Business Tourism under Prof. Josefino Tulabing Larena ,AB,MA,CPS, MPA

1. The future of tourism:
Post tourism?

2. One of the most pressing concerns for planners, decision-
makers and businesses is: will tourism stop growing
and will it stop spreading across the globe?
One key question which policy-makers and the tourism
industry continues to ponder is: will climate change and
other factors dampen the demand and volume of
tourism in the future? In other words, will the spread of
tourism stop?

3. The spread of tourism
One of the enduring themes in the history of travel is the pursuit by individuals, ruling elites and, latterly,
the increasing numbers of leisure travellers, of unique, special and unspoilt locations to visit. This is part of
the increasing geographical spread of tourism across the world to many countries that now embrace it as a
method of stimulating economic activity, particularly where global trade barriers have frozen many
developing countries out of engaging with lucrative trading blocs as a means of generating foreign
currency. This has been one reason behind the GATS proposals to reduce such barriers to the trade in
tourism services, although doing so is not without potential problems. The main issues is that some of
these new tourist destinations have not been able to control tourism to retain their vital unique
elements.In 2003 the World Travel and Tourism Council (WTTC) launched a Blueprint for New Tourism
which recognized that all stakeholders involved in tourism (including tourists, the tourism industry and
destination communities) need to adopt a longer-term planning horizon as opposed to taking the short-
termist commercial perspective that dominates the tourism sector approach globally (with some
exceptions). Implicit in the WTTC’s approach to tourism was a concern for sustainable tourism so that
everything associated with tourism and the environment in which it is developed remains in balance.

4. This seemingly logical and phased approach to tourism destination management by WTTC
assumes that tourism will continue to grow, and that the destinations can manage and
accommodate the effects. It does not support a halt to tourism growth as it is an industry-
funded body with its own agenda to continue to grow global tourism. This approach is very
much based on the notion of growth management. Growth management as a concept is
based on the idea that simple notions of tourism success (e.g. a growth in visitor arrivals
and expenditure and value added to GDP by tourism) do not portray the real costs and
benefits to communities and destinations. Some visionary locations embraced concerns
about the problems which economic growth posed for the environment during the 1970s
(e.g. California, Florida and Hawaii) while Whistler in British Columbia, Canada, has
developed a tourism plan based on the notion of growth management which does not
negate future growth: it states it needs to be managed. The evidence from Whistler is that
the resident community endorsed such an approach where the environmental challenges
which tourism poses are writ large in the landscape. Yet the evidence from the post-war
period in terms of tourism development in many countries is that the growth in visitor
arrivals has been far from orderly, phased, consistent and based on principles of managed
growth.

5. As the case of Spain in the 1960s illustrates, mass tourism rapidly established itself with few
mechanisms in place to control development and growth. Indeed, public sector backing for
tourism in Spain utilized the foreign exchange and political benefits of international tourism
with little concern for long-term sustainability or environmental protection. Ironically, though
not surprisingly, the introduction of a tourist tax to address environmental degradation in
Spanish resorts in the new millennium, has had negative impacts in some mass markets
(e.g. Germany), where it has contributed to a decline in visitor arrivals. It was removed as
an ecotax in 2003 after a short period of implementation. This illustrates the power of the
tourism lobby and its reluctance to see measures which may inhibit growth in either the
volume or value of tourism in given locations. Newly discovered destinations, marketed and
promoted by tour operators, have witnessed phenomenal growth, over and above the
annual growth rates of global tourism. This has been compounded in some cases by the
opening of new outbound markets, such as South Korea in the 1990s and China in the new
millennium. Growth is expected in other Asian middle-class markets which have new-found
wealth: travel (more specifically tourism) is the new musthave consumer product not only in
the developed world but increasingly among those with the means to buy it in the
developing world.

6. So will tourism stop growing? Some mature destinations that have passed through all the
stages of the resort life cycle have probably reached the end of their growth period unless
the public sector intervenes. The UK coastal resorts in east Kent provide an example of the
worst-case scenario. Margate, Ramsgate and Broadstairs in Kent, UK reached their heyday
in the 1950s and 1960s before low-cost overseas package holidays became more
appealing to domestic tourists. Despite substantial interventions from the public sector (e.g.
the local authorities and county council) and funding from the EU, the area has not been
able to rejuvenate the resorts successfully owing to the post-tourism social and economic
deprivation. Yet a number of other UK seaside resorts have been able to reinvent
themselves successfully by repositioning and reimaging themselves (to use the current in-
vogue marketing jargon): in simple terms, these destinations have found new products and
ways to intervene in the resort life cycle to create a new demand for the destination.

8. In many urban areas, new destinations have been created and the towns reimaged and
remodelled to generate a new economic sector based on tourism and the cultural industries
(e.g. Glasgow after hosting European City of Culture in 1990, Bradford and East London’s
Docklands area, and Liverpool with its hosting the 2008 European City of Culture). In each case
of urban regeneration, visitor growth has been significant although the public sector cost of
stimulating these regeneration schemes has been massive, as the case of London’s Olympic
Bid illustrated in Further Web Reading 1. At a time of scarce public resources, with endemic
poverty in some areas of major cities seeking to regenerate their future based on pleasure and
leisure, there have been few attempts to stop and question whether this is the most appropriate
economic strategy. Tourism has been seen almost unquestioningly within the public sector, in a
naive and simplistic manner, as a good development option: it can always be justified if visitors
are generated. What consultants and analysts prefer not to say to these public sector bodies is
that tourists will visit many major cities irrespective of their massive infrastructure development,
although exceptions to this exist such as the case of Bilbao in Spain where the construction of a
flagship project – the Guggenheim Museum – put the city on the international culture map.
This reflects the poor understanding by some organisations in the public sector of tourism as a
development tool.

9. Guggenheim Museum

10. The snowball and amoeba concept in tourism
The resort life cycle was used above to explain the linear growth of tourism through a series
of stages of development ending in either stagnation or rejuvenation to stimulate the
development process once again. This linear growth is best described as a snowball which
begins to gather momentum as it rolls down a hill (see Figure 12.1). The agents of change
that have the idea of stimulating tourism development as a small snowball (i.e. the public and
private sector) do not envisage the rapid transition to mass tourism.

11. Another explanation of the way tourism grows and expands might be described as the ‘amoeba
effect’. The amoeba, as a single-cell, simple form of life has the ability to reproduce itself. Tourism
is not dissimilar because once the initial amoeba is introduced to a locality, and finds a welcoming
home that embraces it as a mechanism to help stimulate economic activity, the process has
begun (see Figure 12.2). The ability of tourism to replicate itself, but then adapt and change to
meet customer needs in certain cases, means that the amoeba keeps dividing and producing new
entrepreneurs, as innovation and change lead to more development.

12. So, to re-examine the question: will tourism continue to grow? If one considers the snowball
and amoeba analogies, then there will almost certainly be tourism growth at a global scale. At a
national and regional/ local level, growth will largely be dependent upon the attractiveness of the
locality in providing a conducive location for tourism to root itself and begin developing. The
example of tourism and regeneration in Chapter 10 explained how this might occur. The challenge
for the public and private sector stakeholders is to try and control and direct tourism – constrain it
if necessary – to meet local social, environmental, economic and political objectives while
ensuring it does not escalate too quickly and get out of control. Yet with governments positively
encouraging the boom in low-cost air travel (which is artificially subsidized due to an absence of
fuel tax on aviation fuel), questioning the efficacy (i.e. the rationale) of continued tourism growth is
problematic: too many vested interests wish to see it grow due to the economic benefits they
receive. This is increasingly difficult: organizations intent on promoting global tourism growth do
not want to see limits imposed on tourism growth. Given this assessment of tourism, it is
interesting to review briefly the ways in which researchers, analysts and policy-makers consider
the future of tourism in different contexts.

13. Understanding the future of tourism

14. (2006) observed that natural disasters and shock events are becoming more common in tourism and thus
there is a greater demand for crisis management tools to manage their effects. It is not surprising to find
tourism analysts utilizing research techniques such as forecasting and scenario planning, which seeks to
construct a number of scenarios of how future trends might play out. This involves:
•framing the issues involved such as the drivers (i.e. the key trends and factor affecting these trends) of
demand and supply for tourism (see Box 12.2)
•identifying people who may be involved in providing input and critical reviews of the scenarios
•drawing a picture or pictures of the future using trends, themes, critical relationships and issues
associated with the problem that is being considered (i.e. how would we respond as a destination to three
different severities of earthquake?)
•providing known uncertainties that could impact upon the scenarios and upset thestatus quo, and factors
that are critical in moving a scenario from a pre-crisis, to crisis and post-crisis stage (i.e. tipping points)
•identifying possible paths for different scenarios
• testing the plausibility of the scenarios
•anticipating how people and organisations associated with tourism might respond during the different
scenarios
•identifying strategies to manage the future scenarios

16. The pressures for tourism to change
At a global scale, and particularly in the industrialized Western countries, there is evidence from
consumer attitudes towards tourism that the self-destructive nature of tourism causes some visitors
to question the impact of where they travel. A greater consciousness of the effects of tourism is now
permeating both the consumer and the more environmentally responsible tour operators. This is a
slow and gradual process of change, and there is always likely to be a role for the mass packaged,
lowcost, high-volume, sun, sea and sand holidays. However, at the upper end of the market, a
greater demand for environmentally sensitive and conservation-oriented niche products may begin
to permeate the activities of the tourism sector, as airlines, tour operators and accommodation
providers introduce environmental products to recognize these consumer tastes as illustrated in
Chapter 2 and 3 (e.g. the rise of slow travel as a new trend). The factors involved in pressurizing
tourism to change can be divided into those that are external to tourism and beyond its control (e.g.
exchange rates) and those that are within its grasp.

17. An ageing travelling public
In many of the Western industrialized countries, tourism markets are becoming characterized by
an ageing population. This has been termed the ‘senior market’ (also called the silver market in
Japan or mature traveller), which, internationally, exceeds 100 million arrivals, or one in six of all
international trips. The senior market is particularly notable in the USA, Europe and Japan,
which are major contributors to outbound travel globally. In many European countries, the over-
55s now comprises 25 per cent of the total population – although, statistically, the likelihood of
travel decreases with increasing age. Senior markets are less seasonal, able to utilize high
disposable incomes in those cases where mortgage payments are negligible, and require more
attention to their needs. This is reflected in the growth of specialist tour operators (e.g. Saga in
the UK and Elderhost in the USA). What is evident is the continued growth in this market and
the potential for tourism businesses to adapt to meet these consumers’ needs. For example, the
revival of coach tourism for long holidays in many parts of Europe reflects one niche product
that is particularly favoured by the grey market, since it is perceived as safe and convenient and
meets the travellers’ needs.

18. New social trends
New social trends have emerged over the last decade in developed outbound markets. For
example, women are playing a more dominant role in the labour market than they were twenty
years ago. People in the 20- to 40-year age bracket are marrying later and deferring having
children; as a result they have more disposable income, making them a lucrative expanding
niche market. This niche market and much of the senior market places a renewed emphasis
on the consumption of luxury tourism products. Whereas luxury products in the 1970s and
1980s were often associated with consumer goods and a house, now travel products have
become far more fashionable among both the elite and the general population, who are willing
to spend more money on a luxury experience.

19. New outbound markets
In the 1990s, much of the attention on the future growth of tourism was focused on the rise of
the Chinese outbound market and the growth in outbound middle-class travellers in Asia.
Since then, other markets have followed a similar growth path and now the attention for future
outbound markets has shifted to the BRIC economies (i.e. Brazil, Russia, India and China).
The significance of the BRIC economies is reflected in the rising economic power where they
control 50 per cent of the world’s exports and also have large foreign currency reserves
alongside a growing middle class. Yet for these economies only around 5 per cent of the
population has travelled overseas before and so their growing middle classes will have a
substantial impact on future tourism demand as their wealth and affluence increase (see
recent UNWTO reports on the BRIC markets in Table 12.1). One of the most obvious forms of
tourism growth will be linked to global travel to visit family and kin in other parts of the world.
What is certain is the scale of such markets are huge and have the potential to change
dramatically the nature of international travel. This reflects the importance of economic and
political changes, such as allowing outbound and inbound travel as well as the significance of
growing affluence which are notable in shaping future tourism trends: governments can also
constrain, facilitate and prevent tourism according to the policies they promote in terms of
domestic and international tourism.

20. Crises and disasters in tourism
One of the principal external factors that can affect tourism and is highly unpredictable for
organizations and countries is a crisis or disaster (man-made or natural). The challenge of
coping with catastrophic events poses many issues for an organization’s ability to adapt to
change, as reflected in the Foot and Mouth crisis in the UK in 2001, 9/11, the 2004 tsunami
and the hurricanes that affected the USA in 2005 as well as the 2010 earthquake in
Christchurch, New Zealand and the 2011 floods in Queensland, Australia
Crises in tourism and business response: A
management challenge?
Although such crises may be short-term in nature, the exposure of the tourism sector is
significant and apparently stable business activities can be transformed into chaos. However,
such crises may also have the potential to stimulate innovation, as Chapter 9 highlighted.
Ultimately, crises and chaos illustrate tourism’s highly volatile nature and indicates how
adaptable organizations need to be to change. In a management context, Faulkner and
Russell (1999) identified the typical modes of operation for entrepreneurs in tourism, who
instituted chaos and change, and for those who were planners and regulators of change.

21. Technology and tourism

22. Technology is globally connecting tourism businesses and clients together. In tourism
environments, the harnessing of technology to achieve entertainment and enhance fun has been
widely embraced in the theme park sector. In the USA, the theme park industry generates over
US$11 billion a year, while globally over 120 large theme parks exist, each attracting over a
million visits a year. Indeed, from a management perspective, the creation of man-made tourism
environments such as theme parks may fill a niche in the market for accommodating mass
tourism without compromising the local environment. Theme parks allow large numbers to be
accommodated, using technology, fantasy, escapism and a safe, monitored and highly managed
experience. This is certainly a trend which will continue, as continuous improvements and
innovation help these tourism environments to adapt to new consumer tastes and trends. At an
individual business level, information communications technology or ICT is the main driver of
change, requiring better management for tourism operations to harness their potential. ICT
provides up-to-date, managed client data and the scope to search and select a wide range of
products and experiences. ICT has enabled forward-looking businesses to respond to the
demand for more up-to-date information and tailormade products. The worldwide web also
allows the customer to undertake this process themselves (dynamic packaging software makes
this much easier), challenging the supply chain and its traditional role in selling tourism products,
some industry analysts suggest. The rapid growth in online booking may have stabilized in terms
of large corporations, but it continues to make inroads into traditional travel agent business. ICTs
are now widely adopted in the tourism sector, and innovation is likely to push further
developments that allow tourism products to reach a wider audience.

23. Climate change, tourism and the environment: Its
impact on future tourism trends
There is major concern among scientists that the world’s climate is changing. Global warming
resulting in climate change could affect the climate and weather in many of the world’s major
tourism destinations by 2050. Tourism related CO2 emissions arise from tourist mobility (75 per
cent of emission) and from on-site consumption (26 per cent) and recent research by Peeters
and Dubios (2010) indicates that tourismrelated CO2 emissions will continue to grow at a rapid
rate up to 2050. According to UNWTO & UNEP’s (2008) climate change report, there are four
mitigation strategies for tackling greenhouse gas emissions in tourism as Figure 12.3 indicates.
Of the four strategies in Figure 12.4, the most effective is reducing energy use but it also
highlights the need for more radical strategies whereby people may need to have their holidays
(or at the carbon emissions they produce) limited in the future through carbon allowances. This
may be critical if the reduction of CO2 is to be achieved given the predictions of future growth in
tourism and the corresponding need to reduce emissions to tackle climate change. In other
words, despite the potential technological solutions which are heralded for transport to reduce
CO2 emissions in the future, the scale of demand for travel and tourism seems an
insurmountable problem for future policymakers without a radical shift in the desire and
availability of cheap travel by air and car. Alternative strategies such as decarbonising the entire
tourism supply chain may be the only long-term option if the global climate change problems
associated with tourism are to be addressed.

25. New business trends
Change is rapid in the tourism sector: today’s trends are redundant tomorrow. Tourism has
gathered momentum since the 1980s as technology has increased the scale, extent and rate of
communication across the tourism sector. ICT has forced many tourism businesse to scrutinize
their operations, to assess whether they are operating in an efficient and profitable manner.
Greater industry concentration through mergers and acquisitions will certainly continue,
premised by perceived economies of scale and efficiency gains. This also reflects competition
strategy in the tourism sector, with larger players seeking to dominate certain sectors (e.g.
retailing, aviation and tour operation) or adopt integrated operations to raise profitability (e.g.
TUI in Europe). This leads to a new operating environment in which evolving trends can create
recognition of the need to participate in certain products if businesses are to compete.

26. New business processes, called hypercompetition, now characterize the fast-growing tourism
sector. D’Aveni (1988) cited in Page and Connell (2009), characterized hypercompetition in this
sector of the tourism industry in terms of:
•rapid product innovation
•aggressive competition
•shorter product life cycles
•businesses experimenting with meeting customers’ needs
•the rising importance of business alliances
•the destruction of norms and rules of national oligopolies such as state-owned airlines which still
dominate South American and South East Asian aviation.
D’Aveni (1988) identified four processes that are contributing to the hypercompetition. These
are:1. customers want better quality at lower prices
2. rapid technological change, enhanced through the use of ICT
3. the expansion of very aggressive companies who are willing to enter markets for a number of
years with a loss leader product (e.g. lowcost airlines), with a view to destroying the competition
so that they will harness the market in the long-term
4. the progressive removal of government barriers towards competition throughout the world.

27. Limiting tourism: The beginning of the end?
With global concerns for environmental impacts generated by the pollution tourism induces,
environmental management has emerged as a new buzzword for the tourism sector. This has
also been embodied in a much larger debate on the ethical issues involved in how and what
form of tourism governments will allow to develop. For example, legal and moral issues
surround the exploitation that sex tourism causes in many countries has produced a great deal
of debate on how tourism fuels such activity. NGOs such as the UN-WTO and End Child
Prostitution and Trafficking have pursued a campaign since 1996 to eradicate this unacceptable
element of tourism. Similarly the work of other organisations like Tourism Concern (see Chapter
1) acts as an important counterweight to the impact of big business with their unwieldy effect on
people and their communities and environment.

28. Towards a new tourism management concept:
Managed tourism
Given the increasing cynicism from tourism analysts about the green lobby and the
unwillingness of almost every government globally (with the exception of Bhutan) to limit
tourism growth, a more radical approach is needed. The 1990s have seen an excessive
amount of research activity associated with the notion of sustainable tourism but few
examples exist of where this has been developed with the degree of sophistication needed
for it to work properly: one notable exception is Calvià in Mallorca that has embraced the
principles to redevelop a mass resort into a more sustainable destination. The concept of
sustainable tourism is quite simply too vague, imprecise and lacking in detailed measures for
an assessment to be made of how it should be implemented and monitored in different
contexts so that limits and thresholds of tourism activity can be established. The tourism
industry does not want to see anything implemented that could damage their commercial
viability (e.g. limits to growth), and without decrying the validity of much of the academic
research activity on sustainable tourism, it has not led to wide-scale changes in the way
tourism is developed or promoted. The theory of sustainable tourism has not been widely
applied in practice, and so it is probably time for a more radical concept to be introduced that
governments and policy-makers can understand in simple terms: it is managed tourism
(MT).