Slide1: Trends Influencing Tourism to 2020: Implications for Tourism Management Larry Dwyer Qantas Professor of Travel and Tourism Economics University of New South Wales Sydney, Australia


Slide2: A Study for the Sustainable Tourism CRC (Project team Dwyer, Edwards, Mistilis, Roman, Scott, Cooper) What form will tourism take in the future? What will be the implications for tourism stakeholders?


Slide3: Specific aims of this talk: identify the major economic, political, social, environmental, and technological forces driving global change to 2020 explore the implications for managers in the private and public sectors to develop NZ tourism in a sustainable way


Slide4: World Tourism Organisation Tourism Forecasts to 2020 International tourism will continue to boom in the 21st century increasing to almost 1.6 billion in 2020 This is 2.5 times the volume recorded in the late 1990s Annual average growth rate in international tourist arrivals is 4.1 per cent a year well above the maximum probable expansion of around 3 per cent per year in the world’s wealth


Emerging Destinations and Origins: Emerging Destinations and Origins Principal new international destinations include China, Vietnam and Mekong River countries the Middle East, North Africa, Eastern Europe and Latin America Emerging Origin markets include the new economic powerhouses of Asia (China, Korea, Taiwan, India and Malaysia) and from large population countries - Indonesia, Brazil, Argentina, Mexico, and, to some extent, the Eastern European countries


Global Trends Affecting Tourism: Global Trends Affecting Tourism We identify 5 key global trends Globalization and long term economic trends Political trends Social trends Environment, Resources and Energy Trends Changes in Technology


INFLUENCE OF MEGATRENDSON TOURISM: INFLUENCE OF MEGATRENDS ON TOURISM


Globalization and Long term Economic Trends: Globalization and Long term Economic Trends Six factors that drive globalization, economic dynamism and growth political pressures for higher living standards improved macroeconomic policies deregulation/liberalisation of international trade rising trade and investment diffusion of information technology increasingly dynamic private sectors


Growing World Economy: Growing World Economy rising income is the most powerful generator of tourism flows continued growth of national economies will generate increased outbound tourism and, to a lesser extent, domestic tourism Economic growth and greater spending power, and with greater available leisure time, will give greater numbers of people the opportunity to travel


Political Trends: Political Trends the gap between the “haves” and “have-nots” will widen unless the “have-not” countries pursue policies that support application of new technologies good governance universal education market reforms


Some Political Influences: Some Political Influences Destinations that are perceived to be less safe and secure will be avoided by tourists Enclave tourism strategies need to be re-examined (risk management) Globalisation Vs Localisation Modernity Vs Identity


Environment, Resources, Energy Trends: Environment, Resources, Energy Trends climate change higher temperatures ozone depletion sea level rise loss of snow cover and permafrost glacial melt in the polar regions extreme weather events, precipitation and hydrological changes natural resource depletion (energy, water) land-use changes (deforestation and desertification, salinity) changes in biodiversity (species loss)


Some Environmental Influences on Tourism: Some Environmental Influences on Tourism tourism both contributes to and is affected by climate change natural environments and climate will influence which destinations will be preferred by tourists climate change impacts on the profitability of the industry through increasing temperatures, energy and water use and increasing needs for adaptation Government policies will affect operator costs Long haul destinations particularly affected Diminishing supplies of energy will impact on fuel costs, affecting transport costs and tourism flows


Slide14: Social Trends ● Population and Ageing ● Urbanisation ● Changing Social Structures ● Health ● Aspirations and Expectations ● Values and Lifestyles ● Changing Work Patterns ● Gender ● Education


Social Influences on Tourism: Social Influences on Tourism Money rich-time poor. leisure time has become an increasingly scarce commodity Individualism. Tourist behavior is becoming driven by a desire for customisation (Pampering/hedonism) Self improvement. As more material needs are satisfied tourists seek newer, richer, deeper, authentic experiences Seeking value for money. The internet has lead to more knowledgeable consumers who seek best value for money and time


Social Influences on Tourism: Social Influences on Tourism Experimental. new tourists are extremely experimental, willing to try new products, foods and attractions, but too impatient to give a second chance to products or service that fail to satisfy initially Safety conscious. Safety issues are becoming increasingly important Social and Environmental Concern. Tourists are becoming more aware of political, social and environmental issues for different destinations (tipping points) Good service. the tourist marketing battle is shifting from competitive pricing to service improvement


Technological Change: Technological Change Two areas of change: IT and Transport Technology is the foremost management tool for successful performance and competitive advantage in the new business operating environment


Technological Influences: Technological Influences database management systems allow response to individual preferences to stimulate tourism New technologies give tourists more control over how they spend their time and money New technology is improving the speed and comfort and reducing the real cost of travel all aspects of tourism and hospitality organizations in all sectors are being dramatically changed by new technology BUT - - the tourism industry generally has not taken an active role in developing or adapting new technology Despite the proliferation of new technology, the industry is often reluctant to adopt new methods and tools


Slide19: Taken together, these drivers and trends set the context in which the global tourism industry may be expected to develop to 2020 No single driver or trend will dominate the global future each driver will have varying impacts in different regions and countries in some cases, these trends work at cross-purposes


Implications for Tourism Management to 2020 : Implications for Tourism Management to 2020 Development of Products and Services Destination Management Enterprise Management


Strategic Drift: Strategic Drift


Reversing Strategic Drift: Reversing Strategic Drift


The risk of strategic drift: The risk of strategic drift


Destination Management to avoid strategic drift: Destination Management to avoid strategic drift Understanding shifts in tastes underpins effective marketing communication Needs to be more joint promotions and alliances between NTOs and the private sector, to create a stronger collective tourism product Communicating destination risk reduction strategies will be important to maintaining competitive advantage managers must have the knowledge and the adaptive capabilities to apply their knowledge in contexts of continuous change (implications for tourism education) A Futures Commission for Tourism ? (Simmons)


Destination Management to avoid strategic drift: Destination Management to avoid strategic drift Destinations will encourage tourism development that benefits community residents, small business opportunities and jobs Theme for this conference Industry stakeholders need to inform communities of potential benefits of tourism development develop mutually beneficial community-stakeholder relationships does concept of ‘interactive traveller’ capture social trends?


Destination Management to avoid strategic drift: Destination Management to avoid strategic drift Importance of Domestic Tourism Theme of this conference crucial to maintaining business profits, incomes and employment in off season short breaks development of attractive packages? development of special events


Destination Management to avoid strategic drift: Destination Management to avoid strategic drift Destinations must adopt principles of sustainable tourism development eg. Kaikoura Green Globe Certified Destinations will increasingly measure leisure and tourism success not by number of visitors but by ‘yield’ per visitor Lower numbers, greater returns (value over volume) Antipodean research on tourism yield Economic Yield Vs Sustainable Yield


Expenditure Matrix: Countries: Expenditure Matrix: Countries


Yield Measures generated using CGE model: Yield Measures generated using CGE model Impact on GDP Impact on Value added Impact on Employment Impact on Environment


Real value added per visitor (trip) and per visitor night: Real value added per visitor (trip) and per visitor night


Greenhouse Gas Emissions: Greenhouse Gas Emissions


Enterprise Management to avoid strategic drift: Enterprise Management to avoid strategic drift Environmental Sustainability TIA Conference theme How can we turn the new environmental expectations of our overseas markets into opportunities for your business? Energy depletion and climate change not favourable to long haul destinations (NZ) Affect on NZ image as ‘green destination’? Important for firms to take a Triple Bottom Line (TBL) approach to sustainable development to ensure integrating social, environmental and economic information into managerial decision making Qualmark will incorporate more comprehensive environmental standards Enterprises need to adopt risk, crisis and disaster management policies and procedures in order to enhance their sustainability


Enterprise Management to avoid strategic drift: Enterprise Management to avoid strategic drift Increasingly travel and tourism will be a buyer’s market Tourism operators must inevitably shift from the promotion of the functional benefits of their products and services to the emotional benefits: reverie/escape status-enhancement stress-alleviation social-skill acquisition


Enterprise Management to avoid strategic drift: Enterprise Management to avoid strategic drift The use of electronic technology enables better identification of market segments and niches and to communicate with them more effectively Smaller players can benefit from web technology Operators must be proactive to link with companies that are developing, expanding, or franchising new entertainment or tourism products that fit with their market segments


Development of Products and Services: Development of Products and Services Product development must respond to context of greater individual choice Products are increasingly consumer rather than product driven, so enterprises must rapidly respond to consumer demands new leisure products cannot overly rely on environmentally and culturally sensitive environments more development of artificial environments Operators should provide high quality interpretation of environmental and cultural/ethnic attractions Product development will be increasingly targeted and increasingly theme-based Entertainment Excitement Education (UNWTO 2002)


Conclusions: Conclusions Tourism will develop consistently with wider economic, social, cultural, political, technological and environmental trends affecting all countries The challenge for tourism stakeholders in both the private and public sectors is to avoid strategic drift – Stay Alert !!! - - - to account for these changes pro-actively to achieve and maintain competitive advantage for their organizations