Tourism Demand to the Portfolio of a Developing and Developed Country - Research Paper Example

? Running head: TOURISM Tourism Demand to the Portfolio of a Developing and Developed Country Introduction – Overview of the essay (internet articles are quality articles that are being used, paragraph explaining sources used) Tourism is defined as travel for the purpose of business, leisure or recreation. Tourism is increasingly becoming a common leisure activity across the world and is growing rapidly in terms of international tourist arrivals at different global destinations. The recent global recession did lead to reduction in travel demand to international destinations and the negative pattern increased in the year 2009. However, tourism is a very important sector for several economies because of the resultant inflows of huge amounts of money in business activities as well as creation of employment opportunities in services associated with tourism such as hospitality services, cruise ships, entertainment, airlines and transport. This paper has examined the different aspects of tourism demand and after having defined the concepts and models of tourism, a detailed analysis has been made of the demand for tourism in Switzerland and Indonesia. In arriving at the different conclusions, this paper has mainly relied on journals, magazines and books that are available on the internet. 2) A critical review of the characteristics of tourism demand (definitions, models, etc.); • Theory - Energizers of demand (in book), decision making steps (theory of demand) • Energisers of demand – the forces of motivation • Determinants of demand – life style, life cycle, macro Tourism is understood as the activity related to people moving away from their normal environments for reasons that are diverse from their work or profession. Tourism is not a new phenomenon and was favored with individuals that wished to enhance their education while the wealthy class traveled largely for pleasure, for socializing or to personally visit destinations that were widely described in the literature or reported by travelers. With the improvement of transport systems in terms of speed and comfort, the flow of visitors increased even to far flung areas. In recent times the traveling habits of people have increased considerably primarily because of: Fast, secure and comparatively cheap modes of transport Increasing interests relative to knowing of new cultures Widespread information about the attractiveness of different places Increasing disposable incomes and leisure time in several parts of the world The earliest attempts to study tourism were made by Ogilvie (1933) who held that the word tourism was the result of the curiosity of language because till that time there was no such word in the English language. He wrote that it can be used to describe an individual that simply leaves his home or country with the objective of coming back to his home after some time. His definition of tourists was, “all people who satisfy two conditions, that they are away from home for any period of less than a year and second, that while they are away they spend money in the place they visit without earning it there” (Ogilvie, 1933, p.5). In considering Ogilvie’s definition, Burkart and Medlik (1981) identified four major characteristics of tourism: They are people who undertake journeys to stay in various destinations (Burkart and Medlik, 1981, p.42). Their destinations are distinct from their normal place of residence and work so that their activities are not the same as those of the residents and working populations of their destinations (Burkart and Medlik, 1981, p.42). Their intention is to return within a few days or months, so the journey is of a temporary and short term nature (Burkart and Medlik, 1981, p.42). Their purpose for undertaking the journey is other than to take up permanent residence or employment remunerated from within the destinations (Burkart and Medlik, 1981, p.42). A socialist approach has been adopted by Cohen (1974) in defining a tourist as, “a voluntary, temperory traveler traveling in the expectation of pleasure from the novelty and change experienced on a relatively long and non-recurrent trip” (Cohen, 1974, p.533). He has acknowledged that tourism is a vague concept that does not have a well defined boundary amongst the roles of tourist and non tourist as also with several intermediate categories. He distinguished the tourist from other travelers in saying that tourism travel is temporary, voluntary, round trip, relatively long, non recurrent, non instrumental and for novelty and change. Pearce (1981) held that the image of a tourist can be differentiated from other travelers in spite of the complicated relationships amongst them. Both Cohen and Pearce brought out characteristics of a tourist in asserting that tourists undertake journeys for pleasure and that their journeys are activities of leisure creation and this is considered to be the main positively defining aspect of travel undertaken by tourists. Models of Tourism Another approach in the context of understanding tourism is to think of the significance of the characteristics and concepts in regard to a model of tourism. It is recognized by researchers that essential relationships and complications can be understood in better ways through models that have multi dimensional and dynamic capacities as compared to the static forms of definitions. It is thus helpful to create a conceptual structure of tourism by analyzing the works of other scholars who have worked on the subject. Just as it is true with the definitions of tourist as underlined above, every model reveals the background and interest of the concerned scholars. The following model is drawn mainly from the research carried out by Mathieson and Wall (1982). Table I. A Model of Tourism Tourist Tour Others Demand Individual characteristics such as income, age, sex etc. Motivations Psychology Prices Fares Promotion and Marketing Attractions Government policies Society and Culture Technology Climate Politics, both national and international Social Trends Economic Trends Supply Stay duration Activities Usage Satisfaction Spending Resources Tourism facilities, Services such as roads, transport Hospitality and entertainment Infrastructure such as roads, electricity, airports Communications Economy and Commerce Society Impacts Experience Knowledge Pleasure Income Depreciation Investment Environmental Economic Social Physical The demand for tourism depends upon the circumstances of tourists such as incomes, motivation levels and psychological frame of mind. These factors directly impact their inclination towards traveling for pleasure, their ability to undertake journeys and their choices of the destinations. The demand for tourism also depends upon the characteristics of the tourist destinations and the motivation they offer in terms of pleasure, prices, satisfaction and entertainment. Government actions and policies are a strong determinant of demand for tourism while factors such as security that is also a function of the government are strong determinants for tourism demand in given destinations. Social circumstances at any given destination can influence the demand for tourism in terms of the behavior and attitude of local people towards tourists and the interest that is created through the prevailing culture at the given destination. The demand for tourism therefore impacts the supply side of tourism at the destinations as more services are available if tourists get motivated to visit the destination (Jafari, 1989). Facilities such as transport, hotels, resorts, restaurants etc are viewed as being most impacted by the demand for tourism, which are the sectors that are immediately associated with the economic impact of tourism. The relationship between demand and supply for tourism is evident from two aspects. Firstly, demand is determined by the supply of facilities and services for the use of tourists while supply also depends upon the quality of infrastructure available in the destination in addition to other factors such as communications, general commercial, economic and social services. The influence of these services is mostly not taken seriously by several nations because considerable impact is made on demand for tourism because of impressions tourists carry on their return and the word of mouth publicity that motivates or de-motivates people from visiting the destination. Most of the research on tourism as focused upon the effect of tourism in terms of the Mathieson and Wall model. 3) Research of the growth of tourism demand in a developing country (i.e. Switzerland) and Developed country (i.e. Indonesia) over the last 5 years or otherwise specify; • Statistics of Country A _ Country B _ Even though the adversities associated with the global recession are gradually fading away in several nations, consumers are still fearful of the after effects. Although tourism is considered to be amongst the most flexible industries, a major impact of the recession has been the changed attitudes of tourists in seeking more value from their money. The decline in luxury and business travel has adversely impacted the high end tourism market while the luxury hotel industry and the airlines are the worst affected by the recession. At the low end, the recession has provided incentives for budget airlines and package holidays. Tourists are now more eager to grab bargains through package tours and this pattern has severely impacted the tourism industry in Switzerland because the Swiss franc continues to become stronger by the day and tourists find it extremely expensive to travel to the country. However the tourism industry in Switzerland is set to welcome sustainable cruising because global tourist cruise trips are slated to double by 2020. Many cruise travel companies are now functioning in offering cruise trips connecting to Switzerland that allow tourists to club round trips with visits to Switzerland that also include excursion trips to destinations in other parts of Europe. Ecotourism is increasingly becoming popular amongst tourists visiting Switzerland and smart tour operators have now introduced eco cruises to several destinations with connections to tourist spots in Switzerland. This enhances the appeal of package tours that combine cruise and air travel in providing variety and excitement to the tourist. Switzerland has immense potential for health tourism, which is the fastest growing segment in the tourism sector across the world. The health tourist is in search of several things other than just wellness and tranquility. More and more tourists are willing to spend money on improving their health and thus travel to other countries for health reasons, on holiday packages. In view of the serene and tranquil environment available in Switzerland, this area has maximum potential to make tourism a lucrative industry, especially in view of the economic downturn that has adversely impacted tourism across the word. Switzerland has several mountain resorts and provides tourists with opportunities to walk in clean and unpolluted air. The spa culture in the country is being further spruced up to attract more tourists. As per the 2010 Mercer Study, Switzerland is placed 5th in the world in terms of cost of living and in being a high end tourist destination the prospects of the country becoming a mass tourist destination is not very bright. However, the segment comprising of the more affluent aging population in developed nations will continue to patronize the country for their tourism needs. A new pattern has emerged whereby increasing interest is being shown by middle class tourists from emerging countries such as China, Brazil and India to visit premium tourist destinations such as Switzerland. Statistics pertaining to tourism in Switzerland are not exhaustively available after 2004 as the Federal Statistical Office in the country stopped generating its own data. Of the information that is available, in 2011 there were about 4950 hotels providing about 250,000 beds. About 56 percent of the hotel occupation in 2007 was accounted for by foreign tourists mostly from Germany, UK, USA, France and Italy. As of 2007, the gross financial turnover from tourism in Switzerland was a little over CHF 13 billion. This figure is slated to increase because of the increase in fuel taxes and road surcharge. Of the total turnover from tourism in Switzerland, 52 percent is accounted for by tourist travel and hotel charges (STV, 2007). Although Indonesia was not severely impacted by the global recession, the tourism industry in the country was negatively affected because of declining visitors from countries that were severely impacted. The number of inbound tourists had become a trickle because of which tourism growth and spending suffered considerable setback. However, 2010 was much better for Indonesia because many countries had recovered from the recession by this time, which translated into larger number of tourists thus increasing the flow of inbound tourism. Although the numbers did not touch the 2008 levels, the spending by such tourists demonstrated a little growth, thus revealing indications of increase in demand. During the last few years the government of Indonesia has been carrying out the Visit Indonesia campaign in order to increase the number of tourists visiting the country. In previous years the government achieved considerable success and the program was given further boost in 2010 by focusing more on encouraging tourists to visit the country’s museums. The government has high expectations to generate tourism revenues from the Visit Indonesia campaign. The major focus of the Visit Museum program is to attract larger number of tourists because most tourists to the country from European nations consider museum visits as an integral part of their itinerary. The government took initiatives from 1st June 2010 by introducing direct flights from Amsterdam to Jakarta and such efforts are expected to increase demand from Europe. There is immense potential created by the Visit Museum program because there are about 80 museums in North Sumatra, Bali, Java and the capital Jakarta that are part of the campaign. In making the campaign attractive, several events are being organized in these museums. Although implementing such programs has not always been successful, the Visit Museum program is being portrayed as a long term campaign to increase tourism demand in the country. The European Union lifted its ban on Indonesian airline companies from operating flights to Europe after they restructured their safety standards. Garuda Indonesia, which is the country’s main airline, was allowed to continue with its flights between Amsterdam and Jakarta fro 1st June 2010. Although the restoration of flights has not immediately increased the flow of inbound tourists, there is considerable scope for improvement in the country’s credibility and image amongst European tourists that consider Indonesia a feasible tourist destination. In view of the opening up of this new route Indonesian airlines will soon commence new flights to destinations such as Rome, Paris, Frankfurt and London by next year. Analysts feel that there is immense potential for increasing flow of inbound tourists from London. Additionally, Garuda Indonesia has commenced new flight routes and increased frequency to some Asia Pacific cities including Taipei and Melbourne (United Nations and World Tourism Organisation, 2007). With improvement in the economic environment, tourism flows into Indonesia will also increase as more and more foreign tourists will visit the country in the coming future. This will become possible because the Indonesian government is taking part in several international tourism events and exhibitions to portray Indonesia as a sought after destination. Although there was a drastic decline in spending by foreign tourists during 2009, some recovery is observed in 2010 because of increasing confidence and spending power amongst foreign tourists. At the same time, the purchasing power of Indonesian citizens is increasing steadily because of which there will be steady increase in outbound tourism from the country as more and more Indonesians opt to take holidays abroad. The following table shows the Indonesian tourism statistics from 2000 to 2009 and it is evident from the same that tourist inflows into Indonesia have been increasing steadily. In 2000, there were 5,064,217 foreign tourists that visited Indonesia wile the figure increased to 6,452,259 in 2009. This indicates that the popularity of Indonesia as a tourist destination is growing steadily (STV, 2007). Indonesian Tourism Statistics Year International visitors Average stay (days) 2000 5,064,217 12.26 2001 5,153,620 10.49 2002 5,033 400 9.79 2003 4,467,021 9.69 2004 5,321,165 9.47 2005 5,002,101 9.05 2006 4,871,351 9.09 2007 5,505,759 9.02 2008 6,429,027 8.58 2009 6,452,259 7.69 Source: Statistics Indonesia, (2010). http://www.bps.go.id/tab_sub/view.php?tabel=1&daftar=1&id_subyek=16¬ab=16 4) Identify a tourism segment • business, leisure, golf, ecotourism, diaspora) and outline its key characteristics as well as its positive and negative aspects • Connect with consumers in the countries. Key components of this segment Ecotourism refers to traveling to delicate, natural and untouched protected regions with the objective of creating low impact. Ecotourism is considered to be a viable alternative to mass tourism. In fact, ecotourism is conscientious travel to natural regions that conserve the environment and improve the welfare of local inhabitants. Ecotourism plays an important role in creating strong links between conservation, societies and sustainable traveling. It is thus apparent hat tourists and service providers relative to ecotourism have to follow some specific principles. They have to act in specific ways so that their actions minimize the impact on the environment. They have to develop respect and awareness about the environment and culture of the places being visited. Ecotourism provides positive experience for both hosts and tourists and provides direct financial incentives for following environmental protective policies. Local people are empowered and provided with financial gains through ecotourism, which raises the awareness towards the host country’s social, environmental and political climate. Responsible ecotourism is inclusive of practices that strive towards minimizing the negativities associated with traditional tourism practices on the environment. Thus ecotourism leads to advantages for host countries by way of water conservation, energy efficiency, recycling of waste and creating employment opportunities for local people. Ecotourism is now the fastest growing segment of the tourism industry because it is growing at between 10 and 15 percent across the world (Scheyvens, 2007). Most of the ecotourism projects and initiatives are not complying with the provided standards, especially in terms of the negative impacts being faced by local communities. For instance, many African countries that are benefiting significantly from ecotourism are imposing extreme hardships on local communities. Local people are being forced to leave their homes, which are recognized as a complete violation of human fundamental rights. Moreover, the environmental hazards emanating from ecotourism in many regions exceed the short and medium term benefits being reaped by ecotourism organizers. A great deal of money is being spent by governments and tour organizers on ecotourism wile human resources in these regions continue to be exploited. To cover up these weaknesses more money is being pumped into advertisement campaigns to give the impression to potential customers that the criticism is not valid. Many feel that ecotourism takes away resources from other more viable activities that could contribute to more practical and long lasting solutions towards resolving environmental and social issues (Wagner, 1998). 5) Propose a list of motivational based recommendations • (energizers of demand) as well as decision making suggestions that a developing country as well as a developed can use to manage that segment; and • Segment advantages and disadvantages In modern times the displacement of people in terms of tourism is being accelerated consistently and it benefits countries to make efforts to increase the demand for tourism in their countries. The demand for tourism can be increased by: 1. Providing good, safe and comparatively cheaper transport 2. Creating interest of people in discovering new places and cultures 3. Providing large scale information through different formats about the attractiveness of the given place 4. Keep track of economic growth and increase in disposable incomes of people and target these markets by addressing their aspirations. 5. Keep track of changing demographic patterns across the world so as to address the aspirations of people in terms of increase in leisure time. Previously, descriptions of tourism related to characteristics of tourists by way of the circumstances in which they traveled and chose to stay. This aspect was the main motivation by which people chose to be temporarily displaced in visiting other destinations. However, now there is increasing consciousness about the roles played by tourism and what can be directly or indirectly induced through it in terms of things such as fashion in an economic environment where people also look out for generating value to their efforts. On the other hand host countries look out for opportunities to generate employment, government income, personal incomes and foreign exchange. In view of the increasing importance attached to global tourism, it is important to use the same criteria for interrelating and comparing data from different parts of the world (Watson, 2004). 6) Conclusion • Compare data – conclusion • Motivation (how you make them come) and decision making (how to make them choose) for country A and country B. (Compare with segment) Recommendations – taking into consideration their statistics and key characteristics. In having critically reviewed the characteristics of tourism demand, this paper has researched the growth of tourism demand in Switzerland and Indonesia. It became known that in the tourism sector, Switzerland has immense potential for health tourism, which is the fastest growing segment in the tourism sector across the world. However the country continues to be considered a high end tourist destination in view of the increasing value of the country’s currency. Although the number of tourists visiting Switzerland have been increasing steadily over the years the increase is not much noticeable as it is a mere trickle because the destinations are mostly patronized by high end aging business people that wish to spend time in quiet and serene natural surroundings. There is now a positive development because large numbers of tourists have been showing interest from developing nations such as India and China to visit tourist destinations in Switzerland. Although Indonesia was not much impacted by the recent global recession its tourist sector did suffer because of declining inbound tourism from countries that were severely impacted. However, with the revival of most economies from the global recession, the tourist traffic into the country has started growing and the government has introduced ambitious program to address the aspirations of tourists in order to attract them to Indonesia. Revival of Indonesian flights to European destination has boosted the potential for Indonesian tourism and inbound tourism has started increasing. Indonesia is exploiting its Museum Campaign that meets the need of tourists to delve into the country’s past and historical importance. Given that tourists visiting the country have been increasing consistently in most years, the tourism sector in Indonesia can prove to be a major foreign exchange earner for the country. Conversely, the position of Switzerland is different because there is not much potential for increase of inbound tourism in the immediate future. List of References Burkart, A.J, and Medlik, S. (1981). Tourism, past, present and future, London: Heinemann Cohen, E. (1974). Who is a tourist? A conceptual clarification, Socialogical Review, 22, pp.527-555. Jafari, J. (1989). Structure of Tourism. Tourism Marketing and Management Handbook, London: Prentice Hall. Mathieson, A. and Wall, G. (1982). Tourism: Economic, physical and social impacts, London: Longman. McIntosh, R.W and oeldner (1984). Tourism: Principles, practices, philosophies, New York: Wiley. Mercer Study. (2010). Quality of Living Survey, 2010, http://www.mercer.com/articles/quality-of-living-survey-report-2010, Accessed on 14 August 2011. Ogilvie, F.W. (1933). The Tourist Movement, London: Staples Press Pearce, D.G. (1985). A Systematic Comparison of Travel Related Roles, Human Relations, 38. pp.1001-1012. Scheyvens, R. (2007), Ecotourism and the empowerment of local communities. Tourism management, Volume, 21, pp.246-249. Statistics Indonesia, (2010). http://www.bps.go.id/tab_sub/view.php?tabel=1&daftar=1&id_subyek=16¬ab=16, Accessed on 14 August 2011. STV. (2007). Swiss Tourism Figures. http://www.swisstourfed.ch/Files/infothek/Vademecum/2007/Def%20Vesch.pdf, Accessed on 14 August 2011. United Nations and World Tourism Organisation. (2007). Recommendations on Tourism Statistics. New York. Wagner, J.E. (1998). Estimating the Economic Impacts of Tourism. Annals of Tourism Research, Volume 24, pp.596-607. Watson, G.L. (2004). Interpretation of Tourism as Commodity. Annals of Tourism Research, Volume 2, pp. 644-650. Read More