Impact of Globalization on International Tourism - Coursework Example

Impact of Globalization on International Tourism Introduction Globalisation is the closer amalgamation of countries and people which has been brought about by the considerable reduction in the costs of transportation and other services such as communication. Moreover, the breakdown of various barriers related to the flow of goods, knowledge, services and to a very lesser extent people across the border can be determined to be a key facet of enhancing effects of globalisation on any industrial sector. Internationalisation or globalisation is the process by which various firms become more and more involved in expanding their markets outside their household country. Globalisation has led to increase the dependency over the countries, and other people. This process of globalisation has further led to the formation of expanded and multidimensional operations of prominent industrial sectors such as global tourism industry. This has also impacted the destination of tourism both positively and negatively. Globalisation has unlocked an entire new world of opportunity for the development of tourism activities. On the other hand, the impact of globalisation has brought in a crucial impact on the demand and supply factors related to international tourism in various ways. In this regard, the supply factors include computerisation in the reservation system, possibility of searching for the tourism destination due to mass media with low cost and decrease in the cost of travelling with emerging new areas of travelling. Moreover, the demand factors include rise in the income and wealth, people’s knowledge and experience (Costa & Panyik, 2013). Correspondingly, this study intends to address the topic related to the impact of globalisation on international tourism with a special focus on its effects in the tourism industry in Canada. Canada is one of the rapidly growing economies wherein it is observed that the tourism sector plays a critical part to maximise the revenue generation by the country. According to the The United Nations World Tourism Organization (UNWTO), around 1.087 billion tourists travelled during 2013 in the world, which is a constantly rising at rate of around 5% every year. Correspondingly, Canada has played a very important role in boosting such growth in the international scenario. The data also reveals that the world share of Canada in supporting tourism industry was around US$85 billion Dollars in 2013 (UNWTO, 2013). Discussion Tourism is one of those areas, which has been considerably affected due to the emerging pace of globalisation. Correspondingly, it is acknowledged that tourism is one of the fastest growing industries of the global economy for mostly the developing countries as they are endeavouring to cash in on this developing sector in an attempt to increase their foreign reserves. Despite yielding abandoned growth, this industry has also led to very serious social and environmental problems, the United Nations asserted that such problems are very important to control and remedial measures need to be presented to drive in the positive impacts of globalisation on the international tourism activities (Third World Network, 2014) Effects and Impacts of Globalisation on the International Tourism According to a UNWTO report, published on the travel guide, it argued and revealed certain important scenarios of world tourism, which show that increasingly various prominent global destinations of tourism are investing in the development of the area to draw in a large section of travellers. This factor is increasingly turning international tourism as a key driver of progress in the economy through generating export revenues, along with creating more and more jobs with new enterprises, and development in the infrastructure. Over the last six decades, tourism has continued to expand and has become one of the fastest and largest progressing economic sectors all over the world. In this rapid progression, globalisation has been the key component. Comparing certain facts and figures, it is ascertained that there has been an evolving positive change in international tourism activities wherein the figure of tourist arrival all over the world in the year 1950 stood at 25 million, which subsequently increased to 528 million in 1995 and 1087 million in 2013. Moreover, in the long-term perspective, it is expected to grow at around 3.3% from 2010 to 2030 to reach 1.8 billion by 2030. In this regard, the global projected growth of international tourist arrival is determined to be 6% rise in arrivals in the Asia-Pacific region, along with 5% rise in Europe and Africa followed by 3% increase in Americas (UNWTO, 2014). International Tourist Arrivals and Changes over Previous Years Figure 1 reveals the tourist travel across the world. It was during the year 2012 ascertained to be 1035 million, while in the 2013 the figure stood at 1087 million i.e. 52 million additional international tourists travelled across the world in different destinations in 2013. Besides, in terms of the number of people travelling to a tourist destination, it is deemed that the European region witnessed the maximum visits. Consequently, it can be highlighted that globalisation driven drivers such as increase in consumer income level, rise of disposable income and willingness of global consumers to expend on leisure activities have been the decisive factor towards facilitating international tourism (UNWTO, 2014). Figure 1: International Tourist Travel over the Years Source: (UNWTO, 2014) World’s Top Tourism Destinations Figure 2 shows the top ten countries in the world in terms of the number of tourists’ arrival and the revenue earned by the countries in the year 2012 and 2013 respectively: Figure 2: Top 10 Countries in Tourism (Arrived and Revenue Earn) Source: (UNWTO, 2014) Region Wise Growth Europe witnessed a growth in tourist arrival of around 5% in the year 2013 i.e. an increase of 29 million over 2012 with the total of 563 million. In this context, Georgia and Belarus had witnessed highest growth of around 15% each followed by Armenia and Kazakhstan with 14% and 11% respectively. In Asia Pacific region, there were around 248 million visits by the travellers during 2013 signifying an increase of around 6%. The Americas received 5 million additional tourists in 2013 which can be termed as a 3% increase over the year 2012. In the North American region, the United States recorded 5% increase while Canada witnessed 2% and Mexico assumed 1% progression in tourists travelled. In South America, growth was 3% wherein the contribution of Peru documented double-digit rise with 11% while Ecuador recorded a rise of 7% in international tourists (UNWTO, 2014). Top Spenders in International Tourism Figure 3: Top Spenders in International Tourism Source: (UNWTO, 2014) Furthermore, as per UNWTO, the increasing pressure of globalisation and advancement in the technology front were the main reasons behind such boost on the global tourism industry. It also predicted that such boom is expected to keep on increasing in days to come and international tourism is predicted to grow by 3.8% within the period of 2010-2020 (UNWTO, 2014). Figure 4: Future Growth in the International Tourism Source: (UNWTO, 2014) According to the Canadian Tourism Commission (CTC) (2014), it can be argued that the tourism industry is one of the biggest industries with trillion dollar business globally by employing more than one out of ten of the world population either directly or indirectly. Subsequently, Canada’s tourism industry is taking the advantage of the opportunities to a certain extent while creating more and more jobs in the country. Also, it can be argued that the county is one of the most promising regions in the tourism market of the world. It was also argued that 1% increase in tourism activities in the country will generate an $817 million rise in its export front. CTC’s recent annual report of the year 2013 states that tourism marketing is generating around 545 million Dollars as revenue in the Canadian economy. Out of which, 72 million Dollars was a contribution made to its federal tax revenue and moreover there was a creation of 4,416 jobs opportunities primarily due to tourism (Canadian Tourism Commission, 2014). CTC’s president Greg Klassen, argued that, Canada’s tourism market which is composed of many small and medium businesses should continue in order to take advantage of international trade and CTC will endure them in order to provide a significant platform to them so that they also have the proper access and expertise and ultimately succeed in the global economy (Canadian Tourism Commission, 2014). Challenges Faced Due to Globalisation With Respect to International Tourism Especially in Canada Over the last few decades, it has been prominently observed that the effect of globalisation has influenced several countries’ economies and people, which has led to interdependence between several countries. As an effect, it has been observed that several countries have been involved in business operations. Thus, people have started travelling globally in order to conduct their business operations. During the last few years, it has been determined that several issues have impacted and challenged the tourism activities in worldwide market along with Canada. Moreover, these ever-evolving challenges have affected the tourism tendency among people. According to the observation, it has been identified that the Canadian Chamber of Commerce had blamed the 9/11 terror attack issue for the downfall in the tourism industry of Canada (The Canadian Chamber of Commerce, 2013). Prior to a decade, it has been observed that Canada’s tourism market had been one of the leading markets in the worldwide tourism segment. However, Canada has slipped in terms of its position during the last few years and now it has is ranked at the eighth position in the global visitation purview (Tourism Industry Association of Canada, 2013). After the emergence of globalisation, it has been ascertained that plenty number of countries have ensured a certain amount of revenue from travel and tourism industry while Canada’s travel and tourism industry has to a certain extent failed to maintain the pace with its competitors. The key factors which have affected the growth of tourism industry in Canada are illustrated below: Higher Cost With the effect of globalisation, it has been observed that costs of goods and services are increasing almost every year. Similarly, it has been recognised that tourism cost has also been increasing significantly in every year. Simultaneously, travelling related taxes and fees are also resizing on a regular basis. Apart from this, in order to collect visa for travelling purpose in Canada, individuals belonging from developed economies need to expense comparatively more money than that of travelling in any other country. Moreover, it has been also identified that in order to travel to Canada, the travellers have to spend more than 65% of the total cost. Thus, it can be asserted that higher cost and greater hassle in tourism related activities factors have affected the tourism industry in Canada (The Canadian Chamber of Commerce, 2013). Lack of Marketing and Awareness In order to analyse the challenges faced by one of the leading international tourism destinations i.e. Canada, it has been determined that the nation has been lagging behind due to its lack of marketing investment on tourism sector. Accordingly, during the year 2011, the Canadian government had been estimated to invest $72 million on tourism development purpose. However, at the end of the year i.e. 2011, it had been perceived that the Canadian government had invested around 10% lesser than that of the budgeted amounts. From this incident, it has been witnessed that a lack of marketing and awareness has become one of the major challenges or causes behind the downfall in the tourism industry (The Canadian Chamber of Commerce, 2013). Reliance on Domestic Tourism On the contrary after the emergence of globalisation, it has been acknowledged that the tendency of tourism industry of Canada has changed by a considerable extent. During the last decade, it has found that Canadian travel and tourism industry has witnessed an increase in revenue from the industry by approximately 16%. This rise in revenue generation has inversely affected the travel and tourism industry in Canada. At the same time, it has been also observed that during the year 2012, only 19% global tourists’ had spent for tourism purpose whereas almost 81% Canadian travellers had spent in domestic travel. After evaluating this information, it can be evidently asserted that Canada’s travel and tourism industry has been relying on its domestic market which has affected its performances indirectly (Tourism Industry Association of Canada, 2013; Transat Chair in Tourism, 2012). Figure5: Reliance on Domestic Market over the Years in Case of Travel & Tourism Industry Source: (Transat Chair in Tourism, 2012) Measures To Be Adopted To Mitigate Challenge in the Context of Canada With reference to the inference made above, it can be stated that Canada has been one of the major tourism locations in the world. At present, the industry contributes around $72 million Dollars to the nation’s federal tax revenue which facilitates economic growth and it has become of the key drivers of private sector growth by creating job opportunities (Canadian Tourism Commission, 2014). However, it is noticed that global market of tourism is growing whereas the share of Canadian economy in it. Responsively, the position of Canada in the global platform is declining as the nation was recognised to be one of the top 10 nations in global tourism activities in 2002; however it slipped out even from the top 20 list during the year 2012. The major causes behind such decline have been ascertained. Thus, Canadian government is required to take necessary remedial measures in order to mitigate such challenges as tourism sector is one of the most important contributing factors in the overall economic development of country. Major strategies or remedies to be taken include: 1. Canadian tourism sector should increase their marketing efforts by substantially increasing their spending which will create more and more awareness to the people from all over the world about the appeal of Canada as an international tourism destination (Restoring Canadian Tourism, 2013) 2. Nations such as Canada is facing a serious problem of competitiveness in their cost structure which has led them to be one of the costlier countries to visit for the purpose of tourism. Thus, the government has to look after the matter and do the needful. 3. Generally, it is observed that tourists face problems related to visa which has detracted them from visiting the beautiful locations in Canada. Therefore, the government should reinvest the revenue they have collected each year as administration fees to the section of visa processing. 4. In the country, there are a number of prospective tourism destinations that are owned and operated by privately but at times it is recommended that rather than working individually they should work collaboratively with the government agencies and departments (The Canadian Chamber of Commerce, 2013). Conclusion From the foregoing discussion, it has been comprehended that globalisation has led to an increase in the interdependency between various countries. Tourism has emerged as a key driver related to the proliferation of gross domestic product (GDP). Globalisation has unlocked different avenues for revenue and employment generation by the countries with the ever-increasing rate of tourists’ arrival in prospective venues. With regard to the changing scenario in the world, it has been ascertained that there are various important facts that highlight the prospect of ever more growth in the global tourism industry. In this regard, it has been found that Canada plays a very important role and has been regarded over the years as one of the major tourist destinations in the world. The tourism industry in Canada facilitates the growth of small and medium term enterprises in the Canadian market which in turn enables to provide a significant platform to them for their sustainability. It has recognised that despite the rise in global tourists’ arrival in the past decade, Canada due to challenges such as higher cost, lack of marketing and awareness and over-reliance on domestic tourists have started to feel the heat. Thus, it is imperative that the government of the nation takes crucial measures to boost and promote the tourism sector of the nation in order to attain greater prominence and leverage the widespread benefits of globalisation related to international tourism. References Canadian Tourism Commission. (2014). Canadian Tourism Commission publishes 2013 Annual Report. Retrieved from http://en-corporate.canada.travel/content/news_release/2013-annual-report-helping-tourism-businesses-prosper Canadian Tourism Commission. (2014). Rendez-vous Canada 2014: Tourism businesses power Canada’s economic engine. Retrieved from http://en-corporate.canada.travel/content/news_release/rendez-vous-canada-2014-vancouver Costa, C. & Panyik, E. (2013). Trends in European tourism planning and organisation. United Kingdom: Channel View Publication. The Canadian Chamber of Commerce. (2013). Restoring Canadian Tourism. Retrieved from http://www.hotelassociation.ca/reports/news%20releases/Restoring%20Canadian%20Tourism;%20A%20Discussion%20Paper.pdf Tourism Industry Association of Canada. (2013). Gateway to Growth. Retrieved from http://tiac.travel/_Library/TIAC_Publications/2013_TIAC_Annual_Report_WEB_FINAL_EN.pdf Transat Chair in Tourism. (2012). Economic Challenges and Opportunities for Canadian Tourism. Retrieved from https://chairedetourisme.uqam.ca/upload/files/McKenzie%20%20-CCT%20EN.pdf Third World Network. (2014). Tourism, globalisation and sustainable development. Retrieved from http://www.twnside.org.sg/title/anita-cn.htm UNWTO. (2014). UNWTO Tourism Highlights. Retrieved from http://dtxtq4w60xqpw.cloudfront.net/sites/all/files/pdf/unwto_highlights14_en.pdf Read More