Changing face of travel

Tourism concepts consumer

Tourism demand z More affluent, measured in disposable
trends income per capita, ownership of property Tourism
Concepts

and household facilities.

Dr. Nimit Chowdhary z Better educated and more interested in
Professor continuing education.
Indian Institute of Tourism and Travel z More healthy and interested in more
Management active pursuits.
z Older, with a particular shift in the
number and attitudes of the more active Indian
Institute of
over-fifties. Tourism and
Travel
Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 2

Changing face of travel Changing face of travel

consumer consumer
z More leisured in terms of hours of work z More computer literate with ownership of
Tourism Tourism
and holiday entitlement, having regard Concepts
personal computers (PCs) and access to Concepts

also to early retirement. internet growing exponentially.

z More traveled, for work and business as z More heterogeneous and individualistic
well as for holidays and leisure, in their demands and expectations.
increasing numbers with frequent z More culturally diverse in terms of ethnic
international travel experience. origin as well as their range of lifestyle
z More exposed to the media and Indian
choices. Indian
Institute of Institute of
information generally Tourism and
Travel
Tourism and
Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 3 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 4

Determinants of tourism
demand Economic factors
z Economic factors and comparative prices z 30 major countries of origin accounted
Tourism Tourism
z Demographic, including education Concepts for over 90% of world traveling spending Concepts

z Geographic z Top 10 alone account for 2/3rd of

z Socio-cultural attitudes to tourism spending and nights.
z Mobility z These are countries with highest per
z Government/ regulatory capita income.
z Media communications z Developed and growing economies also
z Information and communication Indian sustain business travel and trips (more Indian
Institute of Institute of
technology Tourism and
Travel
than 50%) Tourism and
Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 5 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 6

1
Economic factors Economic factors
z Relationship between changes in real z Comparative prices are a major
Tourism Tourism
disposable incomes and volume of trips Concepts determinant of volume of demand. Concepts

and expenditure away from home. z Price is cost to customers in terms of

z Increase in real incomes since 1990s money, time and effort.
has led to increase in expenditure on z Spending will depend upon comparative
travel and tourism (income elasticity) . price and disposable income of tourist.
z China and India are fast emerging as z East Asia, China and BRIC are therefore
tourism markets and suppliers owing to Indian increasingly attracting more tourists. Indian
Institute of Institute of
rapid economic growth Tourism and Tourism and
Travel Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 7 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 8

Demographic factors Demographic factors

z Developed world- one- and two- person z Rise in life expectancy
Tourism Tourism
household, late marriages, with fewer Concepts
z Greater proportion of older population Concepts

children z New demand for leisure and travel

z Divorce, single parent,
z Health care and nursing
z Small households means more households
z Quality of life
z Affluent old age people (26% Europeans are
over 50 years of age) z Structural shifts in communities
z Developing world- greater women z Development of new towns and cities
involvement, two-income households, Indian z Education- higher the education, more Indian
more disposable incomes Institute of
Tourism and
the amount of travel
Institute of
Tourism and
Travel Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 9 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 10

Geographic factors Social factors

z Climatic and scenic attractions z Increased no. of women in work force
Tourism Tourism
z Willingness and affordability to demand Concepts
z Working women and resulting two-
Concepts

destination of choice. income households

z Urban areas generate more tourism
compared to rural areas- for multiple z Quality of life
reasons z International mobility leads to more
z Geographical pockets of heritage, culture sophisticated consumer tastes
and arts offer tourism products z Greater complexity of life
z Eco-tourism, and ecological constructs Indian
Institute of
Indian
Institute of

as tourism products Tourism and

Travel
z Increased competition in life Tourism and
Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 11 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 12

2
Changing attitudes Changing attitudes
z Attitudes towards tourism are a subset of Examples of attitudes in America and
Tourism Tourism
wider view on the desired quality of life and Concepts Europe Concepts

how to achieve it. z Longer holiday entitlement in twentieth

Examples of attitudes in America and century has lead to consumers taking
Europe several holidays in a year
z Therapeutic value in lying on the beech z Scandinavia & N. Europe- people having a
and sun second home
z holidays are ‘rights’ and necessities for Indian z That holiday products should be Indian
Institute of Institute of
relieving stress rather than luxuries Tourism and
Travel
environmentally sustainable Tourism and
Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 13 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 14

Government/ regulatory
Personal mobility factor framework
z Superior roads and infrastructure All governments impose laws and
Tourism Tourism
z More people having cars and four Concepts
regulations to safeguard health and Concepts

wheelers safety of their populations and to control

z Most hotels, nearly all self-catering the use of land and buildings; most
establishments, restaurants, and great impose penalties for non-compliance
majority of visitor attractions and
entertainment in America and Europe are
dependent on travelers by car
z Congestion has increased and Indian
Institute of
Indian
Institute of
governments are favoring public transport Tourism and
Travel
Tourism and
Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 15 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 16

Government/ regulatory Government/ regulatory

framework framework
Governments intervene: Politico-legal changes:
Tourism Tourism
Concepts Concepts
z To ensure fair competition between z Governments creating infrastructure for
supplier- check monopolistic tendencies services (led by EU)
z To ensure that customers have choices z Internationalization
and rights against suppliers
z Governments consciously (rather
z To influence such market patterns as
aggressively) promoting tourism
governments control- timing of holiday
z To ensure that proposed projects do not Indian
Institute of
Indian
Institute of
Tourism and Tourism and
damage the environment Travel Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 17 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 18

3
Government/ regulatory Government/ regulatory
framework framework
Transport regulation Tour operations and hotels
Tourism Tourism
z Air transport Concepts
z Regulatory framework Concepts

z What routes can be flown z Licensing of tour operators and hotels

z Which Airline can fly, number of flights, slots
available at airports, the capacity of seats on routes, z Licensing for bar
prices that can be charged z Example of Bhutan
z Bi-lateral agreements between countries z Taxation
z Asian highway project z Control and grading of hotels
z Train and rail link with Pakistan Indian
Institute of
Indian
Institute of
Tourism and Tourism and
z Rights to sell ‘duty free’ items Travel
Management
Travel
Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 19 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 20

Government/ regulatory Information and

framework communication technology
z Regulation for the environment z Increasing promotion and distribution of
Tourism Tourism

z CRS Concepts products on www. Concepts

z Multimedia information provision in

customers’ homes enhancing
promotional possibilities
z Switch to direct marketing, reducing the
traditional role of travel intermediaries
z Customer database development and
Indian
Institute of
its role in marketing information Indian
Institute of
Tourism and
Travel
systems Tourism and
Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 21 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 22

Information and
communication technology Travel propensity
z Power to develop customized products Low propensity High propensity
Tourism Tourism
for consumers Concepts characteristics characteristics Concepts

z Relationship marketing with repeat z Low income per z High income per
household household
buyers and other targeted customers/
z Single parent z Two parents
stakeholders household (employed) household
z Creation of virtual enterprises- “Make my
z Rural-community z Large-city dweller
trip”, networks of micro-businesses dweller
z Major opportunities for access to Indian z Educated to z Degree or other Indian
Institute of Institute of
international markets at low costs Tourism and minimum age higher education Tourism and
Travel Travel
Management level Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 23 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 24

4
Travel propensity Trendz… Tourism control intelligence

Low propensity High propensity z The cruise industry will experience explosive
Tourism Tourism
characteristics characteristics Concepts growth. Concepts

z Older people (80+)
z No access to private
transport
z Three or less weeks’
paid holiday
z No access to internet
z Young people and
‘empty nesters’
z Two or more cars in
the household
z Six or more weeks’
paid holiday
z Access at work and
z An older, better-educated population in Europe
and North America will increasingly seek
ecotourism and cultural travel products.
z "Slow cities" and "slow food" trends will expand
from Italy to much of Europe.
z London, New York, Sydney and Dubai will be
Indian
the leading tourism poles through the end of Indian

at home
Institute of
Tourism and
the decade. Institute of
Tourism and
Travel Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 25 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 26

Trendz… Tourism control intelligence Trendz… Tourism control intelligence

z Non-residents will pay significantly higher entry z Antarctica will become an ecotourism tourism
fees to tourist attractions than those paid by Tourism
Concepts
destination complete with hotels, restaurants Tourism
Concepts

locals (Venice, Petra, Bath, etc.). and full-service tours.

z Tourism Satellite Accounting will be adopted by z Shopping, from mega-malls to folk craft
centers, will increasingly become a critical
several developing countries but ignored by the feature for tourism destinations.
U.S., China, Japan, Russia and most Western
z Rides on private spacecraft will become a
European countries.
recreational outing for the wealthy.
z Prayer rooms and compasses will be installed z Mega-resorts (Las Vegas, Orlando, Sun City,
on most passenger aircraft serving the Islamic etc.) will do what no one thought possible: get
Indian Indian
world. Institute of bigger. Institute of
Tourism and Tourism and
Travel Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 27 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 28

Trendz… Tourism control

Trendz… Tourism control intelligence
intelligence

z Cruise ships will sell condominiums, becoming z MGM Mirage will beat out rivals Hilton,
ocean-going resorts. Tourism
Concepts
Harrah`s and Bally`s to become the undisputed Tourism
Concepts

z In spite of organized international efforts to leader of the casino industry.

fight them, sex and drug focused tourism will z National economies in Cuba, Egypt, Spain and
flourish. Thailand will become dangerously dependent
z Airlines, travel agents and tour operators will on tourism.
ally themselves with financial institutions to z `Rave` tourists will travel further abroad in
offer consumer travel loans. search of the perfect party (BringItOn! Travel,
z Western tourists will shun countries with Like Hiptrips, Experienceibiza, etc.).
immense tourism potential but "rogue" leaders Indian Indian
(Zimbabwe, Libya, Iran, North Korea, etc.). Institute of
Tourism and
Institute of
Tourism and
Travel Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 29 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 30

5
Trendz… Tourism control intelligence
Trendz… Tourism control intelligence
Product and service trends

z Enormous infrastructure projects will z Hotel rooms, increasingly equipped as offices

significantly expand automobile accessible Tourism
Concepts
with full-size desks, computers and advanced Tourism
Concepts

tourism options (Channel Tunnel car lane, communications technologies, will minimize the
Bahrain-Qatar causeway, etc.). need for business centers.
z Expansion of Europe`s high-speed train
z China will be the first country to receive 100 network will eliminate short haul flights.
million international arrivals in a 12-month
z Hotel meeting and dining areas will be
period, sometime around 2018 - France will designed less formally in an attempt to attract
follow within 2-3 years. the casual business traveler.
Indian
z Small super-luxury boutique inns will take Indian
Institute of
Tourism and
market share from Four Seasons, Ritz Carlton Institute of
Tourism and
Travel
Management
and Fairmont. Travel
Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 31 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 32

Trendz… Tourism control intelligence Trendz… Tourism control intelligence

Product and service trends Product and service trends

z Hub airports will install capsule-cocoon hotels z "100% Satisfaction Guaranteed" will replace
in terminal facilities. Tourism
"Let the Buyer Beware". Tourism
Concepts Concepts
z Hotel and restaurant facilities will be designed z Growth in demand for home food delivery will
for an aging population with lower rise steps, outpace all other food service segments.
more handrails and wider doors.
z Travel guidebooks will become highly z An aging population and growing infatuation
specialized and more frequently consulted - with healthful living will bring a wave of
primarily on the web. European holistic spas and `health-tels` to
z The distinction between business and leisure North America and Asia.
hotels will erode as business clients seek z A new wave of budget conference & exhibition
fitness and entertainment activities and hotels will be built to meet the convention
Indian Indian
vacation guests demand advanced Institute of needs of cost conscious companies. Institute of
telecommunications IT. Tourism and
Travel
Tourism and
Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 33 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 34

Trendz… Tourism control intelligence Trendz… Tourism control intelligence

Product and service trends Product and service trends

z European and Japanese new-build hotels will z Credit card check-in/check-out, F&B vending
Tourism Tourism
be obliged to design larger guest rooms closer Concepts machines, self-cleaning bathrooms and self- Concepts

to North American standards. serve laundries will eliminate most human

z Restaurant groups will operate F&B outlets contact in budget hotels.
wherever people gather (Laundromat bars, z Luxury resorts that once shunned children will
espresso counters at service stations, etc.). welcome them with a expanded array of
z Center-city urban resorts will challenge sun, activities and tailored dining options.
sand & sea vacation villages in the leisure
market.
Indian Indian
Institute of Institute of
Tourism and Tourism and
Travel Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 35 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 36

6
Trendz… Tourism control intelligence Trendz… Tourism control intelligence
Investment and finance trends Investment and finance trends

z Hotel real estate assets will be increasingly z Following the big American sell off of the 1980s
concentrated in the portfolios of fewer Tourism
Concepts and 1990s, hotel companies will be repatriated Tourism
Concepts
investors, particularly private equity funds. to the U.S. (Westin, Ramada, Renaissance,
z Intense competition for hotel operating etc.).
contracts will push management fees as low as
1% of gross, 5% of IBFC and $4 per z Airline alliances of the 20th century will evolve
reservation. into acquisitions as weaker players struggle to
survive (Air France-KLM, American-TWA, etc.).
z Airlines will continue to rack up significant
losses as they struggle to deal with high fuel z By the end of the decade, a score of
costs, new security requirements, an onslaught management companies will control the world
Indian Indian
of no-frills carriers and brutal competition from Institute of inventory of branded hotel rooms. Institute of
Tourism and Tourism and
`open skies` agreements. Travel Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 37 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 38

Trendz… Tourism control intelligence Trendz… Tourism control intelligence

Investment and finance trends Investment and finance trends

z Hotel feasibility studies will become an z Franchising will experience explosive growth
unprofitable commodity for hospitality Tourism
Concepts
as hotel companies strategically reposition to Tourism
Concepts
consulting firms. get out of the hotel business and into the
z Hotel operating companies will sell their business of hotels (i.e. Radisson, Choice,
remaining equity in real estate to free up Cendant, Holiday Inn, etc.).
capital for expansion of management
contracts. z Fewer new-build hotels in Europe and North
z Per room hotel acquisitions in Europe will America, more existing property renovations.
reach stratospheric new records (i.e. Savoy
Group).
Indian Indian
Institute of Institute of
Tourism and Tourism and
Travel Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 39 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 40

Trendz… Tourism control intelligence Trendz… Tourism control intelligence

Human resources trends Human resources trends

z Critical shortages of skilled staff will encourage z Tourism and hotel management schools will
hospitality corporations to develop or outsource Tourism move out of the classroom and out of the library, Tourism
Concepts Concepts
onto the web and into the field.
proprietary training centers.
z Powerful unions, a shorter workweek and
z The introduction of new technologies in the reluctance to taper social benefits will maintain
upscale tourism industry will not replace the Europe's standing as the world's most expensive
human element in service delivery - to the tourism destination.
contrary, it will gain importance. z Middle Eastern countries enforcing employment
quotas for nationals will experience reduced
z Unionized hotel and restaurant workforces will productivity and higher labor costs.
trade scheduling and task flexibility for job z Airline employees will accept significant wage
Indian Indian
security and quality-of-life benefits. Institute of and benefit cuts to prevent their employers from Institute of
Tourism and
Travel
going bankrupt. Tourism and
Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 41 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 42

7
Trendz… Tourism control intelligence Trendz… Tourism control intelligence
Marketing trends Marketing trends

z The Internet will become the dominant z Data warehousing and data mining will provide
distribution channel for all travel and tourism Tourism one-to-one and relationship-marketing Tourism
Concepts Concepts
products eliminating most intermediaries. opportunities never imagined.
z Understanding customers as people - their z Print media advertising will move onto the
likes, dislikes, habits, interests and hobbies - Web.
will become critical to establishing competitive z Increasingly value-conscious customers will
advantage in hospitality marketing. demand more and better product information.
z Customer retention will replace customer z Consumers will increasingly expect to
acquisition as travel agencies` strategic negotiate hotel and airline rates.
objective. z Cross-sector strategic alliances between food
z Homogenization of airline services will render service, lodging, travel and entertainment
Indian Indian
them commodities while lodging products will Institute of companies will prove to be effective marketing Institute of
continue to focus on differentiation. Tourism and
Travel formats. Tourism and
Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 43 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 44

Trendz… Tourism control intelligence Trendz… Tourism control intelligence

Marketing trends Marketing trends

z Better understanding of psychographic z As marketers increasingly distinguish between

consumer behavior will lead to more precise Tourism
Concepts loyalty and satisfaction, frequent use programs Tourism
Concepts
identification of customer segments and sub- will become more elaborate.
segments.
z Hotel companies` PMS standardization will
z Hotel revenue management systems will
result in the transfer of database and data
become more sophisticated and be relocated
from the reservations department to sales & warehousing responsibilities to CRS for greater
marketing. operational and marketing efficiency.
z Revenue management tactics will be applied to z Market share and product profitability will be
pricing in restaurants, amusement parks, golf replaced by customer share and customer
Indian Indian
courses, tour buses, cinemas, convention Institute of profitability as measures of marketing Institute of
Tourism and Tourism and
centers and sports stadiums. Travel effectiveness in the hotel industry. Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 45 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 46

Trendz… Tourism control intelligence Trendz… Tourism control intelligence

Safety and security trends Safety and security trends

z Consumers will systematically consult travel z Guest room safes will be enlarged to
health sites before checking ticket or room Tourism accommodate standard laptop computers. Tourism
Concepts Concepts

availability. z International hotel companies will refuse

management contracts and franchises for
z Security concerns in the Holy Land encourage hotels without in-room sprinkler systems.
religious tourists to make pilgrimages to sites in z Terrorism fears will keep Israel, Indonesia, Iraq
Ethiopia, Cuba, Greece, Italy and Morocco. and India off the mainstream tourist circuit for
the foreseeable future.
z Crime and terrorism will render some traditional
z Advanced encryption technology will make on-
tourist destinations unsellable. line payment genuinely secure.
z Customer credit cards will replace coded key Indian
z To improve energy and water conservation, Indian
cards in most hotels. Institute of
Tourism and
hotels will install usage meters and levy Institute of
Tourism and
Travel charges for consumption. Travel
Management Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 47 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 48