 LC record available at https://lccn.loc.gov/2017030217 10 9 8 7 6 5 4 3 2 1 22 21 20 19 18 Print edition typeset in 10/12 TimesLT Pro by iEnergizer Aptara® , Ltd. Printed in Slovakia by Neografia NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION
- 6. Brief contents Case matrixxi Authors and contributors xiii Preface xvi Publisher’s acknowledgements xviii Abbreviations xx 1 An Introduction to Tourism 1 Part 1 Tourism Demand 20 2 The Nature of Tourism Demand 25 3 Tourism Consumer Behaviour 40 4 Measuring and Modelling Tourism Demand 67 5 Forecasting Tourism Demand 90 Part 2 The Tourism Destination 116 6 Destinations 122 7 The Economic Impact of Tourism 145 8 The Environmental Impact of Tourism 174 9 The Socio-cultural Impact of Tourism 194 10 Sustainable Tourism 221 11 Tourism and Development Planning 252 12 The Impact of Negative Events on Tourism and Destinations 281 Part 3 The Tourism Sector 302 13 Attractions 308 14 Accommodation 344 15 Events Management 370 16 Intermediaries 382 17 Transportation 408 18 Public Sector and Policy 447 Part 4 Marketing For Tourism 480 19 Managing Marketing for Tourism 486 20 Marketing Planning 519 21 Marketing Mix Applications 545 22 Information Technology in Tourism 587 Glossary 615 Index 623
- 8. Contents Case matrix xi Authorsand contributors xiii Preface xvi Publisher’s acknowledgements xviii Abbreviations xx 1 An Introduction to Tourism 1 Stephen Wanhill Learning outcomes 1 Introduction 2 Defining tourism 2 Tourism as a concept 4 A conceptual framework for tourism 7 An operational framework for tourism – the tourism satellite account (TSA) 13 Conclusion 17 Self-check questions 17 References and further reading 18 Part 1 Tourism Demand 20 2 The Nature of Tourism Demand 25 Stephen Wanhill Learning outcomes 25 Introduction 26 Individual tourism demand 26 Market tourism demand 34 Conclusion 36 Self-check questions 36 References and further reading 36 3 Tourism Consumer Behaviour 40 David Gilbert Learning outcomes 40 Introduction 41 The individual decision-making process 41 The fundamentals of consumer behaviour and tourism 41 Energisers and effectors of demand 43 Roles and the decision-making process in tourism 48 Models of consumer behaviour in tourism 54 The buying decision process in tourism 55 The way forward 61 Conclusion 62 Self-check questions 63 References and further reading 63 4 Measuring and Modelling Tourism Demand 67 Stephen Wanhill Learning outcomes 67 Introduction 68 Tourism satellite account requirements 68 Measurement methods 70 Sampling by place 74 Administering the sample 78 Measuring own price elasticity 79 Modelling tourism demand 80 Conclusion 84 Self-check questions 84 References and further reading 84 5 Forecasting Tourism Demand 90 Stephen Wanhill Learning outcomes 90 Introduction 91 An overview of tourism forecasting 91 Forecasting methods 93 The forecasting problem 110 Market planning 111 Conclusion 112 Self-check questions 113 References and further reading 113 Part 2 The Tourism Destination 116 6 Destinations 122 Alan Fyall Learning outcomes 122 Introduction 123 The nature and role of destinations 123 Destination trends 129 Destination management and marketing 136 Conclusion 140 Self-check questions 141 References and further reading 141 7 The Economic Impact of Tourism 145 John Fletcher Learning outcomes 145 Introduction 146 Overview 146 The generation of economic impacts by tourist spending 154 Leakages of expenditure out of the local economy 154 The measurement of economic impact 155 Photograph, left: Ngorongoro Crater, Tanzania, Africa © Graham Meyer
- 9. viii contents The multiplierconcept 156 Types of multiplier 158 Methodological approaches 159 Weaknesses and limitations of multiplier models 165 The policy implications of multiplier analysis 169 Conclusion 170 Self-check questions 170 References and further reading 171 8 The Environmental Impact of Tourism 174 John Fletcher Learning outcomes 174 Introduction 175 Environmental impact 175 Environmental impact assessment 179 The EIA process 181 Environmental auditing 185 Environmental action programmes 186 Conclusion 189 Self-check questions 190 References and further reading 191 9 The Socio-Cultural Impact of Tourism 194 John Fletcher Learning outcomes 194 Introduction 195 The nature of socio-cultural impacts of tourism 195 Approaches to the study of socio-cultural impacts of tourism 196 The tourism development process 198 The psychological basis of tourism development 198 The sociological basis of tourism development 200 Some general negative socio-cultural impacts of tourism 204 Some specific negative socio-cultural impacts of tourism 206 Some general positive socio-cultural impacts associated with tourism 211 Methods of measuring the socio-cultural impact of tourism 212 Conclusion 215 Self-check questions 215 References and further reading 216 10 Sustainable Tourism 221 John Fletcher Learning outcomes 221 Introduction 222 Historical background 222 Definitions of sustainability in general 223 Definitions of sustainable tourism 225 Sustainability of tourism 226 Sustainability as a strategy 240 Climate change and tourism 241 Conclusion 248 Self-check questions 248 References and further reading 249 11 Tourism and Development Planning 252 John Fletcher Learning outcomes 252 Introduction 253 Tourism and economic development theories 253 Integrated planning and development 258 Development planning layers 266 The tourism development planning process 267 Tourism development planning: when it goes wrong 273 Conclusion 277 Self-check questions 278 References and further reading 278 12 The Impact of Negative Events on Tourism and Destinations 281 Yeganeh Morakabati Learning outcomes 281 Introduction 282 Risk perception and fear 282 Destination resilience 283 The impact of terrorist attacks on tourist arrivals 291 Conclusion 294 Self-check questions 294 References and further reading 295 Part 3 The Tourism Sector 302 13 Attractions 308 Stephen Wanhill and Alan Fyall Learning outcomes 308 Introduction 309 The nature and purpose of attractions 309 Managing attractions 324 Conclusion 336 Self-check questions 337 References and further reading 337 14 Accommodation 344 Alan Fyall Learning outcomes 344 Introduction 345 Accommodation and the tourism product 345 Defining the accommodation sector 347 The distinctive nature of accommodation 355 The management of commercial accommodation 356 Sectoral overlap 357 Sector origins and the influence of the United States 357 Quality issues and grading in the accommodation sector 359 The accommodation sector and environmental issues 362 Information technology and the accommodation sector 363 Human resources and the accommodation sector 364 Conclusion 365 Self-check questions 365 References and further reading 366 15 Events Management 370 Debbie Sadd and Mary Beth Gouthro Learning outcomes 370 Introduction 371 The historical development of events 371 Conclusion 378 Self-check questions 378 References and further reading 378
- 10. contents ix 16 Intermediaries382 Stephen Wanhill and Alan Fyall Learning outcomes 382 Introduction 383 The nature of intermediation 383 The role of the retail agent 393 The role of the tour operator/wholesaler 395 Conclusion 405 Self-check questions 405 References and further reading 406 17 Transportation 408 Derek Robbins Learning outcomes 408 Introduction 409 Transport as a component of the tourist product 409 Components of the transportation system 412 Competitor analysis 419 Political influences on transport for tourism 429 Regulation of competition 430 Future trends 432 Conclusion 437 Self-check questions 437 References and further reading 438 18 Public Sector and Policy 447 Stephen Wanhill Learning outcomes 447 Introduction 448 Public policy framework 448 Administrative framework 453 Impact of the public sector 458 Intervention policy 470 Conclusion 471 Self-check questions 472 References and further reading 472 Part 4 Marketing For Tourism 480 19 Managing Marketing For Tourism 486 David Gilbert Learning outcomes 486 Introduction 487 What is marketing? 487 The evolution and application of marketing 487 Definitions and concepts of marketing 489 The differences between marketing and selling 492 Different business philosophies 492 Marketing orientation 494 Tourism as a service product 496 Tourism products and risk 499 Planning the service encounter 500 Quality management 502 Management tasks 511 The adoption of a marketing orientation 512 Criticisms of the marketing concept 512 A societal marketing approach 513 Conclusion 515 Self-check questions 515 References and further reading 515 20 Marketing Planning 519 David Gilbert Learning outcomes 519 Introduction 520 What is marketing planning? 520 The marketing environment of the organisation 521 The purpose of the marketing plan 522 Successful planning 525 Structure of the marketing plan 526 Conclusion 541 Self-check questions 541 References and further reading 542 21 Marketing Mix Applications 545 David Gilbert Learning outcomes 545 Introduction 546 What is the marketing mix? 546 Product 548 Price 553 Promotion 562 Place (distribution) 570 The marketing mix revisited: are the four Ps sufficient? 576 Destination marketing 579 Conclusion 582 Self-check questions 582 References and further reading 583 22 Information Technology in Tourism 587 Dimitrios Buhalis Learning outcomes 587 Introduction 588 Information communication technologies as a business tool 588 eTourism: tourism and information communication technologies 592 eTourism and the tourism industry sectors 599 Conclusion – eTourism and the structure of the tourism industry 607 Self-check questions 609 References and further reading 609 Glossary 615 Index 623
- 12. Case Matrix Mini MajorCase No. Case Title Destination Page • 1.1 Characteristics of elements of the eco-tourism system 10 • 2.1 Family life cycle (FLC) and tourism demand 28 • 2.1 Young people and tourism 37 • 3.1 Generations X and Y 51 • 3.1 Flamenco and creativity as a factor in destination image development Seville 65 • 4.1 The United Kingdom/Great Britain Tourism Survey 75 • 4.1 World patterns of demand for tourism: the historic trend 85 • 5.1 Forecasting at a National Tourism Administration 92 • 5.1 Tourism Forecasting Australia Australia 114 • 6.1 Events are a key differentiator in Orlando tourism Hong Kong 133 • 6.1 Too much of a good thing – when mass tourism becomes over-tourism Italy 142 • 7.1 Dominican tourism redistributes poverty Dominican Republic 153 • 7.1 The Middle East’s battle of perception (or reality) Middle East 173 • 8.1 Environmental pressure on Thailand Thailand 178 • 8.1 Ross Sea preservation Antarctica 191 • 9.1 ‘Tourists go home’: Spanish tourism surge brings backlash Spain 205 • 9.1 Norway is reaching breaking point because of Disney’s Frozen Norway 217 • 10.1 Bhutan: a desire for sustainability but growing debt Bhutan 238 • 10.1 Gijón, one of the best sustainable tourism examples Gijón 250 • 11.1 Iran plans to become global tourism hotspot Iran 261 • 11.1 Republic of Kenya Ministry of Tourism Strategic Plan 2008–2012 Kenya 279 Photograph: The Basilica di Santa Maria del Fiore, Florence, Italy © Sundus Pasha
- 13. xii case matrix MiniMajor Case No. Case Title Destination Page • 12.1 Metrojet Flight 9268: Sharm El Sheikh International Airport, Egypt Sharm El Sheikh 288 • 12.1 March 2011, disaster in Japan Japan 299 • 13.1 Savonlinna Opera Festival Finland 311 • 13.2 The cutest guide to the aquarium: Penguin NAVI by Sunshine Aquarium Tokyo 314 • 13.3 Disney ‘MyMagic+’ 322 • 13.1 Developing a theme park 338 • 14.1 Rural accommodation 349 • 14.1 Hilton worldwide 366 • 15.1 Bestival Brand UK 375 • 15.1 Notting Hill Carnival UK 380 • 16.1 European Union Package Travel Directive 1990/2015 Europe 385 • 16.2 User-generated content 391 • 16.1 Intermediaries, Southwest Airlines and a changing dynamic USA 406 • 17.1 Tourism and the environment: mixed signals from the government 435 • 17.1 The cruise ship industry 440 • 18.1 The United Nations World Tourism Organization (UNWTO) 449 • 18.1 Tourism project assistance from the European Union Europe 473 • 19.1 Tourism destinations and quality management 508 • 19.1 The impact of service crises on perceived service quality over time 517 • 20.1 Rural tourism: planning for a new generation 523 • 20.1 Disneyland® Resort Paris Paris 543 • 21.1 Benefit segmentation of a seaside destination Portorož, Slovenia 577 • 21.1 Price sensitivity in the Swiss Alps Switzerland 584 • 22.1 Social media as an ICT 591 • 22.1 Hilton and ICT 612
- 14. Authors and Contributors Authors Professor JohnFletcher is Pro-Vice-Chancellor at Bournemouth University and was founding Director of the International Centre for Tourism and Hospitality Research. John is Editor in Chief of the International Journal of Tourism Research, a Fellow of the Interna- tional Academy for the Study of Tourism and a Fellow of the Tourism Society. He has undertaken tourism development and impact studies throughout the Carib- bean, the South Pacific, the Indian Ocean and across Europe on behalf of national governments, local author- ities and international agencies. John has led research projects funded by the EU, UNEP, USAID, UNWTO, WTTC, WWF and international development banks. In his efforts to improve the accessibility of tourism impact research he pioneered the development of interactive economic and environmental impact models in the 1990s and is author of more than 130 articles, official reports and book chapters on tourism impacts. He has also written on the place of tourism in national accounts and presented to the BritishAssociation for theAdvance- ment of Science. Alan Fyall is Orange County Endowed Professor of Tourism Marketing at the Rosen College of Hospitality Management, University of Central Florida, USA. Prior to arriving in the United States, Alan was Professor in Tourism and Deputy Dean Research Enterprise in the School of Tourism, Bournemouth University in the United Kingdom. He has published widely in his fields of expertise and is the author of over 150 articles, book chapters and conference papers as well as 20 books. Alan has organised a number of international confer- ences and workshops for academic, professional and governmental audiences and is frequently invited to deliver keynote addresses. He is Co-Editor of Elsevier’s Journal of Destination Marketing Management and sits on the editorial boards of a number of leading jour- nals including Annals of Tourism Research, Journal of Heritage Tourism, International Journal of Tourism Research and Anatolia. Alan’s current research interests lie in destination marketing and management in urban and coastal destinations and the impact of SMART tech- nologies on future destination planning and the tourist experience. Alan is a former Member of the Bourne- mouth Tourism Management Board and Board of Solent Synergy Limited, and has conducted numerous consult- ing and applied research projects across the United Kingdom and overseas for the likes of the European Union, Commonwealth Secretariat, Grant Thornton and the Malaysian Ministry of Tourism. David Gilbert is Emeritus Professor of Marketing at Surrey University as well as a Visiting Professor at the Dongbei University of Finance and Economics. He has also held the distinction of being a holder of the 1,000 Talents Award in China. He has 30 years’academic expe- rience in higher education and over eight years’ opera- tional marketing experience for the private sector, having worked as a Product Manager and as a Marketing Man- ager for Rank Leisure. He specialises in the teaching of marketing related to: Relationship Marketing, Consumer Behaviour, eBusiness, Market Research, Research Meth- ods and the functions of Marketing Management and was the founder of both the MSc in Tourism Marketing at Surrey and the DBA programme. His main research is in the field of services marketing and his publications, which number over 100, also include a book on retail marketing management. Alongside his academic duties he has worked with several government and private organisations and consultancies on tourism or marketing project work, as well as having planned and provided training in 20 countries. He was the founder and research director of the Thomas Cook Research Centre at the University of Surrey and has an in-depth knowledge of marketing in relation to the service industry. Stephen Wanhill is Professor of Tourism Economics, University of Limerick and Emeritus Professor of Tour- ism Research, Bournemouth University and a Visiting Professor at the Universities of Nottingham and Swan- sea. He is a Director of Global Tourism Solutions (UK) and his principal research interests are in the field of tourism destination development. To this extent he has acted as a tourism consultant to a number of UK plan- ning and management consulting firms, and has under- taken a wide range of tourism development strategies, tourism impact assessments, lecture programmes and project studies on subjects from airports to cultural
- 15. xiv AUTHORS ANDCONTRIBUTORS attractions, both in the United Kingdom and worldwide, covering some 50 countries. Steve has written exten- sively on public sector intervention in tourism, tourism impact methodology, and project appraisal and develop- ment in academic journals and edited books, which brought him recognition in terms of acting as tourism policy advisor to the Select Committee on Welsh Affairs for a period of five years in the House of Commons. He has been a board member of the Wales Tourist Board with responsibilities for the development and research divisions. In this capacity, he spent much time reviewing and recommending grant applications for projects that encompass accommodation, restaurants and pubs, attrac- tions and public facilities, such as country parks, visitor centres and infrastructure improvements. He is the Editor of Tourism Economics and has served as an Editorial Board Member for Acta Touristica, The Service Indus- tries Journal, European Journal of Tourism Research, Tourism Management, the International Journal of Tour- ism Research and the Journal of Travel Research. Contributors Professor Dimitrios Buhalis is a Strategic Manage- ment and Marketing expert with specialisation in Tech- nology and Tourism. He is currently Director of the eTourism Lab at the School of Tourism at Bournemouth University. He was also the President of the Interna- tional Federation of Information Technology for Travel and Tourism (IFITT) for the period 2010–14. He has held visiting appointments at ESSEC in France, Hong Kong Polytechnic University, China, University of Aveiro, Portugal, and the Modul University in Vienna, Austria. Dimitrios has been involved with a number of European Commission FP5, FP6, FP7 projects and reg- ularly advises the World Tourism Organisation, the World Tourism and Travel Council and the European Commission on eTourism. Dimitrios represents Bourne- mouth University as a Vice President on the board of Affiliate Members of the United Nations World Tourism Organization (UNWTO). Dr Mary Beth Gouthro is former Programme Leader for BA (Hons) Events Management at the School of Tourism at Bournemouth University and now oversees Graduate and Professional Engagement on behalf of the Events course with industry. Mary Beth delivers on the first year and final year of the events management under- graduate degree, overseeing Events Context and Interna- tional Events Management. Before embarking on an academic career, Mary Beth’s 13 years of industry expe- rience spanned charity, corporate private and public sec- tor positions in Marketing Communications/Events. This combined with her passion for education in the field of events management feeds research and practical interests in the events field more broadly, e.g. managing/ creating optimal event experiences, as well as an interest in Event Management research, particularly qualitative methods. She has advised industry associations such as the UK Chapter of ISES (International Special Event Society) in building a programme for their membership to gain more mutually beneficial initiatives between event management courses and UK universities. Dr Yeganeh Morakabati is a Tourism Risk Analyst, Middle East and Research Methods Specialist. She is currently Associate Professor in the Faculty of Manage- ment at Bournemouth University. Yeganeh read for her doctorate degree on the topic of travel risk perceptions at Bournemouth University before being appointed as a lecturer in 2008 and then moved to Plymouth Business School in 2011. Following a successful period at Plym- outh Business School where she continued her research for organisations such as the UNWTO and the Gibraltar government she returned to Bournemouth University in 2012.Yeganeh was the owner and Managing Director of a successful major travel agency in Tehran prior to mov- ing to the United Kingdom to study for her Master’s degree in Tourism Management and Marketing. Since graduating she has undertaken a wide variety of research projects for the University including economic impact studies, and the construction of a major database for the Commonwealth Tourism Centre, national and local gov- ernments. She also provides research methodology sup- port and training to the postgraduate and PhD students. Derek Robbins trained as a transport planner and is currently Senior Lecturer in Transport and Tourism in the School of Tourism at Bournemouth University. He has developed specialist units at both undergraduate and postgraduate level in aviation, tourism transport, and tourism’s contribution to climate change. He has pub- lished widely on the relationship between transport and tourism and specific research interests include the deregulation of transport services, most notably the bus and coach industry, transport for tourists within the destination, sustainable transport, cycle tourism, cruise ship tourism, slow travel and tourism and climate change. He co-authored a special tourism edition of the Journal of Transport Geography in 2007 and was commissioned to contribute open learning materials for professional courses by a partnership of the Euro Arab Institute Foundation and the UNWTO. Derek chaired the Leisure and Tourism stream of the European Trans- port Conference for four years, which attracts around 400 transport practitioners and researchers, and he remains a member of the programme committee. He is
- 16. AUTHORS AND CONTRIBUTORSxv also an active member of the Chartered Institute of Logistics and Transport. Dr Debbie (Deborah) Sadd is an academic in the School of Tourism at Bournemouth University, teaching Olympic Studies, Strategy and Leadership and Marketing on both the Undergraduate and Postgraduate Events Programmes. She has also undertaken guest lectures within the Sports Management programme, both in the United Kingdom and overseas. Debbie completed a Tourism Management and Planning Master’s degree in September 2004 with distinction. The research for her Master’s was undertaken in Weymouth and Portland, Dorset, prior to the successful 2012 Olympic Bid. This research project is ongoing. She also completed in 2006 a Master’s in Event Management. Her research interests include social impacts of events, urban regeneration opportunities from events, community identification, legacy planning and, in particular, the opportunities to be gained for the local communities from the hosting of London 2012. For her PhD, she used both Sydney and Barcelona as case studies to develop a frame- work of best practice for London 2012 in relation to stakeholder identification. Debbie was awarded an ESRC funded scholarship as part of the STORMING initiative to undertake research into Sporting Events Carrying Capacity including travelling to Tampa, Florida to under- take further research. James Wollner, formerly a graduate student at the Uni- versity of Central Florida, now of Expedia.com, contrib- uted significantly to major cases 6.1, 14.1 and 16.1 as did he to the development of mini cases 13.2, 13.3 and 16.2.
- 17. Preface Welcome to thesixth edition of Tourism: Principles and Practice. This edition is the latest mani- festation of the textbook that we published 24 years ago because we could not find a text that met the needs of our undergraduate and postgraduate students at that time. The past quarter of a cen- tury has witnessed enormous changes in the world, and so too the issues facing those who man- age and lead our tourism industries. This new edition reflects those changes and the dynamics of the world in which we live. This edition contains new features and content to ensure that the book keeps pace with the changing world of tourism and tourism education. We have revised, updated and streamlined this edition to make the content more accessible and contemporary. Employabil- ity features have been added, as well as new, extensive case studies, with clear intended learning objectives, all set in a colourful and user-friendly format. This sixth edition uses a collaborative approach between academics and practitioners to help students, organisations and practitioners understand and apply current principles and practice to the exciting subject area of tourism. The Features of this Book This new edition addresses the concept of tourism satellite accounts and CGE modelling, to reflect their growing role in the management and planning of tourism around the world. There are also chapters that explore the issues of events management and tourism crises and disaster management, the latter being particularly relevant in a world where the effects of matters such as global warming and conflict are known in many geographical regions. In an increasingly challenging and volatile business environment, and with the dynamics of social change facing the world, we offer readers fundamental and underlying principles to study the subject of tour- ism, within four distinct but related Parts: Tourism Demand, The Tourism Destination, The Tourism Sector and Marketing For Tourism. Chapters have all been updated to reflect the developments and changing significance of various aspects, such as the economic/environmen- tal/socio-cultural impacts of tourism, climate change, and concerns for the safety and security of tourists. While the underlying structure of this edition follows those of earlier successful editions, we have updated, refined and improved all subject areas. New concepts have been added where necessary, and new case studies and examples included throughout. The text retains the features that have made it so reader-approachable over the past 24 years, as well as containing some new features. Features include: ● Learning Outcomes at the beginning of every chapter to orientate the reader and to focus their mind in respect of the key concepts that underpin each chapter. ● The use of Major and Mini Case Studies within each chapter to allow the reader to link the theory of the chapter to contemporary issues and practice. Each of these case studies, together with accompanying questions, have been specially selected for this edition. ● The introduction of Employability stories to illustrate the career prospects and routes of successful tourism practitioners. ● The identification of key texts and web-based material in a section of References and Further Reading at the end of each chapter. Here we have provided the key sources to guide the reader through the increasingly complex maze of tourism literature. These bibliographic signposts will act as the first port of call for assignments and presentations and provide an
- 18. preface xvii opportunity forguided specialised investigations where core concepts are reviewed in more detail and from which the reader may derive a deeper understanding. ● The use of hyperlink addresses which allow the viewing of supporting evidence such as videos or other forms of communication which will help reinforce the chapter content. ● The updated Glossary of key terms to guide the reader through the specialist terminology used in the chapters. ● The use of photographs to bring the material to life and the use of colour in the presentation of the text to make the book more attractive and its content more accessible. This text started out on its journey of development and refinement a quarter of a century ago and was based on the research experience of the authors as they undertook projects for national governments, industry and international agencies across all continents of the world. The authors have continued that practice through all six editions, and this current edition reflects their more recent research undertaken to meet the needs of the changing economic, social, environmental and security demands of tourism. When the first edition was written, world international tourist arrivals were around the 500,000 level; in 2015 this number had increased to almost 2 billion. This growth in tourism presents many challenges for those people charged with its management. We hope you find that this edition captures your imagination and helps you set out on your journey of discovery as you research one of the world’s largest and most rapidly growing industries.
- 19. Publisher’s acknowledgements We are gratefulto the following for permission to repro- duce copyright material: Figures Figure 1.4 from ‘A comparison of tourism output and employment in Ireland and the UK: some TSA-based results’, Global Business Economics Anthology, Vol. 1, pp. 445–460 (Deegan, J., Kenneally, M., Moloney, R. and Wanhill, S., 2006); Figures 3.8, 3.9 from Tourism: Economic, Physical and Social Impacts, Pearson Educa- tion Limited (Mathieson, A. and Wall, G., 1982); Figure 3.10 from ‘A general model of traveler destination choice’, Journal of Travel Research, Vol. 27, pp. 8–14 (Woodside, A. and Lysonski, S., 1989); Figure 3.11 from ‘Understanding vacation destination choice through travel motivation and activities’, Journal of Vacation Marketing, Vol. 2(2), pp. 109–122 (1996), Moscardo, G., Morrison, A.M., Pearce, P.L., Lang, C.T. and O’Leary, J., copyright © 1996. Reprinted by permission of SAGE Publications; Figure 5.6 adapted from Progress in Tourism, Recreation and Hospitality Management, Vol. 1, Belhaven (Cooper, C.P. (ed.), 1989) pp. 4–32, Witt, S.F. and Martin, C.A. ‘Demand forecasting in tourism and recreation’; Figure 9.1 from Domestic and International Tourism, Institute of Certified Travel Agents (Plogg, S., 1977), copyright © Dr Stanley Plog; Figure 19.7 from ‘A conceptual model of service quality and its implications for future research’, Journal of Marketing, Vol. 49(4), pp. 41–50 (Parasuraman, A., Zeithaml, V.A. and Berry, L.L., 1985), republished with permission of the American Marketing Association; permission conveyed through Copyright Clearance Center, Inc.; Figure 21.15 from Marketing of Services, American Marketing Association (Donnelly, J. and George, W.R. (eds), 1981) p. 50, Booms, B.H. and Bitner, M.J. ‘Marketing strategies and organization structures for service firms’, republished with permission of the American Marketing Association; permission conveyed through Copyright Clearance Center, Inc. Tables Table 2.1 after The Economic Geography of the Tourist Industry: A Supply Side Analysis, Routledge (Uysal, M., 1998), Figure 5.2, p. 87, 0415164125, copyright (1998) reproduced by permission of Taylor Francis Books UK; Table 4.4 from ‘Long-term forecasts for international tourism’, Tourism Economics, Vol. 10(2), pp. 145–166 (Smeral, E., 2004); Table 9.1 from Hosts and Guests: The Anthropology of Tourism, 2nd ed., University of Pennsylania Press (Smith, V.L., 1989), Table 1, p. 12, 0812212800, reprinted with permission of the University of Pennsylvania Press; Table 15.1 after Risk Management for Meetings and Events, Routledge (Silvers, J.B., 2013), p. 8–9, 0750680571, reproduced by permission of Taylor Francis Books UK; Table 18.1 from American Society of Travel Agents (ASTA) Code of Ethics, https://www.asta.org/About/content. cfm?ItemNumber=745; Table 18.2 from Guide on EU Funding for the Tourism Sector, European Commission (2016) Table 1, p. 3, © European Union, 2016; Table 21.4 after European product purchase methods and systems, The service industries journal Vol.10(4), pp. 644–679 (Gilbert, D.C., 1990), http://www.tandfonline .com/loi/fsij20, copyright © 1990, reproduced by permission of Taylor Francis; Table 22.2 adapted from What Is Web 2.0: Design Patterns and Business Models for the Next Generation of Software, http:// www.oreillynet.com/pub/a/oreilly/tim/news/ 2005/09/30/what-is-web-20.html, copyright © 2005, O’Reilly Media, Inc. Text General displayed text on p. 23 from Lindsay W. Turner, Professor of International Trade, Victoria University; box on p. 24 from Barry Rogers, MA (Distinction) International Tourism, University of Limerick, Ireland; case study on p. 120 from David J. James, Managing Director, Global Tourism Solutions (UK) Ltd; box on p. 121 from Ken Robinson, by permission of Ken Robinson CBE FTS; general displayed text on pp. 306– 307 from Todd J. Fisher, Senior Manager Talent and Leadership Development, Hilton; box on pp. 484–485 from Gui Cunha, Tourism Manager, Orlando North Seminole County; case study 3.1 after ‘The Flamenco factor in destination marketing: interdependencies of creative industries and tourism – the case of Seville, Journal of Travel Tourism Marketing, Vol. 31(5), pp. 576–588 (Thimm, T., 2014), copyright © 2014, reproduced by permission of Taylor Francis; case study 4.1 after UK Tourist 2010, VisitEngland,
- 20. Publisher’s acknowledgements xix VisitScotland,Visit Wales, Northern Ireland Tourist Board (United Kingdom Tourism Survey 2011), p. 3, © September 2011; case study 6.1 after Too Much of a Good Thing – When Mass Tourism Becomes Over- Tourism (Robin Kirk, University of Central Florida, 2017); general displayed text on p. 189 from Press Release: New UNEP Report Released to Mark World Environment Day: ‘Tourism in the Polar Regions – The Sustainability Challenge’, UNEP (2007), by kind permission of the United Nations Environment Programme; case study 8.1 adapted from Ross Sea Preservation, http://www.asoc.org/advocacy/marine- protected-areas/ross-sea-preservation; case study 9.1 from ‘Norway is reaching breaking point because of Disney’s Frozen’, News.com.au, 11/08/2016 (McMah, L.), http://www.news.com.au/travel/world-travel/europe/ norway-is-reaching-breaking-point-because-of-disneys- frozen/news-story/5c0cf9cc3dfa5477dc3541c0c38 d90b2, News Limited copyright © 2014; case study 9.1 after ‘A warm welcome for destination quality brands: the example of the Pays Cathare region’, International Journal of Tourism Research, Vol. 5, pp. 269–282 (Woods, M., and Deegan, J., 2003); case study 10.1 from Gijón, A Lighthouse of the Sustainable Tourism Examples, https://www.biospheretourism.com/en/ blog/17-sustainable-tourism-examples-for-this-2017/2; case study 11.1 from Strategic Plan 2008–2012, Republic of Kenya, Ministry of Tourism, pp. viii–x; newspaper headline on p. 291 from ‘Majority of Paris attackers used migration routes to enter Europe, reveals Hungarian counter-terror chief’, Daily Telegraph, 02/10/2016 (Rothwell, J.), © Telegraph Media Group Limited 2016; case study 13.1 after Managing Visitor Attractions: New Directions, 2nd ed., Butterworth- Heinemann (Wanhill, S., 2008), pp. 58–79, 0750653817, copyright (2008), reproduced by permission of Taylor Francis Books UK; case study 19.1 after ‘Losses loom longer than gains: modeling the impact of service crises on perceived service quality over time’, Journal of Marketing Research, Vol. 52, pp. 642–656 (Gijsenberg, M.J., Van Heerde, H.J. and Verhoef, P.C., 2015), reproduced with permission of American Marketing Association; permission conveyed throughCopyright Clearance Center, Inc.; case study 20.1 after ‘Rural tourism: the evolution of practice and research approaches – towards a new generation concept?’, Journal of Sustainable Tourism, Vol. 23(8–9), pp. 1133– 1156 (Lane, B. and Kastenholz, E., 2015), http://www .tandfonline.com/loi/rsus20, copyright © 2015, reproduced by permission of Taylor Francis; case study 21.1 after ‘Benefit segmentation of seaside destination in the phase of market repositioning: the case of Portorož’, International Journal of Tourism Research, Vol. 15, pp. 138–151 (Nemec Rudež, H., Sedmak, G. and Bojnec, S., 2013); case study 21.1 after ‘The sensitivity of winter tourism to exchange rate changes: evidence for the Swiss Alps’, Tourism and Hospitality Research, Vol. 13(2), pp. 101–112 (Falk, M., 2013), copyright © 2014; reprinted by permission of SAGE Publications. Photographs (Key: b-bottom; c-centre; l-left; r-right; t-top) 123RF.com: 122, 350b, iakov. 6, plotnikov 1; Alamy Stock Photo: Antony Nettle 20t, Photopat 350t, Toby Allen 375, Walt Disney Pictures / courtesy Everett Collection 218t; Alpenglow Productions: 42; Getty Images: AFP / Staff 288, Ken Kinzie / Universal Orlando Resort 338, New York Daily News Archive 303t, PAU BARRENA / AFP 201, Paul Popper / Popperfoto 116t; KLM Royal Dutch Airlines: 601; Shutterstock.com: 91, 218b, 221, 474, 91, 218b, 221, 474, 91, 218b, 221, 474, 91, 218b, 221, 474, Aleksandar Todorovic 587, Alexander Zamaraev 538, Bikeworldtravel 380, canadastock 408, chaoss 95, Claudio Divizia 519, Dan Breckwoldt 180, Dean Pennala 174, Design Pics Inc / REX 227, 259b, Design Pics Inc / REX 227, 259b, E.G.Pors 178, fotohunter 486, Frontpage 281, Gavin Hellier / robertharding / REX 217, Gentoo Multimedia Limited 193, Georgejmclittle 478b, Gerhard Zwerger-Schoner / imageBROKER / REX 219t, goodluz 145, Gordon Bell 310, grzym 111, Iakov Kalinin 308, IR Stone 413, Jeff Whyte 40, JoseAS Reyes 154, Kamil Macniak 506, lazyllama 370, Lukasz Janyst 382, Maridav 38, Mindscape studio 147, Miosotis_Jade 134t, mTaira 287, NAN728 445, Nick Fox 25, Olesia Bilkei 303b, oliveromg 29, ozoptimist 546, Phillip Jackson / ANL / REX 478t, Photomarine 116b, Pi-Lens 566, Richard Cavalleri 252, Rocky Grimes 447, Samot 219b, Soloviova Liudmyla 529, Songquan Deng 134b, starstuff 250, Suwatchai Pluemruetai 195, Targn Pleiades 67, The World in HDR 344, tomas del amo 259t/1, travellight 52, vaalaa 20b, Vaclav P3k 32, ventdusud 88, wassiliy-architect 550, wavebreakmedia 78, wideweb 462; Stephen Lioy: 211; Thomas Cook Archives: 387; © Tourism Australia: 488, 597; TripAdvisor Inc.: 392 Cover images: Front: Getty Images: Moment / Photographed by MR.ANUJAK JAIMOOK, Moment / Photographed by MR.ANUJAK JAIMOOK All other images © Pearson Education
- 21. Abbreviations AA Automobile Association AAAAmerican Automobile Association ABS Australian Bureau of Statistics ABTA Association of British Travel Agents ADS Additional shares AOC Air Operator’s Certificate APEX Advanced purchase excursion fare APT Advanced passenger train ARC Airlines Reporting Corporation ASAs Air service agreements ASEAN Association of South East Asian Nations ASP Application service provider ASTA American Society of Travel Agents ATB Area tourist board ATC Air traffic control ATMs Air traffic movements ATOL Air Travel Organisers’ Licence AWES Automatic website evaluation system B2B Business-to-business B2C Business-to-consumer BA British Airways BCG Boston Consulting Group matrix BHTS British Home Tourism Survey BRIC Brazil, Russia, India and China BTSM British Tourism Survey Monthly CAB Civil Aeronautics Board CGE Computable general equilibrium CLIA Cruise Line International Association CPGI Country potential generation index CPI Consumer Price Index CRO Central reservations office CRS Computerised reservation system CSF Community support framework CSR Corporate social responsibility CTO Caribbean Tourism Organisation CUC Cuban convertible peso CVB Convention and visitor bureau DAGMAR Defining Advertising Goods for Measured Advertising Results DICIRMS Destination integrated computer information reservation management system DMO Destination management/marketing organization DMS Destination management system DPUK Destination Performance UK DRC Democratic Republic of the Congo EAFRD European Agricultural Fund for Rural Development EAP Environmental action programme EAP East Asia and the Pacific EBRD European Bank for Reconstruction and Development EC European Community ECAA European Common Aviation Area ECPAT End Child Prostitution, Child Pornography and Trafficking of Children for Sexual Purposes ECSC European Coal and Steel Community ECTAA European Travel Agents Tour Operators Association EEB European Environmental Bureau EIA Environmental impact assessment EIB European Investment Bank EIS Environmental impact statement EMBOK Event Management Body of Knowledge EMS Environmental management system EPA Environmental Protection Agency EPS model Extended problem-solving model ERDF European Regional Development Fund ESF European Social Fund ETC European Travel Commission ETS Emissions Trading Scheme EU European Union eWOM Electronic word-of-mouth FBP Family brand performance FIT Fully-inclusive tour FLC Family life cycle FTE Full-time equivalent GA General admission GAAP Generally accepted accounting principles GATS General Agreement on Trade in Services GATT General Agreement on Tariffs and Trade GBTS Great Britain Tourism Survey GCET Global Code of Ethics for Tourism GDP Gross domestic product GDS Global distribution system
- 22. GHG Greenhouse gas GNIGross national income GNP Gross national product GRASP Great Apes Survival Partnership GVA Gross value added gwt Gross weight tonnage IAAPA International Association of Amusement Parks and Attractions IAATO International Association of Antarctic Tour Operators IADB Inter-American Development Bank IATA International Air Transport Association IBRD International Bank for Reconstruction and Development ICAO International Civil Aviation Organisation ICT Information communication technology IDD International direct dial IFC International Finance Corporation IIED International Institute for Environment and Development IIPT International Institute for Peace through Tourism IIT Independent inclusive tour ILO International Labour Organization IMC Integrated marketing communications IMF International Monetary Fund IMO International Maritime Organization IO input–output IPCC Intergovernmental Panel on Climate Change IPEX Instant purchase fares IPS International passenger survey ISIC International Standard Industrial Classification IUOTO International Union of Official Travel Organisations KM Knowledge management LAC Limits of acceptable change LCCs Low-cost carriers LDC Less developed countries LPS models Limited problem-solving models LTV Lifetime value MA Moving average MAPE Mean absolute percentage error MARPOL International Convention for the Prevention of Pollution from Ships MDGs Millennium Development Goals MEPs Members of the European Parliament MICE Meetings, incentives, conferences and exhibitions MVIC Manchester Visitor Information Centre NAFTA North American Free Trade Association NATS National Air Traffic Services NGO Non-governmental organisation NSRF National Strategic Reference Framework NTO National tourist organisation NYSE New York Stock Exchange OAS Organization of American States OECD Organisation for Economic Co-operation and Development OECS Organization of East Caribbean States OPEC Organization of Petroleum Exporting Countries ONS Office of National Statistics OPs Operational Programmes ORM Online reputation management PATA Pacific Asia Travel Association PBP Product brand performance PEST Political, Economic, Social and Technological PESTEL Political, Economic, Social, Technological, Environmental and Legal PMS Property management system PNR Passenger name record POP Pay-one-price PPC Pay per click PPT Pro-poor tourism PR Public relations PRC People’s Republic of China QSCV Quality, service, cleanliness and value RM Relationship marketing RMSE Root mean square error RMSPE Root mean square percentage error ROI Return on investment RTB Regional tourism board RTO regional tourism organization SAM Social accounting matrices SARS Severe acute respiratory syndrome SAS Scandinavian Airlines System SBU Strategic business unit SCH Scotland’s Commended Hotels SDNs Sustainable development networks SEO search engine optimisation SIC Standard industrial classification SIDS Small Island Developing States SITA Société Internationale de Télécommunications Aéronautiques SMART Specific, measurable, achievable, realistic, time limits SME Small and medium-sized enterprise SPD Single programming document STB Scottish Tourist Board STEP Social, technological, economic and political factors ABBREVIATIONS xxi
- 23. xxii ABBREVIATIONS ST–EP Sustainabletourism–eliminating poverty SWOT Strengths, weaknesses, opportunities and threats TA Travel agency TALC Tourist area life cycle TAT Tourist Authority of Thailand TT Travel and tourism TCSP Tourism Council for the South Pacific TDC Tourist Development Corporation TERN Tourism Emergency Response Network TFC Tourism Forecasting Committee TFCTC Tourism Forecasting Committee technical committee TGV Train à Grande Vitesse TIC Tourist information centre TIP Tourist information point TO Tour operator TOP Thomson Open-Line Programme TPI Tourism Penetration Index TQM Total quality management TSA Tourism satellite account UFTAA United Federation of Travel Agents’ Associations UGC User generated content UKTS United Kingdom Tourism Survey UN United Nations UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme UNEP United Nations Environment Programme UNESCO United Nations Educational, Scientific and Cultural Organization UNISDR United Nations Office for Disaster Risk Reduction UNSD United Nations Statistical Division UNSTAT United Nations Statistical Commission UNWTO United Nations World Tourism Organization USTTA United States Travel and Tourism Administration VAT Value Added Tax VFR Visiting friends and relatives VR Virtual reality WCS Wildlife Conservation Strategy WCTE World Committee on Tourism Ethics WHO World Health Organization WTO World Tourism Organization WTP Willingness to pay WTTC World Travel and Tourism Council WWF World Wide Fund for Nature WWW World Wide Web WYSE World Youth Student and Educational Travel Confederation YHA Youth Hostel Association YM/WCA Young Men’s/Women’s Christian Association Photograph: The Magic Kingdom, Walt Disney World, Florida, USA © Kelly Miller
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- 26. Chapter 1 An Introductionto Tourism Learning Outcomes In this chapter we focus on the definitions, concepts and frameworks that underpin the study of tourism to provide you with: ● a basic understanding of how tourism is defined; ● a comprehension of the issues associated with the academic and practical study of tourism as a concept; ● an appreciation of the components which when combined comprise a conceptual framework for tourism; ● a knowledge of the role of markets and basic supply-side and demand-side issues; and ● the operational framework for tourism supply and demand as embodied in the Tourism Satellite Account (TSA).
- 27. Travel as anaspect of human activity has a pedigree going back thousands of years, but the idea of travel for leisure, educational or health purposes really came to prominence during the eight- eenth century ‘Age of Enlightenment’, with the development of the ‘Grand Tour’ in Europe. Destinations then organised themselves to provide facilities for these temporary visitors, who we now know as tourists, taking a round trip or tour. The costs of such travel prohibited these trips to all but the wealthy, and it was not until the coming of the railways in the nineteenth century that opportunities were opened up for the general population, albeit limited to domestic tourism, which gave rise to the growth of the seaside resorts in Europe and the United States that can be found all around the coastlines of these continents. During the first half of the twen- tieth century expansion was curtailed by two world wars, so it would be safe to say that the tourism we see today has its roots in the 1950s, when what is now the United Nations World Tourism Organisation (UNWTO) set about introducing a statistical definition of international tourism, and later domestic tourism, for the purposes of collecting information. Operational classification From the standpoint of gathering statistical information, definitions need to be clear, relevant to the subject of study and measurable. The starting point from the official UNWTO perspective is the inbound traveller to the destination (UNWTO, 2008), who is someone moving between dif- ferent geographic locations, for any purpose and any duration. The inbound visitor is a traveller who is included in tourism statistics through taking a trip to a main destination outside his/her usual environment, for less than a year, for any main purpose, as indicated in Figure 1.1, other than to be employed by a resident entity or organisation within the country or locality visited. Thus tourism refers to the activity of visitors as illustrated in Figure 1.1. It is therefore a subset of travel and visitors are a subset of travellers, whose activities are not solely concerned with the popular notion of pleasure travel, but also those who travel for the purposes of business, visiting friends and relatives, and several other reasons. This is relevant to users of tourism statistics: passenger transport carriers require the broad range of travellers to be recorded, while hoteliers are interested in tourists, especially business travel because of the relatively high revenue the latter generates for them. In a world of change, one constant since 1950 has been the sustained growth and resilience of tourism as both an activity and an economic sector. It is therefore clear that tourism is a major force in the economy of the world, an activity of global importance and significance. The World Travel and Tourism Council (WTTC) have demonstrated the tremendous scale of the world’s tourism sector (WTTC, 2016). In 2015 the travel and tourism industry’s direct contribution to the Gross Domestic Product (GDP) of the world was estimated at US$2.2 trillion and in total, by taking account of the re-spending of tourist dollars, US$7.2 trillion. This amounts to a direct contribution of 3.0% and a total contribution of 9.8% to world GDP. From a human perspective, the world travel and tourism industry directly supported 108 million jobs and a total of 284 million jobs when indirect impacts are accounted for, some 9.1% of total world employment. The dimensions of these figures presented by WTTC make it clear that tourism has now become a major economic sector in its own right, but when examined it is found to be a complex multi-sectoral industry demanding high-level planning and co-ordination, with many and varied agents involved, as the contents of this text testify. In this chapter, starting with definitions, we aim to give the overview of tourism as an activity, so as to provide a structure to contain the many different issues discussed in the rest of this text. INTRODUCTION DEFINING TOURISM 2 CHAPTER 1 AN INTRODUCTION TO TOURISM
- 28. The term ‘usualenvironment’ is critical for separating the visitor from the traveller, and hence tourism. It is defined as the geographical area (though not necessarily a continuous one) within which an individual conducts his/her regular life. The purpose of introducing this con- cept is to exclude from visitors those travellers commuting regularly between their place of usual residence and place of work or study, or frequently visiting places within their current life routine, for instance homes of friends or relatives, shopping centres, religious, health care or any other facilities that might be a substantial distance away or in a different administrative area but are regularly and frequently visited. Thus, for international visitors, place of usual residence rather than nationality is the defining characteristic of their origin, as with domestic tourism. Recognising the significance of second homes in today’s tourism, this aspect has particular rel- evance, for trips to vacation homes are usually tourism trips, but should not be so frequent and the duration of the stay so long so as to turn the secondary dwelling into the principal dwelling of the visitor. Business and professional Main purpose of tourism trips Nationals residing abroad other non-residents (foreigners) Inbound travellers Inbound visitors Other inbound travellers Tourists (Overnight visitors) Same-day visitors (Excursionist) Border workers Seasonal workers Other short-term workers Long-term workers Nomads and refugees Transit passenger not entering the economic and legal territory Crews on public modes of transport Persons entering the country to establish there their country of residence Long-term students and patients and their family joining them Other travellers deemed not to enter the economic territory: Diplomats, consular staff, military personnel and their dependants ? Armed forces on manoeuvre ? Holidays, leisure and recreation Visiting friends and relatives Education and training Health and medical care Religion / pilgrimages Shopping Transit Other Classification of inbound travellers Source: UNWTO, 2008 Figure 1.1 Defining Tourism 3
- 29. A further essentialaspect in defining tourism is the separation of visitors into tourists or overnight visitors, when the trip includes an overnight stay, and same-day visitors or excur- sionists otherwise. When the definitions of tourism were first discussed in the early 1950s, the volume of day visits was nothing like it is today, and virtually negligible when interna- tional tourism was considered. However, modern transport and communication develop- ments have made day trips an increasingly important economic activity through ease and speed of access both within a country and internationally, so they cannot be ignored in the assessment of tourism. Forms of tourism Dispelling common perceptions that tourism is mainly about international travel, official clas- sifications put forward by the UNWTO recommend that three basic forms of tourism for a country should be distinguished: ● Domestic tourism, which comprises the activities of a resident visitor within the country of reference either as part of a domestic trip or part of an outbound trip, and is the predominant form (some 80%) of tourism activity; ● Outbound tourism, which consists of the activities of a resident visitor outside the country of reference, either as part of an outbound trip or as part of a domestic trip; ● Inbound tourism, which encompasses the activities of a non-resident visitor within a country on an inward trip. For the resident visitor it is the main destination of a tourism trip, namely the place visited, that is central to the decision to take the trip, and which forms the dividing line between domestic and outbound. An outbound tourism trip might include visits to places within the country of residence in the same way as a domestic trip might include visits outside the country of resi- dence of the visitor. The nature of a visit supposes that there is a stop, so entering a geographical area without stopping there does not qualify as a visit to that area. Combinations of the basic three forms above lead to a further set of tourism categories used to identify visitors: ● Internal tourism, which includes domestic tourism and inbound tourism – that is, the activi- ties of resident and non-resident visitors within a country as part of domestic or international trips; ● National tourism, which is the sum of domestic tourism and outbound tourism – that is, the activities of resident visitors within and outside the reference country as part of either domes- tic or outbound trips; ● International tourism, which covers inbound tourism and outbound tourism – namely the activities of resident visitors outside the country of reference either as part of domestic or outbound trips and the activities of non-resident visitors within the country of reference on inbound trips. These last definitions are significant for the TSA, which, since it was first approved by the United Nations Statistical Division (UNSD) in 2000, now provides the standard framework for assessing the activity of tourism (UNSD, 2008). TOURISM AS A CONCEPT As a field of study and research, the complexity of tourism draws in a wide range of perspec- tives from a variety of disciplines, as illustrated in Figure 1.2, where tourism can be observed from different standpoints due to its near relationship to other social sciences. The economic importance of modern tourism and its impact upon environments and societies are seen as meriting its inclusion as a domain of studies in its own right, but the operational definitions 4 CHAPTER 1 AN INTRODUCTION TO TOURISM
- 30. examined above canbe rightly criticised for reducing tourism to a set of activities or eco- nomic transactions instead of analysing the significance, meaning and role of tourism to indi- viduals. (These latter aspects are discussed in Chapter 3 and in Part 4.) However, some would argue that as an element of human behaviour, it is questionable that tourism should be seen as a separate field of study, as witnessed by the fact that in many universities tourism is sim- ply one aspect of scholarship within an existing single discipline department (Franklin and Crang, 2001). However, it would be naïve to suppose that organisations drawing up operational definitions are unaware that tourism is about human behaviour that consists of many sundry aspects and uncertainties. They recognise tourism as a social, cultural and economic phenomenon related to the movement of people to places outside their usual place of residence, for which pleasure is the usual motivation. But having more and reliable statistics is essential for policy makers to make effective decisions. Only with sufficient and adequate data that generate credible statistics is it possible to undertake different types of analysis of tourism. E d u c a t i o n Sociolo gy E c o n o m i c s P s y c h o l o g y Anthro- pology Geography A g r ic u lt u r e Ecology Law Trans- portation M arketing U r b a n a n d r e g i o n a l p l a n n i n g Parks and recre ation Sociology of tourism Tourism m otivation Role of hospitality in tourism Centre of Tourism Studies Political science Tourism course Department or discipline T o u r i s m e d u c a t i o n Fundamentals of transportation Management of tourism organisation Tourism laws M a r k e t i n g o f t o u r i s m T o u r i s m p l a n n i n g a n d d e v e l o p m e n t Recreation management R u r a l t o u r i s m Design w ith nature Geography of tourism World without borders Host-guest relationship E c o n o m i c i m p l i c a t i o n s o f t o u r i s m Business H o t e l a n d r e s t a u r a n t a d m i n i s t r a t i o n Study of tourism and choice of discipline and approach Source: Jafari and Ritchie, 1981; Goeldner and Ritchie, 2006 Figure 1.2 Tourism as a Concept 5
- 31. Gilbert (1990) commentedthat what makes tourism difficult to define is the very broad nature of the concept as well as the need for so many goods and services inputs. Tourism also envelops other sectors and industries and therefore has no clear boundary due to the expansive spread of activities it covers. With this in mind others have added supply-side aspects to the definition of tourism so as to incorporate the visitor’s impact (economic, social, cultural and environmental) on the destination (Goeldner and Ritchie, 2006; Lieper, 1979, 1990, 2008; Tribe, 1997, 2006). Tribe’s view (1997) was that tourism is ‘the sum of the phenomena and relationships arising from the interaction, in generating and host regions, of tourists [visitors], business suppliers, government, communities and environments’. Within an academic discipline, the benefit of having an overarching theoretical structure is the methodological direction that it bestows. To put it simply, practice without theory is blind. As a field of academic study, various writers, as indicated above, have noted that tourism lacks the theoretical underpinnings that govern other social sciences, giving rise to conceptual weak- nesses and lack of clarity. On the other hand many disciplines have their own imprisoning theo- ries in which esoteric arguments have no known reality, thus rendering them sterile. Scientists have found that the behaviour of natural systems do not conform to the doctrines of reduction- ism that theoretical structures demand. They have shown that small simple actions could never be counted on to have small outcomes and frequently they cascaded into multiple outcomes of unsuspected intensity. Such systems are termed chaotic and chaos theory demands adaptive management, continual learning and monitoring, and frequent reviews to deal with the uncer- tainty arising. Chaos theory has parallels in tourism, which has been subject to several disasters so far this century, for example, the destruction of the World Trade Center on 11 September 2001, the wars in Iraq and Afghanistan, the bombings of the London and Madrid railway systems, tsunamis on the coasts of Sri Lanka, Thailand and Japan, the Global Financial Crisis, and the current trou- bles in the Middle East, notably Syria, with their spillover effects in terms of refugees and ter- rorist activity in other countries, particularly in some of the main capital cities of Europe. These are events over which the actors had no control, which in turn have raised interest in chaos theory and its relation to crisis management. Adaptability is the key, for chaos theory postulates Tourism has become an increasingly popular area of study for many students as the subject gains acceptability in the academic community. Photograph 1.1 6 chapter 1 An Introduction to Tourism
- 32. a system whichhas periodic bouts of instability that facilitate change as their states are trans- formed in an evolutionary and adaptive manner. Interdisciplinary tourism, whether a science, a discipline or not, underpinned by a good working knowledge of the subject, is thought likely to show much more promise than anything else so far conceived. It suggests an open-minded approach to tourism that acknowledges the contribution of differing subjects and disciplines to explaining tourism. This has been termed a ‘post-disciplinary’ approach (Coles et al., 2006), that breaks through the parochial boundaries of the various disciplines to study how the diverse components of tourism interact, adapt and come together as a tourism system which is forever evolving as a construct and in the provision of the tourist experience. A CONCEPTUAL FRAMEWORK FOR TOURISM Having discussed the concept of tourism, the next step is to offer a framework or model that can provide a basis for encompassing the different approaches to the study of tourism. A highly regarded model in the literature is that proposed by Leiper in 1979 (Figure 1.3), which we have adapted to be in accord with the definitions given in this chapter. The general term ‘traveller’ is maintained because this is the measure used in passenger transport services. It is at the destina- tion that the data separation between visitors and other travellers takes place. There are three basic elements to Leiper’s model: 1. Visitors, who, as travellers in this system, initiate the demand for travel for tourism purposes; 2. Geographical elements, which Leiper calls the ‘traveller-generating region’, the ‘tourism destination region’ and the ‘transit route region’; 3. The tourism industry, which Leiper initially took to be all those firms, organisations and facilities that exist to serve the specific needs and wants of visitors (Leiper, 1979), but because the idea of a single tourism industry is debatable, replaced it later with the expres- sion ‘tourism industries’ (Leiper, 2008). Taking account of the spatial aspects, the traveller-generating region represents the source market for tourism and can be thought of as providing the ‘push’ to stimulate and motivate travel. It is from here that the tourist searches for information, makes the booking and departs. The tourism destination region is the raison d’être for tourism, with a range of special places Returning travellers Location of travellers, (visitors and other travellers) and of the travel and tourism industry Environments: Human, socio-culture, economical, technological, physical, political, legal, etc. Transit route region Tourism destination region Traveller- generating region Departing travellers The tourism conceptual framework Source: Adapted from Leiper, 1979, 1990 and 2008 Figure 1.3 A Conceptual Framework for Tourism 7
- 33. distinguished from theeveryday by their cultural, historic or natural significance (Rojek and Urry, 1997). The ‘pull’ to visit destinations activates the whole tourism system and creates demand for travel in the generating region. It is at the tourism destination that the full impact of tourism is experienced and product innovation takes place, together with visitor management and planning processes so as to take account of the effects on host communities. (These aspects are discussed in depth in Part 2.) The transit route region does not simply represent the short period of travel to reach the des- tination, but must include intermediate places which may be visited en route, if it is to be regis- tered as part of a visitor’s trip: ‘There is always an interval in a trip when the traveller feels they have left their home region but have not yet arrived . . . [where] they choose to visit’ (Leiper, 1990: 22). The issue as to whether tourism is an industry rests on the definition of an industry within a country’s national accounts. These use internationally accepted classifications to produce output measures in accordance with a country’s industrial structure. In these terms, an industry is a col- lection of firms that use similar processes to produce relatively homogeneous goods and ser- vices. On the other hand, the tourism product is an amalgam of a multiplicity of goods and services that is configured to meet visitors’ demands and drawn from a range of industries, from transport to retailing. In establishing the TSA, the UNWTO (2000 and 2001) decided to label tourism as a sector made up of a number of industries as defined by international standards, and these are listed fully in Table 1.1 so as to show the range of businesses directly included in tour- ism. Yet on a practical level, those engaged in the tourism business and their trade associations commonly use the term ‘tourism industry’ when representing their views to governments and dealing with issues amongst themselves. Noting this, we will use the terms ‘tourism sector’ and ‘tourism industry’ synonymously throughout this text. Tourism industries SIC2007 Description Accommodation 55100 Hotels and similar accommodation 55202 Youth hostels 55300 Recreational vehicle parks, trailer parks and camping grounds 55201 Holiday centres and villages 55209 Other holiday and other collective accommodation 55900 Other accommodation 68209 Other letting and operating of own or leased real estate 68320 Management of real estate on a fee or contract basis Restaurants and similar 56101 Licensed restaurants 56102 Unlicensed restaurants and cafes 56103 Take-away food shops and mobile food stands 56290 Other food services 56210 Event catering activities 56301 Licensed clubs 56302 Public houses and bars Railway passenger transport 49100 Passenger rail transport, interurban Tourism industries as defined by the UNWTO Table 1.1 8 CHAPTER 1 AN INTRODUCTION TO TOURISM
- 34. The benefits ofLieper’s tourism system lie in its generality in bringing together the demand and supply for tourism in spatial terms at any scale from international to local tourism. It per- mits an interdisciplinary approach to the study of tourism and allows for the positioning of dif- ferent industry components within the framework. Thus, intermediaries such as travel agents Tourism industries SIC2007 Description Road passenger transport 49320 Taxi operation 49390 Other passenger land transport Water passenger transport 50100 Sea and coastal passenger water transport 50300 Inland passenger water transport Air passenger transport 51101 Scheduled passenger air transport 51102 Non-scheduled passenger air transport Transport equipment rental 77110 Renting and leasing of cars and light motor vehicles 77341 Renting and leasing of passenger water transport equipment 77351 Renting and leasing of passenger air transport equipment Travel, tour and guide services 79110 Travel agency activities 79120 Tour operator activities 79901 Activities of tour guides 79909 Other reservation service activities Cultural activities 90010 Performing arts 90020 Support activities for the performing arts 90030 Artistic creation 90040 Operation of arts facilities 91020 Museums activities 91030 Operation of historical sites and buildings and similar visitor attractions 91040 Botanical and zoological gardens and nature reserves activities Sporting and recreational activities 92000 Gambling and betting activities 93110 Operation of sports facilities 93199 Other sports activities 93210 Activities of amusement parks and theme parks 93290 Other amusement and recreation activities 77210 Renting and leasing of recreational and sports goods Country-specific tourism characteristic activities 82301 Activities of exhibition and fair organisers 82302 Activities of conference organisers 68202 Letting and operating of conference and exhibition centres Source: UNWTO (Continued) Table 1.1 A Conceptual Framework for Tourism 9
- 35. and tour operatorsare mostly found in the traveller-generating region, accommodation, restau- rants and attractions are found in the destination region, while passenger transport is largely represented in the transit route region. The framework proposed by Leiper is also flexible in that it provides a backdrop against which the various categories of tourism trips may be examined. Mini Case Study 1.1 shows how the demand and supply aspects of the growing popularity of eco-tourism, namely tourism directed towards exotic natural environments, and intended to support conservation efforts and observe wildlife, can be evaluated within Leiper’s model; for example, the Great Apes Survival Partnership (GRASP), through involving the local communities in Rwanda, Uganda and the Democratic Republic of the Congo (DRC), has seen the gorilla population rising in numbers. From a business perspective, this is about identifying tourism as a series of markets bringing buyers and sellers together to sell a range of tourist products from sun and beach tourism to more focused offers such as medical, cultural and sports tourism. To appreciate this we will look briefly at the role of markets in economic activity and the issues that arise from them, which are fundamental to understanding the various parts of this text. Characteristics of elements of the eco-tourism system, which is a sub-category of green tourism. The latter is more generally designated as environmentally friendly tourism activities either as a tourist or as a provider of tourist services. GENERATING REGION Demand for eco-tourism: ● is purposeful and currently growing two or three times faster than the tourism industry as a whole; ● desires first-hand experience/contact with nature/culture; ● has the motive to study, admire and/or enjoy nature/culture; ● is tempered by the need to consume tourism responsibly and offset carbon emissions; ● can be segmented in many ways including by level of commitment, level of physical effort, motives; and ● comes from those who are more likely to be well educated, have a higher income and be slightly older than the average tourist. DESTINATION REGION Destinations for eco-tourism: ● are relatively natural areas which are undisturbed and/or uncontaminated; ● have attractions of scenery, flora, fauna and/or indigenous culture; ● allow eco-tourism to deliver economic and conservation benefits to the local people; ● provide an incentive to local communities to take care of their environment; ● develop eco-tourism with a view to conserving/enhancing/maintaining the natural/cultural system; ● apply integrated planning and management techniques; ● apply environmental impact and auditing procedures to all elements of the tourism destination (such as accommodation facilities); MINI CASE STUDY 1.1 Characteristics of elements of the eco-tourism system 10 CHAPTER 1 AN INTRODUCTION TO TOURISM
- 36. Role of markets Itwill be apparent that for most towns and cities around the world, their populations go to bed each night without being in fear that the morning will bring a breakdown in the elabo- rate economic processes upon which their existence depends. Yet in a system of free enter- prise no one individual or organisation is consciously concerned with the fundamental economic problems of what to produce, how to produce and for whom to produce. What resolves this somewhat paradoxical situation is the concept of ‘the market’ that puts con- sumers in touch with producers. In times gone by, markets were physical places of critical importance to towns and cities, but in today’s developed world the market square and traders therein often hold more value as visitor attractions serving tourists and residents alike – for example, Covent Garden in central London. Modern information and communication tech- nologies (ICT) have created virtual markets allowing the potential tourist to create his/her own market by contacting suppliers at the destination directly via the Internet using smart- phones to assemble the tourism trip. The effect of the spread of ICT has been to reduce transaction costs and increase accessibility and competition, which in the main has been to the benefit of consumers. In a free enterprise system the prices set in the market serve to adjust demand and supply for goods and services. This is explained in Table 1.2, where at a price of 600 currency units poten- tial tourists only want to purchase 2,000 of the holidays on offer, whereas at that price tour operators are willing to provide 8,000. Clearly there is a mismatch between supply and demand, so the price will have to be reduced to bring the market into equilibrium, at the same time ● attempt to be carbon neutral; ● encourage local ownership of facilities; ● local businesses can deliver up to 90% or more of visitor expenditure into the local economy. TRANSIT ZONE Transport for eco-tourism: ● should be of low impact to the environment in terms of noise, carbon emissions, congestion, fuel consump- tion and waste; ● should monitor emissions and environmental impacts; ● should promote the conservation ethic; ● should be used as a management tool; ● should encourage use of public transport; ● should encourage the use of locally owned transport companies; but ● reaching a long-haul eco-tourism destination may consume large amounts of aircraft fuel and be more damaging to the environment than the tourist realises. Source: Cooper et al., 2008, p.10 DISCUSSION QUESTIONS 1. Do the principles of eco-tourism apply equally to each of the elements of the eco-tourism system? 2. Should eco-tourists be true to their beliefs and offset their carbon emissions? 3. Tourism trade associations establish environmental charters to foster eco-friendly policies amongst their members. How can such charters be propagated and enforced? A Conceptual Framework for Tourism 11
- 37. curtailing supply. Thisis achieved at a price of 400 currency units, where demand now equals supply and the market is said to be ‘cleared’. At prices below 400, demand is greater than the number of holidays on offer, while at 200 there is no offer since costs are such that tour opera- tors are unwilling to supply holidays at this price. To clear the market and satisfy demand, price will have to rise by 400 currency units. Thus, as this example shows, the prices set in the market serve to reward sellers and ration the supplies on offer amongst buyers, at the same time relay- ing information between both parties: forwards from tour operators indicating relative costs of production, or value in exchange, and backwards from tourists showing their relative prefer- ences, or value in use, by what they are willing to pay. When countries attempt to abolish the market system, as was the case in Russia and China under their old Communist regimes, then the state has to take over the role of what to produce, how to produce and for whom to produce. The extraordinary inefficiencies and associated cor- ruption that this entailed resulted in such severe disillusionment with state provision amongst the population that it contributed to the collapse of the Soviet Union in the 1990s and the liber- alisation of markets in China and Cuba, despite the general adherence to what are perceived as socialist principles in respect of state control of the economy. For Cuba, the development of tourism has been seen as a major collector of foreign exchange (‘hard’ currency) for the Cuban economy, but this produced two types of Cuban peso in its largely state-planned structure, one for visitors and another for residents. However, this system is no longer tenable in the current climate of improved relations between Cuba and the United States. Even in North Korea, where free markets are illegal, since they reflect badly on state provision, casual street markets arise quite often to alleviate severe shortages of food and consumer goods, and the authorities turn a ‘blind eye’ to them. Issues with markets Today, the common description of Western societies is that they are ‘mixed economies’in which both public and private enterprise exist. State intervention takes place because free markets do not always work optimally in the allocation and use of resources. Increasing industrial concen- tration has shifted the balance of power from consumers to suppliers, as witnessed by the cur- rent global financial crisis. The financial system, through lack of transparency as to its activities, was able to immunise itself from the market penalties associated with failure, until the financial ‘bubble’burst, when financial institutions had to be rescued by the state on the grounds that they ‘were too big to fail’. The state’s response to monopoly power is to regulate markets so as to make them behave competitively and to pass consumer protection legislation, which is particu- larly important in tourism as the visitor is buying the product unseen and untested beforehand. On the other hand, some goods such as the natural and physical environment produce social benefits which are not captured in the marketplace and so need protection to prevent their deg- radation, which is the essence of the sustainable development issues discussed in Chapter 10. There also exists in society a range of products, referred to as ‘public goods’, which free mar- kets would not provide in adequate amounts, if at all, because it is difficult to enforce payment. Unit price Quantity demanded Quantity supplied 600 2,000 8,000 500 3,000 6,000 400 4,000 4,000 300 5,000 2,000 200 6,000 0 Source: Author Market demand for holiday packages Table 1.2 12 CHAPTER 1 AN INTRODUCTION TO TOURISM
- 38. If they areto be provided at all, they must be shared by everyone, as in the case of city and national parks, so provision for them has to be made out of general taxation. Akin to such facilities are commodities which have a meritorious element such that their consumption should be encouraged. These are termed ‘merit goods’ and they differ from public goods in that pay- ment is enforceable, but as the object is to foster wide consumption they are either provided free at the point of use or are heavily subsidised. Museum services, sports and recreation, galleries and the performing arts fall under this category as well as social tourism provided for the needy. Need and demand are separate notions: the former has to do with social justice, while the latter is about the ability as well as the willingness to pay. AN OPERATIONAL FRAMEWORK FOR TOURISM – THE TOURISM SATELLITE ACCOUNT (TSA) The operational aspects of Leiper’s tourism system from the destination perspective are embod- ied in the TSA, which is a synthesis of tourism statistical provision to provide a means of sepa- rating and examining both tourism supply and tourism demand within the general framework of a country’s system of national accounts (Frechtling, 2010). We have seen that tourism is not a ‘traditional’ industry and is, therefore, not measured in standard economic accounting systems. ‘Industry’ is a supply-side concept: typically, the focus is on what is being produced. But ‘tour- ism’ is a demand-side concept: the focus is on who’s buying products – the traveller, or visitor. Tourism demand affects parts of many industries, hence the need to measure tourism in a way that enables benchmarking with other sectors. The importance of a TSA to a destination is that it: ● measures tourism’s contribution to the economy and allows it to be compared with other economic sectors. The TSA provides much greater detail and accuracy than any other approaches in measuring the economic contribution of tourism. By evaluating and using this information, both public bodies and tourism enterprises will increase their capacity to influ- ence decision making at all levels. By tying the TSA to standard national accounting prac- tices, credible and reliable estimates of the importance of tourism will be produced allowing valid comparisons with other industries both domestically and internationally; ● governs the relevant statistics that need to be collected; ● identifies industries that benefit from tourism and to what extent, particularly industries that are not traditionally associated with tourism – the weight of tourism activity in terms of out- puts for tourism-related industries; ● shows how different forms of tourism (inbound, outbound and domestic) interact in the national economy and generates the ability to gauge the weight of the tourism expenditure incurred by the various visitor categories; ● indicates tourism’s contribution to government revenues: tax is an important factor in terms of convincing municipal, provincial, regional and national authorities to design policies for boosting tourism investments; ● provides information on employment: improvement of knowledge concerning jobs generated by tourism and their characteristics, without which the creation of really useful employee training programmes in more characteristic tourism activities (e.g. hotels, travel agencies, car rental firms, tourism information services, etc.) can prove to be a haphazard exercise. When a TSA was first constructed for Canada, Meis (1999) reported that for the first time they could see the totality of tourism consumption. In the past they had statistics from various surveys of domestic demand, travel nationally, household expenditure and other tourism indica- tors, but they were not able to put them into what they thought was a credible additive total. By commissioning a TSA, they found that the share of value added broken down into each of the tourism components was a real revelation. Other industries, which they did not consider in the An Operational Framework for Tourism – The Tourism Satellite Account (TSA) 13
- 39. tourism sector, wereactually contributing about 25% to total value and GDP. For example, in the retail sector they did not realise how significant that was and subsequently set about new ways of trying to harness some of that money and that activity for tourism development. The structure of a TSA In total the TSA system consists of 10 tables and these are listed in Table 1.3. TSA 6 which features domestic supply and internal tourism consumption by products is the core of the TSA system. It may be seen that the TSA presents a formidable array of information gather- ing and its completion depends on the statistical infrastructure of the country concerned. The UNWTO acknowledges that supply-side data are the most difficult to obtain and suggests the focus should be on the demand tables TSA 1 to TSA 4, and TSA 7 and TSA 10 in the first instance. It is in TSA 6 that supply and demand aspects at the destination are measured, where the contribution of tourism to GDP and its component parts can be estimated, as indicated by the WTTC statistics at the beginning of this chapter. To obtain effective measurement of the level of these activities, detailed statistics on sales and purchases by firms need to be collected to build a transactions account of the economy. These efforts will vary from country to country given the extent and focus of the central statistical office. The significance of TSA 6 is in estimating the share of tourism consumption that is attribut- able to the various supplying industries that serve to meet the demands of visitors. The approach to this is to layer tourism consumption in order of its importance, as illustrated in Figure 1.4, which splits the categories of tourism consumption into three: characteristic products which take a high proportion of that industry’s sales, connected products with a lesser proportion and non-specific products at the lowest level. The appearance of retail sales as non-specific might seem surprising as we all know that visitors on holiday are ‘compulsive’ shoppers, but the point is that for large economies their effect on retail sales in total is likely to be small. However, there are no hard and fast rules and for small, say, island destinations where sales of souvenirs and other retail goods are a key of the economy, shopping may be included as a characteristic product. Table number Contents TSA 1 Inbound tourism consumption by products and categories of visitor TSA 2 Domestic tourism consumption by products and ad hoc sets of resident visitors TSA 3 Outbound tourism consumption by products and categories of visitor TSA 4 Internal tourism consumption by products and categories of visitor (TSA 1 + 2) TSA 5 Production accounts of tourism characteristics and other industries TSA 6 Domestic supply and internal tourism consumption by products TSA 7 Employment in the tourism industrial sectors TSA 8 Gross fixed capital expenditure in the tourism industries and other related industries TSA 9 Tourism expenditure by governments and other public authorities TSA 10 Non-monetary indicators such as the volume of tourist trips and nights, and the number of businesses Source: UNSD, 2008 Structure of a TSA Table 1.3 14 CHAPTER 1 AN INTRODUCTION TO TOURISM
- 40. Understanding TSA 6is best realised by taking a numerical example, as shown in Table 1.4. It is based on an actual research study carried out as part of a team (Deegan et al., 2006) by the author, but considerably simplified for pedagogic purposes. To set it in context, the number of inbound visitors’ trips is just over 2.3 million, while domestic visitors’ trips amount to 31.8 mil- lion, the majority being same-day visitors given the relatively small size of the region as a des- tination. The last column looks at the ratio of internal tourism consumption to domestic supply at the purchase prices paid by inbound and domestic visitors at the destination, and that part of expenditure by outbound visitors that is paid to local suppliers. This represents tourism’s share of the outputs of the various products by the industry groups listed in Figure 1.4. It is to be noted that the outputs by industry are in basic prices. The basic price is the amount receivable by the producer from the purchaser for a unit of a good or service produced as output minus any tax payable, and plus any subsidy receivable, on that unit as a consequence of its production or sale; it excludes any transport charges or trading margins invoiced separately by the producer. Summing down the columns yields total output by the industries associated with tourism at basic prices. From these values input purchases by the respective businesses (which now include product taxes net of subsidies) are then deducted to give the value added by the associated industries in the production of goods and services. The reason for using gross value added (GVA) as a measure of the value of goods and services produced in an area or sector of the economy is technical: it is linked as a measurement to GDP, as both are measures of output. If we sum up the GVA for each sector of the economy as a whole, add on taxes and take off subsidies, we will get to GDP at market prices. As the total aggregates of taxes and subsidies are normally only available at whole economy level, GVA is commonly used for measuring output for entities smaller than the whole economy. It may be seen from Table 1.4 that the tourism GVA for this economy is 378 + 44 + 108 = 530 million currency units. Going across the table it may be observed that total internal tourism Principal TSA Categories of Tourism Products Tourism products (goods and services) A. Specific tourism products B. Non-specific tourism products A1 Characteristic goods and services 1. Accommodation Post telecoms services services Health services All other products, e.g. retail Rental services Financial and insurance 3. Passenger transport 4. Travel, tour and guide services 5. 6. Culture, sport and recreation 2. Restaurants and similar A2 Connected goods and services Principal TSA categories of tourism products Figure 1.4 An Operational Framework for Tourism – The Tourism Satellite Account (TSA) 15
- 41. Tourism industries Connected industries Other industries Domestic supply (basic prices) Net taxes on products Domestic supply (purchasers’ prices) Tourism consumption (purchasers’ prices) Tourism ratios Products All Tourism share AllTourism share All Tourism hare A. Specific products A.1 Characteristic products 1. Accommodation 158 99 158 15 173 108 62% 2. Restaurants and similar 665 377 665 68 733 415 57% 3. Passenger transport 672 97 672 0 672 97 14% 4. Travel, tour and guide services 350 175 350 8 358 179 50% 5 6. Culture, sport and recreation 639 84 639 57 696 91 13% A.2 Connected products 1. Renting and business services 1,503 62 1,503 52 1,555 64 4% B. Non-specific products 1. Retail 5,357 421 5,357 296 5,653 444 8% Total output (at basic prices) 2,484 832 1,503 62 5,357 421 9,344 496 9,840 1,398 14% Total inputs (at purchasers’ price) 1,541 454 446 18 3,981 313 5,968 Gross Value Added (at basic prices) 943 378 1,057 44 1,376 108 3,376 Source: Author TSA 6 domestic supply and internal tourism consumption by outputs for a small economy (currency units in millions) Table 1.4 16 CHAPTER 1 AN INTRODUCTION TO TOURISM
- 42. consumption at purchasers’pricessums to 1,398, which at basic prices is 832 + 62 + 421 = 1, 315. This implies that net taxes on products paid from tourism amount to 1,398 - 1,315 = 83 million currency units. Adding this value to the tourism GVA of 530 results in the direct contribution of tourism to GDP of 613 million currency units. It might at first sight seem unusual in Figure 1.4 that net taxes on passenger transport are given a value of zero, for it is well known that govern- ments around the world levy airport taxes on passenger movements (see Chapter 18), but govern- ments also subsidise domestic passenger transport, so in this instance the net effect on that sector is approximately zero. Where there is a marked disparity in the tax positions of inbound and domestic visitors then appropriate adjustments need to be made. Total GDP in this economy happens to be just under 22 billion currency units, which means that tourism’s direct contribution to GDP is about 2.8%. It is in this manner that the WTTC cal- culates the impact of tourism in the various regions and countries of the world. The total impact is assessed by examining the causal relationships in Table 1.4 to account for the re-spending of money earned from tourism in the local economy by building an economic model to simulate these effects. Thus the TSA is used as the basis for tourism impact models, for the tourism sector as a whole and for particular demand patterns. These aspects are discussed in detail in Chapter 7. CONCLUSION As a human activity modern tourism has experienced unprecedented growth rates since the early 1950s, and its economic importance is something few governments can ignore. But as a field of study it remains relatively new, lacking in the maturity of other subject areas and disci- plines. This lack of maturity is manifested in arguments over how tourism should be studied and the appropriate framework to examine tourism demand and supply. Embodied in this are the dynamics of developing new tourism products in response to changing tastes and more diverse interests as society alters its patterns of consumption and value systems. In a practical sense this has led to new definitions and classifications of tourism, and its most recent formal recognition in the establishment of a Tourism Satellite Account, though even here countries have some lati- tude as to what should be listed as a characteristic tourism product. For those working in our industry the dynamics of change offer both challenges and opportunities in creating new prod- ucts, for example space tourism, managing the increasing volume of tourism flows, and ensur- ing that the expansion that this entails is sustainable at both at the global and local level. 1. Review the major methods used to classify tourists. 2. Which of the following can be counted as tourists in the official definitions? a) military personnel b) space shuttle pilots c) international conference delegates d) travelling diplomats e) students f) immigrants 3. What is the role of markets in economic activity? 4. Review the major elements of the tourism system – how do they relate to each other? 5. How does a TSA classify tourism products? SELF-CHECK QUESTIONS SELF-CHECK QUESTIONS 17
- 43. YOUTUBE https://www.youtube.com/watch?v=xVRb9EU-bkE Travel and tourismoverview. https://www.youtube.com/watch?v=a2uMKG7ETyQ Discussion of what tourism is by Zara Anderson. https://www.youtube.com/watch?v=35KzDBaau7I Importance of tourism. REFERENCES AND FURTHER READING Coles, T., Hall, C.M. and Duval, D.T. (2006) ‘Tourism and post-disciplinary enquiry’, Current Issues in Tourism 9(4–5), 293–319. Cooper, C., Fletcher, J., Fyall, A., Gilbert, D. and Wanhill, S. (2008) Tourism Principles and Practice, 4th edn, Pearson Education, London. Deegan, J., Kenneally, M., Moloney, R. and Wanhill, S. (2006) ‘A comparison of tourism output and employment in Ireland and the UK: some TSA-based results’, Global Business Eco- nomics Anthology, 1, December, 445–60. Dwyer, L., Forsyth, P. and Dwyer, W. (2010) Tourism Economics and Policy, Channel View Publications, Bristol. An excellent and very readable textbook that offers a thorough cover- age of the different business issues facing the tourism industry. Franklin, A. and Crang, M. (2001) ‘The trouble with tourism and travel theory’, Tourism Studies 1(1), 5–22. Frechtling, D. (2010), ‘The Tourism Satellite Account. A primer’, Annals of Tourism Research 37(1), 136–153. Gilbert, D. (1990) ‘Conceptual issues in the meaning of tourism’, pp. 4–27 in Cooper, C. (ed.), Progress in Tourism, Recreation and Hospitality Management, Belhaven Press, London. Goeldner, C.R. and Ritchie, B. (2011) Tourism: Principles, Practices, Philosophies, 12th edn, Wiley, New York. Jafari, J. and Ritchie, J.R.B. (1981) ‘Towards a framework for tourism education’, Annals of Tourism Research 8(1), 13–34. Jafari, J. and Xiao, H. (2016) Encyclopedia of Tourism, Springer, London.A wide-ranging volume with definitive statements on every tourism term, written by the leading expert in each field. Leiper, N. (1979) ‘The framework of tourism. Towards a definition of tourism, tourist and the touristic industry’, Annals of Tourism Research 6(4), 390–407. Leiper, N. (1990) ‘Tourism systems’, Massey University Department of Management Systems Occasional Paper 2, Auckland. Leiper, N. (2008) ‘Why “the tourism industry” is misleading as a generic expression: the case for the plural variation “tourism industries”’, Tourism Management 29(2), 237–51. Meis, S. (1999) ‘The Canadian experience in developing and using the tourism satellite account’, Tourism Economics 5(4), 331–44. Rojek, C. and Urry, J. (1997) Touring Cultures – Transformations of Travel Theory, Routledge, London. Tribe, J. (1997) ‘The indiscipline of tourism’, Annals of Tourism Research 24(3), 638–57. Tribe, J. (2006) ‘The truth about tourism’, Annals of Tourism Research 33(2), 360–81. UNSD, The Statistical Office of the European Communities (EUROSTAT), Organisation for Economic Co-operation and Development (OECD), and UNWTO (2008) 2008 Tourism Satel- lite Account: Recommended Methodological Framework (TSA: RMF 2008), Luxembourg, Madrid, NewYork, Paris.Available at http://unstats.un.org/unsd/statcom/doc08/BG-TSA.pdf United Nations World Tourism Organization (UNWTO) (2000) General Guidelines for Devel- oping the Tourism Satellite Account (TSA): Measuring Tourism Demand, Madrid. 18 CHAPTER 1 AN INTRODUCTION TO TOURISM
- 44. United Nations WorldTourism Organization (UNWTO) (2001) Conclusions of the Interna- tional Conference on Tourism Satellite Accounts, Madrid. United Nations World Tourism Organization (UNWTO) (2008) International Recommenda- tions for Tourism Statistics (IRTS). Department of Economics and Social Affairs, Statistics Division.Available at http://unstats.un.org/unsd/trade/IRTS/IRTS%202008%20unedited.pdf WTTC (2016) Economic Impact 2016: World Report, World Travel and Tourism Council, London. Websites http://www.world-tourism.org An all-embracing website providing the official United Nations’ tourism definitions, statistics and forecasts, as well as policies on tourism issues such as tourism ethics, pro-poor tourism, women in tourism, taxation and many more aspects affecting the industry. http://www.wttc.org A comprehensive website from the private sector’s representative body for tourism with up-to- date statistics and reports on the tourism industry and its economic contribution to different countries of the world. REFERENCES AND FURTHER READING 19
- 46. Part 1 Tourism Demand CHAPTER2 The Nature of Tourism Demand 25 CHAPTER 3 Tourism Consumer Behaviour 40 CHAPTER 4 Measuring and Modelling Tourism Demand 67 CHAPTER 5 Forecasting Tourism Demand 90
- 47. This part ofthe text provides you with a comprehensive introduction to tourism demand. It aims to provide you with six key knowledge areas: 1. The factors affecting tourism demand. 2. The theoretical aspects of tourism demand. 3. Consumer behaviour in tourism. 4. How tourism demand is measured and reported. 5. Tourism demand modelling. 6. Tourism demand forecasting. This part is organised into four chapters, each covering one or more of the key knowledge areas above. Each chapter explores the area of knowledge in depth and is structured to meet a set of learning outcomes which are provided at the beginning of the chapter. In addition, we identify and annotate selected reading in order to provide an introduction to the substantive lit- erature on measuring and evaluating tourism demand. Various case examples are used to con- firm the concepts and theoretical issues examined in the chapters, while self-check questions in each chapter allow you to review and test your understanding of the material. In the introduction to this text we saw how tourism is defined and discussed Leiper’s tour- ism system as an effective structural framework for tourism, where the operational aspects of Leiper’s tourism system from the destination perspective are embodied in the Tourism Satellite Account (TSA). Tourism demand originating from Leiper’s generating region is effectively the subject of this section of four chapters. In Chapter 2 – The Nature of Tourism Demand – we introduce the factors affecting tourism demand and show how these may vary according to different stages taking place during a person’s life span: on this point we provide a mini case study of the family life cycle and tourism demand, and a major case example on youth tourism. The second theme of the chapter is the exposition of the theoretical aspects of tourism demand to show how the transition is made from individual demand schedules into market demand in preparation for the empirical measurement aspects that are the subject of Chapter 4. Chapter 3 – Tourism Consumer Behaviour – allows for a fuller understanding of demand by providing the concepts and relationships of the consumer decision-making process in tour- ism. The subject matter of this chapter provides, first, an understanding of the components of the tourism consumer decision process and, secondly, some of the important models of the process. We show that there is a range of factors that influence travel decisions – factors such as motivation, attitudes, perceptions and images. The chapter provides you with a number of key tourism authors’ approaches and covers their ideas and the major literature debates. In addition, a number of the consumer behaviour factors outlined have been drawn together and presented in the form of models of consumer decision making. For tourism, these models have been adapted from more general approaches in the consumer marketing literature. It is important when reading this chapter to question whether these models are purely an academic exercise or if they have a practical use for tourism managers in a changing world. In Chapter 4 – Measuring and Modelling Tourism Demand – we return to the TSA with the specific intentions of showing how the demand tables are formulated, since these govern the approaches used to measure demand for both international and domestic tourism, and assess- ing their effectiveness. We go on to consider the variety of ways used for collecting tourism data and discuss the principles of sampling tourism populations, as a prelude to building economic models of tourism demand for understanding visitor behaviour and forecasting. The chapter ends with a major case study that provides a historical perspective of tourism demand by major world regions as defined by the UNWTO. Chapter 5 – Forecasting Tourism Demand – focuses on the need for and different methods of tourism forecasting. It will be readily appreciated that accurate forecasts in tourism are es- sential to inform decision making in both governments and the tourism industry. We begin with a Introduction 22 part 1 TOURISM DEMAND
- 48. general overview andthen follow two directions in forecasting practice, namely quantitative and qualitative forecasts, and indicate how they are related. We reinforce this with case examples of good practice. Modern computing power has enabled researchers to develop very sophis- ticated statistical forecasting techniques, but the methods explained in this chapter are those that can be undertaken with the use of a hand-held calculator or a basic computer spreadsheet. The final section of this chapter deals with simple procedures for evaluating forecasting perfor- mance. The case study below focuses on the highly professional practices adopted by Tourism Forecasting Australia. By Lindsay W. Turner, Professor of International Trade, Victoria University, Melbourne and Research Consultant PATA I have been undertaking forecasting for industry for some 30 years, more recently for the Pacific Asia Travel Association (PATA) and now in China for government agencies including the World Tourism Cities Federation (WTCF), based in Beijing. The WTCF is a relatively new organisation developed as part of the Chinese ‘One Belt One Road’ economic development policy. This policy will attempt to administer the development of the old Silk Road between China and Europe through southern Asia, with an extension down to Singapore through Thailand and Malaysia, resulting in major transport development to speed trade including tourism. This develop- ment and the re-focus upon cities is a development that has influenced tourism forecasting generally. Rather than the national country-based forecasts as completed by PATA, the newer forecasts are more regional in nature (in this case based on cities, so in some instances areas even smaller than provinces or states). This re-focus results from the increasing awareness in local regions of the benefits of both domestic and international tourism, and also the fact that international tourists now penetrate further into countries beyond the main ports of entry. In forecasting tourist arrivals and many other series that display variability, it is not possible to know in advance which statistical method will accurately forecast the series. Additionally, it is not possible to forecast many years ahead accurately, although sometimes this is done regardless of accuracy. Although forecasts can be based upon requiring accuracy they can have the dual purpose of setting a standard. Competent forecast- ing can set a benchmark against which the impact of change such as a political, terror or financial crisis can be measured. For one forecast series it is possible to simply try several models, and determine within sample how accu- rately a particular model can predict the last section of the sample data. For regional forecasts this increases the cost and places more pressure on using time-series as opposed to econometric modelling, the reason being that the independent measures needed for econometric modelling are harder to obtain at a regional level. For industry, if the time series forecasts are highly accurate, then there is no point moving to an econo- metric model as there is little reason to explain the causal impact; the industry just wants to know ‘how many will arrive’ from each source country. From experience examining regional forecasting in Australia, Canada, China and the United States, approx- imately 65% of accuracy is derived from time-series models alone, although often including interventions (dummy variables), while 35% is derived from econometric models yielding higher (but not often statistically significantly higher) accuracy. Despite the huge work in quantitative modelling the overall average accuracy relies significantly upon expert opinion. All forecasts need to face a reality test. One major factor missing at present is supply side constraints, and whilst a forecast might be theoretically possible, it will depend upon the supply side (such as accommoda- tion, transport and labour supply) to be realised. Consequently, other sources of information need to be meas- ured against the modelling forecasts, and the forecasts are most commonly lowered as a result (primarily because the bulk of series trend up). Consequently, somewhere between 25% and 40% of the final overall accuracy depends upon changes made as a result of consultation with knowledgeable professionals in the local markets. In turn, the short forecasting horizon, usually up to a maximum of five years, requires constant re-forecasting. A Forecasting Practitioner’s View Introduction 23
- 49. Importance of study Whenyou study tourism, you study a constantly changing and multi-faceted industry. The study of tourism has always for me been a study of its core activities, of economics, sociology, marketing and management to name a few. As students of tourism one competency is not suf- ficient, the modern tourism student must be familiar with and skilled in each area if they are to work in the greater tourism industry. As a tourism student one must be able to build skills in these areas and use them to navigate the industry. I used this text, Tourism: Principles and Practice, in both my undergraduate and postgraduate degrees. It gave me a concise and holistic introduction into the many constructs, principals and concepts that make up the modern tourism industry. Now, within my own career in our industry, I still find myself returning to its case studies, methodologies and principals. My Career My work as a tourism development consultant involves writing reports, giving presentations or undertaking research for various sectors of the tourism industry. The skills I developed as a student are crucial to my work. Whether it is in writing a destination feasibility study, a development plan for a museum, or a marketing study for a ski resort, where I have been looking at risk assessment, I find myself constantly relying on the skills I acquired during my time at University, notably during my M.A at the University of Limerick. In particular, I would highlight long form report writing, feasibility analysis using EXCEL, examining data sets in SPSS or conveying complex data simply through PowerPoint. My work primarily involves providing plans, studies and research for companies, projects or charities who are developing tourism or visitor based projects. The reports I provide can range from marketing studies to risk assessments. The most common type of report I write is a feasibility study, thus one of my current projects is the Suir Valley Adventure’s development plan for a mid-sized adventure centre which is looking to operate in the Midlands region. The feasibility study I am writing for this project serves very much to provide a basis as to why the project should go forward and why it will be viable in the long term as a business. My clients in this case may use this study as the basis for seeking financial assistance in the way of private and community loans, and also to examine the soundness of the business itself. The broad base of such studies is centred around key headings such as Market Research, SWOT Analy- sis, Competitive Analysis, Capital Investment Requirements, Marketing, Pricing and Sales, Funding and Financial Projections. The latter aspect is the most important for substantiating the feasibility/viability of the project. Within this I provide evidence of the projects financial operation. This includes projected project fea- sibility, project viability in both the short and long term. More specifically, I provide a basis for examining the profitability of the business, which is crucial as it provides the entrepreneur a realistic view of long term gains of the business and for any investor a projection of their payback on their investment. Within this area of the study each claim is substantiated using simple EXCEL and accounting methods such as Cost-Benefit Analy- sis, Pay Back, a simple projected cash flow Year 1-5, a simple Profit and Loss Account to back this up, and the necessary Feasibility and Viability formulas. All of which can be completed in EXCEL but it often helps to break each down and demonstrate the work to both the client and the potential investor. The benefits of my work come from its variety, the interesting people you meet in tourism and the knowl- edge that if you are good at what you do there is no ceiling. To give you another example to illustrate variety, I have an interest in film tourism locations: years ago who would have thought that the film trilogy “The Lord of the Rings” would have been such a boon to tourism growth in New Zealand? In tourism now more than ever we are bombarded with information, statistics and data. How we correlate, interact and make sense of this has a huge effect on our understanding of our industry. As a tourism student learning how to design methodologies, examine data and draw conclusions are all fundamental skills which should be in every tourism student’s arsenal to enable them to navigate their way through this ever changing, ever moving and wonderful industry. Barry Rogers Employability of tourism graduates MA (Distinction) International Tourism, University of Limerick, Ireland 24 part 1 TOURISM DEMAND
- 50. Chapter 2 The Natureof Tourism Demand Learning Outcomes In this chapter we focus on the basic concepts and determinants of tourism demand to provide you with: ● the theoretical background to understanding the nature of tourism demand; ● an awareness of the factors affecting tourism demand; ● a comprehension of the purpose of demand schedules and an understanding of how to interpret them; and ● an understanding as to how individual demand translates into market demand.
- 51. In this chapterwe introduce the theoretical approaches to tourism demand that underpin its management. There is no doubt that managing tourism demand is one of the challenges for tourism in this century as the volume of tourism continues to grow and the remotest corners of the world are visited. In Leiper’s model and in the operational framework of the TSA, demand is the fundamental driver of the tourism system and defines the proportion of businesses in the supplying industries that may be said to be involved in tourism. Thus interpreting the observable phenomenon governing tourism demand is critical to understanding how markets will behave. To this end, it is important to understand the nature of demand in terms of the various components that affect it and how they impinge on the business aspects of tourism and measures to regulate visitors’ flows. Introduction Individual Tourism Demand The market demand identified within Leiper’s tourism system discussed in Chapter 1 is the out- come of activities and decisions made by individuals in the generating region (see Figure 1.3). Knowledge of individual behaviour and how it relates to the market makes it possible to predict future trends for planning and visitor management purposes, and enables suppliers to correctly read the signals given in the marketplace so as to provide the right tourism products. Equally it is important for government policy, for example in terms of taxation or influencing visitors’ behaviour. In the latter respect, the perceptions of demand have changed over the years with early pronouncements such as the UN’s Universal Declaration of Human Rights encouraging everyone to travel as a ‘right’, to the present day when the tourist is urged to travel ‘responsibly’ and to offset his or her carbon emissions generated from air travel, though airlines have found that these voluntary schemes attached to ticket prices have not had much take-up. To benefit the destination, the UNWTO (1999) has produced a Global Code of Ethics for Tourism, which requests visitors to observe the laws, practices and customs in the countries they visit. In other words, if individuals demand tourism they should take responsibility for the envi- ronment and host societies at the destination and the hosts have a right to expect this. In tourism development work this is part of what is known as the ‘triple bottom-line’, namely taking account of the economic, social and environmental situation at the places where visitors stay. In economic terms this implies guidance to encourage visitors to support local businesses. (These aspects are covered in much greater detail in Part 2 of this text.) Unlike most other goods and services, consumption of the tourism product by an individual involves purchasing a bundle of goods and services that are consumed at the destination, which is the point of supply. Given this complexity and to be comprehensive, Uysal (1998) has pro- duced a most helpful listing of the major influences on tourism demand that also draws in psy- chological aspects of motivations, tastes and perceptions, and demographics such as population size, age distribution, gender, education, occupation and family composition/life cycle (Mini Case Study 2.1), under the heading social-psychological factors: this is shown in Table 2.1. The exogenous factors are those outside the individual’s control, which Uysal regards as the envi- ronment in which tourism transactions take place. It is to be expected that different subject disciplines (see Figure 1.1) will approach the mat- ter of tourism demand in alternative ways, but in general, for ease of exposition, when look- ing at demand for the tourism product we will divide the factors influencing demand into motivations on the one hand and determinants on the other. Motivations deal with Uysal’s psychological factors as to why people travel and what needs they are trying to satisfy. They are important for the study of consumer behaviour, which is the topic of Chapter 3. Under- standing motivational priorities and their role in decision making are necessary for establishing 26 Chapter 2 The Nature of Tourism Demand
- 52. The major influenceson tourism demand Table 2.1 Economic factors Social-psychological factors Exogenous factors Disposable income Demographic factors Availability of supply resources GNP per capita income Motivations Economic growth and stability Private consumption Travel preferences Political and social environment Cost of living (CPI) Benefits sought Recession Tourism prices Images of destinations Technological advancements Transportation costs Perceptions of destinations Accessibility Cost of living in relation to destinations Awareness of opportunities Levels of development, infrastructure and superstructure Exchange rate differentials Cognitive distance Natural disaster Relative pricing among competing destinations Attitudes about destinations Epidemics Promotional expenditures Amount of leisure time War, terrorism Marketing effectiveness Amount of travel time Social and cultural attractions Physical distance Paid vacations Degree of urbanisation Past experience Special factors/Olympic Games, mega events Life span Barriers and obstacles Physical capacity, health and wellness Restrictions, rules and laws Cultural similarities Affiliations Source: Adapted from Uysal, 1998 the potential demand for a new tourism offer and removing barriers to travel at the destination end, for example visa restrictions, perceptions on security and concerns about the tourism infrastructure, particularly accommodation and transport. Security is a major concern but potential visitors frequently do not discriminate between one country and another, thus the ‘Arab Spring’ which commenced in 2011 had dramatic consequences for visitor numbers to neighbouring countries such as Jordan, with its world class attractions in the rose city of Petra and the Dead Sea, where security was not an issue. (Dealing with these aspects of tourism is the subject of Chapter 12.) Determinants are factors influencing demand which can be economic, sociological, demo- graphic, political and geographical. The latter has a spatial context, in the sense that distance when expressed in both travel time and cost serves to limit travel from the generating region to the destination, as noted in Leiper’s model. As a rule, most destinations find that their near neighbours generate the largest volume of international visitors and this tails off with distance. But, as is well known, if we were to redraw the map of the world based on airfares between countries some very unusual configurations would be the result, since due to different competi- tive practices in the airline industry the pricing of air tickets does not necessarily correspond to the distance travelled (see Chapter 17). Within countries domestic airfares are often several times more than the equivalent distance when flying internationally. Individual Tourism Demand 27
- 53. The demographics ofthe FLC are aspects that are of considerable interest to tourism providers, because not only do the factors listed in Table 2.1 change in importance, but also a person’s value systems and tastes are almost certain to change. Figure 2.1 illustrates how two factors – namely available leisure time and discretionary income (income that is available after meeting what may be considered as essential expenses) – may move over an indi- vidual’s life cycle. Using age as a basis for classification it is possible to draw up different behavioural scenarios. Young When a person is a child, decisions are normally taken for them in terms of holidays. However, children do have a significant influence upon both their parents’ decisions and their satisfaction levels at the destination and as a result children are of interest to tourism researchers. For example, owners of theme parks know very well that if the children have a good day out then so will the parents. Resort parks provide evening entertain- ment for parents combined with child care facilities. By the age of 10 or 11 years some children have already taken organised holidays with school or youth groups and day trips are common, but typically holidays independent of parents begin at around 15 years, constrained by lack of finance. The latter is compensated by having few other commitments, no shortage of free time, and a curiosity for new places and experiences. By their late teens and early 20s, young people have a high propensity to travel, mainly on budget holidays using low-cost travel and self-catering accommodation. Here the preoccupation is simply to ‘get away’ – the destination is not always that important, and is often asso- ciated with rites of passage such as the American ‘Spring Break’. At this stage, sometimes known as the bachelor stage, young single people not living at home have a preoccupation for independence, socialising and a search for identity. In recent years, however, we are seeing more of this group living at home later than before due to longer periods in education and housing costs. Middle Aged The advent of marriage can have a number of options. For example, newly married couples who are young and with no children may have few constraints on travel. Before the arrival of children young couples often have a high income and few other ties, giving them a high travel propensity, frequently overseas. With the raising of a family the combination of factors listed in Table 2.1 is completely reshaped. At this point in an individual’s life, previous constraints and influences upon holiday-taking are totally changed as holidays become more organised around the children’s needs and less about ‘jetting off’ to new places. Companies such as Disney utilise this FLC concept to win children as customers at an early age in order to retain them into later life. With the decline in birth rates in the developed world it is important to create hotel, activity and Mini case study 2.1 Family life cycle (FLC) and tourism demand Time discretion Income discretion Elderly Middle aged Young FLC and changes in demand for the tourism product Figure 2.1 28 Chapter 2 The Nature of Tourism Demand
- 54. restaurant products thatwill socialise children to want to take certain types of activity holidays so as to encourage continual demand. For many, the arrival of children coupled with the responsibility of a home may mean that constraints of time and money depress travel propensity. Holiday preferences switch to domestic destinations, self-catering accommodation, and visiting friends and relatives. This is known as the full nest stage and constraints on travel will depend on the age of the children. The global financial crisis initiated in 2008 exacerbated this situation, introducing the concept of the ‘staycation’ to the travel trade, focusing on domestic holidays. As children grow up, reach the young adult stage and begin to travel independently, constraints of time and finance are lifted from parents and their travel propensity increases in what is termed the ‘empty nest’ phase. This is often linked to lifestyle variables when in married middle age holiday entitlement, income and mobility are often at a maximum and this is reflected in the level of holiday-taking (see Figure 2.1). This is a time for long-haul travel – the cruise market typically comprises this group which extends into older age provided the level of discretionary income is maintained. Elderly The emergence of early retirement at 50 or 55 years is creating an active and mobile group in the population of many countries who will demand both domestic and international travel. However, it is too simplistic to view senior travellers as homogeneous and there are many different categories – partly defined by the tension between physical health and financial resources. In later retirement, lack of finance, infirmity and often the loss of a partner act to offset the increase in free time experienced by this group. Holidays become more hotel- based and travel propensity decreases, switching to the domestic market, commonly coaching holidays. Conclusions The explanatory framework provided by the FLC approach is a powerful one in that it helps us to understand how situation-specific life-stage conditions exert a great influence on tourism demand. It has implications for At certain stages of the domestic life cycle the needs and demands of children determine the family’s holiday decisions. Source: Travel Pictures/Alamy Images Photograph 2.1 Individual Tourism Demand 29
- 55. Economic considerations The economicanalysis of tourism demand focuses on factors which affect an individual’s willingness to pay and ability to pay. Typically the demand for travel goods and services by a person, say, the ith individual may be expressed as: qi = fi (Pt1, P1, c c, Pm, yi , zi ) (2.1) where qi = a quantity measure of the individual’s tourism demand and is functionally fi related to the following: Pt = the price of the tourism product; P1. . . . . . , Pm = the prices of alternative goods and services which are making claims on the visitor’s budget; yi = the person’s income; zi = sociological and demographic factors that characterise this individual’s demand as in Table 2.1. These are taken to change slowly over time. By holding each of the explanatory factors or variables in equation (2.1) that are not of inter- est constant, known as the ceteris paribus assumption, it is possible to specify the relationship between qi and its own price, Pt. Equation (2.1) thus becomes: qi = fi (Pt, ceteris paribus) = fi (Pt) (2.2) This relationship is illustrated in Figure 2.2, in which DD is termed a demand schedule, and refers to the quantities of the tourism product that an individual wishes to purchase at different prices at a given point in time. Generally, the form of this relationship between price and quan- tity purchased is an inverse one, i.e. the higher the price of the product, the lower is the demand; the lower the price, the greater is the demand. It is normal to characterise the demand schedule in Figure 2.2 by an appropriate measure which expresses the responsiveness of quantity to changes in price. Such a measure is termed providers, for the analysis of market needs of particular population groups (for example, the growing numbers of relatively wealthy elderly people in Western countries and the expansion of the cruise industry) and has clearly been used as a basis for market segmentation by tour operators and wholesalers. The cycle is not just a progression by phase or age but represents likely fluctuations in discretionary income and changes in social responsibilities. The single stage represents an individual living away from home with few responsibilities but with the need for affiliation with others and the likelihood of purchases of leisure and entertainment, personal care items and clothes. It is also useful in explaining many barriers to travel – energy and social ties tend to decline with age, while women with young children demonstrate lower levels of travel. Equally it highlights the importance of discretionary income which may be very limited for the poorer groups in society and hence the need for social provision of holidays for the less well-off, particularly those who have some permanent disability. Source: Updated from Fletcher et al. (2013) Tourism Principles and Practice, 5th edn, Pearson Education, London. Discussion Questions 1. How may tour operators use the FLC to segment their products? 2. Examine typical holidays at different periods of the FLC. 3. Using the checklist in Table 2.1, consider the barriers to tourism that might be experienced at each stage of the FLC. 30 Chapter 2 The Nature of Tourism Demand
- 56. the ‘elasticity ofdemand’ and in terms of equation (2.2), the own-price elasticity of demand (ei ) measures the ratio of the percentage change in quantity (qi ) to the percentage change in price (Pt), i.e.: ei = , change in quantity (qi ) , change in own price (Pt) (2.3) Looking at Figure 2.2 it may be seen that for a movement down the demand schedule, equation (2.3) becomes ei = (qi 2 - qi 1) qi 1 (Pt2 - Pt1) Pt1 (2.4) Since quantity and price move in opposite directions the value of when measured from actual data is negative, but it is conventional to consider in its absolute or positive value; thus we refer to an own price elasticity of demand as 1.0, 2.0, 3.0, etc., and not -1.0, -2.0 or -3.0. The critical value of ei is 1.0; for goods that have an own-price elasticity greater than 1, demand is said to be elastic. Products exhibiting this property are goods that are normally viewed as luxury items – overseas holidays or dining out. Typically international travel has an own price elasticity of between 1.2 and 1.5, which implies that a 10% fall in price will produce a 12–15% increase in demand. When a good has an own-price elasticity of demand of less than 1 it is classed as a necessity. For necessities, quantity adjustments respond sluggishly to price changes since they are considered essential purchases, as in the case of food, clothing and utilities such as gas, electricity and water. These items attract lower rates of taxation or even subsidy from govern- ments and price rises often become political issues. If we now repeat the above in a similar manner, but with respect to alternative goods and service competing for the visitor’s budget, we have: qi = fi (P1, c c, Pm)(2.5) By examining the relationship between qi and, say, Pm we are able to derive what are described as cross-price elasticity effects: ei x = , change in quantity (qi ) , change in mth price (Pm) (2.6) Price Quantity qi 1 qi 2 pt1 pt2 D D Individual demand for the tourism product Figure 2.2 Individual Tourism Demand 31
- 57. When the mthgood or service is a substitute for choosing a tourism trip, then the effect of a reduction in its price is to cause the demand for qi to fall. In Figure 2.3 this is represented by a shift in the demand schedule to the left as q i 1 falls to q i 2. This implies that ei x takes on a positive value. Conversely, if the mth good or service is a complement, then a fall in its price will induce the demand for qi to increase from q i 1 to q i 3, in which case ei x is negative in value. Price Complements Quantity qi2 pt1 qi1 qi3 D D Substitutes Effects of substitutes and complements on the tourism product Figure 2.3 Price is a real constraint on demand for tourism, particularly for expensive holidays such as winter sports. Source: AL RF (John Foxx Images)/Pearson Online Database Photograph 2.2 32 Chapter 2 The Nature of Tourism Demand
- 58. Finally, we mayalso plot qi against yi , the individual’s income. This is most important, because in practice income experiences the greatest variation amongst potential visitors and is the most significant determinant of tourism trends. The graph traced out by this plot is known as an Engel curve, after its creator Ernst Engel, who was the first person to study the relation between the quantity of a product sold and income. His findings that the percentage of income spent on food declines as income rises is called Engel’s Law. A ‘normal’ product is where consumption increases as income rises: if the converse is true then the product is called ‘inferior’. Analogous to equation (2.6) we may define the income elasticity of demand as: ei y = , change in quantity (qi ) , change in quantity (yi ) (2.7) If ei y is greater than one, then the product may be considered a ‘luxury’, and if positive but less than one in value it is regarded as a ‘necessity’. When ei y is negative the product is considered an ‘inferior’ good or service, since as income rises less is consumed. Examples of these relation- ships are shown in Figure 2.4 and empirically holiday travel has revealed itself, as a rule, to be a luxury product. Typically the average values of ei y for overseas holidays from the major tourism generat- ing countries are in the region of +1.5 to + 2.0, thus ensuring that volume will respond more than proportionately for unit changes in income. It appears that despite various bouts of recession in the advanced economies since the development of modern tourism in the 1950s, the volume of pleasure travel has continued to rise. Observers of this phenomenon have explained this as a ‘ratchet effect’ or ‘habit persistence’: once people participate in tourism they seem to want more and are loath to put aside their vacation in the face of an economic downturn. Often adjustments are made in terms of the length of trip, the choice of where to stay, and the type of accommodation, as in the recent concept of the ‘staycation’ arising from the uncertainties generated by the global financial crisis dating from 2008, as men- tioned in Mini Case Study 2.1. But in the main, past recessions have not affected the industry to any great extent. This is not to suggest that holiday travel is a necessity, rather that once Effects of income changes on consumption – Engel curves Figure 2.4 Individual Tourism Demand 33
- 59. consumers have acquireda taste for it they seem to place it higher on their list of priorities than other luxuries. Market Tourism Demand In Chapter 1, for the purpose of constructing the TSA, our concern was with the market for tourism products, not just individuals. Since individual tourists make up the market, it is rea- sonable to suppose that market demand curves respond in a similar fashion to individual curves, hence a first approach is to sum the individual demand schedules to arrive at the market schedule. This is illustrated in Figure 2.5, which supposes that there are only two individuals in the market. The market demand is derived from the horizontal summation of the two indi- vidual schedules. We can see that the market schedule has a distinct ‘kink’ where the two individual demands join: this arises because the market is assumed to consist of only two per- sons. As the number in the market increases so any kinks are ironed out and a more or less smooth schedule results. If we designate p as the population of visitors, then summing qi in equation (2.1) for all visitors, holding income and all other determinants save prices constant, gives the market demand Q as: Q = a p i=1 qi = a p i=1 fi (Pt, P1, c c, Pm) = F(Pt, P1, c c, Pm) (2.8) Equation (2.8) tells us that since all individuals broadly face the same set of prices we can model total tourism demand (summed over all visitors, where the Greek sigma ∑ represents summation) as a function of prices in the marketplace, from which we can calculate own price and cross-price elasticities as in equations (2.4) and (2.6), but this time they are market averages as opposed to individual values. However, if we now introduce the income variable, sociological and demographic factors from equation (2.1) into equation (2.8) the relationship is not so simple: Q = F(Pt, P1, c c, Pm, y1 , yi , yp , z1 , zi , zp )(2.9) Equation (2.9) tells us that to correctly represent a market demand schedule, we need to know the personal circumstances of each individual purchaser of the tourism product and their O Q 5 q1 1 q2 q1 q2 Individual 2 Individual 1 Price Quantity Market Derivation of a market demand curve Figure 2.5 34 Chapter 2 The Nature of Tourism Demand
- 60. incomes. This isclearly an impossible task, so in practice in order to estimate market demand approximations have to be made. Looking first at personal circumstances, the zi factors, we can ● assume that they alter slowly, for example working hours or holidays with pay; ● segment the visitor market into specific groupings in accordance with a range of demograph- ics or social factors (see Chapter 20), such as occupation, age group within the FLC or region of origin; ● use a general variable that gives weight to the most salient characteristic of the visitors we are considering, say, educational attainment. The most common practice when dealing with the income variable is to replace all individual incomes by their total sum Y, so having made any adjustments for personal circumstances, equation (2.9) simplifies to: Q = F( Pt, P1, c c, Pm, Y) (2.10) This equation forms the basis of much of the econometric estimation that is discussed in Chap- ter 4, which looks at measuring visitor demand. There is still however a complication that is implicit in equation (2.10), and this relates to the distribution of income amongst individuals. In any period of time, alterations in the current distribution of income will mean that market demand curves will behave differently to individual ones, invalidating the summation action that gave us equation (2.10). This is known as the aggregation problem and is illustrated in Table 2.2, which lists the demand of two individual visitors with similar tastes. If we let the total income shared between the two visitors amount to no more or less than 3,000 currency units, that is: Y = y1 + y2 = 3,000 (2.11) Suppose in the first instance that both persons have the same income of 1,500, then: Q = q1 + q2 = 14 + 14 = 28 (2.12) Now, let y1 = 1,000 and y2 = 2,000, thus maintaining the income constraint given by equation (2.11). Once again summing visitors’ demands yields: Q = q1 + q2 = 10 + 16 = 26 (2.13) Comparing equations (2.12) and (2.13) indicates that for the same aggregate income levels, but different distributions, the level of tourism consumption changes, which is in accordance with reality. This has implications for the discussions on measurement in Chapter 4, in that the dou- bling of income makes little difference to empirical demand models provided the distribution of income shares do not change much. Evidence supports this notion, but it should by now be apparent through comparing equation (2.9) with equation (2.10) that statistical demand rela- tionships are only approximations or ‘caricatures’ of the real world. Demand and the distribution of income Table 2.2 Quantity demanded Income level q1 and q2 y1 and y2 10 1,000 14 1,500 16 2,000 Market Tourism Demand 35
- 61. The generating regionsof Leiper’s tourism system are influential in shaping the nature and scope of tourism flows around the world. As the tourism industry has developed in volume and impor- tance, the techniques and approaches outlined in this chapter are increasingly applied to evaluating tourism demand. The factors or determinants affecting tourism demand are many and different disciplines consider the subject from a range of viewpoints. Economists discuss demand in terms of models and markets, so as to bring supply and demand together as in Leiper’s system. Other fields of study offer a more qualitative appreciation, as in the case of responsible tourism, in other words, visitors exercising their ‘right’ to travel but doing so in a ‘responsible’ way. It is thought that this will become increasingly of consequence if the integrity of destinations, societies and the globe itself is to be preserved. Such qualitative considerations help to give context to the available statistical information on tourism, for by understanding the various determinants of demand, it is possible to identify the barriers preventing people from travelling. This is significant, not just from the welfare standpoint of increasing society’s access to travel, but also from a commercial point of view in increasing the viability of enterprises. Finally, this chapter has outlined the assumptions that are required to translate the behaviour of individual demand schedules into market demand in preparation for empirical measurement aspects, which are the subject of Chapter 4. Conclusion Self-Check Questions 1. What do you consider are the top 10 factors affecting tourism demand? 2. Suggest ways in which travel to a destination can be carbon neutral. 3. List some of the reasons why an individual may not participate in tourism. 4. Review the concepts of demand substitutes and complements in respect of a leisure break to a city destination and provide two examples of each. 5. Identify some typical holiday patterns that occur at different stages of the family life cycle. https://www.youtube.com/watch?v=2_IwD5wRogQ Factors influencing tourism demand. https://www.youtube.com/watch?v=Enz6z9jGmsk Basic demand economics. Youtube Dwyer, L., Forsyth, P. and Dwyer, W. (2010) Tourism Economics and Policy, Channel View Publications. A comprehensive textbook on tourism economics that gives many examples covering issues on tourism demand. Fletcher, J., Fyall, A., Gilbert, D. and Wanhill, S. (2013) Tourism Principles and Practice, 5th edn, Pearson Education, London. Jafari, J and H Xiao (2016), Encyclopedia of Tourism, Springer, London. A number of entries providing definitive view of elements of tourism demand, the gravity model and other con- cepts, written by the leading expert in each field. United Nations World Tourism Organization (UNWTO) (1999) Global Code of Ethics for Tourism, Madrid. Uysal, M. (1998) ‘The determinants of tourism demand: a theoretical per- spective’, pp. 79–95, in Ioannides, D. and Debbage, K.G. (eds) The Economic Geography of the Tourist Industry: A Supply Side Analysis, Routledge, London. References and Further Reading 36 Chapter 2 The Nature of Tourism Demand
- 62. Websites http://www.tourismconcern.org.uk One of thefirst pressure groups for the responsible consumption of tourism and a comprehen- sive resource. http://www.world-tourism.org The UNWTO’s site is an excellent source for new initiatives concerning tourism demand and the Global Code of Ethics. Major case study 2.1 Young people and tourism Their current contribution to global tourism activity is strong, double-digit strong. In 2015, the youth travel segment accounted for a huge 23% of international arrivals. As global arrivals as a whole approach 1.2 bil- lion travellers in 2015, at current rates of growth and contribution, youth travel is estimated to be just over 270 million for that same year according to the World Youth, Student and Educational Travel Confederation (WYSE, 2016). On this basis the numbers should rise to 300 million by 2020. Credit Where It Is Due While the numbers are staggering, what is often absent in statistics is the heartbeat of the people that make up the metrics. The global tourism sector takes great pride in the various dimensions of impact that travel has. As all professionals know, it is about so much more than sim- ply measuring arrivals, since tourism has become a key that is actively, excitedly, and ambitiously being used by nations across the globe to unlock their economies, societies, and identities. In so doing, nations are open- ing their people up to the possibilities of the future. Youth travel offers a number of other key strategic benefits that align directly to the core mandates of tour- ism authorities around the globe, including: ● The youth market is a US$283 billion enterprise; ● Spends more than those in other travel sectors; ● Year-round visitation: unconstrained by holiday peri- ods, able to travel during off-peak seasons when more competitive rates and availabilities allow for longer stays. ● Take four times longer travelling to a destination than the average visitor; ● The average young traveller spends US$3,000 per trip; There are about 1.8 billion people on Earth today who are 15–30 years old. They busily travel around the world in massive numbers. They descend on locations and immediately fill the space with intense colour, sound, and what could easily be described as a hive of activity. Their backpacks provide the wings of their mobility. The sharpness of their minds, words, and texts can be stinging in their often vowel-less expressions and yet their youthful nature can be very engaging. Some destinations tend to view them, somewhat naïvely, as a nuisance, overtaking the image and peace- fulness of the places they arrive into. Others, visionar- ies of the global travel and tourism world, see these travellers not as a nuisance, but as a fundamental necessity. Because it is these travellers, youth travel- lers, who, through their journeys, are securing the future of the industry. Without them, there is no hope of our sector growing across the globe. Still, sadly the eye can judge based on packaging before the mind understands the value of the contents within. What value can these young people from nations across the globe, typically between the ages of 16 and 29, travelling on their own or with a few mates, often without set itineraries, and carrying their worldly pos- sessions in a small sack snugly positioned on their back for easy transporting whether sitting on a plane, a local bus, a rickshaw, or a train, possibly bring to a global sector shaped by the creation of infrastructure, acces- sibility, investment, and promotion? How can the contri- bution of these young people be of such significance when standing alongside grown-ups? What value, indeed! What is so often overlooked is that those small backpacks carry deep within them smart phones (booking by smart phones is only second to price in decisions), cutting-edge technology, and well-fed credit cards that turn these floating travellers of today into formidable shapers of the future of tourism. Major case study 2.1 37
- 63. work experience and/orvolunteering which help to broaden their skills and knowledge. In this way they directly participate and contribute to local communities; ● The most popular cities are Rio de Janeiro, Tokyo, Sydney, Buenos Aires and San Francisco. In the above ways the benefits go even further than just the fulfilment of strategic priorities and political mandates. The innate ‘insider’ quest of a youth travel- ler turns this segment into a vital force of qualitative growth and development of destinations. Young peo- ple from nations across the globe who cross borders, create a borderless community of global citizens shar- ing experiences, provide invaluable contributions, not only quantitatively, but also in terms of how they create and champion emerging trends, as well as respond to emerging issues facing the tourism sector. Not only do these travellers bring their own freshness of spirit, imagination, and opportunity to the places they visit and people they connect with through personal-sharing mediums, they also possess an inner courage and curiosity when it comes to locations of natural, politi- cal, or social crisis. They want to go see, understand, and even help. From a personal perspective this fos- ters an appreciation of diversity and an acceptance of cultural differences, which builds the kind of confi- dence that employers see as a definite advantage in the workplace. ● They have a higher lifetime value than other travel sectors because the backpackers and students of today are tomorrow’s honeymooners, family, busi- ness and leisure travellers; ● Increase in length of stay: average length of stay is 58 days; ● Increase in revenues: making a higher level of finan- cial contribution to local enterprises (especially SMEs) as more inclined to eat, sleep, and shop at local establishments; ● Are more resilient to economic downturns and are less risk averse than mainstream travellers; ● Are trend-setters and pioneers in exploring tourism locations and opening up new markets; ● Communicate their experiences to a wide audience through their use of social media. Vietnam and other Asian markets are examples of areas that developed from the backpacker’s market; ● Are leaders in environmental and socially-conscious causes; ● Dispersion throughout the destination and region. This goes without saying, whether self-guided or on youth travel tourism. ● Travel to seeking meaningful, but educational travel experiences (more than half have a Bachelor’s Degree) that mix cultural immersion, study, language learning, The volume of young people travelling continues to rise. Source: AISPix by Image Source/Shutterstock.com Photograph 2.3 38 Chapter 2 The Nature of Tourism Demand
- 64. future mainstream markettrends. Youth travellers opened many of today’s most popular destinations and led the trend to independent travel that has now spread through the industry.’ Importantly, David Jones emphasises the need to be careful in classifying all youth travellers as simply backpack carrying, Internet café visiting, solo adventur- ers: ‘The youth market demand has been driven by the growth of popular international activities. In the 80s 90s, demand was driven by a massive growth in “back- packing” and in the 90s by the new student working holiday opportunities. The biggest growth sector in youth travel 2000–2010, was voluntary experiences. Acts of community service are increasingly important to young people, and the motivation to do some good in the world created a massive demand for international voluntary experience programs in the first decade of the 21st century. This is a demand that continues today.’ The WYSE regards those destinations that deliver on the interests of the youth market, including the potential for discovery, cultural interaction, heritage exploration, and action, as ones that will be the protecting their brands now and into the future. In this spirit, the tourism sector needs to embrace the invaluable contribution that youth travel makes to one of the world’s fastest growing, and most widely beneficial, economic sectors. Whether they are young, traditional ‘Wwestern’ (i.e., American, Canadian or European) travellers carrying backpacks, or young Asian travellers carrying Burberry bags, youth travellers are defining the direction of our world on the move. With more than a billion people travelling the globe, all types of travellers and travel choices are needed to ensure that the power of the tourism economy is leveraged across all seg- ments and regions. Tourism needs the guided tours and all-inclusive resorts as much as it needs the business traveller hotels and backpacker hostels. There is no ‘right or wrong’, no ‘best way’, no ‘more authentic’, no ‘more valuable’. It is all about shaping the future through enabling travellers to live out their travel dreams today. Source: Updated from Anita Mendiratta, CNN Task Group/ETN, 1 March 2012, the publications of WYSE Travel Confederation and https://www. wysetc.org/ (accessed 16 April 2017). While the motivations of youth travellers change slowly over the years, they go far beyond the quest for sun, sand, sea, and stories. At the heart of youth travel is a wonderfully personal, positively selfish, desire of the traveller to be a more active participant in the world. The travel is about them – their experiences, their learn- ing, their time, their sharing (e- and otherwise). They are travelling with purpose, choosing to put themselves ‘out there’ to be able to experience the world unvar- nished, unpackaged, unedited, and unafraid. For many travel segments, cultural and environmental awareness and appreciation comes implicitly through travel experiences chosen – locations, accommodation, tours, transport methods. The youth travel segment, however, is composed of hundreds of millions of indi- viduals who explicitly seek to learn, to explore, to be immersed, to be involved, and to make an impact. Youth travellers view ‘Responsible Tourism’ as a verb, not a noun. To travel the world with only a backpack is an explicit expression of ‘I want to be a part of where I am through how I travel, where I eat, where I sleep, who I meet, and what stories we share.’ A backpack is an overt statement of ‘I am open’. The most obvious shift in youth and student travel in this century has been the growth of social media and mobile communications, which have revolutionised the way that people interact with travel products and gather information. Young travellers are now using more diverse sources of information and are also beginning to use new mobile media to search for information and book travel products while travelling. Same Planet, Different Worlds One of the world’s strongest, most passionate advo- cates of the power of the youth travel segment is David Jones, the former Secretary General of WYSE [World Youth, Student Educational Travel Confed- eration]. He is clear in his belief that youth travellers – travellers who distinctly do not wish to be referred to as ‘tourists’ – provide a compass for future tourism sector growth . . . : ‘Understanding the characteristics and trends of the youth market offers an insight on Major case study 2.1 39
- 65. Chapter 3 Tourism ConsumerBehaviour Learning Outcomes This chapter provides an understanding of how different factors and influences, when combined, will generate a consumer’s demand for tourism. By reading this chapter you will: ● have a knowledge of the main elements influencing the buyer decision process in tourism; ● have an understanding of the theory of motivation applied to tourism; ● be able to identify the roles and psychographics of tourists and how these are associated with specific forms of tourism and tourist needs; and ● have an awareness of the strengths and weaknesses of the key models that seek to explain the decision-making process for the purchase of tourism products.
- 66. In the previouschapter we outlined basic definitions and concepts of demand and showed how the manage- ment of demand has changed in the past 75 years. This chapter examines additional factors of demand by providing an overview of the consumer decision-making process in tourism. The dynamics of group and indi- vidual consumer decision processes are an important aspect of all consumption patterns. This chapter shows that demand for tourism can be treated as a consumption process that is influenced by a number of factors. These may be a combination of needs, motivation and desires, availability of time and money, images, percep- tions and attitude or roles. In this chapter we review the major approaches surrounding these concepts in order to explain how these factors influence individual behaviour in tourism. For tourism, the models utilised by theorists have been adapted from more general approaches in the consumer marketing literature. As we will see, this creates some issues in terms of the practical use of these models and their ability to capture the par- ticular nature of the tourism purchasing decision. Introduction The Individual Decision-Making Process At the individual level it is clear that the factors influencing demand for tourism are closely related to models of consumer behaviour. No two individuals are alike and differences in atti- tudes, perceptions, images and motivation have an important influence on travel decisions. It is important to note that: ● attitudes are learned predispositions of response and are related to an individual’s percep- tion of the world; ● perceptions are mental impressions which help us organise our world based upon many input factors from childhood, family, work experiences, education, books, television pro- grammes and films and promotional images. Perception involves the encoding of informa- tion by individuals and has a major influence on attitude and behaviour towards products; ● travel motivators explain the dynamics of why people want to travel based upon the inner urges that initiate travel demand as part of need-satisfying goals; and ● images are sets of beliefs, ideas and impressions relating to companies, products and destinations. The Fundamentals of Consumer Behaviour and Tourism For an understanding of tourism demand it is essential to recognise the factors that shape tour- ism consumer behaviour. This allows us to appreciate the way in which tourism consumers make decisions and act in relation to the consumption of tourism products. While the term ‘con- sumer’ would seem to indicate a single concept of demand, the reality is that there is a diversity of psychological, sociological and economic aspects related to consumer behaviour leading to decision making. We need to study the consumer behaviour of tourists to be aware of: ● the history of approaches by authors to understanding the why, where and what of tourism decision making; ● the needs, purchase motives and decision process associated with the consumption of tourism; ● the influence of the different effects of various promotional tactics, including the Internet; ● the different types of perception of risk for tourism purchases, including the impact of terrorist incidents; ● the different market segments based upon purchase behaviour; and ● how managers can improve their chance of marketing success. The Fundamentals of Consumer Behaviour and Tourism 41
- 67. Many variables willinfluence the way consumption patterns differ. Recent technological inno- vations, demographic changes and changing consumer tastes and expectations all affect tourism demand. Patterns will change based upon the different products available and the way individu- als have learnt to purchase tourism products. The variations are complex and therefore it is more practical to deal with general behavioural principles. These are often dealt with in a framework that includes the disciplines of psychology, sociology and economics. Figure 3.1 provides a Gay tourism has emerged as a market requiring more understanding. Photograph 3.1 Socio-economic influences Cultural influences Perception Consumer as decision maker Motivation or energisers Personality/ attitude Learning Family influence Reference group influence Consumer decision-making framework Figure 3.1 42 chapter 3 Tourism Consumer Behaviour
- 68. Energisers and Effectorsof Demand Motivation An understanding of motivation is the key essential to tourist behaviour as it helps answer the question of why people travel. The classic dictionary definition of motivation is derived from the word ‘motivate’, which is to cause a person to act in a certain way or to stimulate interest. We can also refer to the word ‘motive’, which is concerned with initiating movement or induc- ing a person to act. Therefore, we can see that this is a process that leads to the forming of behavioural intentions. As would be expected, tourism motivation is a key concept as motiva- tion is a driving force that impels and influences a trip and is a starting point of consumer behav- iour. If we look at the way tourists satisfy unfulfilled needs then general theories, such as that by Maslow, discussed below, allow us some insight into the levels of demand related to different need states. Maslow’s hierarchy model Maslow’s hierarchy of needs (Figure 3.2) is probably the best-known theory of motivation, perhaps because of its simplicity and intuitive attraction. The theory of motivation proposed by Maslow (1970) is in the form of a universal ranking, or hierarchy, of the arrangements of individual needs which are in mutually exclusive levels. The early humanistic values of Maslow seem to have led him to create a model where self-actualisation is valued as the level ‘man’ should aspire to. He argued that if none of the needs in the hierarchy was satisfied, then the lowest needs, the physiological ones, would dominate behaviour. If these were satisfied, however, they would no longer motivate and the individual would be motivated by the next level in the hierarchy. simplification of some of the main influences affecting the consumer as decision maker. These are discussed within this chapter. It is possible to view the tourism consumer decision process as a system made up of four basic elements which can be found in Figure 3.1: 1. Energisers of demand. These are the forces of motivation that lead a tourist to decide to visit an attraction or go on a trip. Motivation allows us to understand the activation of behaviour. 2. Effectors of demand. The consumer will have developed ideas of a destination, product or organisation by a process of learning, attitudes and associations from promotional messages and information. This will affect the consumer’s image and knowledge of a tourism product, thus serving to heighten or dampen the various energisers that lead to consumer action. Des- tinations, or forms of tourism (such as green tourism), may become more or less fashionable on the basis these processes. 3. Roles and the decision-making process. Here, the important role is that of the individual or group/family member as to their involvement in the different stages of the purchase process and the final resolution of decisions about the when, where and how of the overall tourism product. 4. Determinants of demand. In addition, the consumer decision-making process for tourism is underpinned by the determinants of demand. There is a difference between the motivation to travel and the ability to travel. Even though motivation may exist, demand is filtered, con- strained or channelled due to economic (e.g. discretionary income), sociological (reference groups, cultural values) or psychological (perception of risk, personality, attitudes) factors. As the complementary costs of travel change (air travel, accommodation, activities, etc.) then demand may switch from one destination to another. We further review the determi- nants of demand and its measures in Chapter 4. Energisers and Effectors of Demand 43
- 69. Maslow identified twomotivational types, which can be greatly simplified as: 1. deficiency or tension-reducing motives; and 2. inductive or arousal-seeking motives. Maslow maintained that his theory of motivation is holistic and dynamic and can be applied to both work and non-work spheres of life. He treats his levels of need as universal and innate, yet of such instinctual weakness that they can be modified, accelerated or inhibited by the environment. He also stated that while all the needs are to some extent innate, only those behaviours that satisfy physiological (biogenic) needs are unlearned and other acquired needs (psychogenic) are developed after birth. Although a great deal of tourism demand theory has been built upon Maslow’s approach, there are a number of questions that Maslow does not answer: ● It is not clear from his work why he selected five levels or why the needs are ranked as they are. His research was first published in 1943 and suffers from a dated analysis of an American ‘individualistic’ culture which is dissimilar to Asian (collectivist) or poorer societies. ● The stress of the model is only on satisfaction and not dissatisfaction as the driving force. ● It is claimed people are not all similar and so some require different types of motives to oth- ers when satisfying their needs. ● He did not justify his model based upon appropriate research to generalise the model, or pro- vide the measure of what level satisfaction needs to be in order to make the next level of need operative. In addition there are no set criteria to judge that a need has been satisfied and has ceased to be a motivating force. This is important if we consider that some motives, such as those based upon physiological needs, are present at all times. ● He never tried to expand the original set of motives given the needs are simple and generic. Tourism authors have borrowed extensively from Maslow, simply because he has provided a convenient set of levels of need that can be relatively easily applied and labelled. The notion that a comprehensive coverage of human needs can be organised into an understandable hierarchical framework is of obvious benefit to tourism theorists. Within Maslow’s model, human activity is wired into predetermined, understandable and predictable aspects of action. This is very much in the behaviourist tradition of psychology as opposed to the cognitive approach, which stresses the concepts of irrationality and unpredicta- bility of behaviour. However, Maslow’s theory does allow for humans to transcend the mere embodiment of biological needs that sets them apart from other species. To some extent the popularity of Maslow’s theory can be understood in moral terms. It sug- gests that, given the right circumstances, people will grow out of their concern for the material- istic aspects of life and become more interested in ‘higher’ things. Maslow’s hierarchy of needs Figure 3.2 1. Physiological – hunger, thirst, rest, activity 2. Safety – security, freedom from fear and anxiety 3. Belonging and love – affection, giving and receiving love 4. Esteem – self-esteem and esteem for others 5. Self-actualisation – personal self-fulfilment Lower Higher 44 chapter 3 Tourism Consumer Behaviour
- 70. An evolving understandingof motivation in tourism The study of motivation has been derived from a range of social science fields, which has resulted in a diversity of approach in tourism research and publications. This diversity is reflected in the approaches of various authors’ discussions of how motivation influences tour- ists’ consumer behaviour as outlined below. Dann Following on from early approaches to understanding motivation from authors such as Lundberg (1971), Dann argued for the need to establish a conceptual clarification of tourist behaviour. Dann (1981) has pointed out that there are seven elements within the overall approach to motivation: 1. Travel as a response to what is lacking yet desired. This approach suggests that tourists are motivated by the desire to experience phenomena that are different from those available in their home environment. 2. Destination pull in response to motivational push. This distinguishes between the motiva- tion of the individual tourist in terms of the level of desire (push) and the pull of the destina- tion or attraction. 3. Motivation as fantasy. This is a subset of the first two factors and suggests that tourists travel in order to undertake behaviour that may not be culturally sanctioned in their home setting. The tourist can, as part of this, be freer and more liberated when undertaking the trip. 4. Motivation as classified purpose. A broad category which invokes the main purposes of a trip as a motivator for travel. Purposes may include pleasure, novelty or change as part of visiting friends and relatives, enjoying leisure activities, or study. 5. Motivational typologies. This approach is internally divided into: a) behavioural typologies such as the motivators ‘sunlust’ (search for a better set of ameni- ties than are available at home) and ‘wanderlust’ (curiosity to experience the strange and unfamiliar) as proposed by Gray (1970); and b) typologies that focus on dimensions of the tourist role. 6. Motivation and tourist experiences. This approach is characterised by interpreting the behaviour of the tourist. It would include how a tourist relates to the authenticity of tourist experiences and how this depends upon beliefs about types of tourist experience. 7. Motivation as auto-definition and meaning. Here the emphasis is placed on how tourists judge the host people and define the situation they find. This suggests that the way in which tourists define their situations will provide a greater understanding of tourist motivation than simply observing their behaviour. Dann suggests that these seven identified approaches demonstrate a ‘definitional fuzziness’ which, if not clarified, may make it difficult to discover ‘whether or not individual tourism researchers are studying the same phenomenon’. Dann utilises a push rather than adding the development of a pull approach, and draws mainly from sociology to develop his concepts, and in doing this has been criticised for not taking a more psychological approach to the understand- ing behind his concepts. McIntosh, Goeldner and Ritchie McIntosh, Goeldner and Ritchie (1995) utilise four categories of motivation: 1. Physical motivators: those related to refreshment of body and mind, health purposes, sport and pleasure. This group of motivators are seen to be linked to those activities which will reduce tension. The need to reach a balance or equilibrium state is inherent within this type of approach. 2. Cultural motivators: those identified by the desire to see and know more about other cul- tures, to find out about the natives of a country, their lifestyle, music, art, folklore, dance, etc. Energisers and Effectors of Demand 45
- 71. 3. Interpersonal motivators:this group includes a desire to meet new people, visit friends or relatives, and to seek new and different experiences. Travel is an escape from routine rela- tionships with friends or neighbours or the home environment, or it is used for spiritual rea- sons. 4. Status and prestige motivators: these include a desire for continuation of education (i.e. personal development, ego enhancement and sensual indulgence). Such motivators are seen to be concerned with the desire for recognition and attention from others, in order to boost the personal ego. This category also includes personal development in relation to the pursuit of hobbies and education. Plog In 1974, Stanley Plog developed a theory based upon his research related to why a large sec- tion of the US population of that time did not fly and how could they be encouraged to fly. This allowed him to classify the US population into a series of interrelated psychographic types. The initial research found that personality types exhibited: (i) territory boundness – where individuals had not travelled often; (ii) generalised anxieties – being insecure; (iii) sense of powerlessness – having little control over one’s life. This group led to his defini- tion of the tendency toward pyschocentrism and those who travel less and was characterised as being different to allocentrics, who are venturesome and self-assured. It should be noted that in tourism, Plog’s use of the terms (types) have a different meaning to those used in psy- chological research. These types were then described as having a range of two extremes: 1. The ‘psychocentric’ type is derived from ‘psyche’ or ‘self-centred’, where an individual cen- tres thoughts or concerns on the small problem areas of life. These individuals tend to be conservative in their travel patterns, preferring ‘safe’ destinations and often taking many return trips. For this latter reason, market research in the tour-operating sector labels this group as ‘repeaters’. 2. The ‘allocentric’ type derives from the root ‘allo’ meaning ‘varied in form’. These individu- als are adventurous and motivated to travel/discover new destinations. They rarely return to the same place twice, hence their market research label ‘wanderers’. The majority of the population fall in between these extremes in an area which Plog termed ‘midcentric’. Therefore, the ‘midcentrics’ represent the highest number of travellers. Plog also found that those who were at the lower end of income scales were more likely to be psychocen- tric types whereas at the upper income band there was more of a likelihood of being allocentric. In a later study it was observed that middle-income groups exhibited only a small positive cor- relation with psychographic types. This created a problem because there were a number of psychographic types who could not, through income constraint, choose the type of holiday they preferred even if they were motivated towards it; after all, to be a wanderer around the globe can be expensive. Plog’s theory closely associates travel motivation to types of destination and can help in pro- viding reasons for the rise and fall of destinations. Allocentrics, for example, will prefer destina- tions at the frontier of tourism, unspoilt and undiscovered by the travel trade. Psychocentrics, on the other hand, desire the comfort of a well-developed and ‘safe’ destination. While this is a useful way of thinking about tourists and destinations, it is more difficult to apply it. For exam- ple, tourists will travel with different motivations on different occasions. A second holiday or short-break weekend may be in a nearby psychocentric-type destination, whereas the main hol- iday may be in an allocentric-type destination. Smith (1990) tested Plog’s model, utilising evidence from seven different countries. He con- cluded that his own results did not support Plog’s original model of an association between personality types and destination preferences. Smith questioned the applicability of the model to countries other than the United States. In answer to Smith, Plog (1990) questioned the valid- ity of Smith’s methodology. 46 chapter 3 Tourism Consumer Behaviour
- 72. As we haveshown, the concept of motivation as a major determinant of tourism behaviour is widely used by tourism authors. Yet most authors fail to provide a definitive study or sound scientific basis for their motivation categories, or provide a clear indication of the proportion of tourists who would exhibit one type of motivation rather than another. An exception to this is shown in Figure 3.3. Here motivators were identified by research of a sample based upon a quota sample matched to the British TouristAuthority profile for overseas travel from the United Kingdom. The response involved individuals providing evidence of a cluster of motives, each of which is important as a determinant of demand. A summary of the concept of motivation We can see that the dimensions of the concept of motivation in the context of travel are difficult to map. In summary they can be seen to include: ● the idea that travel is initially need-related and that this manifests itself in terms of wants and the strength of motivation or ‘push’ and ‘pull’ as the energiser of action; ● motivation is grounded in sociological and psychological aspects of acquired norms, attitudes, culture, sub-culture, perceptions, etc., leading to country-specific or individual- specific forms of motivation; and ● the image of a destination created through various communication channels will influence motivation and subsequently affect the type of travel undertaken. The motivation literature is still evolving in tourism and there is no doubt that motivation is an essential concept in the explanation of tourist demand. A survey of the literature indi- cates that most theories are based on the motivation to escape and leave behind something but there are other approaches based upon the seeking of recreational rewards from travel. However, we should remember that while motivation can be stimulated and activated in rela- tion to the ‘want’ to travel, ‘needs’ themselves cannot be created. Needs are dependent upon Young people develop images of tourism at a young age. Photograph 3.2 Energisers and Effectors of Demand 47
- 73. Educational and knowledge 1% Culture and gastronomy 7% The geography 8% Theactivities 8% Enjoyment and adventure 10% For rest and relaxation 13% Improved weather 16% For social reasons 16% Wanting change and escape 21% The range of motivators for overseas travel from the United Kingdom Source: Gilbert, 1992 Figure 3.3 the human element through the psychology and circumstances of the individual. There is also the crucial question of what types of motivation may be innate in us all (curiosity, need for physical contact) and what types are learned because they are judged as valuable or positive (status, achievement). In addition, the situation of the tourist in terms of their own day-to-day lifestyle may motivate toward less or more stimulation based upon whether they have a full life with high levels of well-being or alternatively live in a poor neighbourhood with more pressures on well-being. Roles and The Decision-Making Process in Tourism Tourist typologies Tourists can be characterised into different typologies or roles which exercise motivation as an energising force linked to personal needs. Utilising this approach, roles can be studied in rela- tion to goal-orientated forms of behaviour or holiday choice activity. Therefore, some apprecia- tion of tourist roles provides us with a deeper understanding of the choice process of different consumer segments. The majority of authors who have identified tourist roles have concentrated on the assess- ment of the social and environmental impact of tourism or the nature of the tourist experience. Any definition or interpretation of tourist roles, such as those of motivation, varies according to the analytical framework used by the individual author. The initial ideas of role developed from the work of sociological theorists such as Goffman (1959). He suggested that individuals behave differently in different situations in order to sustain impressions associated with those situations. Just as actors have different front- and backstage performances, participants in any 48 chapter 3 Tourism Consumer Behaviour
- 74. activity vary theirbehaviour according to the nature and context of that activity. Consequently individual roles can be identified and managed according to social circumstances. Whereas tourists may vary considerably in type and activity, we can recognise a pattern of roles from the literature. Theoretical studies focusing on the sociological aspects of tourism role were developed in the 1970s through the work of Cohen (1972, 1974, 1984), MacCannell (1976) and Smith (1990). The interaction of personality attributes such as attitude, perceptions and motivation allow different types of tourist role to be identified. One classification by Cohen is particularly useful and this is presented in Figure 3.4. He uses a classification based on the theory that tourism combines the curiosity to seek out new experiences with the need for the security of familiar reminders of home, thus reflecting Plog’s ideas. Cohen proposes a continuum of possible com- binations of novelty and familiarity. Cohen described the first two roles as institutionalised (organised group/individual mass tourist) and as non-institutionalised (explorers/drifters). Whereas the former is related to the individual’s quest for familiarity, the latter is characterised by novelty seeking. By breaking up this continuum into combinations of these two elements, a fourfold classification of tourists is produced. While destinations may be enjoyed as novel, most tourists prefer to explore them from a familiar base. The degree of familiarity of this base underlies Cohen’s typology in which the author identifies four tourist roles: organised mass tourist, individual mass tourist, explorer and drifter (see Figure 3.4). Cohen was interested in classifying groups in order to understand not only demand, but the effects or impact of institutionalised forms of tourism. He found these to be authenticity issues, standardisation of destinations, festivals and the development of facili- ties. He also identified the impact of non-institutionalised forms of tourism upon the destina- tion, which he found acts as a ‘spearhead for mass tourism’ as well as having a ‘demonstration effect’ on the lower socio-economic groups of the host community. Cohen’s typology assists in formulating operational approaches to tourism research and forms a framework for management practice. Although it is not complete and cannot be applied to all tourists at all times, it does afford a way of organising and understanding different types of Institutionalised tourist Dealt with in a routine way by the tour industry – tour operators, travel agents, hoteliers and transport operators Non-institutionalised tourist Involves individual travel, shunning contact with the tourism industry except where absolutely necessary The drifter All the connections with the tourism industry are rejected and the trip is about getting far away from home and familiarity. With no fixed itinerary the drifter lives with local people by paying his/her way and being immersed in the local culture The explorer Choses an independently organised trip based upon getting away from the ‘beaten track’. However, comfortable accommodation and reliable transport are sought. Will leave the ‘environmental bubble’ sometimes but likes to know it is available The individual mass tourist Similar to the organised approach but has more flexibility and scope related to personal choice. Still has little experience of the destination as seeks to remain in the safe ‘environmental bubble’ The organised mass tourist Has low level of adventurousness and is anxious to maintain safe ‘environmental bubble’. Typically purchases pre-organised packages and has little contact with the local culture or people Novelty Familiarity Cohen’s classification of tourists Source: Adapted from Cohen, 1972 Figure 3.4 Roles and The Decision-Making Process in Tourism 49
- 75. tourist activity. Forexample, Elsrud (2001) in studying backpackers and their narratives found that their accounts of adventurous experiences were an attempt to distinguish themselves from conventional mass tourists. Role and family influence As the fundamental social unit of group formation in society, the influence of a family on tourism demand is extremely important. A family often acts as the purchasing unit which may be supply- ing the needs of perhaps two or more generations. In addition, it socialises children to adopt particular forms of purchasing and acts as a wider reference group. Given the importance of fam- ily behaviour in the purchase of leisure products, we may want to question the preponderance of literature which treats consumer behaviour as an individual model of action. For example, the concept of motivation has been presented as essentially an individual one, yet the idea of ‘shared motivators’ takes into account that family and friends often influence holiday decisions. Each member of a family fulfils a special role within the group. He or she may act as husband/ father, wife/mother, son/brother and daughter/sister. Family decision making assigns roles to specific members of the family and decision making may be shared, or conducted by one per- son. One member of the family may be the facilitator, while information may be gathered by another. The family acts as a composite buying unit with the different role patterns leading to particular forms of tourism product purchasing. We can also see the influence of younger family members on travel behaviour and, in particular, the different generations as they mature, as Mini Case Study 3.1 shows. The importance of image A destination’s image can be positive or, in other instances, negative. Obviously a positive image will lead to higher levels of demand. Therefore, decisions may be made on the level of awareness, beliefs and impressions we perceive between destinations. An individual’s aware- ness of the world is made up of experiences, learning, emotions and perceptions, or, more accu- rately, the cognitive evaluation of such experiences, learning, emotions and perceptions. These perceptions are developed by individuals into a simplified view or image of a place from the many associations and the opinions acquired. This image is critically important to an individu- al’s preference, motivation and behaviour towards tourist products and destinations, as it will provide a ‘pull’ effect resulting in different demand schedules. There are various kinds of definition adopted to describe the word ‘image’ in different fields. The most commonly cited definition of destination image is that from Crompton (1979, p. 18): ‘the sum of beliefs, ideas and impressions a person has of a destination’. Following the work of Gunn (1972), the UNWTO suggests that the tourist image is only one aspect of a destination’s general image, with the two being closely interrelated. Nobody is likely to visit a destination for tourism if for one reason or another he or she dislikes it. Conversely, a tourist discovery may lead to knowledge of other aspects of an economic, political or cultural nature of that destination. The UNWTO further adds that the presentation of a destination image must allow for the fact that it is generally a matter not of creating an image from nothing but of transforming an existing image. Echtner and Ritchie (1991) note that the many definitions utilised for destination image are quite vague. They attempt to clarify the concept by proposing that destination images are perceived in terms of both an attribute-based and a holistic component. They indicate a dual aspect of image whereby destination images should be understood in terms of both individ- ual attributes (such as climate and accommodation facilities) and also holistic impressions (mental pictures or imagery of the destination). They reinforce this by stressing that there are functional and psychological characteristics of an image. The functional characteristics refer to directly observable or measurable components such as price levels, attractions and accommodation facilities, whereas the psychological characteristics are intangibles such as friendliness and safety. The psychological impression is described as the atmosphere or mood of the destination. 50 chapter 3 Tourism Consumer Behaviour
- 76. Introduction Both generations Xand Y represent the future of tourism demand for the next 50 years, and yet little in-depth research has been done about their attitudes to travel, or their travel consumer behaviour. Instead, the research has been focused on the current active travel generation – the baby boomers. However, Generation X will soon take their place, with Generation Y following quickly behind (Y generally taken as time for births from 1980 to 2003). For example, the forecast boom in outbound travel from China and India will be led in part by genera- tions X and Y but operators do not understand how they will behave, the intermediaries that they will use, or their tourism product preferences. This case study examines the characteristics of generations X and Y and the implications for tourism behaviour. Do Generations Impact Upon Consumer Behaviour? In terms of tourism consumer behaviour, there are divided opinions as to whether there are generational dif- ferences: ● Some support the fact that generations X and Y will have differing travel behaviour from, say, their parents. This is because each generation grows up as a cohort within a particular environmental and social system, where the media, culture and world events shape their behaviour, including tourism demand. Effectively, we can define a generation socially as well as demographically. ● Others, however, argue that generations are too large a group to be helpful in explaining different con- sumer behaviour. Also, that these groups need to be studied on a cross-national basis because different country cultures will affect behaviour. This is made worse by the fact that with changing social trends people are marrying and having children later in life, extending generational spans: while in the past the traditional definition of a generation as the years between the birth of parents and the birth of their chil- dren tended to average around 20 years, it is now nearer 30 years. Within this time span, of course, there will be significant changes in technology and social values. Finally, there are cusp times when gen- erations change from X to Y and therefore the question is, do these cusp groups share a mix of cohort characteristics? The Consumer Behaviour of Generations X and Y The two generations are very different. Generation Y, for example, are sometimes known as the ‘millennial generation’, ‘connexivity kids’ or the ‘dot-com generation’, suggesting a techno and connected generation. In contrast, Generation X were raised in less secure economic times and tend to be more mobile than the younger generation. They have married and had children later in life than their parents, and are traditional in their family values and behaviour, while careful in their financial management. Generation Y were born into a period dominated by the information age and technology which offers the ability to be permanently connected to friends and peers and to utilise daily social networking. Media via the use of a screen are important to this generation, particularly broadband Internet and television, in terms of real- ity television and the spontaneous availability of programming. They tire of well-known brands quickly and they enjoy finding adverts in other media, such as the Internet, rather than in the usual press and television place- ment. For tourism, this means that successful tourism products and destinations must ‘connect’ with these consumers. It is less important to build products for them, than to build products with them. One aspect of their life is the emphasis placed upon the reduction of risk and the need for safety as they will have witnessed via the media the reality of terrorist attacks as well as other world crisis events. Generation X, in contrast, are less concerned with the idea of having products built for them and are more interested in being able to afford new authentic experiences. These are preferably in fresh destina- tions and will satisfy their curiosity for other countries and cultures in a memorable way. While they are less Mini case study 3.1 Generations X and Y Roles and The Decision-Making Process in Tourism 51
- 77. technologically savvy thanGeneration Y, they are good at processing and understanding information, and they are catching up with their younger counterparts in their use of the Internet for searching and booking travel. This makes them a challenge for marketers as their demand behaviour demonstrates a lack of brand loyalty – they are more footloose than Generation Y. At the same time their strong family values and finan- cial conservatism means that they seek value for money travel – using low cost carriers for example – and holiday with the family. Both these generations will be mature, adventurous and active travellers. It is thought: they will travel more often; provide more demand for exploration of new areas and forms of travel; search for more information prior to the trip; mainly use the Internet for all their travel needs. They represent the demand patterns and consum- ers of the future and their behaviour will be distinctive, driven by technology and underpinned by their consid- erable formal education levels which make them aware of opportunities, world geography and tourism destinations. Discussion Questions 1. Draft a table summarising 10 characteristics of each generation. How will these characteristics impact upon tourist activity such as that proposed in the Cohen model in Figure 3.4? 2. Make a list of the advantages and disadvantages of taking a generational approach to tourism consumer behaviour. 3. Given their technological orientation, what will the tourism industry need to develop as part of the marketing mix for generations X and Y? Younger people demand lower cost and adventure. Photograph 3.3 52 chapter 3 Tourism Consumer Behaviour
- 78. Echtner and Ritchiefurther stress that destination images can range from images based on common to unique features whereby the image itself can be more unique if sufficient positive differences to other destinations are present. Tourist behaviour both of individuals and groups depends upon their image of immediate situations and the world. The notion of image is closely related to behaviour and attitudes.Attitudes and behaviour become established on the basis of a person’s derived image and are not easily changed unless new information or experience is gained. The holiday image Mayo (1973) examined regional images and regional travel behaviour. Among other things he indicated that the image of a destination area is a critical factor when choosing a destination. Mayo further concluded that, whether or not an image is in fact a true representation of what any given region has to offer the tourist, what is important is the image that exists in the mind of the vacationer. The tourist may possess a variety of images in connection with travel. These include the image he or she has formed of the destination, of the term ‘holiday’ itself, of the mode of trans- port he or she wishes to utilise, of the tour operator/wholesaler or travel agency and of his or her own self-image. For example, it is probable that the term ‘holiday’ evokes different images for different people. These will be ‘cognitive’ (knowledge and beliefs) as well as ‘affective’ (feel- ings about the trip or destination). Different images are formed by individuals but a pattern will emerge whereby groups exhibit similar perceptions. Therefore, similar images of a particular holiday experience are held by people within the same segment of society and who have expe- rienced a similar lifestyle or education. Gunn (1972) provides a framework which leads to the construction, development and modification of image formation. The seven-stage framework identifies two levels of image – ‘organic’ and ‘induced’. Viewed in terms of a country or destination, the ‘organic’ image is the sum of all information that has not been deliberately directed by advertising or promotion of a country or destination; this information comes from television coverage, radio reports, geography books, history books, what other people have said about the area, newspapers and magazines or the Internet. An imaginary picture is built up which is the result of all this infor- mation. The individual, following from the approaches described in Gestalt psychology, attempts to make sense of it by forming a pattern or a picture of what he or she imagines the area to be like. The second level of image is the ‘induced’ image. This is formed by deliberate portrayal and promotion by various organisations involved with tourism. It is important to distinguish between these two levels since the induced image is controllable while it is more difficult to influence the organic image. Equally, the source of information is a significant influence upon a consumer’s perception of its value. We can identify four stages in the development and establishment of a holiday image: 1. The first is a vague, fantasy type of image created from advertising, education and word of mouth and is formed before the subject has thought seriously about taking a holiday. This belief may be that people engage in taking holidays as a desirable activity. 2. The second stage is when a decision is made to take a holiday and then choices must be made regarding time, destination and type of holiday. This is when the holiday image is modified, clarified and extended. On completion of the holiday plans, the anticipatory image is crystallised. 3. The third stage is the holiday experience itself, which modifies, corrects or removes elements of the image that prove to be invalid and reinforces those that are found to be correct. 4. The fourth stage is the after-image, the recollection of the holiday which may induce feelings of nostalgia, regret or fantasy. This is the stage that will mould an individual’s holiday con- cepts and attitudes and will promote a new sequence of holiday images influencing future holiday decisions. Roles and The Decision-Making Process in Tourism 53
- 79. Models of ConsumerBehaviour in Tourism One approach to understanding tourism demand is to identify and evaluate the broader theories and models of consumer behaviour linked to purchasing behaviour. This is not easy given we are faced with a proliferation of research within a subject area that has displayed significant growth and diversity. Perhaps the major utility of these models is to demonstrate the interrela- tionships of the key factors influencing consumer behaviour in tourism. We also have to under- stand the particular characteristics of a tourism purchasing decision as opposed to other products, and this includes the implications of tourism as a service activity. We can identify three phases that characterise the development of consumer behaviour theory: 1. The early empiricist phase covered the years between 1930 and the late 1940s and was dominated by empirical commercial research. This research was characterised by attempts in industry to identify the effects of distribution, advertising and promotion decisions. The basis for these models came mainly from economic theories relating to the company. 2. The motivational research phase in the 1950s was an age where stress was placed on Freudian and drive-related concepts. There was a greater emphasis placed upon in-depth interviews, focus groups, thematic apperception tests and other projective techniques. Activity was directed at uncovering ‘real’ motives for action which were perceived to lie in the deeper recesses of the consumer’s mind. Much of the theory was based around the idea of there being instinctual needs which reside in the ‘id’ and are governed by the ‘ego’ which acts to balance unrestrained instincts and social constraints. The ‘super ego’ in turn was seen to embody values but to limit action on the basis of moral constraint. The major problem was the focus on unconscious needs which are by definition extremely difficult to prove empirically. Furthermore, they do not always translate into effective marketing strategies. 3. The formative phase of the 1960s can be seen as the formative years of consumer behaviour modelling. The first general consumer behaviour textbook became available in 1968 (Engel, Kollat and Blackwell) and other influential books such as Howard and Sheth (1969) fol- lowed soon after. The Howard–Sheth model of buyer behaviour is perhaps the most influen- tial one, as it identifies the inputs to the consumer’s decision-making process. During the formative phase, models of behaviour proved useful as a means of organising disparate knowledge of social action. The major theorists developed ‘grand models’ of consumer behaviour which have been subsequently utilised or transformed by authors interested in the tourism choice process. These grand models can be found to share several commonalities: ● They all exhibit consumer behaviour as a decision process. This is integral to the model. ● They provide a comprehensive model focusing mainly on the behaviour of the individual consumer. ● They share the belief that behaviour is rational and hence can, in principle, be explained. ● They view buying behaviour as purposive, with the consumer as an active information seeker, both of information stored internally and of information available in the external environ- ment. Thus, the search and evaluation of information is a key component of the decision process. ● They believe that consumers limit the amount of information taken in, and move over time from general notions to more specific criteria and preference for alternatives. ● All the ‘grand models’ include a notion of feedback, that is, outcomes from purchases will affect future purchases. ● The models envisage consumer behaviour as multi-stage triggered by the individual’s expectation that a product will satisfy their needs. 54 chapter 3 Tourism Consumer Behaviour
- 80. Need arousal to travel Need recognition for travel Levelof involvement in trip Identify travel alternatives Evaluate travel alternatives Purchase travel Make decision on travel Post-purchase behaviour impacts on future decisions feedback Model of consumer behaviour Figure 3.5 The Buying Decision Process in Tourism Figure 3.5 demonstrates that consumer behaviour is normally conceived as a process of stages. As part of this approach the decision to travel is the involvement of some or all of the following stages. The starting point is where a need is recognised and the individual is energised into becoming a potential customer. The stages can be thought of as: ● need arousal; ● recognition of the need – the prerequisite stage; ● level of involvement – amount of time and effort invested in the decision process, e.g. degree of search for information; ● identification of alternatives – brands that initially come to mind when considering a pur- chase are referred to as the evoked set. However, friends, shop assistants, merchandise, leaf- lets, advertisements, etc. may provide a consideration step; ● evaluation of alternatives – comparisons are made of the salient attributes based upon criteria of the potential purchaser; ● decision choice made; ● purchase action; and ● post-purchase behaviour – the feelings and individual experiences after the purchase. Quite often with important purchases, such as travel, the purchaser will doubt the wisdom of their choice and have a need for reassurance to what is known as dissonance or disequilibrium. This psychological state is reduced by the means of guarantees or telephone helplines to deal with queries. It is also reduced by the ‘welcome back’ communication made to someone on their return from their trip or experience. The Buying Decision Process in Tourism 55
- 81. Consumer behaviour modelsare designed to attempt to provide an overall representation of the consumer behaviour process and to identify the key elements of the process and their inter- relationships. Engel, Blackwell and Miniard (1986) classified models according to the degree of search or problem-solving behaviour by the consumer: 1. Limited problem-solving models (LPS models) are applicable to repeat or mundane pur- chases with a low level of consumer involvement. Apart from short trips near to home these are not applicable to tourism. 2. Extended problem-solving models (EPS models) apply to purchases associated with high levels of perceived risk and involvement, and where the information search and evaluation of alternatives plays an important part in the purchasing decision. Models of tourist behaviour fall into this category. Given the high cost, risk factor and involvement of a tourism purchase, a number of models of consumer behaviour which seek to explain low involvement purchase behaviour are less rel- evant and therefore not considered here. The following models are all examples of EPS models. Wahab, Crampon and Rothfield One of the first attempts to provide some understanding of tourism purchase behaviour is to be found in the work of Wahab, Crampon and Rothfield (1976). These authors presented the con- sumer as purposeful and conceptualised his or her buying behaviour in terms of the uniqueness of the buying decision: ● no tangible return on investment; ● considerable expenditure in relation to earned income; ● purchase is not spontaneous or capricious; and ● expenditure involves saving and pre-planning. They presented a model of the decision-making process based upon the preceding ‘grand models’ of consumer behaviour and having the stages outlined in Figure 3.6. Schmoll Schmoll (1977) argued that creating a model of the travel decision process was not just a theo- retical exercise, for its value could be found in its aid to travel decision making. His model was based on the Howard–Sheth (1969) and Nicosia (1966) models of consumer behaviour – see Figure 3.7. Schmoll’s model is built upon motivations, desires, needs and expectations as personal and social determinants of travel behaviour. These are influenced by travel stimuli, the traveller’s confidence, destination image, previous experience and cost and time constraints. The model has four fields, each of which exerts some influence over the final decision – according to Schmoll (1977): ‘The eventual decision (choice of a destination, travel time, type of Initial framework Conceptual alternatives Fact gathering Definition of assumptions Design of stimulus Outcome Decision Cost–benefit of alternatives Forecast of consequences The Wahab, Crampon and Rothfield (1976) model of consumer behaviour Source: Adapted from Wahab, Crampon and Rothfield, 1976 Figure 3.6 56 chapter 3 Tourism Consumer Behaviour
- 82. accommodation, type oftravel arrangements, etc.), is in fact the result of a distinct process involving several successive stages or fields.’ ● Field 1: Travel stimuli. These comprise external stimuli in the form of promotional com- munication, personal and trade recommendations. ● Field 2: Personal and social determinants. These determine customer goals in the form of travel needs and desires, expectations and the objective and subjective risks thought to be connected with travel. ● Field 3: External variables. These involve the prospective traveller’s confidence in the ser- vice provider, destination image, learnt experience and cost and time constraints. ● Field 4: Destination characteristics. These consist of related characteristics of the destina- tion or service that have a bearing on the decision and its outcome. The model (with the exception of some changes which incorporate the word ‘travel’ in the headings and the location of previous experience in Field 3) has been borrowed directly from the ‘grand models’ already discussed. In Schmoll’s model there is no feedback loop and no input to attitude and values, and therefore it is difficult for us to regard the model as dynamic. However, Schmoll does highlight many of the attributes of travel decision making which, while not unique in themselves, do influence tourism demand. We can include here decisions regard- ing choice of a mix of services which make up the product: high financial outlay, destination image, the level of risk and uncertainty, necessity to plan ahead and difficulty of acquiring complete information. Advertising and promotion 1. TRAVEL STIMULI 2. PERSONAL AND SOCIAL DETERMINANTS OF TRAVEL BEHAVIOUR 4. CHARACTERISTICS AND FEATURES OF SERVICE DESTINATION Socio-economic status Personality features Social influences and aspirations Attitudes and values MOTIVATIONS TRAVEL DESIRES INFORMATION SEARCH DESIRES/NEEDS EXPECTATIONS DECISION Range of travel opportunities Quality/quantity of travel information Type of travel arrangement offered Attractions/ amenities offered Cost/value relations ASSESSMENT/ COMPARISON OF TRAVEL ALTERNATIVES Travel literature Suggestions/reports from other travellers Travel trade suggestions and recommendations 3. EXTERNAL VARIABLES Confidence in travel trade intermediary Image of destination/ service Previous travel experience Assessment of objective/ subjective risks Constraints of time, cost, etc. The Schmoll model Source: Adapted from Schmoll, 1977 Figure 3.7 The Buying Decision Process in Tourism 57
- 83. Schmoll, while highlightingsome of the characteristics associated with the problem-solving activity of travel, simply reiterates the determinants of cognitive decision-making processes. Within Schmoll’s work we are introduced again to the importance of image, which plays a sig- nificant part in the demand process. Mayo and Jarvis Mayo and Jarvis (1981) have also borrowed from the grand theorist models. They have taken the basic Howard–Sheth three-level decision-making approach where problem solving is seen as extensive, limited or routinised. Mayo and Jarvis follow the earlier theories by describing extensive decision making (des- tination purchase for them) as being characterised as having a perceived need for an infor- mation search phase and needing a longer decision-making period. The search for, and evaluation of, information is presented as a main component of the decision-making process whereby the consumer moves from general notions to more specific criteria and preferences for alternatives. Mayo and Jarvis argue that travel is a special form of consumption behaviour involving an intangible, heterogeneous purchase of an experiential product, yet they then fail to develop an activity-based theory. Mathieson and Wall Mathieson and Wall (1982) offer a five-stage process of travel-buying behaviour (see Figure 3.8). Their framework (as shown in Figure 3.9) is influenced by four interrelated factors: 1. Tourist profile (age, education, income attitudes, previous experience and motivations). 2. Travel awareness (image of a destination’s facilities and services which are based upon the credibility of the source). Felt need/ travel desire Felt need or travel desire Information and evaluation Travel decision Travel preparation and travel equipment Travel satisfaction evaluation Information collection and evaluation by image Travel decision (choice between alternatives) Travel preparations and travel experience Travel satisfaction outcome and evaluation A desire to travel is felt and reasons for and against that desire are weighted. Potential tourists utilise travel intermediaries, brochures and advertisements as well as friends, relatives and experienced travellers. This information is evaluated against both economic and time constraints as are factors such as accessibility and alternatives. Stage advancement occurs with destination, mode of travel, accommodation and activities being selected. Travel takes place once bookings are made and confirmed, budgets organised, clothing and equipment arranged. During and after travel the overall experience is evaluated and the results influence subsequent travel decisions. Travel-buying behaviour Source: from Tourism: Economic, Physical and Social Impacts, Longman, London, with permission of Pearson Education Limited (Mathieson, A. and Wall, G., 1982) Figure 3.8 58 chapter 3 Tourism Consumer Behaviour
- 84. 3. Destination resourcesand characteristics (attractions and features of a destination). 4. Trip features (distance, trip duration and perceived risk of the area visited). In addition, Mathieson and Wall recognise that a holiday is a service product with the char- acteristics of intangibility, perishability and heterogeneity, which in one way or another affect the consumer’s decision making. However, apart from pointing out that consumption and evalu- ation will occur simultaneously, the basis of their model relies on the previously reviewed grand models. This is not to say that the model reflects the depth of insight of these models; on the contrary, it only incorporates the idea of the consumer being purposive in actively seeking infor- mation and the importance of external factors. The model omits important aspects of percep- tion, memory, personality and information processing, which is the basis of the traditional models. The model they provide focuses more on a product-based perspective rather than that of a consumer behaviourist. Woodside and Lysonski Woodside and Lysonski’s (1989) model considers two types of inputs: 1. the marketing inputs of product, promotion, place and price as the key external inputs; and 2. the tourist’s internal variables, including experience, socio-demographic variables, lifestyle and values. TOURIST PROFILE Socio-economic and behavioural characteristics Travel desire Information search TRAVEL AWARENESS Image of destination (1or2) Information search continued Primary resources Tourist facilities and services Political and economic and social structure Geography and environment Infrastructures Internal accessibility Assessment of travel alternatives Travel decisions Trip distance TRIP FEATURES DESTINATION RESOURCES AND CHARACTERISTICS Trip pressure Trip cost/value Trip duration Party size Domestic pressures Confidence in travel intermediaries Perceived risk and uncertainty of travel Travel arrangements Travel experience and evaluation The Mathieson and Wall model Source: from Tourism: Economic, Physical and Social Impacts, Longman, London, with permission of Pearson Education Limited (Mathieson, A. and Wall, G., 1982) Figure 3.9 The Buying Decision Process in Tourism 59
- 85. 1 4 6 8 9 7 5 2 3 CHOICE SITUATIONAL VARIABLES AFFECTIVE ASSOCIATIONS INTENTIONSTO VISIT TRAVELLER DESTINATION PREFERENCES DESTINATION AWARENESS Previous Destination Experience Life cycle, Income, Age Lifestyles, Value system TRAVELLER VARIABLES Product design Pricing Advertising/Personal selling Channel decisions MARKETING VARIABLES Inept set Inert set Unavailable/ aware set Consideration set The Woodside and Lysonski model Source: From Woodside, A. and Lysonski, S. (1989) ‘A general model of traveler destination choice’, Journal of Travel Research 27, 8–14 Figure 3.10 The model traces the tourist’s unfolding awareness of the destination or product from initial awareness to choice and purchase (Figure 3.10). Woodside and Lysonski’s contribu- tion lies in factoring into the model the emotions associated with destination or product choice, the fact that tourists may rank the options, and the perceived likelihood of purchase and situational variables such as the environment. Tourists’ ranking of options is seen in Figure 3.10. The categories are: 1. Consideration set – destinations or products considered likely to purchase. Woodside and Lysonski suggest this set ranges from three to five options. 2. Unavailable set – destinations or products not considered for purchase. This includes ‘inept destinations’, rejected on the grounds of, say, lack of relevant attractions. Moscardo et al. Moscardo et al. (1996) have provided a different approach to consumer behaviour by stressing the importance of activity preference as a critical link between the tourist motivation and travel and destination choice. They argue that motives provide travellers with expectations for activi- ties, and destinations are seen as offering these activities. Figure 3.11 demonstrates this approach as an activities model of destination choice. In this model, Moscardo et al. have provided a use- ful applied approach for the use of these models by marketers. They argue that activity-based traveller segments can be linked to destination activities through product development and com- munication strategies. 60 chapter 3 Tourism Consumer Behaviour
- 86. The Way Forward Consumerdecision-making models have tended to be based on a view that tourist consumer behaviour is rational and sequenced. The generic ‘grand models’ are also designed for the pur- chase of tangible goods rather than services, and assume individual rather than group purchase, making them less than ideal to explain tourism behaviour which is often based upon a group or family decision. There is also a danger that these models are too generalised and simplified to explain, first, the richness of tourism behaviour and, secondly, the changed tourism marketplace of the twenty-first century. Decrop (2000) argues that what is needed is an approach that cap- tures both the situational and experiential nature of tourist behaviour, effectively including the complexity of everyday life. In addition we believe that tourism is highly complex given it is based upon many different segments representing different needs and the choice of a whole variety of destinations that can satisfy such needs. New areas of research are required related to understanding the behaviour of dark tourism (visiting places associated with death or suffering) and gay tourism segments. There are a number of large segments, such as gay tourism, which require anunderstanding of this segment’s approach to risk avoidance, and if a destination offers a gay culture or gay friendliness. Such complexity will demand deep and meaningful research into behaviour, utilising methodologies to deliver insights as to how decisions are made and how influences such as current well-being, destination image, attitudes and prior tourist experi- ence may influence behaviour. A Marketing variables/ external inputs B Traveller/socio-psychological variable C Images of destinations D Destination choice E Destinations Motives Information about destinations Activities as attributes Experience Life cycle Income Available time Box A: Contextual or social influence process providing information on the activities available at destinations. Box B: Travel motives are connected to other socio-demographic variables including life cycle and travel experience. Box C: How the travel motive groups perceived destinations. Box D: How the travel motive groups related activity-based images to destination choice. Box E: Activities available at destinations. (offer and promote activities) Based on a match between perceived activities offered and preferred activities An activities-based model of destination choice Source: Moscardo et al., 1996 Figure 3.11 The Way Forward 61
- 87. Issues at particular purchasestages Consumer considerations Marketing considerations Pre-purchase stage How does a consumer decide that he/she needs a travel product? Image formation and motivation. How are consumer attitudes towards travel products formed and/or changed? For example, why is the mass tourism experience, so popular in the 1970s, now less popular? What is the level of involvement/ commitment on the part of the purchaser of a travel product? What cues does the consumer use to infer which products are superior to others – a critical piece of information for promotion and positioning of travel products. What are the best sources of information to learn more about alternative choices, and, given the intangible nature of the travel product, which sources have more authority and influence? Purchase stage Is acquiring a product a stressful or pleasant experience and does this influence the nature of intermediary used – or indeed whether an intermediary is bypassed? How do situational factors such as time pressure, family pressure or travel agent displays affect the consumer’s purchase decision? What does the destination and type of holiday arrangement purchased say about the consumer? Post-purchase stage Does the travel product provide pleasure or perform its intended function? What determines whether a consumer will be satisfied with the travel experience or whether he/she will buy it again? How is the travel product consumed and are there environmental or social consequences to the travelling activity? Does this person tell others about his/her travel experiences and therefore affect their purchase decisions? Source: Adapted from Swarbrooke and Horner, 1999; Solomon, 1996 Considerations for the consumer purchase stages and the relevant marketing approach Table 3.1 Conclusion Tourism marketing will become more effective if it develops a fuller understanding of what influences the tourist’s consumer behaviour. This need has been highlighted following negative events such as the terrorist attack in Paris in 2015. Such events around the world attract high levels of media coverage and highlight the risks to the tourist. In order to understand the com- plexity of decision making we require an appreciation of the way consumers behave. This will include the way they recognise specific needs for travel, search for and evaluate information, 62 chapter 3 Tourism Consumer Behaviour
- 88. make purchases andthen evaluate what has been consumed as part of the tourism experience. This involves the need to understand the major approaches to how motivation may function, the roles we adopt as tourists and how sociological changes will affect demand. The understanding of the consumer is enhanced by the incorporation of these different vari- ables into simplified models. Although these need improvement, they act as a guide to current thinking of how tourism demand may function. Nonetheless, these models of consumer behav- iour in tourism remain at a relatively early stage of their development. This means significant levels of research are still required to clarify what are, effectively, subjective psychological influences upon buying processes in tourism. This future research needs to offer more practical ways to the tourism marketer to improve demand. This said, current consumer understanding performs a useful role in clarifying our thinking about the tourist decision-making process and the interrelationships of a range of complex variables. 1. Draft a table with headings such as Films, Newspapers/magazines, TV, Experience, etc. and place these in relation to Germany, America, China, etc. in order to identify the key ways that image has been created and what your perceptions are. 2. Identify the key tourist typologies that predominate at a tourist destination with which you are familiar. 3. Identify and list the phases you, your friends or family went through in the purchase decision process for the last holiday you took. 4. What important consumer behaviour factors are similar or different in the choice and pur- chase of tourism based upon the 20, 40 and 60 year age groups in the population? 5. Examine the materials used by tourist boards as printed literature or on websites – what clues are there to indicate the key images being communicated? Self-Check Questions Youtube https://www.youtube.com/watch?v=k9jgMmdi98w The link gives an understanding of European tourism demand trends. https://www.youtube.com/watch?v=ywU1-UsgWHs A good background understanding of generation Y and marketing. http://www.youtube.com/watch?v=ugIDVARaTNU A quick explanation of how to segment your customer groups for better targeting within your strategic plan. http://www.youtube.com/watch?v=WocW6gcLkgw Morocco focuses on carving its niche as a tourism destination. http://www.youtube.com/watch?v=sWwRscIX44M The unusual – are there going to be even more unusual tours for young people? References and Further Reading Cohen, E. (1972) ‘Towards a sociology of international tourism’, Social Research 39(1), 164–82. Cohen, E. (1974) ‘Who is a tourist? A conceptual clarification’, Sociological Review 22(4), 527–55. Cohen, E. (1984) ‘The sociology of tourism: approaches, issues, findings’, Annual Review of Sociology, 1984, 373–92. References and Further Reading 63
- 89. Cohen, S.A., Prayag,G. and Moital, M. (2014) ‘Consumer behaviour in tourism: concepts, influences and opportunities’, Current Issues in Tourism 17(10), 872–909. Crompton, J.L. (1979) ‘An assessment of the image of Mexico as a vacation destination and the influence of geographical location upon that image’, Journal of Travel Research 17(4), 18–23. Dann, G.M.S. (1981) ‘Tourist motivation: an appraisal’, Annals of Tourism Research 8(2), 187–219. Decrop, A. (2000) ‘Tourists’ decision-making and behaviour processes’, pp. 103–33, in Pizam, A. and Mansfield, Y. (eds) Consumer Behaviour in Travel and Tourism, Haworth, New York. Decrop, A. (2006) Vacation Decision Making, CABI Publishing, Wallingford. A thorough over- view of leisure and vacation decision-making processes. Echtner, C.M. and Ritchie, J.R.B. (1991) ‘The meaning and measurement of destination image’, Journal of Tourism Studies 2(2), 2–12. Elsrud, T. (2001) ‘Risk creation in traveling: backpacker adventure narration’, Annals of Tour- ism Research 28, 597–617. Engel, J.F., Blackwell, R.D. and Miniard, P. (1986) Consumer Behavior, Dryden Press, NewYork. Engel, J.F., Kollat, D.J. and Blackwell, R.P. (1968) Consumer Behavior, Holt, Reinhardt Winston, New York. Gilbert, D.C. (1992) A Study of Factors of Consumer Behaviour Related to Overseas Holidays from the UK, Unpublished PhD Thesis, University of Surrey, Guildford. Gilbert, D.C. and Abdullah, J. (2004) ‘Holidaytaking and the sense of well-being’, Annals of Tourism Research 31(1), 103–21. Goffman, E. (1959) The Presentation of Self in Everyday Life, Pelican, London. Gray, H.P. (1970) International Travel – International Trade, Heath Lexington Books, Lexington, KY. Gunn, C. (1972) Vacationscape – Designing Tourist Regions, University of Texas Press, Austin. Horner, S. and Swarbrooke, J. (2016) Consumer Behaviour in Tourism, Butterworth Heine- mann, Oxford. Howard, J.A. and Sheth, J.N. (1969) The Theory of Buyer Behavior, Wiley, New York. Hsu, C.H.C., Cai, L.A., and Li, M. (2010) ‘Expectation, motivation and attitude: a tourist behavioral model’, Journal of Travel Research 49(3), 282–96. Hughes, H. (2002) ‘Gay men’s holiday destination choice: a case of risk and avoidance’, Inter- national Journal of Tourism Research 4(4), 299–312. Li, M., Zhang, H., Xiao, H., and Chen,Y. (2015) ‘A grid-group analysis of tourism motivation’, International Journal of Tourism Research 17, 35–44. Lundberg, D.E. (1971) ‘Why tourists travel’, The Cornell Hotel and Restaurant Administration Quarterly 26(Feb), 75–81. MacCannell, D. (2013) The Tourist: A New Theory of the Leisure Class, University of California Press, Berkeley. Maslow, A.H. (1970) Motivation and Personality, 2nd edn, Harper Row, New York. Mathieson, A. and Wall, G. (1982) Tourism: Economic, Physical and Social Impacts, Longman, London. Mayo, E. (1973) ‘Regional images and regional travel consumer behavior’, pp. 211–18, in TTRA Conference Proceedings, Idaho. Mayo, E. and Jarvis, L. (1981) The Psychology of Leisure Travel, CBI Publishing, Boston. McIntosh, R.W., Goeldner, C.R. and Ritchie, J.R.B. (2005) Tourism Principles, Practices, Phi- losophies, Wiley, New York. Moscardo, G., Morrison, A.M., Pearce, P.L., Lang, C.T. and O’Leary, J. (1996) ‘Understanding vacation destination choice through travel motivation and activities’, Journal of Vacation Marketing 2(2), 109–22. Nicosia, F.M. (1966) Consumer Decision Processes: Marketing and Advertising Implications, Prentice Hall, Englewood Cliffs, NJ. Pearce, P. (2005) Tourist Behaviour: Theories and Conceptual Schemes, Channel View, Clevedon. An excellent research-based text reviewing the major theories and concepts of tourist behaviour. 64 chapter 3 Tourism Consumer Behaviour
- 90. Pizam, A. andMansfield, Y. (eds) (2000) Consumer Behavior in Travel and Tourism, Haworth, New York. A useful edited volume covering all the main elements of consumer behaviour. Plog, S.C. (1974) ‘Why destination areas rise and fall in popularity’, Cornell Hotel and Restau- rant Quarterly 14(4), 55–8. Plog, S.C. (1990) ‘A carpenter’s tools: an answer to Stephen L.J. Smith’s review of psychocen- trism/allocentrism’, Journal of Travel Research 28(4), 43–5. Plog, S.C. (2001) ‘Why destinations rise and fall in popularity: an update of a Cornell Restau- rant Quarterly classic’, Cornell Hotel and Restaurant Quarterly 42(3), 13–24. Schmoll, G.A. (1977) Tourism Promotion, Tourism International Press, London. Smith, S.L.J. (1990) ‘A test of Plog’s allocentric/psychocentric model: evidence from seven nations’, Journal of Travel Research 28(4), 40–43. Solomon M.R. (1996) Consumer Behavior, 3rd edn, Prentice Hall, Englewood Cliffs, NJ. Swarbrooke, J. and Horner, S. (1999) Consumer Behaviour in Tourism, Butterworth Heinemann, Oxford. Thimm, T. (2014) ‘The flamenco factor in destination marketing: interdependencies of creative industries and tourism – the case of Seville’, Journal of Travel and Tourism Marketing 31(5), 576–88. Wahab, S., Crampon, L.J. and Rothfield, L.M. (1976) Tourism Marketing, Tourism Interna- tional Press, London. Woodside, A. and Lysonski, S. (1989) ‘A general model of traveler destination choice’, Journal of Travel Research, 27, 8–14. Major case study 3.1 Flamenco and Creativity as a Factor in Destination Image Development arrived at their destination, their perceptions are modi- fied to adjust to reality according to their individual imag- inary geography. Furthermore, the process of travelling itself can be compared to participating in creative events, such as plays or festivals, as they interrupt daily routines (Hennig, 1999). In other words, creative events and tourism are both liminoid regarding time and space – that is, implying a state of transition, an escape from everyday values, structures, and norms (Wöhler, 2001). Creativity and Tourism in Seville One of the associations Seville spontaneously provokes is the image of being a flamenco city, if not the flamenco city, in Spain – especially because Seville was one of the birthplaces of flamenco in the mid-nineteenth cen- tury. Flamenco itself can be regarded as a creative industry in Seville, since flamenco dancing, singing and guitar playing always served as a source of income for the artists from the very beginning. The Sevillian Triana district, in particular, inhabited by many gypsies at that time, was one of the emerging centres of this new hybrid art form, combining Indian, Arabian, Jewish and Andalusian elements. Today, the city sometimes Creative tourism can be seen as an extension, adjunct or antidote to cultural tourism. In the field, destinations have also capitalised on creativity, increasingly using it in destination branding as a form of distinctiveness. Creativity, being difficult to define in particular terms, is often discussed via the concepts of creative people, products, processes and places. Thanks to their own activities, tourists co-create creative tourism. Thus, cre- ative tourism is described by Richards as follows: [. . .] it tends to involve more elements of everyday life and the intangible, embedded culture of the host community.[. . .] In the co-creation of creative tourism experiences, conceptual authenticity is arguably negotiated in situ by the host and the tourist, each playing a role as the originator of the experience [. . .] In view of this complexity per- haps creative tourism is not a coherent ‘niche’ at all, but rather a series of creative practices linking production, consumption and place (Richards, 2011). Tourists follow their imaginary geography (Gregory, 1993), carrying with them their inner pictures of a desti- nation formed during their socialisation. Once they have Major case study 3.1 65
- 91. segment in whichthe value per tourist is around one third above the average figure. In total, however, it is a small segment . . . Seville ranks third in the visitors league table for Spain, after Madrid and Barcelona. [. . .] While the flamenco industry contributes consid- erably to how Seville is perceived and strategically used in destination marketing, the industry itself is of minor importance to the tourism industry at large . . . More than 600,000 of the tourists who visited Andalusia in 2004 had a primary interest in flamenco (Aoyama, 2009). In this regard, flamenco-based tourism can be defined as any tourism activity that is related to flamenco, like visit- ing flamenco performances, participating in flamenco courses, and buying flamenco accessories such as CDs, clothes or instruments. Thus, flamenco-based tourism is a special form of creative tourism – that is, tourism activity related to creative industries, and the members of the flamenco scene in Seville belong to the creative class according to Florida (2002). Flamenco and Image Marketing in Seville Given its attractiveness to tourists, flamenco is widely used in the marketing channels of the Sevillian Tourism Board, such as various tourism fairs (stand design, bro- chures, and materials) and websites: www.visitasevilla. es (and) www.turismosevilla.tv Source: Adapted from Thimm, T. (2014) ‘The flamenco factor in destination marketing: interdependencies of creative industries and tourism – the case of Seville’, Journal of Travel and Tourism Marketing 31(5), 576–88. Discussion Questions 1. From the concepts on consumer behaviour in this chapter explain how a cultural activity such as fla- menco can create benefits for tourism demand. 2. Provide examples and assessment of other destina- tions where creative distinctiveness strengthens brand images. 3. Discuss whether different age groups and segments will be more or less interested in creative forms of tourism. Then draft a table of the findings. represents contradictory aspects, such as ‘Spanish- ness for national unity’, ‘the Andalusian [. . .] regional identity’, and ‘the gypsy influence as representing sub- cultural, marginalized [and] bohemian’ (Aoyama, 2009). Seville is mentioned alongside other ‘music cities’, such as Bayreuth, Vienna, Salzburg, Liverpool, New Orleans, Memphis and Nashville. These cities are characterised as music tourism destinations. Music has gone from an adjunct of tourism, and a pleasant background, albeit often an important one, to a central element of much tourism, at least for a minority. That minority, often seek- ing both recreation and nostalgia, has produced a largely new series of niches within the tourist industry, that have had substantial cultural and economic signifi- cance in a range of places (Gibson and Connell, 2005). From 1940 to 1970, Franco’s government prioritised low-priced, good-quality sun and beach tourism. From 1960 onwards, the country increasingly opened up to foreign markets. In the process, flamenco was gradually transformed from a ‘regional tradition’ to an export commodity, from cultural heritage of Andalusian suffering to exotic cultural entertainment. Careers as flamenco artist- entrepreneurs offered [to the gypsies] an important alternative to agressive proletarianisation of their com- munity (Aoyama, 2009). The comparatively free life of a flamenco artist acting partly in informal sectors corresponds to the gypsies’ way of life. Today, however, payos – that is, non-gypsies, also perform as flamenco artists (Aoyama, 2009). Song, music and dance are important aspects of the construc- tion of Spanish gypsies’ identity (West, 2007). Due to the clearly visible deteriorating effects of mass tourism on infrastructure and natural beauty, the Spanish gov- ernment now focuses more on higher income foreign tourists and on world heritage attractions such as the ‘Alhambra and Generalife’ and ‘Mezquita’ (both 1984), ‘Cathedral, Alcázar Palace and West Indies Archives’ (1987), ‘Úbeda and Baeza’ (2003), and ‘Flamenco’ (2010). Some 80% of tourists in Andalusia are Spanish nationals, followed by tourists from the United Kingdom, Germany and France – the main foreign markets. Along- side golf tourism, flamenco tourism is a high-value sub- 66 chapter 3 Tourism Consumer Behaviour
- 92. Chapter 4 Measuring andModelling Tourism Demand Learning Outcomes In this chapter, we review the key issues associated with the measurement of tourism demand and the process of applying the theory of demand discussed in Chapter 2 to the construction of empirical models. Our aim is to provide you with: ● an understanding of TSA demand tables and the reasons why we measure both international and domestic demand for tourism; ● an overview of the main methods used to measure tourism demand and what is measured in respect of tourism activity; ● an appreciation of the difficulties of researching tourism markets and aspects of sampling; and ● modelling tourism demand and estimating elasticity measures.
- 93. Following on fromprevious chapters dealing with tourism concepts, demand analysis and consumer behav- iour, we now turn to methods for measuring inbound, outbound and domestic tourism commensurate with the needs of the TSA. In this chapter we begin by taking up the TSA structure introduced in Chapter 1 and criti- cally appraise the measurement of demand for both international and domestic tourism. We treat these sepa- rately for convenience, although it is recognised that international and domestic movements may be considered essentially matching activities. We examine the rationale for measuring tourism demand and which statistics are normally compiled. Emphasis is placed on the sampling methods commonly used to gather data by place and process, with an indication of their strengths and weaknesses. In the last part of this chapter we discuss the measurement and importance of measuring own price elastic- ity of demand and outline how empirical models of international tourism demand for leisure purposes are derived and estimated. Based on work by Smeral (2004) we illustrate own price and income demand elastici- ties for a range of countries. Introduction Tourism Satellite Account Requirements In Chapter 1 we based our analysis of tourism supply and demand firmly in the procedures of the TSA. To match Table 1.4, we show a simplified demand side of the tourism economy in Table 4.1, which details the different measures of tourism consumption that are internationally recognised and were defined in Chapter 1. Each column measures all visitors’ expenditure by product category, while at their foot volume statistics are recorded by trips and overnights. Trips are not counts of different individuals, but the number of inbound, outbound or domestic move- ments, so to find out the former one would need to know the average number of trips per person. From the perspective of accommodation establishments it is the number of overnights that is a key measure of performance, which is related to the volume of tourist trips by the average length of stay. On the other hand, from the standpoint of attractions, retail and food and bever- age providers it is the volume of trips that is most significant, especially same-day visits as can be seen in the disproportionate amount of trips taken by residents travelling within the country when compared to overnights. The retail expenditure included in Table 4.1 is actual purchases at market prices, so the total of 757 million currency units for TSA 4 is made up of the retail margin of 444 million, as in Table 1.4, which is the value added or output measure, and product purchases for resale of 313 million, which appear as inputs to the retail industry in Table 1.4. What is clear from Table 4.1 is that measuring the volume and values of international and domestic tourism movements is fundamental to any tourism system, but many statistical collec- tions are incomplete in this respect, notably in gathering information on domestic tourists and day visitors. Conversely, the recording of international tourism has a long history in that govern- ments found it necessary to monitor and attach measures to the movement of people into and out of their countries. This was done for a variety of reasons, many of which have nothing what- soever to do with tourism, such as security, health and immigration control. The measurement of tourism movements, however, has increasingly been seen as important because of the effects of tourism activity on a country’s balance of financial payments arising from international trade and the UN requirement for the reporting of these values. Table 4.1 demonstrates the typical pattern of a small country in high latitudes where there is an imbalance between inbound tourism consumption (which counts as an export in the balance of payments) and outbound tourism consumption (which counts as an import). The latter is caused by main long holidays being taken in warmer latitudes, as for example the movements from Northern Europe to the Mediterranean in the summer months. Nevertheless, as may be seen from column four, not all expenditure by residents travelling abroad ends up as import payments, par- ticularly when there is a sophisticated local travel trade that packages the trips for residents. 68 Chapter 4 Measuring and Modelling Tourism Demand
- 94. TSA Tables 1–4Measurements of tourism demand (currency units in millions) Table 4.1 Tables 1 to 4 TSA 1 Inbound tourism consumption TSA 2 Domestic tourism consumption TSA 3 Outbound tourism consumption TSA 4 Internal tourism consumption Products Same-day + Tourists = All visitors By residents travelling only within the country By residentsa travelling abroad By residentsb travelling abroad TSA 1 + TSA 2 A. Specific products A.1 Characteristic products 1. Accommodation 69 39 323 108 2. Restaurants and similar 96 307 12 301 415 3. Passenger transport 36 52 9 471 97 4. Travel, tour and guide services 15 48 116 31 179 5 6. Culture, sport and recreation 21 70 156 91 A.2 Connected products 1. Renting and business services 6 40 22 39 68 B. Non-specific products 1. Retail 135 597 25 257 757 TOTAL 378 1,153 184 1,578 1,715 Number of trips (000s) 2,319 31,814 4,623 34,133 Number of overnights (000s) 8,693 5,360 21,827 14,053 Source: Author a This refers to those resident visitors whose trip will take them outside the economic territory of the country of reference. These columns will include their consumption expenditure before departure or after their return. b As for (a) but refers to expenditure only incurred outside the economic territory of the country of reference. After deductions of fares paid to international carriers, which go into the transport account of the balance of payments, the remaining inbound and outbound tourism expenditure in columns two and five are put into what is known as the travel account for the country of reference. A negative travel account means that spending by incoming visitors is less than spending abroad by outgoing visitors, and the combined effect will be to the detriment of the balance of payments. Politically, a negative imbalance is often looked at pejoratively as a measure of the performance of the domestic tourism industry, given the importance attached to foreign exchange earnings, and national tourist administrations are often urged to do better in attracting inbound visitors. Such a view is naïve as the imports and exports of travel services are often strongly differentiated or non-competitive products, say city breaks versus summer sun holidays. What is a more sensi- ble alternative is to evaluate the net foreign exchange yield from inbound tourism, namely earn- ings less the foreign exchange cost of servicing this tourism. This is known as the tourist propensity to import which can range from more than 50% for small island destinations to 10–15% for major developed countries. This matter is given further consideration in Chapter 7. While governments are supportive in measuring the movement of international tourism, especially incoming tourism because of its economic benefits and the concomitant need to prepare and evaluate national marketing campaigns (see Part 4), many still do not have effec- tive volume and value measures of domestic tourism.Yet, as Table 4.1 indicates, the volume of tourism by residents travelling only within their country can be many times greater than Tourism Satellite Account Requirements 69
- 95. international tourism. Oneargument is that it will happen anyway, and another is that they do not achieve prominence because they are not major users of the commercial accommodation industry (domestic tourists often stay with friends and relatives), as column three in Table 4.1 will testify, but knowing the volume and value of domestic tourism has a number of important implications: ● measuring the contribution of tourism to the overall economy; ● regional development policies; ● market intelligence for local businesses; ● additional public sector infrastructure provision, as in the case of seaside resorts, to compensate for influxes of visitors; ● understanding the holiday-taking habits of residents in order to deliver social tourism assistance to the underprivileged in society. Measurement Methods The early recording of international travel movements came from the completion of disem- barkation and embarkation cards at ports of entry and exit, along with the passenger statistics collected by international carriers. Such complete tallies are known as a census since all movements in and out are counted. Such procedures used at entry and exit points have normally been determined on the basis of administrative control and other reasons not specifically related to tourism. Tourism statistics are thus a by-product of the process rather than its main aim. Nevertheless, there are many countries that do make counts and collect information at frontiers for tourism-related purposes. While these methods are relatively easy to apply in the case of destinations where there are limited points of entry by sea or air, as in the case of islands, they have proved to be unworkable for countries that are either landlocked or have extensive land borders with many roads and rail links passing through them. Traditionally such countries have relied on the registration of hotel nights as a meas- ure of tourism flows, but as noted above not all tourists stay in commercial accommodation, and there is usually a minimum hotel size, say 20 rooms, below which overnights are not collected, so such records are only partial in their coverage. Similarly, earlier approaches to gathering value statistics for inbound and outbound tourism were exercised through foreign exchange controls. Controls allow the central bank to monitor currency movements in and out of the country from various sources. However, over time agreements on travel movements between countries have seen a reduc- tion in the use of count data methods, save in the case of selected countries where aspects of control for security and immigration are deemed important. Equally, restrictions on currency movements have been increasingly relaxed, so that foreign exchange statistics are no longer a reliable indicator of the value of international tourism. In view of this it is becoming more com- mon to collect information directly from the visitors themselves, through surveying a sample (as opposed to a census) of the relevant population by asking visitors: ● who they are; ● what they do at the destination; ● what they think about the places they visit; and ● how much they spend. By this means tourism authorities are able to establish detailed profiles of their visitors for market intelligence purposes. Smith (1996) has provided a helpful checklist (see Table 4.2), albeit with a North American approach, of the kinds of information that can be asked for on a sample survey questionnaire, depending upon the objectives, type, cost and time available for the survey, matters which are considered in the next section. 70 Chapter 4 Measuring and Modelling Tourism Demand
- 96. Levels of measurement Socio-economicvariable 1 Age Collect by single years. It may be convenient to summarise by age cohorts. 2 Sex Male/female. Age–sex cohorts may also be useful. 3 Education Given the diversity of educational systems in North America, a basic four-part classification may be most useful: elementary, secondary, post-secondary, non-university and university. It may be useful in other circumstances to distinguish between completion of secondary or post-secondary programmes and partial work (drop-out before completion). 4 Occupational status Categories can include employed full-time, employed part-time, retired (some reference to former occupation may be desired), homemaker, student, unemployed. If employed, refer the respondent to the next question, ‘occupation’. 5 Occupation This is best determined through an open-ended question. Responses can be summarised according to the Occupation Classification Manual or other comparable national statistical coding system such as the Canadian Classification and Dictionary of Occupations. These codes refer to the type of industry in which the traveller is employed. 6 Annual income This is an especially sensitive subject; some of the concern over reporting income can be reduced by using income categories. The specific categories should be based on those used in the most recent national census. Household income is often the most relevant measure of income, although the respondent’s income may be useful in special circumstances. 7 Family composition This can be an especially important variable if the purpose of study includes some analysis of the effect of travel party composition on travel behaviour. One possible classification is: Single individual living alone Husband–wife family No children under 18 years No children at home or no children at all Adult children or other adult relatives living at home With children under 18 years With no other adult relatives With other relatives Single-parent families Male head Female head All other families 8 Party composition This is closely related to the previous variable for many travelling parties. Levels include: One person alone One family with children Two families with children Organised group One couple Two or more couples Group of friends (unorganised group) Other Checklist of relevant information to be collected through tourism surveys Table 4.2 Measurement Methods 71
- 97. Levels of measurement Tripvariable 1 Season or trip period Calendar quarters: January to March April to June July to September October to December If the trip overlaps two or more quarters, the following convention is often used: for household surveys, use the quarter in which the trip ends; for exits or re-entry surveys, use the date of the survey. It is sometimes desirable to distinguish weekend trips from other trips. 2 Trip duration Both days and nights are used as the unit of measurement. The number of nights is usually one less than the number of days; a three-day weekend lasts ‘two nights’. The actual number of days or nights up to one week is often collected. Periods longer than one week are often measured as ranges, e.g. 8–15 days (or 7–13 nights). 3 Trip distance This should be based, in part, on the threshold distance required for definition of a trip. Narrow ranges for lowest levels are desirable to permit aggregating or exclusion of data so that comparisons can be made between surveys using different distance thresholds. A possible classification would be: 25–49 miles 50–99 miles 100–499 miles 500–999 miles 1000–1499 miles More than 1500 miles (2400 km) Metric conversion is usually necessary for international comparisons; however, international travel is normally not measured by distance. 4 Purpose of trip Very simple classifications are used, such as business versus pleasure. This dichotomy is normally inadequate for analytical purposes and is too simplistic to represent the purposes of many trips. More precise classifications would include: Conventions or other business meetings Buying, selling, installation or other business Recreation/vacation Touring/sightseeing Attending cultural/sporting events Participating in cultural/sporting events Visiting friends or relatives Other family or personal matters Shopping Study tour Health/rest Many trips involve more than one purpose, so it may be useful to specify ‘primary’ purpose. 5 Mode of transportation Private automobile Rental automobile Bus/motor coach Train (Continued) Table 4.2 72 Chapter 4 Measuring and Modelling Tourism Demand
- 98. Levels of measurement Tripvariable Scheduled airline Chartered airline Private aeroplane Boat/ship (additional categories for ferries, cruise ships, private boats may be added as necessary) Some trips involve multiple modes, such as a combination of scheduled airline and rental car. These combinations may be specified or a primary mode may be requested. 6 Expenditures Transportation (broken down by mode, if desired) Accommodation (including camping fees, but not park entrance fees) Food and beverages (restaurant meals may be separated from food purchased at a store) Convention or registration fees Admission fees and other entertainment, including park admissions, licence fees for hunting and fishing Souvenirs Other purchases 7 Type of accommodation Hotels and inns Motels and motor inns Resorts Campgrounds Hostels Commercial cottages Institutional camps Private cottages Bed and breakfast/tourist home Homes of friends or relatives Other Additional classifications could be based on size of accommodation, price, public versus private ownership, function (e.g. fishing camp, ski resort), type of location (e.g. airport strip; downtown), availability of liquor and so on. Source: Tourism Research Planning Committee, 1975; and from Tourism Analysis: A Handbook, Harlow, Longman with permission of Pearson Education Limited (Smith, 1989) (Continued) Table 4.2 Sample surveys At one time it was thought that the only way to guarantee accurate information about the popu- lation we are interested in was to conduct a census. This might be relatively easy when the refer- ence population is relatively small, say a group of hotels, but with large tourism flows at a national level this would be both time-consuming and very costly, with reporting often some years after the data collection due to the time taken for processing the raw data into useable information. Moreover, with a population that is itself changing in response to events, it may never stay stationary long enough to allow for complete measurement of its characteristics. Fortunately for researchers the statistical theory of sampling permits inferences to be drawn about a population that are representative of its characteristics by randomly drawing a subset or sample of the population to interview. Randomness in statistics does not mean haphazard, but rather that every member of the populace has an equal chance of being selected. In this way, as Measurement Methods 73
- 99. the mathematics assuresus, the sample will mirror the population from which it is taken. How- ever, the estimates obtained from the sample will be subject to error, the amount of which will depend upon the variation in the characteristics being observed and the size of the sample taken. The latter is inversely related to the amount of variation in the population being considered: fewer interviews need to be undertaken when dealing with a very similar population. The degree of sampling error may be calculated to give confidence limits within which the true values may be said to lie. For example, the UK International Passenger Survey records the number of visi- tors to the United Kingdom with a sampling error of around plus or minus 3% of the true value. In any sampling procedure there is always a trade-off between sample size, method and cost. Strict random sampling is a costly method but has the benefits that the sample should be unbi- ased, permits the calculation of confidence limits for the true values and provides sample weights for grossing up to total values. Thus if, say, one in every 50 of the population is sampled using a counting system after a random start, then multiplying the results of the sample survey by 50 will give the estimate for the whole population. Where prior information about the population is available and the need is to profile certain types of visitors, then it is common in market research to use what are described as ‘conveni- ence’sampling techniques. These are non-random methods and are undertaken to reduce survey expense, of which the most frequently used is ‘quota’ sampling. The researcher is given a target or quota of people to select, say young travellers, who will be directly approached rather than go through a strict counting system. The latter would result in considerable redundancy as the per- son selected at random may not be a young traveller. The principal disadvantage of convenience sampling is that the statistical mathematics for estimating confidence limits no longer apply, though if the quota method is well controlled, researchers still make these calculations as an approximation. The other issue to guard against is selection bias: this introduces a systematic error into the results which cannot be eliminated no matter how large the sample. It should now be clear that with random sampling from a given population, the greater the size of the sample the smaller will be the sampling error applied to estimate values, and the nar- rower the range of confidence limits within which the true value may be said to lie. Yet the mathematics of sampling yield a further complication in that raising sample size and reducing sampling error are not directly proportional. Changing the sample size by a factor of, say, n leads to a change in confidence limits by a factor 1 2n . Thus the reduction in the width of confi- dence limits by one-half would require a fourfold increase in the sample size. This is fundamen- tal to the costs of obtaining a representative sample of visitors through random selection and no amount of ingenuity is able to get around this. Sampling By Place Frontier surveys These are undertaken at points of entry and exit, normally by personal interview after the traveller has passed through border controls. Given that locations are known, the sample is stratified by air- ports, seaports and land routes, though, as noted earlier, for landlocked countries with open borders frontier surveys have not proved to be cost-efficient ways of collecting visitor information. By stratifying the sample according to transport mode of entry, the design effect is to reduce sampling error. However, it is common not to sample all points of entry and departure at any one time. While countries need to include their main airports, seaports and land routes (if possible) in the sample with certainty, the remainder are often grouped into clusters from which a few will be randomly drawn for sampling. The assumption is that one or two regional airports, for example, will be repre- sentative of similar facilities. The design effect of clustering is to increase the sampling error, so it will be appreciated that calculating confidence limits for such large-scale surveys is complex. Once the sample is in the appropriate weighting, factors are applied to yield gross totals. These can then be checked against the recorded passenger statistics of transport carriers for accuracy. 74 Chapter 4 Measuring and Modelling Tourism Demand
- 100. For frontier surveystime is of the essence, so the questionnaire is usually fairly brief, asking travellers their country of residence and nationality (for migration statistics), purpose of visit, length of stay, places where they stayed (which provides the regional spread of visitors) and how much in total they spent in the country. This usually takes less than five minutes, but more detailed information (most common being expenditure patterns and the different accommoda- tion used) can be obtained if researchers are given permission to interview passengers while they are waiting in airline or seaport lounges. Household surveys Most governments carry out a census of their population, normally every 10 years, to identify the demographics and socio-economic characteristics of their people. A census form is delivered to every household by an enumerator and completion is mandatory. In between times government statistical offices run general household sample surveys to monitor economic and social trends, and the section on consumption patterns in the questionnaire is likely to include questions on tourism activity. The sampling procedure for such surveys is one of stratifying the country into known administrative areas, say by postcode or election districts, so that the sample population is known, and then allocating the sample size in proportion to the population in each strata before making random drawings of households. However, it may still be too costly to interview a sam- ple of households scattered across a wide area such as a city, so the final selection may be made after first dividing the city into clusters. A random choice of clusters is then taken from which the appropriate sample of households is drawn. Dedicated domestic tourism or national travel sur- veys, as discussed in Mini Case Study 4.1, follow the same method. Such surveys can be used to provide information on both domestic and national tourism, in the latter case by including ques- tions on foreign trips, and also information on those who have not taken any tourism-related trip. Introduction While inbound and outbound visitor flows into the United Kingdom are collected officially by the Office of National Statistics (ONS) through the International Passenger Survey (IPS) as part of border controls, the measurement of domestic tourism by volume and value was left to the national tourist boards of England, Northern Ireland, Scotland and Wales. Prior to 1989, in view of its separate location, Northern Ireland gath- ered in its own statistics on tourism, while the remaining tourist boards joined forces to finance the British Tourism Survey Monthly (BTSM). Given that dedicated randomly drawn sample surveys conducted by per- sonal interview are very costly, the tourism authorities decided to buy questions on a commercially available household consumer omnibus survey so as to economise on the budget. Yet while the BTSM and its annual publication the British Home Tourism Survey (BHTS) gave tolerably accurate estimates in terms of sampling errors for all Britain and England, the results were not sufficient for Scotland and Wales where tourism was becoming an increasingly significant part of each nation’s economy. Thus in 1989 all four tourist boards came together again with the formation of the United Kingdom Tourism Survey (UKTS), using the same procedure as before, but with a far larger sample size of over 70,000, so as to give greater confidence in the results and permit more detailed coverage of the activities of domestic tourists. The United Kingdom Tourism Survey The UKTS covered trips away from home lasting one night or more taken by UK residents for the purpose of holidays, visits to friends and relatives, business and conferences or any other purpose. Tourism is measured Mini case study 4.1 The United Kingdom/Great Britain Tourism Survey Sampling By Place 75
- 101. in terms ofvolume (trips taken, nights away) and value (expenditure on trips) and collects the following key information: ● purpose of trip; ● number of nights away; ● accommodation used; ● transport used; ● activities undertaken; ● type of location; ● month trip started; ● booking method; ● demographics (age, gender, etc.). Method The UKTS is an example of how survey methodology changes to address both financial and technological change, but not necessarily for the better. As the UKTS, the survey method for the 10 years from 1989 to 1999 was an in- home personal interview. Each month, continuously, interviews were conducted face to face in the homes of a fresh representative sample of UK adults aged 16 or more. The sampling frame used was then the UK’s electoral register, leading to named persons for interview who were asked about tourism trips within the last two months. Up to four recalls were made at different times and on different days of the week: no substitutes were used in the sample, since this would lead to selection bias. This method garnered in some 20,000–25,000 completed trips, which illus- trates the considerable redundancy in random sampling. But the survey was able to produce plus or minus confi- dence limits of about 2% for England, just under 6% for Scotland and Wales and 12% for Northern Ireland. Between 2000 and 2004 the method changed to landline telephone interviewing and the sample was reduced to 50,000 adults. The sampling was achieved through random digital dialling with the interviewing spread evenly throughout the year. Unfortunately such a sampling frame is incomplete due to households registering not to receive commercial calls and those not having a landline, some relying on mobile phones. Furthermore, the response rate was affected by the survey length and fell to around 30%, with non-response being connected to the characteristics of the person sampled. Changing the sampling methodology will alter the results, but by 2004 it became clear that the estimates did not conform to supply-side indicators from the tourism industry and were systematically biased downwards, so this method was abandoned. As a result of this experience, the previous methodology was reinstated in 2005, more than doubling the sam- ple size and cutting trip recall to one month. However, this is at the cost of being able to compare year-on-year trends as the change in methodology has meant that the current results are not comparable to previous years. The Great Britain Tourism Survey In 2011 the UKTS became the GBTS as Northern Ireland decided to collect its own data about trips taken by its residents and is included as part of a new all-Ireland survey. The GBTS retains the same key information as above, but the results presented from 2011 onwards are based only on residents of Great Britain. Compari- sons with previous years using the same geographical coverage are included in monthly and annual reports from January 2011 onwards. As with the UKTS, the GBTS survey is conducted continuously throughout the year, using face-to-face interview- ing, as part of an in-home omnibus survey. Weekly omnibus surveys are conducted with a representative sample of 2,000 adults aged 16 and over within Great Britain. Respondents are asked whether they have taken trips in the United Kingdom in the previous four calendar weeks that involved at least one night away from home. When such trips are reported, further questions are asked about a maximum of three trips – the most recent – with a core set of questions for all three trips and additional questions for the most recent trip. The questionnaire is thus designed to maximise accuracy of recall, whilst minimising the task for those who have undertaken more than one trip. To conclude, a final word of caution is in order. While a national survey of this kind will record trips to every part of the country, it is unrealistic to expect it to produce robust statistics for areas smaller than the regions of the 76 Chapter 4 Measuring and Modelling Tourism Demand
- 102. En route surveys Enroute surveys are surveys of travellers during the course of their journey once in the destina- tion country. Strategic points are selected on key transport routes to stop or approach people, who are then either interviewed or given a questionnaire or other documentation to complete in their own time for return by post. A major problem with this type of survey is how representative the sample might be because of incomplete knowledge of traffic movements within a country. Destination surveys Surveys are often conducted at popular tourist destinations or in areas where there are high lev- els of tourist activity. They typically take the form of personal interviews by teams of interviewers. It is difficult to construct with confidence a representative sample of visitors at a tourism destination because visitors are often dispersed over a large area. The golden rule is to spread the sample out as much as possible, hence it is conventional to sample proportionately to the seasonal nature of demand time of year, notably in peak months, and to conduct interviews at a wide range of sites which visitors are likely to frequent, namely attractions and places of interest, accommodation establishments, shopping centres, transport termini and similar. Surveys of suppliers One of the issues with demand surveys is their timeliness, in that acquiring, processing and publishing such extensive volumes of information involves a considerable effort, even with modern technologies, so that the results may not appear until a half-year or more has passed. For business users of these statistics this is often too late, although authorities try to counter this by producing rolling monthly and quarterly statistics. Surveys of the suppliers of tourism ser- vices are much more immediate and, although partial in coverage, they can be used as indicators to monitor trends. There is a range of indicators for which regular collection from a statistically determined sample of businesses is impracticable but can be collected from panels of businesses organised by tourist boards. Evidence on short-term trends in such indicators is beneficial for marketing and for monitoring the impact of any sudden shocks to the tourism system. Interna- tional passenger movements are readily available from aviation authorities, while at the destina- tion indicators may include: ● accommodation occupancy data; ● business confidence surveys; ● attendance at visitor attractions; ● state of the market indicators such as average revenue achieved per available room, average cheque for restaurants and achieved gate prices for attractions; ● key performance indicators collected from best practice forums. United Kingdom, in view of the mathematics of sampling error. For regions the confidence limits are about 12% on average, while for less frequented localities they can be as much as 40%. As a point of reference, estimated domes- tic tourism trips to London have a confidence limit of about 8%, as compared to 3% for Great Britain as a whole. Source: Adapted from The Great Britain Tourist Survey, published jointly by the national tourist boards of England, Scotland and Wales. Discussion Questions 1. Trip recall is a critical element of this type of survey – see if you can remember tourism trips in the last two months in sufficient detail to answer the checklist of questions asked by the UKTS above. 2. Examine ways by which domestic tourism statistics may be best disseminated and may be used in support of local destinations. 3. Consider the differences between personal and telephone interviewing. Sampling By Place 77
- 103. Administering The Sample Themost common ways in which a sample survey is administered are through personal or telephone interview, a self-completion questionnaire sent by post, via the Internet, a mobile phone app or completed at sampling points at the destination or during the return journey, as in the case of business surveys by holiday companies. The choice as to which to use depends on the nature of the research concerned, the available budget, the need to ensure randomness in selection and the completeness of the sampling frame as in the case of Inter- net use. As noted in Mini Case Study 4.1, there is no doubt that using trained interviewers to collect survey data is the best recommendation when dealing with lengthy and often complex questionnaires. Interviewer presence is essential in qualitative market research studies to obtain insight and understanding into consumers’ perceptions, awareness and motivations in ‘focus’ group studies, where between six and ten people, chosen to be repre- sentative of the target market, are led into open discussion of their preferences. Equally, in-depth interviews or discussions with managers of tourism enterprises can be very helpful in profiling the different characteristics of visitors from key tourism generating countries coming to a destination. Telephone interviewing has become increasingly common because it is low cost and the response rate is likely to be good if the interview is kept short and the questions uncomplicated. On the other hand, people are becoming somewhat fatigued by ‘cold’ calls, particularly when the ‘end game’ of the interview is about selling. Non-response bias (hanging up) is a difficulty, as noted in Mini Case Study 4.1, and this also applies to self-completion questionnaires. For the latter, using the postal system enables the researcher to reach the majority of people or busi- nesses within a country and delivery of the survey form may be followed up with telephone interviews to ensure completion, and personal visits to a sample of non-respondents to ensure that their lack of response is not related to the contents of the questionnaire. In drafting a survey questionnaire before piloting it, it is beneficial to take in colleagues’ views. Photograph 4.1 78 Chapter 4 Measuring and Modelling Tourism Demand
- 104. Technological development hasgiven rise to the regular use of Internet survey packages. These surveys are very low cost and benefit from immediacy in delivery and response, particu- larly for post-purchase appraisal. They offer a range of survey tools to simplify the task of col- lecting information in terms of formulating the questionnaire, creating the latter in any language, closing the survey after a certain time, blocking users from revisiting their answers, and giving ‘freebies’ to encourage involvement. From a business perspective, social media networks have been escalating in importance for researching visitors’ preferences and communicating their message, in contrast to traditional promotional methods, but the usual caveats about just being convenience samples and non-response bias still apply. Measuring Own Price Elasticity When measuring own price elasticity for travel products there are two possibilities to consider in the first instance: one is point elasticity of demand and the other is arc elasticity of demand. These possibilities are illustrated in Table 4.3, which extends the example of the demand for package holidays that was first introduced in Table 1.1. Columns four and five show the per- centage change in quantity demanded with respect to the percentage change in price when moving down the demand schedule. Dividing column four by column five yields the own price elasticities shown in column six, while on the other hand, if we move from the bottom upward in the demand schedule a different set of elasticities is derived, as shown in column seven. This arises because the base on which each percentage change in the movements of price and quan- tity varies depending on whether we move down the schedule or up the schedule. The solution to this dilemma is given in column eight, and is known as arc elasticity because it averages the movement between one point on the schedule and the next, and is therefore invariant of the direction taken, whether up or down. For example if the price of a package holiday is reduced from 500 to 400 currency units, then: arc elasticity = 100013000 + 40002 1001500 + 4002 = 1.29 The above measure of elasticity value is now invariant of the direction of movement along the demand schedule. The revenue column of Table 4.3 reveals an interesting practical consequence of elasticity. It may be observed that when the elasticity is greater than unity, cutting price increases revenue, Unit price P Quantity demanded Q Revenue P * Q Percentage change Q Percentage change P Point elasticity downwards Point elasticity upwards Arc elasticity 600 2000 1200000 50% 17% 3.00 1.70 2.20 500 3000 1500000 33% 20% 1.67 1.00 1.29 400 4000 1600000 25% 25% 1.00 0.60 0.78 300 5000 1500000 20% 33% 0.60 0.33 0.45 200 6000 1200000 Source: Author Market demand for holiday packages Table 4.3 Measuring Own Price Elasticity 79
- 105. but upon elasticityfalling below unity overall revenue declines, since it fails to expand propor- tionately to the price cut. The effect of this phenomenon when the situation is one of oversupply is to cause product to be put into stock or, where it is perishable, as in the case of agricultural commodities, simply ‘dumped’ so as to keep up prices. In a world where large numbers of the populace do not have enough food, such actions are difficult to comprehend for many people. In the tourism industry this aspect of demand combined with modern ICT leads to sophisticated revenue management strategies so as to maintain earnings. This relies on dealing with different market segments in which secondary trading is either not allowed (the product sold to a named person) or difficult to accomplish. It allows the travel trade to offer last minute availability for surplus holiday packages, late discounting of hotel rooms and half-price ‘on the day’ tickets in theatres, without affecting the previous selling price. The more people book online the easier it becomes for tourism businesses to use ‘real time’ revenue management in which the price offered for a given product will vary according to the time of booking, the time of consumption and how well the product is selling. Modelling Tourism Demand Given the significance of international tourism and the importance attached to its export earn- ings by governments, it is not unexpected that there have been many empirical country studies on international tourism flows. Globally the UNWTO monitors international arrivals on a con- tinual basis as reviewed in Major Case Study 4.1, while at the country level the demand for international travel is treated in much the same way as the demand for imports and exports of commodities, save that importing refers, as noted previously, to expenditure by domestic resi- dents in foreign countries and conversely for exports, which are demands for international travel made by people abroad. When estimating demand functions for international travel it must be remembered that the data points that are collected through surveys are not that of a demand schedule, but rather observed market equilibrium positions between demand and supply. For such observations to trace out a demand function requires supply to be continually responding to changing market conditions. The supporting evidence for this is that over time the real cost of travel has been falling, which in turn has encouraged continuous growth in demand (see Major Case Study 4.1) and a commensurate expansion of supply. It remains to make operational the general demand function given by equation (2.10) that was derived in Chapter 2, and reproduced below: Q = F(Pt , P1, c c, Pm, Y)(4.1) where, Pt = the price of the tourism product; P1, . . . . . . , Pm = the prices of alternative goods and services which are making claims on the visitor’s budget; Y = the sum of individual incomes in the market. The most frequent analysis of international travel is to interpret equation (4.1) for inbound arriv- als, and the export function is simplified by assuming that consumers have a two-stage budget- ing process. First they allocate their expenditure over broad categories of goods and services such as food, clothing, housing, transport, holidays, and so on. These groups are separable in the sense that they are not directly substitutable and it is only after allocations have been made that the consumer decides where to go for his/her holiday. This allows researchers to draw up a fairly simplified export demand function for international arrivals at the destination from each tourism-generating country: Q* = F(Pt,Y* )(4.2) 80 Chapter 4 Measuring and Modelling Tourism Demand
- 106. where, Q* = measureof inbound visitor demand; Pt = the price of the tourism product; Y* = the sum of inbound visitor incomes for this market. A number of measures of Q* have been used by researchers, which include the number of visitors, total expenditure by all inbound visitors in constant value (real) terms, per capita real expenditure by visitors and the visit rate, the latter being the number of visitors from the origi- nating country divided by the population of that country. Of these, total expenditure adjusted by a consumer price index to remove purely inflationary movements and give real values tends to be most popular. Business travel needs to be treated in a different way to leisure trips, because much of it may be regarded as an intermediate demand to do with the volume of trade and investment between various countries. For Y* there are again a number of possibilities of which the simplest measures are GDP or GDP per capita in the country of origin at constant prices. Some researchers have used personal income after taxation, while the two-stage budgeting process noted earlier suggests that total tourism expenditure to all countries by inbound visitors from the country of reference would be appropriate. In most instances data availability restricts researchers to GDP measures which do perform satisfactorily. However, it is the price measure that presents the greatest difficulty because of the general lack of adequate data for empirical work. Ideally what is needed is an indicator of the relative price of the tourism product as between the origin and the destination, and between the destina- tion of interest and likely competing locations. Given ever widening choice, pricing is necessar- ily comparative, so more and more purchasing decisions are based on relative prices and not actual or specific prices. In practice is broken down into two main components: the round-trip cost of travel or fare , and the comparable cost of stay, which is shown by the cost-of-living index in the two countries, usually the consumer price index, adjusted for exchange rate changes. Thus re-writing equation (4.2) gives: Q* = F aFA, C/E C* , Y*b(4.3) where, C = the consumer price index in the destination country; E = the destination country exchange rate in terms of units of local currency per unit of the visitors’ currency; C* = the consumer price index in the tourism generating country. Some researchers include E as a separate variable from C C* in equation (4.3) on the grounds that visitors are more likely to know E as a price signal than any comparison of the costs of stay. Where competing destinations are considered to be significant, then similar expressions such as CE C* can be inserted into equation (4.3), as well as particular variables to cover for known events and even marketing campaigns levelled at increasing awareness and realising new demand (see Chapter 21). While equation (4.3) is an export demand function, dealing with inbound tourism, outbound tourism or import demand functions are simply the reverse: Q = F aFA*, C*/E* C , Yb(4.4) Modelling Tourism Demand 81
- 107. where, Q = measureof outbound (resident) tourism demand; C = the consumer price index in the home country; E* = the home country exchange rate in terms of units of foreign currency per unit of the domestic currency; C* = the consumer price index in the destination country. Y = the sum of residents’ incomes in the market. Table 4.4 shows aggregate own price and income elasticities (Smeral, 2004) derived from imports end export demand functions of the kind presented in equations (4.3) and (4.4). The price elasticities are shown as their true negative values since quantity and price move in Own price elasticities Income elasticities Countries Import functions Export functions Import functions Export functions Austria −0.58 −1.34 1.12 1.08 Belgium −1.73 −0.57 1.83 0.74 Czech Republic −1.36 – 9.23 3.93 Denmark −0.99 −0.31 1.75 0.53 Finland −1.50 −1.06 1.80 0.61 France −1.12 −1.00 2.06 1.00 Germany −0.74 – 1.21 0.76 Greece −0.74 −1.22 2.18 0.47 Hungary −1.81 −0.66 3.96 1.38 Ireland −0.42 −2.03 1.57 1.32 Italy – −1.43 4.75 1.13 Netherlands −0.93 −1.14 1.20 0.81 Norway −1.55 −0.50 0.81 0.70 Poland – – 4.46 2.86 Portugal −3.61 −0.79 2.18 1.30 Slovenia − −2.89 2.41 – Spain −1.58 −0.91 2.11 1.09 Sweden −1.32 −1.75 3.18 1.09 Switzerland −0.88 −0.45 1.55 0.79 United Kingdom −1.04 −0.62 2.61 0.81 Australia −1.28 −0.47 1.38 1.41 Canada −2.18 −0.69 2.00 0.69 Japan −0.73 – 1.98 0.72 Mexico −0.64 −0.72 2.51 0.34 USA −0.56 −0.40 1.50 0.55 Arithmetic mean −1.24 −1.00 2.45 1.09 Source: Smeral, 2004 Overall country own price and income elasticities Table 4.4 82 Chapter 4 Measuring and Modelling Tourism Demand
- 108. opposite directions. Sincethe measures shown in Table 4.4 refer to all inbound and outbound tourism in the respective countries the statistics used for estimating them are weighted averages of the relevant variables. For example, the average of Y* will usually be real GDP of the leading ‘customer’ countries for the destination, weighted by the share of each country in the total export receipts shown in the travel account of that destination. To conclude this section it only remains to consider the functional form that equations (4.3) and (4.4) may take for statistical estimation purposes. In the absence of any prior knowledge, the common procedure is to estimate them as additive linear or multiplicative, but linear in logarithms. Thus equation (4.3), and similarly for equation (4.4), may be represented as: Q* = b0 + b1FA + b2c C/E C* d + b3Y* + u(4.5) or Q* = b0FAb1 c C/E C* d b2 Y*b3 u(4.6) where b0 is the constant term, and b1 to b3 are coefficients of the explanatory variables of inbound tourism movements to be estimated using statistical multiple regression analysis, with u being the error term. The latter is assumed to be random and normally distributed with a mean of zero, so that the estimates will be unbiased. Multiple regression analysis (which will be dis- cussed further in Chapter 5) is readily available in most statistical computer packages. Taking logarithms of equation (4.6) will convert it into the linear format of equation (4.5) for estimation purposes. The advantages of this procedure are twofold: often the data for each of the variables are in very different dimensions, so by transforming them into logarithms puts them on the same scale; secondly, the coefficients b1 to b3 so estimated turn out to be constant value elasticities, which is how the statistics in Table 4.4 were measured. The implications of knowing elasticities for tourism authorities are about understanding the sensitivity of your markets to changing economic circumstances and adjusting marketing policies accordingly. Table 4.5 is an aggregation of elasticities by the world’s regions derived from a study by Peng et al. (2015). The authors use a technique known as meta-analysis, which is a statistical approach that combines the results from multiple studies in an effort to increase robustness of the results and improve estimates of the elasticities, so as to remove any conflicts. It may be seen that European tourists have the highest income elasticity (3.15) so that improvement in economic circumstances generates a high propensity to travel. On the other hand, from the des- tination perspective, tourists going to Asia demonstrate the highest income elasticity (3.17) so that growth in the world economy will benefit Asia more than other regions as anticipated in the forecasts provided by the UNWTO (Major Case Study 4.1), but the price elasticity is quite high (-1.46), so offering value for money is important. Average own price elasticities Average income elasticities Region Import functions Export functions Import functions Export functions Africa −0.78 −1.17 1.15 2.17 Americas −1.28 −1.55 2.00 2.27 Europe −1.27 –1.29 3.15 2.23 Asia −1.42 −1.46 1.72 3.17 Pacific −1.11 −0.84 2.14 2.07 Source: Peng et al., 2015 World regional own price and income elasticities Table 4.5 Modelling Tourism Demand 83
- 109. 1. Examine thedata requirements for the demand tables of a TSA and see whether they can be completed from the available information in your country. 2. What might be some of the key problems in comparing tourism statistics from different areas and regions of the world? 3. Review the different methods of collecting tourism statistics. 4. List the key questions you would ask in a domestic tourism survey. 5. How does the concept of elasticity help our understanding of tourism demand? Self-Check Questions Conclusion It is now clear to all governments that the activity generated by the demand for tourism is exten- sive. Its measurement has always been problematic, but the requirements of the TSA have imposed a discipline on the collection of data. However, many countries still collect their tour- ism statistics as secondary to other needs, with the balance often distorted to international arriv- als and neglecting outbound and domestic tourism. As a consequence, much of tourism demand modelling is confined to inbound tourism, but in reality all forms of tourism are significant for destination planning, management and marketing. The measurement of tourism activity and an understanding of the factors that influence visitors’ behaviour provide a wealth of information for such purposes. https://www.youtube.com/watch?v=pJMIQt8f9AM https://www.youtube.com/watch?v=pBQ31Pqj_0M South Africa’s TSA Parts I and II by Martin Hatchuel. https://www.youtube.com/watch?v=1NmLg91xEUk Conducting effective surveys. https://www.youtube.com/watch?v=uTIWl76_klI Conducting an online survey. Youtube Lennon, J. (ed.) (2003) Tourism Statistics: International Perspectives and Current Issues, Continuum, London. An in-depth and excellent international overview of the many issues associated with tourism statistics. Peng, B., Song, H., Crouch, G.I. and Witt, S.F. (2015) ‘A meta-analysis of international tourism demand elasticities’, Journal of Travel Research 54(5), 611–33. Ryan, C. (2003) Recreational Tourism Demand and Impacts, Channel View, Clevedon. An approachable and complete overview of tourism demand. Smeral, E. (2004) ‘Long-term forecasts for international tourism’, Tourism Economics 10(2), 145–66. Smith, S.L. (1995) Tourism Analysis, 2nd edn, Longman, Harlow. Song, H., and Witt, S.F. (2000) Tourism Demand Modeling and Forecasting: Modern Econometric Approaches, Amsterdam: Pergamon. An advanced text for those wishing to delve deeper into the modelling of tourism demand. Veal, A.J. (2011) Research Methods for Leisure and Tourism, 4th edn, Pearson Education, Harlow. A non-technical guide to researching tourism. References and Further Reading 84 Chapter 4 Measuring and Modelling Tourism Demand
- 110. World Tourism Organization(2000) Data Collection and Analysis for Tourism Management, Marketing and Planning, WTO, Madrid. A comprehensive practical guide to collecting and analysing tourism information within a disciplined and coherent framework of statistics. UNWTO (annual) Tourism Highlights, UNWTO, Madrid. UNWTO (2008) International Recommendations for Tourism Statistics (IRTS). Department of Economics and Social Affairs, Statistics Division. This not only offers a definitive explana- tion of concepts and definitions, but also recommendations on the collection of data. It is available at http://unstats.un.org/unsd/trade/IRTS/IRTS%202008%20unedited.pdf Websites http://www.world2.unwto.org An all-embracing website providing the official United Nations’ tourism definitions, statistics and forecasts, as well as policies on tourism issues such as tourism ethics, pro-poor tourism, women in tourism, taxation and many more aspects affecting the industry. http://www.wttc.org An all-inclusive website from the private sector’s representative body for tourism with up-to- date statistics and reports on the tourism industry and its economic contribution to different countries of the world. Major case study 4.1 World Patterns of Demand For Tourism: The Historic Trend jet aircraft in 1958, and by the general availability of cheap oil. Furthermore, economic recovery boosted international business travel. As one would expect, the fastest growth in world arrivals took place in the earlier years, so between 1950 and 1970 the average rate was about 9.9% per annum, doubling every seven years. The 1970s started off well but was hit by the rising price of oil in late 1973, which in a short space of time went up four times. The setback this caused to the major tourism-generating countries saw growth in world arrivals fall back to 5.3% between 1970 and 1980. Nevertheless, international tourism con- tinued to expand on a worldwide scale, demonstrating a robustness against economic adversity and the ingenuity of the travel industry in overcoming difficulties. Generally, in times of economic growth, demand for travel has increased; on the other hand, during times of recession, demand has either remained constant or has soon recov- ered, in both cases due to new travellers entering the market and existing travellers taking more frequent trips. THE 1980s In addition to growth, the market has diversified as it has matured, with an extensive growth in the array of desti- nations available. As the market matured, so the aver- age annual growth rate has tended to decrease, as Since World War II, there has been rapid growth world- wide in international tourism (as may be seen from Table 4.6). After the war increasing proportions of the populations of the industrialised nations were in posses- sion of both the time (in the form of paid leave from employment) and the money (with post-war economic recovery in the 1950s) to engage in international travel. Supply to meet this increased demand for leisure tour- ism in particular was developed mainly in the form of the volume package tour, which was priced to get around foreign exchange controls. This was made possible by the availability of surplus transport aircraft and further cost-cutting with the conversion from propeller-driven to Year Arrivals (millions) Year Arrivals (millions) 1950 25.3 2010 948.6 1960 69.3 2011 994.9 1970 165.8 2012 1035.2 1980 277.1 2013 1086.5 1990 434.5 2014 1128.8 2000 674.5 2015 1186.3 Source: UNWTO, annual. International tourism trends: worldwide arrivals 1950–2015 Table 4.6 Major case study 4.1 85
- 111. arrivals to Australia,a series of adverse happenings over the last decade were responsible for keeping growth down. The attacks on the World Trade Centre on 11 Septem- ber 2001 saw international tourism arrivals decline by 0.5% over 2000. 9/11, as it is commonly known, was followed by the Bali bombings of 2002, the commencement of wars in Iraq and Afghanistan and the SARS outbreak in Asia, which gave rise to a three-year period of stagnant growth. Despite the Indian Ocean tsu- nami of 2004, this year saw a considerable rebound in international arrivals, with only two sub-regions not break- ing their previous records, namely North America and Western Europe. Terrorist attacks on surface transport in both Spain and the United Kingdom severely affected the pattern of tourism demand, and tightened security at both borders and in the airline industry prompted consumers to holiday at home rather than internationally. However, tourism demand has shown itself to be robust and arrivals and receipts recovered in general by 2005, with growth restored for the next few years before the effects of the global financial crisis began to be felt in late 2008 and 2009. In 2010, world tourism recov- ered more strongly than expected from the financial shock it had received, with the exception of Europe which was locked into difficulties with the Euro and government debts. By 2015 the world situation was moving back on track, with the exception of Africa and the Middle East due to internal strife and terrorism; growth between 2010 and 2015 averaging 4.6%. Regional Dimensions The changes in the share of international tourism world- wide for the different regions over the period 1950 to 2010 are shown in Table 4.7. It may be seen that the global experience of almost uninterrupted growth is not equally shared by all regions but when viewed in the context of an expanding total even a constant share rep- resents substantial gains. Europe, notably the EU, and to a lesser extent the Americas, under the influence of the United States and Canada, have for some time dominated the international travel scene in terms of numbers of arrivals and receipts. But these are mature markets and it is only to be expected that they will lose market share to emerging destinations in Asia and the Pacific, and more recently the Middle East. For the latter, the key factors have been the support of most governments, the permanent development of tourism infrastructure, significant public and private sec- tor investment in tourism, the low-cost airline phenome- non and the increasing cooperation regarding border facilities among the countries in the region. But the politi- cal activities identified as ‘Arab Spring’ that began in would be expected, implying that the rapid advance in the early post-war period of international travel was unlikely to be repeated. The early part of the 1980s was a continuance of the recession in the late 1970s, which acted to dampen international travel, and volume did not really recover until 1984–1984 and 1985 were record years, with European destinations doing particularly well. However, the accident at the nuclear power plant in Chernobyl, in the then Soviet Union, combined with terrorist activity, the Libyan bombing incident and the weakening of the US dollar against other major currencies all conspired to contribute to the depressing of demand for tourism. As a result, international travel was severely affected. The effect was not so much in terms of total numbers, which were up on the previous year anyway, but in terms of tourism flows and changes in types of trip taken. Many destinations suffered badly, whereas oth- ers gained. The second half of the decade saw a return to some sort of normality, in terms of both growth rates and types of trip taken, but all told the decade achieved less than what had gone before at 4.6% a year. THE 1990s The 1990s commenced with the Gulf War and further economic recession, leading to great uncertainty for international tourism. In the short term, the build-up to the Gulf War, the war itself and the aftermath led initially to the virtual cessation of travel to the Gulf, the Eastern Mediterranean and North Africa. It not only depressed international tourism further afield, but also the eco- nomic recession experienced by the majority of industri- alised countries was aggravated by it. The lessons of earlier years were that international tourism would recover and develop, with new products, destinations and generating markets; and indeed this has been the case, with tourism responding well to the growth in eco- nomic and social conditions and little or no slowdown was seen in international tourism flows in the 1990s. In particular the decade was characterised by the growth of overseas travel by residents of developing countries and the acceleration of multiple, but short-haul, trips from travellers in industrialised countries. The Noughties Tourism in the early years of the new millennium has been characterised by contrast. Based on 1995 data the UNWTO predicted over 1 billion international arriv- als for 2010, at an average annual growth rate of 4.1%. The outturn was somewhat lower, as indicated in Table 4.6, representing a growth rate of 3.7%, for while the millennium opened with optimism and the success of the Sydney Olympic Games, considerably boosting 86 Chapter 4 Measuring and Modelling Tourism Demand
- 112. France and theUnited Kingdom. On the supply side, ease of access, a sophisticated travel industry, a wealth of attractions and a common currency in the euro have all facilitated tourism trips. Nonetheless, the financial turmoil has exposed structural economic weaknesses in having a common currency between different sovereign states, which have posed questions as to the future of the euro in terms of the number of countries joining or staying within the Eurozone, with further questions being raised by the UK’s decision to leave the EU. However, in tourism terms, the statistics clearly show that Europe has bounced back on to a higher growth path since 2010. A number of these factors are equally applicable to North America, which experienced a flat period during the noughties, but the sheer size of the United States and Canada means that the majority of their populations prefer to take domestic trips. Nevertheless, there are substantial 2011 and the internal disruption that followed in the Mid- dle East and North Africa have reversed previous trends. In all this it must be remembered that approximately four- fifths of international travel is within each region (intrare- gional) so that long-haul or interregional travel only accounts for some 20% of the total. The latter is one of the first to be affected by downturns in the market and equally one of the first to recover. One of the conse- quences of uncertainty caused by terrorist actions is to curtail travel to within the visitor’s own region of familiarity. Of all the regions, Europe was hit hardest by the global financial crisis, yet it still accounts for just over half of all international tourist arrivals. The factors that explain this on the demand side have been in place for a considera- ble time, namely a high per capita GDP, paid leave from work and a growing attachment to the annual foreign holiday in the main generating countries of Germany, Region 1950 1960 1970 1980 1990 2000 2010 2015 Arrivals (millions) Africa 0.3 0.8 2.4 7.2 14.8 26.5 49.5 53.5 Americas 7.6 16.7 42.3 62.1 92.8 128.2 150.1 192.6 Europe 16.7 50.4 113.0 177.8 261.5 385.6 488.9 607.7 Asia the Pacific 0.5 0.8 6.2 22.9 55.8 110.1 205.4 279.2 Middle East 0.2 0.6 1.9 7.1 9.6 24.1 54.7 53.3 World 25.3 69.3 165.8 277.1 434.5 674.5 948.6 1186.3 Share of arrivals (percentages) Africa 1.2 1.2 1.4 2.6 3.4 3.9 5.2 4.5 Americas 30.0 24.1 25.5 22.4 21.4 19.0 15.8 16.2 Europe 66.0 72.7 68.2 64.2 60.2 57.2 51.5 51.2 Asia the Pacific 2.0 1.2 3.7 8.3 12.8 16.3 21.7 23.5 Middle East 0.8 0.9 1.1 2.6 2.2 3.6 6.8 4.5 World 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Average annual 1950–1960 1960–1970 1970–1980 1980–1990 1990–2000 2000–2010 2010–2015 growth rates (percentages) Africa 10.3 11.6 11.6 7.5 6.0 6.4 1.6 Americas 8.2 9.7 3.9 4.1 0.8 1.6 5.1 Europe 11.7 8.4 4.6 3.9 2.6 2.4 4.4 Asia the Pacific 4.8 22.7 14.0 9.3 7.0 6.4 6.3 Middle East 11.6 12.2 14.1 3.1 9.6 8.5 –0.5 World 10.6 9.1 5.3 4.6 4.5 3.5 4.6 Source: UNWTO, annual *Estimate Regional distribution of international tourism 1950–2015 Table 4.7 Major case study 4.1 87
- 113. occupied the topspot for many years, but we now see China as number four as the weight of economic devel- opment has shifted in favour of Asia and Australasia. UNWTO Vision Their long-term vision is that international tourism will continue to grow in the period 2010–2030, but at a more moderate pace than in the past decades, with the number of international tourist arrivals worldwide increasing by an average 3.3% a year. It is difficult to contemplate this at a time when most of the leading tourism generating countries have been suffering from economic recession without a clear view of recovery and further growth. Even under conditions of lower increases in GDP and a shift from falling to rising trans- port costs, it is felt that there is still potential for substan- tial expansion in the coming decades as witnessed by the recovery in the main generating regions since 2010. Thus, by 2030, arrivals are expected to reach about 1.8 billion, as shown in Table 4.9, meaning that in under a decade and a half, 5 million people every day will be crossing international borders for leisure, business or other purposes such as visiting friends and family. International arrivals in emerging economy destina- tions are expected to continue growing at double the pace of advanced countries, at 4.4% per annum com- pared to 2.2% a year. In absolute terms, the emerging economies of Asia, Latin America, Central and Eastern Europe, Eastern Mediterranean Europe, the Middle numbers of North Americans who do engage in foreign travel each year, not merely within their own continent but also in long-haul trips. As may be observed from Table 4.7, the rising star in the last three decades has been the Asia and Pacific region in response to economic development. The most significant destination has been China, which has been consistently moving up the rank of the world’s major destinations. Table 4.8 shows the most recent ranking of the top ten destinations in the world. France has Europe, the world’s most popular tourist destination. Photograph 4.2 Country 2010 Country 2015 France 76.8 France 84.5 Spain 59.7 USA 77.5 USA 55.7 Spain 68.2 China 52.7 China 56.9 Italy 43.6 Italy 50.7 UK 28.1 Turkey 39.5 Mexico 27.0 Germany 35.0 Germany 26.9 UK 34.4 Austria 24.6 Russian Federation 32.1 Russian Federation 22.4 Mexico 31.3 Source: UNWTO, annual Top ten international destinations (millions of arrivals) Table 4.8 88 Chapter 4 Measuring and Modelling Tourism Demand
- 114. rising affluence, itis expected that Brazil, Russia, India and China will become significant tourism generating countries for the traditional destinations. Source: www.world-tourism.org Discussion Questions 1. Consider the circumstances that point to Asia and the Pacific region becoming a major destination in the world. 2. With reference to Chapter 12 examine the impact of political unrest on international tourism demand patterns. 3. International tourism growth was phenomenal during the twentieth century. Identify some constraints to tourism in the twenty-first century that might slow this growth. East and Africa (given a return to more normal times) will gain an average 30 million arrivals a year, compared to 14 million in the traditional destinations of the advanced economies of North America, Europe and Asia and the Pacific. Equally, with large populations and Region 2020 2030 Africa 85 134 Americas 199 248 Europe 620 744 Asia the Pacific 355 535 Middle East 101 149 World 1360 1810 Source: UNWTO, annual UNWTO vision (millions of arrivals) Table 4.9 Major case study 4.1 89
- 115. Chapter 5 Forecasting TourismDemand Learning Outcomes The purpose of this chapter is to introduce and discuss the various approaches to forecasting. We develop some basic statistical methods and introduce qualitative or judgemental techniques, drawing together this analysis with practical examples and case studies. This chapter is designed to provide you with: ● an overview of tourism forecasting; ● an understanding of the need for forecasting and the different time periods involved; ● some basic modelling techniques for forecasting tourism demand; ● a knowledge of econometric models of tourism demand; ● an understanding of qualitative and combined approaches to forecasting; ● an appreciation of forecasting errors; and ● an awareness of the role of forecasting in market planning. Price is a real constraint on demand for tourism, particularly for expensive holidays such as winter sports.
- 116. Set against abackground of increasing liberalisation in terms of border controls and interna- tional trade growing at twice the rate of world GDP, tourism has verified the nature of demand illustrated in textbooks on economics, namely that a combination of higher incomes and lower prices brings forth an increased volume. As discussed in Major Case Study 4.1, tourism has demonstrated its resilience in the past to adverse events, with their impacts usually being dis- counted within three years of normal operating conditions being restored, and even here the spill-over effects are not all negative, since market share is relatively easily switched from trou- bled regions to other destinations. Even in the face of continued uncertainty following the global financial crisis and the internal strife in the Middle East, the UNWTO (2015) is predicting a long-term growth trend for international tourism of 3.3% per annum over the period 2010–2030. This is a more moderate pace than in past decades. It is based on a scenario of lower increases in GDP and a shift from falling to rising transport costs, yet continuing innovation in the travel industry. International income elasticities of demand for the major countries are in the region of +1.5 to +2.0 (see Chapter 4), while own price elasticities are around 1.2 to 1.5, thus ensuring that volume will respond more than proportionately to unit changes in these economic varia- bles. Thus, by 2030 international arrivals are expected to reach a level of 1.8 billion. At the individual country level, demand forecasts have their importance in planning tourism investments and managing visitor flows as destinations and businesses need to know in advance who will come. In the short term they are also of value to firms for planning revenue yields (Frechtling, 2001). In an industry with such an array of different, but complementary suppliers the role of forecasting is to give direction and this task is typically taken on by the appropriate tourism authority at the destination (see Mini Case Study 5.1). A particular issue that lays emphasis on accuracy in forecasting arises from the nature of tourism as a ‘perishable’ service industry, implying that surpluses cannot be stored. Thus supply has to be calculated around peak demand, though not the very peak as this would result in excessive capacity, but rather an average busy time during peak holiday months. This is necessary to avoid unwarranted expense, but does mean that every business may experience times when there is heavy congestion or overloading of facilities. At the firm level, one of the major drawbacks to forecasting is the availability of quantitative data of the kind that is at the disposal of a National Tourism Administration (NTA). Breaking down national data to the local level is not very practical because of the resulting size of sam- pling errors. In the main businesses rely on their own management accounts, polling their sales This chapter builds upon our previous discussion of the determinants of tourism demand and the theoretical appraisal of demand models. It goes on to show how an understanding of these underlying influences is important for predicting future tourism in both a quantitative and qualitative sense. Case studies are used to indicate how these two approaches are combined in practice to generate what are termed ‘hybrid’ forecasts that can be used by the tourism industry for market planning. The emphasis in this chapter is on basic model building and linking this to the time period for which the forecast is likely to be made and the availability of information. There is no doubt that forecasts are necessary, despite the fact that some might argue from a chaos theory perspective (as in Chapter 1) that the volatile nature of our industry operating in a world of rapid and unexpected change makes forecasts increasingly irrel- evant. As the case examples will show, forecasters counter this issue by taking account of a wide spectrum of opinions and techniques in settling upon their final predictions. Introduction An Overview of Tourism Forecasting An Overview of Tourism Forecasting 91
- 117. force and advancedbookings in their reservations systems. Apart from their own experiences, they will also draw on destination indicators provided by the local tourist boards (as suggested in Chapter 4) and any anticipatory data, such as holiday intentions surveys. But while such information will be sufficient for short-term forecasting over two years, it is inadequate for pro- ject development which depends on long-term assessment in order to determine whether the Given the many influences on the demand for tourism, experience indicates that successful market planning at the NTA level requires knowledge of: 1. current demand and supply position; 2. historic trends that have produced this; 3. factors influencing tourism; a) exchange rates; b) GDP; c) personal disposable income; d) unemployment, e) airfares; f) petrol costs; g) accommodation costs at home and abroad; h) holiday entitlement. 4. decisive factors and bottlenecks in the sector; 5. current importance of tourism; 6. tourism product that is offered; 7. market outlook for this product. The need for such information is determined by the complex and sometimes volatile nature of tourism demand. While everyday monitoring of trends may be drawn from business indicators, for the longer term the NTA will produce typically a ten-year forecast; annually for the first five years, with just target figures for the tenth year. Longer term forecasts will be set against likely scenarios to produce high, central and low targets that might be achievable. It is often difficult to quantify some of the influences listed above, either due to measurement difficulties, for example the future of space tourism, or the costs of collecting such information in relation to the available budget. A common difficulty is how to measure the effects of promotional spend, and the accepted wisdom is that this may be best represented through changes in market share rather than absolute visitor numbers. NTAs will normally layer their markets in order of importance and in relation to the tourism products on offer, termed a ‘product-fit table’, paying most attention to the major sources of origin of visitors and those showing new potential. There is an old forecasting adage to deal with uncertainty which says: ‘Give them a number or give them a date but never both!’ This is to avoid being tied down to absolute numbers on a given date some way into the future. Customary practice is to put forward scenarios for each market with likely targets sup- ported by qualitative analysis of the influences that affect them, so that the probabilities of change may be thoroughly understood. This will enable plans to be drawn up to make rational responses to changes when and where they occur. Discussion Questions 1. With reference to a destination of your choice construct a product-fit table. 2. How might an NTA organise a response to a violent disturbance such as a riot or terrorist attack in its capital city? 3. How would you evaluate the impact of a large rise in oil prices on international travel? Mini case study 5.1 Forecasting at a National Tourism Administration 92 Chapter 5 Forecasting Tourism Demand
- 118. capital costs willor will not be recovered. This is particularly difficult for ‘new-to-the-world’ products where there is little prior knowledge to hand (a matter that is looked at in more detail in Chapter 18, covering attractions). Time periods It should be apparent that the time period over which the forecast has to be made will affect the approach and methodology. Forecasters conventionally divide time into short-, medium- and long-term phases, and then what may be considered futuristic planning that looks at the evolu- tion of past and present innovations so as to assess when the next likely breakthrough will occur and what would be its consequences. By and large there tends to be an optimism bias in these matters, which goes with the nature of human society. Governments have been shown to have a poor track record in this respect, pouring vast sums of money into ‘seemingly never-ending’ projects on the promise that the solution is ‘just around the corner’ before they are finally aban- doned. On the other hand, history has revealed that the prophets of ‘doomsday’ have not been too successful either. The short term is considered to last up to one or two years and represents a period in which nothing much can be done apart from mobilising unused capacity to meet changes in visitor flows; indeed it is often desirable that not much should be done until such time as these changes are seen to be permanent. The medium term is considered to be up to five years and corresponds to the development plan of most tourist boards. In this time phase it is feasible to build models of supply and demand to assess the effects of alternative policies, such as restructuring prices, taxes and subsidies, regulations, organising events or festivals, for it will now be possible to make alterations to the tourism infrastructure that will carry into the longer term covering the next 5–15 years. Model building is still valid in the longer term provided that there are no major changes in the social, economic and technical factors of the kind listed in Table 2.1. It is these that form the basis of scenario writing as far as futuristic planning is concerned. In essence, scenario writing is ‘story-telling’ about the future. The objective may not necessarily be about prediction, but rather to raise awareness of the factors or variables that might alter the future and how they could com- bine. Forecasting requires a deep understanding of the prime movers of change as they affect visitor flows and how to interpret them. With the aid of long-term projections of underlying trends, different scenarios are drawn up on the basis of what the ‘world’ might look like in 15 or more years’time, selecting the most likely occurrence and then working backwards to the present to identify the bottlenecks that need to be eliminated for the forecast targets to be realised. An essential strategy for future planning is to try to keep options open so that the final deci- sion as to when capital funds should be invested in fixed assets such as hotels, restaurants, transport and recreation facilities is made in the medium term when the most recent information on underlying trends is available. It follows therefore that a good information system is a very necessary part of a forecaster’s ‘toolkit’. Forecasting Methods There is a wide variety of methods available for forecasting tourism demand at very different levels of sophistication that are supported by advanced computer packages (Song and Witt, 2000; Frechtling, 2001; Song et al., 2009). Two basic approaches may be adopted – quantitative and qualitative – but as should be apparent from the discussion in the last section these are not mutually exclusive. Most applied forecasters use a combination of these two methods, utilising the strengths or relative strengths of each. A key factor is the availability of quantitative data and the further we look into the future the more reliance we tend to place on qualitative assessments. Quantitative forecasting Again, there are numerous quantitative aspects to forecasting demand, ranging from the simple to the highly technical. At the level of this text we will confine ourselves to basic techniques that Forecasting Methods 93
- 119. may easily beimplemented on a hand-held calculator or a spreadsheet. Techniques that do not involve a great deal of mathematics, provided they are effective, are easier to explain to the end user. If the latter has a good appreciation of how they work then this gives more confidence in their use for decision making. Time series models These models rely on extrapolating future trends from the past by taking the variable to be fore- cast as being solely a function of one explanatory variable, time. As such these relationships are known as ‘univariate’ models. Thus equation (4.1) in Chapter 4 becomes Q* = F(t) (5.1) where, Q* = measure of inbound tourism demand; F(t) = the functional relationship explaining Q. The simplest approach is the ‘one-step’ no-change model, which essentially says that the next period is going to be very much like this one, so this year’s value is the best approximation of what might happen next year. To guard against fluctuations some will take a further step in using average values from the most recent years as a basis for forecasting, but a method which is eminently suitable for short-term forecasting at the firm or country level is where the depend- ent variable is broken down into its component parts, namely the trend T, a cyclical component C, a seasonal component S and an error term u. The latter is assumed to be random and normally distributed with a mean of zero (see Chapter 4), so that the estimates will be unbiased. It is therefore the non-systematic part of the time series which will always be unaccounted for. This procedure for separating a time series into its component parts is known as ‘classical decomposition’. There are two structural forms for undertaking this, additive and multiplicative: Q* = T + C + S + u (5.2) Q* = TCSu (5.3) A representative time series pattern is illustrated in Figure 5.1 with the trend component also shown separately as a straight line. The choice as to whether to use equation (5.2) or TCS T 1 C 1 S or Q T t Components of a time series Figure 5.1 94 Chapter 5 Forecasting Tourism Demand
- 120. equation (5.3) forthe modelling process depends on the behaviour of the data. In an additive system the components are independent amounts, while with a multiplicative process, the components are proportional to fluctuations in the data. The latter tends to correspond more closely to reality, so multiplicative models are those most frequently used for practical forecasting. Their use is best explained through a worked example, which is the subject matter of Table 5.1. The second column in Table 5.1 corresponds to equation (5.3) and shows the monthly visitor data taken from a destination that has an all-year-round tourism industry. Nine years of data are available, but for short-term forecasting the most recent three years have been taken for model building. From inspection it can be seen that the destination does have a peak summer season, but the difference between winter and summer demand is not as marked as in other tourist areas, for example islands in the Caribbean where demand from North America is heavily concen- trated in the winter season. Being able to fill the off-season has important economic benefits for a destination in terms of employment, accommodation occupancy and the use of tourism facili- ties in general. The first step in analysing data of this kind is to inspect it for ‘outliers’. These are out of the ordinary happenings, say a festival that is unlikely to be repeated, and should be replaced in the data with a commensurate average so as not to skew the results. Once the data have been pre- pared, it is then necessary to remove the irregular and seasonal components via a ‘moving average’ (MA) with length equal to the seasonal effect, which is 12 months. A moving average is a series of arithmetic means constructed by taking a rolling average of the data 12 months at a time by successively dropping the first observation in the series and adding the next one. The result is shown in column three of Table 5.1, where the first mean 323 is the monthly average of the data in Year 7 from January to December, the second 325 is the monthly average from Understanding seasonal visitor flows is essential for capacity planning in tourism. Photograph 5.1 Forecasting Methods 95
- 121. Classical time seriesdecomposition, visitor data (000s) Table 5.1 Time Q* = TCSu MA(12) MA(2) = TC Su = Q*/TC Unadjusted S Adjusted S Q*s = Q*/S Year 7 Jan 251 306 Feb 242 313 Mar 284 315 Apr 309 321 May 347 327 Jun 364 323 324 Jul 392 325 324 1.210 324 Aug 395 326 325 1.214 325 Sep 349 328 327 1.067 325 Oct 341 330 329 1.037 327 Nov 311 331 330 0.942 330 Dec 290 332 332 0.875 331 Year 8 Jan 273 335 334 0.819 0.819 0.820 333 Feb 259 337 336 0.771 0.773 0.773 335 Mar 305 339 338 0.902 0.900 0.901 338 Apr 328 342 341 0.963 0.963 0.964 340 May 361 344 343 1.053 1.059 1.060 341 Jun 385 346 345 1.117 1.122 1.123 343 Jul 418 348 347 1.206 1.208 1.209 346 Aug 423 350 349 1.214 1.214 1.215 348 Sep 378 352 351 1.078 1.073 1.074 352 Oct 370 354 353 1.049 1.043 1.044 354 Nov 334 357 355 0.940 0.941 0.942 355 Dec 314 360 358 0.876 0.875 0.876 358 Year 9 Jan 296 363 361 0.819 11.990 12.000 361 Feb 282 366 364 0.774 365 Mar 330 369 367 0.899 366 Apr 356 371 370 0.963 369 May 396 373 372 1.064 374 Jun 422 375 374 1.128 376 Jul 452 374 Aug 459 378 Sep 412 384 Oct 398 381 Nov 362 384 Dec 338 386 96 Chapter 5 Forecasting Tourism Demand
- 122. February ofYear 7to January ofYear 8, and so on in a rolling manner until the data series is all used. This process has three consequences: 1. fluctuations in the data are smoothed out; 2. 11 observations are lost, the general rule being that the number is the order of the moving average less one; and 3. the data need to be repositioned as the mid-point of a year is between June and July. Thus the next step is to calculate a two-period moving average of the moving average. This is done to centre the average to a month. The result is shown in column four, which is the measure of TC or T + C according to whether the series is multiplicative or additive. As the centred moving average in column four represents the trend and cyclical components, it is now possible to calculate Su, by dividing the original series Q* in column two by the centred moving average. The result is a 24-month seasonal index as shown in column six that contains elements of the error or irregular component. The latter may be eliminated by averaging the seasonal factors for each month as in column six. The results are unadjusted seasonal factors, for by definition they should add to 12, so a further minor adjustment is necessary as indicated in column seven. The final column in Table 5.1 is the seasonally adjusted value Q* s, which is derived by dividing the original date series in column two by the appropriate monthly adjusted seasonal factors in column seven. The values of Q* s still contain C, which would be a gradual wavelike movement in the series around the trend T. The easiest approach is to fit a trend line to Q* s of the kind shown in Figure 5.1, as follows: T = b0 + b1t (5.4) The Excel spreadsheet has an in-built function TREND which may be used to estimate equa- tion (5.4), but an algorithm which is relatively easy to use on a hand calculator to estimate trends, though not necessarily optimal, is the three-point method (Granger, 1986). The method- ology follows from the basic notion that two parameter (coefficient) trends such as equation (5.4) require two data points, three parameter trends, three data points and so on. When the number of observations N is below 10 we take the weighted average of the first three terms and the last three terms. Thus: F = (Q* 1 + 2Q* 2 + 3Q* 3)6 (5.5) L = (Q* n-2 + 2Q* n-1 + 3Q* n)6 (5.6) From which the parameters of equation (5.4), the proofs for which may be found in Granger (1986), are: b1 = L - F n - 3 (5.7) and b0 = F - 7 3 b1 (5.8) Substituting into the above formulas the data from column seven of Table 5.1: b1 = (384.56 - 312.92)33 = 2.17 and b0 = 312.92 - (73 * 2.17 = 307.86 hence, T = 307.86 + 2.17 t (5.9) Forecasting Methods 97
- 123. With a longseries as is the case in Table 5.1, we can take an average of five terms: F = (Q* 1 + 2Q* 2 + 3Q* 3 + 4Q* 4 + 5Q* 5)15 (5.10) L = (Q* n-4 + 2Q* n-3 + 3Q* n-2 + 4Q* n-1 + 5Q* n)15 (5.11) From which the appropriate formulas are: b1 = L - F n - 5 (5.12) and b0 = F - 11 3 b1 (5.13) From which, as before b1 = (383.70 - 319.82)31 = 2.06 and b0 = 319.82 - (113 * 2.06 = 312.27 and T = 312.27 + 2.06 t (5.14) The TREND function in Excel estimates equation (5.4) by the process of ‘least squares regres- sion’. This method regresses the dependent variable Q* on the independent variable t and posi- tions the trend line in Figure 5.1 in such a way as to minimise the squared deviations between the trend and the data series. The trend parameters are derived from solving two equations: a Q* = nb0 + b1 a t (5.15) a tQ* = b0 a t + b1 a t2 (5.16) where the sign a refers to the summation of all values of the N observations. As before we solve first for b1: b1 = na t Q* 1a t2 1a Q* 2 na t2 - 1a t22 (5.17) If we then divide equation (5.15) through by N it produces mean values so that we can solve for b0 in terms of the means in the time series: b0 = mean(Q* ) - b1 mean(t) (5.18) The calculations undertaken by the least squares method are shown in Table 5.2. It will be noticed that the line is not being fitted through all observations, but rather the mean monthly values for each of the three years presented in Table 5.1. This is a perfectly acceptable proce- dure, for in any statistical series the mean is a representative measure, and since the seasonal Classical time series decomposition, visitor data (000s) Table 5.2 Year t Q* t2 tQ* 7 6.50 322.92 42.25 2,098.96 8 18.50 345.67 342.25 6,394.83 9 30.50 375.25 930.25 11,445.13 a t = 55.50 a Q* = 1,043.84 a t2 = 1,314.75 a tQ* = 19,938.92 98 Chapter 5 Forecasting Tourism Demand
- 124. variation cancels itselfin one year, the mean monthly values will provide the correct indication of the trend. Note that the value of time is given in months, so the mean monthly value for the first year falls between June and July, hence t = (6 + 7)/2 = 6.5. Placing the values from Table 5.2 into equations (5.17) and (5.18) yields the trend line T = 307.60 + 2.18t (5.19) In Table 5.3. we match the predicted values from the trend lines given by equations (5.9), (5.14) and (5.19) against the deseasonalised data Q* s. If we now divide the latter by the trend line then this will produce the cyclical component C. However, by inspection of the trend val- ues it will be appreciated that the deviations from the trend in Q* s are negligible, indicating the cyclical component is of little consequence, certainly within the period for which such analysis will be used for forecasting. It will be further observed from Table 5.3 that while each statisti- cal method produces a slightly different trend line, as is to be expected, their predicted values of Q* s are broadly the same. This then raises the question as to how the best trend line might be evaluated. The recommended test of ‘goodness of fit’ is the root mean square error (RMSE) = Ca N t=1 (Q* st - Tt)2 N - k . This statistic is derived by summing the squared differences between the deseasonalised observations on visitor numbers and their trend estimate. The resulting sum Classical time series decomposition, visitor data (000s) Table 5.3 Month Q* s Three-term prediction Five-term prediction Least squares 1 306 310 314 310 2 313 312 316 312 3 315 314 318 314 4 321 317 321 316 5 327 319 323 319 6 324 321 325 321 7 324 323 327 323 8 325 325 329 325 9 325 327 331 327 10 327 330 333 329 11 330 332 335 332 12 331 334 337 334 13 333 336 339 336 14 335 338 341 338 15 338 340 343 340 16 340 343 345 342 17 341 345 347 345 18 343 347 349 347 19 346 349 351 349 20 348 351 353 351 Forecasting Methods 99
- 125. is then dividedby the value of N - k, where k is the number of parameters, which in this case is 2. The value N - k is termed ‘the degrees of freedom’ of the estimate, hence the model has 34 degrees of freedom. The last step is to take the square root of the derived value to standardise the error to the same order as the estimates. Applying this procedure results in an RMSE of 2.88 for equation (5.9), 4.28 for equation (5.14) and 2.87 for equation (5.19), indicating that the least squares procedure is the most accurate. However, it will be seen from Table 5.4 that each method generates similar forecasts for the next year. The latter are constructed by projecting the trend and then multiplying by the seasonal factors to give TS. This may be repeated for succeeding years provided the researcher is confident in the stability of the market over the required fore- casting period. A common practice is to produce a rolling forecast by updating the estimates every time new data become available. Econometric models Without the help of intentions surveys or leading indicators, it is not possible for pure time series models to predict changes or turning points in the direction of tourism flows. On the other hand (as noted in the last part of Chapter 4), econometric models attempt to explain tourism demand by estimating the latter as a function of influencing variables. They provide the oppor- tunity to predict turning points, in the sense that it is possible to demonstrate the outcomes of different scenarios through asking ‘what if?’ questions, but are very data using. This is one of their major difficulties, since their development has been generally constrained by data availa- bility in the tourism sector. Below we restate the multiplicative form for measuring inbound tourism demand Q* from a particular country of origin. Q* = b0FAb1 c C/E C* d b2 Y*b3 u (5.20) Month Q* s Three-term prediction Five-term prediction Least squares 21 352 353 356 353 22 354 356 358 356 23 355 358 360 358 24 358 360 362 360 25 361 362 364 362 26 365 364 366 364 27 366 366 368 366 28 369 369 370 369 29 374 371 372 371 30 376 373 374 373 31 374 375 376 375 32 378 377 378 377 33 384 379 380 380 34 381 382 382 382 35 384 384 384 384 36 386 386 386 386 (Continued) Table 5.3 100 Chapter 5 Forecasting Tourism Demand
- 126. where FA = theround trip travel cost or fare variable; C = the consumer price index in the destination country; E = the destination country exchange rate in terms of units of local currency per unit of the visitors’ currency; C* = the consumer price index in the tourism generating country; Y* = the sum of inbound visitor incomes for this market; and b0 is the constant term, and b1 to b3 are coefficients of the explanatory variables of inbound tourism movements to be estimated using statistical multiple regression analysis, with u being the error term. The estimation of equation (5.20) requires the dependent variable Q* to be regressed on mul- tiple independent variables. There are specific statistical packages designed to do this and Excel has the LINEST function, which again uses the least squares method to calculate a straight line that best fits the data set. But to be able to undertake this in the case of equation (5.20) would require the function to be made linear in logarithms by converting the data set to give: LogQ* = Logb0 + b1LogFA + b2Logc C/E C* d + b3LogY* + Logu (5.21) The Excel spreadsheet contains the two most commonly used logarithmic functions, LN and LOG10. The former transforms the data into natural logarithms to the exponential base e, where e = 2.718 approximately, while the latter converts the data to common logarithms to the base 10. A logarithm to the base, say a, is the power to which the base a must be raised in order to be equal to the number, hence the value of Log39 = 2, for 32 = 3 * 3 = 9. Natural logarithms are also known as Napierian logarithms after John Napier who originated the concept. The expo- nential base e is used because it is a mathematical constant irrespective of the nature of the analysis being undertaken: it is known as a transcendental constant. The benefit of using loga- rithms is seen in changing multiplication to addition. To allow for habit persistence in tourism trip-taking most researchers use lagged as well as current values of the independent variables shown in equation (5.21). This gives a multi-period or dynamic time dimension to the forecast equation and produces what is termed a distributed Monthly Trend Forecast Monthly Seasonal Forecast Year 10 t Seasonal index Three terms Five terms Least squares Three terms Five terms Least squares Jan 37 0.82 388 389 388 318 318 318 Feb 38 0.77 390 391 390 302 302 302 Mar 39 0.90 393 393 393 354 354 354 Apr 40 0.96 395 395 395 380 380 381 May 41 1.06 397 397 397 421 420 421 Jun 42 1.12 399 399 399 448 448 448 Jul 43 1.21 401 401 401 485 485 485 Aug 44 1.21 403 403 404 490 489 490 Sep 45 1.07 406 405 406 435 435 436 Oct 46 1.04 408 407 408 426 425 426 Nov 47 0.94 410 409 410 386 385 386 Dec 48 0.88 412 411 412 361 360 361 Classical time series decomposition, visitor data (000s) Table 5.4 Forecasting Methods 101
- 127. lag model oftourism trends. These are complex models, for example Witt et al. (2004) estimate such a model for Denmark in the form: LnQ*it = Lnb0 + b1LnQ*it-1 + b2LnY*it + b3LnY*it-1 + b4Lnc C/E C* d it + b5Lnc C/E C* d it-1 + b6Lnc Cs/Es C* d ist + b7Lnc Cs/Es C* d ist-1 + b8T + dummies + Lnuit (5.22) where Q* it = tourism consumed per capita at time t measured by the expenditure-weighted number of nights spent by tourists from country i in Denmark: the weights reflect the different daily spending for tourists in different accommodation types; Y* it = real private consumption expenditure per capita in country i; c C/E C* d it = represents the real cost of stay for tourists in Denmark relative to country i; c Cs/Es C* d it = weighted average of tourism prices in substitute destinations; T = a time trend; and dummies = dummy variables to account for ‘spikes’ in the data caused by two oil scares, the first Gulf War, German unification and a dummy for Chernobyl/the US bombing of Libya. The construction of demand models of the kinds shown by equation (5.22) involve consid- erable time and effort. An illustration of the model-building process is presented in Figure 5.2. Witt et al. estimated six different model specifications through imposing certain restrictions on the parameters in equation (5.22) and examined their performance over one-, two- and three- year forecasts to discover the best fit structure. The reasons for this complexity lie in the disap- pointing performance of econometric forecasts in the past, even against the most simple of Identify factors influencing demand Model development Calibrated demand model Demand forecast Forecast evaluation Final forecast Projected values of independent variables Review past trend Data Quantification, reliability, consistency, size of base, projected values Specification Data collection Calibration Evaluation Assumption on independent variables Building an econometric model Figure 5.2 102 Chapter 5 Forecasting Tourism Demand
- 128. time series extrapolations.While the availability of data is one hindrance, it has been noticed that fluctuations in the data are not internally consistent, giving rise to unreliable model esti- mation. To cope with this, researchers have introduced a range of demand models in order to produce more stable long-run relationships for forecasting purposes. What is interesting about equation (5.22) is that the travel cost variable is omitted as it was found to be insignificant in the empirical analysis. Relative destination prices reveal themselves to be the more important signal in consumers’ decision making. Long-term projections At this level, the data resource difficulty is further exaggerated, given that we are looking at time periods covering the next 5–15 years, or more when project evaluation is being considered, though situations longer than this are regarded as ‘futurism’. Causal models require the future values of independent variables to be known at the time of forecasting, which is highly improb- able, so we tend to focus on univariate annual trend analysis as a qualitative judgement aid. In order to produce the best representation of the trend, we need a range of equations that may be classified into: Two parameter curves: ● Straight line Q* = b0 + b1t ● Exponential Q* = b0 b1 t ● Hyperbola Q* = 1/( b0 + b1 t ) Three parameter curves: ● Parabola Q* = b0 + b1t + b2t2 ● Modified exponential Q* = b0 + b1b2 t ● Gompertz Q* = b0 b1 b2 t ● Logistic Q* = 1/(b0 + b1b2 t ) An illustration of the trend drawn out by the two parameter curves is given in Figure 5.3. Three parameter curves are capable of producing more varied shapes: examples for the parabola Q t Exponential Straight line Hyperbola Two parameter curves Figure 5.3 Forecasting Methods 103
- 129. or modified exponentialare shown in Figure 5.4, while the Gompertz and logistic curves pro- duce the familiar S-shaped trend, as presented in Figure 5.5. S-curves have often been used to illustrate the tourism life-cycle of destinations. This is because as the value of t S ∞ they approach limiting values of b0 and 1 b0 respectively, and so they are appropriate for a time series that has an upper limit that may be interpreted as maximum market penetration. Estimation Most people today would use a computer software package to fit these trend curves to the available data and some basic shapes are available as set functions in modern spreadsheets. However, the three-point method discussed earlier may also be developed for calculating these curves. For two parameter curves the formulas are the same as for a straight line, but for Three parameter curves Figure 5.4 Q Modified exponential or parabola t S-curve Figure 5.5 Q t Gompertz or logistic 104 Chapter 5 Forecasting Tourism Demand
- 130. Q* = b0b1 t and Q* =1/(b0 + b1t) we have to transform the data, so the exponential becomes LogQ* = Logb0 + tLogb1 and the hyperbola 1 Q* = b0 + b1t. Of the three parameter curves, it is the parabola that is set apart from the others, as it has a squared ‘t’ term. The other three curves are all of the same family, as in the two parameter case, once the dependent variable is transformed for estimation purposes: ● Modified exponential Q* = b0 + b1bt 2 ● Gompertz LogQ* = Logb0 + Logb1bt 2 ● Logistic 1 Q* = b0 + b1bt 2 Furthermore, the fact that there are three coefficients to compute means that it is necessary to have three data points. So in addition to F and L, we now take the middle terms M, three or five as the data allow, namely: m = (Q*j-1 + 2Q*j + 3Q*j+1)6 (5.23) or m = (Q*j-2 + 2Q*j-1 + 3Q*j + 4Q*j+1 + 5Q*j+2)15 (5.24) where j = (N + 1)/2, hence the need for dropping the earliest term when the data series is an even number so as to allow the average to fall on a specific data point. The relevant formulas for estimating three parameter curves are presented in Table 5.5. They are shown in sequential order of calculation. Note that the algorithms for the Gompertz and logistic curves are exactly the same as for the modified exponential, save that for the former we use logarithms of the data when forming F, L and M, and for the latter the reciprocals of the data. Once again the use of trend curves may be best illustrated through worked examples so we return to the data from Table 5.1, but this time using the nine years of annual statistics, to which an exponential and modified exponential trend will be fitted. The results are shown in Table 5.6 together with annual projections for the next 10 years. The second column in Table 5.6 has the Three-point method Three terms Five terms Parabola b2 = 2(F + L - 2m) (n - 3)2 b1 = L - F n - 3 - b2(3n + 5) 3 b0 = F - 7 3 b1 - 6b2 b2 = 2(F + L - 2m) (3n - 5)42 b1 = L - F n - 5 - b2(3n + 7) 3 b0 = F - 11 3 b1 - 15b2 Modified exponential Gompertz logistic Logb2 = 2 n - 3 Log a L - m m - F b m = 6 b2 + 2b2 2 + 2b3 2 b1 = m(m - F)2 F + L - 2m b0 = LF - m2 F + L - 2m Logb2 = 2 n - 5 Log a L - m m - F b m = 15 b2 + 2b2 2 + 3b2 2 + 4b4 2 + 5b5 2 b1 = m(m - F)2 F + L - 2m b0 = LF - m2 F + L - 2m Source: Granger, 1986 Algorithms for estimating three parameter trend curves Table 5.5 Forecasting Methods 105
- 131. actual data, whilethe third column presents the natural logarithms of this same data for the purposes of estimating the two parameter exponential curve. Using the formulas in equations (5.7) and (5.8): Lnb1 = (8.36 - 7.89)/(9 - 3) = 0.078 and Lnb0 = 7.89 - (7/3) * 0.078 = 7.71 hence, LnQ* = 7.71 + 0.078 t (5.25) If we take anti-logarithms of equation (5.25) by raising the base e to the power of the values shown (in Excel there is an EXP function that does this), then the actual exponential trend is Q* = 2227(1.081)t (5.26) The predicted values of Q may be calculated from equations (5.25) or (5.26) by substituting in the values for time as shown in the first column of Table 5.6, though if the former is used then the resulting estimates will be in logarithms and will require conversion back to actual values. Year Data Log data Exponential Modified exponential Actual Ln values Three terms Three terms 1 2,397 7.7820 2,408 2,409 2 2,612 7.8679 2,604 2,605 3 2,815 7.9427 2,816 2,816 4 3,052 8.0236 3,045 3,045 5 3,285 8.0971 3,293 3,292 6 3,562 8.1781 3,561 3,560 7 3,875 8.2623 3,850 3,849 8 4,148 8.3304 4,163 4,163 9 4,503 8.4125 4,502 4,502 10 4,868 4,869 11 5,264 5,265 12 5,692 5,695 13 6,155 6,159 14 6,655 6,662 15 7,196 7,205 16 7,782 7,794 17 8,414 8,430 18 9,099 9,118 19 9,839 9,863 Annual trend in visitor arrivals, visitor data (000s) Table 5.6 106 Chapter 5 Forecasting Tourism Demand
- 132. The use ofnatural logarithms in estimation has an added benefit in that Lnb1 measures the annual growth rate of visitor arrival in Table 5.6, which is about 7.8%. This may be used to advantage by forecasters through the ‘Rule of 70’: if 70 is divided by the growth rate of Q* in percentage terms, it will tell you how long it will take in years for the current value to double. This acts as a useful ‘common sense’ check on the forecast, as well as being helpful for com- parative purposes in setting realistic goals. Thus if Q* is growing at 7.8% per annum, then the current value of 4.503 million visitors will double in just under nine years’ time, which occurs towards the end of Year 18 in Table 5.6. Turning now to the modified exponential, this is calculated by applying the formulas shown in Table 5.5 in sequence, but using the actual data in column two of Table 5.6 and not the loga- rithmic data in column three. From this it follows that Lnb2 = 0.79 hence b2 = 1.082 and m = 0.83 and b1 = 2205 and b0 = 24 which gives: Q* = 24 + 2205 (1.082)t (5.27) As one might expect, it turns out that equations (5.26) and (5.27) are very similar in param- eters and also in their forecasting ability, as shown in Table 5.6. To discriminate between the two we apply the RMSE procedure, which gives a value of 12.84 for equation (5.26) and 14.07 for equation (5.27). Fitting an extra parameter in equation (5.26) results in an additional loss of one degree of freedom for no improvement, therefore the simpler exponential curve is to be preferred. In practice forecasters will augment their statistical techniques by observing the pat- tern of the data before specifying the functional form of the trend curve and use judgement in respect of the causal logic behind the trend. Testing the reliability of long-run forecasts can be undertaken by using the Rule of 70 and examining what happens when the time value becomes very large, in order to see whether the forecasts are within an acceptable range. If they do not seem credible in terms of what is theoretically possible then they must be reconsidered. These are the qualitative aspects of forecasting, which are the subject of the next section in this chapter. Qualitative forecasting Qualitative methods may be used solely or in combination with statistical forecasts by providing a reasoned scenario for likely outcomes. Qualitative methods come into their own when data are scarce, which is the case when predicting long-term trends. From the practitioner’s standpoint it makes sense to combine the best of quantitative and qualitative forecasting so as to produce an integrated approach to future planning. This makes drawing distinctions between different approaches somewhat arbitrary, but for the purposes of exposition we will consider the most common qualitative methods, namely by analogy to what has happened elsewhere, the Delphi technique and scenario writing. Analogy Most countries produce macro-economic data which may be used to interpret the rela- tive wealth, economic health and the stage of economic development in the country (see Forecasting Methods 107
- 133. Chapter 11). Thepurpose of international comparisons is to use available data to place the country of reference on a general trend line so an assessment may be made of what demand might be given appropriate conditions. The main points to watch when selecting countries for analysis are the comparability of the qualitative factors influencing tourism demand and uniformity in data definitions. Boniface and Cooper (1987) have identified a few tourism indi cators to aid comparisons: ● The gross travel propensity, which gives the total number of tourism trips taken as a percent- age of the population. This is a measure of the penetration of trips, and not individual travellers. The relevance of this can be found in developed economies where second and third holiday- taking are increasingly common. ● The net travel propensity, which refers to the percentage of the population that takes at least one tourism trip in a given period of time. This is a measure of the penetration of travel among ‘individuals’ in the population. Simply dividing gross travel propensity by net will give the travel frequency, which is the average number of trips taken by those participating in tourism during a given time. ● Finally, they offer the ‘country potential generation index’ (CPGI) as a measure: cPgi = Ne /Nw Pe /Pw where Ne = number of trips generated by the country; Nw = number of trips generated in the world or region of interest; Pe = population of the country; Pw = population of the world or region of interest. ● Countries with an index greater than unity are generating more tourists than expected by their population and conversely for countries with an index below one. Delphi models As the name suggests, the Delphi technique relies upon finding an ‘oracle’ to predict future trends and events. The oracle in this case is a panel of experts chosen according to the nature of the research question and asked to deliver a consensus view of the future. Unlike everyday panels or committees, the essence of a Delphi study is anonymity, so the participants never meet. This is to avoid opinions being influenced by the pressures of group discussion where one or a group of individuals may have strong opinions that can assert considerable influence on the consensus forecast that is reached. The procedure for undertaking a Delphi study is outlined in Figure 5.6. The experts commu- nicate only with the coordinator through successive rounds of questionnaires. Those holding extreme views, that is views outside the interquartile range, which is defined as plus or minus a distance of 25% from the median or middle value, are invited to give their reasons. At the end of the first round the replies are summarised by the coordinator and returned to the panel members who are invited to revise their opinions in view of the information feedback to them. This pro- cess is repeated through a number of iterations until it is clear that a consensus has emerged or is not likely to emerge. Three rounds are normally considered sufficient for this and an excellent evaluation of this process can be found in Hsu and Sandford (2007). Scenarios From the discussion in this chapter it should now be apparent that although scenarios may stand alone, scenario writing has an important part to play in integrated forecasting through clarifying the issues involved. The steps in scenario writing involve in the first instance 108 Chapter 5 Forecasting Tourism Demand
- 134. establishing a baselinewith some specific patterns relating to the current situation in order to build up a logical sequence of events to indicate how some future state might arise. Next a range of future scenarios are drawn up, followed by the exploration of networks of events that will define the pathway to each future state of affairs. Technological forecasts are often included into scenario writing so as to comprehend factors that might cause major shifts in travel patterns or behaviour. While most attention is given to the more probable scenarios, one issue that frequently arises is how critical incident or disaster planning, say an explosion, earthquake, fire or crash, may be built into planning tourism projects for the future. These factors are very dif- ficult to account for in a quantitative manner in the appraisal process, as this example will show. Suppose, when matched against a catastrophe, the probability of achieving positive net economic benefits of 50 over a project’s lifetime is 99%, leaving the probability of some accident as 1%. Presume that this accident would result in the loss of the investment in the project of 200, all the net benefits of 50 and compensation of 50. Then the expected value of the net economic benefits is 0.99 * 50 - 0.01 * (200 + 50 + 50) = 46.5, and so the possibility of a catastrophe has very little bearing in a quantitative sense on the worth of the project. Nonetheless, these low-probability but high-impact scenarios cannot be ignored as they tend to be featured by the media and colour public opinion. What happens in practice is that safe- guards are built into the project design and management to ensure that such accidents are avoided. Major incidents are rare, but when they occur they can usually be put down to the simultaneous failure of a number of preventative measures, arising from some combination of human error, design flaws, and natural occurrences that are difficult to guard against with 100% certainty. Problem definition Develop final report Select panel members based on the expertise required Prepare and distribute questionnaire Analyse questionnaire responses Provide requested information and tabulated responses YES NO Has a consensus been reached? The Delphi process Source: Taylor and Judd, 1989, Witt and Martin, 1989 Figure 5.6 Forecasting Methods 109
- 135. Actual B A 0 t t1 1 Time Visitor arrivals Which forecast? Figure 5.7 The Forecasting Problem Figure 5.7 poses the question as to whether A or B is the better forecast? Any measure of fore- cast accuracy both at t and t + 1 would rank A B, because of A’s tracking ability, which implies that Model A is better than Model B.Yet it is clear that B is the most useful because of its ability to predict accurately the turning point in the actual data series at t. Thus the evaluation of a fore- cast must consider two aspects: the ability to predict turning points and the ability to track closely the original series. All in all we are prepared to sacrifice tracking for the benefit of predicting turning points. For although forecast B consistently underestimates the actual series, if year-on-year changes are taken they will show that B follows the data very closely. The importance of this may be realised by the fact that forecasters are interested in finding leading indicators that will enable them to predict changes in the economic variables they are studying. For the calculation of turning point errors, it is essential to take changes in the actual data and the forecast, either absolute, or in per- centage terms. When comparing forecast values against outcomes, we can use the familiar: rmse = C c a f t=1 (At - Pt)2 f d (5.28) where At = actual data; Pt = predicted data; f = the length of the forecast period. Alternatively we may use a percentage error calculation: rmsPe = C c 1 f a f t=1 (At - Pt)2 A2 t d * 100 (5.29) But a more common measure is the mean absolute percentage error, namely maPe = 1 f a f t=1 c aaBs At - Pt At b d * 100 (5.30) 110 Chapter 5 Forecasting Tourism Demand
- 136. Propensities for travelin the developing world are generally higher for those living in the cities than for rural areas. Photograph 5.2 Market Planning It will now be appreciated that the measurement and forecasting of tourism demand are an essential component of market planning for businesses, destinations and government bodies, particularly where investment in infrastructure that requires long lead times is concerned. Irre- spective of the organisation involved market scheduling follows along these lines: ● identification of current demand; ● taking and inventory of existing supply and its capacity; ● matching existing supply and demand to determine whether there is currently too much or too little capacity; ● forecasting future demand, noting the lead times required for future investment; and ● planning future supply. (Further aspects of market planning are discussed in more detail in Chapters 11 and 20.) Of the different industries engaged in tourism, it is generally the transport and commercial accommodation sectors that pay most attention to demand forecasting, since they are the princi- pal facilitators for tourism. Attractions, unless they are destinations in their own right, as in the case of Disney World in Orlando, Florida, tend to compete for visitor numbers once they are at the destination. Each supplier will have its own particularities, thus airports will be looking at passenger movements and matching these to the type of aircraft, which in turn affects runway capacity and terminal provision. The absolute value ignores the sign of the number so there is no need to square the differences in equation (5.30) to avoid plus and minus values cancelling themselves when summed. The popu- larity of MAPE over RMSPE relates to the fact that the latter penalises outliers in the forecast heavily, when average performance may be satisfactory. Market Planning 111
- 137. At the destinationthe commercial accommodation sector will be relating demand to the pro- vision of rooms. As for any other supplier this does require some adaptation to the forecasted volume of visitors Q* . In order to produce a forecast for rooms we need the following additional information about supply: ● The proportion of visitors who are tourists in that they stay overnight, say p. ● The proportion of tourists using commercial accommodation, say a, since many tourists stay with friends and relatives. ● The average length of stay in nights, say l. ● The time period for which the above apply, which would commonly be a year, but could be the main season or the peak month. ● The effective occupancy rate, say u, for 100% occupancy is unlikely year-round due to seasonal fluctuations in demand but very possible in the peak month. Thus it relates to the time period being considered. ● The expected room density, say d, which is the average number of persons per room and is derived from the ratio of the number of bed nights sold to room nights. In hotel terms it is a measure of the degree of double occupancy compared to single occupancy. Putting the above together gives the following formula for calculating the number of rooms required R: R = p # Q* # a # l 365 # u # d (5.31) The numerator in equation (5.31) determines the number of commercial bed nights demanded, thus using the example in Table 5.6 we note that in 10 years’time according to the forecast there will be just over 9.8 million inbound visitors. We estimate that some 85% of these will be staying visitors, of which 65% will be requiring commercial accommodation, staying an average of 5.5 nights, hence the number of bed nights demanded = 0.85 * 9.839 * 0.65 * 5.5 = 29.898 mil- lion. Given the degree of seasonality it is expected that the year-round effective occupancy rate would be at the most 80%, and with an average room density of 1.6 persons per room, giving R = (29.898 million)/(365 * 0.80 * 1.6) = 63,995. From this value current stock and developments already planned need to be deducted to arrive at additional new build targets. Conclusion As outlined in the overview to this chapter, forecasting is an activity which is undertaken by organisations at all levels with the primary purpose of giving directions as to the future. The methodology of forecasting can be divided into quantitative and qualitative approaches for pre- dicting the flows and patterns of demand. It so happens these are bound up with a time dimen- sion in that the further we look into the future the less likely it is that supportive data are available for building numerical models of prediction. Consequently more reliance is placed on qualitative assessment such as scenario writing and expert opinion where long-term forecasts are concerned. The case studies in this chapter reveal that in order to counter uncertainty practitioners base their forecasts on a combination of quantitative and qualitative methods to produce a hybrid prediction. The conceptual thinking behind this approach is to take account of as wide a range of information sources as possible and also to reach a consensus amongst industry participants upon which to base future planning. Forecasting logic dictates that detailed estimates are prepared for the short term, with greater aggregation and a range of options in the longer term. By instituting a rolling forecasting plan practitioners are able to update their forecasts as new information becomes available and the long 112 Chapter 5 Forecasting Tourism Demand
- 138. 1. Consider howthe time period chosen affects the choice of techniques in forecasting the demand for tourism. 2. Review the key determinants of demand at an aggregate level and their importance for econometric models. 3. List three advantages of quantitative approaches to demand forecasting and three advantages of qualitative approaches. 4. Summarise the experiences of practitioners in developing procedures for tourism demand forecasting. 5. Taking a destination of your choice list the steps you would take to plan for future demand. Self-Check Questions Youtube https://www.youtube.com/watch?v=gHdYEZA50KE Time series forecasting in Excel by Jalayer Academy. https://www.youtube.com/watch?v=fp-1_9mLlbc Discusses different forecasting methods. References and Further Reading Boniface, B. and Cooper, C. (1987) The Geography of Travel and Tourism, Heinemann, London. Frechtling, D. (2001) Forecasting Tourism Demand: Methods and Strategies, Butterworth Heinemann, Oxford. A very user-friendly account of the techniques and issues of tourism demand forecasting. Granger, C. (1986) Forecasting in Business and Economics, 2nd edn, Emerald Group Publish- ing, Bingley, UK. Hsu, C-C. and Sandford, B.A. (2007) ‘The Delphi technique: making sense of consensus’, Practical Assessment Research Evaluation 12(10), 1–8. Available online: http://pareonline .net/getvn.asp?v=12n=10 Song, H., and Witt, S.F. (2000) Tourism Demand Modeling and Forecasting: Modern Econo- metric Approaches, Amsterdam: Pergamon. Song, H., Witt, S. F., and Li, G. (2009). The Advanced Econometrics of Tourism Demand, New York: Routledge. An advanced text building on their previous book for those wishing a thorough and technical review of tourism demand forecasting. Taylor, R.E. and Judd, L.L. (1989) ‘Delphi forecasting’, pp. 535–9, in Witt, S.F. and Moutinho, L. (eds) (1989) Tourism Marketing and Management Handbook, 2nd edn, Prentice Hall, Hemel Hempstead. UNWTO (2001) Tourism 2020 Vision – Global Forecasts and Profiles of Market Segments, WTO, Madrid. A comprehensive, but now somewhat dated, review of future patterns of tourism demand and the key changes in determinants across the world. UNWTO (2011) Tourism towards 2030 – Global Overview, WTO, Madrid. Witt, S.F. and Martin, C.A. (1989) ‘Demand forecasting in tourism and recreation’, pp. 4–32 in Cooper, C.P. (ed.), Progress in Tourism, Recreation and Hospitality Management, Vol. 1, Belhaven, London. Witt, S., Song, H., and Wanhill, S. (2004) ‘Forecasting tourism generated employment: the case of Denmark’, Tourism Economics 10(2), 167–76. term turns into the short term, requiring concrete planning decisions to be made. When looking back at previous forecasts priority should be given to methods and models which have the ability to predict changes in direction of the reference data, rather than tracking ability alone. References and Further Reading 113
- 139. Major case study5.1 Tourism Forecasting Australia ● Airport Coordination Australia ● Australian Bankers’ Association ● Jones Lang LaSalle ● Tourism Australia ● Qantas Airways Limited ● Department of Resources, Energy and Tourism Principal Objectives of The TFA The main objective of the TFA is to: improve private and public sector investment and marketing decision making by providing forecasts that are based on evidence using the best economic and statistical forecasting methodol- ogy combined with judgement drawn from industry experts. In this way the TFA complements and improves the forecasts based on econometric modelling, ensuring that aspects of a qualitative nature, which cannot be modelled, are taken into account in the forecasts. More- over, by engaging with the tourism industry the TFA not only gathers in a diverse range of influences, but also gives credibility to the forecasts for management deci- sion making. The aim is to ensure that TFA’s forecasts are both disseminated to and used by Australian tourism businesses. The Forecasting Process Tourism Research Australia (TRA) is charged with pro- viding official long-term forecasts (10 years) for Austral- ia’s international, domestic and outbound tourism sectors, usually in April and October. The operation of Tourism Research Australia (TRA) is based on the con- cept of ‘professional independence’, which is further enhanced by the TFRP’s work. The TRA also provides secretariat services to the TFC. The forecasts have a firm base due to the implemen- tation by the Australian Bureau of Statistics (ABS) of an annual TSA in accordance with international standards, which in turn is underpinned by Australia’s key tourism surveys (the International Visitor Survey and the National Visitor Survey) and a range of international and domes- tic economic indicators to form part of the modelling and forecasting process. The approach consists of three iterative rounds of consultation. The first round generates initial forecasts produced by Tourism Research Australia based on Organisation Tourism forecasting plays an important role in providing awareness and support for future development of the Australian tourism industry. Tourism Forecasting Aus- tralia (TFA) was established to provide the Australian tourism sector with accurate forecasts of international tourism arrivals. The TFA is an independent body charged with providing present and potential tourism investors, industry and governments with ‘consensus forecasts’ across the tourism sectors. By consensus is meant that the forecasts are vetted by the Tourism Fore- casting Reference Panel (TFRP) for accuracy prior to release. The independence of the Committee ensures that the forecasts are free of any perceived distortions from any vested interests or political interference. The final forecasts are released by the TFA or the govern- ment minister responsible. The TFRP is a consultative body drawing upon a wide range of expertise to formulate its forecasts. The Panel is composed of senior representatives of a cross- section of the tourism industry and government depart- ments. It typically comprises the following members: The Tourism Forecasting Reference Panel ● Assistant General Manager Tourism Research Australia (Chair) ● Chief Economist (markets) National Australia Bank ● Research Director, Tourism Transport Forum ● Queensland Tourism Industry Council ● Executive General Manager, Tourism Australia ● Chair of the Australian regional tourism network ● Managing Director, Australian Tourism Export Council ● Private sector quantitative consultants The TFRP is supported by a technical committee (TFCTC) from the TFA, which also has a mixture of private and public sector representation and relevant experience to inform decision making: The Tourism Forecasting Committee Technical Committee ● Tourism Research Australia ● Tourism Transport Forum 114 chapter 5 Forecasting Tourism Demand
- 140. published. The TFRPtakes the view that this integrative or hybrid approach delivers the forecasts that are the most probable outcomes, given historic data, current trends, and the impact of policy and industry events. The rolling nature of the forecasting process generates the best available estimates of future activity at a given time. Website http://www.tourism.australia.com/statistics/forecasts.aspx Discussion Questions 1. Suggest ways in which these forecast might be used by tourism enterprises. 2. Download the TFC’s latest forecast and consider its user friendliness. 3. It is evident that the TFC takes advice from a wide range of sources. Which organisation would you like to see on a committee of this kind in your country or region? econometric and time series modelling, incorporating variables such as aviation capacity, price comparisons, incomes, populations and seasonality as well as signifi- cant events affecting source markets. In the next round the TFCTC reviews the forecasts addressing methods and technical matters affecting the models, such as GDP projections, relative price changes and movements in exchange rates. Adjust- ments are made using qualitative information to take account of uncertainty, competitors’ marketing, market conditions, travel propensity, aviation trends and inter- country agreements in terms of travel movements and trade relations. Some of these influences cannot be modelled and the TFCTC uses its collective expertise and judgement to adjust the outputs to produce a con- sensus as to the most likely outcomes. The last round rests with the TFRP to assess the strategic direction of the industry and provide consen- sus growth rates to determine the final forecasts to be Major case study 5.1 115
- 142. Part 2 The TourismDestination CHAPTER 6 Destinations122 CHAPTER 7 The Economic Impact of Tourism 145 CHAPTER 8 The Environmental Impact of Tourism 174 CHAPTER 9 The Socio-cultural Impact of Tourism 194 CHAPTER 10 Sustainable Tourism 221 CHAPTER 11 Tourism and Development Planning 252 CHAPTER 12 The impact of negative events on tourism and destinations 281
- 143. Part 2 ofthis text focuses on the destinations in which tourism activity takes place and the impacts associated with that activity on the economy, environment and culture. This part also includes an examination of how those impacts can be managed during the planning process and what should be done in the event of a shock to the tourism system. Unlike most goods or services, tourism brings the consumers to the place of production and that creates a wide range of impacts, both positive and negative and these impacts need to be understood and built into planning processes and systems if tourism development is to be optimal. The chapters in this part examine the concept of destinations and how this term is fluid and can be applied to single attraction sites and to regions of the world. The chapters also identify and scope out the impact issues and then examine the multitude of models and approaches that have been used to address them in order to facilitate sound tourism planning. Each chapter examines a specific aspect of destinations, impacts and planning. The models that have been used to measure impacts are examined and the final two chapters of this part address the planning processes and the ways in which disaster management can be used to improve the resilience of tourism destinations when incidents occur. Tourism development, although often driven by economic needs such as foreign exchange earnings, job creation or economic diversification, cannot be considered without examining the environmental and socio-cultural impacts that such development may bring. Tourism, as a development option, must be considered in the light of its net impacts, its sustainability and the vulnerability to which the destination may be exposed if it chooses tourism as a major part of its economy. When assessing the positive and negative impacts of tourism development it is important that they are examined within a common framework so that the direct and indirect effects of development can be fully considered in a way that allows sensible planning decisions to be made. Therefore, one of the major learning outcomes of this part is to demonstrate the breadth and depth of impacts associated with tourism development and the ways in which they can be considered within a single analytical framework. It is acknowledged in this part of the text that the main driving force that explains the strong, resilient growth of the global tourism industry over the past century is money; money in the form of foreign exchange earnings, income and investment – i.e. the contribution that tourism makes to a destination’s gross domestic product (GDP). In effect destinations are selling some of their environment and culture in return for the economic benefits associated with tourism and planning is intended to secure the best net result for destinations. Chapter 6 looks at the central role of destinations in the tourism system. The definition, scope and range of destinations are explored, and the way destinations are a fluid concept that refers to the economy, environment and society within which tourism takes place. It can be a region of the world, a national economy, a sub-national region or a resort. Because tourism has many secondary effects associated with it, some positive and some negative, the definition used to identify the ‘destination’ is vital because the wider the economy the more comprehensive the indirect or secondary effects become. The destination concept is crucial for the management and marketing of tourism and thus its competitiveness and resilience. Chapter 7 examines how important (the significance) tourism is to the economies in which it takes place and how the full significance can be measured. It then goes on to look at the meth- odologies that have been used in an attempt to measure the economic impact associated with a change in the level of tourism activity within an economy. To measure the economic significance of tourism it is necessary to identify the structure of the destination’s economy and the level of economic dependence that exists upon the in- come, employment and foreign exchange earned from tourism. Where the level of economic dependence is high there may be concerns that the economy is vulnerable because of tour- ism’s sensitivity to factors outside the control of the destination. This is particularly important following the past decade or more of enhanced terrorist activities and the more recent global economic and financial crises. The ability to measure the economic significance of tourism using Introduction 118 part 2 The Tourism Destination
- 144. accounting practices suchas tourism satellite accounts (TSA) provides governments with the ability to understand the importance of the sector but offers little scope to help with specific policy decisions. In order to provide economic policy and planning guidance it is necessary to turn attention to the economic, environmental and socio-cultural impact models that have been constructed to determine the nature of the impacts and how these relate to the volume and characteristics of tourism activity. The economic impact of tourism can be measured using a number of techniques of which ad hoc, input–output (IO) and Computable General Equilibrium (CGE) multiplier models have been the most important over the past 30 years or so. Chapter 7 examines the advantages and weaknesses of each type of economic impact model and looks at their practical use to policy makers. Finally, this chapter looks at the often overlooked economic costs associated with tourism and its development and stresses the need for policy makers to focus on the net economic benefits. Chapter 8 examines the relationship between tourism activity and the environment in which it takes place. One of the major issues with respect to tourism development is the way in which the environment is often seen as a ‘free’ (not priced) input to the tourism product. Tourism is often discussed in terms of its negative environmental impacts, whereas in fact it has both nega- tive and positive environmental attributes. A range of environmental issues is discussed in order to examine tourism’s relationship with the environment in which it takes place and how this need not be solely a negative result. The importance of looking wider than purely the direct environ- mental effects is also stressed, together with ways of looking at the secondary environmental consequences associated with production in general and tourism production in particular. The chapter concludes by examining some of the environmental tools that have been used such as environmental impact assessments (EIAs) and environmental audits, drawing distinctions between them and the roles that each can play in enhancing resilience both of the environment and tourism activity. The socio-cultural aspects of a destination and their relationship with tourism activity are examined in Chapter 9. The various approaches that have been used to study the develop- ment of tourism are examined, together with their implications for socio-cultural impacts in the destination. An overview of the major models that have been used to explain the development of tourism is employed to demonstrate the commonality of the models and also to highlight the inadequacy of the framework to produce solutions within a dynamic world. The chapter draws out some fundamental issues with respect to the socio-cultural impact of tourism on host com- munities and critically examines their implications for tourism development. Both positive and negative impacts are discussed and some high-profile negative issues such as crime, sex tour- ism and displacement are examined in further detail. The chapter concludes by looking at some of the sources of data that are available for the study of the socio-cultural impacts. Sustainable tourism has become commonplace in the literature but the concept is subject to a variety of interpretations and is often misunderstood. The definitions and concepts are ex- amined in Chapter 10 together with their implications for tourism development. Different types of sustainability are considered and the fundamental rationality of sustainability is brought into question. Factors that work towards some form of sustainable tourism and those that work against it are reviewed before moving on to the main ways forward to improve the resilience of the industry and the destination. The limits to development are discussed using terms such as carrying capacity and limits of acceptable change together with the strengths and weak- nesses of such approaches. Concern is expressed about the use of the term sustainability as a marketing strategy rather than a commitment to resilience, and then different types of tourism products are examined, including eco-tourism, to examine if they are robust in practice. The chapter finishes by looking at the issue of climate change, and scopes out the likely relationship between climate change and tourism followed by an examination of mitigation and adaptation strategies and policies. Several competing models that have been put forward to explain the process of general economic development and some of the main theories are examined, together with an assess- ment of the role that tourism can play within such models. Chapter 11 starts by briefly looking at Introduction 119
- 145. each of themain models and the role of tourism before looking at the characteristics of tourism that make it such an attractive development option for many destinations. Tourism planning is a process that can take place at different levels from the international (such as the Caribbean or Europe) through to national and then to local planning levels. Planning at each of these levels is discussed prior to looking at the planning process and its key stages. The importance of each stage is considered, followed by a brief look at the expertise needed to construct successful tourism development plans. The chapter concludes by looking at what can go wrong and the reasons that can bring about plan failure. Finally, tourism operates in a dynamic world and, whereas there are many forces that drive tourism forward to higher volume and deeper penetration, there are also forces outside a destination’s control that can suddenly deter people from travelling to specific places or, like the events of 9/11 in 2001, can change the way in which some aspects of tourism activity are conducted. Therefore, tourism development strategies must also consider how best to deal with the negative forces that can switch off tourism activity overnight or work against tourism growth. Chapter 12 concludes this part by examining the negative impacts that might hinder tourism development and the ways of examining what the impacts may be. By David J. James TD FTS FRSA, Chairman, Global Tourism Solutions (UK) Ltd In 1985, following the establishment of Canada’s National Task Force on Tourism Data, Frank Hart and I were appointed co-Chairmen of the Working Party to consider local area statistics. This work focused on the city of Edmonton, Alberta, Canada, and became the first attempt to develop the effective use of supply-side- generated local area tourism statistics drawing on the model developed in Saskatchewan in 1981. This research provided much-needed data for the city councils and convention bureaus on the impact of tourism, which is the principal subject matter of this part of Tourism: Principles and Practice. In 1988, I was appointed Director of Tourism and Amenities for Scarborough Borough Council and it was in that context that the model was transferred to the United Kingdom. The model was first run on behalf of Scarborough Borough Council in 1990, becoming known as the ‘Scarborough Tourism Economic Activity Monitor’ (STEAM), and has subsequently been adopted by many local authorities in the United Kingdom. STEAM approaches the measurement of tourism at the local level from the supply side, which has the ben- efit of immediacy and relative inexpensiveness. It is not a statistically estimated model in the manner of an input–output model of the local economy, but rather uses the output of such models as discussed in this sec- tion, particularly multiplier values arranged by location and industrial sector as pioneered by the authors of this text. In effect STEAM is a spreadsheet model that is more of a process in which the values of the relationships or equations defined on the spreadsheet are specified at each stage by the user. Thus, although the logic of the model is constant, the nature of data input will alter from area to area depending on the amount of survey material available and qualitative expert opinion concerning the structure of tourism in the local economy. In this way the model builds in both quantitative and qualitative assessments to arrive at local volume and value measures of tourism. An Impact Assessment Practitioner’s View 120 part 2 The Tourism Destination
- 146. My career intourism began in 1964, years before mass tourism literally ‘took off’ as the first jumbo jets began to make international travel accessible and affordable. Bored by my city job and big salary, I responded to an advertisement for a ‘Spanish speaking Water Ski Instructor’, boldly, as I could do neither. Nor could the young woman who interviewed me in Brixton, so I got the job. With experience of organising guests’ hotels, travel and activities, I returned to the United Kingdom, managed restaurants, shops and hotels – then applied to manage Lord Mon- tagu’s successful but outdated stately home business and motor museum at Beaulieu, in Hampshire. Promoted to Managing Director I oversaw the design and construction of the new National Motor Museum, ‘state of the art’ visitor facilities, the restoration of the grounds and gardens of Palace House, and the interpretation of the Abbey – and all the other businesses there, from the hotel to the marina. The 20-year development plan for Beaulieu was accomplished in under 5 years, and attendances, revenues and visitor’s appreciation were all maximised. As a result I was approached by the owners of other leisure businesses, stately homes and museums to provide them with specialist advice. I arranged the first specialist management courses – and the demand for help grew. So I formed two specialist consultancy companies, one advising private clients, charities, and developers, the other worked mainly with public sector clients – local authorities and development entities and government departments. The services we provided were greatly appreciated. Over the following 30 years we completed over 1,500 projects and at peak had 300 staff, with an office in New York, developing attractions and tourism projects around the world. Today there are numerous multi- functional consultancies. Back in the 1970s there were none. We blazed a trail. These services culminated in the production of Tourism Development Strategy Templates for nations and regions, concentrating on the means by which local people can collectively manage their own tourism destinies, optimising the benefits for local communities. So what is the ideal education, training and qualification for a career in tourism? Facing a room of over 400 new graduates recently when I was being given an honorary Business Doctorate in Tourism, I was asked to give such guidance to them. Was this too late? Shouldn’t it have been at the beginning of their university days? I thought of their specialisms: Law, Accountancy, Environmental subjects, Human Resource Manage- ment and Personnel Development, Economics, Business Management, Hospitality, Events, Adventure and Outdoor Management, and I realised that every one of them could find a rewarding career in today’s diverse and growing tourism industry. Job opportunities are not just for graduates – tourism offers entry opportunities at all levels and for all ages, as the experience of years is recognised as a key asset in this quintessentially ‘people business’. The lesson of my opening paragraphs is that what is required to succeed in tourism is enthusiasm, a wish to learn, and to respond to the needs of people, and the world that they discover through tourism. 14 February 2017 Ken Robinson CBE FTS Introduction 121
- 147. Destinations Learning Outcomes The focusof the chapter is on the destination and its role in the tourism system. By the end of this chapter, therefore, you will understand: ● the nature and roles of destinations in the wider tourism industry; ● the range of destinations that exist and the context within which they are planned and developed on the one hand, and compete with other destinations on the other; ● the number of forces in the external environment impacting on a destination’s future; ● the ways in which destinations are managed and marketed; and ● the collaborative nature of destinations and the organisational and governance structures advocated for their effective management. Photograph: London, most visited international destination in the world. Chapter 6
- 148. In this chapterwe show that the destination lies at the core of the travel and tourism system. Destinations come in all shapes and sizes and can be found in a variety of geographical settings such as in urban, rural and coastal environments. Destinations can be countries or a collection of countries, a distinct state, county or province, or in fact represent a local city, town or resort, national park, area of outstanding natural beauty or coastline. As with other parts of the tourism system they can be viewed in both a supply and demand context in that destinations can be seen to represent a mix of products and services that come together to meet the needs of the tourist (sup- ply) or as places where tourists travel to in order to experience particular features or experiences (demand). The geographical location of destinations is, for reasons that will become clearer as you proceed through the chapter, particularly significant as often they do not sit comfortably in convenient political, administrative and/or legislative- bound locations. More often than not, destinations are in fact subject to artificial divides that ignore the more consumer-driven needs and expectations of the tourist. As will become evident throughout this chapter, destina- tions are traditionally viewed as particularly difficult entities to manage due to the complex relationships of stake- holders that come together to make them work and the multiple objectives that they seek to achieve. This chapter outlines the relationship between the destination and the wider tourism industry before intro- ducing the context within which destination policy, planning and development takes place. The chapter contin- ues by identifying a number of trends impacting on destinations and provides a useful framework which facilitates understanding. The chapter then introduces a range of issues relating to the management and marketing of destinations before concluding with a series of thoughts for the future. Introduction The Nature and Role of Destinations The destination sits at the core of the wider tourism system in that it represents an amalgam of tourism products that collectively offer a destination ‘experience’ to visitors. For many consumers (day visitors or tourists), particularly in leisure tourism, the destination is the prin- cipal motivating factor behind the consumer’s decision and expectations. In this context it is somewhat surprising to find that, even to many experts in the field, the destination remains conceptually difficult to define. One of the principal barriers in neatly defining destinations is the ‘inconvenient’ nature of boundaries, be they administrative, political or simply geograph- ical, and the means by which they do not always sit comfortably with the perceptions of the destination to consumers. For example, although London represents an ‘iconic’ global desti- nation, the wider destination is made up of 33 local authorities which incorporate two cities: the City of London and the City of Westminster. However, for the purposes of tourism, espe- cially international visitors, ‘tourist’ London is essentially the inner core, often referred to as that area within the Circle Line of London’s Underground system. With respect to arriving at a definition of a destination, it is necessary to introduce both sup- ply- and demand-side perspectives. So, while supply-side definitions identify the destination as ‘a well-defined geographical area which is understood by its visitors as a unique entity, with a political and legislative framework for tourism marketing and planning’ (Buhalis, 2000: 98), demand-side definitions define destinations as ‘places towards which people travel and where they choose to stay for a while in order to experience certain features or characteristics’ (Leiper, 1995: 87 in Buhalis, 2000: 98). In reality, whether one views the destination as a ‘tourist place’, a ‘tourism product’ or a ‘system of products’ very much depends on the purpose of defining it and the perceptions of the stakeholders either directly and/or indirectly involved with its man- agement. Despite this definitional haze, the UNWTO considers the destination to be the funda- mental unit of analysis in tourism (WTO, 2002a). The destination is complex and difficult to manage, but their importance for the entire tourism system is such that the effective and effi- cient management of destinations is one of the key priorities for tourism professionals across the world. For this reason alone, it is imperative that a systematic and interdisciplinary approach is adopted for the analysis, planning, management and control of destination The Nature and Role of Destinations 123
- 149. development (Manente andMinghetti, 2006: 230). The adoption of a systematic approach to the understanding of destinations has been advocated for some time in that those responsible for destinations are fully aware of the interactions among destination stakeholders and the impact(s) exerted by the competitive environment on the destination ‘system’. Destination types There are many types of destinations that can be identified but the most basic classification is threefold: ● coastal destinations, epitomised in the ever popular seaside resort that has undergone many changes since its modern-day emergence in the mid-eighteenth century with advocacy of inland spas and sea bathing for health cures; ● urban destinations in that major cities have been cultural attractions from ancient times onwards and some, such as Venice, which was popularised in the period of the Grand Tour by Europe’s aristocracy, have continued as tourist cities long after their commercial function has diminished; ● rural destinations that range from the ordinary countryside to national parks, wilderness areas, mountains and lakes. From a planning perspective, the designation of a tourist destination should provide the basis for integrated development to generate the balance of amenities and facilities required by tour- ists. It also allows for the staging of tourism from one locality to another, opening up new areas as others become saturated, therefore the definition of a destination is a dynamic concept even for a particular geographical area where neighbouring areas can be encompassed as and when they are brought into the tourism offer or tourists recognise them as such. It follows from the discussion so far that the key features of a tourist destination are: ● logical geographical unit recognised by visitors; ● contains visitor attractions; ● access or possible provision of access; ● internal transport network; ● tourist infrastructure and superstructure are present or can be developed; ● administratively possible to plan and manage. When planning tourist destinations it is often desirable to establish a tourist centre that acts as the hub and gateway to various parts of the area. This allows the public and private sectors to concentrate facilities and obtain economies of development scale. Access is also a key factor in determining the development of tourism and this can be clearly seen with the development of transport infrastructure and services that have heralded the development and spread of tourism nationally and internationally. Economic distance becomes an impor- tant factor in determining which locations/destinations are within the scope of a potential tourist (economic distance in this sense is the geographical distance, taking into account the cost of travel in terms of actual costs and time). As transport developments took place, first with the development of the railways, then the ownership of cars to the development of low-priced air travel, tourists have travelled further and more frequently, not only for the traditional longer stay leisure vacations but also for the shorter stay and weekend breaks. Coastal In Britain, as in the rest of Europe, although ‘taking the waters’ was popularised by the Romans through the building of luxurious thermae over hot springs, the foundation of spa towns, the peak periods for seeking cures at spas or at the seaside took place during the Georgian and Victorian eras of the eighteenth and nineteenth centuries. Initially for the wealthy, it was the industrial growth in the north of Europe and on the east coast of the United States, together with the advent of the railways, that popularised coastal resort development. A classic example of this is Brighton, located on the south coast of England. The community was formerly a fishing village, known as Brighthelmstone, 124 Chapter 6 Destinations
- 150. but the constructionbetween 1784 and 1787 of an Asian-style Royal Pavilion as a residence for the Prince Regent, later King George IV, initiated the transformation of the village into a fashionable resort town. By 1841 Brighton became accessible by rail, and it grew rapidly thereafter. The development of the railway networks helped bring about the growth of seaside resorts during the latter half of the nineteenth century in Europe and the United States, and this growth can be seen as the result of a partnership between the public and private sectors. The local authorities invested in the promenades, piers, gardens and so on, while the private sector devel- oped the revenue-earning activities, which increased the value of property in the area and thus the associated property tax receipts for the authorities, and enhanced local income and employ- ment opportunities. Pier building was a particularly British phenomenon; 78 were constructed between 1860 and 1910, while very few were built on mainland Europe. However, the develop- ment of seaside resorts was paralleled in Europe and the United States with the expansion of the amusement park industry. Although New York’s Coney Island had started up in the 1870s, and its rides and games entertained countless visitors, it was Captain P. Boynton’s Sea Lion Park, which opened on the Island in 1895, that set the trend and inspired numerous amusement parks throughout the United States, including the three Great Coney Island Parks: Luna Park (1903–1947), Dream- land (1904–1911) and Steeplechase (1897–1964).Although travelling fairs in Britain have a history that dates them back to the twelfth century, the amusement arcades were a late nineteenth and early twentieth century attraction that tended to be confined to the ends of piers, but in 1896 theAmerican ‘revolution’crossed the Atlantic with the founding of Blackpool Pleasure Beach. It was not until the 1950s, with the growth of air travel, that the dominance of the seaside resorts of northern Europe over the traditional summer break began to face the challenge of the warm water resorts in southern Europe. This left them facing a different future, to which some have adapted by investing in new markets, for example, the conference trade and the growth in short breaks. In Europe the latter are more likely to be taken within the home country, whereas the ideal main holi- day today is often considered to be abroad, mainly short haul, but also being made easier by devel- opments in long-haul overseas travel to more exotic destinations. Another major change has been increased residential settlement in these resorts, simply because they are ‘nice places to live’. This has generated local conflict in terms of allocating resources to tourism use versus residential use, and over time has altered the demographic and economic base of the resort, because the priorities of local representatives have changed and they remain not as seaside resorts but as coastal towns. Typical stereotypes of resorts that have become urban settlements are seaside towns that now have a population where the proportion of pensionable age residents is above the national average; low levels of economic activity; seasonal employment opportunities; considerable commuting; a high percentage of second homes; and a high percentage of communal living in apartment blocks and retirement homes. The policy of NTOs in these circumstances is to focus their attention on regenerating a few key resorts that are willing and able to maintain their position in the marketplace. One of the fundamental lessons to learn from the development of coastal resorts, whether new or old, is the importance of the public–private sector partnership. Embodied in the tourist product are common goods and services, which are either unlikely to be provided in sufficient quantity if left to the market mechanism, or are available without cost, as is the case with natural resources. The principal concern for the environment is that indiscriminate consumption, without mar- ket regulation, will cause irreversible damage that cannot be compensated by increasing the stock of other capital (see Chapter 10 on sustainability). The upshot is that the single-minded pursuit of private profit opportunities within tourism may be self-defeating, as many older resorts have found to their cost. The outcome may not be the integrated tourism development which distils the essence of the country in its design, but a rather crowded, overbuilt and place- less location with polluted beaches – one that is totally out of keeping with the original objec- tives set by the country’s tourism policy. As a number of Mediterranean resorts have discovered, the lack of public involvement in tourism has resulted in overbuilding by the accommodation sector, since this tends to be the major revenue-earning activity where there are substantial short-term profits to be made during the early stages of development. Such building has often been at the expense of the aesthetic quality of the natural landscape and also, when it has been overlaid onto an existing town or village, it may severely disrupt the lifestyle of the local com- munity. For example, the major hotel developments that took place in the resorts of southern The Nature and Role of Destinations 125
- 151. Spain during the1960s and early 1970s were completed under laissez-faire expansionism with little consideration given to planning or control. In general, the public infrastructure was over- loaded and, since the second half of the 1980s, there has been a continual programme to correct this imbalance by refurbishing the resort centres to give more ‘green’ space in the form of parks and gardens, and pull down older hotels, as in the Balearic Islands. It is evident that the public is becoming more aware of the perceived adverse effects of tour- ism on the environment and it has become fashionable to ‘go green’. Green tourism, eco- tourism or alternative tourism (the words are often used synonymously) is in essence small-scale solutions to what is a large-scale problem, namely the mass movements of people travelling for leisure purposes. Thus, there is a requirement to continue to maintain large ‘resortscapes’ capa- ble of managing high density flows, such as sun, sea and sand family groups, and it is important that the local economy, whilst being sustainable, is kept in balance with the coastal environ- ment. Local people should be involved in the decision making, but the ‘last settler syndrome’ of incoming residents opposing new developments in the seaside economy, which has hampered the regeneration of many older resorts, should be avoided. Urban During the last half of the twentieth century, the troubles caused by the move of manufacturing industries from urban areas to cheaper rural locations and the continued flight of the middle classes to the suburbs severely affected the image of industrialised cities, already dented by issues of congestion and pollution. This has forced local authorities, policy makers and business groups to revive their cities by attracting new industries, residents and visitors through the application of modern city management and marketing systems founded on longer term plans. North American cities, where the revitalisation trend was referred to as ‘city boosterism’, were the first to practise city marketing strategies with the support of both public and private organi- sations, for example, Toronto, Baltimore and Boston. Tourism has thrived in the regeneration of run-down industrial and dock areas, at the same time acting as a catalyst to attract new indus- tries, belying the previously held notions that cities are just places where people live and work. From the early 1980s, major cities have been taking tourism development more seriously and trying to strengthen the sector with strategic plans and tactics hinged upon the existence of quintes- sential factors for tourism development. While such factors include the social, cultural, economic and environmental endowments of urban areas, their use as tourism assets depends heavily on the success of public and private authorities in integrating tourism development into overall town plan- ning. The characteristics of such tourism derive from both the distinctive nature of urban structures and the manifestation of tourism in such intricate settlements. Some of the common characteristics of city destinations drawn from the empirical and theoretical research available in the literature are: ● Urban destinations are both multi-sold and multi-bought, through offering a range of tourist products and services that create diverse product packages. Shoppers, cultural visitors, visi- tors on education trips, business visitors, short-break trips, domestic visitors and overseas visitors can all be found in many major city destinations. ● City destinations are often the tourism gateways to their surrounding region. Locations that associate themselves with a major city destination may benefit from the latter’s high volumes of visitors, by drawing day trips from tourists basing themselves in the city. ● The sheer scale of heterogeneous products and services sold to visitors and locals in urban areas make each city destination a unique tourism product cluster. Therefore, while there may be some similarities between some urban functions and tourist services, as in accom- modation and transport, each city destination is different when it comes to their size, loca- tion, heritage, and economic and social functioning. ● Developing and marketing the product clusters of city destinations cannot be directed by a single authority. Residents, private and public tourism stakeholders and other urban authori- ties need to cooperate to initiate development projects and to effect marketing activities by creating a one-voice strategy. The ‘over-fragmentation’ of tourism stakeholders in urban areas makes partnerships, alliances and cooperation imperative in the process of developing the tourism economy. 126 Chapter 6 Destinations
- 152. ● Despite thefact that tourism-related products and services in cities are manifold, visitors usually concentrate on certain locations and create invisible boundaries that define tourist zones or districts. ● Tourism in urban areas, compared to traditional holiday resorts, is an all-year-round activity with limited seasonality. This is principally due to the diversified demand and supply aspects of city destinations. ● By their very nature, cities embrace more than one economic industry. Hence their economic function depends on the coexistence of various manufacturing and service operations. Whether the economic and social richness of urban areas is tourism-related or not, sustaina- ble tourism development and management can only be fulfilled through the success of local authorities in being able to integrate tourism into the overall urban economic structure. Nei- ther tourism nor other industries should hamper each other’s functioning. Opposition to tour- ism may arise from residents and businesspeople if concentrated tourist flows in certain districts impair the living standards of the city. Rural The product strengths of many rural areas lie in their strong natural environments – for example, hills, mountains and lakes, and remoteness – which make them increasingly attractive for tourism development at a time when an increasing proportion of the world’s population are becoming urban dwellers and where environmental guilt brings ‘green tourism’ into vogue. Benefits are seen in the rural way of life, physical activity from hill walking to adventure sports, tranquillity, aesthetics of the landscape and so forth. Within Europe, as in many other regions, the promotion of rural tourism is part of a greater convergence and cohesion policy. In many rural locations, the outlookforsmallfarm- ersandthereforethefabricofthelandscape,cultureandwayoflifeoftherural economy is bleak without the expenditure of substantial sums of public money for little return. Supporting farm tourism is just one of a number of ways in which essential and inevitable subsidies can be paid to farmers, and it seems to be among the more cost-effective measures. Policies aimed at developing this sector, espe- cially those seeking to improve the qualitative characteristics such as suitable transport infrastruc- ture, accommodation facilities, cultural activities in the form of festivals, and food quality, are intended to generate higher tourism revenues, which would be beneficial to sustaining local income growth. However, although every location has some tourism potential, it would be naïve to suppose that tourism development could be effective in every region. Increasing market segmentation will generate niche markets for some areas, but the cost of supplying these markets could be prohibitive, for in higher latitudes the lack of tourist infrastructure in rural areas is compounded by weather con- ditions, which limit the length of the season, as in so many of the outlying regions of the world. On the other hand, there is concern for the social impact of tourism on small, close-knit com- munities and the environmental threat to undisturbed wilderness. Scenic areas may be protected by zoning landscape for different use patterns, creating intermediate or buffer zones and limiting tourist flows, which is the purpose of creating national parks and designating areas of outstand- ing natural beauty. This is to protect them from inappropriate developments, so as to preserve the landscape and rural structure. As a rule, when considering the impact of tourism on the local community, the greater the difference in lifestyles between rural hosts and tourists, and the less the former have been exposed to visitors, then the longer should be the period of adaptation. Phasing development over time and space is a fundamental underlying principle, but any programme for growth is made all the harder when the community lacks the necessary skills, capital, organisation structures and information sources to progress the plan. Solutions for such difficulties could include bringing in ‘flagship’ projects from outside and inviting the operators to invest long term in the community, forming a development corporation or taking a low-key approach by running a small business extension service backed up by development grants. Although there is always the risk with outside companies that they might, in response to commercial pres- sures, revert to short-term profit goals, there is no guarantee that local owners will not be even keener to exploit tourism opportunities, particularly when they have the necessary political representation to do so. The Nature and Role of Destinations 127
- 153. Destination policy, planningand development Prior to the closer examination of those forces in the external environment that are impacting on the future management of destinations, it is advisable to set destinations more broadly, and their management, within the context of tourism policy and planning and the wider context of ‘com- petitiveness’. In essence, all aspects of tourism sit within the broader context of tourism policy. According to Ritchie and Crouch (2003) tourism policy focuses on macro-level policies, is long term in orientation, and concentrates on how critical and limited resources can best respond to perceived needs and opportunities in a changing environment. Tourism policy is significant as it defines the so-called ‘rules of the game’, sets out the activities and behaviours that are accepta- ble, and provides common direction and guidance for all tourism stakeholders within a destina- tion. In a strategic sense it facilitates consensus around the specific vision, strategies and objectives for a given destination while it also provides a suitable framework for public and private discussions on the role of the tourism sector and its contributions to the economy and to society in general. In its broadest sense, tourism policy allows tourism to interface with other industrial sectors within the wider economy and link more effectively into other more general strategies such as national and regional economic strategies, spatial strategies and integrated national and regional strategies. Destination management, on the other hand, represents a more micro activity in ‘which all the many resident and industry stakeholders carry out their individ- ual and organisational responsibilities on a daily basis in efforts to realize the macro-level vision contained in policy, planning and development’ (Ritchie and Crouch, 2003: 147). Destination competitiveness Destinations are managed within a broader context of ‘competitiveness’ and ‘stewardship’ which relate to the deployment of ‘management’ resources to both develop and enhance the destination and at the same time protect and conserve its core resources respectively. Hence, the competitiveness of a destination refers to its ability to compete effectively and profitably in the marketplace, while the successful management of a destination involves a balance between traditional economic and business management skills with an increasing need for sensitive envi- ronmental management capabilities. The comparative advantage of a destination, meanwhile, refers to a destination’s ability to manage its natural and man-made resources effectively over the long term. Fundamental to achieving competitive advantage for its tourism industry, any destination must ensure that ‘its overall “appeal”, and the tourist experience offered, must be superior to that of the alternative destinations open to potential visitors’ (Dwyer and Kim, 2003: 369). One of the particular challenges in defining competitiveness in the context of destinations is that, as already stated, the destination represents an amalgam of many industrial services, such as accommodation, transportation, attractions, entertainment, recreation and food services. This fragmented and highly disparate ‘product’ clearly does not make the management of the visitor experience an easy task. Despite difficulties of definition, it is sensible for destinations to Queens, the Next Tourist Destination (The New York Times): https://youtu.be/JHZ9YfIfvjk Stockholm – It’s Not a Coincidence (Visit Stockholm): https://youtu.be/CAkdWUjdJyA Step Into Your Never Ending Story (Visit Orlando): https://youtu.be/d83e4zT3R9M Destination Marketing for the Future (Arabian Travel Market): https://youtu.be/VQQOTxCIiPc Youtube Trends: new destinations 128 Chapter 6 Destinations
- 154. focus attention onlong-term economic prosperity as the yardstick by which they are to be assessed competitively (Ritchie and Crouch, 2003). In order to remain competitive, destinations need to be aware of both demand and supply factors. With regard to demand, those managing destinations need to take note of the nature, timing and magnitude of demand. At the same, they need to be aware of those products, ser- vices, amenities and attractions that are necessary components for a satisfactory destination ‘experience’. Ritchie and Crouch (2003: 60) propose a conceptual model of destination com- petitiveness as a vehicle to facilitate understanding of what is essentially a quite complex issue, the model depicting the ‘structure of interrelationships between separate constructs or factors which help to explain a higher-order concept’. The tourism system is open in that it is subject to many (micro) influences and pressures arising from the system itself. In addition, numerous (macro) forces exist externally that are profound in their implications for tourism. Although the attractiveness of a destination may remain relatively constant, the means by which competition changes indicate that a constant reassessment of the destination’s strengths, weaknesses, opportunities and threats is necessary. The work by Porter (1998) is useful here in that those managing destinations need to understand the contributions of factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, organisation and rivalry in determining destination success. Building on the work of Porter, the study by Ritchie and Crouch (2005) refers to the global (macro) environment; the competitive (micro) environment; core resources and attractors; supporting factors and resources (such as infra- structure, accessibility and hospitality); destination policy, planning and development; destination management; and qualifying and amplifying determinants. In reality, all destinations, irrespective of size, location and market, need to adapt continually, not simply because they need to modernise but because they need to retain and build on their overall competitiveness over other destinations. Destination Trends The challenges facing destinations are significant, with a whole host of issues that impact on their management and marketing. The global economic crisis only served to increase those challenges as the patterns of distribution of tourism activity changed to accommodate the effects of falling real income levels for many tourists. Both the macro and micro environments are in a constant state of change and evolution and, as such, those managing destinations are encouraged to migrate from their traditional ‘inward looking’ nature and recognise more fully the true magnitude of events and their impact on how destinations are to be managed in the future. For the future man- agement of destinations there is a need to take into account: the needs, wants and expectations of more mature and knowledgeable customers; more up-to-date and reliable information upon which to base such decision making; and the considerable pressures caused by the sustained presence and influence of e-intermediaries such as Expedia.com, Booking.com and Trivago.com, and their growing power and influence on destinations and the wider tourism system. With regard to trans- portation and technological pressures, developments in useful destination management systems have taken place which now afford them necessity status, while the systematic growth of discount airlines and the surplus of new destinations continues to ensure severe competition among destina- tions for tourist spend. Of all these forces, however, it is the long-standing ‘dividing line’ between the public and private sectors that remains the prime catalyst for change, a dividing line considered to have been holding back the potential of destination marketing for far too long. King (2002), whilst acknowledging the existence of a number of pressures, also raises the scenario of the traditional distribution channels being increasingly bypassed in the future with more direct contact between the consumer and the supplier taking place. He also suggests that a reduction in booking lead times is likely to occur, as is a steady downturn in the demand for mass tourism products, leading to a greater pressure for the destination to deliver satisfaction and meet expectations of an increasingly independent tourist. King is very critical of many existing destination management organisations (DMOs), in that the majority remain focused on ‘what the destina- tion has to offer’ and continue to use ‘mass marketing techniques more suited to the passive customer’ (King, 2002: 106). He develops this theme by alluding to the fact that the customer is Destination Trends 129
- 155. now very muchan active partner, or co-creator, in the marketing process. For destinations to be a success, marketers will need to engage the customer as never before, as well as to be able to provide them with the types of information and experience they are increasingly demanding. In the same study, King advances a number of so-called ‘new realities’ for destination mar- keters. These include the need for even greater emphasis on a strong brand image, with clearly identified and projected brand values that resonate with key target segments; more direct engagement with the customer to identify their holiday motivations, anticipate their needs and fulfil their aspirations; the establishment of ongoing, direct, two-way and networking consumer communication channels, and for key customer relationship strategies to take place with the eventual development of mass customisation marketing and delivery capabilities; greater emphasis to be given to the creation and promotion of holiday experiences that link key brand values and assets with the holiday aspirations and needs of key customers; and a move away from a relatively passive promotional role to include greater intervention, facilitation and direc- tion in the conversion process. The 15 Cs framework In recognition of the dynamic context within which destinations are being managed now, and are to be managed in the future, Fyall et al. (2006) propose a framework which provides a ‘route map’ for professionals and researchers working in the field (see also Fyall, 2011). Although in a developmental phase, and in no way intended to represent a definitive list, the 15 Cs framework provides a suitable synthesis of the key challenges facing the domain of destination manage- ment and marketing for the next decade. Clearly their degree of importance will vary according to the destination in question. However, the omission of even one of the challenges in the design and implementation of destination management and marketing strategies is likely to hinder the effectiveness of the final plan or strategy in that an inadequate understanding of the wider desti- nation environment is evident. Nevertheless, identifying future issues and strategic challenges is a common practice. The challenge for destinations is to take due notice of the forces at play and to manage destinations accordingly. Complexity The complexity of the destination product is not in dispute as all destinations to varying degrees are comprised of multiple stakeholders, multiple components and multiple suppliers, and con- vey multiple meanings to multiple markets and market segments. Perhaps the issue most press- ing in the context of complexity is the pressure for the public sector to increase revenue from private sector sources at a time when considerable pressure is being put on the public purse within the context of emerging destination management structures and the increasing devolution and regionalisation of tourism organisation and funding, most notably in the United Kingdom. The complexity of a destination is particularly marked when the consumer and community dimensions are taken into consideration (see Wang, 2008). For example, consumers will often differ in their perceptions, expectations and desired satisfactions of the ‘tourism place’. Only a minority, if at all, will view the destination as a neatly encapsulated bundle of suppliers. Control The adoption of a strategic approach to marketing destinations based on destination branding is often undermined due to the inherent difficulties of destination coordination and control. For example, campaigns can be frequently undertaken ‘by a variety of tourist businesses with no consultation or coordination on the prevailing message or the destination values being pro- moted’ (Scott et al., 2000: 202). One of the consequences of a greater top-down orientation is the tendency to ignore the smaller players, many of whom in the past were members of previous forms of destination man- agement structures and tourist boards. For the wider management of destinations, however, it is recognised that developments are being made in the need to bring tourism’s information base up to date as there is considerable evidence to suggest that ‘the design and implementation of des- tination management systems (DMSs) are taking place to the extent that for most destinations, 130 Chapter 6 Destinations
- 156. rather than beingan aspirational element of their marketing armoury, they are now deemed essential and represent a very real opportunity for destination marketers to gain greater control of their product’ (Fyall et al., 2006: 77–8). Change The migration from the traditional division that has historically existed between the public and private sectors is perhaps that element of change most needed in that it has often been perceived as holding back the potential of destinations. To date, however, most countries around the world retain a strong public bias in their organisational and funding structures. Not only does this result in the retention of a predominantly public ‘organisational’ mindset but it serves as a bar- rier to the raising of additional funding and the speed with which DMOs can react to forces in the external environment. Crisis The majority of destinations around the world, either directly or indirectly, are to some extent affected by crises, be they natural or man-made. Crises often impact on established tourism flows and their related spend and accommodation requirements (Fletcher and Morakabati, 2008). Unfortunately, the external environment is predictable in its unpredictability. For exam- ple, political turmoil in Tunisia, Egypt and across the Middle East continues to impact nega- tively on many destinations around the world. It is clear that the future for many destinations is inherently uncertain due to a whole myriad of natural and man-made crises, the one type that is often overlooked being economic crises in the major generating countries, which are eco- nomically far more damaging for tourist-receiving countries than more high-profile, media- hungry events such as 9/11. For these reasons alone, any destination management organisation that does not now incorporate some form of crisis management planning into its strategic mar- keting planning cycle can be accused of grossly ignoring the realities of modern tourism. Complacency The crises mentioned above are all significant in that although many destinations clearly suf- fered from very rapid drops in demand, among other negative impacts, tourists continued to travel, albeit intra-regionally or domestically. For destinations everywhere, irrespective of scale and geographic location, fear of crises ought to be sufficient to prevent complacency among those managing and marketing destinations. For many destinations, however, specific markets have been such reliable sources of custom over many years (Fyall and Leask, 2007). However, although in the past destinations could perhaps be excused for being slow to react to forces in the external environment, this clearly is no longer the case. Although as a broad phenomenon tourism has proven to be particularly robust, travel and spending patterns do change. Tourism in its broadest sense has consistently proved to be a highly robust phenomenon in that although travel patterns may change the act of travelling remains steadfast and for many markets it is now a necessity rather than a luxury, especially in the developed world. Customers The task of managing destinations is never going to be an easy one and destinations urgently need to develop suitable strategies to accommodate what may be referred to as Poon’s ‘new tourist’: that is, tourists who are flexible, segmented, diagonally integrated and environmentally conscious, who seek quality, flexibility and value for money (Poon, 1993). Every year that passes, destination marketers need to be more innovative in their adoption of marketing tech- niques and strategies in meeting the needs of more demanding customers (Li and Petrick, 2008). For example, the highly competitive global market for tourists serves as a catalyst for tourism destinations to seek more innovative ‘relationship’ marketing strategies so as to engender a degree of loyalty and stimulate lucrative repeat business among their visitor base. That said, in a context of many destinations competing in price-driven, low-margin markets, the costs and benefits to be derived from relationship marketing require significant research before tourism destinations are able to accept the concept as a new paradigm or potential solution to maintain/ expand their share of the market for visitors. In view of the inherent imbalance of power, Destination Trends 131
- 157. resources and experiencebetween tourism destination ‘actors’, generating cohesion, mutual trust and respect within the tourism system stand as significant challenges for those marketing tourism destinations in the future. Culture Although the cultural division between the public and private sectors within tourism continues to represent a barrier for progress across many countries, on the demand side culture represents a significant opportunity for destinations, especially those that have acquired ‘commodity’ sta- tus in recent years, to differentiate themselves in the future via the development of niche tourism strategies. With respect to aspects of supply, the cultural division between the public and private sectors is considerable by the very nature of their respective roles in providing for the tourist experience. Destinations are for the most part reliant on ‘public goods’ as part of their wider tourism appeal – which in turn raises the issue of who is to pay for the upkeep of these ‘public goods’in the future: the local community or visitors? Despite the pressure in many countries for a greater financial contribution to the costs of developing and managing destinations, the ration- ale for continued public sector intervention remains strong. For the most part, governments continue to recognise the economic value of tourism (which in turn has contributed to the pro- liferation of DMOs worldwide) while the ‘one-industry’ concept of tourism recognises that although businesses have individual goals, the success of the tourism industry relies on effective interrelationships between the public and private sector (Pike, 2004). Competition One interesting indirect dimension to competition is the exponential growth in the owner- ship of second homes, most notably in countries such as France and Spain. The phenomenon of second-home ownership is a significant threat in that an increasing percentage of the mar- ket now no longer needs variety in their choice of destinations as with their purchase of a second home they have expressed some indication of their loyalty, albeit to varying degrees, to a particular destination. Work by Pedro (2006) has explored this phenomenon in greater depth and evaluated the true impact on the management of destinations. Some of the key outcomes include the fact that second-home tourism is not labour intensive, involves visitors with lower expenditure patterns and represents competition for the traditional hospitality sector. It also involves visitors who do not pay tourism taxes and are not subject to the legis- lation often associated with tourism accommodation although they may well pay taxes on their properties. Finally, the phenomenon inadvertently puts pressure on the price of land and contributes to price inflation in the house and consumer goods markets. One notable fact is that, as evidenced recently, competition is at its most cut-throat post-crisis, with evidence from recent disasters suggesting that, although the overall volume of trips taking place remains relatively static, the shift in travel patterns is significant in that domestic and intra-regional travel to more familiar and perceived ‘safe’ destinations has become the norm. Commodification According to Fyall et al. (2006: 80), one of the ‘outcomes of commodification of the destination product is the continual downward pressure on prices’. The reduction in prices, although beneficial to tourists, reduces the destination-wide yield and poses a considerable challenge for destination marketers in that increasingly more marketing, and marketing spend, is necessary to generate a decreasing yield from tourists. Niche tourism developments are a means to counter such a trend – as best demonstrated by marketing strategies adopted by the Tourism Authority of Thailand and their development of the Amazing Thailand brand and its annual niche-orientated marketing ‘straplines’. One of the principal means to counter commodification is via the use of events, as evidenced in Mini Case Study 6.1 on Orlando, Florida as a key differentiator in the international marketplace. Creativity The considerable challenges that confront those tasked with developing destination brands helps to explain why there is such a paucity of brand innovation in the destination sector as compared to other sectors within the tourism industry (Hankinson, 2007). 132 Chapter 6 Destinations
- 158. Events are veryimportant motivators for tourism. In fact, they are so important that they are, in many cases, calculated into the overall destination planning and development (Getz, 2008). Events, festivals, shows, etc. cannot be the single sustainable driving force behind tourism, but rather an enhancement of the overall tourism destination product. This is so because destination tourism that is enhanced by events is a matter of supply and demand given the target tourists’ perspectives. Rather than viewing events as the basis of a destination’s tourism industry, DMOs tend to view events as catalysts, image-makers, and attractors of the destination. A prime example of this can be seen in Orlando, Florida, which boasts a great number of annual events that help to enhance the overall destination offer. In 2015, Orlando ranked as the both the number one overall tourist destination and the number one event/meeting destination in the United States (Dineen, 2015; Srinivas, 2015). Orlando is home to one of the largest convention centres in the world and saw one of the fastest growing event sectors of the tourism industry from 2005–2015. Furthermore, one of the single greatest generators of special event tourism can be found at Walt Disney World. Throughout the year, the Walt Disney World Resort hosts special events that coincide with various holidays throughout the year. Their most popular events are the Fourth of July celebrations, Food and Wine Festival, and Mickey’s Very Merry Christmas Party, respectively (Shute, 2016). Couple these park-specific events with various character-themed marathons and Disney has quite the event attendance. One facet of the enhancement of Orlando’s destination tourism product is the use of shopping as a means to target potential tourists. According to Amy He (2015) at China Daily, Brazilian and Chinese tourists arrive in Orlando with one goal in mind: ‘shop first’. They come to spend thousands of dollars on novelties, clothing and electronics that are far pricier back home (He, 2015). The ability to acquire commodities and consumer goods Mini case study 6.1 Events are a key differentiator in Orlando tourism Shopping as a pastime in Orlando, Florida. Photograph 6.1 Destination Trends 133
- 159. at a steeplydiscounted price (compared to visitors’ home nations) was a catalyst for the destination develop- ment of Orlando. The events, festivals and shopping that Orlando offers will remain very important to its con- tinued growth and development as a world-class tourism destination. Source: Dineen, C. (15 August 2015) ‘Orlando overtakes Chicago as nation’s top meeting destination’, retrieved from http://www.orlandosentinel. com/business/tourism/os-rlando-cvent-ranking-20150814-story.html; Getz, D. (2008) ‘Event tourism: definition, evolution, and research’, Tourism Management, 29(3), 403–28; He, A. (3 March 2015) ‘US cities make pitch to high-spending Chinese, Brazilian tourists’, retrieved from http://usa. chinadaily.com.cn/world/2015-03/30/content_19945184.htm; Shute, D. (2015) ‘Disney World crowds in 2015’, retrieved from http://yourfirstvisit. net/2013/12/05/disney-world-crowds-in-2015/; Srinivas, R. (9April 2015) ‘Orlando: most visited tourist destination in the US: 62 million people vis- ited in 2014’, retrieved from http://www.inquisitr.com/1995019/orlando-most-visited-tourist-destination-in-the-u-s-62-million-people-visited-the- city-in-2014/ Discussion Questions 1. What are some of the principal challenges facing a destination of your choice when deciding upon an extensive programme of year-round festivals and events to enhance its appeal to visitors? 2. In what ways can festivals and events be used by destinations to enhance the visit ‘experience’? 3. Retail is a major component of destinations but very often is managed separately. How do retail and tourism cross over and what are some of the many benefits to be derived from a cohesive retail tourism strategy at the destination level? Communication In view of the competitive forces at play, there is a strong argument for more varied approaches to the development of communication strategies for destinations. According to King (2002), much greater emphasis needs to be given to the creation and communication of holiday experiences that link key brand values and assets with the holiday aspirations and needs of key customers. In paral- lel King advocates a move away from a relatively passive promotional role to include greater intervention, facilitation and direction in the conversion process. The migration to an economy based on ‘experience’ opens the door to the establishment of ongoing, direct, two-way and Shopping as a pastime in Orlando, Florida. Photograph 6.2 134 Chapter 6 Destinations
- 160. 2015 UNWTO WTM Ministers’ Summit – Destination branding: new challenges in a changing market https://youtu.be/oejXydv9cAA Destination marketing and economic development: creating a singular place brand https://youtu.be/NGcwfatkwGY Branding Nashville as ‘Music City’ https://youtu.be/Lfauq0zn4gI Branding a city – Dubai https://youtu.be/p9ZIMyQagLg Youtube Destination branding networking consumer communication channels, and for key customer relationship strategies to take place with the eventual development of mass customisation marketing and delivery capabilities. Channels Although there have been significant developments with regard to computer reservation systems and global distribution systems, for the destination it is the growth of destination management and marketing systems that are the principal competitive tools in their quest for gaining greater control over the distribution of the destination product. Irrespective of the location, scale and type of destination in question, the development of a suitable destination management system, whether unilaterally or with other destinations, is a priority that can no longer be ignored. Cyberspace The emergence of the Internet and its application in the domains of tourism (most notably in SMART Destinations[ED5]), travel and hospitality is significant. It has underpinned significant changing patterns of consumption, and has affected the entire buying processes and the means by which tourism, travel and hospitality products are packaged and sold. The complexity of the destination product and the coordinating role practised by destination marketers clearly makes the development, implementation and management of destination-wide websites particularly challenging. However, as with the rest of the wider tourism industry, it is a challenge that desti- nations cannot afford to ignore. Consolidation Greater consolidation has impacted significantly on the global tourism industry, most notably in the domains of travel in the form of airlines, hospitality in the form of large international hotel groups, and tourism in the form of intermediaries. For destinations this issue throws open a number of challenges in their attempt to counter the power imbalance that often results from such developments. Collaboration Destinations are difficult to organise as there are often numerous stakeholders involved, all with their own aims, goals and motivations, which have to coexist. Whether one is referring to intra-destination networks, inter-destination collaboration, relational brands or forms of collaboration governance, this move towards the need for greater collaboration is referred to by King (2002) as the ‘network economy’, in that DMOs will probably enter into strategic relationships with industry partners who can together provide a seamless experience for the customer. This is because it will be the ‘relevance of the experience they offer the customer, rather than the destination they promote, which will be the key ingredient for success in the Destination Trends 135
- 161. future’ (King, 2002:108). In this context, collaboration is not considered a luxury but a neces- sity for destinations to survive in the face of considerable competition and environmental challenges. Benefits to be derived from cooperative public–private sector tourism organisa- tions include: the reduction in antagonism through representation of all stakeholders; the avoidance of duplication through enhanced communication channels between represented sectors; and the bringing together of expertise. Benefits can also include increased funding potential through the reduction in duplicated efforts as well as industry-based taxes; the crea- tion of a win/win situation through an increase in industry profitability and ensuing increase in government tax revenue; and the provision of infrastructure and investment funds. Destination Management and Marketing Destination collaboration Destination management is predominantly a micro-level activity in which ‘all the stakeholders carry out their individual and organisational responsibilities on a daily basis in efforts to realise the macro-level vision contained in policy, planning and development’ (Ritchie and Crouch, 2003: 111). However, the fact that destinations are comprised of so many products, stakeholders, and complex management and political relationships contributes to their being regarded as one of the most difficult ‘products’ to manage and market. To best manage the complexities and ‘imper- fections’ inherent within destinations it is accepted that destinations need to bring together all parties to collaborate rather than to compete, and to pool resources towards developing an inte- grated management and delivery system. Referred to by King (2002) as the ‘network economy’, destination management organisations are, in the future, recommended to enter into strategic partnerships that can collectively deliver a seamless visitor experience to customers. This is likely to occur because it is the significance of the experience that they offer the customer, rather than the destination they promote, which will be the key constituent for success in the years to come. The UNWTO (WTO, 2002b) also recognises that there is a growing need for destinations to develop alliances with a broad range of organisations, even on occasion with potential competitors. Despite this sense of currency and urgency, collaboration among and between destinations is not a new phenomenon. For example, various forms of destination collaboration have taken place in Bali and the Caribbean. In the case of Bali, collaboration was deemed essential in overcoming the island’s perceived migration ‘downmarket’, while in the Caribbean cooperation among the public and private sectors in tourism was not merely desirable but a necessity in view of the particular characteristics of the tourism industry. Fyall and Garrod (2005: 289–90) highlight a number of advantages that exist with respect to collaboration within and among destinations. These include: ● Reduction in risk through strength in numbers and interconnectedness within and across destinations. ● Efficient and effective exchange of resources for perceived mutual benefit. ● The generation of increased visitor flows and positive economic impacts. ● The potential for collaborative initiatives to counter the threat of channel intermediary powers. ● In peripheral locations, collaboration serving as a significant vehicle to broaden the destina- tion domain. ● The ability to counter greater standardisation in the industry through the use of innovative collaboration marketing campaigns. ● The potential to develop destination-wide reservation systems and two-way dialogue with customers through technological collaboration, whereby the emerging technologies can facilitate relationship building and customer relationship management programmes. ● Further collaboration on the Internet, so affording DMOs the ability to reach large numbers of consumers, to transmit information and offer products at a relatively low cost, to provide complete and more reliable information, to make client reservations quickly and efficiently, and to reduce the costs associated with producing and distributing printed materials. 136 Chapter 6 Destinations
- 162. In addition, suchactivity may be particularly useful when a country’s tourism product is underdeveloped or when existing products are in an advanced stage in the product life cycle. Similarly, collaboration in a promotional sense often starts at the ‘national’ stage of the resort development spectrum, which involves joint campaigns by state and local government and local businesses together with campaigns by hotels and major attractions (Prideaux, 2000). Destination collaboration is, however, far from widespread. Indeed, there remain a number of constraints and drawbacks to collaboration both within and between destinations. These include: ● General mistrust and suspicion among collaborating partners due to governance or structures that are inappropriate for moving the shared project forward. ● Inability of various sectors within the destination to work together due to excuses of a politi- cal, economic or even interpersonal nature. ● Instances where particular stakeholders fail to recognise the real value of collaboration and remain closed to the benefits of working together. ● The frequent lack of interest in collaboration from ‘honey-pot’ attractions, where the need to work more closely together is discounted due to their own individual success in the marketplace. ● Competition between municipal authorities that administer separate geographical regions within a recognised destination resulting in inertia (Fyall and Garrod, 2005: 290). Despite the above shortcomings, inter-organisational collaboration, often in the form of public–private sector partnerships, is a popular strategy for tourism destinations. Destination management organisations Destination management organisations (DMOs) represent a recent conceptualisation of the organ- isation function for the management of destinations, where the ‘M’ emphasises total management rather than just marketing. This refocused philosophy represents a more holistic approach to the management of destinations whereby the DMO is responsible for the well-being of all aspects of the destination. According to Ritchie and Crouch (2003: 73–4) it ‘emphasizes the provision of a form of leadership in destination development that makes extensive use of teamwork in all DMO- led initiatives. Destination promotion is no longer the sole purpose of the DMO. While this modi- fied role presents many new challenges, it also provides a much broader range of opportunities for ensuring destination competitiveness’. One can now legitimately argue that the DMO is the most appropriate organisational arrangement to meet fully the experiential needs of visitors. Ritchie and Crouch (2003: 175) argue that a DMO may be either a ‘public sector agency or a private sector- driven organisation’. Buhalis (2000: 99), meanwhile, suggests that DMOs tend to be ‘part of the local, regional or national government and have political and legislative power as well as the finan- cial means to manage resources rationally and to ensure that all stakeholders can benefit in the long term’. Irrespective of their nature, Ritchie and Crouch (2003: 175) advocate that DMOs are constituted in a manner that provides them with the following characteristics. They must: ● Be clearly identifiable as the organisation responsible for coordinating and directing the efforts of the many parts of the diverse and complex tourism system. ● Command the support of all important sectors and all major actors in the tourism system. ● Be capable of influencing the decisions and actions of the many public sector agencies/ departments and private firms that directly determine the nature and quality of the tourism experience provided to visitors. ● Possess the tools necessary to stimulate and encourage the type and amount of supply devel- opment that is required by the overall tourism megapolicy. ● Be sufficiently independent and flexible to develop innovative strategies that can be implemented in a timely manner in response to rapidly evolving market and environmental conditions. Although the scope of DMOs varies, in most cases they exist to build the destination, to support and bring together the trade, to help minimise business failures, particularly among SMEs, to Destination Management and Marketing 137
- 163. manage the publicrealm, to build and develop the destination brand, represent the interests of the trade at national, regional and sub-regional organisations, to develop skills and training for the trade, and to deliver an input into the planning process and wider economic development plan. Ulti- mately, the role of a DMO must be to enhance the long-term competitiveness of the destination. Roles and structures Despite the importance and significance of DMOs across the world, it is therefore surprising that no real ‘blueprint’exists. That said, most DMOs, although varying in their roles and tasks undertaken, demonstrate an effective internal and external focus, especially with regard to marketing. In all real- ity, DMOs identify and manage stakeholders, manage community relations and develop suitable publication programmes. More importantly, they stress the need to expand the number of roles and tasks to include all that is necessary to manage the destination in its entirety. Ritchie and Crouch (2003: 188) argue that in ‘the past, the importance of the marketing and promotion roles of the DMO were of such priority that the DMO label was understood to mean “destination marketing organisation”. It is only in recent years that DMOs have acknowledged how significant their non- marketing roles are in developing, enhancing and maintaining destination competitiveness. Nearly all progressive and effective DMOs in today’s world now appreciate the importance of their more broadly based mandate and use DMO to mean “destination management organisation”.’ Despite the above inclusive list of roles/functions, for many DMOs marketing remains a core focus of its activity. In this context, Pike (2004) excludes separate government departments and a number of regional bodies that are responsible for planning and policy. That said, it is difficult to make sweeping generalisations as so many national tourism organisations (NTOs), regional tourism organisations (RTOs) and convention and visitors bureaux (CVBs) vary in the roles undertaken and structures adopted. One of the challenges of comparing and contrasting the roles and structures of DMOs is the significant paucity of information on DMOs generically. Although Pike (2004) provides a worthy historical overview of their development, his text is isolated and represents one of the very few works that explore this phenomenon in any signifi- cant depth. Pike is passionate about the role of DMOs, both now and in the future, and, irrespec- tive of their title, argues that while a ‘myriad of private and public sector organisations have vested interests in different aspects of society relating to tourism, no other entity has such an active and holistic interest in the quality of the traveller experience, the host community’s sense of place, and the profitability of tourism businesses’ (2004: 19). Buhalis (2000) is equally passionate and argues that DMOs should all meet four generic strategies if they are to be a success. He argues that they should: ● enhance the long-term prosperity of local people; ● delight visitors by maximising their satisfaction; ● maximise profitability of local enterprises and maximise multiplier effects; and ● optimise tourism impacts by ensuring a sustainable balance between economic benefits and socio-cultural and environmental assets. Buhalis (2000: 109) continues by suggesting that DMOs have an overall responsibility ‘for the entire destination product and through incentives and policies facilitate the development of products, which is desirable from the demand side, and at the same time does not jeopardise local resources’. In essence, he is arguing that it is the DMO that should serve as the guardian of the image and resources of the destination. One additional area where DMOs will increasingly be looked upon to take the lead is in managing the information and research needs of the desti- nation. Related to this is the need for a suitable framework to analyse/evaluate the effectiveness of the DMO itself, work undertaken in the United Kingdom by Destination Performance UK (DPUK), representing a small beginning in what remains an under-researched area. While the basic roles of a DMO are generally similar at all destination levels, structures put in place will depend on numerous factors, in particular the nature and type of the destination and the level of funding that is forthcoming to meet both operational and strategic targets and ensure ongoing long-term success. Although structures can vary slightly at the national regional/state/ provincial level, principal differences in structure can be found at the urban/municipal/city-state 138 Chapter 6 Destinations
- 164. level. Some DMOsare membership-based while others tend to represent a loosely connected ‘federation’ of supporting organisations. It is also the case that the structures of yet others are such that in all reality they merely represent a department or section of local government. With regard to the balance between the public and private sectors in the United Kingdom, it is usual for a local authority tourism department to remain in public hands, while convention and visitor bureaux are often privately controlled. Interestingly, very few, if any, countries or regions have experimented with more novel forms of organisation lying somewhere between the public and the private models. For the most part, the public sector remains ‘crucial in ensuring optimal use of public tourism resources/services and a balanced sharing of costs and benefits among all the actors involved’ (Manente and Minghetti, 2006: 234). For the most part, the involvement of the public sector is critical in order to preserve the local environment, the residents’ quality of life, the tourists’ quality of experience, and the identity of the destination as a whole. In essence, the public sector serves as an agent for development in that it creates the conditions necessary to suc- ceed. Pike (2004) concludes that ultimately the key goals for DMOs should be to enhance desti- nation image, increase industry profitability, reduce seasonality and ensure suitable long-term funding. To achieve this he advocates that DMOs should be responsible for industry coordina- tion, the monitoring of service and quality standards and the enhancing of community relations. Governance, funding and effectiveness In view of the considerable diversity apparent with regard to roles and structures, it perhaps comes as no surprise that governance also varies considerably. Critical factors for success with regard to the governance of DMOs of globally competitive destinations include: 1. a significant level of private sector control over spending; 2. understanding of the need to incorporate public sector objectives to achieve a balance between marketing and new product development; 3. a dedicated revenue stream that is not subject to annual government control; and 4. a broad, integrated mandate encompassing a function critical to developing a strong tourism industry, such as marketing, education, research and infrastructure development. Although the orientation of the principal decision-making body, most probably a board, is also important in that orientations will vary quite considerably between an official public board, a private board, or a public–private sector partnership, each body will have to come to terms with considerable diversity, the likelihood of some representatives being unable to grasp the wider ‘domain’ picture, suspicions of others’ sectoral interests, the probability of a cumbersome organisational name to reflect all areas covered, a regional community not fully informed on the advantages of tourism and a paucity of current and reliable statistics. Irrespective of their structure, the majority of DMOs, at all levels, rely to a large extent on public support, i.e. funding. Sources of funding for DMOs vary considerably, although the grad- ual reduction in funding from the public sector serves as a principal catalyst for change with greater emphasis on the need to source funds from alternative avenues. One alternative is to increase membership fees for industry members. Although a very logical and laudable rationale, it is frequently unsuccessful due to the propensity for too many stakeholders within the destina- tion benefiting from ‘free-rider’ activity. One further option is the imposition of a local hotel tax. However, although relatively easy to administer, it is arguably one-sided, unfair and in essence not representative of the wider visitor economy. Conceptually logical but impractical to put into practice is a tourism/recreation tax whereby the cost of implementation often outweighs the ben- efit to be gained from its imposition. Finally, there is the private sector sponsorship alliance which, although considered successful in the short term, does not represent a sustainable vehicle for the longer term funding of destinations. In addition, it has been suggested that various types of user fees and more importance placed on partnership and buy-in programmes be advocated. Related to the above, there are also various means by which a budget, most notably in the pub- lic sector, can be determined, for example by the size of the host population, visitor numbers, as a ratio of visitor spend, by the number of commercial accommodation beds/rooms, and/or the num- ber of taxpayers/ratepayers. Pike (2004: 51–2) suggests that each of these will be influenced by Destination Management and Marketing 139
- 165. the local situationvis-à-vis the local political situation, the stage of the destination in the tourism area life cycle (TALC) and the state of maturity of the local industry, the economic importance of tourism relative to other industries, and the overall history of the DMO and its current structure. One of the perennial problems of destination management has been the extent to which the contribution of DMO efforts to the overall success of the destination can be measured. Pike (2004: 36) argues that the ‘lack of suitable data leaves the industry open to attack from politi- cians and other industries seeking justification for funding from the public purse’; and adds that ‘isolating and quantifying a DMO’s contribution to destination competitiveness is currently an impossible task. Ultimately the success of a destination will be as a result of a combination of factors, many of which will be exogenous to the DMO’ (Pike, 2004: 190). Conclusion Given the foremost position of destinations in the tourism system it is a little surprising that the UNWTO waited so long to conduct an international forum on destination management and that so few academic texts have explored the operations and dynamics of DMOs to date (WTO, 2002a). This is also true of academic research published in journals where there remains a dis- tinct paucity of material that explores the origins, nature, organisational and governance struc- tures, sources of funding and overall performance aspects of DMOs (Wang and Pizam, 2011). Further areas lacking research rigour in this domain include strategic planning and implementa- tion, destination competitiveness, destination positioning, human resource management, desti- nation brand management and integrated marketing communications (Pike, 2004). One of the common themes emerging throughout this chapter is the issue of collaboration. For collaboration to succeed the DMO needs to act as a strong unifying force that is able to bring all component parts of the destination together and develop it in its entirety. Effective col- laboration is key while the need to remain cognisant of all those issues and forces impacting on their future direction is vital if destinations are to keep abreast of competitors. In many ways destinations have not changed over the years; they have always been difficult products to man- age. What has changed is the quite significant forces for change existing in the macro and micro environments and their long-term impact on the future management of destinations. According to Pike (2004: 2) the vast majority of DMOs, irrespective of where they are in the world, share ‘a common range of political and resource-based challenges not faced by private sector tourism businesses’. The most notable challenge is that of year-on-year reductions in contributions from the public purse. This factor alone represents a significant catalyst for change which single- handedly may change how the industry and general public view destinations, especially with regard to boundaries. DMOs are clearly emerging as the ‘glue’ that bonds together stakeholders at the destination in their search for increasing competitiveness and long-term sustainability. Costa and Buhalis (2006: 245) add that ‘DMOs will play a critical role in ensuring that business opportunities are planned and managed within the context of regional development, and therefore will be contrib- uting to optimization of economic, physical and social impacts’ in the years ahead. Neverthe- less, evidence suggests that many tourism destinations, whether at a national, regional or local level, still retain a narrow perspective of their process of evolution (Manente and Minghetti, 2006). The same authors continue by asking whether traditional tourism destinations in the mature phase of their life cycle will be able to make an evolutionary leap, or whether in fact competition will be driven by new emerging destinations that see tourism as an important factor of economic development and can learn from other territorial experiences. To conclude, although present across many countries, DMOs are a relatively new phenomenon in many parts of the world where their rationale for establishment, roles and structures, and governance and funding remain unclear. In theory at least, however, they serve as the most appropriate organisa- tional structures for the effective management of destinations. 140 Chapter 6 Destinations
- 166. 1. What arethe principal differences in the markets attracted to different types of destinations? 2. What are the differences between ‘competitive’ and ‘comparative’ advantage in the context of destinations? 3. Identify five key trends impacting future visitation patterns to rural and coastal destinations. 4. Why is the management of urban destinations particularly challenging? 5. What is the difference between a destination management organisation and a destination management partnership? Self-Check Questions Buhalis, D. (2000) ‘Marketing: the competitive destination of the future’, Tourism Management 21(1), 97–116. Costa, C. and Buhalis, D. (2006) ‘Conclusion: tourism futures’, pp. 241–6 in Buhalis, D. and Costa, C. (eds) Tourism Business Frontiers: Consumers, Products and Industry, Elsevier Butterworth Heinemann, Oxford. Dwyer, L. and Kim, C. (2003) ‘Destination competitiveness: determinants and indicators’, Current Issues in Tourism 6(5), 346–69. Fletcher, J. and Morakabati, Y. (2008) ‘Tourism activity, terrorism and political instability within the Commonwealth: the case of Fiji and Kenya’, International Journal of Tourism Research 10(6), 537–56. Fyall, A. (2011) ‘Destination management: challenges and opportunities’, pp. 340–57 in Wang, Y. and Pizam, A. (eds) Destination Marketing and Management: Theories and Applications, CABI, Oxford. Fyall, A. and Garrod, B. (2005) Tourism Marketing: A Collaborative Approach, Channel View, Clevedon. Fyall,A., Garrod, B. and Tosun, C. (2006) ‘Destination marketing: a framework for future research’, pp. 75–86 in Kozak, M. andAndreu, L. (eds) Progress in Tourism Marketing, Elsevier, Oxford. Fyall, A. and Leask, A. (2007) ‘Destination marketing: future issues – strategic challenges’, Tourism Hospitality Research 7(1), 50–63. Hankinson, G. (2007) ‘The management of destination brands: five guiding principles based on recent developments in corporate branding theory’, Brand Management 14(3), 240–54. King, J. (2002) ‘Destination marketing organisations: connecting the experience rather than promoting the place’, Journal of Vacation Marketing 8(2), 105–8. Leiper, N. (1995) Tourism Management, TAFE Publications, Collingwood, Victoria. Li, X. and Petrick, J.F. (2008) ‘Tourism marketing in an era of paradigm shift’, Journal of Travel Research 46, 235–44. Manente, M. and Minghetti, V. (2006) ‘Destination management organisations and actors’, pp. 228–37 in Buhalis, D. and Costa, C. (eds) Tourism Business Frontiers: Consumers, Products and Industry, Elsevier Butterworth Heinemann, Oxford. Pedro, A. (2006) ‘Urbanization and second-home tourism’, pp. 85–93 in Buhalis, D. and Costa, C. (eds) Tourism Business Frontiers: Consumers, Products and Industry, Elsevier Butter- worth Heinemann, Oxford. Pike, S. (2004) Destination Marketing Organisations, Elsevier, Oxford. Poon, A. (1993) Tourism, Technology and Competitive Strategies, CABI, Oxford. Porter, M. (1998) ‘Clusters and the new economics of competition’, Harvard Business Review (Nov–Dec), 77–90. Prideaux, B. (2000) ‘The resort development spectrum: a new approach to modelling resort development’, Tourism Management 21(3), 225–40. Ritchie, J.R.B. and Crouch, G.I. (2003) The Competitive Destination: A Sustainable Tourism Perspective, CABI, Oxford. References and Further Reading Conclusion 141
- 167. Scott, N., Parfitt,N. and Laws, E. (2000) ‘Destination management: co-operative marketing, a case study of Port Douglas Brand’, pp. 198–221 in Faulkner, B., Moscardo, G. and Laws, E. (eds) Tourism in the 21st Century, Continuum, London. Wang, Y. (2008) ‘Collaborative destination marketing: roles and strategies of convention and visitors bureaus’, Journal of Vacation Marketing 14(3), 191–209. Wang,Y. and Pizam, A. (2011) Destination Marketing and Management: Theories and Applica- tions, CABI, Oxford. WTO (2002a) Thinktank, WTO, Madrid. WTO (2002b) Tourism in the Age of Alliances, Mergers and Acquisitions, WTO, Madrid. Major case study 6.1 Too much of a good thing – when mass tourism becomes over-tourism these throngs is literally sinking the lagoon city. Mass tourism packages, specifically those offered by behe- mothian cruise liners, have created a dire scenario for the once tranquil destination. Due to over-tourism, Venice finds itself overrun with waves of day-trippers. Iconic experiences like gondolier canal rides and walking bridge strolls have become nearly impossible during the Venice high season. The unsustainability of this over-tourism has caused its local population to flee at alarming rates. Once having a citizenship of 175,000 in 1991, Venice has now dwindled to a mere 55,000 residents. Further, there is the issue of the type of con- sumer this type of mass tourism produces. For Venice, they are of lower spending quality (Giuffrida: 2017). Referred to as ‘the “nickel and dimers” or the “hot-dog crowd”’ (Stone: 2014) these day-trippers are opting for cheap, souvenir trinkets (Bellafante: 2017). This is in extreme, stark contrast to a city with a rich heritage of high-end luxury items, fine dining and premier lodging (Horowitz: 2017). The development of unsustainability and the hedonistic tourist With the advent of mass tourism is also manifested the issue of throwing a destination out of sustainability. Sustainability occurs when ‘a tourism product . . . is in harmony with the local environment and community” (Sharpley and Telfer, 2015: 153). When a destination is in opposition to this sustainability paradigm, it is said to become ‘unsustainable’ (Sharpley and Telfer, 2015: 153). Unsustainability ‘tends to change the social condi- tions [and] create[s] various problems for the commu- nity in the tourist destination’ (Tosun, 1998: 604). The problems associated with the mass tourism construct Venice: the over-tourism sinking a city One of the most pressing issues currently facing the tourism industry is the challenge of over-tourism. Over- tourism occurs when ‘the objective of using tourism as a stimulus for the urban economy and adding value to urban life’ (Sharpley and Telfer, 2015: 162) does not occur due to excessive usage. There are several precipi- tating factors that are leading to the rise of over-tourism globally. Specifically, airline ticket prices continue to drop internationally as many emerging and industrialised nations see a rise in middle class per capita income. This combination of events has made tourism more affordable as the world median or middle class has more spending power for non-essential items and experiences. This divergence of affordability and buying power has created an ideal scenario for tourism expansion as an industry (Crotti and Misrahi, 2017: 4–6). No longer an exclusive luxury of wealthy patrons, tourism is now an achievable reality for a large mass populace (Higgins-Desbiolles, 2006: 199). While the industry and the world economy has greatly benefited from this trend, the explosion of mass tourism is not without its problems. More and more, popular destinations like New York, Barcelona, Hong Kong and Paris are facing the difficult transition now created by mass tourism. These major cities are ‘finding it increasingly difficult to deal with the growing number of tourists’ (Sharpley and Telfer, 2015: 162). These major cities are approaching, reaching and, in some cases, exceeding their population capacity limits. One of the worst examples of this problematic phenomenon is the city of Venice, Italy. Venice, no stranger to tourism, currently finds itself a city in crisis. The numeric volume of its mass tourism now exceeds 20 million visitors annually. The sheer physical weight of 142 Chapter 6 Destinations
- 168. experienced almost onemillion visitors while only having a year-round residency of about 28,000. This ratio, in combination with the fortress city’s limited geographic size, has created disastrous effects when cruise ships dock. The steady stream of day-trippers often disem- barks at 10,000 passengers all at once. This has created a bottlenecking effect that warrants very few sustainable rewards for the city (Foster: 2017). However, just as Dubrovnik seems bound for destruc- tion, redemption has begun. The wake-up call has come as the city was informed in 2016 that it is now in danger of losing its coveted World Heritage Site status (Foster: 2017). In response to this crisis, Dubrovnik elected a new mayor, Mato Franković, in June 2017 with a primary purpose of decreasing and enforcing passenger dock- ing limits to a 4,000 at-once capacity limit. In September 2017, the new mayor went further and issued an open letter to the Cruise Lines International Associa- tion (CLIA) in a plea for help with the new restrictions. While the CLIA has yet to respond, their reaction is being closely watched by other major cities (Morris: 2017). If Dubrovnik’s mayor can get the CLIA to com- ply, it may create a precedent that other major European destinations can utilise. Moreover, this action by Mayor Franković (Morris: 2017) could be just the opening nec- essary to finally create ‘triangular interaction’ (Sharpley and Telfer, 2015: 360) between tourist, industry and destination, finally offering hope for ‘a balanced, symbi- otic relationship [that] should exist between tourists – and the satisfaction of their needs – and the developmental needs and objectives of the destination’ Sharpley and Telfer, 2015: 360–61). References Becker, E. (5 August 2017) ‘Only governments can stem the tide of tourism sweeping the globe’, The Guardian, retrieved 25 September 2017 from https://www.theguardian.com/commentisfree/ 2017/aug/05/only-governments-can-stem-tide-of- tourism-sweeping-the-globe?CMP=share_btn_fb %28. Bellafante, G. (29 June 2017) ‘How much tourism is too much?’, New York Times, retrieved 25 September 2017 from https://www.nytimes.com/2017/06/29/ nyregion/how-much-tourism-is-too-much. html?smprod=nytcore-iphonesmid=nytcore- iphone-share %28. Burgen, S. (1 August 2017) ‘Barcelona anti-tourism activists vandalise bikes and bus’, The Guardian, retrieved 25 September 2017 from https://www .theguardian.com/world/2017/aug/01/barcelona- anti-tourism-activists-vandalise-bikes-and- bus?CMP=Share_iOSApp_Other %28. create an unsustainability that leaves many municipali- ties with piles of rubbish, destruction and unmanagea- ble debris. One of the key factors that makes the mass tourism paradigm unsustainable is the negative mob mentality often created in sustained large gatherings of non-natives. Further, a large draw of the cruise ship industry is its ability to facilitate a hedonistic experience for its customer (Stieghorst: 2014). One of the key identifying markers of the cruise con- sumer is their tendency for escapism preferences. This type of tourist is often unsatisfied and/or overworked in their daily life thus viewing vacations as an opportunity to let loose and escape the drudgery of everyday living. The hedonistic mentality often lends itself to a person uncaring of the local rules and customs, creating ‘social, cultural, economic and environmental havoc’ (Sharpley and Telfer, 2015: 361). This leads to potentially negative interactions with the local inhabitants of their vacation destination. The city of Barcelona is a prime example of the contentious relationship that can occur between local inhabitants and the unsustainability of the hedonis- tic tourist. In 2017, local residents became so frustrated with the behaviour of visitors they began yelling at them. Graffiti began to appear with the phrasing ‘Why call it tourist season if we can’t shoot them?’ (Edwards, Bin- nie and Zuvela: 2017). The aggravation of this type of unsustainable tourism has caused actual violence to break out in the city. ‘In one [neighbourhood] several hooded individuals stop a tourist bus in Barcelona, slashing the tires and spray-painting the windscreen’ (Edwards, Binnie and Zuvela: 2017). Predictions for industry implications and practical usage – the crisis of Dubrovnik and a positive plea for change toward sustainability ‘Winter is coming’ (Connolly: 2017) is the phrase made popular by the mega-hit Game of Thrones. It serves as a dire warning to the characters of the fic- tional lands of its inhabitants. Strangely enough, this warning is becoming all to true for the real-life places where the HBO television adaptation films. In looking at the topic of over-tourism and the unsustainability of mass tourism, it is important to consider the problem from the axis of over-capacity (Connolly: 2017). Such is the case for Dubrovnik, a busy port of the Mediterranean Sea located in Croatia. Highly popular for centuries, Lord Byron refers to it is as ‘the Pearl of the Adriatic’ (Foster: 2017) in many of his most famous writ- ings. Dubrovnik is best known for its reinforced, medieval defence walls that are so iconic they appear in numerous television and film productions like Star Wars and practi- cally every version of Robin Hood ever shot. Ironically, the walls meant to protect Dubrovnik for so many centuries are now in danger of tearing it apart In 2016, the city Major case study 6.1 143
- 169. Connolly, K. (16July 2017) ‘Cruise tourists overwhelm Europe’s ancient resorts’, BBC, retrieved 25 Septem- ber 2017 from http://www.bbc.com/news/world- europe-40592247. Crotti, R. and Misrahi, T. (May 2017) ‘The travel tourism competitiveness report 2017’, The World Economic Forum. Dizik, A. (19 September 2017) @Capital – why so many people overspend on their holidays’, BBC, retrieved 25 September 2017 from http://www.bbc.com/capi- tal/story/20170919-why-so-many-people-over- spend-on-their-holidays?ocid=ww.social.link.email. Edwards, S., Binnie, I. and Zuvela, M. (5 August 2017) ‘Summer lovin’? Not in angry Europe’s tourist hot- spots’, Reuters Group, PLC, retrieved 25 September 2017 from http://www.reuters.com/article/us- europe-tourism-backlash-idUSKBN1AK24L?utm_ source=applenews %28Links to an external site.%29. Foster, J. (23 June 2017) ‘The death of Dubrovnik? Crowds and cruise ships have ruined the city, claim locals’, The Telegraph, retrieved 28 September 2017 from http://www.telegraph.co.uk/travel/destinations/ europe/croatia/dubrovnik/articles/dubrovnik-faces- overcrowding-cruise-ship-visitors-/. Giuffrida, A. (22 July 2017) ‘“Imagine living with this crap”: tempers in Venice boil over in tourist high sea- son’, The Guardian, retrieved 25 September 2017 from https://www.theguardian.com/world/2017/ jul/23/venice-tempers-boil-over-tourist-high-season. Glusac, E. (19 September 2017) ‘International tourism to the U.S. declined in early 2017’, New York Times, retrieved 25 September 2017 from https://www. nytimes.com/2017/09/19/travel/tourism-united- states-international-decline.html. Higgins-Desbiolles, F. (2006) ‘More than an “industry”: the forgotten power of tourism as a social force’, Tourism Management, 27(6), 1192–1208. Horowitz, J. (2 August 2017) ‘Venice, invaded by tour- ists, risks becoming “Disneyland on the Sea”’, New York Times, retrieved 25 September 2017 from https://www.nytimes.com/2017/08/02/world/ europe/venice-italy-tourist-invasion.html? smprod=nytcore-ipadsmid=nytcore-ipad-share %28Links to an external site.%29. Isaac, M. and Rao, P. (22 September 2017) ‘Uber loses license to operate in London’, New York Times, retrieved 25 September 2017 from https://www .nytimes.com/2017/09/22/business/uber-london .html?mcubz=1. Morris, H. (5 September 2017) ‘“Please help us protect the city,” mayor of Dubrovnik tells cruise lines as he reaffirms drastic visitor cap’, The Telegraph, retrieved 26 September 2017 from http://www.telegraph.co. uk/travel/destinations/europe/croatia/dubrovnik/ articles/dubrovnik-tells-cruise-lines-to-help-cap- visitor-numbers/. OECD (2016) OECD Tourism Trends and Policies 2016, OECD Publishing, Paris, http://dx.doi. org/10.1787/tour-2016-en. Sharpley, R. and Telfer, D.J. (2015) Tourism and Devel- opment: Concepts and Issues (2nd ed.) Channel View Publications, Bristol. Stieghorst, T. (14 January 2014) ‘Ports of contention’, Travel Weekly, Northstar Travel Media, LLC, retrieved 25 September 2017 from http://www.travelweekly. com/Cruise-Travel/Ports-of-contention. Stone, A. (1 March 2014) ‘Does Key West need (or want) to be “saved” Aspen-style?’, Swift Communi- cations, Inc., retrieved 25 September 2017 from http://www.aspentimes.com/opinion/does-key- west-need-or-want-to-be-saved-aspen-style/. Tosun, C. (1998) ‘Roots of unsustainable tourism devel- opment at the local level: the case of Urgup in Turkey’, Tourism Management, 19(6), 595–610. Tussyadiah, I.P. (2016) ‘Factors of satisfaction and intention to use peer-to-peer accommodation’, Inter- national Journal of Hospitality Management, 55, 70–80. Vora, S. (25 September 2017) ‘Airbnb offers tours with New Yorkers (no vacation rental required)’, New York Times, retrieved 25 September 2017 from https:// www.nytimes.com/2017/09/25/travel/airbnb-tours- hosts-new-york.html?ribbon-adidx=12rref=travel module=Ribbonversion=context®ion=Headeracti on=clickcontentCollection=Travelpgtype=article. Discussion Questions 1. What are the underpinning causes of over-tourism and why is it such a problem in European cities? 2. What responsibilities do tourists have in mitigating the impacts of over-tourism? 3. What may be the short-, medium- and longer-term solutions to the problems of over-tourism? 144 Chapter 6 Destinations
- 170. Chapter 7 The EconomicImpact of Tourism Learning Outcomes This chapter focuses on the economic impacts of tourism and aims to provide you with: ● an understanding of the economic contribution of tourism locally, nationally and internationally; ● an understanding of the methods used to estimate tourist expenditure and the way in which the significance of tourism can be measured; ● an appreciation of the positive and negative economic impacts of tourism activity; and ● an understanding of the different approaches that may be used to measure the economic impacts of tourism and the strengths and weaknesses associated with each approach.
- 171. This chapter examinesthe economic significance of tourism as well as the economic impacts associated with the industry. In the same way that the literature tends to exaggerate the negative impacts of tourism upon host societies and environments, so the positive impact of tourism upon economies is often overstated. Therefore the positive and negative economic impacts of tourism will be discussed. An integral part of this chapter is a critical assessment of the methods of measuring economic impact drawing, particularly, on the application of multiplier analysis, tourism satellite accounts (TSAs) and computable generalised equilibrium models. The multiplier models that are outlined in this chapter generate information that is valuable to policy makers and planners. It should also be noted that, within known limitations, multiplier analyses provide powerful and valu- able tools for estimating and analysing the economic impact of tourism, comparing the performance of tourism with that of alternative industries and understanding how the tourism industry interacts with other sectors of the economy. Introduction Overview The economic benefits of tourism provide the main driving force for tourism development. Tourism is a business and what we are doing when we sell tourists our services is exchanging some of our environment and culture in return for foreign exchange earnings (when it is inter- national tourism), tax revenue, income and jobs. Although tourism is based on services, tourist expenditure is as ‘real’ as any other form of consumption and international tourist expenditure can be seen as an invisible export by the host country. Domestic tourism is, simultaneously, an ‘import’ substitute if it chosen instead of residents taking trips abroad and an ‘export’ from the hosting region to other regions within the national economy. To the tourist-generating countries, tourism spending is an invisible import when their residents spend money created in their home economy and spend it on services abroad. Domestic tourism is also one of the greatest forms of income redistribution, where income earned in urban areas is re-spent in coastal or sparsely populated countryside areas. Although domestic tourism is many times greater, in terms of volume and spending, than international tourism the latter is often easier to measure because it frequently involves custom/ immigration procedures and currency exchange. Many countries collect information from visi- tors at the frontier, providing good quality data relating to the volume of arrivals, country of origin and purpose of visit. Currency exchange information is collected and monitored by cen- tral banks and this provides some useful information about tourism spending, but is by no means ideal. Tourist expenditure can only be accurately estimated by undertaking visitor expenditure surveys, normally at exit points such as airports or frontier crossings. Such surveys tend to be time-consuming and costly. Some countries attempt to estimate the level and patterns of tourist spending from central bank statistics, while others try to economise by collecting tourist expenditure data at infrequent intervals (say, every five years). In order to use economic impact analyses for tourism planning and development it is important to have reliable expendi- ture data. Therefore, visitor expenditure data should be collected by exit surveys each year, or at least every other year. This information can be collected along with demographic data and other variables that help underscore other surveys for, say, the market research referred to in Part 4 of this text. During the past half century many economies have experienced growth in their service sec- tors, even when the more traditional agricultural and manufacturing sectors have been subject to stagnation or decline. The global importance of the service sectors can be identified by the introduction of the General Agreement on Trade in Services (GATS) following the Uruguay Round of negotiations. Tourism is the largest service-based industry and, as such, has been 146 chapter 7 The Economic Impact of Tourism
- 172. partly responsible forthis service sector growth. In developing countries tourism is often responsible for around 40–50% of GDP, while in the more industrialised economies it is respon- sible for around 15% (Spain), 10% (the United Kingdom and Australia) and 8% (the United States) of GDP. The growth of the service sectors tends to come in two waves, the first occurring with the introduction of traditional services where retail/wholesale trade, transport and public adminis- tration start to grow in low Gross Domestic Product (GDP) per capita economies, and the sec- ond when more advanced services, such as finance, computing and legal services take over from manufacturing to create another period of growth in high GDP per capita countries (Eichen- green and Gupta, 2011). The latter half of the 1980s saw a growing interest in the operation and performance of service industries and their strong intersectoral linkages perform an important role in development. From the mid-1990s, the world has seen the service industries take respon- sibility for the accelerated drive towards globalisation. International tourism enjoyed strong growth throughout the 1990s, growing faster than other commercial services and almost twice as fast as international trade. Although the second half of the twentieth century was character- ised by the strong relentless growth in arrivals, the twenty-first century has to date been quite volatile. Global growth rates of arrivals ended the twentieth century with a 3.7% year on year growth rate and the new millennium got off to a bright start, recording a 7.9% growth in arrivals in its first year. However, the optimism generated by this performance was short-lived and the events of 9/11 brought confidence down to the ground and 2001 saw a decline in tourist arrivals of 0.1%. Tourism bounced back in 2002 (3%) only to be dashed again in 2003 with the onset of the Iraq War causing arrivals to decline (1.6%). This was followed by a period of strong growth from 2004 to 2007 riding on an economic boom that was noted by the UNWTO in its market trends assessment in 2007. However, the onset of the global financial crisis in 2008 again caused a downturn in tourism activity that was far more dramatic than any caused by terrorist attacks and natural disasters. Tourist arrival growth was well below the long-term average rate in 2008 at 2.1% only to decline by 3.8% in 2009. Since then tourism has resumed its growth, albeit not with the strength recorded prior to the recession. It is also interesting that the recovery has been more pronounced in terms of arrivals than it has in expenditure. Decline in tourist arrivals. Photograph 7.1 Overview 147
- 173. The industrialised economieshave suffered more from the global financial crisis than the emerging economies as real incomes fell sharply. Nevertheless, since 2010, international tourist arrivals resumed their positive trend, reaching 1.2 billion arrivals in 2015 and accounting for around 10% of the world’s GDP. This is in spite of the interruptions caused by the Arab Spring in the Middle East and North African (MENA) region starting in Tunisia (December 2010) and spreading to Libya, Egypt and Syria, resulting in the greatest humanitarian catastrophe since World War II, in Syria. There was sporadic unrest elsewhere in the region, with civil and regional wars in Yemen, making the region one of the most politically unstable areas of the world. The conflicts in the Middle East region and the consequential mass migration of people (either for economic or security reasons) has played a part in changing the travel patterns of many Europeans who switched their travel plans for safer destinations. The introduction of the General Agreement on Trade in Services (GATS) and its push towards the liberalisation of international trade has been accompanied by the growth of globalisation. Globalisation refers to the result of a collection of forces that tend to change the way that the economic, political and cultural worlds operate. As the world becomes economically smaller, the concept of globalisation has taken on a more central position on the stage of world politics. From the earliest days when the world economy first started to transform from subsistence farming and fishing towards a market-based economy there has been a sustained growth in the geographical reach of businesses. However, this process of globalisation accelerated throughout the latter half of the last century. It has been referred to as a process in which the geographical distance between economic factors, producers and consumers becomes a factor of diminishing significance. To put the economic impact of tourism into context, it is useful to examine the economic significance of tourism for a number of countries, most notably the prime generators and/or recipients of international tourists. The economic significance of tourism is determined not only by the level of tourism activity that is taking place, but also by the type and nature of the econ- omy being considered. For instance, the economic significance of tourism activity to a develop- ing country may well be measured in terms of its ability to generate an inflow of foreign exchange or to provide a means for creating greater price flexibility in its export industries, whereas, for an industrialised economy, it may be judged by its ability to assist diversification strategies and combat regional imbalances. The significance of tourism may be assessed in terms of the proportion of total international visitors to individual countries, for here one can assess the relative importance of single coun- tries in determining the volume of world travel. On the other hand, the significance of tourism may be examined with respect to the importance of tourist activity to the economy of each des- tination. This chapter examines both aspects in order to establish how some countries are extremely important as tourist generators and how other countries are highly dependent upon such tourism activity. International tourism in selected countries Events that have happened throughout the 1990s and the first part of the twenty-first century have had a profound effect on the patterns and flow of international tourism. How permanent these effects will be depends, to a large extent, on the future political and economic stability of the world. The global financial crisis has affected not only the flow of activity but also the geo- graphical patterns. The events of 11 September 2001 fundamentally changed air transport ser- vices and the subsequent conflicts in the Middle East, including the Arab Spring, still leaves that region of the world in an uncertain state. Therefore, the global and regional figures for interna- tional tourist arrivals and spending have been characterised by volatility in the twenty-first cen- tury together with the rapid rise of new economic powerhouses, such as China and India, with China entering the top five tourist-generating countries for the first time towards the end of the first decade of the twenty-first century (2009). The selection of countries for inclusion in tables of top generating and top recipient countries is at best challenging and at worst arbitrary. However, the countries selected in 148 chapter 7 The Economic Impact of Tourism
- 174. Tables 7.1 and7.2 (China, France, Germany, Italy, Spain, the United Kingdom and the United States) have been included because they are among either the top five tourist-generating coun- tries with respect to tourist expenditure and/or the top five countries with respect to tourism receipts. Table 7.1 shows the principal tourist-generating countries, with respect to the level of their international tourist expenditure, over the time period from 2000 to 2014. It can be seen that, over the years covered by the table, the proportion of the world’s total tourist expenditure attrib- utable to the top five generating countries fell as emerging countries took a more active role in Principal tourist-generating countries, 2000–2014: expenditure (US$ billion) Table 7.1 Country 2000 2005 2009 2010 2014 China 13.1 21.8 43.7 54.9 164.9 United States 65.4 69.9 74.1 75.5 110.8 Germany 53.0 74.4 81.2 78.1 92.2 United Kingdom 38.4 59.6 50.1 50.0 57.6 France 22.6 31.8 38.4 38.5 47.8* Top five countries 192.5 257.5 287.5 297.0 473.3 Rest of world 282.5 421.5 564.5 629.0 775.7 World total 475.0 679.0 852.0 926.0 1249 Top five as percentage of world total 40.5 37.9 33.7 32.1 37.9 Source: Derived from UNWTO World Tourism Barometer, January 2015, http://www.e-unwto.org/doi/pdf/10.18111/9789284416899 Note: *Russia entered the top five countries in 2014, displacing France, with a spending of US$50.4 billion Principal destinations in terms of tourism receipts, 2000–2014: tourism receipts (US$ billion) Table 7.2 Country 2000 2005 2008 2009 2014 United States 82.9 82.2 94.2 103.5 177.2 Spain 30.0 48.0 53.2 52.5 65.2 China 16.2 29.3 39.7 45.8 56.9 France 33.0 44.0 49.5 46.6 55.4 Italy 27.5 35.4 40.2 38.8 45.5* Top five countries 189.6 238.9 276.8 287.2 400.2 Rest of world 285.4 440.1 575.2 638.8 536.8 World total 475.0 679.0 940.0 852.0 937 Top five as percentage of world total 39.9 35.2 33.5 32.5 42.7 Source: Derived from UNWTO, Tourism Highlights 2015 Note: *Macao displaced Italy in 2014 with a value of US$50.8 billion Overview 149
- 175. tourism generation butsince 2010, with the inclusion of China as one of the top five, the per- centage attributable to the top five countries has come back to the situation in 2005, with a value of 37.9%. It should also be noted that China not only entered the top five, it was the prime gen- erating country in 2014. The start of the new millennium saw the proportion of the world’s total tourism receipts from international tourism activity attributable to the top five countries fall below 40% for the first time (see Table 7.2) but this has now grown back to 42.7% as China marks its influence on the table. World tourism receipts have almost recovered to their peak in 2008 as the impact of the global economic recession diminishes. Tourism does not perform well as a global redistributor of income and wealth in the same way as it does for sub-national income redistribution. Many of the top generating countries are included in the top receiving countries. It is also notable that it is the industrialised countries that tend to populate the lists in both the top generators of tourist expenditure and the top recip- ients. The industrialised countries are responsible for 70% of total world exports and yet receive over 70% of all tourism receipts, which contrasts with developing countries that are responsible for less than 30% of all world exports and received less than 30% of all tourist receipts. It is also interesting to note that, in 2015, the top three countries in terms of the highest proportion of total world exports were China, Germany and the United States. Dependence upon tourism Table 7.3 provides another way of examining the economic significance of tourism for countries by looking at dependence on tourism receipts (economic dependence) relative to total gross domestic product (GDP), employment, export earnings and investment for 2015. Travel and tourism’s contribution is shown as a percentage of each indicator both as a direct significance, i.e. the first round effect of international tourism receipts, and as a total contribution which takes into account the secondary effects of travel and tourism spending as it runs through the support- ing sectors. It can be seen that even among these industrialised economies, there is significant variation, with tourism’s contribution to GDP ranging from Spain’s 16% to Russia’s 5.7%. In terms of export earnings, travel and tourism accounts for 15.6% of Spain’s total exports but only 2.6 % of total exports for China. Two major problems that exist when making international comparisons of tourism expenditure and receipts are that the data are generally expressed in current prices and are standardised in US dollars. The problems created by this form of presentation is that (1) it does not take into account the effects of inflation, and (2) movements in the value of the dol- lar exchange rate (which can be both frequent and dramatic) will appear as changes in the local value of tourist receipts and expenditure. This is particularly true in the somewhat volatile economic state that has characterised the twenty-first century to date. Also, the US dollar has suffered as a result of its massive trade deficit and its involvement in the conflicts in Afghanistan and Iraq. Table 7.4 examines the relationship between tourism receipts and expenditures in order to establish the net effect of travel on selected countries of the world. In 2014 the United States, Italy, France and Australia all had positive tourism balance sheets. That is, they earned more from inter- national tourism receipts than their national residents spent as tourists outside of the country. However, China, Canada, Japan, the Russian Federation, the United Kingdom and Germany were all subject to a negative tourism balance sheet. That is, the residents of those countries spent more abroad on international tourism than the countries received from international tourism receipts. There have been various attempts at finding consistent ways to measure the level of demand or the significance of tourism activity to any individual country. The most universally accepted approach is through the construction of tourism satellite accounts. Tourism satellite accounts One approach to determining the economic significance of tourism to an economy is to con- struct tourism satellite accounts. This methodology was approved and adopted by the United 150 chapter 7 The Economic Impact of Tourism
- 176. Travel and tourism’scontribution to GDP, employment, exports and investment, 2015 (%) Table 7.3 Country As % of total GDP As % of total employment As % of total exports As % of total investment Spain Direct contribution 5.8 5.2 15.6 7.7 Total contribution 16 16.2 Australia Direct contribution 2.8 4.4 8.3 4.5 Total contribution 10.8 12.6 France Direct contribution 3.7 4.2 6.7 6.4 Total contribution 9.1 10.1 United States Direct contribution 2.7 3.8 8.4 4.2 Total contribution 8.2 9.6 Italy Direct contribution 4.2 5.0 7.5 3.2 Total contribution 10.2 11.6 China Direct contribution 2.1 2.9 2.6 2.8 Total contribution 7.9 8.4 United Kingdom Direct contribution 3.7 5.3 6.2 4.4 Total contribution 11.2 12.7 Japan Direct contribution 2.6 1.9 3.4 3.6 Total contribution 7.9 7.4 Russian Federation Direct contribution 1.5 1.4 3.5 2.7 Total contribution 5.7 5.2 Germany Direct contribution 3.9 7 2.7 4.1 Total contribution 8.9 12.2 Source: WTTC Country Reports 2011 Overview 151
- 177. Nations and theWorld Tourism Organization in 2000. Tourism satellite accounts (TSAs) per- form a different role from economic impact models that attempt to estimate the net economic benefits associated with a change in tourism activity. To be of use TSAs must be built around an input–output model and they take a demand-orientated approach rather than the supply- orientated approach that is associated with input–output models. As the TSA name suggests, they are a set of accounts that can be used to determine the size or significance of tourism within an economy, but not the impact of tourism. They are based on the national accounts data but this information is rearranged so that the full magnitude of tourism activities can be taken on board. Like input–output models, they also provide a means whereby tourism can be viewed in parallel with other industries and across international boundaries. The underpinning philosophy of TSAs is to add credibility to tourism, which suffers because it does not fit into a single industry and its socio-economic impact is often difficult to measure. In terms of the discussions in this chapter, the multiplier models are used to determine the economic impact of changes in tourist spending on the income, employment, government rev- enue and foreign exchange of any economy. They can also be used to identify opportunity costs by examining the effects of comparable changes in other industries. TSAs, on the other hand, offer a way of improving the estimation of the significance of tourism to an economy. The concept of tourism satellite accounts is based on the need for a framework that provides consistency over time and between countries and comparability between industries when calcu- lating the significance of tourism to an economy. Providing the accurate and extensive data needs can be met in a timely manner the accounts should do much to promote the importance of tourism globally and within countries. There have been some serious concerns, however, that tourism satellite accounts require more data than are often available, resulting in data being estimated or ‘imported’ from other economies to be used as a proxy for the TSA. Thus, TSAs may be constructed using data that are not accurate and this will only undermine the confidence that can be attached to these accounts and harm the reliability of the estimates derived from them. The framework for Tourism Satellite Accounts is aptly demonstrated in the 10 Excel spreadsheets from the UN Statistics office (http://unstats.un.org/unsd/tradeserv/TSA%20 RMF%202008%20edited%20whitecover.pdf). These TSA spreadsheets show the composition Tourism balance sheets for the top ten tourist spenders, 2014 Table 7.4 Country International tourism receipts (US$ billion) International tourism expenditure (US$ billion) Balance (US$ billion) United States 177.2 110.8 66.4 Italy 45.5 28.8 16.7 France 55.4 47.8 7.6 Australia 32.0 26.3 5.7 China 56.9 164.9 −108 Canada 17.5 33.8 −16.3 Japan 18.9 28.6 −9.7 Russian Federation 11.8 50.4 −38.6 United Kingdom 45.3 57.6 −12.3 Germany 43.3 92.2 −48.9 Note: A minus balance indicates where the country spends more than it receives through tourism activity Source: Derived from UNWTO, Tourism Highlights 2015 edition http://www.wttc.org/research/economic-research/economic-impact-analysis/ country-reports; http://data.worldbank.org/indicator/ST.INT.XPND.CD 152 chapter 7 The Economic Impact of Tourism
- 178. of the varioustables and the most useful, from this chapter’s perspective, is Table 6 (reproduced in Chapter 1 as Table 1.4). TSA 1 Inbound tourism expenditure; an element of aggregate demand TSA 2 Domestic tourism expenditure; part of total consumption TSA 3 Outbound tourism expenditure TSA 4 Internal tourism final consumption TSA 5 Production accounts of tourism industries and other industries TSA 6 Domestic supply and internal consumption by products TSA 7 Employment in tourism industries TSA 8 Tourism gross fixed capital formation TSA 9 Tourism collection consumption by functions and levels of government TSA 10 Non-monetary indicators of tourism Santo Domingo. A report by the Catalan association Alba Sud, specializing in research and communication for development, affirms that Dominican Republic’s tourism model, far from providing development for its popula- tion, concentrates wealth and redistributes poverty. The study conducted in August funded by the Catalan Cooperation for Development Agency, notes that, ‘paradoxically,’ the growth of tourism in the country has been excluding. It based its affirmation on reports from 2005 to 2008 by the UN Development Program (UNDP), jointly with the university INTEC, interviews with Dominican officials and visits to poor places of several tourism zones, among them Bavaro, Punta Cana and Boca Chica. Official of the UNPD ‘Though it constitutes an important alternative for the national economy, the tourism activity hasn’t generated a development that involves the community so that it contributes to invigorate the productive apparatus,’ said UNPD official Pavel Isa on the report. He said the situation’s main factors are a tourism model based on large hotel complexes not linked to the reality of their social surroundings and the absence of public policies that bolster social services and the involvement of populations that live near them. ‘On the one hand, extraordinary growth of tourism and hotels, and on the other, the massive diffusion of marginal population centers.’ Source: Dominican Today 2011, http://www.dominicantoday.com/dr/poverty/2011/2/14/38596/Dominican-tourism-redistributes-poverty-report-says Discussion Questions 1. It is often argued that tourism is a great redistributor of wealth. Explain how tourism may in fact result in the redistribution of poverty rather than wealth. Consider the nature of the tourism business process from booking to the operational issues at the destination and comment on the resultant effects on wealth distri- bution at each stage of the product production chain. 2. If the natural market forces are left to their own devices, will tourism result in income redistribution that works in favour of the poorer segments of the population (nationally and internationally)? 3. What actions could be taken to encourage tourism to assist in redressing income inequalities without dam- aging the development of the industry? Mini case study 7.1 Dominican tourism redistributes poverty Overview 153
- 179. The Generation ofEconomic Impacts by Tourist Spending Tourists spend their money on a wide variety of goods and services provided by a wide range of businesses. For example, tourists purchase accommodation, food and beverages, transport, communications, entertainment services, goods from retail outlets and tour/travel services. This money may be seen as an injection of demand into the host economy, i.e. demand that is created by people from outside the area of the local economy. In the case of international tourism, the tourist expenditure is a result of non-nationals spending within the national economy. In the case of domestic tourism, the tourist expenditure is a result of spending by people that do not live within the local area in which the money is spent. However, the total value of international and domestic tourist expenditure represents only a partial and sometimes misleading picture of the economic impact. The full assessment of economic impact must take into account other aspects such as: ● leakages of expenditure out of the local economy; ● indirect and induced effects; and ● displacement and opportunity costs. Tourist expenditure locally is an important aspect of economic activity. Photograph 7.2 Leakages of Expenditure Out of The Local Economy When tourists make expenditures within an economy the amount of money that stays within that economy depends upon the extent of leakages that occur. For instance, if a tourist pur- chases a carved wooden souvenir from a gift shop in Beijing, the extent of leakages will depend upon whether the carving was imported or made locally. If the carving was imported the tourist is really only buying the value added that was created within the local economy, 154 chapter 7 The Economic Impact of Tourism
- 180. i.e. the valueof local transport, import, wholesale and retail margins, government taxes and duties, etc. The extent of leakages can result from demand-side factors such as the fact that different types of tourist and different types of tourist activity tend to be associated with differ- ences in propensities to purchase imported goods. The leakages can also be associated with supply-side factors, particularly in developing economies where the local capacity to supply the needs of tourists may be small and there is consequently a high proportion of demand met through imported goods and services. Wherever money flows out of circulation, either by being spent on goods and services from outside or simply being withdrawn through savings, this constitutes a leakage. The Measurement of Economic Impact The measurement of the economic impact of tourism is far more involved than simply calculat- ing the level of tourist expenditure. Indeed, estimates of the economic impact of tourism based on tourist expenditure or receipts can be not only inaccurate, but also very misleading. Before examining how the economic impact is measured, it is necessary to look at the different aspects of the economy that are affected by tourism expenditure. To begin with, a difference can be drawn between the economic impact associated with tour- ist expenditure and that associated with the development of tourism. The former refers to the ongoing effects of, and changes in, tourist expenditure, whereas the latter is concerned with the one-off impact of the construction and finance of tourism-related facilities. The difference between these two aspects of impact is important because they require different methodological approaches. The calculation of the economic impact of tourist expenditure is achieved by using multiplier analysis and the estimation of the economic impact of tourism development projects is often achieved by resorting to project appraisal techniques such as cost–benefit analysis. The measurement of the economic impact of tourist expenditure, if it is to be meaningful, must encompass the various effects of tourist spending as it impacts throughout the economy. That is, the direct, indirect and induced effects associated with tourist expenditure need to be calculated. Direct, indirect and induced economic effects Tourist expenditure has a ‘cascading’effect throughout the host economy. It begins with tourists spending money in ‘front-line’ tourist establishments, such as hotels, restaurants and taxis, and then permeates throughout the rest of the economy. It can be examined by assessing the impact at three different levels – the direct, indirect and induced levels. Direct effects The direct level of impact is the value of tourist expenditure less the value of imports necessary to supply those ‘front-line’ goods and services. Thus, the direct impact is likely to be less than the value of tourist expenditure except in the rare case where a local economy can provide all of the tourist’s wants from its own productive sectors. Indirect effects The establishments that directly receive the tourist expenditure also need to purchase goods and services from other sectors within the local economy, for example hotels will purchase the ser- vices of builders, accountants, banks, food and beverage suppliers, electricity and water, etc. Furthermore, the suppliers to these ‘front-line’ establishments will also need to purchase goods and services from other establishments within the local economy and so the process continues. The generation of economic activity brought about by these subsequent rounds of expenditure is known as the indirect effect. The indirect effect will not involve all of the monies spent by tourists during the direct effect since some of that money will leak out of circulation through imports, savings and taxation. The Measurement of Economic Impact 155
- 181. Induced effects Finally, duringthe direct and indirect rounds of expenditure, income will accrue to local resi- dents in the form of wages, salaries, distributed profit, rent and interest. This addition to local income will, in part, be re-spent in the local economy on goods and services and this will gener- ate yet further rounds of economic activity. It is only when all three levels of impact (direct plus indirect plus induced) are estimated that the full positive economic impact of tourism expenditure is fully assessed. However, there can be negative aspects to the economic impact of tourist expenditure. Measuring the economic impact of tourist expenditure At a national level, the UNWTO publishes annual tourist statistics for countries throughout the world. These statistics include figures relating to tourist expenditure, but these figures do not reflect the economic impact of tourist expenditure. These figures only show how much tourists spend in a destination. They take no account of how much of that sum leaks out of the economy (paying for imported goods and services) or how much additional impact is experienced through the ‘knock-on’ effects of this tourist spending. At a sub-national level the availability of accurate and consistent tourist expenditure data is much more difficult to find. Some countries, such as the United Kingdom, undertake visitor expenditure surveys (for example, International Passenger Survey (IPS) and United Kingdom Tourist Survey (UKTS)) which allow expenditure estimates to be made at the national level and these figures lose some of their accuracy when examined at the regional level. It is often neces- sary to undertake specific tourist expenditure surveys to establish the tourist spend in particular areas. This is a very important point given that investment and planning decisions are often taken at the local level where such data are not freely available. In order to translate tourist expenditure data into economic impact information the appropri- ate multiplier values have to be calculated. The term multiplier is one of the most quoted eco- nomic concepts in the study of tourism. Multiplier values may be used for a variety of purposes and are often used as the basis for public sector decision making. The Multiplier Concept The concept of the multiplier is based upon the recognition that sales for one firm require purchases from other firms within the local economy, i.e. the industrial sectors of an economy are interdependent. This means that firms purchase not only primary inputs such as labour and imports, but also intermediate goods and services produced by other establishments within the local economy. Therefore, a change in the level of final demand for one sector’s output will affect not only the industry that produces that final good/service but also other sectors that supply goods/services to that sector and the sectors that act as suppliers to those sectors as well. Because firms in the local economy are dependent upon other firms for their supplies, any change in tourist expenditure will bring about a change in the economy’s level of production, household income, employment, government revenue and foreign exchange flows (where appli- cable). These changes may be greater than, equal to or less than the value of the change in tour- ist expenditure that brought them about. The term ‘tourist multiplier’ refers to the ratio of two changes – the change in one of the key economic variables such as output (income, employment or government revenue) to the change in tourist expenditure. Therefore, there will be some value by which the initial change in tourist expenditure must be multiplied in order to estimate the total change in output – this is known as the output multi- plier. In the same way, there will be a value that, when multiplied by the change in tourist expenditure, will estimate the total change in household income – this is known as the income multiplier. The reason why the initial change in tourist spending must be subject to a multiplier effect can be seen from Figure 7.1. 156 chapter 7 The Economic Impact of Tourism
- 182. Figure 7.1 showsthat the tourist expenditure goes, initially, to the front-line tourist establish- ments that provide the tourists with their goods and services. This money will be re-spent by the firms that receive it. A proportion of the money will leak directly out of the economy in the form of imports and savings (the tan boxes in the diagram). These imports may be in the form of food and beverages that the tourist consumes but are not provided locally, or in respect of services provided to the establishment by individuals or firms located outside the economy being analysed. Where the tourist consumes a product that has been imported into the local economy, they are only consuming the value added (distributive trade, importation, transport, local taxes, etc.) rather than the full cost of the product. The money paid to persons outside the economy cannot have any further role in generating economic activity within the local eco nomy and, thus, the value of tourist expenditure that actually circulates in the local economy is Tourist $ Tourist businesses Household income Savings All businesses Household income Savings Savings All businesses Household income Imports (leakages) Imports (leakages) Imports (leakages) Imports (leakages) Imports (leakages) Imports (leakages) Government revenue Government revenue Government revenue Local inter-industry purchases Local inter-industry purchases Local household purchases Local household purchases Local inter-industry purchases Local household purchases Until money in circulation becomes insignificant I N D I R E C T E F F E C T S D I R E C T E F F E C T S The multiplier process Figure 7.1 The Multiplier Concept 157
- 183. immediately reduced. Theremaining sum of money will be used to purchase locally produced goods and services, labour and entrepreneurial skills (wages, salaries and profits) and to meet government taxes, licences and fees. These effects are all known as the direct effects. We can see from Figure 7.1 that money will flow from the tourism-related establishments to other local businesses. This money will also be re-spent, some of it leaking out as imports, some of it leaking out of circulation through savings and some going to the government. The remain- der will be spent on labour and entrepreneurial skills and purchases from other businesses for goods and services. The businesses that receive money in payment for their goods/services will also make purchases locally, import goods and services and pay government taxes. These effects are known as the indirect effects. During each round of expenditure, some proportion of money accrues to local residents in the form of income (wages, salaries and profits). Some of this money will be saved (by either house- holds or businesses) and will cease to circulate in the economy, i.e. a leakage. The income that accrues to local households and is not saved will be re-spent. Some of it will leak out of the system as imports and some of it will go to the government as tax. The remainder will be re-spent as household consumption. This spending of income accrued as a result of the initial tourist expendi- ture will generate further rounds of economic activity – this effect is known as the induced effect. The value of any tourism multiplier is meaningless unless it is qualified by both the method- ology used to estimate it and the type of multiplier involved. Types of Multiplier There are a number of multipliers in regular use and each type has its own specific application. However, considerable confusion and misleading conclusions can be derived if they are mis- used or misinterpreted. This issue will be discussed later in this chapter. The major types of multipliers are as follows: ● A transactions (or sales) multiplier that measures the amount of additional business reve- nue created in an economy as a result of an increase in tourist expenditure. Similar to this in concept is the output multiplier. ● An output multiplier that measures the amount of additional output generated in an econ- omy as a result of an increase in tourist expenditure. The principal distinction between the two multipliers is that output multipliers are concerned with changes in the actual levels of production and not with the volume and value of sales. Not all sales will be related to current production (some sales may have been made from inventories and some productive output may not be sold within the time-frame of the model and, therefore, result in an increase in inventories). Therefore, the value of an output multiplier may well be larger or smaller than the value of the corresponding transactions multiplier. ● An income multiplier which measures the additional income (wages and salaries, rent, interest and profits) created in the economy as a result of an increase in tourist expenditure. Such income can be measured either as national income (regional in the case of domestic tourism) or as disposable income, i.e. the income that is actually available to households either to spend or to save. However, as mentioned earlier, the income which accrues to non- nationals who have been ‘imported’ into the area should be excluded because the incomes that they receive cannot be considered to be benefits to the area. On the other hand, the sec- ondary economic effects created by the re-spending of non-nationals’ incomes within the area must be included within the calculations. ● An employment multiplier which is a measurement of either the total amount of employ- ment generated by an additional unit of tourist expenditure or the ratio of the total employ- ment generated by this same expenditure to direct employment alone. Employment multipliers provide a useful source of information about the secondary effects of tourism, but their measurement involves more heroic assumptions than in the case of other multipliers and care is needed in their interpretation. 158 chapter 7 The Economic Impact of Tourism
- 184. ● A governmentrevenue multiplier that measures the impact on government revenue, from all sources, associated with an increase of tourist expenditure. This multiplier may be expressed in gross terms, that is, the gross increase in government revenue as a result of an increase in tourist spending, or in net terms when the increase in government revenue is reduced by the increase in government expenditures associated with the increase in tourist activity. Since the different types of multiplier are calculated using the same database they are closely interrelated. However, the concepts involved in each of the above multipliers are very different, as are the magnitudes of each of the different multipliers calculated for the same economy. Some examples of these multiplier values are shown later in this chapter. Given the number of different multiplier concepts that are available it is not surprising to find that there has been some confusion over their interpretation. This confusion has been compounded by the fact that there are also a variety of methods that may be used to calculate each of the above multipliers. Methodological Approaches There are five major techniques that have been employed to measure the economic impact of tourism. Although they are often viewed as alternative approaches by many authors, with the exception of the base theory approach, each of the other methodologies plots out the natural evolution of a single concept as it struggles to overcome the inherent weaknesses and limita- tions. The five approaches are: ● base theory models; ● Keynesian multiplier models; ● ad hoc models; ● input–output analysis; and ● computable general equilibrium (CGE) models. Base theory models The basic assumption underlying base theory models is that there exists a stable relationship between each of the export sectors and the local sectors of an economy, so that changes in the level of tourist expenditure will create predictable and measurable changes in the level of activ- ity in local sectors. An example of this approach is given under the following sub-heading. Base theory multipliers are normally oversimplified formulations and are now rarely used. Multiplier analysis using base theory One early and interesting application of the technique by R.R. Nathan and Associates (1966) was used to calculate the short-run employment effects created by tourism expenditure in each of 375 counties and independent cities of Appalachia. The final model used took the form: E Erx2 = 1 1 - ErEr (7.1) where Er is total local employment, Erc is local employment servicing local consumer demand and Erx2 is the direct change in employment created by a change in tourism expenditure. Nathan Associates developed the multiplier model further, to measure long-term effects, by incorporating investment activity. This model took the form: Er Erx2 = 1 + i2 1 - ErcEr (7.2) where i2 is a statistically estimated parameter (the value of which lies between 0 and 1) which relates the change in investment to the change in tourism activity. This model is far too simplistic to be accurate in calculating tourism multiplier values. Methodological Approaches 159
- 185. Keynesian multiplier models Thesemultipliers are designed to measure the income created in an economy by an additional unit of tourist expenditure. The Keynesian multipliers were the first rigorous attempt at measur- ing the economic impact of an exogenous change in demand. The simplest formulation of the multiplier (k) is shown in equation (7.3): k = 1 1 - c + m (7.3) where 1 is the additional unit of tourism expenditure and leakages are the proportion of this expenditure which goes into savings (1 - c) and imports (m), i.e.: k = 1 leakages To develop this model into a long-term formulation, which takes investment into account, is shown in equation (7.4): k = 1 1 - c + m - i (7.4) where i is the marginal propensity to invest. Similarly the effects of the re-spending of money accruing to the public sector can be built into the model, and this is shown in equation (7.5): k = 1 1 - c + m - i - g (7.5) where g is the marginal propensity of the public sector to spend. A typical Keynesian short-term multiplier model is shown in equation (7.6). The derivation of this model is given in Archer (1976): k = 1 - L 1 - c11 - ti211 - td - b2 + m (7.6) where L = first round leakages out of the economy, ti = the marginal rate of indirect taxation, td = the marginal rate of taxation and other deductions and b = the marginal rate of transfer payments. The difference in the value of the multiplier created by applying exactly the same data to the short-term models shown in equations (7.3) and (7.6) highlight the dangers of relying on a model whose structure is too simplistic. For example, if we let L = 0.5, c = 0.9, m = 0.7, ti = 0.16, td = 0.2, b = 0.2 and calculate the income multipliers using, first, the model shown in equation (7.1) and then, again, using the more developed model shown in equation (7.6), the results are: 1 1 - c + m = 1 1 - 0.9 + 0.7 = 1.25 and 1 - L 1 - c11 - ti211 - td - b2 + m = 1 - 0.5 1 - 0.911 - 0.16211 - 0.2 - 0.22 + 0.7 = 0.40 The two multiplier values derived from the same database are very different and would result in very different policy implications. However, even the more developed model shown in equation (7.6) is far too simplistic and is unable to measure variations in the form and magni- tude of sectoral linkages and leakages out of the destination’s economy during each round of transactions. Even the most complex and comprehensive Keynesian models developed for some studies are unable to provide the level of detail that is required for policy making and planning. One practical solution is to use ad hoc models. 160 chapter 7 The Economic Impact of Tourism
- 186. Ad hoc models Thenext step in the evolution of the multiplier approach was intended to overcome the ‘broad brush’ approach adopted by the Keynesian model wherein each sector was treated in an identi- cal manner. The ad hoc models, although similar in principle to their Keynesian counterparts, are constructed specifically for each particular study. The simplest form of ad hoc model, using matrix algebra, is shown in equation (7.7): A* 1 1 - BC (7.7) where A = the proportion of additional tourist expenditure remaining in the economy after first- round leakages, i.e. A equals the (1 - L) expression in the Keynesian model, B = the propensity of local people to consume in the local economy and C = the proportion of expenditure by local people that accrues as income in the local economy. The ad hoc model shown in equation (7.7) is too simplistic for serious application but more advanced models have been developed and used widely to calculate tourist multipliers to esti- mate the effect of tourist expenditure on income, public sector revenue, employment and imports. One such model, developed in the early 1970s (by Archer and Owen, 1971) is: a N j=1 a n i=1 QjKijVi 1 1 - ca n i=1 XiZiVi (7.8) Where j = each category of tourist j = 1 to N, i = each type of business establishment i = 1 to n, Qj = the proportion of total tourist expenditure spent by the jth type of tourist, Kij = the propor- tion of expenditure by the ith type of tourist in the jth category of business, Vi = the direct and indirect income generated by unit of expenditure by the ith type of business, Xi = the pattern of consumption, i.e. the proportion of total consumer expenditure by the residents of the area in the ith type of business, Zi = the proportion of Xi which takes place within the study area and c = the marginal propensity to consume. The multiplicand equation (7.8) measures the direct and indirect effects of tourist expendi- ture while the multiplier measures the induced effects. In order to trace the flows of expenditure through successive rounds, separate equations are estimated for a range of Vi values. Examples of these are provided in the literature (see, for example, Archer and Owen, 1971). Multiplier studies using ad hoc models are commonly used and examples can be found in the United States, the United Kingdom, South Pacific islands, Caribbean and elsewhere. More recent models have achieved even greater levels of disaggregation, even down to the levels of individual establishments. Although models of this type can produce a large quantity of detailed and accurate informa- tion for policy making and planning purposes, they are unable to provide the wealth of data yielded by the final methodological approach to be discussed, input–output analysis. Input–output analysis In order to overcome the subjectivity inherent in the ad hoc multiplier approach and to provide a more encompassing estimate of economic impact, the multiplier models commonly being used adopted the input–output framework. The input–output model approach presents a general equilibrium, rather than the partial equilibrium approach used in ad hoc models, to studying economic impacts. Input–output analysis begins with the construction of a table, similar to a table of national/regional accounts, which shows the economy of the destination in matrix form. Each sector of the economy is shown in each column as a purchaser of goods and services from other sectors in the economy, and in each row as a seller of output to each of the other sectors. The structure of an input–output table is shown in Figure 7.2. The table may be subdivided into three major quadrants. First, the inter-industry matrix (located in the top left-hand quadrant) details the sales and purchases that take place among the various sectors of the economy (for example, X11, X12, X13, are the sales of sector 1 to all other sectors within the economy, whereas Methodological Approaches 161
- 187. X11, X21, X31,X41, etc., represent the purchases of sector 1 from all other sectors within the economy). Secondly, the bottom left-hand quadrant shows each sector’s purchases of primary inputs (such as payments to labour, W, profits, P, taxes, T and imported goods and services, M). Thirdly, the right-hand quadrant shows the sales made by each sector to each source of final demand. The simplest formulation is shown in equations (7.9) and (7.10) where, for ease of explana- tion, all forms of final demand are represented by a column vector (Y). X = aX + Y X - aX = Y(7.9) 1i - a2X = Y X = 1i - a2-1 Y ∆X = 1i - a2-1 ∆Y(7.10) where X = a vector of the total sales of each sector of the economy, i.e. Cx1 + x2 + x3 + x4D, A = a matrix of the inter-industry transactions within the economy, Y = a vector of final demand sales, I = an identity matrix (equivalent to 1 in simple algebra) and ∆ = a change in a variable. A change in the level of final demand (Y) will create an increase in the level of activity within the economy which manifests itself as changes in the output and sales of each sector. Further sub-models are required to calculate the effects on business revenue, public sector reve- nue, imports, employment and income. The model shown in equation (7.10) is still too simplistic for practical application and must be developed further. For instance, in the simplified model discussed above, the imports of the economy are shown as a single row vector. However, the robust and flexible framework of input–output models where: 5 Output 5 Consumption (households) 5 Investment (private) X C I G 5 Government expenditure Final demand sectors: 5 Household consumption sector 5 Investment expenditure sector 5 Government expenditure sector H I G E 5 Exports sectors E 5 Exports M 5 Imports W 5 Wages and salaries P 5 Profits and dividends T 5 Taxes Primary inputs Productive sectors SALES TO INTERMEDIATE DEMAND FINAL DEMAND Productive sectors Final demand sectors PURCHASES Industry FROM 1 2 4 3 . . . m H I G E Industry 1 X11 X12 X13 X14 . . . X1m C1 I1 G1 E1 X1 Industry 2 X21 X22 X23 X24 . . . X2m C2 I2 G2 E2 X2 Industry 3 X31 X32 X33 X34 . . . X3m C3 I3 G3 E3 X3 Industry 4 X41 X42 X43 X44 . . . X4m C4 I4 G4 E4 X4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Industry m m1 Xm2 Xm3 X X m4 . . . X mm Cm Im Gm Em Xm Wages and W1 W2 W3 W4 . . . Wm WC WI WG WE W salaries Profits/ P1 P2 P3 P4 . . . Pm PC PI PG PE P dividends Taxes T1 T2 T3 T4 . . . Tm TC TI TG TE T Imports M1 M2 M3 M4 . . . Mm MC MI MG ME M Total X1 X2 X3 X4 . . . Xm C I G E X inputs TOTAL OUTPUT Basic input–output transactions table Figure 7.2 162 chapter 7 The Economic Impact of Tourism
- 188. allows the researcherto incorporate a matrix of import functions in order to draw distinctions between competitive and non-competitive imports. This is an extremely useful distinction because competitive imports are, by their very nature, far less predictable than non-competitive imports. Incorporating an import function matrix which examines the trade-off between domestic production and competitive imports results in equation (7.10) being revised as follows: ∆X = 1i - K*a2-1 ∆Y(7.11) where K* = a matrix where the diagonal values reflects the level of competitive imports associ- ated with each sector which, when applied to the A matrix, reduces the domestic component of output by the required amount. In this manner, changes in primary inputs (∆P) created by a change in tourist expenditure (∆T) will be given by: ∆p = B1i - K*a2-1 ∆T(7.12) where B = an m * n matrix of primary inputs. Furthermore, the input–output model can be developed in order to provide information with respect to changes in employment levels brought about by changes in tourism expenditure. Let ΔL represent the change in employment and E be an m * n matrix of employment coefficients. The model will now take the form shown in equation (7.13): ∆L = e1i - K*a2-1 ∆T(7.13) Using this procedure, the labour usages of each productive sector can be incorporated on either a skill or educational requirement basis and this will allow the multiplier model to provide human resource planning information. Thus, multiplier models can provide information which will inform the future training needs for the destination. Input–output models can also be used to examine the levels of dependencies between econo- mies as well as between sectors of a single economy. For instance a study by Fletcher and Morakabati (2015) examined the relationship between the economy of Gibraltar and that of the Campo de Gibraltar region in Spain. The results demonstrated how important free-flowing trade and labour were to both economies. In general, the input–output model can be as comprehensive as data, time and resources allow. Notwithstanding the fact that input–output analysis has been subject to criticism because of its general approach and the aggregation of firms into ‘whole industries’, the sectors of the model can be disaggregated to achieve the highest level of detail – even down to the level of individual establishments. There are several weaknesses and limitations apparent with input–output models and most of them are the result of the restrictive assumptions upon which the model is based. For instance, the input–output model as discussed so far implicitly assumes that there are no such things as supply constraints. Supply constraints can inhibit the ability of an economy to supply the quan- tity and quality of goods and services needed to accommodate an increase in tourism expendi- ture. If capacity is inadequate to meet the additional demand and if insufficient factors of production, especially labour, are available, then additional tourism expenditure creates infla- tion and additional goods and services may have to be imported. Thus the size of the multiplier, if measured by an appropriate model, will fall. Within the input–output model framework the existence of supply constraints can be incorporated by building in a restrictions matrix that will channel unsupportable supply requirements into the import matrix. Such a way of working around this problem has the disadvantage that it tends to act as a switch in the sense that it will either be ‘on’ or ‘off’. The reality of supply constraints is that there are likely to be some infla- tionary pressures that build as supply capacity is approached and such inflationary pressures may bring about other undesirable effects on the production function of many sectors within the economy. This is always a problem when the model that is being used is static rather than dynamic. Methodological Approaches 163
- 189. Most multiplier modelsare static in nature but can be made dynamic. Static models assume that: ● production and consumption functions are linear and the intersectoral expenditure patterns are stable; ● all sectors are able to meet any additional demands for their output; and ● relative prices remain constant. The first of these assumptions is that any additional tourism expenditure occurring will gen- erate the same impact on the economy as an equivalent amount of previous tourism expenditure. Thus, any additional production in the economy is assumed to require the purchase of inputs in the same proportions and from the same sources as previously required. Similarly, any conse- quential increase in consumer demand is assumed to have exactly the same effect upon the economy as previous consumer expenditure. These anomalies arise because of the use of aver- age rather than marginal production coefficients. The difference between the two often comes down to the existence or otherwise of economies of large-scale production and the stability of the production functions themselves. With respect to the stability of the production functions, tourism, being a labour-intensive personal service, tends to be associated with fairly stable production functions. Thus, the use of average technical coefficients and the assumption of linear homogeneity in production tends not to be a serious drawback when using input–output analysis to study service-based economies. However, the problems of not being able to handle price changes are a major drawback of static systems. Computable general equilibrium (CGE) models have been developed to overcome some of these limitations. Computable general equilibrium (CGE) models Input-output (IO), Social Accounting Matrices (SAM) and CGE all have their roots embedded in the same economy-wide approach to economic analysis, popularly referred to as general equilibrium models. However, IO and SAM models have restrictions imposed by their assump- tions, the most serious being the simplifying assumptions that ignore the behavioural responses that agents or actors make to changes in prices, together with the forces that generate such price changes. CGE models, which started to emerge in the 1970s with international trade simula- tions, build on the IO and SAM framework by constructing a series of relationship equations that reflect the behaviour of economic agents (production and consumption agents) to changes in prices and then go on to map out the repercussions of that behaviour on the prices of inputs influenced by that change in behaviour. CGE models relating to the effects of policy changes on the tourism sectors started to take shape during the latter half of the 1990s. If constructed properly, CGE models allow for the effects of interaction between all elements of the economy, unlike the input–output models that focus upon the supply side through output changes. For instance, CGEs can allow prices to vary and for resources in an economy to be reallocated from one sector to others. Furthermore, the CGE approach, because it is based upon a series of equations that explain the behaviour of indi- vidual sectors that are then simultaneously solved for the economy, means that changes from a wide range of sources (such as tax, price inflation, interest rate, exchange rate changes, etc.) can be analysed. Although the addition of the dynamic aspects offered by CGE modelling to the input–output framework are clearly welcome, there is much work to be done, particularly in terms of the availability of reliable data, before such models can make significant improvements to the accu- racy of impact estimates. To create realistic models, the data requirements of CGE models are enormous and at the end of the day there has to be some trade-off between accuracy and cost. Also, the approach of CGE modelling often presents itself as a black box approach where it is frequently difficult to see where the impacts take place within an economy other than the final effects. This is not because the model does not trace them, but is more related to the way in 164 chapter 7 The Economic Impact of Tourism
- 190. which the resultsof such model are disseminated. Also, there is the danger, as with TSAs, of making assumptions with respect to price elasticities of demand, substitution propensities, etc., that are not appropriate to the economy being examined and this can lead to wildly inaccurate results. Seghir et al. (2015) also examined the relationship between the impact of tourism on economic growth, a topic explored more fully in Chapter 11, and found that tourism does indeed make a positive contribution to economic growth as measured by GDP per capita across 49 countries. Weaknesses and Limitations of Multiplier Models Each of the multiplier model approaches outlined above contains several inherent problems that need to be overcome if they are to produce meaningful results. The majority of these problems stem from two distinct areas: the assumptions necessary to apply the models and the data needs. Restrictive assumptions Every economic model is founded upon a series of assumptions. The realism of those assump- tions is clearly crucial to the model’s performance – unrealistic assumptions will provide unre- alistic results. During the early attempts at multiplier analysis the assumptions used were very restrictive. Sectors were all assumed to have the same propensities to import, employ labour, pay taxes and they were all assumed to be producing homogeneous output. As the models have become more sophisticated, one by one these assumptions have been replaced with more realis- tic ones. The homogeneity of output can be overcome by the sectoral disaggregation, the dif- ferential needs for imports, tax liabilities and labour requirements can all be catered for within the post-Keynesian model structures. However, the greatest obstacles to improving the accuracy of estimates are found in the dynamics of the model. Most impact models are static in nature, providing a snapshot of an economy at one point in time. If the model is static it will not be able to reflect the effects of changes in relative prices, changes in production and consumption func- tions as a result of changes in relative prices and/or supply constraints. To build these bridges and enhance the accuracy of the estimates, it is necessary to calculate price and income elas- ticities of demand and supply, relative returns on investment within dynamic capital markets and the effects of changes in interest and foreign exchange rates. In order to achieve this, it is necessary to know whether each sector is operating close to operational capacity because, as they move towards full capacity, pressure will be placed on the prices of some resources and this will affect other sectors as they compete for resources, and so on. This leads to the second category of problems – that is, those associated with data deficiencies. Recent attempts to build in such enhanced assumptions by using CGE models have not been too successful in overcoming these weaknesses and limitations. For instance, it is not uncom- mon for CGE models to assume that economies are always in full equilibrium at all times. This is clearly unrealistic for most economies. Many economies have some unemployment and are not populated by sectors that are all running at full capacity. Therefore models using such an assumption are likely to underestimate the true economic impact of an increase in tourism activ- ities. Furthermore, CGE models tend to be based on assumptions that reflect developed market systems with relative prices constantly adjusting to reflect demand and supply circumstances. This is not always the case and can lead to inaccurate estimates. Finally, as pointed out by authors such as Miller (2002) and Cooper and Wilson (2002), most CGE models are heavily constrained by theory in the way that the dynamics are included and they typically do not per- form well when subjected to statistical tests. Data deficiencies Secondary data (published and unpublished data) are rarely adequate to meet the requirements of the more demanding and advanced models. This means that researchers need to spend con- siderable time, effort and money collecting data for multiplier purposes. Weaknesses and Limitations of Multiplier Models 165
- 191. Other data difficultiesarise out of the nature of tourism itself as a multi-product industry directly affecting a large number of sectors in an economy. Tourist expenditure is spread across several sectors of an economy and accurate surveys of visitor expenditure are required in order to obtain an acceptable breakdown of this expenditure into its various components, e.g. accom- modation, meals, beverages, transportation and shopping. Furthermore, problems often arise when attempting to integrate this visitor expenditure into the categories disaggregated in the input–output table. Rarely are pre-existing input–output tables produced in a form sufficiently disaggregated to accept the detailed data derived from visitor expenditure surveys. In such cases, either the tourist expenditure data have to be com- pressed to fit the sectors already identified in the input–output table, with a consequent loss in the accuracy of the results, or else much time and effort has to be expended on disaggregating the existing input–output table. If, however, an input–output (or alternative) model is constructed especially for the study, then the matrix can be arranged in a form which fits the tourist expenditure pattern and the data can be fed directly into the model. The development of the CGE models demonstrates the need to enhance the dynamic nature of the models but adds considerable pressures to the data needs of the models. Rarely do we have sufficient information to calculate the effects of relative price changes on the allocation of resources within an economy. The movement of people from region to region as the relative prosperity of regions changes is, itself, a dynamic event and is deter- mined by a host of economic, social and environmental factors. Foreign exchange rate data need to be considered on a global basis because international tourism is a global industry. Therefore, the data demands associated with making the models dynamic and sensitive to economic inter- actions between sectors and regions are formidable. As economic impact models become more sophisticated and are able to reflect some of the dynamic processes it will be possible to estimate the ‘net’ economic benefits of tourism in a more meaningful way. As with any change in economic output, there are likely to be positive as well as negative economic impacts. To date the negative economic impacts have been sadly neglected by most model structures. These negative economic impacts can manifest in a number of ways ranging from the misal- location of resources, an increase in the demand for public goods and infrastructure as a result of urbanisation, through to the displacement of existing business. Negative economic impacts The production of tourist goods and services requires the commitment of resources that could otherwise be used for alternative purposes. For instance, the development of a tourism resort in Spain may involve the migration of labour from rural to urban areas which brings with it eco- nomic implications for both the rural and urban areas – the former losing a productive unit of labour and the latter implying additional infrastructure pressure for health, education and other public services. If labour is not in abundance then meeting the tourists’demands may involve the transfer of labour from one industry (such as agriculture or fishing) to tourism industries, involv- ing an opportunity cost that is often ignored in the estimation of tourism’s economic impact. Furthermore, if there is a shortage of skilled labour then there may be a need to import labour from other countries such as Morocco and this will result in additional economic leakages as income earned from this imported labour may, in part, be repatriated (repatriated income). Similarly, the use of capital resources (which are often scarce) in the development of tourism- related establishments precludes their use for other forms of economic development. To gain a true picture of the economic impact of tourism it is necessary to take into account the opportunity costs of using scarce resources for tourism development as opposed to alternative uses. Where tourism development substitutes one form of expenditure and economic activity for another, this creates an opportunity cost, known as a displacement effect. Displacement also happens when a new tourism project takes away business from an existing facility. For instance, if a destination such as St Lucia finds that its all-inclusive hotels are running at high occupancy levels and returning a reasonable yield on the investment, the construction of an additional 166 chapter 7 The Economic Impact of Tourism
- 192. all-inclusive hotel maysimply reduce the occupancy levels of the existing establishments. This means that the destination may find that its overall tourism activity has not increased by as much as the new business from the development. This is displacement. The size of multiplier values The size of multiplier values will vary under different circumstances because it is dependent upon the patterns of tourist expenditure, the nature of an area’s economy and the extent to which the various sectors of the economy are linked in their trading patterns. A large number of tourism multiplier studies have been carried out since the 1960s. Table 7.5 shows the range of values of tourism output multipliers for a selection of industrialised coun- tries, US states, cities and rural areas. The figures are provided only to give an indicative view of the relative size of output multipliers. Of course, the values will also depend upon the meth- odology used to calculate them and the following multiplier values were derived from the aver- age of studies that used the unorthodox multiplier (output change as a result of a change in tourist expenditure) at the direct, indirect and induced level, using input–output analysis. For policy making and planning purposes, income multipliers are often seen to be the most useful because they provide information about national or local income rather than merely busi- ness output or turnover. Table 7.6 shows the range of income multiplier values for a variety of types of destinations. Care must be taken when comparing multiplier values between countries. First, the analyses may be undertaken over different time periods and, even though multiplier values tend not to be subject to drastic changes even over two decades, they do tend to increase as economies develop and improve their sectoral linkages. Secondly, and more importantly, using the different methodologies can make a significant difference to the values. For instance, input–output models, because they are based upon a general equilibrium approach, tend to yield significantly higher multiplier values than ad hoc models and, depending upon the level of com- prehensiveness and detail achieved in the ad hoc models, this difference may be as high as 30%. It has been suggested that input–output based multipliers often return higher multiplier values than their CGE counterparts (Dwyer et al., 2003) because they may not pick up the negative The range value of tourism output multipliers for selected destinations Country or region Tourism output multiplier Medium to large industrialised economies 2.00–3.40 Selection of US states 1.57–2.20 City/urban economies 1.24–1.51 Rural area economies 1.12–1.35 Source: Compiled by the author from published articles and unpublished reports to governments Table 7.5 The range of tourism income multipliers for selected types of destinations Table 7.6 Country or region Income multiplier National economies 1.23–1.98 Small island economies 0.39–1.59 US states and counties 0.44–1.30 UK regions and counties 0.29–0.47 UK cities and towns 0.19–0.40 Source: Compiled by the author from published articles and unpublished government reports Weaknesses and Limitations of Multiplier Models 167
- 193. effects created byrelative price changes or demand displacement. However, there is a tendency for CGE models to underestimate the economic impact of tourism when they are based on assumptions of full capacity and market equilibrium. It is also noticeable from Table 7.6 that the size of the income multiplier values tends to be correlated with the size of the economy. In general, the larger the economy, the higher will be the multiplier value, although there will obviously be some exceptions to this. The reason for this correlation is that larger economies tend to have a more developed economic structure which means that they have stronger intersectoral linkages and lower propensities to import in order to meet the demands of tourists, the tourist industry, non-tourist industries and the local population. The higher the propensity to import in order to meet local and tourist demand, the lower the income multiplier. In addition to calculating the levels of output, income, employment and government revenue generated by additional units of tourist expenditure, multiplier analysis provides valuable infor- mation concerning its impact on a country’s net foreign exchange flows. The impact model can be used to determine not only the direct import requirements necessary to meet the tourists’ demands but also the indirect and induced imports required or generated as a result of the initial tourist expenditure. When all import requirements are summed and deducted from the interna- tional tourist expenditure the result will be the net foreign exchange flow. This can be further explored by examining the expenditure of local people when travelling abroad and a travel and tourism trade balance can be calculated. The multipliers most vulnerable to criticism (and inaccuracies) are the employment multipli- ers. Therefore great care must be exercised in their interpretation. The data used for their meas- urement and the assumptions underlying the model constructions are more heroic for employment than for any other type of effect. The two major problems relate to the fact that: ● in the majority of studies employment is assumed to have a linear relationship with either income or output, whereas the available evidence suggests that this relationship is non-linear; and ● multiplier models assume that employment in each sector is working at full capacity, so that to meet any increase in demand will require additional employment. In practice, this is unlikely to be true and increases (or decreases) in the level of tourist expenditure will not generate a corresponding increase (or decrease) in the number of people employed. In consequence, tourism employment multipliers should be interpreted as only an indication of the number of full-time equivalent (FTE) job opportunities supported by changes in tourist expenditure. Whether or not these job opportunities will materialise depends upon a number of factors, most notably the extent to which the existing labour force in each sector is fully utilised, and the degree to which labour is able to transfer between different occupations and between different sectors of the economy. Table 7.7 shows the employment multipliers for several countries and regions. We can see that these employment multipliers are of a different magnitude from those relating to either Tourism employment multipliers for selected destinations per 10,000 units of tourist expenditure (i.e. dollars, pounds or lira) Table 7.7 Country/city Employment multiplier Bermuda 0.44 Fiji 0.79 Jamaica 1.28 Malta 1.59 UK (Edinburgh) 0.37 168 chapter 7 The Economic Impact of Tourism
- 194. output or income.This reflects the need for considerably larger amounts of tourist spending to generate one new full-time equivalent job opportunity. Unlike the income and output multipliers, it is not possible to compare employment multipli- ers between different destinations when they are presented in this form. This is because the table figures show the number of full-time equivalent job opportunities created by 10,000 units of tourist expenditure where that unit is expressed in the local currency. Thus, differences in the unit value of local currencies will provide employment multipliers of different magnitudes. A more sensible way of making international comparisons of employment multipliers is to express them as a ratio of total employment generated to direct employment. Examples of this latter type of employment multiplier are shown in Table 7.8. Table 7.8 shows that in Jamaica, for every new full-time employee directly employed as a result of an increase in tourist expenditure, a further 4.61 full-time equivalent job opportunities are created throughout the Jamaican economy. Again, we can see that the more developed the tourism economy, the larger the employment multiplier. Standardised employment multipliers for selected destinations Table 7.8 Country Employment multiplier Jamaica 4.61 Mauritius 3.76 Bermuda 3.02 Gibraltar 2.62 Solomon Islands 2.58 Malta 1.99 Western Samoa 1.96 Republic of Palau 1.67 The Policy Implications of Multiplier Analysis Tourism multipliers measure the present economic performance of the tourism industry and the short-term economic effects of a change in the level or pattern of tourism expenditure. They are particularly suitable for studying the impact of tourist expenditure on business turnover, incomes, employment, public sector revenue and the balance of payments. Tourism economic multipliers are most frequently used to examine short-term impacts where policy objectives other than the efficiency of resource allocation are considered important. A detailed input–output or CGE model, for example, can yield valuable infor- mation about the structure of an economy, the degree to which sectors within the economy are dependent upon each other, the existence of possible supply constraints and the relative capital and labour intensities of each sector. More recently, multiplier analyses have been used to measure the economic impacts of negative events on national economies such as the 2004 Boxing Day Indian Ocean tsunami, or terrorist attacks in Egypt or Tunisia (see Chapter 12). Detailed multiplier models are suitable for: ● analysing the national or regional effects of public or private sector investment in tourism projects; The Policy Implications of Multiplier Analysis 169
- 195. ● simulating theeconomic impact, sector by sector, of any proposed tourism developments and hence determining the future requirements of factors of production, such as labour needs; ● estimating the economic costs of natural or man-made disasters; ● examining the relative magnitudes of the impacts made by different types of tourism and by tourism compared with other sectors of the economy; and ● identifying the optimal tourism mix (those associated with relatively high net benefits). Conclusion The economic impact of tourism on a host economy is generally positive but also carries with it some negative aspects. The literature is biased towards the positive aspects of economic impacts. It is important to establish how significant tourism spending is to an economy because this allows policy makers and planners to determine dependency and to develop strategies for the future. Of particular note is the fact that the majority of tourism spending tends to take place between the richer, industrialised countries rather than between industrialised and non- industrialised countries. Tourism satellite accounts have been derived in order to present a clearer picture of the eco- nomic significance of tourism to a given destination. Built along similar lines to national accounts, such tables provide insight into the contribution that tourism makes towards gross national product and the proportion of demand that is attributable to tourism activity. Such tables tend to be based around input–output models in order to provide an accurate picture and to help determine optimal policy decisions. There are several models that have been used to estimate the economic impact of tourism but only the ad hoc, input–output and CGE models are of sufficient accuracy and of policy use. The input–output and CGE methods provide the most comprehensive picture of tourism’s economic impacts and also information that is useful to the tourism development planners. However, these models are also the most expensive type of impact model because of their data requirements. The impacts are measured in terms of income, employment and government revenue multipliers as well as demonstrating the import requirements per unit of tourist spend- ing. All of these different forms of economic impacts can be estimated at the direct, direct plus indirect and direct plus indirect plus induced levels of impact. This information has been suc- cessfully used to target market segments in order to enhance the economic benefits associated with tourist spending. Recent developments in the estimation of tourism impact analyses include the combining of economic, environmental and social impact models with forecasting techniques all within a common framework to provide a comprehensive planning tool. There are weaknesses associated with economic impact models but most of these can be alleviated by the adoption of various procedures. 1. What methods would you use to determine the economic significance of tourism activity on a national economy? 2. Explain the meanings of direct, indirect and induced economic impacts and discuss whether governments can influence the level of impact at each level. 3. Domestic tourism is just displacing consumer activity from other goods and services within a national economy. Discuss. 4. How can tourism, domestic and international, act as a method of income redistribution and what are the barriers to such an effect? Self-Check Questions 170 chapter 7 The Economic Impact of Tourism
- 196. Youtube Tourism’s economic impact Examplesof tourism’s economic impact: https://www.youtube.com/watch?v=NyVI2tiRBeE https://www.youtube.com/watch?v=Zb6ZIaPXCYQ https://www.youtube.com/watch?v=wr7urVS9IuA https://www.youtube.com/watch?v=i0tyiAxVFyA Tourism and development https://www.youtube.com/watch?v=1h5X539d-wo Economic impact The economic impact of tourism in Galveston 2014 https://www.youtube.com/watch?v=wr7urVS9IuA Tourism Alliance: tourism is one of the largest industries in the UK https://www.youtube.com/watch?v=jNwnwwzdiY8 Overview of Angola: Economy, Tourism More https://www.youtube.com/watch?v=_Zw9JooZhrU World Tourism Day 2014 Tourism Stories https://www.youtube.com/watch?v=8UdBpEgn0lc TUI: Ground-Breaking study measures impact of TUI’s tourism operations https://www.youtube.com/watch?v=fUBQor_8LQ4 Tourism and the Visitor Economy https://www.youtube.com/watch?v=0uFDquNA35A Employment conditions Employment Conditions in the Tourism Industry @ #WTM14 https://www.youtube.com/watch?v=S9awOUkQdDQ Slum tourism in India India’s Tourism Industry Thrives on Largest Slum https://www.youtube.com/watch?v=Z-88Qw8Uosc References and Further Reading Archer, B.H. (1976) ‘The anatomy of a multiplier’, Regional Studies 10, 71–7. Archer, B.H. (1982) ‘The value of multipliers and their policy implications’, Tourism Management 3(2), 236–41. Archer, B.H. and Fletcher, J.E. (1990) Multiplier Analysis, Les Cahiers du Tourisme, Series C, No. 130, April. Archer, B.H. and Owen, C. (1971) ‘Towards a tourist regional multiplier’, Regional Studies 5, 89–94. Bryden, J.M. (1973) Tourism and Development: A Case Study in the Commonwealth Caribbean, Cambridge University Press, Cambridge. Cooper, A. and Wilson, A. (2002) ‘Extending the relevance of TSA research for the UK: general equilibrium and spillover analysis’, Tourism Economics 8(1), 5–38. Diamond, J. (1976) ‘Tourism and development policy: a quantitative appraisal’, Bulletin of Economic Research 28(1), 36–50. References and Further Reading 171
- 197. Dwyer, L., Forsyth,P., Spurr, R. andVanHo, T. (2003) ‘Tourism’s contribution to a state economy: a multi-regional general equilibrium analysis’, Tourism Economics 9(4), 431–48. Eichengreen, B., and Gupta, P. (2011) ‘Two waves of service sector growth’, Oxford Economic Papers 65, 96–123. Fletcher, J.E. (1989) ‘Input–output analysis and tourism impact studies’, Annals of Tourism Research 16(4), 541–56. Fletcher, J.E. and Archer, B.H. (1991) ‘The development and application of multiplier analysis’, pp. 28–47, in Cooper, C. (ed.), Progress in Tourism, Recreation and Hospitality Management, Vol. 3, Belhaven, London. Fletcher, J.E. and Snee, H.R. (1985) ‘The need for output measurements in the service indus- tries: a comment’, Services Industries Journal 5(1), 73–8. Fletcher, J.E. and Morakabati,Y. (2015) An Economic Impact Study and Analysis of the Economies of Gibraltar and the Campo de Gibraltar, Gibraltar Chamber of Commerce, available at http://www.gibraltarchamberofcommerce.com/economic-impact-study-2015-summary/ Frechtling, D. (2010) ‘The tourism satellite account: a primer’, Annals of Tourism Research 37(1), 136–53. Leontief, W. (1966) Input–Output Economics, Oxford University Press, New York. Mayer, M., Muller, M., Waltering, M., Arnegger, J. and Job, H. (2010) ‘The economic impact of tourism in six German national parks’, Landscape and Urban Planning 97, 73–82. Miller, R. (2002) ‘Preface to Cooper, A. and Wilson, A.’, Tourism Economics 8(1), 5–38. Nathan, R.R. and Associates (1966) Recreation as an Industry, A Report Prepared for the Appalachian Regional Commission, Washington D.C. OECD (2001) National Accounts, OECD, Paris. Seghir, G.M., Mostefa, B., Abbes, S.M. and Zakarya, G.Y. (2015) ‘Tourism spending–economic growth causality in 49 countries: a dynamic panel data approach’, 2nd Global Conference on Business, Economics, Management and Tourism, 30–31 October, Procedia Economics and Finance, Prague, Czech Republic. Sinclair, M.T. and Sutcliffe, C.M.S. (1982) ‘Keynesian income multipliers with first and second round effects: an application to tourist expenditure’, Oxford Bulletin of Economics and Statistics 44(4), 321–38. Smeral, E. (2009) ‘The impact of the financial and economic crisis on European tourism’, Journal of Travel Research 48(1), 3–13. TCSP (1992) The Economic Impact of International Tourism on the National Economy of Fiji, a report published by the Tourism Council for the South Pacific, Suva, Fiji. UNWTO (2007) Yearbook of Tourism Statistics, UNWTO, Madrid. Wanhill, S.R.C. (1988) ‘Tourism multipliers under capacity constraints’, Service Industries Journal 8(1), 136–42. WTO (1980a) Manila Declaration on World Tourism, WTO, Madrid. WTO (1980b) Tourism and Employment: Enhancing the Status of Tourism Professions, WTO, Madrid. WTO (1988) Yearbook of Tourism Statistics, WTO, Madrid. WTO (1992, 1997, 2002a) Yearbook of Tourism Statistics, WTO, Madrid. WTO (2000b) The Tourism Satellite Account (TSA): A Strategic Project for the World Tourism Organization, Report by the Secretary-General, Madrid, November 2000. WTO (2003) Yearbook of Tourism Statistics, WTO, Madrid. WTTC (2006) ‘The impact of travel and tourism on jobs and economy’, available at http://www.oxfordeconomics.com/OE_Tourism.asp# 172 chapter 7 The Economic Impact of Tourism
- 198. Major case study7.1 The Middle East’s battle of perception (or reality) The Middle East region has been engulfed in oil and water disputes, beleaguered by the Arab–Israeli con- flict and currently facing some of its biggest challenges since World War II (e.g. the Iraq invasion and conse- quential sectarian wars and the Arab Spring that con- tributed to the creation of extremist groups). Many of the countries are experiencing conflict of one form or another. Indeed, as it stands, the perception of the region is one of elevated risk and government travel advice warnings which switch off access to tourism revenue. Discussion Questions 1. Travel risk perception is no longer location-specific. Discuss. 2. For every destination loser there is a destination win- ner. Which destinations are the winners of the insta- bility in parts of the Middle East? 3. The economic impact of instability in the region is multi-faceted. Discuss. The share of the Middle East in terms of global interna- tional tourist arrivals is 4.5%, most of which is intra- regional. Perversely, its share of oil production among the 10 leading oil production countries is 26% and it ranks second in terms of the world’s total gas produc- tion. A number of countries in the Persian Gulf, including those who are members of the Gulf Cooperation Coun- cil (GCC), have long recognised the importance of eco- nomic diversification within the region and attempts have been made to diversify their economies, acknowl- edging tourism as a viable option. Within this, there have been some successes, in particular with the UAE and especially Dubai tourism. Qatar, Abu Dhabi (UAE) and Oman have made significant investments to place their destinations on the stage of international sporting contests, with Qatar hosting a number of major events, including the controversial 2022 World Cup. In spite of all of these efforts there remain significant challenges in attracting tourists from the main generating markets in Europe and North America. Major case study 7.1 173
- 199. Chapter 8 The EnvironmentalImpact of Tourism Learning Outcomes The objective of this chapter is to provide you with: ● an understanding of the physical impacts of tourism on the environment, both direct and indirect, positive and negative; ● a review of strategies and techniques that may be implemented to measure and quantify the impacts of tourism on the environment such as an environmental impacts assessment; ● an appreciation of the difficulties of assessing environmental impacts; and ● real-life examples to encourage the application of theory to practice.
- 200. All forms ofproduction (goods and services) will have impacts on the physical environment in which they take place. Because tourists must visit the place where the services are provided in order to consume the output, it is inevitable that tourism activity will be associated with environmental impacts. The need to ensure that tourism is developed and operated in a way that minimises its environmental impact is now into its fourth decade but in spite of the fact that environmental issues are high profile, little has been achieved to ensure that future developments are environmentally sound. Introduction Environmental Impact At the end of the 1970s the OECD set out a framework for the study of environmental stress cre- ated by tourism activities. This framework highlighted four main categories of stressor activities including permanent environmental restructuring (major construction works such as highways, airports and resorts); waste product generation (biological and non-biological waste which can damage fish production, create health hazards and detract from the attractiveness of a destina- tion); direct environmental stress caused by tourist activities (destruction of coral reefs, vegeta- tion, dunes, etc. by the presence and activities of tourists); effects on the population dynamics (migration, increased urban densities accompanied by declining populations in other rural areas). In 1992, the United Nations Conference on the Environment and Development, held in Rio de Janeiro, added further impetus to a debate that was growing stale and a new maxim emerged where ‘Only whatever can be sustained by nature and society in the long term is permissible’. This new impetus was given the title Agenda 21 to reflect the fact that it was a policy statement aimed at taking the world into the twenty-first century. What made Agenda 21 significant was the fact that it represented the first occasion when a comprehensive programme of environmen- tal actions was agreed to be adopted by 182 governments. The Agenda was based around a framework of themes that were aimed at providing an overall strategy to transform global activ- ity onto a more sustainable course. The matters addressed within Agenda 21 were not solely environmental because they included aspects such as human development and the redressing of the imbalance between rich and poor nations. However, many of the matters discussed and the strategies recommended were environmentally based. Now, in the twenty-first century and in spite of the programme’s elegance and simplicity, the adoption of this maxim requires enforcement that is still far beyond the reach of most legislative frameworks and none of the recommendations made in Agenda 21 were legally binding on the 182 nations that approved its adoption. Furthermore, the implementation of this maxim requires that those charged with the construction of the necessary legislative framework be fully informed of the environmental repercussions of productive and consumptive activities. To date this is not the case. The literature on the environmental impacts of tourism is often biased, painting highly negative pictures of tourism with respect to its associated environmental impacts. In this chapter we examine the nature of environmental impacts, how they can be identified and measured and how this information can be integrated into the tourism planning process. Tourism and the environment The environment, natural or man-made, is a vital component of the tourism product. However, as soon as tourism activity takes place, the environment is inevitably changed or modified either to facilitate tourism or through the tourism production process. Environmental preservation and improvement programmes are now an integral part of many development strategies and such Environmental Impact 175
- 201. considerations are treatedwith much greater respect than they were in the twentieth century. However, relatively little research has been undertaken within a standardised framework to ana- lyse tourism’s impact on the environment. The empirical studies that have taken place have been specific case studies – such as the impact of tourism on the wildlife of Africa, the pollution of water in the Mediterranean or studies of particular coastal areas and mountains. But the diverse areas studied, the varying methods used to undertake those studies and the wide range of tourism activities involved makes it difficult to bring these findings together in order to assemble a comprehensive standardised framework within which to work. In order to study the physical impact of tourism it is necessary to establish: ● the physical impacts created by tourism activity as opposed to other activities; ● what conditions were like before tourism activity took place in order to derive a baseline from which comparisons can be made; ● an inventory of flora and fauna, together with some unambiguous index of tolerance levels to the types of impact created by different sorts of tourism activity; and ● the secondary levels of environmental impact that are associated with tourism activity. Positive environmental impacts On the positive side, the direct positive environmental impacts associated with tourism include: ● the preservation/restoration of ancient monuments, sites and historic buildings, such as the Great Wall of China (PRC), the Pyramids (Egypt), the Taj Mahal (India), Stonehenge and Warwick Castle (UK); ● the creation of national parks and wildlife parks, such as Yellowstone Park (USA), the Amboseli National Park and the Maasai Mara National Reserve (Kenya), Las Canadas (Tenerife), the Pittier National Park (Venezuela) and the Fjordland National Park (New Zealand); ● protection of reefs and beaches, such as the Great Barrier Reef (Australia), Grand Anse (Grenada); and ● the maintenance of forests, such as the New Forest (UK) and Colo I Suva (Fiji). Conservation and preservation may be rated highly from the point of view of researchers, or even the tourists. However, if such actions are not considered to be of importance from the hosts’ point of view, it may be questionable as to whether they can be considered to be positive environmental impacts. When evaluating the net worth of preservation and conservation activi- ties the opportunity costs associated with such activities must also be taken into account. African wildlife parks, such as Etosha National Park in Namibia, may result in the grazing lands of nomadic tribes being limited and hence constrain food production capability. Negative environmental impacts On the negative side, tourism may have direct environmental impacts on waste production, the quality of water, air and noise levels. Sewage disposal into water adds to pollution problems, as does the use of power boats on inland waterways and sheltered coastal waters. Increased usage of petrol and diesel for tourist transport, oil burning to provide the power for hotels’ air condi- tioning and refrigeration units all add to the level of air pollutants. Noise levels may be dramati cally increased in urban areas through nightclubs and other forms of entertainment as well as by increased road, rail and air traffic. Physical deterioration of both natural and built environments can have serious consequences: ● hunting and fishing have obvious impacts on the wildlife environment; ● sand dunes can be damaged and eroded by over-use; ● vegetation can be destroyed by walkers; ● camp fires may destroy forests; 176 Chapter 8 The Environmental Impact of Tourism
- 202. ● ancient monumentsmay be disfigured and damaged by graffiti, eroded or literally taken away by tourists (the Byzantine Fort in Paphos, Cyprus, for instance, is a World Heritage Site subject to pilfering); ● the construction of a tourism superstructure utilises real estate and may detract from the aesthetics; ● the improper disposal of litter can detract from the aesthetic quality of the environment and harm wildlife; ● the erosion of paths to the Pyramids at Giza, Egypt by the camels used to transport tourists; ● the dynamiting of Balaclava Bay (Mauritius) to provide a beach for tourist use; and ● the littering of Base Camp on Mount Everest, Nepal by tourists and the erosion of the pathway to this site. The building of high-rise hotels on beach frontages is an environmental impact of tourism that used to achieve headline status. This kind of obvious environmental damage is now less common than it was during the rapid growth periods of the 1960s and 1970s. In a number of countries, particularly island economies, the issue of land usage is often high on the agenda of planning meetings. Regulations have been introduced in many countries to restrict beachfront developments to a height no greater than that of the palm trees (as for example in Mauritius), or restrict development to a certain distance back from the beach (as in some parts of India). Tourism activities can put scarce natural resources, such as water, under severe pressure. Tourists tend to be far more extravagant with their use of water than they are at home, with esti- mates of up to 440 litres per person per day being made for areas around the Mediterranean. To put this into context, this is up to twice the normal usage of residents in urban areas of Spain or Italy. Some activities, such as swimming pools and golf courses, require intensive use of these scarce resources and the latter can add further to the environmental impacts if fertilisers and weeding chemicals are used. Tourism Concern has estimated that the average golf course in tropical countries like Thailand requires 1,500 kg of fertilisers, pesticides and other treatments per annum and uses the same amount of water that would be consumed by approximately 60,000 village residents. Similar physical depletion can be witnessed in terms of deforestation as trees are cleared for land use and fuel. Tourism is responsible for high levels of air and noise pollution through the transportation networks and leisure activities. Air transport is claimed to be a significant factor in global warm- ing and tourism is responsible for the vast majority of international air transport. At the local level air transport near urban areas can cause severe noise and air pollution problems, along with ground transport systems such as tour buses that use up resources to maintain climate con- trol for their passengers. Other forms of transport, such as jet skis, quad bikes and snowmobiles, can create excessive noise pollution in coastal areas, national parks and areas of outstanding natural beauty. Tourists can be responsible for high levels of littering (such as the high profile given to the littering by tourists at Base Camp on Mount Everest) and this can present signifi- cant dangers to wildlife as well as being unsightly and expensive to clean up. Similarly, solid human waste disposal, if not undertaken properly, can be a major despoiler of the environment in coastal areas, rivers, lakes and roadsides. Such pollution can also give rise to serious health risks, to humans as well as wildlife. The issues relating to tourism and environmental impact have been high profile for some time and organisations such as UNEP are actively trying to address those issues (see http:// www.unep.org). Nowhere is this type of direct environmental impact more obvious than with respect to cruise ships. Cruise ships have grown in size over the past century and are now equivalent to floating cities or towns. They visit coastal areas where water quality is vital for marine life and the safety of bathers. Although they are subject to regulations such as the use of advanced water treatment systems, these are often violated because of a lack of monitoring and such violations have resulted in areas, such as British Columbia, being referred to as the ‘toilet bowl’ of the Western Coast of the United States (see ‘Cruise Ships Dumped a Billion Gallons of Sewage, Environmental Environmental Impact 177
- 203. Group Says’, athttps://www.youtube.com/watch?v=FnihqVWds3I). A typical 3,000-passenger cruise ship will produce nearly 200,000 litres of sewage every day and the maximum capacity of the largest cruise ship in 2017 is 6,780 passengers (Harmony of the Seas), which results in more than double that volume of sewage. Furthermore, the sewage systems on cruise ships are often not as water-intensive as land-based flushing; consequently any effluent pumped into the sea will be four or five times more concentrated than effluent discharged from land systems. This can introduce hazardous levels of bacteria into the sea. It is not only the environmentally pristine islands that are suffering from the impacts of cruise ships, historic ports such as London and Southampton in the United Kingdom are suffering from cruise ship-related pollution (https:// www.theguardian.com/environment/2016/mar/31/huge-cruise-ships-will-worsen-london-air- pollution-campaigners-warn). Photograph 8.1 Tourism is a major source of income and foreign exchange for Thailand. It accounted for 19.3% of Thailand’s total GDP and represented 14% of its total employment in 2014, and international visitor arrivals accounted for 69.9% of total tourist spending. With these figures in mind Thailand ranks as one of the world’s top tourist destinations, receiving almost 30 million tourists annually. The tourism offering in Thailand is diverse. However, sun, sea and sand is its major attraction for tourists from all over the world. The sheer number of arrivals to many of Thailand‘s small islands has now started to put pressure on its environment. Mini case study 8.1 Environmental Pressure on Thailand 178 Chapter 8 The Environmental Impact of Tourism
- 204. The Thailand governmenthas been facing a number of political challenges including allegations of corrup- tion, political instability and terrorist attacks. But the country is also facing environmental challenges caused by mass tourism. For many, social media is now an inherent part of life, but only a few years ago it was movies that informed people about destinations and they were a powerful and far-reaching means of destination placement. The Beach, filmed in 2000 and starring Leonardo DiCaprio following his lead role in Titanic, was seen as a major success for the Phi Phi Islands in Thailand. Since the distribution of that particular movie the Phi Phi and nearby islands have seen annual visitor arrivals soar to over 1.4 million. In response to the environmental pres- sures incurred through this level of tourism activity the Thailand government ‘closed’ Koh Tachai Island to all tourists in an attempt to preserve the island and limit the damage that had been caused by tourism. There are, however, suggestions of serious damage also to Phi Phi and its surrounding islands. This is being caused by a wide range of mass tourism-related activities such as anchors, scuba diving, oil pollution from motorboats and contamination from untreated waste. Discussion Questions 1. ‘The tourism industry is a relatively “clean” industry and just gets a bad press.’ Discuss this statement with respect to the evidence on the environmental impact of tourism. 2. ‘Environmental damage is simply a part of the twenty-first century and there is no point in trying to clean up the tourism industry unless all industries are brought into line.’ Discuss. 3. Are certification schemes likely to succeed in ‘greening’ the tourism industry? It is also important to note that many environmental factors are interdependent – often in ways that are not yet fully understood. Damage to coral reefs by divers, cruise ship anchors, or through the construction of coastal developments will reduce the local diversity and population of fish and other creatures that may feed off the coral. This, in turn, may reduce the numbers of birds that feed on the fish and so on. In order to determine the full impact of environmental changes accurately, the ecological system and the way in which it responds to environmental stress must be understood. The effect of any loss to biological diversity is an increased threat to the food chain, can imbalance species and soil formation, and result in less ability to absorb greenhouse gases. A loss of biodiversity also hinders nature’s ability to withstand the natural shocks caused by droughts, earthquakes, floods and hurricanes. Finally, it reduces the enjoyment that tourists experience when visiting areas by reducing the variety and wealth of flora and fauna available. Environmental Impact Assessment There are no generally accepted models for environmental impact assessment (EIA). In many environmentally sensitive tourism destinations the need for EIAs has become more frequent and expected when considering tourism development and its relationship with the environment. There are now examples of EIAs in all forms of tourism activity from mass tourism to back- packing and for geographical areas as remote as the poles or as intense as the Mediterranean. Many countries have now incorporated the need for EIAs within their planning legislation but even the absence of legislation to support environmental planning should not deter tourism planners from undertaking their own environmental impact assessments on proposed develop- ments. Environmental protection is so much easier and less costly than environmental correc- tion even when such remedial action is possible. It is important to understand the motivation that underlies a particular environmental impact assessment before an appropriate methodology is selected. For instance, an EIA may be under- taken in order to determine a development’s impact upon a specific ecology or even upon a Environmental Impact Assessment 179
- 205. single ‘rare’species. Thistype of assessment may not require the evaluation of the environmental impacts in monetary terms. However, other EIAs may be instigated for the express purpose of determining the financial implications of environmental correction in order to reflect accurately the net economic returns of tourism activity or in an attempt to retrieve some of these costs from the industry. Furthermore, EIAs may be required in order to compare alternative developments so as to allocate resources in a manner that maximises the economic benefits of development while minimising the negative environmental impacts. In this case there is a need to take a general equilibrium approach which enables the researcher to compare and contrast development options not only between various tourism strategies but also between different industrial structures. Finally, EIAs may be required simply to raise the profile of environmental issues. That is, future developments should not be evaluated solely in economic terms but in a more holistic manner that includes the effects upon the local environment. This approach allows the demo- cratic processes of development choice to be fully informed. It also highlights the fact that environmental impacts and environmental audits should become a way of life for business organisations as well as governments and individuals. Once the environmental consequences of our actions are recognised this information can be incorporated at every decision-making level to ensure the effective use of the planet’s finite resources. Environmental awareness during the production and consumption processes may also bring long-term economic and social benefits. For instance, the effective use of scarce resources, particularly energy-related resources, can result in lower marginal costs of produc- tion. On the other hand, the careless or reckless use of resources during the production or con- sumption processes can add to social resentment of tourism development. This may hinder future development and will certainly detract from the effective use of resources. In spite of the fact that there is no single accepted framework for conducting EIAs, the true scope of environmental impacts should not be underestimated. Most forms of industrial devel- opment impact upon land use, energy consumption and other direct forms of physical impacts. However, to assess the overall environmental impact it is necessary to take into account the consequential impacts brought about by the direct productive activity. In the same way that the economic impacts associated with tourism development can be direct and indirect, the same Photograph 8.2 180 Chapter 8 The Environmental Impact of Tourism
- 206. must be saidfor environmental impacts. If tourism activity requires the production of output from a diverse range of industries, including those that do not supply tourist goods and services directly, then the environmental impact associated with the output and production processes of these supporting industries should also be included in the overall evaluation. For example, if the level of tourism increases and this causes hotels to increase their purchases from the building and construction industry, then the environmental damage created by that increased building and construction must also be included. This is also true with respect to the effects of the quar- ries that supply the builders and the transport system that facilitates it. The direct and indirect environmental impacts can be estimated with the input–output frame- work (discussed in Chapter 7). By constructing a matrix of environmental coefficients relating to a variety of indicators, the change in tourist expenditure can be used to estimate the change in output of each productive sector and this in turn can be used to determine the likely environ- mental impact brought about by those changes. (This is discussed in greater detail under the sustainability heading in Chapter 11.) Attempts have been made in some areas to construct tourism/environment balance sheets to assess the net effect of tourism development with respect to the environment. One such approach for Scotland concluded that tourism is an important sector of the Scottish economy and that, although there are widespread environmental impacts associated with tourism activity, they were only regarded as being serious in a few specific locations and that careful management could overcome these problems in the wider tourism areas. In 1991 the UK Department of Employment set up a task force to examine the relationship between tourism and the environ- ment in England and the report published under this same title supported the major views expressed by the Scottish Tourism Coordinating Group. However, this suggests that in places where the environmental impacts are serious over a wider range of areas then careful manage- ment may not be able to overcome these problems. In this latter case it may be questionable as to whether tourism should be considered as a development option. The EIA Process It is important to identify environmental impacts associated with tourism development at an early stage because: ● it is easier to avoid environmental damage by either modifying or rejecting developments than it is to rectify environmental damage once a project has been implemented; and ● projects that rely heavily upon areas of outstanding beauty may become non-viable if such developments degrade the environment. There are a variety of methods that may be used for EIA including checklists and network systems, but generally the EIA is a process that enables researchers to predict the environ- mental consequences associated with any proposed development project. What is important is that the focus of EIA is not simply on the direct impacts as that would miss the more seri- ous indirect impacts associated with tourism activity. Thus there has been a tendency to incorporate the life cycle impact assessment into EIAs so that the impacts can be identified throughout the chains of supply and in the consequential effects on other aspects of the envi- ronment. Furthermore, it is not simply the impacts that are important, in a world where we are rapidly consuming elements of the environment at a rate that will exhaust them within a few generations – the efficiency of using environmental resources must be taken into consid- eration. This means not only that they should be effectively used within the tourism industry but that this effectiveness should also be evaluated in relative terms in comparison with alternative economic development strategies. Only then can fully informed and sound rational planning decisions be made. Once the potential impacts have been considered, a checklist consisting of the fundamental elements at risk can be assembled. This checklist can then be used to form the basis of an evaluation The EIA Process 181
- 207. matrix which willassess the impact of proposed developments on each of the fundamental elements according to whether the development will have no impact, minor impacts, moderate impacts or major impacts. An EIA will examine: ● environmental auditing procedures; ● limitations to natural resources; ● environmental problems and conflicts that may affect project viability; and ● possible detrimental effects to people, flora and fauna, soil, water, air, peace and quiet, land- scapes, cultural sites, etc. that are either within the proposed project area or will be affected by it. Figure 8.1 sets out a typical process which an environmental impact assessment would adopt. A proposed development is put forward by a developer and this is initially assessed using the destination’s environmental policy document as a performance indicator. Following this initial evaluation the proposal moves forward to site selection and undergoes a preliminary environ- mental impact assessment. This assessment can then be compared in more detail with the envi- ronmental performance indicators identified in the policy legislation/regulations in order to investigate potential conflicts. Proposed development Environmental policy Site selection Environmental screening Preliminary assessment Pre-feasibility report Detailed environmental impact assessment Feasibility study Modifications to proposal to minimise environmental effects Project physical planning and design Implementation of environmental protection measures Project implementation Environmental monitoring Project monitoring and evaluation The environmental impact assessment process Figure 8.1 182 Chapter 8 The Environmental Impact of Tourism
- 208. Environmental indicators There isa wide range of environmental indicators that can be used. However, few countries have instigated data collection procedures to monitor these environmental variables. The OECD (2017) provides an ongoing programme that highlights green growth indicators. The framework incorporates a wide range of aspects including quality of life, carbon dioxide production and growth, natural asset base and economic opportunities. The development of harmonised environmental indicators has to be pursued with the recog- nition that there is no one universal set of environmental indicators but many sets that will meet the needs of different purposes and audiences. More emphasis is now given to the conceptual framework of environmental indicators. The framework has evolved from the criteria initially set out by the OECD in 1994 when it subdivided indicators into the following categories: ● climate change and ozone layer depletion; ● eutrophication; ● acidification; ● toxic contamination; ● urban environmental quality; ● biodiversity; ● cultural landscapes; ● waste; ● water resources; Inputs PRODUCTION CONSUMPTION POLICIES Measures, opportunities Taxes subsidies Regulations Investment innovation Education, training, jobs, trade INVESTMENTS + Recycling Re-use, remanufacturing, substitution Labour Outputs Income Capital Goods services Resources Residuals Energy and raw materials Water, land, biomass, air Pollution and waste Resource functions Service functions Sink functions NATURAL ASSET BASE Amenities, health 4 3 1 2 ECONOMIC ACTIVITIES: PRODUCTION, CONSUMPTION, TRADE Green growth indicators framework Source: http://www.oecd.org/environment/indicators-modelling-outlooks/greengrowthindicators.htm Figure 8.2 The EIA Process 183
- 209. ● forest resources; ●fish resources; ● soil degradation; ● material resources; and ● socio-economic, sectoral and general indicators. The criteria for indicator selection are that they should: ● provide a representative picture of conditions or society’s response; ● be simple, easy to interpret and able to show trends over time; ● be responsive to changes in the environment and related human activities; ● provide a basis for international comparisons; ● be either national in scope or applicable to regional environmental issues of national signifi- cance; and ● have a threshold or reference value against which to compare it. These criteria should be expanded further to allow for intersectoral comparisons if they are to facilitate future development planning and the optimum use of resources. Environmental indica- tors should not be confined to a role of simply measuring what we do; they should also provide information as to what we should do. Once the preliminary assessment has been completed, a pre-feasibility study should be undertaken followed by a detailed EIA that evaluates specific environmental costs and benefits. Again the results of the impact assessment are compared with the environmental policy and, if no serious conflicts arise, the proposal can move forward to a full feasibility study and modifica- tions can be introduced to minimise any negative environmental impacts and bring the project in line with policy. The physical planning and design of the project can then take place together with the intro- duction of measures designed to protect the environment in line with environmental policy. At this stage the project can be implemented and the project’s development can then be monitored in terms of its future environmental impact. However, if the EIA is undertaken in order to estimate the economic costs of correcting for the environmental impacts, or to compare the environmental performance of various industries, the above approach requires some modification. To examine impacts within a cohesive framework it is important that economic and environmental indicators are com- bined within a single framework. This approach to EIA has been undertaken by researchers from Bournemouth University (UK) in studies for the government of Mauritius (1994) and the Wales Tourist Board (2002). The integration of economic, environmental and social impacts is essential if tourism strategies and choices are to be well informed and steps taken to prevent tourism development exceeding the carrying capacity of the destination. The Mauritius and Welsh models utilise the economic linkage information acquired during the input–output analysis (see Chapter 5) to provide the framework for estimating the indirect and induced environmental impacts associated with an industry’s output level. The model relies only upon quantifiable environmental indicators in order to maintain objectivity. By constructing a set of environmental indicator coefficients that relate output by sector to envi- ronmental effects, planners are able to identify the environmental impact of any given change in the pattern or volume of production. The direct, indirect and induced environmental con- sequences of production in each industry can be assessed in exactly the same way that eco- nomic effects are measured. By utilising the economic linkage information to trace the consequential environmental effects of production, the model can provide a uniform frame- work for comparing not only the different types of tourism activity but also tourism with other forms of industrial activity. Adding to this is the life cycle assessment whereby not only the initial impacts (direct and indirect) are taken into consideration but also the conse- quential effects of those impacts. 184 Chapter 8 The Environmental Impact of Tourism
- 210. Environmental Auditing Unlike EIAswhich focus on the effects of any given change in demand, environmental auditing represents a way of life; a way of doing business; a modus operandi; an ongoing process of monitoring and evaluation. The major differences between EIAs and environmental auditing are: ● environmental audits are generally voluntary in nature while EIAs tend to be written into the legislation and required as part of the planning approval process; ● environmental audits are part of an ongoing process – even a sense of attitude – rather than the one-off EIA studies; and ● environmental audits are concerned with performance and focus on how well a process is functioning. In this sense the environmental audit should become part of the organisational structure of private and public sector bodies alike. However, one of these distinguishing features, the voluntary nature of environmental audit- ing, is also its Achilles’ heel. Without the necessary legislation and regulation required to enforce the implementation and quality of environmental auditing, it is unlikely to be an effective environmental protector. Also, because tourism is a fragmented industry with no clear boundaries, the environmental auditing needs to be economy-wide rather than solely aimed at tourism establishments. There is also an argument that common standards of envi- ronmental audits and performance indicators should be adopted on a universal basis because of the dangers of conflict if different industries pursue different environmental goals. All of these factors point to a single conclusion, namely that environmental auditing is a macro rather than micro issue and that the distinction between EIAs and environmental auditing is becoming narrower. A more satisfactory solution is to adopt the general equilibrium EIA approach which encompasses all industrial output and consumption and facilitates the identi- fication of consequential as well as direct impacts. In this way the EIA model can be a subset of the environmental audit process and be used to generate relative performance indicators that will act as benchmarks for each of the productive sectors within the economy. Legislation could then be drafted in such a way as to reward businesses that perform better than their industry average, thereby rewarding best practice. Where environmental legislation and regulations are in force, then environmental auditing should be used to ensure that these legal and planning requirements are fulfilled. Where there are no legal or regulatory requirements, then environmental auditing should still be imple- mented in order to secure the long-term benefits associated with the effectiveness of appropriate development. The environmental auditing process involves three distinct aspects: 1. An assessment of the system, how it functions and the implications of its operation. 2. A rigorous testing of the system to see how its performance compares with some optimal ideal or benchmark performance. 3. The certification of the results from the above comparisons. Environmental auditing can take place at establishment and corporate levels for national and multinational businesses. However, with the recognition by many countries that the public sec- tor has a vested interest in the development of tourism, environmental auditing should not only be incorporated into the legislation for private sector businesses, but it should also be part of the operational remit of public sector divisions and departments. The adoption of environmental auditing can effect good use of resources as well as help create a good marketing image. Finally, neither the public nor the private sector owns the environment. It is important that all of the stakeholders should be consulted when there are any proposals to implement develop- ment policies that will impinge or detract from the environmental store. These consultations can take many forms but should be undertaken well in advance of any implementation to allow proper time to consider and evaluate opposition and alternative strategies. The public announce- ment shown in Figure 8.3 demonstrates how such consultative procedures can be organised. In Environmental Auditing 185
- 211. this example, theproposal for a second airport in Sydney, Australia, was under consideration and the public was being informed of the preparation of an EIA. It is commendable to note that the public were invited to attend preliminary information seminars prior to the release of the draft environmental impact assessment report. The airport development has not gone ahead but the consultation process did open up the forum for debate. Having progressed through the ‘cautionary platform’ of tourism research, the major thrust of experienced researchers is now one of acceptance. That is, there is an acceptance that destina- tions should not have the ideological stances of ‘puritan’ researchers imposed upon them. Indeed, destinations should have sovereignty over their own economic and environmental des- tiny providing that destiny does not impinge upon the destiny of others. Thus, if it is decided that tourism is an appropriate catalyst for economic development, it should not be suffocated under a barrage of concern for environmental conservation. Where tourism researchers can best help these destinations is in providing the framework for environmental auditing so that devel- opment may move forward in an optimal manner. The Commonwealth Government is assessing Badgerys Creek and the Holsworthy Military Area as potential sites for the Second Sydney Airport. An Environmental Impact Statement is being prepared to consider the impact of these proposals. Preliminary information is available on: Flight Paths information prepared by Airplan Master Plan Road and Rail Access to the Sites Assessing the Impact of Noise Air Traffic Forecasts information prepared by Commonwealth Department of Transport and Regional Development; to assist you to understand these proposals. When the Draft EIS has been completed it will be released for public comment. Come to a preliminary information session prior to the release of the Draft EIS Helensburgh Helensburgh Community Centre Walker Street, Helensburgh Tuesday 22 July, 6.00 pm − 9.30 pm Penrith Penrith Civic Centre High Street, Penrith Saturday 26 July, 10.00 am − 2.30 pm Telephone Information Line: 1800 818 017 HOW TO FIND OUT MORE Fax the Community Access Centre on (02) 9600 9741 Look up the Internet at http://www.magnet.com.au/2sydair and e-mail us at 2sydair@magnet.com.au Second Sydney Airport p r o p o s a l Public announcement for the new Sydney Airport Source: Advertisement from the Sun Herald, 6 July 1997, p. 9 © Commonwealth Department of Transport and Regional Development Figure 8.3 Environmental Action Programmes In addition to the development of viable and acceptable environmental impact assessment models, there has been a wide range of environmental initiatives undertaken in order to enhance the net effects of tourist activities and move towards some consideration of environmental 186 Chapter 8 The Environmental Impact of Tourism
- 212. sustainability. There areenvironmental protection agencies located at regional (for example, EU) and national levels throughout the world and further tiers of agencies at sub-national levels. Within Europe, the European Commission produces policy directives and guidelines in the form of Environmental Action Programmes (EAPs) as well as commissioning wide-ranging research projects into the specifics of environmental issues. The latest EAP is the seventhth such plan and will direct environmental policy through to 2020. The seventh plan identifies three main objectives: 1. protecting, conserving and enhancing the natural capital; 2. creating a resource-efficient, green, and competitive low-carbon economy; and 3. safeguarding residents from environment-related pressures and exposure to health and well- being risks. There are four ‘Is’ to drive forward these objectives: 1. Implement legislation; 2. Improve information; 3. better Investment in the environment; and 4. full Integration into other policies. Within the United States the Environmental Protection Agency (EPA) provides national environmental policies while state EPAs provide local directives (https://www3.epa.gov/). The US EPA’s declared role is to protect human health and to safeguard the natural environ- ment. The national agency works to develop regulations and enforce their implementation as well as commissioning research into environmental issues and providing support (policy and financial) to state EPAs. In spite of the proliferation of environmental protection agencies since the 1980s there is still no consensus on the way that the environment should be protected from the activities of tourism. This in part may be the result of the fact that tourism’s environmental impacts tend to be most obvious in specific areas rather than across nations. Unlike its position with respect to agriculture, energy and transport, the EU has so far failed to produce a comprehensive environmental policy with respect to tourism and much of the policy has been left to individ- ual member countries. Environmental impact assessments (EIAs) and environmental impact statements (EISs) are studies that estimate the potential or expected environmental impacts of proposed actions or developments. In many countries EIAs or EISs are required (by legislation) for developments that exceed some minimum threshold level. For instance, in Mauritius an EIA is required on any tourism real estate development where more than nine tourism bungalows are to be built. In Ghana EIAs are required if a planned hotel construction involves more than 40 rooms or if it is to be located within a national park, reserve, hilltop or island. However, the criteria for deter- mining whether or not an EIA or EIS is required vary from always to only when there are sig- nificant environmental implications. The vagueness of the latter approach often renders environmental legislation impotent and even when there are detailed criteria there are quite often ways of circumventing the requirement, such as developing multiple adjacent sites where each site may be below the prescribed threshold and yet the development as a whole may vastly exceed that criteria. To be effective, environmental legislation must be enforceable, rigorous and given the same serious consideration as the financial aspects of the proposed development. The UNWTO pro- duced a tourism and environmental publication in 1992 that illustrated ‘an integrated approach to resort development’ (Inskeep and Kallenberger, 1992) by referring to six case studies. These case studies covered a wide variety of resorts in Indonesia, the Republic of Korea, Mexico, the Dominican Republic, Turkey and the Canary Islands of Spain. In spite of the range of countries included in the case studies some general conclusions and recommendations could be noted. One major conclusion was that serious environmental problems can be prevented by the adoption of sound planning and development. The recommendations Environmental Action Programmes 187
- 213. made by theauthors encompassed not only the physical needs of integrated planning such as adequate infrastructure, the implementation of appropriate design standards and the need to integrate the resort planning exercise into the local or regional planning process, but also the organisational structures and training of human resources. However, EIAs and EISs tend to apply to new developments. What can be done to mitigate the damage that is being done by the operation of existing sites? A survey undertaken by the United Nations Environment Programme (UNEP) revealed that more than 100 codes of con- duct exist for national tourism organisations, the industry and tourists. For instance, environ- mental codes of conduct have been adopted by the Tourism Industry Association of Canada and the American Society of Travel Agents as well as by national bodies and individual com- panies that are targeting the environmentally aware tourists and/or operating in particularly fragile areas. International organisations such as the World Tourism Organization and the World Travel and Tourism Council also promote environmental codes of conduct to the tour- ism industry. While some countries have attempted to create an economic framework that will encourage best practice from an environmental point of view, and examples of these can be found in the national parklands of New Zealand, Africa and the Great Barrier Reef Marine Park of Australia, others have attempted to produce comprehensive environmental guidelines for developers. The UNWTO, UNEP and the EU have all published guidelines for the development of tourism in protected areas such as national parks. Some players within the private sector have been notable in their attempts to drive home greater environmental awareness and the pursuit of best practice. Large private sector busi- nesses have adopted environmental management systems which contain four distinct elements: 1. An environmental review – baseline impact studies that produce environmental inventories of the businesses activities and functions. 2. An environmental policy – a publicly stated set of identifiable and achievable objectives. 3. The design of an implementation and environmental system – setting out the mechanisms by which the objectives will be pursued. 4. An environmental audit – which can be used to measure the business’s actual performance against its declared objectives. Individual airlines have been striving to improve their environmental performance and IATA has released its ‘Global Approach to Reducing Aviation Emissions’ which it claims has been endorsed by the whole aviation industry as they strive to become carbon neutral by 2020. South- west Airlines (USA) has adopted its 2010 Environmental Stewardship programme which ranges from seeking enhanced fuel efficiency from its fleet, changing idling speeds on the ground, using recyclable and greener material inside the aircraft to the engagement of its crews and ground staff in the environmental goals. Disney has been effective in driving forward environmental initiatives and claims a 60-year pedigree of environmental programmes and conservation (http://corporate.disney.go.com/ citizenship/environment.html). The European operations of CenterParcs claim to be a flagship of environmental initiatives in the leisure industry (http://www.centerparcs.co.uk/company/ environment/index.jsp) and have been noted for their car-free resorts which provide a healthier environment for guests and, while the Maya Mountain Tours Company of Belize provides teaching facilities for students and researchers into environmental ethics, the Grecotel hotel chain ensures that all of its staff are trained in environmental issues. The Greek National Tourist Office uses policies of spatial zoning, visitor management plans, financial incentives and awareness campaigns in an attempt to drive home the need for better environ- mental management. There are also dangers embodied in the growing awareness of environmental issues. With imperfect information the tourist can easily be misled into believing that specific tourist products are environmentally sound. This may encourage tourists to purchase tour operators’ packages that are anything but environmentally friendly. 188 Chapter 8 The Environmental Impact of Tourism
- 214. It is onlythe largest of private sector businesses that normally have the expertise and resources to implement their own environmental management systems. Given the fact that the tourism industry is dominated by SMEs, the full impact of environmental management systems will be relatively minor. There are some areas of the planet that are extremely fragile, where even very small numbers of tourists can have a very high environmental impact. The United Nations Envi- ronment Programme (UNEP) noted the rapid rise in tourism to the polar regions in 2007, with tourism activity growing rapidly both in terms of visits from cruise ships and land- based tourists. In such fragile areas one could question the environmental viability of any amount of tourism irrespective of how low-key or what activities they undertake when in these areas. Tourism in the Arctic and Antarctic regions has grown dramatically over the past few decades and poses serious threats to the local populations and the integrity of the environment. It has grown to sufficient proportions to attract the larger tourism businesses and this increase in the level of tourism brings new hazards to tourists and to the environ- ments they visit. Small aircraft have been known to run into problems when taking tourists sightseeing in the Antarctic and the debris of crashed vehicles is sometimes left behind as it is not economically viable to recover the remnants. The pollution caused by increased vehicular activity in the region adds to the pressures being imposed on the environment. Major Case Study 8.1 at the end of the chapter highlights the scale of tourist numbers and activities in Antarctica in order to provide some insight into the growing problems involved in conserving the polar regions. However, to temper this view, a more positive statement was issued by Achim Steiner, UN Under-Secretary General and UNEP Executive Director, who said: The fragility of some of these unique and biologically rich ecosystems may be impacted by the number of visitors and the activities undertaken. Yet, tourism is an activity that if sustain- ably managed and with profits and revenues fairly shared can contribute to the conservation of the polar environment as well as the well-being and livelihoods of local communities in the Arctic. (http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=512ArticleID=5593l=en) Tourism in such areas is often characterised by very marked seasonality patterns. Although where these areas have an indigenous population tourism can bring much-needed revenue and employment opportunities, it can also damage the fragile stability of the economy, driving them to become dependent upon ever-increasing levels of tourist activity, with the environmental and socio-cultural damage that comes with this growth. Where the areas do not have indigenous human populations the presence of tourists and their associated activities can have serious repercussions on the flora and fauna and the impacts of tourists can bring about permanent and irrecoverable damage to the environment. Conclusion Environmental impacts are not unique to tourism and tourism receives a disproportionate share of criticism for its negative environmental impacts. Environmental impacts manifest themselves at the direct, indirect and induced levels and all three levels of impact should be taken into account during the process of assessment. The methods of assessment available to researchers have been developed in a piecemeal fashion, limiting their usefulness to generalisations. How- ever, the adoption of a matrix approach, utilising input–output modelling structures, provides the most promising outlook for a universally acceptable framework for the study of such impacts. International agencies, through statements such as Agenda 21, have declared their intentions to develop an environment-friendly approach to policy making. Similarly, national Conclusion 189
- 215. Environmental impacts Galapagos: managingtourism http://www.youtube.com/watch?v=jBiLFjK_Ztw https://www.youtube.com/watch?v=sq3aiN9Eebo Bali: island paradise or paradise lost? https://www.youtube.com/watch?v=_6QPvDazk_8 Sustainable tourism https://www.youtube.com/watch?v=JFbbKbdqoJg http://www.youtube.com/watch?v=pVSaVwcTiec Responsible tourism definition http://www.youtube.com/watch?v=_08Nxj-7RSQ Responsible tourism https://www.youtube.com/watch?v=D08n4yBJfsM Impact of tourism on dolphins: The Changing Oceans Expedition http://www.youtube.com/watch?v=-aW-mSa4ngU Polar tourism http://www.youtube.com/watch?v=0Desa9FzBjQ Youtube 1. With respect to the environmental impacts associated with tourism activity, list three positive and negative impact examples at the (a) direct (b) indirect, and (c) induced levels of impact. 2. Assess the benefits and consider what made Agenda 21 so unique. 3. Explain briefly the difference between environmental impact assessments (EIAs) and envi- ronmental audits. 4. What are the major difficulties associated with trying to identify the environmental impacts caused by tourism activity? 5. If you were asked to present a talk, how would you define and explain eco-tourism? Self-Check Questions governments are responding to the pressures from these international bodies, as well as from their own populations, to move towards a more environmentally friendly development path. Finally, the private sector (at least as represented by the larger businesses) is responding to pres- sures by implementing environmental management systems. Environmental issues have captured many headlines in the tourism world over the past decade and in response organisations such as UNEP have launched a variety of initiatives. UNEP has recently launched the Global Partnership for Sustainable Tourism (http://www. globalsustainabletourism.com) to help drive home sustainable tourism principles in tourism policies, development and the industry’s operations. There is an overwhelming need to bring some credibility to the study of environmental impacts and this can be achieved by focusing upon the objective environmental indicators, such as those listed by the OECD, IADB, UNEP and other organisations, rather than subjec- tive data sets that may only have local relevance. There is also a need to bring together the various types of impacts associated with tourism (economic, environmental and socio-cul- tural) so that they can be assessed and considered within a single framework. Only then can policy decisions be made on the basis of informed choice (such an approach is discussed in Chapter 11). 190 Chapter 8 The Environmental Impact of Tourism
- 216. Major case study8.1 Ross Sea Preservation Why is it important? The Ross Sea has incredible biological diversity and a long history of human exploration and scientific research. Marine life is as abundant now as it was thousands of years ago, and a recent scientific study (Halpern et al. 2008) determined that the region has the lowest level of disturbance from human activities among the world’s oceans. The Ross Sea also has the longest history of scientific research in the Southern Ocean. This means that scientists have data beginning 170 years ago, and continuous records going back over 50 years. The Ross Sea: A New Marine Park The Last Ocean is a documentary created by Peter Young about the Ross Sea and the Southern Ocean. You can find it on several Video On Demand platforms, and iTunes. Location of the Ross Sea, Antarctica. The Ross Sea is one of the last remaining stretches of ocean on Earth that has not been harmed by human activity. It is yet to be damaged extensively by overfishing, pollution or inva- sive species. Over 500 scientists have signed a state- ment calling for extensive protection for the Ross Sea. Burnett, G.W. and Conover, R. (1989) ‘The efficacy of Africa’s national parks: an evaluation of Julius Nyerere’s Arusha Manifesto of 1961’, Society and Natural Resources 2, 251–60. Cohen, E. (1978) ‘The impact of tourism on the physical environment’, Annals of Tourism Research 5(2), 215–37. De Kadt, E. (ed.) (1979) Tourism: Passport to Development?, Oxford University Press, New York. Getz, D. (1986) ‘Models in tourism planning’, Tourism Management 7(1), 21–32. Green, D.H., Hunter, C.J. and Moore, B. (1990) ‘Applications of the Delphi technique in tourism’, Annals of Tourism Research 17, 270–79. Halpern B.S., Walbridge S., Selkoe, K.A., Kappel C.B., Micheli F., D’Agrosa C., Bruno J.F., Casey K.S., Ebert C., Fox H.E., Fujita R., Heinemann D., Lenihan H.S., Madin E.M.P., Perry M.T., Selig E.R., Spalding M., Steneck R. and Watson R. (2008) ‘A global map of human impact on marine ecosystems’, Science 319, 948–51. Inskeep, E. (1991) Tourism Planning: An Integrated and Sustainable Development Approach, Van Nostrand Reinhold, New York. Inskeep, E. and Kallenberger, M. (1992) An Integrated Approach to Resort Development: Six Case Studies, WTO, Madrid. Lorch, J. and Bausch, T. (1995) ‘Sustainable tourism in Europe’, in Tourism and the Environ- ment in Europe, EU, Brussels. Mathieson, A. and Wall, G. (1982) Tourism: Economic, Physical and Social Impacts, Longman, Harlow. OECD (1994) Environmental Indicators, OECD core set and Paris. OECD (2004) Environmental indicators, modelling and outlooks, http://www.oecd.org/search Result/0,2665,en_2649_34283_1_1_1_1_1,00.html OECD (2017) Green Growth Indicators, available from http://www.oecd.org/greengrowth/ greengrowthindicators.htm UNEP (2004) http://www.uneptie.org/pc/tourism/sust-tourism/env-3main.htm Welford, R. and Gouldson, A. (1993) Environmental Management and Business Strategy, Pitan, London. References and Further Reading Major case study 8.1 191
- 217. more than 30%of Antarctic petrels, 6% of Antarctic minke whales, and perhaps more than 30% of “Ross Sea” killer whales. Moreover, it has the richest diversity of fishes in the high latitude Southern Ocean, including seven species found nowhere else. Source: Adapted from Ross Sea Preservation, Antarctic and Southern Ocean Coalition, http://www.asoc.org/advocacy/marine-protected-areas/ ross-sea-preservation Why is the Ross Sea ecologically unique? Although the Ross Sea encompasses less than 13% of the circumference of Antarctica, and just 3.3% of the area of the Southern Ocean, it provides habitat for sig- nificant populations of many animals, including 38% of the world’s Adélie penguins, 26% of Emperor penguins, W i l k e s L a n d Victoria Land South Pole x South Orkney Islands Queen Maud Land Graham Land Marie Byrd Land SOUTH AFRICA AUSTRALIA South Georgia and South Sandwich Islands South Shetland Islands Bouvet Island (Bouvetøya) Port Elizabeth Prince Edward Islands Crozet Islands Kerguelen Islands Heard Island and McDonald Islands Scott Island Peter I Island Falkland Islands Balleny Islands Macquarie Island Auckland Islands Snares Islands Sydney Campbell Island Chatham Islands Wellington Christchurch Melbourne Adelaide NEW ZEALAND SOUTH AMERICA South Atlantic Ocean South Indian Ocean South Pacific Ocean Southern Ocean Southern Ocean Weddell Sea Amundsen Sea Ross Sea Amery Ice Shelf Shackleton Ice Shelf Ronne Ice Shelf Ross Ice Shelf Map of Antarctic Figure 8.4 192 Chapter 8 The Environmental Impact of Tourism
- 218. 3. What elsecan be done to prevent irreversible dam- age to fragile environments? 4. Making places marine parks simply creates pressure elsewhere on the planet. Discuss. Discussion Questions 1. How do we balance making the people aware of these fragile environments without creating more issues as tourism seeks out new places to visit every year? 2. Should tourists and cruise ships be banned from Antarctica? Emperor penguins in the Ross Sea. Photograph 8.3 Major case study 8.1 193
- 219. Chapter 9 The Socio-CulturalImpact of Tourism Learning Outcomes The learning outcomes of this chapter may be defined as: ● identifying those aspects of socio-cultural behaviour that are most susceptible to tourism activity and most likely to be influenced and changed as a result of it; ● understanding the various approaches to studying the socio-cultural aspects of tourism and the relationship between them; ● providing a framework for the study of the relationship between tourism development and socio-cultural impacts; and ● helping the reader to understand key socio-cultural concepts.
- 220. A core aspectof tourism is that it creates an arena where different cultures interact. That interaction can be through the act of delivering the tourism product, it can be incidental, or one of the prime motivators for travel- ling. The results of such cultural interaction can be either positive or negative, with respect to both the hosts and tourists. When buying a service there is often no need for the consumer to visit the place of production in order to consume the product, such as when buying insurance or financial services. But tourists must visit a location for tourism consumption to take place and this means that cultural impacts are inevitable. The implica- tions of this for the destination’s population is that not only will it be subject to the changes created by the stimulation and change in direction of the local economy, it will also be subject to change from coming into contact with an alien population. Changes in economic growth and development will always be associated with changes in socio-cultural characteristics. As the population becomes wealthier and healthier, their wants and needs change and this influences their spending choice and lifestyles. However, because tourism brings visitors into contact with the local population it adds further dimensions to the socio-cultural change. The contact between visitors and local residents can be beneficial or detrimental to the host population depending upon the difference in cultures and the nature of the contact. Much of the literature on social impacts is biased in that it focuses attention upon the negative impacts of tourism on the host population. In reality socio-cultural impacts tend to contain a mixture of both positive and negative strands and these impacts affect both hosts and guests. Similarly, little attention has been paid to the fact that there can also be socio- cultural impacts on the tourist population, which can again be either positive or negative. Introduction The Nature of Socio-Cultural Impacts of Tourism The aim of this chapter is to outline the nature of socio-cultural impacts, and to examine those contacts that are positive and those that may be deemed to be negative. In order to do this it is important to include an examination of the process of tourism development because the speed and nature of development can be a major influence on the magnitude and direction of socio- cultural changes. The chapter will also investigate the causal factors for socio-cultural impacts, suggest possible methods for measurement and outline some policy implications. It is impossible for tourism to take place without creating some form of socio-cultural impact because, by its very nature, tourism is about bringing people from one culture and background to co-exist temporarily alongside people from a different socio-cultural back- ground. That difference may be slight, as is the often the case with domestic tourism where there may be regional variations in dialect, eating habits and dress codes, or it may be sig- nificant in the case of international tourism where there may be differences in language, religion, dress and behaviour codes. The range of impacts is enormous and ranges from the arts and crafts through to the fundamental behaviour and beliefs of individuals and collec- tive groups. The impacts can be positive, such as the case where tourism preserves or even resurrects the craft skills of the population or where there is a positive cultural exchange between two distinct populations. The impacts can also be negative, such as when the impact detracts from the local socio-cultural beliefs and values or through the commercialisation and bastardisation of arts, crafts and ceremonies/rituals of the host population. The impacts can also detract from cultural exchange by presenting a limited and distorted view of one of the populations. A factor often overlooked by researchers is the socio-cultural impact of tourism on the visitor population. For instance, the growth of UK tourists visiting Spain throughout the 1960s and 1970s resulted in culinary and beverage changes in the United Kingdom (paella and Rioja wine being two Spanish products that benefited from this exchange). Visitors to Australia would often find it hard to resist adopting the beach-based lifestyle and the barbecue when they returned home. The Nature of Socio-Cultural Impacts of Tourism 195
- 221. There is evidenceof socio-cultural impacts, ranging from the clothes we wear, the food we eat and our general lifestyles and attitudes, which can all be influenced by places we visit. There is a tradition of viewing the socio-cultural impacts as a combined effect because of the difficulty in distinguishing between sociological and cultural impacts. This distinction is also somewhat artificial given the fact that sociological and cultural effects overlap to a large extent. There is also a tradition of examining the socio-cultural impacts of tourism purely in terms of the contact that takes place between the host and visiting populations: this is a very limited approach. The true socio-cultural impact of tourism is far-reaching and encompasses direct and indirect effects in a manner similar to the economic impacts. Again, some of these consequen- tial impacts may be beneficial while others may be seen as detrimental. These matters will be explored in greater detail below. Approaches To The Study of Socio-Cultural Impacts of Tourism The relationships between tourism development and socio-cultural and socio-economic changes can be examined in a variety of ways. Authors such as Cohen (1984) looked at the study of socio-cultural impacts from four different but overlapping viewpoints: 1. Tourism impact studies. 2. Host–guest interaction. 3. Tourist systems. 4. Tourists and their behaviour. The early studies that took place attempted to provide formal models to explain tourism development and the host–guest interaction (such as those by Butler (1980), Doxey (1975) and Smith (1989)) but met with limited success. However, they created frameworks that researchers could use to examine some of the issues. Since those pioneering times most of the studies relat- ing to socio-cultural impacts of tourism have been specific case studies, lacking the universal rigour to help formulate an overarching theoretical understanding. One of the major handicaps that has prevented major breakthroughs in understanding the nature and characteristics of the social impacts of tourism has been the reliance upon quantitative methods. Socio-cultural impacts, both positive and negative, tend to be more subjective and qualitative in nature. This is a point highlighted by Deery et al. (2012) when they argue for a new framework for research into socio-cultural impacts. The development of the tourist product is inextricably linked to the contribution that tourism development can make to general economic development. In fact, the relationship between tourism development and general economic development can be studied under the heading of dependency or core–periphery theory, which relates to the enrichment of metropolitan areas at the expense of underdeveloped peripheral areas. Studies of dependency theory often cite exam- ples of the Caribbean and the South Pacific to highlight not only the economic and political dependence resulting from tourism activity, but also the socio-cultural dependence. However, the issues are more far-reaching than the effects upon small island developing states (SIDS) and we find that all countries that are in the tourism business experience socio-cultural changes as a result of tourism activity. In some countries, such as Spain, the dynamics of socio-cultural change have been found to be surprisingly rapid, as the effects of tourism development in the Costa Brava demonstrated in the late 1960s and early 1970s. The development of the tourism product will, to some extent, be determined by the type of tourism activity that takes place. This, in turn, will be partly determined by the nature of the destination and the socio-economic characteristics of the tourists. Similarly, the magnitude and direction of the economic and sociological impact of tourism on the host population will be partly determined by the type of tourism product. 196 Chapter 9 The Socio-Cultural Impact of Tourism
- 222. The impact broughtabout by the interaction of hosts and tourists is a well-documented phe- nomenon, and the findings of researchers, such as Smith (1989) in her book on the anthropology of tourism, have rapidly gained acceptance in the academic world. The categorisation of tourists into typologies is now accepted as an orthodox tool in the study of socio-cultural impacts. Authors such as Doxey (1975) have explored the changing relationship between guests and hosts through the construction of his Index where that relationship travels from a state of eupho- ria, through apathy to annoyance, and ends up with a state of open antagonism as the visitor presence becomes more and more pronounced. Plog (1977) and Butler (1980) both used the dynamics of change as part of their explanatory models, but here they were looking at the changing fortunes of the destination as the visitors revised their perceptions. The typology of tourists Typology is a method of sociological investigation that seeks, in this instance, to classify tour- ists according to a particular phenomenon, usually motivations or behaviour. An example of a typology which has implications for the development of the tourism product is shown in Table 9.1. (See also Chapter 20 as these typologies can be linked to choosing and targeting different segments of the market.) ● Package tourists – usually demand Western amenities, are associated with rapid growth rates and often lead to the restructuring of the local economy. ● Independent tourists – usually fit in better with the local environment and social structure, are associated with relatively slow growth rates and often lead to local ownership. In the twenty-first century there are many ways of categorising tourists, including those interested in niche products such as wine tourism, real ale tourism, gastronomic tourism, those seeking products relating to their sexual orientation, such as pink tourism (LBGT), and even those that seek out places where previous macabre or horrific events took place, such as people interested in dark tourism. A more detailed typology, such as the seminal one devised by Valene Smith, relates the type of tourist to both volume and adaptation levels and is shown in Table 9.1. Before examining the different approaches that can be used to study the socio-cultural impacts of tourism it is important to consider some fundamental matters relating to these impacts that are often ignored by researchers. In spite of the fact that some researchers regard socio-cultural change as one of the evils of tourism development, any form of economic devel- opment will, by definition, carry with it implications for the social structure and cultural aspects of the host population. This is true for both international and domestic tourism development. To condemn tourism development because it will inevitably bring with it socio-economic change is tantamount to consigning a destination to a cultural museum. This choice can only come from the host population and not from external researchers who become too embroiled in the Types of tourist Number of tourists Adaptation to local norms Explorer Very limited Accepts fully Elite Rarely seen Adapts fully Off-beat Uncommon but seen Adapts well Unusual Occasional Adapts somewhat Incipient mass Steady flow Seeks Western amenities Mass Continuous flow Expects Western amenities Charter Massive arrivals Demands Western amenities Source: Smith, 1989. Reprinted by permission of the University of Pennsylvania Press Typology of tourism: frequency of types of tourist and their adaptations to local norms Table 9.1 Approaches To The Study of Socio-Cultural Impacts of Tourism 197
- 223. sociological resources thatare used in the tourist transactions. Furthermore, to criticise research- ers for forecasting future growth levels of tourism and human resource requirements on the grounds that such forecasts ignore the fact that these employees are members of families is to deny the whole essence of sound tourism planning. Successful tourism development can only be achieved by undertaking rigorous quantitative and qualitative research. The speed and concentration of tourism development are also important influences on the magni- tude and direction of social impacts and must be taken into account when attempting to attribute the cause of socio-cultural impacts. The nature of the tourism development process and its impact on the host population can be categorised into a variety of subsets and the analyses of each of these subsets can shed additional light on the type and source of impacts attributable to tourism development. With respect to the speed of development a broad analytical approach would suggest that if tourism develops rapidly, the accompanying change to the economy would create a new power structure. In contrast, slow tourism development tends to be associated with small, locally owned developments with less change to the power structure. The Tourism Development Process Studies that look at the socio-cultural impact of tourism on specific types of destinations accord- ing to their resource base are quite common (see for example, Gill and Williams (1994), Price (1992), Stokowski (1996)). Although tourism development can take place in a wide variety of forms, a typical development scenario considers the tourism product as it grows from infancy to maturity and looks something like this: ● A few tourists ‘discover’ an area or destination. ● In response to this discovery, local entrepreneurs provide new or special facilities to accom- modate the growing number of visitors and service their needs. More importantly, they pro- vide the means to attract more visitors in the future. ● The public sector provides new or improved infrastructure to cater for the inflow of visitors. ● Finally, institutionalised or mass tourism is developed, which is commonly resort-based and sold as a package. It is based upon large-volume production techniques in order to exploit economies of large-scale production in marketing, accommodation and transport, such as high payload factors for aircraft. Many regional and national tourism development plans have attempted to shortcut the above tourism evolution cycle by aiming for the final stage of mass tourism straightaway, but few des- tinations can make this leap without first securing outside capital and expertise and incurring severe social stress. Unfortunately, there is no single coherent body of knowledge or theory that comprehensively explains tourism development. Evidence, such as it is, is rather piecemeal and comes from a num- ber of disparate case studies. Furthermore, the situation is compounded by the fact that different disciplines approach the subject matter in different ways, and although many aspects of the studies may overlap, it is difficult to tie the different conclusions together into a single body of thought. The different approaches may be categorised under the following headings: ● psychological; ● sociological; ● socio-economic. The Psychological Basis of Tourism Development In Chapter 3 we introduced Stanley Plog’s (1977) approach to a typology of tourists and in this chapter we have reiterated how useful such typologies can be in the study of socio-cultural impacts. Plog devised his classification in terms of psychographic analysis, and in this way attempted to 198 Chapter 9 The Socio-Cultural Impact of Tourism
- 224. explain why resortdestinations appear to follow a pattern that causes them to rise through a period of development and then fall into a period of decline. He saw a continuum of market segments with two diametrically opposed groups occupying either pole (see Figure 9.1). In 2004, Stanley Plog revisited his earlier work and modified the categories of tourists, replac- ing the allocentrics with venturers and the psychocentrics with dependables (Plog, 2004). Plog also updated his chart in 2003. Plog’s theory suggests that the tourist segments can be divided into different psychographic traits, i.e. allocentrics, near allocentrics, midcentrics, near psychocentrics and psychocentrics. The polar extremes of these groups can be described as exhibiting the following characteristics: ● Allocentrics seek cultural and environmental differences from their norm, belong to the higher income groups, are adventurous and require very little in the way of tourism plant. ● Psychocentrics seek familiar surroundings, belong to the lower income groups, are unadven- turous and demand a high level of tourism plant. According to Plog’s framework, a resort may typically begin by attracting a small number of allocentrics (trendsetters), similar to Smith’s explorers, but will soon develop in order to attract larger numbers of visitors. Using Plog’s terminology, this development will move the resort into and through the near allocentrics and then into the midcentrics. During this process the allocen- trics will be alienated and they will move on to look for new destinations to ‘discover’. Resorts that have a strong competitive advantage, in terms of climate, location or top-quality tourism plant, such as Disneyland in Florida, USA, may continue to thrive in the midcentric market. However, many resorts will tend to lose favour (perhaps because they are considered by tourists to be too commercialised) and continue their drift towards the psychocentric markets by offering lower tariffs, more comprehensive packaging and more scheduling of activities – the complete ‘no-surprise vacation’. Contrary to thoughts concerning Plog’s original theory, this process of rise and decline is not immutable. Such a process may have seemed inevitable for many resorts in the past but, once Psychocentric Near psychocentric Near allocentric Allocentric Africa S. Pacific Orient (esp. Japan) Hawaii (outer Islands) S. Europe Mexico (cen.) Midcentric N. Europe Caribbean C. Europe and Gt Britain Honolulu (and Oahu) Florida USA (Gen.) Miami Beach Coney Island Psychographic positions of destinations Source: Plog, 1977 Figure 9.1 The Psychological Basis of Tourism Development 199
- 225. decision makers realisethat limited tourism development can be an attractive means of growth, they may develop tourism plant that is compatible with the environment and the indigenous characteristics of a region, and target them at the ‘desired’ market segments. Alternatively, recognition of the importance of quality tourism plant can allow destinations to maintain a mid-centric position in the market continuum. Classic examples of this would include Disney resorts, which have maintained their positioning over the years. The Sociological Basis of Tourism Development The sociological basis of tourism development can be subdivided into (a) the social phenome- non of tourism and (b) the socio-economic basis underlying tourism development. Several factors of the modern world can be identified as the seeds from which international tourism has grown into an inescapable social phenomenon: ● Population growth. ● Increasing urbanisation and the overwhelming pressures of urban life which create the desire to escape. ● Growth in communications and information technology, creating awareness and stimulating interest and demand. ● Changes in mobility and accessibility, brought about largely by the growth of air transport and private motor car ownership. ● Increased leisure time and holiday leave benefits allowing longer periods of vacation, together with rising real incomes in the wake of sustained economic growth. ● Increases in world trade for business tourism. When examining the factors that are associated with tourism development it is interesting to note that they can also be categorised according to whether they are push factors or pull factors. By this we mean that some factors generate a desire to escape (push) such as urbanisation, over- crowding, pollution or even tedium, whereas other factors such as specific events (Olympics) or climate and natural phenomena generate a magnetism that attracts tourists (pull). There are a number of factors that will influence the attitude of people towards tourism at both domestic and international levels. These include the following: ● Age. The age of the tourist will, within certain boundaries, influence the type of tourism activity pursued. For instance, there is likely to be less demand from the elderly for trekking and mountaineering vacations than from other age groups. Similarly, the greatest demand for tourist destinations with a hectic nightlife is likely to be from the 18–35-year age group. Of course there are always exceptions to these rules. ● Education. There is a tendency to associate the more adventurous and independent vacations with the more educated portion of the population. These would include Plog’s allocentrics as well as Smith’s explorers and elite travellers. ● Income levels. Income levels have an obvious influence on the decision of people to travel, the location to which they travel, the nature of the activities undertaken while away and the mode(s) of transport utilised. ● Socio-economic background. The previous experiences of people will play an important role in determining the type of holiday they will consume in future time periods. For instance, children from the higher socio-economic groups, who are accustomed to frequent trips abroad, are likely to continue this pattern throughout adulthood. In addition to the socio-economic characteristics of the tourists, the tourism development process, together with its implications for socio-cultural impacts, should be examined. This approach encompasses all three approaches discussed so far – the psychological basis, the sociological basis and the socio-economic basis for tourism development. In general there is a 200 Chapter 9 The Socio-Cultural Impact of Tourism
- 226. direct socio-cultural impactwhich occurs as a result of the contact between the host population and the visitors. De Kadt (1979) suggests that there are three broad categories of such contact: 1. When the tourists buy goods and services from the hosts. 2. When the hosts and tourists share a facility such as the beach, a train or bus, a restaurant or bar, etc. 3. When tourists and hosts come together for the prime purpose of cultural exchange. The first two of these types of contact are associated with the majority of the negative aspects of social contact, whereas the third type of contact is generally considered to be positive in nature. To draw comparisons between this work of de Kadt and the typology-based research of Smith, it is evident that the explorer/adventurer tourist is most likely to take part in the latter, positive type of interaction – providing a favourable association between this type of tourist and their socio-cultural impacts. However, the mass and charter tourist is more likely to be pre- dominantly concerned with the first two types of contact, thereby making their presence gener- ally unfavourable from a socio-cultural impact point of view. A crude conclusion can be drawn from this somewhat simplistic approach – the negative types of interaction are by far the most common and the positive types of contact are relatively rare. The demonstration effect is also an aspect of the direct socio-cultural impact of tourism. Tourists influence the behaviour of the host population by their example. This is an area where tourism development is at a distinct disadvantage when compared with the use of alternative industries as a means to economic development. Tourism is a product that requires simultaneous production and consumption. Although international tourism may be seen as an export industry, in the same way as, say, oil or automobiles, it has the disadvantage that the consumer must visit the place of production (the factory) in order to consume it. This means that tourism will bring with it the physical presence of tourists and this will stimulate changes in the behaviour and dress style of the host population. It is not even necessary for tourists to come into direct contact with members of the host population for the demonstration effect to take place. Those members of the host population Photograph 9.1 The Sociological Basis of Tourism Development 201
- 227. who are influencedby the behaviour of the tourists are likely to influence other members of their community by their changed attitudes and behaviour. This can be classified as an indirect socio-cultural impact. Moreover, if tourism development is successful, new employment oppor- tunities created by the increased activity will be the harbinger of social change in the same way that any form of economic development will change the consumption habits, the location and the behaviour of the local population. These changes will be stimulated further by the introduc- tion of new or enhanced forms of communications, transport and infrastructure primarily pro- vided for tourism development. These latter factors may also be considered to be indirect socio-cultural impacts but this time they are associated with many types of economic develop- ment, not just tourism. However, the diversity of productive sectors associated directly and indirectly with the tourism industry is such that these types of socio-cultural impacts will prob- ably be more widely spread as a result of tourism development than any other industry. As an economy grows and develops there will probably be an increase in income levels and the proportion of the population involved in the monetised sector. This will alter the con- sumption patterns of the local population. Such changes, if they include consumer durables such as television, videos and radio, will expose the local population to a greater range of wants and, in so doing, speed up the process of social change. These effects, because they are a result of increased income levels and consumer spending, may be seen as being induced socio-cultural impacts. This latter type of socio-cultural impact will also be evident irrespec- tive of the type of economic catalyst that generated the development and is not uniquely attributable to tourism development. The magnitude of the direct socio-cultural impact associated with tourism development will also be determined by the extent of the difference in socio-cultural characteristics between hosts and guests. Inskeep (1991) suggests that these differences include: ● basic value and logic system; ● religious beliefs; ● traditions; ● customs; ● lifestyles; ● behavioural patterns; ● dress codes; ● sense of time budgeting; and ● attitudes towards strangers. To add further complexity to our understanding of the problems, the speed of development and change will have an important role in determining the magnitude of the socio-cultural changes because time allows for the process of adaptation. Compounding the issue further is the fact that the tourists’ cultures when abroad (it is probable that the tourists will represent several different cultures) are different from the tourists’ cultures at home. In other words, tourists often take on different attitudes and adopt different codes of behaviour when they are on vacation and away from their normal environment. As discussed earlier, the socio-cultural impacts associated with tourism can be either positive or negative. One of the positive impacts highlighted by de Kadt was the exchange of cultural infor- mation, ideas and beliefs. But tourism can also be used to help stimulate interest in, and conserve aspects of, the host’s cultural heritage such as in Petra, Jordan, York in the United Kingdom and Machu Picchu (the lost city of the Incas) in Peru. This is a significant positive socio-cultural impact and extends over ancient monuments, historic sites, arts, crafts and cultural ceremonies and rituals. If tourists appreciate the cultural heritage of a destination, that appreciation can stimulate the hosts’ pride in their heritage and foster local crafts, traditions and customs. The negative socio-cultural impacts are sometimes the result of direct contact and the dem- onstration effect and these can distort the traditional crafts and customs into shorter, commer- cialised events that offer the host community little in the way of rich cultural experience. 202 Chapter 9 The Socio-Cultural Impact of Tourism
- 228. Negative socio-cultural impactscan also be generated if the tourism development is not man- aged properly and the full economic potential of that development is not realised. For instance, foreign employment in tourism-related jobs and foreign investment in tourism projects both add to the local resentment of tourism development. The exclusion of hosts from certain tourist facilities (such as private beaches, casinos and transport services such as the Sky Train in Bangkok where locals have been excluded by high prices and limited flexibility of the tourism route) will further increase the pressure of resentment and may create conflict between the host population and the tourists. As with any form of economic development, the new income-earning opportunities created by tourism development are unlikely to be evenly distributed across the destination. This may give rise to some members of the host community feeling resentful and antagonistic towards tourism development. Tourism destinations such as Jamaica in the Caribbean have experienced social problems because tourism development was confined to the north and western coast, although more recently attempts have been made to redress this imbalance. In tourism’s favour, it is generally developed in areas where there is little in the way of competing industries (par- ticularly manufacturing); therefore it helps provide employment opportunities in areas where they may be most needed. The creation of job opportunities with higher wage rates than those paid by the more traditional industries of fishing and agriculture can create social pressures between hosts who occupy these posts and their families and peers who do not. A major problem can also occur because of a real (and sometimes only apparent) difference in wealth between the tourists and their hosts. It is true that there are occasions when the tourists are generally much wealthier than the hosts with whom they come into contact. However, this difference may be exacerbated by the fact that tourists exhibit spending patterns and behaviour that is very different from their norm, simply because they are on vacation. The normal spend- ing habits of tourists is not information readily available to the average host. Furthermore, the difference in wealth between tourist and host may not be as severe a problem as initially per- ceived given the fact that the vast majority of international tourism takes place between indus- trialised countries and not between industrialised and developing countries. When attempting to measure the level of irritation generated by tourist–host contact, Doxey (1975) drew up the following Index: 1. The level of euphoria – the initial thrill and enthusiasm that comes along with tourism development results in the fact that the tourist is made welcome. 2. The level of apathy – once tourism development is under way and the consequential expan- sion has taken place, the tourist is taken for granted and is now seen only as a source of profit-taking. What contact is made between host and guest is done on a commercial and formal footing. 3. The level of irritation – as the industry approaches saturation point, the hosts can no longer cope with the number of tourists without the provision of additional facilities. 4. The level of antagonism – the tourist is now seen as the harbinger of all ills, hosts are openly antagonistic towards tourists and tourists are regarded as being there to be exploited. 5. The final level – during the above process of ‘development’ the host population has forgot- ten that all they once regarded as being special was exactly the same thing that attracted the tourist, but in the rush to develop tourism circumstances have changed. The social impact has been comprehensive and complete and the tourists will move to different destinations. Although we have discussed a wide range of approaches to the study of the socio-cultural impact of tourism, there are some very strong common strands. If the typology used by Valene Smith is linked to the host–guest interaction suggested by Doxey, within the framework pro- posed by Butler and Plog, then the commonality can be seen. Figure 9.2 shows each of these theories combined within a two-dimensional frame. Although Figure 9.2 presents the various approaches within a single framework, the frame- work is a static one. This means that it is still hampered by the fact that the dynamics of the process are not reflected and thus its practical applicability is severely limited. The Sociological Basis of Tourism Development 203
- 229. EXPOSURE TO TOURISM(MATURITY) I N T E N S I T Y O F T O U R I S M Allocentric Midcentric Psychocentric Individual mass tourism (annoyance) Independent traveller (apathy) Explorer Drifter (euphoria) Organised mass tourism (open antagonism) The approaches to studying the socio-cultural impact of tourism Figure 9.2 Some General Negative Socio-Cultural Impacts of Tourism There is a wide variety of ways in which the development and operation of tourism can create social tensions and impact on the integrity of the local culture. The most obvious and direct effect is the bringing together of two different cultures and this is an issue that threads its way throughout this chapter. However, the socio-cultural impact of tourism may arise from some general but less obvious factors. Economic factors The majority of tourism activity takes place between the industrialised economies of the world. However, where tourism takes place between the industrialised and the less developed destina- tions or regions, there can be an enormous imbalance of economic power between the tourists and the hosts. Where tourists are much wealthier than the people with whom they come into contact there is likely to be some attempt at emulation as well as some resentment. This may be reflected in behaviour, dress and spending patterns. Furthermore, where tourism results in the migration of labour from rural to urban areas and attracts workers from the traditional sectors, there could be a growing inequality in the wealth of the local residents as some of them enjoy the higher wages of the tourism sector. This can also lead to social tensions. But it should be borne in mind that the latter channel of economic inequality will be present with any form of economic development. The tax burden on the local residents may be increased in order to meet the growing demands for better infrastructure (roads, water supply, sewage treatment, etc.). Where tourism drives improved infrastructure without the costs being reflected in the tourism product, there will be growing social tension as residents may struggle to meet the higher tax demands. 204 Chapter 9 The Socio-Cultural Impact of Tourism
- 230. Labour factors The economicfactors demonstrated how tourism can attract workers from other industries. The level of antagonism with respect to tourism can be exacerbated where the employment opportu- nities for workers within the tourism industry are limited to lower level, front-line workers. In such cases the senior and middle management positions are filled by experienced staff from outside the country (often from the country that has provided either the investment or the tour- ists). Even where a significant proportion of the managerial staff is local, their contact with other non-local staff and the tourists may cause a change in their consumption habits so that they have a high propensity to consume imported goods. Although tourism may be an industry that is associated with higher wages and salaries than the more traditional industries such as farming and fishing, there are many cases where the working conditions are found to be less than desirable. Child labour, casual contracts, part-time jobs with no training are all too common. The International Labour Organization (ILO) estimate that some 10–15% of all employees in the tourism industry are below the age of 18. Children under the age of 12 are frequently employed in devel- oped and developing countries to work in tourism-related businesses. This, is not unique to tourism as child labour has always been apparent in the primary sectors (such as agri- culture) and manufacturing sectors (such as textiles). Tourism, because of its relatively high use of female labour and also its dependency upon land usage, can bring with it some far-reaching socio-cultural impacts. The importance of the tourism economy to Spain is significant. In 2014, the total contribution of tourism counted for 15.2% of GDP in Spain, one in sixth of their employment and international tourists contributed to around half of total tourist spending. Regionally, the Balearic Islands are attracting around 18% of total inter- national arrivals to Spain, ranking as the second most popular tourist region in Spain. Tourism employs a third of the islands total employment and count for half of its economic output. The tourism industry has just started picking up after five years of weak growth following the global financial crisis. As an industry tourism has witnessed continuous growth but this is true more so in some areas than others with tourist demand shifting location as a result of external factors rather than diminishing. This means that one destination’s loss is another’s gain. In the summer of 2016 Spain has seen itself even more popular with tourists. With security issues in destination offering similar products to Spain in Northern Africa and the migration crisis in the Eastern Greek islands, the South West of Europe has become even more popular with tourists. Some of the destinations in Spain have seen up to a 50% growth in tourist arrivals compared with 2015. This increase in tourist arrivals however, puts pressure on the resources. These include water and car park spaces. In Ibiza where reserves are already tight, 50% of the growth in tourist arrivals means that the population in the island doubles during the peak and hotter seasons, putting extra pressure on water supplies, which unlike other types of resources cannot be substituted. In other places such as Palma de Mallorca, the extra population creates pressures on car parking, where it forces the local population to park further and is accompanied by disorderly behaviour by the high numbers of holiday makers. This year in particular these islands have seen a number of graffiti attacks stating “ tourists go home”. With the importance of tourism to the economy of Spain and the Balearic islands, combined with the current state of the national economy, Spain cannot afford to lose its tourism market. Yet, the additional pressure on locals seems to have triggered the question in the minds of at least some of the population as to whether this type of growth is desirable. MINI case study 9.1 ‘Tourists go home’: Spanish tourism surge brings backlash Some General Negative Socio-Cultural Impacts of Tourism 205
- 231. Behavioural and demonstrationfactors If the tourists are not aware of, or care for, the local customs they may behave in a way that creates severe social friction between tourists and residents and, ultimately between the residents them- selves. The planet is rich in customs and every custom gives the tourist an opportunity to adapt to the local norms or to insult their hosts, often without ever knowing that they have done so. Slurp- ing of soup may be seen as the result of poor table manners in the United Kingdom but is an expression of appreciation in China; putting your chopsticks vertically into the bowl of rice in Japan or China is a symbol of death and is usually only seen in funeral ceremonies; showing the soles of your shoes is considered offensive in a number of countries including Thailand and Iran; inappropriate dress in Muslim countries can cause offence, so too can inappropriate consumption (such as alcohol) or nude sunbathing in countries that may be conservative in this respect. There are many destinations in the Middle East, the Far East, the Caribbean and the South Pacific that would find the lack of adherence to local social behaviour codes difficult to tolerate. Those that are exposed to such inappropriate behaviour or dress codes may find that, over time, they come to accept them and even emulate such behaviour, causing tension between the residents. Resource use factors A great deal of tourism is concerned with real estate development and this places high demands on land use. These demands compete with alternative local use and often result in land price inflation. Where land price inflation occurs it can create social tensions as local residents are priced out of the market for local houses and apartments. Environmental and cultural damage resulting from tourism can lead to significant social ten- sions. This is a common problem in areas where there are heritage sites and examples can be found in places like Paphos, where there was open pilfering by the tourists and residents from the site of the Byzantium Fort. It is not only the man-made heritage that is being stolen; pre- cious and irreplaceable fossils in areas such as the Petrified Forest of Arizona are also subject to looting by smugglers and tourists. Similarly, where the social tensions increase there can be vandalism and wilful damage to heritage sites. Competition between locals and tourist businesses for local resources is commonplace, such as the use of a beach or mountain area. The economics of the situation gives the tourist busi- nesses the upper hand in such competitions and the locals often find that their use of the facili- ties are removed or downgraded. Discussion Questions 1. Would it be better, from a socio-cultural point of view, to isolate tourists from the local population by putting them into private resorts or to integrate them by encouraging tourists to existing sites? 2. What policies could be implemented to mitigate the negative impacts and yet create benefits that would appeal to Spanish residents? 3. What controls would you implement and what indicators would you monitor to ensure that the scheme is working effectively? Some Specific Negative Socio-Cultural Impacts of Tourism Sex The fact that tourists will travel abroad to enjoy uninhibited casual sexual encounters is not a new phenomenon. Sexual exploitation has grown as rapidly as tourism in many destinations. The early European tourists were to some extent motivated by the liberal attitude towards sex in 206 Chapter 9 The Socio-Cultural Impact of Tourism
- 232. some of theThird World countries they visited. More recently, a major tourism market has grown up around sex tourism and destinations such as Thailand, Gambia and some of the Cen- tral European countries have actively marketed the sexual content of their products. The prolif- eration of AIDS has done much to dampen the rapid growth of this element of the tourism industry but it is still a significant part of the market. It is questionable whether tourism created the social disruption associated with the sex trade or whether the sex trade has stimulated the tourism market. But, as with all forms of prostitution, it is impossible to be conclusive as to the rights and wrongs of either party. Certainly the growth of paedophile activity is one element of the tourist industry that is outlawed in many tourist-generating countries and can only be pur- sued under the guise of international tourism. The United Nations defines sex tourism relating to children to be ‘tourism organised with the primary purpose of facilitating the effecting of a commercial sexual relationship with a child’. The growth of such activities is often supported by a network of facilitators ranging from pimps and brothels through to the seemingly more respectable taxi drivers and hotel workers where, for instance, at major sporting events in America, girls under 12 years of age are sometimes trafficked. The Internet has added to the problem by creating an international communication network that can market these services on an international scale. So prolific is this problem that agencies such as ECPAT have been set up to campaign against child prostitution. The acronym stands for ‘End Child Prostitution, Child Pornography and Trafficking of Children for Sexual Purposes’. Sex tourism is prolific in many destinations and covers all permutations from males seeking females, females in search of males, same-sex encounters and even catering for those in search of group sex or those trying to fulfil fetish desires of some sort or other. All forms of sex tourism carry with them dangers not only to the participants but also to the destinations and tourist- originating communities as a whole. Given the current world where AIDS and other sexually transmitted diseases are prevalent one would have thought that the development of the tourism based on offering sexual activities would have been in decline. However, many tourists, particularly those from industrialised countries, may expect to relax their sexual morals during a vacation and this can lead to a thin line being drawn between destinations that are primarily trading on sex and those that offer an environment wherein tourists can relax their sexual morals. Certainly there seems to be no limit in the imagination or permutations of sexual offerings associated in some tourism destinations. Furthermore, sex tourism is often linked with organised crime, making destinations that use sex as a tourist attraction vulnerable to a wide range of serious consequences. Crime The link between tourism and crime is hard to establish. Many writers, such as Mathieson and Wall (1982), have suggested the link but find it hard to establish whether crime increases simply because of the increased population density (urbanisation) or whether it is more specifically associated with tourism. Clearly the presence of large numbers of tourists carrying relatively large sums of money and valuables with them provides a source for illegal activities including drugs trafficking, robbery and violence. Brazil, Florida and Jamaica are just three of the many destinations that have been the subject of international press coverage because of acts of violent crimes against tourists. Tourists are sometimes obvious victims of crime where they are clearly identifiable by language or colour and can be expected to be carrying significant sums of money with them. Tourism is often the catalyst for the growth of gaming activities and a number of destinations have used casino developments as a means of attracting tourist spending. Unless properly monitored and controlled, such developments can induce social behaviour that is detrimental to social cohesion. Where hotels attempt to protect their guests by the use of armed agents this can often inflame the social tension between tourists and local residents. Health The problem of AIDS has already been mentioned. However, there are other less newsworthy diseases that can be transmitted when people from different communities interact, such as the Some Specific Negative Socio-Cultural Impacts of Tourism 207
- 233. recording of morethan 8,500 cases of malaria in the United Kingdom largely through tourists and visiting friends and relatives (VFR) traffic. Although often not fatal, these illnesses can cause social and economic stress to the host population who may have less immunity to the diseases than the tourist population. Fears of the Zika virus have had an impact on tourism demand, where vulnerability to the mosquito-borne disease, linked to microcephaly and other fetal brain damage, has led to some destinations becoming less popular. Where tourism growth is rapid and unplanned there can be infrastructure failures that lead to health hazards. Tourism activity can also be suddenly curtailed by outbreaks of health scares such as those related to SARS, Avian Flu, Swine Flu and Foot and Mouth Disease. The media are highly influential in the way that tourists and tour operators respond to outbreaks of disease, for instance during the outbreak of SARS (2002–2003) the media created an image of an outbreak of pandemic proportions and some destinations, such as Malaysia, suffered severely even though they did not have a single registered case of SARS. In the United Kingdom, during an outbreak of Foot and Mouth Disease (2001), the image of the United Kingdom was severely damaged by pictures and videos of mountains of sheep and cattle carcasses being burned in an attempt to curtail the spread of the disease which closed off large swathes of the British countryside. Although agriculture was compensated to some degree by the government for its losses, the same was not true for tourism where many businesses fell victim to the closure of the countryside. Slum tourism Slum tourism, where relatively wealthy tourists visit areas of extreme poverty is not a new phe- nomenon and was something that was practised back in Victorian England and subsequently in the United States, when wealthy people visited some of the deprived areas of London or Man- hattan to see how poor people lived. Organised tours to slums, Favelas or Townships are now given greater publicity, with some notable destinations such as those found in India, Brazil and South Africa. This type of tourism raises some moral and ethical questions regarding the ‘zoo- ism’ aspects of visitors going to observe people living in squalid conditions. However, if oper- ated ethically, such forms of tourism can generate income and employment opportunities to those living under conditions of extreme poverty and can act as a catalyst to further develop- ment. Again the impact of tourism can be on the visitors as well as the hosts, and visits to areas of extreme poverty and deprivation can change the attitudes and behaviour of the relatively wealthy visitors towards poor people. Dark tourism Dark or ‘Thanotourism’ refers to the more macabre side of the tourism industry where tour- ists visit sites where shocking events have occurred. It covers a spectrum of darkness in that some events can be very distant, such as the eruption of Mt. Vesuvius in AD 79 which destroyed Pompeii which has been a major tourist attraction for more than 200 years. Tourists can go and visit the area and not only see some of the buildings that were excavated, but also see representations of figures of people who died in excruciating circumstances. In contrast to this, the site of the Twin Towers in New York City (Ground Zero) went from being a site of mass death in September 2001 to being a major tourist attraction with over 3 million visitors in 2002. Sites such as Auschwitz, where over a million Jews or ‘enemies of the state’ were transported, or as small as a quiet village in England (Soham), where two schoolgirls were murdered, attract tourists in their thousands. There are clearly issues relating to the moral and ethical underpinning of such forms of tourism and where the line is drawn between what is human curiosity and what is exploitation. (Issues relating to dark tourism are discussed in greater detail in Chapter 12.) Other aspects Following the lead of Cohen (1988), it is possible to categorise the key themes that characterise the interface between culture and tourism. There are a variety of ways in which such categories 208 Chapter 9 The Socio-Cultural Impact of Tourism
- 234. can be constructedbut the following issues reflect the major concerns that are currently being debated: ● Commodification – where the demands of tourism lead to the mutation and sometimes destruction of the meaning of cultural performances and events. Tourists are likely to have different time-frames and expectations from local residents and this may result in religious rituals and traditional ethnic customs and rites being changed to suit the needs and wishes of tourists. This process is sometimes referred to as reconstructed ethnicity. ● Staged authenticity – where ‘pseudo-events’ are presented to satisfy tourists’ needs for new (simulated) experiences, such as the Fijian firewalkers (see below). ● Standardisation – where the tourists’search for the familiar leads to a loss of cultural diversity. ● Alien cultural experiences of tourists – which examines the apparent inability to enjoy meaningful cultural experiences without travelling to different environments. Commodification Commodification is a long-standing criticism relating to tourism’s effect on culture and art. Crafts, ceremonies and rituals are often driven into an exploitation stance, abbreviated, made more col- ourful, more dramatic and spectacular in order to capture the attention and imagination of an audience that often does not possess the underlying knowledge/experience that would make the unadapted version appealing. Countless examples can and have been cited, from the sale of concrete paving slabs with carvings of Bob Marley on them in Jamaica, the Bula Fiji carved wooden knives and clubs, to the Polynesian dances of Western Samoa and the limbo dancers of the Caribbean. Where culture becomes a commodity for financial transactions it is difficult to be objective. Although it is true that the demands of people from alien cultures who are operating on a very tight and sometimes fixed time budget are very different from the local demands, it is sometimes this foreign demand that enriches and/or preserves decaying and dying skills and performances. Staged authenticity With growing public awareness regarding cultural and ethnic differences there has been increas- ing demand for tourism products that offer cultural authenticity, that is, environments where the tourists can ‘get behind the scenes’ to meet and observe the real people. Although, in the Plog sense, this may be considered a great leap forward in perception and understanding by volume tourists and a movement back from the psychocentric scale of the tourist market, it can also be regarded as being a signal for impending cultural devastation for some destinations. This repre- sents the social impact dilemma of post-1980 tourism development. In order to differentiate their product from other tourism products on the market destinations have highlighted environmental, climatic and cultural differences. In this last instance, they are using their cultural heritage as a promotional device to attract increasing numbers of tourists. Although this may be considered to be a positive step in achieving greater awareness concern- ing cultural differences and, perhaps, a greater empathy between tourist and host, it also exposes a deeper layer of the sociological structure and thereby risks further ‘contamination’. However, there are ways of differentiating the tourism product, providing tourists with suffi- cient cultural exposure to satisfy their demands while preserving the true cultural identity of the host population. One such way is the use of staged authenticity whereby the host population provides a more realistic performance of cultural heritage than existed before, but still ensures that the tourists do not manage to penetrate behind the stage curtains. Figure 9.3 demonstrates the concept and dangers of staged authenticity. In Figure 9.3 the arena is divided into three distinct areas: A – the previous level of tourist penetration into the host culture; B – the new level of cultural penetration that is considered to be authentic by the tourist but is, in fact, staged authenticity; and C – the true cultural heritage of the host society that maintains its integrity by keeping tourists on the other side of the firewall curtain. Some Specific Negative Socio-Cultural Impacts of Tourism 209
- 235. Although effective inthe short term, this approach to cultural impact containment can lead to increasing levels of penetration when the firewall curtains are continually retreating in order to provide greater tourist experiences and diversity within a competitive market. Even if the social firewall does not retreat there is a danger that some of the tourists will manage to penetrate beyond the curtain. Eventually there will be nowhere for the host population to maintain the integrity of their culture. There is an additional danger in the form of a gradual cultural impact. The very act of staging the authenticity of the culture can blur the true boundaries of the local heritage and, in so doing, distort the cultural heritage that is being maintained behind the firewall curtain. It has also been argued that the so-called authenticity of culture is a fleeting moment in the development calendar. Culture is a dynamic living concept and changes continually in order to capture and embrace the needs of society in the present time period. From this point of view culture continually runs through a process of being invented and reinvented and so, in this sense, all of culture can be defined as staged authenticity. An example of the dynamics of cultural performances can be seen in the Fijian firewalkers. Like the limbo dancers of the Caribbean, the firewalkers of Fiji are, today, almost exclusively found in cultural centres or hotels. In fact, they can be found wherever tourists are willing to exchange money for the privilege of watching these ancient customs that are packaged and transformed into dinner-side entertainment. The Fijians who perform the ritual known as Vilavilairevo (which translates literally as ‘jumping into the oven’) accept that the walking across the heated stones of a lovo (earth oven) is now a com- mercial event. It is rarely performed as a sign of respect for powerful and important visitors and never as a commemorative ritual to celebrate (and test the legend of) Tui Qualita. Nor does it any longer signify the conquering of the lovo in which a defeated warrior may be buried and baked. The tourists who visit Fiji often have no prior information about the origin of this particular form of firewalking but it does little to detract from the spectacular and impressive displays. The fact that the tourists, in spite of any narrative that may accompany the firewalking events, are unaware of the true meaning and signifi- cance of the ritual does not mean that tourism’s mutation of the custom has created a gulf between host and visitor. That gulf existed prior to the performance and may well be one of the reasons why the tourist chose that destination. The commercialisation of the event in itself is also not wholly bad in that it generates much-needed currency for communities and, given its redundancy as part of modern- day Fijian culture, preserves a custom and instils pride in the history and culture of the Fijian people. Standardisation Tourists, although they may search for unfamiliar environments and cultures, often search for familiar facilities. Examples such as McDonald’s demonstrate this effect quite clearly. This Previous level of cultural penetration A B C Staged authenticity True cultural heritage Cultural curtain Tourists Levels of cultural penetration Figure 9.3 210 Chapter 9 The Socio-Cultural Impact of Tourism
- 236. introduces a numberof factors into the development scenario. First, there is the development of superstructure that might be quite different from that normally found in the local environment. Secondly, the operation of those facilities may introduce work practices and systems that are different from those normally found in the local economy, particularly their employment struc- tures and conditions as well as their purchasing strategies. Finally, by building familiar struc- tures within unfamiliar environments there is a loss of diversity that is as real to the socio-cultural environment as the loss of a species may be to biodiversity. This issue becomes more problem- atic as you move into the high-volume tourist markets where destinations must not appear too strange if they wish to capture large segments of the market. Alien cultural experiences of tourists This issue revolves around the apparent inability of tourists to take part in or enjoy meaningful cultural experiences within their home environment. As with many of the aspects that underlie the motivation of tourists, it is not so much the inability of tourists to enjoy meaningful cultural experiences within their home environment – indeed many do so without even recognising the fact – it is more the reflection that tourists search for different – or alien – experiences. The desire to experience different climatic conditions (sun, rain or snow) and different environmen- tal surroundings (deserts, rainforests, cities or rolling green fields) is willingly accepted. There- fore, it is not an absurd proposition to suggest that tourists may actively seek out cultural experiences that are deliberately different from their norm – indeed such motivation is becom- ing an increasingly important aspect of twenty-first-century tourism. Photograph 9.2 Some General Positive Socio-Cultural Impacts Associated with Tourism Tourism fosters local pride Tourism can inspire pride in a destination’s heritage. Often we forget the value of the things that surround us and only when seen through the eyes of tourists do we revalue our culture. Some General Positive Socio-Cultural Impacts Associated with Tourism 211
- 237. Ceremonies and ritualsbecome jaded over time and can lose their appeal to local residents. Tourism can put new life into such ceremonies and make them come alive once more. The same is true regarding old skills and crafts that, without tourism, may have ceased to exist in a modern world where they lose relevance. Of course, it can be argued that if these skills or crafts were past their sell-by date and would have ceased to exist then they should be allowed to have a peaceful natural death and not be preserved as something that is ‘quaint’for the sake of tourism. Tourism for socio-cultural awareness and peace Tourism takes people to new places and broadens their understanding and knowledge of other cultures and environments. This is an educational process and is an important part of the indus- try. If channelled properly this education can lead to a greater awareness, sympathy and admira- tion for other societies. This cultural exchange that takes place between tourists and local residents can help foster peace between communities. So strong is the belief in the relationship between tourism and peace that in 1986 the International Institute for Peace through Tourism (IIPT) was set up. The IIPT has organised several conferences since its inception and in Novem- ber 2000 made the Amman Declaration that set out the fundamental objectives of the IIPT, which was ratified by more than 450 delegates from 60 countries and included the chief execu- tive officers of 22 major international tourism corporations. The Amman Declaration was a far- reaching document that attempts to incorporate socio-cultural, environmental and economic objectives under a single banner. Tourism provides shared infrastructure When tourism is developed in a destination the local infrastructure is often enhanced to meet the needs of this development. The local community can find that the quality of their life is signifi- cantly enhanced through being able to enjoy this improved infrastructure. This can be as simple as the increased health afforded by improved water supply and sewage treatment to the more complex issues surrounding the provision of an airport and access to regular international flights. New sporting venues, entertainment facilities, restaurants and a better range of food and beverages available for consumption are just some of the many positive side effects that tourism can create for the local population. Tourism can provide direct socio-cultural support The tourism industry can provide much-needed funds to help restore heritage sites or conserve natural and cultural sites. Examples of such good practice can be found on the Tour Operators Initiative website (http://www.toinitiative.org/index.php?id=48). They include examples such as the Travel Walji’s case, where the company is not only providing direct financial support to conservation in the Karakorum region of South Asia but is also providing indirect support to the area through its tourism development aid. Tourism can yield enormous socio-cultural benefits as well as devastating costs. The net effect depends upon the responsibility exercised by the various stakeholders of the industry, including the public and private sectors as well as the tourists and residents. To be able to evalu- ate the net socio-cultural benefits of tourism it is necessary to be able to measure the benefits and costs in an objective and acceptable framework. Methods of Measuring the Socio-Cultural Impact of Tourism Data collection The socio-cultural factors influenced by tourist activities are, in general, the most difficult ones to measure and quantify. Whereas the economic and many of the environmental indicators do lend 212 Chapter 9 The Socio-Cultural Impact of Tourism
- 238. themselves to objectivemeasurement, the socio-cultural impacts are often highly qualitative and subjective in nature. The nature of socio-cultural impacts can range from those impacts that are obvious and measurable, such as the outbreak of particular types of disease and/or infection, to those that are hard to identify and measure such as changes in customs and codes of conduct. On the other hand, there are those impacts that may be identifiable, such as increased crime rates, drug abuse and prostitution, but are difficult to attribute to tourism rather than to other factors of influence (such as media intrusion, i.e. the fact that these issues are on TV and in movies and magazines, and so are not necessarily the result of observing the behaviour of tourists). There is a wide range of data sources that may be utilised in order to examine the social impact of tourism. It is important to recognise that some of these data may not be exclusively related to tourism activity. Where causes of variable changes are multivariate then deeper analysis must be undertaken in order to filter out other influences. Complete filtering is unlikely to be possible. Data collection sources can be categorised into primary and secondary. Primary data can be collected by undertaking household and visitor surveys. This method of data collection is time- consuming and costly. It is also sometimes difficult to maintain the appropriate level of objectiv- ity and the resident awareness questionnaires require very careful construction if they are to provide data that are both unbiased and in a form that is user-friendly. Other forms of primary data collection include the interviewing of focus groups, key informants, Delphi analyses and participant observation. Table 9.2 distinguishes between interview/questionnaire/Delphi approaches and those that use observation techniques. Primary data Secondary data Indicators (changes in) Survey Observe Data Media Crime rates/levels × × × Prostitution × × × Drug abuse × × × Promiscuity × × × × Gambling × × × Family relationships × × × Social values × × × × Creative expressions × × × Traditional ceremonies × × × Safety levels × × Health × × Community organisations × × × Infrastructure × × × × Collective lifestyles × × × Economic independence × × × Population dispersion × × Cultural commercialisation × × × × Host/tourist hostility × × × Demonstration effects × × Economic and social dualism × × × Psychological stress × × × Living standards × × × Data from different sources Table 9.2 Methods of Measuring the Socio-Cultural Impact of Tourism 213
- 239. There are avariety of secondary sources for gathering information with respect to socio- cultural impacts. These include criminal activity statistics, notification of infectious diseases statistics, employment and unemployment data, newspaper reports/articles and other media coverage. Some of these data are quantitative in nature whereas others are quite subjective and care must be taken in the interpretation. Table 9.2 distinguishes between those data that are col- lected, assimilated and tabulated for other purposes, and information (largely qualitative) that can be gleaned from scanning past and present newspaper cuttings, television and radio news and documentary programmes and other media forms of covering current affairs. The two fundamental means of assessing socio-cultural impacts in a destination are by sur- veying both tourists and local residents. There are several factors that should be taken into account when undertaking a local resident survey. First, it is important, as with all sampling procedures, to obtain a representative sample of the population. This may seem obvious, but several social impact studies have relied entirely upon random sampling of the immediate population (those directly in the vicinity of the tourist facilities). In order to gauge the true impact and its level of penetration it is important that the survey population is seen as being wider than this. Secondly, it is important to establish whether or not the respondent correctly identifies who is a tourist. The misperception as to what constitutes a tourist can render local resident surveys misleading. Thirdly, in areas sub- ject to seasonality, it is also important to undertake the survey at different times of the year. Quite often a good indicator of the magnitude of the social impact of tourism is how quickly the levels of awareness, resentment and other characteristics decline once the peak season recedes. Where there is a significant level of decline shortly after the peak season one can assume that the impacts, although severe during the peak period, are not too deeply embedded in the local population. Where remedial action is required in visitor management flows or infrastructural investment, there is every chance that these actions will be successful. If the levels of resentment continue to run high during the off-peak periods then there is a distinct possibility that any remedial action will need to be fundamental, even to the point of reducing the peak levels of tourism flows. In order to complement the work that has already been undertaken in the field of economic and environmental impacts and to provide a common framework for the analysis of socio-cultural impacts, researchers at Bournemouth University have attempted to embed the process of socio- cultural impacts within the economic and environmental model structure. The inclusion of socio-cultural impacts within such a model allows for the direct, indirect and induced impacts to be considered as well as providing a vehicle for the study of social and cultural changes as a result of other (non-tourism-related) factors. At present the number of socio-cultural variables that can be included at such a detailed and quantifiable level are limited but include indicators such as: ● the ratio of tourists to host population; ● the number of contacts between hosts and guests for transactions; ● the number of contacts between hosts and guests while sharing facilities; ● the number of contacts between hosts and guests for socio-cultural purposes; ● differences between host and guest age distributions; ● percentage of local population coming into contact with tourists; ● percentage of population working in tourism-related industries weighted by indirect and induced employment; ● tourist/host clustering; and ● the nature of tourism. The above data should be collected and analysed at relatively frequent intervals. Some of these data are readily available in most countries and systems can be put into place to show those ratios on a weekly or monthly basis. Others are more difficult to acquire and may only be available at discrete time intervals. 214 Chapter 9 The Socio-Cultural Impact of Tourism
- 240. 1. What arethe major approaches to studying the socio-cultural impacts of tourism? Create your own list of what you think are socio-cultural impacts and then check this chapter to compare your findings. 2. Assess the models have been put forward to explain the development of tourism and its impact on the local population. Do you think some members of the population benefit more than others? If so, explain why. 3. What are the main socio-cultural dangers associated with allowing sex tourism or gambling to be platforms for tourism development? 4. Identify three direct positive socio-cultural impacts of tourism and three indirect negative socio-cultural impacts of tourism. 5. What are the major difficulties involved in measuring the socio-cultural impacts of tourism and what sources of data are available? Self-Check Questions Conclusion This chapter has examined the nature and determinants of the socio-cultural impacts associated with tourism development. In so doing, the nature of the tourism development process has been explored together with the influence of socio-economic factors in driving the development of tourism. The typological studies undertaken by researchers such as Smith and Plog have pro- vided a framework which facilitates the further development of socio-cultural impact method- ologies and that framework can be used to show the commonalities of the models suggested by Butler and Doxey. But, it was noted, this framework is static and is severely limited by the nature of the variables used. The development of tourism can have specific implications for incidents of crime and health, as well as influencing the individual and collective lifestyles of the local population. It was also noted that there are positive aspects to tourism’s socio-cultural impacts and that these should not be neglected when evaluating the performance of tourism in a given destination. It is also important to recognise the fact that tourists can also transmit socio- cultural impacts back to the populations of the originating countries. The problems associated with measuring either the desirability of preserving the cultural heritage of a destination or determining how this is influenced by the presence of tourists make it a difficult area of research. The staged authenticity approach to tourism development can pro- vide a firewall in order to maintain the integrity of the local cultural heritage. However, staged authenticity can also act as a catalyst for further cultural penetration and form the ‘thin end of the wedge’ for further intrusion. There are data available that can be used to analyse the magnitude and direction of socio- cultural impacts and these were examined in order to suggest a framework for an integrated tourism impact model. Cultural impacts Impacts of tourism on Majorca https://www.youtube.com/watch?v=_dWw9wAKXoY Negative impacts of tourism https://www.youtube.com/watch?v=O-CUtL5k9rg The dark side of Costa Rica tourism https://www.youtube.com/watch?v=GSGznv9IORk Youtube Youtube 215
- 241. Known for itsgreen approach to tourism, not everything in the Cost Rican garden is green. How can we avoid this type of development? Punishment affects a few, but this is the symptom of something more fundamental. Discuss. Commodification: does it always have to be bad? https://www.youtube.com/watch?v=04JOkZ-F-rA Butler, R.W. (1980) ‘The concept of a tourist area cycle of evolution: implications for mana- ment of resources’, Canadian Geographer 24(1), 5–12. Caiazza, R. and Audretsch, D. (2015) ‘Can a sport mega-event support hosting city’s economic, socio-cultural and political development?’ Tourism Management Perspectives 14, 1–2. Cohen, E. (1984) ‘The sociology of tourism: approaches, issues and findings, Annual Review of Sociology 10, 373–92. Cohen, E. (1988) ‘Authenticity and commoditization in tourism’, Annals of Tourism Research 15, 371–86. Daldeniz, B. and Hampton, M.P. (2013) ‘Dive tourism and local communities: active participa- tion or subject to impacts? Case studies from Malaysia’, International Journal of Tourism Research 15(5), 507–20. Deery, M. Jaogo, L., and Fredline, L. (2012) ‘Rethinking social impacts of tourism research: a new research agenda’, Tourism Management 33(1), 64–73. De Kadt, E. (ed.) (1979) Tourism: Passport to Development?, Oxford University Press, New York. Doxey, G.V. (1975) ‘When enough’s enough: the natives are restless in Old Niagara’, Heritage Canada 2(2), 26–7. Gill, A. and Williams, P. (1994) ‘Managing growth in mountain tourism communities’, Tourism Management 15(3), 212–20. Inskeep, E. (1991) Tourism Planning: An Integrated and Sustainable Development Approach, Van Nostrand Reinhold, New York. Kadt (1979) [to be supplied] Kim, W., Jun, H.M., Walker, M., and Drane, D. (2015) ‘Evaluating the perceived social impacts of hosting large-scale sport tourism events: scale development and validation’, Tourism Management 48, 21–32. Kim, K., Uysal, M., and Sirgy, M.J. (2013) ‘How does tourism in a community impact the quality of life of community residents?’, Tourism Management 36, 527–40. Mathieson, A. and Wall, G. (1982) Tourism: Economic, Physical and Social Impacts, Longman, Harlow. Plog, S.C. (1977) ‘Why destination areas rise and fall in popularity’, in Kelly, E.M. (ed.) Domestic and International Tourism, Institute of Certified Travel Agents, Wellesley, MA. Plog, S.C. (2004) Leisure Travel: A Marketing Handbook, Pearson Prentice Hall, Upper Saddle River, NJ. Prayag, G., Hosany, S., Nunkoo, R., and Alders, T. (2013) ‘London residents’ support for the 2012 Olympic Games: the mediating effect of overall attitude’, Tourism Management 36, 629–40. Price, M.F. (1992) ‘Patterns of the development of tourism in mountain environments’, Geojour- nal 27(1), 87–96. Saraiva, G.L. (2016) ‘Globalization, tourism and sustainable development: the multifaceted impact of tourism on development and poverty alleviation in Brazil’, CUNY Academic Works, http://academicworks.cuny.edu/cc_etds_theses/601 Smith, V.L. (1989) Hosts and Guests: The Anthropology of Tourism, 2nd edn, University of Pennsylvania Press, Philadelphia. Stokowski, P.A. (1996) Riches and Regrets: Betting on Gambling in Two Colorado Mountain Towns, University Press of Colorado, Niwot. References and Further Reading 216 Chapter 9 The Socio-Cultural Impact of Tourism
- 242. Major Case Study9.1 Norway is reaching breaking point because of Disney’s Frozen growth in numbers of 7.5% in 2015. Last northern summer, more than one million visitors flocked to the Lofoten Islands alone. It was good for a while, but some Norwegians are starting to grow cold on Frozen fans. The Lofoten archi- pelago’s public facilities are being exhausted, with prob- lems plaguing local waste disposal, public toilets and car parking. The environment is also taking a hit, with locals concerned about the severe erosion of paths leading to popular spots on the coastline. Residents on the islands have even dubbed small woodlands near a popular mountain climb ‘the forest of sh*t’ due to the mess left by tourists, The Guardian reported. Fredrik Sørdal, the mayor of the nearby town of Flakstad, said the growth in tourism was ‘challenging’. ‘In Flakstad we have, for example, become extremely unbalanced when it comes to tourism this year, and need to take many measures before next year,’ he told Norwegian broad- caster NRK. More than a million tourists were expected to flock to Norway between April and September. ‘This will mean more traffic,’ Mr Sørdal said. ‘Part of the road network consists of narrow and complex sections. I fear that [a] MANY of us can confidently say we’ve survived the global juggernaut that was the 2013 Disney epic Frozen. Queen Elsa and Olaf merchandise has been squared away out of sight, that damned theme song is finally out of our heads, and it’s been at least a year since we’ve heard someone say, ‘I mean, I know it’s a kids’ movie but I actually really enjoyed it.’ But while we all relish in having been unshackled from Frozen’s steely, all-conquering grip, spare a thought for Norway. Specifically, Norway’s suffering Lofoten Islands. These remote islands, north of the Arctic Circle, risk being overrun by tourists lured by the dramatic snow-capped scenes that inspired Frozen as well as a growing list of other Hollywood blockbusters filmed there. And authorities say the islands are reaching breaking point. Frozen, set in a fantasy kingdom inspired by Norway, was released in 2013 with the bacaking of the Norwegian tourist board and provided a huge boost to the country’s tourism sector. After its release, the film was attributed to a massive 20% rise in foreign visitor numbers to the country. Those num- bers are continuing to climb, with Norway recording a The Norwegian city of Bergen inspired the setting for the Disney animated film Frozen. Parts of the country now risk being overrun by tourists who still haven’t shaken off Frozen fever. Photograph 9.3 Major Case Study 9.1 217
- 243. Norway’s Lofoten Islandsis becoming overwhelmed by tourists, including crazed Frozen fans. Photograph 9.5 Elsa from Frozen. Photograph 9.4 218 Chapter 9 The Socio-Cultural Impact of Tourism
- 244. the Lofoten Islandsas he shoots scenes for the upcom- ing science fiction comedy Downsizing. The chief exec- utive of the Lofoten Explorer luxury cruise ship suggested the islands’ new-found fame was a double-edged dramatic accident, the accident we do not want to have here, is getting nearer day by day. Nature is vulnerable, and requires that we be much better prepared.’ Holly- wood star Matt Damon is currently causing a buzz on The picture-perfect fishing village of Reine, on the island of Moskenesøya in the Lofoten Archipelago. Photograph 9.6 Photograph 9.7 A cruise liner in the Norwegian Fjords. Major Case Study 9.1 219
- 245. premiered – tomore than one million in 2015. The small Spanish city of Osuna, where scenes set in Meereen were shot, is experiencing a similar surge in popularity. Source:LaurenMcMah,http://www.news.com.au/travel/world-travel/europe/ norway-is-reaching-breaking-point-because-of-disneys-frozen/news-story/ 5c0cf9cc3dfa5477dc3541c0c38d90b2, 11 August 2016 Discussion Questions 1. Films are a great way of promoting destinations and raising their profile, but can lead to unforeseen con- sequences when they attract tourists by their thou- sands. What can destinations do to control these surges of visitor arrivals? 2. When attracting tourists from international markets using concepts developed in another country, what do you think the socio-cultural impacts may be? sword. ‘It may be too much of a good thing if even more tourists come here thanks to the film (Downsizing),’ Gunnar Skjeseth told NRK. ‘We in the tour business have more than enough to do already, all year round. It is debatable whether we need more tourists.’ The storybook village of Bergen was reportedly the inspiration for Anna and Elsa’s home kingdom of Arendelle. After the film’s release Disney launched adventure tours through Norway, including visits to Bergen and treks through fjord country, which remain popular. It’s a phenomenon similar to what’s been dubbed the ‘Game of Thrones effect’, which has seen visitor numbers skyrocket at filming locations used by the HBO series. Game of Thrones has been cited as a key factor behind a surge in tourism in Norway’s Nordic neighbour, Iceland, which saw the number of holiday- makers rise from 566,000 in 2011 – the year the series 220 Chapter 9 The Socio-Cultural Impact of Tourism
- 246. Chapter 10 Sustainable Tourism LearningOutcomes This chapter focuses on the long-term tourism issues relating to the development and operation of tourism activities and issues related to climate change and how it may affect tourism. It is intended to provide you with: ● an understanding of the concept of sustainability and an appreciation of the difficulties associated with trying to derive a universally acceptable definition; ● an appreciation of how the sustainability issue pervades all aspects of the tourism process and applies to all of the stakeholders involved in the tourism process; ● an understanding of the concept of carrying capacity and the difficulties involved in applying that concept in the real world; ● an understanding of the impact of climate change; ● an insight into the simulation models used to predict climate change and its effects on tourism; and ● an understanding of how destinations may mitigate the effects of, or adapt to climate change.
- 247. This chapter investigatesthe concept, definition and practical applications of sustainable tourism. Sustainabil- ity has become a fashionable term with respect to tourism development and operation. However, even though sustainable development was discussed by those interested in agriculture and forestry centuries ago and the modern usage of the term can be traced back 40 years or so, there is still a significant amount of confusion relating to its meaning and whether or not it is achievable with respect to tourism. The chapter looks at the historical background of sustainability and how it applies to tourism activity. Following a debate about the origin of the term and its definition in general, the implications of the concept for tourism are considered. The threshold levels of destinations are examined under the heading of carrying capacity, a fundamental aspect of sustainability. Carrying capacity is associated with economic, environmental and social impacts as well as the ability of the tourism product to withstand degradation as flows increase. Finally, the chapter examines climate change and how that may impact on the long-run development of tourism around the world. Introduction Historical Background Sustainability is one of the most common concepts used in modern tourism development dis- cussions. At the same time it is also one of the least understood concepts and both academics and practitioners are still a very long way from reaching a consensus regarding its definition. The analytical framework of sustainability is broad, encompassing economics, environmental and socio-cultural issues while using ethics and the platforms of intra- and inter-generational equity as the instruments of the debate. Type ‘sustainable development’ into an Internet search engine and you will find 84 million results (this compares with 22 million in 2013 and just under 5 million in 2007) and more than a hundred definitions of sustainable development. Inter- estingly, in comparison typing in ‘sustainable tourism products’ only yields 7.5 million results compared with 6.5 million in 2013 and less than 2 million in 2007. Although finding its roots in agriculture with the notion of sustainable yield (the Holy Grail of Forestry) in the Middle Ages, the movement towards today’s sustainable development platform can be traced back to the late nineteenth century when the first formal signs of concern about planet Earth manifested them- selves in the formation of protection societies and national parks (Yellowstone National Park, USA, 1872; Royal Society for the Protection of Birds, UK, 1889; National Trust, UK, 1894). National Parks were formed in many Commonwealth countries (Australia, Canada and New Zealand) towards the later stages of the nineteenth century and within the United Kingdom at the start of the twentieth century. Economics has never been far away from the issues of sustain- ability because of its focus upon the optimum use of scarce resources, and sustainability issues have been explored for the best part of a century. The 1960s were a catalytic decade that saw the first major movements towards mass concern for the planet, perhaps in response to the post-war period of rapid economic development and the realisation of the planet’s fragility fuelled by the first images of Earth from space. The early 1970s witnessed the first United Nations (UNEP) Conference on the Human Environment (Stockholm, 1972), which produced an action plan for the environment based on: 1. the global environmental assessment programme (Earthwatch); 2. environmental management activities; and 3. international measures to support the national and international actions of assessment and management. The Stockholm Conference resulted in the commissioning of the World Conservation Strat- egy (WCS) (1980), which can be seen as the implementation arm of the human environmental action plan in the way it focused on how development and conservation could work together. 222 chapter 10 Sustainable Tourism
- 248. The next landmarkin the pathway to sustainability was the Brundtland Report (1987: ix), which stated that one of its primary goals was to: help define shared perceptions of long-term environmental issues and the appropriate efforts needed to deal successfully with the problems of protecting and enhancing the envi- ronment, a long-term agenda for action during the coming decades, and aspirational goals of the world community. The Brundtland Report has been criticised on the grounds that many of its predictions and concerns did not materialise, but it provided an invaluable platform for the debate on the north– south poverty divide as well as underscoring the global concerns that had been the outcome of the Stockholm Conference. Within five years of the Brundtland Report the Earth Summit was held in Rio de Janeiro (1992) putting down a landmark for sustainability in the form of a broad action strategy that is known as Agenda 21. The good intentions that came out of the 1992 Sum- mit still apply today; what has been lacking has been any significant action to implement the resolutions that came out of the Summit and this was the main focus of the Johannesburg Sum- mit a decade later (2002). Then, 20 years after the original Summit meeting, in 2012, the UN returned to Brazil and created its sustainable development policy at the Rio+20 conference. A significant difference between the 1992 and 2012 conferences was the fact that in 1992 where tourism was not specifically considered, the 2012 conference recognised the important contribu- tion that sustainable tourism development could make to the global agenda (Edgell, 2015). Although sustainability is embedded in the language of development in the twenty-first century, it is still a challenge to identify the success of the 1992 and 2012 initiatives because much of the momentum built up to overcome the inertia of dealing with sustainable development issues has been brushed aside by the global economic crisis that started in 2008 and still reverberates today. It seems to be a sad fact that economic imperatives are always more urgent and carry greater weight with governments than sustainability imperatives. This tension between sustainability and economic necessity is nowhere more evident than in the Galapagos Islands and the polar regions, where the acknowledged need for protection is somewhat overtaken by economic needs. Any form of production and consumption will have sustainability implications and therefore the debate on sustainable development should rightly encompass all forms of activity. Tourism in particular comes under the sustainability spotlight because (a) production and consumption tends to take place in areas where the natural or man-made resources are fragile (for example, areas of natural beauty, coastal areas, heritage buildings, etc.) and (b) the environment and cul- ture are often used as a major component of the product without being subject to the price mechanisms that apply to many natural resources. Definitions of Sustainability in General The Brundtland Report (1987) defined sustainability to be ‘meeting the needs of the present generation without compromising the ability of future generations to meet their own needs’ and it went on to identify some basic principles of sustainability. These identified needs were to: a) take a holistic approach to planning and strategy; b) protect the environment (biodiversity) and man-made heritage; c) preserve the essential ecological processes; d) facilitate and engage public participation; e) ensure that productivity can be sustained into the long-term future; and f) provide for a better level of fairness and opportunity between different countries. The challenge is at its greatest when looking at the last identified need (f) in the context of all of the other needs listed. There is a conflict unless (f) can be achieved by reducing the resources currently used by industrialised countries. The increasing pressures placed on the world’s Definitions of Sustainability in General 223
- 249. resources have beenunderscored by the dramatic increase in demand for minerals and fossil fuel by the emerging BRIC (Brazil, Russia, India and China) economies. Thus, there is a debate between intra-generational equity and inter-generational equity. If the latter objective is pursued without concern for the former then there is an implicit assumption that the distribution of wealth and opportunity in the present day is somehow optimal and this is not a point that many would be able to defend. There are many definitions of sustainability that range from the early definitions proposed by Coomer (1979), which suggested that a sustainable society is not a no-growth society but one that lives within the self-perpetuating limits of its own environment, through the WCS (IUCN, 1980) definition that focused its attention on maintaining the essential ecological processes, to the more recent suggestion by Choucri (1997), who argues that it is the process of managing social demands without eroding life support properties or mechanisms of social cohesion or resilience. The vagueness of the definitions and the hypocrisy that often accompanies international organisations that have flaunted sustainable development on the global stage, have undermined the principles of sustainable development and done little to enhance the implementation of sustainable practices (Butcher, 1997). To be effective any objective must possess certain charac- teristics. They should be clear, unambiguous, non-conflicting, measurable and achievable. The reality of sustainable development as it has been defined to date is that it fails on nearly all of these counts. On that basis alone sustainable development cannot be considered to be achievable. The term ‘sustainable development’ could be replaced by terms such as ‘wise use’, ‘sound planning’or ‘responsible development’as they have in the past, but even here it is too vague and still lacks any mechanism by which it could be measured or achieved. Economists could argue that all resources should be properly costed and included within the market process so that rational decisions can be made on the basis of complete information. But the issue is much wider than the economics of the environment; the planet’s heritage and culture are also part of the system and these too should be included within the decision-making processes. The responsibility of pursuing sustainability is also a matter of some importance because it is not simply the responsibility of the international organisations or the governments that support them. Industry and consumers have a key role to play in recognising the importance of social responsibility and long-term objectives. Yet both are driven by short-term needs and objectives that work counter to the long-term goals of sound planning and sustainability. The proponents of sustainability can be subdivided into two schools of thought: those that may be classified as strong or full sustainable supporters and those that may be deemed to be weak or partial sustainable supporters. In order to examine the two schools it is necessary to define the different types of resource that are subject to depletion or degradation. Simplistically we can categorise them into four types of capital stock: 1. Human – the population, welfare, health, workforce, educational and skill base. 2. Physical – productive capital such as machinery, equipment, buildings. 3. Environmental – man-made and natural resources, biodiversity. 4. Socio-cultural – well-being, social cohesion, empowerment, equity, cultural heritage. These four categories of capital stock are shown in Figure 10.1. In reality there are significant overlaps between these categories. However, they do serve to explain the differences between the two schools of thought and the concept of sustainability. At any point in time there is a given stock of each form of capital. These capital stocks can be used for production that will be either consumed or invested back into the capital stock. The strong sustainability proponents would argue that sustainability meant that the level of each of these individual capital stocks must be maintained for future generations. The weak sustainabil- ity proponents would argue that the total capital stock (i.e. the sum of all four categories) must be maintained but that it is possible to deplete one stock in order to increase another. Clearly some of the capital stocks are responsive to investment. Education and health services are two ways of improving the quality of the population and workforce and this stock can be increased 224 chapter 10 Sustainable Tourism
- 250. over time bysuch investment. In the long term there are likely to be diminishing returns to such investments. The physical capital stock is that capital used for productive purposes and this can and is being invested in all the time both for replacement purposes and for new investment to increase productive capacity. Some aspects of the environmental capital can respond to invest- ment, the creation of national parks, cleaning up rivers, preventing air and noise pollution being examples on the natural environment side, and, with respect to the built environment, the con- struction of new homes, shopping malls, hotels, etc. However, there is clearly a trade-off between these two elements of the environmental stock. Bridging the environmental capital stock with the socio-cultural stock there is also scope for investment in temples and monu- ments. Finally, with respect to the socio-cultural capital stock it is possible to invest in customs and traditions by training and raising the profiles of them within the local population and to visitors to ensure their continuity. If the strong sustainability approach is adopted there is a serious question mark over any form of production because, although it is possible to invest in some of the capital stocks and to restore their levels, it is not possible to increase the level of others without adopting a no-growth stance. For instance, new physical capital cannot be created without depleting some of the envi- ronmental capital stocks. Wherever land or raw materials are used this represents a depletion of that capital stock and unless alternative land or raw materials can be recovered from elsewhere such a process will have a finite future and cannot be sustained. HUMAN CAPITAL TOTAL CAPITAL STOCK PHYSICAL CAPITAL ENVIRONMENTAL CAPITAL SOCIO-CULTURAL CAPITAL INVESTMENT (replacement and induced) ECONOMIC ACTIVITY (production and consumption) TOTAL HUMAN WELFARE Sustainability and capital stocks Figure 10.1 Definitions of Sustainable Tourism The difficulty of coming up with an acceptable definition for sustainability in general is mir- rored in the efforts to define sustainable tourism. Using the Brundtland definition as its starting point, the World Tourism Organization defined sustainable tourism thus: Sustainable tourism development meets the needs of present tourists and host regions while protecting and enhancing opportunity for the future. It is envisaged as leading to man- agement of all resources in such a way that economic, social, and aesthetic needs can be fulfilled while maintaining cultural integrity, essential ecological processes, and biological diversity, and life support systems. Definitions of Sustainable Tourism 225
- 251. There have beenmany variations of this definition used by regions and countries around the world. For instance, the Organization of East Caribbean States (OECS) provides the following definition: The optimal use of natural and cultural resources for national development on an equitable and self-sustaining basis to provide a unique visitor experience and an improved quality of life through partnership among government, the private sector and communities. Whichever definition of the hundreds that have been published seems most relevant, the key factors that come out of the debate on definitions of sustainability are that sustainability requires appropriate consideration of the long-term economic, environmental, socio-cultural and politi- cal well-being of all stakeholders, and that to achieve such long-term goals requires the engage- ment of all of the stakeholders involved in the production and consumption process. Sustainability of Tourism Tourism is not an industry that sits easily within the concept of sustainability. International tourism, for instance, involves major transport components, cultural mixes and fierce resource competition. Examining each aspect of sustainability with respect to tourism activity and development paints a depressing picture. Economic aspects working against sustainable tourism To work within the parameters of ‘wise or responsible use’ or ‘sustainability’ it is important that the net long-term economic benefits are optimal. The economic impact of tourism (discussed in Chapter 7) means that tourism competes with other industries for factors of production, and as such it can create price inflation, driving up the cost of resources, land and labour. It attracts workers from rural areas who may have been employed in traditional industries causing output levels in those industries to fall. Scarce investment funds may be attracted to the tourism indus- try on the promise of rapid returns and foreign exchange inflows. This can distort the allocation of resources in the longer term and lead to structural unemployment. Where tourism develop- ment takes place in industrialised urban areas the above may not present severe obstacles, but to less developed countries or sparsely populated regions the effects associated with the develop- ment of tourism can be economically traumatic. Environmental aspects working against sustainable tourism Airlines are responsible for a major aspect of air pollution and the vast majority of air transport is for tourism purposes. Tourism is about real estate development and so it competes for land use and depletes the natural environmental stock as it does so. Tourism activities can be severely disruptive to biodiversity from the extreme activities of hunting and fishing to the less obvious disruptions through wildlife observing and hill walking. The spectacular is often headline mate- rial, such as the effects of boats, anchors and pollution on the coral reefs in the Caribbean. The unusual also captures headlines, such as visitors to the Antarctic, the degradation of the environ- ment at Everest Base Camp, and the erosion of ancient monuments. The increased presence of tourists in the tombs of the Valley of the Kings, Egypt can raise the humidity levels by several percentage points and this increases the erosion from pollutants. The less spectacular is no less devastating, such as the increased use of fossil fuels for energy consumption and water desalina- tion, and the construction of roads, airports and sea ports to cater for the travel of tourists. The introduction of large numbers of visitors to environmentally fragile areas will always be accom- panied by tension between the natural environment and tourism. Socio-cultural aspects working against sustainable tourism Tourists, whether they come from the explorers that Valene Smith suggests adapt to local norms or the mass tourists who do not adapt at all, will always have socio-cultural impacts on the local 226 chapter 10 Sustainable Tourism
- 252. community. They maybe through natural curiosity where the empathetic visitor is intrigued by local customs and traditions so they go to observe and that observation can set in motion a com- mercialisation process that will sooner or later change the events. Or it could be the psychocen- tric visitor who wishes no surprises, does not wish to get involved but, through the demonstration effect of their behaviour, dress and customs, alters the corresponding behaviour, dress and cus- toms of the local residents. Because tourism requires the tourists to visit the destination these negative impacts are bound to be a threat. Irrespective of the difficulties encountered when trying to define sustainable tourism in a usable and acceptable manner, there are approaches that can be taken to mitigate some of the threats to the long-term viability of the industry. One approach is to set limits on the future growth of tourism in each destination. This would not necessarily improve the net benefits derived from tourism for any destination and in a destination where tourism was already creat- ing problems it would not secure its long-term viability. Another approach is to change the behaviour of the stakeholders in the tourism industry to make the products currently provided more sustainable. This could involve better socio-cultural and environmental management within businesses together with better awareness and behaviour from tourists towards the desti- nation’s environment and culture. It would also probably require some changes to the economic structure and power balance between the businesses involved in the supply chain of tourism products so that local factors were fully and equitably included within the market processes. The third approach is to replace the current (unsustainable) tourism products with new products that are sustainable. To be successful it is likely that a combination of all three approaches will be necessary. That is, there will need to be a change in the behaviour of stakeholders, with businesses, tourists and local residents behaving more responsibly, with limits or thresholds being placed on develop- ments and activities (carrying capacity) and with new products being introduced that have greater empathy with the local environment and culture. The following discussion examines the issues surrounding the identification of carrying capacity for a destination. Photograph 10.1 Sustainability of Tourism 227
- 253. Thresholds and carryingcapacity The fact that tourism activity impacts on the social, cultural, environmental and economic aspects of a destination brings with it significant implications for sustainability. Even with a more aware tourism industry or more environmentally friendly types of tourism activity there will be thresholds beyond which the negative impacts may easily outweigh the net economic benefits. It would be unrealistic to assume that these impacts could be eliminated altogether and, therefore, the volume of tourists and the type of activity they pursue will have a direct implica- tion for sustainability. If it is assumed that there are both positive and negative impacts associ- ated with tourism and that the net effects are likely to diminish as the volume of tourism increases there will be certain thresholds beyond which additional tourists will create unaccep- table net impacts (economically, environmentally or socially). Exceeding these thresholds is likely to affect every facet of tourism development. For instance, exceeding: ● physical thresholds will limit the volume of tourist flows and expose tourists to safety hazards; ● environmental thresholds will also limit the tourist flows by creating secondary problems, such as health hazards, or detract from the attractiveness of a destination; ● social and cultural thresholds will generate resentment and antagonism towards tourists from the host population; ● tourist flow thresholds will affect the satisfaction levels of tourists and cause them to search elsewhere for a better product; and ● economic thresholds will result in the misallocation of resources and factors of production as prices increase and opportunity costs are incurred. The main challenge is to find the level of the thresholds beyond which tourism should not venture. As with the definitions of sustainability, defining these thresholds and the carrying capacity implied by them is a difficult task. Scientists from a wide range of specialist fields have attempted, with varying degrees of success, to provide a working definition of carrying capacity. For instance, ecologists might define carrying capacity as ‘the population of an identified species which can be supported throughout the foreseeable future, within a defined habitat, without caus- ing permanent damage to the ecosystem upon which it is ultimately dependent’. If this type of definition is transferred to the human species some modifications must be made unless the ‘defined habitat’ is taken to be the planet as a whole. That is, the territorial boundaries are not unique or limiting in terms of the ability of the species’ population to survive. What happens within one territorial boundary may well influence the long-term viability of the species in others. With respect to tourism, one approach is to adopt Hardin’s (1991) formulation of human impact and simply transfer it to tourism such as that set out below: tourism’s impact = tourist population * tourist impact, per capita However, this is not sufficient and such a definition fails to reflect the variety of influences relating to the nature of the tourist activity, the vulnerability of the destination, technological changes and so on. Carrying capacity has been defined as ‘the maximum number of people who can use a site without an unacceptable alteration in the physical environment and without an unacceptable decline in the quality of experience gained by visitors’ (Mathieson and Wall, 1982). Note that the use of words like ‘acceptable’means that there will be alterations and decline and this means that sustainability in its purest sense will not be achieved. Note also that the term ‘tourist pres- ence’is used as opposed to the simpler notion of tourist numbers. This is because it is necessary, when attempting to identify the levels of carrying capacity, to weight the absolute numbers of tourist arrivals to take account of a number of factors as follows: ● the average length of stay; ● the characteristics of the tourists and hosts; ● the geographical concentration of tourists; 228 chapter 10 Sustainable Tourism
- 254. ● the degreeof seasonality; ● the types of tourism activity; ● the accessibility of specific sites; ● the level of infrastructure use and its spare capacity; and ● the extent of spare capacity among the various productive sectors of the economy. Where tourism products are offered to very specific market segments the carrying capacity may be determined by the nature of that tourism. For instance, niche tourism products such as medical tourism, wine tourism and dark tourism will all have their capacity levels determined by the capacity of the facilities available for those activities. Another aspect rarely touched upon in the literature is the fact that different tourists interact with each other in different ways. For example, destinations in the Caribbean, such as St Lucia, draw their tourists from a variety of countries, but the majority of tourists come from the US market and a significant number come from European countries. The problem here is the fact that the Caribbean is a relatively inexpensive destination for the American market, which is close by, whereas it is a relatively expensive destination for the European market, because of the high cost of transport involved in the package. This means that European tourists are more likely to be from a higher socio-economic grouping than their American counterparts. This problematic mix can shorten the tourist satisfaction ratings quite significantly, suggesting that, from the tourists’ point of view, carrying capacity may be as much influenced by the mix of tourists as by their absolute number. When attempting to determine or identify carrying capacity, it is essential that tourism pres- ence is measured in some unambiguous manner. One possibility is to discuss carrying capacity in terms of tourism units, where a tourism unit is a standardised concept based upon tourist numbers weighted by some composite factor derived from the above influencing elements. In this way each destination is likely to have different carrying capacity levels. However, the deri- vation of some standardised unit is difficult. For example, there are problems to be encountered if the number of day visitors is to be incorporated into the overall tourist numbers. This is because day visitors tend to be associated with different levels of impact per hour per tourist from those of their staying counterparts. The shorter the stay of tourists the more pressing will be the sense of time budgeting and the higher will be the level of expenditure per unit of time. Composite indicators can be constructed to provide some insight into the threshold levels of tourism activity. For instance, McElroy (2004) discusses the strengths and limitations of a Tourism Penetration Index (TPI) for selected Caribbean islands where the index is based on per capita visitor spend, average daily density of visitors (in aggregate) and hotel rooms per square kilometre. The use of such indices is highly questionable given that they do not take into account temporal variations (seasonality), the spatial spread and size of the island (which influences the density indicator) and the retention of revenue from tourism. Many other factors could also be included, such as the geographical spread of economic activity, the nature of visitor host inter- actions, etc., but these data are expensive and time-consuming. Carrying capacity definitions tend to include the term ‘acceptable’ and the question that needs to be asked is to whom should a change be acceptable or unacceptable? If, as in the case of social impacts, the host population is the body that should consider the acceptability of developments, how is this reflected in policies? In a perfectly democratic political system, then, we could argue that the residents would be able to register their views on proposed developments. However, such perfect democracy may be hard to find. Furthermore, much tourism development is driven by the private sector, which may take a much narrower perspective on the issues surrounding develop- ment and hold quite different views about acceptable levels of development. The issue becomes even more complex with respect to any environmental carrying capacity. Who should consider and vote on the acceptability, or otherwise, of a project that brings envi- ronmental impacts? The environment itself may signify changes and species of flora and fauna may suffer from development but they do not have a vote. How will environmental acceptability be considered and voiced within the planning framework? Sustainability of Tourism 229
- 255. The above issuesrelate to all aspects of carrying capacity, with the exception of the accept- ability of developments to tourists. Visitor satisfaction surveys are frequently undertaken by many destinations to monitor acceptability. Furthermore, if the carrying capacity in this respect is exceeded, tourists will vote with their feet and go elsewhere. In spite of the problems involved in converting a theoretical definition of carrying capacity into an operational tool, it does fit in well with modern development strategies that increasingly incorporate attempts to impose some constraints on the level of development to prevent damag- ing impacts on the environment and society or to avoid the risk of over-dependence. The dynamics of carrying capacity The literature on carrying capacity, rather like the literature on tourism development planning, gives the impression that it is in some way static or absolute. The very word ‘capacity’ makes one think of a specific level like filling the seats on a boat or an aircraft, but nothing could be further from the truth. Carrying capacity is an extremely fluid and dynamic concept. As with many human traits, exposure to stimuli brings with it a degree of acceptability. Socio-cultural tolerance levels change over time with gradual exposure to tourists. If, for example, a small island destination goes from 100 to 1 million tourists in the space of a year it is likely that the socio-cultural, economic and environmental impacts will be devastating. Take the same desti- nation and increase the volume of tourists by the same amount over a 50-year period and the discernible impact is likely to be far less. People become accustomed to change – it does not make the change any less, but it does make it more acceptable. Economies too are better at adjusting to structural change that takes place over a long time period, rather than dealing with rapid changes. Sufficient time will allow for the necessary linkages and support services to be put in place and, in consequence, allow the destination to optimise its benefits from tourism. Even the environment, or at least the local population’s concern for it, may be better able to cope if change comes slowly and proper visitor management systems can be implemented to mitigate negative impacts. In effect the carrying capacity of today will not be the carrying capacity of tomorrow. In the 1950s few of the top tourist destinations in the world could have imagined the volume of tour- ists that they are playing host to today. This dynamic characteristic of carrying capacity, together with the difficulty in finding a universally acceptable definition, has resulted in some bodies, such as the United States National Park Service, choosing to adopt an alternative terminology, that of limits of acceptable change (LAC), as their planning indicator. Therefore, carrying capacity is a dynamic concept in the sense that the threshold levels that determine carrying capacity are likely to grow over time, providing that the development of tourism is sound. Unplanned rapid development could easily result in low tolerance levels and carrying capacities of much lower values. Other factors influencing carrying capacity In addition to the characteristics of the tourists and their hosts, there are a number of other fac- tors that will influence the carrying capacity of a destination. It has already been noted that the speed of change is an important factor. The difference between the tourists and hosts is also an important consideration. It is not the absolute characteristics of either population group that is important, but the relative difference. This is one reason why domestic tourism is often, but not always, more acceptable than international tourism in terms of the socio-cultural impacts. If the demographic profiles of tourists are similar to those of the host population, particularly in relation to age distribution, socio-economic grouping and religion, then the socio-cultural impact of increasing tourist numbers is likely to be relatively low. On the other hand, major dif- ferences in any of these factors can result in significant socio-cultural impacts even though the number of tourists in both scenarios is the same. The fact that there are four broad groups of capacity indicators – economic, environmental, socio-cultural and tourist satisfaction levels – gives rise to some difficulty in establishing exactly what the carrying capacity of a specific destination may be. It is likely that, for any given 230 chapter 10 Sustainable Tourism
- 256. destination, the carryingcapacity will be reached in just one of these areas before it is reached in the rest. Thus, a destination may find that tourism activity brings pressure to, say, the local ecosystem before it creates any significant threats to the social structure, the culture or the economy. This means that, regardless of the threshold limits in these latter areas, the carrying capacity for this destination is dictated by the vulnerability of the ecosystem. In order to move away from the qualitative to the quantitative approach for determining carrying capacity it is necessary to delineate the different areas of study (outlined below) and examine the processes by which carrying capacity is determined and how it may change over time. The process of scoping the various aspects of carrying capacity Figure 10.2 outlines the process by which carrying capacity is influenced and can be assessed. The diagram shows the broad groups of factors that determine carrying capacity along with the differ- ent stages that can influence the magnitude and direction of the impacts and hence the carrying capacity. The different areas of the flow diagram are set out under the following subheadings. Local factors There are many local factors that will influence the magnitude and direction of impacts but what is important, besides the nature of the local factors, is the relative difference between the local factors and the tourist counterparts and the speed of change. Looking at individual factors we can see how complex the issues are. Local factors Alien factors Planning process Management of development Technology The interaction between local and alien factors, directed and governed by the planning process, will determine the impacts I M P A C T S O N Society Culture Environment Economy Tourists Parameters Standards Current carrying capacity The present level of carrying capacity soon becomes accepted and this level of acceptance influences the local and alien factors at the top of the process and modifies tolerance levels throughout. In this way carrying capacities can be extended over time These affect local and alien factors The determinants and influences of carrying capacity Figure 10.2 Sustainability of Tourism 231
- 257. Social structure The socialstructure of the destination is vital in determining the scale and nature of any impacts. For example, taking two extreme views, the social structures of London, New York and Sydney are more able to absorb and tolerate the presence of tourists than cities such as Apia in Western Samoa or Port Louis in Mauritius. The former can tolerate the presence of tourists without incurring any significant changes to their social structures because those changes have already occurred. They are larger in population and cosmopolitan in structure, making them more adapt- able to change. The latter have relatively small populations, the extended family system is still largely intact (particularly in Apia) and they are not as cosmopolitan in structure. Therefore, some societies can accept large-volume tourism with little obvious effect while others cannot. In general, the smaller the local population, the more dramatic will be the social impact of tourism, particularly if that tourism is based upon large-volume tourist flows. Cultural heritage The cultural heritage of a destination is very important when attempting to determine the impact and carrying capacity. The more unusual the cultural background, the more attractive a destina- tion may become to potential tourists. Ironically, the more unusual the cultural background, the more likely it is to be adversely affected by the presence of tourists. The end result is either the destruction of the cultural heritage or, more probably, the distortion of the local culture through staged authenticity and the over-commercialisation of cultural features and traditions, such as dances and costumes, religious ceremonies, arts and crafts. The destination can soon be in dan- ger of becoming a caricature of itself. Environment The environment will be changed by the presence of tourists no matter how sympathetic they may be or how carefully the tourism activity is planned. The environment can be either artificial or natural. In general the former is more resilient to tourism impacts than the latter. Environ- mental change is inevitable and will be more obvious and pronounced in those areas that are sparsely populated and not subject to frequent high-volume tourist visits. The more fragile and unique an environment, the more vulnerable it is to change from the presence of humans. It is important to remember that the environment is also changed by many factors, not just tourism, and it is often difficult to isolate those effects created by tourists from those created by other factors. Economic structure The economic structure will determine the benefits and costs associated with tourism activity. In general, the more developed and industrialised the economy, the more robust and adaptable it will be. As economies grow and diversify, so too do the skills of the workforce. This, together with a more refined capital system, allows such economies to respond and adapt to the changes brought by tourism. These countries will be able to secure the greatest benefits from tourism activity while incurring the minimum costs. In contrast, economies that are not sophisticated may find that rapid developments in tourism can distort the allocation of resources quite drasti- cally and set up importation habits that may be difficult to break in the future. Tourism development, particularly rapid development, tends to be resort-based and this may bring with it the economic problems associated with: ● migration from rural to urban areas; and ● the transfer of labour from traditional industries to tourism and its related industries. Economies have to be mature to be able to adjust to these pressures. Political structure The political structure can affect the impacts of tourism and its carrying capacity in a number of ways. To begin with, political instability will deter tourists and therefore hinder tourism devel- opment. Some groups of tourists are more sensitive to political instability than others but few 232 chapter 10 Sustainable Tourism
- 258. tourists are unaffectedby the prospect of political instability. The political structure may also have direct influences upon tourism development if, in reflecting the ideals and beliefs of the population, it is decided that tourism development should be constrained or even discouraged. Some countries limit tourism development by restricting the number of visas issued within any given year (Bhutan, for example), whereas others may increase the costs of obtaining visas or make the acquisition of visas difficult, thereby restricting them to only the most determined. The political openness may well reflect the willingness of society to welcome tourism development and this may either raise or lower the carrying capacity thresholds. Resources The availability of local resources (labour, capital, land, etc.) is likely to have a major influence on the acceptability and desirability of tourism development, and even on the form that develop- ment takes. Where resources are scarce, competition for them will be high and the opportunity cost of using these resources for tourism will also be high. The local infrastructure is also part of the resource base. If tourism development means that the local infrastructure will be over- utilised then this will create a capacity constraint (at least in the short term) that may well become operative before any of the other carrying capacity constraints are approached. If the infrastructure is over-utilised because of tourism development then this may well breed resent- ment and hostility among the local population, and then the social impact of tourism will create a carrying capacity constraint. On a more positive note, tourism development may well result in an improved infrastructure, which will be available for the use of hosts as well as tourists, and this may enhance the lives of the local community. Alien factors Tourist characteristics Clearly, the characteristics of the tourists who visit any given destination are an important factor in determining the social and cultural impact of tourism on the host community. For instance, tourists who belong to the mass or charter groups are more likely to have a greater social and cultural impact than those who belong to the explorer, adventurer and ethnic tourist categories. The former tends to demand Western amenities and bring their culture with them without adapt- ing to the local norms and customs. The latter tend to be far more sympathetic towards local customs and traditions and actively seek them out as part of their vacation experience. This, however, is not always the case. The important factor is the relative difference between tourists and hosts. The greater the difference between the host’s and the tourist’s social and cultural backgrounds, the greater the impact and consequent change. Indeed some tourism products may not even be possible in some destinations where the nature of the tourism activities run counter to the social beliefs of the hosts, such as pink tourism in strict Muslim countries. Tourist charac- teristics also include visitor expenditure patterns, mode of transport, structure and size of party, age, educational background, income and purpose of visit. All of these factors will influence the nature and magnitude of the impacts on the host community. Carrying capacity is centred on tolerance levels: ● how tolerant the ecological system is to tourist intrusion and activity, as well as those activi- ties created as a result of tourism activity; ● how tolerant the socio-cultural structure is to the introduction of foreign cultures, ideals and beliefs; and ● how much tolerance there is within the economic structure. However, carrying capacity is also about the tolerance levels of the tourists. A destination that is considered to be overcrowded by the tourists has exceeded its carrying capacity and, in consequence, will find its tourist arrivals diminishing or the composition of tourists changing. The composition of tourists may change as the destination lowers prices in an attempt to shore up falling numbers. The tolerance level of tourists introduces a further complication into the Sustainability of Tourism 233
- 259. issue of determiningcarrying capacity. Different categories of tourists will display different levels of tolerance with respect to deviations from their expected experience. Figure 10.3 demonstrates how tolerance levels associated with different types of tourist and within different types of resort may change. The figure represents two planes. The horizontal plane depicts the nature and characteristics of the destination with a range moving from the fragile and vulnerable, such as Antarctica, through the vulnerable but less fragile areas, such as the Galapagos Islands, to the more organised and controlled but nevertheless vulnerable game parks, such as those found in Kenya, right through to the full-blown totally dedicated destina- tions such as Hawaii and Benidorm in Spain. The vertical plane represents the type of tourist and ranges from the explorer to the mass tourist as you move down the plane. The diagonal line running from the top left-hand corner through to the bottom right-hand corner demonstrates the ‘fit’ between tourist and destination. Thus, starting in the top right-hand corner we find that the explorer will seek out the fragile but exclusive destinations such as Antarctica. At the bottom left-hand corner, reading across the horizontal plane and down the vertical plane we find that the mass tourist will seek out the no- surprise destinations such as Benidorm. The range along the line between these two polar extremes also shows the ‘fit’ between the characteristics of the tourist and the destination. The dotted lines that run alongside the central diagonal line represent the tolerance levels. By this we mean that each type of tourist will be associated with an average given level of tolerance with respect to how closely a destination may match their expectations. Thus, explorers may gener- ally be regarded as being fairly intolerant of significant deviations from their expectations. If the destination does not live up to expectations they will quickly seek alternative destinations. At the other extreme, mass tourists are generally more tolerant of deviations from the expected. Thus, the corridor of tolerance increases in size as we move away from the top left-hand corner. The tolerance levels of destinations can also be seen in this diagram in the sense that the central diagonal line still shows the ‘fit’ between tourist and destination, but the corridor of tolerance may also relate to the destination’s tolerance to changes in tourism. Fragile destinations are unable to cope with significant changes in the volume of tourism whereas the more commercial purpose-built destinations are more able to absorb such deviations. Range of tolerance levels Antarctica Belize African game park Benidorm Explorer Mass tourists The relationship between tourists, destinations and tolerance levels Figure 10.3 234 chapter 10 Sustainable Tourism
- 260. Types of touristactivity The types of tourist activity pursued will be closely linked to the characteristics of the tourists who take part in them. However, the presence of certain activities, such as gambling, can bring specific social problems and stresses that are far greater in magnitude than those associated with the same number of tourists undertaking different activities. Gambling can bring with it increased risks to the host community (and to other tourists) in terms of exposure to prostitu- tion, drugs and crime. All of these factors will help create much lower carrying capacities than might normally be associated with tourism. It need not be just the emotive cases of gambling and prostitution that can limit the carrying capacity. Destinations with very fragile ecosystems or with, say, rare bird species, may suffer more severely at the hands of the special interest groups who would actively seek out and disturb the habitats, albeit unintentionally. Planning, management and technology Planning is concerned with the organisation of factors in order to manipulate future events. The management of tourism is the process by which plans are put into practice. Changes in technol- ogy will have direct and indirect effects on the difficulties associated with the planning and management tasks. Given the interaction between local and alien factors within the host envi- ronment, the planning and management process should aim to secure the maximum positive benefits (as dictated by the planning objectives) while incurring the minimum costs. Figure 10.2 shows that the planning, management and technology factors act as a funnel between the ‘raw’ interaction of the local and alien factors and the impact that this interaction has on the destina- tion. The more successful the planning and management, the lower will be the levels of negative impacts and the greater will be the carrying capacity. The dynamic nature of this process is such that suitable developments combined with appropriate visitor flow management will ‘naturally’ select the required tourist market segments, while allowing the local factors the amount of time and space needed to adapt to the alien factors. The end result is a destination that can enjoy both growth and sustainability (growth + sustainability = development). Impacts The local and alien factors, manipulated by planning and the management of tourism develop- ment, will result in impacts on the social structure, culture, environment and economy, and upon other tourists. Impacts are the yardsticks of carrying capacity, but they are derived variables. The task to the planner and tourism management specialists is to ensure that the appropriate impacts occur. Parameters The impacts that occur reflect the nature and magnitude of change brought about by the interac- tion between tourists and hosts, given the management and planning that has been implemented. The parameters can be identified as the changes that take place to the local and alien factors as a result of different levels and types of interaction. They are factual in the sense that they are devoid of value judgements and simply relate tourist host interaction and tourist presence to changes in the social, cultural, environmental and economic factors. Standards The standards may be seen as acceptable limits applied to the parameters. They refer to the value judgements imposed by the host and tourist populations with respect to how much a vari- able may change without incurring irreversible or undesirable damage to the nature of tourism and the environment in which it takes place. Carrying capacity determination Carrying capacity is the dependent variable. It is not possible to overemphasise the word ‘vari- able’ because it is not a fixed value based on tourist presence. The dynamic nature of carrying capacity is based upon the changing tolerance levels of each of the determining factors as a result of both exposure and management. Sustainability of Tourism 235
- 261. The feedback overtime, between carrying capacity and the local and alien factors, will be responsible for increasing/decreasing the magnitude of acceptable tourist presence. The carry- ing capacity will also feed back into the planning and management stages in order to inform and enhance the processes of visitor and destination management. If the carrying capacity is exceeded with respect to any of the impact areas, the tourism development process will be hindered and the development may be considered unsustainable. The damage created by exceeding the carrying capacity may be related to any of the impact areas or in terms of tourist satisfaction, but the end result will be the same. Either the destination will experience diminishing numbers as its tourism industry declines – tourists pursuing alter- native destinations – or the mix of tourist arrivals may change, making it increasingly difficult for the destination to achieve its declared planning objectives. The vulnerability of different destinations to the presence of tourists is a major factor in set- ting the limits of acceptable standards. To illustrate this point the plight of World Heritage Sites can be examined. The very nature of World Heritage Sites means that they are not only finite but also irreplaceable and the successful management of such sites is vital. The World Heritage Convention requires that the international community cooperates to ensure that measures taken to protect and conserve these sites are effective. The management of these sites is almost always translated into access control. For instance, the management of Keoladeo National Park in India relies upon the access provided by the restricted number of trained guides or by bicycles and specified trails set out for the 100,000 tourists that visit each year. In other areas more arbitrary, but still restrictive, limits are set, such as the 11,800 visitors per annum allowed to view the resident gorilla families, and accommodation within the park is limited to two lodges owned and controlled by the government. Alternative strategies can also be used, such as the spacing of tourist visits, or restrictions based on a specific aspect of a destination in order to manage its overall tourism development. Measurement criteria Carrying capacity is subject to multiple determination and, as such, each of the separate compo- nents must be investigated. Tables 10.1 and 10.2 are provided to give some guidance to the variables that may be measured, the thresholds that may be encountered and the effects of over- exploitation. Clearly, understanding the implications for each of the indicators is an important aspect of being able to determine the thresholds of successful tourism development. As mentioned earlier in this chapter, setting limits on tourism activity is only one aspect of striving towards success- ful tourism development. Destinations can also work towards changing the behaviour of the stakeholders involved in the tourism process either by creating an appropriate economic frame- work or by investing in awareness campaigns. They can also encourage the development of more sustainable forms of tourism activity. Given that both of these strategies work towards meeting tourism demand in a way that minimises the net negative impacts they can be consid- ered within the same framework. Sustainable tourism products Terms such as eco-tourism and alternative tourism have taken a prominent position in tourism literature (academic and marketing) since they were introduced in the mid-1980s. Eco-tourism has been misused as a term both intentionally, as a marketing ploy, and unintentionally due to a lack of understanding and, in common with the term sustainability, there has been considerable debate about an acceptable definition. Wight (2001) points out that the World Tourism Organi- zation estimated that some 10–15% of global tourism could be classified as eco-tourism in 1997. However, within that same year the WTO revised this estimate to 20%. It is hard to find any credibility in these proportions given the dominance of mass tourism in total global tourism activities. Eco-tourism is unequivocally linked to natural tourism attractions rather than their man-made counterparts and environmental sustainability is often found to be a core component of such a product’s definition. However, it is also accepted that many definitions of eco-tourism 236 chapter 10 Sustainable Tourism
- 262. Variables and thresholds Table10.1 Impact on Variable Threshold(s) Economy Dependency Finance Labour Price inflation Wealth Contribution to GNP Level of investment Employment Consumer price index Income growth/distribution Diversity/imports Availability of funds Shortages/training Social costs/distribution Wage inflation/imports Environment Changes Hazards Viability of wildlife Species/populations Fires, erosion, pollution Urbanisation Extinction/balance of population Costs/risks Land usage/species count Physical resources Access Accommodation Attractions Land Transportation Infrastructure Cost/time/volume Number/size/quality Number/size/type Proportion of land usage Cost/capacity Investment/quality Congestion/hazards Occupancy Access/available land Land price inflation Congestion/hazards Capacity/health risks Political framework Strategies Resources Cooperation Goals range/scope Expenditure/revenue Partnerships Conflicts, goals missed Budgetary deficits Lack of participation/funds Society/culture Population Living standards Values Traditions Migration Real income/wealth Crime/drugs/health Participation/quality Distribution/infrastructure Inflation Social disruption/costs Occurrence/characteristics Scale of development and its effect on impacts and carrying capacity Table 10.2 Effect on Small-scale dispersed Large-scale concentrated Accommodation Range of products Range of prices Seasonality Size of business Ownership Highly limited Low/medium Peaked SME Local Diverse Low/medium/expensive Wider but more problematic SME to international Non-local Characteristics of facilities Range Finance Usage Need for support Highly limited Local Peaked Low Diverse Mixed local/foreign High volume High Labour market Demand/supply Learning by doing Local labour Constrained by local supply Demand for high skills Mixed local/migrant labour Increased migration Transport Infrastructure Supplier Stimulating supply Limited Private sector Low-level effect High but congestion during peaks Greater public supply High-level effect Sustainability of Tourism 237
- 263. Tourism is oftenseen as an ‘easy’ way of generating income and employment opportunities yet not needing the capital investment often associated with other productive sectors. It also has the added bonus of attracting private sector investors which can help relieve the often cash-strapped public sector. International visitors are attracted to Bhutan by its exquisite, but fragile, environment, and to some extent the government attempts to protect the natural assets by focusing on selling its limited capacity to ‘high value, low impact’ tourists who respect Bhutan’s culture and environment. In spite of the 24/7 social media world in which we live with our mobile phones and tablets, television companies were only allowed into the country from 1999. Its close proximity to India and China provides help in creatting strong demand for the country’s surplus energy production generated by its fast-flowing waters. Such exports do not come without costs though, and the government of Bhutan has invested heavily in hydroelectric energy, growing its publically granted external debt to 94% of its GDP in 2013, with hydropower accounting for 70% of this debt. In 2016, a visit by the Duke and Duchess of Cambridge brought Bhutan firmly into the world’s media spot- light. The natural beauty of the Himalayas combined with the young royals’ visit created an appealing image to potential high value tourists and suggested that the country was opening up for the business of tourism more than ever before. Tourism in 2014 accounted for 19% of its total export trade and it is looking as if there is pressure within the Bhutan to attract even more tourists, given the growing debt – which then brings pressures on the govern- ment to preserve the country’s natural environment and cultural identity. Discussion Questions 1. Do you think the idea of creating economic diversification in Bhutan is viable? 2. What actions should they take to preserve their culture and environment? 3. Do you think tourism can threaten Bhutan’s cultural identity? 4. Culture or nature – which one do you think is more vulnerable to the growing visitor numbers and why? References UNWTO elibrary (2016), http://www.e-unwto.org/doi/pdf/10.5555/unwtotfb0064010020102014201511; International Monetary Fund (2016) Bhutan, https://www.imf.org/external/pubs/ft/dsa/pdf/2016/ dsacr16206.pdf; BBC (14 April 2016) Bhutan: things you may not have known about the country, http:// www.bbc.co.uk/news/world-asia-36041907; Tourism Council of Bhutan: Economy, http://www.tourism. gov.bt/about-bhutan/Economy. Mini case study 10.1 Bhutan: A desire for sustainability but growing debt 20 15 10 5 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 International tourism, receipts (% of total exports) Figure 10.4 238 chapter 10 Sustainable Tourism
- 264. include some referenceto indigenous cultural sustainability. According to Weaver (2004), a further factor that is associated with definitions of eco-tourism relates to their educational or learning opportunity components. Once all of these aspects are incorporated into a single tour- ism product it can be seen that eco-tourism will not appeal to the masses at present. The masses seek sand, sea, sun vacations within a wide variety of areas that may or may not also be areas of outstanding natural beauty. Eco-tourism demands a high level of interpretation whereas the mass tourism product does not. This is not to say that mass tourism products would not benefit from greater interpretation. Both eco-tourism and alternative tourism imply small-scale, indigenous low-key activi- ties. Where the former holds the preservation of the natural environment at its core, the latter may not necessarily do so. Indeed, the latter may simply be at the beginning of the tourism development process for a destination soon to be enveloped in a more commercial pack- age as the product develops. Eco-tourism suggests that it has in place constraints that will prevent or inhibit uncontrolled development. However, both forms of tourism activity can provide a temporary runway for the take-off of the destination as it moves towards mass tourism. There is no product currently on the market that could come close to being classified as mass sustainable tourism. The presence of large numbers of tourists in high densities with the necessary infrastructure for transportation and public health and safety defies the laws of sustainability. The 1980s also saw the emergence of the ‘Three Rs’ being applied to sustainability in the corporate world. The fact that the corporate world was even thinking about sustainability was a huge leap forward, although the cynics would argue that they were paying lip-service to a con- cept that would pay dividends in terms of increased sales. Tour operators such as Thomsons did not find sustainable tourism products to be the ‘hot’ products that this line of thinking promised. The three Rs were: Reduce Reuse Recycle The very fact that these words were being used in corporate circles represents a major shift in attitudes towards the environment and social responsibility. Middleton (1998) expanded this list to 10 Rs: Recognise Refuse Replace Reduce Reuse Recycle Re-engineer Retrain Reward Re-educate Although some of the additional Rs may be considered to be contrived and there is considerable overlap between several of them, the list does serve to show just how far away the three Rs were from presenting a significant step towards sustainability. Furthermore, a major R in the form of ‘Responsibility’ was not included in the Middleton list. Middle- ton’s marketing approach provides some good examples of the issues relating to sustainable tourism. Sustainability of Tourism 239
- 265. Sustainability As aStrategy In spite of the difficulties involved in trying to find an acceptable definition for sustainability that will have practical value and the enormous problems in trying to measure crucial factors such as a destination’s carrying capacity, there is a way forward. Sustainability more than any- thing else involves a process of recognition and responsibility. Recognition that the resources which are used to produce the tourism products are vulnerable. Responsibility for the wise use of these resources rests across all stakeholders from the governments and planners, through the industry that delivers the product, to the tourists and their hosts who temporarily coexist within the destination. A sustainable strategy must engage all of the stakeholders in the planning of tourism. The involvement of local resident participation is as difficult to achieve in practice as trying to get the industry to behave in a more environmentally and socially sympathetic manner. From an environmental point of view there have been numerous attempts at trying to ‘green’ the industry. These attempts have been in the form of awareness campaigns through to certifica- tion schemes but none of them has been successful to date. The major problem has been the failure of the companies and organisations that have touted their certification programmes to demonstrate to the industry that certification truly saves them money or generates additional demand. Tourists are still largely driven by the pleasure factors of the product rather than their social and environmental conscience. Therefore, consumers must share their responsibility because without a demonstrable demand for certified green products the certification process will not be embraced by the industry without some form of supporting legislation. The certifica- tion companies have by and large failed to put credible programmes into the marketplace because the enforcement that must accompany certification is expensive and time-consuming, making it an unwelcome burden on the industry. The only effective way of providing such cer- tification schemes would be through a non-profit public sector body in the same way that health and safety standards are enforced. The only practical way forward from a planning point of view is to develop integrated impact-modelling tools. One such tool was developed by staff at the International Centre for Tourism and Hospitality, Bournemouth University. It demonstrates the use of fully integrated impact software and provides a valuable planning tool that demonstrates the interrelatedness between each of the different types of impact, analyses them within a unified framework and allows these impacts to be examined from either forecasted future impacts or from those drawn as hypothetical case studies. Economic sustainability for tourism requires holistic planning across all industrial sectors. It must also reach beyond the destination to make sure that intermediaries such as tour operators are not able to circumvent or put undue pressure on the planning processes. The formation of partnership chains throughout the industry would be one way to achieve this but is unlikely ever to happen given the competitiveness of the tourism industry and the predominance of SMEs. The quality of the tourism product demands staff training that is universally acceptable and the economic environment must make environmentally and socio-culturally sound behaviour the best economic choice. Environmental sustainability in tourism requires greater awareness and knowledge about the impacts and ways of translating those impacts into the economic marketplace. The responsibil- ity of tourists and businesses must be made clear and there needs to be a legislative system that penalises failure to abide by those systems. The indirect and induced environmental conse- quences of activities must be included in the calculation of their market prices but it must also be recognised that environmental and social systems change over time as a natural consequence of development and such changes need to be accommodated. Tourism is also fundamentally dependent upon the climate in which it takes place and cli- mates are subject to dynamic process. There has been much discussion about climate change over the past couple of decades and a great deal of debate about whether the climate changes we are currently experiencing are the result of cyclical effects or whether they are the result of human activities. Irrespective of the source of climate change, such changes will, in the long term, bring fundamental changes to the way in which tourism activity takes place. Tourists have 240 chapter 10 Sustainable Tourism
- 266. a ‘comfort zone’where the climate is appropriate to the activities they are pursuing. At its extremes, skiers require a climate that produces snow as much as sunbathers require one that has plenty of sun rays. The vast majority of tourism activity requires a climate that is within the ‘comfort zone’ of tourists so that they can do whatever activities they wish to pursue in comfort. Therefore, the issue of climate change is an important one when considering the long-term sus- tainability of the tourism industry in each region of the world. Climate Change and Tourism The earth’s climate has demonstrably changed since pre-industrial times (before 1750) and is anticipated to continue changing for centuries to come. The most recent scientific, technical and socio-economic information produced worldwide relevant to the understanding of climate change is periodically reviewed and assessed by the Intergovernmental Panel on Climate Change (IPCC). In its latest report that was published in 2007, the IPCC declared that ‘Warming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over decades to millennia. The atmosphere and ocean have warmed, the amounts of snow and ice have diminished, and sea level has risen’ (available from http://www.ipcc.ch/ report/ar5/syr/). The global mean temperature has increased approximately 0.76°C between the end of the nineteenth century and the beginning of the twenty-first. Most of the temperature change observed since the middle of the twentieth century can very likely be attributed to human activities that are increasing greenhouse gas concentrations in the atmosphere. Tourism is one of the human activities that contributes directly to climate change. Tourism is responsible for an estimated 5% of total CO2 emissions, 40% of which are caused by aviation and 35% by other modes of transport. Air travel needs to be seen as the most problematic global environmental impact of tourism. The increasing trends for short breaks and more distant destinations add to this problem, with flights getting longer and far more frequent. Tourism is a highly climate-sensitive economic sector, as a result of its close connections to the environment and climate itself. Indeed, the impacts of a changing climate are already becoming evident at destinations around the world, making clear that climate change is not a remote issue for tourism. The capacity of the tourism sector to adapt to climate change is rela- tively high because of tourism’s dynamic nature. Therefore there will be important opportuni- ties for tourism to reduce the vulnerability of communities to climate change through sustainable development. The following section provides an overview of the main types of impacts of climate change on tourism and the regions that are most vulnerable. It also presents some of the main avenues for adaptation that are open to tourism stakeholders. Climate change impacts on tourism Tourism businesses and the destinations in which they operate are clearly sensitive to climate variability and change. For example, changes in temperature, precipitation, wind speed, humid- ity or snow depth may have a direct effect on (i) the feasibility of tourism and recreation activi- ties, and/or (ii) levels of safety associated with participation in tourism and recreation activities, and/or (iii) the quality of the experiences of those who participate in them. Modifications in any of these three aspects may cause participants to alter the frequency, duration, timing and/or location of future activity, or even to shift participation to an entirely different activity alto- gether. Climate defines the length and quality of tourism seasons and plays a major role in des- tination choice. In addition, climate affects a wide range of environmental resources that are critical to tourism, such as snow depth, biodiversity and stocks of fresh water. It also influences various facets of tourism operations, including heating, cooling and snowmaking. All in all, there are four broad categories of climate change impacts that could affect the competitiveness and sustainability of tourism destinations: direct climatic impacts; indirect environmental change impacts; indirect societal change impacts; and policy responses of other sectors, such as mitigation policy. Climate Change and Tourism 241
- 267. Direct climatic impacts Directimpacts include changes in the frequencies and patterns of extreme weather events, and changes in climate-related push and pull factors. In addition, costs for heating and cooling, as well as snowmaking, are directly linked to thermal conditions, which are changing. Adequate climatic conditions are key for all types of tourism activities, ranging from conventional beach tourism to special interest segments. As a result, the redistribution of climatic assets among tourism regions will be one of the most prominent impacts of projected climate change. Changes in the length and quality of climate-dependent tourism seasons (i.e. sun-and-sea or ski holidays) could have considerable implications for competitive relationships between destinations and, therefore, the profitability of tourism enterprises. Substantial shifts in the world’s climate suitability patterns have been projected. Some stud- ies indicate that, towards the end of the century, the Mediterranean region is expected to become much less attractive for tourism in summer and more attractive in the shoulder seasons of spring and autumn. At the same time, northern Europe, the traditional source regions of the majority of tourists to the Mediterranean, is projected to become more suitable for tourist activities year round, particularly in the summer. As a result, more of these tourists might opt to stay within their own region, and more people from the south might decide to escape hot summer tempera- tures in the Mediterranean by travelling to northern Europe during the summer months. In North America, the number of cities in the United States with excellent conditions in the winter months is likely to increase, so that southern Florida and Arizona could face increasing compe- tition for winter sun holiday travellers. Other world regions may have the potential for an even more substantive redistribution of climate resources for tourism than NorthAmerica and Europe. In particular, the tropics may be vulnerable, although no detailed analyses for these regions have been performed so far. Indirect impacts from environmental change Climate change also has an impact on tourism in more subtle and indirect ways, through changes in the environment and through changes in society. Environmental and climatic conditions are such critical resources for tourism that any changes will have an inevitable effect on the indus- try. Changes in water availability and snow cover, biodiversity loss, degradation of the aesthet- ics of destination landscapes, coastal impacts, damage to infrastructure and the increasing incidence of vector-borne diseases all impact on tourism in various ways. A significant share of tourism takes place in warm, dry and sunny places, where water avail- ability already acts as a constraint for tourism development. Climate change is likely to intensify this problem, as for major tourism regions such as the Caribbean and the Mediterranean rainfall levels are projected to decrease further. Competition for water will intensify between different uses, including drinking water (residential population), irrigation (agriculture) and swimming pools and golf courses (tourism). Globally, tourism accounts for only a tiny contribution to water demand, but locally it can be significant. The tourism industry is generally considered to be wasteful with regard to water. Specific segments such as golf tourism can have an enormous impact on water withdrawals. An 18-hole golf course can consume a few hundred million or even billion cubic metres of water per year. Ironically, climate change is also projected to increase the likelihood of heavy precipitation and other extreme weather events. As a result, the tourism sector is likely to be affected not only by water shortages, but also by water excesses such as floods, which will impact on both natural and cultural heritage attractions in many regions. The higher frequency and higher intensity of natural hazards such as flooding, coastal erosion and more frequent hurricanes and tropical storms will also damage tourism facilities and infrastructure. In fact, this is already happening. The higher frequencies and intensities of hurricanes and other phenomena seem to play a sig- nificant role in the marked increase in insured losses from natural catastrophes that has occurred over recent years. Insurability may soon become a difficult issue for businesses operating in high-risk areas such as flood plains and coastal areas. Nature and biodiversity constitute important resources for tourism that will be strongly affected by climate change. The existence of certain endemic animal populations, birdsong, the 242 chapter 10 Sustainable Tourism
- 268. flowering of plants,coral reefs, the type and cover of forests and other facets of biodiversity will be affected by climate change. Between 20% and 30% of plant and animal species assessed are likely to be at risk of extinction if increases in global average temperature exceed 1.5–2.5°C. Among other things, this will alter landscape aesthetics, a factor that greatly influences destina- tion choice. In Tanzania and Kenya, park managers have noticed that changing climate condi- tions are affecting the migration of the wildebeest herds, in terms of both timing and route. Witnessing this great migration is one of the primary reasons for tourists to visit East Africa. The health of millions of people will also be put at risk by projected climate change, particu- larly in those regions that have a low adaptive capacity. Countries identified as having the lowest adaptive capacity are predominantly in Sub-Saharan Africa and developing countries in Asia. The greatest impacts are likely to be caused by proportionally small increases in diseases that currently have major impacts already and will become even more widely prevalent. Examples include diarrhoea, malnutrition and malaria and other so-called vector-borne diseases transmit- ted by mosquitoes, flies and other vectors. These health impacts will compromise some destina- tions’ ability to cater adequately for tourism, and will also affect tourists themselves, who will be exposed to new health risks when travelling. Indirect impacts from societal change Climate change is thought to pose a risk to future economic growth and to the political stability of some nations. According to the influential Stern Review (2006), there could be an eventual permanent reduction in consumption per capita of 20% later in the twenty-first century or early twenty-second century, if we do nothing to slow down climate change. Any reductions of global GDP due to climate change would be likely to have negative implications for anticipated future growth in tourism spending. Tourism, as discussed in Chapter 12, is known to be sensitive to security issues. Regional climate change can bring about the degradation of fresh water resources, declining food produc- tion, increased storm-related disasters and trans-boundary environmental migration. All of these impacts could overwhelm local capacities to respond to them and result in violence and the destabilisation of fragile governments. Climate change-associated security risks have been iden- tified in a number of regions where tourism is highly important to the local economies, such as the Caribbean and Central America, Mediterranean and North Africa and China. Impacts from (mitigation) policies in other sectors The Stern Review notes that tackling climate change is a pro-growth strategy for the longer term, with the benefits of strong, early action considerably outweighing the costs of doing nothing. It is also clear that in order to achieve the large emissions reductions needed to avoid ‘dangerous’ climate change, absolute emission reductions will eventually be required of the aviation sector, and aviation mitigation policies will therefore become increasingly relevant to international tourism. National or international mitigation policies – that is, policies that seek to reduce greenhouse gas emissions – have an impact on tourist behaviour in a number of ways: by increasing the costs of travel and perhaps real income through inflation, and by fostering environmental attitudes and changes in travel behaviour. Climate change policy initiatives such as carbon trading are likely to increase transport costs enough to outweigh economic savings achieved through efficiency gains. Leisure travellers and short-haul travellers appear to be more sensitive to such price increases than business travellers and those on long-haul trips. One reason for this may be that there are more choices and possi- bilities for substitution for shorter trips compared with longer ones. In addition, tourists who can afford long-distance holidays are likely to be wealthier than average. An increase in air fares may not have an immediate effect (i.e. tourists cannot or do not want to change their plans quickly), but over time tourists will learn to avoid the more expensive option of air travel and become more aware of alternative transport options, such as buses, trains and cars. In common with the role played by the perception of tourists towards travel risk, their per- ception with respect to transport, particularly air travel and its carbon footprint, is possibly more important than tourists’responses to price changes. Again, as with terrorist attacks (see Chapter 12), Climate Change and Tourism 243
- 269. there is akey role played by the media that influences tourists’ behaviour in response to climate change. Cheap air travel has increasingly come to be viewed as a ‘right’ that people appreciate and do not want to give up. Examples of this can be found in the concerns about the impact of ‘anti-travel’ sentiments in Europe, and concerns about the costs of carbon taxes or other mitiga- tion policies have been expressed in Australia, New Zealand and Asian long-haul destinations. Some studies even conclude that a ‘psychology of denial’ exists in terms of people’s awareness of air travel’s contribution to climate change. Impacts on vulnerable destination types The positive and negative impacts of climate change on the tourism sector will vary substan- tially by market segment and geographic region. There will be ‘winners and losers’ at the busi- ness, destination and nation level. In order to minimise associated risks and capitalise upon new opportunities, all tourism businesses and destinations will need to adapt to climate change in a sustainable manner. The vulnerability of tourism is of particular concern to those areas where tourism constitutes the major livelihood of local communities (dependency). The following sec- tion looks at the potential impacts of climate change on three major destination types with established vulnerabilities: mountains, islands and coastal zones, and natural and cultural herit- age areas. Mountain and winter sports destinations Mountain regions are important destinations for global tourism, and snow cover and pristine mountain landscapes are their principal attractions. These features are also very vulnerable to climate change. Sensitive mountain environments will be altered by climate change, with impli- cations for their attractiveness for nature-based tourism, as well as for the frequency and magni- tude of natural hazards. The impact of climate change on the snow-based sports tourism industry is potentially severe. The industry has been repeatedly identified as being at risk regarding global climate change, because of the close linkage between economic performance and climate. The key climate change impacts of interest to the winter sports industry relate to natural snow reliability and also technical snow reliability (i.e. cold temperatures to make snow). The latter is important in areas where snowmaking is almost universal among ski areas and covers a high proportion of terrain suitable for skiing. Known vulnerabilities exist in a range of European and North American countries, but the projected impacts on destinations in these nations vary in magnitude and relate to different time horizons. The Australian and Scottish ski industries could disappear completely if some of the projections relating to moderate or high warming scenarios over the next 50 years materialise. Within most regional markets, however, the probable consequence of climate change will be limited to a contraction in the number of ski operators and destinations. In practice, the higher- altitude destinations are likely to expand at the expense of the lower-altitude ones. A study conducted for the Organization for Economic Cooperation and Development (2007) suggests that the number of ski areas in the European Alps that are considered ‘naturally snow reliable’ will drop from 609 (91%) to 404 (61%) under a 2°C warming scenario and would fur- ther decline to 202 (30%) under a 4°C warming scenario. By comparison, climate change sce- narios for the European Alps project an annual warming of 2.3 to 3.3°C by mid-century and 2.9 to 5.3°C by the end of the twenty-first century. Warming is even more pronounced in the winter months. Developments in natural snow reliability do not tell the whole story. Evidence from North America suggests that advanced snowmaking systems substantially lower the vulnerability of ski areas. Such systems may be beneficial for a ski area as a whole, but require investments that may be too large for individual actors. This may partly explain why advanced snowmaking sys- tems are less common in Europe than in North America, where ski resorts tend to be more integrated. Snowmaking is no solution for snowmobiling, which is another major snow-based winter sport in North America. Snowmobiling is completely reliant on natural snowfall, which 244 chapter 10 Sustainable Tourism
- 270. makes this industrymuch more vulnerable to climate change than the ski industry. Under the rapid climate change scenarios, a reliable snowmobile season will disappear from most regions of eastern North America within 50 years. Impacts on islands and in coastal zones Islands and coastal zones are among the most vulnerable types of tourist destinations with respect to climate change. They are likely to experience an increased intensity and frequency of extreme events, sea-level rise, increased climate variability, changes in ocean circulation and changes in natural ecosystems. It is very likely that the most immediate and significant of these will be changes in the nature of extreme events (e.g. flooding, tropical cyclones, storm surges, heatwaves) and climatic variability (e.g. droughts, and prevailing winds accelerating coastal erosion). Coastal areas are particularly vulnerable to extreme wind events. Major wind-storm disasters and the losses generated by them have increased drastically in recent decades. Extreme events can destroy ecosystems, such as mangrove forests, tropical forests and coral reefs. Coral reefs especially are a crucial resource for tourism and other sectors. In many destinations, reefs are the key pull factor for tourists as a visitor attraction and can be considered a major economic asset. The increase in sea surface temperature and increasing acidity of the water will impact on marine life and coral reefs and erode these assets. Given that most tourism activities take place in coastal zones, sea-level rise is of major importance to tourism. It aggravates coastal erosion and leads to the loss of beaches. Sea-level rise is primarily a consequence of the expansion of sea water (warmer water takes up more space); the continued melting of mountain glaciers and small ice caps add to this. Further global sea-level rise could range from 20 to 60 cm by 2100. Even small rises in sea level will result in significant erosion, increased flood hazard, con- tamination of freshwater aquifers, loss of protective coral reefs, mangrove areas and sand beaches. In small island regions especially, much of the biological diversity and most of the population, agricultural land and capital assets are located in these areas and are, therefore, at risk. Among these vulnerable islands are major tourism destinations. In the Indian Ocean, the Maldives average only 1.5 metres above sea level and projected rates of sea level rise are likely to inundate large areas of the different islands and atolls. Other low-lying islands, such as the Bahamas and Kiribati, face similar problems. Impacts on natural and cultural heritage The natural environment is often a very important determinant of tourism demand. Landscape ranks among the most important factors in destination choice, and tourists are attracted to national parks because they represent an aesthetically pleasing and healthy environment with interesting flora and fauna. The impact of climate change on biodiversity and natural landscapes may have a negative influence on their amenity value and hence on visitor numbers. Coral bleaching is a case in point. Its effects on visitation could be assessed by studying the impacts of the bleaching events in the 1990s and 2000s. In 2016, 93% of individual reefs along the Great Barrier Reef experienced bleaching and 22% of the coral died. Whether the impacts on demand remain limited after sustained periods of bleaching is an open question. For some types of tourism, the loss of individual species is important, rather than the loss of scenic beauty. Sportfishing, for example, depends upon specific types of fish that require spe- cific climatic conditions. Changes in these conditions will lead to financial damage for the sportfishing industry, which for the United States have been estimated at US$320 million per year or more in the 2050s. Cultural heritage includes considerations of built heritage (historic and architectural), archae- ological heritage and socio-cultural heritage. The most obvious impact of climate change on cultural heritage is the direct effect of rising sea level on structures near coasts that may be flooded or damaged by coastal erosion. Increased rainfall resulting in rising water tables will also have an effect on the foundations or the fabric of buildings. Saving vulnerable sites from climate change, including world famous destinations such as Venice, will in many cases be very costly. Climate Change and Tourism 245
- 271. Implications for tourismdemand patterns The response of tourists to the complexity of destination impacts will determine how tourism demand patterns will be affected by climate change. Climate, the natural environment and per- sonal safety are three primary factors in destination choice, and climate change is anticipated to have significant impacts on all three of these factors. Climate is also a principal driver of season- ality in demand, which has been described as one of the most problematic features of the tour- ism industry. Weather and climate are of universal importance in defining destination attractiveness and central motivators in the selection of holiday destination and the timing of discretionary travel. Temperature and sunshine have been found to influence travel patterns and tourism expendi- tures. In addition, the weather conditions experienced at the destination are believed to influ- ence holiday satisfaction. As climate is an important resource for tourists, projected changes in the distribution of climate resources are forecast to have important consequences for tourism. Translating these projected changes in climate resources into projected changes in tourist visitation has proved to be very difficult. Our understanding of how tourists respond to climate variability and change is very limited, and the effect of perceived versus real changes has hardly been explored. In addition, it is uncertain if and how institutions such as school holidays will respond to climate change. Rigid institutions may limit tourists to adaptation through destina- tion choice, whereas flexible institutions may open up the possibility of going on holiday in a different season. For many destinations, coping with climate change will be much easier in this latter scenario. Simulation models have been used to explore the potential impact of climate change on the level of aggregated international tourism. Anticipated impacts include a gradual shift in pre- ferred destinations to higher latitudes and to higher elevations in mountainous areas. Tourists from temperate nations that currently dominate international travel (e.g. northern Europe) are expected to spend more holidays in their home country or nearby, adapting their travel patterns to take advantage of new climatic opportunities closer to home. This shift in travel patterns would have three important implications: proportionally more tourism spending in temperate nations, proportionally less spending in warmer nations now frequented by tourists from tem- perate regions, and a modest net reduction in total international tourist numbers. The above studies assume the existence of certain temperature thresholds, above which fur- ther temperature increases lead to deterioration in the level of attraction of specific destinations. Little is known about such thresholds, however; for instance, about what tourists perceive to be ‘too hot’ for any particular tourism destination. Equally little is known about the role of tourist perceptions of the environmental impacts of global climate change at destinations. Perceptions of coral bleaching, glacier losses or reduced wildlife prevalence may be more important for tourism demand than the actual changes that occur. Information on tourist climate preferences and key thresholds, and tourist perceptions are important knowledge gaps that need to be addressed if potential long-range shifts in tourist demand are to be more accurately forecast. Adaptation to climate change Regardless of the level of success of efforts to reduce emissions, a certain amount of climate change is unavoidable. Even if emissions were reduced to zero today, the global average tem- perature would still increase by another 0.6 °C. The IPCC has therefore indicated that there is a need for societies around the world, and economic sectors like tourism, to adapt to climate change in the decades ahead. Adaptation to climate change refers to an adjustment in natural or human systems in response to actual or expected climatic stimuli or their effects, which moder- ates harm or exploits beneficial opportunities. The tourism industry is known to be remarkably resilient to shocks. Recent disasters from which tourism has quickly recovered include SARS, terrorist attacks and the Asian tsunami. The resilience and dynamic nature of the tourism industry suggests a relatively high climate change adaptive capacity within the sector as a whole. Many stakeholders in the industry are highly optimistic about their ability to cope with the effects of climate change. This optimism 246 chapter 10 Sustainable Tourism
- 272. may not bewarranted, however, as climate change may bring major impacts that the stakehold- ers do not have prior experience with. There are several key barriers to adaptation. While acknowledging the reality and seriousness of climate change, many stakeholders have no clue how climate change might affect their busi- nesses or activities. There is a real or perceived gap between the long timeframes associated with climate change and the short timeframes of business activities. In addition, there is a gap between the broad-scale projections produced by climate models and the very local conditions experienced by the stakeholders. Large parts of the tourism industry are relatively poorly organ- ised, consisting of SMEs with limited human and financial resources to invest in a good under- standing of the relevance of climate change for their business. Importantly, the tourism industry is very image sensitive and is very cautious about even acknowledging concerns about climate change risks for fear of adversely affecting destination or business reputation. Many businesses are therefore inclined to adapt quietly rather than publicly express their worries. Not wanting to be or appear proactive the industry tends to expect public authorities to take the lead. In general, adaptive capacity is thought to vary between the sub-sectors of the tourism indus- try. Tourists have the greatest adaptive capacity, with relative freedom to avoid destinations impacted by climate change or to shift the timing of travel to avoid unfavourable climate condi- tions. Large tour operators, which do not own the infrastructure, are also in a good position to adapt to changes at the destination level because they can respond to clients’ demands and pro- vide information to influence clients’travel choices. Destination communities and tourism oper- ators with large investments in immobile capital assets (e.g. hotel, resort complex, marina or casino) have the lowest adaptive capacity. The new risks introduced by climate change pose additional challenges to the design of new tourism infrastructures. Similarly, existing infrastructure may have to be modified if current performance standards are inconsistent with the changed climatic conditions. For example, tourist accommodation in tropical areas should be built or retro-fitted to be cyclone-proof, with- standing both high average wind speeds and extreme conditions. Early-warning systems can help to reduce risks further. Some climate-related risks cannot be avoided by any adaptation measures. In such cases, insurance is critical. It enables the industry to spread the burdens of such risks. In time, some risks may become uninsurable, however, as the insurance industry faces the prospect of a growth in the number and size of claims as a consequence of climate change. In fact, the insurance industry is already implementing risk-reduction strategies. A number of insurers in the United States over the past decade decided to reduce coverage in Florida and the Gulf of Mexico. Such changes in insurability will have major implications for future tourism reinvestment in and development of disaster-prone regions such as the Caribbean. Adaptation is not limited to technical or behavioural measures; it can also include manage- ment of tourism’s natural resource base. Conservation of biodiversity and maintenance of eco- system structure and function are important climate change adaptation strategies. Establishing and enforcing protected areas is generally considered to be one of the most appropriate strate- gies for ensuring that terrestrial, freshwater and marine ecosystems are resilient to the additional pressures arising from climate change. Protecting the natural environment can also help to reduce the risk of avalanches and rock slides in mountain destinations. These destinations also have a wide range of climate change adaptation options available to cope with reduced natural snowfall and to take advantage of longer warm-weather tourism seasons. The importance of snowmaking as an adaptation to cli- mate variability and change cannot be overstated. In eastern North America and Australia, snowmaking is almost universal among ski operators. In other ski regions such as Western Europe, western North America, East Asia and South America, snowmaking is not as exten- sively used, but is continuing to grow. The sustainability of some adaptation strategies has been questioned. Glacier preservation and expansion of ski areas into higher elevations have been criticised for harming fragile eco- systems and reducing landscape amenities. Communities and environmental organisations have expressed concern about the extensive water and energy use associated with snowmaking, and Climate Change and Tourism 247
- 273. about the chemicaladditives involved in the process. For some ski operators, snowmaking may be uneconomic altogether, because of the elevated costs of energy, infrastructure and water. Product and market diversification are common adaptation strategies to cope with the busi- ness challenges of pronounced tourism seasonality. Many ski resorts have made substantial investments to provide alternative activities for non-skiing visitors (e.g. snowmobiling, indoor pools, health and wellness spas, retail stores). A number of former ski resorts have further diversified their business operations to become ‘four season resorts’, offering non-winter activ- ities such as golf, boating and white-water rafting, mountain biking, paragliding, horseback riding and indoor skiing. Product diversification is also a key adaptation option for island and coastal destinations. Many of them seek to become less dependent on beach tourism and other climate-sensitive activities by adding golf courses, cultural heritage sites and shopping malls to their portfolio. Climate change risk management should be integrated into business practices relating to revenue and cost, assets and liabilities, and the wider supply chain. As the above show, tourism businesses, entrepreneurs and investors can improve their management of climate change risks, independent from the adaptation policies undertaken at an institutional level (e.g. international organisations, national governments or communities). This includes managing vulnerabilities to direct impacts from climate change, and those to changes in the resource or customer bases. For example, business planning might benefit from an understanding of which markets might react most strongly to temperature increases or to the negative perception of air travel. Conclusion Sustainability is an integral part of twenty-first century tourism development, in spite of the dif- ficulties associated with achieving it or even defining it. Sustainable strategies are now at the forefront of the tourism agenda. The greatest benefit of the sustainability agenda has been the fact that it has forced wider stakeholder engagement in the development of tourism in the major- ity of destinations. This means that the environmental, socio-cultural and economic benefits and costs have a more holistic and comprehensive airing. Climatic change adds to the factors that influence perceived travel risk and major environ- mental events such as tsunamis, earthquakes and hurricanes attract a great deal of media atten- tion. Destinations can adapt to climatic change within limits by building infrastructure and superstructure designed to withstand extreme weather conditions, developing tourism facilities on land with higher elevations or away from areas that are known to be more at risk of tempera- ture or rainfall levels that exceed the threshold of acceptability exhibited by tourists, but this is a slow and very expensive process. Some businesses, such as intermediaries, are better able to adapt to climatic change whereas others have no room at all for adaptation. The only certain thing is that travel-related risk has always been a part of the industry, it has become more important over the past couple of decades and is likely to continue to influence tourists’decision making in an increasingly significant way. 1. Define sustainability. 2. What are the major obstacles to achieving sustainable development? 3. What methods can be used to make tourism more sustainable than it is at present? 4. What is meant by the term ‘carrying capacity’? 5. What are the major direct and indirect impacts of climate change on tourism destinations? 6. How might tourism destinations adapt to climate change and what are the limitations to such adaptations? Self-Check Questions 248 chapter 10 Sustainable Tourism
- 274. Youtube Sustainability Tourism in Nepal:a success story? Responsible Tourism + Nepal https://www.youtube.com/watch?v=74EEd3SDBZ8 Sustainable tourism means business https://www.youtube.com/watch?v=qsZgB90pOrc Risks and benefits of eco-tourism: India https://www.youtube.com/watch?v=-qpBJN-Q2yo Climate change Climate Change in the Pacific: COASTS (narrated by Neil deGrasse Tyson) https://www.youtube.com/watch?v=dq234w56n2o Christiana Figueres addresses UNWTO–ASEAN International Conference on Tourism and Climate Change https://www.youtube.com/watch?v=otmxh6cjScg The effects of climate change on glacier tourism in Iceland https://www.youtube.com/watch?v=YcFO2xAebpU References and Further Reading Brundtland, G. (ed.) (1987) Our Common Future: World Commission on Environment and Development, Oxford University Press, Oxford. Butler, R.W. (1997) ‘The concept of carrying capacity for tourism destinations’, pp. 11–22 in Cooper, C.P. and Wanhill, S.R.C. (eds), Tourism Development: Environmental and Community Issues, Wiley, Chichester. Ciscar, J.-M., Iglesias, A., Feyen, L., Szabo, L., Regermorter, D.V., Amelung, B., Nicholls, R., Watkiss, P., Christenson, O.B., Dankers, R. Garrote, L., Goodess, C.M., Hunt, A. Moreno, A., Richards, J. and Soria,A. (2011) ‘Physical and economic consequences of climate change in Europe’, PNAS 108(7), 2678–83. Esparon, M., Stoeckl, N., Farr, M., and Larson, S. (2015) ‘The significance of environmental values for destination competitiveness and sustainable tourism strategy making: insights from Australia’s Great Barrier Reef World Heritage Area’, Journal of Sustainable Tourism 23(5), 706–25. IUCN, UNEP and WWF (1980) ‘World conservation strategy: living resource conservation for sustainable development’, IUCN, Gland, Switzerland. Johnson, P. and Thomas, B. (1994) ‘The notion of capacity in tourism: a review of the issues’, pp. 297–308 in Cooper, C.P. and Lockwood, A. (eds), Progress in Tourism, Recreation and Hospitality Management, Wiley, Chichester. Lee, T.H. (2014) ‘Influence analysis of community resident support for sustainable tourism development’, Tourism Management 34, 37–46. McElroy, J. (2004) ‘Global perspectives of Caribbean tourism’, pp. 39–56 in Duval, D.T. (ed.), Tourism in the Caribbean, Routledge, London. OECD (2007) Climate Change in the European Alps: Adapting Winter Tourism and Natural Hazards Management, available from http://www.oecd.org/env/cc/climatechangeintheeurope- analpsadaptingwintertourismandnaturalhazardsmanagement.htm Stern Review (2006) at http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury. gov.uk/stern_review_report.htm References and Further Reading 249
- 275. Major case study10.1 Gijón, one of the best sustainable tourism examples Environmental Commitment: more than 85% of the council’s rural area. It stresses the Botanic Garden, unique in the Cantabrian coast, with an area of 25 hectares where about 30,000 plants are cataloged, emphasizing the Tragamón Carbayera, over 400 years old. Culture and Tradition: Gijón is a city rooted in popular values and with plenty of activities and museums that allow tourists to experience firsthand the history and local customs. Social Commitment: Gijón has different programs to boost economic activity, job creation and sustainable development in motion. In addition, for the most vulnerable, the care and coverage of basic needs is guaranteed. It highlights the beginning of a ‘Comprehensive Plan of accessibility and non- discrimination’ aimed at achieving an accessible city. Gijón, a lighthouse of the sustainable tourism examples Certified in 2013 as ‘Biosphere World Urban Destina- tion’, awarded by the Responsible Tourism Institute (ITR) and supported by UNESCO, the city of Gijón remains as one of the best sustainable tourism examples. After renewing its certificate of sustainability thanks to the strong involvement of the tourism area of Gijón and the development of a marketing plan undertaken to publicise the city’s commitment to responsible tourism, Gijón continues to champion the example of a city com- mitted to responsible tourism thanks to the many bene- fits it offers in terms of sustainability both to visitors and to its own citizens. A broad culture and cuisine that blend with its green landscapes, a comprehensive care of the environment, a high quality of life and a tourism model that focuses on the satisfaction of its visitors are the strengths that have made Gijón a city certified the Biosphere World Urban Destination. The city of Gijón. Photograph 10.2 250 chapter 10 Sustainable Tourism
- 276. Discussion Questions 1. Iscertification the answer to sustainable tourism? What are the advantages and disadvantages of certi- fication? 2. What aspects of sustainability are not encapsulated in such destinations? 3. Should all destinations take the Gijón approach? Differential For Quality: Awarded as the best destination for tourism quality in 2012 by the Ministry of Industry, Energy and Tourism of Spain and being recognized again for the work done dur- ing 2014, Gijón works by being based on a differentiated tourism model of innovation, quality and environment. Source: https://www.biospheretourism.com/en/blog/sustainable-tourism- examples-gijon/2. Major case study 10.1 251
- 277. Chapter 11 Tourism andDevelopment Planning Learning Outcomes The objectives of this chapter are to ensure that you: ● understand how tourism fits into the general theories of economic development; ● understand the importance of integrated tourism planning and development, development planning layers and the role of the community in this respect; ● understand how approaches such as Visioning, SWOT, STEP and PESTEL can add value to the planning process and the likely success of strategies; ● are able to identify characteristics of the tourism product that have implications for tourism planning and development; and ● can outline the major steps involved in the tourism planning and development process.
- 278. All forms ofeconomic development require careful planning if they are to be successful in achieving the implicit or explicit objectives. This chapter demonstrates that tourism development, because it is a multi- sector activity, bringing with it environmental, social and economic impacts (discussed in Chapters 7–9), requires considerable planning if it is to be successful and sustainable (see Chapter 10). The role of tourism within the major general economic development theories is examined. We also show that the development of tourism will not be optimal if it is not undertaken as a partnership that engages all stakeholders rather than being left in the hands of the private sector. The private sector can have a myopic view that is focused upon short-term profits (although the increasing importance of corporate social responsibility mitigates against this with the larger companies) whereas the public can be conservative in its approach. This chapter argues that tourism development planning requires careful cooperation and coordination of public and pri- vate sector organisations, together with the engagement of local communities. This chapter also demon- strates that the emphasis of tourism development planning has moved away from the rigid ‘grand design’ master plan in favour of more flexible and reactive development plans. This change in approach is due, in no small way, to the recognition that development is not a finite concept. Development is infinite and takes place in an ever-changing environment. Therefore development plans should attempt to facilitate the desired objectives while taking into account the changing factors that influence not only the objectives but also the means of achieving them. Introduction Tourism and Economic Development Theories There have been many theories put forward to explain the process of economic development (see for instance, Peet and Hartwick, 2015). A few of the more influential economic develop- ment theories (see Nafziger, 1997) over the years have included: ● The English classical theory of economic stagnation. ● Marx’s historical approach. ● Rostow’s identification of stages of economic growth. ● Vicious circles of demand/supply and investment. ● Balanced and unbalanced growth theories. ● Theories of dependence. It is possible to examine the main threads of these theories in order to identify whether or not there is a role for tourism within the more general theories of economic development, although it should be noted that since the 1970s there has been a tendency to move away from the grand theoretical notions of economic development and instead use a more specific, case-by-case, approach. Nevertheless, it can be helpful to look at the characteristics of tourism development within a framework of general economic development. English classical theory of economic stagnation This theory grew out of the classical writings of early economists Malthus, Mill and Ricardo. To understand the concept of the theory it needs to be noted that such writers were very much influ- enced by Newtonian physics with its belief that life was never random and was ordered by some ‘grand design’. Of the various assumptions employed by the classical economists, the operation of this theory can best be seen by focusing upon just two of them: that in the event of no tech- nological progress, output was constrained by the scarcity of land, and the law of diminishing returns. Tourism and Economic Development Theories 253
- 279. In Figure 11.1it can be seen that additional units of labour with a fixed amount of land increase output per unit of labour significantly when the labour is increased from 1 to 3. How- ever, when a fourth unit of labour is added the increase in output, although positive, is not as great as the previous increase. The increase in output achieved when the fifth and sixth units of labour are added becomes progressively less. If more than six units of labour are added the out- put starts to decline as diseconomies of large scale are experienced. The theory also suggests that the long-term wage rate, the natural wage rate, was at the sub- sistence level. Therefore, in spite of short-term deviations from the natural wage rate, it would always tend to return to the natural level. Under this theory, if food production increases, wages rise and the extra food available means that the population becomes healthier and as a consequence the size of the population increases. As the population increases there are more mouths to feed and more units of labour with the fixed supply of land. As the labour force is increased the average wage rate falls and continues to do so until the subsistence wage rate is reached. If the wage rate falls below subsistence level then the population declines and the scarcity of labour forces the average wage rate back up to its natural level. Given the lack of any technological progress, the only way to mitigate the diminishing returns is to increase the capital accumulation per worker. But even here, the clas- sical economists had tied themselves into an economic straitjacket. The need to acquire profits and interest payments in return for increased capital stocks requires the existence of increased availability of surplus value (output less the cost of labour) but the diminishing returns assump- tion means that the surplus diminishes and hence the return on capital. With diminishing returns on capital there is reduced incentive to increase the capital per worker and the route to economic stagnation and decline is set. There are good grounds for viewing the English classical theory as a theory of doom and gloom. The flaws in the theory are many and include the neglect of technological progress that can greatly multiply the output per worker. Also, the assumption that population growth was uniquely determined by prosperity is found to be wanting, particularly in industrialised coun- tries where voluntary birth control has stabilised population levels. The ownership of capital and land is not necessarily the prerogative of the private capital owners. State ownership of capital and land may result in a different set of objectives that may allow continued growth. Marx’s historical approach to development Marx’s historical materialism approach to development is framed within a dynamic world rather than being based on the static scenario used by the classical economists. Within this dynamic Output Labour Units of output 40 35 30 25 20 15 10 5 0 1 2 3 4 5 6 7 8 9 The law of diminishing returns Figure 11.1 254 chapter 11 Tourism and Development Planning
- 280. view of development,changing technology, enhanced organisation of production and the devel- opment of human skills all work together to provide lubricant for the engine of change. The world, as seen by Marx and Engels, moved naturally from feudalism to capitalism to socialism and then to communism. The economic consequences of the rise to capitalism include demand expanding more slowly than productive capacity and an increase in monopolistic power that forces out small businesses, creating a segment of the population of workers who are without property. The dynamics of this results in what Marx referred to as a reserve army of unem- ployed that acts as a buffer to absorb the shocks as the economy expands and contracts during business cycles. The result is a series of crises where the ownership of productive capacity is repeatedly challenged by the educated proletariat until communism is established and socialism through the state becomes redundant. There are a number of flaws in Marx’s view of economic development, including the observed facts, that revolution when the proletariat took the state happened in Russia rather than the West at a time when Russia was one of the least developed capitalistic countries in Europe. The the- ory relies upon there being a conflict of the objectives held by capitalists and those held by the proletariat. If there is no conflict and both sides realise that they can prosper if they both decide to share a fast-growing output then the dynamism of Marx’s theory takes a serious blow. In spite of this, Marx’s theory still finds a great deal of support from those either discontented with the distribution of wealth in their country or worried about the threats of the recent trends towards globalisation and the dominance of multinational corporations. Rostow’s theory of growth and development The processes of change identified within Marx’s dynamic world were not evenly distributed. If a historical view is taken, the existence of the pre-capitalist societies was spread over long peri- ods of time with little evidence of significant changes to economic life. It was the recognition that there were five distinct stages through which economies pass as they develop that led to Rostow identifying the stages in his influential work (Rostow, 1990). The five stages were: 1. The (pre-industrial) traditional society. 2. The preconditions for economic take-off. 3. Economic take-off. 4. Self-sustained drive towards maturity. 5. The age of mass consumption. Rostow’s work was more a collection of identified sequential trends rather than a theory. The tenet of Rostow’s paper is that there is a natural inertia that needs to be overcome before self- sustained development takes place. This inertia is overcome by a build-up of transport invest- ment; enhanced organisation and production in agriculture; and increased imports – particularly capital. These three factors Rostow refers to as the preconditions for take-off. The preconditions were deemed to have been met when countries experience a rapid increase in net investment, have a major leading economic sector with strong linkages to other sectors and have in place the necessary infrastructure to support the development of modern industries. Once the preconditions for take-off have been met and take-off has started, the economy is deemed to be on a route of self-sustained consistent growth. This stage is associated with migra- tion from rural to urban areas, a developed labour force and a state system that provides stabil- ity. This process of self-sustained growth will continue until it matures into a stage of mass consumption where the ownership of durable goods such as automobiles, white goods and other equipment is considered to be the norm. Rostow’s view of economic development was more influential within government circles, where it presumably struck some familiar chords in US government offices, than it has within academic circles. Rostow’s academic peers received his theory with mixed views and it was severely criticised by some as being too vague, overly simple and impossible to test. His theory was also criticised on the basis that it lumped together a wide range of countries under the Tourism and Economic Development Theories 255
- 281. category of traditionaleconomies irrespective of their resources, history or structure. The theory relating to the role played by net investment in breaking down the natural inertia of economies is not supported by empirical evidence and there is no demonstrable reason as to why the com- ponents of each stage should not occur at any time in the development process rather than only in the stage to which Rostow refers. A fundamental criticism of Rostow’s theory is that it implicitly assumes that development today will mirror the development process that was expe- rienced by today’s developed countries. This ignores the effects of international linkages and trade as well as assuming that today’s developing countries all have the same objectives for development as were pursued by the industrialised countries of today. Vicious circles of demand/supply and investment This theoretical approach suggests that countries are poor because they always have been. The poverty leading to poverty premise can be examined from either the demand side or the supply side in order to arrive at the same conclusion. From the demand side it is suggested that if a country is poor then the levels of income will be low. This means that the level of demand for goods and services will also be low and therefore there is no incentive for entrepreneurs to invest in additional productive capacity. This means that the amount of capital per worker remains low, productivity remains low, and this sustains the link between low income and low demand. From the supply side, there is a suggestion that low income levels present few oppor- tunities for saving and this means that there is little in the way of capital availability to invest in productive capacity. With low investment there is low capital per worker and this maintains the low productivity which leads to low income and savings. These mechanisms are appealing from the point of view of simplicity but it is their simplicity that gives most cause for concern. The link between income levels and savings at national level is not as obvious as this theory suggests. Corporate saving is an important element of total sav- ings and in many cases the marginal propensity to consume may not be significantly higher than in industrialised countries where there are constant forces trying to induce consumers to spend more. The simplicity of the theories also suggests a level of volatility that is not apparent in national economies. For instance, a small injection of additional demand would lead to the opportunity to invest in additional capital per worker, leading to additional productivity, higher income levels and higher demand. This would expand the economy out of its poverty trap. Balanced and unbalanced growth approaches These theories are variants of a theme and relate to whether development occurs across all sec- tors or whether there is development in a few leading sectors that will act as a catalyst for devel- opment across the economy as a whole. The balanced growth theory suggests that it is not possible to overcome the natural inertia in a stagnant economy by investing in and developing only a few export sectors. There is indivisibility in infrastructure that requires a broader devel- opment platform if it is to be successful and investment decisions often have linkages with other investment decisions without which they would not be viable. As an alternative there is the sug- gestion that unbalanced growth, where investment occurs in just a few leading sectors, is far more achievable with resources of developing countries and that these leading sectors will drag the other sectors up in their wake. Dependency theory of development The dependency theory of economic development suggests that the ability of an economy to achieve autonomous development is determined by its dependency upon other capitalist coun- tries. The greater the dependency upon other capitalist economies the lower the ability to achieve economic development. Proponents of this theory cite the colonial periods as evidence of for- eign powers exploiting less developed countries in order to grow richer as a result of their rela- tionship – even to the point of de-industrialising them. There are many instances where colonialism can be seen to have had such a negative impact on a colony’s economic development, 256 chapter 11 Tourism and Development Planning
- 282. although it isoften difficult to determine how much development would have taken place with- out colonialism. Furthermore, there are many countries that were never colonised and that have remained underdeveloped, such as Afghanistan and Ethiopia. Nevertheless, there are few people who would argue that colonialism and dependency did not lead to the suffocating of indigenous development forces through: ● migration of workers from rural to colonial organised urban areas; ● ‘cropping’ the best workforce members to work in colonial offices; ● foreign trade on unfair terms; and ● opening of local markets to foreign companies. The development theories and tourism’s role Within the English classical theory of development there is no clear role for any industry beyond the limits imposed by the scarcity of land. Tourism development is a form of real estate develop- ment and as such it will add to the pressures on the use of land without providing a way of breaking down the constraining factors associated with diminishing returns. As a vehicle or catalyst of change, there is a clear role for tourism within Marx’s theory of development. Tourism can speed up the process of change because it has product characteristics (see below) that enable it to develop quickly and help the transfer process perhaps from capital- ism through to socialism and eventually communism. However, there are elements of the indus- try that thrive on exploiting economies of large-scale production (natural monopolies such as airlines) that would resist the movement from capitalism to more egalitarian-based systems. But, overall, tourism can be seen as an excellent driving force for economic, social and political change. If the role of tourism is examined with respect to Rostow’s stages of economic develop- ment there is clearly a strong role that can be played by tourism. The development of the transport and infrastructure, together with the import of capital, that is seen as a precondition for take-off is a fundamental part of most tourism development. Thus, tourism can be used as a catalyst to overcome the inertia of developing countries. The organisation of agricultural production is also often associated with the injection of the additional demand presented by tourism development. Tourism could play a significant role within the vicious circle theory of development simply by either injecting additional demand into an economy or providing a stimulus to investment. The introduction of tourism under this theory of development would result in an expanding economy when viewed from either a demand or a supply side. In either the balanced or unbalanced growth theory approaches there is a clear role for tour- ism within the theories, either as part of the overall broad balanced approach to development or as one of the leading sectors in an unbalanced approach. Why tourism would be chosen as a lead sector within the unbalanced approach to development can be found in the extent of linkages that tourism has with other industries within an economy. Often they are far more widely spread and of deeper significance than those traditionally found with primary goods markets such as agriculture or fishing. It is not difficult to relate modern-day tourism traits to the dependency theory of develop- ment. There are often fears about dependency on tourism as an industry and as a dependency upon foreign suppliers (particularly tour operators and transport companies) as they are the lifeline of tourism development. As such the dependency theory is more an explanation of underdevelopment rather than one that tries to explain development. There is a role for tourism but it can be either a stimulant or an inhibitor of development depending upon ownership of the tourism establishment. In summary, of the major theories that have attempted to enhance our understanding of the economic development of countries, there is a major role that can be played by tourism except in the case of the English classical theory where there is little scope for any industrial sector other than the latitude offered by the availability of land and its relationship with population (see Tourism and Economic Development Theories 257
- 283. Table 11.1). Tourismleads the global economy as an engine of development as we move further into the twenty-first century. Its growth performance has been nothing short of astonishing over the last half of the twentieth century. The result of this is that tourism is a development option that most governments fondly embrace. When the discussion turns to ‘sustainable’development the key economic development theo- ries discussed above are all found to be lacking as they do not encompass the environmental and socio-cultural aspects that must be considered if sustainability is to be explored. Nor does the market system fully reflect the true cost of resources upon which so much of tourism depends. (This is a topic that is explored in Chapters 6 and 8.) The role for tourism in major development theories Table 11.1 Theories A role for tourism English classical theory × Marx’s theory ✓ Rostow’s theory of growth ✓ Vicious circle theory ✓ Balanced/unbalanced ✓ Dependency theory ✓ Integrated Planning and Development When planning for the development of an industry or an economy the planners and policy mak- ers may take a proactive stance and develop strategies to secure the desired development path. This approach requires deep and thorough understanding of not only the local economy and its structure, limitations and strengths, but also the probable effects of external factors and how they may impinge on the development process. Alternatively, one can adopt the reactive stance of chaos theory. This approach is based upon the premise that there are too many variables, internally and externally, to be able to plan. These variables cannot be controlled nor can they be predicted with sufficient levels of accuracy because we are working in a complex system (Baggio, 2013). Therefore, it is better to develop reactive schemes so as to be in good order to meet the unexpected rather than to attempt a proactive but indeterminable development path. This latter approach involves training policy makers to react (like pilots are trained using flight simu- lators) so that their reactions develop in positive and enlightened ways. However, both proactive and reactive approaches make use of other approaches, such as analogies. Pilots are trained to fly to predetermined paths and schedules while, at the same time, they are trained to be able to react sensibly to unexpected events. The same may be said about tourism development plan- ning. To rely purely on reactive policy solutions is to forsake the prospect of optimising tourism development. A second issue that has given rise to much academic debate since the 1990s is the notion of sustainable development (see Chapter 10). Although much that has been said about sustainable development is sound from an academic viewpoint, it is neither innovative nor radical. The notion that we must look forward to future generations when we are planning to consume finite resources today is commendable and such notions should also be transferred to all other production and consumption activities, not just tourism. Furthermore, the term ‘sustainable development’ is a misnomer and has led to much confusion. Development has sometimes been confused with the concept of growth and it is this misunderstanding that has caused the increased vol- ume of literature to be published proclaiming the call for sustainable development. In reality, 258 chapter 11 Tourism and Development Planning
- 284. Intensive tourism development. Photograph11.1 Low-intensity tourism development: the Kuelap archaeological complex, Peru. Tourism here is relatively small scale, but on the rise. Source: Yolka/Shutterstock.com Photograph 11.2 Integrated Planning and Development 259
- 285. development has tobe sustainable to be classified as development at all, otherwise it is short- term growth. Most textbooks that attempt a definition of development include some statement about self-sustained growth. However, the allocation of finite resources to productive activities is not sustainable unless technological inventions and innovations can find alternative resources in the future. There is a danger in inhibiting specific forms of tourism activities in order to reduce the immediate impacts of tourism in the short term because such remedial actions may unleash far more devastating and less sustainable impacts in the future. Clearly, there is no sim- ple answer to the sustainability debate, only to state that development planning has always been concerned with sustainability issues and it is only ‘bad’ planning that has given so much impetus to these recent debates. Tourism and development If tourism is to be incorporated into a country’s development plan it must be organised and developed according to a strategy constructed on sound foundations. These foundations should take account of the coordination of the tourism-related sectors, and the supply and demand for the tourism product. The process of development planning involves a wide cross-section of participants who may bring with them goals that are conflicting. Furthermore, different stake- holders may well bring with them incompatible perceptions about the industry and the develop- ment process itself. Before looking at the process of tourism development planning it is worth considering some of the advantages and disadvantages associated with selecting tourism as a catalyst for general development. Tourism product characteristics The tourism product is unique in terms of the range and diversity of activities encompassed. Few products can compete with the wide variety of activities included under the heading of tourism. Tourists can add to this uniqueness by bringing their own extra dimension to the prod- uct. Furthermore, the tourism product must be consumed within the geographical boundaries of the destination in which it is offered. The producers of the tourism product, however, are not always confined to the local economy and in this growing age of globalisation tourism may include transport businesses, accommodation owners, tour operators, travel agents and infor- mation providers that are based outside of the destination. As with most personal services, production and consumption occurs simultaneously and, in the case of tourism, such produc- tion affects most other sectors (directly and indirectly) of the economy. As seen elsewhere in this book, this simultaneity of production and consumption also creates specific social (and to some extent, environmental) impacts not normally associated with the production of other goods and services. Tourism as a means of wealth redistribution Tourism is widely recognised as one of the fastest earners of foreign exchange and one of the most effective income redistribution factors in many countries. Although able to provide strong redistribution effects within an economy when residents of urban areas spend some of their income in the less populated poorer regions of their country, it has been disappointing as a vehi- cle to redress the global economic imbalance between North and South. Nevertheless, it has provided a valuable source of foreign exchange to the smaller developing countries that find it difficult to compete in the tangible goods markets. Domestic tourism is a very effective means of redistributing income between different areas within a national economy. This is because tourism tends to take place in the more sparsely populated scenic areas where there is little in the way of manufacturing industry. Therefore tourism provides the opportunity to create employment and income in areas with limited alter- native sources. Thus, English residents head for Cornwall, the Peak District, Scotland and Wales for domestic trips, the French leave Paris en masse in August and generally head south. The mass exodus of people out of the cities throughout Europe, the Americas and Australia during the main vacation periods is evidence of this domestic redistribution at work. 260 chapter 11 Tourism and Development Planning
- 286. Since the Islamicrevolution in Iran, tourism growth in the country has suffered. Iran claims to have an abun- dance of natural and cultural attractions, some of which are registered with UNESCO. The destination also lays claim to having a hospitable guest culture where ‘hospitality is our old tradition’. In spite of all of these factors the tourism industry faces a myriad of obstacles, each one enough to deter the development and growth of the tourism industry. This includes but is not limited to an 8-year war with neighbouring Iraq, eco- nomic sanctions imposed by the international community, and accusations of state sponsored terrorism, as a result of which the state of the current infrastructure and superstructure leaves much to be desired. Conse- quently the country has an image that may not make it desirable for many of the important tourism generating markets. Following a challenging period of negotiations, an agreement with the West has led to a lifting of economic sanctions (2016) and the country has enjoyed an increase in the number of international tourist arrivals. Iran has high hopes of attracting increasing numbers of international visitors and has set a target of 20 million visitors by 2025; this is twice as many visitors as that enjoyed by Morocco in 2015. In spite of this target, the current state of tourism planning in the country seems to be lacking cohesion and is ad hoc. For example, within the green belt of northern Iran, which had previously been seen as one of the major attractions for international visitors, planning and development along the coast lacks appropriate envi- ronmental planning in areas that are considered to be environmentally fragile. The country, like many develop- ing countries, is considered to be subject to corruption which will make it challenging to be able to develop the industry into one that is attractive and yet sustainable. The ambitious target for 2025 needs considerable drive if it is to attract tourists to a country that is still bedevilled by a poor image and a tradition where there is a presence of strong sharia law which will work counter to attracting sun, sea and sand tourists. For those who are attracted by the rich and welcoming Iranian culture, the development of infrastructure and quality of the superstructure often lag behind those of the coun- try’s main competitor destinations. For Iran to put its attractions, rich culture and food onto the tourist map, it needs to put both its international image and its domestic industry into a place where they clearly meet the international standards that are expected by visitors. Discussion Questions 1. In terms of tourism development, at what stage would you perceive Iran to be? 2. Comment on how planning may be used to take advantage of Iran’s strengths and opportunities whilst addressing its weaknesses and threats. Use a SWOT matrix to explain your answer. Mini case study 11.1 Iran plans to become global tourism hotspot The literature on international tourism as a means of income redistribution is somewhat deceptive. Many of the articles written about tourism development tend to focus upon economi- cally, environmentally and/or socially vulnerable destinations. This is because they provide a more visible stage on which to examine each of the consequences of tourism development. However, in reality, the vast bulk of international tourist movement takes place within their own region and between industrialised countries. In 2015 more than 80% of total international tour- ist arrivals went to destinations within their own region. In terms of the North–South debate, tourists escape the industrialised countries to visit other industrialised countries and the South enjoys little in the way of a significant share of the wealth created by tourism. This is a fact that should be borne in mind when examining the global consequences of tourism development. Tourism is a labour-intensive industry Tourism, in common with most personal service industries, is labour intensive. For developing countries with surplus labour and for industrialised countries with high levels of unemployment, Integrated Planning and Development 261
- 287. tourism provides aneffective means of generating employment opportunities. In general, at a time when the labour:capital ratio is moving strongly against labour in most production industries, the importance of the labour-absorbing qualities of tourism cannot be overlooked. However, in many countries there are labour shortages and it is not uncommon to find these countries importing labour to work in their tourism industries. Under such circumstances one might question whether these countries have a comparative advantage in tourism and whether or not their factors of production would be better employed in alternative industries. Even in those situations where there is an abundance of labour it may be the case that there are other factors of production that provide arguments in favour of development routes other than through tourism. Where there are clear indications that the local destination would benefit from the employment created by tourism, this view should be tempered by the characteristics of the labour force generally associated with tourism-related establishments. The employment pro- file of large hotels, for example, tends to yield a relatively flat occupational pyramid such as that shown in Figure 11.2. This means that middle and senior management posts are relatively scarce compared with the high number of low-skill employees. Such an occupational pyramid results in a lack of career development and, consequently, a lack of staff motivation. A point also wor- thy of consideration is the predominance of females and young people employed in tourism- related establishments. Attempts have been made to increase the height of the occupational pyramid by, for example, the introduction of departments and layers of middle management posts in luxury hotels. This, it was hoped, would provide a much-needed impetus to career prospects and motivation. How- ever, recent experience suggests that there has been a reversal of this trend with ‘de-layering’ and the career development prospects in large hotels are not significantly different from that exhibited three decades ago. Thus, although tourism may provide a quick and ready means of increasing the number of employed people in the local economy, its contribution to long-term development may be questionable. To expand this argument further it is necessary to consider the secondary employment effects associated with tourism development and here one can find a much broader range of skill requirements and career development paths. Therefore, although the direct employment effects of tourism may be subject to some limiting characteristics, the indirect effects do not suffer in the same way. The structure of the tourism industry One of the more notable features of the tourism industry is the proportion of the total businesses that are classified as small and medium-sized enterprises (SMEs). The nature of tourism as a personal service industry tends to make it attractive to individual and family entrepreneurs. The proliferation of small businesses brings with it both advantages and disadvantages. In the first instance it facilitates quick start-ups and flexible supply sources that can respond rapidly to fluctuations in demand. It is also an industry that, from the outside, does not appear technically daunting and thus encourages budding entrepreneurs to enter the industry. There are few barriers to entry in the sense that businesses can be started with small amounts of investment and Managerial Supervisory Craft Operative 6% 8% 22% 64% Typical hotel employment structure Source: Cooper, 1991 (reproduced with permission) Figure 11.2 262 chapter 11 Tourism and Development Planning
- 288. there is roomfor product differentiation to provide some monopolistic power to the smallest businesses. However, these advantages can also be the source of the industry’s worst problems in terms of: ● inadequate staff training (unstructured informal training); ● too high a debt/equity ratio leading to business failure (borrowing on the goodwill of the business); and ● inefficiency problems because of a failure to capitalise on economies of large-scale production. Although the vast majority of business establishments in tourism may be considered to be SMEs, a significant proportion of the total output of the industry is attributable to the larger national and multinational corporations. Nevertheless, there is certainly scope for a wide range of business structures within tourism, from bed and breakfast units through to international hotel chains, from independent sightseeing flight operators to national airline giants. Each type of business has its own operating characteristics, with a tendency for the smaller firms to be more labour intensive and dependent upon local suppliers, to the larger companies that make extensive use of capital and bulk purchase from a global warehouse. Protectionism The simultaneity of production and consumption of tourism means that the tourist must travel to the destination to enjoy the product. This makes tourism unique as an export industry. The con- sumers of international tourism (the importing country) often fail to recognise their tourist spending overseas as an import and hence do not see it as a serious threat to the level of employ- ment in their own countries. Thus, tourism tends to escape the danger of being singled out for protectionism or trade retaliation, except as part of a general macro-economic policy which restricts foreign exchange allowances to correct balance of payment problems. Having said that, it is often the existence of foreign exchange restrictions in many of the developing regions of the world that explains the relatively slow rates of growth in interregional tourism (as, for example, in South-EastAsia). Similarly, when countries are faced with currency crises (such as the United Kingdom in the 1960s and 1970s and Malaysia in the 1990s) the governments of the day imposed restrictions on the amount of currency that outbound tourists could convert. In the global financial crisis that started in 2008 industries not associated with protectionism are a valuable tool to combat the effects of recession. Multitude of industries Tourism is a composite industry product. That is, it is composed of the output of the travel, accommodation and food and beverage, retail, entertainment sectors plus many others. This means that its economic and development impacts are felt widely from the initial impact onwards. It also tends to suggest that tourism has strong linkages with many other sectors of the economy and it is the strength of these linkages that determines the value of the output, income and employment multipliers associated with tourist expenditure. The variety of industries included under the umbrella of tourism means that there are a vari- ety of employment opportunities generated by tourism activity. This may stimulate the labour market and the delivery of vocational training. Price flexibility Many developing countries are dependent upon the world market prices for primary agricultural produce for their foreign exchange receipts. That is, the prices of, say, cocoa, sugar, rice, etc., are determined in world commodity markets where individual countries have very little say in determining the final price of the goods. Tourism, on the other hand, provides a source of for- eign exchange that is subject to some degree of control by the host country. Product differentia- tion, either through natural endowments or man-made resources, can provide some price-setting power. The greater the product differentiation that is either innate or can be engineered, the Integrated Planning and Development 263
- 289. greater the monopolisticpower and hence the greater freedom a destination has in setting its own price. Product differentiation can be based on natural factors, ranging from broad aspects such as climate (Florida, Bermuda and Iceland as examples) to specific natural attractions (such as Victoria Falls, Great Barrier Reef and Grand Canyon). Differentiation can also be achieved through socio-cultural aspects, heritage (such as the Pyramids of Egypt, the Great Wall of China and Stonehenge in the United Kingdom) and even in terms of the quality of the tourism product itself. Basically, it does not matter what aspect is used to differentiate the product providing there is sufficient demand for it. However, tourism is also highly price competitive. Price competitive The bulk of the tourism market, which is resort tourism, is extremely price sensitive and, conse- quently, internationally competitive. The effects of currency fluctuations on the number of inter- national arrivals and the volume of tourist expenditure adequately demonstrate this fact. Although most mass tourism destinations claim a high degree of product differentiation, a brief examination of the major tour operators’ brochures selling sun, sand and sea products will show that the major battleground is fought not on hotels, the quality of beaches or the sea, but the price of the package. Price competition is a fundamental feature of the budget tourism market for both destinations and operators. Seasonality A striking feature of tourism in many countries is the way in which the level of activity fluctu- ates throughout the year. This is not a characteristic unique to tourism – agriculture is also an industry used to seasonal fluctuations in activity – but the majority of industries are not subject to the degree of seasonality experienced by tourism establishments. Seasonality in tourism can be caused by either supply factors, such as those mentioned above, or demand factors such as the availability of tourists to travel at different times of the year. For instance, international holi- day packages aimed at attracting family groups from Europe or the United States would need to bear in mind that the availability of most families will be determined by the school holidays. The effect of this can be seen by searching for flight costs during school term periods and those during school holiday periods. The latter tend to be associated with a premium price tag. There- fore, the forces of seasonality attack the consumption of the product from both sides of the market – demand and supply. Irrespective of the cause of the seasonality in the tourism industry, it tends to be reflected in: ● employment (casual/seasonal staff); ● investment (low annual returns on capital); ● pricing policies (discounted off-season prices). From an economics point of view, any business subject to seasonal fluctuations in demand for its output is faced with a dilemma. If it purchases sufficient resources to meet the peak load demand, then it will have to carry spare productive capacity for the remainder of the year. If it gauges its resources according to the average level of demand it will spend part of the year car- rying spare capacity and be unable to meet the peak-load demand level. Alternatively, it can take on variable resources (staff) to meet the peak-load demand and then shed these variable factors of resources during the off-season. Although attractive from the point of view of the profit and loss account, this widely practised solution does nothing to improve employer/employee rela- tions. Also, there is an inherent waste in taking on staff each year on a temporary basis, invest- ing in human resources (by training) and then losing that investment at the end of the main season. In order to offset some of the costs associated with seasonality many hotels and operators offer holidays for off-season periods with heavily discounted prices. By offering lower prices it is possible to induce visitors to a destination at a time when they would otherwise not visit. However, there are limits to such discounting. First, the revenue that establishments receive dur- ing the off-season must at least cover the variable costs of production. If this is the case then, by 264 chapter 11 Tourism and Development Planning
- 290. opening in theoff-season, they will be able to maintain their staff and, perhaps, make some contribution to their fixed costs. Secondly, the discounting of off-season packages should not be so great as to damage the desirability of the main season product. There are also destinations that do not suffer much from seasonal variations and this provides them with a competitive advantage by allowing them to operate at a higher throughput of tourist activity across the year without suffering from as much socio-cultural and environmental impacts as their seasonal competitors. High operating leverage/fixed costs Many of the tourism-related industries are subject to high levels of fixed costs. That is, there is a large capital element that must be committed before any output is produced. In industries sub- ject to this type of cost structure (e.g. airlines and hotels) the volume of sales becomes the all- important factor. This aspect is shown in Figure 11.3, where the vertical axis measures revenue and costs, and the horizontal axis depicts the quantity of output produced during the time period under consideration. The break-even output for the non-tourism industry is represented by Q1 whereas Q2 shows the break-even output for the tourism industry. The cost curve C1 relates to the cost function of a non-tourism industry and C2 relates to the cost function of a typical tourism- related industry. We can see that both industries are subject to the same variable-cost structures (that is why the two cost functions run parallel to each other) but the tourism-related industry is subject to a higher fixed-cost element. The end result is that the break-even point for the tourism-related industry (BEP2) is much higher than that for the non-tourism industry, thus the volume of output becomes all important for high fixed-cost industries. The break-even point refers to that level of revenue and output that will just cover the costs involved in producing the output. The preoccupation with volume displayed by industries that have high operating leverages can also influence the mindset of the national tourist organisations. Many tourist destinations base their tourism development plans on volume figures. Countries the world over tend to cele- brate the fact that visitor numbers exceed some magical annual threshold and many countries still express the targets/objectives of their development plans in terms of bed spaces and tourist nights. However, the presence of tourists in itself is not the main objective of any of these desti- nations. The primary aims are economic and the indicators of performance and targets should be expressed in economic rather than volume figures and/or constrained by environmental or social indicator values. Revenue and costs Quantity of output 0 Q2 C2 C1 Q1 BEP2 BEP1 R The effect of fixed costs on the break-even point of production Figure 11.3 Integrated Planning and Development 265
- 291. Clearly, there isoverwhelming evidence to support the view that there are a number of factors related to the tourism industry which make it an attractive development option. But some of these factors may make it less attractive if they are not controlled or alleviated by proper planning. Development Planning Layers Tourism development planning can take place at international, national and sub-national levels. International tourism planning At the international level organisations such as the WTO, EU, OECD, Caribbean Tourism Organization (CTO) and the Tourism Council for the South Pacific (TCSP) all undertake, albeit limited, forms of tourism planning. This level of planning is often weak in structure, detail and enforcement. It is generally provided in guideline form in order to assist the member states. National tourism planning National tourism planning encapsulates the tourism development plans for a country as a whole but often includes specific objectives for particular sub-national regions or types of areas within the national boundary. The plans manifest themselves in a variety of forms including: ● tourism policy; ● marketing strategies; ● taxation structure; ● incentive/grant schemes; ● legislation (e.g. employment, investment, repatriation of profits); ● infrastructure developments; ● external and internal transport systems and organisations; and ● education/training and manpower programmes. Regional/local tourism planning Regional and local tourism planning deals with specific issues that affect a sub-national area. It tends to be much more detailed and specific than its national counterpart and can vary quite significantly from area to area. For instance, there may be areas where tourism development is to be encouraged and others where specific types of tourism facilities, such as a casino, are actively discouraged. Such plans may relate to a state within a country, to a county, a city or even a local resort area. However, there are constraints on how different regional plans can be from other regional plans or from the national plan. Certainly they should not detract from the overall aims and objectives of the national plan or those of another region. Ideally, the sub-national plans should work in harmony with the national plan as far as local conditions will allow. Plans at all levels should include consideration of how information is transferred to the consumer – the tourist. It should also be borne in mind that what you do not tell the tourist is often as vital as what you do tell them. This is particularly true from the point of view of visitor management when attempts are made to direct the tourists towards some specific regions but deter them from visiting others. Such information can be disseminated through a variety of media including the Internet, which is becoming increasingly important as a tool for tourism development and marketing. However, traditionally the following media have been used: ● visitor orientation centres; ● tourist information centres; 266 chapter 11 Tourism and Development Planning
- 292. ● advertising brochures,maps, magazine articles and broadcasting; ● self-guided tours and trails; ● official guides; ● posters and displays. The above can all be seen as a means to visitor awareness and can be used to support more formal programmes run by tourism officials. In the globalised world in which we now live the cooperation, coordination and co-integration of the different planning levels is not only more feasible than it was in the middle of last century, it is more vital and is likely to be one of the characterising trends of tourism planning as we move forward through this century. The Tourism Development Planning Process The concept of planning is concerned with organising some future events in order to achieve pre-specified objectives. The pre-specified objectives are clearly fundamental and start from the question: ‘Why do we want to develop tourism?’ Of course there are many reasons and the eco- nomic reasons often prevail. However, even when there is a green light to go ahead and develop tourism from an economic perspective there are still many questions that have to be asked and these can often be identified and debated during a ‘Visioning Exercise’. A visioning exercise is where the key stakeholders are brought together to discuss and agree on what it is they envisage for their destination. What are the activities that are acceptable, which activities would not be acceptable, what is the scale of the development, the limits to acceptable development, etc. Often these visioning exercise lead to the crystallisation of the tourism development objectives which are discussed below. Integrated planning and development is a form of comprehensive planning: comprehensive because it integrates all forms of planning – economic, physical, social and cultural. Planning should not be seen as a static concept, rather it attempts to deploy the best strategy in a world of changing internal and external influences. Although planning as a dynamic concept can take a variety of forms, there is a consistent structure that can be applied to the process of planning. That structure is set out in Figure 11.4. Study recognition and preparation The study recognition and preparation are really concerned with the recognition by the planning authorities (normally the government), private industry and the local community that tourism is a desirable development option, together with some awareness of the constraints within which it must develop. The fact that it is recognised that a strategy is required is an important indica- tion that the government and people are aware of the complexity of the tourism industry and its need for coordination. Setting of objectives or goals for the strategy In order to design a development plan successfully it is necessary to have a clear understanding of the objectives that are to be achieved by the development of tourism. A common mistake in tourism development planning is to lose sight of the reasons why tourism has been selected as a development option. If it is the case that tourism is seen as the most appropriate vehicle for generating foreign exchange and employment opportunities, these goals should be embedded in the development strategy from the start. This helps to avoid the problems encountered when the objectives are set down in terms of visitor numbers or annual guest nights. Some major objectives, commonly found in tourism development plans, are set out below: ● To develop a tourism sector that, in all respects and at all levels, is of high quality, though not necessarily of high cost. ● To encourage the use of tourism for both cultural and economic exchange. The Tourism Development Planning Process 267
- 293. ● To distributethe economic benefits of tourism, both direct and indirect, as widely and to as many of the host community as feasible. ● To preserve cultural and natural resources as part of tourism development and facilitate this through architectural and landscape design which reflect local traditions. ● To appeal to a broad cross-section of international (and domestic) tourists through policies and programmes of site and facility development. ● To maximise foreign exchange earnings to ensure a sound balance of payments. ● To attract high-spending ‘upmarket’ tourists. ● To increase employment opportunities. ● To aid peripheral regions by raising incomes and employment, thus slowing down or halting emigration. It is important that the objectives set out in the development plan are clear, unambiguous, non-conflicting and achievable. We can see from the above list of objectives that these examples are not specific in nature, thus it would be difficult to assess whether or not the objective had indeed been achieved. Also, some of the objectives may be conflicting, particularly those relat- ing to the type of tourist to be attracted and their desired impact. Where the objectives are vague and/or conflicting, the tourism development plan is doomed to failure from the start. Study recognition and preparation Setting of objectives or goals for the strategy Survey of existing data Implementation of new surveys Analysis of secondary and primary data Initial policy and plan formulation Recommendations Implementation Monitoring and plan reformulation The monitoring and reformulation process is dynamic and feeds back into the policy and planning stage Several recommendations may be put forward for policy choice Filling the information gaps What data are available? Why do we want tourism development? Recognising the need for a strategy – a vital step forward The key stages of the planning process Figure 11.4 268 chapter 11 Tourism and Development Planning
- 294. Survey of existingdata Before setting out on the data collection stage it is vital to undertake an existing data search. Although this may sound obvious, there are many instances where data that are crucial to tourism development planning are collected and held by government agencies not expressly concerned with the planning process. Thus, when researchers go out into the field to collect primary data they are told that businesses have already supplied this information. The authors have come across incidences where no fewer than five hotel surveys were being conducted concurrently. This is not only wasteful in terms of time and resources, but it also depletes the goodwill of the business community. Implementation of new surveys Once the existing data are known and the scope of the planning objectives have been set, the information gap can be filled by undertaking primary data collection. The data requirements for development planning are quite comprehensive and include: ● tourist characteristics/travel patterns; ● tourist attractions; ● accommodation facilities; ● other tourist facilities; ● land availability and use; ● economic structure – all sectors; ● education and training needs and provisions; ● environmental indicators; ● socio-cultural characteristics; ● investment and available capital – all sectors; ● public and private sector organisations; and ● relevant legislation and regulation. All of the above factors are considered with respect to both their existing states and their projected states within the development plan’s timescale. The survey of existing data and primary data collection should generate an awareness of the importance of good-quality data for planning, management and monitoring purposes. The authorities should implement a long-term strategy of data enhancement by setting up a man- agement information system that is flexible enough to accommodate the collection of new data when they become available and to encompass issues not necessarily identified within the current strategy. Analyses Once the objectives have been formulated, the analytical framework chosen will determine the precise sets of data to be collected. Once collected, the data are analysed by considering a wide range of issues. The major issues to be considered generally fall into four subject areas: 1. Asset evaluation. Examines the existing and potential stock of assets, the ways in which they can be developed and the probable constraints on that development. The asset evaluation should also include an appraisal of the infrastructure in order to determine whether or not further investment is required. The asset evaluation should begin with a broad approach, looking at assets across a wide range of sectors and their alternative uses. The evaluation could then be focused to concentrate on the tourism-related assets and how they should be best employed within that framework. 2. Market analysis. Is clearly a crucial component of a sound development plan. The market analysis undertaken during tourism development planning is sometimes too narrow in scope The Tourism Development Planning Process 269
- 295. to be ofoptimum use. Initial issues that need to be addressed concern global, regional and country market trends by type of tourism activity. Another fundamental question is ‘Why do tourists come to this destination?’ Too many development plans of the past have relied upon the assumption of constant market share and this is not a valid assumption. To appraise the development plans, attempts must be made to determine whether or not the proposed devel- opments are appropriate, the markets that are likely to be attracted by these developments and the price level or tariff structure that should be adopted. The market analysis must also incorporate a study of developments in competitive markets and/or in competitive modes of transport. Generally these issues will be tackled within a competitive and comparative advantage study that incorporates a SWOT analysis. 3. Development planning. A major issue to be studied under this heading is the time phasing of the development plan in order to ensure successful implementation. The possible sources of funding of the development are examined and the appropriate level of foreign funding (if any) is calculated. The analysis section encompasses all issues, such as the number of foreign employees, the marketing strategy to be adopted, investment incentives, organisational structures and training programmes. 4. Impact analyses. Should be all-embracing, covering issues such as the probable effects that the development will have on the host community and the environment, the economic implications in terms of key indicators (employment, income, government revenue and foreign exchange flows) and the probable economic rates of return. Analyses should also examine the risks involved and the sensitivity of the results to changing assumptions. The integration of eco- nomic, environmental and socio-cultural impact analyses is a vital advancement to tourism planning tools. Sensitivity testing should be undertaken to explore the specific impacts that may be created by particular types of tourism, such as pink tourism, dark tourism and medical tourism, to explore the more intense impacts that may be associated with such developments. The analyses set out above are of both a quantitative and qualitative nature and most of these issues must be faced before a move can be made towards formulating policy recommendations. The resilience of the strategies can be tested through the use of SWOT, PESTEL, STEP, PEST analyses to explore the weaknesses, strengths, opportunities and threats which exist that could benefit or detract from the strategies. The framework for such tests takes into account the fol- lowing dimensions: Political factors Stability of the government and the dynamics of change. Legislation, including labour, environmental, planning, social and constitutional laws. Media freedom, corruption and bureaucracy. Trading legislation together with regulation and deregulation. Economic factors GDP, changes in growth, inflation, interest rates in originating and the local economies. Income distribution and growth. Fluctuations in activity, internal and external. Imports, exports, exchange rates and globalisation. Labour demand and supply, training, unemployment rates. Social factors Population dynamics: age distribution, gender. Education, career development, employment profiles. Health awareness and social mobility. Safety, security and risk management. Religion, work ethics, etc. 270 chapter 11 Tourism and Development Planning
- 296. Technological factors Research anddevelopment activities, rates of technological change. New technologies, incentives, transfer of technologies. Infrastructural developments. Environmental factors Resource usage and depletion. Protection of identified species and areas. Climate change effects, including extreme weather events. Pollution and clean-up strategies. Legal factors Legal changes (internal and external) such as anti-trust/monopolies legislation. Trading, consumer and employment legislation. Discrimination law (internal and external). By assessing the different factors and the creation of alternative scenarios on how they may affect the destination and, more importantly, how they might affect the performance of the rec- ommended strategies, policy makers can assess the corridors of likely outcomes from the strate- gies. The SWOT and PESTEL approaches can also be used earlier in the planning process to help identify those aspects that might create development opportunities (opportunities) and those aspects that give rise to concern (threats) in the future. Policy and plan formulation The results from the analyses of the survey data are unlikely to yield a unique solution and, instead, will tend to suggest a number of possibilities for development strategies. The process from here is one of formulating draft plans on the basis of each policy option derived from the analyses. The alternative plans are then evaluated in terms of their potential economic, physical and socio-cultural costs and benefits, together with any possible problem areas that may result from the implementation of each plan. The plans that achieve the most objectives while not exposing the destination to potentially serious problems are then selected and drawn up in full. Finally, a ‘preferred’ plan is drafted for policy consideration. Recommendations The preferred plan that has been selected on the basis of the analyses, having now been com- pleted in detail, is submitted to the authorities by the planning team. This submission is sent to the authorities, together with recommendations concerning the optimum methods of developing tourism in the destination and, in so doing, achieving the plan’s objectives. It is more than likely that the planning team will present the authorities with a selection of recommendations that all fulfil the requirements of the preferred plan. It is at this stage that feedback between the author- ities and the development plan team is essential in order to focus attention on issues where attention is needed and to play down areas where it is not. During the process of these discus- sions the final development plan is formulated. Therefore, the recommendations stage should really be regarded as a period of dialogue between the planning team and the policy makers. Implementation of the plan The methods of implementing the development plan will have been considered throughout most stages of its construction. Thus, during the secondary data survey stage attention will have been paid to many aspects that relate to implementation – such as the existing legislative and regula- tory frameworks. By the time that the implementation stage is reached, all of the necessary legislation and regulation controls will have been brought into effect. Furthermore, the methods The Tourism Development Planning Process 271
- 297. used to facilitatepublic debate and discussions relating to the development will have been devised and enquiry and appeal mechanisms will be in place. During the implementation stage particular attention will need to be paid to the phasing of the plan and the critical path analyses will have highlighted areas that may be the cause of concern. Monitoring and reformulation Once the development plan has been implemented it must be closely monitored in order to detect any deviations that may occur from the projected path of development. Any such deviations – and there will probably be some – must be analysed in order to assess how they will affect the development plan and its objectives. Once this secondary analysis has been completed, the research team can report back to the authorities with recommendations as to how the plan and its policy recommendations should be modified in order to stay on target. External and internal fac- tors may influence the performance of the strategy and it is important that the monitoring systems enable the research team to be fully informed about all relevant changes. Furthermore, even with the best-laid plans, unexpected events do occur and it is here that the reactive policy skills of the research team and policy makers come into play. For instance, there could be outbreaks of dis- ease that are of international headline importance (the outbreak of the plague in India, the Zika virus in Brazil, terrorist activities (Bali, Cairo, London, Madrid, New York and Paris) or a desti- nation may be deemed to be unsafe by governments (such as – at various times – Egypt, Tunisia, Indonesia, Saudi Arabia and Sri Lanka) that cause the international flows of tourists to deviate from their expected path. Even positive developments in competing countries, such as the liber- alisation of South Africa, can have unforeseen effects on other destinations. It is important that the research team is aware of how sensitive the strategy is to each of the conceivable variables and how best to react to such events. Even then the tourism plan is likely to face inconceivable events where the research team and policy makers will have to rely upon intuition. The development plan team The development plan team will need considerable expertise and experience in the formulation of such plans. In general, the team will consist of four groups of specialists, falling into the broad categories of technical services, marketing specialists, planners and economists. In more detail, the likely spread of specialist skills will include: ● market analysts; ● physical planners; ● economists; ● environmental scientists; ● infrastructure engineers; ● transport engineers; ● social scientists; ● architects and designers; and ● legal experts. The plan will be constructed over a period of time and this time can be broken down into five distinct phases. 1. Identification and inventory of the existing situation. This phase includes: a) characteristics and structure of current levels of demand; b) study consumer choice; c) current land use, land tenure and land-use control; d) existing natural and artificial attractions; e) ecosystem factors – particularly those considered to be vulnerable; 272 chapter 11 Tourism and Development Planning
- 298. f) economic structuresand the capacity thresholds of industries; g) labour force skill mix and educational base, together with availability; h) accommodation facilities; i) tourist services facilities; j) infrastructure facilities and capacities; k) transport facilities and capacities; l) graphic presentation of physical inventory. The above data will be used to establish the adequacy of existing structures and facilities, the classification and cost organisation of existing facilities (together with an index of standards currently achieved), and the economic impact of present tourism activity. This then leads on to the second phase. 2. Forecasts for the future. This phase will include forecasts of future demand and probable tourist movements and needs. This will be complemented by an analysis of the implications of these forecasts for future production levels of each relevant service and good, together with the infrastructural requirements. Anticipated standards of service will be examined and the economic forecasts of local repercussions will be estimated. 3. Plan formulation. The formulation of the plan will include proposed programmes of market organisation and promotion, comprehensive land-use and control planning, detailed infra- structural plans and the economic, environmental and social evaluations associated with the proposed development plan. Again it is likely to include a graphic presentation of land use and infrastructure, together with a mapping of social impacts and the constraints imposed by the environmental considerations. 4. Specific project development. This phase will include an analysis of specific policies and projects for marketing and tourism management. The physical planners and architects will draw up selections of alternative layouts relating to specific projects and alternative solutions to infrastructural development problems will be developed. Costs of the alternative projects and infrastructural schemes will be assessed, along with the economic analysis of the various possible investment projects. Once the specific projects have been selected from the various alternatives these will, again, be subject to graphic presentations. The local environmental issues will be assessed and methods of alleviating problems will be set out. Examples of envi- ronmental planning actions could be broadly based, such as the treatment of raw sewage and the maintenance of water quality, or highly specific, such as the planned periodic movements of footpaths to prevent serious erosion. Matters relating to visitor orientation programmes, visitor management and interpretation will all be considered and set out within this phase. 5. Implementation. The implementation programme will be set into motion with construction and supervision, technical and managerial assistance in tourism development projects, and financial analysis, and the recommended infrastructure investment programme will com- mence. The implementation stage will include the setting up of the continuing monitoring and re-evaluation activities to ensure that the strategy is performing optimally and so that adjustments can be made swiftly if the circumstances (internally or externally) change. Tourism Development Planning: When It Goes Wrong Even the best-laid plans can be knocked off course or fail because of unexpected events. Disaster management is an important element of modern-day planning and tourism is subject to a wide range of disasters, including earthquakes, hurricanes, infectious diseases, public unrest, conflicts and acts of terrorism.A large number of tourism development plans are, to varying degrees, unsuc- cessful. Given the fact that such plans operate in an environment that is changing at an increasing rate, because of forces acting outside the control of the authorities, often outside the geographical area of the destination, perhaps this is not surprising. For instance, the terrorist attacks on the Tourism Development Planning: When It Goes Wrong 273
- 299. United States on11 September 2001 changed tourism flows in ways that have severely damaged the tourism development plans of many Caribbean states, and the increasing levels of conflict in the Middle East and North Africa (MENA), accelerated by the events of the Arab Spring and the subsequent rise in the terrorist group known as ISIS, have severely damaged all tourism to that region and diverted tourists to ‘safer’ destinations in mainland Europe. Examples of other uncer- tainties that can be thrown into the tourism development melting point include the United King- dom vote in favour of BREXIT and the uncertainties associated with leaving the EU. The vote result shocked many industry players and consumers throughout Europe (including the United King- dom). Investment plans have been put on hold by many large corporations and the levels of uncer- tainty is generally bad for business. This may bring long-term undesirable consequences for the tourism industry throughout Europe. However, many plans fail as a result of inadequacies in the development plans themselves. Discussions about this latter type of failure can be broken down into two categories: failure at the design stage and failure at the implementation stage. Design stage plan failure Many of the tourism development plans that fail do so because, at the design stage, they follow no more than the basic formulation of tourism development. Consider the basic tourism devel- opment plan in Figure 11.5. A plan of this structure will provide a general framework for state and municipal/local investments and will help to guide and evaluate the proposals of private developers. However, this type of plan structure lacks the analytical detail and scope necessary for a successful tourism development plan. Quite often this absence of analytical components is a reflection of the planning bodies that carry out the construction of the plan, bodies lacking in planning expertise and experience. More importantly, the plan does not give a clear statement with respect to its objectives – objectives must be achievable, unambiguous and non-conflicting. The plan also fails to take into account the wider issues relating to environmental and social impacts because it is driven uniquely by its financial returns. One of the dangers of drawing up development plans in order to seek external funding is that the myopic view of financial profit and loss accounts may cause the planners to overlook some of the fundamental issues involved. This may well result in a plan that will fail financially as well as structurally. The development plan takes no consideration of the impact of tourism on the host commu- nity, the environment and the economy. The projects are only evaluated on a financial basis (profit and loss accounts) and take no account of social costs and benefits. Survey of resources and existing facilities Analysis of global market share and trends Programme of additional facilities Land-use plan with location of existing facilities Evaluation of costs and returns Basic tourism development plan Figure 11.5 274 chapter 11 Tourism and Development Planning
- 300. Too much emphasisis placed upon physical development, i.e. supply-led tourism develop- ment, without proper consideration of returns to capital investments and effects on the market. The plan structure fails to make adequate market assessment. The global approach of examining tourist flows from the tourist-generating countries and projecting forward to future time periods under the assumption that all destinations will receive their fair share, fails to address the funda- mental issue of why people want to come to this particular destination. Unless this issue is addressed future projections can be wildly off target. Taking the above points into account, the basic development plan structure can be modified as in Figure 11.6. Implementation stage plan failure Problems encountered at the implementation stage are largely, but not exclusively, concerned with miscalculations regarding the use of land and the control of land usage or the costs involved. The global financial crisis that started in 2008 is to some extent still echoing around the world and has resulted in many governments and private sector organisations cutting back on their planned investments. Tourism is, after all, an activity largely involved in real estate develop- ment. The type of land difficulties encountered during the implementation stage include the following: ● Those that actually undertake the development are sometimes more concerned with real estate speculation rather than the operation of tourist facilities. Thus, the motivation for development (particularly when incentives are on offer) may be more to do with capital gain than the tourism product. Such speculative development can lead to poorly designed facilities which are inefficient to operate, or facilities situated in poor locations. Tourism plan objectives Survey of resources and existing facilities Competitive and comparative advantage analysis Comprehensive market evaluation and assessment Programme of additional facilities Land-use plan with location of additional facilities Evaluation of public and private costs and benefits Integrated analyses of economic, environmental and social impacts This information then feeds back into the objectives stage for re-assessment Monitoring and re-evaluation A N A L Y S I S Modified basic development plan Figure 11.6 Tourism Development Planning: When It Goes Wrong 275
- 301. ● Development oftentakes place on the basis of a high debt/equity ratio using land values as security for the loans. This may lead to financial failure when property sales and operating profits do not materialise. ● The planning authorities often underestimate the difficulties that can be encountered when attempting to control the use of land. The only certain way of controlling land usage is by ownership. ● Failure to introduce the required planning legislation quickly enough to implement the devel- opment plan, or the lack of ability to enforce such legislation. ● If the specific sites earmarked for development are ‘leaked’ prior to the implementation of the development plan, land speculation and price inflation is likely to follow. This will alter the economic evaluations and may turn a viable project into a certain failure. Other problems that may be encountered include the following: ● Failure to coordinate intermediaries in the travel trade, private sector development and public sector provision. Tour operators are an extremely influential component of the tourism pro- cess. If left to market forces then oligopolist behaviour can put severe pressure on the eco- nomic profitability and local benefits derived from tourism will suffer. Lack of coordination between public and private sectors can result in supply bottlenecks, affecting most aspects of the tourism product, damaging the economic benefits associated with the tourism activity, adversely affecting visitor satisfaction, and consequently causing the plan to miss its targets. ● Poor communications and infrastructure. ● Inadequate procedures to deal with public opposition and representations concerning the proposed development. A lack of such a mechanism can slow the development process down considerably and result in plan failure. One of the most common scenarios from unsound tourism planning policies is over- exploitation – when the carrying capacity thresholds of a destination are exceeded, such as in Aya Napa in Cyprus where the local population was displaced by tourism development or Benidorm in Spain during the rapid growth stages that created pressures on infrastructure, water supply, health and safety. Such excesses tend to lead to a decline in the quality of the tourism product and, ultimately, to a decline in the ‘quality’ of tourists, i.e. tourists associated with greater undesirable impacts and lower spend. Under such circumstances the destination may find some or all of the following indicators: ● ecological imbalance through overuse of resources; ● outbreaks of diseases through infrastructural failure; ● congestion, queues and economic inefficiencies; ● deterioration of natural and artificial environment through overuse; ● resentment towards tourists; ● increases in criminal activities; and ● destruction of host community’s values. Although some of the above problems can be alleviated, such as improving the infrastructure to reduce the health risks of water and sewage treatment failure, some of them cannot. The effects of over-exploitation can be minimised, however, by diverting pressures. For instance, ecological imbalances can be tackled by: ● appropriate visitor flow management; ● fencing off areas subject to overuse; ● providing alternative routes and facilities for tourists to relieve others; ● dispersing tourists over wider or to different areas; ● zoning tourism-related activities; 276 chapter 11 Tourism and Development Planning
- 302. ● educating touristsand hosts to limit socio-cultural damage; and ● encouraging more positive local involvement in tourism activities. One of the most well-tried techniques is that of access control – the volume or flow of tourists can be controlled economically, through prices, or physically, through closures, limiting parking facilities, transport or issuing quotas. There are, of course, dangers associated with these remedial actions. For instance, dispersing tourists to other areas or to a wider area can sow the seeds for greater long-term problems if the source of the over-exploitation is not harnessed. Dispersing tourists temporally by extending the tourist season can reduce the time that some destinations need to recover from the industry’s activities. Redirecting tourism flows may alleviate damaged areas in the short term, but only to replace them with newly damaged areas in the longer term. Such dispersion can also conflict with the prime objectives of the tourism plan. Zoning brings with it many limitations and prob- lems, particularly in border areas. Therefore, when the remedial actions are implemented they should be seen as short-term alleviation methods until the true source of the problems can be tackled. Finally, the issue of quality should be embedded in all aspects of tourism development plan- ning. The issue of quality is vital for successful tourism development and should manifest itself in the structure and nature of the plans, the educational institutions that train the management and labour force and the monitoring and evaluation of the tourism development process. There are destinations, such as Mauritius and some Indonesian resorts, that owe their competitive advantage to the ‘quality’ of their tourism product and use ‘quality’ as a means of product dif- ferentiation. Quality should not be confused with high price or up-market tourism. It is just as important to strive for quality in a bed and breakfast or one-star hotel as it is in a five-star hotel or resort. However, when quality is the only factor leading to a competitive edge, then the devel- opment of the destination is vulnerable because quality is replicable by other destinations. This means that quality should be considered as a vital part of any tourism development strategy if the strategy is to achieve long-term success. Conclusion Tourism, as an industry, fits well into the various economic development theories that have been put forward over the past couple of centuries. The only theory that does not provide a positive role for tourism in achieving general economic development is the English classical theory which provides little hope for any industry. The remaining theories all suggest that tourism would be a useful component of general economic development. The successful development of tourism requires the construction of a development plan or strategy that is flexible and thorough. Flexibility is required in order to adjust and reformulate in response to internal and external changes. Thoroughness is required because of the complexity of the tourism industry and the economic, environmental and social consequences of its devel- opment. The issue of ‘sustainability’ is no more than sound planning because development requires that the path chosen is one that is in some way sustainable. Although the process of tourism development planning will be specific from destination to destination there are pro- cesses that need to be followed at national and sub-national levels and these processes provide the framework for tourism development planning. Tourism development plan failure, when it occurs, is likely to be attributable to failures at either the design stage (inadequate planning structure) or the implementation stage. Both forms of failure are common but in many instances there are remedial actions that may be taken to alleviate some of the problems encountered by failure. Finally, it is important that authorities have contingency plans in place to deal with unexpected events that may knock the tourism strategy off-course. Conclusion 277
- 303. 1. Which theoriesof economic development provide the best basis for tourism as a catalyst for economic development? 2. What are the major steps, and their sequence, that need to be undertaken as part of the planning process? 3. What reasons can be cited to explain tourism development plan failure at the design stage? 4. Why do tourism master plans/strategies fail at the implementation stage? 5. List the characteristics of the tourism product that influence its attractiveness as a develop- ment option. In so doing identify whether the characteristic provides a positive or negative influence when considering tourism as a development option. Self-Check Questions References and Further Reading Ashworth, G. and Dietvorst, A. (1995) Tourism and Spatial Transformations: Implications for Policy and Planning, CAB, Oxford. Baggio, R. (2013) ‘Studying complex tourism systems: a novel approach based on networks derived from a time series’, paper for the XIV April International Academic Conference on Economic and Social Development, Moscow, 2–5 April. Bodlender, J. and Gerty, M. (1992) Guidelines on Tourism Investment, WTO, Madrid. Chopra, S. (1991) Tourism and Development in India, Ashish, New York.Cooper, C. (1991) Progress in Tourism, Recreation and Hospitality Management, Wiley, Chichester. De Kadt, E. (1979) Tourism, Passport to Development, Oxford University Press, Oxford. Edgell, D. (1990) International Tourism Policy, Van Nostrand Reinhold, New York.Hall, C.M. and Jenkins, J.M. (1994) Tourism and Public Policy, Routledge, London. Inskeep, E. (1993) National and Regional Planning, Methodologies and Case Studies, WTO/ Routledge, Madrid/London. Inskeep, E. and Kallenberger, M. (1992) An Integrated Approach to Resort Development, WTO, Madrid. Jansen-Verbeke, M. (1998) Leisure, Recreation and Tourism in Inner Cities, Routledge, London. Johnson, P. and Thomas, B. (eds) (1992) Perspectives on Tourism Policy, Mansell, London. Kinniard, V.H. and Hall, D.R. (eds) (1994) Tourism Development: The Gender Dimension, Belhaven, London. Lawson, F. (1995) Hotels and Resorts: Planning, Design and Refurbishment, Butterworth Heinemann, Oxford.Murphy, P. (1997) Quality Management in Urban Tourism, Wiley, New York. Nafziger, E.W. (1997) The Economics of Developing Countries, 3rd edn, Prentice Hall, Upper Saddle River, NJ. Peet, R. and Hartwick, E. (2015) Theories of Development: Contentions, Arguments and Alternatives, 3rd edn, Guildford Press, New York. Rostow, W.W. (1990) Stages of Economic Growth: A Non-Communist Manifesto, 3rd edn, Cambridge University Press, Cambridge. WTO (1980) Tourism and Employment: Enhancing the Status of Tourism Professions, WTO, Madrid. 278 chapter 11 Tourism and Development Planning
- 304. Major case study11.1 Republic of Kenya Ministry of Tourism Strategic Plan 2008–2012 (c) treble annual national earnings from Kshs 65.4 billion in 2007 to Kshs 200 billion by 2012. The plan outlines the major strategic objectives to be implemented within the plan period and provides imple- mentation strategies, activity implementation plans, monitoring and evaluation plan, financial requirements projections and proposes a new Ministry structure. The plan also envisages mobilisation of resources beyond Central Government’s budgetary allocations and out- lines some of the potential sources of funds and how they will be identified. It is projected that the Ministry will require an estimated Kshs 116 billion to implement its strategies and activities over the Plan period. The Ministry’s objectives and the requisite strategies needed to actualize the tourism sector goals are: Objective 1: To formulate and implement an appropriate policy and legal framework for the development of the tourism sector The objective will be achieved through the following strategies: ● Finalize and facilitate the enactment of the National Tourism Bill. ● Operationalize the Tourism Act. ● Harmonize and enhance coordination of tourism development and service delivery. Objective 2: To develop new products and diversify source markets The strategies for achieving this objective are: ● Develop and diversify tourism products ● Broaden the source markets. Objective 3: To increase tourism revenue from Ksh. 65 billion in 2007 to Ksh. 200 billion by 2012 This objective will be accomplished by implementing the following strategies: ● Increase the number of international tourists from 1.8 to 3 million. ● Increase the number of domestic bednights from 1.8 to 3.6 million. ● Increase average spending per visitor from Kshs 40,000 to Kshs 70,000. Kenya Vision 2030 is the country’s new development blueprint covering the period 2008 to 2030. It aims to transform Kenya into a newly industrialising, ‘middle- income country providing a high quality life to all its citi- zens by the year 2030’. The Vision has been developed through an all-inclusive and participatory stakeholder consultative process, involving Kenyans from all parts of the country. It has also benefited from suggestions by some of the leading local and international experts on how the newly industrializing countries around the world have made the leap from poverty to widely-shared pros- perity and equity. The Vision is anchored on three ‘pillars’: the eco- nomic, the social and the political. The adoption of the Vision by Kenya comes after the successful implementa- tion of the Economic Recovery Strategy for Wealth and Employment Creation (ERS) which has enabled the country’s economy to revert back to the path of rapid growth since 2002, when GDP grew from a low of 0.6% rising gradually to 6.1% in 2006 and 6.3% in the first quarter of 2007. The economic pillar aims to achieve an economic growth rate of 10% per annum by 2012. Six priority sectors have been targeted to raise the national GDP growth rate to 10% by 2012. Tourism has been listed as the leading player of the six sectors. Others include Agriculture and Livestock, Wholesale and Retail Trade, Manufacturing, Business Process Outsourcing and Financial Services. The social pillar seeks to build a just, cohesive and equitable social development in a clean and secure environment. The political pillar aims to realise an issue- based, people-centred, result-oriented and accountable democratic system that respects the rule of law, and protects the rights and freedoms of every individual in Kenyan society. The Kenya Vision 2030 is to be imple- mented in successive five-year Medium-Term Plans, with the first one covering the period 2008–2012. The Ministry of Tourism’s Strategic Plan for fiscal years 2008/9–2012/13 takes into account the Ministry’s commitment to achieve the tourism sector goals as spelt out in Vision 2030 and the Medium Term Plan (2008– 2012). These goals are to: (a) increase international visitors from 1.8 million in 2007 to 3 million in 2012; (b) increase average spending per visitor from Kshs 40,000 in 2006 to Kshs 70,000 by 2012; Major case study 11.1 279
- 305. Objective 8: Toreduce tourism resource conflict This objective will be accomplished by pursuing the following strategies: ● Promote tourism area management. ● Enhance community based tourism. Objective 9: To enhance tourism information management and research capacity This objective will be attained by pursuing the following strategies: ● Improve use of ICT in tourism sector. ● Establish tourism research centre. ● Enhance publicity and information flow on tourism. Implementation of the objectives and strategies out- lined above will enable the Ministry to harness its resources and to take advantage of the opportunities existing in the dynamic tourism sector and address per- tinent challenges as outlined later in this Plan. This will in turn propel the Ministry to higher levels of performance and realization of its mission and vision for the benefit of all stakeholders (Republic of Kenya, Ministry of Tourism, Strategic Plan 2008–2012, pp. vii–x). Source: http://www.vision2030.go.ke/economic-pillar/ Discussion Questions 1. Identify the strengths and weaknesses of the strategic plan drawn up by the Kenyan Ministry. What oppor- tunities might they take advantage of to fulfil their objectives and what threats are posed both internally and externally that may undermine their plan? 2. Assess the plan in relation to the issues you identify and then provide, with reasons, those you would want to raise with respect to the objectives of the strategy. Objective 4: To offer and maintain internationally accepted standards of tourist service The strategies for achieving this objective are: ● Review the hotel and restaurant classification criteria. ● Coordinate compliance with regulations and standards. Objective 5: To enhance safety and security of tourists This objective will be accomplished by pursuing the following strategies: ● Develop capacity of the Tourist Police Unit (TPU) and Kenya Wildlife Service (KWS) rangers. ● Enhance capacity of crisis management centre. ● Coordinate management of beach activities. Objective 6: To enhance and sustain the financial resources for the tourism sector The strategies for achieving this objective are: ● Establish a sustainable funding mechanism for the sector. ● Mobilize resources from external sources. ● Improve efficiency of resource utilization. Objective 7: To attract, develop and retain competent and motivated staff This objective will be accomplished by pursuing the following strategies: ● Upgrade skills in the workforce ● Rationalize staff capacity. ● Improve work environment. ● Mainstream public sector integrity programme. 280 chapter 11 Tourism and Development Planning
- 306. Chapter 12 The impactof negative events on tourism and destinations Learning Outcomes This chapter will provide you with: ● an understanding of the effect of risk perception and fear on travel decisions; ● an insight into a destination resilience framework; ● an overview of the impact of terrorism on destination tourism arrivals.
- 307. The past twodecades have seen a number of shocks which have disrupted tourism activities, directly or indi- rectly. As a global industry, tourism has been incredibly resilient, witnessing almost continuous growth, but performing better in some areas than others. When shocks have occurred, the result has been a shift in demand to other locations rather than a curtailing of activity. The impact of shocks varies, with some being place-dependent (e.g. earthquakes) and localised and others not place-dependent (e.g. global financial crisis). In relative terms, tourism is more susceptible to shocks and disruptions than many industries because (a) it is a highly perishable service sector industry, (b) it requires the consumers to travel to the destination in order for tourism to take place, and (c) a large part of the industry depends upon the environment in which it takes place. The image or perception that tourists hold of a destination can be dramatically altered when shocks occur and future activities can be disrupted by elevated perceptions of risk. The impact of shocks can also vary because not all tourists respond to negative events in the same way. This chapter examines how shocks can change the balance between supply and demand for a destination. It provides an overview as to why demand might fall following a negative event before moving on to examine how it falls, in terms of magnitude and the time needed for recovery. We then discuss destination attributes and how they impact on destination resilience. Introduction Risk perception and fear Risk means different things to different people. Slovic, (Slovic and Weber, 2002), argues that risk is a combination of multi-dimensionality and subjectivity. He suggests that risk can be seen as hazards, probabilities, consequences, potential adversity or threats. Rosa (2003: 56) offers a simple but comprehensive definition of risk suggesting it is a ‘situation or event where something of human value is at stake and where the outcome is uncertain’. In this sense hazard, probability, consequence, potential adversity or threat are all variables that attempt to measure the risk quan- titatively. The difficulty with risk is the natural uncertainty attached to it and the difficulties of analysing it, particularly at the level of the individual. These challenges are amplified further when it is acknowledged that the behaviour of individuals, particularly during a period of stress, can be irrational (Morakabati et al., 2016). Overall social scientists agree with the notion of risk being subjective, where both cognitive and affective responses have key roles, therefore individual assessment is likely to differ from one person to another (Krimsky and Golding, 1992; Pidgeon et al., 1992; Slovic, 1992; Gigerenzer and Todd, 1999; Weber, 2001; Wynne, 1992). The perception of travel-related risk experienced by an individual will be determined by a variety of factors. Risk perception has been measured using different independent variables, such as when using the axiomatic measurement paradigm, the socio-cultural paradigm and the psychometric paradigm (Weber, 2001; Slovic and Weber, 2002). Using these methods, studies have produced both homogenous and heterogeneous results, with the psychometric paradigm being widely used in studies of tourists’ risk perception, such as research on personalities (Plog, 1974, 1991;Roehl and Fesenmaier, 1992; Sonmez and Graefe, 1998; Lepp and Gibson, 2003; Pizam et al., 2004; Valencia and Crouch, 2008; Lepp and Gibson, 2008; Correia et al., 2008; Fuchs and Reichel, 2011; Sharifpour et al., 2013). It can be concluded that there are two differ- ent main factors that can affect risk perceptions, the individual’s attributes and the external effect attributes (i.e. media). Risk perception matters in the context of travel and tourism because it can impact signifi- cantly on businesses. The risk of negative events can create fear (and anxiety) among potential tourists who, when faced with uncertainty, may turn to harm avoidance behaviour (Rhudy and Meagher, 2000) which brings with it economic consequences. Harm avoidance is a character- istic of any living creature and can result in ‘fight, flight or freeze’. These responses, in the 282 chapter 12 The impact of negative events on tourism and destinations
- 308. context of traveland tourism, have different consequences for destinations. For example, the spread of a life-threatening disease in a beach resort area could encourage flight responses as tourists choose an alternative beach resort which does not have this threat. The events of the 9/11 terrorist attack created both flight and freeze responses, where many tourists decided to go to alternative destinations (often closer to home), or simply postponed any travel. Travel is fraught with risks in terms of the potential for accidents, getting lost, disruptions through industrial action, the effect of the weather and acts of terrorism. Even the destination may hold risks in terms of health, crime, being an unfriendly environment, or visitors finding that an onward flight or the hotel is overbooked. Some of these risks may not figure strongly in some tourists’ minds whereas they may be a central focus for others. Destination and tourism characteristics give rise to risk upon which travellers’ perceptions will be formed. Tourism is a form of consumption that is largely based on ‘faith’in the sense that consumers are often booking something that they have not tried before and cannot take back if they do not like it. In simple terms the consumption process involves uncertainty about whether there will be a difference between the expected and the actual outcomes of decisions or actions. Tourists are not always the best people to evaluate the true risk associated with travel – after 9/11 many US residents chose to drive to their destinations within the United States and yet far more people are killed on the roads each year than died as a result of the Twin Towers attack. The risk of being killed per mile as an air passenger is negligible compared with travelling in a car, but people have elevated risk perceptions associated with air transport, in part because there is a lower degree of control over it compared to driving and it is something we tend to do less frequently. The nature of risk during the tourism decision and consumption process is such that if the level of perceived risk is greater than some personal threshold limit, the tourist may try to reduce exposure to this risk by not travelling or travelling elsewhere. Normally, this threshold value is reached more quickly for a discretionary tourism product than, say, for a tangible good (one can always send the dysfunctional washing machine back to the seller but this is not the case with tourism). Researchers found that perceived risk has a stronger influence with respect to tourists avoiding a particular region than it has on the decision of planning to visit one (Sönmez and Graefe, 1998). Risk perceptions are subjective and not generally formed on the basis of factual data or cal- culated risk indices. They are often formed in ways that do not reflect reality and yet perceptions are all-important, because they will guide the decision. Thus it does not matter how incorrect or wrong a perception of risk may be, it will still influence the behaviour of the potential tourist in exactly the same way that decisions would be affected by changes in the level of actual risk. Destination resilience Tourism can be directly or indirectly disrupted by natural disasters (e.g. Hurricane Katrina on the North Central Gulf Coast, USA 2005; the tsunami in March 2011 off the Pacific Coast of Tōhoku; fire in Spain’s south- eastern coast 2016) or man-made disasters such as terrorist attacks, political unrest, civil wars, kidnapping and ongoing crime (e.g. Paris attacks 2016; Arab Spring; Syrian civil war; killing of tourists in Thailand beach resorts 2014; kidnapping of tour- ists in Rio summer 2016). The UNWTO (2014) highlights the importance of the tourism sector to national and global economies, whilst also recognising the industry’s fragility (see also Faulkner, 2001 and Ritchie, 2009). There is a great amount of interest among industry and academia on how negative events impact on business activities in terms of their magnitude, the recovery period and how to mitigate the effects through sound planning. A number of studies have looked into emergency manage- ment, impact and recovery following a negative event with the focus on tourism (e.g. Enders and Sandler, 1991; Pizam and Fleischer, 2002; Drakos and Kutan, 2003; Morakabati, 2007; Fletcher and Morakabati, 2008; Coshall, 2009; Minton, 2011; Calgaro et al., 2014; Sandler, 2015; Beavis and Morakabati, 2017; Morakabati et al., 2016). However, studies on the effects of Destination resilience 283
- 309. negative events havenot been consistent. Research on the subject has been mostly restricted to the limited effects of an event on one aspect and the research on destination and/or business resilience remains largely inadequate (Tierney, 1997; Comfort, 1999; Petak, 2002; Rose, 2004; Rose et al., 2007, Fischer et al., 2010; NRC, 2011 and 2013; Hallegatte, 2014). The literature has argued that tourism destinations and businesses, when faced with scenarios of disasters, can take approaches that either strategise or improvise. The strategise approach demands planning and forecasting, so that future events can be predicted and built into opera- tional systems (Porter, 1980; Prahalad and Hamel, 1990). Hosie (2006) suggests that crises demand preparation, response and recovery planning while others have gone so far as to argue that organisations (and by inference destinations) that do not have a plan of action in case of crises are unlikely to be resilient and therefore unlikely to stay in existence. The improvise approach adopts the view that one cannot plan for what one does not know and that extrapolating from the past will not equip you for the future (Fredrickson, 1984; Ansoff, 1991; Mintzberg, 1990, 1991, 1994). Authors such as Drabek (1995), Kash and Darling (1998), Faulkner (2001), Glaesser (2003) and Ritchie (2004) have all suggested that proactive planning within the industry is a rarity (although the large multi-nationals may have site-specific plans) and, in 2011, a thorough examination of the UN International Strategy for Disaster Reduction (UNISDR) and UNWTO Survey databases only served to reinforce this view. Others have even gone so far as to suggest that taking the strategy approach can be detrimental when faced with a crisis (Cunha, 2004). The increased rate of change in the business environment and its accom- panying volatility pushes businesses away from rigid top-down planning in favour of more flex- ible, reactive planning approaches. Such views suggest that the days of static plans are long gone and there has been a paradigm shift in terms planning for such events (e.g. Snowden, 2005). For example, the organisations responsible for planning for disasters and responding to them are likely to include different public and private sector entities, and the roles they take are likely to be fluid, changing as the disaster moves from one stage to another. These flexible planning systems form the basis of emergent strategies where plans evolve through a process of learning as a result of events. Thus businesses’ strategies are dynamic pro- cesses that are continually monitoring the environment in which they operate and the strategies are reformulated on the basis of what is discovered. Flexibility is at its height within the improv- isation approach. It would be incorrect to simply assume that improvisation is based on a ‘make it up as you go along’ strategy, as it relies on there being a learning process to understand the environment in which the business is operating. Because disaster management, particularly dur- ing the response stage, is dealing with the unknown in many cases, improvisation is clearly an important element of any disaster management strategy. This does not mean that it should not occur within a more planned disaster strategy. In reality, the approaches from traditional strat- egy to improvisation are polar extremes of the same spectrum. Managing and measuring the impact of negative shocks and disturbances (negative events) on tourism presents the industry and researchers with a number of dilemmas. To start with, tour- ism is an open societal system, suggesting the classical paradigm of science and engineering is not applicable. This means that theory is not capable of forecasting the impact of shocks accu- rately, given the complexity of such a system (i.e. such a large number of variables involved and their interaction with each other). There are too many variables with too many interactions to be able to predict crises or the outcome of crises. The complexity of the system also increases in a disaster environment (Coskun and Ozceylan, 2011) and the literature has not been slow in dis- cussing the potential relevance of complexity theories for disaster management (Gilpin and Murphy, 2008; Hilhorst, 2003; Ramalingam, 2013). In spite of the difficulties created by attempting to work within a complex system, we can follow the ‘explanation of the principle’. The goal of this approach is neither the specific prediction of an event (disaster) nor of testing a particular hypothesis. Instead it identifies the combined factors that could explain the outcome in an eloquent way, therefore going from the ‘known to the unknown’ (Popper, 1957102). Using this approach, the impact of shocks at the destination level could be divided into shock, destination and recipient attributes, plus destination management (see Figure 12.1). 284 chapter 12 The impact of negative events on tourism and destinations
- 310. The impact thata shock may have on tourism demand in terms of a fall in activities and the recovery time (see Mini Case Studies 12.1 and 12.2 and Figure 12.2) depends on a wide variety of factors, including its nature, intensity or magnitude, frequency (thus the likelihood of a recur- rence), timing, target (e.g. are tourists the focus of the event or the natural environment?) and its relation to place (place-dependent such as an earthquake, or place-independent such as a global financial crisis). The literature divides the economic impact of these events into direct and indirect economic impacts (Waxman, 2011). It suggests that the direct impact could be immediate, with a loss of infrastructure, superstructure (assets loss) and the disruption of business activities at the desti- nation level. The indirect impact could be a change in risk perceptions or the disruption of sup- porting business operations and the reduction of market confidence, the latter being more long term. The evidence suggests that natural disasters tend to have a relatively higher direct loss than man-made disasters, whereas the latter often result in a greater indirect loss because it instils fear in tourists’ minds and elevates risk perceptions, particularly when they are deliberate actions (i.e. terrorist attacks targeted at tourists). Distinctions can be made between types of disasters, in the sense that some disasters can be minimised through the implementation of early warning systems. For instance, natural disasters such as hurricanes or typhoons can be identified and prepared for, whereas others (such as earth- quakes or terrorist attacks) have little or no warning before the disaster occurs. This gives rise to the distinction where some types of disasters are known as ‘python events’ (slow but inevitable) whereas others are known as ‘cobra events’ (sudden and unexpected). Another difference - - - - - Destination attributes Level of economic diversification Level of tourism development Geographic location Types of tourism product Image Culture and religion Event type attributes Event characteristics Natural Man-made Scale Frequency Timing Place dependency - - - - - Generating market relationship and response Media relationship interest Tourist type Recipient attributes Event attributes Destination resilience - - - - Extent of bureaucracy and corruption Communication strategy The strength of security Destination management Structure of emergency management Warning time Sudden Un-intentional Intentional - - - Destination resilience framework Figure 12.1 Destination resilience 285
- 311. between types ofcrises is that natural disasters are often seen as being one-off events whereas terrorist attacks can be seen as being part of a series of events. Disaster time phases can be divided into three distinct periods: pre-disaster, during or imme- diately after a disaster and post-disaster. One important aspect of disaster management is the ability to prepare for events during the pre-disaster phase. When there is a short window the authorities can work to evacuate tourists, communicate information and coordinate supporting activities. The pre-disaster time frame associated with a python event can help mitigate infra- structure and superstructure damage (such as shutting down nuclear reactors), and ensure the availability of food, shelter, and mobile and satellite phones, etc. (Seymour and Moore, 2000). In spite of this, poor planning and the lack of adequate infrastructure and superstructure can detract from the mitigation process. Thus, Haiti’s hurricane Matthew in 2016 devastated the destination and took many lives on an island that had not recovered from the devastating 2010 earthquake. The same event can have different impacts on different destinations. At the destination level, factors such as geographic location, religion and culture (see later in this chapter), the level of economic diversification and tourism development are all part of a destination’s attributes. Some destinations may appear to be associated with greater travel risks than others (see Mini Case Study 12.1). For instance, some countries in the Middle East and North Africa have expe- rienced political unrest for sustained periods and hence travel to that region as a whole may seem to carry a higher level of risk than travel to other destinations. Industrialised economies tend to be diverse, which can help them rebound with greater spending power, level of control and better finance to prepare for such shocks. Furthermore, they tend to have more favourable internal and external political relationships, so their media dissemination and relationship with the generating market countries can often seem much better than the corresponding environ- ments in less industrialised countries. Concepts of intergovernmental crisis management as a complex adaptive system (Comfort et al., 2010) and emergent human behaviour during crises have been debated in the literature (Provitolo et al., 2011). Over four decades ago Churchman (1967) and Rittle and Webber (1973) suggested that the search to scientifically (i.e. in a linear fashion) solve problems of social sci- ence will inevitably fail because they are ‘wicked’ problems as opposed to the ‘tame’ problems of science. Within the context of social science, the complex system has questioned the Taylorist (1911) world of scientific management and the clear outcomes from a well-planned strategy. Hiller (2012) argues that this is not suited to the circumstances that are embedded within social complexity as there are myriad intricacies and limitless types of combinations, and so unlimited interactions. Destination attributes relevant to disaster management include factors such as the structure of the emergency management systems, the strength of security, the communication strategies and the overall extent of both bureaucracy and corruption. There has been a tendency amongst emergency managers to regard tourists as fellow victims, to be managed by the emergency ser- vices, and the tourism industry purely seen as an economic sector that simply needs to regener- ate itself following a shock. In reality, tourists and the tourism industry should be seen as being crucial partners within the development and conduct of any wider strategy for emergency man- agement. The activities of both the tourism industry and emergency management overlap, and can combine to make a more effective response to an emergency or even to a political conflict. Morakabati et al. (2014) suggest that national emergency plans are not universally in place, or sufficiently developed for implementation. This was found to be particularly the case for the less industrialised economies, where tourism may play a vital economic role. The presence of emer- gency management planning means that countries are prepared to deal with the situation and respond rapidly. This in return can send the signal to stakeholders (tourists and tour operators) that they have greater level of control in dealing with an emergency, therefore managing the market confidence better. In the case of natural disasters, there may be conflicting issues between hosts and tourists when both are affected. Holidaymakers in hotels expect to be looked after by the staff, whereas 286 chapter 12 The impact of negative events on tourism and destinations
- 312. in reality anearthquake may devastate local towns and villages and staff will be focused on the safety of their own families. From the employees’ perspective it seems to be a challenge to expect staff to prioritise guests over their own families. From the tourists’ perspective they have few if any local connections, do not know the area well and may not even be able to speak the local language. Without access to local emergency response information, tourists are particu- larly vulnerable. There is also the issue of the ‘crying wolf syndrome’ as stakeholders might not take action because they assume the impending event might not be as severe as is predicted. There is a loss associated with taking action, as evacuation and cancellation is a financial cost to businesses and is hardly conducive to creating a relaxing time for tourists. On other hand, if businesses do not take action and the event happens as predicted it can cost lives and the busi- nesses may be pursued on the grounds of negligence. Referring to the type of shock, the situation is far more complex when the event occurs without warning (cobra scenario) – for example, when there is a terrorist attack which results in fatalities. By definition, there is no time to evacuate because, by its nature, in the vast majority of cases the event occurs before response teams can be deployed or warnings can be given. In these instances, responses to shocks can be divided into two main categories: first, dealing with the immediate needs, such as responses by emergency services and secu- rity forces; secondly, when the government and industry attempt to restore public confi- dence. Dealing with many conflicting stories coming from a variety of sources can be a major headache for the authorities. In the pre-social media period governments could get away with limiting the information made available to reduce the risk of creating panic among the public or generating overreactions. However, the evolution of social media, with its instant and unregulated information, means that governments must ensure that accurate and timely information is made available. Furthermore, stakeholder views can differ even within destinations. Quite often there may be conflicting signals between the public sector and the private sector in the immediate aftermath Photograph 12.1 Destination resilience 287
- 313. of a disaster,when the government wishes to communicate internationally on the scale of the damage as it goes in search of international aid, whereas the private sector may want the world to know that it is ‘business as usual’ to kick-start the recovery process. There is a need for proactive plans with respect to the release of information and those plans should include and engage all stakeholders. Following a terrorist attack in November 2015, France immediately brought a ‘state of emer- gency’ into play to give police more power and place people under house arrest. A state of emergency is when the government suspends the normal constitutional regulations and pro- cesses in order to have greater control. The Bali bombings caused Indonesia to respond and react quickly and appropriately. Increasing the security and arresting a number of suspects, communicating emotionally positive details (see Mini Case Study 12.1) and providing assertive signals to the world community: We ask for the understanding and assistance of the world to come to the aid of the Balinese people who love and cherish peace. It makes no sense to isolate them [the people of Bali]. If we compare, when the WTC [World Trade Center] was attacked no one issued a travel ban on the United States, did they? Metrojet Flight 9268 carrying 224, mostly Russian, tourists disintegrated above northern Sinai in Egypt, 23 minutes after departure from Sharm El Sheikh Airport. Mini case study 12.1 Metrojet Flight 9268: Sharm El Sheikh International Airport, Egypt Photograph 12.2 288 chapter 12 The impact of negative events on tourism and destinations
- 314. The world communityresponded quickly by offering various kinds of assistance to the Indonesian government, including support with the investigation of the events. A partnership of 52 countries requested or supported the UN designation of Jemaah Islamiya as a terrorist group and more than 150 jurisdictions agreed to block JI-related assets. Destination communication following a shock is a crucial part of restoring business as usual. Therefore, marketing campaigns and inviting the media and tour operators from tourist-generating markets to visit the destination are fairly standard practice. However, there is no guarantee that such strategies will bring about positive results: the media also tend to invite experts to The Egyptian government has used ‘isolating’ marketing to make sure that Sharm El Sheikh has been seen as being distinct from Egypt so that if there are problems in Cairo’s Tahrir Square (i.e. during the Arab Spring) they do not reflect on the image of the Red Sea resort. Sharm has been at the heart of tourism for Egypt and the Egyptian government really needed the aircraft crash to be attributable to an unfortunate technical failure, rather than to terrorist activity. Egyptian investigators initially pointed out that ‘before the plane lost contact with air traffic controllers the pilot had radioed and said the aircraft was experiencing technical problems and that he intended to try to land at the nearest airport’. Later on, Russian state-controlled NTV ran an interview with the wife of the copilot, with her suggesting that he complained before the flight ‘that the technical condition of the aircraft left much to be desired’. In contrast to this French aviation officials suggested to the BBC that the crash was not caused by a techni- cal failure. Other French officials said the flight data recorder suggested the cause was a ‘violent, sudden’ explosion. The US and UK governments both suggested that there was intelligence information to suggest that the air crash was the result of a bomb being placed on board. The American network NBC, quoting unnamed US officials, said that communications had been intercepted between IS officials in Syria and people in Sinai about how the jet had been brought down . . . ‘They were clearly celebrating’. Meanwhile the Egyptian foreign minister accused some countries of ‘concentrating on their self-interests’ and labelled the UK government’s actions of suspending all flights and evacuating British tourists from the resort as ‘premature and unwar- ranted’. The media in the West broadcast clips of ‘relaxed’ security officials in Sharm Airport, triggering further dis- content among the Egyptian authorities who then put restrictions on the evacuation of tourists, attributing delays to airport capacity problems. This resulted in the evacuation taking many days. Two weeks after the event, Russia announced that the plane was brought down as a result of a ‘terror act’. UK security service investigators stated that they suspected someone with access to the aircraft baggage compartment had planted a bomb. ISIS claimed that they hid the improvised explosive device inside a can. US officials also said that their intelligence services suggested that the bomb was planted by local affiliates of the jihadist group IS (known as Sinai Province). The tourist arrival figures suggest a significant drop in numbers to Sharm since the incident. Discussion Questions 1. Identify the possible impacts on the main tourism markets of Egypt and their relative significance. 2. Why would the Egyptian government have preferred the air crash to be considered the result of a technical failure? 3. In what ways do you think the Egyptian government could have managed their responses to the event better, to ensure business continuity? References Coombs, W. (2004) ‘Impact of past crises on current crisis communication: insights from situational crisis communication theory’, Journal of Business Communication 41(3): 265–89. Destination resilience 289
- 315. comment on thesafety of a destination following a negative event and the commentaries made can still be negative. For example, the Tunisian government tried progressively inviting the media and tour operators to the country to reinforce their message that all is safe, yet many ele- ments of the international media continued to raise doubts about safety, inviting experts to counter the government’s claims (Focus, France 24, 2015; BBC, 2015). The difficulty of getting positive messages out becomes even more of a challenge when the scale of the event is large, or there has been a series of shocks. Biermann (2001) suggested that it takes time for the public to rebuild their confidence in a destination and that images from the media repeatedly showing the aftermath of an emergency, or the reconstruction of infrastructure and superstructure, keeps the event firmly in the minds of potential tourists. In this twenty-first century world where phones are cameras with access to the world, controlling the media is an impossible task. Terrorist attacks – including the lorry driving down the promenade in Nice, July 2016; the gunman on the beach in Tunisia, June 2015; the Paris terrorist attacks, 2015, 2016 – were all graphically cap- tured on CCTV and mobile phones and distributed through social media. These images can have a powerful effect in influencing tourist decision making. The period of time (attention life cycle) when a disaster is in the minds of potential tourists can be quite fleeting and tourists traditionally have short memory spans, their attention being diverted to the ‘next’ crisis being highlighted by the media. During the time when the disaster is fresh in the thoughts of tourists, even the most vigorous marketing campaigns are unlikely to be effective. Other challenges arise from promotional campaigns, as they might change the demo- graphics of tourists through attracting different types of the market. Such changes may lead to a fall in the average tourist spending levels or they may attract tourists who are associated with greater negative environmental and socio-cultural impacts. This can damage the long-term net returns to tourism activity. For destinations that are highly dependent upon tourism for their economic well-being such changes can have major effects, especially on the poorer segments of the host population. The attributes of the recipients (tourists, media and generating markets, i.e. the destination’s international stakeholders) are critically important. In the final analysis it is the potential tourist that will have final say as to whether to continue to go to the destination, find an alternative destination or to stay at home. Destinations may suffer long-term damage to the tourism indus- try if tourists perceive there to be a lack of safety and security measures to protect them. Gener- ally speaking, the perception of travel-related risk is an image based on the likelihood of experiencing negative consequences when visiting a destination. But risk is not a tangible aspect of travel; it is what tourists perceive and experience during the process of making their travel decision and travel-risk perceptions can be a major factor influencing the outcome in terms of choice of destination and the purchase of tourism services. As stated earlier in this text, tourism is a part of the service sector with unique characteristics (intangibility, inseparability, variability and perishability) which intensify the perceived risk when compared to the purchase of tangible goods. In addition, tourism gives rise to other risk elements, such as the possibility of poor weather, unfriendly communities, disruptions to travel through industrial action, inedibility of local food, acts of terrorism, crime, political unrest, disease and natural disasters. These factors can all influence the level of perceived risk experienced by tourists and hence their decision to travel. The type of tourism activity is directly linked to the destination’s attributes because it centres on the types of tourism products they offer. This, in turn, helps determine the sort of tourist that the destination attracts (e.g. risk-takers or those who are risk-averse). The relationship between perceived risk and the travel decision is not an isolated process however, and other factors (such as media coverage, governmental advisories on travel, e.g. from the Foreign and Common- wealth Office (FCO) and CIA) are very influential. It is common to see governments issue travel warning advisories to their citizens if a disaster has occurred in a specific country. Travel advi- sories can result in tour operators evacuating their customers from a destination and stopping the inflow of tourists. Travel advisories can also negate aspects of travel insurance policies. From a destination’s point of view, once the disaster has passed and the local environment is safe for tourism to resume, it is important that such travel advisories are lifted as quickly as 290 chapter 12 The impact of negative events on tourism and destinations
- 316. possible. However, governmentssometimes err on the side of caution and it can take time for these travel recommendations to be lifted. There are observations that suggest the decisions governments take to issue travel advisories and the level at which they are issued (1, 2 or 3) may be influenced by the relationships in place and the level of economic investment by home busi- nesses in destinations. The media’s choice of words and how they frame their message may determine the levels of risk perception. For example, when there is a disruption by a group or by an individual, the media tend to point to the fact that it is caused by a particular terrorist group or by an individual for personal reasons; see ‘Majority of Paris attackers used migration routes to enter Europe, reveals Hungarian counter-terror chief’ (Daily Telegraph, 2 October 2016). The acts carried out or inspired by terrorist groups tend to have a more profound effect on the public’s perception of risk than acts carried out by isolated individuals, because the former events seem more likely to recur. The media attention that a destination receives depends on a combination of factors rang- ing from the type of event that occurs; the bilateral and political relationships between generat- ing and receiving country governments; and its relationship to other news at that time. Quantitative evidence suggests that there is a positive relationship between the frequency of media coverage and audience engagement with the frame. The media tends to take notice of destinations that are politically relevant, economically of interest (i.e. relating to market struc- ture) and of wider public concern. For example, the European media has taken far more interest in the Russian air crash in Egypt (2015) and the Paris and Brussels terrorist attacks (2016) than they have in, say, the explosion that killed 43 and injured 239 in Beirut (2015). Destinations may be able to predict the tone and interest that the media will take following a negative event; however, they will have very little control over mainstream reporting and especially over the social media channels. There is also an internal dimension to the effects associated with political relationships, in the sense that when there is internal political discord, such as that in some European countries with respect to the migration crisis, the media discourse may take on a more hostile tone following a terrorist attack in Europe. This may then influence travel decision making. The destination resilience framework presented in Figure 12.1 maps out the factors that determine destination resilience (in terms of the attributes of the destination, the tourists and the management of the destination) as well as the factors that will influence the power of the event (its characteristics and attributes). The framework clearly echoes the comments made earlier in the chapter relating to complexity and how challenging it is to predict the outcome of a shock for the destination’s tourism industry. Having explored why negative events affect a destination and the ability of a destination to mitigate those affects and recover, we now turn our attention to how negative events affect a destination. The next section examines how terrorist attacks have impacted on destinations. The impact of terrorist attacks on tourist arrivals The past few decades have witnessed a surge in terrorist activities where the perpetrators have distinguished themselves by using religion as their social identity. Religion as a social identity is an extremely strong demarcation (Beit-Hallahmi, 2015; Ysseldyk et al., 2010) between groups. Studies by some of the pioneers in this area of research (Tajfel and Turner, 1982) when studying the conflict in Northern Ireland, suggest that people identify ‘others’ on the basis of social cues, where religion played a distinct role between Catholics and Protestants (Tajfel, 1982). More recent studies have repeatedly emphasised the issue of political ambivalence towards religion (e.g. Ben-Nun Bloom et.al., 2015) suggesting it can both encourage coopera- tion and provoke conflict. The literature goes on to argue that religion has a tendency to increase the probability of outgroups being seen as being more threatening than ingroups (Norenzayan, 2014; Appleby, 2000; Philpott, 2007; Branscombe et al., 1999; Haslam and Reicher, 2006). Religiously motivated attacks aiming to maximise casualties have attracted international media, especially when the victims are Western nationals or those with close political ties. The impact of terrorist attacks on tourist arrivals 291
- 317. The effects tendto be more pronounced when tourists are a direct target. This is particularly so where tourism is one of the main income earners, such as for Bali, and attacks will have compound effects on the other sectors of the economy and consequently on people’s liveli- hoods. The media has a large appetite for publicising terrorist attacks and both the media and terrorists feed off each other’s activities (Rohner and Frey, 2007) when these events gain such publicity. So it is not hard to see how this could create some element of fear in the minds of potential travellers. The harm avoidance behaviour, resulting in seeking alternative destinations, can be even more pronounced where the main religion of the tourist generating countries is not the same as the destination or the perpetrators who commit the attacks (i.e. Luxur, 1997, New York, 9/11 2001, Bali, 2002 and 2005, Kenya, 2002, Madrid, 2004, London, 2005, Sharm El-Sheikh Egypt, 2005 and 2015, Mumbai, 2008, Tunisia, 20015, France, 2015, Brussels, 2016). The Indonesian terrorist attacks since 2000 are examined below with respect to the pattern of visitor arrival reductions related to attacks (see Beavis and Morakabati, 2017). Various studies over the past two decades have examined the quantitative impacts of terrorism on economic growth with a number examining the impact of terrorism on tourism activities (Sandler, 2015, Minton, 2011, Coshall, 2009, Fletcher and Morakabati, 2008, Morakabati, 2007, Drakos and Kutan, 2003, Pizam and Fleischer, 2002, Enders and Sandler, 1991). The results of this research and the methodologies employed have not been sufficiently consistent to identify whether or not there is any predictable effect, associated with terrorist attacks, on the flow of visitor arrivals and this makes it challenging to generalise from these findings. Building on the significant work undertaken by Box and Tiao (1975), Chen and Liu (1993) and Cryer and Chen (2008), this study used the approach put forward by López-de-Lacalle (2015?) using the tsoutliers R package. This function (tso) examines disturbances from the mean value of the dependent variable (monthly international arrivals) which has been using an autoregressive integrated moving average (ARIMA) model (see Lopez, 2014; Beavis and Morakabati, 2017). It is interesting to focus on the analysis of the impact of terrorism on tourism arrival to Bali, which currently receives around a third of all international arrivals to Indonesia (see Figure 12.2). The findings of this research are shown in Figure 12.2 and Table 12.1. Figure 12.2 shows the location of outliers (red dots), the forecast (blue line) and orange line indicate original time series, Original and adjusted series 2000 Outlier effects 2005 2010 2015 10.5 21.2 20.8 20.4 0 11.5 12.5 Bali, Y = International Tourism Arrivals (IA) Figure 12.2 292 chapter 12 The impact of negative events on tourism and destinations
- 318. and blue showswhat the model would look like when the effects of the detected outliers are removed. Moving on to the Table 12.1, ARIMA (1, 1, 1) (2, 1, 1) has been specified to fit the series. The results suggest that the effect of the Bali terrorist attack (12 October 2002) is signifi- cant and the fingerprint effect of the terrorist attack shows several Level Shifts (LS), Temporary Changes (TC) and Additive Outliers (AO). The difference between these terms relates to the types of fall in visitor arrivals and their subsequent recovery period. Additive Outliers and Level Shift are instantaneous drop and quick recovery that can take one unit of measurement; here this could be a month. TCs are instantaneous falls in arrivals followed by a gradual recovery, which could take several months in our example and, finally, Level Shifts are drops that are instantaneous, Bali, table of estimates and list of outliers Table 12.1 Bali y = ln(IA) model specification: ARIMA (1,1,1) (2,1,1)(12) Parameter Inda Estimate Standard error Monthly IAc (×104 ) Three-monthly mean IAbc (×104 ) Outlier date Ar 1 0.3918 −0.4117 Standard terms ma1 −0.8428 −0.3282 sar1 −0.7644 0.1579 sar2 −0.3135 0.1309 sma1 −0.2791 0.1575 Outlier terms Temporary Change 46 −0.5402 0.0669 8.11 5.87 2002:10 Additive Outlier 47 −0.9014 0.0616 3.14 5.19 2002:11 Additive Outlier 48 −0.3191 0.0677 6.33 6.39 2002:12 Additive Outlier 49 −0.4117 0.1215 6.08 6.69 2003:01 Additive Outlier 50 −0.3282 0.0745 6.74 6.45 2003:02 Additive Outlier 51 −0.4065 0.0714 7.22 5.78 2003:03 Temporary Change 52 −0.7339 0.0721 5.38 6.09 2003:04 Additive 53 −0.2585 0.0531 4.79 8.03 2003:05 Temporary Change 62 −0.2324 0.0602 8.43 9.84 2004:02 Level Shift 82 −0.5636 0.0518 8.11 7.32 2005:10 Level Shift 88 0.2047 0.0513 10.34 10.51 2006:04 Level Shift 95 0.2399 0.0489 11.39 11.53 2006:11 Pre-event 9.65 8.63 2001:101 Disappearance of effect 11.39 11.53 2006:11 a = Observation number b = Starting at the outlier event date c = Actual value The impact of terrorist attacks on tourist arrivals 293
- 319. but a dropthat operates at the new level until something else occurs and shifts them to a changed direction. (For more on this see Beavis and Morakabati, 2017.) The perception of travel-related risk associated with terrorism has changed in recent times as a result of the change in the magnitude and frequency of attacks. These effects are such that they can be considered to be place-dependent, but the recent attacks in Europe, combined with issues around migration, have to some extent created an atmosphere that has tended to make terrorism seem less place-dependent, thereby creating security challenges for the international commu- nity and elevating the perceptions of travel-related risk. We can sum up this discussion by sug- gesting that the extent to which tourists perceive the risk from terrorist acts often depends on the nature of the terrorist attack, the recipient (see Fischer et al., 2010), the destination attributes and the destination’s management. Conclusion This chapter examined why the demand from international tourists might fall following a nega- tive event or shock and the concept of risk perception. Tourists have to travel to destinations in order to consume tourism products; they step into a world that can quickly become transformed into something outside of their comfort zone. At the destination they may not be familiar with the supporting networks around them and this can generate higher perceptions of risk and make them more susceptible to shocks and disruptions. The nature of leisure tourism also means that potential tourists for a particular place may not be willing to sacrifice any of their civil liberty, income, safety and security when there are alternative destinations that may pose fewer per- ceived risks. We have provided a brief overview of the main approaches to emergency management, dis- cussing the paradigm shift to a more flexible approach. The complexity associated both within the tourism system and any ensuing disaster has been considered, challenging the standard stra- tegic approach because of those complexities and discussing explanations of the principles (Hayek, 1967, Snowden, 2005) which offer a more flexible and open approach to responding to negative events. In this chapter a framework is developed, dividing destination resilience into: the event; the destination attributes; the recipient attributes, and; destination management. The effect on a destination of a negative event is determined by the force of the event and the destination and recipient attributes and destination management. The framework highlights the multidiscipli- nary nature of destination resilience and therefore, the need for a more integrated approach both among tourisms sectors but also with national emergency management and wider international stakeholders (Morakabati et al., 2016 and 2014). Finally the chapter offers a relatively new look at an old measurement, to measure the impact of the disturbance to the tourism industry by identifying outliers within a time series model. The tourist industry is a resilient yet intelligent system. Whilst the argument remains that tourists tend to have a relatively short memory spans, the availability and diversity of media channels means that people are becoming more aware of events, bringing a growing desire to avoid risk, in the context of leisure travel. 1. Identify and assess the different factors that influence travel risk and travel-risk perceptions? 2. Identify the main factors that are likely to determine the impact of terrorist attacks on tourism destinations? 3. Examine the ways in which regional (e.g. Asia, Europe, Middle East) tourism may suffer when only one or two countries within that region are in conflict? Self-Check Questions 294 chapter 12 The impact of negative events on tourism and destinations
- 320. Youtube The Effects ofthe Disaster in Japan on the Travel and Tourism Industry (Euromonitor International) https://www.youtube.com/watch?v=Ad1I16rDDoc Meinhard Breiling: Tourism Supply Chains and Natural Disasters (ERIA) https://www.youtube.com/watch?v=HAJmxl5JBAs Is Post-Disaster Tourism Ethical and Safe? Alex Berger https://www.youtube.com/watch?v=jRd1WlCl-4g Tourism and Disaster Management Richard Gordon https://www.youtube.com/watch?v=yRf2YIh1_Uo Terrorism on Tourism. Courtney Jane https://www.youtube.com/watch?v=PNuyQxBLeWE Tourism in Europe bears the brunt of terrorism. CCTV News https://www.youtube.com/watch?v=Dan9RWWgihI References and Further Reading Ansoff, H.I. (1991) ‘Critique of Henry Mintzberg’s the design school: reconsidering the basic remises of strategic management’, in Strategic Management Journal 12(6), 449–62. Appleby, S.R. (2000) The Ambivalence of the Sacred: Religion, Violence, and Reconciliation, Rowman and Littlefield, New York. BBC (2016) ‘Tunisia tourism: Ambassador urges FCO to relax travel warning’, available from http://www.bbc.co.uk/news/uk-36365957. Beavis, J. and Morakabati, Y. (2017) ‘Do terrorist attacks leave an identifiable “fingerprint” on international tourist arrival data?’, International Journal of Tourism Research 19(2), 179–90, DOI: 10.1002/jtr.2095 Beirmann, D. (2003) Restoring Tourism Destination in Crisis: A Strategic Marketing Approach, Allen Unwin, St. Leonards, New Zealand. Beit-Hallahmi, B. (2015) Psychological Perspectives on Religion and Religiosity, Routledge, New York. Ben-Nun Bloom, P., Arikan, A. and Courtemanche, M. (2015) ‘Religious social identity, religious belief, and anti-immigration sentiment’, American Political Science Association 109(2), 203. Box, G.E.P. and Tiao, G.C. (1975) ‘Intervention analysis with applications to economic and environmental problems’, Journal of the American Statistical Association 70(349), 70–79. Branscombe, N.R., Ellemers, N., Spears, R. and Doosje, B. (1999) ‘The context and content of social identity threat’, in N. Ellemers, R. Spears and B. Doosje (eds), Social Identity: Context, Commitment, Content (pp. 35–58), Blackwell Science, Oxford. Calgaro, E., Dominey-Howes, D. and Lloyd, K. (2014) ‘Application of the Destination Sustain- ability Framework to explore the drivers of vulnerability in Thailand following the 2004 Indian Ocean tsunami’, Journal of Sustainable Tourism 22(3), 361–83. Chen, C. and Liu, L.-M. (1993) ‘Joint estimation of model parameters and outlier effects in time series’, Journal of the American Statistical Association 88(421), 284–97. Churchman, C. (1967) ‘Wicked problems’, Planning Science 14(4). Comfort, L.K. (1999) Shared Risk: Complex Seismic Response, Pergamon, New York. Comfort, L.K, Boin, R. and Demchak, C. (2010) Designing Resilience: Preparing for Extreme Events, Pittsburgh University Press, Pittsburgh. Cunha, M.P. (2004) ‘Organisational time: a dialectical view’, Organisation 11(2), 271–96. Correia, A., Pimpao, A. and Crouch, G.I. (2008) ‘Perceived risk and novelty-seeking behaviour: the case of tourists on low-cost travel in Algarve (Portugal)’, in Woodside, A. (ed). Advances in Culture, Tourism, and Hospitality Research, Sage, Bingley. References and Further Reading 295
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- 324. Original and adjustedseries Outlier effects 2006 13 13.5 14 14.5 2008 2010 2012 2014 2016 20.8 20.6 20.4 20.2 0 Japan, Y = International Tourism Arrivals (IA) Figure 12.3 Over five years after the March 2011 earthquake in Japan, some parts of Fukushima are still ‘no-go’ areas. Fukushima is an example of multiple connected crises with an earthquake, causing a tsunami, which in turn triggered a nuclear disaster. It took the lives of over 15,800 people, with 2,652 missing and at least 230,000 people displaced. Tourism in Japan was already feeling the effects of the global financial crisis of 2008 when it was subjected to the March 2011 earthquake and the consequential tsunami (see Figure 12.3). While the effect of the finan- cial crisis was observed as being represented by one instantaneous down and up (AO), the multiple disasters in 2011 created much longer and larger effects, show- ing multiple temporary changes (TC) with gradual recovery, using the measure of international tourist arriv- als to Japan (see Figure 12.3, table 2). Following the tsunami, the annual tourist arrivals fell 27% when com- pared with the corresponding figure for 2010 with the number of arrivals eventually exceeding the number prior to the 2008 financial crisis in 2013. Major case study 12.1 March 2011, disaster in Japan Japan has a large share of seismically active areas on Earth, accounting for about 20% of global quakes of magnitude 6.0 or greater (BBC, 2016). With the Olympics being hosted there in less than 4 years’ time, Japan has also dealt with challenges related to the design of the Olympic stadium, an expense scandal and is still recovering from the triple disaster in Fukushima. This creates a perception of risk that would not have been the same if the last of the three disasters had not happened. Discussion Questions 1. Explore the ways in which different events can com- pound effects on a destination. 2. What lessons can be learned by the tourism industry from the disasters and challenges that they faced in Japan? 3. Examine the ways in which the tourism industry could help build resilience in countries such as Japan. Major case study 12.1 299
- 325. Japan, table ofestimate and list of outliers Table 12.2 Japan y = ln(IA) model specification: ARIMA(2,1,0)(2,0,0)(12) Parameter Inda Estimate Standard error Monthly IAc (×104 ) Three-monthly mean IAbc (×104 ) Outlier Date Standard Terms ar1 −0.3344 0.0935 ar2 −0.2987 0.0935 sar1 0.3997 0.0817 sar2 0.3952 0.0867 Outlier Terms Additive Outlier 38 −0.2779 0.0525 NAd NA 2009:02 Temporary change 63 −0.7472 0.0622 35.26 33.54 2011:03 Temporary change 64 −0.3560 0.0619 29.58 36.21 2011:04 Pre-event 70.96 73.97 2010:03 Disappearance of effect 64.85 68.13 2012:11 a = Observation number b = Starting at the outlier event date c = Actual value d = Not interpreting AO (38 42) as part of the fingerprint. 300 chapter 12 The impact of negative events on tourism and destinations
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- 328. Part 3 The TourismSector CHAPTER 13 Attractions 308 CHAPTER 14 Accommodation 344 CHAPTER 15 Events Management 370 CHAPTER 16 Intermediaries 382 CHAPTER 17 Transportation 408 CHAPTER 18 Public Sector and Policy 447
- 329. In Part 3we turn our attention to the tourism sector and public sector organisations that influ- ence and support tourism demand and supply. We have adopted an analytical and evaluative approach to this section, identifying the main sub-sectors that, when combined, constitute the tourism sector. Our focus is on providing insights into the operating characteristics, trends and issues that dominate tourism and, specifically, upon attractions, accommodation, the organisa- tion and management of events, intermediaries, transportation, public sector organisations and their role in policy making. Although these do not represent an exhaustive range of enterprises, they do illustrate the dominant characteristics of the tourism sector and demonstrate key operational practices. Leiper defined the tourism ‘industry’ as ‘the range of businesses and organisations involved in delivering the tourism product’ and, in the light of his model of the tourism system, these businesses and organisations represent a key element. However, despite the unique nature of tourism and the differing attributes of the individual sectors, there are common characteristics, trends and issues that can be identified: ● The low level of concentration in a sector where small businesses dominate despite the fact that a relatively few, large corporations have market prominence. ● The high ratio of fixed costs to variable costs which has considerable implications for financial stability and which dominates tactical and strategic operation. ● The high levels of customer contact, demanding staff to be highly trained in both operational aspects and customer care. ● The low levels of technological adoption across much of the sector for small and medium- sized enterprises. ● The general lack of marketing and human resource management expertise remains a constraint in all sectors of tourism, albeit to varying degrees. ● The importance of location vis-à-vis access to markets. ● The perishable nature of the product for all tourism sectors demands continued investment in reservation and yield management systems. ● The prevalence of seasonal and irrational demand patterns, involving enterprises in the use of tactical promotional and pricing strategies. ● The inconsistent adoption of the principles of sustainability, environmental auditing and EIA techniques. ● The increasing degree of vertical, horizontal and diagonal integration throughout the sector. ● The increasing adoption of collaboration within and across the various segments of the tourism sector. ● The traditional outlook of service industries and, arguably, the so-called ‘under-management’ of the tourism sector which means that the sector as a whole is vulnerable to ideas and takeovers from other industrial sectors. ● Conversely, the increasing professionalism of the sector. These are issues and difficulties that dominate tourism as a whole, irrespective of sub-sector. Nevertheless, it is also possible to isolate the key sectors and attribute more detailed and pre- cise characteristics to each; thus, we have divided this section into six chapters. This said, it is important that the reader should understand the complex linkages and interrelationships that exist between the various individual tourism sectors and the mutual dependency of one sector on the next. It is the objective of this section, therefore, to highlight these complex relationships and to explore the implications of these on tourism as a whole. Introduction 304 part 3 The Tourism Sector
- 330. In Chapter 13,the focus of attention is on the attractions segment of the tourism sector, incorporating natural and artificial attractions. Attractions are integral to the tourism product, often providing the primary motivation for tourist visits, yet they continue to receive a patchy and undisciplined coverage in the literature. We use this chapter to explore many of the issues associated with the development and management of attractions as well as to consider some of the possible visitor management techniques that may be implemented to address the adverse social, cultural and environmental impacts of tourism at both natural and artificial sites. Chapter 14 is concerned with accommodation, perhaps the most visible and ubiquitous of all sectors of tourism. The scope and size of the sector is explored and the relationship between this sub-sector and the complete tourism product is discussed. We also evaluate many of the key issues that are currently influencing the accommodation sector such as hotel consortia, yield management, the role of information technology, the new-found emphasis on environmen- tal issues and the role and importance of quality and branding. Chapter 15 reflects the growing influence of events in tourism more broadly and their specif- ic contribution to the development and marketing of destinations. In order to leverage maximum benefit from the organisation and management of events, the chapter introduces the nature of events management and the reasons behind its growth, the diversity of the types of events in existence and a synthesis of contemporary developments within the sector. The chapter con- cludes with an introduction to event legacies and the increasing focus on sustainability within the events market. Chapter 16 introduces and reviews the role of intermediaries in the packaging and distribu- tion of the tourism product. The distribution of the tourism product is unusual in so far as it is achieved, almost exclusively, by intermediaries, rendering the distribution channel extremely competitive and susceptible to fierce power struggles and damaging price wars. The structure of the distribution channel and the respective roles of intermediaries make the distribution of the tourism product very risky, particularly in light of the precarious economics of tour operation/ wholesaling and the intense financial pressures that dominate their operation. The chapter also explores more recent online and social media developments and the increasing consolidation and concentration of tourism intermediaries. Chapter 17 concentrates on transportation for tourism and offers a thorough review of the issues which dominate this sector. Particular emphasis is placed on the changing competitive framework with a focus on the development of low-cost airlines and the continued expansion and popularity of cruising. In Chapter 18, we concentrate on those public sector organisations that are crucial to tour- ism and discuss the role of governmental intervention in tourism. We consider the importance of public sector involvement in tourism and review its current, and changing, role: increasingly, the public sector is withdrawing from tourism and private sector organisations are being encour- aged to step in. However, it is argued here that, while tourism must involve participation and funding by the private sector, there are many clear and powerful reasons why the public sector must remain involved: ● Many core tourist attractions – such as landscapes, culture and built heritage and architecture – are public goods and, to this end, public sector involvement is at least desirable and at best crucial. ● Many activities such as planning, research, resource allocation, management and regulation can be undertaken most effectively – and most impartially – by the public sector. ● The lack of expertise in the tourism sector in certain key areas (such as marketing), and the domination of small businesses with inadequate funds to promote themselves sufficiently, provides a compelling argument for continued involvement of the public sector. We also use this chapter to demonstrate the global and local policy frameworks for tourism and to provide an overview of the likely administrative structure of a national tourist office (NTO). In addition, the impact of the public sector in respect of its demand and revenue management Introduction 305
- 331. roles (marketing, promotionand information provision) and its supply and cost management roles (planning controls, building regulations, land-use decisions, market regulation, market research, and planning and investment incentives) are also considered in detail. It is clear that, while the individual sectors of tourism are interlinked and, to some extent, are mutually dependent upon each other, there is a potential for conflict within and between sectors. This may be attributed to the fact that each sector is working to its own agenda with a view to its own profit maximisation. One of the primary objectives of the public sector, therefore, is to temper overambitious individual providers and sectors and to provide a strategic approach to product development, distribution and marketing for the overall benefit of the destination. However, it may be argued that the intermediaries are perhaps the most powerful determinants of the ultimate success or failure of a destination in terms of revenue, market share and visitor numbers, since it is in the hands of the intermediaries that influence is exerted most directly on tourism demand. In the next six chapters, we explore many of the key issues in respect of the above and pro- vide the reader with a greater understanding and appreciation of the tourism sector, its core business and its operating practices. What is your role in the company/organisation? There are two distinct objectives in my role as Senior Talent and Leadership Development Manager for Hilton. The first is ‘talent development’. We are dedicated to a proactive form of talent searches. The objective is to foster our property human resources directors and general managers to identify and share ‘who’ are their top talent managers. With this data my team is able to form a complete picture of the Americas managers and become internal headhunters when open executive positions evolve. The second is leadership development. The objective is developing and implementing programmes for a global audience that ensures our first-time supervisors through corporate executives are able to participate either in person or via webinars that elevate their position, engage them with others, or allow them to excel in their current roles. What are your key tasks/duties? My key duty is to support all the owned and managed properties throughout the Western United States. Whether as a talent scout or through on-site classroom facilitation, my key duty is to inspiring performance that creates heartfelt and meaningful experiences for our team members that supports our mission ‘to be the most hospitable company in the world’. What are the necessary skills/characteristics to do your job successfully? Working with general managers and executives can be an exhaustive psychological exercise and forces me to use both the left and right sides of my brain. At times I am part consultant using analytical and organisational skills to review key performance indicators and discuss patterns of positive or negative performance. Other times I am a counsellor using social and visionary skills to work through trust and engagement issues with the leadership team or encouraging methods of successful change management or how to retain talent. One thing I do not do is pretend to be the smartest person in the room. This is not only detrimental to the process but would leave the property dependent upon me rather than believing in themselves. Regardless of which role I am playing the most important element is humbleness, to put the team first and allow them to develop the solu- tion or ideas that they will eventually implement and measure. Talent and Leadership Development Todd J. Fisher Senior Manager Talent and Leadership Development – Hilton 306 part 3 The Tourism Sector
- 332. What skill sets/characteristicsare necessary for future success (i.e. what advice do you give to future leaders)? The transition from team member or student to leadership is not an overnight transformation. It takes time, patience, discretionary effort, and a little luck. If we are lucky early in our careers we may encounter a role model who demonstrates the qualities we seek in a leader and want to emulate them. This becomes our style. If not immediately perhaps a family member, first boss, professor, mentor, or celebrity will inspire the leader within. There is inspiration all around us if we are willing to watch and listen. Those who eventually become leaders will know when they have evolved because in that moment they realise that others respond to and want to follow them. Introduction 307
- 333. Chapter 13 Attractions Learning Outcomes Attractionsare an integral part of the tourism product and, in this chapter, we focus on providing you with: ● a review of the nature, purpose and classification of attractions; ● a discussion of the roles and responsibilities of the public and private sectors in respect of the development and management of tourist attractions; ● a consideration of all issues associated with the management of attractions; ● an analysis of environmental issues in respect of attractions; and ● an evaluation of strategies that have been developed with a view to alleviating environmental and visitor impacts of tourism at attractions.
- 334. For many touristdestinations around the world, it is their attractions that serve as the catalyst for tourist visits. Attractions are numerous, diverse, fragmented geographically and often have limited resources at their dis- posal for purposes of management. In order to shed some light on the management complexity and diversity of development of attractions this chapter is broken down into three main sections. The first section introduces the nature and purpose of attractions, their characteristics and issues pertinent to both natural and man-made attractions. The second section builds on this foundation by exploring a range of issues relating to their devel- opment. The third and final section concentrates on the management of attractions with issues of ownership, the problems of cost structure, pricing and revenue generation, the employment and training of staff, and attempts to counter seasonality featuring strongly. It also outlines the variety of visitor management techniques in existence and attempts made by operators of attractions to manage visitor impacts in a more sustainable manner. This leads on to the issue of sustainable tourism development in which the object is to manage tourism growth in a manner that ensures that tourists do not destroy by pressure of numbers the very attractions they come to see. In this discussion, the choice – or balance – between regulation and market solutions is dis- cussed, with a closing discussion on the impact on attraction authenticity of ‘modern’ attraction management. Introduction The Nature and Purpose of Attractions Attractions provide the single most important reason for leisure tourism to a destination. Many of the components of the tourist trip – for example, transport and accommodation – are demands derived from the consumer’s desire to enjoy what a destination has to offer in terms of ‘things to see and do’. Thus a tourist attraction is a focus for recreational and, in part, educational activity undertaken by both day and stay visitors that is frequently shared with the domestic resident population. Every region and every town boasts at least one attraction, adding to its appeal as a destination. Attractions also serve a variety of different purposes, since for many their origins had nothing to do with tourism. For example, attractions often have an explicit educational pur- pose, are frequently central to the protection, or in fact creation, of cultural identities, and can contribute to the conservation and protection of many historic sites. This variety of ‘sense of purpose’ is important in that it helps explain why attractions are often so difficult to manage, especially those that fall within the domain of the public sector, such as museums. They fre- quently have to accommodate the numerous wishes of their stakeholders, the various expecta- tions of different visitor groups (often from different countries), meet the needs of owners or trustees, and serve on occasion as attraction ‘icons’ for national governments in international marketing strategies. Examples of the latter are the use of images of the Colosseum when mar- keting Rome, the use of Table Mountain when marketing South Africa, or the Houses of Parlia- ment when promoting London and the UK overseas. In addition to the above, there are many examples where attractions have played a catalytic role in the regeneration of an area or destination. The success of the Guggenheim Museum in Bilbao, Spain and the National Museum of New Zealand and its contribution to the develop- ment of Wellington as a destination are two examples of ‘best practice’. Such ‘flagship’ attrac- tions can be used to pull in visitors, meet needs of local residents and develop stronger tourism activities within the destination. While a destination rarely survives long term on the basis of one attraction, it can be the key pump-primer in more sustainable development of a destination. Flagship attractions need not be iconic or characteristic of the destination: it is their ability to attract visitors that is their main benefit (Weidenfeld, 2010). With such diversity present within the attractions sector, the uniform definition and categori- sation of attractions has proved elusive, as has the ability of many attractions to share ‘best practice’ both from attractions of a similar kind and from attractions elsewhere around the The Nature and Purpose of Attractions 309
- 335. globe. The factthat tourist attractions may be shared with the host community can give rise to conflict in popular destinations, where tourism is perceived to cause problems of crowding, traffic congestion, environmental damage and litter. There can thus be little doubt that the management of tourist attractions is a challenging activity with so many publics to please. Characteristics of attractions There are many different types of attraction, and a number of attempts have been made to clas- sify them. Classification is possible along a number of different dimensions: ● ownership; ● capacity; ● market or catchment area; ● permanency; ● type. Early attempts at classification were according to type, distinguishing between natural resources and artificial ‘man-made’ features or products. Man-made features were as follows: ● Cultural – religion, modern culture, museums, art galleries, architecture, archaeological sites. ● Traditions – folklore, animated culture, festivals. ● Events – sports activities and cultural events. We commonly associate such features with positive experiences, but visits to ‘dark tourism’ sites, that is those associated with death, suffering and tragedy, have become increasingly com- mon (Ryan, 2007). The motives for this are not necessarily just voyeurism, but can be a pilgrim- age in search of loved ones, looking for truth, pursuing knowledge or a sense of social responsibility, for example visits to Auschwitz–Birkenau or the 9/11 Memorial Museum. Table Mountain, which identifies Cape Town, South Africa, in any international marketing and publicity material. Source: Gordon Bell/Shutterstock.com Photograph 13.1 310 Chapter 13 Attractions
- 336. Natural resources includenational parks, wildlife, viewpoints and outstanding natural phe- nomena such as Uluru (Ayers Rock) in Australia or the Niagara Falls in Ontario, Canada. Clas- sification by type is the most common way in which countries collect attraction statistics, but here some form of permanency is required so that public access can be controlled and meas- ured, which implies that even some iconic attractions are never listed in official statistics. An alternative and more complex approach is that designed by Clawson and Knetsch (1966). In one diagram, Clawson and Knetsch linked the classification of attractions in a spatial sense, according to their proximity to markets, to their level of uniqueness and to their intensity of use. Clawson’s approach is flexible and best utilised as a way of thinking about attractions. For example, a major historic building is clearly a resource-based attraction, but it may extend its market by adding a user-orientated element, such as a leisure park or garden development, as has occurred with many of the stately homes and palaces in Britain and continental Europe. In this chapter, for purposes of analytical convenience, we have adopted the more recent clas- sification shown in Leask (2003) which identifies the principal features of classification used in various settings and demonstrates the diversity of the attraction product around the world. At the core of the recent classification rests the core product offered by the attraction, which represents the resources/attributes that attract visitors in the first place. Also within the core are those aspects of the attraction which contribute to its presentation, such as interpretation, and genera- tion of additional income and revenue streams – a facet of most attractions irrespective of their natural or man-made origins. Going further, it will be appreciated that this basic classification may be subdivided again into attractions which are site-specific because of the physical location of facilities and therefore act as a destination, and attractions which are temporary because they are events. International events that are regarded as world class normally stand alone as hall- mark events, while others may be used to complement site-specific attractions. It is what is happening at the time that is usually more important for events than their location, so mega- events, such as the Olympics, and exhibitions, for example world trade fairs, may move around the globe. However, some hallmark events do evolve in and become specific to their location, so that they become branded by it. Thus several of the most spectacular events in the form of parades or carnivals have become associated with major cities, for example the Rio Carnival, the Pamplona Bull Run in Spain or the Calgary Stampede in Alberta. This is because cities pro- vide access to a large market and have the economic base to support them. Similarly, important religious festivals are often connected with locations that are considered the foundations of the faith, such as Mecca and Jerusalem. In this respect, the growth in cultural tourism is encourag- ing many destinations to try and turn important events in the local calendar into hallmark events as a means of developing tourism as evidenced in Mini Case Study 13.1. In many instances festivals and events are designed to augment the tourist product of a destination. Hallmark events are stand-alone products because it is what is happening at the time that is important rather than their location. However, some become branded by their location and in so doing contribute greatly to the image of the destination through becoming an iconic attraction. Such an example is the Savonlinna Opera Festival, an annual event that takes place every July in Olavinlinna Castle, which adjoins the town of Savonlinna in the Etelä-Savo region, a lake area of Eastern Finland, but in this case location choice is highly relevant. What determines the establishment of most music festivals is the place and the setting and for Savonlinna the setting is the courtyard of a medieval castle, with exceptional acoustics, that juts out into a lake. One can compare this to the Dalhalla Opera Festival in mid Sweden, which is located in an old quarry that has its own natural lake and, again, first-class acoustics. The history of the Savonlinna Opera Festival dates back to 1912 when it was founded by the famous Finn- ish soprano Aino Ackté (1876–1944), thus making it one of the oldest European music festivals. Unfortunately, Mini case study 13.1 Savonlinna Opera Festival The Nature and Purpose of Attractions 311
- 337. the Savonlinna Festivalwas swallowed up in the maelstrom of World War I and then caught up in the political turmoil between Finland and Russia, so it did not appear again until 1930. In the recessionary period of the 1930s and with war clouds again on the horizon, this revival was short-lived. But memories of the Festival lin- gered on in the town, and after a period of close on four decades, it was started again in 1967 with the pro- duction of Beethoven’s Fidelio. The artistic revival of the Festival is considered by the management team to date from the production of Mozart’s Magic Flute during the 1973 season. At that time the Festival lasted only one week, but it has progressed now to a stable formula of three weeks of own productions of four to five operas over 24–26 performances, some concerts and one week when it hosts a guest company. To accom- plish this task, the Festival has a full-time staff of 12 and three craftsmen in its workshop, with total employ- ment rising to some 660 persons during the season, including its own chorus and orchestra. Opera is recognised as one of the most expensive of the performing arts, and sums of £350,000–£400,000 per performance in the world’s major opera houses are not uncommon. Equally, public subsidy per attendance by far outstrips any other performing art. This is because it is a nineteenth century art form in which the original cost assumptions are no longer applicable in the twenty-first century. By this is meant that costs are dictated by a long-gone composer and his/her librettist in terms of performers, and there is little the artistic director can do about this without radically changing the experience, which would be self-defeating if it fails to attract audi- ences. Thus the traditions and conventions in the repertoire lead to high costs and prices in today’s market, despite relatively high amounts of public subsidy given to enable the art form to survive. Many cultural activities are risky and have, as a consequence, an uncertain financial return, because it is difficult for consumers to know which production they would enjoy most, and hence banks may not lend money for new productions, even to good credit risks. It is not for nothing that investors in the performing arts are called ‘Angels’! From a tourism standpoint, it is externalities generated by ‘off-site’ visitor expenditure that are often contem- plated as most important in the evaluation of the performing arts. With the exception of most of the United States, where there is reliance on private sponsorship, major cities do subsidise their artistic companies, because it is evident that in today’s tourism market no city can claim to be world class without a first-class cultural centre. From a human welfare perspective, cultural activities are public ‘merit’ goods which generate consumption externalities for society as a whole, such as adding to the creativity of the population, quality of life, identity, social criticism, aesthetics, pluralism and so forth; values that provide, to a considerable degree, the rationale for cultural measures and are legitimate arguments for public provision or subsidy. As a charitable organisation, the underlying philosophy of the Festival is one of service to the public at large through offering a quality experience that is comparable to any other world-class venues. However, the experi- ence is constrained by the requirement to break even ‘one year with another’ from a variety of revenue sources, of which some 65– 70% comes from ticket sales, the remainder being made up of public subsidy, sponsor- ship and commercial trading of opera recordings, guest performances and so on. This means that despite the many operas that exist, in order to meet revenue targets, most opera companies position the bulk of their work around a popular few, either in the form of new productions or revivals. These are the operas that are popular with audiences worldwide and can be relied on to fill seats. Audiences tend to fall dramatically for contempo- rary opera even at reduced ticket prices. These aspects are reflected in the artistic policy of the Festival: ● one new production every year; ● one new opera every three years; ● carrying over some (popular) operas from previous years; ● a guest company performing two (usually popular) operas in the last week. In this the Festival office is attempting to balance artistic endeavour against prudential financial management. The potential monetary risks from changing the repertoire are high; hence the marketing concentrates on retaining existing customers, bringing in around 70–75% repeat business every Festival. The management is cautious about experimenting with tradition and new ventures. For example, some years ago the Festival launched a winter season for one week, which proved to be very damaging financially. On the other hand, while repeats of popular operas sell well, venues do not get the same critical acclaim as they would for new productions or totally new operas. It may thus be appreciated that the skill in managing the performing arts is about maintaining a balance between filling seats, controlling costs and artistic integrity. 312 Chapter 13 Attractions
- 338. Complementarity of eventsand site-specific attractions may be achieved by staging a festival of the countryside to enhance the appeal of a country park, and similarly for the performance of a Shakespeare tragedy in the courtyard of a historic castle. Events are also used to give anima- tion to object-orientated attractions, such as museums, to encourage new and repeat visitors, particularly in the off-season. Hallmark events are frequently cited for the legacy that they leave behind, which is usually a combination of social, economic and environmental impacts. Their ability to raise the image of a destination is a factor that lies behind the very competitive bidding for the Olympic Games, which had a lasting impact on the international perception of Barcelona in 1992. It is considered that the Games held in Sydney in 2000 were equally successful and have been perceived as a 10-year marketing investment for Australia. They are, however, very costly activities and within two years of winning the bid, the budget for the successful London Olympics in 2012 had risen from £2.5 billion to nearly £10 billion, but it was also seen as a major regeneration project for the environment of East London. The extent to which attractions are in fact ‘natural’ or ‘man-made’ represents the next stage of classification. Natural attractions include country parks in Britain, lakes in Canada, moun- tains in Switzerland and the coast in Spain, for example. Man-made attractions, however, are more commonly the results of the history and culture of a country which leaves a legacy of historic monuments and buildings, but also includes specially created entertainment complexes such as theme parks, of which the most well known are the Walt Disney parks, originating in California, but now reproduced in Florida, Tokyo, Paris, Hong Kong, and Shanghai. One could, in fact, go one stage further and subdivide the man-made category into those attractions that were created specifically for tourism, such as Disney’s theme parks, and those that were created originally for purposes other than tourism. Historic houses, castles and monuments would all The success of the Opera Festival witnessed the establishment of a summer ballet event in 2002 and the opening of a new concert and conference centre and a holiday home fair. From the perspective of the munici- pality, cultural tourism has become the catalyst for the establishment of arts amenities for the town, as well as drawing in new businesses through building a successful image of the area as a place to live and work. The town has around 35,500 inhabitants, but being a popular tourist resort, the population rises to around 100,000 during the main season when the Festival is running. In today’s prices the Festival generates about €20 million (£16.7 million) of tourism expenditure in the local area, which amounts to some 15% of revenue from tourism in the Etelä-Savo region – an impressive contribution from a festival that lasts a month, demonstrating that it is a flagship attraction for the locality. An indirect measure of the importance of the Festival to the town’s tourism sector can be gauged from the expansion of flights between Helsinki and Savonlinna to five flights per day during the period of the Festival, dropping to two flights per day afterwards. Success breeds success and the Festival organisers continue to augment the product by adding new events such as an international singing competition, and arranging opera packages through selected tour operators. Sources: Authors and Savonlinna Opera Festival, http://operafestival.fi Discussion Questions 1. The popular view of opera is that it is an elite art form, so to what extent should it be subsidised from the public purse, if at all, given the many other calls on government money, such as health, welfare and education? 2. The pricing process for opera seats is similar to other arts venues. Suggest the various criteria that may be used to set seat prices. 3. Cultural values and economic values do not necessarily go together, yet cultural change is irreversible. Should art forms of the past be preserved if most people do not suffer any great sense of loss if they disappear? 4. Consider how festivals can meet different objectives for a destination, such as a catalyst for development, a tourist attraction or enhancing the image of the area (Luonila and Johansson, 2015). The Nature and Purpose of Attractions 313
- 339. come under thiscategory of man-made attractions. It is these types of attractions in particular that often have the greatest challenges in maintaining their authenticity, the addition of cafés, restaurants and gift shops for purposes of income generation often diluting the ‘purity’ of the attraction product, but they are essential for meeting the requirements of the average visitor. In addition, the exponential growth in, and use of, technology, across the entire tourism and hospitality industries is very much a part of the marketing and management of visitor attrac- tions, as evident in Mini Case Study 13.2 which highlights the use of augmented reality in experiential marketing strategies. The varying approaches to the management of natural and man-made attractions and the dif- ferent pressures they have to face help explain their inclusion here. For example, while the Grand Canyon may have management objectives that focus on conservation issues and the man- agement of visitors, theme parks have at their core objectives of entertainment and income generation. The division between natural resources and artificial attractions, however, is not always clear-cut. Many natural attractions require considerable inputs of infrastructure and management in order to use them for tourism purposes. This is the case for water parks, ski resorts, safari parks, aquaria and many attractions based on nature. This infrastructure may also be put in place to protect the resource from environmental damage. In many countries, it is no longer possible to have open public access to many forests. Specific sites are designated for cars, caravans and camping, and there are colour-coded trails for walkers. Human beings are instinctively drawn to cute animals. The Sunshine Aquarium in Japan successfully utilised this human instinct for experiential marketing when they had to find a way to attract more visitors and, more importantly, make sure that visitors have no trouble finding the aquarium. The metropolis of Tokyo where the Sunshine Aquarium is located is a hive of activity with hundreds of thousands of distractions. The 35-year-old aquarium was losing its attractiveness due to intense competition and its location in an extremely dense area of Tokyo with a kilometre of distance from the nearest station. The aquarium feared that potential visitors were losing their way or getting distracted on the way. In order to attract more visitors to the aquarium, they devel- oped a unique app called ‘Penguin NAVI’ where the cutest aquarium inhabitant guides visitors to the aquar- ium. They applied the motion capture technology to penguins for the first time and designed an augmented reality GPS system featuring penguins that guides the way straight to the aquarium from the current visitor’s spot. The GPS penguins walk and move exactly like real penguins, and visitors only need to follow the toddling cute penguins until they get to the aquarium using the app on their mobile phones. Visitors using the app did not notice other distractions on the way because it changed the boring point-to-point travel into entertainment. The analysis showed that people who downloaded the Penguin NAVI spent more than 9 minutes on average at the aquarium, over 32% of users opened the app more than 7 times, and 93% of users planned to recom- mend it to friends and/or families. As a result, the number of visitors increased by 152% compared to the previous year, and the aquarium has successfully attracted a variety of new segments after this experiential marketing project. Penguins brought not only people to the aquarium, they also brought smiles. Source: ‘The cutest guide to the aquarium: Penguin NAVI’, https://www.youtube.com/watch?v=IK4-zPD_25Ufeature=youtu.be Discussion Questions 1. What is augmented reality and how can it contribute to the overall visitor experience at attractions? 2. is the use of augmented Reality in experiential marketing campaigns likely to be effective across all types of attractions (i.e. cultural, natural and man-made)? 3. What are some of the limitations of using experiential marketing campaigns of this nature? Mini-Case Study 13.2 The cutest guide to the aquarium: Penguin NAVI by Sunshine Aquarium 314 Chapter 13 Attractions
- 340. Man-made attractions thatare the legacy of history and culture also share with natural resources the fact that they cannot be reproduced without considerable expense and alterations to their authenticity, unlike attractions designed principally for entertainment. They therefore deserve greater protection and management input to guard against excessive use. Such attrac- tions are commonly in the control of the state. A good example is Stonehenge in the United Kingdom, which exhibits all the features of being resource-based and non-reproducible, so that for some time too many visitors have threatened it. Measures to resolve this have included the construction of a new visitor centre some distance from the monument and putting a cordon around the stones to prevent them being further defaced by touching and, in some instances, chipping of the stones by capricious visitors. From this it follows that when looking at the development of attractions, we can place them on a scale that has at one end those that have been built or designed for visitor purposes such as family recreation parks, which are in the minority, and, at the other, cultural resources and facilities that were neither for visitors nor can be adapted for them. The bulk of attractions would then be spread out between these two poles. The next basis upon which classification can be attributed is the pricing policy adopted for access to attractions, that is whether or not access is free or an admission charge is required. Many countries around the world offer free access to their national museums, galleries and monuments – such attractions considered by governments to be the national heritage of the population at large (tax concessions are often also connected to such a strategy). This is not always the case, however, with the decline of the public purse sometimes serving as the catalyst for the levy of admission charges at previously ‘free’ attractions. Understandably, the contrast- ing objectives between the public and private owners of attractions affects the operational and management approaches adopted. More recent studies, however, suggest that the increasingly competitive markets that attractions now find themselves in are leading to greater commonality of management practice, because once paying visitors are introduced to attractions in the public and voluntary sectors, then pressure builds up for the visitor experience, in support of admis- sions, to become the marketed output, as in the commercial sector. This is something that is often resisted by the curatorial staff of these attractions, who are rightly concerned about the authenticity of the visitor experience. For example, in the 1980s, the Victoria and Albert Museum was heavily criticised for using the marketing strap-line ‘Ace caff with rather a nice museum attached!’ to stimulate a reappraisal of the museum by the public, a marketing strategy that would be considered quite acceptable today. The market in which the attraction draws its visitors represents the final classification high- lighted by Leask (2003). For example, while Universal Studios’ theme parks may have an inter- national audience, since they are based on the global film industry, the Eden Project in England a national audience, and the wineries of Western Australia a regional audience, the majority of attractions have a much smaller local audience. Clearly the nature of the market and the volume of visitors may well determine the product offering, particularly with regard to pricing, visitor spend and interpretation. Today the importance of multimedia, notably films and TV pro- grammes, in boosting the demand for particular attractions is significant and there is a large element of truth in saying that Hollywood is the world’s best travel promoter (Hudson et al., 2011), as witnessed by the major boost in visitor numbers to the locations in the United Kingdom where the Harry Potter films were made. Natural attractions In the instance of natural features it is often the quality of the resource that provides the attrac- tion, whereby location becomes secondary. Their appeal is both national and international. Thus tourists come from all over the globe to enjoy the Himalayas in Nepal, the Blue Ridge Moun- tains of Virginia, or the Ring of Kerry in Southern Ireland. Traditionally, water-based resources, either coastlines or lakes, have always been the most important tourism resource and still are, but with more frequent holiday-taking, the countryside and panoramic scenery have witnessed increasing usage. However, natural amenities are not only confined to the landscape but also include, for example, climate (which accounts for the dominant tourist flows still being North– South to sun resorts), vegetation, forests and wildlife. The Nature and Purpose of Attractions 315
- 341. The most commonaspect of natural resources is that they are generally fixed in supply and are able to provide only a limited amount of services in any given time period. But in many cases, the services provided by this fixed stock of natural amenities can be put to several differ- ent uses. Thus if it is proposed to increase the land available for tourism and recreation pur- poses, it may often be at the expense of other land users, say, industry. There is therefore a trade-off that must take place to ensure that the resource is used to the best advantage of society. This is demonstrated in Figure 13.1, where the vertical axis represents the social net benefits (social benefits less social costs) of using a given area of land for tourism or industrial purposes. The schedule TT illustrates how these net benefits decline as more land is made available for tourism, and similarly for the schedule II which applies to industrial use. At Q1 the social net benefit from the last portion of land devoted to industry is measured by the distance ZQ1 while that for tourism use is given by XQ1. Clearly, the net benefits obtainable from tourism use are much greater than those that can be gained from industrial use and so it will pay society to switch land from industrial designation to tourist use. The optimal point will be at Q2 where the net social benefits from each use are equalised. By undertaking such a move, society increases social net benefits by the amount XYZ, for the total gain from tourism use is XQ1XQ2Y but this must be offset by a loss to industry of ZQ1ZQ2Y. The essence of land-use planning and the legislation that enforces it is to determine some optimal allocation in the manner shown by Figure 13.1. In this way land is zoned for a variety of uses, from tourism and recreation through to urban development, and when disputes occur as to use it is customary to hold some form of public inquiry in which the benefits and costs of alternative choices are evaluated to reach an appropriate decision. Most governments maintain strict planning controls on alternative uses of land, whether it is publicly or privately owned. Thus social considerations via the political process are the main driving force behind land allo- cation; for example, the planning of the London Olympics involved the relocation of a number of firms away from East London and similarly for Rio de Janeiro in 2016. In the case of privately owned land, social choice may be enforced through compulsory purchase by the state. In some cases the stark choice presented in Figure 13.1 is nullified in practice because multiple land use is possible. National Parks in Britain, such as the Lake District, for example, include residential, farming, forestry, recreational activities and small-scale production within their boundaries. Market failure and public provision One of the problems concerning the provision of outdoor areas for leisure purposes on a large scale is that they are rarely commercially viable in terms of the investment costs and operating Total supply of land use o T Z T I Y X I Q1 Q2 o Tourism use Industrial Social net benefits Optimal resource allocation Figure 13.1 316 Chapter 13 Attractions
- 342. expenditure necessary toestablish and maintain them (Bracalente et al. 2011). The reasons for this lie in their periodic use (weekends and holidays) and the political and administrative diffi- culties of establishing private markets in what are perceived by the public as gifts of nature. This suggests that, if left to market forces, the result is more likely to be under-provision of natural resources for leisure purposes rather than over-provision. Yet there are considerable social ben- efits to be enjoyed by the population from the availability of recreational amenities and in the control of land use to prevent unsightly development spoiling the beauty of the landscape. Economists ascribe the term market failure to situations of the kind outlined above and in such circumstances it is common for the state to make the necessary provision. Thus some 85% of outdoor recreation areas in the United States are owned by the federal government, with the object of encouraging consumption and protecting the resource for the enjoyment of future generations. Public facilities made available for the purpose of encouraging consumption are termed merit goods, to indicate that the facilities are socially needed even if the willingness to pay for them in the marketplace is somewhat limited. The recognition of this principle in the United States goes back to 1872 with the enactment of theYellowstone National Park. In Britain, planning and development for tourism purposes is largely a post-1945 phenomenon, commenc- ing with the National Parks and Access to the Countryside Act in 1949, though it was not until the 1960s that positive action in the field of tourism and recreation provision really got going. The worldwide growth of tourism has prompted many other countries to enact similar legisla- tion to manage natural resources in a way that will sustain their use for consumption, while at the same time providing protection against overuse. There is another aspect of state provision: the so-called public or collective good. The princi- pal feature of such goods or services is that it is not realistically possible to exclude individuals from consumption once they have been made available. Private markets for these goods would quickly disintegrate because the optimal strategy for the individual consumer is to wait until someone else pays for the good and then to reap the benefits for nothing. Thus if the good or service is to be provided at all, it may be consumed by everyone without exception and nor- mally without charge at the point of use. The natural environment is a typical example of a public good and the growing pressure of tourist development has created concern for the envi- ronment in a number of countries. The point at issue is that public goods form no part of the private costs facing the tourism developer and are therefore open to abuse through overuse. In response the state, in addition to enforcing collective provision out of taxation, regulates indi- vidual behaviour through legislation to preserve environmental amenity. For example, in Ber- muda tourists are not allowed to hire cars, but only mopeds, while on the Greek island of Rhodes, vehicles are banned from the touristically attractive town of Lindos. Mauritius has a planning law that restricts buildings to a height no greater than the palm trees. In practice, this means hotels of only two storeys and thus permits adequate screening on the seaward side. Where legislation is considered impractical, or overly restrictive, then the approach is to try to change behaviour through educational awareness campaigns. The purpose of such codes is to