Globalization and the tourism industry


Tourism is one of the world’s largest multinational economic activities. It ranks among the top five export industries for 83% of the world countries. Tourism involves the greatest flows of goods, services, and people on the surface of the earth, and it is, therefore, the most visible expression of globalisation. Although the role and share of tourism in international trade is constantly increasing in importance, trade in tourism services has been concentrated mainly in the developed countries, such as North America and the European Union. The share of developing countries in total world tourism is comparatively low, although rising significantly.
Globalisation has opened new opportunities for developments in tourism. It has facilitated growth in tourism through developments in electronic technology, communication, and transportation. It has affected worldwide suppliers and computerised information and reservation systems, which have become more flexible and cost-effective; decreased costs of air travel; and offered easier access to destinations. The rapid spread of information technology has improved the efficiency of the industry’s operations as well as the quality of services provided to consumers.
Globalisation in tourism has taken many forms. The examples of globalisation in the airline sector have included the liberalisation of air transport that allowed for market access for private carriers, the formation of international alliances, privatisation, restructuring of government-owned airlines, investment in foreign carriers, airline consolidations at the national level, joint ventures between airline companies or between airlines and equipment manufacturers, and outsourcing.
Examples of globalization in the accommodation sector have included hotel cooperation and chain creation, joint ventures, franchising, management contracts, and consortia of independent hotels. Diamantis Knowles, a noted tourism researcher stated that major international hotel groups include Intercontinental Hotels (the United Kingdom); Accor (France); and Cendant, Marriott, and Starwood Hotels and Resorts (the United States). These hotel corporations are involved in various countries worldwide.
For example, Marriott International bought more than 50% of Renaissance Hotel Group and is presently managing more than 1,300 hotels of different brands worldwide. Strategic partnerships provided Marriott International with access to 40 new markets, including Russia, China, Japan, India, Italy, and Turkey. Four Seasons Hotels used the strategic partnership with Regent International Hotels Ltd. to take over the management of hotels in Bangkok, Hong Kong, Kuala Lumpur, Melbourne, and Sydney.
Examples of globalization in the retail sector include partnerships, integration, and franchising. Tour operators and travel agencies entered into partnerships and/or integrated with hotels, charter airlines, retail distributors, and cruise companies. According to Diamantis Knowles, American Express developed a range of products in various sectors of the industry. Since it focuses on the activities of 3200 travel agencies, it has become the largest tour operator in the United States, Australia, Canada, Mexico, and France. Franchising and management contracts are used as management strategies by food- service companies. Another example is the German group TUI, leisure tourism world leader. This integrated company owns travel agencies, tour operators, airlines, cruise ships, and hotels in more than 30 countries.
Large firms have exerted their influence on the operations of local firms by obliging local authorities to comply with certain laws and imposing conditions on local suppliers. Some tour operators have exerted a strong influence on the ways hotels operate and the prices they charge. For example, one adventure tour operator from the United Kingdom, strongly committed to protecting the environment of the destinations it features, ensures that local suppliers comply with environmental protection rules and use environmentally friendly equipment, products, and materials.
Globalization and the new political and economic world also brought changes to the tourist profile and preferences for products and services. In the eighteenth and nineteenth centuries, scientific and technological advances led to mass production and the development of mass markets with similar attitudes and tastes. The consumer demanded mass-produced goods and services at a low price. This led the producers to mass produce products and services that had a universal appeal, such as fairly standardized mass-market package holidays. They offered good value products, though quality was sacrificed for price. This process has often been described as ‘‘McDonaldization’’.
New consumers have shown a completely different behavior pattern. They have become more globally oriented. As a result of developments in communication and information technology, and increased social and economic exchanges, they have been exposed to different cultures and developed new ideas and viewpoints. They have multiple demands, often borrowed from other cultures. They have become more dependent on information technology, self-service, and personal reservation tools. The new self-sufficient consumer has become more individualistic and requires more customized and highly developed products; greater choice, quality, and variety; and good value for money. Consumers have also begun to demand easier access to information technology, lower-cost transportation, and greater flexibility in travel.
Moreover, after September 11, 2001, the fear of the unexpected, such as wars, political conflicts, terrorism, or incurable diseases, has increased consumers’ desire for safety, social stability, and order. Consumers have begun to re-evaluate their consumption behaviors, use of time, and attitudes toward leisure. They have chosen a new balance between career and family, and work and play. They have developed a new ‘‘wait and see’’ attitude, facilitated by ‘‘last-minute-purchase’’ web sites, resulting in late bookings.
Also, the emergence of ‘‘search for experiences’’ as a travel motivator, as well as increased environmental awareness, has led travelers to modify their behavior and to look for alternative forms of travel. These changes in consumer behavior have generated demand for new experiences. Consumers have begun to demand authentic and genuine experiences. A new type of tourist called the ‘‘experiential’’ tourist has emerged. This type of tourist is interested in novelty, ‘‘strangeness,’’ authenticity, and all that is different and that creates unique experiences. As a result, the industry has striven to organize tours to various localities that have something unique and specific and that set them apart from other destinations with their scenic beauty, festivals, or art works.
The new tourist has also developed new, intrinsic travel motivations and cultural needs, such as seeking new identity, self-actualization, and self-development, rather than physical recreation and rest. As a result, the suppliers must pay more attention to what the new tourist thinks and feels. Such a shift in consumption preferences has begun to produce a new tourist who demands new products, variety, flexibility, and personalization. New tourists have also begun to develop new values and world views that stress the importance of family and ecology.
It is hoped that in such a world, traveling will come to be more about developing social relations, preserving natural resources, becoming educated, and maximizing the quality of experience than about the quantity of products purchased. In fact, more and more tourists are seeking the fulfillment of intrinsic needs and finding self-expression in culture, ethics, and morality; understanding the importance of intellectual, emotional, and spiritual well-being; and becoming more concerned about the planet, its resources, and its inhabitants all coexisting in peace.
Such changes in consumer behavior have also brought changes to destination marketing and called for the development of more targeted and customized products. A number of new lifestyle segments, such as single-parent households; ‘‘empty nesters’’ (couples whose children have left home); double-income couples without kids (DINKS); baby boomers; and generations X, Y, and M, have became prevalent in tourism and signaled the need for a more differentiated approach to targeting. The identification of the specific needs of the individual customer have called for product diversification, customization, and exploitation of niche marketing.