LT1001N Lecture 5 2006 7

LT1001NThe Leisure and Tourism Environment: 

LT1001N The Leisure and Tourism Environment Lecture 5 Producers and Consumers

Lecture Content: 

Lecture Content The commercial sector in leisure and tourism The commodification of leisure – ‘the leisure product’ Commercial partnerships: leisure, retail, hospitality and entertainment Home-based and virtual leisure Leisure as consumption

Characteristics: 

Characteristics Requires mass participation Caters for popular mass activities rather than specialisms Market driven Highly competitive Requires profit and growth for survival Creates additional demand through marketing strategies

Characteristics: 

Characteristics Growth stimulated by mass media (press and television) Emphasis on customer sovereignty Exploits ‘willingness to pay’ - determines pricing strategy Focus on passive consumption activities High volume, high cost, high throughput

Characteristics: 

Characteristics Some providers monothematic But most now tend to be involved in more than one leisure activity Commercial sector leisure corporations First Leisure Rank Leisure Leisure parks and plazas Often located on margins of cities (Evans – ‘the new leisure periphery’)

Characteristics - ‘consumption’: 

Characteristics - ‘consumption’ Commercial sector increasingly markets leisure and tourism as ‘consumable products’ Postmodern thinking Reflects contemporary lifestyles Leisure: Rojek, C., ‘Decentring Leisure’ Tourism: Urry, J., ‘Consuming Places’

Strengths and Weaknesses of the Commercial Sector: 

Strengths and Weaknesses of the Commercial Sector Strengths Able to identify, stimulate and create demand Consumer orientation Variety of provision Marketing skills Impacts on other sectors Weaknesses Generally mass provision Market determines price Affordability? Minority groups neglected?

DevelopmentMiddle Ages: 

Development Middle Ages Early roots of commercialism: Drinking (taverns) Gambling (wagers on rough sports and tavern games) Prostitution Circuses, travelling entertainers, fairgrounds

DevelopmentLate Industrial Revolution - 1840-1900: 

Development Late Industrial Revolution - 1840-1900 Growth of mass markets Workers with ‘disposable income’ Early capital investment in commercial leisure: Music Hall (by 1866, 33 in London) Football stadia Railway network - freight, business, leisure

DevelopmentEarly 20th Century - 1900-1939: 

Development Early 20th Century - 1900-1939 Growth in investment New technology - cinema, cylinder phonographs, gramophone records 1924-32: 100 cinemas built Spectator and audience development Massive football and cinema audiences Passive consumption of new commercial leisure forms Holiday infrastructure developed Butlin’s camps - Skegness 1936 Thomas Cook - packages to seaside resorts

DevelopmentPost-war period - 1945-1970’s: 

Development Post-war period - 1945-1970’s Initial post-war austerity - rationing (food, clothes, petrol) Some commercial leisure forms nonetheless continued - notably football, cinema Late 50’s - growth of disposable income Growth of home-centred leisure market Radios, record-players, television (impacts) DIY materials and equipment Growth in car ownership - increased access to leisure opportunities, short-stay domestic tourism

Development1980’s to the present: 

Development 1980’s to the present Increased growth of the commercial sector Provision takes new forms - e.g. leisure, retail and hospitality complexes Growth in ‘leisure shopping’ - malls, integrated facilities and attractions Metrocentre; Meadowhall; Bluewater; Lakeside Commercial leisure plazas Tower Park Poole; Milton Keynes Leisure Plaza; Leisure World, Jarman Fields, Hemel Hempstead Growth in technologically driven home-based leisure Increased commercial sector leisure spending

Nature of Commercial Sector Involvement: 

Nature of Commercial Sector Involvement How is the commercial sector involved in leisure? What types of provision does it currently make? What are the implications: for other sectors? for leisure participants? What current trends are evident?

Nature of Commercial Sector Involvement in Leisure: 

Nature of Commercial Sector Involvement in Leisure Direct provision of commercial facilities and venues Sale of leisure hardware and consumables (home-based leisure, consumer electronics, DIY materials and equipment, sports goods) Partnerships (various kinds) Sponsorship

Extent of Commercial Leisure Provision(after Martin and Mason, 1989): 

Extent of Commercial Leisure Provision (after Martin and Mason, 1989)

Economic Value of Commercial Leisure(Irvine and Taylor, 1998): 

Economic Value of Commercial Leisure (Irvine and Taylor, 1998) UK Commercial Leisure Market - total aggregate value (turnover) estimated as: £ 83,937 Million pounds! (£ 84 Billion) Total worth is equivalent to 17.5% of gross domestic product (GDP)

Nature of Commercial Sector InvolvementFacility Provision and Activity Promotion: 

Nature of Commercial Sector Involvement Facility Provision and Activity Promotion Mass appeal commercial provision Commercial leisure plazas ; ‘consumption’ – food, drink, eating out, takeaway; often linked to ‘consumption’ of the leisure experience itself: – multiplex cinemas; casinos, bingo-halls; dance halls, discotheques; nightclubs; ice rinks; ten-pin bowling alleys; snooker clubs; amusement arcades; laser games Mass appeal sports, arts and entertainment : Andrew Lloyd-Webber, Raymond Gubbay, West End theatre, major football stadia, pop concerts, motor shows, Wembley, Earls Court, London Arena Focus - “buying a good time”

Nature of Commercial Sector InvolvementMass media and home-based leisure: 

Nature of Commercial Sector Involvement Mass media and home-based leisure Mass media: Commercial TV, cinema, radio, press, publicity - sports coverage - media integration, popular cultural ‘product’, homogenisation Hardware and software: Home-based leisure : TV, video, satellite, cable, home cinema, music, CDs, DVDs, PCs, internet, computer games, growth of e-commerce

Nature of Commercial Sector InvolvementThe corporate market / The tourist market: 

Nature of Commercial Sector Involvement The corporate market / The tourist market Industrial leisure provision Corporate fitness market In-house gyms, health clubs, hotels Tourism Commercial sector activity Transportation - air, land, sea Accommodation Hospitality – food and drink Entertainment Visitor attractions

Nature of Commercial Sector InvolvementPartnerships: 

Nature of Commercial Sector Involvement Partnerships With OTHER PROVIDER SECTORS Public Sector: Operation of a commercial lease on local authority premises Private Finance Initiative agreement (PFI) Provision of a site Voluntary Sector: Voluntary stewards, first-aiders at commercial events With OTHER LEISURE-RELATED SECTORS Hospitality Retail

Best source on Commercial Partnerships: 

Best source on Commercial Partnerships Simmonds, B. (1994) Developing Partnerships in Sport and Leisure: a practical guide. Harlow: Longman.

Nature of Commercial Sector InvolvementSponsorship: 

Nature of Commercial Sector Involvement Sponsorship Sponsorship not philanthropic Sports and arts (teams; TV programmes; prominent events) Two-way process Benefits and drawbacks

Benefits to Sponsors: 

Benefits to Sponsors Publicity and promotion of the sponsoring organisation Corporate image enhancement (oil, tobacco, alcohol, banks) Improved public relations Trade relations Tax benefits Employee / client entertainment (special seating at sports event, opera)

Sponsorship drawbacks: 

Sponsorship drawbacks Funding to élite - who can afford to purchase (hidden subsidy) Activities with media exposure only Male orientated - (cf. women’s sport) – ‘many heroes but few heroines’ Can be short-lived, vulnerable, not sustained Influences pattern of leisure activity (e.g., ‘safe’ mainstream arts, rather than fringe - sponsors avoid controversy)

Trends in Commercial Leisure Provision(80’s and 90’s to present): 

Trends in Commercial Leisure Provision (80’s and 90’s to present) Six main trends identifiable : MARKET CONCENTRATION DIVERSIFICATION VERTICAL INTEGRATION . . . 80’s, 90’s GLOBALISATION . . . present COMMODIFICATION HOMOGENISATION

Market Concentration: 

Market Concentration Progressive sequence: Competition gives rise to small-scale entrepreneurs Growth and expansion of their businesses Stock-market floatation Mergers, take-overs, acquisitions Domination by larger firms and by transnational and international corporations – shape market - ‘concentrated’ in a few hands Oligopoly Loss of consumer power and choice

Examples of Market Concentration: 

Examples of Market Concentration Brewing industry Between 1920 and 1939 the number of British breweries fell from 2,889 to 885 1989 Monopolies and Mergers Commission first expressed concern At present, a small number of brewing giants produce 85% of the country’s beer Almost 9 out of 10 pints sold Bland product (e.g., ‘nitrokeg’), poor quality, overpriced, consumer choice reduced

International ownership and distribution: 

International ownership and distribution Much British beer is no longer British-owned e.g., Tetley: owned by Carslberg Brewery, Copenhagen Whitbread, and Bass: both now part of Interbrew of Belgium, which has 32% share of UK market British owned: Scottish Courage – 30% of UK market Guinness (Anglo-Irish), brewing operations world-wide Globalisation – some American products – e.g. Budweiser beer

Examples of Market Concentration: 

Examples of Market Concentration Airline industry In mid-1980s, top 25 airlines controlled 80% of the market Tour operations Top 10 tour operators control 50% of the market Dominated by a small number of ‘big players’ Thomson’s Holidays; My Travel; First Choice Competition intense; profit margins keen; insolvency a very significant risk (My Travel)

Diversification: 

Diversification Additionally, many large leisure and tourism companies choose to DIVERSIFY - Spread their investment (portfolio) across a wide range of sectors Often transnational and international companies Allied Leisure, Granada, Ladbroke, Rank Interests in hotels and catering, brewing, gambling, entertainment, attraction management, and media interests

Advantages of Diversificationin Leisure and Tourism investment: 

Advantages of Diversification in Leisure and Tourism investment Spreads risks in a volatile market Maximises profit, allows rapid growth, increased market share Limited barriers to entry Perceptions of growth Counter-balance to seasonality Perceptions of enjoyable sector - attractive to investors

Integration – horizontal and vertical(The merging of different business organisations): 

Integration – horizontal and vertical (The merging of different business organisations) Horizontal integration: Occurs between firms operating at the same level of production in the same industry e.g., My Travel (Airtours) / Aspro Travel / SAS Leisure / Sunquest Vacations (all package tour operators)

Integration – horizontal and vertical(The merging of different business organisations): 

Integration – horizontal and vertical (The merging of different business organisations) Vertical integration: Occurs between organisations at different levels of production in the same industry (Airline - packaging - retailing) Britannia Airways / Thomson Holidays / Lunn Poly (now German owned – TUI) My Travel International / My Travel / Going Places Air 2000 / First Choice / Thomas Cook Caledonian Airways / Best Inspirations / AT Mays

Advantages of Vertical Integration: 

Advantages of Vertical Integration More power / control over the industry Economies of scale (purchasing, marketing) Organised packaging to suit them Cross-subsidisation - so can undercut competitors Profit maximisation Allows diversification into related fields Customer: good price deals, but limited choices

Internationalisation and Globalisation: 

Internationalisation and Globalisation DIVERSIFICATION leads to INTERNATIONALISATION of PRODUCTS: books, films, music, restaurants of COMPANIES: visitor attractions – Disney and in turn to GLOBALISATION the development of global PRODUCTS and MARKETS - e.g., music, media, films, technology Control of output by MULTINATIONAL companies Promotional role of the MEDIA

Commodification: The Leisure and Tourism Product: 

Commodification: The Leisure and Tourism Product Increasingly, commercial leisure and tourism services seen as PRODUCTS to be sold - COMMODITIES Emphasis placed on BUYING and SELLING in the leisure and tourism MARKET Cultural activities become big business The ‘product’ is ‘packaged’ for sale Leisure packages – e.g. fitness club deals Package holidays Linkage to postmodern lifestyles (cf. Rojek, Urry)

Standardisation and Homogenisation: 

Standardisation and Homogenisation The focus on a cultural ‘product’ leads at best to STANDARDISATION - a fixed ‘package’ Reflects marketing needs, and the ‘volume/variety relationship’ High volume (mass sales) = limited choice At worst, product becomes bland and uniform - HOMOGENISATION Consumer choice eroded, price controlled by market

Current trends and issues in Commercial Leisure: 

Current trends and issues in Commercial Leisure Development of leisure / retail / hospitality partnerships The multiplex anchor (cinema complex as core) Location – concept of ‘critical mass’ of consumers Location - fringes of cities (Evans – ‘leisure / pleasure periphery’) Commercial leisure parks per se -no longer monothematic - diversification

Current trends and issues in Commercial Leisure‘Leisure / Other’ vs. ‘Leisure / Leisure’: 

Current trends and issues in Commercial Leisure ‘Leisure / Other’ vs. ‘Leisure / Leisure’ Interest now focusing on linked commercial leisure developments in a ‘leisure park’ (rather than, say, leisure/retail) More compatible - opening hours; customer motivations; leisure ethos Also commercial leisure / hospitality outlets Food courts Growth in family leisure, some decline in youth market

The Multiplex Phenomenon: 

The Multiplex Phenomenon Peripheral location (‘The leisure periphery’) Key ‘anchor’ Secondary spend (food, souvenirs, videos, DVDs, programmes, advertising) exceeds primary spend (cinema admission) Still growing – popularity of choice, ‘total experience’, high quality sound and vision (IMAX, Dolby, Surround Sound) Vehicle access essential, also public transport Has reversed decline in live film-going

Other Commercial Leisure Developments: 

Other Commercial Leisure Developments Public parks as places of commercial entertainment Event games: Paintball, Laserquest Commercial Arenas O2 Arena (Anschutz, 2007); MEN (formerly Nynex) Arena; Sheffield Arena; Braehead) - ice hockey Superleague, basketball, major pop concerts) 8,500 – 10,000 (- 26,000) seats. Arts Festivals Park Villages – Center Parcs

Recommended Reading: 

Recommended Reading Readings Five Evans, G. (1998) “Urban Leisure: Edge City and the New Leisure Periphery” Gives an excellent overview of new leisure developments in the commercial sector.

LT1001N - Keeping ahead!WHAT YOU SHOULD HAVE DONE BY NOW (Week 5): 

LT1001N - Keeping ahead! WHAT YOU SHOULD HAVE DONE BY NOW (Week 5) Downloaded Lectures 1-5 from the website Revised these lectures and made your own supplementary notes Prepared Readings Four (Bishop & Hoggett; Torkildsen papers) for this week’s seminar Completed and written up your Portfolio Task Two (‘The Tourism and Travel Domain’) Starting on Portfolio Task Three (‘The Sport and Recreation Domain’)