Integrating Issues

Identify the key trends and implications to tourism

Discuss trends in Leadership and Management
A General Manager’s Survival Kit
Discuss future developments in hospitality sector
Discuss future developments in air transport sector
Discuss future trends in the airline industry
Discuss future developments in passenger ships sector
Discuss future developments in land transport sector
The World’s Population will grow to 9 billion by 2050. United
States, China and EU will be the top three economies.
Societal values are changing rapidly. Pragmatic governments
will provide consumers greater security and promote
economic growth.
Time is becoming the world’s most precious commodity.
Internet and mail-order market will continue to be more
popular over traditional stores.

Tourism, Vacationing, and Travel continue to grow with each

passing year. Hospitality industry will grow at about 5%
each year for the foreseeable future
Cetron et al (2010)
Generation X, the Dot-coms, and the Millenials are gaining
social and organizational influence. Brand marketing
positioned as ‘affordable luxury’ will prosper. They are IT
savvy but lack job loyalty.
The global economy is growing more integrated. Growth of
commerce on the Internet boost global exchange of goods
and services. Smaller firms can use IT to compete with
giants worldwide.

Consumerism is still growing. Brands with good reputations

will have a strong market advantage over lesser-known
competitors.
Cetron et al (2010)
Technology is creating a knowledge-dependent global
society especially if more rural populations in China and
India gain modern educations and easy access to the
internet. Knowledge workers are better paid than less-
skilled workers.
People around the world are becoming increasingly sensitive
to environmental issues as the consequences of neglect,
indifference, and ignorance become even more apparent.
‘Unspoiled’ environments will enable the development of
“green” tourists industries and contributes to countries that
manage to protect them.

Cetron et al (2010)
 Trends
Ageing population in
developed world
Time is becoming the world’s
most precious commodity
Tourism, Vacationing and
Travel continue to grow
Consumerism is still growing
People are more sensitive to
environmental issues
Implications to Cruise Lines
Older people make up a growing segment
of the cruise market.
Preference for short ‘cruises to nowhere’ as
they are time-conscious.
Cruise market will grow as fast as the
travel market.
Internet-savvy consumers search
information online to compare cruise lines.
Cruise operators incur higher costs with
new anti-pollution technologies
Cetron et al (2010)
 Trends
World’ population reach 9
billion by 2050
Transportation technology
and practice are improving
rapidly
People are more sensitive to
environmental issues
Implications to Airline industry
Demand for air travel will continue to
grow as quickly as world’s population.
New technology can save fuel costs
by 10% and fuel tanks filled with inert
gas can reduce potential incidents.
Reduced greenhouse gas emissions
help carriers more efficient and
profitable.
Cetron et al (2010)
 Trends Implications to Restaurants

Generation X, The Dot-coms, and Higher salaries, better benefits and

the Millenials are gaining social training opportunities to motivate and
and organizational influence retain younger workers.

Population in developed countries Older diners as potential clientele.

lived longer Older workers available for jobs.

Time is becoming the world’s Dining out culture. Fast-casual

most precious commodity restaurant chains provide convenient
alternatives to quick-service meals.

Tourism, Vacationing and Travel Tourists are taking vacations out of

season, softening seasonality issues.

Cetron et al (2010)
The World Travel and Tourism (WTTC) launched the ‘Blueprint
for New Tourism’ in 2003. The Blueprint establishes three
fundamental conditions:

1. Governments must recognize travel and tourism as a top priority.

Governments must develop competitive business environment and
promote sustainable tourism growth.

2. Business must balance economics with people, culture and

environment. Expand markets while protecting natural resources,
local heritage and lifestyles.

3. All parties must share the pursuit of long-term growth and

prosperity. Prepare sustainable master plans for entire
destinations.

WTTC (2003)
Forecasting change in tourism
(Jefferson & Lickorish, 1991) view that forecasting the demand
for tourism is essential for commercial operators (public or
private sector) as they seek efficient utilization of resources to
maximize revenue and profits. The principal methods are
(i) extrapolation (study historic trends) and
(ii) pextrapolation (application of statistical methods)

Bull (1991) notes the common variables in pextrapolation are:

a. number of tourist trips
b. total tourist expenditure and expenditure per capita
c. market shares of tourism
d. the tourism sector’s share of GDP

Page & Connell (2009)

Forecasting change in tourism

WTO (2001) forecasts that international tourist arrivals will

grow to 1.5 billion by 2020. Domestic tourism will grow at a
slower rate due to lack of available leisure time.

Researchers are critical of tourism demand forecasting:

- Failure to accommodate the impact of tourist behaviour
change and impact of events (Song and Li, 2008)
- Scenario planning is needed to analyze the impact of
events as it predicts multiple and uncertain futures
(Prideaux, Laws & Faulkner, 2003)

Page & Connell (2009)

Factors affecting the future shape of tourism trends

Coopers et al (2005) outline two broad considerations:

Factors within our control Factors outside of our control

The shape and form of future Societal changes e.g. growth

markets
The development, design and
nature of destinations
Sustainability of tourism
of senior markets due to
ageing population,
Political changes e.g. Trade
blocs, NAFTA, ASEAN
Safety and global security e.g.
Vigilant after 9/11 attack
Global environmental issues
such as climate change
Page & Connell (2009)
Factors affecting the future shape of tourism trends:

Another uncontrollable factor is ‘hypercompetition’ concept as

a changing business practice (Page, 2005):
Characteristics
Rapid product innovation
Aggressive competition
Shorter product lifecycles
Businesses experimenting with meeting customers’ needs
The rising importance of business alliances
The destruction of norms and rules of national oligopolies

Page & Connell (2009)

2 issues of concern to tourists:

1. Ethical and moral issues–sex tourism and impact on children

2. Sustainability and the environment – WTTC (2002)
suggested governments should:
a) Develop a more cooperative approach among government
departments, NTOs, trade associations and the tourism industry
b) Integrate tourism policy with environmental policies to achieve
sustainable goals
c) Create incentives for the tourism industry to embark on
sustainable initiatives.
d) Encourage policies to promote corporate social responsibility

Page & Connell (2009)

 Favorable Trends Unfavorable trends

Increased number of retired Health issues e.g. Bird flu,

persons SARS
Change in living conditions e.g. Instant communication and
more living in urban areas technology i.e. Technology
can reduce business travel

Education and shift in values e.g. Cost and location e.g.

more interested in foreign Expensive destinations
cultures
Packaged Tour is preferred for
simplicity in booking

Walker & Walker (2011)

 Favorable Trends
Rising disposable income e.g.
India and China
Greater discretionary time or
longer vacation time
Changing family structure e.g.
more singles
Unfavorable trends
Uncontrollable issues e.g.
recession, terrorism, political
unrest, war
Travel Hassles e.g. flight
delays jammed airport
terminals
Travel Security i.e. Too much
security may deter travellers
Walker & Walker (2011)
 Key Management functions leading to goal
accomplishment:
a) Planning – set the goals and develop plans to
meet goals
b) Organizing – task allocation, structure
c) Decision making – determine the vision,
rescheduling employees, items on the menu
d) Communication – motivate individuals and
groups to get the job done
e) Controlling – compare actual results with
standards set
Walker & Walker (2011)
 Managerial skills:

Kalyan-city.blogspot.com
 Managers wear a variety of hats including:

a) Figurehead role–President of the company greets

the important business guests
b) Leader role–leader and coach to motivate staff
c) Liaison role–contact with other suppliers or other
department staff
d) Spokesperson role–host a college visit to the firm
e) Negotiator role–negotiate with trade union on
employees’ benefits

Walker & Walker (2011)

 Key Management functions leading to goal
accomplishment:
a) Planning – set the goals and develop plans to
meet goals
b) Organizing – task allocation, structure
c) Decision making – determine the vision,
rescheduling employees, items on the menu
d) Communication – motivate individuals and
groups to get the job done
e) Controlling – compare actual results with
standards set
Walker & Walker (2011)
Ali Kasiki, Peninsula Beverly Hills, California offers some tips:

 know yourself, your own core competencies, and your values

 hire a seasoned management team
 make yourself indispensable
 be very flexible
 get close to your guests and owners to define reality versus
perception
 show leadership, both from the top and bottom
 delegate
 appeal to trends
 take risks and change the ground rules
Walker & Walker (2011)
 Many leaders will be leading a diverse group of associates
 Many entry-level employees will not have basic job skills
 There will be an increasing need for training
 There will be a need to create leaders out of line managers
 Leaders will need to manage sales revenue all the way to the
bottom line
 Departments will be subcontracted out
 More part-time staff will be hired to avoid paying benefits
 Keep up with technological change
 Increase in importance of social and environmental issues
 Greater emphasis placed on ethics

Walker & Walker (2011)

Need for constant innovation to ward off competition
by best meeting changing consumer demand for
novelty and improved facilities
Large chain hotels offering the wow factor. Budget
hotels selling not just on price, but brand and
image
Fast-food chains focus on younger travellers. For
older and better-off travellers, quality of food and
service is more important than price

Holloway et al (2009)
High fuel costs resulted in low-cost carriers cut back
on services.

Development of jet aircraft reached a plateau as

productivity and efficiency unlikely to substantially
improve. E.g. A380 lowered cost per seat but
savings outstripped by oil price increase.

Developing low-cost air transport e.g. Virgin is

working on developing the 100-seat Skycat 200

Holloway et al (2009)
Technical change – more complex computer reservation system
(CRS) and global distribution system

New trading blocs – ASEAN posed new challenges for patterns of

trade and business travel

Air travel poses ongoing health risks

Lack of training for staff to deal with difficult travellers as low-cost

travel is not accompanied by reduced expectations

Page (2009)
Developing more fuel-efficient craft

The appeal of cruise ships that resemble floating

hotels with a range of leisure activities lead to
construction of larger vessels

New marine technology such as SES-200 Surface

Effect Ship or superconducting electromagnetic
propulsion vessels tested in Japan

Holloway et al (2009)
Developments in the railways e.g. Japan’s Linear
Express can speed up to 300mph

Introduction of Maglev trains and possibly in UK

Improvement in information about transport e.g.

Electronic noticeboards detail the arrival of next
bus

Holloway et al (2009)
 Walker, J.R. (2013). Introduction to Hospitality. Sixth Edition.
International Edition. Pearson
 Cetron,M., DeMicco, F. and Davies, O. (2010). Hospitality
2015-The future of Hospitality and Travel. American Hotel &
Lodging Educational Institute.
 Walker, J.R. and Walker, J.T. (2011). Tourism Concepts and
Practices. Prentice Hall
 Page, S.J. and Connell, J. (2009). Tourism-A Modern
Synthesis. Third Edition. Cengage Learning
 Holloway, J.C., Humphreys, C. and Davidson, R. (2009). The
Business of Tourism. Eighth Edition. Prentice Hall
 Page,S.J. (2011). Tourism Management-An Introduction.
Fourth Edition. Butterworth-Heinemann