Globalization, Tourism, and Foreign Investment and Liberalization of the Economy - Coursework Example

Tourism Table of Contents Introduction 2 Globalization and Tourism 3 Tourism as export strategy 4 Threat to indigenous peoples 5 Tourisms high cost 6Morocco as a Tourist Place 7 Major Tourist Attractions 7 Tourism and the Economy 9 Foreign Investment and Liberalization of the Economy 10 Seasonality 11 Tourism Marketing and Promotion 13 Prospects 14 Reference: 16 Introduction The latter half of the twentieth century has been marked with amazing changes in technology, transportation, and communication and, in varying degrees, a spread of geo-political stability that has accompanied economic affluence for many citizens in industrialized and developing countries throughout the world. These changes have triggered the development of a number of new industries and the substantial evolution of existing industries to address the needs of increasingly prosperous, educated, and sophisticated post-industrial societies. One of these industries, tourism, has quietly emerged to become an important force in many societies and economies in various parts of the world (Burns & Holden, 1995, pp 134-146). Though not usually thought of as a single cohesive industry, the growth of tourism since World War II has nonetheless been dramatic (Landau, 1969). Higher discretionary incomes, smaller family size, changing demographics, lower transportation costs, improved public health standards, infrastructure development, and hospitable environments for tourists in many destinations have made tourism, especially long-distance tourism, an activity within the reach and desires of many members of many nations. Furthermore, developments in marketing, management, vertical and horizontal integration, pricing, and tour packaging, as well as capital investments in physical facilities -- "bricks and mortar" -- and public infrastructure, have provided tourism with the necessary framework to allow the tremendous growth it has experienced over the past half century. Thus, tourism has indeed emerged as an "industry" which, according to the World Tourism Organization, in 1989 generated approximately 74 million jobs in its direct and service-related industries, such as airlines, hotels, travel services, and publications (Gartner, 1996, pp 76-82)). Many countries and regions which have possessed the necessary resources for tourism development have chosen, either consciously or otherwise, the path of developing large scale tourism as a major national or regional activity. Tourism has become a major employer, taxpayer, and physical and political presence in many jurisdictions. As a result, tourism has often altered the very nature of social, political, and economic interaction that occurs in these places. Frequently, the transformation has been no less dramatic than the shifts that took place generations before, as agrarian ways were pushed out by industrialization. Now, in industrialized countries, tourism is frequently pushing out (or more correctly, replacing) manufacturing, distribution, or extractive industry as the economic mainstay. In developing countries, the shift typically has been from an agrarian economic base to a touristic economic base, bypassing an industrial phase altogether. Globalization and Tourism Tourism is not only arguably the worlds largest industry; it also involves the greatest flows of people on the surface of the earth. It is, therefore, a major agent of change in todays world and some see it as one of the most visible expressions of globalization. Tourists and tourism development affect almost every country. They produce impacts upon communities, environments and economies, some of which are beneficial and others that can be a cause of concern. At the same time, tourism is a source of immense enjoyment and pleasure for hundreds of millions of people and creates contact and communication between peoples from different regions and cultures. With the effects of globalization, tourism sector has lived some changes in the marketing, tourist profile and technology areas. As a result of these changes, new tourism concepts have emerged like sustainable tourism, ecotourism, soft-tourism (http://stad.adu.edu.tr/TURKCE/makaleler/stadhaz2003/makale030103.asp) Globalization and tourism have become a deadly mix for indigenous peoples. Tourisms impact on indigenous peoples way of life and on their control of and access to their resources and environment has become more pronounced with globalization of the world economy. For several decades now, tourism has been a major source of revenue for countries, specifically in the Third World. Its growth has been nothing short of phenomenal. In the 1950s, 25 million people traveled to a foreign destination. In the 1960s, this grew to 70 million. By 1997, 617 million tourists had been reported by the Madrid-based World Tourism Organization to have traveled to foreign countries. The World Tourism Organization has even predicted that by the 21st century, tourist arrivals would have reached billions annually. It foresees that by the year 2010, 1 billion tourists would have traveled abroad and by 2020, this would have increased to 1.6 billion. In terms of revenues, this would easily translate to billions of dollars yearly. In the 1960s, for example, tourism earned only US$6.8 billion. In 1997, revenues jumped to US$448 billion. By the year 2000, the WTO predicts tourism earnings to reach $621 billion and by 2010, a whopping $1.5 trillion. Tourism as export strategy It is no wonder therefore that cash-starved Third World countries view tourism as a shortcut to rapid development. Its potential to earn billions of dollars easily has resulted in it being viewed as a panacea for debt-ridden countries. But more than this, tourism has become part and parcel of multilateral financial institutions package for financial bail-outs for countries in distress. Tourism is now being pursued as a serious development strategy for the Third World. Third World governments have therefore tried to fulfill their commitments to these SAPs by large-scale investments in tourism-related ventures. In conjunction with financial multilateral institutions and travel and tourism transnational corporations (TNCs), they have launched infrastructure projects such as roads, hotels and tourist-promotion programs. Worldwide, public and private investments have reached $800 billion annually, accounting for 12% of total worldwide investments. In short, GATS makes it easier for big tourist and travel TNCs to invest in the local tourism industries of Third World countries. Among others, it removes restrictions on foreign corporations abilities to transfer staff from one country to another; and enables them to use trademarks, create and operate branch offices abroad, and more importantly, to repatriate their earnings to their mother companies abroad. Threat to indigenous peoples But what does globalization and tourism mean for the indigenous peoples? It is already an established fact that tourism had brought pernicious and long-term damaging effects on indigenous peoples even prior to globalization. The present economic order further exacerbates and hastens these impacts. For one, indigenous communities, which have otherwise been left untouched by traditional tourism activities, have now been targeted for tourism ventures, most specifically, ecotourism. A relatively new variant, ecotourism is described as environment-friendly, sustainable and nature-based. It came about as a response to the growing environmental awareness worldwide these past decades. This tourism sub-sector has been met with remarkable success. Today, it has become the fastest growing sub-sector, growing at a rate of 10%-15% annually. Ecotourism now accounts for 25% of all leisure trips abroad.8 It is important to note that ecotourism destinations are more often than not in the Third World. Tourism here has been increasing annually by 6% as compared to 3.5% in developed countries. After all, it is in these areas that relatively undisturbed and preserved natural environments and exotic areas are located. But it is also in these countries that the majority of the distinct indigenous cultures can be found. To a large extent, therefore, indigenous communities have become targets of ecotourism in this globalised economy. Tourisms high cost Indigenous peoples are paying a high price for tourism. In their desire to cash in on the billion-dollar profits from this industry, governments, specifically in the Third World, and transnational corporations have disregarded the interests of indigenous peoples. The effects have been devastating. Indigenous peoples have been evicted from their traditional lands, their control and access to their natural resources compromised. They have suffered social degradation brought about by foreign influences and the commercialization of their culture. Even the rich biodiversity of their natural resources has suffered from pollution and environmental damage, unable to support the growing number of tourist arrivals. What few benefits indigenous peoples derive from tourism are far outweighed by the damage it has caused them. They have been made to bear the brunt of an industry over which they have neither say nor control. Unless indigenous peoples have a direct participation in the planning, implementation, and regulation of tourism activities that affect them, and unless benefit-sharing mechanisms are put in place, tourism can never redound to their interest. Indigenous peoples will continue to be mere cogs in the wheel of this billion-dollar industry. http://www19.homepage.villanova.edu/karyn.hollis/prof_academic/Courses/2041-Travel/globalization_&_tourism.htm Morocco as a Tourist Place Morocco is an ancient kingdom whose history dates back over 1,000 years when it was ruled by Idriss (788-974), a descendent of Mohammed. Long before his arrival, waves of conquerors--among them the Phoenicians, Carthaginians and the Romans,--left their mark on this North African nation (Knopf, 1994, pp 67-71). Idriss, who was a political refugee from Arabia, founded the first Muslim dynasty and Fez, one of the Imperial Cities, the others being Rabat, Meknes and Marrakesh. These cities are among the countrys maj or tourist attractions, offering numerous historical remains and ruins, left behind by these many civilizations (Lea, 1988, pp 89-93). Major Tourist Attractions Morocco is a country with immense tourist potential. The government eagerly promotes what it sees as a major source of hard currency earnings. Yet there are a host of problems confronting the tourist industry. Not least among them are social deprivation and tense relations with neighboring Algeria. Only a few hours journey from Europe and less than six hours flying time from the United States, Morocco is well placed to become one of the regions major tourist destinations. With its miles of unspoilt beaches and warm climate, high snow-capped mountains, large expanse of desert, historical cities such as Fez, Meknes and Marrakech that date back many centuries, and a wide variety of sporting and recreational facilities Morocco contains all the necessary ingredients to become a holiday-makers paradise (Gordon, Talbot, & Damien. 1998, pp 45-48). Moroccos geography--a blend of desert, forests, palm groves, lofty peaks (the Rif and Atlas Mountain ranges) and spectacular beaches--makes it a diverse destination with many opportunities to enjoy the great outdoors. However, so far it has largely been marketed to the outside world as a cheap sea, sand and sun holiday venue, in particular to tourists from more northern climes such as Germany, Great Britain and Scandinavia. Holidaymakers from France, Spain and Italy tend to come to Morocco for its culture and history. Those countries have warmer climates than Northern Europe and plenty of beach resorts of their own. In the mid-1990s, however, the Moroccan government, aware that it had to diversify the tourism industry, started to make a concerted effort to change the countrys image. This switched the focus from sea, sun and sand--the formula that launched the tourism industry as far back as the 1930s--towards niche markets such as golf tourism and on the meetings, incentives, conferences and exhibitions (MICE) sector. It does not come as a surprise to learn that Morocco has earned its reputation as a beach destination. The country, which covers 172,414 square miles on the north western tip of Africa, is ringed by both the Mediterranean Sea and the Atlantic Ocean and it has over 2,000 miles of coastline. Its climate ranges from Mediterranean temperatures on the coast, to a torrid 30-45[degrees] C in the Saharan interior. Even during the winter, which runs from November to early April, temperatures along the coastal areas where most resorts are situated are a temperate 15-21 [degrees] C. Moroccos northern shore practically touches Spain across the Straits of Gibraltar. Continental Europe is a mere nine miles away, an accessible route for conquerors in the past and for vacationers today. To the south, Morocco is bordered by the disputed area of the Western Sahara and by Mauritania. Moroccos North African neighbors to the east are Algeria and Tunisia, its competitors for the tourism dollar in this part of the world. Morocco registered 3.8 million international tourist arrivals in 1999 and 4.1 million in 2000, compared to 4.8 million and 5 million for Tunisia during the same periods. For Morocco, however, tourism revenues were higher (Strathern, 1995, pp 235-240). In 1999, they were US$1.8 billion, compared to US$1.5 billion for Tunisia and in 2000, the tourist spend was US$2 billion--more than half a million than the tourism spend for Tunisia. Tourism and the Economy Moroccos economy is in better shape than that of many developing countries but poverty is still endemic. According to the Washington-based Middle East Policy Council, a non-profit educational organization, in 2001, the average per capita income was US$1,300, compared to US$2,200 in Tunisia. The Council estimates that the number of people below the poverty threshold--as in those who earn less than the equivalent of US$1 per day--has risen from 3.34 million in 1991, to 5.31 million in 1999. Low wages are not confined to the poor, illiterate sectors of the populace. University graduates too, find it hard to get a well-paid job and an estimated 100,000 degree holders are currently out of work. Not surprisingly, many Moroccans leave the country in search of a better standard of living, including, according to tourism officials, people who graduate from hotel and hospitality schools. Almost 2 million Moroccans live and work abroad (the majority in French-speaking France and Belgium, though there are some 150,000 in Italy and 80,000 in Germany), however, these non-resident Moroccans travel frequently to their former homeland to visit family and friends. They also remit monies from abroad, contributing in a major way, to the health of the Moroccan economy. Tourism revenues from non-resident Moroccans have risen steadily over the past five years, from the equivalent of US$949 million in 1995, to US$1.8 billion in 2000. Some 14 schools and colleges in Morocco offer courses in tourism, travel and the hospitality trade, but a large number of graduates, faced with the prospect of earning subsistence wages, prefer to immigrate to Europe, where their skills are in demand. In total 1,344 tourism students graduated at the end of 2000. Unfortunately, that has resulted in less qualified people (usually those who cannot afford to move abroad either legally or illegally) being hired by hotel and restaurant managers who themselves often have minimum training. Although Moroccans are by nature friendly and hospitable, slow service is an oft-heard complaint. In cities such as Marrakesh, tourists are frequently harassed by unofficial guides or merchants seeking to augment their meager incomes by peddling their services and goods to people whom they consider to be more fortunate than themselves. Both of these issues are being addressed by the government. A "tourist" police force is helping to cut down on the "hassle factor" and the Ministry of Tourism conducts service checks on hotels and restaurants, downgrading them if it deems their standards to be unsatisfactory (Harris, 1983, pp 34-39). Foreign Investment and Liberalization of the Economy In spite of underlying social and economic problems, Moroccos economy as a whole performs better than that many other developing nations. The rate of inflation is only 2% and foreign investment--including investment in the tourism sector--has been growing steadily, from US$50 million a decade ago, to US$2 billion in 1999. Throughout the early 1980s and 1990s, the government started to liberalize the economy by simplifying the countrys complicated regulatory laws, freeing up the banking system, reforming trade rules and privatizing state-owned sectors. This included selling off 35% of Maroc Telecom, the states telecommunications company to Vivendi, the French media giant, in 2000. During the 1990s, the economy grew at an average rate of 2% per year, though it should be pointed out that the growth rate rocked back and forth during that decade, from a high of 11.5% in 1996, to 0.2% in 1999. An economic plan launched in 2000, aims for an annual GDP growth of 5% by 2004. Unfortunately some of the governments more ambitious plans for economic reform have yet to be implemented. Political infighting within the coalition government and the still-stultifying, though slimmed-down, bureaucracy have dampened the rate of progress. There are also ongoing demands on the public purse and throughout 1999 and 2000, there were countless strikes and sit-ins, organised by frustrated workers seeking higher wages. The Moroccan economy has also been hampered by several factors outside of the governments control. These include the strength of the dirham against the euro (nearly two-thirds of Moroccos exports go to Europe, which makes prices less competitive than before the euro was implemented), severe droughts throughout 2000 and 2001 and the rise in the price of oil in 2000. On 25 April 2001, the dirham was devalued by 5%, to bring it more in line with the euro. Morocco is, however, still heavily dependent on imported oil which provides more than 80% of its energy needs. It was hoped that preliminary oil finds in Talsint, in the northeast of the country two years ago would ease Moroccos reliance on foreign oil imports, but early estimates of the value of the finds, are believed by many economic analysts to be overly-optimistic. Seasonality Morocco is not as susceptible to seasonality as some other countries with more extreme temperature differences between summer and winter, nonetheless, the greatest number of Europeans arrive in July and August--holiday season for tourists from the origin countries, some of whom have as long as two months vacation. Moroccans too, take their holidays during the two months of summer school breaks. Patterns do, however, vary a little according to the country of origin. The greatest number of Germans come in October (24,860 in 2000) when temperatures and package prices are lower than in peak season. In 2000, almost 22,000 German travelers came to Morocco in March and April as well for the same reasons--only 500 fewer than in July. Scandinavians on the other hand, come in the middle of the winter and early spring. Although the cost of package vacations plays a role in their decision making process, it is not always the prime consideration for well-heeled Danes, Swedes and Norwegians. Rather, they want to flee to the sun, as a relief from their long, chilly winters. In 2000, the greatest number of Scandinavians--13,186--arrived in March. The second most popular month to travel to Morocco was in January, when over 10,000 Scandinavians headed south, compared to only 6,817 in July. Although Scandinavians like the sun, with their fair skins and health-oriented outlook towards life, they are less inclined to tolerate the high temperatures of mid-summer in Morocco. Given that people from northern climes like to travel at cooler times of the year, there are clearly more opportunities to market Morocco in the off-season. In spring and autumn, temperatures are moderate, between 14[degrees] C and 21[degrees] C, and Moroccos mountains, where temperatures can be downright chilly, offer many opportunities to enjoy outdoor activities (Tourneau, 1973, pp 140-147). Skiing, trekking and mountaineering are all possible in the High Atlas though, at present, these alpine activities are not as widely marketed to the outside world as they might be. Tourism Marketing and Promotion The Ministry of Tourism has been streamlined under the new government. Until 1998, it operated under the aegis of the Ministry of Transport, Tourism and Energy; however, it has now been combined with the Ministry of Finance, under a single minister, Fathallah Oualalou. The two ministries were brought under the same portfolio in order to give tourism a higher business profile and to reduce the many levels of bureaucracy. The Ministry of Tourisms role goes beyond marketing and promoting the country. It also oversees Moroccos travel agencies, and the hotel schools. There is no move afoot as yet, as there has been in other countries, to turn the promotion of tourism over to the private sector. However, the Office National Marocain du Tourisme (ONMT) which is the promotional arm of the Ministry of Tourism, has its own board of directors and it operates as a separate entity from the Ministry of Tourism, albeit funded by the Moroccan government. Moroccos overseas tourist offices have a certain degree of independence as well, which allows them to operate in a flexible manner and there are 15 National Tourist Offices outside the country, in Brussels, Dusseldorf, Jeddah, Lisbon, London, Madrid, Milan, Montreal, New York, Orlando, Paris, Stockholm, Sydney, Tokyo and Zurich. In 2001, the ONMTs marketing budget was US$20 million, covering the cost of salaries and office overheads for the tourist offices around the world, as well as promotional and marketing programs. Within Morocco, there are 25 tourist offices and tourist information bureaus. The tourist regions are grouped into entities called GRIT (Groupement Regional dinteret Touristique) which brings together private and public interests to promote local tourism. The first GRIT was created in Agadir and there are now five around the country. Prospects The Moroccan government has instigated a tourism master plan spanning 2001 to 2010 which calls for an increase in the number of visitors to 10 million annually (from the current 4 million annually)--an ambitious goal, which has many hurdles to overcome. The WTO has a less optimistic view. Based on an annual growth rate of just under 5%, it forecasts that by 2010, Morocco will welcome 5.5 million visitors annually and 8.7 million by 2020. These estimates are, however, based on the average performance of the tourism industry to date. If some of the more ambitious schemes come to fruition quicker than predicted, the government may well succeed in achieving its goals (Drummond, 2001, pp 98-105). Part of the master plan is to create six new resorts from the ground up--two on the Mediterranean coast and four on Moroccos Atlantic shore. They will be modeled on traditional Moroccan villages and their design will be environmentally friendly, in other words, the kind of places that well-heeled tourists prefer. There is no doubt that the Moroccan government has the vision, and the will, to achieve these tourism projects. However, in the coming decade, there are likely to be strong demands on the public purse, fuelled by the countrys social problems, the high unemployment rate and ongoing labour disputes which, in the past, has diverted funds from tourism development. Further privatization could, however, alleviate that problem, as would the sale (at least in part) of state-owned Royal Air Maroc, a longstanding goal of the government. Morocco also faces stiff competition from similar cheap beach destinations such as Turkey. Price-cutting by major European tour operators, who have their own agenda for continuing to encourage quantity over quality, is also a major stumbling block to developing the high-end market. A continuing downturn in the European economy--though this now appears to be less severe than predicted a year ago--could also hamper growth, if European travelers decide to cut back on luxuries such as holidays. Morocco does, however, have a great deal going for it. The country has many things in its favor--a fascinating past, stunning scenery, friendly people, an exotic culture, a wide range of outdoor activities and a much-improved level of service in hotels and restaurants. Its makeover is well under way, but it will take time for tourists to look beyond Moroccos stereotypical image as a cheap sun destination. The heart and soul of the country has yet to be exploited to the full and much is riding on the ability of the young monarch and his reform-minded ministers to carry through some of their more ambitious plans. The Moroccan tourism industry will have to lessen its reliance on traditional beach tourists from Europe, by pursuing new markets, perhaps in other regions of the world, as well as presenting the countrys rich offerings in a different light, which will attract the discerning travelers that they see as the key to Moroccos future. Reference: Burns P. and Holden A. (1995) Tourism: A new perspective. Prentice Hall, Hemel Hempstead. Gartner, W.C. (1996) Tourism Development: Principles, Processes, and Policies. Wiley. Lea, J. (1988) Tourism and Development in the Third World. Routledge, London. Alfred A. Knopf, Inc. 1994. Knopf Guides: Morocco. New York, N.Y. Gordon, Frances Linzee. Talbot, Dorinda. Simonis, Damien. 1998. Morocco. Lonely Planet Publications. Australia. Windo, Pamela; 2000. Escape to Morocco. Fodors Travel Publications. New York, N.Y. Strathern, Oone, ed. 1995. Travelers Literary Companion, Africa. Passport Books. Lincolnwood, IL. James Drummond, 2001. "Taxing Days for Casablanca Market," Financial Times, January 3 l Rom Landau, 1969. The Kasbas of Southern Morocco, Faber and Faber, London, 1969. R. Le Tourneau, 1973. The Modern History of Morocco. Walter Harris, 1983. Morocco That Was, Eland Books, London. http://stad.adu.edu.tr/TURKCE/makaleler/stadhaz2003/makale030103.asp http://www19.homepage.villanova.edu/karyn.hollis/prof_academic/Courses/2041-Travel/globalization_&_tourism.htm Read More