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poets, inventors, rebels and artists; a culture that decisively pushed back the old barbarism of intolerance, dogma, single-mindedness and reject the separation of morality from the PEOPLE.
I am proud to have been born in a corner of America, to be the son of a tradition that was the first to criticize itself to
the point of self-sacrifice, a tradition that has given prominence to pluralism and tolerance. This great university, your alma mater, is an example of the best our culture has to offer for it has equipped you to face great challenges in most areas of human endeavor. So stand up to your vocation and make the world a better place.
Tlhe F'u:ture of Tourism
THE EFfECT Of SCIENCE AND TECHNOLOGY
By JOSEPH F. COATES, Coates & Jarratt, Inc.
Delivered to the 41st Annual Conference, Pacific Asia Travel Association, Hong Kong, April 2, 1992
IT IS GOOD to be here to explore with you the next ten or fifteen years of the travel industry. I plan to cover three P0111tS. First is a central proposition that whatever you think your business is, you probably have it wrong, ~ f you sell sleeping rooms or air transportation; if you fin buses with people and move them from place to place; if you move from one area to another in order to make physical arrangements; If you serve food - if you. do any of those things connected with travel and tourism and you think that that is your primary business, that is your primary error. AU of you are in the information business, The single feature that links every one of your enterprises together is that they are all part of an information machine. Re-examine your own businesses from the point of view of being an information mach me and you will get a fresh perspective on where your future lies and on the great opportunities before you.
The second point I wish to explore briefly is how I see the industry restructuring in a sensible and subtle way to satisfy what lias to be central to every one o~ your, concerns: to better satisfy your customer's needs" The new linkage will be between information and the restructured portions of the industry.
The third point is that some of the specifics of how technology - particularly information technology. - may affect the future of your business.
Let us look first at why people travel. One important reason is to f~ntasize, to escape, to away. Fantasy is just 100 percent pure information, all generated and-processed in your head, People go to see the unusual, What is the unusual? The unusual is what you don't know. The unusual is what you have not previously experienced,
Why else dID people travel? To do something different; to see something different; to behave in lit different way. It may be to climb a mountain or it may be to do something much more esoteric, For example, in 11 nited States, some 150,000 people engage in war games In which they dress up in military uniforms, go off into the b.ack woods or a swamp, and shoot at each, other with guns $hat balls of paint, Instead of dropping dead from a bullet, they end up with splatters of red, green, or blue paint on their fatigues.
Why else dp we travel? Wen, 1.01 have something done to us. Traditionally, one goes to a spa to enjoy the warm baths, but there are: many other places and. reasons to go to and have things done to you. Then, of coutse, there is the checklist traveler: just because it is there and one has-heard about
it, one must see it. Again, another almost pure information activity.
In all of this - and a key to your business - travel provides endless cocktail party stories. And.iafter all, what is a story but information?
Then there is the educational aspects that people of all ages pursue: one goes places to learn or to practice a language, to study an art form, a culture, or a cuisine. Keep in mind that among the new students in the world, those most avid for travel in order to learn and enjoy are older people. In the United States, the only group in our population in the last twenty years to continue to grow in wealth and income has been people over age 65. And the new old are better educated, better informed, and have a wider knowledge of the world than any previous geriatric generation. They are effectively money in your bank if you figure out how 10 unlock their treasury.
One also travels to be challenged, albeit for most of us, to be challenged safely. And how do you know it will be safe? Information makes that dear.
Then, of course, many of us travel to reminisce. The military veteran returning to where he fought; the romantics going back to the place where they met. Reminisces are a major part of pre- and post-travel.
All of the above are overwhelmingly information related and m08~ carry with them an image. The neglected places of the world for travel are places which effectively have negative, or few dear positive images to draw people to them. SOl one of the enterprises for your own businesses over the next tea years is to help create those kinds of positive images which draw people to places that they have never been before. And, of course, creating those images IS
totally information. .
Let's take a byway while we are thinking about esoteric
unu~wil,J places. Many of them will suffer from the stress of too many.people trying to trot over too small places; too heavy IQads on cultural treasures or the natural environment or .the other desirable aspects of a particular site. To cope with the overuse of desirable places it is necessary to ration their use. The most attractive and immediate form of rationing for. many people would be monetary; charge what the traffic will bear and only those who can pay will get to
enjoy the site. .
That is short-sighted from everyone's point of view. A much more attractive way to ration access to unusual and
extremely attractive facilities is to ration by qualification and preparation. To explore an area, one would be required to take a test, do some physical preparation, undergo a synthetic preparatory experience. Train through a series of thresholds in order to establish that one is qualified to climb this mountain, to canoe on this stream, to enter this jungle, or to trot over this ancient site. Think of the implications for that rationing for the travel industry. If you were to prepare a hundred million people a year to see the fragile and delicate sites of the globe, a gigantic new enterprise could grow up around rationing intrinsically limited sites.
Coming out of that, of course, will be the development of new synthetic sports and recreations. Once we learn to prepare people to visit, use, and explore limited and fragile environments, the technologies and techniques that allow us to prepare them for these places will themselves become attractive as recreation. Eventually the synthetic sports and recreations could evolve in new kinds of theme parks.
Recognize that your travelers are increasing in numbers.
The global population today is about 5.3 billion. About 1 billion of the world's population enjoys middle class status and middle class lifestyles, which, of course, is the centerpiece of your enterprise. The population is growing at about 93 million a year, about a billion people a decade. Some fair portion of them will add to the billion people who comprise your customer base. Demographically, there is intrinsic good news in terms of the people available to satisfy your entrepreneurial expansionist drives.
Perhaps more important, present and new travelers are increasingly experienced. They want each new experience to exceed the previous one. They also come with a diversity of values. The tourist and the traveler are by no means homogeneous. The tourist or the traveler might be visiting the place for a score of different reasons, as noted earlier. And yet most travel today is homogeneous in the sense that it is a product prepared for a center cut of the world's middle class population. The future lies in differentiating the travel market in order to satisfy the scores of different reasons why people go anyplace.
People are increasingly knowledgeable, and the unstoppable feature of knowledge is that once you have it you want more. Unfortunately, travel and tourism information tends to be canned, prefabricated, and limited. The opportunity for the future which information technology will fill is to provide tailor-made, endless, in-depth, detailed information about every aspect of every place and every site one might care to visit.
The central feature implying a major change in the way one organizes travel and tourism is the desire for a positive experience. Increasingly that involves hands-on experience. Vacationers want to touch, feel, smell, deal with, swim in, climb into or upon the things that they are looking at. But most tourism shields people from the sites that they can merely see. It protects them from the site, or in many cases, protects the sites from the people. But when you combine the pressures for experience and the pressures for handson, you have an emerging radical change.
For your business, the central need is to evolve in new directions. Right now the business, or industry if you prefer, is fragmented. There are those who take care of getting us there; there are those who service us when we are there; and there are some who service us after we have left. What I
VITAL SPEECHES OF THE DAY
see - and let me just take the travel agent as a focus of discussion - is that the travel agency first will be involved with pre-travel; i.e., with the preparation of the person to visit a site, and that pre-travel will introduce the individual in interesting and satisfying depths to such things as gambling customs; the cuisine and how it is prepared; how to buy silk or how to buy whatever is the local product; how to enjoy a city. Incidentally, I have never seen a publication, a book, or a video about a subject that is absolutely central to the traveler: how do you enjoy a city? Not how do you enjoy this city, but how does one enjoy any city. How does one begin to understand the logic, the structure, the organization of a city? Why is Hong Kong laid out the way it is? What underlay all of that? A fascinating story remains untold. And then, of course, ditto that in detail for every particular site or city in the world. There are some cities for which many of us have some casual information about its history, but there is no city which I have visited in which any travel-related agency or service was prepared to lay in front of me the logic, the structure, the organization, the functions of the city.
The second concern of your business in the future will be, of course, the present functions an agency now serves. The third element in the new travel industry will be post-travel. How does one satisfy the needs of the individual for memories, for reminisces, for recall? That is a boundless opportunity for travel agencies. I took a tour yesterday to Canton, and it was rather interesting to watch the several people on the tour with their video cameras, just kind of hanging out, pressing against glass, leaning over a parapet, not particularly knowing what they were doing with their video camera, and almost surely coming honie with a collection of secondrate material. More's the pity, because they put the time and money into it, but literally no one had ever shown them how to take a travel trip and use the video to create reminisces and recall. I have never seen anyone on a trip doing an oral diary, a spoken diary. Occasionally you see people writing things. It was very much the custom a century ago for people to keep travel diaries. But with modern technology I have never seen anyone reach into his pocket or her purse, pull out the recorder, and record right there for their own future recall what they were seeing, what they were feeling. Keep in mind that people know very little about how to construct and prepare reminisces. And once they learn to do that in a more sophisticated way, we will all be preserved from the tedium qf amateur slide shows.
Another factor proliferating opportunities right and left for you, and one that you ar~ all sensitive to, is the emergence of ecotourism. TouriST and travel must respond to global and environmental concerns because that is a 100 percent middle class concern ~hroughout the world, and the middle class are your primary customers. In the United States we have an influential publication called Consumer Reports, which takes household items - vacuum cleaners, TV sets, videos, skis, golf clubs - anything one might be interested in, and tests and evaluates them in a complex and sophisticated way. To get a poor evaluation by Consumer Reports is a disaster.
I see an ecotourism consumer report in your future. Unless you people get on the ball and generate that internally to your industry, with a great: degree of honesty and sophistication and present it forthrightly with all of the warts,
JOSEPH f. COATES
bumps, and blemishes of a given place, someone hostile to your industry will do it.
As ecotourism captures the minds of more and more people, an ceo-positive tour will not be merely able to see birds saved from extinction or animals brought back from the brink - that is a routine and relatively simple passive activity - but people will put their hands onto things, will bend their backs to help and assist, will actually labor in creating the positive ceo-tour experiences. People will build and restore. For example, on my trip to Canton, we saw a splendid temple, a marvelous architectural achievement held together by pegs, with no nails. Room after room was beautifully built, but every single surface was dirty, overlaid with grit, poorly maintained and needing repair. I have no doubt that one could marshall hundreds of people and have them pay good bucks for the opportunity to work On the restoration of that temple.
Most of your tourism is directed at sheltering people from the things that they most want to get their hands on and to experience. ,,1\, big opportunity for your industry is to break that shelter barrier, that wall between people and experience, and allow them to have more and more direct encounters.
.Let me turn now to information technology itself and some the things that are going on, with their implications for the future, lnformation technology has already had great positive effec~s on your industry. Airline booking, of course, would be unthinkable without the assistance of computers. Hotel reservations and credit cards would be unworkable without a network IOf global selecommunicadons. But applications IOf information technology have a 1- mpst exclusively belen directed at the backroom functions that appeal to the bean counters, the accounting ment in your businesses. The emerging opportunity to bring information technology to the customer interface. That will transform your industry into something unprecedented So let's, look at what some technologies are that are coming along.
First, all. the advanced nations are being rapidly wired with fib~Jr PPt~I~S. Fiber optics are So rich in the capability to carry infhrmatilo~~ that every telephone could have the information c~pacit:Y of a television broadcast. W~ do not want ~:very teilep~lone to be a TV but the point is that with fiber optics the cost IOf communication will plummet, Aad the.problems for the telecommunications industry in the future will not be meeting consumer demand, but the problem illltlr the iwdustry will be promoting applications at each end ()f:dle Hne to fill.the enormous capacity for carrying information. That channel capacity will allow the free flow IOf voice-to-eoice, data .. to-voice, data-to-data, imageto-image, any ki~d IOf ccsntmmication .from anyone, ill\ny" where, anytime, to anyplace. That is the emerging model in the advanced nations. It will f;lpidlly nerrneate advanced areas of the rest (ilf the world. Comrnunicaticns satellites will be very important adjnncts 110 ~i1ineI pptics for sl~a.niling losg d~stap.celSi, over oceans or mpuutains, Cellular telephone will be local adjuncts to the central spine of. fiber optics telecommunication,
Second, everything is acquiring its own microprocessor.
E'\'~ler)Jrthillg jis.~ecproing smart, The: Japanese term for that is ~('mecihatro~iics/' As everything becomes smart, it will acquire the ability to sense its internal environment. It will
acquire the ability to sense both its internal environment (what am I doing, as a device, as a machine, what am I doing today?), and it will be able to sense its external environment (what is happening out there that I should be responding to?). The implications of everything becoming smart are that they will become more environmentally sensitive and responsive, and they will be linked and networked to the larger fiber optic and communications networks.
Third is the evolution of slow scan video, that is, video telephony, The new telephone-delivered video will not of course be the fun motion video that you are familiar with on broadcast or cable video. It will rather be stop-action, but in real-time. The voice will be at a normal pace, but you will see people and you will see things move or change more intermittently. For many purposes, that win ~e an outstanding value. That will be the opportunity to directly communicate face-to-face, Image-to-image, data-to-data; it will be the opportunity for people to work with each other in ways that are now impossible.
Fourth is voice recognition. Increasingly, devices will be responsive ~o the human voice. Those with the most general application - "open the door, please" - will respond effectively to everyone's voice. The more sophisticated uses requiring complex messages or involving vocabularies of thousands of words lie farther in the future, but not very much farther in the future" What is emerging ~s the capability that every single device in our world can understand the spoken word and that every single device canibe able to talk back in anylanguage, any dialect, and any timbre that one chooses. Imagine a world IOf tourism and travel in which everything becomes intelligent to the point where it can both talk and listen; where it can listen in one language and respond in another, Suppose, for example, I am at a railroad station in some out-of-the-way place ini which no one speaks my language, I will go to an automated teller machine-Iike device, and I talk to it in my lan:guage, it processes 'ilvhat l want and talks back to me as well as gives me a printed form in the language which is best suited for the occasion.
'"~VjLlU~jl1"> along behind that - subtle, hidden, not visible, not the of thhllgs that you or your customers will directly e~,~erieJqce - will be the emergence IOf enormous worldwide datr(ilb~ses. Effectllvely all information in the technical selplse wUI become digitized. AU information will be easily transmitltab~e from one place to another and ithe databases hoidiqg ~ha~ infol1JOl'liI.tiQn will be, for all prac~ical purposes, unlimitedand boundless in their storage capacity, Information will: be. able to be sorted .and assembled to taste 011 demand, wttat that means to you.as a practical matter is that over the next decade there will be no information that Y(1) cQuld c~l1,ceivabJy ~1Vant lin the pursuit of your business or in the 8~tibfar.:tion IOf a customer's needs which will not be
available to .Y9U" .
Coming over the horizon, not yet dearly commercial, is virtual reality. YQU are all familiar with computer screens. Many of Y01l actually manipulate symbols,' numbers, or words, on a screen, Now we have moved past that in many regards, and perhaps the most striking sort of thing is the ~ill:d o:fs:inn:uila~fon you!ilaw today: the trip from the airport lJtl the new I·loug,Kong supercity. We are able: to create and enjoy Jimagle~ .. BWl We are be:,gimning to go beyond images used pa6siv~1l1y. You all have played or Seen .ehildren play
with Nintendo, in which you interact with the screen through some kind of hand-held device. What lies right over the horizon is the successor to that Nintendo-type technology of interaction - virtual reality. In virtual reality you will be on the screen and off the screen at the same time. You will manipulate yourself off screen in terms of whatever activity is going on on that screen. Would you like to be a sumo wrestler? Well, there you are right on the screen and you will wrestle with a sumo wrestler on the screen. What will be particularly attractive about virtual reality is that you won't be manipulating something that merely is the image, but rather you will be wearing a skin-tight uniform; and as you move your hands, your arms, your heads, your legs, your body, those exact movements will occur on the screen. Furthermore, every experience that is going on on the screen will be fed back to you. A blow to the abdomen, and you will feel a blow in your abdomen. A knock in the side of the head, a twist of the arm, a pressure on the shoulders, you will feel all of that. That is what virtual reality is.
Now imagine being able to take your customers on a virtual reality tour of any part of the world; to engage in any kind of sport or activity. To suggest that this is not too far over the horizon, let me point out that the first commercial virtual reality machine was just put in an amusement park in the United States. The device cost $50,000, but that is today's price. The prices on these devices always drop sharply.
So those are some of the tools and techniques that lie ahead. Now what will information technology do to your businesses? I see two big effects. First, it will allow people to explore in-depth before the trip what they want to experience; then it will allow them to review it after the trip. It will deal with what is one of the most stultifying aspects of tourism: namely, that it is homogeneous. You will be able to differentiate the experience for individuals and tailor-make what they want to exactly fit them.
The second big effect will allow the individual to put himself or herself, the family, directly in the image. Suppose, for example, I wish to go to Thailand and ride on an elephant. There will be a film of some people riding on an elephant. "Could our family do that?" "Well, I'm not quite sure, Mr. Smith, but step over here, let me get a photograph of you and the family," and five minutes later, there you and your family are, in that motion picture riding on that elephant in Thailand. So the ability to directly put the customer into the image and into the scene is something that lies just a little bit ahead of us. The ability to capture your reminiscences, I have already discussed. But the essence of all of this pre-travel is that you will bring the experiences to the customer, and my central thesis is that what you have read about, heard about, seen, you want to visit. And if that is true, certainly what you have experienced vicariously through images and through devices will further increase your desire to have that actual experience.
While on travel, simple things like a compact disk can be a "concierge in a box" to tell you and show you about every single thing that you are seeing and to give you the information in depth or detail on a city or countryside tour, the way you want it. The middle class customer will want it because he and she is better educated and more experienced than any of your mass customers have been in the past. Imagine carrying a six- or eight-ounce device that would give you a
VITAL SPEECHES OF THE DAY
potential encyclopedia of detail on anything you see on a tour.
The technology also offers interesting prospects for the social side. Is there anyone here who is from Iowa? I am from Iowa, I would sure like to know while I am in the Sepic Valley if there is anyone from Iowa with whom I can exchange experiences or meet. Information technology will make that kind of question and its answer a breeze.
For the traveler alone or in groups, it will allow for congeniallinkages. The opportunity to pair up people with each other, to link them by interest, by location, by concern, by whatever happens to be importance to them while on the tour or in the field, will become routine.
Cultural preparation to allow one to understand the gestures, what to do and not to do, how to understand people's behavior, or how to interpret their face and body motions, all of that will become part of your pre-travel and travel services. To understand the local habits and the lifestyles, understand the games and to be able to engage in them could be quite exciting.
Take something as simple as and prosaic as a restaurant.
I have been in scores of ethriic restaurants in every place that I have been to. I have never been in an ethnic restaurant which was able to deliver two obvious kinds of information concerning food: what is this I am eating, and how was it prepared. What is its history and its background. And no restaurant has ever delivered to me a description and the story of the cultural artifacts which surround me in the best and most interesting of restaurants. The enormous pent-up demand for insight and information to enhance the traveler's experience could make the ethnic food an intellectually satisfying experience as well as a delight for the palate. While on food, of course, it will be fairly routine to have totally tailored diets to fit an individual's needs or proclivities.
One can say many, many critical things about hotels.
Probably the most significant critical thing about hotels is that they are in cultural lag. Hotels are so basically set around sleeping and eating that they are tuned out of the information era. Hotels are still, in many cases, charging you for electronic access. You would never think of going to a hotel that charged you for electricity or charged you for hot water. Why would you think of going to a hotel that charges you for access to a fax line, a telephone line, to outside communication? The hotel of the future will be rich in teleconferencing; video conferencing, provide universal fax, surely will have picture phones in the room for you. Everything will be voice-activated insofar as that is useful and practical. Rooms themselves will become electronically driven and mood responsive to the activities going on in that room. If the people in the room seem hostile and aggressive, the walls will turn a pacifying yellow. If the group seems to be too passive and unresponsive, the walls turn an exciting zigzag red. Now all of that is technically possible with the technologies now available.
There is certainly no longer any reason why anyone should be lost in the outback or the jungle. The new geodesy, the emerging capabilities with synchronous satellites going around the world to mark every single spot, to tell any individual exactly where rescue is, and to provide the necessary information should rescue be required, will become totally routine. This will open up more exotic, more excit-
ing, more remote, more questionable, more threatening kind of tourism because the new geodesy will make it safe for people to go anywhere, in the sense that they will always know where they are and they win allways be accessible to a rescue mission.
At the more micro level, as more and more of your customers travel around with small and not so small children, lost children will cease to be the concern that it has been in the past. VIle already have the technology in several countries for monitoring people who are on parole. We put an electronic bracelet on their ankle and we can find out exactly where they are. And, of course, we could send them away and can them back ad lib. There will be no more lost eightyear-olds,
Technology will do many things to your industry itself. Of course, the technology will become a primary training and teaching tool in order to make your own employees, your own staff, your own functionaries more culturally sensitive to the, peeple that they are dealing with. One of the. large staff qOS~S in many of your enterprises over the next decade will be the cost of training in using new information technology,
There are a slew of esoteric things driven by information technology that will open up to people. For example, if 1 come from country X, massive data-bases and the capabilities that you will have at your beck and call will facilitate my exploration of my genealogy.
One other technologies that is coming along is the
interaction between vehicles and roads and highways. NIOW,
obviously, technology will take off first in the more
advanced the more sophisticated technologically-rich
countries. lies ahead is interaction between auto-
mobiles andvans with the highway andthe roadway that will allow people to collect tile kind of information that they
want as they travel. Where am I, is always a primary question. Here is where I want to go; how do I get there? All that information will be available to you right on your dashboard at the flick of a knob, at the press of a button. Are there any sights along the way that I should see? Feeding into your dashboard vehicle-highway interactive system, your own particular interests, whatever they may be, it win respond tailored to your interests. How far is it? How safe is it? How good are the highways? How long does it take? Are there restaurants along the way? Just think of the automobile as it goes down the road being able to answer all those questions which you, as a traveler, so desperately try to find the answers to as you thumb through a too-thick and too obscurely written paper tour guide. An of that win be available on the dashboard. There is no doubt that that is around the corner and will come very, very fast.
It is not at all unthinkable, and it would be extremely desirable, [or a large portion of your clientele to undergo a psychological test to accomplish two things: to find out what they really want when they travel, i.e., what their real interests are; and how to pair them up with the kinds of people who will enhance their experience and travel, Testing will aUOIw you to help them to find the particular things in a sightseeing, area that win have the: maximum positive impact on them,
That is asampler of the way I se('; science and technology affecting you over the next decade or so. The central theme really is that you are not in the business you think you are, you really a~'e primarily in the information game and part of a growing i~rrrorrnatilOn machine. TIlle future of the business lies in turning toward the customer and providing much, much more.intimate, systematic pre-travel, travel, and posttravel services and experiences.
Thank you all very much.
hir1a'SI N::8,.,Ecorlomic Policy
SINOmU.Si. ECONOMIC TRJ!l.DE AND TECHNOLOGICAL COOPERATION
By GAN ZIYU, Vice Chairman, State Planning Commission, People's Republic of China Delivered before the Economic Club of Detroit, Detroit, Michigan, July 28, 1992
FIRST OF ALL, please allow me to express my sincere gratitude to the Economic Club of Detroit, to American automobile corporations GMs, Chrysler, Ford and in particular, to Mr. Ambassador Woodcock, for your kind and considerate arrangement, which enable us, Chinese Vehicle Buying Mission, to meet American business and commercial communities and exchange views on the issues of our common concern.
Detroit is famous for its automotive industry, Once we are in the city, we have a feeling that it is a city on wheels. In fact, the invention and development of automobile is an reflection of the development and change of economy. We all live in this fast changing world. China is undergoing renovation; Sino-U.S. relations is developing and the scope of our cooperation is expending continuously. Hence, I'd like to brief you on the reform, opening-up and economic development in China.
China is the most populous developing country in the world. For Olver a decade, under the guidance of the thought of building socialism with Chinese characteristics initiated by comrade Deng Xiaoping, the Chinese people have implemented the policy of reform and opening to the outside world, which has brought about sustained economic development, marked improvement in people's livelihood, national unity and harmony, as well as a stable political situation. This policy of reform and opening to the outside world will not change or waver for one hundred years.
Promoted by the policy of reform and opening-up, the 1980s became a decade that witnessed great achievements in the economic construction with the fastest growing speed and the tangible benefits for the people. Compared to 1980, the GNP in 1990 rose by 136 percent, with an average annual growth rate of 9 percent. People's livelihood has also improved remarkably. We have basically solved the
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