The Analysis of The Global Tourism Sector - Essay Example

?DMS and Destination Tourism Background The global tourism sector is one of the rapidly growing industries today. The World Trade Organization (WTO) estimated that it is the largest industry in the world, with a growth rate of 25 percent in the past decade and with international tourism receipt representing at least 6 percent of global exports (Pforr and Hosie 2009, p.93) There are about 340 million people around the world who are directly and indirectly employed in the industry (Ivanovic et al., 2009, p91). The projection estimates for the industry is equally enthusiastic. The World Travel and Tourism Council predicted that the global tourism turnover would reach $7 trillion per year (Buckley 2009, p.4). The WTO cited that the current figures both in financial receipts and international arrivals will double by the year 2020 (Pforr and Hosie, p.93). It is not surprising, hence, when countries, especially the developing economies, integrate tourism strategies in their overall economic policy. The idea is to take advantage of the opportunities, which are facilitated by the globalization phenomenon. According to Goeldner and Ritchie (2009, p.26), “for a number of countries, tourism is the largest commodity in international trade,” and that “in many others, it ranks among the top three industries.” The case of Namibia’s tourism strategy is a case in point. Last 2006, the World Travel and Tourism Association conducted an accounting study and found that: The broader tourism economy in Namibia accounts for 72,000 jobs and 18% of Namibia’s gross domestic product (GDP). These figures are 50% higher than were originally estimated. (Ivanovic et al. 2009, p.91). Since tourism is an industry that operates within the current globalized international trading system, countries and destinations have to compete with each other for tourists in an integrated tourism market in order to gain meaningful economic benefits. The process is facilitated by free trade and technology. One of the consequences of this development is the emergence of the destination tourism model, which entails the identification and promotion of localities as a result of their location, natural attraction and tourist-oriented facilities (Binns & Nel 2002, p.235) The employment of this approach has enabled many destinations to thrive in the intensely competitive tourism market. Destination Tourism Destination tourism emphasizes location. What this means is that a country or a location builds on its own characteristics in creating a unique brand that help the location gain competitive advantage and effectively sold to a target market. Carter and Fabricius (2007) explained that a destination in tourism is "the basic unit of analysis in tourism which is a distinctly recognizable area with geographic or administrative boundaries that tourists visit and stay in during their trip where tourism revenue is significant, or potentially significant, to the economy and is serviced by both private and public sector." Keller and Bieger (2007, p.12) contextualized the benefits of tourism in their discussion of the economics of destinations. They argued that from a general perspective destinations could or should be treated as geographically delineated economic aggregates, which, similar to economic regions, generate economic growth, which can be driven by "quantitative and qualitative changes in inputs and the efficiency with which these inputs are being employed." This is the reason behind the thematic conception of the way destinations are marketed. For example, Singapore works on promoting itself as an Asian urban destination. The public relation initiatives that sell the location as a product focus on the urban amenities that Singapore has to offer. The “theming” of the city has been very consistent. In the past, it has pursued thematic concepts depicting “Instant Asia” and “Garden City” and after 1997, it has finally adopted a highly effective imaging strategy that aims to market the city-state as a modern metropolis with an exotic Asian soul, hence, a destination that is so easy to enjoy and so hard to forget (Singapore Tourism Board 1996). This Singaporean tourism strategy has been the subject of an intensive study by Chang (2000, p.35), who revealed that, all in all, Singapore was able to integrate eleven themes in a cohesive tourism model that promotes an Asian character and modern urban sophistication. Through this thematic approach, Singapore was able to strengthen its identity and reinforce it systematically in the minds of its tourist market. This theming is crucial in destination tourism because it makes it easy to identify and choose the destination. It is analogous to the product characteristics that can easily satisfy the consumers’ requirements and desires. In the case of Singapore, the theming enables the city-state to rise above the Asian cities that offer the same urban destination theme. It was well ahead in the pack, seizing opportunities and new trends to constantly appeal to tourists without losing its identity. Savage et al. (2004) identified the concept of “function” in tandem with character that propels the success of the Singaporean destination tourism strategy. It was able to come up with ideas that the metropolis is a recreational and business district at the same time. One of the excellent examples of the Singaporean initiatives is the development of enclavic spaces that appeal to tourists because of the kaleidoscope of experience they offer (Savage et al. p.214) The there is also the case of Central Asia. As more and more tourists clamor for exotic destinations in their pursuit of leisure, recreation and adventure, Central Asian countries such as Kyrgyzstan and Kazakhstan were able to position themselves as a unique location and alternative to the popular tourist meccas, capitalizing on its rich history as part of the Silk Road and its novelty, since it is a new entrant in the tourism market (Werner 2003, p.141). The brand is new, interesting and different, so to speak, so the destination consumers are naturally curious especially those who are adventurous. According to Goeldner and Ritchie (p.60) tourism destinations can be classified according to political jurisdictions, hence, they could be: a nation or country; a macroregion, consisting of several countries (e.g. Europe) or other groupings that either transcend national borders or reflect economic trade zones; a province or state of a country; a localized region within a country; a city or town; a unique local such as a national park, a memorial or readily identifiable institutions and monuments. Uysal et al. (2012, p.531) added to these factors the natural environmental destinations as a criterion for classification. Meanwhile, Gunn and Var (2002, p.239), there are five conditions for destination tourism development and these are: A clustering of communities, each supporting the others; Avoiding duplication; Key placers who are ready, willing, and able to cooperate; Resident cooperation; and, Finance for start-up is available. Gunn and Var’s conditions demonstrate an initiative to involve communities and location-based enterprises so as to come-up and maintain a cohesive and consistent local “brand” that can be sustained and marketed. A UN provided an excellent example in the experience of the Philippines. The Philippine Tourism Council have developed a strategy that involves the participation of poor and indigenous communities in an interesting mix of destination program that integrates social and cultural dimensions to the local city of Baguio (UN 2003, p.65). The business case for this type of involvement, a public-private sector cooperation, is necessary because destination tourism benefits the public. It is, wrote Dwyer and Forsyth (2006, p.256), both non-rival and non-excludable and that once a destination is promoted, all the businesses and residents benefit whether they helped or not. Destination Tourism Systems The operational principle at work behind destination tourism and the emergence of technological phenomenon such as the Internet created a modern platform by which stakeholders especially tourism businesses in a tourist destination are able to integrate their operations into one system that effectively provides almost all services to their clients electronically. An excellent example of this is the computer reservation systems (CRS) for airlines, hotels and restaurants wherein tourists can book reservations, buy tickets, reserve seats, among other transactions. Organizations are also able to cooperate more easily, leading to the establishment of the so-called Destination Management Organizations (DMO) wherein organizations join forces to better sell a location and make it accessible and worthwhile for tourists. The computer reservation system is one of the core operational components of many organizations in the tourism and hospitality industry today Tassioupoulos, 2009, p.456). Using computing technologies and the Internet, a destination and the organizations in it can provide information about the place as well as local products and services that can be made available online to tourists from anywhere around the world. The system operates on a real-time basis, making bookings more feasible through Tourist Information Centres, websites and touch screen kiosks, among other platforms (Singh, 2008, p.13). Destination Management System Softwares, applications and database management systems also allow organizations to actively network and cooperate in order pursue common goals and tourism initiatives. One of these enabling technologies is the Destination Management System or DMS. It is a consequence of the emergence of the Internet. The technology provided the tools by which distribution systems such as DMS are able to operate. As explained by Singh (p.13), it is the system comprised of a database of all tourism services in an area or location that includes points and places of interest, accommodations, shops, restaurants and transportation, which: Provides detailed information about the tourism product; Feeds and updates one or more websites that provide tourists world-wide immediate and up-to-date information and even news; Provides information directly to tourists within the town through tourist information centers. In short, DMS can be involved in all stages of the product/service purchase and delivery in the tourism industry: it is a source of information, a basis and a platform for marketing and sales and a point of communication. Moreover, the design, characteristics, contents and functionalities of a DMS are crucial in achieving competitive advantage. Through the platform, a destination or site manager can control many factors that can influence consumer behaviour. This is important especially that the market is in constant flux. As Jamieson (2006, p.13-14) explained, attractions change over time and are fundamentally driven by two major factors: First, physical characteristics can change: cities may improve or deteriorate in quality, and developed destinations may wear out. Second, market conditions can change. Popularity is as much a function of market forces as physical factors. Influences such as international monetary exchange rates, fashion, personal interests, public policy, and competition can change market segment interest in attractions. A DMS organization could offer its client both the technologies and marketing tools in order to achieve its targets. It can be tapped to implement policy and planning framework on a daily or per project basis on activities that include marketing of the destination, gathering and dissemination of information, effective visitor management, ongoing resource stewardship, and a host of other initiatives (Goeldner and Ritchie, p.72) DMS can help DMOs gain competitive advantage by acting as facilitators of its objectives, which include the enhancement of the long-term viability of the local population, provision of visitor satisfaction and maximization of profit (Campilho and Kamel, 2004, p.202). The reason for this is simple. A sophisticated DMS model can function as the information technology infrastructure of the DMO (Bidgoli 2008, p.949). Besides the provision of information, the DMS can act as enabler in the manner by which products and services in a tourism destination are integrated, marketed and sold to consumers. Sharma (p.148) explained this in detail by stressing that, “the contribution is to strategic management and marketing, which is demonstrated by their ability to co-ordinate and manage destinations as well as increase the intra-channel power of principals within the distribution channel,” elevating DMS to a strategic tool in the process. An important factor that enables a DMS model or solution to be effective is its use of Internet technology. As a marketing tool, explained Buhalis and Laws (2001, p.240), it provides the possibility of not only implementing the marketing mix quicker and with lower costs but “also transmitting to the potential guest emotions, which are not effective with other forms of marketing such as brochures or printed material.” According to Lubbe (2003, p.16), the Internet is perfect of DMS because: It allows travel suppliers to set up a direct communications link with their customers; It eliminates unequal barriers for customers and suppliers, particularly the geographical and physical barriers that separate buyer and seller. The rationale, wrote Hernandes and Torres-Coronas (2009, p.184), is that it establishes a relational framework that permits interaction and cooperation – factors necessary in achieving competitive advantage. This is demonstrated in the cases of two UK-based DMS websites, NVG and New Mind E-tourism Solutions. The former pitches an integrated solution that helps destinations and tourism businesses communicate better with their market, target new ones and increase revenue streams (NVG 2011). New Mind E-tourism Solutions , on the other hand, focuses on marketing by offering services such as marketing software, content development, optimization and pay-per-click advertising. Challenges While stakeholders such as DMOs can gain many benefits to DMS, there are those who are skeptical about its capabilities. For instances, Kandampully et al. (2001, p.78) argued that attempts at integrating technology in DMS have met with mixed results and, worse, attempts to market countries and locations have achieved fewer advances. The authors attribute the problem to the risks entailed in the use of technology. They pointed out that there are historical evidences that show both success and failure. Sharma supported this point, explaining that majority of public tourism organizations’ projects with DMSs have high failure rate because they fail to attract a critical mass of tourism demand (p.148). Gartner and Lime (2009, p.59) also identified the problem about the way other DMS could copy an operational model, hence, erase some semblance of competitive advantage. However, these problems are structural in nature. They can be avoided provided there is an deep understanding of both the consumers and the stakeholders so that DMS model avoids risks and challenges. In addition, a DMS framework can help maintain competitive advantage by constantly innovating. Conclusion A Destination Management System is an interorganizational information technology infrastructure. This characteristic is the fundamental reason why it is crucial in the operations of Destination Management Organizations and the viability of destination tourism. It implies several critical variables. First, there is the cooperation variable amongst organizations and stakeholders within a tourism location. As cited by this paper, the partnerships, participation, engagement and collaboration among stakeholders is one of the most effective ways by which destination tourism can achieve some measure of success. Without them, the theme, characteristics and identity that the destination tourism managers work hard to build and promote in order to gain competitive advantage in international tourism market, will not leave their mark. DMS networks stakeholders electronically, which allows for several effective ways of cooperation in terms of product development, marketing, sales and service delivery. Secondly, there is the technology variable. As an IT application, it is supported by the enabling capacity of the Internet to reach as many people as possible, efficiently and meaningfully. Through the Internet, consumer motivations, expectations and needs are not only addressed immediately and efficiently. Rather, the platform also provides the mechanism that supports relational marketing strongly. It allows for fast, accessible, cost-effective and easy interactions and transactions. It, therefore, creates value for consumers because it permits a viable one-on-one marketing. Finally, there is the knowledge variable. In tourism management, it is a resource especially when transmitted across the available network channels effectively. All in all, the above variables help lead to the sustainability and competitiveness of a tourism destination. It allows for the efficiencies that create value, which of course is a precondition for competitive advantage. One can say that Destination Tourism and DMS are customer-oriented models and processes that can achieve successful outcomes in tourism marketing. References Bidgoli, H. 2008. 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