The Impact of the US Economy on the Events Industry - Research Paper Example

The Impact of the U.S. Economy on the Events Industry Overview of the Events Industry In the published report on the Labour Market Review of the Events Industry, it was explicitly revealed that defining the events industry initially proved to be a challenging endeavor. The rationale for the difficulty stemmed from the diversity within which the industry allegedly encompasses different kinds and natures of events. Initially, the term “events” was qualified as the most appropriately defined by Allen, O’Toole, McDonnell and Harris, whose definition was catered more specifically on tourism, to wit: “A special event is a one-time or infrequently occurring event outside normal programs or activities of the sponsoring or organizing body. To the customer or guest, as special event is an opportunity for a leisure, social or cultural experience outside the normal range of choices or beyond everyday experience” (Allen, OToole and McDonnell qtd. in Skoultos and Tsimitakis 1). The definition was corroborated by Getz who traced the evolution of the events planning and management as a profession and disclosed that “events are an important motivator of tourism, and figure prominently in the development and marketing plans of most destinations” (Getz 403).With more organizations pursuing endeavors that focus on a variety of events, it was, therefore, imminent that a categorization of events naturally occurred. From among the events categorization that emerged, the following were noted: local, major, hallmark and mega events (Skoultos and Tsimitakis); and the typology of planned events as presented by Getz who differentiated cultural celebrations, political and state events, arts and entertainment, business and trade, educational and scientific, sport competition and recreational events, and finally, private events (Getz 404). At this point, the definition of events tourism has been clearly established as “a systematic planning, development, and marketing of festivals and special events as tourist attractions, image-makers, catalysts for infrastructure and economic growth, and animators of built attraction” (Ghazali, Collins and Minnis qtd. in Skoultos and Tsimitakis 2). In different studies, it was clearly established that holding significant events generate marked impacts on the promoter of events, as well as in the location within which these events were organized and implemented. From a more traditional perspective, it was deduced that event tourism aims to spur economic growth and gain profound benefits in terms of money generated from the event (“expenditure on travel, entertainment, shopping, and pre- and post-conference tours” (“Labour Market Review of the Events Industry” 29)). Getz, on the other hand, emphasized that there is a need to closely examine the impact of event tourism on factors such as social, cultural, political, and environmental transformations resulting from these endeavors. The paper written by Skoultos and Tsimitakis clearly identified, through a tabular presentation, the positive and negative impact of event tourism on factors such as economic, tourism or commercial, physical and environmental, psychological, and political as well as administrative factors. Objective of the Discourse Given the general overview of the event tourism industry, the objective of this paper is to determine the impact of the economic condition of the United States on the event tourism industry. This would include providing the current economic condition of the country, as compared to historical figures. The effect of the current economic status on the number of establishments that enter or leave the event tourism industry would thereby be examined to gauge the impact of the status of the economy on sustaining profitable performance of organizations within the event tourism industry. Finally, the specific factors that influenced significant changes in the current and future trends in the event tourism industry would be identified and presented. Economic Condition of the United States The economic condition of the United States in contemporary times could be evaluated in comparison to historical figures. The most prominent economic indicators that have been the subject of continued scrutiny include “ jobs created or lost since the start of the recession; jobs saved or created by the Recovery Act; unemployment rates; per capita earnings; and, the condition of the housing sector (which was the culprit of the last recession)” (Joint Economic Committee 1). Highlights from the Executive Summary of the report disclosed the following findings: “one-half of the states gained private-sector jobs in August. Nationally, private-sector job gains totaled 103,000 during the month. Retail sales increased in August by 0.9 percent, after a gain of 0.6 percent in July” (Joint Economic Committee: Executive Summary 1). In terms of reference to the event tourism industry, particulalry noting the leisure and hospitality sector, it was revealed that : “Twenty-seven states added jobs in the leisure and hospitality sector during August. Wisconsin (5,900), Texas (4,600) and Florida (4,500) saw the largest gains. In the past 12 months, 42 states and the District of Columbia added leisure and hospitality jobs. During this period, leisure and hospitality employment increased by 315,000 positions” (Joint Economic Committee: Executive Summary 2). Likewise, North presented a general summary of the economic condition as exhibiting slow, positive but weak growth of reportedly 2% in GDP for the period 2012 to 2013 (North). There were an evident number of jobs that were apparently created (100,000) over the last seven months, but as indicated, this figure is insufficient to bring the unemployment rate down. Accordingly, a figure of 200,000 jobs should have been created during the period under review in order to post an improvement in the unemployment rate, which was still reportedly pegged at 8.2% by the end of March 2012 (North). Impact of Economic Condition on Event Tourism Industry In a study written by Kapiki, the author disclosed that the economic condition of a particular country creates both internal and external threats to the tourism industry, to wit: “External threats: recession; currency fluctuations; and taxation; Internal threats: rising costs; falling revenues; unprofitability” (Sian et al. qtd. in Kapiki 2). In general, a downturn in economic condition of a particular country was reported to have created the following impact: “a downturn in sales of lodging, foodservice, events and other hospitality products and some have closed their doors forever. The decline resulted not only from fewer customers in hotels, restaurants, conference and convention centres, etc., but also from a significant decline in the average expenditure per guest (Pizam 301 qtd. in Kapiki 3 ). However, due to the slow positive growth that has been exhibited in the United States’ economy after the recession, the UNWTO World Tourism Barometer, an international organization that monitors tourism activity globally, has revealed that the economic growth forecasts have started to post remarkable increases in tourist activities (World Tourism Organization). Of the number of tourist arrivals reaching the one billion mark, a reflected increase of 6 million tourist arrivals, or 156 million, is recorded in Americas. As disclosed, “South America, up by 10% for the second consecutive year, continued to lead growth. Central America and the Caribbean (both +4%) maintained the growth rates of 2010. North America, with a 3% increase, hit the 100 million tourists mark in 2011” (World Tourism Organization par. 6). The figures are indicative of the direct relationship between economic growth and increase in event tourist activites, as manifested by the number of tourist arrivals in a particular destination. Accordingly, there were increased in receipts (or money generated from tourist activities) where the USA was named the top tourist destination and generated an increase of 12% in receipts (World Tourism Organization). Thus, future trends in the event tourism industry, particulalry in the hospitality industry reveals thrusts that focus on the following areas: “More green and eco-lodgings; Development of mega hotels (multi- purpose facilities with casino, shops,theatre, theme park, etc.); More boutique hotels; Intelligent hotels with advanced technology using the guest’s virtual fingerprint in order to perform all the operations (check-in,charges, check-out, etc.); Increasing employee salaries in order toretain the existing staff; More emphasis on the internet andtechnology; Guests’ virtual and physical social networks will be the best distribution channels” (Kapiki 8). Using these projected trends, event planners and organizers should take a proactive stance in catering to the needs and demands of the potential clientele with the identified thrusts and opportunities that were apparently noted. Using the rising trends as revealed from the economic indicators, the event tourism industry is expecting a rebound that could generate revenues for the government, create employment, exhibit increased tourist spending, and potentially increase the standard of living of the constituents. As recommended by the United Nations World Tourism Organization, governments should facilitate creating an environment that would support the growing trend exhibited in event tourism. It was evidently disclosed that there is a need to exert more efforts in “advancing travel facilitation, an area in which in spite of the great strides made so far there is still much room for progress. UNWTO advises countries to make the most of information and communication technologies in improving visa application and processing formalities, as well as the timings of visa issuance, and to analyze the possible impact of travel facilitation in increasing their tourism economies” (World Tourism Organization par. 12). Postive efforts and support mechanims should be carefully planned and implemented to match the postive growth trends that results for the optimistic growths exhibited by the prevailing economic condition of the the country. Conclusion The paper has proffered pertinent issues relative to determining the impact of the economic condition of the U.S. on the event tourism industry. By initially providing an overview of the events industry, the theoretical framework for discussion was effectively established to clarify definitions of the terms “events” and “event tourism,” among others. Subsequently, the prevailing economic condition of the U.S. was expounded to determine pronouned economic indicators that could significantly impact the event tourism industry in general. As such, the effects of the economic condition on the event tourism industry were determined to include an initial slowdown and various internal and external threats due to the last recorded recession. However, the marked growth, despite slow and weak patterns towards economic recovery, have picked up a surge in tourist arrivals that were reportedly monitored by the World Tourism Organization. As such, the impact of this trend is the optimistic forecast in the continued rise in tourist visits that could create greater demands in events planning, management, and tourism. The implications of the findings include stirring events organizers and promoters to take a proactive stance in focusing on the future trends to cater to the needs and demands of the clientele. Creating a conducive tourist environment, in conjunction with the needed political and economic support, would greately assist in taking advantage of the opportunities that abound in the event tourism industry in the near future. Works Cited Allen, Johnny, William OToole, Rob Harris, and Ian McDonnell. Festival and Special Event Management. Wiley Australia Tourism Series, 2002. Print. Collins, Tejay, and Rachel Minnis. Perceived Community Impacts of Event Tourism: Case Study of the 2006 “Hot Wheels Event” hosted in Speed, Kansas. Hays, Kansas: Docking Institute of Public Affairs Fort Hays State University, n.d. Print. Getz, Donald. "Event tourism: Definition, evolution, and research." Tourism Management 29 (2008): 403–428. Joint Economic Committee. "Understanding the Economy: State-by-State Snapshots September 2012 (based on August 2012 Data)." jec.senate.gov. September 2012. Web. 30 September 2012 . Kapiki, Soultana. "Current and Future Trends in Tourism and Hospitality. The Case of Greece." International Journal of Economic Practices and Theories 2.1 (2012): 1–12. "Labour Market Review of the Events Industry." January 2010. businesstourismpartnership.com. Web. 30 September 2012 . North, Dan. "Economic Outlook – As of May 2012." eulerhermes.us. May 2012. Web. 30 September 2012 . Pizam, Abraham. "The Global financial Crisis And Its Impact on the Hospitality Industry." International Journal of Hospitality Management 28 (2009): 301. Sian, T. L. et al. Fundamentals of Hospitality and Tourism Management. Open University of Malaysia, 2009. Print. Skoultos, Sofoklis G., and Emmanuil N. Tsimitakis. "Event Tourism: Statements and Questions about Its Impact on Rural Areas." N.d. Web. 30 September 2012 . World Tourism Organization. "International tourism to reach one billion in 2012." unwto.org. January 2012. Web. 30 September 2012 . Read More