The Forces of Globalisation in the Tourism Industry: A Blessing or a Blight - Essay Example

?The Forces of Globalisation in the Tourism Industry: A Blessing or a Blight 0 Introduction Globalisation is a widespread concept, particularly about foreign operations and modernisation, which has a significant impact in modern societies. It is now made by multiple sectors as their groundwork to success in the global environment. Also, it is made up of forces (external & internal environment), which would explain the concept as a mode of change (Chen & Hsu, 2010, p.121). Globalisation and its forces are present long before trends are rapidly changing, but they are given emphasis when global trends have opted transnational organisations, nations, economies, societies, politics/government, industries, etc., to move out of the conventional way. “Tourism is both a cause and a consequence of globalization” (Azarya, 2004, p.949). Furthermore, tourism industry is perceived as an economic breadwinner of both developed and developing nations considering that it is today’s most rapidly growing industry and world’s largest export earner (Harrison, 2007, p.61; Higgins-Desbiolles, 2006, p.1192; Page & Connell, 2006, p.5). Globalisation and tourism are considered as the inseparable strategy and process; however, their interrelationship is gaining too much attention among tourism and academic scholars. The mostly debated topic is about the forces of globalisation in the tourism industry whether they are a blessing or a blight to the industry. However, before a claim is made, it is necessary to define various terms first, so that the issue will be understood thoroughly. The main thrust of this paper is to study what is the real role of globalisation in the tourism industry and determine if its forces are beneficial to the industry or not. 2.0 Globalisation Globalisation is the “highest development level of internationalisation,” and it is associated with increasing involvement in foreign markets” or international transactions through innovation (Calof & Beamish, 1995, p.116; Williams & Shaw, 2011, p.29). It is also defined as an old way of fragmentation, a concept for a shifting of trends or ideology of growth, and an instrument for the extension of capitalisation, politics, economics, international relations, and environmental restructuring. According to Cooper and Wahab (2001, p.319), globalisation is a “concept with consequences,” and these consequences are applicable to multiple industries, societies, economies, businesses, transnational organisations, and many more. Specifically, it played an important role in the tourism industry because it made the scope of tourism production and consumption a part of the global society, increased tourism demand in developing countries, and opened tourism goods and services to the world (Macleod, 2004, p.15; Azarya, 2004, p.952). However, globalisation is a double-edge sword, which carries both cooperation and conflict in the world society through its forces (Page & Connell, 2006, p.17). In globalisation, organisations, industries, economies, etc., are becoming more and more competitive wherein their primary objective is to gain the competitive advantage of internationalisation (both costs & accessibility). According to Dwyer, et al. (2009, p.63), tourism companies would gain a competitive edge if they were more conscious of global trends/events, which would lead them to the development of appropriate and effective global schemes. In fact, “those tourism destinations and enterprises that isolate themselves from world trends will be at a severe disadvantage,” and those in a globalised society will “embrace the new way of operating and recognise the forces of change” (Cooper & Wahab, 2001, p.332). This event would also lead to strategic drift or wear-out wherein trends and schemes in the global context are not inter-related and do not follow common objectives or directions. Thus, it is important for industry players to be proactive in the mode of change, especially that the components of globalisation are constantly changing. 3.0 Tourism Industry Nowadays, tourism industry is considered as one of the largest and most tradable industries worldwide, and it is the “most valuable export category” in the 20th century (Telfer & Sharpley, 2008, p.2; Vandegrift, 2008, p.778). Furthermore, the industry is practically significant in modern economies because it has accelerated most of the components of a gross national product (GDP) of rich and poor countries. However, the role of tourism does not only involve around the structure of the global economy because it also gives cultural, societal, political, and ecological values for the satisfaction of human necessities. Thus, tourism is not just an industry or a business that generates profits and revenues for the economy, but it is a social force that has the authority to promote peace and equity among nations and remove economic gap between rich and poor nations (Higgins-Desbiolles, 2006). Tourism as an industry is composed of products and services, which have unique characteristics and intricate dispositions compared to other conventional industries. In other words, it offers intangible goods and services in most of its operation. According to Sinclair and Stabler (1997, p.58), tourism is a “composite product involving transport, accommodation, catering, natural resources, entertainments, and other facilities and services, such as shops and banks, travel agents, and tour operators.” 4.0 The Forces of Globalisation to the Tourism Industry “Many of the forces and consequences of globalisation will benefit tourism...” (Peric, 2005, p.35). Globalisation has contributed various benefits and consequences to the world, but it has a wide contribution to the development of tourism. Its most prominent contributions include “financial deregulation in many countries and the lifting of barriers to capital and private enterprise” (Page & Connell, 2006, p.17). Also, various range of tourism products and services are made available to consumers because global tourism has specific destination (consumption point), and there is “international fragmentation of production” (Nowak, et al., 2010, p.228). In addition, other sectors/ units (e.g. hotels, air transport, tour operators, transnational corporations) have the ability to expand their operations and capital flows in various tourism destinations because of positive policies brought by the process of globalisation. Tourism as part of the global activity is a blessing not because it generates economic value to communities, but on how the “needs and interests [of local communities] are given priority over the goals of the industry per se” (Huggan & Tiffin, 2010, p.68; Sarkar & George, 2010, p.37). Globalisation is made up of exterior (external environment) and interior (internal environment) forces that are within and outside its command, and these forces would explain the concept as a mode of change (Chen & Hsu, 2010, p.121). It has brought a new world order through the unrestricted trade flows across borders (internationalisation), increased of market economies or global integration of investment flows, and the connectedness of information flows (Cooper & Wahab, 2001, p.320). These forces are occurring in different timelines, and their level of existence is beyond the mainstream; thus, they are known as the converging drivers of globalisation. However, the impact of these forces to many industries, economies, and businesses across the world is not at all times favorable because these have opted a reformation of structures, strategies, resources, and concepts. These changes would give them opportunities to gain a competitive advantage, minimise threats, maximise positive elements, and set a predetermined future. Aside from converging forces, globalisation has also an interrelationship with technological, economical, political, cultural, and environmental forces (Sharpley, 2009, p.85). The forces of globalisation are a blessing to the industry because they have contributed several benefits; however, the greatest challenge under these forces is “how to lay the foundation for tomorrow’s success while competing to win in today’s market place” (Dwyer, et al., 2009, p.72). 4.1.1 Technology In this global economy, global commercialisation and modernisation of information and communication will emerge. The force of technology has made it all start. It has made information, transportation, travel, and ways of doing business more modernised and complicated. It has also allowed global organisations to embrace worldwide communication for it stands as the fundamental aspect of the widespread of globalisation. Globalisation has brought two technological developments in the tourism industry including transport technology and communication technology (Cooper & Wahab, 2001, p.320). This globalisation force would help the industry in achieving “dual goals of reducing operating costs and increase their ability to add value for their customers” (Dwyer, et al, 2009, p.65). Through the emergence of efficient transport system/infrastructure, both financial and secular operating costs are reduced because of the decrease in travel time and shrinkage of travel distances from one tourist destination to another; thus, the customer value is attained. On the other hand, the advent of efficient communication technologies has allowed industry players to keep in touch with their global customers all the time, improve customer service, expand distribution system, oversee local and international activities, and communicate worldwide. Thus, the technology force through communication and transport technology (e.g. Internet, satellite television, tourism agencies, tour operators, etc) would internationally promote local tourism destinations to the global audience, and vice versa. Advances in technology would increase tourism demand; in fact, in the world’s top ten international tourism destinations (2007), seven countries are coming from Europe considering that technology infrastructures in the region are highly developed (Sharpley, 2009, p.19). Furthermore, 80.7 % of travel agents said that a quick adoption of technology is very important to the tourism industry (see figure 1). Figure 1: How Important is Quick Adoption of Technology Source: m-Travel.com (2011) Therefore, technology in the tourism industry is a blessing, and industry leaders need to capitalise this blessing by becoming a technology-oriented sector that is equipped with state-of-the-art technologies. Also, it should work hand-in-hand with technology companies and technology enthusiasts, so that the industry will be able to maximise the benefits of tourism technological advancements. 4.1.2 Economic “The widespread liberalisation of current and capital account transactions and the development of intentional financial markets have enhanced the process of globalisation” (Fletcher & Westlake, 2006, p.466). Also, this enhancement of the globalisation process has delivered the tourism industry to be dependent on the economic status in terms of its growth ideology, market demand, and consumption/ production patterns (Cooper & Wahab, 2001, p.321). Tourism consumption can be in a form of “services and goods in a package tour” (Nowak, et al., 2010, p.229), and enjoyment in the “scenery, people, culture and activities of the host community” (Higgins-Desbiolles, 2006, p.1204). In terms of economic force, reduction of cross-border barriers or deregulation in international tourism and travel would improve the employment rate and foreign trade considering that tourism companies are given free access to trade borders. Also, more tourism infrastructures would be established for tourist attractions and accommodations, which would increase the value of the country’s foreign currency, employment status, international relations, and economic growth. Tourism companies could also create their own alliances (e.g. code sharing) or cooperation through joint ventures and mergers to give consumers the best of industry. There is also an interrelationship between the economy and the technology because tourism infrastructures are promoted worldwide through technological transport and communication; thus, the tourism demand would grow. The process is facilitated by trade blocs and associations, so that “more goods and services crossed the border, more travellers of all types would follow, promoting increased use of credit cards, airlines, hotels, restaurants, rental cars, tour buses, cruise lines and other travel-related products and services” (Smith & Pizam, 1998, p.18). Economic value is a blessing to the tourism industry because open trade and freer capital flows brought by economic deregulation have expanded the scope of the industry to the world market. Also, “international tourist arrivals worldwide will reach 1.5 billion in 2010,” which are heavily situated in developed countries like Europe, America, and East Asia Pacific (Bhatia, 2001, p.37; Brohman, 1996, p.9). The industry has also able to improve its customer service considering that it is one of the world’s largest employers with estimated employment of 251.6 million jobs (Tiwari, 2009, p.36). It is also the recipient of “5 to 10 percent of all consumers spending in a year” (Harris & Katz, 1999, p.17). 4.1.3 Politics Politics as one of drivers of globalisation is inseparable with the economy because a certain country would not achieve greater economic values if it has a poor economic relation with other countries (Cooper & Wahab, 2001, p.321). Also, countries would have strong economic, government, and domestic relations if they would restructure their political settings in line with global trends like nations’ ability to trade. The new world order formed by the process of globalisation is the cooperative international efforts of several economies or the multi-polar world economies that determined economic prosperity. For instance, tourists would be freer to travel from one tourist attraction to another because of interdependence in economies, and currency of these countries are widely acknowledged and accepted in many economies. Politics in the tourism industry is a blessing because tourism demand and investment flows have increased through political stability and reduction of “state-imposed barriers to trade” (Fletcher & Westlake, 2006, p.466). These opportunities have existed through the foundation of international tourism organisations and trade bloc including the General Agreement on Trade in Services (GATS), World Trade Organization (WTO), Free Trade Agreement (FTA), Association of South East Asian Nation (ASEAN), European Union (EU), and many more (Cooper & Wahab, 2001, p.322). These associations and trade bloc have a significant impact to the tourism industry because they are the one responsible in making economic and trade policies, which will determine the future growth of the industry (Dwyer, et al., 2008, p.104). For instance, members of these associations (developed & developing nations) have integrated themselves to reduce trade barriers or deregulation and liberalisation (i.e. international travel, private sector, export/import, technology exchange, etc), which would result to a freer market, lesser operating costs, and market civilisation (Higgins-Desbiolles, 2006, p.1194). Trade bloc has also created trade zones and standard trade policies for tourism activities, which will make most industry players act and think globally, “and those operating in the global arena will become more diverse, both in size and origin, more Asian and less Western in orientation” (Brown, 2006, p.8). Profits and revenues would also increase because tourism companies could already use concentrated consumption and production activities that would target a broader market. Consumers or tourists would also be free to travel from one tourist destination to another, and they are guaranteed of a safe and secure tourists’ consumption because of these global tourism standards. 4.1.4 Culture In the field of globalisation, it is very difficult and challenging to adapt standardisation when it comes to cultural differences. Culture as defined by Burns (2001, p.293), “is about the interaction of people and results in learning and that such learning can be accumulated, assimilated and passed on.” With this definition, it is difficult for all industries or nations from all over the world to develop cultural uniformity; however, this is possible to happen, but more time and effort are necessary. Cultural difference is one of the greatest challenges of the tourism industry considering that it is difficult to provide fulfillment of needs and preferences without disrespecting others culture or home surroundings. “Cultural change is related to interpersonal communication and increasing change results from increasing communication”; thus, culture and technology are inter-related (Macleod, 2004, p.221). Culture in the tourism industry is a blessing because it is capable of producing a universal culture and having cultural uniformity would help the tourism industry players to think and act globally. Others have cited this not as a blessing, but a blight to the industry because it has erased local standards or cultural identity (Brohman, 1996, p.11). However, “globalisation will not eliminate local cultures; on the contrary, the increasingly interconnected and interdependent world will create incentives for new generations to learn and assimilate to other cultures” (Mak, et al., 2011, p.182). In short, they can work together in peace and harmony. 4.1.5 Environment The environment is one of the driving forces of globalisation, and it is indispensable to the sustainability of the tourism industry and other sectors/units. The relationship between the environment and the industry is like consumption in such a way that without the natural environment (point of consumption), the industry is worthless and would not be sustainable. The environment is a “fundamental element of tourism experience: tourists seek out attractive, different or distinctive environment, which may support specific touristic activities” (Sharpley, 2009, p.22). Climate is also a tourist attraction considering that a good climate would stimulate tourism consumption (Goosling, et al., 2011, p.37). Furthermore, the environmental force in the tourism industry is a blessing because tourism assets such as the natural environment and good climate would serve as the primary attributes of a good destination image or tourist attraction (Dwyer & Kim, 2003, p.376). Therefore, it is very important for the tourism industry players to be watchful on the environmental sustainability because it will determine the success of the industry. There should be cooperative international efforts in the tourism sector (public and private), so that effective and equitable environmental regulations will be created to preserve this global resource. Globalisation in the tourism industry is not free from various criticisms. In fact, there are numerous tourism and academic scholars who have published negative effects of this concept towards the industry and society. Some of the mentioned problems include “environmental damage, conflicts over access to scare resources, and the perceived loss of cultural identity and social control of outsiders” (Brohman, 1996, p.11). All these allegations are not acknowledged nor denied; however, the drivers of globalisation are greatly challenged to develop a balance global vision, and “meet the material needs of the world community as a whole in ways that reduce, rather than increase, inequality and which do so without destroying the environment” (Dicken, 2004, p.599). 5.0 Conclusion The forces of globalisation in the tourism industry: a blessing or a blight? This question is hard to answer despite extensive research, but as the reality tells that the world is moving towards the future (rather than towards the past), then globalisation and its forces must be embraced by the industry. The global forces (technology, economy, politics, culture, and environment) have negative effects to the tourism industry. 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