Globalisation Of Tourism Drivers And Outcomes .

1. 1

2.  The growing interdependence between national economies is
reflected in a trend towards global markets, global production,
global competition and global communication.
 Globalisation involves the evolving interconnectedness of the
world, reflected in the expanded flows of information,
technology, capital, goods, services and people.
 Globalization includes, and goes beyond, simple
internationalization of markets.
 a process by which national and regional economies,
societies, and cultures have become integrated through the
global network of trade, communication, immigration and
transportation
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3.  promotes global economic growth,
 creates jobs,
 makes companies more competitive,
 expands consumer choice
 lowers product prices.
 the basis for disseminating technical knowledge and
education
 improves global communication and transport,
 creates new markets for firms and countries,
 generates innovation and enhanced product quality,
 fosters democratic ideals and cultural exchange and
international understanding
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4.  generates income inequalities,
 destroys local industries,
 creates greater dependency of developing economies on
developed ones, with adverse effects on small business
 Local level negative effects include
 increased prices of consumer goods and services,
 increased price of land and housing beyond local affordability,
 increased demands on public services and facilities.
 Some critics advance stronger claims that the effects of
globalisation, through the operation of TNCs, include
 displacement of indigenous peoples from lands,
 human rights abuses,
 unfair labour and wages,
 commodification of cultures,
 environmental degradation
4

5.  Generalisations are hazardous
 The effects of globalisation differ case by case and
by context.
 This is particularly true for the two- way link
between the tourism industry and globalisation.
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6.  Economic
 Technological
 Demographic
 Social
 Political
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7. 7

8.  Globalisation drives the integration of national economic
systems, including
 greater trade in goods and services,
 the creation of trading blocks, with the ability to move goods
and services freely across borders,
 substantial, and increasing, volumes of world trade.
 The centre of gravity of the world economy is shifting from
west to east and north to south.
 Rapid income growth within emerging economies is creating
new markets and new sources of competition. Newly
emerging economies, particularly China and India, are driving
this growth in trade.
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9.  Easier access to foreign capital and increased FDI provides
the foundation for import substitution and export promotion to
generate competitive markets.
 Globalisation induced economic growth is a source of tax
revenue for development financing. TNCs can help developing
countries to improve their balance of payments with critical
financial infrastructure for economic and social development
 more integrated and interrelated world labour market.
 Does globalisation reduce global economic inequalities?
 While jobs are created in developing countries, globalisation
is claimed to cause unemployment in industrialized countries
as businesses outsource work to developing countries where
the cost of labour is low.
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10.  The globalizing economy and technological change inevitably
require a more highly skilled labour force.
 Developments in information and communications
technology (ICT) and transportation have accelerated the pace
of globalisation, lowering operating costs and making it more
economically feasible for a firm to locate in different
countries.
 technology makes it possible to produce customised services
on a large scale at cost competitive prices (mass
customisation).
 Technological spillovers are particularly important for
developing countries providing opportunities for them to
narrow the productivity gap with the developed economies.
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11.  The Internet and related social media has been a
vital development across all industries as consumers
use it to gather information on destination, products
and services.
 Rise of social media. Internet services such as
Facebook, Twitter, YouTube and Skype, e cross-
cultural communication.
 Technological advances in the transport sector,
particularly aviation, enable the continued rise in
mobility as people are able to move greater
distances, more comfortably and in faster time.
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12.  Major demographic shifts have profound effects on most
social institutions.
 important drivers involve the related areas of population
growth and age structure change, driven by differential fertility
rates and improved health care
 A high standard of public health in developed countries has
contributed to increased longevity. With increasing longevity,
the growing world population is ageing, especially in rapidly
expanding urban areas
 Population is ageing in developed countries but getting
younger in developing countries.
 Population growth in the context of globalisation has
generated a worldwide trend toward urbanisation. By 2020,
more than 60% of global population will live in cities The
number of very large cities, megalopolises of more than 10
million people, will increase to about 30 by 2020
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13.  Parallel to changes in demography are changes in people’s
values and needs, aspirations and expectations.
 As incomes rise in most countries in the world, so people’s
values, aspirations, motivations and behaviour do too.
 Worldwide, people possess:
 an increased sense of deservingness with emphasis on
quality.
 Individualism
 Money rich time poor
 Experimental
 Hedonistic
 Feeling of deservingness
 Social and environmental consciousness - - -
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14.  Globalisation has produced a generation that is more
international in its outlook than any before.
 This is demonstrated in membership of international
organisations, studying abroad, taking part in human rights
campaigns and so on.
 the migration and movement of people – either from rural to
urban environments within countries or migration related
between countries is a prominent feature of the globalization
process.
 provides better opportunities for people all round the world to
gain access to jobs.
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15.  increasing liberalization of trade and capital markets.
 International bodies such as the World Trade Organisation
(WTO) and the International Monetary Fund (IMF) have
facilitated globalisation by respectively reducing trade barriers
(such as tariffs and subsidies) and the deregulation of world
financial markets.
 The Organisation for Economic Cooperation and
Development (OECD) and the World Bank support continued
liberalisation of trade through their lending and debt relief
policies.
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16.  ongoing political pressure for higher living standards in
developing societies with a growing global middle class
creating a cycle of rising aspirations.
 A rapid expansion of the private sector in many emerging
market economies,spurs economic growth by generating
competitive pressures to use resources more efficiently
 development of generic consumer protection frameworks in
many countries providing certainty to all businesses and
consumers as to their rights, expectations, responsibilities and
obligations across all industries
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17.  The above highlights only some of the relevant drivers of
globalisation
 Each of the drivers has tourism relevance and no single driver
or trend will dominate.
 Each influences the others and will have varying impacts in
tourism destination different regions, countries, industry
sectors and tourist behaviour.
 The drivers are not necessarily mutually reinforcing; in some
cases they will work at cross-purposes.
 Taken together they set the context in which the global
tourism industry will develop in a context of continued
globalisation.
 The trend towards increased globalisation will boost tourism,
as people are increasingly ‘international’ and ‘cosmopolitan’ in
their outlook.
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18.  Economic Growth
 income inequality,
 economic dependency
 consolidation
 tourism expenditure leakages
 destruction of local industry,
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19.  Globalisation is considered to increase the economic prosperity of
countries, as rising trade and investment flows generate additional
world GDP.
 In particular, strong income growth in developing economies such
as BRIC (Brazil, Russia, India, China) is expected to drive the
increase in international tourism worldwide as the ‘new wealthy’
seek new experiences.
 The UNWTO projects tourism to grow at 4.1% annually at least to
2020, fuelled primarily by economic growth internationally.
 By 2030, it is forecast that destinations in today’s emerging
economies will account for 57 percent of international tourist arrivals
compared to 47 percent in 2011
 As rising income is the most powerful generator of tourism flows to
the extent that globalisation generates a dynamic world economy, it
also creates the economic basis for continued growth in domestic
and international tourism worldwide.
 The circle may be virtuous.
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20.  Critics have argued that globalisation has effects that greatly
reduce the economic impacts of tourism growth.
 income inequality,
 economic dependency
 consolidation
 tourism expenditure leakages
 destruction of local industry
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21.  A particular advantage claimed for globalization is that it
fosters the generation of employment, increasing the standard
of living of people worldwide, and also alleviating poverty.
 Over time, as nations become wealthier and more efficient,
the benefits of trade will ‘trickle down’, reducing poverty levels.
 Even so, a causal relationship between inbound tourism and
economic growth may not necessarily lead to higher living
standards in developing countries, as these are also
dependent on the distribution of income and the quality of
services such as health care and education.
 Some studies suggest caution when generalizing the effects
of tourism growth on poverty within a country.
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22.  Most developing economies are highly vulnerable to any
economic disruptions that occur in the developed countries
that purchase their products.
 Two types of risks from overspecialisation relate to tourism.
 a dependency on tourism in general as an export market. The
global financial crisis has demonstrated the risks involved in
tourism dependency arising from sudden unfavourable
changes in demand from world markets
 too much reliance on tourism from particular origin markets or
too much reliance on a particular tourism product (e.g.
hunting, spa tourism, gambling).
 Given the discretionary nature of tourism expenditure, the
industry is extremely sensitive to crises of every type
(economic, environmental, political).
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23.  Both of the above types of risk are compounded by the reality
that TNCs are increasingly 'footloose', with ability to move and
change at very short notice creating uncertainty for the host
destination.
 TNC’s can switch their investments between territories in
search of the most favourable regulatory regimes with
adverse consequences for the local tourism industry.
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24.  In many developing countries, local economic activities and
resources are used less for the benefit and development of
communities and increasingly for export and the enjoyment of
others (i.e., consumers from other areas of the world). This
occurs in tourism when the domestic market is neglected.
 To avoid overdependence on the international tourism
market and related problems, countries can explore tapping
the potential of domestic tourism
 domestic tourism can effectively absorb the excessive supply
resulting from any slumps and seasonality of inbound
tourism.
 This also helps redistribute the national income, thus
reducing interregional gaps in the level of economic
development and contributing to social equality.
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25.  For many tourism firms, survival in the global marketplace
requires merging with or taking over companies that deliver
different components of the whole product.
 The growth of TNCs, and the rise in the significance of global
brands, has been central to the emergence of globalisation in
the tourism industry.
 The high concentration in some tourism sectors creates
market power and the potential for abuse by large
international firms as evidenced by exclusionary agreements,
price fixing, market sharing among dominant operators or
boycott and refusal to deal with operators in developing
countries.
 These anti-competitive agreements and conduct can impose
substantial costs particularly on developing economies
eliminating many of the benefits of globalisation
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26.  Expenditure patterns of international tourists has a higher
import content than the expenditure of domestic tourists.
 The resulting higher leakages imply a loss of foreign
exchange and a loss of economic benefits outside of the
community back to foreign owners.
 The weaker industrial bases of developing countries implies
that most products demanded by tourists cannot be
manufactured domestically.
 Weak links between tourism and other sectors in a
destination implies a weak ‘multiplier effect’ from tourism
expansion
 Leakages also include export of profits by TNCs’ to foreign
locations by way of repatriation of profits to their 'home
country',
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27.  Globalisation can also erode an economy's manufacturing
base.
 Local businesses, particularly in developing countries, face
much greater competition due to globalisation.
 This can put local tourism SMEs at a disadvantage as they do
not have resources to compete at global scale.
 Local stakeholders may also be pushed out or sell out
 local prices for commodities and services rise, as do taxes.
 The crowding out effects of export oriented tourism growth,
resulting in the decline of local (non- tourism) industries, are
well recognised.
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28.  Globalization can be a catalyst to the creation of jobs that
require higher skill sets.
 Globalisation generates greater labour mobility as the internet
provides greater opportunities to gain jobs internationally.
 The implications of this for tourism employment include an
increased demand for people with language skills, and with
the skills to work in different cultural environments.
 Tourism can also be a good employer of women and
disadvantaged groups and can upgrade their economic
status.
 The jobs created by tourism can act as a very important
motivation to reduce emigration from rural areas. Local people
can improve their earnings prospects through tourism-related
professional training.
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29.  competition from other sectors is causing a diminishing labour
pool of tourism staff of the right quality.
 the jobs created may be low-skilled with the TNC employing
expatriate workers for the more senior and skilled roles.
 TNCs can operate as local monopsonies of labour, and push
wages lower than the free market equilibrium.
 Local employment can be low level or unskilled, seasonal, low
wage, part time with little opportunity for advancement and
development of business and organizational skills.
 the tourism-related informal sector may contract as the
tourism-related formal sector expands
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30.  Access to information technology provides awareness of other
countries and their tourism offers.
 The tourism industry globally uses social media platforms
such as Facebook, Twitter, YouTube and travel blogs such as
TripAdviser, much more intensively, both on the demand and
supply side
 These new technologies have facilitated greater information
flows between travellers.
 interactive access to product offering via the Internet gives
tourists unprecedented control over how they spend their time
and money
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31.  Travel and tourism companies and organisations increasingly
integrate ICT into their sales and marketing activities.
 The Internet allows marketing activity to be undertaken on a
more level playing field whereby small businesses can
connect directly to consumers and compete for market share
on an even footing with larger firms
 New technologies globally also compete with tourism by
delivering new forms of entertainment in or near the
consumer’s home.
 The new technologies with sophisticated database
management systems have transformed travel and tourism
into a more flexible, customised, individual-oriented activity
responding to individual preferences
 Technology changes thus enable an increasing proportion of
tourism organizations to achieve the dual goals of reducing
operating costs and increase their ability to add value for their
customers.
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32.  In the transportation sector, new technology is
improving the speed and reducing the real cost of
travel.
 However, developing countries do not have a proper
infrastructure in place to leverage technological
benefits (TTCI)
 Is there ‘too much’ technology?. A consideration for
the tourism sector will be whether it can deliver
authentic experiences that aren’t crowded by
technology.
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33.  two main causes of the development of new
markets in tourism, both of which are associated
with globalisation.
 demographic variables
 new consumer values.
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34.  Population growth generates substantial expansion in overseas
travel.
 Mass tourism is one of the visible manifestations of globalization.
 In 2000 the rate of international journeys was 11.5 per 100 people.
At this rate population increase alone would see a 20% rise in
international travel. However increases in wealth, particularly in
developing countries, are expected to see the rate of journeys grow
to 20 per 100.
 Population growth is much higher in developing countries.
 The changing distribution of the population implies the importance
of Asian tourists to all markets.
 emerging economies expected to experience faster growth in tourist
arrivals
 By 2030, it is forecast that destinations in today’s emerging
economies will account for 57 percent of international tourist arrivals
compared to 47 percent in 2011.
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35.  The world is experiencing a shift from rural to urban
communities.
 This trend is a positive development for tourism, since urban
dwellers have a greater propensity to travel than those living
in rural areas.
 The growing urban congestion in both the industrialised and
developing economies leads to the increasingly felt need to
engage in discretionary tourism to escape and/or to indulge.
 As the world’s population grows and becomes increasingly
urbanised, tourists will be drawn to nature-based experiences.
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36.  Migration levels worldwide have increased
substantially due to globalisation.
 Migration and tourism are clearly interlinked.
 Both Migration- Led Tourism (MLT) and Tourism- Led
Migration (TLM) make important economic and social
contributions to countries ranging from cultural
exchange to providing labour for tourism related
industries.
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37.  Increased life expectancy means larger numbers of older tourists
from existing markets in developed countries.
 Increased longevity increases the period over which people are
active travellers and tourists.
 Older persons are attractive as tourists because they have the
financial means, and time to devote to travel experiences.
 Tourism industry will increasingly have to take account of the needs
and preferences of older travellers by way of product design and
marketing.
 At the same time, tourists from developing countries will be younger
with very distinctive needs from the older tourists from more
traditional source markets. Concurrent to income growth in the
developing world youth travel is experiencing rapid growth.
 The challenge for tourism industry is to address both the needs of
younger less experienced tourists in developing markets and the
needs of experienced tourists in developed markets.
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38.  Changing social structures associated with globalisation affect
tourism flows.
 Household types are diversifying away from the traditional
‘nuclear’ family in developed economies.Family structures are
shifting from more ‘horizontal’ with fewer generations to more
‘vertical’ structures with more generations included
 tourism will need to adapt itself to provide a more varied offer.
 Marketing and communications will have to address new needs
and wants that result from these emerging family and household
structures, with staff trained accordingly.
 Meanwhile, the growth of the singles market suggests strong
opportunities for educational and ‘interest-based’ tourism.
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39.  Work patterns are changing which is also associated with
globalisation.
 Changing work patterns will allow for more flexibility of
travel plans.
 The distinction between work and leisure will continue to
blur
 Society is also becoming more feminised, with the
traditional distinction between the roles of men and women
becoming more blurred.
 Women have increasing influence on all the key
consumption decisions, including tourism opportunities
and destination choice.
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40.  Demographics will have a dramatic impact upon tourism in the
coming decades.
 It will impact upon the types of tourists that will travel, where
they originate from, where they travel to, the types of
accommodation they require, length of stay, and the activities
they engage in while away.
 The changes clearly have implications for business
management, marketing and new product development in
tourism
40

41.  In developed countries, the growth of ‘money rich-time poor’
people implies a high demand for short time holidays.
 The greater pressure on ‘time’ and rising ‘stress’ levels leads
to growing emphasis on the means of ‘escape’ through
holidays.
 Greater flexibility in working hours can provide benefits to
employees in terms of greater freedom to choose when to go
on holiday.
 This balancing between time and money is a critical issue for
the tourism industry to offer the right balance of activities and
relaxation to maximise the ‘benefit’ of the experience.

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42.  People increasingly tailor holidays to meet their particular
requirements.
 As travellers become more experienced, they want
customised services, rejecting the impersonal, non-
interactive system of ‘mass tourism’.
 Tourists seek the unusual and the authentic experience
rather than the shared, off-the-shelf holiday package
 The experiences sought are those ‘authentic’ to the
destination and its people, personalised and often involve
social interaction and emotional connection.
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43.  As incomes grow, people shift their discretionary expenditure
towards experiences as opposed to products.
 One result of the experience economy and tourism has been
a fragmentation of the tourist market into subsets of unique
experiences.
 With tourists desirous of involvement as participators not
spectators, seeking a variety of optional experiences,
 At the same time, tourists are demanding assurances of safe
products and services prior to purchase.
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44.  individuals are becoming more interested in self-
improvement as part of the tourism experience, emphasising
health, well-being, education, skill development and cultural
appreciation.
 people are increasingly concerned about their health and
well-being. Greater value is being placed on de-stressing and
selfmedicating
 People are increasingly interested in discovering,
experiencing, participating in, learning about and more
intimately being included in the everyday life of the
destinations they visit.
 As more material needs are satisfied tourists seek newer,
richer, deeper, experiences. Tourists, have an increased
social and environmental consciousness, seeking ‘authentic’
tourism experiences.
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45.  Standards in hospitality management and hotel sector are
now judged by global comparisons, even at the more localised
level.
 The tourist marketing battle has shifted from competitive
pricing towards service improvement.
 TNCs that have been able to establish and sustain a
consistent brand image and control quality typically
outperform competitors unable to do so.
 As domestic businesses have to combat foreign competition,
they are compelled to raise their standards and customer
satisfaction levels in order to survive in the market.
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46.  The new consumer values have important implications for
tourism on both the demand and supply side.
 Rising affluence, greater internationalism, an appetite for
risk taking, more sophisticated marketing, the feeling of
greater time pressures, and improved access to technology
all contribute to a fragmentation of tastes in both developed
and emerging markets.
 Firms must adopt individual strategies for individual
markets and customers, in order to become increasingly
competitive in the market place.
 This will require more detailed analyses of demographic
trends and value shifts, how these are impacting on
tourism demand
 Those tourism organisations that ignore this massive
demographic and values shifts and their global impact are
likely to experience strategic drift and cease operations.
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47.  Globalization results in easier access across borders, which for the
tourism industry implies more foreign tourists as well as increased
global competition from international tourist destinations.
 The continued deregulation and liberalisation of air transport and
‘open skies’ policy supports the growth of trade and tourism.
 However, it has been argued that international institutions aid and
abet some negative effects of globalisation
 Under GATS, protection to the local tourism industry would be
construed as unfair practice and would thus have to be eliminated.
 Regulations such as those found in the TRIMS agreement which
restrict a country's rights to require companies to purchase local
materials, the "most favoured nations" provisions which make it
illegal for countries to reward companies who hire locals or have
good environmental practices, and the liberalization of trade in
services of GATS which would allow foreign companies to merge or
take over local companies.
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48.  Tourism is now being pursued as a serious development
strategy for the less developed world. Under IMF-World Bank
prescriptions, tourism is classified as an export strategy.
 The International Monetary Fund (IMF) has included tourism
as part of its Structural Adjustment Programmes (SAPs).
 The SAPs, which are preconditions for the approval of
financial assistance require the indebted country to: be
integrated into the global economy; deregulate and liberalise
its economy; shift from an agriculture-based to a
manufacturing and service industry-based economy; and
liberalise its financial sector.
 All such initiatives reinforce the importance of globalisation to
tourism industry development.
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49.  On one view, globalisation has enhanced our understanding of the
importance of environmental protection benefitting all tourism
stakeholders. Tourism can foster conservation and preservation of natural
resources, encouraging community revitalisation and beautification, raising
revenues to help maintain quality of natural and heritage attractions
 The rise of the socially conscious and environmentally conscious
consumer leads to new patterns of tourist behaviour, as exemplified by the
development of alternative tourism, in opposition to mass tourism
 Many global environmental problems involving cross-boundary pollution,
e.g. over-fishing in the oceans, climate change, are being solved by
discussions and conventions.
 Globalization enhances the ability of countries to work together to
overcome natural disasters and global challenges, such as global warming
and whaling.
 Another phenomenon that the globalization of ideas brings about is
improving environmental awareness and the popularization of the concept
of sustainable development
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50.  As a counterargument, all countries face intensified
environmental problems as a result of population growth,
economic development and rapid urbanisation.
 Trade growth has also accelerated the depletion of non-
renewable resources, such as oil. Increased consumption
leads to an increase in the production of goods, which in turn
puts stress on the environment via its carbon footprint.
 Tourism transport, especially aviation, is a high emitter of
greenhouse gases, and contributor to global warming.
Human, animal and plant diseases spread more quickly
through increased movement of goods and people around the
globe.
 The main environmental trends such as climate change,
depletion of natural resources and loss of biodiversity, are all
associated with globalisation.
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51.  The globalisation of social networks, whether through multinational
companies, higher education, or international civil society, can be
expected to drive further growth of tourism and travel.
 Inter alia, tourism can lead to removal of social or national
prejudices, promote mutual understanding between hosts and
guests, encourage civic involvement and local pride in a
destination, improve the quality of life of locals including the vitality
of local communities, and increases availability of recreation
facilities and opportunities.
 Globalisation forges cross-cultural contacts, helping to promote
cultural understanding and tolerance, as well as the spread of
democratic ideals.
 Globalization has helped to create internationally sanctioned
agreements which attempt to ensure that people are not
discriminated against on the basis of country, caste, creed or sex.
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52.  On a contrary view, since the cultures of those countries that
have more economic power are likely to be more dominant
than others, it is no surprise that global tourism threatens
indigenous knowledge, social structures and relationships.
 In many developing countries, tourism's effects on indigenous
peoples have been profound:
 widescale eviction from their lands,
 economic dislocation,
 breakdown of traditional values
 degradation of cultural sites when historic sites and buildings
demolished to make way for tourist facilities.
 commodification of culture
 Clearly the reality differs case by case.
52

53.  On a brighter note, populations are responding to the globalization
of economies, markets, systems and cultures by exploring their
own identities
 This tension between ‘modernity’ and ‘identity’ is leading to the
increasing questioning by local communities of the form and scale
of tourism development and type of destination marketing in those
societies.
 Increased community involvement in tourism planning and
development results in a growing dispersion of tourism away from
mass tourism dominated by TNCs, into diverse niche markets.
 From this perspective, globalisation appears to pull in two ways,
both towards the creation of TNCs by the extension of operations
through take-overs, the formation of strategic alliances or
franchising agreements, and, in terms of consumption, towards
more localised or regional ‘branding’ and niche marketing.
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54.  We cannot generalise too broadly on globalisation’s impacts on
tourism and the subsequent effects on economies, communities
and natural environments.
 Globalisation has positive and negative effects.
 More case studies are required to identify the effects in particular
locations.
 As the drivers of globalisation show no signs of a slowdown, the
challenges facing tourism are formidable.
 Since the same forces that drove mass tourism are sewing the
seeds of its demise, it is very likely that a complete change of
paradigm, is required if tourism globally is to develop in a
sustainable way
 Some critics argue that the growing incidence of crises,
environmental, political and economic, encourages a counter trend
to the globalisation process, with possible significant implications for
the future of the global travel system.
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55.  All elements of the tourism industry need to be sensitive to the
needs of the ‘new tourists’. Communities must ask: What do tourists
want? What types of experiences do they value? How can we meet
those needs? Do we want to?.
 Perhaps even more important than catering for visitor needs,
destination residents should be developing a vision for the type of
community they wish to live in, and the role that tourism might play
(if at all) in achieving that vision.
 the tourism industry can do more to critically engage with the main
international institutions and governments, providing a link from
stakeholders who are marginalised and exploited by the processes
of globalisation.
 The international tourism industry, through organisations such as
the UNWTO, can play an important advocacy role, helping to build
the capacity of developing countries to participate more fully and
negotiate more effectively in the discussion about trade rules,
subsidies, liberalisation and corporate responsibility and regulation.
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56. Thank You
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