The tourism industry in Singapore has undergone countless changes over the years in an attempt to make it the perfect getaway. This has seen the country adopt different strategies designed to promote tourism. These policies have been subject to endless socio-economic fluctuations, not only on the local scene but also on the global front. This paper is intended to discuss Singapore as the ideal tourist destination and the inherent features that give it preference over others.
Discussion
Tourism is regarded as a major industry in Singapore and one of the chief contributors to the country’s economy. In 2010 alone, the country attracted 11,638,663 tourists, a figure that is twice the population of Singapore. The attraction to the country can be attributed to the diversity of its culture that echoes its colonial history blended with the Indian, Chinese, Malay and Arab cultures (Lim, 2007). The official languages of the country are Malay, English, Chinese and Tamil. English serves as the language of administration while Malay is the national language. Singapore’s government has adopted meaningful and well-calculated policies and strategies that have served to promote tourism (Lim, 2007).
The island is geographically divided into three: the western region, which is made up of a succession of rolling hills and valleys, the flat eastern part and the central hilly region. Singapore has a uniform climate of high humidity and sufficient rainfall due to its proximity to both the equator and the ocean and has an average temperature of 26 degrees centigrade.
One of the most popular attractions is the zoo which operates on modern concepts where the animals are not caged. Instead, they are kept in enclosures and are separated from the tourists by moats. The island of Sentosa is another major attraction that attracts an average of 5 million tourists annually. It contains more than 30 landmarks including Fort Siloso which is a Japanese fortress built to protect Japanese interests during the second world war..Also present on the island is the Tiger Sky Tower on top of which visitors can have an unobstructed view of the entire island.
Another major tourist destination in Singapore is the Orchard Road District. The area comprises multi-storeyed shopping malls and hotels and is widely regarded as the center of Singapore’s tourism. In order to encourage shopping, the government organizes a yearly sale called the Great Singapore sale where shoppers are offered great bargains and discounts at identified outlets. Singapore also has some of the best conference and meeting facilities in the world. This has resulted from the government’s interest in the business sector that has seen it give incentives to investors who have done a wonderful job in establishing incredible conferences and facilities (STB, 2011).
The year 2010 also saw Singapore emerge as one of the most sought-after cruise ship destinations. 650 passenger ships came calling, bringing with them 1.01 million passengers. Other waterfront attractions include the Boat Quay which is located on the mouth of River Singapore. On the quay are old shophouses that have been conserved and renovated, to house classic upscale bars, pubs and restaurants. Moored close by are Chinese junks that have also been refurbished to house floating restaurants and bars. These establishments also provide the country’s nightlife, as they are designed to include nightclubs and discos.
In recent times Singapore’s hotel occupancy has risen, and in line with the demand, more hotels have been put up. The inventory at present shows a bed capacity of 47,000 (STB, 2011). The surge in visitors’ arrival has not in any way compromised the quality of services offered in these establishments. The government has seen to this by launching the hotel transformation plan of 2010. This brought together over 70 hotels in a ceremony that sought to formalize their dedication and commitment to strengthening the sector’s competitiveness by introducing productivity initiatives. Consequently, this plan has raised the value of hotel-related jobs and has attracted a better and skilled workforce, thereby improving service delivery (Yeoh, et al 2003).
Singapore’s cuisine is one of the major drivers of the country’s tourist industry. The country has a cuisine that captures the cultural diversity that is ever evident among its population. Apart from the rich cultured food found in the hotels, street stalls provide an appetizing and rich array of mouth-watering traditional meals that are prepared in the different traditions of the local population. It is commonplace to find on the streets, Malay hawkers selling traditional Chinese food or Chinese stalls that excel in the preparation of Indian cuisine. This trend has been used with much success to promote Singapore as a tourist destination by the Tourism Board of Singapore (STB,2011). To further enhance the proliferation of local cuisines, the government organizes a food festival every July and invites chefs from all over the world to showcase their talent in the field. Singapore can thus be termed as a food paradise, where food from all over the world can be sampled. (STB, 2011).
All this would not be possible in the absence of certain levels of infrastructural development. Singapore has an advanced infrastructure that it inherited from the colonialists. Over the years it has strived to improve the existing infrastructure while developing new ones. The country has an advanced road network that makes the entire country accessible. To supplement this complex road network is a comprehensive railroad network that connects the northeast of Singapore to the Marina area and Sentosa (Lim, 2007). The state is also served by a modern airport at Changi which has won international accolades for its dedication to service delivery. The airport accommodates more than 80 airlines that fly to 180 cities in 120 countries.
Singapore has undoubtedly established itself as a prime tourist destination. However, a lot still needs to be done in order to compete with other top Asian destinations such as Shanghai, Tokyo and Hong Kong. There is a need to widen the port further in anticipation of more cruise tourism that will undoubtedly be realized in the coming years. It is also vital to develop integrated world-class resorts to match similar establishments in Las Vegas and the Bahamas. This will have the effect of providing within one compound, world-class developments with facilities such as hotels, luxury retail, casinos, convention facilities and theme attractions. However, these changes must be founded on long-term planning if they are to be economically tenable. If done with care and precision, the changes will transform Singapore into one of the best and most sought-after tourist destinations in the world.
Reference List
Lim, H. (2007) infrastructure development in Singapore. International infrastructure development in East Asia, 2(1) 228-262.
Secretlab has planned employee vacations because of their numerous advantages to the employees. First, when the employees are taken on vacation, they will feel valued, increasing their workplace motivation. Vacations allow employees to move out of their everyday environment, reducing anxiety and stress. When workers are less stressed, they will not experience burnout in the workplace because they are refreshed. Finally, it promotes a balanced life-work balance which helps employees increase their productivity. When employees go on vacation, they connect with the outside world, share their ideas, and meet their families, making them satisfied and contented in their job, hence increasing productivity.
Trip Destination
Ho Chi Minh City is a good vacation destination for employees because it provides a wide range of team building, exploration, and exciting experiences. Employees will be able to interact with other people as they explore the city, enhancing their intercultural skills. The tourist destination provides fun activities such as hiking experiences, motorcycle tours, tunnel experiences, and water experiences, which shall provide employees with a new environment from the one they are used back home. This provides relaxation to their minds and enhances their mental health reducing stress. The employees will have an opportunity to see the impact of their work in Asian communities.
Travel Day
The employees will be required to arrive at the office at 11 am to give them enough preparation time. They will have a morning briefing with the managers and then be taken to the airport. They will catch a flight to Tan Son Nhat Airport, where they will be picked up by another bus and taken to Vinpearl Luxury Landmark 81 Hotel. On arrival at the hotel, there will be a welcoming grand dinner consisting of introductions and briefings, and then dinner will be served.
Day One
After having breakfast in the hotel, the employees shall be transported to Chu Chi tunnels which are not far from the hotel. Later in the midmorning, they will advance to the famous Ben Thanh Market to mingle with the traders as they purchase products which will enhance their intercultural communication. Lunch will be served at the IL CORDA Charcoal steakhouse, famous for its tasty steaks. Then employees will enjoy the afternoon on a boat ride in the Mekong before heading for dinner at Rai restaurant and then back to the hotel.
Day Two
The employees will have breakfast at the hotel and then proceed to Saigon Opera House to watch the authentic cultural show. It features; local artists, acrobatic talents, and other optical illusions. This activity shall provide the employees with a relaxing experience and knowledge of Vietnamese culture. After the show, they will interact with the Vietnamese people by attending local cuisine cooking classes where they shall enjoy lunch. Later in the afternoon, the employees will have motorcycle rides around the city to different landmarks and then supper at Poke Saigon Ly Tu Trong Restaurant.
Day Three
After enjoying breakfast at the hotel, the workers shall be ferried to Golden Dragon Water Puppetry Theatre, where they will experience the people’s traditional culture. Traditional dancers will entertain them on a stage full of water. The employees will then be taken to Then Hau Pagoda temple, an ancient Buddhist temple, to see some traditional sculptures. Lunch will be at Aloha Boys Poke, a local restaurant that offers a variety of local meals. They will take a motorbike ride to explore the city and then have dinner in the middle of the Saigon River.
Day Four
Employees will be transported to a classy local restaurant called Baba’s kitchen for breakfast. After that, they will then be taken on a trip to the Cai floating market and Tan Phong island for a private experience. They will then return using a VIP delta-guided tour and head for lunch at Dahi Handi Indian Restaurant. In the afternoon, they will have a private excursion from Ho Chi Minh City to Phu My Port and enjoy a private street food dinner on their way to the hotel.
Day Five
On the final day, the employees shall be served breakfast at Le Petite Chef restaurant, which offers various local dishes. Army jeeps will then take them for a half-day tour around the busy city to enjoy the scenery. Lunch will be served at Kebaby, a classy restaurant in the city. They will be on a deluxe half-day sightseeing Group tour in the afternoon, including viewing various items used in the cold war. To make the last dinner memorable, they will experience it in the middle of the Saigon river with dancers on board.
Importance of the activities
This trip will be necessary for the organization and the employees. For the organization, it will help to increase employee productivity which will lead to increased profits. For the employees will have better mental health, more value to the company, and feel refreshed, which will enable them to work better. In addition, employees who have not made it to the trip will work hard to be on the trip next time. This shows that it will increase employee motivation across the organization.
Conclusion
This trip was chosen for Vietnam because the Asian country has a diverse culture from the US. This allowed the employees to interact and enhance their intercultural skills. The vacation will allow the chosen employees to enjoy their December in a free vacation worth $40,000, which shows that the company values them. Fun activities like this make the workplace enjoyable hence reducing employee turnover. Finally, this trip will provide the employees with a fantastic way of starting their year as each one will work hard to be featured in the next end-year trip.
The Chinese tourism industry is an important part of the country’s economy because it represents about 2.6% of the nation’s Gross Domestic Product (GDP) (Zeng 2014). Stakeholder engagement is instrumental to the future sustainability of the industry because unlike other segments of the economy, the sector thrives on culture and the environment, which can be sustainably managed (Vinodan & Meera 2018). The recent diversification of the Chinese tourism industry has prompted the creation of varied and personalised products that meet different stakeholder needs (Ma et al. 2016). This development stems from the need for tourism practitioners to respond to the demands of different interest groups because doing so is vital to the realisation of sustainable development goals in the sector (Qian, Shen & Law 2018; Chen, Huang, & Cai 2014). However, tourism practitioners in the Chinese tourism sector have been unable to create synergy in their operations. Consequently, there has been renewed interest in the industry regarding how to balance stakeholder and sustainability goals (Qian, Shen & Law 2018).
Stakeholders’ perceptions regarding Chinese tourism play an important role in promoting sustainable development in the industry (Qian, Shen & Law 2018; Chen, Huang, & Cai 2014). However, few researchers have bothered to understand differences in interests of each stakeholder group and they should be addressed through sustainable development. This gap in literature partly explains why some of the initiatives aimed at changing aspects of the industry to embrace sustainability have been slowly adopted (Lederer, Wallbott & Bauer 2018). Stated differently, stakeholders who do not believe that their interests will be met through sustainability are likely to sabotage ongoing efforts to embrace it (Kozak & Kozak 2016).
Against this background, this paper demonstrates differences in stakeholders’ perceptions regarding sustainability. The need to embrace new perspectives regarding sustainability in the Chinese tourism sector informs this review. Broadly, this document focuses on four main types of stakeholders: inbound tourists, government authorities, suppliers of tourism products and community residents. The tourism system model and the stakeholder theory will provide the theoretical frameworks guiding the discussions. They will also provide tools to understand the advantages and disadvantages of stakeholder engagement in the Chinese tourism sector. However, before delving into this analysis, it is important to understand the theories underpinning stakeholder engagement that will be used in this study.
Theoretical Background
Stakeholder Theory
As highlighted above, the theories and models used in this paper aim to provide contextual support for understanding stakeholders’ views on sustainability (Qian, Shen & Law 2018; Chen, Huang, & Cai 2014). The stakeholder theory is one model that will be used in this paper to guide the investigation. It accounts for the impact of businesses on interest groups, such as communities, employees and creditors (Usadolo & Caldwel 2016). It also focuses on the morals and values that managers use to oversee the operations of an industry or organisation (Usadolo & Caldwel 2016). Kumar, Rahman and Kazmi (2016) contend that the stakeholder theory integrates aspects of resource and market-based views. One of the theory’s vital contribution is the need to prioritise stakeholders’ interests in all critical decision-making processes (Kumar, Rahman & Kazmi 2016). This theoretical basis stems from one of the theory’s focus, which is to identify key stakeholders and describe how they are treated in an organisation or economic sector (Usadolo & Caldwel 2016).
Tourism System Model
Researchers, such as Lohmann and Netto (2016) are strong proponents of the tourism system model. It has two main components: market demand and destination supply. Sotiriadis (2018) adopts a different approach of implementing this model by saying it has two main components: inner subsystem and external macro environment. In the context of the Chinese tourism sector, as a case study of this investigation, the inner subsystem comprises of local tourism resources and their allocation to realize industry goals. The external macro environment would be made up of factors that are out of the control of industry players, such as local culture, nature, economy and society. In this regard, the tourism system model highlights the importance of perceiving associated events from a holistic perspective, which includes demand and supply side functions (Sotiriadis 2018). To demonstrate its efficacy, researchers have used this model to investigate how different tenets of the tourism sector develop (Lohmann & Netto 2016).
Types of Stakeholders in the Chinese Tourism Sector
The Chinese tourism industry is one of the world’s most recognisable sources of inbound and outbound tourism (Li 2016). The industry’s boom stems from many factors but the growing middle class and the ease in restrictions of travel by Chinese authorities are some of the main catalysts of the development (Li 2016). Inbound tourists form one of the most dominant groups of stakeholders in the industry because China is among the top five most visited countries in the world (Correia, Kozak & Kim 2018). Recently, there has been an increase in the number of tourists from the United States (US) but figure 1 below provides a more comprehensive list of the top 20 sources of tourists in the Asian country.
Figure 1. China’s inbound tourism (Source: Incitez China 2016).
Based on the figure above, inbound tourists emerge as a significant stakeholder group in the Chinese tourism industry. According to Lee and Yin (2017), most of them travel to the communist nation because they have a positive image of the country’s tourism potential (Incitez China 2016). Nonetheless, from a stakeholder’s perspective, the design of China’s tourism industry mostly fits the needs of inbound tourists, as is evident from the increase in the number of international hotels in the country (Zeng 2014).
The government is also another key stakeholder of the Chinese tourism sector because it is a regulator. In other words, it enforces policies, laws and regulations developed in the industry and makes sure that practitioners pay taxes accordingly. Enforcement of laws is strict in China because the government is a product of a one-party governance structure. Therefore, linked regulations could significantly influence the impact of every stakeholder on the industry. Local communities also form a vital interest group in the development of the Chinese tourism sector because they are a potential source market of tourists. Their relevance is similar in stature to other aspects of the industry’s performance, such as the prevailing legal environment in tourism planning.
Siti-Nabiha and Saad (2015) conducted a case study in Penang Island to investigate the role of stakeholder engagement in tourism planning and found out that healthy stakeholder engagement is essential in advancing the industry, while fragmented communication affects progress. The case study also pointed out that the disjointed application of law between federal, state and local authorities could have a significant impact on the manner stakeholders choose to engage with one another (Siti-Nabiha & Saad 2015).
Broadly, it is difficult to separate the development and growth of the Chinese tourism sector from stakeholder engagement. Inbound tourists, industry practitioners, suppliers of tourism products and community residents are interlinked because they are key partners in the promotion of sustainable development (Qian, Shen & Law 2018; Chen, Huang, & Cai 2014; Lederer, Wallbott & Bauer 2018). They also play an important role in improving the industry’s competitiveness. Unlike Chinese domestic visitors, foreign tourists play a singular role in promoting the sector because they have stringent needs (Siti-Nabiha & Saad 2015). Furthermore, their perception of the industry is a product of international conceptions of it (Zeng 2014). Studies have also shown that their views of the industry are relatively more accurate and sensitive compared to domestic tourists (Lee & Yin 2017). Therefore, their interests differ from local tourists.
Stakeholder Engagement in the Chinese Tourism Sector
Usadolo and Caldwel (2016) characterise stakeholder engagement as the practice of influencing concerned parties to help realise a project’s benefits. Indeed, the successful development of project plans largely depends on how interested parties view them (Ngai & Singh 2018). According to Darnall and Aragón-Correa (2014), trust and commitment are the two main antecedents of stakeholder relationships in China. Additionally, Saffer, Yang and Taylor (2018) say that stakeholder management shares a direct correlation with a firm’s profitability and customer satisfaction standards.
Recently, China has had a robust stakeholder engagement, which has seen the country’s profile in the global tourism map improve. For example, there has been a profitable collaboration between the Chinese government and tourism practitioners, which has yielded improved infrastructure development in the sector, which has aided in the free movement of goods and services. In addition, the ease of travel restrictions by the Chinese government and its active participation in global politics has also diverted the world’s attention to China as a world power. The tourism industry has benefitted as a result.
Communities are also taking part in the development of the Chinese tourism sector because they create content and products sold to tourists. They also preserve local and indigenous cultures, which are attractions to foreign tourists (Serra-Cantallops et al. 2018). Furthermore, they engage with the government through local authorities and act as suppliers of products and labour to local hotels and other suppliers of tourism products. The preservation of great monumental sites in China, such as the Great Wall, is also a product of a partnership between local authorities, tourism players and host communities (Serra-Cantallops et al. 2018). For example, tourism players provide transportation services, such as taxis, while the government and local communities preserve historical sites and monuments.
Broadly, stakeholders in the Chinese tourism industry have engaged with each other in the past through negotiation, consultation and communication (Bratt 2018). Making compromises and nurturing existing relationships are also other strategies that stakeholders in the sector have used to improve industry outcomes (Ngai & Singh 2018). The importance of stakeholders in the implementation of project plans stems from studies, which have emphasised the need to consult all interested parties at different stages of a project’s lifecycle (Usadolo & Caldwel 2016; Zeng 2014). For example, according to figure 2 below, stakeholders should be consulted when defining a project’s scope, estimating timelines for the completion of project tasks, developing project plans and handing over programs to other agencies.
Figure 2. Stakeholder engagement process (Source: Association of Project Management 2017).
Barriers to Reconciliation of Perceptions
Discussions relating to sustainable development in the Chinese tourism industry have been centred on promoting diversification because the reliance on one product could be detrimental to the livelihoods of people who depend on the sector (Qian, Shen & Law 2018; Chen, Huang, & Cai 2014; Lederer, Wallbott & Bauer 2018). The lack of economic appeal of Detroit city is an example of the need for diversification because the city’s economic growth was almost entirely dependent on the manufacturing sector. Therefore, when the industry collapsed, thousands of workers lost their jobs and millions of families were negatively affected by poor living conditions. Discussions about sustainability in China are cognizant of such an outcome and strive to promote the concept as a feasible operational mantra for making sure that the city’s tourism outlook remains viable even in the wake of unpredictable human and natural disasters (Qian, Shen & Law 2018; Chen, Huang, & Cai 2014; Lederer, Wallbott & Bauer 2018).
Discussions on sustainability in China are also cognizant of the complex interplay between the industry’s products and the environment (Qian, Shen & Law 2018; Chen, Huang, & Cai 2014). The complexity is highlighted by the fact that culture influences the creation of different tourism products (Bakir et al. 2017). Community members are most affected when there is no proper relationship between tourism stakeholders and the environment (Chen 2017). In addition, community-based groups are also the main custodians of local culture and they cooperate with other industry players in packaging tourism products and selling them to both local and international tourists. A different side of the argument is informed by the fact that economic development in China could threaten the environmental health of the country and, by extension, the tourism sector (Lederer, Wallbott & Bauer 2018). Consequently, sustainability emerges as an important concept of development that influences the industry’s future.
One barrier to stakeholder engagement in the Chinese tourism industry is the lack of proper leadership in implementing successfully negotiated projects (Sotiriadis 2018). This challenge stems from a poor attitude among some stakeholders, which makes them assume that by agreeing to undertake a project with their partners, they could simply walk away and “other people” would complete it. Conflicting interests is also another barrier to stakeholder engagement in the Chinese tourism sector because different groups of people have varied and competing interests. Whitehead (2014) says that, traditionally, industry players placed shareholders’ interests before all other considerations in the industry.
This business model was a product of past traditions and norms in commerce (Whitehead 2014). However, modern scholars have criticised the framework and attributed it to the crash of some major companies in the last decade (Sotiriadis 2018; Zeng 2014). Most of these scholars have instead proposed a balance between shareholder and consumer perspectives, with the latter gaining attention in recent academic literature (Sotiriadis 2018; Zeng 2014). Broadly, this analysis means that there is a high possibility of a conflict of interest between stakeholders who push for shareholder’s interests and those who promote consumer goals. This dilemma has been the cause of contention for most interest groups in major sectors of the Chinese economy (Sotiriadis 2018; Zeng 2014). It has also impeded efforts to promote sustainability in the sector.
The implication of Theories on the Competitiveness, Innovation and Stakeholder Engagement
The theories highlighted in this paper have an impact on competitiveness, innovation and level of stakeholder engagement in the Chinese tourism sector. In this section of the report, the effects of the theories on the above-mentioned critical areas of assessment will be mentioned from management and consumer perspectives.
Impact of Stakeholder Theory
From a management perspective, the stakeholder theory is useful in improving the competitiveness of the Chinese tourism sector because it helps to identify gaps in performance that need to be addressed to improve performance. Particularly, the theory has a significant effect on stakeholder engagement because it encourages interest groups to go beyond superficial engagement and implement their collective agreements holistically (Pham, Nghiem & Dwyer 2018). It also aids them to make follow-ups from the start to the end of negotiated projects. Notably, the theory rejects the philosophy of a “hands-off” approach in management because of its failure to promote authentic engagements among concerned parties (Pham, Nghiem & Dwyer 2018). It also rejects the idea that consultations need to occur only when one party pushes for change. Instead, it advocates for greater collaboration among all interest groups to improve the odds of success (Pham, Nghiem & Dwyer 2018; Bratt 2018). Broadly, the contribution of the stakeholder theory in management is to improve the quality of engagement among concerned parties. Relative to this assertion, the case study by Correia, Kozak and Kim (2018) highlights the importance of stakeholder engagement in the tourism sector because it demonstrates its efficacy in increasing the flow of tourists between mainland China and Hong Kong.
The importance of the theory in improving the competitiveness of the Chinese tourism industry can be explained through a case study by the World Tourism Cities Federation (2018), which sought to investigate sustainable management practices in Beijing, China. The case study showed that authorities are committed to conservation and the efficient use of resources (World Tourism Cities Federation 2018). These developments also influenced local regulations on sustainable development (World Tourism Cities Federation 2018). Engagement among all stakeholders also led to the effective implementation of appropriate laws in Beijing and the promotion of progressive principles and models of tourism management, such as the implementation of the green certification system (World Tourism Cities Federation 2018). The stakeholder theory provides the framework for undertaking such engagements. Therefore, it is a tool for managers to use in striking the best balance between accomplishing stakeholder objectives and meeting the industry’s sustainable goals (Qian, Shen & Law 2018; Chen, Huang, & Cai 2014; Lederer, Wallbott & Bauer 2018).
The stakeholder theory also has a significant implication on the innovativeness, competitiveness and level of engagement of the Chinese tourism sector. Notably, it adds the socio-political level of collaboration that is needed in making sustainability a reality in the Chinese tourism sector (Usadolo & Caldwel 2016). In other words, it proposes a paradigm shift of engagement from a resource-based to a consumer-centred view. The addition of the socio-political level to stakeholder partnerships means that there is room for consumers and other stakeholders who do not have a profit-based interest to support industry development (Usadolo & Caldwel 2016).
Impact of Tourism System Model
The tourism system model has a significant implication on innovation in the Chinese tourism industry because it involves the seamless integration of different aspects of the industry’s features (Newsome 2017). Innovation could help to improve business processes and synergies by creating linkages and differentiation areas when executing industry functions. The tourism system model explains how this process occurs by encouraging managers to look at the industry or organisational issues from both demand and supply side perspectives (Newsome 2017). Therefore, it emphasises the deliberate application of knowledge pertaining to the implementation of industry functions. This system underscores how to translate ideas into unique goods and services that improve the profile of the Chinese tourism sector.
Comparatively, the tourism system model highlights the role of the consumer in influencing policies relating to the industry (Athanasopoulos, Song & Sun 2018). It describes their position in the larger social, economic and political system of the Chinese tourism industry so that all parties understand their roles. Broadly, this theory also helps to make consumers more aware of different systemic parts of the market that may influence their purchasing experience (Athanasopoulos, Song & Sun 2018). For example, through the broad understanding of industry patterns, consumers become aware of ongoing innovations or unfair competitive behaviours they need to look out for in sustainable development.
Broadly, both the stakeholder theory and the tourism system model have a significant implication on the competitiveness of the Chinese tourism industry because they influence how the world perceives the sector’s products, based on the efforts of stakeholders make in marketing the country. Particularly, the stakeholder theory draws attention to the need to increase the quality of engagements among all concerned parties. The tourism system model also influences the competitiveness of the industry because it focuses on the development of easily replicable ideas that satisfy a specific need. Nieves and Quintana (2018) add that innovation is a revolutionary concept that involves multiple risks, especially for companies that want to create new markets by embracing innovative ideas. Broadly, the tourism system model and the stakeholder theory have a positive impact in fostering collaboration among tourism stakeholders in China.
Summary and Recommendations
Summary
Overall, this paper demonstrates the need to look at the development of sustainability in the Chinese tourism industry from a holistic perspective that includes all parties. The results are useful to the Chinese tourism industry because they support sustainable development and coordination in the sector. Both consumer and management perspectives highlight the discussions and arguments presented in this paper. The consumer perspective explains non-financial objectives of sustainable development in the tourism industry, while management perspectives relate to the allocation of industry resources to achieve desired goals. The management perspective has been more dominant in academic literature compared to the consumer view because issues relating to stakeholder engagement, such as competitiveness, innovation and nurturing stakeholder relationships, are commonly discussed in management literature.
Recommendations
There is a need for leadership engagement in the improvement of stakeholder relationships in the Chinese tourism sector. This recommendation stems from the role of leadership in improving individual and collective team performance. The need to improve this management principle is desirable because of the need to reinforce behaviours that create a good working environment for all concerned parties. In addition, there needs to be more synchrony between business and industry development goals because some tourism stakeholders are unable to work well because of conflicting interests. For example, it is difficult to merge the non-profit goals of the Chinese government and the profit-centred goals of multinational firms if there is no compromise between the two. Consequently, developing training strategies that merge profit and non-profit goals of various stakeholders in the Chinese tourism sector could be beneficial in improving responsiveness, enhancing efficiencies, increasing organisational partnerships and encouraging high levels of employee retention in the industry.
Lastly, there is a need to restructure the stakeholder engagement framework of the Chinese tourism industry and embrace one that identifies new ways of merging stakeholders’ interests. Redefining the accountability structure would play a critical role in improving the efficacy of stakeholder engagement processes. The idea of accountability addresses the challenge of embracing a “hands-off” approach to management, which undermines industry responsiveness. Relative to this recommendation, Bratt (2018) posits that the effective development of sustainable tourism largely depends on the creation of strong and integrated management systems. Collaboration is important in realising this vision and the stakeholder theory plays a vital role in fostering it.
Athanasopoulos, G, Song, H & Sun, JA 2018, ‘Bagging in tourism demand modeling and forecasting’, Journal of Travel Research, vol. 57, no. 1, pp. 52-68.
Bakir, A, Wickens, E, Boluk, K & Avgeli, V 2017, ‘Cross-cultural issues in tourism and hospitality’, Tourism and Hospitality Research, vol. 17, no. 3, pp. 245-248.
Bratt, J 2018, ‘Return to the east: tourism promotion as legitimation in Qiandongnan, China’, Tourist Studies, vol. 18, no. 1, pp. 21-40.
Chen, S 2017, ‘Power, apathy, and failure of participation: how local voices on environmental issues are muted in a Chinese rural context’, SAGE Open, vol. 7, no. 4, pp. 1-10.
Chen, Y, Huang, Y, & Cai, LA 2014, ‘Image of China tourism and sustainability issues in Western media: an investigation of National Geographic’, International Journal of Contemporary Hospitality Management, vol. 26, no. 6, pp. 855-878.
Correia, A, Kozak, M & Kim, S 2018, ‘Luxury shopping orientations of mainland Chinese tourists in Hong Kong: their shopping destination’, Tourism Economics, vol. 24, no. 1, pp. 92-108.
Darnall, N & Aragón-Correa, JA 2014, ‘Can ecolabels influence firms’ sustainability strategy and stakeholder behavior?’, Organisation & Environment, vol. 27, no. 4, pp. 319-327.
Kozak, M & Kozak, N (Eds.) 2016, Tourism and hospitality management, Emerald Group Publishing, London.
Kumar, V, Rahman, Z & Kazmi, AA 2016, ‘Assessing the influence of stakeholders on sustainability marketing strategy of Indian companies’, SAGE Open, vol. 6, no. 3, pp. 1-10.
Lederer, M, Wallbott, L & Bauer, S 2018, ‘Tracing sustainability transformations and drivers of green economy approaches in the Global South’, The Journal of Environment & Development, vol. 27, no. 1, pp. 3-25.
Lee, C & Yin, M 2017, ‘Chinese investment in Taiwan: a challenge or an opportunity for Taiwan?’, Journal of Current Chinese Affairs, vol. 46, no. 1, pp. 37-59.
Li, X (ed) 2016, Chinese outbound tourism 2.0, CRC Press, New York, NY.
Lohmann, G & Netto, AP 2016, Tourism theory: concepts, models and systems, CABI, New York, NY.
Ma, Y, Su, H, Jin, Q, Feng, W, Liu, J & Huang, W 2016, The general history of Chinese tourism culture, World Scientific, London.
Newsome, D 2017, Natural area tourism, Channel View Publications, London.
Ngai, CS & Singh, RG 2018, ‘Using dialectics to build leader-stakeholder relationships: an exploratory study on relational dialectics in Chinese corporate leaders’ web-based messages’, International Journal of Business Communication, vol. 55, no. 1, pp. 3-29.
Nieves, J & Quintana, A 2018, ‘Human resource practices and innovation in the hotel industry: the mediating role of human capital’, Tourism and Hospitality Research, vol. 18, no. 1, pp. 72-83.
Pham, TD, Nghiem, S & Dwyer, L 2018, ‘The economic impacts of a changing visa fee for Chinese tourists to Australia’, Tourism Economics, vol. 24, no. 1, pp. 109-126.
Qian, J, Shen, H, & Law, R 2018, ‘Research in sustainable tourism: a longitudinal study of articles between 2008 and 2017’, vol. 10, no. 590, pp. 1-13.
Saffer, AJ, Yang, A & Taylor, M 2018, ‘Reconsidering power in multistakeholder relationship management’, Management Communication Quarterly, vol. 32, no. 1, pp. 121-139.
Serra-Cantallops, A, Peña-Miranda, DD, Ramón-Cardona, J & Martorell-Cunill, O 2018, ‘Progress in research on CSR and the hotel industry (2006-2015)’, Cornell Hospitality Quarterly, vol. 59, no. 1, pp. 15-38.
Siti-Nabiha, AK & Saad, NH 2015, ‘Tourism planning and stakeholders’ engagements: the case of Penang Island’, Problems and Perspectives in Management, vol. 13, no. 2, pp. 269-276.
Sotiriadis, M (ed.) 2018, The emerald handbook of entrepreneurship in tourism, travel and hospitality: skills for successful ventures, Emerald group publishing, London.
Usadolo, SE & Caldwel, M 2016, ‘A stakeholder approach to community participation in a rural development project’, SAGE Open, vol. 6, no. 1, pp. 1-10.
Vinodan, A & Meera, S 2018, ‘Exploring the relevance of cultural resource management: a case study of Kalaripayattu’, Journal of Heritage Management, vol. 3, no. 1, pp. 71-86.
Whitehead, D 2014, ‘Chinese NGO-Firm partnerships and CSR from an institutional perspective’, Journal of Current Chinese Affairs, vol. 43, no. 4, pp. 41-74.
World Tourism Cities Federation 2018, UNWTO-WTCF city tourism performance research: Beijing case study, Web.
Zeng, G 2014, Tourism and hospitality development between China and EU, Springer, New York, NY.
Locales in Scotland guarantee visitors short stay accommodation in the form of restaurants, bars, and travel agents, the presence of recreational facilities such as museums and cultural activities further embellish the Scottish tourism market. According to Hallier (2011), the tourism sector is ranked fourth in the nation’s export-earning scales. The tourism sector in the Scotland has shown rapid growth as compared to other sectors that drives the Scottish economy, for example, the retail, utilities, and manufacturing sectors. Marketing tourism in Scotland acts as a hinge between leisure as a tourism activity, while offering an opportunity for an inbound investment. Moreover, in the Scottish economy, other sectors of income also benefit directly or indirectly from the reservoir of wealth, or resources that the tourism sector guarantees (Transport tourism and the environment in Scotland report, 2000).
The Tourism Products and Destination Identity
Scotland attracts tourists from all over the world. For the Scottish tourism sector, the most domineering visitors have been from the UK and the US. In the event the day trip revenues are added into the mix, the value of the United Kingdom alone increases the Scottish market score significantly (Transport tourism and the environment in Scotland report, 2000). However, speculation is rife that Scottish share of the United Kingdom’s daily catch might be on a declining scale. For the Scottish tour market, prospects lie in the sense that nearly half of the England’s population yearn for an opportunity to experience the Scottish beauty.
The Scottish tourism market score still looms large; the overseas market, for example, remains at a high value. The prospects of overseas tourists visiting Scotland in recent years have swollen exponentially from 2.4 million to 2.7 million of visitor arrivals between 2012 and 2013 (Latest Statistics, 2014). This is expected to grow further in the months to come, and a great visitor score is expected to be documented at the fall of 2014. The Scottish tourism sector seems to be having an augmented market score even in the face of great economic hitches that have trivialized the world.
The core of Scottish oversees tourist resources remains the US, as well as a collection of Western European countries and the Scandinavian countries, such as Denmark, Norway, and Sweden, which naturally share a mutual ethno-cultural Germanic heritage. Moreover, there are yet emerging potential tourism resources from an influx of tourists visiting Scotland from other parts of the world, especially from Brazil, Russia, India and China, otherwise identified as the (BRIC) markets within the Scottish tourism sector (Joao & Estevao, 2009).
Nationals of various origins come to various parts of Scotland for many reasons and the most outstanding ones are ether leisure or business. By estimation, the United Kingdom and oversees market score for Scotland worth 21% of the total daily tourism revenues. Tour surveys in Scotland conducted in recent times indicate that Scottish sceneries and other activities happening in Scotland stands out as the robust market scores for Scotland as a holiday destination for worldwide tourists (Hallier, 2011).
As a nation, Scotland is well endowed with various assets, and an expansive reservoir of resources that offers visitors satisfying experiences, good expectations, and security as well. Scottish tourism market strengths emanate from the natural heritage such as quality of the landscape, culture, food and drink offering, distinctiveness of its destinations and a sense of place. Other factors that pools mass visitation to Scotland includes viable business ventures, open market for both the Scottish populations and the foreign prospectors, including but not limited to outdoor activities, sports and ball games and most importantly the state of the art security prevalence in Scotland (Joao & Estevao, 2009).
While international travels to major markets in Scotland are expected to grow exponentially, a significant increase is anticipated in Scottish economic circles between now and 2020. Scotland is relatively growing within the European community, and judging from the recent tour market scores, it is expected that Scotland will continue to expand as a regional hub for mass tourism destination.
According to Joao and Estevao (2009), Scotland has of late become a low-cost operational market, thus making it to appeal to visitors despite the overarching global economic meltdown witnessed in recent years. Therefore, Scotland is a sure destination and an alternative to most tourists from across Europe and other parts of the world. Given its venture to reach out to operational markets, Scotland has impressively doubled its inbound visitor number from year to year with preferential ease, especially after a considerable duration largely seen as have been consummated by the sector in certifying and satisfying visitors’ expectations (Transport tourism and the environment in Scotland report, 2000).
Tourism, no doubt is a vital cash generator for the Scottish economy and a robust factor in social infrastructure both in urban and rural areas. To grow within these market scales, to maintain this hold and to stimulate growth both in value and per capita, there is need to identify amiable solutions to hard-line problems that has denied the Scottish tourism sector to explore its fullest especially in light of the potential challenges and opportunities available of late.
For any organization to grow in stature within its resources, it is expected that consumers’ needs and desires have to be addressed in line with the targeted markets to meet such needs (Sieglinde & Joao, 2005). The tourism sector in Scotland has categorically endeavored to thrive within these scores to attain the optimum market share, a peak in the sector profitability as well as tourists’ satisfaction. In the Scottish tourism setting, academicians and policy makers have become much involved in the study of clusters. Here, particular concern has been centered on the regional atmosphere that shapes policy making in the tourism industry (Sieglinde & Joao, 2005).
As a way of identifying the characteristic of Scottish tourist market competitiveness, its diversity for conceptual models, researchers refer to regional or industrial cluster especially with respect to tourism as a concept of market score largely seen in the mirrors of national economy (Sieglinde & Joao, 2005). One particular factor that augments the huge interest in the cluster theme in Scottish tourism study is the presumed or real impact that it has had on companies’ performance, economic development and the competiveness of sector especially when put against the thread of others regional market scores.
Segmenting the Tourism Market
Tourists all over the world have never been of the same caliber; in most cases, they have shown likeness to various images of their ideal vocation. By nature, tourism has shown to be a heterogeneous market yet a robust business venture for most counties across the globe (Thym, 2005). Market segmentation therefore passes out as a powerful tool that readily accounts for the heterogeneity of this particular market niche. Both researchers and academicians in the tourism study use market segmentation to explore the available opportunities to gain the much desired competitive advantage (Dolnicar, 2008).
The environment under which the Scottish tourism thrives rapidly changing making it necessary for policy makers to in the Scotland’s tourism market to shift to a new ballgame that is expected to guarantee the sector into greater levels of market score in the region. This has further been upped by the fact that the global tourism continues to be competitive in most countries and Scotland is not an exception to these trends (Thym, 2005).
Destinations for tourists around the world continue to be more accessible yet in agreement to the needs of tourists. As Dolnicar (2008) observes, tourism itself is undergoing changes especially with regard to developments in particular areas of technology communication and the growth in the e-commerce. Under these considerations, Thym (2005) opines that tourism in the Scotland has not necessarily relied on the regions natural resources alone, neither has it vested primarily on the quality of the service that the tourism sector has been able to offer both in the past and currently. The Scottish tourism policy makers and market strategists have nonetheless learnt segmenting the nation’s tourism market must involve the duty to educate, invest, and modernize in order to remain competitive. The basics to survive within this particular market according to Dolnicar (2008) is to get the basics right and this is essentially what the Scottish tourism community is doing now.
All these, according to Dolnicar (2008) have been achieved by the stepping of policies to provide quality services, which both complement and emphasize on the Scottish unique assets. This, as Thym (2005) notes, is the most approachable way to ensure Scotland gets hold of a sustainable and a robust long-term growth in the region and to mitigate the impacts of external elements that offers challenge to the tourism industry such as global economic meltdown. Tourism policy shapers in Scotland hold that the Scottish strategies for future developmental paradigms in the industry can only thrive on clear understanding of the tourism industry’s changes that are taking place in all parts of the world.
Factors that impact on the Scottish tourism sector are very diverse and carried and they include many aspects that do not necessarily share any relationship with nature, and largely seen in the strength of the pound, travel costs and fuel prices. Nonetheless, pressures that have a bearing on the environmental quality that visitors to the Scotland normally expect to see usually impact invariably on the beauty of Scotland as a tourist destination (Porter, 2000).
It is reasonable, however to assume that factors which adversely impact on the Scottish attractiveness include land marks, water ways, water falls cataracts. Wildlife and game reserves equally offer the Scottish economy with an augmented income from foreign earning especially in tourism related activities. In the Scotland, tourism also offers the benefits to individuals that are not necessarily reflected in the domestic economic contribution. These, according to Easto and Warburton (2010), are in the form of cultural benefits that form the fundamental components of the general welfare of Scotland as a nation, and which Porter (2000) opines must not be neglected especially on the basis that they make little economic contribution to Scotland.
Generally, tourism in Scotland is more associated with the rural than the urban areas given that it is in these locales that the natural beauties of the state of the art sceneries are experienced (Easto & Warburton, 2010). Again, research indicates that the rural areas have limited employment scores and visitors to these areas are likely to be attended to by the locals who are always willing to assist especially in exchange for goodies.
It has always been observed that any adverse impact on tourism have the likelihood of impacting disproportionately on employment as well as on the income of the Scottish rural and on those in the society who naturally are flexible to offer seasonal services that are characteristic of rural tourism. Under these parameters, it would be reasonable to suggest that there exist in Scotland sound basis on which to construct a robust tourism competitiveness by way of transforming the basic assets into the very unique experiences that visitors coming to Scotland for various reasons will always want to purchase and get the reward of their cash (Becken, 2010).
This usually calls for higher levels of tourism leadership and managerial skills coupled with sound understanding of the available market opportunities in Scotland. For Scotland, given its robust cultural heritage bedecked with a unique geographical identity all of which offer an authentic backdrop for a great tourism market. Among the notable assets that are for grabs in Scotland, include a range of built state of the art facilities and venues, rich and diverse programs of cultural events and seasonal festivals across Scotland (Easto & Warburton, 2010).
Competitive Analysis
Within the Scottish Tourism Intelligent (STI) records, the tourism sector in Scotland generated 8.9 million pounds with 4.3 million pounds having been received from 15 million daily trips within the first quarter of the 2013 economic calendar (Latest Statistics, 2014). Accordingly, these figures are presumed to be within the Scotland’s tourism sector market niche and the institution holds that 2013 had set the pace for what the industry must expect in the succeeding years (Becken, 2010).
Scottish Tourism Intelligent major statistics however show that in the fast quarter of the year 2013, data for domestic overnight trips as well as spending within that duration signaled that performance was at per with the preceding years (Prentice & Andersen, 2003). This market score, compared to the first quarter of 2014, the volume of overnight inbound trips might be impressive at the fall of the year. As the case maybe, occupancy statistics for serviced as well as self-catering have returned to normalcy as was documented in 2010 before the economic slump down in 2011-2012. According to the STI indices, consumers might be unwilling to cut down on leisure expenditure, and this has been witnessed during the previous holidays where an influx of visitors across the world has trouped to Scotland (Latest Statistics, 2014).
Scotland, naturally has maintained a robust tourist visitor score even in the face of great economic meltdown, perhaps this is so owing to its irresistible attractiveness which observers note has become the arena of expenditure of held unique by various households (Becken, 2010). According to Easto and Warburton (2010), one theory according to STI seems to stand out in making Scotland a global tourist hub and destination; it is observed that following the ongoing issues that regards the Eurozone, many Mediterranean destinations that share a common bond with key Scotland markets. Typically, such destinations like Germany, the United Kingdom, Benelux, and the Scandinavia (Denmark, Norway, and Sweden) will offer substantial value for incentives and money packages (Dolnicar, 2008). The STI Statistics is a pointer that Sterling is likely to remain competitive for outbound Scottish travel as well as other parts of Europe for the better part of 2014 giving visitors a reason to travel to Scotland (Prentice & Andersen, 2003).
On the other hand, this analysis also shows that recent changes that have lately been done to Air Passenger Duty is expected to surge the stable costs of air travel giving way to a situation, akin to 2008 that witnessed the widespread credit crisis in most parts of Europe (Becken, 2010).
STI analysis seem to hold that while it cannot be taken in totality that this trend might indefinitely continue, there is rather a strong indication that quality investment and product development as well as marketing may help the Scottish tourism market to gain a competitive advantage (Easto & Warburton, 2010). The same analysis show that these trends are expected to continue after the fall of 2014 and these have been seen in the popularity of public transport as a means of travel to destinations across Scotland (Prentice & Andersen, 2003). Growth in train travels according to the research by the STI has equally been observed under a declining scale (Dolnicar, 2008).
While car travel remains most popular in the region, choices of transport have been easy to predict. In addition, the introduction of the Stagecoach services between Scotland and England is expected to add yet another dimension to tourist travel options. As Dolnicar (2008) notes, adventure and activity tourism too are expected to become increasingly popular with the foreign visitors as they seek to venture on the available experiences to achieve additional value for their money. Finally, even in the face of the higher levels of youth unemployment, the Scottish tourist market is characterized by a demographic split as seen by the younger population short period participation in cultural events such as music festivals. The older demographics by comparison usually seek out longer breaks preferring to expand their experience during the holidays.
Seen in the lenses of SWOT (Strength, Weakness, Opportunity, and Threat), the SWOT analysis gives the Scottish tourism sector a robust view of itself which in turn assist it in its interaction in the market. To maintain intercontinental market share, Dolnicar (2008) posits that the nation’s overseas tourist’s numbers and values usually increases in line with the anticipated growth rates for international arrivals across Europe (Easto & Warburton, 2010). For Scotland to move within the projected growth rate and arrest stagnation that has characterized the market, the SWOT as provided here after must be used categorically to inform research on future development.
The tourism sector in Scotland identifies major strengths that if used appropriately will increase the significance of Scottish tourism within the next few years. Scottish diversity and the domineering quality of the golf course give the sector a unique presence in the global tourism market consideration (Prentice & Andersen, 2003). In addition to these golfing ventures, the strong media presence that gives various events and sceneries a broader coverage has always added to the advantage of the tourism industry in Scotland. Geographically, Scotland lies to the meridian of the European axis and this means that naturally the region has long daytime hours during summer. Yet other fabulous attractions are commonplace thereby drawing mass visitation to the region (Driving forward together Scottish golf tourism development strategy 2013 – 2020, 2013).
Scotland is also enriched with a reservoir of opportunities that seen largely as a factor in its visitor market scores (Prentice & Andersen, 2003). Scotland has been a hub of high profile sporting activities such as the Ships race – 2011, Ryder Cup -2014, Glasgow Commonwealth Game – 2014, and the Rugby World Cup expected in 2015 among other opportunities. There are however, potentials for progress in key zones of the economy where the Scottish state of the art opportunities are realized, especially in the form of biotechnology and renewable energy, which guarantees both business and conference tourism.
There is also an augmented access to Scotland with travel tariffs having been lowered impressively in recent years. However, there are also areas of weaknesses and threats which if looked upon well have the capacity to deliver the Scottish tourism sector into great market scores (Dolnicar, 2008). Research has documented that weaknesses have been realized, especially with regard to inconsistent customer satisfaction, Scotland’s hospitality industry seem reluctant to adopt to online booking and some firms are unwilling to trade with others in the region leading to fragmentation of the industry. While there is no central authority for booking a golf trip to Scotland, the other weakness is the fact that some firms are financially downtrodden with week resources and unclear governance. In addition, threats that the tourism sector face in Scotland according to research studies are primarily characteristic to the United Kingdom.
According to Joao and Estevao (2009), visitor glitches experienced in the UK have the propensity of being replicated in Scotland owing to their socio-economic and geographical linkage.
Scotland faces the danger of a regional recession characteristic of the nations across Europe, and this is further amplified by the fact that government spending in both Scotland and the UK complements one another. Terrorism threats, whether real or perceived continues to impact negatively on the Scottish tourism sector. These threats have further been worsened by the outbreak of global epidemics such as SARS, foot and mouth disease and avian flu (Driving forward together Scottish golf tourism development strategy 2013 – 2020, 2013).
The Destination’s Sustainability Profile
From the data availed in this research work, it is evident that Scotland is such a marvelous place to visit. Yet customers still feel that they are not receiving the desired attention that is capable of sustaining the Scottish market scores (Driving forward together Scottish golf tourism development strategy 2013 – 2020, 2013). In addition, while the Scottish tourism market looks robust especially in the context of the region, data shows that the reputation of the various stakeholders is still wanting. The major concerns in developing tourism as a sure destination must involve the need to strategize for the tourism industry in Scotland (Prentice & Andersen, 2003).
Competition is extremely fierce, and to retain and nurture the Scottish market share, action is required not only on the part of individual tourism firms, but also specifically at the destinations. From the forgoing analysis, it is can be argued that Scotland is either a stagnating or a mature tourist destination and which have the greater likelihood of slipping into an economic limbo, especially if no corrective measures are taken into consideration. To revitalize the sector and align it within the sustainability proxy, another element must be taken into concern. According to Joao and Estevao (2009), policy makers in this industry must make priority their prime focus to make Scotland a haven for tourist arrivals as well as an alternative destination of choice.
Market failure as evidenced in some spheres of the tourism industry in Scotland where upon the public sector and private firms usually put much of their resources and time. A strategic framework must approach these areas of concern and evidence based homegrown policies that are capable of intervening for the market various failures that have been a challenge to the Scottish tour market share (Prentice & Andersen, 2003). In addition, while there are many players and shakers in the Scottish tourism industry, with both the private and public sectors yearning for a place in the market share, it would serve the good purpose to have all parties gain access to the market and compete based on competence.
The strategy to address these concerns must involve the provision of a framework that takes into consideration, the key target areas and objectives that must be aimed at as well as the type of work that must be done to ensure these are achieved (Joao & Estevao, 2009). A sustainable strategy will often be that which sets out a workable framework, which gives the private sector an opportunity to lead the strategy, the ease to coordinate it while ensuring that it is delivered both at national and at local level. The basis of which is to ensure that the private sector takes the lead and plays a key role in shaping these changes. Future tourism in the Scotland is expected face competitive concerns that must be addressed in both good time and in a manner that involve both the public and private sectors to seek out a common purpose in the domestic tourism in Scotland. Above all, there is an increasing need to generate the efficacies to build upon the sustainability profile as the prospects of the future are expected to witness scarce resource turnout (Dolnicar, 2008).
Defining The Destination’s Key Product Attributes and Identity
Consistent with research, it is worth noting that Scotland offers a robust destination for visitors from many parts of the world. The Scottish tourism market passes out as a distinct and differentiated in a number of ways from other regional and global competitors (Hallier, 2011). Scottish tourist destination distinctiveness is seen in its strength – its heritage and its people. The socio-cultural and geographical landscape according to Hallier (2011) naturally makes Scotland appeal readily for many people in various parts of the world (Prentice & Andersen, 2003).
Perhaps, Scotland’s tourism destination could not b amicably explored without categorically taking into consideration, its main weaknesses which lie in the fact that the economy has consistently failed to offer value for money while customer satisfaction has not always been met even in areas that visitor experience is expected the most. Another robust feature is that Scotland is not a low cost tourist destination and this has factored in that the domestic firms do not necessarily compete on price. However, Scottish strength lies based on differentiation, the Scotland’s tourism market stands out of many, as essentially offering value for customer experience (Prentice & Andersen, 2003).
From these market scores available within the Scottish tourism sector, it suffices that most of its tourism marketing and development agenda is focused solely on its mature markets structures (Hallier, 2011). Specifically, the United Kingdom is a domestic market niche while the overseas markets continue to be established with sectors such as golf, rugby, business, and educational tourism continue to broaden the Scottish tourism market share. For Scotland to maintain its regional lead in Europe, these endeavors must be improved further (Driving forward together Scottish golf tourism development strategy 2013 – 2020, 2013).
However, as the tourism sector continues to be more global; it is expected that the sector will be a great contribution to the Scottish economy (Prentice & Andersen, 2003). As a robust destination to many tourists from across Europe and other parts of the world, the sector needs to adopt clear cut perspectives and well thought out policies to identify its future opportunities. In addition, the sector needs to devote a bigger share of its resources to expand on her future markets (Hallier, 2011). As observed in various research works, the industry hold the view that her strategy must focus much on Brazil, Russia, India and China earlier identified as the BRIC countries, the sector must equally consider the Scandinavian states and reach out to her overseas trading blocs such as Australia, Africa, and the US.
The sector must ungrudgingly invest in the futurist sectors like resort development and security given that security has become a matter of global concern especially with the rise in terrorism. Future scanning as well as networking venture will need to be stepped up to put the best ever practices on the market. These may not be complete without the use of resources of the Scottish public sector support systems to ensure that the sector is enabled to develop a robust focus on upcoming markets that is currently not given their due consideration (Hallier, 2011).
The Destination’s Positioning Statement
Positioning, as Chacko (2008) indicates, is an essential method of communication in the tourism target points used to enhance its desirability. Therefore, position is categorized as one of the fundamental marketing tools, not only in the tourism sector, but also in other key sectors of a country’s economy. In all sectors, positioning as a marketing tool aims at creating a significant in the minds of prospective consumers. An excellent position that can fulfill the requests and desires of potential customers, as Belch and Belch (2004) assert, is one that can induce the details of a destination in the mind of customers to enable them distinguish the destination from that of the competitors.
Therefore, as market dissections rely on the perception that each tourist target location attracts different tourists in diverse manners, the Scotland’s tourism marketers must then identify their target subdivision before they kick off the campaign to lure their prospective clienteles. An efficient positioning strategy, therefore, offer a competitive edge over competitor in the similar market.
Effective positioning
Generally, marketing aims to satisfy needs and wants and provide benefits to the esteem customers (Chacko, 2008). Therefore, positioning, as a marketing tool, must adhere to the general marketing rules where it aims to promise the customers the benefits that they are likely to receive, initiate worthwhile expectation, as well as solve the challenges that their customers might face in order to be effective. Moreover, Chacko (2008) notes that the solutions and interventions that an effective positioning offer should be completely different and more superior than one offered by the competitors, more specifically, when their competitors already offer a related way out. Significantly, as tourism industry is noted to compete on a range of issues that include image, benefits offered to customer and differentiation, destination positioning should be the overall concept under which other tourism essentials revolves in.
Thus, properly targeted destination position affects not only the customers’ imagination, but also workers’ perceptions, guidelines and measures, grievance solving techniques, customers’ relationship, and a number of other factors that sums to create the tourism familiarity. An effective destination position, therefore, must ensure that their esteemed customers can believe in the position and the chosen destination can consistently deliver that promise. Scotland as a country that is centrally placed in Europe, and with stable political leadership already enjoys this virtue, thus can capitalize on the advantage of positioning to surmount their competitors.
Positioning process
Positioning process as Chacko (2008) indicates is a combination of various steps necessary to develop a successful positioning strategy. Due to environmental dynamism, which prompts variation in the desires and wants of clienteles, as well as their competitors’ strategies, the positioning need to be an endless process in order to be at par with the alterations in the market. The steps include market positioning, psychological positioning, objective positioning, subjective positioning, and positioning approach.
Since lower prices are always associated to lower quality in the tourism sector, international destinations do not reduce prices of products in order to attract customers (Chacko, 2008). However, for the Scotland to thrive in the competitive tourism industry, they can be offer high quality services to compensate for the costs incurred. Similarly, in positioning with respect to product, the destination is associated to extraordinary events or experience. In addition, in the tourism sector destination can be determined with respect to the user or application. In this, the tourist destination is positioned based on the intentions for the visit. Finally, tourism destinations are positioned in respect to the expected customers, such that if the country intends to get a good number of tourists, it should target the youthful generation since it has a variety of sceneries that can attract the youthful generation (Chacko, 2008).
Destination positioning challenges
Over the years, the intangibility of numerous products in the sector has been a key challenge to tourism marketers globally. The intrigue has impelled an intense argument among the tourism marketers where some argue otherwise that since hotel rooms, oceans, mountains, and beaches are readily available, the industry has vast tangible products. However, those in denials say that the tangible products are what are sold to the customers, but not what is marketed as is supposed to be (Chacko, 2008).
Never the less, they collectively agree that whatever they are marketing are intangible, but are essential needs too and necessary except for the fact that immediately these products reach a certain level, they become secondary needs to the tourists (Chacko, 2008). Marketing of intangible products is vital in the competitive tourism market since they require a high-leveled approach to differentiate. As a result, the Scotland’s tourism industry ought to focus on differentiating and improving abstracts that relates to tangible clues.
Positioning vis-a-vis the competitors
Whenever need be to confront competitors while intending to convey the differences between different destinations, positioning vis-a-vis the competitors’ approach as noted is the most effective approach (Chacko, 2008). This approach, as Chacko (2008) asserts, may involve mentioning other countries or destinations negatively. To outweigh competitors, the Scotland’s tourism industry marketers should develop creative campaigns where endorsements from early tourists can be used to entice the target market segment. However, owing to the fact that the dread feeling is part of human nature, tangible evidence must accompany the position statement.
Nevertheless, as evidence shows, it is appropriately effective in marketing of tourism products and services. In this approach, Scotland’s tourism marketers have to recognize their competitors and the perception of their customers towards both the competitors and their products and services. With this information, the Scotland’s tourism marketers can identify the potential of their positioning as well as information on its weaknesses that can be utilized to better market the positioning. Likewise, in this approach, the marketers can identify whom they should out position to top the market. Moreover, as Chacko (2008) indicates, this approach helps the tourism marketers to identify and evaluate the position that they current own in relation to their competitors.
Destination Branding
Generally, tourism marketers across the world acknowledge that in the sets of strategies that influences decision on tourism destination, the brand is a major contributor. However, as Qu, Kim, and Im (2010) note, customers are often given a range of tourist destination options that gives related features such as gorgeous sceneries. From this point of view, one would easily argue that destination-branding thought is significant for tourist marketers in enhancing the target market’s identification and differentiation of a brand from the alternatives. However, as Qu, Kim and Im (2010) argue, destination image, even though, not extensively analyzed in branding context, it should be valued as a concept that exist long before and a necessity with exceptional value as far as destination branding is concerned.
Furthermore, as these authors indicates, destination branding mostly aims to build a positive image, which by itself identify, differentiates and express the destination in relation to the trusty brand elements mix. Basing the knowledge in the assumption, that destination image in totality is the impression of cognitive and an excellent evolution, for the Scotland to excel in the tourism industry, while marketing their brand association. The marketers should include these two components namely cognitive and effective image components as they are generally accepted as factors that greatly influence indicators of destination image.
In support of this, Qu, Kim, and Im (2010) argue that unique images of destination should be considered important brand association, thus greatly influence the image of any destination brand. This has instigated a rising trend where tourism marketers globally believe that forming a differentiated destination image is the best option of surviving the very competitive and intense global tourism market segments.
Therefore, Scotland’s tourism industry should strive never to lag behind in the global trend. According to Qu, Kim and Im (2010), destination brands distinguish themselves from their competitors in relation to their distinctive connotation and exceptional services given to clienteles. In fact, tourism destination scholarly research put emphasis on points of quality connection such as outstanding cafeterias and excellent accommodations. Therefore, for the Scotland’s tourism industry to flourish, the marketers must recognize association of brands that are advantageous over competitors. Since the major reason for branding is for the consumers to note the difference amongst the brand in product category, points of difference then helps the consumers to evaluate a brand destination positively (Qu, Kim, & Im, 2010).
Brand identity and brand image
Brand identity and brand image, as Qu, Kim, and Im (2010) note, are essential for a success of a destination brand. However, differentiating the two concepts as noted usually confuse a number of scholars. Therefore, it is worth noting that a crucial factor in differentiating the two is that they are created from two contrasting factors, namely from the dispatcher and recipient. Whereas, on one hand brand identity reflect the contribution of all the elements in a brand to awareness and image, where it provides a direction, meaning, and purpose for the brand’s strategic vision (Tasci & Kozak, 2006). Scotland as a country with varied unique feature such as highest Munros, greenest forest and sandy coastland unique to the destination can constructive influence their potential customers feeling towards these brands.
Brand Association
Brand associations as empirical research signify sway consumers evaluation towards the brand. Literally, brand associations are allied to attribute, benefits and attitude by the potential customers. However, in the tourism literature, scholars usually recognize that the image of tourism destination is ever influenced by cognitive and affective evolution. Even though it is imperative to analyze both the emotional and mental constituents of a destination’s image in building an inclusive target model, it is unfortunate that most of the tourism studies treated destination image as a cognitive evaluation (Tasci, & Kozak, 2006).
Therefore, the brand association, which is argued to correlate to renowned heroes or leaders of a tourist destination, can affect the attitude of the potential customers. In this regard, when a tourist destination is associated to individuals of great value, most tourists will prefer the destination. Scotland, a nation with renowned heroes such as Robert Burns can utilize this opportunity to influence the attitude of their potential customers, thus can boost their tourism industry. For instance, whenever a destination is associated to recognized heroes, previous visitors will aspire to visit it more and even influence new tourist to visit the destination. In essence, the affective and cognitive domains are significant for the Scotland’s tourism sector, as they positively affect the tourists’ memories of the destinations.
Destination slogan and logo
Since Scotland is a country with variety of sceneries, other than choosing a logo that will only market a destination or a single tourist attraction heritage, it is rather effective to use this logo and its slogan since it portrays the entire Scotland as a tourist destination. This eliminates unhealthy competition amongst the different destinations within Scotland.
Implementation
Nature drives away boredom, nature instigate, renew and rejuvenate strength. Nature when explored at the right time and place heighten an individual’s psychological, physical, and mental health. The medicine to all these is destination to Scotland, a country rich in natural geographical landscape, right from the highest Munros, greenest forest and sandy coastland to enjoy. Scotland, a country with political stability, you have the opportunity to enjoy the natural phenomenal without intimidation or panic. Scotland a friendly nation is the place to be.
Ever imagined or fantasized about dinning with the world most respected heroes, the destination is just right at your doorstep if not fingertips. Scotland a nation of heroes welcomes you to fulfill your dreams at affordable cost. Worry not about spending because your money matches the offer. At the Scot’s year of homecoming, you will not only enjoy the multiplicity of delicious meals, but also dine with heroes. Not to mention much cover to discover a land where art meets culture, with spectacular heritage, the place to be is packed with brilliant moments that are forever memorable.
Scotland the world class tourism destination has, an untouched natural environment, beautiful and vibrant cities, magnificent scenery, Rich cultural and historical background, highest green mountains and famously known for sporting attraction. Scottish welcomes all tourists irrespective of their background to their country to enjoy all these God given asserts at affordable cost. Scotland is lucky, as it is relatively small and can be easily accessed from all over the world through a divergent means. Likewise, the size can advantageously be utilized to develop adequate transport infrastructure within, thus will allow the tourist the chance to tour all the cities to notice their vitality as well as the thrill of the rural draw back in the shortest time the tourist can spend. Similarly, an excellent transport infrastructure will ease travelling of tourist to hotels and restaurants of the customer’s choice. Hence, the tourist has a choice to enjoy quality services since they have a variety of choice to select. In a case where services of any of the hotels might be below their expectations, the customer can easily shift to another when the transportation infrastructures are of good standards (Travel & Tourism 2011, 2011). For this reason, the tourists are assured of high quality service since the competition is high and none of the hotel management would wish to easily lose their potential customers.
In addition, the Scotland’s tourism industry in comparison to the global tourism industry, as Travel & Tourism 2011 (2011) shows, is slightly above most countries within its region. This is because it offers unique products to their customers. These include rich culture, impressive history, stunning geographical landscape, golf, genealogy, whisky among other. This combination has made the country enjoy a strong and stable recognition globally over their major competitors in the tourism industry. To continue enjoying this opportunity, the country’s marketing strategist should develop an advertisement that informs the world, especially by use of statistical evidence that they have been the most preferred tourist destination for a long time. This advertisement should include the reason that has placed them at the top as this can influence the customers’ destination choice.
Scotland as a country that enjoys political stability has the potential to moderate most of their income generating resources. As Travel & Tourism 2011 (2011) notes, the Scottish tourism industry being one of the government machineries to generate income enjoys a comparatively high access to quality assurance penetration. This is because majority of those providing tourist accommodations are government owned. This has then made the tourist to trust the authenticity of adverts relating to Scotland tourist industry. Therefore, as a country that would wish to prosper in the tourism industry, the Scottish government can utilize this trust to lure potential customer to make Scotland their destination choice. Equally, the stability in Scottish government has bred a friendly culture among the residents. This can as well be used when marketing to entice people from other parts of the world to visit Scotland.
Since in the tourism industry, people who interact with customers can influence their attitudes, the Scottish tourism department should organize training programs that would create awareness to the tour guides on the importance of cautiously handling their clients. In addition, the Scottish government should invest heavily on tourism sector, which is a core income generating activity to the government. This should include good pay to the tour guides, tourist hotel managers, policy maker, and other tourism industry stakeholders. Likewise, even though the country enjoys political stability, the government should ensure a proper security to the beautiful sceneries and the wildlife. This will ensure that that tourist who visits the place has a variety of sceneries to enjoy, hence encourage them to revisit the country.
Promotion
According to Chacko (2008), promotion is the process intended to inform potential clients about the product and services that a tourist destination offers and the industry sharing of the very valuable, attractive and innovative attributes within their destination. For that reason, a promotion usually incorporated distribution and entail communication activities that involve both the tourist factory and the targeted market including advertisements. However, as Belch and Belch (2004) note that word of mouth is still the most effective promotion method. The method remains to be only with the loyalty of customers.
Therefore, to enjoy the loyalty of the customers, the Scottish tourism sector must invest on quality of products and services offered to their potential customers in order to thrive in this ever-competitive industry. This method, as Belch and Belch (2004) point out, can only be used to retain the already existing customers. Therefore, to attract new customers, the Scottish tourism industry must involve other promotional methods such as advertisements using different mediums.
Advertising, as empirical research indicates, is the excellent method for early publicity of tourist attraction. It is defined as a marketing activity paid for to induce potential clients to buy products or services (Belch & Belch, 2004). For tourist attraction destinations that aim to gain an international market like the Scotland’s tourism industry, they should advertise on broadcasting media. This is because broadcasting marketing tools that include TV and radio can both be effective since they cover an extensively large geographical region, unlike in the print media that covers a small geographical region hence favorable for domestic tourist. Similarly, broadcast method will be effect over online method, which equally covers large area, but owing to the fact that in broadcast method the audience can trust the authenticity of the information, unlike in the online media where the users rarely belief the sources of information (Belch & Belch, 2004).
In the industry, a tourist travelling to a destination will use several different facilities that include air travel, a hotel room, a rental car, and meals from different restaurants. These suggest that the aim of the tourist is to enjoy the travel to its maximum. Therefore, while designing a website for the tourism industry, the Scotland web designer should ensure that the web site facilitates the tourist planning, by ensuring that the tourist makes the right choice that will enable an enjoyable experience. In order to ensure this, website should serve as distribution of all the services that a tourist may need in their travel and the entire stay (Sterne, 2001).
This means that every tourist destination wishing to thrive in this competitive business should have a website portal that acts as the gateway to the destination instead of relying on individuals’ website. This website can then be linked to other organizations who supplement the destination website. The website must then contain information on how to get to the destination, touring the place once at the destination, the rest rooms and the things the tourist can do at the site (Sterne, 2001)
Similarly, as Sterne (2001) indicates, internet use as it entails the cost for the entire vacation enables the potential customers to plan and prepare well enough to avoid any inconveniency that may arise during their stay. In addition, as it is a normal norm to brag about exceptional occurrence in one’s life. Therefore, Scotland should advance in use of internet since in such a circumstance this will promote the destination hence; attract more tourists to the destination. Internet use in such feedback incidences in addition to achieve in a destinations website online store will boost the tourist destination preference.
In the contemporary world, internet has emerged to become part of every human life. As noted human being spends an infinite fraction of their time on a daily basis-using internet, chatting with friends, acquaintances, or virtual communities formed in the internet simply to stay connected to the global world. Since the population involved in internet use grows gradually, number of social site have so far emerged to satisfy the radically growing population. The social sites include Facebook, Twitter, You Tube, blogs, and LinkedIn among other social sites. Hence, for promoting a tourist destination, Scotland marketers can utilize the social media. Owing to the fact that, most of social media users are elite groups, which are the target of the Scotland tourist marketers, social media can be effective tool in marketing the country tourist destination (Sterne, 2001).
Similarly, as social media users have the habit to form virtual groups, tourist marketers can utilize the large no of these communities to boost their brand awareness and visibility of their product and services to large number of audience at low cost (Sterne, 2001). Furthermore, Scotland’s tourism marketers can use the links in the social sites to redirect the users to their online stores where the potential customers can find videos or online advertisement about their tourism destinations. These links can as well direct the customers to the destination tourist websites. Lastly, since social media sites allows for interactions, the potential customers can post both the negative and positive comment. Whereas positive comments will automatically boost the tourist destination, good marketers will use the negative comments to improve their services. Concisely, Scotland’s tourism marketers can capitalize on social sites to promote their destinations effectively (Belch & Belch, 2004).
Summary
In developing the Scottish tourism market economy within these scores, the primary concern of the policy makers should be pegged on ensuring that the sector accesses its future market opportunities. More than anything, the sector must further be shaped to meet the expectations and needs of future tourists from other emerging markets in the years to come, and these must be seen in light of the efforts to give the sector a competitive advantage over its regional and overseas challengers. Business and reliable tourism market research hold that customers are not necessarily those that the sector may come about now, and those that have the prospects of visiting in future have meaning to tourism economy. As such there is need to work around the clock to file past the expectations of those customers that are already in the Scottish tourism basket for their stories to extend to those that will be willing find Scotland as their preferred destination.
References
Becken, S. (2010). The importance of climate and weather for tourism. Web.
Belch, G. & Belch, M. (2004). Advertising and promotion: An integrated marketing communications perspective. Singapore: McGraw-Hill Companies. Web.
Chacko, H., E. (2008). Positioning a tourist destination to gain a competitive edge. Web.
Dolnicar, S. (2008). Market segmentation in tourism. University of Wollongong: Cambridge. CAB International. Web.
Driving forward together Scottish golf tourism development strategy 2013 – 2020. (2013). Web.
Easto, P. & Warburton, C. (2010). Adventure tourism in Scotland market analysis report. Web.
Hallier, B. (2011). Defining the Mining Tourism: Case study Idar-Oberstein. Cactus Tourism Journal, 2(1), 12-15. Web.
Joao, F. and Estevao, C (2009). Regional Competitiveness of a Tourism Cluster: A Conceptual Model Proposal. Web.
Latest Statistics. (2014). Web.
Porter, M. E. (2000). Location, competition, and economic development: Local clusters in a global economy. Economic Development Quarterly, 14(1), 15-34. Web.
Prentice, R. and Andersen, V. (2003). Festival as creative destination. Annals of Tourism Research, 30(1), 7–30. Web.
Qu, H., Kim, H., L., and Im, H. H. (2010). A model of destination branding: Integrating the concepts of the branding and destination image. Journal of Tourism Management, 32(11), 465-476. Web.
Sieglinde, K. and Joao, C. (2005). Tourism Cluster Competitiveness and Sustainability: Proposal for a Systemic Model to Measure the Impact of Tourism on Local Development. Web.
Sterne, J. (2001). World Wide Web marketing: Integrating the web into your marketing strategy. New York: John Wiley & Sons. Web.
Tasci, A., D., & Kozak, M. (2006). Destination brands vs. destination images: do we know what we mean?. Journal of Vacation Marketing, 12(4), 299-317. Web.
Thym, M. (2005). A Lifestyle Segmentation Analysis of the Backpacker Market in Scotland: A Case Study of the Scottish Youth Hostel Association. Journal of Quality Assurance in Hospitality & Tourism, 5(2), 53-78. Web.
Transport tourism and the environment in Scotland report. (2000). Web.
Global digitalization, generated by the fourth industrial revolution, leads to dramatic changes in all spheres of society’s socio-economic life. The most significant trends in humanity’s development are currently accelerating technological innovation, globalization, and digitalization of all processes. Tourism is one of the first to experience the impact of global digitalization. It is an information-rich industry that responds quickly to all changes. Digitalization is mainly manifested in introducing digital technologies into the business processes of enterprises in the tourism field. Automated management systems for hospitality and tourism primarily ensure the smooth implementation of internal processes. Such technologies in practice make it possible to modernize the service, increase data processing speed, and eliminate errors due to the human factor. However, there are some critics and concerns about this trend, being implemented in hotel and tourism services annually.
Main Factors Driving Global Trends within the Hospitality and Tourism
Over the past two decades, the number of international travel has doubled. Consistently growing demand ensured the same increase in hotel rooms. According to the Deloitte report (2019), at the beginning of 2019, there were more than 184 thousand hotels in the world, including about 17 million rooms. Investors are keeping an eye on new tourist destinations; simultaneously, a significant part of the funds is invested in premium hotels. They are the first to innovate technology, use new marketing techniques, and follow the trends.
Consumer needs are driving the development of the hotel industry. New formats and brands are emerging in the budget and economy segments, representing an alternative to well-known hotel chains. For instance, Radisson develops the Radisson Red brand, Marriott relies on Moxy, and Accor Hotels depends on Mama Shelter (Deloitte, 2019). The industry is also opening hotels targeting specific tourism types, such as food, agro, and ecotourism (Deloitte, 2019). The construction of apart-hotels for a long-term stay of tourists continues. Investors buy numbers in them and transfer them to the management of a specialized company.
Brief History
Automation continues to grow in the hospitality industry and has long been an integral part of many business processes. First of all, these technologies and systems make it possible to save resources and optimize personnel work (Brondoni, 2016). There are several stages in the creation of automation systems. According to Ivanov and Webster (2019), in the 1950s, various electromechanical calculating machines were used for payroll and invoice processing. Such actions resulted in an inevitable reduction in costs and savings in time when working with paper documents. The second stage in the 1960s was characterized by a change in people’s attitudes to information technology (Ivanov & Webster, 2019). In the 1960s, the three largest hotel chains Hilton, InterContinental, Sheraton, together with the ABM corporation, financed the creation of the first hotel management system and called it Hotel Information System (HIS) (Ivanov & Webster, 2019). In developed countries, a part of the employed population is connected with the preparation, storage, processing, and transmission of information.
Therefore, it is forced to master and practically use information technologies (IT). The beginning of the 1970s – 1980s is marked by its widespread introduction in management (Ivanov & Webster, 2019). At the end of the 20th century, profound changes are taking place in using IT (Ivanov & Webster, 2019). According to Ivanov and Webster (2019), information and computer technologies turn into strategic information sources and are applied in business entities of various spheres at all management levels. Due to information systems, enterprises perform successful activities, develop and introduce innovations, and find new sales segments.
Modern automated solutions for hotel infrastructure can be divided into two main groups. The first is the Building Management System (BMS), responsible for managing the climate, lighting, and water supply of the entire hotel building (Ivanov et al., 2017). The second one is the Guest Room Management System (GRMS) standard, designed to create comfortable conditions directly in the room stock (Ivanov et al., 2017). It helps control and manage the lighting and room temperature as quickly and conveniently as possible, adjusts the curtains’ position, interacting with the room’s electronic filing.
Current Use of Automation and Future Impact
The most advanced GRMSs can interact with the BMS, the door lock control system, and the Property Management System (PMS) of the hotel. For instance, it allows the hotel personnel to remotely exercise centralized control over room equipment, change settings, and set operational statuses depending on current tasks (Naumov, 2019). If all systems are configured correctly, then the room conditions will be dictated by the PMS, based on its data. If the premises are not planned to be occupied soon, the system switches it to the “operational” mode (Naumov, 2019). The room consumes minimal electricity and heat in this status, and all electrical devices are de-energized. As long as PMS has received information about an imminent check-in, such as booking via the Internet, the number is switched to standby mode (“comfort”) (Naumov, 2019). When the guest enters the room, its status changes to “occupied.” The presence sensor on the door opens and detects an arriving person.
Another example of the usage of this approach is the automation of minibars. Due to automated monitoring, hotel staff can determine if the guest has used the minibar, how many drinks and products are left there, thereby saving the time required for personnel to check. It is profitable for large hotels; for example, the Swiss company Minibar Systems offers several automated minibars (Moyeenudin et al., 2020). The most popular is the semi-automatic series with an electronic lock. The device works online, automatically sending information about the fact that the door has been opened. This system saves up to 40% of the working time of the hotel staff (Moyeenudin et al., 2020). A fully automatic system with smart infrared sensors immediately transmits information about the consumed products to a central computer. This solution eliminates abuse by guests and staff, significantly reduces unforeseen costs, while saving up to 60% of the staff time required to service the minibar (Moyeenudin et al., 2020). An automated minibar pays for itself three to five years from the moment of installation, but automation brings benefits for large companies.
Moreover, it also allows the client to use these technologies. For example, at the time appointed by the guest, the TV turns on with a special morning video, which gradually increases the volume. Information about the weather appears on the screen and a wish to the person for a good day. Another use case is that when a room service representative presses the doorbell in the room, the TV and tablet are turned on. Their screens display an image broadcast from a camera installed in the corridor. Thus, the guest can see who is in the hallway and decide whether to open the door or not.
The hotel staff can be relieved of the need to independently monitor the disconnection of devices and provide a comfortable climate in the room in the shortest possible time. It remains for employees to monitor alarms and events and perform preventive maintenance (Ivanov, 2020). GRMS can reduce electricity and heat supply costs by up to 45% with proper setup and operation (Ivanov, 2020). Besides, in addition to the ability to set rooms’ operational status to save money for the hotel, script programs aim to increase guests’ comfort and loyalty (Ivanov, 2020). The most convenient is the guest greeting; after the customer checks in, the PMS system automatically turns on the TV with the hotel’s promo video, and a salutation addressed to the guest personally.
Criticism and Concerns of the Automation
Experts emphasize that, despite the significant advantages of automation, this process also has disadvantages. The main cons of using automated processes include an increase in the unemployment rate due to people’s departure in order to replace manual labor with machine one, development costs, and security threats. (Manthiou et al., 2020). One of the most significant issues associated with industrial automation is unemployment, which is the loss of jobs caused by technological change (McKinsey Global Institute, 2017). This problem gives rise to negative views regarding the introduction of automation. According to the research by McKinsey (2017), by 2030, more than 800 million people around the world will lose their jobs due to growing robotization and automation. Compared to other systems, such as traditional accounting programs, the hotel system works in real-time because guests check-in, pay for services, check out, and receive returns daily. In case of a crash, it cannot be restored based on a paper archive, and a copy made several days before the collision (Buhalis et al., 2019). Another aspect that many entrepreneurs attribute to this option’s disadvantages is training staff to work with new systems.
An integral part of the work of modern hotels is working with payment information. Therefore, building an information security system, it is imperative to take care of certification for compliance with the international PCI DSS standard (Buhalis et al., 2019). Also, any hotel should have modern systems for repelling attacks, support the timely installation of new versions of corporate software and antiviruses (Buhalis et al., 2019). The booking service must have reliable security systems and bear some responsibility for violations.
Companies face the challenge of cyber defense; it doubles the cost of leaks and makes errors in cloud configurations an increasingly complex problem. Employee credentials and misconfigured clouds are vulnerabilities targeted by attackers (Buhalis et al., 2019). Stolen or compromised credentials and improperly set cloud environments are the most common causes of hacks (Buhalis et al., 2019). However, companies that have invested in automated technology can more effectively mitigate the negative impact of data breaches.
Conclusion
The The hotel’s internal automation is essential both for the guests of the hospitality establishment and for the management. The useful application of effective software solutions becomes the basis for analyzing business processes. The hospitality and tourism domains are an integral and significant component of the economy of many countries. A rapid change in economic conditions characterizes the hotel business, a constant process of improving the quality of services provided, attracting new participants to the market, including the world’s prominent hospitality industry leaders. The competitive advantage of enterprises in the hospitality industry largely depends on the active use of information technology innovations. This powerful marketing tool allows hotels and companies to manage customer loyalty.
Ivanov, S., & Webster, C. (Eds.). (2019). Robots, Artificial Intelligence and Service Automation in Travel, Tourism, and Hospitality. Emerald Publishing Limited.
Ivanov, S. H., Webster, C., & Berezina, K. (2017). Adoption of robots and service automation by tourism and hospitality companies. Revista Turismo & Desenvolvimento, 27(28), 1501-1517.
Moyeenudin, H. M., Anandan, R., & Parvez, S. J. (2020). Exploration on Revenue Using Pioneering Technology in Infrastructure Facilities of Luxury Hotels. Springer.
Revenue management in the hospitality industry is a complex of strategies and techniques used to generate profits depending on forecasting the demand and setting prices. Pullman Quay Grand Sydney Harbour is a five-star hotel in Sydney which requires the solution to the problem of increasing the revenue to improve a current stable position of the hotel in the market of Sydney and achieve the further progress.
This proposal provides an explanation of the solution to the identified problem. The solution includes the simultaneous implementation of the improved or new revenue management strategies, such as the direct online distribution, variable pricing, competitive benchmarking, demand modelling, and capacity monitoring, to regulate the demand, attract more customers, and avoid a high percentage of cancellations. Benefits of applying these strategies are associated with integrating techniques as a system, the components of which affect each other. Possible barriers to the project implementation and its schedule are presented in the proposal.
Introduction
Pullman Quay Grand Sydney Harbour is one of the leading upscale hotels known under the brand name “Pullman”, which belongs to the group of AccorHotels. This five-star hotel is located in East Circular Quay in Sydney, Australia (Pullman Quay Grand Sydney Harbour, 2017). While focusing on the revenue management followed in the hotel, it is possible to note that managers use a traditional model for making the revenue that is based on forecasting the demand, adjusting prices, and changing the availability of services.
Pullman Quay Grand Sydney Harbour’s revenue centres as operations that influence generating the hotel’s revenue include a restaurant, a lunch area, a bar, a boardroom, a gallery, a sauna, a gymnasium, and room services (Pullman Quay Grand Sydney Harbour, 2017). The problem is that the revenue of this Pullman hotel is at a stable high level during several years, however, changes in customers’ interests in buying upscale services and general tourism trends observed during a recent period of time do not allow for speaking about further significant increases in the revenue (Lu, Berchoux, Marek, & Chen, 2015).
Much attention should be paid to reconsidering the currently applied revenue management approach in order to determine new areas for attracting customers and increasing income (Erdem & Jiang, 2016; Ortega, 2016). The solution to the identified problem should be based on applying the most effective and advanced revenue management strategies to guarantee the financial progress of the hotel, and this solution will be discussed in this proposal in detail.
Thus, the purpose of this proposal is to recommend the implementation of such revenue management strategies as the direct online distribution, variable pricing, competitive benchmarking, demand modelling, and capacity monitoring. The report will provide a detailed discussion of these strategies to demonstrate their effectiveness in generating the revenue for the hotel. The following key terms will be operated in this proposal to explain the recommended solution: a distribution channel as a way to spread the information about rooms for booking, demand modelling as an approach to forecasting requests, and variable pricing as a form of dynamic pricing.
The Solution to the Identified Problem
The proposed solution to the problem identified for Pullman Quay Grand Sydney Harbour is based on the simultaneous implementation of five effective revenue management strategies that are determined and developed to address the needs of this hotel at the current stage of its development. Such strategies as the direct online distribution, variable pricing, competitive benchmarking, demand modelling, and capacity monitoring are expected to be implemented in the hotel as a bundle and in combination with corresponding changes in operations and customer relationship management (Erdem & Jiang, 2016; Richard, 2017).
According to Kimes (2016), the synergistic approach to implementing the determined strategies in the hotel in the context of revenue management will guarantee increases in profits associated with improved marketing and operations. The proposed strategies address the key areas of revenue management, such as distribution channel management, pricing, competitive benchmarking, demand modelling, and capacity management, in order to implement the change in all fields to achieve higher results (Guillet & Mohammed, 2015; Thakurta, 2016). These strategies need to be further explained as they are developed according to the needs of Pullman Quay Grand Sydney Harbour.
Distribution Channel-Focused Strategy
In order to maximise profitability, Pullman Quay Grand Sydney Harbour should change its distribution channel strategy. Currently, the reliance on online travel agents (OTAs) can be inappropriate for the hotel because of its upscale status, high commissions for cooperating with OTAs, and the impossibility to guarantee flexible rates for all rooms in the hotel (Kimes, 2016). Still, an online distribution channel remains to be one of the most effective ones in the hospitality industry today (Yeoman & McMahon-Beattie, 2017).
Therefore, the strategy that should be selected for Pullman Quay Grand Sydney Harbour is the distribution of services through the hotel’s website. This direct online marketing strategy is appropriate to decrease distribution channel costs and increase the demand by using different channels.
To implement this channel-focused distribution approach, it is important to focus on the following steps. Firstly, it is necessary to redesign the Pullman Quay Grand Sydney Harbour’s website for booking (Ferguson & Smith, 2014). It must become more user-friendly and include all features that attract customers of OTAs: demonstrate photographs, represent price rates to address clients with various price sensitivities, including updates, and provide customer reviews (Kimes, 2016). Secondly, it is important to promote this website with the help of social media and Google Hotel Finder. This low-cost channel is appropriate for Pullman Quay Grand Sydney Harbour because it combines the benefits of a direct distribution strategy and an online distribution strategy.
Pricing Strategy
Depending on the status of a five-star hotel which sells a high-quality experience to customers, the value-based pricing strategy was discussed as the most effective for Pullman Quay Grand Sydney Harbour for many years. However, in order to address current changes in customers’ interests in buying upscale services, it is also important to combine this strategy with the tactical pricing approach followed by many hotels in the context of revenue management. The final variant of the pricing strategy for the hotel should be based on the principles of variable pricing (Bayoumi, Saleh, Atiya, & Aziz, 2013).
The first step is to determine price sensitivity and price ratios with reference to the forecasted demand in order to be able to change prices for customers (Figure 1). The second step for this Pullman hotel is to determine the value created for customers and identify rooms which can be offered according to the principle of variable pricing without decreasing profits during the first months of this strategy’s implementation process (Erdem & Jiang, 2016; Phumchusri & Maneesophon, 2014). It is important to guarantee that the hotel has different room types offered for various prices.
Figure 1. Variable Pricing.
The third step is to guarantee changes in rooms’ rates and prices to reflect supply and demand. The fourth step is the revision of messages regarding discounts to make them flexible rather than stable (“save up to 30%” in contrast to “save 30%”).
For instance, the price for a one-bedroom suite will vary from 679 AUD to 560 AUD depending on the date or season, as well as the period of booking this room. Variable pricing is more appropriate for Pullman Quay Grand Sydney Harbour than other variants of tactical pricing because it provides the hotel with opportunities to accentuate the value and improve profitability without changing the orientation to other audience and significantly decreasing prices (Erdem & Jiang, 2016; Talón-Ballestero & González-Serrano, 2013).
Competitive Strategy
Pullman Quay Grand Sydney Harbour is one of the upscale hotels in Sydney, which services and price can resemble its competitors, including Park Hyatt Sydney, InterContinental Sydney, Sheraton on the Park, and Pier One Sydney Harbour among others. In order to compete effectively, it should improve its strategy in the context of competitive benchmarking typical of revenue management. Changes should be started from monitoring price fluctuations in the market with the help of comparing services and costs online (Ferguson & Smith, 2014).
The next step is the analysis of how Pullman Quay Grand Sydney Harbour’s competitors promote their services with the help of a variety of distribution channels (El Haddad, 2015). For Pullman Quay Grand Sydney Harbour, it is important to monitor the effectiveness of its distribution strategy and compare the booking progress with the industry’s averages in Sydney to remain competitive. One more technique to apply is the provision of more value for customers while remaining to be one of the leading hotels, which belong to the group of luxurious five-star hotels. It is also important to add more value and propose new discount programmes for regular visitors in order to increase the position in the market.
Demand Modelling
The implementation of an effective forecasting or demand modelling strategy can contribute to increasing the hotel’s profitability by about 5% within a short period of time. Traditional models used in order to forecast the demand in the hospitality industry include additive and multiplicative models. Still, while applying only one of these models, it is impossible to forecast changes in the demand from all perspectives (Schwartz, Uysal, Webb, & Altin, 2016).
Therefore, it is important to recommend referring to multivariate exponential smoothing as a method which combines the strengths of both models. While applying this technique, managers will be able to analyse the demand with reference to the local trend, general tourism trends in the region, customers’ behaviours, seasonal changes, and variations in competitors’ proposals (Claveria, Monte, & Torra, 2015). The hotel requires additional resources in order to integrate the programme for modelling in the corporate system. Depending on the results of demand modelling, it will be possible to determine the number of clients to expect and predict negative effects of cancellations.
Capacity Management Strategy
The strategy followed in Pullman Quay Grand Sydney Harbour regarding its capacity management should be in line with the forecasting approach and the distribution strategy. In spite of the fact that the hotel effectively controls its capacity to satisfy customers’ demand, it is possible to propose implementing the following techniques in order to improve the situation: reduce rates during low seasons according to the data of demand modelling; keep suites in expectation of customers’ demand; prioritise long-stay requests; use a discount system; plan conferences during low seasons (Ferguson & Smith, 2014; Ortega, 2016).
All these techniques are viewed in revenue management as advanced to be applied in the hospitality industry to control the hotel’s capacity and maintain it in balance with the demand. Assuming the fact that Pullman Quay Grand Sydney Harbour is characterised by stable demand rates during low and high seasons, these approaches are easy to be implemented in the hotel.
Benefits of the Solution
Recent studies in the field of revenue management in hotels demonstrate that managers are able to achieve higher results when they implement certain strategies and techniques simultaneously or as bundles (Di Foggia & Lazzarotti, 2014; Erdem & Jiang, 2016). The reason for using this approach to improve the profitability of the hotel is that revenue management strategies depend on each other, and changes in one of them lead to changes in other management areas (Richard, 2017).
For instance, in Pullman Quay Grand Sydney Harbour, changes in the distribution channel strategy cause changes in analysing competitors’ offers and forecasting the demand. Changes in the approach to forecasting lead to changes in capacity management and pricing. The benefits of focusing on these strategies and tactics are that they cover all basic revenue management areas while allowing managers of the Pullman hotel to maximise profits.
The direct online distribution is important to oppose OTAs and high costs associated with using their services without limiting customers’ access to options for booking. Variable pricing allows the hotel to propose flexible prices without compromising its value and expected revenues. The competitive strategy and demand forecasting techniques allow for preparing rooms and discounts with reference to the predicted number of clients to avoid wasting resources (Ortega, 2016). Therefore, the capacity strategy is correlated with demand modelling.
Task Schedule, Budget, Experiences Required for the Project Implementation
The table representing a schedule for completing tasks that are determined according to the strategies implementation plan is provided as Figure 2. In order to maximise profitability for the hotel, it is important to start with demand modelling and preparing the distribution channel. Other strategies to implement should be pricing, capacity, and competitive strategies (El Haddad, 2015; Erdem & Jiang, 2016).
Figure 2. Project Implementation Schedule.
Two main tasks that require additional financial resources for their implementation are the improvement of the website for direct booking and the integration of a new demand modelling or forecasting programme. Thus, the cost of creating an appropriate website is about 7,000 AUD, and the cost of integrating the programme for making forecasts is about 3,000-5,000 AUD. Additional costs are associated with attracting specialists who will consult employees regarding the work with the programme for multivariate exponential smoothing.
It is possible to pay about $4,000 AUD to an expert with experience in working with multivariate exponential smoothing models for 2-3 training sessions. Other skills and knowledge that are required for the project implementation are associated with the capacities of the revenue manager and team.
Opposition and Barriers to the Solution Implementation
In order to implement the solution in the most efficient manner, it is important to identify possible barriers to the project implementation and propose ways to overcome them. The application of a new pricing strategy and a competitive benchmarking strategy is in line with the current research and evidence in the hospitality industry. Still, the reference to the direct online distribution after the period of using OTAs can have negative effects on the process of attracting customers (Erdem & Jiang, 2016; Ferguson & Smith, 2014).
To avoid these negative effects, it is necessary to cooperate with partners with the help of social media and promote advertisements regarding an advanced approach to booking rooms in Pullman Quay Grand Sydney Harbour. Furthermore, opponents of the complex demand modelling approach state that similar results can be achieved while using more simple programmes (Kimes, 2016; Lu et al., 2015). However, it is important to note that the accuracy of forecasting can be guaranteed only if different models are applied simultaneously, and multivariate exponential smoothing provides managers with opportunities to analyse different factors while influencing pricing and further operations.
Conclusion
The implementation of improved revenue management strategies in Pullman Quay Grand Sydney Harbour can result in increasing its profitability because of addressing the interests and needs of more customers. The five-star status of the hotel provides certain limits regarding the orientation to new customer groups because of the phenomenon of price sensitivity.
However, while applying the variable pricing strategy supported by the results of multivariate exponential smoothing and analysis of competitors’ approaches, it is possible to attract more visitors and control supply and demand with reference to the proposed effective distribution and capacity strategies. This solution to the problem of the absent increase in profits can be viewed as appropriate for Pullman Quay Grand Sydney Harbour.
References
Bayoumi, A. E., Saleh, M., Atiya, A. F., & Aziz, H. A. (2013). Dynamic pricing for hotel revenue management using price multipliers. Journal of Revenue and Pricing Management, 12(3), 271-285.
Claveria, O., Monte, E., & Torra, S. (2015). A new forecasting approach for the hospitality industry. International Journal of Contemporary Hospitality Management, 27(7), 1520-1538.
Di Foggia, G., & Lazzarotti, V. (2014). Assessing the link between revenue management and performance: Insights from the Italian tourism industry. Measuring Business Excellence, 18(1), 55-65.
El Haddad, R. (2015). Exploration of revenue management practices: Case of an upscale budget hotel chain. International Journal of Contemporary Hospitality Management, 27(8), 1791-1813.
Erdem, M., & Jiang, L. (2016). An overview of hotel revenue management research and emerging key patterns in the third millennium. Journal of Hospitality and Tourism Technology, 7(3), 300-312.
Ferguson, M., & Smith, S. (2014). The changing landscape of hotel revenue management and the role of the hotel revenue manager. Journal of Revenue and Pricing Management, 13(3), 224-232.
Guillet, B. D., & Mohammed, I. (2015). Revenue management research in hospitality and tourism: A critical review of current literature and suggestions for future research. International Journal of Contemporary Hospitality Management, 27(4), 526-560.
Kimes, S. E. (2016). The evolution of hotel revenue management. Journal of Revenue and Pricing Management, 15(3-4), 247-251.
Lu, C., Berchoux, C., Marek, M. W., & Chen, B. (2015). Service quality and customer satisfaction: Qualitative research implications for luxury hotels. International Journal of Culture, Tourism and Hospitality Research, 9(2), 168-182.
Ortega, B. (2016). Revenue management systems and hotel performance in the economic downturn. International Journal of Contemporary Hospitality Management, 28(4), 658-680.
Phumchusri, N., & Maneesophon, P. (2014). Optimal overbooking decision for hotel rooms revenue management. Journal of Hospitality and Tourism Technology, 5(3), 261-277.
Pullman Quay Grand Sydney Harbour. (2017). Sydney’s premier address. Web.
Richard, B. (2017). Hotel chains: Survival strategies for a dynamic future. Journal of Tourism Futures, 3(1), 56-65.
Schwartz, Z., Uysal, M., Webb, T., & Altin, M. (2016). Hotel daily occupancy forecasting with competitive sets: A recursive algorithm. International Journal of Contemporary Hospitality Management, 28(2), 267-285.
Talón-Ballestero, P., & González-Serrano, L. (2013). Future trends in revenue management. Journal of Revenue and Pricing Management, 12(3), 289-291.
Thakurta, P. G. (2016). Revenue management: The ever changing landscape and the need to innovate. Worldwide Hospitality and Tourism Themes, 8(4), 461-468.
Yeoman, I. S., & McMahon-Beattie, U. (2017). The turning points of revenue management: A brief history of future evolution. Journal of Tourism Futures, 3(1), 66-72.
Technological changes in the hotel and hospitality sector prompt the essence of effective revenue management to enhance customer service and profit growth. For this reason, hotels need to apply automated revenue management systems (ARMS) to foster the optimization of revenues. InterContinental Sydney is one of the 5-star hotels that can apply efficient revenue management systems to boost their performance in the Australian market.
Technological changes influence the distribution channels in the hotel sector, thereby calling for the integration of ARMS to facilitate the analytics of customer trends. The real-time and re-optimizable pricing aspects of ARMS have the potential of increasing the revenue growth of InterContinental Sydney by an annual average of 3%.
Introduction
Revenue management is one of the critical aspects of running successful business organizations. The concept of revenue management is mainly the art and science of foreseeing instantaneous customer demands at the micro-market category and facilitating the optimization of price, as well as improving the availability of products (Mauri, 2013). In other words, revenue management entails the process of selling the right product to the intended customer at the correct time featuring the most reasonable prices (Yang, Pan, & Song, 2014).
Flexibility is crucial for revenue management to perform better in the hotel and hospitality sector, owing to the changes in different market forces (Suryakant, 2012). Some trends that are currently shaping the hospitality sector include:
Relationship Marketing
Partnership marketing and Strategic alliances
Technology
Guest Preferences
Media Planning
Globalization
Product segmentation and branding
Consolidation
Environmental awareness
Therefore, the revenue management approach focuses on improving customer service, as well as the maximization of profits.
InterContinental Sydney is one of the notable 5-star hotels in Australia. The figure below shows an image of this world-class hotel. Situated in the Sydney central business district (CBD), InterContinental Sydney has been offering quality hospitality and hotel services to customers from different parts of the world for over three decades. The hotel upholds the essence of timely service delivery with an irresistible touch of luxury (Cannon, 2014).
InterContinental Sydney.
Over the years, the business has recorded an impressive growth of its customer base, owing to the pricing it offers during off and peak seasons experienced in the hotel and hospitality sector. Notably, the InterContinental Hotels Group (IHG) proposed the incorporation automated revenue management systems (ARMS) model that facilitates the efficiency of the individual hotels situated globally. Importantly, the ARMS applies revenue analytics to develop visionary capabilities in the pricing and management of revenue. For this reason, InterContinental Sydney offers one of the best prices for rooms to its customers at any given time.
Undoubtedly, it is relevant to analyze the practices that have accounted for the success of the hotel’s revenue management over the few decades it has been operating in Sydney. In this view, it becomes crucial to justify the integration of ARMS at a given 5-star hotel with regards to its influence on the delivery of effective customer services besides bolstering the maximization of profits in the highly competitive hotel industry (Jayawardena, Lawlor, Grieco, Savard, & Tarnowski, 2013).
Therefore, the purpose of the research is to investigate the importance of ARMS in the hotel industry. This paper identifies how automated revenue management systems can be applied at InterContinental Sydney to enhance its competitiveness in the hotel sector in Australia. In this respect, the study will conduct a review of the relevant literature addressing the incorporation of ARMS in the hotel industry before leading a discussion of the findings.
Literature Review
Efficient revenue management is crucial in enhancing the profitability of a hotel business. In this light, Noone (2016) asserts that the revenue management approach in the hotel industry needs to guarantee the optimization of rates concerning the peaks and valleys experienced over time to realize meaningful occupancy figures. Hence, the need to consider the finer details of revenue management goes a long way in ensuring that the hotel company makes good use of the data required in pricing the rooms by understanding how much money customers are willing to pay at a given time.
Hua, Morosan, and DeFranco (2015) underline that taking care of the practical details of revenue management can introduce complexity to the important process of offering quality services to the right clients at the right price and in real-time. For this reason, hotel owners, as well as managers, need to adopt automated revenue management systems to realize a balance in the process of offering rooms to the right clients at the correct price in real-time (Hayes & Miller, 2011).
According to Hayes and Miller (2011), the changing distribution channels in the hotel and hospitality industry require players to embrace strategies that meet the needs of consumers. Law, Leung, Lo, Leung, and Fong (2015) assert that technological changes, especially the increased use of the Internet, affect the distribution of products and services in the hospitality and tourism sector. In this light, hotel managers need to incorporate technological advancements that capture the new distribution channels used by customers to access pricing information and the availability of rooms besides the offers presented by different competitors in the industry.
Additionally, Law et al. (2015) observe that technological advancements render traditional travel agencies irrelevant. In a similar line of thought, Kracht and Wang (2009) hold that changes in the distribution channels in the tourism industry prompt players to collaborate with other service providers such as software developers to foster the effectiveness of revenue management. Therefore, hotel managers need to embrace technologies that boost the growth of their revenues amid the changing distribution channels.
The adoption of third-party distribution metrics is critical in the current business environment. In this respect, Maier (2012) delved into an inquiry to assess the relevance of adopting the distribution metrics offered by third parties to foster the marketing aspects of a company to realize the set revenue management goals and objectives. The price parity aspect of the distribution metrics offered by third-party developers facilitates the real-time optimization of prices to realize maximum revenues. Maier (2013) insists that hotels that use the traditional revenue management approach portray incompetency in their price parity.
The optimization and adjustment of prices for the services offered by a given hotel company are crucial in streamlining revenue management. According to Jasin (2014), the manual management of the finite inventories and stochastic demands, as well as the selling horizon, brings about cumbersomeness in revenue management in the wake of complexities in the hotel sector. The need to remove such difficulties calls for the incorporation of the static price control system in revenue management (Jasin, 2014).
Importantly, ARMS such as the static price control requires a single optimization of prices at the start of the selling horizon without the need for re-optimization. Automated revenue management systems offer relief to managers who were traditionally needed to engage in substantial computations, in particular, for considerably large applications with regular adjustments of the price. Moreover, Bodea and Ferguson (2014) underline that the integration of ARMS is responsible for the realization of high-standard revenue performance, owing to the real-time adjustment, as well as re-optimization.
Pekgün et al. (2013) delved into a study to gauge the relevance of integrating innovative revenue optimization systems in the management of hotels. Particularly, the study assessed the collaboration between Carlson Rezidor Hotel Group (CRHG) and JDA Software Group in their efforts towards the application of operations research to heighten revenue gains, as well as bolstering the competitiveness of hoteliers.
The JDA Software Group offered an ARMS system referred to as Stay Night Automated Pricing (SNAP) to facilitate enterprise demand prediction in at least 600 hotels in the US in 2007. Pekgün et al. (2013) uncover that compliant hotels acquired a 2-4% revenue growth compared to companies that failed to integrate the SNAP system in their revenue management. The global rollout of SNAP by CRHG in collaboration with JDASoftware Group has seen hotels in America record a significant 416 million revenue growth annually (Pekgün et al., 2013). Therefore, to a considerable degree, the integration of ARMS in the hospitality industry is crucial in promoting the desired growth and competitiveness.
The InterContinental Hotels Group (IHG) is one that upholds the use of new technologies in its revenue management strategies. In this light, Koushik, Higbie, and Eister (2012) purposed to uncover the impacts of one of the large-scale implementation of ARMS in the hospitality industry by studying the outcomes of the PERFORM, a price optimization software.
The ARMS mainly focuses on improving price optimization by conducting an automated determination of room rates founded on price elasticity, occupancy, and the competitiveness of prices in the market. Surprisingly, the IHG has experienced an incremental growth of its revenue to the tune of $145 million since the implementation of the PERFORM system in its price optimization processes (Koushik et al., 2012).
Important to note, ARMS discourages the application of the traditional revenue management approaches, which assume that price independence or interdependence influences the level of demand (Bodea & Ferguson, 2014). Conversely, ARMS promotes the use of price elasticity, price competitiveness, and occupancy to foster revenue optimization.
The need to abandon the traditional assumptions of determining customer demand patterns in the hotel industry calls for the incorporation of advanced revenue management systems. Mauri (2016) posits that the traditional assumption of assessing customer demand trends in the hotel sector perceives how the customers engaging in the late booking of rooms have the willingness of paying higher prices compared to the consumers who make an early booking (Law, Leung, Au, & Lee, 2013).
Additionally, the traditional approach assumes that weekend demand for occupancy is usually higher than the weekday demand (Mauri, 2016). Nonetheless, changing consumer trends question the validity of the traditional approach in the fast-changing hotel industry. In this light, there is a need for managers to incorporate advanced mechanisms for gauging demand trends throughout the week and on weekends.
Viglia, Mauri, and Carricano (2016) assert that the simultaneous adjustment of prices by players in the hotel industry affects the decisions of customers significantly. Such decisions can undermine the revenues of a particular company. In this concern, there is a need for the embracement of independent behavior among competitors in the hotel sector. The integration of ARMS is one of the strategic approaches to fostering autonomous behavior in revenue management. ARMS discourage simultaneous and leader-follower approaches to revenue management by ensuring that a company in the sector sets and optimizes its prices independently, owing to the automated features of such systems.
The effective management of revenues about multiple-night stay at the hotel realizes a considerable efficiency through the implementation of automated revenue management systems that uphold the importance of customer service and profit optimization. In this concern, Aslani, Modarres, and Sibdari (2013) underline that automated revenue management systems go a long way in ensuring that customers experience an effective arrival rate after placing their bookings for a hotel.
Therefore, the positive image created by satisfactory customer services is instrumental in improving the competitiveness of the hotel, thus raising its revenues because of the growth of its customer base. Furthermore, Phumchusri and Maneesophon (2014) point out that ARMS ensures that hotel owners and managers take into consideration the avoidance of “customer losses” arising from the perception of expensive nights during a customer’s stay (p. 262). Notably, effective revenue management focuses on selling a product or a service to the right customer at a reasonable price that is also in line with the supply and demand trends in the industry.
Findings and Discussion
Hotel owners and managers need to integrate critical requirements for the efficient functioning of ARMS. Importantly, the reviewed literature shows that profit management experts need to engage in strategic pricing analysis that facilitates the establishment of revenue targets over a specified period. The setting of revenue targets is an important requirement for the incorporation of revenue management technology since its integration in the hotel seeks to realize the shared goals and objectives.
Therefore, if InterContinental Sydney seeks to attain a given number of bookings for its rooms, adopting the ARMS can facilitate the pricing analytics to meet the target by taking into account the market trends in the hotel industry. In this light, setting revenue targets is one of the key requirements that drive the efficiency of ARMS in InterContinental Sydney.
Additionally, the study unearths that the changing distribution channels in the hotel sector prompt the incorporation of technologies, including ARMS. The changing distribution channels affect the behavior of consumers, especially their willingness to pay for occupancy at a given hotel such as InterContinental Sydney. The embracing of ARMS is critical since it incorporates analytics to facilitate the optimization of prices. In this view, the study reveals that the acquisition of third-party distribution metrics is crucial for enhancing the competency of a hotel, thus facilitating the attainment of revenue management goals and objectives.
Furthermore, the study reveals that the elements of real-time adjustment and re-optimization of the ARMS applied in InterContinental Sydney are integral in facilitating the attainment of high-standard revenue management performance. The features relieve managers of the cumbersomeness of large computations that require constant readjustment of prices. Importantly, the technological systems apply analytics to establish the right prices for consumers, thus bolstering the optimization of revenues in the 5-star hotel.
The large-scale implementation of ARMS in hotels has the potential of boosting revenues by an average of 3% annually (Koushik et al., 2012). Notably, the modern revenue management tools foster the decision-making processes undertaken by hotel owners and managers by selling the preferred room to the intended client at the right time at a reasonable price. By so doing, the automated system supports the offering of quality customer service, which leads to the maximization of profits.
The traditional revenue management assumptions undermine the efficient pricing of hotel products, owing to the change in consumers’ preferences, marketing trends, and technological advancements. ARMS improves the prediction of customer demands by applying analytics that incorporates relevant and updated data. In this respect, the real-time optimization of prices denotes the irrelevance of applying outdated assumptions to determine the demand trends in the hotel sector.
Based on the results, revenue managers need to determine the most suitable pricing in every market situation. In the hotel industry, the determination of pricing is a crucial aspect of attracting the increased occupancy of the hotel rooms. In this respect, the incorporation of ARMS at InterContinental Sydney will simplify the pricing analytics aspect of revenue management by offering managers the right prices for customers to pay for rooms at any particular time.
The retail price optimization element of the ARMS will be integral in bolstering revenue increment of InterContinental Sydney by at least 3% annually. Important to note, retail price optimization improves the estimation of price elasticity in the hotel industry. Thus, it facilitates the optimization of the InterContinental Sydney hotel’s pricing strategy. Therefore, the smart revenue optimization tools of the ARMS will see InterContinental Sydney achieve instantaneous decision-making processes, as well as suggestions for optimum rates in just a click.
Revenue management requires experts in the field to set the best rates and apply them effectively. The effective establishment of rates is crucial in fostering the distribution of prices across different and multiple distribution channels. In this light, the implementation of automated revenue management systems at InterContinental Sydney will guarantee the swift setting of rates besides pushing them for application in the various processes of the hotel industry.
Therefore, the integration of such technologies relieves busy managers from the hassle of setting and managing prices across various distribution channels. In this light, managers at InterContinental Sydney can quickly come up with reliable forecasts and reports developed through the help of the automated systems. Additionally, the multidimensional view of the revenue management aspects fosters a greater understanding of the extent to which market trends influence the pricing aspect of the hotel industry.
Conclusion
The expositions made in this paper present the revenue management practice in business organizations as crucial for predicting customer demands. The practice bolsters the optimization of inventory, as well as price availability to reinforce revenue growth. This study has focused on the hospitality and hotel industry where revenue management is pivotal, especially in ensuring that managers offer rooms at the right prices depending on the market demand at a given time.
Therefore, as highlighted in the paper, through effective revenue management, a hotel would be in a position to offer the right room to the right client with the right timing, for the right price, and through the desired distribution channel. The study concludes that the implementation of ARMS at InterContinental Sydney will be crucial in an array of ways. For instance, it would bolster customer service delivery and profitability. The position is founded on the finding that the changing distribution channels necessitate the use of ARMS in the hotel sector to predict market demands and/or set strategic prices effectively.
ARMS offers real-time and re-optimizable prices to achieve the desired revenue management goals and objectives. The notable significance of ARMS in the management of hotels involves facilitating the attainment of average revenue growth of 3% yearly. Therefore, there is a need for 5-star hotels such as InterContinental Sydney to embrace ARMS to report a high-level performance in customer service and revenue growth in the highly competitive hotel and hospitality industry.
References
Aslani, S., Modarres, M., & Sibdari, S. (2013). A decomposition approach in network revenue management: Special case of hotel. Journal of Revenue and Pricing Management, 12(5), 451-463.
Bodea, T., & Ferguson, M. (2014). Segmentation, revenue management and pricing analytics. London, England: Routledge.
Cannon, M. (2014). Intercontinental: Sydney. London, England: Panacea Publishing International Ltd.
Hayes, D. K., & Miller, A. (2011). Revenue for the hospitality industry. Hoboken, NJ: Wiley.
Hua, N., Morosan, C., & DeFranco, A. (2015). The other side of technology adoption: Examining the relationships between e-commerce expenses and hotel performance. International Journal of Hospitality Management, 45(1), 109-120.
Jasin, S. (2014). Reoptimization and self-adjusting price control for network revenue management. Operations Research, 62(5), 1168-1178.
Jayawardena, C., Lawlor, F., Grieco, J. C., Savard, M., & Tarnowski, M. (2013). Challenges and innovations in hotel operations in Canada. Worldwide Hospitality and Tourism Themes, 5(2), 177-189.
Koushik, D., Higbie, J. A., & Eister, C. (2012). Retail price optimization at intercontinental hotels group. Interfaces, 42(1), 45-57.
Kracht, J., & Wang, Y. (2009). Examining the tourism distribution channel: Evolution and transformation. International Journal of Contemporary Hospitality Management, 22(5), 736-757.
Law, R., Leung, D., Au, N., & Lee, H. A. (2013). Progress and development of information technology in the hospitality industry: Evidence from Cornell hospitality quarterly. Cornell Hospitality Quarterly, 54(1), 10-24.
Law, R., Leung, R., Lo, A., Leung, D., & Fong, L. (2015). Distribution channel in hospitality and tourism: Revisiting disintermediation from the perspectives of hotels and travel agencies. International Journal of Contemporary Hospitality Management, 27(3), 431-452.
Maier, T. (2012). International hotel revenue management: Web-performance effectiveness modeling–research comparative. Journal of Hospitality and Tourism Technology, 3(2), 121-137.
Maier, T. (2013). Revenue management implications of branded vs. independent hotels price-parity and online distribution effectiveness. International Journal of Revenue Management, 7(3-4), 223-243.
Mauri, A. G. (2013). Hotel revenue management: Principles and practices. New York, NY: Pearson.
Mauri, A. G. (2016). Pricing and revenue management in hotel chains. London, England: Routledge.
Noone, B. M. (2016). Pricing for hotel revenue management: Evolution in an era of price transparency. Journal of Revenue and Pricing Management, 15(3-4), 264-269.
Pekgün, P., Menich, R. P., Acharya, S., Finch, P. G., Deschamps, F., Mallery, K., & Fuller, J. (2013). Carlson Rezidor hotel group maximizes revenue through improved demand management and price optimization. Interfaces, 43(1), 21-36.
Phumchusri, N., & Maneesophon, P. (2014). Optimal overbooking decision for hotel rooms revenue management. Journal of Hospitality and Tourism Technology, 5(3), 261-277.
Suryakant, L. (2012). Marketing strategies and quality management of five star hotels in order to improve its revenue with special reference to selected five star hotels in Mumbai. Commerce and Management, 1(4), 28-36.
Viglia, G., Mauri, A., & Carricano, M. (2016). The exploration of hotel reference prices under dynamic pricing scenarios and different forms of competition. International Journal of Hospitality Management, 52(1), 46-55.
Yang, Y., Pan, B., & Song, H. (2014). Predicting hotel demand using destination marketing organization’s web traffic data. Journal of Travel Research, 53(4), 433-447.
It could be observed that in the contemporary world, which experiences the continuous impact of the globalization process, tourism is one of the industries that are rapidly developing. Taking into account the variety of different means to travel, people are able to take various tourist destinations considerably easy. However, it should also be noted that there are barriers to travel that can affect contemporary tourism to a vast extent.
In his article, Edgell (2016) elaborates on various issues that are expected to challenge the industry of tourism in the near future. Among the different problems discussed in the article, several important barriers should be mentioned. They include the following factors: the problems with visas and passports, immigration-related complications, as well as the issue connected with the airline services, such as fees and delays (Edgell, 2016).
This list is considerably comprehensive as it mentions several highly important areas of concern. Nevertheless, it is argued that contemporary barriers to travel are not restricted to the mentioned factors as the overall problem is far more complicated due to the fact that it is deeply connected with the majority of spheres of modern life. This paper aims to elaborate on the variety of problems related to the industry of travel, referencing recent scholarly literature on the topic.
Borders as One of the Central Concepts in Tourism
First of all, it is decided to observe the concept of borders and cross-border tourism as it is one of the most evident barriers to travel in the contemporary world. Edgell (2016) mentions visas and passports as the most evident obstacles to traveling across the world, and this claim could hardly be denied. Despite the fact that the existence of the system of international passports and the major regulations about international travel is determined by several important factors, it is still possible to argue that overall this system represents a barrier to travel.
Therefore, it is essential to discuss the concept of borders and cross-border tourism. The article by Timothy, Saarinen, and Viken (2016) is dedicated to the exploration of the subject matter in the context of the Nordic region. The authors claim that security, political, socio-cultural, and economic mechanisms related to the concept of borders (or boundaries) have an immense impact on vastly different areas of concern, including “regional and industrial development, trade, human mobility, social networks, cultural diversity, environmental regulations and tourism” (Timothy, Saarinen & Viken 2016, p. 1).
It is worth mentioning that the authors elaborate on the topic from an interesting perspective as they acknowledge that even though the existence of borders naturally hinders the mobility of people, goods, and ideas, it also serves as the ground for connectivity (Timothy Saarinen & Viken 2016). Their paper is dedicated to the exploration of various phenomena related to the topic.
In general, it is evident that the authors’ point of view should be taken into account as it is highly valuable. Naturally, the borders are seen as barriers by people who have little to no desire to travel and to discover new opportunities. For people who are entitled to traveling abroad, crossing borders are one of the aspects of tourism, which also excites them. These claims, made by the authors, can serve as the confirmation of the fact that the importance of borders in the context of traveling is overrated.
Also, Timothy Saarinen and Viken (2016) mention such tendency as “de-bordering,” As the authors state, “recent geopolitical changes are blurring the traditional roles of borders as barriers to trade, communication, and human mobility, and lines of absolute sovereign control” (Timothy Saarinen & Viken 2016, p. 1). Accordingly, it could be projected that in near future the problem of visas and passports as barriers to travel can become irrelevant.
Technological Advancements as Enablers and Barriers to Travel
The second aspect of contemporary tourism that is of ambivalent nature is technological advancements. In general, it is apparent that in the majority of cases the overall progress of technologies facilitates the ability of people to travel to various destinations. However, it should also be observed that these advancements can act as barriers. The article by Neuhofer, Buhalis, and Ladkin (2015) dwells upon the discussion of this topic, stating that “information and communication technologies (ICTs) have had a major impact on the way people experience travel” (p. 789). Based on the assumption that technologies can significantly enhance the tourist experience, the authors aim to address various technology-related enablers and barriers to travel.
Using the qualitative approach, Neuhofer, Buhalis, and Ladkin (2015) reveal several principal findings. First of all, they found that enablers to travel in the context of technological advancements could be categorized into three groups:
software,
telecommunication and infrastructure, and
usage and usability (Neuhofer, Buhalis & Ladkin 2015).
It is quite apparent that the mentioned aspects have a positive impact on the traveling process. However, as the focus of this paper is on the exploration of barriers to travel, it is of particular interest what is found by the authors in this field. Similar enough to the findings of the enablers, the authors mention that there are four main categories of barriers:
The hardware barriers are related to the deficiencies in the existing technologies, such as battery power-consuming travel applications on mobile phones and the availability of appropriate devices (Neuhofer, Buhalis & Ladkin 2015). Software barriers are closely related to the previous factor as they are also connected to the use of mobile devices.
Telecommunication and infrastructure barriers represent a comprehensive set of various factors. The authors observe the following examples: “the lack of Internet connection abroad (international travel), lack of network (rural contexts, camping) and limitations of infrastructure in developing countries (network coverage, Internet availability)” (Neuhofer, Buhalis & Ladkin 2015, p. 796). Thus, tourists are often restricted from accessing information in real-time and connect with other people. The fourth category that is mentioned by the authors, the usage barriers, appears to have much in common with the first two categories.
Neuhofer, Buhalis, and Ladkin (2015) discuss various instances in which the problems with software and hardware negatively impact the use of mobile applications, especially when the Internet is unavailable. In general, it could be concluded that the development of contemporary communication technologies, despite the fact that it made significant progress in recent decades, is still far from providing tourists with full comfort while traveling. Thus, one should consider this factor when discussing barriers to travel.
Tourism in the Context of Disability
Further, it is appropriate to discuss more specific barriers to travel that were not mentioned in the article by Edgell (2016). One can begin with the exploration of such topics as problems that are faced by people with disabilities while traveling. As it is mentioned in the doctoral dissertation by Fraser (2017), there has been insufficient research in the field of disabled people’s participation in tourism. Nevertheless, this topic is of high significance due to the fact that various information, economic, social, and physical factors influence the emergence of barriers and risks to travel for people with disabilities.
Fraser (2017) conducted qualitative research that employed the sample of 149 disabled people, who participated in research either in the form of online surveys or by completing paper questionnaires in face-to-face interviews. The most important finding that was retrieved by Fraser (2017) is that the estimated gap between the disabled and the general population in the context of participation in tourism has increased in the recent 8 years. Moreover, it is also found that such factors as low level of income, increased price differentials, and negative attitudes to disability in some cultures also have an adverse impact on participation in tourism (Fraser 2017). Therefore, it could be stated with certainty that physical and mental disabilities represent a highly important barrier to travel.
Climate Change as the Important Factor Affecting Tourist Industry
Another factor, which is of immense significance in general but not given enough attention when discussing tourism-related issues, is climate change. The article by Dillimono and Dickinson (2015) dwells upon the discussion of this topic, with a particular focus on developing countries such as Nigeria. The reason for such a focus is explained by the authors in the following way: the relationships between climate change and tourism are largely studied in the context of developed countries, but in the case of countries that are currently experiencing economic growth, the effects of climate change will be a highly important factor (Dillimono and Dickinson 2015)
The qualitative study conducted by the authors is based on a sample of 20 Nigerian active tourists, which might appear as a small sample; however, given the specificity of the topic and the qualitative nature of the research, this sample could be considered as sufficient for drawing the conclusions. In general, the findings of the research by Dillimono and Dickinson (2015) are not promising as the authors state that the understanding of climate change and tourism patterns is considerably low among the sample. The participants were unwilling to contribute to the combat with climate change by altering their tourist behavior. Therefore, it is stated that the knowledge about climate change and its relation to various tourist patterns should be promoted among the population of developing countries.
Barriers to Travel: Example of Iran
Among other mentioned factors, it is of particular interest to observe the example of Iran. As Iran also represents a rapidly developing country, the questions related to the tourist industry are highly relatable in this case. In the article by Arabzadeh et al. (2015), the authors investigate various barriers to the development of the tourism industry in Iran. Evidently enough, the majority of the problems that are mentioned by Arabzadeh et al. (2015) were already discussed in this paper at least to some extent.
Particularly, the authors mention such factors as the weakness of marketing efforts, the absence of advertising, infrastructure barriers, the lack of cultural acceptance for tourism, and the overall underdevelopment of the tourist industry in Iran (Arabzadeh et al., 2015). Therefore, it is apparent that Iran experiences somewhat typical problems for a developing country in terms of the advancement of the country as a tourist destination.
Medical Tourism as the Industry with Specific Barriers
Lastly, it is possible to mention medical tourism as the rapidly developing branch of the tourist industry with its specific problems and barriers to travel. According to the article by Rokni, Turgay, and Park (2017), in which the authors focus on the case of South Korea, medical tourism is an emerging movement, which incorporates tourism and medicine industries. The tendency of people traveling abroad in order to access various healthcare services is largely growing across the world and on the example of South Korea, the authors observe the primary kinds of barriers that can prevent the industry from successful development (Rokni, Turgay & Park 2017). The following five factors represent the constituents of the model developed by the authors:
policy-making and government regulations,
communication skills,
language,
expertise, and
promotion (Rokni, Turgay & Park 2017).
Accordingly, this example could be used as a framework for the development of medical tourism in other countries.
Conclusion
In conclusion, it is essential to state that the topic of barriers to travel in the contemporary world is a highly complicated subject matter that requires a thorough investigation. Based on the assumptions provided in the article by Edgell (2016), this paper attempted to discuss several aspects of the mentioned concern. As it is apparent from the discussion, the barriers to travel are not limited to what is mentioned in the study by Edgell (2016) since barriers to travel are far more diversified. Accordingly, this paper provides a brief overview of the state of international tourism in the modern globalized world. However, it could be stated that this paper can serve as the foundation for the development of further research.
Reference List
Arabzadeh, E, Arabzadeh, S, Bavarsad, R & Arabzadeh, T 2015, ‘Assessing barriers factors in development of tourism in Iran’, International Journal of Management Research and Business Strategy, vol. 4, no. 3, pp. 257-263.
Dillimono, HD & Dickinson, JE 2015, ‘Travel, tourism, climate change, and behavioral change: travelers’ perspectives from a developing country, Nigeria’, Journal of Sustainable Tourism, vol. 23, no. 3, pp. 437-454.
Edgell Sr, DL 2016, Future world issues that will impact on managing sustainable tourism. In Managing Sustainable Tourism (pp. 227-245). Routledge.
Fraser, D 2017, Perceptions of risks and barriers to participation in tourism for the disabled (Doctoral dissertation, University of Plymouth).
Neuhofer, B, Buhalis, D & Ladkin, A 2015, Technology as a catalyst of change: enablers and barriers of the tourist experience and their consequences. In Information and communication technologies in tourism 2015 (pp. 789-802). Springer, Cham.
Rokni, L, Turgay, AVCI & Park, SH 2017, ‘Barriers of developing medical tourism in a destination: a case of South Korea’, Iranian Journal of Public Health, vol. 46, no. 7, pp. 930-937.
Timothy, DJ, Saarinen, J & Viken, A 2016, ‘Tourism issues and international borders in the Nordic Region’, Scandinavian Journal of Hospitality and Tourism, vol. 16, no. 1, pp. 1-13.
The tourism industry has continued to register positive results despite pessimistic economic forecasts across the globe. Global tourism maintained a positive momentum of more than 2% growth between 2010 and 2012. This growth occurred due to an increase in the number of travellers going to different destinations. Market estimations show that tourism will grow by 2.3% by the end of 2013 (Research and Markets 2012).
The amount of money spent by tourists in different parts of the world has increased considerably. This has increased the amount of money earned by countries with large tourism industries. This augurs well for the industry which has experienced many challenges in the past which discouraged tourists from travelling (ITB 2013).
This report highlights issues that affect tourism in Switzerland and Malaysia. The report will evaluate tourism policies in these two regions and how they have affected tourism activities in the last two decades (Klopping 2012). It will also compare the models of innovation and creativity that have made positive impacts on tourism in these countries.
Industry Overview
Switzerland’s Tourism Industry
The Swiss tourism industry has recorded positive growth in the last one year and it earned the country an estimated CHF 35.5 billion in 2012. The industry’s main drivers of growth were transportation, restaurant services and accommodation services, all of which contributed more than CHF 18 billion in 2012 (STF 2012).
These three tourism sub sectors contributed more than 51 percent of total revenues obtained in the industry in 2012. These estimates show that the tourism industry in the country is registering positive results because of its status as one of the most preferred tourist destinations in the world (Barton 2008).
The country’s tourism balance of payments is favourable because foreign tourists spent an estimated CHF 15.4 billion in 2012. Similarly, Swiss tourists who travelled abroad spent an estimated CHF 11.8 billion in the same year. Comparatively, Swiss nationals who travelled to foreign countries spent CHF 11.6 in 2010 and CHF 15.6 billion in 2011, respectively. Switzerland’s tourism industry is one of the most competitive in the world and earns the country high amounts of foreign currency.
The country has experienced an increase in the number of firms that offer specialized services to tourists. There are many tourism firms in Switzerland which target different market segments. Some of the leading firms include; Switzerland Tours, My Switzerland, Incoming Travel Services and Zicasso (Khalid 2013).
Malaysia’s Tourism Industry
Malaysia is one of the most popular and competitive tourist destinations in Asia. Malaysia recorded a 7% increase in the number of tourists visiting the country in 2009. It is estimated that 23.6 million tourists visited the country in 2009 compared to 21.95 million that arrived in 2008. The country’s tourism industry did not experience problems felt by other countries due to the global financial crisis.
Malaysia continues to receive a lot of visitors which has helped the local industry to achieve positive growth. This situation is similar to the favourable industry environment that exists in Switzerland. There are several firms which offer a wide variety of services that seek to take advantage of opportunities existing in the market. These firms are optimistic that positive tourism indicators in the country will help them increase their earnings (Chakraborty 2007).
Market leaders in Malaysia’s tourism industry include Tourism Malaysia, HK Top Tourism, Apple Vacations and Conventions, Cat City Holidays, Ping Anchorage and Tropical Adventures and Tours. These firms have unique niche segments, a situation which is similar to the Swiss tourism industry. These firms have strengthened their brands in the market through differentiation of products and services.
Innovation, Creativity and Enterprise
There are several theories and models which are used to analyse innovation, creativity and enterprise in different tourism sectors. Rothwell’s Five Generations of Innovation Model and Incremental Innovation Theory will be used to analyze Swiss and Malaysian Tourism Industries.
Rothwell’s Five Generation of Innovation Model
This model is considered as one of the most important contributions to the study of innovation in tourism industries. This model captures generations of innovations dating from the 1950’s to the current period (Moutinho 2011). The model looks at various generations of innovation and specific market conditions that made them happen.
It focuses on how different stages of innovations are responsive to various changes in market conditions such as competition, inflation and economic recovery. It also focuses on unemployment, economic growth, industrial expansion and scarcity of resources (Hassanien, Dale & Clarke 2010). This model will mainly focus on generations of Swiss and Malaysian tourism industries from 1990s onwards.
Malaysia Tourism Industry
Malaysia’s tourism industry experienced an awakening during the fifth generation of innovation in the 1990s. This begun when the government launched a five year economic plan in 1991, which spelt out what needed to be done to ensure the local tourism industry became more competitive (King 1993, p. 78).
A key pillar of this plan was the emphasis on research, product development and marketing, which helped the country establish itself as a niche destination for eco and agro based tourism (Malhotra 201, p. 56). The National Tourism Policy formulated in 1992 helped to provide proper regulatory guidance to the local industry (Government of Malaysia 1991).
The country took note of sustainability issues in tourism by launching the National Ecotourism Plan in 1996 to encourage sustainable tourism practices (Government of Malaysia 1996). This fifth generation of innovation has made the country’s tourism stand out due to its high quality attractions and environmental sustainability (Government of Malaysia 2001).
Swiss Tourism Industry
The industry’s innovative practices took root during the fourth generation in the 1980’s. it easily attained the fifth generation of innovation because many firms were willing to offer new products and services to their customers (Wurz 2013). Major tourist attractions in the country include historical sites, unique cuisine, luxurious accommodation and a wide range of entertainment activities (Koumelis 2013).
This has helped the country maintain its status as one of the most visited tourist destinations in the world. The Swiss tourism industry is built on four main pillars which are economic, ecological, cultural and local community sustainability. This has made it easy for the country to maintain product diversity which appeals to different tourist segments. The industry encourages different players to explore more opportunities and implement new technologies to help them have a positive impact.
Incremental or Radical
Coles and Hall (2008) reveal innovation and creativity can either be incremental or radical, depending on the firm managing the process. Improvements made in existing technologies, processes and products are referred to as incremental innovation (Hall & Wouldiams 2008). Innovation that is initiated from the beginning meant to overhaul different industry systems is known as radical innovation. Radical innovation is very difficult to implement but offers long term benefits to a tourism industry.
Malaysia’s tourism industry before the fifth generation was based on incremental innovation, which stifled the development of innovative products and services (Peng 2010). The implementation of new policies encouraged adoption of new technologies which improved performance of firms active in the sector.
Radical innovative approaches encouraged ecotourism to flourish which made more visitors tour waterfalls, rivers and agricultural parks. Technological advancements have also revolutionized the quality of services offered in the industry. Most booking and ticketing services are done electronically, which has made it easy for different industry players to collaborate.
Switzerland’s tourism industry also uses new technologies to improve the quality of services offered. The country has a competitive edge over other destinations because it has diversified its tourist attractions to cater for niche customer interests.
It offers ecotourism, reverie tourism, agro-tourism, and holiday entertainment (Hall & Piggin 2003). The country improved its transport and communications infrastructure with neighbouring countries, which has made it easy for tourists to visit different places.
Conclusion
Both Switzerland and Malaysia are key tourist hubs in their respective regions. Their industries have recorded positive growth in the last few years. Five generations model and incremental or radical theories have been used to describe innovative tourism practices in the two countries.
Malaysia managed to streamline its tourism sector in the fifth generation of innovation which improved the quality of services offered to tourists visiting the country. Switzerland was able to put in place effective innovation, creativity and enterprise pillars in the third generation. These approaches have made tourism sectors in the two countries more competitive.
References
Barton, S. 2008, Healthy living in the Alps, Manchester University Press, Manchester.
Chakraborty, A. 2007, Global tourism, APH, New York.
Coles, T. & Hall, M. 2008, International business and tourism, Routledge, London.
Government of Malaysia 1991, Sixth Malaysia plan, Government of Malaysia Printers, Kuala Lumpur.
Government of Malaysia 1996, Seventh Malaysia plan, Government of Malaysia Printers, Kuala Lumpur.
Government of Malaysia, 2001, Eighth Malaysia plan, Government of Malaysia Printers, Kuala Lumpur.
Hall, C and Wouldiams, M. 2008, Tourism and innovation, Routledge, New York.
Hall, M. and Piggin, R. 2003, World heritage sites: managing the brand, Elsevier, Oxford.
Hassanien, A., Dale, C. & Clarke, A. 2010, Hospitality business development, Routledge, New York.
ITB 2013, ITB world travel trends report – 2012/2013, International Tourism Board, Berlin. Web.
Khalid, K. 2013, ‘Cover story: massive benefits from JVs with foreign developers’, New Strait Times 4th July. Web.
King, T. 1993, Tourism and culture in Malaysia, Routledge, London.
Klopping, L. 2012, Health tourism in Switzerland, Grin Verlag, Berlin.
Koumelis, T. 2013, ‘Sustainable tourism gets green light in Langkawi, Malaysia’, Travel Daily News Asia 5th May. Web.
Malhotra, Y. 2001, Knowledge management and business model innovation, Idea Group Inc, London.
Moutinho, L. 2011, Strategic management in tourism, CABI, London.
Peng, H. 2010, ‘Innovation way to tourism charisma, ’, The Star 22 May. Web.
Research and Markets 2012, Malaysian tourism industry forecasts to 2012, Research and Markets Industry Reports, London. Web.
STF 2012, Swiss tourism in figures 2011 – structure and industry data, Swiss Tourism Federation Annual Overview, Berne. Web.
The tourism industry has been booming in Turkey, and it is likely to become an important part of its economy. The resources of the state allow for a streak of revenue obtained from tourism, which implies that a marketing strategy for promoting tourism for target customers needs to be designed. A combination of resorts and historical sites makes Turkey a very attractive tourist destination, which should be used to encourage economic growth within the state. Therefore, the mission of the project is to attract new tourists to Turkey to promote its economic development, whereas the vision involves creating an environment in which sustainable tourism can thrive in Turkey.
The inimitable combination of the ancient history and modern setting should be seen as the unique selling proposition (USP) for tourism in Turkey. The sites that the state has to offer are truly spectacular and worthy of seeing, whereas food and hotel services are modern and sophisticated. The USP in question will be used to promote tourism in Turkey. Particularly, one should consider Pamukkale as the key tourist destination due to its magnificent water terraces and historical sites, including the antique ruins of Hierapolis (Richardson, 2015).
At present, the tourist resources of the specified destination belong to the categories of Luxury, Leisure and Entertainment, and Residential ones (Management Association, Information Resources, 2017). These resources include local hotels, restaurants, sites, and entertainment, such as cinemas. Therefore, expanding the range of options for tourists to enjoy should be considered. It will be necessary to add a medical, business, and sport-related tourist resources to ensure that the quality of the services remains high.
Therefore, the services associated with transportation, food, and selling souvenirs should be seen as hard products, whereas the process of sightseeing and the services that include movies and other types of entertainment should be seen as soft ones. Thus, the types of products that will be offered to the target population will not be different from the ones that tourists can enjoy in any other tourist destination. Instead, it is the way in which tourists will experience the specified services that will define the uniqueness of the local tourism industry.
The synergy of the components will play a key part in increasing the attractiveness of this tourist destination. For instance, the inimitable flair of the ancient era and the presence of modern technology and facilities will become a crucial characteristic that will attract tourists and make Turkey look particularly interesting to the target demographic. In addition, the synergy of cultures should also become the focus of people’s attention since it will invite people to embrace the connection between multiple cultures.
Finally, the synergy between the past and the future should be seen as the synergy that will produce the greatest impact on tourists and impress them to the greatest extent. The coexistence of ancient ruins and modern technological innovations will produce a striking contrast that will astonish even seasoned travelers and ensure that they will remain entertained throughout their journey. As a result, the combination of local sights and technological advances will create the highest value and lead to a rise in the number of visits.
At present, the market segments that the project targets include people from the middle class, especially families and students. The specified demographic is most likely to be willing to combine traveling, learning, and excitement. Therefore, the combination of the selected elements will intrigue the target population and invite them to experience the surprise and wonder of the discovery of ancient cultures, at the same time maintaining the opportunity to use advanced services and comforts of the modern civilization. Moreover, the emphasis on the cultural fusion that will be observed during the tour will attract students and families as the kind of safe and fun adventure that they are most likely to enjoy.
Quality dimensions are particularly important in the plan mentioned above since the marketing campaign will place a heavy emphasis on the presence of both advanced technology and ancient culture. Therefore, the dimensions such as performance, reliability, aesthetics, perceived quality, and conformance to standards should be deemed as especially important aspects of quality management in the described scenario. By introducing the elements listed above into the setting of the tourist project mentioned above, one will ensure that customers will stay satisfied throughout their journey (Singh, Kumar, & Ray, 2016). Thus, the probability of them building loyalty toward the service and returning in the future will rise exponentially.
In addition, it is critical to building a partnership with other tourist destinations to reduce the devastating effects of rivalry and create mutual opportunities for consistent growth. At present, it is important to focus on Turkey and the local tourist destinations, yet it is also essential to expand globally in the future. For instance, it may be necessary to cooperate with tourist organizations in Ankara in order to expand the target audience and attract them to Pamukkale, which offers similar experiences regarding sites and services, yet it is considerably less known. On a global level, partnering with Malaysia is the place that is most visited by tourists.
Step 2
Becoming a component of the tourism industry and entering its market may become a problematic process due to the lack of awareness concerning the issues such as competition and demand. In addition, it is critical to building a competitive advantage that will allow a project to shine among the rest of the propositions. In the specified scenario, the competitive advantage by which the tourist destination can be characterized is quite pronounced, yet the project needs analysis of its strengths and weaknesses, as well as the challenges that it will face in the Turkish economy. Therefore, a SWOT analysis is required (see Table 1).
Strengths
Original and inimitable USP;
Strong competitive advantage;
Focus on diversity in appealing to customers;
High quality of services;
Active use of innovative technology
Weaknesses
Lack of experience;
Lack of presence in the global market
Opportunities
Expanding into the global market;
Using technology to improve the quality of services;
Introducing innovative approaches to marketing;
Creating new tourist attractions and services
Threats
Failure to establish a presence in the selected market;
Very high competition rates in the target market;
Unsustainable use of resources leading to a financial crisis;
Failure to manage the existing risks and build an efficient risk management framework.
Table 1. SWOT Analysis.
As Table 1 shows, a strong competitive advantage and a well-developed USP are the main advantages of the project. The identified strengths need to be utilized as the key assets and explored further to increase the potential of the project. As a result, one will be able to build its credibility and customer value, thus attracting target audiences to it. At present, the project is at the earliest stage of its development since it is only planned as a concept.
The specified situation implies both significant challenges and vast opportunities (Medlik, 2016). On the one hand, the lack of experience, as well as the absence of representation in the tourism industry of Turkey are serious disadvantages, which lower the chances for success. On the other hand, the impressive competitive advantage and an inimitable UVP, which lies at the core of the project, increase the probability of gaining public attention.
Given the current state of the project, it is critical to building a set of long-term strategies for tourism planning given the existing range of assets that the project could use. For instance, the integration of technologies and the focus on the continuous improvement of services should be seen as essential elements of the planning process. However, by far the most important addition to the current framework is the focus on innovative thinking and the integration of innovations into the core of the project.
Specifically, the use of disruptive innovations will be deemed as the foundation for the development of tourism in Turkey. While the incorporation of non-incremental innovations into business is often fraught with challenges, it is critical to developing flexibility in applying new approaches. Thus, the project will utilize all available resources and will meet the demands of its market fully. Moreover, the integration of innovative thinking into the core of the project will help it to grow and adapt to market changes (Pellé, 2017). Compared to the existing competitors, which prefer to incorporate incremental innovations into their design, the current project will be capable of adjusting to rapid changes and, thus will gain an opportunity to respond to rapid changes faster.
While the project currently focuses on building a unique brand and gaining a presence in the Turkish market, it will need to enter the field of rather tight competition. Particularly, the brand will have to face rivals that feature historical tourist attractions, at the same time providing outstanding comfort and inviting tourists to feel at homes, such as Aya Sofya and Ephesus. The specified two destinations have a very similar identity and roughly the same number of resources to compete with Pamukkale (see Figure 1).
Figure 1. Pamukkale and Other Destinations: Matrix.
As the matrix shows, the target destination is superior to the other two, primarily due to the use of innovative approaches in providing comfort to its visitors. Moreover, the sense of authenticity, while being very difficult to recreate, is more distinct in Pamukkale than in the rest of the destinations. Thus, the probability of succeeding is comparatively higher for this project. However, the two competing destinations also have a range of advantages to offer to the tourist market of Turkey. For instance, the beautiful scenery of Aya Sofya and the historic sites of Ephesus are difficult to surpass (see Appendix A).
Each of the identified destinations has its unique charm and is known quite well, which makes the process of competing with them all the more challenging. Nevertheless, with the right marketing strategy and the appropriate allocation of resources, Pamukkale has the chance to become a popular tourist destination (Uysal, Schwartz, & Sirakaya-Turk, 2017). Thus, the project will attract a range of customers to Turkey, increasing its economic growth rates and boosting its economy.
Singh, P. U., Kumar, R., & Ray, N. (2016). Handbook of research on promotional strategies and consumer influence in the service sector. New York, NY: IGI Global.
Uysal, M., Schwartz, Z., & Sirakaya-Turk, E. (2017). Management science in hospitality and tourism: Theory, practice, and applications. Boca Raton, FL: CRC Press.
Appendix A: Turkey: Tourism Map (The British Government, 2018).
