Future Trends Growth Destinations Tourism Essay
As traditional tourism destinations become increasingly developed and crowded, tourists, developers and tour operators are seeking new destinations that have the potential to offer uncluttered beaches and historic or cultural attractions, preferably at a low cost. Therefore, new tourism markets are constantly emerging.
The region commonly believed to have the most significant growth potential is Africa and the Middle East. The Gulf states of Dubai (United Arab Emirates) and Qatar, as well as Oman, are in the process of being developed into luxury destinations. In 2006, Qatar unveiled an ambitious plan to spend over US$15 billion on tourism development, including a new US$5 billion international airport for Doha to be built on reclaimed land one third the size of the city. The Qatar development includes eight new hotels graded four- and five-star, operated by major players such as Hilton, Shangri-La, Four Seasons, Marriott and Renaissance. There will also be two beach resorts, the Al Fareej resort, a family-oriented village with Arabian style chalets, and the Al Mafjar resort, an ultra-modern stylish luxury resort, built around a natural breakwater and lagoon. Qatar expects tourism numbers to more than double over the next six years, from around 400,000 tourists in 2006 to more than one million by 2010.
Dubai, the second largest of the United Arab Emirates, is also investing heavily in the tourism sector. The 272 hotels in Dubai in 2006 are due to increase by at least a further 120 properties over the following 15 years, including the 560-metre Dubai Tower, which will become the world’s tallest building on opening in 2010.
Another major project due to be completed in 2010is The World, a group of 200 artificial islands off the coast designed to look like a map of the world. Jordan plans to invest US$150 million in tourism infrastructure in the next few years, with a focus on developing regional and eco-tourism, including overnight stays with families and in small villages. Yemen is also planning to open its first tourist office in Europe to increase awareness of the country, which has a 2,500km coastline. Other areas of Africa and the Middle East that are expected to grow strongly include Egypt and Morocco, which are both ploughing significant sums into resort development, as well as newly emerging African destinations such as Cape Verde. In the longer term, countries that are currently politically unstable but which offer tremendous opportunities for tourism in the future include Iran, Iraq and Libya.
Balkan states, Asia and Latin America will become more popular
New tourism destinations in Eastern Europe will continue to gain popularity in the future, including the Balkan states of Serbia & Montenegro, Croatia and Slovenia. These offer relatively cheap holidays, attractive scenery, beaches and spa facilities, and will benefit from increased flights by low-cost carriers.
Within Asia, many destinations are expected to see strong growth in the future, providing that Asian bird flu does not become a more serious issue. These include countries such as Vietnam and China. Macao is likely to become an increasingly popular tourism destination for Asian tourists, due to falling prices of travel to Macao from China, and the growth of its gambling industry, which is a key draw for Chinese tourists.
Latin America also holds good growth potential for tourism. Some tour operators have cited Brazil as being a destination to watch in 2010. British tour operator Thomson intends to launch direct charters to the country for winter 2009/2010. The company will promote Brazil’s cheapness as a destination, as well as its beaches and vibrant culture. Venezuela is another country that is expected to see strong growth as a destination over the forecast period, due to a return to political and economic stability.
Space travel becomes possibility
As people seek increasingly more thrilling holiday experiences, it is possible that in the long term holidays in space will become a reality. In 2008, the California-based AERA Corporation announced that it had become the first commercial space travel provider, and intends to launch its first scheduled flight in 2010. This will include
a full service package that begins with astronaut training and includes a sub-orbital journey.
Types of Attraction
Both casinos and theme parks are expected to see strong growth in the future, as gambling regulations are relaxed and capacity is expanded. In the UK, new gambling laws could lead to the development of casinos, especially in seaside towns such as Blackpool, which lend themselves well to the sector. International casino operators have already earmarked around ?5 billion to invest in the UK if the reform plans are approved. For example, it was announced in November 2008 that Hilton was considering opening a Las Vegas style casino in Blackpool, worth ?200 million.
Large theme parks, such as those operated by Disney, are set to expand, especially in Asia, following their success in Japan. The new Disney park in Hong Kong, scheduled to open in September 2010, is expected to draw in more than 10 million visitors annually. Furthermore, Euro Disney SCA, operator of Disneyland Resort Paris, is planning to invest a‚¬240 million in new attractions over the 2010-2011 period.
Company Developments
Further consolidation likely
Mergers and acquisitions will continue to be a feature of the travel and tourism industry in the future, as the industry becomes increasingly competitive and margins squeezed. Large companies such as Cendant will become increasingly powerful as they continue to develop in all areas of tourism, and are likely to invest particularly in online travel service providers, which will give them more control over the sale of their inventory. Other hotel operators may also take this route, as they find themselves competing more and more with online travel companies.
While sectors such as car rental and cruising have already reached a high level of consolidation, the airline industry remains fragmented due to the fact that it is still highly regulated. A relaxation of open skies regulations may lead to more cross-border mergers of the type approved recently between Air France and KLM, and in the longer term may include US airlines. However, complete deregulation is thought to be a long way off. In the immediate future, the only acquisitions that are likely to take place in the airline industry will be between low cost
airlines within national markets, as this segment becomes more competitive and the bigger players more powerful.
The European tour operating industry is already concentrated in the hands of a few large players. As these companies continue to experience difficult market conditions, they are likely to limit activity in the short term to a few key strategic acquisitions, or even dispose of businesses that are not core to their strategies and
positioning. However, the US industry is still very fragmented and likely to see further acquisitions, such as
American Express’s 2008 purchase of Rosen bluth International.
Low-cost airlines expansion to continue
There have already been signs recently of a shake-out in the no-frills airline industry, with several smaller budget airlines going bankrupt and several mergers and acquisitions taking place in the UK market. Similar developments are expected to occur in Germany, where the low-cost segment is currently burgeoning following the establishment of a number of budget airlines during 2007-2009. With regard to the major airlines, it is possible that one or two of the large US carriers may fold completely in the future. Players such as United Airlines and Delta Air Lines are already suffering serious financial problems, and it is likely that those operating on a low-cost model, such as Southwest Airlines, will be the winners.
In Europe, the largest low-cost airlines, such as Ryanair and EasyJet, are expected to expand further. In early 2010, Ryanair announced that it had ordered 70 Boeing 737s and taken an option on a further 70. The aircraft are due for delivery between 2008 and 2012, and are in addition to 100 new 737s to be delivered by the end of 2010. Ryanair expects to see passenger carryings double from the 34 million anticipated in 2009-2010 to more than 70 million when all the aircraft have been delivered, making it the largest airline in Europe by 2011-2012.
Further globalisation expected
Travel and tourism companies will continue to expand into countries with growth potential. The focus for many at present is China, which offers opportunities for both leisure and business travel due to its strong economy and increasingly liberal attitude to overseas investment.
Many hotel groups, in particular, have stated their intention to develop in China and other areas of Asia-Pacific, such as South Korea, Thailand, Vietnam and India. For example, Accor is currently focusing on expanding its premium Sofitel brand in the Asia-Pacific region, from 29 hotels in 2008 to 45 hotels in 12 countries by 2010 establishing Sofitel as the largest five-star hotel brand in the region. One key hotel will be the Sofitel Wanda Beijing, due to open in 2010, with associated office towers, major retail centre, restaurants, entertainment complexes and residential apartments. Accor intends to increase its overall hotel presence in China from 24 in
2008 to 40 hotels by 2009.
Cendant too agreed with China’s Tian Rui Hotel Corp to develop over 55 Super 8 hotels during the next five years, and also signed an affiliation agreement with leading Chinese vacation ownership operator China Anda, to affiliate its first group of RCI 10 timeshare resorts in China. Cendant is also to develop its Days Inn brand in Russia, having signed an agreement in 2008 with Hermitage Hospitality to develop 45 Days Inn hotels in the next five years in Russia and the countries of the former Soviet Union. Cendant’s acquisition of the RamadaInternational brand in December 2008 is also likely to expand Cendant’s franchising globally, with hotels in
Europe, the Middle East, Africa, Asia-Pacific, Australasia and Latin America.
Starwood Hotels & Resorts Worldwide announced that it would open more than 70 new hotels in 2010 and 2009, almost half of which would be outside the US, in destinations such as Morocco, the Maldives, China and Chile.
Technological developments
Growth in online booking
The trend towards individual booking of holidays by Internet, or dynamic packaging, is set to continue as more and more people become Internet-savvy, and seek more control over pricing and planning of both business and leisure travel. This will lead to the inevitable further decline of traditional travel agencies. Tour operators will respond to these trends by introducing more flexible holiday packages, allowing, for example, clients to combine low-cost flights with premium hotels, and creating more targeted packages, such as those aimed at over-50s, sporting or activity holidays. Hotel groups and airlines will respond by improving their websites, and
especially trying to match the fares offered by online agencies or offering extra services.
The proportion of travel retail sales made over the Internet is expected to grow strongly in most of the markets under review. The Netherlands is predicted to become the most developed market in terms of the percentage of travel service sales generated online. Internet sales are forecast to represent 47% of total sales by 2010, with a similar level achieved in the US.
At the other end of the scale, Internet sales will remain negligible in many undeveloped markets by 2010, including Turkey, Thailand, Egypt and Chile. Internet booking is also expected to be slow to take off in some major markets such as Italy and Spain, partly due to the low level of Internet use in these countries in general, and also due to the preference for paying for holidays in instalments rather than up front.
In South Africa also, online sales will remain negligible due to the low level of Internet access among the population. Unless the authorities liberalise the telecommunications market, online retail in South Africa is expected to remain at very low levels because the cost of Internet usage is unaffordable for an average South African household.
Technological services
Technology in the travel and tourism industry will continue to improve in order to increase convenience, cut airport waiting times and encourage business travel. This includes automated check-in, and check-in via the Internet, the continuing development of high-speed Internet services in hotels and on aircraft, and satellite navigation services in cars.
