Destination Analysis UNIT 1: THE CONCEPT OF TOURIST DESTINATION Chapter objectives • Understand the general destination concept and the connection between the destination system and tourism • Explore the operation of the destination management as the tourist value chain • Identify and explain the necessities of tourist destination managementDestination ConceptThe characters of the destination, its concept, can be opened in the knowledge of its forming factorsand of the “behaviour”, nature of destination. In the conceptual estimation of destination differentstanding-points can be followed. In the whole,“Destination is a physical location where the tourist is spending at least one night. It is containingtourist attractions, products, relating services that are necessary to meet the stay of a tourist on theplace at least for one day. Destination has physical and administrative limits, which aredetermining its management, and has an image and perception. It includes a lot of elements beingconcerned, it is capable for constructing a network, a cooperation and to become a biggerdestination; the determination of destination is made from the point of view of the tourist.”To become a tourist destination the location, the region have to have the factors that determine thetourist destinations. These factors are determinants in the bordering, determination of the core areadestination; their development is essential by the increase of the competitiveness of the specificdestinations.According to Buhalis (2000) determinants of the destination are as follows: • Tourist attractions, e.g. natural factors, factors made by human being, heritage, special events, etc.; • Approachability, e.g. the entire traffic system, including roads, traffic means, etc.; • Tourist services, e.g. accommodation, host services, other tourist services, etc.; • Product packages; • All kind of activities that can be run by the tourists during their stay; public-utility services, e.g. banks, telecommunication, hospitals, etc.Definition of destination, summarizing the aspects regarding the nature of destination and itsdetermining factors (Angelo Presenza – Lorn Sheehan – J.R. Brent Ritchie, 2005), the charactersof destination can be summarized as follows:Destination: • Area target that is chosen by the tourist as the target of his travel • Receiving area that is providing services for the tourist and people living on the spot • It is defined from the point of view of the tourist • A place/region that is confinable physically and geographically • A place/region that is containing tourist attractions, products, services and other background services being necessary for spending at least one day • The tourist is spending at least one night here ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis • It is containing a lot of persons being concerned who are cooperating with each other • It has an image • It has perception (it means that each of the tourists can form an opinion about a destinationthrough his own “screen” subjectively) • It is providing integrated experience for the tourist • In a wider sense it is a tourist product that is competing with other tourist products (destinations) on the market of tourism • A kind of a complex and integrated system that is taking the existence of a modern tourism controlling and management system to the successful operation for granted • It is a system being built from below and supported from aboveNot all locations, regions can become a tourist destination. There are such kind of basic criterionsthat has to be met so that a location, region could become a tourist destination. The abovementioned are only the most basic criterions. The determination and bordering of the destinations orthe core area destinations are supposing the development of a special system of criterions that ismade according to preferences, expectations, points of view of the tourist first of all.Tourist Destination - DefinitionThe term ‘destination’ used in relation to travel and tourism refers to a place to which a touristtravels, generally with the intention of “staying” (e.g. making use of accommodation) for sometime.Some tourist destinations are ‘transitory’ ones; perhaps on the way to another destination. Forexample, a tourist might visit a number of islands in a “group”, staying at each one for two or threedays. Many tourists, on the other hand, travel direct to their ‘final destinations’, where they proposeto stay - or to be “based” - for the duration of their tours.Some tours might provide a “combination”. For instance, a tourist might travel to - and stay for oneor two days at - one or more transitory destinations on the way to the final destination, where he orshe will stay for the remainder of the tour. Of course, in some cases - such as fly-drive tours - theremight be no “final destination” as such, because the tourists decide where they want to stay, and forhow long they want to stay there. Also, some fly-drive and coach tours and cruises start andeventually finish at the same seaport or airport, etc.The foregoing examples illustrate just how wide is the range of types of tour available to touriststoday. The range of destinations available to tourists from many countries is also very wide - and iscontinually increasing.Although some people are content to take the “same” holiday over and over again, in the sameresort (sometimes staying at the same hotel, guesthouse, camp site, etc) many other people seekvariety - “something different”, new or exciting. Indeed, in many countries the “traditional” type ofholiday - to a national seaside resort, for example, has declined considerably in popularity.International travel has blossomed in recent years (although economic restraints and transportproblems - such as airline and air traffic controllers’ strikes - tend to reverse the trend to somedegree) and peoples’ “horizons” have widened. Low-fare airlines and tour operators offeringmodestly priced package tours have, of course, been responsible to a large degree for this change inattitudes, but they must be constantly on the lookout for new destinations (as well as new types oftours) as tourists’ demands and expectations change. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisThe connection between the system of destination and tourismThe place of destination in the system of tourism is demonstrated by the system of tourism.Destination can be found on the side of the supply (the product) from the two sub-systems of thetourism system. The tourist supplies are consisting of the factors of the receiving area that is usedby the tourist during his stay. Central element of the supply is the tourist product that is containingthe services meeting the demands of the tourist. Tourism is an integrated, open, complex systemoperating dynamically each element of which (its micro- and macro environment) there is in amutual dependence with the others.From the factors forming the two sub-systems of the tourism market, the supply (tourist product) isconsisting of the following elements: attractions, accessibility, services, safety, hospitality, etc.. Theelements of the tourist destination according to the above definition (Buhalis, 2000) run as follows:tourist attractions (natural and made by human being, special events, etc.), accessibility, touristservices, product packages, active activities, and public services.Elements of importance for the composition of a holiday include infrastructure (airports, roads,telecommunications, environmental services, car-hire, etc.), accommodation facilities (hotels,camping sites, houses for rent, etc.), catering (restaurants, pubs, supermarkets, etc.), entertainmentfacilities (shopping, museums, attractions, sports facilities, etc.), and reception services (travelagencies, promotional offices, information services, guides, etc.).The emphasis, however, is not only on private, commercial units: infrastructure and someattractions and information facilities are publicly operated. The product can be only one or severalproducts as well, however destination can be characterised as a set of complex services andattractions related to each other. Destination management system being responsible for the touristdestination controlling and management is forming a connection with the poles of demand andsupply. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisOperation of the destination management – as the tourist value chainThe simple value chain is representing such kind of a process that is delivering a product from theidea through the product development phases to the final user. Michael Porter has characterised thevalue chain with the connection of the activities of which each element represents the different levelof providing offers. The principle of the destination operation is similar to the one of the traditionalvalue chain too. However, destination management as the tourist value chain is leading the touristthrough the entire process of travel, right from the decision of travelling to the return.The traditional value chain puts first of all the product and its development in the centre; the leadingcharacter of the tourist value chain is the tourist who wants to use the tourist products (touristsupply of destination) on a more complex way to be able to meet his demands.The elements of the tourist value chain are consisting of the elements determining and influencingthe travel process and of the offering elements provided by the specific destination. There can befound different characters behind the offering factors that form destination, just like e.g. the localself-government, the owners and operators of the attractions, services, local tourist consortiums andpartnerships, civilian organisations, institutions supporting enterprises, tourist developinginstitutions, organisations, etc.The effective operation of destination is taking the conscious cooperation of the characters forgranted that is realized in the harmonized organization and operation of the products and servicesmostly. It is important that the service providers should deliver the same high level of qualitybecause the service of different levels of the key and supplementary functions of destinations caninfluence the judgment of the whole destination negatively. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisNecessity of the development of tourism destination managementThe destinations – as the organizational systems developing on the regional concentration andcooperation – have to be taken into connection with the economic processes in the world, one basicprinciple of which is that the durable industrial and business competitive advantages are appearingconcentrated geographically more and more.In the competition there are not taking part separate persons of the market but the basic units of themarket competition, the companies, enterprises and regional institutions. The regional concentrationprinciple is playing a determinant role in the effective operation of the destination as well, which isgenerating competitive advantages. The tourist target areas are worth settling to a regionalconcentration being significant from the point of view of tourism, based on definitive basicprinciples, so that the economic potential of the region can be increased.Determinant factors of the tourist competitiveness of each region are the development and operationof the management system with the effective, suitable competences and calculable financing andorganisational background. Modern tourism management and operation, that is the revaluation ofthe current traditions, are needed to the development of an effective management system organisedon the basis of the regional concentration principle.The integrated planning, management and operation of tourism are needed on all levels of tourism.Development of the system is taking for granted such kind of regional and organisational planningbasic principles as the: • Revaluation of cooperation, development of consciousness in the cooperation, development, planning, organisation, operation of the forms of cooperation; • More close cooperation with other regions, branches in the processes of planning and development originating from the multiplier effect of tourism; • More complex approaches in the development of the service system of tourism: beside the development of the tourist infra- and superstructure the development of the background infrastructures, the supporting factors have to be emphasized too; • The use of innovative, modern, up to date technologies in the processes of development.Destination Competitiveness ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisRitchie and Crouch’s (1993) Calgary model recognised 5 key constructs of destinationcompetitiveness. These constructs are underpinned by a number of destination related factors.At the outset, Ritchie and Crouch identify a destination’s appeal to be a factor of tourismdestination competitiveness, referring to the destination attractors and deterrents. Attractors includeeleven elements: natural features, climate, cultural and social characteristics, general infrastructure,basic services infrastructure, tourism superstructure, access and transportation facilities, attitudestowards tourists, cost/price levels, economic and social ties and uniqueness.Among destination deterrents are security and safety (i.e. political instability, health and medicalconcerns; poor quality of sanitation; laws and regulations such as visa requirements). These factorscan act as a barrier to visiting a particular destination. The Calgary model further emphasises that acarefully selected and well executed program of destination management can serve to improve thetourism competitiveness of a destination.In particular, marketing efforts have the potential to enhance the perceived appeal (e.g. image) of adestination, whilst managerial initiatives can strengthen the competitive position of a destination.The model also argues that destination competitiveness can be enhanced through managementorganisation capabilities and strategic alliances. Additionally, the use of detailed informationsystems is advanced as a basis for decision making, where internal management informationprovides the ability to better manage the performance of destinations product. This aspect of themodel is closely linked to a research function, as research enables a destination to adapt to changingmarket conditions.The final construct in the model is Destination Efficiency, which draws on the integrity ofexperience, relating to the ability of the destination to provide an appropriate (expected andpromised) experience. The second set of the efficiency factors are termed by the authors asproductivity variables. These include variables which are hypothesised to develop skills and/orconditions which can increase the quantity and quality of the output of tourism experiences for agiven level of resource input, such as training staff. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis UNIT 2: INTRODUCTION TO DESTINATION ANALYSIS Chapter objectives • Outline and describe the tourist destination features • Analyze different types of destinations and their competitiveness • Understand the evolving concepts of destinationsTourist Destination FeaturesDestination is the location of a position or point in physical space that something occupies on theEarth’s surface. The location can be reached by using transportation of air, water and also main landwhich is by airplanes, ferries, coaches, cars and so on. Currently, there will be many changes to thelocations once there has development in that place – there will have a growth in the economic, aswell as an increase in the standard of livingGenerally there are two (2) features for the destination which are: • Primary feature • Secondary featurePrimary FeaturesClimateClimate encompasses the statistics of temperature, humidity, atmospheric pressure, wind, rainfall,atmospheric particles count and other meteorological elements in a given region over long periodsof time. Climate can be contrasted to weather, which is the present condition of these same elementsand their variations over periods up to two weeks.The climate of a location is affected by its latitude, terrain and altitude, as well as nearby waterbodies and their currents. Climate can be classified according to the average and the typical rangesof different variables, most commonly temperature and precipitation.Different climate attract different types of tourists. Example, tourist from the Western Hemispheretends to choose destination with warm climate as to avoid the colder climate at their country oforigin. Meanwhile, tourist from warmer climate may want to experience the winter season of theother countries.EcologyEcology is the scientific study of the distributions, abundance, share effects, and relations oforganism and their interactions with each other in a common environment. Ecology can be definesas the study of the interactions between life and its physical environment; the relationship betweenanimals and plants and how one species affect another. An eco-system is the unique network ofanimal and plant species that depends on the other to sustain life – the interactions between andamong organisms at every stage of life and death can impact the system. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisEcology system is one of the main resources in nature tourism. Destination with well-preservedecology will be able to sustain their attractiveness and competitiveness in getting tourists attentionand stay as the top chosen destination among nature lovers.Cultural heritageCultural heritage is the legacy of physical artifacts and intangible attributes of a group or societythat are inherited from past generations, maintained in the present and bestowed for the benefit offuture generations – often though, what is considered cultural heritage by one generation may berejected by the next generation, only to be revived by a succeeding generation. Physical or ‘tangiblecultural heritage’ includes buildings and historic places, monuments, artifacts, etc., that isconsidered worthy of preservation for the future – these include objects of significant to thearchaeology, architecture, science or technology of a specific culture.Culture also can include cultural landscapes (natural features that may have cultural attributes). Theheritage that survives from the past is often unique and irreplaceable, which places theresponsibility of preservation on the current generation. Grassroots organizations and politicalgroups have been successful at gaining the necessary support to preserve the heritage of manynations for the future.Cultural heritage is one of the main resources in cultural tourism, and also one of the mostinfluential tourist’s travel motivations. Learning of different cultural elements and the process ofcultural exchange between the tourists and the host communities are part and parcel in culturaltourism, and it can only be possible if the cultural heritages are preserved.ArchitectureArchitecture means: The art and science of designing and erecting buildings and physical structures.The practice of an architect, where architecture means to offer or render professional service inconnection with the design and construction of a building, or group of buildings and the spacewithin the site surrounding the buildings, that have their principal purposes of human occupancy orusage.Architecture is both the process and the product of planning, designing and constructing form, spaceand ambience that reflect functional, technical, social and aesthetic considerations – it requires acreative manipulation and coordination of material, technology, light and shadow. Architecture alsoencompasses the pragmatic aspects of realizing buildings and structures, including scheduling, costestimating and construction administration.Architecture can be about man-made attractions such as destination landmarks, as well as influentialand iconic structures. Examples of this type of attraction are Taj Mahal, Pyramid of Giza, GreatWall of China, as well as Sydney Opera House.Land formsIn the earth sciences and geology sub-fields, a landform or physical feature comprises ageomorphologic unit, and is largely defined by its surface form and location in the landscape, aspart of the terrain, and as such, is typically an element of topography. Landform elements alsoinclude seascape and oceanic water body interface features such as bays, peninsulas, seas and soforth, including sub-aqueous terrain features such as submerged mountain ranges, volcanoes, andthe great ocean basins. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisLandforms are categorized by characteristic physical attributes such as elevation, slope, orientation,stratification, and rock exposure and soil type. Some generic landform elements including: pits,peaks, channels, ridges, passes, pools and plains, may be extracted from a digital elevation modelusing some automated techniques where the data has been gathered by modern satellites andstereoscopic aerial surveillance cameras.Landforms also can be part of attractions in nature tourism - iconic landforms such as GrandCanyon, Niagara Falls and Mount Fuji.Secondary FeaturesAccommodationAccommodation in tourist destination is an establishment that provides paid lodging on a short-termbasis – most common are hotels, motels, resorts, etc. The provision of the accommodation consistedof rooms with modern facilities, including en-suite bathrooms and air-conditioning or climatecontrol. Additional common features found in hotel rooms are telephone, television, and Internetconnectivity – snack food and drinks may be supplied in a mini-bar, and facilities for making hotdrinks.Larger establishment may provide a number of additional guest facilities such as a restaurant,swimming pool or childcare, and have conference and social function services. Some establishmentoffer meals as part of a room and board arrangement – in UK, a hotel is required by law to servefood and drinks to all guests within certain stated hours, to avoid this requirement it is notuncommon to come across private hotels which are not subjected to this requirement; in Japan,capsule hotels provide a minimized amount of room space and shared facilities.Unusual accommodation – there are many accommodation that can be considered destinations inthemselves, by dint of unusual features of the lodging or its immediate environment. The categoriesare as follow: 1. Treehouse Hotels Some hotels are built with living tress as structural elements, for example the Costa Rica Tree House in the Gandoca-Manzanillo Wildlife refuge, Costa Rica; the Treetops Hotel in Aberdare National Park, Kenya; the Ariau Towers near Manaus, Brazil; and Bayram’s Tree Houses in Olympos, Turkey 2. Bunker Hotels The Null Stern Hotel in Teufen, Appenzellerland, Swirtzerland and the Concrete Mushrooms in Albania are former nuclear bunkers transformed into hotels 3. Cave Hotels Desert Cave Hotel in Coober Pedy, South Australia and the Cuevas Pedro Antonio de Alarcon in Guadix, Spain, as well as several hotels in Cappadocia, Turkey, are notable for being built into natural cave formations, some with rooms underground. There are all built underground 4. Capsule Hotels Capsule hotels are a type of economical hotel that are found in Japan, where people sleep in stacks of rectangular containers 5. Ice and Snow Hotels ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis The Ice Hotel in Jukkasjarvi, Sweden, and the Hotel de Glace in Duschenay, Canada, melt every spring and are rebuilt each winter; the Mammut Snow Hotel in Finland is located within the walls of Kemi snow castle; and the Lainio Snow Hotel is part of a snow village near Yllas, Finland 6. Garden Hotels Garden hotels, famous for their gardens before they become hotels, include Gravetye Manor, the home of garden designer William Robinson, and Cliveden, designed by Charles Bary with a rose garden by Geoffrey Jellicoe 7. Underwater Hotels Some hotels have accommodation underwater, such as Utter Inn in Lake Malaren, Sweden. Hydropolis, project cancelled 2004 in Dubai, would have had suites on the bottom of Persian Gulf, and Jules Undersea Lodge in Key Largo, Florida requires scuba diving to access its roomsCateringCatering is the business of providing foodservice at a remote site or a site such as a hotel, publichouse (pub), or other location. 1. Mobile catering A mobile caterer serves food directly from a vehicle or cart that is designed for the purpose. Mobile catering is common at outdoor events (such as concerts), workplaces, and downtown business districts. 2. Event catering Events range from box-lunch drop-off to full-service catering. Caterers and their staff are part of the foodservice industry. When most people refer to a "caterer", they are referring to an event caterer who serves food with waiting staff at dining tables or sets up a self-serve buffet. The food may be prepared on site, i.e., made completely at the event, or the caterer may choose to bring prepared food and put the finishing touches on once it arrives. 3. Boxed lunch catering A box lunch is a lunch consisting of a sandwich, chips, fruit and a dessert. A box lunch is typically prepared by a caterer and dropped off to a location for a client’s dining needs. Box lunches are used primarily in the corporate arena for working lunches when they do not have time to take a break from their meeting yet still need to eat. A box lunch order is placed with a caterer a couple of days before the delivery date and is a cheaper way to go instead of a full sit-down lunch. The box lunch option is strictly a drop-off service and does not offer any type of wait staff or cleanup. The caterer’s only job is to prepare and deliver the food. 4. Catering Officers on ships Merchant ships often carry Catering Officers - especially ferries, cruise liners and large cargo ships. In fact, the term "catering" was in use in the world of the merchant marine long before it became established as a land-bound business.TransportationsTransport or transportation is the movement of people, cattle, animals and goods from onelocation to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. Thefield can be divided into infrastructure, vehicles, and operations. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisTransport is important since it enables trade between peoples, which in turn establishescivilizations.Transport infrastructure consists of the fixed installations necessary for transport, and may be roads,railways, airways, waterways, canals and pipelines, and terminals such as airports, railway stations,bus stations, warehouses, trucking terminals, refueling depots (including fueling docks and fuelstations), and seaports. Terminals may be used both for interchange of passengers and cargo and formaintenance.Vehicles traveling on these networks may include automobiles, bicycles, buses, trains, trucks,people, helicopters, and aircraft. Operations deal with the way the vehicles are operated, and theprocedures set for this purpose including financing, legalities and policies.In the transport industry, operations and ownership of infrastructure can be either public or private,depending on the country and mode. Passenger transport may be public, where operators providescheduled services, or private. Freight transport has become focused on containerization, althoughbulk transport is used for large volumes of durable items.Transport plays an important part in economic growth and globalization, but most types cause airpollution and use large amounts of land. While it is heavily subsidized by governments, goodplanning of transport is essential to make traffic flow, and restrain urban sprawl.Transport in LondonLondons transport forms the hub of the road, rail and air networks in the United Kingdom. It hasits own dense and extensive internal private and public transport networks, as well as providing afocal point for the national road and railway networks.London also has a number of international airports including one of the worlds busiest, Heathrow(ithave also first London pod system called ULTra), and a seaport. Londons internal transport systemis one of the Mayor of Londons four policy areas, administered by its executive agency Transportfor London (TfL).TfL controls the majority of public transport in the area, including the Underground, London Buses,Tramlink, the Docklands Light Railway, and London Overground rail services within GreaterLondon; other rail services are franchised to train operating companies by the national Departmentfor Transport (DfT).TfL also controls most major roads in the area, but not minor roads The body is organised in threemain directorates and corporate services, each with responsibility for different aspects and modes oftransport. The three main directorates are: 1. London Underground Responsible for running Londons underground rail network, commonly known as the tube, and managing the provision of maintenance services by the private sector. This network is sub-divided into three service delivery units: a. BCV: Bakerloo, Central, Victoria and Waterloo & City lines b. JNP: Jubilee, Northern and Piccadilly lines c. SSR (Sub Surface Railway): Metropolitan, District, Circle and Hammersmith & City lines 2. London Rail, responsible for: ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis Co-ordination with the operators that provide National Rail service within London. a. London Overground, although actual operation is undertaken by a private sector franchisee and maintenance by Network Rail. b. Docklands Light Railway: normally abbreviated DLR, this is the automatically driven light rail network in east London, although actual operation and maintenance is undertaken by a private sector franchisee. c. London Trams, responsible for managing Londons tram network, by contracting to private sector operators. At present the only tram system is Tramlink in south London, but others are proposed. 3. Surface transport, consisting of: a. London Buses, responsible for managing the red bus network throughout London, largely by contracting services to private sector bus operators. Incorporating CentreComm, London Buses Command & Control Centre, a 24 hour Emergency Control Centre based in Southwark. b. London Dial-a-Ride, which provides paratransit services throughout London. c. London River Services, responsible for licensing and coordinating passenger services on the River Thames within London. d. London Streets, responsible for the management of Londons strategic road network. e. London congestion charge. f. Public Carriage Office, responsible for licensing the famous black cabs and other private hire vehicles. g. Victoria Coach Station, which owns and operates Londons principal terminal for long distance bus and coach services. h. Cycling Centre of Excellence, which promotes cycling in London and manages the contract with Serco for the Barclays Cycle Hire scheme i. Walking, which promotes better pedestrian access.Types of DestinationsSelf-contained resortsThe term "resort" is now also used for a self-contained commercial establishment which attempts toprovide for most of a vacationers wants while remaining on the premises, such as food, drink,lodging, sports, entertainment, and shopping. The term may be used to identify a hotel property thatprovides an array of amenities and typically includes entertainment and recreational activities.A hotel is frequently a central feature of a resort, such as the Grand Hotel at Mackinac Island,Michigan. A resort is not merely a commercial establishment operated by a single company,although in the late twentieth century this sort of facility became more common.Destination resortA destination resort is a resort that contains, in and of itself, the necessary guest attractioncapabilities—that is to say that a destination resort does not need to be near a destination (town,historic site, theme park, or other) to attract its public.A commercial establishment at a resort destination such as a recreational area, a scenic or historicsite, a theme park, a gaming facility or other tourist attraction may compete with other businesses ata destination. Consequently, another quality of a destination resort is that it offers food, drink,lodging, sports and entertainment, and shopping within the facility so that guests have no need toleave the facility throughout their stay. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisCommonly these facilities are of higher quality than would be expected if one were to stay at a hotelor eat in a towns restaurants. Some examples are Atlantis in the Bahamas, Costa do Sauípe in theNortheastern Brazil, Laguna Phuket in Thailand and Sun City near Johannesburg in South Africa.All-inclusive resortAn all-inclusive resort charges a fixed price that includes most or all items. At a minimum, mostinclusive resorts include lodging, unlimited food, drink, sports activities, and entertainment for thefixed price. All-inclusive resorts are found in the Caribbean, particularly Cuba, and elsewhere.Notable examples are Club Med and Sandals Resorts.An all-inclusive resort includes a minimum of three meals daily, soft drinks, most alcoholic drinks,gratuities and possibly other services in the price. Many also offer sports and other activitiesincluded in the price as well.They are often located in warmer regions - The all-inclusive model originated in the Club Medresorts which were founded by the Belgian Gérard Blitz. Some all-inclusive resorts are designed forspecific vacation interests. For example, certain resorts cater to adults, while even more specializedproperties accept couples only.Other all-inclusive resorts are geared toward families, with facilities like craft centers, game roomsand water parks to keep children of all ages entertained. All inclusive resorts are also very popularlocations for destination weddings.Conference and resort hotelsConference and resort hotels are hotels which often contain full-sized luxury facilities with fullservice accommodations and amenities. These hotels may attract both business conferences andvacationing tourists and offer more than a convenient place to stay.These hotels may be referred to as major conference center hotels, flagship hotels, destinationhotels, and destination resorts. The market for conference and resort hotels is a subject for marketanalysis. These hotels as destinations may be characterized by distinctive architecture, upscalelodgings, ballrooms, large conference facilities, restaurants, and recreation activities such as golf orskiing. They may be located in a variety of settings from major cities to remote locations.Ways a self-contained resort could compete for tourists 1. provide most of the travel facilities (accommodation, foods and beverages, recreation, shopping, etc.) within the compound 2. a fixed price that includes most or all items 3. does not need to be near a destination (town, historic sites, theme park, etc) 4. designed for specific vacation interest i.e. certain resorts carter to couple only 5. characterized by distinctive architecture, upscale lodging and recreation activities such as golf and skiing 6. the facilities provide are of higher quality than would be expected 7. provide special comprehensive programs such as spa services, physical fitness activities, and healthy cuisine 8. a combination of activities and attractions for both looking for adventure and tranquility in the vacation ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisTownsA town is a human settlement larger than a village but smaller than a city. The size definition forwhat constitutes a "town" varies considerably in different parts of the world, so that, for example,many "small towns" in the United States would be regarded as villages in the United Kingdom,while many British "small towns" would qualify as cities in the United States.Towns which are resorts — or where tourism or vacationing is a major part of the local activity —are sometimes called resort towns. If they are by the sea they are called seaside resorts. Inlandresorts include ski resorts, mountain resorts and spa towns.Towns such as Sochi in Russia, Sharm el Sheikh in Egypt, Barizo in Spain, Cortina dAmpezzo inItaly, Druskininkai in Lithuania, Nice in France, Newport, Rhode Island, St. Moritz in Switzerland,Blackpool in England and Malam Jabba in Pakistan are well-known resorts.Seaside resortsSeaside resorts are located on a coast. Many seaside towns have turned to other entertainmentindustries, and some of them have a good deal of nightlife. The cinemas and theatres often remainto become host to a number of pubs, bars, restaurants and nightclubs. Most of their entertainmentfacilities cater to local people and the beaches still remain popular during the summer months.Although international tourism turned people away from British seaside towns, it also brought inforeign travel and as a result, many seaside towns offer foreign language schools, the students ofwhich often return to vacation and sometimes to settle.Ski resortsIn Europe, ski resorts are towns and villages in ski areas, with support services for skiing such ashotels and chalets, equipment rental, ski schools and ski lifts to access the slopes.VillageA village is a clustered human settlement or community, larger than a hamlet with the populationranging from a few hundred to a few thousand (sometimes tens of thousands). Though often locatedin rural areas, the term urban village is also applied to certain urban neighborhoods, such as theWest Village in Manhattan, New York City and the Saifi Village in Beirut, Lebanon, as well asHampstead Village in the London conurbation.Villages are normally permanent, with fixed dwellings; however, transient villages can occur.Further, the dwellings of a village are fairly close to one another, not scattered broadly over thelandscape, as a dispersed settlement.Tourism villageIs a village area which have some special characteristics of a place as tourism object. In this area,the traditions and culture of local community are still pure. A tourism village is also coloured bysome supporting factors, such as local cuisine/food, agriculture system and social system.Besides, pure nature and environment are added points for a tourism village. Good facilities toprovide a village becoming a tourism object are also important. These facilities make visitors whocome to a tourism village enjoy their vacation. So, all tourism villages are completed by manysupporting facilities, such as transportation, telecommunication, medical, and accommodationfacilities. The accommodations in tourism village are special. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisVisitors can spend the nights using homes stay provided in the village - It gives visitors amemorable moment because they can feel a purely village atmosphere. Until now, there are seventourism villages located in Central Java province, Indonesia. - There are Candirejo, Dieng, Duwet,Karangbanjar, Karimunjawa, Ketenger, and Selo village.Capital CitiesA capital city (or just, capital) is the area of a country, province, region, or state considered toenjoy primary status; although there are exceptions, a capital is typically a city that physicallyencompasses the offices and meeting places of the seat of government and is usually fixed by law orby the constitution.An alternative term is political capital, but this phrase has a second meaning based on an alternatesense of the word capital. The capital is often, but not necessarily, the largest city of its constituentarea, and is also often a specialized city.Strategy to maintain capital city competitiveness as tourist destination a) the construction of new cultural center b) improve access – enlarging road, improve transportation system c) more monitoring of accommodation in terms of health and safety standards d) develop new tourist attractions e) improvement of public facilities such as toilet, signage f) continued marketing and advertising activitiesCountryA country is a region legally identified as a distinct entity in political geography. A country may bean independent sovereign state or one that is occupied by another state, as a non-sovereign orformerly sovereign political division, or a geographic region associated with a previouslyindependent people with distinct political characteristics.Regardless of the physical geography, in the modern internationally accepted legal definition asdefined by the League of Nations in 1937 and reaffirmed by the United Nations in 1945, a residentof a country is subject to the independent exercise of legal jurisdiction, while "Any person visiting acountry, other than that in which he usually resides, for a period of at least 24 hours" is defined as aforeign tourist‘.There are 204 total states, with 193 states participating in the United Nations and 13 states whosesovereignty status are disputed - The newest state is South Sudan.International tourist arrivals by country of destination 2010Out of a global total of 940 million tourists, the top ten international tourism destinations in 2010were (see the barometer for the full rankings): Rank Country International tourist arrival 1 France 76.80 million 2 United States 59.75 million 3 China 55.67 million 4 Spain 52.68 million 5 Italy 43.63 million ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis 6 United Kingdom 28.13 million 7 Turkey 27.00 million 8 Germany 26.88 million 9 Malaysia 24.58 million 10 Mexico 22.40 millionRegions and AreasA tourism region is a geographical region that has been designated by a governmental organizationor tourism bureau as having common cultural or environmental characteristics. These regions areoften named after historical or current administrative and geographical regions. Others have namescreated specifically for tourism purposes. - The names often evoke certain positive qualities of thearea and suggest a coherent tourism experience to visitors.Countries, states, provinces, and other administrative regions are often carved up into tourismregions. In addition to drawing the attention of potential tourists, these tourism regions oftenprovide tourists who are otherwise unfamiliar with an area with a manageable number of attractiveoptions.Some of the more famous tourism regions based on historical or current administrative regionsinclude Tuscany in Italy and Yucatán in Mexico. Famous examples of regions created by agovernment or tourism bureau include the United Kingdoms Lake District and Californias WineCountry.Specialty RegionsWine Regions - Building on the success of wine tourism in regions such as Californias WineCountry, the number of wine regions catering to tourists has grown in recent decades. Althoughwine regions have existed since the 1850s in France, wine tourism became increasingly popular inthe 1970s.Wine regions such as Bordeaux and Burgundy in France were joined by regions in California, Italy,Spain, and even New York as areas of interest to the potential wine tourist. Currently, several dozencountries have their own wine regions, while many of these countries have dozens of regions withintheir borders.Many wine regions do not correspond to designated tourism regions. For example, the famousBordeaux region in France is part of the political and tourism region of Aquitaine while the Moselwine region of Germany is located in the Rhineland-Palatinate state and extends far to the northeastof the Moselle and Saar tourism region.Traditional CentersA national center for traditional arts that usually established by the tourism governing bodies of aparticular country. The goal of the center is overall planning, supporting the related research,promoting, preserving, and teaching the traditional arts, and also redefining, renovating, anddeveloping the traditional arts.Example; • The National Gugak Center (Formerly: National Center for Korean Traditional Performing Arts) is the governing body established to preserve and promote traditional Korean performing arts. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis • National Center for Traditional Arts, Taiwan - In addition to organized displays and performances of culture and art, it also provides a stage where performing artists can show off their creative works. The emphasis here is on the continuous propagation, innovation, and renewal of traditional arts.Touring CenterAn attraction that established with variety of activities (especially outdoor pursuit activities) offer atone place.Example: • Elk River Touring Center, West Virginia, US - Walk out the doors of the inn to enjoy world class West Virginia Fly Fishing, cross country skiing, West Virginia Mountain Biking and more • Steamboat Ski Touring Center, US offers fun for everyone of all ages with groomed cross country ski trails, 10 km of beautiful forested snowshoe trails, ski school, & Nordic shop.Purpose BuiltThese are destinations developed specifically for tourists which provide all the facilities needed inone place. Theme parks are not generally acceptable, although this category may include themepark resorts such as Disneyland Paris or large holiday centres such as Center Parcs.It may also include some whole resorts in their own right, such as La Pobla de Farnals - Thispurpose-built resort town has the advantage of being easily accessible and close to the lively city ofValencia. Located in an enclave, around 12 kilometres to the north of the city, the sea is its mainattraction, with a seafront promenade, fine sandy beaches and a central marina – ideal for enjoying arelaxing stroll.Evolving Concept of DestinationsHaywood (1990) and Pigram (1992) identify a number of implementation gaps in the adoption ofstrategic planning at tourist destinations:Destinations are comprised of a constantly shifting mosaic of stakeholders and value systems. Eachof these groups has a different view of the role and future of tourism at their destination andtherefore the adoption of strategies becomes a political process of conflict resolution and consensusIn addition, the tourist sector at destinations is characterised by fragmentation and a dominance ofsmall businesses, who often trade seasonally. This has led to a lack of management expertise atdestinations, a divergence of aims between the commercial and public sectors and a shorttermplanning horizon which in part is driven by public-sector, twelve-monthly budgeting cycles, butalso by the tactical operating horizon of small businesses (Athiyaman, 1995).The stage of the destination in the life cycle also influences the acceptability of a destination-wideplanning exercise. In the early stages of the life cycle for example, success often obscures the longterm view, whilst in the later stages, particularly when a destination is in decline, opposition to longterm planning exercises may be rationalised on the basis of cost.Finally, the performance indicators adopted in such exercises can be controversial as tourist volumeis the traditional, and politically acceptable, measure of success in many destinations. In otherwords, the tourism industry is often reluctant to make the tradeoff between present and future needswhen success is judged by short-term profitability and volume growth. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisDestination VisioningDestination visioning is a community-based strategic planning approach, effectively placing thefuture of the destination in the hands of the local community, government and industry.As Ritchie (1993) says:‘residents of communities and regions affected by tourism are demanding to be involved in thedecisions affecting their development’Of course, this involvement and control is also a key element of delivering a sustainable destination.Whilst the concept of community involvement in planning is well known, it is the ‘process’ ofvisioning that is so well suited to destinations.Ritchie (1993) identifies three key elements of the process as: • The vision must bring together the views of the whole community and all tourism stakeholders; • The vision must reach concensus and endorsement of the future; and • The vision defines the long term development of the destination. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis UNIT 3: DESTINATION DEVELOPMENT ANALYSIS Chapter objectives • Discuss about destination development analysis in terms of TALC, resort life-cycle and PLC • Explain the spatial tourism development in a destination • Outline the product portfolio and understand its application in destination management • Describe the business strategies that can be apply in destination developemt analysisResort development modelTourist Area Life-cycle (TALC)Hypothetical Evolution of a Tourist Area (Adapted from Miller and Gallucci, 2004) 1. Exploration – small numbers of visitors attracted by natural beauty characteristics. Tourist numbers are limited. Few tourist facilities exist. 2. Involvement – limited involvement by local residents to provide some facilities for tourists. There is a recognizable ‘tourist season’. There begin to be a definite tourist market. 3. Development – large numbers of tourists arrive. Control passes from the locals to external organizations. Increase in tension between local people and tourists 4. Consolidation – tourism has become a major part of the local economy. Visitors’ numbers star to level off (at a high number). Some older facilities are seen as second-rate 5. Stagnation – peak numbers of tourists have been reached. The resort is no longer considered fashionable. 6. Rejuvenation/decline – attractiveness continue to decline. Visitors are lost to other resorts and destinations. Long term decline will continue unless action is taken to rejuvenate the area and modernize. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisTourism Area Life Cycle (TALC) model is that a destination begins as a relatively unknown andvisitors initially come in small numbers restricted by lack of access, facilities, and local knowledge,which is labeled as Exploration. As more people discover the destination, the word spreads about itsattractions and the amenities are increased and improved (Development). Tourist arrivals then beginto grow rapidly toward some theoretical carrying capacity (Stagnation), which involves social andenvironmental limits.The rise from Exploration to Stagnation often happens very rapidly, as implied by the exponentialnature of the growth curve. The possible trajectories indicated by dotted lines A-E are examples of asubset of possible outcomes beyond Stagnation. Examples of things that could cause a destinationto follow trajectories A and B toward Rejuvenation are technological developments or infrastructureimprovements leading to increased carrying capacity. Examples of things that could cause adestination to follow trajectories C and D are increased congestion and unsustainable development,causing the resources that originally drew visitors to the destination to become corrupted, or nolonger exist. The trajectory of most interest to this is trajectory E, which is the likely path of adestination following a disaster or crisis.It is also important to point out that the Law of Diminishing Returns could cause a destination tofollow trajectories similar to those of C or D, and that the concepts and practices of destinationrecovery, as applied to destinations recovering from a disaster, could easily be applied to adestination in Decline as a result of the Law of Diminishing Returns. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisProduct Life-cycleThe understanding of a product’s life cycle, can help a company to understand and realize when it istime to introduce and withdraw a product from a market, its position in the market compared tocompetitors, and the product’s success or failure. The product’s life cycle - period usually consistsof five major steps or phases. These phases can be split up into smaller ones depending on theproduct and must be considered when a new product is to be introduced into a market since theydictate the product’s sales performance. 1. Product Development Phase Product development phase begins when a company finds and develops a new product idea. This involves translating various pieces of information and incorporating them into a new product. During the product development phase, sales are zero and revenues are negative. It is the time of spending with absolute no return. 2. Introduction Phase The introduction phase of a product includes the product launch with its requirements to getting it launch in such a way so that it will have maximum impact at the moment of sale. A successful product introduction phase may also result from actions taken by the company prior to the introduction of the product to the market. 3. Growth Phase The growth phase offers the satisfaction of seeing the product take-off in the marketplace. This is the appropriate timing to focus on increasing the market share. A new growing market alerts the competition’s attention. Good coverage in all marketplaces is worthwhile goal throughout the growth phase. 4. Maturity Phase When the market becomes saturated with variations of the basic product, and all competitors are represented in terms of an alternative product, the maturity phase arrives. In this phase market share growth is at the expense of someone else’s business, rather than the growth of the market itself. This period is the period of the highest returns from the product. A company that has achieved its market share goal enjoys the most profitable period, while a company that falls behind its market share goal, must reconsider its marketing positioning into the marketplace. 5. Decline Phase The decision for withdrawing a product seems to be a complex task and there a lot of issues to be resolved before with decide to move it out of the market. Dilemmas such as maintenance, spare part availability, service competitions reaction in filling the market gap are some issues that increase the complexity of the decision process to withdraw a product from the market. Often companies retain a high price policy for the declining products that increase the profit margin and gradually discourage the “few” loyal remaining customers from buying it. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis Sales and profit Sales Profit s 0 Time Maturit Declin Product Introduction Growth y e Development Losses/investmen tSpatial process of tourist developmentBortoun defines the procedures for the tourism spatial development as follows:First phase: The starting point of tourism development is the existence of a residential regioncreated by the tourist’s production potential, and a potentially remote destination where the tourismhas not yet improved.This process may begin by the Allocentrics (Tourists seeking diversity), the discoverers and orthose aimless individuals or the well-to-do elites. They are motivated by the interests, curiosity,educational needs and etc, and they arrange for their own trips by making use of localtransportation. As a result of their narrations and announcements, they identify the destination andalso they gain fame and by means of a few of tourists who are able to travel they visit; the hostsociety also responds to them by providing some small services. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisThe second phase: If the living standard of people in the region of tourist production (tourismmarket) is promoted and the welfare is increased among them, the second phase of tourism isstarted.During this phase, firstly those who enter feel that some services should be provided in thedestination for which different and new potential tourists search - such as the rich tourists or thosewho are similar to Allocentrics. Therefore, a new product is rendered and the lifecycle of theproduct begins. The first time, The merchants who are exposed to risk enter into the market. Theystart working by provision of travel services directly to the destination and reinforcing the existingfacilities at the destination, and then, they proceed for selling them to the potential touristssomehow different from the tourists of the first phase. There is limited response on the part of thehost community. They directly make use of tourism emotional motivations and they welcome thetourists.The third phase: The tourism industry starts making novel changes in the destination by developingthe first residential-commercial centers for tourism soon.The tourists of the first phase leave this destination for finding other destinations. Those merchants,who were not exposed to the risk, enter into the market in order to reinforce the existing servicesand facilities. The speed and scope of development are increasing. The accumulation of touristswho are in search of completely well developed destinations, now are able to travel to suchdestinations. The speed of tourism growth leads toward immigrating to a tourism destination sincethe local workforce cannot provide services requested by the tourists. Landlords and the localtraders welcome tourism development, however, the majority of the local people are annoyed bysuch development. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisThe fourth phase: The destination is well identified among the population of the Midcentric tourismgenerating region. The destination is totally developed and is distinct from its primary shape.Its attractions are diversified and the potential for meeting tourism demands of major travelers(Midcentric) grows in an organized manner. A major part of Midcentric tourists are attracted by thesecond destination and therefore, the first destination loses a portion of tourists for its own benefit.The tourism merchants attempt for the provision of services even with cheaper price in the firstdestination, while other ones expand their services in the second destination. Coincided withincreasing economic potential of people, in the market of tourist, the tourism improves step by stepin more distant regions. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisTourism Spatial FrameworkThe Tourism Spatial Framework describes how tourism currently works in space and how it shouldwork in future. It aims to provide a context for intervention and a rationale for the choice ofspecified actions, development areas and anchor projects. It also demonstrates the importance ofusing routes to create linkage between areas in order to generate critical mass and maximise use ofresources.Recognition of the requirement for alignment of strategies partnerships between stakeholders andorganisation and linkages between products is key to success. There is also a need for realismregarding the developmental role of tourism. The physical product provides a strong basis foreconomic growth and social development yet tourism cannot solve all the socioeconomic problemsof every community. Expectations can become unrealistic if the platform from which to begin is settoo high.Under such circumstances the first step may never happen if stakeholders are overwhelmed by toomany priorities, options and opportunities. Disenchantment and withdrawal of support will be theresult. Perhaps the most important objective of this study is to get all stakeholders talking the samelanguage and working towards common goals. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisIn line with the above objectives, focus has been placed on issues and solutions that will directchange. An important lesson that has been learned from our discussions is that “turnaround” ispossible. It requires capital, prioritisation, drive, action, ambition and delivery but it is achievable.Miami, Barcelona and Atlanta are cities where diversity has brought unity of purpose.The tourism spatial framework describes the spatial roles that different places fulfil when touristsvisit the city. For example, some places are the ‘entrance gates’ to the city or parts of the city, othersare places where people stay over and use as a base to visit other areas, and so forth.The tourism spatial framework also identifies Tourism Development Areas throughout the city.Each area has a distinctive character in terms of types of tourism products and resources foundthere, the types of tourist experiences currently offered, the potential to develop new products andthe characteristics of the population of the area.The Tourism Spatial Framework provides recommendations regarding the actions that can betaken in each Tourism Development Area in order to: • increase the attractiveness of the area by developing unique products and experiences that build on the resources of the area; • make it easier for tourists to get to and move around the area; and • help local people to develop tourism businesses and share in the benefits of tourism. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisThe desired outcomes of the spatial framework are as follows: • alignment and integration of tourism projects throughout the city; • greater equity in the distribution of tourism benefits in all sectors of the community; • creation of a legible and connected city; • improvement of local environments through sustainable tourism; • acceptance and actioning of proposed catalytic developments; • local, provincial and regional economic development and cooperation; and • increased visitation and expenditure from both domestic and international tourists.This approach emphasises the need for prioritisation of resources and alignment of strategies priorto focus on delivery and implementation. - The Tourism Spatial Framework represents an importantstarting point.Product PortfolioIntroductionThe business portfolio is the collection of businesses and products that make up the company. Thebest business portfolio is one that fits the companys strengths and helps exploit the most attractiveopportunities.The company must: • Analyse its current business portfolio and decide which businesses should receive more or less investment, and • Develop growth strategies for adding new products and businesses to the portfolio, whilst at the same time deciding when products and businesses should no longer be retained.Methods of Portfolio PlanningThe two best-known portfolio planning methods are from the Boston Consulting Group (the subjectof this revision note) and by General Electric/Shell. In each method, the first step is to identify thevarious Strategic Business Units ("SBUs") in a company portfolio.An SBU is a unit of the company that has a separate mission and objectives and that can be plannedindependently from the other businesses. An SBU can be a company division, a product line or evenindividual brands - it all depends on how the company is organized.Growth-share matrixThe BCG matrix (aka B-Box, B.C.G. analysis, BCG-matrix, Boston Box, Boston Matrix, BostonConsulting Group analysis, portfolio diagram) is a chart that had been created by Bruce Hendersonfor the Boston Consulting Group in 1968 to help corporations with analyzing their business units orproduct lines.This helps the company allocate resources and is used as an analytical tool in brand marketing,product management, strategic management, and portfolio analysis. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisUsing the BCG Box (an example is illustrated above) a company classifies all its SBUs accordingto two dimensions: • On the horizontal axis: relative market share - this serves as a measure of SBU strength in the market • On the vertical axis: market growth rate - this provides a measure of market attractivenessBy dividing the matrix into four areas, four types of SBU can be distinguished: • Stars - Stars are high growth businesses or products competing in markets where they are relatively strong compared with the competition. Often they need heavy investment to sustain their growth. Eventually their growth will slow and, assuming they maintain their relative market share, will become cash cows. • Cash Cows - Cash cows are low-growth businesses or products with a relatively high market share. These are mature, successful businesses with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars. • Question marks - Question marks are businesses or products with low market share but which operate in higher growth markets. This suggests that they have potential, but may require substantial investment in order to grow market share at the expense of more powerful competitors. Management have to think hard about "question marks" - which ones should they invest in? Which ones should they allow to fail or shrink? • Dogs - Unsurprisingly, the term "dogs" refers to businesses or products that have low relative share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in.Using the BCG Box to determine strategyOnce a company has classified its SBUs, it must decide what to do with them. In the diagramabove, the company has one large cash cow (the size of the circle is proportional to the SBUssales), a large dog and two, smaller stars and question marks.Conventional strategic thinking suggests there are four possible strategies for each SBU: ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis • Build Share: here the company can invest to increase market share (for example turning a "question mark" into a star) • Hold: here the company invests just enough to keep the SBU in its present position • Harvest: here the company reduces the amount of investment in order to maximise the short-term cash flows and profits from the SBU. This may have the effect of turning Stars into Cash Cows. • Divest: the company can divest the SBU by phasing it out or selling it - in order to use the resources elsewhere (e.g. investing in the more promising "question marks").Business StrategiesStrategy – MissionA strategic plan starts with a clearly defined business mission. Mintzberg defines a mission asfollows:“A mission describes the organisation’s basic function in society, in terms of the products andservices it produces for its customers”.A clear business mission should have each of the following elements:Taking each element of the above diagram in turn, what should a good mission contain?A PurposeWhy does the business exist? Is it to create wealth for shareholders? Does it exist to satisfy theneeds of all stakeholders (including employees, and society at large?)A Strategy and Strategic ScopeA mission statement provides the commercial logic for the business and so defines two things: • The products or services it offers (and therefore its competitive position) • The competences through which it tries to succeed and its method of competingA business’ strategic scope defines the boundaries of its operations. These are set by management.For example, these boundaries may be set in terms of geography, market, business method, productetc. The decisions management make about strategic scope define the nature of the business.Policies and Standards of Behaviour ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisA mission needs to be translated into everyday actions. For example, if the business missionincludes delivering “outstanding customer service”, then policies and standards should be createdand monitored that test delivery.These might include monitoring the speed with which telephone calls are answered in the sales callcentre, the number of complaints received from customers, or the extent of positive customerfeedback via questionnaires.Values and CultureThe values of a business are the basic, often un-stated, beliefs of the people who work in thebusiness. These would include: • Business principles (e.g. social policy, commitments to customers) • Loyalty and commitment (e.g. are employees inspired to sacrifice their personal goals for the good of the business as a whole? And does the business demonstrate a high level of commitment and loyalty to its staff?) • Guidance on expected behaviour – a strong sense of mission helps create a work environment where there is a common purposeStrategy: Values and VisionValues form the foundation of a business’ management style. Values provide the justification ofbehaviour and, therefore, exert significant influence on marketing decisions.Why are values important?If “values” shape the behaviour of a business, what is meant by “vision”? To succeed in the longterm, businesses need a vision of how they will change and improve in the future.The vision of the business gives it energy. • It helps motivate employees. • It helps set the direction of corporate and marketing strategy.What are the components of an effective business vision?Davidson identifies six requirements for success: • Provides future direction • Expresses a consumer benefit • Is realistic • Is motivating • Must be fully communicated • Consistently followed and measuredStrategy: Objectives"Objectives are statements of specific outcomes that are to be achieved"As we shall see, objectives are set at various levels in a business - from the top (corporate) andthrough the layers underneath (functional and unit). Objectives are often set in financial terms. Thatmeans that the objective is expressed in terms of a financial outcome that is to be achieved. Thosecould include: • Desired sales or profit levels • Rates of growth ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis • Amount of cash generated • Value of the business or dividends paid to shareholdersHowever, it is incorrect to say that objectives have to be expressed in money terms, or that theyhave to be able to be measured. Some objectives are hard to measure, but are often important. Forexample, an objective to be: • An innovative player in the market • A leading in the quality of customer serviceA popular way to look at objectives is to see them as part of a hierarchy of forward-looking termswhich help set and shape the strategy of a business. That hierarchy can be summarised asfollows:SMART objectivesThe SMART criteria are summarised below: • Specific - The objective should state exactly what is to be achieved. • Measurable - An objective should be capable of measurement – so that it is possible to determine whether (or how far) it has been achieved • Achievable - The objective should be realistic given the circumstances in which it is set and the resources available to the business. • Relevant - Objectives should be relevant to the people responsible for achieving them • Time Bound - Objectives should be set with a time-frame in mind. These deadlines also need to be realistic ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis UNIT 4: SOCIAL AND CULTURAL FEATURES IN DESTINATION ANALYSIS Chapter objectives • Identify and explain the tourist destinations main activities • Outline tourist attractions and activities of interest in a destination • Understand the determinants that can affect the destination activities: natural disasters • Discuss the growth of tourism industry in the 20th centuryTourist destination activitiesTourist activities can be segregated into different aspects of activities. The different aspects ofsegregations are in terms of tourist activities that are involve in: • Social activities • Demographic development • Economic activities • CultureAll the tourism activities can help to explore the specialty and uniqueness of the destinations, butalso may slow down the development of those particular destinations.Social ActivitiesThe concept was primarily developed in the non-positivist theory of Max Weber to observe howhuman behaviors relate to cause and effect in the social realm – for Weber, sociology is the study ofsociety and behavior and must therefore look at the heart of interactions.The theory of social action, more than structural functionalist positions, accepts and assumes thathuman vary their action according to social contexts and how it will affect other people; when apotential reaction is not desirable, the action is modified accordingly – action can mean either abasic action or an advanced social action, which not only has a meaning but is directed at otheractors and causes action.Social change involves changes in the nature, attitudes, and habits of the society – social changesare continually happening, and trends can be identified.Some of the identified trends are: • Rising standard of living may result in wider ownership of consumer and luxury goods, which have implications for those industries • Society attitude to business – in UK, increasing obligations and responsibilities are being heaped on to companies, not least with respect to environmental protection and ethical conduct • Increase social division between the rich and the poor have been noted • Changing family structure – there has been an increase in divorce and single parenthoodDemographics Development ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisIn develop countries, the population is growing slowly or has practically ceased growing –population is still growing rapidly in developing countries. The age structure in most developedeconomies, the proportion of elderly people in the population is increasing.Geographic distribution, two contrasting factors are decreasing population of inner cities indeveloped countries and the flight from the country side in developing countries. Sex is referring tothe proportion of men and women. Class is referring to the distribution of wealth or life chancesbetween different groups.Example of demographic development in UK, cause by various activities: • Service and product – we might expect the consequences of an ageing population to include greater demand for health care services • Location of demand – there appears to be a gradual population shift out of the inner cities towards suburbs and small towns • Recruitment – a decline in the number of young people entering the workforce has encourage companies to reconsider their attitudes in employing married women, who leave work to have children but wish to return to employment later on, as well as older personnelEconomic ActivitiesThe stage of economy affects all organization, both commercial and non-commercial – the rate ofgrowth in the economy is a measure of the overall change in demand for goods and services.Growth is an indication of increase in demand – for example, an increase in gross domestic productof the population has wide effects.The forecasts state of economy will influence the planning process for organization which operateswithin it. In times of boom and increased demand and consumption, the overall planning problemwill be to identify the demand. Conversely, in times of recession, the emphasis will be on costeffectiveness, continuing profitability, survival and competition. The economic environmentchanges continually – predicted changes or developments in the economic environment can bevitally important for planning decisions.CultureCulture is the sum total beliefs, attitudes of mind and customs to which people are exposed in theirsocial conditioning – for example, the use of English language is one of the features of culture inUK.Culture has important implications for business, for example: • Over emphasis on legal formalities in the early days of commercial relationship might upset a Japanese partner, but formal legal documentation would be expected by US firm • The way products are promoted – i.e. nudity in advertising is frowned on in some countries but acceptable in others • Social attitudes – the roles of men and women in the household and in society, and their respective economic power have changed • The types of products that can be sold to a particular subculture – i.e. in some cultures/countries, alcohol is prohibited • Cultural variable are particularly significant for overseas marketing • Language differences have clear marketing implications – for example, brand names have to be translate, often leading to entirely different meaning in the new languageBenefits of cultural activities in developing destination: ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis • can be developed as major attractions in the destination • introduce the uniqueness of the local culture to the international tourist • opportunity to do a conservation program of the cultural activities • provide economic opportunity for local people that involved in the cultural activities • cross-cultural exchangeTourists’ attractions and activitiesTourist attractions can be categorized in various ways, all of which are logically based. Gunn(1988), for example, organizes them into touring circuit attractions (short-stay) and longer-stay(focused) attractions, based on two types of tourism: those that satisfy touring markets for travelerson tours involving many separate locational stops and those at or near longer-stay destinations.Lew (1987) reviewed the research methods used in the study of tourist attractions and the touristattractiveness of places and concluded that most studies can be classified into one or more of threegeneral perspectives: (1) the ideographic listing, (2) the organization and (3) the tourist cognition ofattractions – all these approaches make comparisons of attractions based on their historical,locational, and valuational aspects.Common systems of classification are: • Natural attractions that are based on features of the natural environment • Cultural attractions that are based on man’s activities • Special types of attractions that are artificially createdNatural AttractionsMajor categories of natural attractions include the following:ClimateA warm, sunny, dry climate is typically considered desirable by most tourists, especially those fromcold winter areas, and particularly when associated with other attractions such as beaches, marinesand mountain areas. But some types of popular tourist activities such a snow skiing require coldweather and snow but preferably still clear skies.Climatic seasonality must be considered in evaluating climate as an attraction. In evaluatingseasonality, consideration must be given to resource opportunities and markets available thatlengthen the tourist season create a double season or extend s high level of visitor use throughoutthe year.Scenic beautyThe overall natural scenic beauty of an area may be a major motivation to visit there – especially ifconservation measure has been applied. Associated are activities such as pleasure driving with stopsat scenic view points, hiking, picnicking, camping and wildlife viewing. Remote scenic areas mayoffer opportunities for adventure-oriented tourists engaging in activities such as river rafting, rockclimbing and long-distances trekking.Beaches and marine areasMajor attractions in many places in the world for activities like sunbathing, swimming, surfing,water skiing, parasailing, snorkeling, scuba diving, etc. Beach and marine areas should also haveconservation measures applied in the form of parks, reserves and development controls. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisFlora and faunaUnusual and interesting flora and fauna can be very important attractions, especially whencombined with scenic landscapes. Zoos, aquariums and botanic gardens are specialized flora andfauna features and, if well developed and maintained, can be major international attractions; such asSan Diego Zoo, botanic gardens at Kew near London and Bogor in Java, Indonesia.Special environmental featuresSpecial environmental features such as high mountains, unusual geological formations, caves,geysers, hot springs, and mild forms of volcanic activity are important attractions for both generalsight-seeing and special interest tourists.Parks and conservation areasImportant natural areas and their flora and fauna should be designated for some type ofconservation status – national and regional parks, nature reserves, and wildlife refuges. TheInternational Union for Conservation of Nature and Natural Resources (IUCN) has specifiedcategories and criteria for establishment of parks and conservation areas.Health tourismRelated to the natural environment - i.e. spas based on hot mineral waters. Another type thatdeveloped more recently is the ‘diet’ resorts, a place where people go to lose weight and regainphysical vitality. Some centers for treatment of drug addiction and alcoholism function in certainways as resorts and may be considered as a type of health tourism.Cultural AttractionsMajor types of cultural attractions, based on man’s activities, include those described in thefollowing:Archaeological, historical and cultural sitesIncluding cultural and national monuments, historic buildings, districts and towns, importantreligious buildings such as churches, synagogues, temples, mosques and monasteries, and places ofhistoric events such as battlefields.The United Nations Educational, Scientific and Cultural Organization (UNESCO) has begun theprocess of designating, based on certain criteria, the most important archaeological and historic sitesthroughout the world as world cultural heritage sites. Important for viewing by tourists and,reflecting tourism trends in recent years, participation by tourist laymen in archaeologicalexcavations, on a supervised basis, has become popular.Distinctive cultural patternsCultural patterns, traditions and life-styles that are unusual (different from those of the tourists) and,in some cases, unique to one place can be of much interest to many tourists. These cultural patternsinclude customs, dress, ceremonies, life-styles, and religious beliefs and practices and are oftenassociated with rural and village life but may be prevalent in some urban places.Arts and handicraftsThe performing arts forms, including dance, music and drama, and the fine arts of painting andsculpting can be important attractions – especially if effectively presented. Performing arts centersand theaters are often developed at considerable cost for presentation of the performing arts,primarily for the benefit of residents but often substantially supported by tourists. Handicrafts of anarea can be both an interesting attraction for tourists and a source of income for local artisans. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisInteresting economic activitiesAn often successful type of specialized cultural attraction is observation, description and sometimesdemonstration of interesting economic activities such as operation of tea and rubber plantations andprocessing plants, use of working elephants in a tropical forest, traditional fishing and agriculturaltechniques in many areas. Traditional market places are also widely popular with tourists.Interesting urban areasUrban areas with their varied architectural styles, historic buildings and districts, civic centers,shopping facilities, restaurants, parks and street life are of interest to many tourists who enjoygeneral urban sightseeing and absorbing the ambience of a city’s character, as well as visitingspecific attraction features such as museums and public buildings. In some cities, theaterperformances, including plays, operas, concerts and dance presentations are major attractions fortourists as well as residents.Museums and other cultural facilitiesDifferent types of museums on such themes as archaeology, history, ethnology, natural history, artsand crafts, science and technology industry, and many specialized subjects. Other cultural facilitiessuch as cultural centers, important commercial art galleries and antique shops.Cultural festivalsVarious types of cultural festivals related to the local traditions and arts can be major attractions.Friendliness of residentsAlthough not quantifiable, a very real attraction for many tourists can be the friendly, hospitablecharacter of local residents and, more generally, their tolerance and acceptance of tourists visitingtheir environment.Special Types of AttractionsTheme parks, amusement parks and circusesTheme parks are oriented to particular themes, such as history, adventure, unusual geographicplaces, fantasy and futurism, or a combination of these in one park, and offer simulated experiences,shows, thrill rides, shopping, and a variety of restaurants and snack bars in a clean and controlledenvironmentShoppingShopping is a significant activity and type of expenditure of many tourists and must be consideredin tourism planning. In urban tourism, large department stores that are internationally well-knownattract many tourists visiting those cities. Duty-free (which actually may refer to low duty but notfree of duty) shopping for consumer goods has been developed as a major attraction in cities such asHong Kong and Singapore.Meetings, conferences and conventionsMany countries, regions, cities, resorts and individuals hotels have developed various types ofmeeting facilities and some conference facilities, such as the Trade and Convention Center inVancouver, Canada.Conference tourism is highly competitive and should be carefully evaluated for an area to determineits overall market and economic feasibility and the most appropriate type of facilities to bedeveloped. At any scale of development, conference centers must meet certain standards and oftenneed to include specialized facilities and services such as for simultaneous language translation andexhibit space. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisSpecial eventsSpecial events can be major tourist attractions for short times period – these are organized for thepurpose of attracting tourists and also for reasons such as national or regional prestige and gainingnew facility complexes for permanent use.Gambling casinosHave been developed in certain places as major attraction – usually in areas that have limitednatural and cultural attraction features. Often developed to supplement the basic attraction of anarea such as has been done in Monaco.EntertainmentRelative to the traditional and contemporary performing arts and its association with gamblingcasinos and their resort environment – nightclubs, discos, etc. Some places providingentertainments based on local culture – folk dancing and singing, or contemporary music and dance.Recreation and sportCan be important primary or secondary attractions for tourists – polo grounds, tennis centers, horseand other types of tracks, etc.Tourist Facilities and Services as AttractionsHotels and resortsWell-designed, historic or unusual hotels and resorts can be attractions in themselves. Beside that,usually high quality service is associated with these types of hotels and resorts.TransportationInteresting, historic and unusual forms of transportation can also be made into attractions such asthe Nile River Cruise in Egypt.CuisineThe food of an area, in addition to being an important service for tourists, can be significantsecondary tourist attraction, especially if the area offers a special type of cuisine that is wellprepared and presented.Other Attractions ConsiderationsIn addition to tourist attraction features, there are several other considerations that must be made inevaluating the attractiveness of the tourism area.Ethnic, religious and nostalgic associationsEthnic associations often relate to the ancestral origin of the tourists – for example, overseas ethnicChinese visiting their ancestral villages in China. Religious pilgrimages comprise a major type oftravel in many places of the world, and very important sacred places generate much long-distancetravel.Examples of historic associations as attractions are the visits made by Japanese and Americans toplaces in the Pacific Islands, where they fought during World War II, and of retired colonialadministrators visiting former colonies where they previously stationed and may have lived formany years – sometimes referred to as nostalgic tourism. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisPolitical stability, public health and safety, and other considerationsAlthough not an attraction as such, the extent of political stability of an area and the popularperception of political stability, whether realistic or not, by the potential tourist markets is asignificant factor in attracting tourists. Another important consideration is the extent of public safetyof the country or region and especially in the tourism areas – a high level of crime will be adeterrent to attracting tourists.Destination travel costA major factor in the attractability to tourists may be the cost of travel to the destination and thecost of using tourist facilities and services at the destination, compared to the costs of travel to andwithin similar destinations elsewhere. Cost is, of course, less of a concern to affluent tourists whocan afford to travel where they want, although they will still expect “good value for their money”.Determinants that can affect the destination activitiesThere are many factors which will be able to affect tourism or destination attractions and activitiesglobally.Three (3) main determinants are: • Natural disaster • Diseases • Man-made (anthropogenic) disasterAll these factors or determinants may affect the destinations activities in terms of social activities,demographic development, economic activities as well as culture.Natural DisasterA natural disaster is “a natural event with catastrophic consequences for living things in thevicinity.” It can affect tourism for obvious reasons as it destroys the natural environment and thethings which the industry relies on. There is a very close link between tourism and natural disastersas in the event of a natural disaster tourism is significantly disrupted and in most cases the industryis destroyed, then requiring development and adjustment.Tourism is an important part of countries’ economy and in less economically developed countriessuch as those affected by the tsunami, on Boxing Day 2004, the local economy greatly relies uponthe industry’s services for the livelihood of its population. The massive affect a natural disaster canhave on tourism is related to the negative multiplier effect, which involves the impact of the eventspreading through the economy.Types of natural disaster that often occurred are: • Tsunami • Flood • Earthquake • Volcano eruption • Avalanche, etcThe natural disaster had two main affects on tourism: ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis • Creating the image the area was unsafe • Physical damage to the area (leaving most tourist resorts in ruins.The unpredictability of natural disasters and the tourism industry can have disastrous effects whenoccurring simultaneously. In general natural disasters have the effect of initially decreasing tourismbut destinations affected can then change and allow the industry to adapt to involve the disaster.As countries rely so much on tourism there is a need to regenerate their trade and deal with naturaldisasters in order to survive.It can be seen in the following diagram: Natural Disaster Decline in number of tourists visiting in the area Decrease in money being spent in the area due to lack of visitors, decrease in general economy of the area Businesses suffer due to lack of money generated through tourism, local businesses close, and larger businesses decline – possibly leading to closure of parts of the business and job losses. Unemployment in the area affected by the natural disaster increases, the disposable income of local’s decreases meaning less money is spent in the area which causes more businesses to decline. Government spending increases due to lack of money generated through tax (as less people are working in the formal sector), combined with the aid needed to recover from the event, government spending is very high and the area’s economy is at its lowest.DiseasesA disease is an abnormal condition affecting the body of an organism. It is often construed to be amedical condition associated with specific symptoms and signs. It may be caused by externalfactors, such as infectious disease, or it may be caused by internal dysfunctions, such asautoimmune diseases.The effects of the ways in which the government handled the outbreak are important. These includethe imposition of “restricted areas” that include historic sites and tourist attractions, closedcountryside walking paths and waterways, and cancelled/postponed sports and public events. Allare in addition to the mass slaughtering, burning and burying of animals which, in themselves, hadadverse effects on tourism.An issue of particular concern is whether the government’s policy towards the outbreak succeededin limiting the loss of revenue from the livestock and meat trade at the cost of a greater loss of ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysisrevenue from tourism and day visits. Disease has a serious impact on the tourist industries of theplaces it strikes.Usually, disease helps to deter people from visiting, and as a result the industry suffers. This can bedue to the extra costs incurred due to vaccination prices, or by the fear of contracting a diseasewhilst on holiday. The demographic groups that are most affected by the threat of disease tend to beolder generations and families.Backpackers, young couples or groups may be attracted to such places through the excitement ofthe unknown. Some diseases are prevalent all year round, others have nearly caused worldwidepandemics, but all have some effect on the tourist industries of the countries they affect.Examples of diseases are: SARS, Bird Flu, Foot and Mouth Disease, Malaria, Yellow Fever andEbola. All in all, disease always has an effect on where it strikes, but this can be negative orpositive, depending on the circumstances - However, most of the time, the effect is resoundinglynegative.Man-made (Anthropogenic) DisasterAnthropogenic hazards or man-made hazards can come to fruition in the form of a man-madedisaster. In this case, "anthropogenic" means threats having an element of human intent,negligence, or error; or involving a failure of a man-made system. This is opposed to naturaldisasters resulting from natural hazards.There are two (2) types of man-made hazards that may affect the tourism industry: • Sociological hazards • Technological hazardsHowever, most of the impacts on tourism occur through the sociological hazards, even thoughtechnological hazards are not that far behindSociological hazards 1. Crime Crime is to breach the rules or laws for which some governing authority (via mechanisms such as legal systems) can ultimately prescribe a conviction. Modern societies generally regard crimes as offenses against the public or the state, distinguished from torts (offenses against private parties that can give rise to a civil cause of action). 2. Arson Arson is the criminal intent of setting a fire with intent to cause damage. The definition of arson was originally limited to setting fire to buildings, but was later expanded to include other objects, such as bridges, vehicles, and private property. 3. Civil disorder Civil disorder is a broad term that is typically used by law enforcement to describe forms of disturbance. Rioting has many causes, from antipathy over low minimum wages to racial segregation. Examples of well-known civil disorders and riots are the Poll Tax Riots in the United Kingdom in 1990; the 1992 Los Angeles riots in which 53 people died; the 2008 Greek riots after a 15-year-old boy was fatally shot by police; and the 2010 Thai political protests in Bangkok during which 91 people died. 4. Terrorism ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis September 11 attacks, which are in multiple categories of man made disaster: terrorist attack, air disaster, arson, and structural collapse. Can be defined as the use or threatened use of violence for the purpose of creating fear in order to achieve a political, religious, or ideological goal. 5. War War is a conflict between relatively large groups of people, which involves physical force inflicted by the use of weapons. Warfare has destroyed entire cultures, countries, economies and inflicted great suffering on humanity.Technological hazards 1. Industrial hazards Industrial disasters occur in a commercial context, such as mining accidents. They often have an environmental impact. The Bhopal disaster is the worlds worst industrial disaster to date, and the Chernobyl disaster is regarded the worst nuclear accident in history. Hazards may have longer-term and more dispersed effects, such as dioxin and DDT poisoning. 2. Structural collapse Structural collapses are often caused by engineering failures. Bridge failures may be caused in several ways, such as under-design (as in the Tay Bridge disaster), by corrosion attack (such as in the Silver Bridge collapse), or by aerodynamic flutter of the deck (as in Galloping Gertie, the original Tacoma Narrows Bridge). Failure of dams was not infrequent during the Victorian era, such as the Dale Dyke dam failure in Sheffield, England in the 1860s, causing the Great Sheffield Flood. Other failures include balcony collapses or building collapses such as that of the World Trade Center. 3. Power outage A power outage is an interruption of normal sources of electrical power. Short-term power outages (up to a few hours) are common and have minor adverse effect, since most businesses and health facilities are prepared to deal with them. Extended power outages, however, can disrupt personal and business activities as well as medical and rescue services, leading to business losses and medical emergencies. Recent notable power outages include the 2005 Java–Bali Blackout which affected 100 million people and the 2009 Brazil and Paraguay blackout which affected 60 million people.Growth of tourism industryThe World Tourism Organization (UNWTO) forecasts that international tourism will continuegrowing at the average annual rate of 4% - with the advent of e-commerce, tourism products havebecome one of the most traded items on the internet. It has been suggested that there is a strongcorrelation between tourism expenditure per capita and the degree to which countries play in theglobal context – not only as a result of the important economic contribution of the tourism industry,but also as an indicator of the degree of confidence with which global citizens leverage theresources of the globe for the benefit of their local economies.Space tourism is expected to take off in the first quarter of the 21st century, although compared withthe traditional destinations; the number of tourists in orbit will remain low until technologies suchas a space elevator make space travel cheap ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisTourism and the Universal Declaration of Human RightsThe Universal Declaration of Human Rights (UDHR), adopted by the UN General Assembly onDecember 10, 1948, consists of 30 articles which outline the view of the United Nations on thehuman rights guaranteed to all people in the world. Although tourism was not widely perceived asan area where the human rights declaration could find application, its ramifications for tourism arefar and wide.In fact, a few of the articles of the UDHR are more direct in their application to tourism humanrights than to any other sector: for instance, • Article 13, which states that everyone has the universal right to freedom of movement; and, • Article 24, which states that everyone has the universal right to rest, leisure, and holidays with pay.Also, some of the objectives of UDHR presented in its preamble are the social objectives of tourismas well: for instance, • UDHR speaks of the role of human rights protection in strengthening the development of friendly relations between nations; • similarly, one of the evergreen goals of tourism is achieving international harmony and peace (D’Amore, 1988).Another major boost in the direction of tourism human rights has been brought by the WorldTourism Organization (WTO) through the 1999 Global Code of Ethics for Tourism (GCET), whichis a comprehensive set of principles whose purpose is to guide stakeholders in sustainable tourismdevelopment: central and local governments; local communities; the tourism industry and itsprofessionals; as well as visitors, both international and domestic (WTO, 1999).The Code includes ten articles: nine articles outlining the directives for destinations, governments,tour operators, developers, travel agents, workers and travelers themselves; the tenth articleinvolves the redress of grievances. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis UNIT 5: POLITICAL FEATURES IN DESTINATION ANALYSIS Chapter objectives • Discuss the government’s roles and responsibilities in a destination planning and development • Outline the tourism investment incentives and their examples as apply in Malaysia tourism industry • Identify the general development and design standards in destination developementGovernment’s role in planningThe government systems and its organization should understand as a consideration to determinefunction in tourism development. Different country will often use different plan in developing theirtourism industry.The government organization relate to tourism industry are: • Transportation • Custom • Communication • Environment and health • Culture and art • Immigration • Other planning organizationsGovernment tourism development policies usually influenced by socio-culture and differentenvironment considerations. Government also needs to make details research and implementplanning in order to maintain the sustainable tourism.Organizational Structures for TourismImportance of tourism organizationsIn order to plan, develop, market, coordinate and manage tourism in a country or region, effectiveorganizational structures are essential. An organizational structure for tourism management includespublic and private sector types of organizations at the regional, national and international levels.The types of government or public sector structures and the extent of their involvement in tourismmust be adapted to the particular needs and ideological and political structure of the country and thetype and extent of tourism development. In determining the most suitable types of organizationalstructures, each area must be specifically evaluated as to what its particular needs and objectives indeveloping tourism are and which would be the most effective organizational approach to satisfythe objectives, within the context of the overall government structure. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisPublic organizational models • A separate government ministry – with responsibility for all aspects of tourism management • A government ministry (or cabinet level department) with a mixed portfolio – part of which is responsible for all aspects of tourism • A separate or mixed portfolio government ministry – that is responsible for policy, planning, and establishing and administering facility and service standards and licensing requirements and procedures. It often does some development and research, with marketing and perhaps some development and research being done by a non-statutory board or tourism development corporation • A non-statutory board appointed by government – that has no legal powers and is therefore sub-ordinate to a government department and is responsible for all or certain aspects of tourism • A statutory board that is established by law – comprises an autonomous legal entity, and is responsible for all or certain aspects of tourism • A tourism development corporation – a separate legal entity funded by government or a combination of public and private sector funding. It is responsible for all tourism development and related matters or for development of particular tourism projectsNTA organizationNTA is the National Tourism Administration. Can take various forms depending on the particularfunctions and size of the agency - However, some general guidelines can be set forth for aprototypical organizational structure.The functions usually are; policy, planning, some development and facility operation, coordination,statistics, research, marketing and tourist information services, coordination of education andtraining, establishing and administering tourist facilities standards, administrative functions andperhaps some specialized organization of special eventsIf international tourism is important in the area, a decision will need to be made on whether tomaintain overseas offices in the market origin countries or region, and if so, where these are bestlocated. Staffing of the NTA will, of course, depend very much on the functional needs andresources available – it is essential that the staff be properly trained to effectively fulfill theirfunctions.Typical NTA Organizational Chart: Ministry of Tourism ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis Tourism Advisory Committee Department of Tourism Administrative Services Marketing and Information Research and Statistics Education and Training Planning and Development Services Developme Market Local Statistical Planning Developmen nt Planning Tourist Special Compilation And Training t Policy And Information Studies And Programmi Institutions Implemen- And Promotion Offices Collection ng tation Planning Overseas Facility Offices StandardsFinancing public tourism organizationsFinancing of the government tourism office or statutory board activities is usually directly fromgovernment funding. For financing tourism promotional programs, the government typicallyprovides the funding for overall promotion, while the private sector finances promotion of itsparticular products.Private sector tourism organizationsServe several important purposes: • Providing a forum for discussing and resolving common problems of tourism enterprises • Making coordinated recommendations to the government tourism office for improvements in the tourism sector • Providing representation on tourism boards and committees • Conducting research and training that is relevant to the private sector • Sponsoring special eventsInternational tourism organizationsThese organizations currently perform various important roles and it is expected that their activitiesand influence will expand in the future. Often, a staff member of the NTA is designated to beresponsible for maintaining relationship with international organizations and representing thegovernment at international tourism meetings.Approach to Policy FormulationTourism development policy is determined in the plan formulation stage of the planning process.Policy is determined based on several considerations: • The objectives of developing tourism • Must reflect the overall policy and plan of the country or region • Related to the respective roles of the public and private sectors in developing tourismAlso evolves from the survey, analysis and synthesis of any present tourism development patternsand infrastructure, tourist attractions and tourist markets. The government should assume the leadrole in determining the tourism policy.Policy Considerations ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisRole of governmentA basic policy decision that must be made is whether the government assumes a passive, active orsomewhat intermediate role in the development of tourism. In any country or region that wants todevelop or expand tourism, the government needs to perform an active role in terms; • Adopting tourism policy, plans and regulations • Making certain that basic infrastructure is adequateAfter tourism become established, the government can assume a more normal active role, includingdivesting itself of actual ownership and management of tourist facilities and services.Environment protection, cultural conservation and sustainable developmentApplying contemporary concepts of tourism development, there are usually one or more policystatements relative to tourism being planned and developed so that the natural environment is notdegraded, archeological and historical sites are conserved, socio-cultural impacts are minimized anddesirable aspects of cultural pattern are maintained and if necessary revitalized.Reasons for developing tourism • Economic reasons such as earning foreign exchange • Social reasons of encouraging cross-cultural exchange • For domestic tourism, social reasons of providing opportunities for recreation • Using tourism to help achieve environmental and cultural conservation objectivesType of tourism to be developed • Basic policy consideration: o Types of domestic and international tourism o Types of tourist markets to aim • The quality level tourism need to be decidedExtent of tourism developmentRelated to the type of tourism development, as well as socio-economic and environmentalconsiderations. A large country or region may decide to develop different levels of tourism indifferent areas, and at different times.Growth rate of tourismThe growth rate of tourism to be aimed for – slow, medium or fast. Desirable to control for severalreasons: • Social reasons – for allowing residents adequate time to adjust to tourism and participate in its planning and socio-economic benefits • Development reasons – of balancing tourism with infrastructure development and the various other demands on limited capital resources • Manpower planning reasons – of allowing sufficient time for training persons to work effectively in tourism • Economic reasons – of integrating development of various economic sectors, not creating economic distortions in the economy nor generating undue land speculationLocation and staging of developmentGeneral geographic location and staging of tourism development can also be policy decision that isfurther defined in the development structure plan.Other types of policies • May relate to multi-use of tourism infrastructure ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis • Relation between domestic and international tourism • Education and training • Social integration of tourism • Investment and employment policiesTourism investment incentivesGovernment schemes aimed at stimulating private sector interest in specified types of capitalexpenditure, or investment in areas of high unemployment or backwardness. These incentives maytake the form of direct subsidies (investment grants) or corporate income tax credits (investmentcredits) that compensates the investors for their capital costs.The tourism development plan and program recommendations and economic analysis will indicatethe magnitude of capital investment required and the type of investment needed, such as fordevelopment of infrastructure, hotels, resorts and tourist attractions. A basic consideration anddecision that needs to be made by the government is the source of financing infrastructuredevelopment for tourism.Any new or improved infrastructure should be multi-purpose to the greatest extent possible, servinggeneral community needs as well as tourism. If there is difficulty in attracting either the limitedlocal financing or outside capital, then provision of incentives to attract the investment required canbe considered.If incentives is provided, they should not be greater than is absolutely necessary to attract thedesired investment and should be provided only as long as needed based on prevailingcircumstances - as these changes, the incentives should be adjusted or dropped accordingly.Investment policiesBefore implementing an incentive policy, a destination should first: • Examine the performance of other countries’ schemes in the light of their resources and development objectives • Research the actual needs of investors • Design codes of investments concessions related to specific development objectives, with precise requirements of the investors • Establish targets of achievement and periodically monitor and assess the level of realization of such targetsTypes of investment incentives • Provision of land at moderate or no cost at suitable sites to develop tourist facilities • Provision of off-site infrastructure at no cost to the developer • Provision of all or part of the on-site infrastructure • Complete or partial exemption from customs duties on imported items used in the initial development • Reduction of company taxation • Complete or partial exemption from property taxes • Provision of loans up to a certain percentage of investments cost • Provision of grants for development of tourist facilities • Allowance of foreign exchange credits from foreign sources for allocation to investments in tourist facilities • Provision of subsidies on interest payments of loans ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis • Unrestricted repatriation of all part of invested capital, profits, dividends and interest subject • Provision for grants for staff training programs • Guarantees against nationalization or appropriation of the investmentExample of Malaysia Government Tourism IncentivesTourism projects, including eco-tourism and agro-tourism projects, are eligible for tax incentives.These include hotel businesses, construction of holiday camps, recreational projects includingrecreational camps, theme parks and construction of convention centres with a capacity toaccommodate at least 3,000 participants.Hotel businesses refer to the following: • Construction or renovation of medium and low-cost hotels as certified by the Ministry of Tourism; • Expansion/modernisation of existing hotelsIncentives for the Hotel and Tourism Industry 1. Pioneer Status A company granted Pioneer Status enjoys a 5-year partial exemption from the payment of income tax. It will only have to pay tax on 30% of its statutory income, commencing from its Production Day which is determined by the Minister of International Trade and Industry. 2. Incentives for Reinvestment in Hotels and Tourism Projects Companies that reinvest in the expansion, modernisation, renovation and refurbishment of hotels and tourism projects are eligible for additional rounds of Pioneer Status or Investment Tax Allowance as follows: a. Pioneer Status with income tax exemption of 70% of the statutory income for a period of five years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or b. Investment Tax Allowance of 60% on the qualifying capital expenditure incurred within a period of five years. The allowance can be offset against 70% of the statutory income in each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.Companies are eligible to apply for PS or ITA for the first two rounds of reinvestments. For the third round of reinvestment, companies are only eligible to apply for ITA. c. Investment Tax Allowance As an alternative to Pioneer Status, a company may apply for Investment Tax Allowance (ITA). A company granted the ITA gets an allowance of 60% on the qualifying capital expenditure incurred within five years from the date on which the first qualifying capital expenditure is incurred. Companies can offset this allowance against 70% of statutory income in the year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised. 3. Enhanced Incentives for Undertaking New Investments ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis Companies undertaking new investments in 4 and 5 star hotels in Sabah and Sarawak are eligible for the following incentives: a. Pioneer Status, with income tax exemption of 100% of the statutory income for a period of five years. Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company; or b. Investment Tax Allowance of 100% on the qualifying capital expenditure incurred within a period of five years. The allowance can be offset against 100% of the statutory income in each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.Applications received by 31 December 2013 are eligible for these incentives. 4. Incentive for Healthcare Travel Private hospitals that invest in expansion, modernisation, renovation, refurbishment of existing hospitals or in the construction of new private hospital, or setting up of the International Patients Unit, are eligible for: a. Investment Tax Allowance of 100% on the qualifying capital expenditure incurred within a period of five years. The allowance can be offset against 100% of the statutory income in each year of assessment. Any unutilised allowances can be carried forward to subsequent years until fully utilised.These hospitals must be registered with the Ministry of Health to qualify for the incentive. 5. Additional Incentives for Healthcare Travel Double Deduction for Expenses Incur in Obtaining Recognise Accreditation a. Private hospitals which incur expenses in obtaining domestic or international recognised accreditation such as from the Malaysian Society for Quality in Health (MSQH) or Joint Commission International (JCI) qualify for double deduction for the purpose of income tax computation. b. Claims should be submitted to IRB. Automatic Employment/Professional Pass Approval for Medical Specialists a. Employment/professional pass will be offered automatically to the following qualified medical specialist who return or come from abroad to serve in Malaysian hospitals: b. Malaysian or non-Malaysian medical specialists; and c. Non-Malaysian spouses who qualify as a professional as per stipulated in the Malaysian Classification of Occupation (MASCO). 6. Incentives for the Luxury Yacht Industry The luxury yacht industry is promoted as part of tourism products and is eligible for the following incentives: a. Companies that construct luxury yachts are eligible for the Pioneer Status incentiveApplications should be submitted to MIDA. b. Companies that carry out repair and maintenance activities for luxury yachts in the island of Langkawi, Malaysia are eligible for an income tax exemption of 100% for five years.Applications should be submitted to the Ministry of Finance. c. Companies that provide chartering services of luxury yachts in the country are eligible for income tax exemption of 100% for a period of five years.Additional Incentives for the Tourism Industry 1. Double Deduction on Overseas Promotion ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis Hotels and tour operators qualify for a double deduction on the expenditure incurred for promotional activities overseas. The qualifying expenditure are: a. expenditure on publicity and advertisements in any mass media outside Malaysia; b. expenditure on publication of brochures, magazines and guide books, including delivery costs that are not charged to the overseas customers; c. expenditure on market research into new markets overseas, subject to the prior approval of the Minister of Tourism; d. expenditure that includes fares to any country outside Malaysia to negotiate or secure a contract for advertising or participating in trade fairs, conferences or forums approved by the Minister of Tourism. Such expenses are subject to a maximum of RM300 per day for lodging and RM150 per day for food for the duration of the stay overseas; expenditure in organising trade fairs, conferences or forums approved by the Minister of Tourism; and e. expenditure on the maintenance of sales offices overseas for purposes of promoting tourism in Malaysia.2. Tax Exemption for Promoting International Conference and Trade Exhibitions Local companies which promote international conferences in Malaysia qualify for tax exemption on the income earned from bringing at least 500 foreign participants into the country. Income earned from organising international trade exhibitions in Malaysia qualifies for tax exemption as long as the exhibitions are approved by Matrade and the organisers bring in at least 500 foreign visitors per year.3. Deduction on Cultural Performances Expenditure incurred by companies promoting and managing musical or cultural groups and sponsoring local and/or foreign cultural performances as approved by the Ministry of Tourism, qualifies for a single deduction. To further encourage the private sector to sponsor local arts, cultural and heritage performances and shows, expenditure incurred in sponsoring such performances and shows has been increased from RM300,000 to RM500,000. However, the ceiling for deductions allowed on foreign performances and shows remains at RM200,000 per year.4. Double Deduction on Approved Trade Fairs Companies are also eligible for a double deduction on expenditure incurred in participating in an approved international trade fair in Malaysia.5. Incentive for Car Rental Operators Operators of car rental services for tourists are eligible for full excise duty exemption on the purchase of national cars and to enable tourists to explore challenging destinations, tour operators are also eligible for a 50% excise duty exemption on locally assembled 4WD vehicles.6. Tax Exemption for Tour Operators Foreign Tourists a. Tour operators who bring in at least 500 foreign tourists in groups in a year inclusive of tours that enter and exit the country by air, sea or land transportation, will be exempted from tax in respect of income derived from the business of operating such ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis tours. This incentive is only applicable to tour operators licensed by the Ministry of Tourism. Local Tourists a. Companies that organise domestic tour packages for at least 1,200 local tourists per year qualify for tax exemption on the income earned. A domestic tour means any tour package within Malaysia participated by local tourists (excluding inbound tourists) by air, land or sea transportation involving at least one nights accommodation. 7. Tax Exemptions on the Value of Increased Exports Healthcare services offered to foreign clients are qualified for tax exemption of 50% on the value of increased exports income subject to 70% of the statutory income for each year of assessment. Foreign clients are defined as: a. A company, partnership, organisation or cooperative society which is incorporated or registered outside Malaysia; b. A non-Malaysian citizen who does not hold a Malaysian working permit; or c. A non-resident Malaysian living abroad. Effective from the year of assessment 2010 until the year of assessment 2014, this tax exemption rate has been enhanced to 100% and for the purpose of this incentive the following foreign clients are excluded: a. a non-Malaysian citizen that participates in Malaysia My Second Home Program and his dependants; b. a non-Malaysian citizen holding a Malaysian student pass and his dependants; c. a non-Malaysian citizen holding a Malaysian work permit and his dependants; or d. Malaysian citizens who are non-residents living abroad and his dependants. However, healthcare services offered to such foreign clients as mentioned above continue to enjoy existing tax exemption on statutory income to the amount of 50% of the value of increased exports.Development and design standardsImportance of Establishing Standards • Relate to building location, size, and other characteristics, interrelationships with the with the natural environment, architecture, landscaping, engineering and quality levels • Influence both the satisfaction level of tourists and the overall quality and character of the environment for residents • To guarantee that the resulting tourist facilities development will be appropriate from either the tourism marketing or environmental quality standpointsSome Site Planning Considerations 1. Avoiding environmental hazards • Not located and designed in such a manner that environmental hazards may result • Improper cut and fill and building design on steep slopes can lead to land slippage and property damage ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis 2. Building relationships • The grouping of buildings is an important concern of site planning • The type of grouping depends on the density and character of development desired as related to the natural environment 3. Maintaining views • Maintenance of view or at least view corridors toward the amenity feature, such as beach, of the site and its settingSingle unit layouts Solitary units Linear layout Cluster layoutCluster groupings 5-unit row 6-unit cluster Courtyard grouping 10-unit cluster Linear arrangementRelationship to amenity ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis Case 1 seafront cottage units all in a line Case 3 cottage units in a garden setting Case 2 seafront cottage units staggered and Case 4 row units in a garden setting offsetView plane analysis ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisSite Development StandardsTypes of development standards: • Density of development • Heights of buildings • Setbacks of buildings from amenity features, shorelines, roads, lot lines and other buildings • Ratio of the building floor area to the site area • Coverage of the site by buildings and other structures • Parking requirements • Other requirements, such as for landscaping and open space, public access to amenity features, signs and utility linesDesign Considerations ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisArchitectural designMust be more flexible than development standards to allow for the creativity of the architect.However, basic guidelines should be established and provided to the architects for their use in thedesign process. These guidelines also used by the approving authority in its review of the proposedfacility design.Some basic types of guideline considerations: • Local styles and motifs • Roof lines • Use of local building materials • Environmental relationshipsLandscaping designLandscaping in tourism areas involves the effective use of plant materials and other features forsuch purposes, according to certain principles as: • Creating an attractive setting conducive to relaxation and recreation • Screening objectionable views and providing privacy • Providing vegetative buffers to absorb unpleasant sound, smell and dust • Arranging plants to provide relief from intense sun glare and rain, as well as to reduce surface temperatures • Minimizing the effect of high winds • Organizing the plant material to complement a landform, to enhance a building line or façade, to gradually unfold an attractive vista or to frame a major entrance area • Situating plans in strategic places where they can be best appreciated • Arranging and massing trees and shrubs to provide dramatic color and textural variation • Introducing tourists to new species and varieties of plants, especially from the local area ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisLandscape planting functions: Groups of plants may be used Plants can be used to screen This engineering with plant architecturally to form walls, the hot summer sun while design reduces light glare. canopies or floors. allowing sunlight through bare branches in winter for a type of climate control. This design, employing plants and Plants can form a living pavements, emphasizes a sculpture on their own, or help functional and important entry soften surrounding architecture. approach by directing traffic to the main entry.Designing for the HandicappedBarrier-free design should be applied to tourist transportation facilities and attractions, withtechniques applied such as: • Developing hard, relatively smooth, wide walkway paving surfaces • Curbs with ramped cuts at intersections • Ramped access with automatic door openings or through bars at entrances to buildings • Restrooms, drinking fountains and public telephones designed for use by persons in wheelchairs • Vehicular traffic should be well separated from pedestrian waysEngineering designShould be established to ensure that at least minimum infrastructure and construction requirementsare met in tourism development areas. The basic types of engineering standards are: • Roads • Drainage • Water supply • Electric power • Sewage disposal • Solid waste disposal • Telecommunications • Boat piers and marinas • Building construction standards • Sanitation and public health standards • Other types of engineering design standards ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis UNIT 6: DESTINATION IMAGERY AND BRANDING STRATEGIES Chapter objectives • Outline the destination image concept, its formation, as well as the components that made up a destination image • Understand the stages and roles of branding a tourist destination • Discuss the different types of market segmentation that can be apply in a destination • Describe the concept and application of slogans and logos in destination managementDestination imageDestination image can be defined as an individuals awareness of a destination made up of thecognitive evaluation of experiences, learning, emotions and perceptions. One of the widestdefinitions is the one issued by Echtner and Ritchie in 1991 - They concluded that the image of thedestination contains qualities, attributes, holistic, functional, psychological, common and uniquecomponents.The image of a nation involves the image of a country altogether, covering political, economic,historical and cultural aspects. The concept is at the national, multidimensional level and dependenton the context. Destination image is commonly accepted as an important aspect in successfultourism management and destination marketing.The information about a specific destination is an important means of promotion for the tourismindustry and influences destination image. Image plays an important role for destination marketersso as to differentiate their destination in this highly competitive market. In this sense, formal (that isbrochures) and informal information sources (that is relatives and friends), have an influence on theimage formation of a tourist destination.On the other hand, tourists formulate images of alternative destinations, so image also emerges as acritical element in the destination choice process. This is consistent with the notion that informationsources and the attributes of the different destinations form the basis for different image andexperience expectations. The image of a destination is more than a distinguishing element; it is acomponent of the supply and brings more value to it.The image of a tourist destination is strongly connected to the image of a country, the image of anation and the image of a place. The image of a place is formed for a receiver naturally byaccumulating experiences with that place, the use of the sources of personal and impersonalinformation.The branding of the place is the conscientious and coordinated process of an image achievement.Gunn (1972) identified two (2) components of image: • Organic – images formed by individuals themselves through such things as past experiences with destinations, and through unbiased sources of information (e.g. news reports, movies, newspaper articles, etc) • Induced – images created through information received from external sources, including destination advertising and promotion ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisThe Process Of Destination Image FormationThe formation of image has been described by Reynolds (1965) as the development of a mentalconstruct based upon a few impressions chosen from a flood of information. In the case ofdestination image, this flood of information has many sources including promotional literature(travel brochures, posters), the opinions of others (family/friends, travel agents) and the generalmedia (newspapers, magazines, television, books, movies).Furthermore, by actually visiting the destination, its image will be affected and modified basedupon first hand information and experience. The influence of these various sources of informationand their role in destination image formation have been put into context by Gunn (1988) in hismodel of the seven phases of the travel experience.The seven phases of the travel experience: 1. Accumulation of mental images about vacation experiences 2. Modification of those images by further information 3. Decision to take a vacation trip 4. Travel to the destination 5. Participation at the destination 6. Return home 7. Modification of images based on the vacation experience.The process of destination image formation highlights two important points. • Firstly, it suggests that individuals can have an image of a destination even if they have never visited it or even been exposed to more commercial forms of information. • Secondly, since there are changes in destination image before and after visitation, it is desirable to separate the images of those individuals who have visited and those who have not.The components of destination image ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisDestination image could be considered in terms of both an attribute-based component and a holisticcomponent. In addition, some images of destinations could be based upon directly observable ormeasurable characteristics, (scenery, attractions, accommodation facilities, price levels), whileothers could be based on more abstract, intangible characteristics (friendliness, safety, atmosphere) .Therefore, the notion of functional and psychological characteristics, could be applied to destinationimages.Images of destinations can also range from those based on common functional and psychologicaltraits to those based on more unique‘ features, events, feelings or auras. Based on this conceptualframework, destination image is defined as not only the perceptions of individual destinationattributes but also the holistic impression made by the destination. For example, a destinationsimage can include ratings on certain common functional characteristics, such as price levels,transportation infrastructure, types of accommodation, climate, etc.The destination can also be rated on very commonly considered psychological characteristics: levelof friendliness, safety, quality of service expected, fame, etc. On the other end of the continuum,images of destinations can include unique features and events (functional characteristics) or auras(psychological characteristics ) .Examples of truly unique features are easy to provide. For instance, India may evoke an image ofthe Taj Mahal, California of Disneyland, Brazil of the Amazon Jungle or the Carnival in Rio. Onthe other hand, instances of truly unique auras are much more difficult to provide - However, manydestinations maybe distinguished by special atmospheres. For example, Paris may be perceived asbeing romantic, Mexico as slow-paced, Nepal as mystic, etc.The factors influencing the creation of the image of a country, according to Hans Sussmuth’sclassification in 1993, are the following: • the historical relation between two states, • events with profound effects (such as wars, occupation, expel), • the current policy and the international relations between the two states, • well-known personalities and social groups, • the image specific to the country, • geographical surface and demography, • the function of the enemy’s image, • the state of economic development (for example, the quality of the products), • military potential (possible atomic threat) and the behaviour in solving the conflicts (diplomacy), • culture, such as important cultural treasuries, • antagonistic ideologies, for example the East-West conflict, • population (behaviour, rituals, etc.), • politico-social system and home affairs policy (the way the immigrants are treated), • moral reputation (for example, human rights)Branding a tourist destinationThe brand adds value to the product or service and differentiates it from the competition. In theindustry of hospitality, branding is fundamental in obtaining the competitive advantage. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisThere is not only one definition of a country branding. For some it is another effect of the origincountry or of the place’s marketing. For others, it refers to a consistent and multilateral brandingstrategy which determines a strategic vision for the country and by which it is ensured that thisvision is enriched and re-strengthened by each communication act between the country and the restof the world.Branding a destination contains a set of marketing activities which: • they require the creation of a name, symbol, logo or other graphs truly identifying and differentiating a destination; • they express consistently the holiday memorable expectations which are associated uniquely with the destination; • which serve to consolidating and strengthening the emotional connections between the visitor and destination; and • which reduce the searching costs of the consumers and perceived risk.Together, these activities serve to create an image of a destination influencing positively the choiceof the consumerism destination. In branding a nation, the aim is to create a clear, simple idea builtaround the emotional qualities which can be symbolised both verbally as well as visually andunderstood by different auditors and in different situations. To work, the branding of a nation mustembrace the political, cultural, business, sport activities.The branding of a nation works with a wide variety of factors and associations: place –geographical, tourist attraction, natural resources, local products, people – race, ethnic groups,history, culture, language, economic and political system, social institutions, infrastructure, well-known people, images and photos. Depending on the context in which it is used, the branding of anation can remind of a similar and sometimes intriguing combination of these factors.The name or the symbol of a country can be used either by a single company or by an organizationto promote the origin country. This form of a nation’s branding has the clear aim to use the image ofthe country to promote the export and sales. The second form is actually the branding of the place –to promote the country (or maybe a city in that country), as a tourist destination. The branding ofthe place is a component of the tourism marketing and it is also called the destination marketing andit promotes a place not only for visitation and tourism, but also for home investments, creation ofjobs.Definition of Destination BrandingDestination branding is a process used to develop a unique identity and personality that is differentfrom all competitive destinations. Destination branding also can be defined as “selecting aconsistent brand element mix to identify and distinguish a destination through positive imagebuilding” (Cai, 2000).Destination branding is about combining all things associated with the ‘place’ (i.e. its products andservices from various industries – agriculture, tourism, sports, arts, investments, technology,education, etc) that collaborate under one brand. Its aim is to capture the essence of a destination, ina unified manner, and can be consumed simultaneously at a symbolic and experiential level. It isthen used to market those unique added values to consumer needs and sustaining its success in theface of competition. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisWhat is Destination Brand?A destination brand is: • A way to communicate a destination’s unique identity to visitors • A means of differentiating a destination from its competitors • A uniform ‘look’ that all destination partners can consistently use • A symbol, name, term or design, or combination of these elementsChallenges of destination branding: • Destinations are not a single product but composite products consisting of a mix of different components (the destination mix) • Destination marketers have little control over the destination mix they are branding • There is a diverse range of organizations and partners involved in crafting and delivering on the brand • Often, there is a lack of enough funding for branding efforts • Political influences may be feltGood destination branding: • attractive • consistent with positioning • conveys excitement and quality • expresses the destinations’ personality • simple and memorable • transportable to the web as a domain name • unique and well-accepted by all partnersFive (5) steps in branding: 1. market investigation, analysis and strategic 2. brand identity development 3. brand launch and introduction – communicate the vision 4. brand implementation 5. monitoring, evaluation and reviewMarket SegmentationThe term ‘market’ means different things to different people – we are all familiar with thesupermarkets, stock market, fish market, and flea marketAll these types of markets share several characteristics: • They are composed of people (consumer market) or organizations (business markets) • These people or organizations have wants and needs that can be satisfied by particular product categories • They have the ability to buy the products they seek • They are willing to exchange their resources, usually money or credit, for desired products ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisIn sum, a market is people or organizations with need or wants and with the ability and thewillingness to buy. Within a market, a market segment is a subgroup of people or organizationssharing one or more characteristics that cause them to have similar product needs.A market segment also known as is a sub-set of a market made up of people or organizations withone or more characteristics that cause them to demand similar product and/or services based onqualities of those products such as price or function.A true market segment meets all of the following criteria: • it is distinct from other segments (different segments have different needs), • it is homogeneous within the segment (exhibits common needs); • it responds similarly to a market stimulus, and • it can be reached by a market intervention.The term is also used when consumers with identical product and/or service needs are divided upinto groups so they can be charged different amounts for the services. The process of dividing amarket into meaningful, relatively similar, and identifiable segments or groups is called marketsegmentation. The purpose of market segmentation is to enable the marketer to tailor marketingmixes to meet the needs of one or more specific segments.Bases for Segmenting Consumer MarketsMarketers use segmentation bases, or variables, which are characteristics of individuals, groups ororganizations, to divide a total market into segments. The choice of segmentation bases is crucialbecause inappropriate segmentation strategy may lead to lost of sales and missed profitopportunities.The keys is to identify bases that will produce substantial, measurable, and accessible segments thatexhibit different response patterns to marketing mixes. Markets can be segmented using a singlevariable, such as age group, or several variable, such as age group, gender, and education.Although, it is less precise, single-variable has the advantage of being simpler and easier to use thanmultiple-variable segmentation.The disadvantages of multiple-variable segmentation are that • It is often harder to use than single-variable segmentation; • Usable secondary data are less likely to be available • As the number of segmentation bases increases, the size of individual segments decreaseNevertheless, the current trend is toward using more rather than fewer variables to segment mostmarkets. Multiple-variable segmentation is clearly more precise than single-variable segmentation.Consumer goods marketers commonly use one or more of the following characteristics to segmentmarkets: • Geographic • Demographic • Psychographic • BehavioralGeographic SegmentationRefers to segmenting markets by region of the country or world, market size, market density, orclimate. Market density means the number of people within a unit of land, such as a census tract. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisClimate is commonly used for geographic segmentation because of its dramatic impact onresidents’ needs and purchasing behavior.Geographic segmentation is an important process – particularly for multi-national and globalbusiness and brands. Many such companies have regional and national marketing programs whichalter their products, advertising and promotion to meet the individual needs of geographic units.Example; (1) regions – in the UK these might be England, Scotland, Wales Northern Island or (at amore detailed level) counties or major metropolitan areas; (2) countries – perhaps categorized bysize, development or membership of geographic region; (3) city/town size – population withinranges or above a certain levelDemographic SegmentationDemographic segmentation consists of dividing the market into groups based on variables such asage, gender, family size, income, occupation, education, religion, race and nationality.The main demographic segmentation variables are: • Age – consumer needs and wants change with age although they may still wish to consume the same type of product, so marketers, design, package and promote products differently to meet the wants of different age groups • Life-cycle stage - a consumer stage in the life-cycle is an important variable – particularly in markets such as leisure and tourism • Gender – gender segmentation is widely used in consumer marketing • Income – another popular basis for segmentation; many companies target either affluent consumers with luxury goods and convenience services or consumers with relatively low incomes • Social class – there is a clear link here with income-based segmentationPsychographic SegmentationThis type of segmentation divides the market into groups according to customers’ lifestyles – itconsiders a number of potential influences on buying behavior, including the attitudes, expectationsand activities of consumersThe main types of psychographic segmentation are: • Lifestyle – different people have different lifestyle patterns and our behavior may change as we pass through different stages of life • Opinions, interests and hobbies – this covers a huge areas and includes consumers’ political opinions, views on the environment, sporting and recreation activities and arts and cultural issuesBehavioral SegmentationBehavioral segmentation divides consumers into groups based on the way they respond to, use orknowledge of a product.Behavioral segments can group consumers in terms of: • User status – many markets can be segmented into non-users, former users, potential users, first-time users, and regular users of a product. Potential users and regular users often require different marketing appeals. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis • Usage rate – markets can be segmented into light-, medium-, and heavy-user groups. Many hospitality firms spread their marketing resources evenly across all potential customers. • Loyalty status – a market can also be segmented on the basis of consumer loyalty. In the hospitality and travel industries, marketers attempt to build brand loyalty through relationship marketing. • Buyer readiness stage – at any given time, people are in different stages of readiness to buy a product. Some are unaware of the product; some are aware; some are informed; some want the product; and some intend to buy. The relative number in each stage makes a big difference in designing a marketing program.Special occasion segmentationSpecial occasion segmentation – buyers can be grouped according to occasions when they make apurchase or use a product. Occasion segmentation helps firms build product use. For example, airtravel is triggered by occasions related to business, vacation, or family.Benefits soughtBenefits sought – buyers can also be grouped according to the product benefits they seek. Knowingthe benefits sought by customers is useful in two ways: • Managers can develop products with features that provide the benefits their customers are seeking • Managers communicate more effectively with their customers if they know what benefits they seek‘Positive’ segmentation‘Positive’ - dividing the market into groups of individual markets with similar wants or needs that acompany divides into distinct groups which have distinct needs, wants, behavior or which mightwant different products & servicesMultivariable segmentation • Use multiple Demographic Variables such as age,gender, income & education. • Use various Demographic, Psychographic,Geographic, and Behaviorist Variables • Geodemographic Segmentation (Combines Geographic and Demographic info) • Psychographics and Demographics Variables(VALS, based on values, attitudes, lifestyles,and demographic. Therefore, combines Psychographic and Demographic variables)Slogans and LogosThe first evidence of a brand that consumers see is often the logo and tag line. As visualrepresentations of the brand promise, logos and tag lines are powerful forms of communication.Big corporations usually use slogans to express their aim or nature of business. - Catch phrases arecreated to capture consumers attention in advertising. Some also use it to establish branding orcreate an image.- Some slogans are so successful that people would immediately associate theirproduct with the slogan. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisLogo design is one often a communitys most anticipated elements of the branding process,reflective of a logos potential power to connect emotionally and motivate. Logos help integrate thebrand promise into the community.SlogansPhrase or sentence used repeatedly in the advertising of a product or service that, through itsrepetition alone, eventually comes to identify the product or service ~ also known as tagline.Essentially, slogans serve one of two basic functions: • To communicate an idea that manufacturers want associated with the product or service • To retain continuity within an advertising campaignTOURISM SLOGANS, at their best, become as much a part of a place’s identity as an iconiclandmark: “I ♥ New York”, “Virginia is for lovers”, “Las Vegas: What happens here stays here.” Inreal life, where do tourism slogans actually come from? Within the tourism industry, places are notplaces. - They are “destinations.”When tourism becomes relevant enough in an area, public and private interests team up to form adestination marketing organization, or DMO. National, regional, and city-level DMOs areresponsible for the entire “branding” of the destination, and the slogan is just a part of the overallmarketing campaign.Destination Slogan CriteriaThe goal of a slogan — that succinct phrase — is to encapsulate a destination’s sense of place. If itdoes its job, it will be stored in consumers’ working memory. A typology of destination positioningcan be developed, and it is suggested DMO slogans are currently used to position destinations byone of the following categories of propositions: • Functional destination attributes, such as ‘Tropical North Queensland – where rainforest meets the reef’ and ‘Hurunui – alpine Pacific triangle’. • Affective qualities, such as ‘Brisbane – its happening’ and ‘West Virginia – wild and wonderful’. • Travel motivation benefits, such as ‘Hawaii – the island of Aloha’ and ‘Ruapehu – where adventure begins’. • Market segmentation, such as ‘Dive into the heart of exotic Micronesia’ and ‘Hawkes Bay – wine country’. • Symbols of self expression, such as ‘If travelling is your passion, Brazil is your destiny’ and ‘Pack your six senses – come to Peru’. • Countering risk, such as ‘Cuba – peaceful, safe and healthy tourism’. • Brand leadership, such as ‘Zambia – the real Africa’, ‘Egypt – where history began and continues’ and ‘Eastland – first to see the light’. • Focus, such as ‘Kalgoorlie-Boulder – gold capital of Australia’ and ‘Auckland – city of sails’. • Unfocus, such as ‘Curacao – in the Southern Caribbean. Real. Different’, ‘Ecuador – nature, culture, adventure and travel’ and ‘Take time to discover Bundaberg, Coral Coast and country’. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis • Combinations of the above, such as ‘Northland Naturally – first region of New Zealand’ and ‘Michigan. Great Lakes. Great times’.Slogans should be designed to cut-through the media clutter, and might therefore lose effectivenessif further promotional material is required to explain the proposition. The ideal is for the valueproposition to be stored in working memory, with simplicity the key - As a short statement limitedto around seven words the slogan should be expressed in simple terms and clearly focused on onevalue proposition of interest to the target.Since destination image change occurs only slowly in the market place (Gartner & Hunt, 1987), anda considerable financial investment is made in brand development, the positioning theme should beconsistent over the longer term.Examples;The Tourism Authority of Thailand (TAT)Taglines: Thailand. Happiness on Earth. Amazing Thailand - Experience Variety. Amazing Thailand - Dreams for all seasons.Malaysia Tourism Promotion Board / Tourism MalaysiaAdvertising slogan: Malaysia. Truly Asia.Queensland, Australias state Tourist BoardTaglines: Where Else But Queensland Beautiful one day, perfect the nextLogosA logo is a graphic mark or emblem commonly used by commercial enterprises, organizations andeven individuals to aid and promote instant public recognition. Logos are either purely graphic(symbols/icon) or a composed of the name of the organization (a logotype or wordmark). • An example of an abstract mark is the blue octagon representing Chase Bank • Representational mark is the ‘everyman’ icon on PBS • Well-known logotypes are the striped IBM design, Mobil written in blue with red ‘o’, and Coca-Cola written in flowing red scriptIn the days of hot metal typesetting, a logotype was a uniquely set and arranged typeface orcolophon. At the level of mass communication or simply in the high street a company’s logo todayis often synonymous with its trademark or brand. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisThe main goal of a logo is to enhance awareness about the destination and to build a beneficialdestination image. Input from three parties should be considered in the process of developingdestination logos. - These are: (i) the logo owner, (ii) the logo developer, and (iii) the logorecipients.A normative model for testing of logos used in destination marketing is delineated, based on inputfrom these contributors. DMOs believe that a recognized, well-differentiated, and consistentdestination image is central to the success of destination branding.Destination logos, according to DMOs, exist to accurately represent destination image and itsattributes. Although not practiced among DMOs to a large extent, efforts to ensure effectivedestination branding might include: • ensuring the logo differentiates the destination to provide a unique selling proposition; • pretesting the logo design so that visitor perceptions are aligned with DMO intentions; and • continually measuring visitor perceptions of the destination image and logo with appropriate DMO refinement.Elements of Travel LogosSince logos are the symbol of a company’s identity, it is important for travel companies to havetheir own travel logos. The main idea of travel logos is to portray the tourism activities that thecompany offers while focusing on the services (ticketing, visa drop box, etc.) that the companyprovides.Following are the elements that travel logos must have: 1. Colors: The colors used in travel logos are associated with the nature of the places they deal with. Most companies have color red, purple, green and/or blue in their logos. These colors though not necessarily related to the destinations; do represent every aspect of a country. 2. Fonts: Travel logos have fonts that reflect the ethnicity and cultural perspectives of a particular destination. However, there is no strict rule concerning the typeface of fonts in travel logos. It can simply go with the whole facade of the logo rather than relating to some aspect/s. 3. Style: counterpart. Yet the style should be There are many styles that can be simple to recognize, easy to employed in travel logos. For instance, understand and relevant to the logo. a travel logo can have the images and name of the services on its logo; or it can carry the map of the country or its ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisExamples; ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis UNIT 7: DESTINATION MARKETING ANALYSIS Chapter objectives • Discuss the SWOT and PEST analysis in destination marketing analysis • Outline the competitive positioning in destination marketing analysis • Identify the marketing mix – 7P’s and their application in destination marketing plan • Outline the destination marketing planSWOT AnalysisA tool that used to identifies the Strengths, Weaknesses, Opportunities and Threat of anorganization. Specifically, SWOT is a basic, straightforward model that assesses what anorganization can and cannot do as well as its potential opportunities and threats. The method ofSWOT analysis is to take the information from an environmental analysis and separate it intointernal (strengths and weaknesses) and external issues (opportunities and threats).Once this analysis is completed, SWOT analysis determines what may assist the firm inaccomplishing its objectives, and what obstacles must be overcome or minimize to achieved desiredresults. SWOT can help management in a business discover: • What the business does better than the competition • What competitors do better than the business • Whether the business is making the most of the opportunities available • How a business should respond to changes in its external environmentThe result of the analysis is a matrix of positive and negative factors for management to address: Positive factors Negative factorsInternal factors Strengths WeaknessesExternal factors Opportunities ThreatsThe key point to remember about SWOT is that:Strengths and weaknesses: • Relate to the present situation • Are internal to the business Opportunities and threats: ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis • Are external to the business • Relate to changes in the environment which will impact the business 1. Strengths are: • Things a business is good at • A characteristic giving a business an important capability • Sources of clear advantage over rivals • Distinctive competencies and resources that will help the business achieve its objectives 2. Weaknesses are: • Things the business lacks or does poorly • Factors that place a business at a disadvantage • Issues that may hinder or constrain the business in achieving its objectives 3. An opportunity is any feature of the external environment which creates positive potential for the business to achieve its objectives. 4. Threats are any external development that may hinder or prevent the business from achieving its objectives. Differences between internal and external factors: • Internal factors include the strengths and weaknesses of the business. These aspects relate to the present situation and contain within the company environment itself, example the financial availability and the employees capability. • External factors relate to changes in the large environment which will impact the whole business operation in terms of the opportunities and threats. Examples are technological innovation and demographic change. Examples of Potential Business Strengths Examples of Potential Business WeaknessesHigh market share Technological Low market share Cash flow problemsAchieving economies of leadership Inefficient plant Undifferentiatedscale Brand reputation Outdated technology productsHigh quality Protected IP Poor quality Inadequate distributionLeadership & Distribution network Lack of innovation Low productivitymanagement skills Employee skills Skills shortagesFinancial resources Potential Business Opportunities Potential Business ThreatsTechnological Higher economic New market entrants Economic downturninnovation growth Change in customer Rise of low costNew demand Trade liberalization tastes or needs production abroadMarket growth EU enlargement Demographic change Higher input pricesDemographic change Diversification Consolidation among New substitute productsSocial or lifestyle opportunity buyers Competitive pricechange Deregulation of the New regulations pressureGovernment spending marketprograms ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisPEST AnalysisPEST analysis stands for "Political, Economic, Social, and Technological analysis" and describesa framework of macro-environmental factors used in the environmental scanning component ofstrategic management.It is a part of the external analysis when conducting a strategic analysis or doing market research,and gives an overview of the different macroenvironmental factors that the company has to takeinto consideration. It is a useful strategic tool for understanding market growth or decline, businessposition, potential and direction for operations. 1. Political factors Political factors are how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads). Furthermore, governments have great influence on the health, education, and infrastructure of a nation 2. Economic factors Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. - For example, interest rates affect a firms cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis 3. Social factors Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a companys products and how that company operates. - For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social rends (such as recruiting older workers). 4. Technological factors Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation. 5. Environmental factors Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones. 6. Legal factors Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products.Competitive positioningCompetitive positioning is about defining how you’ll “differentiate” your offering and create valuefor your market. It’s about carving out a spot in the competitive landscape and focusing yourcompany to deliver on that strategy.A good strategy includes: • Market profile: size, competitors, stage of growth • Customer segments: groups of prospects with similar wants & needs • Competitive analysis: strengths, weaknesses, opportunities and threats in the landscape • Positioning strategy: how you’ll position your offering to focus on opportunities in the market • Value proposition: the type of value you’ll deliver to the marketWhen your market clearly sees how your offering is different from that of your competition, it’seasier to generate new prospects and guide them to buy. Without differentiation, it takes more timeand money to show prospects why they should choose you; as a result, you often end up competingon price – a tough position to sustain over the long term. One of the key elements of yourpositioning strategy is your value proposition.These companies are totally focused on delivering their value propositions. They don’t just say it —they do it, and that makes it easier to win in their respective markets. Rather than leaving yourpositioning and value proposition to chance, establish a strategy. Think impartially about thewants and needs of your customers and what your competition offers. You may find an unmet needin the market, or you may realize that you need to find a way to differentiate from your competitors. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisWhat you’re ultimately striving for is to be known for something — to own mindshare of themarket. This is difficult to do, but you have a better chance achieving it if you position yourself andbuild your brand around your position. As a result, you may decide to promote a different attributeof your product, or you may find entirely new opportunities to create new products and services.There are three essential types of value: operational excellence, product leadership and customerintimacy.Here is a hypothetical example of each type of value. OPERATIONAL PRODUCT LEADERSHIP CUSTOMER INTIMACY EXCELLENCEAltra Home Furnishing’s CRC Technology’s customers Starboard’s market is floodedcustomers care most about don’t want bells and whistles — with products at all points of thequality – they want the best they just want a good product at price spectrum.products. the lowest possible price. Yet, Starboard’s customers wantAltra is completely dedicated to CRC focuses on operational more than a product off theinnovation and quality. excellence so they can shelf; they want customized continually offer the lowest price solutions.They’re constantly working on in the market.product improvements and new So Starboard’s mission is toideas that they can bring to For example, they just patented a know as much as possible aboutmarket. new manufacturing machine that their customers’ businesses so dramatically lowers their costs. they can deliver the correctThey know what their solutions over time.competitors are doing and are They’re not trying to come upcompletely focused on staying with new or better products; they Starboard knows they can’t justone step ahead in order to just want to produce more say, “We offer great service.”capture a greater share of their volume at a lower cost. Starboard’s team knows theymarket. have to deliver on that value CRC’s value proposition is proposition in every interactionAltra’s culture is all about operational excellence; they they have with prospects andproduct leadership, and their convey it in their messages and customers.market sees it even before they in everything they do.become customers.Either way, you’ll strengthen your business in both the short and long terms. Best Case Neutral Case Worst CaseYou provide a one-of-a-kind Your product is somewhat Your prospects see littleproduct/service that your market different from, and better than, difference between you and yourneeds and wants. those of your competitors, and competitors, so you’re you communicate that competing solely on price.You have a strong value difference, though probably notproposition that differentiates as consistently as you should. You have to fight long and hardyou from your competitors; you for every sale.communicate it consistently in Your prospects partially buy into ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysiseverything you do. the value you provide, but you It’s very difficult to meet your don’t win all of the deals that revenue and profit goals.Your prospects respond because you could.you’re completely meeting theirneeds.Competitive Positioning Key Concepts & StepsBefore you beginYour competitive positioning strategy is the foundation of your entire business – it’s the first thingyou should pin down if you’re launching a new company or product. It’s also important whenyou’re expanding or looking for a new edge.Profile your marketDocument the size of your market, and identify your major competitors and how they’repositioned.Determine whether your market is in the introductory, growth, mature, or declining stage of its life.This “lifecycle stage” affects your entire marketing strategy.Segment your marketUnderstand the problems that your market faces. Talk with prospects and customers, or conductresearch if you have the time, budget and opportunity. Uncover their true wants and needs – you’lllearn a great deal about what you can deliver to solve their problems and beat your competitors.Group your prospects into “segments” that have similar problems and can use your product — insimilar ways. By grouping prospects into segments, you can efficiently market to each group.Evaluate your competitionList your competitors. Include any that can solve your customers’ problems, even if thecompetitors’ solutions are much different from yours – they’re still your competition.Rate your own company and your direct competitors based on operational efficiency (price),product leadership and customer intimacy. It’s easy to think you’re the best, so be as impartial asyou can be.Stake a positionIdentify areas where your competition is vulnerable.Determine whether you can focus on those vulnerable areas – they’re major opportunities.Identify products/services you can offer to meet the true needs of your market in a new and betterway.Define your value propositionThere are three core types of value that a company can deliver: operational efficiency (the lowestprice), product leadership (the best product), or customer intimacy (the best solution & service).Determine which one you’re best equipped to deliver; your decision is your “value proposition.”Select the mindshare you want to own, and record your strategy ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisReview the components of your market and evaluate what you want to be known for in the future.Condense all your research and analysis into “the one thing.”MarketingIn the hospitality industry, marketing and sales are often thought to be the same, and no wonders:the sales department is one of the most visible. Sales managers provide prospective clients withtours and entertain them, thus the sales function is highly visible. Whereas, most of the non-promotional areas of the marketing function take place behind closed doors. The four-P frameworkcalls upon marketing professionals to decide on the product and its characteristics, set the price,decide how to distribute their product, and choose methods for promoting their product. Ifmarketers do a good job of identifying consumer needs, developing a good product, and pricing,distributing, and promoting it effectively, the result will be attractive products and satisfiedcustomers.Marketing mixElements include product, price, promotion and distribution channels. Sometime distribution iscalled place and the marketing situation facing a company. Also known as the 4P’s: 1. Product/service A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible good or an intangible service. Intangible products are service based like the tourism industry & the hotel industry or codes-based products like cellphone load and credits. Tangible products are those that can be felt physically. Typical examples of mass-produced, tangible objects are the motor car and the disposable razor. 2. Price The price is the amount a customer pays for the product. The price is very important as it determines the companys profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often, it will affect the demand and sales as well. When setting a price, the marketer must be aware of the customer perceived value for the product. 3. Place (distribution channel) Refers to providing the product at a place which is convenient for consumers to access. Place is synonymous with distribution. Various strategies such as intensive distribution, ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis selective distribution, exclusive distribution, franchising can be used by the marketer to complement the other aspects of the marketing mix. 4. Promotion Represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion. • Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. • Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. • Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. • Sales staff often plays an important role in word of mouth and public relationsThe Extended Marketing Mix (7Ps)The additional Ps have been added because today marketing is far more customer oriented than everbefore, and because the service sector of the economy has come to dominate economic activity inthis country. These 3 extra Ps are particularly relevant to this new extended service mix. The threeextra Ps are: 1. Physical layout (evidence) Refers to the experience of using a product or service, for example, when a service goes out to the customer, it is essential that you help him see what he may or may not buy. Examples are brochures and pamphlets. 2. People (provision of customer service) Refers to the customers, employees, management and everybody else involved in it. In tourism industry especially, it is essential for everyone to realize that the reputation of the brand is in the people’s hand. Example; a FOA service is the first impression of the hotel. 3. Processes Refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers. Example; how the customer services handle customer complaints.Destination marketing plan ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisDestination marketing is the process of communicating with potential visitors to influence theirdestination preference, intention to travel and ultimately their final destination and product choices.Destination marketing is a major part of the ‘Implementation’ process; it is the articulation andcommunication of the values, vision and competitive attributes of the destination.The actions implemented in the destination marketing phase should be underpinned by the findingsof the ‘Destination Planning’, process and the subsequent ‘Destination Development’ activities.Successful destination marketing involves: • Understanding the motivations and preferences of visitors in their decision-making and travel planning process and how these behaviours change over time; • Identifying appropriate visitor markets that ‘fit’ the destination attractions and experiences and align with community values; • Developing a ‘Strategic Marketing Plan’ to provide direction for destination marketing activities; • Developing a stakeholder agreed, strong and recognised destination brand and image that is underpinned by the values and unique point of difference of the destination; • Facilitation of a process to engage stakeholders to implement key marketing activities including: o Relevant promotional and advertising actions to influence visitor perceptions, awareness and destination choice; o Effective sales and distribution channels to enable conversion of intention to visit into actual visitation; o Development of cooperative marketing programs with tourism organisations and businesses to provide resource synergies and increased visitation potential for a destination. • Gaining ‘cut-through’ of your message either through innovative marketing ideas, for example Tourism Queensland’s ‘Best Job in the World’ campaign or by allocating significant budget to marketing to gain a greater ‘share of voice’. • Effectively building a destination brand that is in harmony with the community’s aspirations.Strategic Destination PlanSuccessful marketing can influence a potential visitors destination choice, itinerary planningprocess and choices, and also encourage word-of-mouth referrals. A Marketing Plan sets theframework and direction for all marketing activities for a destination including market research,brand development and management, advertising and promotion, sales, distribution and cooperativemarketing opportunities.The development of a successful strategic marketing plan should: • Determine the existing and forecast market characteristics for the destination including visitor markets and operating environment; • Identify Trends and influences that may impact on the target markets of a destination, in their travel preferences and choices; • Understand the visitor markets’ information-searching and decision-making process and factors that influence destination choice and product selection; • Engage stakeholders in a collaborative planning process to develop an agreed strategic direction and vision for marketing in the region; as demonstrated by Noosa’s award winning approach to the development of industry partnerships to guide strategic tourism marketing in the region; ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis • Identify marketing strategies and techniques that are aligned with the destination’s target market segments, vision and values; as highlighted in the marketing strategy of the ‘Australia’s Hunter Valley’ which divided the region into precincts based on the type of tourism experiences available to target different consumer segments; • Recognise the increasing trend toward e-marketing and use of ICT technologies for promotion and sales and the impact of this trend on a destination’s target market and marketing techniques; • Develop clear timelines and responsibilities for actions identified in the plan; • Develop key performance indicators to monitor and review the implementation of the plan; • Link the destination marketing plan to other regional and state plans; • Identify funding opportunities including cooperative marketing programs, industry participation and alignment with State marketing programs.Marketing PlanA marketing plan for a small business typically includes Small Business Administration Descriptionof competitors, including the level of demand for the product or service and the strengths andweaknesses of competitors • Description of the product or service, including special features • Marketing budget, including the advertising and promotional plan • Description of the business location, including advantages and disadvantages for marketing • Pricing strategy • Market SegmentationSeven steps of marketing planStep 1. Prepare a mission statement The marketing plan mission statement clearly and succinctly describes the nature of the business, services offered, and markets served usually in a few sentences. Sometimes for larger companies it’s combined with a vision statement that can be two to three paragraphs in length.Step 2. List and describe target or niche markets In this section, list and describe potential groups of users or clients. After you create the list, identify various segments of a market. Segments can include specific types of people in a company by role for example, chief executive officer, chief financial officer, or marketing director. Department heads are another type of market segment. For segmenting the consumer market, consider age groups. In addition, niche markets are an integral part of marketing. Within a target market of attorneys, for instance, there may be niche groups such as trial or malpractice attorneys. In some instances, targeting by firm size is an important consideration.Step 3. Describe your services As mentioned above, its necessary to conduct market research to understand your market and to identify the services they require. At the same time, inventory the services you currently offer and identify new services you wish to provide. Determine what it will take to provide these services in terms of staff, expertise, and costs. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisStep 4. Spell out marketing and promotional strategies Various strategies work better for different target markets and, therefore, several may be required to triumph. The key for successful marketing is understanding what makes someone want to use or buy services and what type of marketing strategy they respond to. This requires you to learn needs, problems, industry trends, and buzzwords. To get up to speed for a particular business market, read trade journals and attend professional conferences to meet prospective users or buyers in person. Become active in various groups whenever possible and form strategic alliances. Find out what works best for the markets you serve. This is a trial-and-error process that requires testing and interaction with clients or prospective clients, although reading case studies and interviewing and consulting with libraries that have already had marketing achievements is one way to save time. Basic marketing strategies include the following: • Network, either in person or electronically, by participating in discussion groups online where your target markets congregate. • Direct marketing involves sending out sales letters, capability brochures, flyers, or special offers on a regular, repeated basis to the same group of prospects. Direct marketing can only work if you speak the language of your target market and contact them regularly. Advertise in print media or directories, often with a specific offer to reap the benefit of an immediate response or sales. • Advertising lends credibility (image advertising) and, like direct marketing, must be continuous. Devise training programs that increase awareness about your services. • Write articles for local media or professional journals and newsletters that describe the benefits of your services. • Direct or personal selling is the one-on-one selling, often on site at a prospects office or company. Direct sales are a particularly costly form of marketing since you only reach one person at a time. However, if you present your services to a group of people at a company, such as people from a particular department or several department heads, direct sales can be beneficial. • Send out publicity and press releases through local newspapers, radio, and television stations. Participate in trade shows at the local or regional level. When a strategy works, repeat it. But if it fails, and you have done it right, drop it. The ability to develop and implement each of the strategies above requires learning and honing new skills. It will most likely be necessary to read marketing and sales books, attend courses or workshops, or hire consultants and specialists to assist you as necessary.Step 5. Identify and understand the competition As part of the market planning process, you must learn about your competitors and how to position yourself in relation to them. Describe your strengths and what you want to emphasize. Once you identify both direct and indirect competition (for example, the Internet as indirect competition), you can determine how and why your services are special and benefit users in a particular way. You can compete based on value, price, product, or service, or some combination of these. Your unique position in the marketplace must be touted in your marketing programs and marketing literature.Step 6. Establish Marketing Goals that are Measurable ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysis Marketing goals can include setting the number of new clients you would like to acquire, the number of people you would like to reach, or the amount of income you would like to generate. Be realistic and practical in establishing your goals. Take a good look at the available skills and resources that you can commit to implement and integrate your goals into your marketing plan effectively. Study the budget requirements for the strategies you select and plan accordingly.Step 7. Monitor your results carefully By monitoring results, you determine which of your marketing strategies are working and which are not. Identify strategies that generate leads and sales. This involves tracking and evaluating customers responses to each marketing strategy. As you get to know your repeat clients better, meet with them for detailed feedback and ask them for ideas and suggestions about how you can introduce your products and services to more prospects who are just like them. Client comments are invaluable for creating or enhancing your market literature, and you can also learn and incorporate terms or language common to a particular user group through this process. Just as valuable, these interviews lead to statements that can be used as testimonials (with permission of course) and in future brochures and promotional activities. UNIT 8: DESTINATION AUDITING Chapter objectives • Understand the destination audit definition and approach • Outline the destination audit process and its benefits in the destination management analysis • Discuss on how to analyze competitors and determine the competitive advantages • Analyze the factors affecting destination choiceDestination AuditAn audit is “inherently retrospective, concerned with detection of errors and many evaluativetechniques can be applied retrospectively, concurrently, or prospectively”Particularly, Kotler (1998: 747) defines the marketing audit as:“a comprehensive, systematic, independent and period examination of company’s – or businessunit’s – marketing environment, objective, strategies and recommending a plan of action toimprove the company’s marketing performance”.Extending this concept to the performance analysis, the audit can be understood as an evaluationand an improvement of the efficiency and effectiveness of an entity’s operating activities related tothat entity’s mission and goals.According to the definition of Crouch and Ritchie (2004: 9) “the idea of an audit is familiar to most– it is some sort of an official examination to make sure that everything is in order, and where it isnot, an audit makes recommendations and seeks to provide advices”.Recent issues on sustainability measurement incorporated the use of audit techniques.Environmental auditing (EA) has been defined as the process of measuring the actual and potentialenvironmental impacts of public and private sectors within the tourism industry (Diamantis and ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisWestlake, 1997; Diamantis, 1998). The EA has been defined by the Central and GovernmentEnvironmental Forum – CGEF - (1993: 145) as a management tool comprising a systematic,documented, periodic and objective evaluation of the performance of the organization, managementsystem and equipment designed to protect the environment, with the aim of: • facilitating management control of practices which may have an impact on the environment; • assessing compliance with the local authority’s environmental policies.The general objective of a destination audit is to improve its performance, competitiveness, andsustainability as governed by a vision for the destination.Destination Audit ApproachPrinciples that a successful destination balances are including these four (4) key elements: 1. Attractors – the things that motivate people to visit, individually or as part of the key whole experience. They include attractions, events, shopping offer, etc. increasingly they include accommodation and restaurants, which are often the prime reason that people visit places 2. Infrastructure – the facilities that enables visitors to get to the destination and stay there. Principally, transport, accommodation, and food and beverage. Both could actually be treated as attractors as accommodation and accessibility are primary factors in choice of destination 3. Services – information that allows visitors to make the choices as to where they go, to boo, and to enjoy the experience when they are at the destination. Includes visitor information, signage, interpretation and facilities like toilets 4. Management – a system responsible for developing and managing the destination brand, the brand encapsulating all elements of the product and the way in which it presents itself to the world.Constructing a destination auditThe information and work needed to carry out an audit comprises both desk and field research. Thedesk research will mainly entail a review, analysis and assessment of existing informationconcerning the destination.Such information may cover: • Domestic and international visitor statistics • Destination-specific studies established to provide for the assembly of a destination management database • Tourism development strategies and plans • Economic development studies and assessments • Annual reports on competitor destination • A wide variety of available information covering various elements of the destination competitiveness model ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisThis information may be sourced from relevant destination management’s organizations,government departments, tourism research bureau, university research centre, economicdevelopment agencies, industry associations, tourism enterprises, etcThe field research requirement involves: • Meeting with representatives and assessing the relevant roles of all major organizations with responsibilities and programs affecting the development of the destinations in significant ways • Identifying the mechanisms in place that govern these different responsibilities and facilitate coordination and cooperation • Inspection of the state of tourism resources • Carrying out destination audit-specific research activities and instituting an on-going research program to provide improved timely information for future auditsFor an audit to be systematic, a structured process for conducting the audit needs to be developed.While various alternative processes might serve this purpose, they ought to have certain basicfeatures in common if they are to achieve that goal of an auditDestination Audit ProcessThe destination audit process starts with the analysis of the destination vision, goals and objectives,and links them with desired outcomes. It is fundamental to establish the principal competitors and ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination Analysisthe market structure as well as to identify destination competitiveness elements of majorimportance.The audit should then pay particular attention to these critical areas. The examination of thedestination’s environment will reveal important environmental trends, changes, and developmentsthat could have a significant impact on the destination.The evaluation of the destination competitiveness dimensions is the most detailed and time-consuming part of the audit process because it determines “what is”. With the next step, theattention turns to “what should be”. The auditor, therefore, needs to appraise destinationcompetitiveness and performance.The standard for making this appraisal was established in the first step, when the destination vision,goals, and objectives were determined. The audit process continues with the recommendations forenhancing and maintaining the destination’s competitiveness and sustainability, and to review thedestination’s competitive position and vision.The destination audit needs a significant degree of impartiality and independence. It is alsoimportant that the auditor is very experienced, knowledgeable, competent, and creative in order toadequately evaluate destination competitiveness and to identify courses of action that will improvethe destination’s prospects.Kotler (1988) notes that the marketing audit can be conducted in six ways: 1) self-audit; 2) audit from across; 3) audit from above; 4) company auditing office; 5) company task-force audit; 6) outsider audit.Self-auditThe self-audit is the least expensive approach because it is conducted by the destinationmanagement organization. If the main advantage is that the audit is carried out by someone alreadyvery knowledgeable about the destination, the main disadvantage is that this organization oftendoesn’t have sufficient time to do the audit and is not very critical of its own performance.Recommendations are likely to involve only minor change. - However, for small destinations, thismay be the only viable option.Audit from acrossThe level of independence is bigger with the audit from across than the self-audit because the auditis not made by the destination managers but by someone different in the organization or area ofresponsibility. The benefits from a familiarity with activities help to understand theinterorganizational relationships but their views may be biased by being either highly critical or notcritical enough.Audit from aboveThe audit from above approach relies on more superior managers or organizations assessingsubordinate organizations or managers. Similar problems with independence apply and no one isleft to review the most important player in the destination – the organization or manager at the top.Auditing office ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisThe independence would be increased with the auditing office. The problem here could be that theexperience of this auditor may have been limited to only the one destination or, if responsible forother audit needs in government, still have insufficient knowledge of the tourism sector.Company task-force auditThe members of the task force could be drawn from a range of destination stakeholders includingrepresentatives of the local community and various important interest groups, where no oneorganization can dominate. This type of audit also tends to carry more weight and authority. Apotential disadvantage concerns the time it may take to complete an audit undertaken in this wayunless the task force is adequately resourced with research assistance and a strong chairperson.Outside auditorThe outside auditor – shaped by specialized consultants – can ensure the most independent andobjective appraisal. They have a large knowledge of the issues facing other destinations and can,therefore, adapt the strategies and solutions that have worked in other contexts.Nevertheless, thissystem is expensive and a great deal of time must be spent becoming familiar with the destination tobegin with. - Moreover, with regard to the audit of destination, few such experienced consultantsare available.Three benefits for a destination undertaking a destination audit: 1. reveal important environment trends, changes and development that could have a significant impact to the destination 2. identify the destination competitive advantages and core competencies 3. chances to improve the destination overall performance from the recommendation and corrective action takenHow SWOT analysis would be used during the auditing of a destination?SWOT analysis used in determining the destination competitiveness in relative to the competitors,market structure, destination competitive elements (attractors, infrastructures, services,management), destination environment as well as the destination overall performance.In terms of the Strengths, Weaknesses, Opportunities and Threats that can be derived from the auditprocess.Analyzing CompetitorsCompetitor analysis in marketing and strategic management is an assessment of the strengths andweaknesses of current and potential competitors. This analysis provides both an offensive anddefensive strategic context through which to identify opportunities and threats.Competitor profiling coalesces all of the relevant sources of competitor analysis into one frameworkin the support of efficient and effective strategy formulation, implementation, monitoring andadjustment. Given that competitor analysis is an essential component of corporate strategy, it isargued that most firms do not conduct this type of analysis systematically enough. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisInstead, many enterprises operate on what is called “informal impression, conjectures, and intuitiongained through the tidbits of information about competitors every manager continually receives”.As a result, traditional environmental scanning places many firms at risk of dangerous competitiveblind-spots due to a lack of robust competitor analysisCompetitor arrayOne common and useful technique is constructing a competitor array.The steps include: 1. Define your industry – scope and nature of the industry 2. Determine who your competitors are 3. Determine who your customers are and what benefits they expected 4. Determine whet the key success factors are in your industry 5. Rank the key success factors by giving each one a weighting – the sum of all the weightings must add up to one 6. Rate each competitor on each of the key success factor 7. Multiply each cell in the matrix by the factor weightingThis can best be displayed on a two dimensional matrix - competitors along the top and key successfactors down the side.An example of a competitor array follows: Key Industry Competitor #1 Competitor #1 Competitor #2 Competitor #2 WeightingSuccess Factors rating weighted rating weighted1 - Extensive 0.4 6 2.4 3 1.2distribution2 - Customer 0.3 4 1.2 5 1.5focus3 - Economies 0.2 3 0.6 3 0.6of scale4 - Product 0.1 7 0.7 4 0.4innovation Totals 1.0 20 4.9 15 3.7In this example competitor #1 is rated higher than competitor #2 on product innovation ability (7out of 10, compared to 4 out of 10) and distribution networks (6 out of 10), but competitor #2 israted higher on customer focus (5 out of 10). Overall, competitor #1 is rated slightly higher thancompetitor #2 (20 out of 40 compared to 15 out of 40). When the success factors are weightedaccording to their importance, competitor #1 gets a far better rating (4.9 compared to 3.7).Two additional columns can be added. In one column you can rate your own company on each ofthe key success factors (try to be objective and honest). In another column you can list benchmarks.They are the ideal standards of comparisons on each of the factors. They reflect the workings of acompany using all the industrys best practices.Competitor profiling ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisThe strategic rationale of competitor profiling is powerfully simple.- Superior knowledge of rivalsoffers a legitimate source of competitive advantage. The raw material of competitive advantageconsists of offering superior customer value in the firm’s chosen market. The definitivecharacteristic of customer value is the adjective, superior.Customer value is defined relative to rival offerings making competitor knowledge an intrinsiccomponent of corporate strategy. Profiling facilitates this strategic objective in three importantways. • First, profiling can reveal strategic weaknesses in rivals that the firm may exploit. • Second, the proactive stance of competitor profiling will allow the firm to anticipate the strategic response of their rivals to the firm’s planned strategies, the strategies of other competing firms, and changes in the environment. • Third, this proactive knowledge will give the firms strategic agility.Offensive strategy can be implemented more quickly in order to exploit opportunities and capitalizeon strengths. Similarly, defensive strategy can be employed more deftly in order to counter thethreat of rival firms from exploiting the firm’s own weaknesses. Clearly, those firms practicingsystematic and advanced competitor profiling have a significant advantage.As such, a comprehensive profiling capability is rapidly becoming a core competence required forsuccessful competition. A common technique is to create detailed profiles on each of your majorcompetitors. These profiles give an in-depth description of the competitors background, finances,products, markets, facilities, personnel, and strategies.Media scanningScanning competitors ads can reveal much about what that competitor believes about marketingand their target market. Changes in a competitors advertising message can reveal new productofferings, new production processes, a new branding strategy, a new positioning strategy, a newsegmentation strategy, line extensions and contractions, problems with previous positions, insightsfrom recent marketing or product research, a new strategic direction, a new source of sustainablecompetitive advantage, or value migrations within the industry.It might also indicate a new pricing strategy such as penetration, price discrimination, priceskimming, product bundling, joint product pricing, discounts, or loss leaders. It may also indicate anew promotion strategy such as push, pull, balanced, short term sales generation, long term imagecreation, informational, comparative, affective, reminder, new creative objectives, new uniqueselling proposition, new creative concepts, appeals, tone, and themes, or a new advertising agency.It might also indicate a new distribution strategy, new distribution partners, more extensivedistribution, more intensive distribution, a change in geographical focus, or exclusive distribution.Little of this intelligence is definitive: additional information is needed before conclusions shouldbe drawn. A competitors media strategy reveals budget allocation, segmentation and targetingstrategy, and selectivity and focus.From a tactical perspective, it can also be used to help a manager implement his own media plan.By knowing the competitors media buy, media selection, frequency, reach, continuity, schedules,and flights, the manager can arrange his own media plan so that they do not coincide. Other sourcesof corporate intelligence include trade shows, patent filings, mutual customers, annual reports, andtrade associations. Some firms hire competitor intelligence professionals to obtain this information. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisNew competitorsIn addition to analysing current competitors, it is necessary to estimate future competitive threats.The most common sources of new competitors are: • Companies competing in a related product/market • Companies using related technologies • Companies already targeting your prime market segment but with unrelated products • Companies from other geographical areas and with similar products • New start-up companies organized by former employees and/or managers of existing companiesThe entrance of new competitors is likely when: • There are high profit margins in the industry • There is unmet demand (insufficient supply) in the industry • There are no major barriers to entry • There is future growth potential • Competitive rivalry is not intense • Gaining a competitive advantage over existing firms is feasibleDestination CompetitivenessOver a number of years, Ritchie and Crouch further refined the concepts and propositionsunderlying the Calgary model, to a point where it has developed to its current form (Ritchie andCrouch 2003). This more complex model has some 36 factors divided into five categories withrelatively complex interrelationships.Chon and Mayer (1995) suggested enhancements to the five constructs on the Calgary model. Theyproposed the inclusion of sub factors ‘substitutes’ for the appeal dimension, ‘entry/exit barriers’ forthe management dimension, ‘organisational design’ for the organisation dimension, ‘technology’for the information dimension, and ‘value’ for the efficiency dimension.The present model explicitly recognises demand conditions as an important determinant ofdestination competitiveness. It also explicitly recognises that destination competitiveness is not anultimate end of policy making but is an intermediate goal towards the objective of regional ornational economic prosperity.Understanding the sequence of events or phases that mark the history of the destination can alsoassist in bringing a destination’s inherent potential and its impediments into sharper focus. Butlers(1980) paper on destination development signified a fundamental turning point into life cycleresearch, by intending to show the development of a destination in terms of the series of life stagesdefined by infrastructures and number of visitors.Hovinen’s (1981) work in Lancaster County, Pennsylvania, likely the first use and examination ofButlers tourism area life cycle (TALC) model, concluded that a destination may be categorised bythe co-existence of several development stages, a stance supported by other tourism researchers. ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
Destination AnalysisIn recognising this feature, Hovinen substituted Butler’s phases of consolidation (commonlycharacterised by factors such as: early signs of declining visitor numbers; the emergence ofdiscontent towards tourism among permanent residents; some deprivation and restrictions placedupon visitor activities) and stagnation (where an area is seen to have poorly maintainedaccommodation and amenities; has a well-established image, but is no longer in fashion; has aheavy reliance on repeat visitation traffic) with a stage termed ‘maturity’.Having resolved that different destinations are affected by a recognised pattern of development,some tourism researchers (Dwyer and Kim 2003; Enright and Newton 2005) argue that theprincipal factors contributing to competitiveness will vary amongst destinations, and as such,destinations must take a more tailored approach to enhancing and developing tourismcompetitiveness, rather than adopting a single, universal policy or strategy. Of particular interest isthe relevance or importance of key competitiveness variables to destinations at different stages ofdevelopment or evolution.Factors affecting destination choice 1. Cost and budget (Total trip expenditure) 2. Time constraint (length of stay) 3. Illness and disability 4. Visiting family and friends 5. Preferred activities 6. Climate (season) ©2012 World-Point Academy of Tourism Sdn. Bhd. All Rights Reserved.
UNIT 9: THE FUTURE OF DESTINATIONS Chapter objectives • Discuss the future of destination in the form of ecotourism and sustainable tourism • Identify and explain teh different types of carrying capacity • Understand the general concept of distribution channel in a destination analysis • Explore the relationship between information technology and a destination including the concept of virtual reality and travelEcotourism and sustainable tourismEcotourismEcotourism is a form of tourism involving visiting fragile, pristine, and usually protected areas,intended as a low impact and often small scale alternative to standard commercial tourism. Itspurpose may be to educate the traveler, to provide funds for ecological conservation, to directlybenefit the economic development and political empowerment of local communities, or to fosterrespect for different cultures and for human rights.Generally, ecotourism focuses on volunteering, or "voluntourism", personal growth andenvironmental sustainability. Ecotourism typically involves travel to destinations where flora,fauna, and cultural heritage are the primary attractions. One of the goals of ecotourism is to offertourists insight into the impact of human beings on the environment, and to foster a greaterappreciation of our natural habitats.Responsible ecotourism includes programs that minimize the negative aspects of conventionaltourism on the environment and enhance the cultural integrity of local people. Therefore, in additionto evaluating environmental and cultural factors, an integral part of ecotourism is the promotion ofrecycling, energy efficiency, water conservation, and creation of economic opportunities for localcommunities. For these reasons, ecotourism often appeals to environmental and social responsibilityadvocates.According to the definition and principles of ecotourism established by The InternationalEcotourism Society (TIES) in 1990, ecotourism is "Responsible travel to natural areas thatconserves the environment and improves the well-being of local people." (TIES, 1990).Martha Honey, expands on the TIES definition by describing the seven characteristics ofecotourism, which are: 1. Involves travel to natural destinations 2. Minimizes impact 3. Builds environmental awareness 4. Provides direct financial benefits for conservation 5. Provides financial benefits and empowerment for local people 6. Respects local culture 7. Supports human rights and democratic movements such as: • conservation of biological diversity and cultural diversity through ecosystem protection • promotion of sustainable use of biodiversity, by providing jobs to local populations
• sharing of socio-economic benefits with local communities and indigenous peoples by having their informed consent and participation in the management of ecotourism enterprises • tourism to unspoiled natural resources, with minimal impact on the environment being a primary concern. • minimization of tourisms own environmental impactBenefits of EcotourismThere are plenty of valid ecotourism businesses, but to qualify, they have to provide long-termbenefits to a community and fulfil the following conditions, at the very least.The benefits of ecotourism activities can: • be educational by teaching about local plants and animals • give you a deeper understanding of a local culture • be spiritually uplifting and bring you closer to nature • open you up to new ideas • take you off the beaten path • help you lose weight! (by getting you on your feet and on your bicycle!)If your dollars are spent wisely, here are some of the benefits of ecotourism they will reap: • money will go back into the community • endangered habitats and biodiversity will be conserved • people, both local and visitors, will become more aware of the surrounding environmental wealth • providing employment will ensure fewer people leave for the cities • poor countries often sell their primary resources to survive - water, trees, minerals, wildlife... so ecotourism provides them with a decent alternative source of income • provide financial incentives that encourage local people to protect their environmentBeware, though, the benefits of ecotourism are touted by plenty of commercial firms that have nobusiness using the word. These less honest businesses, by claiming to be involved in ecotourism,would be guilty of greenwashing, pretending to practice ecotourism but focused only on profits.When the benefits of ecotourism become liabilities, heres what can happen: • people may be displaced to build resorts, like the Masai in Kenya • population increases may put too much pressure on land, reducing opportunities for local people to make a living off the land • the same can happen if water is diverted from rivers to service tourist resorts • overcrowding in tourist venues may actually endanger protected areas, as in the Galapagos Islands, where too many tourists are visiting; in Tibet, the number of tourists visiting Tibet is higher than the number of Tibetans who actually live in their country • rare species can be endangered - unusual plants can be picked or trampled, vehicles and planes can and do pollute • energy sources can be depleted to accommodate tourist hordes, etcSustainable tourism
As more regions and countries develop their tourism industry, it produces significant impacts onnatural resources, consumption patterns, pollution and social systems. The need forsustainable/responsible planning and management is imperative for the industry to survive as awhole.Sustainable tourism is tourism attempting to make a low impact on the environment and localculture, while helping to generate future employment for local people. The aim of sustainabletourism is to ensure that development brings a positive experience for local people, tourismcompanies and the tourists themselves. Sustainable tourism is not the same as ecotourism -Sustainable tourism is about re-focusing and adapting. A balance must be found between limits andusage so that continuous changing, monitoring and planning ensure that tourism can be managed -This requires thinking long-term (10, 20+ years) and realising that change is often cumulative,gradual and irreversible. Economic, social and environmental aspects of sustainable developmentmust include the interests of all stakeholders including indigenous people, local communities,visitors, industry and government.Tourists who promote sustainable tourism are sensitive to these dangers and seek to protect touristdestinations, and to protect tourism as an industry. Sustainable tourists can reduce the impact oftourism in many ways, including: • informing themselves of the culture, politics, and economy of the communities visited • anticipating and respecting local cultures, expectations and assumptions • contributing to intercultural understanding and tolerance • supporting the integrity of local cultures by favoring businesses which conserve cultural heritage and traditional values • supporting local economies by purchasing local goods and participating with small, local businesses • conserving resources by seeking out businesses that are environmentally conscious, and by using the least possible amount of non-renewable resourcesFour Clusters Of Criteria For Sustainable Tourism 1. Community well-being Sustainable tourism development supports and ensures the economic, social and cultural well being of the communities in which tourism takes place. The criteria belonging to this cluster are ranging from the generation of income over the enhancement of local traditions up to the strengthening of participatory processes. 2. Protection of the natural and cultural environment Sustainable tourism allows the use of natural and cultural resources for gaining economic profit while at the same time guaranteeing that these resources are not deteriorated or destroyed. Additionally, tourism is expected to be a driving force with regard to the establishment or the enhancement of nature protection and the maintenance of cultural values. 3. Product quality and tourist satisfaction The quality of tourism products offered by a region is a key factor for the economic success of tourism. It is not only characterised by material criteria like the quality of transport, accommodation and food, but also by non-material criteria like hospitality or the quality of experiences. 4. Management and monitoring
To ensure that tourism is developed in a way which is feasible and fulfils the criteria of the first three clusters, adequate management and monitoring must be established. Sustainable tourism development theoretically could be implemented without management and supervision, but in reality is not likely to be ensured without.Benefits of Sustainable Tourism Development • Helping expand marketing reach by tapping into additional travel motivators, i.e. the desire for more authentic experiences • Enhancing customer loyalty by demonstrating best tourism practices • Increasing the appeal of travel itineraries through “special experiences” such as access to researchers, behind-the-scene tours, or enhanced interactions with local people • Improving impact management, helping to ensure the preservation of destinations and cultures for future generations, which equates to more attractive environments and better products • Providing access to standards recognized as best innovative practices within the travel industry, helping businesses to meet higher standards through continuous improvement • Adding value to local communities’ economies, helping them to safeguards the livelihood of local and indigenous peopleCarrying capacity"Tourism Carrying Capacity" is defined by the World Tourism Organisation as “The maximumnumber of people that may visit a tourist destination at the same time, without causing destructionof the physical, economic, socio-cultural environment and an unacceptable decrease in the qualityof visitors satisfaction”.Where as Middleton and Hawkins Chamberlain (1997) define it as “the level of human activity anarea can accommodate without the area deteriorating, the resident community being adverselyaffected or the quality of visitors experience declining” what both these definitions pick up on iscarrying capacity is the point at which a destination or attraction starts experiencing adverse as aresult of the number of visitors.There are number of different forms of carrying capacity referred to in tourism, however this articlewill focus on the four most commonly used. 1. Physical carrying capacity This is the max number that area is actually able to support. In the case of an individual tourist attraction it is the maximum number that can fit on the site at any given time and still allow people to be able to move. This is normally assumed to be around 1m per person. 2. Economic carrying capacity This relates to a level of unacceptable change within the local economy of a tourist destination, it is the extent to which a tourist destination is able to accommodate tourist functions without the loss of local activates, take for example a souvenir store taking the place of a shop selling essential items to the local community. Economic carrying capacity can also be used to describe the point at which the increased revenue brought by tourism development is overtaken by the inflation caused by tourism. 3. Social carrying capacity
This relates to the negative socio-cultural related to tourism development. The indicators of when the social carrying capacity has been exceeded are a reduced local tolerance for tourism as described by Doxey’s Index of irritation.Reduced visitor enjoyment and increased crime are also indicators of when the social carrying capacity has been exceeded. 4. Biophysical carrying capacity This deals with the extent to which the natural environment is able to tolerate interference from tourists. This is made more complicated by the fact that because it deals with ecology which is able to regenerate to some extent so in this case the carrying capacity is when the damage exceeds the habitats ability to regenerate. Environmental carrying capacity is also used with reference to ecological and physical parameters, capacity of resources, ecosystems and infrastructure.Weaknesses Of Carrying CapacityThe main criticism of carrying capacity is that is fundamentally flawed conceptually and practically.Conceptually, the notion of an inherent carrying capacity assumes a stable and predictable world, a"J-shaped" curve in the relationship between use level and impact, and techno-scientific view ofwhat are essential value judgments.On the practical level, it is difficult to calculate a maximum number of visitors because this is alsodependent on other factors like the way in which the tourists behave ‘a large group of bird Watchersmoving through a landscape will have a different impact compared to a similar sized group ofschool children.’In the case of natural heritage like national parks, visitor impacts change with seasons. What isimportant is the acceptability or appropriateness of these impacts, an issue that is largely dependenton social and cultural value systems with science having an input.Tourism distribution channelThe concept of distribution channels is not limited to the distribution of physical goods - Althoughthe principles are the same, the channel distribution for tourism differs significantly from those usedfor manufactured goods. This difference stems from the nature of tourism services and theirproduction system and consumption patterns.Tourism services require simultaneous production and consumption, meaning the product is notnormally moved to the consumer. Further, the product is often sold in conjunction with anotherone, such as airline tickets - Because of the perishability of most of the tourism products, manytraditional channels may not work.While eliminating some of the functions and problems of transportation and warehousing, adistribution channel in tourism should consider such reasons in reaching and catering to the market.A tourism distribution channel may be defined as a total system of linkages between actual andpotential tourists and the suppliers.The structure of the distribution system may be either direct (from the producer to the seller) orindirect (the sale to the consumer through an intermediary).As the definition implies, the challenge is how to get the customer to the consumption site (theretailer), that is, to make it convenient and accessible - This unique feature raises the need for adifferent kind of distribution system in tourism. Suppliers of tourism services and destinations may
use several different methods to distribute their goods and services. These include their ownchannels (partially or wholly owned), selling through management and marketing contracts,franchising, hiring sales representatives and using various intermediaries.The intermediaries in a tourism channel of distribution consist of three main categories: tourpackagers, retail travel agents and speciality channels. Included in the latter are incentive travelfirms, meeting planners and convention planners, hotel representatives, association executivemarketing organisations, corporate travel offices and others.New developments in direct access to global distribution systems make tourism arrangementsinstant and more accessible. For example, agents can make the flight arrangements, get a rental car,book a hotel room and buy a ticket to a show without ever using the telephone. In addition, there isenough evidence to suggest that direct selling, away from the location of production andconsumption, is on the increase since consumers have more access to the world information systemof the Internet and other available information databases.There are three main channel strategies used by marketing professionals and destination promotersto stimulate demand: • the pull strategy - the goal is to entice the consumer to buy the product. Certain inducements are offered to make the potential tourist more interested or seek the appropriate distribution channel for the product in question. For example, this includes frequent flyer programmes or incentives for repeat visitors to a given resort • the push strategy - The goal is to get the intermediary to sell the product to the consumer. For example, tour operators and travel agencies that work with resorts and hotels, or convention and meeting planners may be offered commission to increase bookings for a given time period. Certain incentives, such as complimentary rooms or free tickets to destinations, are among commonly used strategies. • joint promotional efforts or cross marketing - useful and commonly employed strategies in expanding the market base through intermediaries. For instance, hotels, restaurants and attractions can utilise coupons in order to bundle products and bridge the gap among offerings, or hotels working with airlines can arrange specific marketing packages to mutual destinations.Large tourism companies can become their own suppliers of products (vertical integration) - Thistype of distribution needs a large amount of capital to be successful. Vertical integration allowsbusinesses to have and exert control over the entire channel of distribution through retail outletownership and organisation of the distribution channel.Functions of Tourism Distribution Channels • Identify consumer’s needs, requests and expected experiences • Assemble tourism products from different providers according to customer expectations • Provision of coordinated and seamless tourism products • Facilitate the selling process by reserving and issuing travel documents • Reduction of prices by negotiating and pre-purchasing tourism products in bulk • Improve inventory management by managing demand and supply • Issue and deliver travel documentation, i.e. ticketing, vouchers, etc • Assessments of quality of facilities and products • Assistance in legal requirement for consumers (i.e. visa) and suppliers • Facilitate communications between consumers and suppliers especially in multilingual and multicultural environment
• Etc.Information technology and tourismThe tourism industry can be seen as one of the first business sectors where business functions arealmost exclusively using information and communications technologies (ICT). InformationTechnology (IT) and ICT has played an important role in the development of tourism.Computerised reservations Systems (CRS) were among the first applications of IT worldwide. • Computer Reservation System (CRS) The technology works by using computers of special kind and leased telephone lines. The travel agent is connected on-line to the central host computer system or CRS. This system contributes to a great extent in increasing sales volume and giving precise information on the availability and selling the products efficiently ensuring substantial profit gain. • Global Distribution System (GDS) GDSs are systems which distribute reservation and information services to sales outlets around the world. Unlike the CRS that used solely by an airline or hotel chain, GDS distribute more than one CRS to users who are usually travel agents. GDSs were formed from several CRSs. Example; Amadeus, Galileo, Abacus, Worldspan and SabreInitially, CRS and GDS emerged from the hotel and the airline reservation systems respectively, butmeanwhile they also include other tourism relevant products such as holiday packages and othermeans of transport. They provide the main links to systems of tour operators and travel agents.Given that the internet has become already a primary source of information for planning travel andholidays in the major tourism markets, it is critical for DMOs to achieve a broad distribution of theironline product, i.e. their internet portal. The first and most obvious task is to maximise the numberof visitors to the destination’s website.The industry is one of the more successful areas of e-commerce because it is largely consumeroriented and since services and the provision of information is at its centre. Werthner & Klein(1999) suggest tourism is a hybrid industry since even though it is dominated by the provision ofinformation, essentially it is about a physical product. This requires the ‘seamless integration ofinformation and physical service, with flexible configurations of the physical and the informationalparts”.ICT facilitates this integration and enables customisation of tourism products to suit the needs ofindividuals. Due to changes in consumer behaviour of the tourist the market is becoming moresegmented with each potential consumer belonging to a number of market segmentssimultaneously. Tourist operators need to be aware of these changes and be equipped to respond, orbetter still, take a proactive approach. The challenge for the tourism operator is the provision ofaccurate, localised data, increasingly via IT, whilst maintaining a relationship with the tourist.Rather than being just transaction based longer term relationships need to be fostered and IT canplay a role in this relationship building.
The Internet and tourismThe Internet is especially relevant to tourism since it enables knowledge about the consumer ortourist to be gathered, as well as vice versa. This gives ‘rise both to global visibility of destinationsand a global merging of market segments’. The use of web-based tourist information systems hasgrown significantly.Travel revenues on the Internet have consistently ranked highly in comparison with other goods andservices (Kadison, et al., 1998). The reasons cited for this prominence relate to the richness andcurrency of information provided online and the breadth of the audience as well as the intensity ofcompetition and the emergence of new players with countless web sites supported by efficienttransaction support. Online technologies within the tourism industry have significantly impacted oncommunications, transactions and relationships between the various industry operators and with thecustomer, as well as between regulators and operators.Clayton and Criscuolo (2002) argue that technology behind the modern information society,particularly by way of the Internet, has bought about four key changes for the way in whichbusiness is conducted. These changes, which apply equally to the tourism sector, are: 1. the ability to turn ideas into marketable innovation for a wide range of customers, with reduced buyer search costs and costs of access to markets; 2. increased speed to market and access to new product offerings via the Internet; 3. changed processes and the sharing of information within and between organisations; and 4. a shift in the balance of power between suppliers and customers due to the increased availability of information.Benefits of the InternetBenefits from IT, particularly the Internet for tourism, are substantial. These benefits are no longerdependent on proprietary information systems as has been the past experience, since the Internet is acommonly available technology. Dogac, et al, (2004) considers the Internet provides manyadvantages to players in the tourism industry. Some of these benefits are: 1. enhanced level of collaboration between tourism operators, for example, between travel agencies and service providers; 2. pre-arrangements with respective suppliers no longer necessary; 3. web service discovery will identify alternatives, enabling holiday packages to be constructed; 4. greater negotiation of service to be purchased and customization of services/activities; and 5. generally greater levels of interoperability with internal and external applications.Virtual realityVirtual reality (VR) allows the user to interact in realistic three-dimensional full immersivesituations and environments generated by a computer that responds to human movements. The usercan navigate, and interact with the virtual environment and directly manipulate objects within theenvironments. A virtual environment is a virtual reality application – the cosmos, a landscape, animaginary space, the inner side of a painting, a city – that allow users to navigate and interact with athree-dimensional, computer-generated environment in real time. It is the user to believe he is inreality, fully immersed in this unique world.
Virtual Reality: Field of Application 1. Arts Virtual reality and emerging technology has revolutionized the traditional concept of perspective visualization of viewpoints, the composition and perception of time and space. Moreover, it has generated a rupture with the precedent art forms, allowing the emergence of a new way of making art, a diverse style of creativity and above all, the crystallization of a revolutionary artistic language 2. Cultural heritage Virtual reality is useful for reconstructuring cultural, historical and archaeological sites to stimulate environments and cities which no longer exist. What at the beginning appears as ruins or simple historical structures and barren landscaping can be transformed into animated places – bustling with life and personal experiences 3. Architecture/design Virtual reality presents many interesting features for disciplines such as: architecture and design. It is a valuable visualization tool for: structures, buildings, interior design, habitats, ambiences and environments. It is also a beneficial tool for both planning and design and evaluating the planning and design process with customers. Virtual reality can demonstrate how a planned construction fits into an environment and how it is intended to be built.Virtual TravelVirtual tourism, the activity of "visiting" sites of interest over the Internet without having tophysically travel to them, can take on many forms. An early form of virtual tourism presents theuser with a slideshow or video which explores a limited area, for example, a museum. Somemuseums offer a 3D graphical interface that allows one to explore the attraction site using simpledirectional camera controls.Most of these early efforts met with limited success and didnt really take off for various reasons,among them the limited ability to immerse the user in a believable environment. Tourist can chooseto sit at their home office and use various tools and internet and do a virtual travel. Virtual travelagencies on the net which offers a tour through its gallery and offers a great deal of information. Forexample; free package for a week which can be download. After going through this demo, the usercan see the real stuff, if he registers online and pays for it.Expanding on the concept, some sites now offer free video tours of a city; the user is invited to toura city on Street View, and at specific points, watch a short user-created video of the place. WithGoogle taking over YouTube, users can easily embed videos hosted on YouTube on the GoogleMaps service, offering an engrossing interactive environment for the new breed of virtual tourists.