Tourism concepts

Changing face of travel consumer
More affluent, measured in disposable income per capita, ownership of property and household facilities. Better educated and more interested in continuing education. More healthy and interested in more active pursuits. Older, with a particular shift in the number and attitudes of the more active over-fifties.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism demand trends
Dr. Nimit Chowdhary
Professor

Tourism Concepts

Indian Institute of Tourism and Travel Management

Indian Institute of Tourism and Travel Management
2

Changing face of travel consumer
More leisured in terms of hours of work and holiday entitlement, having regard also to early retirement. More traveled, for work and business as well as for holidays and leisure, increasing numbers with frequent international travel experience. More exposed to the media and information generally
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Changing face of travel consumer
Tourism Concepts

Indian Institute of Tourism and Travel Management
3

More computer literate with ownership of personal computers (PCs) and access to internet growing exponentially. More heterogeneous and individualistic in their demands and expectations. More culturally diverse in terms of ethnic origin as well as their range of lifestyle choices.

Tourism Concepts

Indian Institute of Tourism and Travel Management
4

September 17, 2007

(C) Prof. Nimit Chowdhary @IITTM

Determinants of tourism demand
Economic factors and comparative prices Demographic, including education Geographic Socio-cultural attitudes to tourism Mobility Government/ regulatory Media communications Information and communication technology
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Economic factors
Tourism Concepts

Indian Institute of Tourism and Travel Management
5

30 major countries of origin accounted for over 90% of world traveling spending Top 10 alone account for 2/3rd of spending and nights. These are countries with highest per capita income. Developed and growing economies also sustain business travel and trips (more than 50%)
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
6

1

Economic factors
Relationship between changes in real disposable incomes and volume of trips and expenditure away from home. Increase in real incomes since 1990s has led to increase in expenditure on travel and tourism (income elasticity) . China and India are fast emerging as tourism markets and suppliers owing to rapid economic growth
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Economic factors
Tourism Concepts

Indian Institute of Tourism and Travel Management
7

Comparative prices are a major determinant of volume of demand. Price is cost to customers in terms of money, time and effort. Spending will depend upon comparative price and disposable income of tourist. East Asia, China and BRIC are therefore increasingly attracting more tourists.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
8

Demographic factors
Developed world- one- and two- person household, late marriages, with fewer children
Divorce, single parent, Small households means more households Affluent old age people (26% Europeans are over 50 years of age)
Tourism Concepts

Demographic factors
Rise in life expectancy
Greater proportion of older population New demand for leisure and travel Health care and nursing Quality of life
Tourism Concepts

Structural shifts in communities
Development of new towns and cities
Indian Institute of Tourism and Travel Management
9

Developing world- greater women involvement, two-income households, more disposable incomes
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Education- higher the education, more the amount of travel
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
10

Geographic factors
Climatic and scenic attractions Willingness and affordability to demand destination of choice. Urban areas generate more tourism compared to rural areas- for multiple reasons Geographical pockets of heritage, culture and arts offer tourism products Eco-tourism, and ecological constructs as tourism products
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Social factors
Increased no. of women in work force
Tourism Concepts

Working women and resulting twoincome households Quality of life International mobility leads to more sophisticated consumer tastes Greater complexity of life

Tourism Concepts

Indian Institute of Tourism and Travel Management
11

Increased competition in life
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
12

2

Changing attitudes
Attitudes towards tourism are a subset of Tourism wider view on the desired quality of life and Concepts how to achieve it. Examples of attitudes in America and Europe Therapeutic value in lying on the beech and sun holidays are ‘rights’ and necessities for Indian Institute of Tourism and relieving stress rather than luxuries Travel
Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 13

Changing attitudes
Examples of attitudes in America and Europe Longer holiday entitlement in twentieth century has lead to consumers taking several holidays in a year Scandinavia & N. Europe- people having a second home That holiday products should be environmentally sustainable
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
14

Personal mobility factor
Superior roads and infrastructure More people having cars and four wheelers Most hotels, nearly all self-catering establishments, restaurants, and great majority of visitor attractions and entertainment in America and Europe are dependent on travelers by car Congestion has increased and governments are favoring public transport
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Government/ regulatory framework
Tourism Concepts

All governments impose laws and regulations to safeguard health and safety of their populations and to control the use of land and buildings; most impose penalties for non-compliance

Tourism Concepts

Indian Institute of Tourism and Travel Management
15 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
16

Government/ regulatory framework
Governments intervene: To ensure fair competition between supplier- check monopolistic tendencies To ensure that customers have choices and rights against suppliers To influence such market patterns as governments control- timing of holiday To ensure that proposed projects do not damage the environment
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Government/ regulatory framework
Politico-legal changes:
Tourism Concepts

Governments creating infrastructure for services (led by EU) Internationalization Governments consciously (rather aggressively) promoting tourism

Tourism Concepts

Indian Institute of Tourism and Travel Management
17 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
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3

Government/ regulatory framework
Transport regulation Air transport
What routes can be flown Which Airline can fly, number of flights, slots available at airports, the capacity of seats on routes, prices that can be charged
Tourism Concepts

Government/ regulatory framework
Tour operations and hotels
Regulatory framework Licensing of tour operators and hotels Licensing for bar Example of Bhutan Taxation Control and grading of hotels
Indian Institute of Tourism and Travel Management
19 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Bi-lateral agreements between countries Asian highway project Train and rail link with Pakistan Rights to sell ‘duty free’ items
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
20

Government/ regulatory framework
Regulation for the environment CRS
Tourism Concepts

Information and communication technology
Increasing promotion and distribution of products on www. Multimedia information provision in customers’ homes enhancing promotional possibilities Switch to direct marketing, reducing the traditional role of travel intermediaries Customer database development and its role in marketing information systems
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 21

Indian Institute of Tourism and Travel Management
22

Information and communication technology
Power to develop customized products for consumers Relationship marketing with repeat buyers and other targeted customers/ stakeholders Creation of virtual enterprises- “Make my trip”, networks of micro-businesses Major opportunities for access to international markets at low costs
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Travel propensity
Tourism Concepts

Low propensity characteristics Low income per household Single parent household Rural-community dweller Educated to minimum age
September 17, 2007

High propensity characteristics High income per household Two parents (employed) household Large-city dweller Degree or other higher education level
(C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
23

Indian Institute of Tourism and Travel Management
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4

Travel propensity
Low propensity characteristics Older people (80+) No access to private transport Three or less weeks’ paid holiday No access to internet High propensity characteristics Young people and ‘empty nesters’ Two or more cars in the household Six or more weeks’ paid holiday Access at work and at home
Tourism Concepts

Trendz…

Tourism control intelligence

Indian Institute of Tourism and Travel Management
25

The cruise industry will experience explosive growth. An older, better-educated population in Europe and North America will increasingly seek ecotourism and cultural travel products. "Slow cities" and "slow food" trends will expand from Italy to much of Europe. London, New York, Sydney and Dubai will be the leading tourism poles through the end of the decade.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
26

September 17, 2007

(C) Prof. Nimit Chowdhary @IITTM

Trendz…

Tourism control intelligence

Trendz…
Tourism Concepts

Tourism control intelligence

Non-residents will pay significantly higher entry fees to tourist attractions than those paid by locals (Venice, Petra, Bath, etc.). Tourism Satellite Accounting will be adopted by several developing countries but ignored by the U.S., China, Japan, Russia and most Western European countries. Prayer rooms and compasses will be installed on most passenger aircraft serving the Islamic world.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
27

Antarctica will become an ecotourism tourism destination complete with hotels, restaurants and full-service tours. Shopping, from mega-malls to folk craft centers, will increasingly become a critical feature for tourism destinations. Rides on private spacecraft will become a recreational outing for the wealthy. Mega-resorts (Las Vegas, Orlando, Sun City, etc.) will do what no one thought possible: get bigger.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
28

Trendz…
intelligence

Tourism control

Trendz…
Tourism Concepts

Tourism control intelligence

Cruise ships will sell condominiums, becoming ocean-going resorts. In spite of organized international efforts to fight them, sex and drug focused tourism will flourish. Airlines, travel agents and tour operators will ally themselves with financial institutions to offer consumer travel loans. Western tourists will shun countries with immense tourism potential but "rogue" leaders (Zimbabwe, Libya, Iran, North Korea, etc.).
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

MGM Mirage will beat out rivals Hilton, Harrah`s and Bally`s to become the undisputed leader of the casino industry. National economies in Cuba, Egypt, Spain and Thailand will become dangerously dependent on tourism. `Rave` tourists will travel further abroad in search of the perfect party (BringItOn! Travel, Like Hiptrips, Experienceibiza, etc.).

Tourism Concepts

Indian Institute of Tourism and Travel Management
29 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
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5

Trendz…

Tourism control intelligence

Trendz…
Product and service trends
Tourism Concepts

Tourism control intelligence

Enormous infrastructure projects will significantly expand automobile accessible tourism options (Channel Tunnel car lane, Bahrain-Qatar causeway, etc.). China will be the first country to receive 100 million international arrivals in a 12-month period, sometime around 2018 - France will follow within 2-3 years.

Indian Institute of Tourism and Travel Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 31

Hotel rooms, increasingly equipped as offices with full-size desks, computers and advanced communications technologies, will minimize the need for business centers. Expansion of Europe`s high-speed train network will eliminate short haul flights. Hotel meeting and dining areas will be designed less formally in an attempt to attract the casual business traveler. Small super-luxury boutique inns will take market share from Four Seasons, Ritz Carlton and Fairmont.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
32

Trendz…
Product and service trends

Tourism control intelligence

Trendz…
Product and service trends
Tourism Concepts

Tourism control intelligence

Hub airports will install capsule-cocoon hotels in terminal facilities. Hotel and restaurant facilities will be designed for an aging population with lower rise steps, more handrails and wider doors. Travel guidebooks will become highly specialized and more frequently consulted primarily on the web. The distinction between business and leisure hotels will erode as business clients seek fitness and entertainment activities and vacation guests demand advanced telecommunications IT.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
33

"100% Satisfaction Guaranteed" will replace "Let the Buyer Beware". Growth in demand for home food delivery will outpace all other food service segments. An aging population and growing infatuation with healthful living will bring a wave of European holistic spas and `health-tels` to North America and Asia. A new wave of budget conference & exhibition hotels will be built to meet the convention needs of cost conscious companies.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
34

Trendz…
Product and service trends

Tourism control intelligence

Trendz…
Product and service trends
Tourism Concepts

Tourism control intelligence

European and Japanese new-build hotels will be obliged to design larger guest rooms closer to North American standards. Restaurant groups will operate F&B outlets wherever people gather (Laundromat bars, espresso counters at service stations, etc.). Center-city urban resorts will challenge sun, sand & sea vacation villages in the leisure market.

Credit card check-in/check-out, F&B vending machines, self-cleaning bathrooms and selfserve laundries will eliminate most human contact in budget hotels. Luxury resorts that once shunned children will welcome them with a expanded array of activities and tailored dining options.

Tourism Concepts

Indian Institute of Tourism and Travel Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 35 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
36

6

Trendz…
Investment and finance trends

Tourism control intelligence

Trendz…
Investment and finance trends
Tourism Concepts

Tourism control intelligence

Hotel real estate assets will be increasingly concentrated in the portfolios of fewer investors, particularly private equity funds. Intense competition for hotel operating contracts will push management fees as low as 1% of gross, 5% of IBFC and $4 per reservation. Airlines will continue to rack up significant losses as they struggle to deal with high fuel costs, new security requirements, an onslaught of no-frills carriers and brutal competition from `open skies` agreements.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
37

Following the big American sell off of the 1980s and 1990s, hotel companies will be repatriated to the U.S. (Westin, Ramada, Renaissance, etc.). Airline alliances of the 20th century will evolve into acquisitions as weaker players struggle to survive (Air France-KLM, American-TWA, etc.). By the end of the decade, a score of management companies will control the world inventory of branded hotel rooms.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
38

Trendz…
Investment and finance trends

Tourism control intelligence

Trendz…
Investment and finance trends
Tourism Concepts

Tourism control intelligence

Hotel feasibility studies will become an unprofitable commodity for hospitality consulting firms. Hotel operating companies will sell their remaining equity in real estate to free up capital for expansion of management contracts. Per room hotel acquisitions in Europe will reach stratospheric new records (i.e. Savoy Group).

Franchising will experience explosive growth as hotel companies strategically reposition to get out of the hotel business and into the business of hotels (i.e. Radisson, Choice, Cendant, Holiday Inn, etc.). Fewer new-build hotels in Europe and North America, more existing property renovations.

Tourism Concepts

Indian Institute of Tourism and Travel Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 39 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
40

Trendz…
Human resources trends

Tourism control intelligence

Trendz…
Human resources trends
Tourism Concepts

Tourism control intelligence

Critical shortages of skilled staff will encourage hospitality corporations to develop or outsource proprietary training centers. The introduction of new technologies in the upscale tourism industry will not replace the human element in service delivery - to the contrary, it will gain importance. Unionized hotel and restaurant workforces will trade scheduling and task flexibility for job security and quality-of-life benefits.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
41

Tourism and hotel management schools will move out of the classroom and out of the library, onto the web and into the field. Powerful unions, a shorter workweek and reluctance to taper social benefits will maintain Europe's standing as the world's most expensive tourism destination. Middle Eastern countries enforcing employment quotas for nationals will experience reduced productivity and higher labor costs. Airline employees will accept significant wage and benefit cuts to prevent their employers from going bankrupt.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
42

7

Trendz…
Marketing trends

Tourism control intelligence

Trendz…
Marketing trends
Tourism Concepts

Tourism control intelligence

The Internet will become the dominant distribution channel for all travel and tourism products eliminating most intermediaries. Understanding customers as people - their likes, dislikes, habits, interests and hobbies will become critical to establishing competitive advantage in hospitality marketing. Customer retention will replace customer acquisition as travel agencies` strategic objective. Homogenization of airline services will render them commodities while lodging products will continue to focus on differentiation.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
43

Data warehousing and data mining will provide one-to-one and relationship-marketing opportunities never imagined. Print media advertising will move onto the Web. Increasingly value-conscious customers will demand more and better product information. Consumers will increasingly expect to negotiate hotel and airline rates. Cross-sector strategic alliances between food service, lodging, travel and entertainment companies will prove to be effective marketing formats.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
44

Trendz…
Marketing trends

Tourism control intelligence

Trendz…
Marketing trends
Tourism Concepts

Tourism control intelligence

Better understanding of psychographic consumer behavior will lead to more precise identification of customer segments and subsegments. Hotel revenue management systems will become more sophisticated and be relocated from the reservations department to sales & marketing. Revenue management tactics will be applied to pricing in restaurants, amusement parks, golf courses, tour buses, cinemas, convention centers and sports stadiums.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
45

As marketers increasingly distinguish between loyalty and satisfaction, frequent use programs will become more elaborate. Hotel companies` PMS standardization will result in the transfer of database and data warehousing responsibilities to CRS for greater operational and marketing efficiency. Market share and product profitability will be replaced by customer share and customer profitability as measures of marketing effectiveness in the hotel industry.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
46

Trendz…
Safety and security trends

Tourism control intelligence

Trendz…
Safety and security trends
Tourism Concepts

Tourism control intelligence

Consumers will systematically consult travel health sites before checking ticket or room availability. Security concerns in the Holy Land encourage religious tourists to make pilgrimages to sites in Ethiopia, Cuba, Greece, Italy and Morocco. Crime and terrorism will render some traditional tourist destinations unsellable. Customer credit cards will replace coded key cards in most hotels.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
47

Guest room safes will be enlarged to accommodate standard laptop computers. International hotel companies will refuse management contracts and franchises for hotels without in-room sprinkler systems. Terrorism fears will keep Israel, Indonesia, Iraq and India off the mainstream tourist circuit for the foreseeable future. Advanced encryption technology will make online payment genuinely secure. To improve energy and water conservation, hotels will install usage meters and levy charges for consumption.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
48

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