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Given that tourism is very fragile to terrorism, and that it has come to dominate or perhaps displace, economy of most courtiers, it is imperative to take a closer look at the interrelation between tourism terrorism to lessen the negative impacts. As indicated in the introduction, the first approach to the studies into relationship between tourism and security incidents focus on diverse but interrelated topics ranging from the nature of such relationship (including types, causes, targets, motives and so forth) to the impact of terrorism on the tourism demands. The overarching objective of this chapter is to review studies with such approach which emerged in the beginning of the 1990s.

The chapter begins with a general discussion and overview of the direct and indirect importance of tourism to the national and global economies and proceeds to discuss the susceptibility of tourism industry to rampant crisis. Those terrorism concepts which relates to tourism industry are briefly reviewed. As contribution to literature, a time series analysis approach with yearly aggregated data is presented to show how and to what extent terrorists have targeted tourism since 1968. The rational and motives behind terrorists attack on tourism destination is a crucial area which seeks logically examine relationship between terrorism and tourism. The next section devoted to these significant discussions. Then it would turn to next area of studies or the impact of terrorism as a tourism crisis on the tourism industry. For this purpose the extant research on the impact of terrorism on the tourism industry in several countries will be reviewed. It also considers various determinants of terrorism acts on the tourism industry. Last but not least, it explores the theories and components of image and perception management. It is also imperative to clarify the definitions of a few repeatedly used terms that there is potential for confusion among them. This chapter also attempt to offer definition and develop empirically derived concept.

Importance

Despite recent crisis, tourism represent, one of the fastest growing sectors in the world economy. In 1960 the whole tourist arrivals were around 70 million while it rocketed to some 700 million in 2003. According to World Travel and Tourism Council, out of overall world exports, tourism industry is account for 12.2% and provides 8.3% of total jobs (WTTC, 2007: 6). These figures represent direct economic impact of the industry while the indirect impacts estimated to be much larger. The indirect impacts are enormous. For instance; it plays an important role in the development of new cities, societies and provides them with necessary infrastructure and superstructure. What is more, tourism helps the protection of environment by stimulating the creation of national parks for wild life as well as the conservation and preservation of beaches and marine life as a part of tourist products. From cultural point of view, it offers more opportunities for the restoration of old monuments. It also encourages small industries, souvenirs, handmade art and craft; it improves the standard of living in many societies. Moreover, the tourist spending in the tourist establishment (hotels, restaurants, and transportation) doesn’t go totally to them. These establishments need to purchase goods and services from other sectors with local economy (services of builders, accountants, food, and beverage suppliers). Bale (1998) argues that tourism makes much contribution to employment by differentiating between its impact on direct and indirect employments.

“The contribution of tourism and travel to both industrialized and developing countries is now so great that any downturns in the level of activity in the industry are a cause of concern. The repercussions extend beyond activities directly associated with tourism, notably airlines, hotels and catering, to sectors that supply intermediate or final goods that are purchased by firms and employees in the industry, so that all sectors of the economy are affected to a greater or lesser extent.” Adam Blake and M. Thea Sinclair, “Tourism Crisis Management: adjusting to a temporary downturn,”Sixth Annual Conference on Global Economic Analysis, 2002, p. 1.

Tourism is important not only to developed nations but to many less developed ones, whose chief resources often come from their visitor attractions. Since no other substitute major natural resources, such as oil or heavy industry is available in such countries, they are heavily reliant on international tourism to generate national income. Although the lack of the necessary infrastructure and communication facilities are often proved to be an obstacle to attract a considerable number of tourists, some less developed countries demonstrated considerable success in attraction of tourists (Harrison 2001). In recent years, tourism has been focus of attentions for its potential to help aˆZto the reduction of poverty. UNWTO statistics reveals the growing strength of the aˆZtourism industry for developing countries. International tourism receipts for aˆZdeveloping countries accounted for a record number of 203 billion US dollar in 1995. According to the UNWTO, “tourism is one of the major export sectors of poor countries and a leading source of foreign exchange in 46 of the 49 Least Developed Countries (LDCs)”. (UNWTO 2007: p 38)

Terrorism background and definition

Terrorism phenomena across the world is traceable to centuries ago when Jewish patriots, begun to challenge the Roman sovereignty in holy lands (Poland, 1988). In our times it dates back to the latter half of the twentieth century when terrorist attacks came to occupy a central place to in news headlines and it was in 1960s and 1970s that grabbed the attention of the people from all over the world. It was for the first time in world history that so few people managed to put into trouble so many peoples in a quick and effective manner (Sacks, 2004). The attacks against the US on 11th September 2001, and the post-9/11 attacks, including the bombings in Bali, Jakarta, Casablanca, Mombasa, Madrid, Saudi Arabia, Egypt, London, India and other places are prime examples to this. The terrorism attacks have been of importance to tourism industry as the tourism destination turn out to a prime target of terrorist attacks.

Despite the omnipresence of terrorism attacks in the world today, there has been little consensus among scholars of terrorism studies over the concept. There are several reasons why terrorism is difficult to define (Cronin 2002). Firstly, labelling an action as terrorism or a group as terrorist is hardly free from ideological or political partiality (Moxon-Browne, 1994). In addition, most definitions are very flawed. Over time particularly when they come to power, the terrorism groups may recognized as a legitimate government. A prime example is Nelson Mandela and the African National Congress in South Africa. Another source of ambiguity in the definition lay in differing perception of what terrorism as it means different things to different governments and different scholars.

To better define the terrorism it is important to set apart terrorism from crime-related acts. Tarlow (2001) lists the differences between acts of crimes and terrorism. He argued that dealing with criminal acts requires well trained police forces while terrorism is more war like in nature which can not cope with police actions alone. Rather it needs cooperation between all stakeholders in question. In addition, the goals of terrorist are destruction through victimization and seek publicity and mass economic destructions with added bonus of loss of life.

Table 1.1 Key Difference between Acts of Tourism Crime and Terrorism
Crime
Terrorism
Goal

Usually economic or social gain

To gain publicity and sometimes sympathy for a cause.

Usual type of victim

Person may be known to the perpetrator or selected because he/she may yield economic gain

Killing is random and appears to be more in line with a stochastic model. Numbers may or may not be important

Defenses in use

Often reactive, reports taken

Some pro-active devices such as radar detectors

Political ideology

Usually none

Robin Hood model

Publicity

Usually local and rarely makes the international news

Almost always is broadcast around the world

Most common forms in tourism industry are:

Crimes of distraction

Robbery

Sexual Assault

Domestic terrorism

International terrorism

Bombings

Potential for bio-chemical warfare

Statistical accuracy

Often very low, in many cases the travel and tourism industry does everything possible to hide the information

Almost impossible to hide. Numbers are reported with great accuracy and repeated often

Length of negative effects on the local tourism industry

In most cases, it is short term

In most cases, it is long term unless replaced by new positive image

Source: Tarlow (2001: 134-135)

Since the extent to which terrorism challenges governments and threatens civilian populations differs considerably, it is possible to constitute a typology based on which we can compare different types of terrorism. One approach is to differentiate between domestic restricted to the borders of one country and international consist of the citizens of more than one country terrorism. However, this distinction is proved to be perplexing in practice as most terrorist groups have links to abroad. (Chalk 1996) A more elaborate typology categorizes groups in terms of their primary motivations. Based upon such criteria, Peters (2002) classified terrorists into two broad categories: the practical terrorist and the apocalyp­tic terrorist. The demand of practical terrorists is restricted to recreation of a state and society without destruction of the whole society, what its followers have in mind is to eradicate what they see as a political evil. A prime example of such terrorism is anti-abortion terrorists in United State. Apocalyptic terrorists are very different. Their ultimate goal is to destroy completely the current worlds and build up a new order from the outset. Table 1.2 summarizes the main feature of each approach.

Table 1.2 Differences between Practical and Apocalyptic Terrorists

Practical Terrorist

Apocalyptic Terrorist

Mental state

Hopes to change a policy through violence

Victim of self-rage and anger

Time frame for success

This world oriented

Next world oriented

Attitude toward religion

Tends toward secularization

Tends toward religious mystical experiences

Suicide

Rarely suicidal, not a key goal

Highly suicidal; suicide is a

means to a greater end

Goal

Recreation of state or policy

Annihilation of the state, or people

Willingness to use WMDs

Limited use of chemical

Biological or nuclear

Value of human life

Low

Nonexistent

Source: Peters (2002) p.86

Regardless of these ambiguities, it is imperative to offer a working definition. For the purposes of this research, the terrorism defined as “the calculated threat or use of violence designed to create an overwhelming fear in a larger target population, perpetuated by individuals, sub-national groups, or state actors to attain political, social, or economic objectives.” (Alexander, 2002) take the original article

http://www.allacademic.com/meta/p_mla_apa_research_citation/0/9/8/4/7/pages98470/p98470-3.php (GETTING IT RIGHT: Understanding Effective Counter-Terrorism Strategies)

The records of terrorism attacks on tourism targets

Tourism and terrorism has always been inevitably interwoven. Over the last 30 years tourist industry have been key targets for terrorists’ attacks. The terrorists believed that they have been very successful in accomplishing their goals through terrorism attacks to tourism destinations. As international terrorism augmented by September 11, 2001 attacks on US targets by al Qaida, its inevitable effects on tourism became the subject of serious concern (Sabasteanski, 2005). Paraskevas and Arendell’s (2007) list of pos-9/11 truism destinations and tourist targets attacked by terrorists up to September 2006 include more than 18 incidents. As such, Mitroff (2005) is right to state that “it is no longer a question of ‘if’ terrorists will strike but rather a question of ‘when,’ ‘how’ and ‘how prepared’ the destination is to deal with them.” The records of terrorist incident on the tourism industry between 01/01/1968 and 07/20/2007 indicate that tourists have been target of 261 out of 33817 terrorist accidents. (Figure 1) This accidents account for 676 tourists’ loss of lives and 1875 injury (Figure 2 and 3).

Figure1.1 International Terrorism, 1968-2007, Number of Incidents

Source: US Department of State (various years) and RAND series

Figure1.2 International Terrorism, 1968-2007, Number of Deaths

Source: US Department of State (various years) and RAND series

Figure1.3 International Terrorism, 1968-2007, Number of Injuries

Source: US Department of State (various years) and RAND series

The targeted list of terrorist attacks varies. The 1960s and 1970s was the time of plane hijackings. Consequently, the terrorist targeted the tourism destination initially through plane hijackings in the time. In the 1960s, hijackings were often from the U.S. to Cuba with no intention to harm pas­sengers. However, in the 1970s, the purpose of terrorists’ actions was the loss of life plus damage to the property. Thus we witnessed the more severe actions from them. During the 1970s, the Munich Olympic Games became the focus of one of the most notorious terrorist attacks and set a new standard for terrorism at major world events. In the consequent years, the targeted list encompassed a variety of sites including, airlines, cruise ships, buses, restaurants and cafes, events and festivals, or sporting or cultural institutions, wherever people get together for leisure or any other purpose. In the beginning of 90s, a significant number of terrorists’ incidents occurred at tourist destinations, while in the recent years we witnessed a shift in the targets of terrorism accidents (Mansfeld and Pizam, 2006). (Figure 4)

Figure1.4 International Terrorism, 1968-2007, Incidents by Targets, Compare Tourists to other Targets

Source: US Department of State (various years) and RAND series

Terrorists’ motives

Tourism scholars argued that understanding terrorist motive may shed light on the relationship between terrorism and tourism (Sonmez, 1997). As such they have sought to explain the motive behind the terrorist activities regarding the tourism destination. To date, there is no consensus among scholars on their explanation of terrorist objectives, however almost all agree that terrorists have much to gain by targeting tourists. In their influential work on terrorism and tourism Sonmez, Apostolopoulos, and Tarlow (1999: 85) noted that tourism destinations offer ”a cost-effective instrument to deliver a broader message of ideological/political opposition”. They placed the terrorists’ objective in two main groups: strategic objectives and ideological objectives.

With respect to strategic objectives, they maintained that terrorists tend to accomplish some goals that can be found only in tourism destinations. These goals include mass casualties, mass publicity and great economic damage. As discussed earlier, tourism is lucrative business interconnected with several other industries; thus an attack on the tourism industry would affect considerably a number of secondary industries as well. What is more, tourism officials have often avoided taking tough steps to stop terrorism because such measures often result in frightening the potential customers. As such the tourism destinations have seen as an easy target for terrorism attacks. Tourism destinations also are visited by a regular flow of new people, thus terrorists are hardly suspected. In other words, terrorists can easily disguise their identity in the tourism destinations. Tourism industry is also a sensitive area to media especially when nationals of other countries are engaged it will receive massive coverage from international media and at the same time it bypass their government’s censorship. (Weimann and Winn 1994: 143)

The ideological objectives are more complex ones encompassing clashing values, cultures, or socioeconomic levels. Such motives push the terrorists to target the tourists for their symbolic value as proxy of larger group or apparently their governments. In his discussion of terrorism in Egypt, Aziz (1995) put into question a widely accepted notion that Islam is simply against foreign tourists. According to Aziz, tourists differs from and locals by many cultural and social gaps. Following Richter’s he argue that since travel styles can be representative of ideological values, class behavior, and political culture of tourists and their countries, tourists may be targeted because of their tourism styles which may dem­onstrate conspicuous consumption (i.e., demonstration of money or credit cards; flashy photography equipment; expensive clothes, jewelry, and luggage). The clash of cultures and values between locals and travelers can also account for motives. Certain tourist behaviors (i.e., consumption of pork and alcohol; gambling; Western dress; codes of behavior incongruent with Islamic tradition) oppose to Islamic cultural values-are also suggested as a possible explanation for the Egyptians’ frus­tration (Aziz 1995). Wahab (1996) stated that sometimes terrorism “specifically targets tourism because it is seen as a movement of visitors representing a form of neo-colonialism or a threat to well-established societal norms, traditions, value-systems, and religious convictions”.

The impact of terrorist attack to tourism industry

“The impact of terrorism on a state’s economy may be enormous, leading to unemployment,

homelessness, deflation, crime and other economic and social ills” (Laurance, 2003:2)

Previous studies based on the accumulate evidence throughout the world shows that the impact of terrorists attacks on tourism industry, destination, the local community, the tourists are in the most cases negative and resulted in decline in tourism demands. Such incidents paralysed or severely impacted the local tourism industry as result of trip cancellation and the inclination of passengers of booking to safer alternative destinations. These events have resulted in major drops in tourism demand, for example we witnessed the loss of more than a million arrivals from the United States to Europe in 1986 down 23% from 1985 because of December 1985 Palestinian terrorists’ attacks in airports in Rome and Vienna and the 1986 hijacking of TWA flight. (Brady and Widdows, 1988: 8; Hurley, 1988; Conant et al, 1988)

The following is copied from: Effects of News Shock on Inbound Tourist Demand Volatility in Korea http://jtr.sagepub.com/cgi/reprint/44/4/457.pdf

Blake and Sinclair (2003) explored the effects of the September 11 terrorist attack in the United States using a computable general equilibrium model. In their study, they reported the percentage decreases in the number of visits during September 2001 compared to the previous 12 months were 34% for domestic and 23% for international travel. Baron analysed monthly tourism figures to measure the effect of terrorism on tourism in Israel, Spain, Egypt and turkey. For instance, the analysis indicated that ongoing terrorism cost Israel approximately 332000 visitors from North America between Spring of 1985 to the end of 1987, at a cost of around 54 million U.S. Dollars (??). Others have also reported reductions in tourist arrival and receipts in the periods following terrorist action in, for example, Israel (Pizam 1999), Egypt (Wahab, 1996) and Northern Ireland (Pizam, l999; Wall, 1996). In addition to quantifying the reduction in the number of visitors to destinations affected by terrorism, studies have also assessed the duration of this impact. Using newspaper reports of terrorism world-wide between 1985 and 1998 Pizam and Smith (2000), found that 79% of media reported terrorist incidents were associated with a significant decline in tourism, and that the effect lasted between one and six months. Enders and Sandler (1991) estimated that an average terrorist incident in Spain in the period between 1970 and 1988 resulted in a decrease of approximately 140,000 visitors. However, the decline did not start until three months after the incident, and took around two years for visitor numbers to stabilize at a le just below that prior to the incident. A somewhat longer delay was observed tourism to Greece and Italy, where it was between six and nine months after terrorist attack before tourism figures started to decrease (Enders et al., 1992). Pizam and Smith (2000) argue that observed time delays in the deterrent effect of terrorist action might be because travelers would usually forfeit the costs of the travel if they were to cancel at short notice.

In addition to the effects of terrorism on tourism over time, research has also examined whether the deterrent effect is limited just to the country targeted by the terrorists or whether it extends to other destinations. Enders et al., (1992) identified a generalized deterrent effect of terrorism in certain European countries on tourism throughout Continental Europe during the 1970s and 1980s. They also identified that terrorism in France did not specifically impact French tourism, but that it did contribute to lost revenues for continental Europe as a whole, suggesting that the deterrence was generalized to the whole continent. However, it is not clear why there was not any reduction in visitors to France. Similarly, Richter and Waugh (1936) state that tourism to Switzerland was adversely affected by terrorism in France, Italy and Austria.

The determinants of terrorist attacks to tourism industry

The scholars identified diverse variables determining the impacts of terrorism on the tourism industry and the ability of countries to recover quickly. However they failed to offer any integrated empirical or theoretical frameworks for the casual relationship between these variables. Still, almost all studies refer to ‘tourism demand drop’ as a proxy for tourism industry suffering. Santana (1997) developed a model, which bring together the psychological and demographic factors that tend to influence the attitude to international travel (or destination image) referred to as deterrence (or drop in demand) in the light of threat from terrorism. He identified the psychological factors as Thrill and Adventure Seeking (TAS), Experience Seeking (ES), attitude to international travel (AIT), risk perception of political hazards and risk perception of physical hazards. The socialization factors of age, gender and travel experience are included in the model as well.

Figure1.3 casual relationship among determinants of terrorists’ attacks to tourism industry

TAS

Gender

ES

Deterrence

Age

AIT

Political Hazards

Travel Experience

Physical Hazards

Source: Santana (1997), p. 457

To find out which certain acts of terrorism has more determining impact on tourism demand than others, Pizam and Smith (2000) identified a variety of characteristics of terrorism activities including frequencies, locations, severity and motives. They also took into account destination image and mass media as two important intervening which suppose to impact the tourism demand over the security incidents.

Elsewhere Pizam (1997) have maintained that the impact of terrorism attacks on tourism industry varys by its severity of the event and the frequency of occurrence. He noted that:

acts resulting in mass destruction of life and property followed by loss of life and bodily harm have the strongest effect on tourism demand. . . . Acts resulting in loss of property only have the lowest effect on tourism demand. . . . All else being equal, acts occurring more frequently will have a more intense, widespread and lengthy effect on tourism demand than those occurring less frequently (Pizam, 1997: 11).

Tarlow(2006) argues that in the last decades there does not seem to be a rela­tionship between a locale’s base population size and the act of terrorism. As such, ter­rorism has targeted both rural and urban settings (Mansfeld and Pizam, 2006:17). Discussing on risk evaluation, Walker and Page, (2003) has demonstrated the interrelationship between severity and frequency of incident on a graph. As they indicated there is a direct correlation between frequency of problems and its severity. As such the minor incidents happens more frequent than the severe ones like terrorism.

Figure 1.4 The Tourist Health and Safety Continuum: Severity and Frequency of Incidents

Source: Walker and Page, 2003, page 222

Image and Perception management

Terrorism attacks on tourism destination have not always left an enduring impact on the tourism industry. Yet, the comparative evidence show that soon after the event receives the international coverage, the information it conveys will be result in negative image among potential tourists and this in turn lead to cancelation their travel and /or choosing to book a more secure place. (Mansfeld and Pizam, 2005) Therefore, the host countries tend to take necessary measures to lessen the negative images by conveying correct, impartial and market oriented messages. Lepp and Gibson (2003) referred to four key authorities responsible for disseminating such information

aˆ? Security and risk information issued and communicated by governmental agencies in the generating markets (in the form of travel advisories);

aˆ? The global and local mass media;

aˆ? Governmental tourism organizations in the affected receiving destination; and

aˆ? The travel industry in the generating markets (Lepp and Gibson, 2003).

Since discussing on all aspects of the topic will be beyond of the scope of the research I only explore the destination image and the role of media.

4.6.1 The Concept of Image (Tourism Events thesis) pp 57

An image is a concept that is hard to understand. It has both vague and shifting meanings and used in a variety of contexts and disciplines, thereby creating different meanings. The definition for tourist destination image that is most commonly cited is that by Crompton

(1979, in Jenkins, 1999):

“aˆ¦the sum of beliefs, ideas and impressions that a person has of a

destination.” (p. 18)

Many authors have also defined tourism image of a destination as the mental portrayal of a destination (Alhemoud & Armstrong, 1996; Kotler, et al., 1993, in Erfurt et al., 2003).

The image of a destination is a crucial factor in a tourist’s destination choice process (Jenkins, 1999) and according to Mercer (1971, in Mossberg, 2000) the initial image formation stage is the most important phase in the buying process when selection a destination. Only the destinations the individual is aware of will be considered in the destination selection process and this awareness implies an image of the destination (Mossberg, 2000). Furthermore, according to Fakey and Crompton (1991) only destinations with positive images can be expected to prosper, while those with less favourable images may never achieve their fullest tourism potential.

Destination image

To make decision on where to go or choosing the one destination over another by potential travellers has long been of great significant to academics and tourist stakeholders. The existing literature suggested that destination choices are influenced and conditioned by both internal (such as images, perceptions, motives, attitudes, and beliefs) and external factors (i.e., time, destination attributes, perceived costs of tourism product, buyer characteristics, and benefits sought). Image among other factors received more attentions as a deciding factor in choosing on destination. Thus the scholars employed the concept of “destination image” to describe this determining factor. Bojanic (1991: p??) defined country destination image as “the impressions that a person or persons hold about a country in which they do not reside”. Similarly Crompton Crompton (1979: 18, in Jenkins, 1999) noted: destination image is “the sum of beliefs, ideas, and impressions that a person has of a destination”. Due to its importance, destination image has come to consider as a dependent variable in the consequent studies and the scholars attempted to identify the determinants that define, modify, and strengthen this construct. For instance, Hall and O’Sullivan (1996) identified three basic elements creating a destination image (a) Returning tourists via verbal reporting, (b) the role of Media in making image and (c) Overall policies of the host government.

The scholars are on consensus that the destinations with strong, positive images are more likely to be considered and chosen in the destination selection process. In contrast, they argue that the perceptions held by visitors about potential crisis in the tourist destination have significant influences upon the tourism demand. However, there exist little if any, clearly defined conceptual base for destination image studies, especially the ones investigating causality between destination image and negative events. Seddighi and his colleagues (2000) developed a framework for the examination of perceived impact of political instability on tourism. As illustrated in figure 1.5 a synthesis of information flow which comes from the above mentioned elements of destination image creation (i.e., word of mouth, media, and government policies) is account for the perceptions of potential travellers. This information is in turn manipulated by Prospective Holidaymakers and Tourism Generating Region through a process of ‘the determination of the perceptual pattern/image for a particular tourism destination.’ The destination choice therefore is reliant on the extent to which the perceptual patterns of holidaymakers towards the destination are positive or negative.

Figure 1.5 Perceived impact of political instability on tourism

Source: Seddighi et al., (2000 ), p.182

Since the tourists do not spare time to check the reality behind the received images, these images become highly biased and distorted. Due to frequent hostilities that have originated from the Arab-Israeli conflict, Israel’s high-risk tourism image has prevailed. The struggle to reverse this image has been extremely frustrating, involving simultaneous confrontation between government agencies, tourism operators, and the media.

Media

Almost no researches disagree on that intensive mass media coverage of security incidents results in the drop of tourists’ arrivals in affected destinations (Mansfeld and Pizam, 2006:17). They widely accepted that it is the media that give the event more or less significance by different interpretation. Therefore in many cases the news media tends to distort the actual security situation and to exaggerate the risk involved in traveling to affected destinations. In addition, the media reports often is not merely limited to exact report of what happened but also act as an advisor by interpreting the risk involved i

Spain developed its tourism during the last years of dictator’s Franco governance, when the country became a popular place for summer holidays, especially for tourists from Northern Europe (UK, France, Germany and Scandinavia). It is said that mass tourism started that time because Franco’s government needed money and dedided to “open up” its coasts for tourism. . At that time, Mallorca, Costa del Sol and all multi-storey buildings on the coast were built. Murcia and Almeria were not built because there did not have a good network. This was what protected them. However, in the minds of the locals this was the cause of their poverty (Barke et al. 1996:120).

Since then, Spain has become the second – the most visited country in the world (the first one is France). 60 million foreign tourists arrived in Spain in 2007, according to the data provided by the World Tourism Organization (2007), that its offices are in Madrid. The cost of tourism in Spain is over $ 46 billion per year, the highest tourism expenditure worldwide except for U.S. that has tourism expenditure of $ 74 billion (Sinclair et al. 2008:75).

Summer resorts and beaches

This form of tourism was the first that was developed in Spain, and today is the one that has received more income grants and subsidies form the state economy. The nice and warm climate during the whole year and the long beaches on the Mediterranean and South Atlantic, as well as Balearic Islands and the Canary Islands have been visited by tourists from northern Europe for decades. These summer resorts are popular among Spaniards as well.

The Spanish coasts that suitable for summer holidays include:

aˆ? Costa Dorada, Costa Brava and del Maresme, located in Catalonia, which are very popular for local and French tourists, including the popular resorts like Salou and the city of Barcelona which is also the largest port in Spain.

aˆ? Costa del Azahar, whose main city is Valencia and Costa Blanca, (one of the most developed Spanish coastal regions, extremely popular for tourists from Great Britain and Germany, having Benidorm as the main summer city of Spain.

aˆ? Costa Calida.

aˆ? The side de Almeria, the tropical side, Costa del Sol and Costa de la Luz, all of them are found in Andalucia. Some of its summer resorts are famous all over the world, like Marbella, a tourist resort for tourists with important spending capacity. Finally, one of the largest Spanish ports, is Malaga (Fsadni and Selwyn 1997:66).

The volcanic Canary Islands in the Atlantic, and the Balearic Islands are two famous Spanish archipelagos. Many Spaniards and foreigners visit them because they are very popular.

Apart from the summer tourism, there are other forms of tourism such as cultural, sport or fun tourism. Two cities, Barcelona and Valencia (the two largest ports in the Mediterranean side of Spain) are among them.

Tourism of the beaches (Beach Tourism) has also contributed to the development of nightlife, as well as to the Spanish excellent food culture.

Important from the ecological and natural aspect are many places both coastal and island Theme and water-fun parks like Port Aventura are also popular among the local population and foreigners (Eden 1996:48).

Long ago it became known in Europe Senior Tourism program that allows people over 55 to enjoy a holiday social tourism in Spain with low cost. The program subsidizes the EU holiday in the Balearic Islands and Andalusia in periods of low tourist traffic from October 2009 until April 2010.

The indicative costs where the agency is about 400 euros for 8 days 4stars at selected hotels with full board, tickets, tours, and more.

Tourist Packages in Spain are part of the program Calypso approved by Parliament with a budget of 1 million euros and refers to the promotion of social tourism with the participation of Member States.

Cultural and business tourism

Spain is a country full of culture and therefore, it is a popular destination for cultural tourism due to its historical importance, including cities like Seville, Granada, Cordoba and Toledo. UNESCO has declared the following Spanish cities as World Heritage Cities: Alcala de Henares, Avila, Caceres, Cordoba, Cuenca, Ibiza, Salamanca, La Laguna SAN Cristobal de, Santiago de Compostela, Segovia, Tarragona and Toledo (Maiztegui-Onate 1996:84).

Madrid and Barcelona (two big Spanish metropolis) are famous historical places and are also part of cultural tourism. In addition, there are other important places in Spain with cultural importance are: Coruna and Vigo, in Galicia, Santander Cantabria, Oviedo and Gijon Asturias, Bilbao and San Sebastian in the Basque country. North Spain has such a green landscape that resembles to the UK’s and Ireland landscape and this is why it is “Green Spain”. They have many important folklore, nature and culinary aspects and they are even suitable for summer vacations despite the fact that the beaches of North Spain are colder than the Mediterranean ones.

Spain is also an important place for religion, mainly Judaism and Christianity.The city of Santiago de Compostela Galicia (northwest Spain) are holly places. This city is the third holiest place in the christian world after the Vatican City of Rome and Jerusalem. The fourth holiest place is Camino de Santiago followed by the sanctuary Caravaca de la Cruz in the southeast area. These places attract tourism from all over the world (Robinson 1996:210).

The many celebrations and festivals in Spain. A very famous one is the Holy Week in cities like Seville and Carthage. Very popular also is the Seville Exhibition or Feria de Abril in Spanish, the celebrations of Spring (Fiestas de Primavera) which include the famous Entierro de la Sardina (Burial of the sardine) and La Huerta EL Bando de (the area of the orchard) This festival attracts crowds from both inside and outside Spain. There are also the festivals Carthaginians and Romans of Carthage, the festival of San Fermin of Pamplona – famous worldwide, the Fiestas del Pilar in Zaragoza etc. The celebrations in small towns are also very popular.

Spain has a lot of cultural festivals, including the Carnival all over Spain, but particularly the festivals of the Canary Islands and Cadiz. San Sebastian, Malaga and Sitges have famous film festivals. The Lorca Rock, FIB, Festimad, and Primavera sound are some indicative music festivals. Several cities have hosted international events:Catholic exhibition in 1888 and 1929 in Barcelona, the Olympics of 1992, also in Barcelona, the catholic exhibition of 1992 in Seville, the 2008 world exhibition in Zaragoza and the America’s Cup in Valencia (Selwyn 1997:93).

The Europe Senior Tourism program is another tourist attraction source of Spain. This program allows people over 55 to enjoy low cost holidays of social tourism in Spain. It is an EU program that subsidizes vacations in the Balearic Islands and Andalusia in periods of low tourist traffic namely, from October 2009 until April 2010.

The indicative cost depending on the tourist agency is about 400 euros for 8 days at selected 4stars hotels with full board, tickets, tours etc.

Tourist Packages in Spain are part of the program Calypso which was approved by the European Parliament with a budget of 1 million euros and refers to the promotion of social tourism with the participation of Member States.

Tourism in Spain and financial data

The sightseeing visits and payments in 2008 (Sinclair et al. 2008:85)are the following:

Greece
Spain
Italy
France
Turkey
Visitors (in millions)

17

57,4

42.7

79.3

25

Revenue ($ billions)

17.1

61.6

41.7

55.6

22

.

From the above numbers, it is easily concluded that Spain is a major tourist destination, but it also attracts high-level tourists who spend enough money, since it has the best revenue ratio per visitor among the major European destinations!

The tourist development of the country is organized. Some areas are developed for very high level tourism as Marbella.

Some areas are selected for mass tourism, as for example Benidorm which is a Spanish Miami with 4 million visitors every year or not Liouret de Mar and Rosas in Costa Brava.

In addition, tourism is organized in large hotels, which have lower costs and higher bargaining power with the major tour operators. One example is the Sol Melia which has a revenue of 1.3 billion euros, 35,000 employees at 270 hotels from Brazil to China. Another example is Iberostar with 102 hotels in 15 countries and 1 billion revenue, 23,000 employees and around 70,000 beds.

However, if financial data get more analyzed the following will be concluded:

Spain in 2008 (Sinclair et al. 2008:94) welcomed 57.4 million visitors, representing 1.8 million fewer than last year, which means a fall of 3.1%. This fact has occurred since 1997, the year when, the statistical monitoring of the tourist industry began. This decline is mainly due to the decrease in arrivals from France and the United Kingdom which are two of the three main countries of foreign tourists in Spain. The ratio of reduced tourist traffic is attributed to a decline in the economies of these two countries.

So, after the sectors of construction and industry, there was the turn of the tourism sector to cope with crisis. This sector represents 10.7% of Spanish GDP and employs 13.5% of the workforce of the country.

The areas with the highest tourist traffic in 2008 were: Catalonia with 14,193,952 tourists (-6.7%), the Balearic Islands with 10,288,958 tourists (+1.4%), the Canary Islands with 9,363,219 tourists , (-1%), Andalusia with 8,147,688 tourists (-4%), the region of Valencia with 5,655,801 tourists (+0.2%) and Madrid with 4,564,345 tourists (+3.6% ).

The tourists in the country in 2008 and the percentage change compared to 2007 is as follows:

Table 1
Countries of origin
Number of tourists
% change compared to 2007

United Kingdom

15.749.000

-3.0

Germany

10.048.939

-0.2

France

8.151.449

-8.5

Scandinavian countries

3.574.398

+3.0

Italy

3.464.241

-5.8

Netherlands

2.502.060

+0.4

Portugal

2.291.146

-3.5

Ireland

1.659.327

+1.5

Belgium

1.626.983

-4.7

Switzerland

1.282.740

-6.7

Rest of Europe

3.262.834

+11.6

USA

1.133.801

-1.5

Rest of America

1.331.449

-6.1

Rest of the world

1.339.499

-12.2

TOTAL

57.417.871

-2.6

Source: Spanish Ministry of Industry, Tourism and Commerce

Table 2
Year
Number of tourists (in millions)
% change compared to 2007

1997

39.5

1998

41.8

5.9

1999

45.4

8.5

2000

46.4

2.1

2001

48.5

4.7

2002

50.3

3.6

2003

50.8

1.0

2004

52.4

3.1

2005

55.9

6.6

2006

58.1

4.1

2007

59.1

1.7

2008

57.4

-3.1

Source: Spanish Ministry of Industry, Tourism and Commerce

Criticism of the Spanish model of tourism

The Spanish model has disappointed its original supporters. The “promising” North European market turns its back to Spain. The temporary economic gains in the housing market and in the construction market of vacation houses have already begun to subside. Unlike the most optimistic forecasts of the real estate lobby, these investments in 2005 showed a decrease of 16.7%. The decrease of 6% in 2004 was interpreted as a slight variation, and not as a big change (Casado – Diaz 2006:78).

Foreign investments in the real estate sector dropped by 0.9%. The property market in Spain has began to have a negative reputation among potential customers of northern Europe, while international organizations talk about the need to manage a “soft landing “of the specific market to avoid unpleasant and extended economic consequences.

The rampant construction of holiday homes and hotels in coastal areas has begun to generate negative consequences. The freely accessible places on the beaches have been reduced overcrowding and disturbing activities are increasing, the water quality is deteriorating having as an effect the undermining of the overall tourism policy in Spain. The professional organizations of hoteliers call for an immediate discontinuation of coastal areas building programs.

Lastly, there is the growing trend for creating golf courses at the new holiday home complexes and the subsequent environmental consequences (Wall 1997:105). Indeed, it is planned an increase in golf areas despite the saturation of these facilities. It is estimated that each year 10 new stadiums are built and in ten years, there will be 500 golf areas (Mc Laren 2002:187). The strengthening of trend of creating new golf areas is based on the fact that golfers spend on average much more money per person.

The reaction to this new situation was an attempt to redefine tourism policy (Newton 1996: 150). The fall in profits encouraged the adoption of positions that until recently was criticized inthe tourism industry.

The Mediterranean coasts of Spain gather 15,600,000 residents who represent 39% of the total population. The length of its coastline is 7268. and 68% of the population lives in an area of 100 km from the coast, where the corresponding figure for the entire world population is 39%. Urbanization is so widespread that 85% of the population the Mediterranean coast lives in cities with populations over 10,000 inhabitants (Kirkby 1996:240).

In general, in recent years, there has been recorded a significant deterioration of the

coastal areas of Spain despite the existence of relative specific legislation.

The situation in some coastal areas is as follows (Casado – Diaz 2001:77):

In the region of Catalonia, nearly 50% of one kilometre lane from the coast is built. 59% of the coastline has already been built. It is estimated that 70% of the coast will be built within the next years.

Specific parts of the coasts of Malaga have been built 100% and this trend is spreading to the shores of Granada, Almeria, Kadid and Huelva. 90% of the Andalusian coast faces already problems of environmental degradation. Even natural area parks, such as the Cabo de Gata-Nijar in Almeria, have become an area of housing development programs and projects.

The rapid urbanization and population growth of the region of Murcia has led to an increase of population growth in two years (1999 – 2000) by 15% bringing a significant pressure for further residential development and reduction of free and public spaces.

Many coastal regions of Valencia have been built. 33% of the total coastal area shows residential development. Specific areas such as Alicante have been built at a rate exceeding 40% of its coasts. The urban development plans of the region have occasionally been the subject of study and complaints from the European Commission (Bramwell 1996:453). Indeed, the latter has proposed the imposition of a moratorium on the urban development to address the related deficiencies in design and ensure the protection of the environmental conditions of the development process (Casado – Diaz et al. 2004:363).

Conclusion

Spain remains a country of great beauty and high tourist interest. The model, however, of mass tourism that has followed does not seem to be as successful as it was in the past and the country should follow modern tourism practices that will help it remain competitive in the future. A basic prerequisite for a successful redefined tourism strategy should be the concern for the environment and the reduction of residential development (Hunter – Jones et al.1997:291).

Another article written by the International Air Transport Authority states that some airlines have started to see some stabilization in the business and the first class sectors of the airlines. These are the most profitable sectors for an airline.however it is pertinent to note here that not all airline have been as lucky and thus some airline are still facing a loss on these sectors as well.

For the other airline which are seeing stabilization, these sectors are back up and running because of the fact that the economic crisis is now improving and slowly people are returning back to their normal lives and businesses have stabilized and thus they are back to doing business as they were before the crisis took place a few years ago in the world. World trade has thus become essential once again and the companies are now slowly allowing their employees to start spending extravagantly as well.

Business class has not recovered fully either on the other hand. Passengers who used to fly these classes now resort to flying economy or taking budget airlines. This is due to the new reforms that some companies have come up with restricting the use of the high end seats by its employees in an effort to save up on the money.

Economy class passengers who were the tourist class passengers have not fully come back to their original number however. As the majority of the revenue on a flight does come from the economy class, airlines are starting to feel the effects of decline of passengers now. When on certain routes the economy class used to go packed, it is now seeing empty seats as well and empty seats are causing the airlines problems and thus the management of the airlines are considering alternative strategies to deal with these seats. The strategies include offering special last minute deals on seats and thus earning something in comparison to having nothing when a seat goes empty on a flight.

The article further goes on to state that as a result of all of the above, passengers numbers are now being stabilized at the expense of much lower yields for the airlines now as airlines are trying to boost up their cash flows now. Having the financial independence is necessary for airlines in order to remain afloat thus they need to take a profit that is lower than that they would normally be receiving just to remain afloat. Times are hard for the airlines but they realize that without this they will not be able to survive and thus will see their precious consumer base going to other airlines in the market. [ii]

This article written by Jones (2012) states that at a time when the airline industry was booming, many airlines had made their future expansion and growth plans according to this. However after the global financial crisis, airlines had to cut back on their plans in order to remain afloat. Airlines used many techniques to cut back on these plans.

Airlines which had ordered planes in advance to cope with the demand that had been increasing over the last few years had to cancel their orders and thus face losses with that as well. Airlines which had merged with other airlines in order to cope with the demand were not regretting this decision as it was becoming too expensive to cope with these expenses in the prevalent economic conditions. Airplanes were being sold off as well. An example can be that of Lufthansa which added 50% more capacity in 2007 in order to cope with the increasing demand but only added 2.3% capacity in 2012. This has shown that there is a downward trend in the increasing world market and that has actually crippled the airline industry.

Airlines have also had to retire their older fleet of aircrafts as well in order to cut back on their losses. International routes have been hit the hardest as these were the routes which generated the most profitability for these airlines. The airlines have shrunk their size and laif off their employees as well in order to cope with the decreasing demand for these routes.

Many routes have also been scrapped by these airlines as now some routes are not generating the profitability that once was generated and some are even running on loss. This has also resulted in airlines reducing frequency of their flights. This all has an impact on the airline profitability and thus they are now having lower profitability.

Feeder airlines have also impacted the profitability of the larger airlines as they were the ones who used to transport people to the major airports from where larger airlines used to operate to the long haul destinations. These feeder airlines have reduced their frequency and some routes have also been closed down thus hampering the profitability of the larger airlines on the long haul routes.

Given these changes their has been an immense price competition in the market as well which has resulted in airlines offering cheaper tickets in order to grab the maximum passenger load. [iii]

Business and first class travel have been the airlines prize possession and they have counted on these seats for they are the ones that achieve maximum profitability for an airline. These seats used to be fully booked well in advance and were typically booked by business travellers. These seats are now going empty a lot of the time as there has been a decrease in the passenger revenues and thus these seats are the ones that once used to bring in a lot of profitability for the company but now are becoming a source of loss for airlines in the economic downturn.

Business class and first class passengers are now shifting to cheaper alternatives, like flying in Economy class or shifting to other modes of transportation like the train and even not flying at times and resorting to modern technology like video conferencing in order to cut back costs which are associated with the premier class travel which is expensive.

This has impacted the European market the most as the level of business confidence has gone down considerably and thus has proven to have very small increase chances in Europe. However, it is noted that the fluctuation is not consistent and can bounce back as well. However if it does not bounce back it can also spread to other markets as well and thus also hamper profitability.

This article highlights the reasons for the decline in PIA air travel which is ultimately affecting the profitability of the airline. there are many reasons given for the decline and all of them are related to PIA in terms of the way the airline is being currently run and thus are not related to the workings of the airlines who are also being faced with this problem as well.

One of the major issues faced by PIA is the devaluation of the rupee. PIA suffers high losses due to the exchange rate fluctuations. This devaluation of the rupee has thus led the airline to experience losses even in 2012. Many of the purchases are made in US Dollars are thus the rupee has depreciated and thus the airline is now suffering losses as steps were not taken in advance to solve this problem.

The article goes on to say that the airline has also had to deal with the fuel price risk as well however In 2012 the price of the fuel has declined by 8%. The fluctuations in fuel prices has thus led to losses being incurred by PIA as they were not able to protect themselves against this fluctuation. Other airlines have protected themselves by adopting many techniques like purchasing fuel in advance at pre determined rates and thus avoiding the fluctuations that were happening in the international airline market and thus avoiding the problems which were being faced by airlines all over the world as well.

Its own internal problems have also led to the profits being decreased as well. This is majorly due to the internal inefficiencies of the airline and the unstable operating performance of PIA well. However recently due to the change in the management the airline has been able to bounce back a bit and improve its European operations as well considerably but it will take more than that in order to improve the condition of the airline. policies also need to be formulated which will help the airline run properly and thus avoid losses. Experienced personnel need to be brought in to take care of this problem.

PIA needs to have a long term strategy which it needs to follow in order to improve the profitability and the image of the airline. only by having a long term strategy will PIA be able to protect itself from the changing patterns in the market and thus avoid making losses in the long term as well. Thus it can be said that a long term strategy is something that is needed but is lacking currently in PIA. [iv]
An article written by IATA(2012) states that the jet fuel prices have also been a reason for the high increase in airline tickets. This has led to the passengers sales declining. The jet fuel prices have risen at a time when there is an economic meltdown and thus passengers have already been forced to reduce their expenditures and this increase has further led them to not travel on airlines thus hampering their profitability.
Airlines have not been able to hedge themselves against this fuel rise and that is why many airlines have had to suffer losses and also face decrease in passengers as well. Very few airlines were able to hedge against the rise in fuel prices which have saved them from facing such losses. Other airlines have continued to face losses with the increase in jet fuel prices. PIA has not been able to do so and thus they have lost out on passenger revenues on long haul flights. The management does not have a long term strategy to deal with the rise in fuel prices and thus hedge from it either in any possible way that will help it minimize the losses being faced by the airline.
Airlines have also not had the breathing space to adapt to these changes as the changes in the price of jet fuel has increased steadily. Owing to this IATA has spotted a decrease in the industry profits and weak traffic volumes as well. The price of the jet fuel will also determine how the airlines operate in order to best address this situation they are facing. They may need to re think their routes and perhaps even cancel some routes as well. Restructuring will also take place. [v]
An article written by Hafeez UdDin(2012) states that as PIA is an airline which does not have many international agreements with other airlines, that is why passengers choose not to fly PIA. in this day and age, airlines have contracts with many airlines in order to facilitate the passengers so they can connect on to their destinations with another airline if a particular airline does not fly to a particular destination. Code sharing has become essential now a days and thus is proving to be useful for many airlines in order to improve their profits as well as their image as it really helps facilitate the passengers travelling with one particular airline.
However with PIA, they do not offer many options to passengers who need to connect at an airport to another airline. that is one of the core reasons why passengers then choose to fly airlines other than PIA and thus the demand for long haul flights with PIA decreases as well.
In Pakistan, there has been a lack of tourism owing to the current conditions of the country. There has been terrorism, political instability, viral outbreaks and acts of violence as well which have caused the condition of Pakistan to deteriorate. This reason has also caused the aviation industry in Pakistan to suffer as well. People feel insecure about travelling to Pakistan that is why the Pakistani tourism industry has decreased considerably. Owing to this people are not willing to travel to Pakistan in order to sight see as much as they once used to at a point in time. Even Pakistani people who reside abroad are a bit reluctant to come to Pakistan and that is why the passenger sales on long haul flights has also decreased as well as the EXPATS were the ones who used to travel on PIA long haul flights the most as well.
The reason listed above show why there has been a decline in the sales of PIA long haul routes. Being the national airline of a country that is plagued with these problems is one of the reasons why PIA has been losing out on sales. However, it is not the only reason. [vi]

According to an article published by IATA (2012), Airlines around the world have devised a new strategy in order to cope with the changing trends in the international market. These airlines are now aware of the impact of the global crisis and are thus adopting new strategies in order to effectively target that segment who has been impacted by it. The effective implementation of this strategy has led them to regain their market share and thus avoid making losses which were going to be inevitable owing to the changing market trends.

It is of most importance to note here that the consumers who travel on airlines will not be the ones to change. It is the airline which has to change their strategy in order to effectively cope with the consumers and their varying trends. Airlines have thus adopted new strategies to deal with this. Some new ways of doing it are by offering loyalty programs with added benefits. The other is by cutting on the expenses which an airline were incurring in order to satisfy their customers like providing a meal on board. Even though meals are still provided by the airlines on long haul flights, those meals are then prepared by contractors who charge the airline less for the food. This in turn helps reduce the cost of the ticket. Airlines have also resorted to using the low key airports to operate their flights which have less taxes etc. this means a lower cost ticket for the consumer. All of this eventually leads to lower priced tickets which is what in reality the consumer wants and thus the airlines needto give them. However the airlines have also taken quite a large dip out of their profits in order to provide them with this.

Airlines that are not using strategies like these mentioned above are the ones that are incurring losses on their flights. Passengers will continue to move to other airlines as they feel that those airlines are more suited to their needs and are thus a more viable option for them. Thus this will result in the airlines making more losses and losing out on the market share that is important to them. [vii]

This articles states that people are very conscious of the things they use these days. People want value for their money and as the competition is immense these days the consumers are spoilt in terms of choice and thus they will very easily switch brands in order to gain something. This shows that there is very little brand loyalty left in consumers. This is also applicable to airlines as well. Airlines need to remain on top of the game in order to deal with the competition they are facing.

Every particular aspect needs to be taken into consideration as it can be any factor that changes the mind of the consumer. Many airlines think that things like inflight entertainment are not important factors but the reality is that they are of importance especially on long haul flights. Passengers do give importance to them and thus the consumers believe that these are the aspects which are really important to them

Failing to take these into account are the reasons why some airlines are now facing losses. These airlines are also facing consumer shifts to other airlines as well hence steps need to be taken to curb this.

An article written by the centre of aviation(2012) states that the problems faced by the airlines are obvious but the successful implementation of a strategy are proving to be problematic. Many airlines face the issues of government intervention. This ultimately leads to a greater time for approving any changes that need to take place as many people/authorities need to approve of the changes before they can be implemented. By the time the strategy is actually implemented, it is too late as the airline is also facing losses owing to the loss in time that the airline faced while getting the approval for the changes that they wanted to the airline.
Given the limited finances available to these airlines as well, growth may peak at one time but the financial recovery is slow. This ultimately leads to the unability to raise capital for the airlines. And given the global economy, banks are also reluctant to give out loans as well as they are uncertain of the future in this day and age which leads to financing problems for the airlines. With lack of financing available, airlines thus resort to leasing aircrafts instead of purchasing them. This in the long run is not profitable for the airline.
The management of the airline also needs to take into account the micro issues that the airline is facing. Many a times the management aims at solving the macro issues which at the given time appear to be larger but the micro issues are also very important in the running of an airline. these are the issues which need to solved as well because a pile up of these issues will ultimately result in the airline suffering from losses if these issues are not addressed as well as the macro issues as well. Thus an environment needs to be set up where all the problems can be tackled. [viii]
The article written by Houriani(2012) states that the airline industry is being faced by an excess capacity. This is basically derived from underutilized planes which ultimately lead to an increase in competition. Airlines are facing cut throat competition and because of this the airlines have had to deal with many problems. The operational costs of actually running an airline are increasing and as a result of this airlines are not making that much profits as they once used to. The airline is not passing on the excess costs on to the consumers in fear of losing out on the consumers. This also related with the inflation which is taking place leads the airlines in a very uncomfortable position.
Airlines which are in trouble have had to take drastic steps in order to actually live through this. They have had to merge with other airlines and thus resort to compromising on many things. Another thing which the airlines have had to do is join strategic alliances. Joining these alliances have kept the airlines afloat in one way as it means that the consumer powers have gone down and thus the members of strategic alliances have more control thus allowing them to incur less losses as well in these troubling times.
The case of operational costs further split into fixed costs and variable costs particularly on long haul flights also needs to be taken into consideration. The airlines are faced with intense inflation which is happening and thus owing to that the fixed costs are rising and the airlines are trying very hard to curb their variable costs so that their expenditures do not increase by that big of a margin. However the variable costs that the airline is now cutting down on are the costs which create a deep and meaningful relation with the customers. Examples of this can be the frequent flyer programs and the lounges that the airlines operate. However, these are the costs that the customers care about the most and thus that eventually leads to the customer base diminishing. [ix]

An article written by Thompson (2009) states that long haul flights were once an airlines main source of income. Revenue earned from these were greater in comparison to the revenues earned by other flights operated by an airline which were termed as short haul flights. However in this day and age, passengers have been spoilt for choice. Many passengers prefer having layovers in other cities which lets them relax and thus does not prove to be tedious for them either. However, this has not been fared well with the airlines. This has ultimately resulted in lower profits for them.

Airlines have taken this change in customer patterns to their advantage. Many airlines now allow their passengers to have a break in many cities before continuing on with their journeys. Many airlines also offer tourism services as well in many cities which ultimately allows the passenger to see the city they are stopping over in. this allows the passenger to book tourism services with the same airline and thus can be less stressful for the passenger and possibly also more cheaper as well for the passengers.

This change of pattern has let the airlines branch out into many other services as well which ultimately allows them to have more than one source of income. This has led them to increase their income which is beneficial for the airline. They realized that the passenger patterns have changed and thus aligned themselves with those changing trends. Airlines which have adopted this technique are more profitable than those airlines who have not done so and thus still suffer from making low profits or even losses.

Airlines which have not adapted themselves to the changes in the passenger patterns have ultimately lost out on profits and thus they are seeing that the travelling passenger loads have thus shifted to other airlines. This ultimately leads to passengers preferring one airline over the other and thus creating strong loyalties with the airline that best suits their needs. In the long run this is not good for an airline as it leads to the company losing out on its precious consumer base.

It is important for an airline to change itself with the changing passenger trends as that is what it is about at the end of the day. Airlines can not stick to their own agenda and not worry about what the travelling passengers want because at the end of the day the passengers are the ones who bring income to the company so their likes and preferences also need to be taken into consideration. [x]

An article written by Paylor (2005) states that airlines now a days are operating at a capacity that is larger than required. These airlines tend to have excess fleets, larger number of employees and overall are using resources that are not required. Owing to these excess utilization of resources, airlines are now being faced with the problem of incurring losses repeatedly. The losses can be cut down and hence the profitability of these airlines can be improved if various techniques are implemented to cut down on the expenses incurred by these airlines.

Airlines feel that they need to have a larger fleet size in order to cater to the global market. Purchasing or even the leasing of aircrafts is expensive hence airlines incur losses. One way for airlines to reduce the losses is to cut down on the flights which they operate. As many of their flights are going with empty seats especially on long haul routes, airlines should thus resort to cancelling flights and filling the load of empty planes on other planes. This can only happen if airlines cancel their scheduled flights and then operate only on those flights which they have full capacity. This way they will be able to minimize the losses incurred and thus will have more profitability as well.

The case of an airline is given where the airline should operate one larger aircraft instead of multiple smaller aircrafts and this will prove to be a more viable option for these airlines as they will be able to fill the larger aircraft with the same number of passengers as the smaller aircrafts. This will ultimately result in a lesser loss for the company as the airline will not have to incur the costs of fuel or employee salary on both aircrafts. Thus this is a useful technique.

Hence airlines can benefit from employing a strategy which will help minimize the losses incurred by the airline so that the financial position of the airline can be improved. This strategy needs to be employed so that the airline can benefit from the advantages that are derived from it. the advantages of the strategy will help improve the workings of the business and thus allow them to regain some things like the improved profitability and the internal management workings of the company. This will ultimately help the airline in its operations amongst many other things. [xi]

This article written by Chiu (2012) states that global inflation along with the global economic crisis is the root cause for the losses that the airlines are making especially on the long haul flights. The profitability of the airlines are under pressure and high oil prices are escalating the problems the airlines are currently being faced with in this economic crisis for the last couple of years.

Even freight has been showing a low trend and at one time the demand for this way very high but over the last few years this has been been showing a fall as the international market has been slowing down as well. In this condition, many airlines have no choice but to downsize. The first half of this years results have proven to not be good and thus the airlines have had to resort to taking appropriate steps to ensure that losses will not be incurred like they were in the first half of the year.

Given this not good scenario for airlines, the airlines are now cancelling orders for aircrafts that they have booked and thus losing lots of money on it as well. Moreover the airplane currently in operations in these airlines are being retired from use as well as the airline can not afford to use them anymore.

Over all it can be seen that a long term strategy needs to be in place for the airlines to start maxing profits. Firing employees will not solve the problems because the problem is much more than that. Where as that may be a short term solution in order to increase the profits, in the long term this is not a valid solution as the same thing will occur again hence steps need to be taken to avoid that from happening.

Thus these airlines need to come up with long term initiatives in order to solve this problem as this is not a small problem but will continue to increase if it is not properly handled to ensure it happens again. [xii]

The article written by Upadhyay (2012) states that the future for the airline industry in the long term does seem to improve. By 2030 the airline industry should improve its operations and thus the global traffic for airlines will also double that what it is right now. This will help create jobs as well and this will also be beneficial for the economy as well. The global GDP is also expected to rise substantially too. Thus the aviation sector is perceived to be a very successful and integral one as well to the global growth as it will help the global industry in many ways.

However currently the market conditions are not ideal for that to happen. Owing ot the tazes imposed by the EU in favour of a creating a cleaner carbon footprint. Other countries are suggesting imposing similar type of taxes on EU airlines. If this is continued it could lead to a global war which is not in favour of anyone. Thus steps need to be taken to take care of this problem as well.

Now a days the industrys profitability is precariously balanced on the edge of a knife which shows the fragile state of the industry. It will not take much to push it over and thus steps need to be taken in order to ensure that it is not pushed over to the side which will lead to a loss.

Thus steps need to be taken to ensure that there are proper legislations in place which are in favour of all the airlines and thus are not stopping the progress of any one particular airline. [xiii]

Industry Overview

Air travel remains a large and growing industry. It helps increase theinternational investment, world trade, economic growthand tourism and is therefore central to the globalization taking place in many other industries. Transportation sector is most important sector of any economy and aviation industry is major part of this sector. [xiv]

In the past decade, air travel has grown by 7% per year. Travel for both business and leisure purposes grew strongly worldwide. Scheduled airlines carried 1.5 billion passengers last year. [xv]

Worldwide, IATA, International Air Transport Association, forecasts air travel to grow by an average 6.6% a year to the end of the decade and over 5% a year from 2000 to 2010. These rates are similar to those of the past ten years. In Europe and North America, where the air travel market is already highly developed, slower growth of 4%-6% is expected. The most dynamic growth is centered on the Asia/Pacific region, where fast-growing trade and investment are coupled with rising domestic prosperity. [xvi]

In Pakistan the transportation and communication sector holds more than 10% share in GDP (Gross Domestic Production). The aviation industry can affect the other sector of the economy, e.g. the International Trade, tourism and socio-economic condition of the country.

Historically Pakistan International Airline dominates the major portion of aviation industry. The state owned PIAC establish in 1955 to conduct the domestic as well international operations. It enjoys the monopoly until the deregulation of aviation industry. [xvii]

Pakistan has a limited number of airlines operating in the country and an even more limited number of airlines that provide international destinations as well. PIA being the National Flag Carrier Is the largest airline in Pakistan and is thus offering the largest network in comparison to any other airline in Pakistan.

In the international arena, PIA is being faced with intense competition as many International airlines, especially middle eastern airlines are operating in Pakistan on a regular basis and provide flights to destinations that PIA does not. With the advent of these airlines, PIA has faced stiff competition and has thus lost out on passenger revenues as it has done nothing to cater to those problems.

If the financials for PIA are looked at, it can be seen that the revenue being generated by international flights is decreasing at an alarming rate over the last few years. This is despite the fact that PIA has introduced new aircrafts for routes such as London, Toronto, New Yo

Tourism Industry is one of the fastest growing industries in the world. “Tourism has long been a central component of the economic, social and cultural shift that has left its imprint on the world system of cities in the past two decades” (Dumond; 2005 cited in Beben; 2006;1). According to the statistics of World Trade Organization, there was 693 million tourist arrivals across the globe in 2002 (Beben; 2006). Moreover, WTO and the World Tourism and Travel Council announced a possible increase in the number of tourists to close to 1 billion by the end of 2010 (Massound; 2010).

Mass tourism is seen as a large number of people participating in tourism as well as inflexible and packaged standardized holidays (Poon; 1993). Starting from the 50’s a new tourist demand leaded to a new stage in this evolutionary process. Tourism industry just like other Fordist industries has been supplying mass products, mostly considered under the label of mass tourism (Conti; Perelli; 2004). According to Conti and Perelli (2004;3), Thomas Cook created the tourism packages in the 19th century as “the pioneering forms of mass tourism and the opportunity for the definitive shift from the aristocratic forms of vacation to the mass mobility of workers spending their paid holidays travelling”. The concept of Cookism was used in a place of Fordism to express the era of mass tourism. Others seen mass tourism as consuming places by the large number of visitors (Urry; 1995). More recently mass tourism consumption experience has been linked to the ideas of “a McDonaldization, Disneyfication or McDisneyfication of societies” (Ritzer and Liska; 1997 cited in Conti and Perelli; 2004;3). The impact of those consumption patterns has been considered as the typical Fordist “leading to a reduction of the cultural diversity by mean of the demand of a tourist experience that will be more and more reproducing the everyday life patterns of consumption” (Contti and Perelli; 2004).

Mass tourism is strongly linked to seasonality. The impact of schools closure for the holiday periods as well as companies? work programmes and the destination specific weather conditions, all that aspects are gathering great number of tourists at the same time (Shaw and Williams; 1995). Before tourism was a luxury, available mostly for higher class but after the introduction of packaged holidays and development of mobility and technology, travelling became more accessible for everyone.

Tourism has aroused on the market as a forceful industry making changes which have both positive and negative economic, socio-cultural and environmental impacts. The development of tourism industry is very important for economy of the country especially for less developed countries as it increase foreign exchange earnings and generates employment. According to UNWTO, tourism stands for 8% of employment and 9% of global GDP and by the year 2019 will provide 296 million jobs (UNWTO cited in MercoPress, 2010). Tourism can have a powerful and beneficial direction for both economic and sociio-cultural change but at the same time it can be destroying. Do actual benefits from tourism go to the host community? Is government?s priority in development are to provide the needs of the tourists instead of local community? The government blinded by the opportunity of the country to generate the money from the development tourism is forgetting about the negative aspects that the industry can bring. Most of the attention has been made to economic aspects of the tourism growth and environmental and socio-cultural issues have been swept out to the second plan. Although to make tourism sustainable it is very important to look at those aspects.

As mentioned before tourism enables the development of the destination although, the lack of own capital and a weak economy of some underdeveloped destinations makes foreign investors to build a new hotels that makes tourism being beneficial mostly for the developed countries. The same is with employment. It seems like tourism would give jobs to the local community but in the meantime the investors from developed countries employed the workers with a better education and abilities so the developing country stays with almost nothing. When the development is lower than the position of a country is worse. Leakage is an amount of money that escapes from the local economy (France; 1997). According to Kripperdorf(1982;136), “tourism planning is usually in the hands of outside promoters the local population are regarded merely as landowners or as a reserve of labour, not as people entitled to participate in decision making”. For example, tour operators owning resorts and sending the customers to the destination which mean that local community won’t benefit much from those tourists. They export food for the tourist and employ British stuff.

How tourism can be sustainable if it?s breaking the basic rules of it. The tourism control and planning strategy is crucial in developing sustainable tourism but how can it be done if even government is closing their eyes on the unfair practices in the Tourism sector of that region. The uncontrolled tourism in Goa has a strong impact on host community who has to face the food and water shortage (Almeida; 1996). Moreover, Goan has to face with “electricity problems, there is a severe water shortage. The water pipeline that was originally meant for the villagers is now being utilised by the hotels. The transport too is insufficient to transport both locals and tourists” (Misquita, 1996a cited in Noronha;1999;101). Very fast process of urbanisation has changed Goa into the concrete jungle. Police is closing their eyes on the drug fulfilled parties. Barely 10 % of Goans have benefited from tourism development, moreover, the foreign investors are buying large amounts of lands in the region (Almeida; 1996).All those examples illustrate how unsustainable tourism it is.

Moreover, as suggested by Wall and Wright (1977); physical impacts to the tourist destination include “alterations to the natural environment, including air, water, soils, vegetation and wildlife as well as changes to the build environment” (Mathiesen and Wall; 1999; 38).

Mass tourism affects strongly beaches, cliff-side, environment and degraded landscape. In some mass destinations ground water is in an alarmingly low level which is largely consumed by agricultural sector, by the irritation of a great number of gardens constructed due to the development of new summer houses and second homes and golf courses (Molz; 2004;5). Also the beaches have been extended in order to meet tourist demand. The unlimited constructions and unsustainable exploitation of natural resources will lead to the serious environmental problems. Recreational activities organized for tourists have also strong impact. Tourists by touching reefs when diving and snorkeling are damaging them. Also by the great number of boat trips tourist are disturbing marine animals. According to Kripperdorf (1982;135), “the mass phenomena of modern tourism have initiated the paradoxial process “Tourism destroys tourism”. The landscape loses its tourist value through its use, or rather over-use, by the tourist”.

Mass tourism is not only a problem of coastal regions but also the winter season is strongly connected to mass tourism. In Alps the number of tourists doubles every 7 years (Dziedzic; 1998). In Tyrol the ski slope is going through the endangered forests. Every year more than 500 hectares of agricultural land is used to make new skiing resorts and slopes (Dziedzic; 1998). Environmental degradation destroys the meaning of existence of tourism itself. The number of tourists is growing every year. According to the World Travel report (cited in Hickman; 2006) “by 2020 the natural features of some of the wonders of the world will be damaged by global warming, while other resorts will become seriously overcrowded”.

The carrying capacity has been described as greatest number of people who can use the place without any damage to the natural resources and without degradation of the environment (Wall and Mathiasen; 1999). The attrition of historical buildings and the saturation of the coasts are one of the problems were carrying capacity has been overtaken. Changes in tourist destinations are inevitable but the concept of carrying capacity has the chance to indicate the amount and the way of change and to assess to which point those changes are acceptable (Mathiesen and Wall; 1999).

The socio-cultural impacts are the other aspect of a great importance when looking at the changes in tourism as it strongly changes the way of life of the local communities. Mass tourism is causing displacement of indigenous population by tourists. For example in Hawaii there are about 1 million of indigenous inhabitants, which is a quarter of the whole population (Dziedzic; 1998). In human relationships, the disappearing traditional hospitality is a very important aspect. Especially in the big tourist resorts, these relations were long ago converted into a commodity for sale.

Kuhn (2007; cited in Hanna; 2010 HHhhKKKK) argues that sustainable tourism attempts to preserve traditional cultures in a way that the western tourist deems as ‘authentic’. If sustainable tourism will lead into that direction it will not be very successful. Tourist resorts also offer its guests a more refined, but a fake version of its folklore and traditions, adapted to the stereotypical images of the visited country. According to Mathieson and Wall (1992; 4) “the commercialization of culture, through the marketing and sale of artefacts, may revive traditional art forms or modify them so that they are scarcely recognizable”. Which in a long term might create a “phony folk culture” but at the same moment it can lessen existing unemployment problems and create more jobs.

The Tourism authorities are pleased of the fact that tourism is developing in the country but some of the local communities have different opinions on that. According to Ignacio Cembrero in “View from Fez” (2006), “the country’s Islamist party frequently rails against hotel casinos, restaurants that serve alcohol and the growing gay club scene” (Ranger; 2006). The tourist must accept the cultural differences of other countries. The most of Moroccans are very religious and tourist has to respect it. Even more tolerate Moroccans can become tired of tourists when seeing nudity on the beaches or tourists wearing t-shirts or short trousers in the churches. It insults their believes and rules. “A lack of consideration by tourists for local norms, culture, people or the environment of tourist receiving destinations” is leading to unsustainable tourism practices (Poon; 1993 in Wahab and Pigram; 2004;51). This point was also commented by Obrador et al (2009;3) who suggest that “local cultures are seen as eroded by a homogenous inauthentic, consumer culture”.

Moreover, overcrowding and growth of the bad reputation of the destination by breaking ethical rules can be destructive for the destination. There are many places in the world which have been spoiled by mass tourism and after the development of low cost airlines many cities has lost their “shine.

As most of the products also destinations have a lifecycle. It was clearly presented by Butler (1980) in his model of lifecycle of a tourist destination. He evaluated six stages a destination goes through when tourism development takes place: “exploration, involvement, development, consolidation, stagnation, concluding with either rejuvenation or decline.”

At this stage the destination is visited by small number of tourists who are keen to explore cultural and natural beauty of the place but the number of visitors is limited due to accessibility difficulties and lack of facilities. Here the attraction of the place yet remains unmodified by tourism. In the next stage of involvement advertising and local initiatives are seen as the element of promotion of the destination which results in increase of the tourist number with the pressure on the public sector to develop infrastructure. Next step in the cycle is development in which further initiatives for development of facilities are made by national and multinational companies. In this stage the control of the public sector is necessary as the popularity of the destination and increasing number of visitors may not only be the reason of success but also cause failure and “the destination may suffer a change in quality through problems of over-use and deterioration of facilities” (Butler; 1980;92). The consolidation is the next level of tourism life cycle when tourism becomes a great part of the local community. Next step of stagnation occurs when after reaching peak numbers of visitors the destination is no longer popular and only conservative visitors are still coming back. In this stage the environmental, economical as well as socio-cultural problems can be seen as the reason. The last stage is decline where effort is need to maintain the tourist arrivals by introducing new types of facilities like for example casinos.

Prague is only one of the examples of the life cycle destination. The city has become one of the most visited cities in Europe after Czech Republic became a member of EU and after the growth of mobility (Global Travel Industry News; 2010). This beautiful, full of historical monuments city was rejuvenated in the last two decades. The commercialization of the city took place and the old town became surrounded by souvenir vendors, Irish pubs and beer gardens losing its authenticity. Also the prices have gone up and all locals who couldn?t afford been forced to move out of town. It’s one of the examples when the way of making quick cash has prevailed over the unspoiled charm of the historic Prague.

Mass tourism has led to the development of sustainable tourism in order to reduce negative impacts of tourism growth. Later in time the concept of Post Fordism was seen as the customers seem to acquire more power in determining market tendencies. According to Contti and Perelli (2004;9), “this change also tend to meet the new demand for environmental friendly tourism products, being new tourists generally perceived as more educated, interested in local communities culture and in a real interaction with the surrounding environment”. Since 1980 the sustainable tourism has began to be an important issue in the tourism industry (Swarbrooke; 1999). By creating a new infrastructure, hotels and businesses the employment is increasing. By travelling people have a chance to experience new cultures and traditions, although not every tourist is keen to do that and some visitors are not interested in it and ignore host communities. Sustainable tourism development is directed especially to create a better understanding of tourism, of how to achieve balance between economic, cultural and environmental aspects of tourism development. It is necessary to encourage people to take responsibility for the environment. Moreover, fair distribution of tourism benefits is necessary and the bigger involvement of local community in the tourism development decisions of their region has to be improved. The sustainable tourism directs to reduce negative impact on environment by introduction of quieter, more fuel efficient aircraft to start from to maximizing economic benefits for the host community rather than the visitors countries. Mass tourism is strongly connected to the high seasonal tourism caused by the great demand of 3’s tourism tourists all over the world (Bramwell; 2004). That is why diversification of tourism like development of rural tourism has been developed to minimize saturation of the beaches in the high seasons and to avoid mass tourism. The development of sustainable tourism in very important for the countries where tourism industry is a main element of the local economy because the traditional beach holidays will decline caused by the saturation if the mass tourism will be increasing with that speed (Swarbrooke; 1999). According to Perry (2001), the climate change caused by humans will result in future modification of the climate conditions for example in the Mediterranean area, whereas the northern and western Europe climate will be improved.

In 1992 on the conference in Rio de Janeiro in Brazil the first strategy document on sustainable tourism has been announced – Agenda 21 as the basic economic model of tourism in XXI century (Hanna; 2010). Although, the Agenda 21 has meet various criticism mostly “due to its non-binding treaties allowing most of the recommendations surrounding climate change and various other cultural issues to be ignored by the international community” (Hanna; 2010). Nowadays, alternative forms of tourism have been emphasized but taking in account that even small group tours can be damaging the sustainable tourism is hard to accomplish.

Latest debate of Tourism Concern came to a conclusion “that all-inclusive holidays, arguably the epitome of mass-packaged tourism consumption should be banned” (Farrington; 1999 cited in Sharpley and Telfer; 2002; 304). For example Gambia’s tourism authorities have banned all-inclusive holidays in 1999 (Sharpley and Telfer; 2002). It is an effective contribution to the development of destination. This could be a possible solution of applying sustainable tourism into a real life but it is doubtful if it would work for every country. Another alternative solution suggested by France (1997;89) is “the development of holiday complexes which provide artificial ?sun-warm water` environments (e.g. Center Parc villages), located at points of maximum market access” which could be an exit for achieving sustainable tourism just if the great number of people would choose it instead of “normal” holidays.

In conclusion, the growth of tourism seems to be inevitably unsustainable. Tourism is giving employment and economic benefits but for example in the Third World countries the division of money is unequal. The powerful developed countries are always going to be stronger than less developed countries if management will not be carefully planned. So even if tourism is bringing money, it is not always bringing it to the right place. Nowadays people blinded by money forgetting about more important things like passing their tradition to the next generation by conserving it.

Mass tourism is termed as a neo-colonialism which can be compared to army forces where instead of their invasion we have an invasion of the tourist influx (Dziedzic; 1998). There is no solution to stop people from travelling. The great understanding of negative impacts would lead to better sustainable tourism development but this need a high number of people involved in it which is hard to accomplish as nowadays people don?t think much about the future risk related to the planet because “not to go away is like not possessing a car or a nice house. It is a marker of status in modern societies” (Urry; 1990;4). There is a lack of sustainable understanding and adequate tourism control to develop sustainable tourism. Sustainable tourism will not eliminate negative impacts of tourism but it could be a way to minimize its impact. Because if the growth in mass tourism will continue as fast as it does now the global warming will be arising and some destinations will suffer unbearably high temperatures with an increase in the risk of fire. All those changes will lead tourists to changes in their holiday destinations, which not necessarily means stop of mass tourism. Tourist will continue with transport use even if they will reduce their travels, it will be still environmental damaging. All the facts are coming into conclusion that the best way for sustainable tourism would be staying at home.

These days a huge range of mega-events is offered to diverse target groups. According to Getz (1991) as cited in Robertson (2006) sport events are more famous for male participants whereas arts and cultural events gain more importance for female participants. The range of mega-events offered are big sporting events like the Olympic Games, the FIFA football World Cup, Formula One, as well as many more disciplines. Furthermore there are also World’s Fairs like the Expo or big music festivals as for example the Glastonbury Festival in the southwest of England, just to name some of the numerous offers. All of them are in different countries, regions or cities spread out all over the world. Some of them always stay in one location whereas others change the venue each time. Besides there is also a variation in the frequency the events take place. There are some events that are hold several times during a year and there are also events that are once a year whereas many only even occur every second or fourth year.

The aim of this essay is to critically assess the influence mega-events have on tourism. Furthermore it contains general information about mega-events, like definitions. As there is a huge range of different events along with many issues, the focus is mainly on sports mega-events.; on their diverse stakeholders as well as especially on the task of hosting them. The outcome is a conclusion and recommendations for future mega- events.

Mega-events in general are not easy to define due to the previously named different forms that are existing. In 1988 Jafari did not know how to clearly define them. For him it was not clear what an event needed to fulfil to be considered a mega-event. Therefore he had the following questions that needed to be answered beforehand: Is it more important to consider “the number of visitors attracted”? Or should it be the duration or the orientation it has that makes it a mega-event? (Jafar Jafari, 1988: 272).

However, Robertson (2006: 1) presented the definition Roche (1994) made: “Mega-events are best understood as large-scale cultural (including commercial and sporting) events which have a dramatic character, mass popular appeal and international significance.” Roche avoids paying attention to the duration but in contrast considers the international importance as a key-value. Regarding the ‘global significance’ he mentions within his definition, this leads perfectly to sports mega-events which are performed by international athletes and simultaneously are watched all over the world. But before even arguing about sports mega-events it is important to define what they are considered to be.

According to Horne (2006) “sport mega-events are important elements in the orientation of nations to international or global society.” As can be seen here, Horne talks about the importance of the ‘global thought’ as well. This makes obvious that mega-events always have an influence on the whole world and therefore as well impacts on it. There is the possibility that they take place almost all over the world and besides that the visitors are coming from all over the world, too, to watch such a spectacle, which covers the tourism aspect in this case. But it is important to be aware that every single event has a different number of visitors coming due to several reasons. The author of this essay has the opinion that above all it is necessary to look at the place the event takes place. This is very significant because of probably existing political issues for example, tourists would rather visit a country where they feel safe than a country where they possibly would be afraid of. So the number of visitors attracted is not only dependent on the theme of the event itself but also on the country where it takes place.

One central question is: why did mega-events gain such an importance for the whole global community within the last years? To clarify this question Horne (2006) suggests as stated in Robertson (2006:2) that there are “three reasons for the expansion and growing attraction of mega-events.” Firstly he mentions the media as an important factor for it. The possibility to use mass communication is responsible for “unprecedented global audiences” for these spectacles. As can be seen, the media makes it possible for the whole world to participate in a certain way in mega-events by e.g. watching them or reading about them in newspapers. Secondly he names a model called “tri-partite model”. Within this model are “sponsorship rights, exclusive broadcasting rights and merchandising” which “have been attracting sponsors by the association with the sports and the vast global audience exposure the events achieve.” (Robertson, 2006:2). And thirdly there is also the importance of applying as host nation, city or region because according to the above mentioned author mega-events “have become seen as valuable promotional opportunities for cities and regions.” Regarding above all the third reason makes it obvious why there are always so many cities, regions and nations applying to host such a big spectacle. Nevertheless, these bidders should take into consideration that hosting a mega-event can also cause negative impacts. For example for the Olympic Games 2008 in Beijing a huge number of people has been displaced in the preparation of the Games for building the required infrastructure. This is a really bad issue because the same problem will inevitable occur for the Olympic Games taking place in London 2012 and probably also for the upcoming Games in the future.

However, when thinking about this it is not really reasonable that for example the local population has to suffer when a mega-event is taking place in the area where they are living. Otherwise hosting a mega-event has many advantages for the host city, region or country: numerous jobs are created and most notably there is the possibility of enlarging tourism. But according to Roche (2000: 141): “[aˆ¦] any new bid is likely to focus on long-term image-building and not short-term touristic economic returns.” That means that those responsible of a possible host city or country know, that they probably will not benefit from the event short-term but there will be more tourism long-term due to an improved image for example. This goes along with Kang and Perdue (1994) as cited in Roche (2000: 141): “mega-events have a long-term impact on international tourism to the host country; the impact is the greatest in the year following the event and diminishes over time.” Besides that there are other authors who also see the possible economic impact. As stated by Toohey and Veal (2007) the potential positive economic effect is the reason for cities and nations to bid to host a mega-event. In addition to the possibility to enlarge tourism in long-term there are several other stimuli to host a mega-event according to Richard Cashman (1999) as cited in Toohey and Veal (2007: 74): He mentions “different forms of legacies like economic benefits, built environment (transport infrastructure), public life, politics, culture and built sporting infrastructure.” All these legacies benefit the host city or country long-term.

Additionally to the long-term impacts there is always the danger of wrong estimations according to Horne (2006) as stated in Robertson (2006: 5): “[aˆ¦] forecasts are nearly always wrong. [aˆ¦] A major concern in considerations of sports mega-events has been the gap between the forecast and actual impacts on economy, society and culture.”

According to Horne and Manzenreiter (2006) another important fact is that on the one hand some areas will benefit through tourists visiting a mega-event but on the other hand the organizers have to be aware that tourists who maybe would have come to visit the city or region will not come because they are not interested in the event. There will always be a lot of people who come because of the event taking place but there will also be enough people who avoid to visit the host city or region because they are maybe not interested in the event that is offered or they do not want to be in that particular place when there are so many other people at the same time.

According to Kim and Chalip (2004: 695) “marketers of mega-events have the need to stimulate international visitation to their event in order to optimize the events financial and tourism outcomes.” As seen it is the task of the marketers to make a mega-event attractive to appeal to as many tourists as possible.

Regarding the aspect of attracting tourists Kim and Chalip (2004) consider events as pull-factors for destinations. In the opinion of the author of this essay it is therefore important for destinations to host mega-events to attract tourists. This goes along with Alexandris et al. (2009), who mention that “mega-events play an important role in strategies that expressly target an international tourism market.” In addition to this, Weed (2008: 296) states that “The main economic benefit for a region derives from the consumption by visitors during the event and increased tourism in the post event period.” As can be seen he also mentions the increase of tourism after the event took place and additionally brings up the theory of consumption during the event. But it is not easy to estimate the economic benefit that will be made through hosting a mega-event because along with Preuss (2008) as cited in Weed (2008: 296) “one of the main hurdles in determining the economic impact of major multi-sport events on a city or region is the lack of knowledge on consumption patterns of visitors and the number of persons that are visiting the event.”

As a mega-event is such a big spectacle has to be planned for a very long time. According to Robertson (2006: 10) “[aˆ¦] things come together after months and sometimes years of planning.” Therefore different stakeholders are essential as there are so many tasks that have to be fulfilled and as there is the need of a huge amount of money to make mega-events happen. This leads to a very important question: who is paying for organising any kind of mega-event? A perfect example that shows the complexity about funding a mega-event are the upcoming Olympic Games in London 2012. As the official Internet website presentation of the Olympic Games in London states, there are “two key organisations – one private, one public.” (London 2012, 2010). According to this website the private sector is the ‘London Organising Committee of the Olympic Games and Paralympic Games’ (LOCOG). The budget they have will be delivered through the private sector by for example the sale of tickets and merchandising articles, as well as it will receive income from the ‘International Olympic Committee’ (IOC) and additional money through a “domestic sponsorship programme”. (London 2012, 2010). The public sector, which is responsible for the new venues and the infrastructure, is represented by the ‘Olympic Delivery Authority’ (ODA). “The ODA is funded by the Department for Culture, Media and Sport, the Greater London Authority, the London Development Agency and the Olympic Lottery Distributor.” (London 2012, 2010). As can be seen there are many different organizations that have to pay a huge amount of money to fund this specific big spectacle. And of course it would not be possible to make such an event happen if there would not be so many funding it.

Nevertheless, as mentioned by Toohey and Veal (2007) the host city or country knows beforehand that hosting a mega-event will cost them more money than they in fact will gain. So why are there each time so many bidders who want to host a mega-event? This question can easily be answered with the already above mentioned arguments that the long-term impacts of these events are more important for a city or the whole country than the fact that they have to pay more money than they actually will receive through hosting them. This was already found out by Pyo et al. (1988) by looking on several Olympic Games between 1964 and 1984, that “there were not enough visitors and there was not enough spending by them to justify the event costs.” (Pyo et al., 1988: 141).

Along with Toohey and Veal (2007: 127) the most important source of income for the organizers are the broadcasting rights: “[aˆ¦] the Olympic Movement is significantly dependent on income from broadcasting rights.” Furthermore they list some other “main sources of income for Game events: world and local sponsorship, ticket sales, lottery, sale of merchandising articles as well as Government donations.” (Toohey and Veal, 2007: 135). These statements show that there are many sources where money can be gained before and during a mega-event but it has always and probably will always be less than the money spend beforehand and during the event by the organizers.

Research for this essay shows that it is not easy to define mega-events in one term due to the huge range of existing events. Nevertheless there are various kinds of events that are called mega-events even if some have a lot more visitors than others. Besides each single event has a different target group that is attracted by it.

The fact that mega-events can take place practically all over the world makes them a contemporary issue for the travel and tourism industry. There may be some tourists who could be afraid to visit a certain country for example due to political issues. Therefore each country that is chosen to host a mega-event will have different impacts. There will always be a difference in the number of visitors attracted to an event and above all each host city or country will have different long-term tourism impacts afterwards.

As seen hosting a mega-event does not profit the host city or country short-term but all the arguments like enlarging tourism long-term, building lasting transport infrastructure and building up the image of a country are more important than the loss of money that probably will be coming in the years after the event took place. But even when the costs for hosting mega-events are much higher than the money gained through them the author of this essay has the opinion that such huge events are very important for the whole world as already mentioned as well regarding the statements of Robertson (2006) and Weed (2008).

In the opinion of this essays’ author events and especially mega-events bring the world together due to the global importance and definitely help people to get a better understanding of other countries.

Because of all the above mentioned arguments mega-events are a contemporary issue for travel and tourism and due to the fact that there always will be such events in the future the issues will be persisting.

“Mega-events like Olympic Games and expos have been and continue to be important phenomena at many levels and in many respects.” Roche (2005:5)

Atithi Devo Bhava means Guest is God. In India guest is treated as God. Max Muller stated that If we were to look the whole world to find out the country most richly endowed with all the wealth, power, and beauty which nature can bestow- in some parts a veritable paradise on Earth- I should point to India. If I were asked under what sky the human mind has most fully developed some of its choicest gifts – I should point to India.

Tourism is at a rising industry in India. Tourism is considered as major foreign earnings for Indian nation. India as an ancient cultural cradle of the world is considered as exotic tourist destination. It has fascinating tourist destinations like the Taj Mahal, The Khajuraho temples, The marble mountains, The Gateway of India, The Red fort and The Qutub Minar, The Ajmer Palace, The Bharatpur, Bird Sanctuary, The city of Canals and many moreThe foreign tourist longs for a tryst with India and loves to visit each and every corner of this vast country. Tourism is the largest service industry in India, with a contribution of 6.23% to the national GDP and 8.78% of the total employment in India. India witnesses’ more than 5 million annual foreign tourist arrivals and 562 million domestic tourism visits. The tourism industry in India generated about US$100 billion in 2008 and that is expected to increase to US$275.5 billion by 2018 at a 9.4% annual growth rate. The Ministry of Tourism is the nodal agency for the development and promotion of tourism in India and maintains the “Incredible India” campaign.

According to World Travel and Tourism Council, India will be a tourism hotspot from 2009-2018, having the highest 10-year growth potential. The Travel & Tourism Competitiveness Report 2007 ranked tourism in India 6th in terms of price competitiveness and 39th in terms of safety and security. Despite short- and medium-term setbacks, such as shortage of hotel rooms, tourism revenues are expected to surge by 42% from 2007 to 2017. India has a growing medical tourism sector. The 2010 Common wealth Games in Delhi are expected to significantly boost tourism in India. (wikipedia ).

Major Sub-categories

The tourism industry has two major aspects:

i. Tourism: Tourism includes various types, like medical tourism, health tourism, spiritual tourism and rural tourism, adventurous tourism..

ii. Travel: The travel segment includes various tour operators and other travel agencies.

India Tourism Industry’s Role in the World Economy

Indian tourism industry contributes to around 5.9 percent of the country’s GDP and it provides employment to around 41.8 million of inhabitants. India’s tourism industry is calculated both in terms of business and vacations. The number of foreign tourists arriving from all over the world rose from 0.37 percent to 0.53 percent as has been stated by UN World Tourism Organization (UNWTO) in the year 2006.

Indian tourism exchange earnings are approxiamtely $1.5 billion and account of 0.5 percent of the total tourism traffic of the world. Central India, The North Eastern states, Calcutta, Mumbai, New Delhi, Khajuraho, and Goa are the most popular tourist destinations. Rajasthan is paradise for the foreigners and this state provides a wide range of cultural and ethnic diversities to the visitors.

Major global players

Emerging Trends of Indian Tourism Industry

aˆ? In an effort to boost the confidence of visitors and tourists after the Mumbai attacks, the Union Ministry of Tourism, India is launching a new scheme ‘Visit India 2009’ offering various incentives to foreign tourists and tourism industry. These value addition services will be offered to tourists visiting the country during the period April 2009 – March 2010.

aˆ? The Department of Tourism also has plans to organize road shows in countries like Singapore, Canada, UK, Japan and Australia, in joint venture with the IATO. The ongoing year will see a rise in the advertisements and marketing through trade fairs and exhibitions to draw the attention of foreign tourists from across the world. Moreover, there are possibilities of constructing helipads in various places to introduce the helicopter services for the tourists.

aˆ? The real GDP growth for travel and tourism economy is expected to grow at an average of 7.7 per cent per annum in 2010.

aˆ? Earning through exports from international visitors and tourism goods are expected to generate 6.0 per cent of total exports (nearly $16.9 billion) in 2009 and expected to increase to US$ 51.4 billion in 2019.

aˆ? According to the Ministry of Tourism, Foreign Tourist Arrivals (FTAs) for the period from January to March in 2009 was 1.461 million. For the month of March 2009 the Foreign Tourist Arrivals was 472000.The reason for the decline is attributed to the ongoing economic crisis.

aˆ? In spite of the short term and medium term impediment due to the global meltdown the revenues from tourism is expected to increase by 42 per cent from 2007 to 2017

The Indian Hotel Industry has been divided into seven categories by the Ministry of Tourism, Government of India based on the facilities and features offered in the hotels. Of these the luxury segment has been defined as consisting primarily of Five Star and Five Star Deluxe hotels, catering to the elite class of the society. It offers high quality service at a significant premium over the other types of hotels. Its target market segment is usually business executives and upmarket foreign and domestic tourists (Indian Ministry of Tourism, n.d.). There is a significant overlap between the luxury sector and the heritage hotel segment as a number of the larger heritage hotels like the Oberoi Udai Vilas and the Taj Palace in Udaipur are classified as luxury hotels though they also belong to the heritage category. For the purpose of this study, such large heritage hotels have also been included in the Indian Luxury Hotels sector.

Current Trends

The net annual sales for the luxury hotels industry amounted to approximately Rs. 5060 crore for the year 2011-12. This represented a more or less constant Year-on-Year growth of 12.47% for the ten years between FY 2001-02 and FY 2011-12 (Indian Ministry of Tourism, n.d.). Not only do the financial figures show the significant size of this industry, but the overall efficiency of this industry is quite high too as is evidenced from the growth in operating profits over the same time period. For the industry, this growth has been a spectacular 24.15% Year-on-Year (Indian Ministry of Tourism, n.d.).

The industry has largely been isolated from the global economic slowdown even though rising inflation levels have meant increased overhead costs for luxury hotels which could still result in lower margins over the coming years. Till now however, this has been largely offset by the large influx of foreign tourists attracted by the weakened Indian rupee. Also the economic meltdown has meant that the domestic travelers have decided to cancel their trips abroad and travel more extensively within the country itself (Narayana, 2011).

Hotel guests from ASEAN Countries have increased 17% over the last year. This may be attributed to the recent proliferation of South-East Asian airlines like AirAsia, Tiger Airways and Silk Air, which have made travel to India more accessible to the populace there (Narayana, 2011).

The manpower utilization ratio for the luxury hotel industry has been rising steadily and currently stands at around 2.71 employees for every available hotel room. Not only are these figures well above the overall industry average of 2.01 employees for every hotel room, but they are among the highest on the global scale as well (FHRAI, 2012). These high values are attributed to Indian hotel owners tending to ‘overspec’ their offerings and can pose a significant cost risk as a rising inflation rate increases the labor costs.

There is also a current tendency in the luxury sector towards the adoption of green initiatives, which have resulted in a drop of about 3.3% in energy costs as percentage of hotel revenue (FHRAI, 2012). Such eco-friendly initiatives also improve the marketability for these properties.

Indian luxury hotels have largely been quick to adopt the latest technological trends. This is evidenced currently through two facets. Firstly, Indian luxury hotels have jumped on the social media marketing bandwagon and have benefitted immensely from its strong reach at almost no cost. These hotels have even managed to develop a connect with the non-elite, aspirational section of the society through the use of their Facebook and Twitter pages which a give a behind-the-scenes look at the daily workings of many of these properties (Abraham, 2012). Secondly, the rise of the Internet has also made logistics a lot easier for these hotels to manage. Online bookings coupled credit card and net banking transactions and an extensive use of customer databases have made it easier for hotels to provide no hassle quality service that can now be customized to each traveler’s individual needs (FHRAI, 2012).

Major Players

The major players in this segment are limited to large private chains and franchisees or joint ventures of large international chains who have decided to enter India in order to take advantage of its growth rate. The players in the former category include The Indian Hotels Company Ltd. (known to the common public as Taj Hotels, Resorts and Palaces), EHI Ltd. (Oberoi group), ITC Hotels, Leela Group of Hotels and The Lalit Hotels, Palaces and Resorts. The international hoteliers who have a presence in the Indian luxury hotel sector include JW Marriot, Starwood, MGF Emmar, Radisson group and Shangri La among others.

Competition

The luxury hotel industry faces direct competition from a number of sources, which can include:

Mid-segment hotels that are looking to scale up their offerings. They pose a significant threat because if these hotels can raise their service quality to somewhere near the same level as that provided by the luxury hotels, their cheaper prices will ensure that many of the upper middle class population who may have been aspiring to move up the ladder to the luxury segment no longer feel the necessity to do so. It will additionally be difficult for the luxury chains to battle them on prices since they have their brand image and the promise of a ‘five-star’ experience to maintain. In the long run though, the iconic stature of these hotels should ensure that customer demand for their service never dries up.

A more significant threat comes from industries offering alternative travel experiences. These would include firms offering trips on luxury yachts or high-end adventure tourism like safaris and mountaineering. These are especially attractive to the nouveau rich, a significant portion of who favor ‘Entertainment’ over ‘Pampering’ (Barsky, 2011).

With respect to the domestic travelers, competition also comes from the international luxury hotel and resort chains, which themselves have well established brand names and statures.

Location on the Tangibility Spectrum

The luxury hotel industry can be placed roughly on the right side of the tangibility spectrum as it is an industry whose main offering (i.e. accommodation) as well as various supplemental experiential services (i.e. spas, meditation, etc.) are intangible, though there are some tangible elements that complement these, such as dining, room and laundry services (Appendix 1). Looking at these, this study also places the luxury hotel industry on the overlap between People Processing and Mental Processing quadrants of the Tangibility Matrix. This again implies that it luxury hotels provides a mix of both intangible and tangible benefits for their customers (Appendix 2).

Service Offerings
Customer Expectations of Service in This Industry

The behavior of consumers in a hospitality industry is quite heterogeneous and cannot be measured easily. The behaviors and expectations of the consumer change as they travel more, gain more knowledge to become more confident. “Consumers are more discerning of tourism purchase, irrespective of what they pay, and having high expectation of quality” (Abraham, 2012).

A Consumer visits hotel for a basic reason to get accommodation which is his need; however he expects polite staff, good ambience, and attentive service and so on. If such expectations are not met within timeframe, customer may leave the hotel even if the basic need is being fulfilled.

The customer expectation of service in an Indian luxury hotel may be evaluated in terms of following offerings (Narayana, 2011)-

Unique Oriental Experience

From the cuisine to the decor and staff culture, personalized services to every small detail, everything must be fussed over because the customers come in expecting a unique experience straight from the Orient.

Highest Standards of Luxury

Highest standards in every aspect of hospitality, fulfilling the essence of “Treat me like an honored guest” and “Keep your promises”. These are supplemented by tangible aspects like Deluxe and Premier Rooms, Premium Suites, best Spas and clubs with a unique oriental theme, private and semi-private pools, fleets of Mercedes and BMWs, etc.

Hospitality from the Heart

The staff must go the extra mile to create an indelible memory in the heart of the guest and build a relationship that is strengthened with every visit.

They know their guests well in advance, their birthdays, taste and preferences. A full-fledged itinerary is made for the guests as per their preferences. They have low Room to staff ratio. Suites have their own private butlers.

Possible Levels of Customer Expectations (Ref Exhibit 1)

The level of expectation varies widely depending on reference point the customer holds. The exhibit shows a continuum along which different services expectations have been ordered from high to low. On the left are different types or levels of expectations from high to low. We give name to each of the expectation and try to find what it means in terms of that hotel. The importance of expectation as perceived by the customer will assess the hotel’s performance.

‘Bundle of Benefits’ Typically Received By Customers

Some services are consumed effectively in conjunction with other services. When customers find value in a package of services that are interrelated, price bundling is a good strategy. The effectiveness of the bundling depends on how well the hotel understands the bundles of value that customers perceive and on complementarity of demand for these services. Some bundled packages are Pilgrim Packages, Leisure Travel Packages, Corporate Packages, and Wine Tasting Packages. Also there may be various offers like complementary rooms, Loyalty card: based on stay in number of days, Itinerary based vacations, honeymoon packages.

Typical Service ‘Performance’ of Firms in This Industry

The service performance of firms can be measured using GAPS model with SERVQUAL as instrument. We took depth interview and assessed the five dimensions of service quality to ascertain the level of service and determine which dimensions need improvements.

Random sample of ten customers was selected and questions were asked based on five point (1 to 5) Likert scale expounding all 22 variables of SERVQUAL dimensions. When we tested the results it was found that the facilities experienced were lower than expected in many cases. We asked the customers 17 questions to check their level of expectation and perception.

(Ref Exhibit 4 for complete analysis of SERVQUAL dimensions)

Tangibility

Under the Tangibility dimension, Staff appearance got the highest Cumulative average rating of 5 both for perception and expectation. The overall average rating for the Tangibility was positive with perception was more than the expectation. The reason for customer satisfaction is the splendid infrastructure, the palatial build of the hotel and professional hotel staff.

Reliability

When we looked into the reliability, the average rating for operating hours, availability of rooms, external environment were the highest with rating 5. The least rating was for on time delivery of service with average 4.2. The service quality of reliability was rated at average -0.023. So overall perceived rating for the dimension was slightly less than expected meaning expectations have not been met fully. This was due to few of the customers were dissatisfied with timely delivery of service.

Responsiveness

When we looked at the responsiveness dimension, the highest average rating was for the expectation of quality of food and beverages with 4.9 but perception did not met the expectation. Some of the customers preferring local tastes were not satisfied. The greeting and exclusive welcoming of the guests was highest in perception with rating 5. Overall service quality was rated at 0.054 with perception better than the expectation.

Assurance

For assurance the highest expectation was 4.9 for security and for perceived the highest was for staff trustworthiness with rating 5. The lowest average rating was for value for money and some for hotel atmosphere where few of the customers sometime get disturbed with the noise outside their room apparently from hotel staff. Overall the perception exceeded the expectation by 0.122.

Empathy

When we analyzed Empathy it was found that for both the perception and expectation the rating was highest with 4.9 for availability of the staff. The least was for the flexibility of the staff. The perceptions did not meet the expectations fully and had a negative difference of -0.027.

Overall Service quality dimensions based on the SERVQUAL (Ref Exhibit 5)

When we analyze the service performance on all the dimensions of the SERVQUAL, we find that customers’ expectations are met for Tangibility, Responsiveness and Assurance but not for Reliability and Empathy dimensions. We can also refer the graph of Expectation and perception (Ref Exhibit 6).

Service Quality Dimensions & Their Relative Importance

Service quality is one of the most important factors affecting the customer satisfaction and enhancing the performance of the business. The service quality is being analyzed based on the ServQual Model (Ref Exhibit 2). Service quality is the difference between the Perceptions and Expectations where expectations measures what is anticipated ideally and perceptions means actual performance.

Satisfaction measures the gap between the perception and expectations, S = P – E

The ServQual model examines five dimensions of service quality – Reliability, Responsiveness, Assurance, Empathy and Tangibility.

All five service quality dimensions can be applied to firm in this industry. But the order of importance differs from a normal course with Tangibility being most important being followed by Reliability, Responsiveness, Assurance and Empathy. (Ref Exhibit 3)

Customer’s Involvement in the Service Delivery

Customers play an important role in the service delivery and many a times are co-creator of the service. They also contribute to the quality of service offered. The characteristics of the service business where customers are engaged in numerous and varied activities to increase the importance of compatibility management is most suitable for hotel business. This is due to the fact that when service facility supports varied activities all going on at the same time, the activities themselves may not be compatible. Luxury hotels usually attract maximally homogeneous groups of customers through careful positioning and segmentation strategies. The upscale travellers are the primary target segment for such hotels and customers self-select into the hotels. Even in such contexts, conflict may arise; e.g. hotel is hosting a business convention, a NBA team and individual leisure travellers. As the customers frequently interact in the process of service delivery and consumption, so the mix of customers simultaneously experiencing the service needs to manage effectively. This can be done by grouping together compatible customers; e.g. keep meetings and conventions separate from areas of hotel used by individual travelers.

Service Blueprint

A service blueprint for a typical luxury hotel is included in Appendix 3. This is based on our visits to the Oberoi Udai Vilas and the Trident in Udaipur.

Moments of Truths

The moments of truth are the critical customer interactions with the hotel’s staff or physical ambiance which can make or break his or her impression of the service quality of the establishment. For the luxury hotel industry these include:

Zeroth Moment of Truth: Is the actual search for the hotel and subsequent booking online. Only the virtual avatar of the hotel interacts with the guest at this point of time.

First Moment of Truth: When the Guest interacts with the first hotel employee (i.e. the driver) and subsequently arrives at the hotel.

Second (and subsequent) Moments of Truth: This includes all the activities post the Check In, when he/she interacts with the hotel staff during the course of his/her consumption of all the service offerings that the hotel has to offer.

The thing to note about the luxury hotel industry is that since it is so highly dependent upon the perception that a customer forms about the service quality of a particular establishment, any little mistake on the part of the hotel risks the chance of reflecting poorly on its overall service quality. Hence, every customer-staff or customer-ambiance interaction becomes an important moment of truth all by itself. This is also because the establishment is dealing with customers who have the highest levels of demand of any market segment.

Value in Blueprinting and its Advantages for a Service Marketer

The luxury hotel industry can derive a lot of value from Service Blueprinting of the kind that we have done for the course of this study. This can include:

Identification of the key activities that go into delivering the kind of service that the highly demanding guests expect on a daily basis from the hotel. For example, blueprinting will help a service marketer understand that the zeroth moment of truth is perhaps the most important for the hotel, since it allows a potential customer to get information about hotel that can potentially convert him into a future guest.

Distinguishing between the visible and invisible (frontstage/backstage) staff and their relative importance in delivering high quality service to the customers. Again, from the point of view of the service marketer it is important that equal importance be given to both the staff member who actually pick up and deliver the luggage for a particular guest as well as to the staff member who does the backstage work of actually transporting the luggage after its arrival from the airport. The learning is that if the backstage link breaks down at any stage of the service blueprint, it will reflect poorly on the customer interaction on the frontstage.

Blueprinting also allows the industry to identify stage where fail points may occur and eliminate them. For a service marketer, the experiential aspects of a luxury hotel’s service (i.e. its restaurant, night club, spa, gym etc.) are offerings where in case the training of the staff is not up to the mark or if the backstage preparation is not done properly, it can result in the customers going back with a negative view of the hotel’s overall services. For a luxury hotel, as has already been mentioned, all aspects of service are equally critical because of the nature of the clientele. Thus, elimination of fail points is essential and a blueprint will help a marketer know where these exist and get the people from operations to fix them. He/she can even prepare for contingencies in case preventive or corrective measures cannot be applied right away. For example, if there might be a problem with a suite that a particular guest desires, he can compensate for that by providing another room but with all the extra services that usually go bundled with their desired suite.

Blueprinting also allows a service marketer to properly set up the support services and get the employees trained in handling those aspects of customer interaction that are most likely to affect their perception of service quality. Thus, for a luxury hotel, personal grooming and customer interaction training for all levels of staff will be recognized as essential by a service marketer once he sees the level of front and back stage interaction that they are having with the guests to a hotel.

From a marketing perspective, a blueprint will allow the marketer to know where the greatest strengths of the hotel lies so that he/she can play that up in any promotion or customer communication campaigns that he/she might be helping the firm run. For example, if Udai Vilas recognizes the fact that its ambiance is the main point of attraction and retention for its existing customers, its service marketer will play it up as a strength in future brand communications with potential customers.

Physical Evidence

The servicescape includes the facility’s exterior (landscape, exterior design, signage, parking, surrounding environment) and interior (interior design and decor, equipment, signage, layout, air quality, temperature and ambiance).

Role of Servicescape in the Industry

Servicescape plays a very important role in the hospitality sector as tangibility or physical evidence is of utmost importance and is often the most visible dimension of service quality. When customers visit any luxury hotel, they expect grand service, nice decors and infrastructure, helpful and trained staff, etc. Many of the luxury hotels have brilliant architectural statement and occupy occupied classic buildings with antique furnishing. The servicescape plays a very important role in shaping the service differentiation, customer expectations, facilitating the customers and goals of the employees and thus influencing the nature of the customer experiences. In luxury hotel industry the visitors interact with the physical environment more than the service agent. In fact a customer experiences the servicescape before interacting with the service agent. Moreover, this interaction is omnipresent, i.e. throughout the guest’s stay at the hotel he will continue to interact with the physical aspects of the hotel and thus his perception of service quality will be greatly influenced by it.

There are various physical constituents and environmental cues which help customers form holistic picture of the overall servicescape. The visual cues include lighting, color, personal artifacts and plants, space and function and design and layout.

Three of the important roles of servicescape are –

Segmentation It helps segment the market as per the need of the hotel. By maintaining the grand-looking physical exterior, luxury hotels often weed out those customers who they do not believe are in keeping with the type of clientele that are their actual target market.

Targeting It help luxury hotel brands attract well-defined market segment. A display of opulence in the exterior of a hotel signals its exclusivity in the eyes of the elite members of the society.

Positioning The servicescape helps in the positioning of hotel brands by distinguishing them from each other. Hence the open verdant surroundings of the Oberoi Udai Vilas in Udaipur set it apart from the more business like environment of the Grand Hyatt in Mumbai, even though both are competing in the luxury hotel segment. Hence, the former attracts travelers looking for luxury and relaxation while the latter attracts more senior executives from the industry (Ref Exhibit 7).

Aspects of Servicescape Significantly Influencing Service Delivery

The physical evidence significantly influences the flow of experiences for guests at a luxury hotel. It can modify the meaning that they attach to the service delivery, their satisfaction and their emotional connection with the brand. Hotels thus, employ a number of unique aspects of servicescape that can positively influence their service delivery. These include:

Ambient Conditions: The luxury hotel industry has amassed great expertise in the use of background characteristics of the environment such as temperature, lighting, music, scent and color to influence the behaviors and perceptions of its customers. Luxury brands make it a point to have climate control systems in all parts of the hotels so that the customers have a consistent experience and do not face any physical discomfort during their stay. They also make use of appropriate lighting and music at different locations to suit the moods of the guests. This could range from providing soothing music inside elevators to the varying lighting employed in corridors to remove a sense of ‘sameness’ to them during a guest’s stay. Even the scent and color, especially in the external surroundings of the hotel provide a positive reinforcement to the guests about the place’s service offerings.

Spatial Layout and Functionality: Hotels also make use of spatial layouts so as to ensure the most effective delivery of services to its customers. This is the reason for having lobbies with open atria and a bank of elevators to ensure that guests do not have to keep waiting in the lobby. Also, many hotels have dedicated stairs and service lifts for its employees to ensure their quick and efficient movement from place to place throughout the hotel. Also, the design of the hotels usually takes into account the common activities that the guests are expected to undertake. Hence, the gym and swimming pool are often placed together for fitness enthusiasts while the restaurant, bar and night club are kept together separate from the rooms so that the guests are not disturbed by the noise.

Signs, Symbols, Artifacts: These are primarily used by hotels in forming a positive first impression in the minds of the customers. These include the outer signage at the hotels, which are often done in elaborate fonts to signify the exclusivity of the place. Also, the prominence of the brand logo and its use at various places in the hotel help to reinforce the brand exclusivity in the customers’ minds.

Servicescape as a Source of Competitive Advantage

Hotels can use their physical evidence as a source of competitive advantage in the following ways:

By packaging the entire bouquet of service offerings within a consistent servicescape. This ensures that the guests are able to put a tangible face to the service delivery offered by the firm. This tangibility also helps the customers form the first impression about a hotel and hence a brilliantly designed external facade can be the visual metaphor for a high quality service offered by a firm, which will attract potential customers to it. These physical evidences need not be external facades though, for hotels, they can also include website and travel brochure design because these are often the communications that the firm has with potential customers.

Hotels can use efficiently designed servicescapes to facilitate the delivery of high quality service. As has been mentioned above a well-designed facility with separate service stairs and elevators for the quick movement of hotel staff ensures an error free and prompt service delivery for the guests.

Hotels can also use their servicescapes to function as socializers so that it is easier for the guests to mingle amongst themselves. On the other hand, for the benefit of those guests who wish to escape from it all and spend their vacation in secluded luxury, hotel servicescapes can also be designed in such a way that such guests are not disturbed by others. This can be achieved through providing private cottages or suites with built-in pools for such guests.

As has been mentioned above, hotels can use servicescapes as differentiators, especially in positioning. However, they can also them to highlight offerings that are unique to them. For example, a hotel with a variety of restaurants to choose from may design its landscape in such a way that it reflects the cuisine on offer at each particular one. Also, hotels with large ballrooms can further accentuate them by investing in expensive interior decoration.

Wild Card: Customer Loyalty at Luxury Hotels: Attracting the Right Clientele

Luxury hotels are faced with the problem of customer retention not because of intense competition, though it still has some role to play, but majorly due to the fact that they cater to a relatively smaller and highly specific set of clientele that demand only the highest quality of service and is certainly not averse to moving on to a competitor’s hotel if the services provided to them are not of their desired service quality. Also, with the ramifications of the financial recession of 2008 still being felt in the industry, retention has become an even bigger issue. It is no secret that attracting new customers is both too difficult and too expensive as compared to retaining old ones (Viajayadurai, 2008).

However, for such hotels, the issue of customer retention acquires another unique aspect: that of attracting and retaining a specific type of elite customer. Such customers are necessary not only because they are the only ones to possess the financial wherewithal to be able to afford the services being offered but more importantly because they positively affect the service quality dimension of Tangibility that other guests experience at these hotels. In short, the presence of elite, well-to-do guests is essential for a luxury hotel because it makes other hotel guests feel that they are being served by an exclusive establishment thereby bettering the latter’s perception of the service quality being offered. Moreover, elite guests often have an amplified word-of-mouth effect due to their superior social standing and thus having them consistently visit you as a guest provides for a large scope of future business for luxury hotels (Alfred N.P, 2007).

For the purpose of this study, we conducted an analysis of the methods adopted by the Oberoi Udai Vilas in Udaipur in attracting and retaining the right clientele and the reasons and ramifications of it doing so.

Identifying the Right Customer: The customer profile targeted by Udai Vilas includes the characteristics that one would associate with well-to-do customers

Psychographics

Values – Luxury, Grandeur, Hospitality and Comfort

Life style – Plush, extravagant spending, high self-esteem and social recognition

Behavioral Profile

Consumption level and situation – visit one place once; repeat visits very rare

Loyalty – Do recommend if satisfied

Occupation – Business Executives, Managers and Entrepreneurs

Marital Status – Mostly married, esp., just married

Education – Mostly highly educated, Graduates and Post Graduates

Age – 25+

Reaching the Right Customer: The Integrated Marketing Communication effort of the hotel is aimed at a healthy mix of well-to-do domestic and international guests. Of the total guests arriving in the hotel, 45% are domestic and almost 55% are international travelers. As per (Market Metrix, 2011), luxury hotel guests have had the fastest uptake of Internet and Social Media among all segments of travelers. The study also states that nearly 30% of all luxury guests are inspired to choose a travel destination from friends’ recommendations and another 20% search the web for holiday ideas.

Keeping these statistics in mind, Udai Vilas has maintained a strong online presence through online travel and lifestyle magazines/portals the most significant of which has been the use of Travelzoo, which has over 25 million global subscribers and specializes in providing information on different luxury services, i.e. not something that would be visited often by casual travelers. The hotel also maintains both Facebook and Twitter pages that are updated regularly and provide a platform for past and future customers to engage with the hotel administration who are more than willing to address queries or even settle grievances. The hotel also displays its TVCs on only select lifestyle and travel channels during shows that business and luxury travelers are more likely to be watching. The entire effort is targeted towards attracting the type of guests that Udai Vilas wants.

Efforts towards retaining the Right Customer: Udai Vilas recognizes that even the most affluent gues

The increasing trend in marriage halls over the years mainly from 2007-2012 is contributed by a number of reasons. The main aim of this thesis is to find out the reasons to the rising trend in marriage halls from 2007-2012 and to gather in depth knowledge of the marriage halls business and industry in Lahore Pakistan. The areas of research are Gulberg and Garden Town Lahore.

Marriage is a basic necessary process every human being passes through during their life time. It not only is necessary but a social custom as it is a religious practice that every individual is likely to follow. Marriage halls aim at organizing marriage and wedding functions providing all the services for the convenience of the people under one roof. Marriage halls provide all services including food, cutlery, sitting arrangements, decor, music system, safety, security and parking.

The mission of a marriage hall is to sustain customers and increase repeat clientele as there is high competition in the marriage hall industry. Marriage halls aims at providing customers with the best quality and best arrangements in arranging their marriage function and allowing them to be satisfied as much as possible.

Marriage halls business has been a glooming business in the past couple of years and has proven to be profitable. There are 20 marriage halls located in Gulberg and Garden Town both registered and un-registered. As a result with the changes in the government regulations, awareness of customers and economical changes in the economy of Pakistan has affected the industry tremendously and has also given way to increase in competition by introducing outdoor catering services, marquees and other catering service providers to meet customer needs.

In this paper I will be discussing the trend of marriage halls from 2007-2012 and the reasons as to why they have increased or decreased supported by facts and figures and using both qualitative and quantitative data. I will be focusing on only Gulberg and Garden Town area in Lahore as my target market and sample size.

1.1 Background

Increase in the number of marriage halls and the increasing trend over the years have increased in all over Pakistan from 2001-2012. Pakistan having a large population allows a large number of people getting married every now and then. The marriage halls business is increasing day by day and therefore it is of my interest to find out the reasons to the increasing number of marriage halls in Lahore from year 2007-2012.

The increase in the number of marriage halls is due to the convenience it provides to the hosts and allows package budgeting and are easily available according to the requirement. Indoor marriage halls provide protection against bad weather conditions and also allow more traditional outlook for marriages the ambiance, the decor as compared to the outdoor marriage events.

According to the Punjab Government laws the halls have to be closed by 10pm rather than events held outside. The owners of marriage halls are more pressure and tension to shut down by 10pm if not they are penalized but in case of outdoor marriage events the organizer and host are in less pressure and tension as they have more time to vacating the area.

The marriage hall industry is the only industry booming in the past 5 years as it requires converting residential area to commercial marriage halls. I am motivated to research on the rising trend of marriage halls as this research has not been done previously as it requires first hand information. Therefore it allows me to conduct different research methods to find out the increase in the number of marriage halls. The purpose of this research is to gain all the knowledge about the industry and to have in depth knowledge of the industry.

1.2 Industry Overview

Marriage halls industry has been glooming in Pakistan from 2007-2012. A rising trend is seen in the increase of number of marriage halls in Pakistan. Investors foresee it as a profitable investment irrespective of the economical challenges, fluctuations in the prices and changing policies of the government.

The changes in the government policies have affected the overall industry in Pakistan; therefore investors have made big investments in marriage halls business. Marriage halls are and have been facing different challenges that affect the business including the rules and regulations of wrapping up the function by 10pm, allowing a one-dish policy in food which as a result squeezes the profit margins for the investors but allows them to earn profits.

The high rate of inflation strongly contributes to the increase in the number of marriage halls as the purchasing power of customers have reduced and they prefer to arrange their functions as economically as possible. The challenge of load shedding is another major problem faced by the marriage halls which as a result has increased their expenses and decreased their profits.

The overall industry in Pakistan has been facing a business slum by the changes in the government frequently over the years with fluctuations of prices therefore marriage halls have been a safe resort for investors to invest and earn profits.

As marriage is a necessary process every individual goes through investors foresee marriage halls business as a profitable business in spite of the challenges being faced by them.

Recently from 2010, the competition for marriage halls has been increased by different competitors including marquees and outdoor catering which has increased competition for marriage halls to compete with. Though the target market for marriage halls is particularly the upper-middle, middle-middle and lower-middle class therefore it allows marriage halls business to sustain the business as the middle class income group is high in Pakistan.

1.3 SWOT Analysis
Strengths
Security

Marriage halls provide security to the customers as compared to the other competitors. They provide security in situations of danger, fire and secure the properties of the guests in the function.

Economical Prices

Marriage halls target the middle class and therefore allow middle class income groups to arrange their function with the best facilities in the most economical prices possible. Due to the high inflation rate in Pakistan marriage halls are booming as the purchasing power of consumers have decreased and marriage halls provide the best economical prices to arrange function compares to competitors.

Weaknesses
Customization

A major weakness of marriage halls is that they provide standard format to arrange marriage functions and lack in providing customization the customers according to their needs.

Capacity

Marriage halls do not have enough capacity to accommodate people more then 500-700. Whereas marquees can accommodate large number of people from 700-1000 number of guests.

Opportunities
Increase usage and capacity

Marriage halls have an opportunity to increase their usage by conducting other functions including seminars, exams, business meetings, lunches to increase their revenue. Marriage halls also have an opportunity to increase their capacity by building halls to accommodate more people.

Threats
Government Regulations

Government regulations pose a serious threat to marriage halls as they can only offer one dish to be served in the main course and the time restrictions that the functions have to be wrapped up by 10pm. The government regulations are a limitation for marriage halls to earn more profit and to offer customers more satisfaction.

Increasing Competition

The increasing competition in the industry is also a serious threat that the marriage halls have to face a number of challenges and meet different ways of conducting business.

1.4. Research Objectives:-

To find out the percentage increase of the marriage halls from 2007-2012 in Lahore.

To find out the number of marriage halls in Gulberg and Garden Town Lahore from 2007-2012.

To find out the reasons as to why the trend has increased in marriage halls over the years.

To conduct primary research and gain knowledge on marriage halls business in Pakistan.

To find out the prospects of marriage halls in Lahore Pakistan.

To compare the trend of rise in marriage halls in Pakistan with India and China.

2 – Theory
2.1 Literature Review:-

Marriages take place in every society, community and country. A number of reasons have been highlighted over the years as to the rise of marriage halls. “Wedding expenses have increased by 20 to 30 percent this season and are likely to increase in the coming months. Catering and poultry prices are high and wedding hall rates have been raised considerably. This has added to the consumers’ financial burden but traders in wedding-related businesses are making the best of it.

Wedding halls in Gulberg, Garden Town, Johar Town and Faisal Town have increased their rates and blamed the move on inflation.2Inflation plays an important role in decreasing purchasing power of consumers to spend on wedding activities. Increase in prices has increased expenses and therefore there has been a 30 percent increase in the prices of wedding expenses and wedding halls rates. Due to the high inflation rate consumers find places with economical prices to arrange their functions. Marriage halls therefore provide the only means to arrange a wedding function economically that can be easily afforded by the consumers targeting the middle income groups.

“The trend of conducting marriage ceremonies at banquet halls has decreased in the city in recent days, as people are scared to leave their houses in the prevailing security situation, owners of various banquet halls told Daily Times on Saturday.

In addition to a reduction in the total number of reservations, the numbers of guests attending weddings has also decreased, they said, adding this was very bad for business. They said their business was already under tremendous pressure due to rising prices and limited budgets and the recent wave of terror attacks had only added fuel to the decline. “Inflation has squeezed the purchasing power of the people,” said Mahboob Ahmed, the owner of a private marriage hall.3

In 2009 with the increase of terrorism in the country marriage hall business has been affected tremendously. People instead arranging their functions outdoor or in marriage halls preferred to stay at home and arrange it at their home. Lack of security caused a lot of people to think whether to arrange wedding functions in house or in marriage halls. Terrorism along with inflation posed a serious threat to the marriage halls and increased intense amount of security concerns in order to survive their business. The industry in 2009 faced a number of challenges allowing the business slope to move downwards effecting marriage halls adversely.

“The LDA concerned is responsible for providing basic facilities to residents, but it seems that the authority has adopted a ‘liberal policy’ for issuance of NOCs for conversion of residential plots into commercial plots. It is because of this liberal policy businessmen take advantage and are building marriage halls without considering the prerequisites of the by-laws. The residents are suffering from this mushroom growth of marriage halls which are more than from any other scheme in Lahore. 5

The liberal policy of LDA to issue NOC to the marriage halls in one of the major reasons in the rise of marriage halls in the past couple of years. Lahore Development Authority has been converting residential plots into commercial areas providing businessmen to invest in opening marriage halls and serve as a source of generating revenue for the government as well as the marriage hall owners. Marriage halls surrounded everywhere in the residential area cause inconvenience to the residents causing traffic jams and noise disturbance to the residents living in the surroundings. By issuing NOC creates a high opportunity for businessman to open marriage halls and earn revenue more easily as compared to other industry in Pakistan

“District Coordination Officer (DCO) Noorul Amin Mengal has warned the owners of marriage halls and said they should be closed on the given time and in case of negligence they would have to face consequences as per law. Chairing a meeting at Town Hall on Wednesday, the DCO said in future no case would be lodged against bride and groom and their relatives while the entire responsibility of late closing of marriage halls would be on the shoulder of halls’ owners and case would be registered against them.6

Government regulations have immensely affected the running of marriage halls business. All marriage halls are strictly advised to adhere to wrapping up of a wedding by 10pm. In providing food items government has also limited the availability of food items to one-dish only which effects the marriage halls reducing their profits. The DCO stated to charge fines to any marriage hall violating the law and the fine solely being paid by the marriage hall owners.

Government regulations have limited the profits of marriage halls but on the other hand the government regulations have been made in the favor of the public security and protection. Therefore these laws allow marriage halls to be profitable as the customers pay the full price of a function allowing marriage halls to provide less and earn more money per head.

“As Pakistani society has grown more overtly conservative, weddings remain one of the few culturally acceptable venues for men and women to meet without restriction and even dance with each other. In other words, a mehndi is simply a substitute for a nightclub.

The phrases used to justify the extravagance ranged from “people will talk if you don’t have an elaborate wedding,” to “I just want a traditional wedding” and “there is social capital being built at weddings.7Marriages in Pakistan from the very start have been a source of entertainment and over the years the ritual has become more of a status symbol of having a prestigious marriage. People in Pakistan spend big amount of money on marriages and is known to be one of the biggest expenses in lifetime for every family in Pakistan. Marriages in Pakistan are costly due to the different events taking place in a marriage including dholki, mehndi, barat and walima.

Pakistan facing severe economic challenges the higher spending on wedding functions has not declined as marriages in Pakistan is known to be a big event and spending more money is a status symbol to have a status in the society. But India’s burgeoning middle class – now 300 million strong – are turning weddings into showcases of their growing disposable incomes and newfound appetites for the goodies of the global marketplace.

The largesse has spawned an $11 billion wedding industry, growing at 25 percent annually and beginning to rival the US industry valued at $50 billion. Top global luxury brands and local entrepreneurs are learning that the way into the pocketbooks of India’s new consumers is through their nuptials. 8India has a big wedding industry which is overcoming the US industry. Indian weddings are now a show of wealth in the society and wedding service providers are earning large amounts of money by customizing services. The Indian wedding industry is growing with 25% annually which is more than the growth of the US industry.

India is an emerging country with people witnessing rise in disposable income. Increasing disposable income renders people to mark this grand event with luxurious celebrations. Wedding at exotic locations, far from the maddening crowd of the city has become a rage and is considered to be a significant driver. Destination weddings continue to increase as it allows the wedding to be unique. In this format of the event, a planner becomes imperative due to the lack of knowledge of the place at which the wedding will take place as well as towards streamlining the entire process. An Indian wedding needs a lot of time and effort towards planning and implementation.9

India has a big wedding industry growing with a high rate every year. Different factors contribute to the increase in the spending on the marriages in India as well as the number of marriages taking place every year. Weddings for higher class in India are an opportunity to show their wealth, for middle class it is an event for which they have to go beyond limits to make it luxurious and for the lower class it is as simple as a normal event. Spending on luxurious locations, places, have given way to wedding planners as wedding in India require a lot of time to plan.

Demographic Profile, In 2011, India had a population of 1.21 billion, and with average family size of five members, there are around 242 million families in India. Considering one marriage per family every 20 years, on average India has around 10 million marriages per year. Also,the estimated median age in India as of 2011 in 26.2 years, signifying a large proportion of population in marriage age group.10

India has a large population of 1.21 billion with average families accounting around 242 families. Almost 10 million marriages take place every year in India with the increasing population the number of marriage increases proportionally. In 2011, it was seen that majority of India’s population lies with the marriage age bracket.

Availability of wedding loan and wedding insurance, Many banks and financial institutions have started lending marriages loan to ensure hassle free wedding experience. Also, increase in disposable income has encouraged newlywed to opt for wedding loan and make wedding a grand event. This attitude to make the wedding event grand increases the total wedding cost. With high financial stakes, the couples or their families opt to buy marriage insurance that take care of contingencies during marriage like cancellation/ postponement due to fire or natural disaster, accident of bride groom or burglary.11

Another important factor contributing to the increase in the number of weddings and increase on wedding expenditures is the accessibility of marriage loans and insurance provided by the Indian government. Now its easier for people to spend more as they have access to loans and can pay off later. These all facilities provided by the Indian government are provided to enhance the wedding industry in India and to strengthen it. Wedding Insurance is also popular among people as due to natural disasters during wedding functions people have an option of being compensated by the insurance companies in case of different problems including natural disaster.

Official figures suggest that 10 million people wed annually and that the industry as whole turns over more than 250 billion yuan (US$30.2 billion) each year. Big cities such as Beijing, Shanghai and Guangzhou have established well developed wedding celebration markets. Beijing, for example, leads the country with 1,000 wedding related firms. About 50,000 couples get married each year in the capital, a “diamond mine” for the wedding businesses.12

China wedding industry is rising with an increasing number of marriages taking place each year. The main cities of China including Beijing, Shanghai and Guangzhou contribute to the higher revenues generated from weddings on a larger scale. All cities in China have related business to the wedding business which help generate higher profits and develop its wedding industry.

While parents use weddings to cement their status and display their wealth, the bridal couple are experimenting with ways to personalize the experience, drawing not only from the U.S. but also from South Korea and Japan, and usually involving vast sums of money. Whereas Chinese weddings used to be about a dinner banquet and honoring parents, today’s weddings feature more exotic fare like fire-dancing, elaborate video presentations and motorcades of luxury cars with nameplates like Bentley, Lamborghini and Ferrari.13

Wedding in old times were entirely different from what they are now in the 21st century. People now focus more on showing of their wealth and status by having a lavish wedding of their children and is more considered as a symbol of honour. Chinese weddings are now arranged more exotically with having large amount of budgets for each step in a wedding arrangement from wedding planners to make up to photography and honeymoon. People in china display their status in a wedding by the prestigious cars they have and the different presentations of showing of their wealth in the society.

Excess is in order in all departments of the Indian wedding industry, estimated to be a staggering US$ 25.5 billion (Rs.1,42,596 crore) – the economy of a small country – and growing at the explosive rate of 20 to 25 per cent a year. The speed of economic growth in India, which is responsible for the creation of overnight fortunes, is also creating a conspicuous, yet almost desperate type of consumption at weddings. The average budget for an Indian wedding ceremony in the middle class is estimated to be US$ 34,000 (around Rs.19.01 lakh). The upper-middle and rich classes are estimated to spend upward of US$ 1 million (Rs.5.59 crore). This doesn’t include cash and valuables given as part of a dowry. Companies like GE Money India have introduced an “auspicious” personal loan, exclusively for weddings. Giant malls like the Wedding Souk in Pitampura, Delhi, spread over one acre and with over 100 shops dedicated to weddings, have emerged14

Indian wedding industry is rising day by day and the Indian government provides loans to provide access to cash for weddings. The average wedding costs around 6 crore. People in India spend large amount of money on weddings therefore wedding in a flourishing business in India and contributes a large chunk to the growing economy.

Marriage rates have tumbled over the past few decades, falling from about 10 marriages per 1,000 people in the mid-1980s to 6.8 marriages in 2009. This decline is a result of social influences (fewer couples looking to commit) and attitudinal changes, as consumers hold off for financial and lifestyle reasons. However, the fall in the marriage rate has not resulted in a complete disaster for the industry. In fact, the decline has led to a higher-than-average wedding spend, meaning even greater profits for those involved

Coming off of 2005 and 2006, two of the most prosperous years in the wedding industry, the sector plummeted as the economy entered recession. Revenues fell from a high of $67.5 billion in 2005 to $42.9 billion in 2009. Industry performance is expected to improve in 2010, expanding an estimated 10% to $47.2 billion, but still far below the years, so businesses need to put in place appropriate strategies to capture that increasing demand.15

As mentioned above the decline in marriage rate in China has led to increase in spending and earn higher profits. The decline is mainly caused by social influence on people, lack of commitment and difference in lifestyles. The decline has not caused damaged but allows the Chinese government to implement strategies that help to capture the increasing demand and develop wedding related business to enhance the industry and provide more services in order to generate more revenues from the wedding industry.

2.2. Competitor Analysis

The competitor analysis focuses on two main competitors including Marquees and Outdoor Catering services that cause a serious threat to the marriage halls. Over the past few years the competition in the industry has increased by the increasing awareness among the consumers and consumer needs and wants. Consumers now like everything their way which imposes a pressure on the service providers to be more efficient and provide customized services to cater to their needs.

2.2.1. Marquees

Marquee is a tent used for outdoor functions. Different investors have introduced a new concept of marquee which is basically taken from Saudia Arabia Hajj performance in Mina where there are small marquees for people to reside in for 5 days as a necessary process to perform Hajj. The concept has been introduced in Pakistan to arrange marriage and other functions in the outdoor. This has increased the competition for marriage halls as marquees allow customized services meeting the consumer needs and wants and providing value added facilities that include changing the theme of the set, colors, lighting, sitting arrangements to customize the marriage function to the consumer needs. Though marquees lack in providing few facilities including no kitchen, re-heating food facilities and as everything in a marquee is outsourced by other service providers they cause a threat to the quality of food and food diseases as to being stored for longer hours before it is served.

Marquees pose a serious threat to the marriage halls indoor services as consumers are more aware and require more customized services and facilities then the traditional marriages concept in the marriage halls.

2.2.2. Outdoor Catering Services

Outdoor catering services are an emerging business that has been posing a serious threat to the marriage halls from past many years. The Pioneers of the outdoor catering services are Nadeem Caterers, Hanif Rajput, Zafar Caterers, Dynasty and many other that have changed the way marriage take place now. They provide a complete package from providing a tent to the food, sitting arrangements, generators, lights, music system and all other facilities according to the customer requirements leaving them satisfied. Outdoor caterers pose a threat to marriage halls as it allows consumers to arrange the function with outsourcing different materials from different people and arranging their function according to their needs and budget.

2.3 Comparative Analysis
2.3.1. Industry Overview of Marriage Halls in India

India being rich in its culture, history rituals and customs in all aspects surpasses all countries and is known to have the best lavish wedding ceremonies all over the world. All industries in India have been affected tremendously with the financial slum being faced by India, but somehow the marriage hall industry has been able to survive and people spend more money on marriages and perceive to have a life time experience spending as much as they can.

The demand for weddings in India has increased and the numbers show that weddings have increased every year. The Wedding season in India takes place in October and all the marriage halls in New Delhi are booked a month before.

India’s wedding industry is flourishing as not just the halls but the wedding planners, designers, jewellers, beauty parlours now cash on the wedding season by providing different ways of organizing weddings. Weddings in India are more taken as a an event t spend large amount not by the upper class but the middle class to project their wealth having a status symbol. Wedding Planners in India provide all services from marriage halls to arranging the whole event within the consumer’s budget making it a customized service for people to pay high fees.

People are now more aware of the changing trends in arranging marriages they do not want a simple five-star hotel wedding but a customized wedding. With the increase in purchasing power of the consumers in India people now have more income and spend more on weddings.

India’s wedding industry is growing faster and bigger day by day, with people trying to overdo each other as to whose wedding arrangement is better. According to experts it’s been stated that a single wedding now normally takes 1.5 crore without jewellery. India’s wedding business is flourishing as now new designers are capitalizing on the opportunities in India.

India’s wedding business is the best business to invest as it has large profit margins and because of people increased income, and increase in purchasing power they spend more on weddings allowing wedding related services to earn more. Fewer auspicious days, as marriages are arranged only on auspicious days as Hindus place a lot of emphasis on astrology, the industry faces seasonal revenue. In case of unfavourable planetary combination as per astrology marriages are postponed.

This act as a barrier for the growth of wedding planner. Furthermore as large number of marriages across country takes place on few selected dates this give rise to the possibility that wedding planner may not be able to capture additional market share.22Marriages in India take place seasonally as majority of the Hindus believe in astrology. This restricts wedding planners on capturing the market share apart from the seasonal dates. This is a restriction for the wedding planners to earn high revenues and is a challenged faced by them.

2.3.2. Industry Overview of Marriage Halls in China

Chinese wedding industry has been glooming from past 5 years with a rise in number of marriages each year. The increase in the spending on weddings in China is attributed mainly because of economic, increase in disposable income and cultural change. Wedding expenditures have increased mainly in the urban areas of China accounting to 70% wedding day expenses.

The cultural change has a strong impact on the increase on the wedding expenses due to the different government policies including one child policy. Parents want to spend large amounts of money of their child’s wedding as they just have one child and desire to have a dream wedding for their child.

Other factors contributing to the increase in the wedding expenses is the traditional arrangements and economic factors. Having a new house, household accessories after wedding has become a necessity as before wedding children live with parents and after marriage live separately. The spending habit of chinese people and the increase in disposable income increase the spending on weddings. 30% of savings are spend on weddings of every person in China.

With the rise in the number of marriages each year and the increase in wedding expenditures businesses in China have taken it as an advantage and strengthened the wedding industry by providing specialized wedding services and increasing revenue.

2.4 Research Question
“Rising trend in marriage halls in Gulberg and Garden Town from 2007-2012 in Lahore Pakistan”
3 – Methodology:-

The methodology I will be using to research and analyze the rising trend in marriage halls in Pakistan is by conducting

Interviews

Survey Study

Questionnaires

Examination of Secondary Data

To gain in depth knowledge of the marriage halls in Lahore I conducted a survey study following the steps mentioned by Campbell and Katrina (1953) in the book Essentials of research design and methodology.

Campbell and Katona (1953) delineated nine general steps for conducting a survey. Although this list is more than 50 years old, it is as useful now as it was then in providing a clear overview of survey procedures. The nine steps are as follows:

1. General objectives: This step involves de¬?ning the general purpose and goal of the survey.

2. Speci¬?c objectives: This step involves developing more speci¬?city regarding the types of data that will be collected, and specifying the hypothesis to be tested.

3. Sample: The major foci of this step are to determine the speci¬?c population that will be surveyed, to decide on an appropriate sample, and to determine the criteria that will be use

Mass Market tour operators have dominated in the outbound market for years, with the rise of holidays abroad becoming more and more popular since the end of the Second World War. Thomas Cook, Thomson and First Choice are examples of mass market tour operators. Thomson and First Choice belong to TUI, these are known as mass market tour operators as they sell/sold holidays that appealed to the majority of holiday makers. Some of the larger mass market tour operators have diversified in now offering more specialised products such as safari and skiing.

TUI AG is the largest travel group in the world; Thomson belongs to TUI and is a travel agency as well as having its own airline. First Choice is another travel agent that has its own airline, which belongs to TUI.

TUI travel was formed in 2007, with the merger of TUI; their existing distribution, tour operators, air-lines and destination groups; with First Choice Holidays Plc.

TUI travel is the majority shareholder of the company and is listed on the London Stock Exchange. They operate in 180 countries worldwide, making TUI the leading tour operator within Europe; to become this they provide a wide and varied service for over 30million customers. TUI is a British based company, with their head office in Crawley, West Sussex, not too far from Gatwick Airport; one of the UKs busiest international airports.

TUI has over 200 different brands to over, over 140 aircraft and 3,500 retail shops across Europe, employing approximately 50,000 employees.

TUI is separated in too four sectors of business, covering all 200 plus brands, these are:

Mainstream

Specialist

Activity

Accommodation and Destinations

The mainstream sector is the largest of the four sectors in size, operating profit and the number of employees. The 3,500 retail outlets through-out Europe, providing over 25million customers per year, with package, self-package, sun and beach holidays. This sector operates over 140 aircraft to a wide variety of destination through-out the year, incorporating a large number of high street retail stores.

The Specialist and Emerging Markets sector includes 40 specialist tour operator companies, providing and selling tour destinations to a smaller demographic, this sector is becoming more popular as people are starting to spread away from the usual “package beach” holiday. Specialist travel and emerging markets are places such as tours in North America, Europe and further afield such as China and Russia, the emerging markets that have not been popular in the past due to inaccessibility. This sector also provides escorted tours to the Galapagos, around-the-world trips and student gap years to Australia for example.

The Activity sector is designed in providing customers that are seeking adventure or active holidays unique tours or packages to suit them. These specialised tour operators operate in the marine, adventure, ski, student and sporting segments, for example hiking in Kilimanjaro, polar expeditions, skiing in Canada and chartering yachts in the Caribbean.

The Accommodation and Destination sector provides on and offline accommodation and destination services worldwide; selling accommodation directly to the customers through online hotel booking sites, such as Laterooms.com; Hotelpedia.com and Asiarooms.com. It also provides accommodation, transfers, excursions and a destination agencies portfolio to tour operators, travel agents, cruise lines and other corporate customers.

Thomas Cook is another example of a mass market tour operator. As with TUI, Thomas Cook has travel agencies, airlines, hotels and tour operator; Club 18-30. In 2007, Thomas Cook merged with MyTravel; this was to cut costs; a predicted ?75million per year saving; and to combat competition from the low-cost airlines and web-based travel agents, that are on the rise in where customers are buying their holidays from.

All tour operators that offer air inclusive packages are required by law to have an Air Travel Organisers’ Licence (ATOL). This protects customers from losing their money and/or being stranded abroad if something was to happen to the flights. ATOL is managed by the Civil Aviation Authority (www.caa.co.uk)

Specialist Tour Operators

Specialist tour operators cater for niche market holidays, they specialise in particular destinations and/or in a particular product. For example Journey Latin America specialises in the particular destination of Latin America (www.journeylatinamerica.co.uk) and Active Diving specialise in Scuba Diving holidays around the world (www.activediving.co.uk).

Journey Latin America (www.journeylatinamerica.co.uk) specialises in holidays to Latin America; some of the destinations they include are:

Antarctica

Argentina

Belize

Chile

Cuba

Caribbean

El Salvador

The Galapagos Islands

The Falkland Islands

Guyana

Peru

Mexico

Nicaragua

Venezuela

They provide a wide variety of different types of holidays for a wide range of different markets. The types of holidays available are:

Tailor-Made Tours

Small Group Tours

Value

Active

Beach

Wildlife

Expedition

Honeymoon

Responsible

Family

Learn to… (learning a new skill)

Cruise

JourneyLatinAmerica markets to everyone, with holidays suitable for low-budgets to the higher budgets, family holidays to romantic honeymoons.

Wildlife holidays with JourneyLatinAmerica offers the traveller a vast array of wildlife and birdlife to see, from giant tortoises to llamas to sloths and penguins, all depending which country has been chosen to go to, there is the added advantage of there being the largest rainforest, driest desert to the longest mountain range and biggest river within the territories of the holidays available.

There is plently of advantages of travelling with a smaller, specialised tour operator, the service is more personal and the smaller operators tend to have more of a passion for the area they specialise in. Smaller operators are experts in their destination, enabling them to give first-hand advice and recommendations to the holiday maker. They also have more care towards to the places, the people and the environment and try to minimise the negative effects of the holiday.

Inbound Tour Operators

Not only is there tour operators for outbound tourists, either specialised or/and mass market; there is also many tour operators for inbound tourists, specialised and/or mass market. These tour operators specialise and cater for inbound tourists to the UK from many different countries. They provide tours and holidays in many different languages and for different budgets. One example of an inbound tour operator is British Tours.

British Tours (www.britishtours.com) specialise in tours of Britain. They provide tours to all size groups, from private groups up to 7 persons by car with their own guide; to larger groups by mini-bus or coach, with own guide. All prices are per car not per person. Tours are available in most languages, at an extra cost; including French, German, Spanish, Russian, Italian, Japanese and Chinese. Tours are suited to individual travellers, families, people with special interest, people with special needs and anyone who wants the freedom to travel at their own pace with their guide to help and inform. The tours of Britain cover the main tourist attractions and sites; the more famous to the lesser known authentic tourist sites; all with guide that are local to the area with a vast knowledge and interest of the particular site. Some of these tours are Stonehenge at Dawn, Legal London, Harry Potter and England’s Gardens.

British Tours offer private day tours leaving London as well as personally guided tours of Scotland, Wales and England, special interest tailor-made tours. They also provide European destination tours, such as Paris, Normandy Beaches by private plane and private bus tours of Rome and Italy.

British tours work with 100’s of travel agents worldwide, as well as many UK companies for sightseeing, ground-handling, interpreting and corporate entertainment within the UK. British Tours is a member of the London Tourist Board, the British Incoming Tour Operators Association, The Society of the Golden Keys and the American Society of Travel Agents.

An example of a tour and costs with British Tours:

Harry Potter Tour includes the locations where the Harry Potter films have been made, including London, Oxford and Gloucester. Oxford and Gloucester tour only (not including the London sights) for up to 7 people taking roughly 10 hours to complete would cost ?655 per car; price includes private car and guide, collection and return to hotel; anywhere in London; entrance and meals are not included in the price. These tours are also available in most languages.

The World Tourism Organization (WTO) defines tourism as “the activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business, and other purposes.” James Mak (2004) found that about 62 percent of international travel is leisure travel, 18 percent business travel, and the remaining 20 percent is for other purposes. Regardless of what the reason for travel may be there is a direct linkage of tourism and the economy.

According to the latest provisional data from the International Passenger Survey in the first quarter of 2010, London welcomed 2.96 million visitors. “Tourism is a vital contributor to London’s economy, generating approximately ?10.6 billion of overnight visitor expenditure in 2009” (Visit London: fact sheet). Evidently tourism represents a relevant source of foreign exchange earning a significant income, benefiting the London economy. This paper will attempt to explore the importance of tourism to the London economy focusing on different aspects in the industry that relate to the economic situation of London.

In 2002, Mayor Ken Livingstone devised a massive plan to encourage tourism and thereby improve the economic conditions of the country. He saw tourism as an industry with great potential and therefore intended to benefit the economic situation by improving the efficiency of the system. Since then much of the ‘Mayor’s plan for tourism in London’ has been revised and improved upon by the present mayor Boris Johnson. In Livingstone’s foreword to the publication he stressed that “tourism is vital to London’s prosperity. Ours is a world city with unrivalled appeal” London has assumed increasing importance as a premier tourist spot especially after turmoil from other “rivals’ that deter tourists from visiting their country. For instance popular tourist spots like Luxor, Alexandria and Sham Al Sheik are now looked upon as hostile environments after the ousting of president Ben Ali in Tunisia and the massive street protests that followed. In an article posted by the Euronews (2011), a Spanish traveller told reporters he had decided to leave Egypt “because the situation is getting complicated and dangerous.” He added: “We can’t go anywhere and we have three little daughters.” This unrest in rival tourist countries makes the politically stable and hence ‘safer’ London a prime tourist destination.

It is evidently clear that London is ranked highest for international tourism. London is a city of proud historic tradition, authentic architecture, an entertainment capital as well as an important financial and business centre. Many foreign dignitaries besides attending to their official duties also take time to experience the city as tourists. “Leisure activities have more flexibility and there is usually a range of places where particular leisure activities can be undertaken, and far less temporal constraints on their enjoyment, even if individuals are still bound by obligated, biological and work related time” (Shaw and Williams, 2002)

The Economic Development Strategy for London recognized that tourism and hospitality sector as one of the most significant forces in the London economy. “Tourism and leisure are also important elements in labor markets, with tourism accounting for more than one million jobs in the UK alone.” (Williams and Shaw, 1998) The London Tourist Board’s Tourism Strategy for London has calculated that the number of jobs created by tourism in 1985 is around 275,000 full-time job equivalents. This accounts for some 8 per cent of all London’s employment. This calculation includes day visitor spend which is estimated to add 10 per cent to the total (25,000 jobs) Since then, the plan stresses on the fragility of the key economic statistics on London’s tourism as the structure of employment in the industry has changed considerably for example in the advancements of the information and communication technologies as well as part-time employment and capital investment. However, tourism is set to grow with this increasing rate of tourism it will inevitably bring profit to the economic situation in London.

The Draft London Plan forecasts that growth in employment in hotels and catering will be second only to financial and business services. Technical Report Thirteen on hotel capacity and demand predicts a 3.4 per cent annual increase in overseas visits to London between 2000 and 2020. “The service sector has increased in importance, in both absolute and relative terms, in most economies in recent decades.” (Knox and Agnew, 1998) As the service sector benefits greatly a multiplier effect comes into play which creates inter-firm linkages which all have much ado with the economy. “The geography of the production of leisure and tourism services does share many features with other sectors” (Agarwal, 2000). Shaw and Williams (2002) found that catering held strong links to the agricultural sector and also that there was coherence between inter-regional transport firms, as well as some forms of furniture producers. It is this “multiplier effect that concerns the way in which expenditure in tourism filters throughout the economy, stimulating other sectors as it does so” (Pearce, 1989) Although this may represent profit within the economic sector of the city Smith (1995) argues that “regrettably, the abuse of multipliers often seen to be as frequent as legitimate uses – thus contributing further to the industry’s lack of credibility.” This pessimistic view holds certain truth as corruption is well within the tourist industry, however the extent to this is not as severe as to cause a significant downfall in the economy.

Another point stressed by the mayor is London’s success in the global tourism marketplace of which had a major impact on the performance of the UK tourism economy. The mayor has restated his commitment to ensuring that London continues to contribute to the wider interests of the British tourism industry. The visionary plan fittingly called ‘Visit London’ will seek to sustain London’s international profile and status as a world city as it has long been established as the international gateway to the UK, according to the Tourism Company (2002), with 59 percent of overseas visitors arriving via one of London’s airports. Over half of overseas visitors spend time in London, many of whom travel by rail car and coach. This leads me to my next point, which is the importance of the travel infrastructure.

Geoff Muirhead, CEO of an airport group, stressed the importance of the aviation industry in the UK economy “four group airports generate more than 3 billion pounds for UK plc, and support thousands of travel and tourism related jobs. Inbound tourism is clearly good news for the British economy, while overseas travel allows UK citizens a well earned break in a sunnier climate. We need to find ways of supporting both these aspects of tourism much more effectively, given their importance to the UK economy as a whole.”

The hospitality and leisure development is also greatly interlinked with the development of an efficient travel infrastructure. Whitbread Chief Executive Alan Parker explained that “the hospitality industry depends heavily on the infrastructure of air, road and rail links, which transport clients to the hotels. If infrastructure does not keep pace with growth, then business and tourism could drift away from the UK to other markets on the continent.”

In conjunction with the 2012 Olympic and Paralympic games more than 11 billion pounds of investment is set to flow into the capital between now and 2012, much of this funding goes into a range of various developments for the reconstruction of East London, particularly the transport system. Accessibility is an important aspect in tourism as tourism requires a journey, “similarly the view through the car windscreen has also had significant consequences for the nature of the visual ‘glance’, enabling the materiality of the city or the landscape to be clearly appreciated” (Larsen, 2001) Hence the mode of transportation is essential in creating an efficient tourist experience which undoubtedly brings revenue into the country. WTTC Chairman Geoffrey Kent commented on the infrastructural plan and said, “the government must put a long term infrastructure plan with at least a 15 year horizon. The 2012 Olympic Games will provide the platform, focus and budget for this long-term plan, which will drive the forecasted tourist demand.”

The Olympic Games is not the only highly anticipated major sporting event going to be held in London as it also plays host to mass events such as tennis at Wimbledon, cricket at Lord’s and the Oval, and rugby at Twickenham all representing pull factors that attract the tourists. Apart from sporting activities London is also rife with entertainment, art and music scenes renowned for edge and creativity. The cultural diversity and authentic music spots such as the ever so eclectic Camden Town is just one of the many interesting places tourist visit and due to consumerism succumb to marketing ploys that inevitably benefits the city’s economy. An article on “Late Night London” (2002) reports that 500,000 young people are estimated to go ‘clubbing’ in London on a Saturday night, the club scene again gains lucratively especially as in contrast to the United States the legal age to consume alcohol in London is 18 and hence teenagers deprived of such an experience in America can enjoy in London.

Tourism has brought exceptional to the city of London in terms of the economy and hence benefits the living standards of Lodoners of which become increasingly apparent. In reference to the Mayor’s plan, the quality of life of the locals increase tremendously with both leisure and employment opportunities. With all the development of travel and industry that is essential in fostering an efficient tourist system, in hindsight it also greatly benefits the locals, as accessibility is improved. The tourism sector accounts for 12 per cent of London’s Gross Domestic Product (GDP) and supports 13 per cent of London’s workforce. Growth in the tourism benefits London economically and crutially distributes that benefit across London’s sub-regions, communities and businesses through direct and indirect means or expenditure.

In conclusion, it is evident that tourism is important to London’s economy. It is not only the source of all job opportunities but it also requires development of less industrialized areas and hence benefits not only the economy but also society. For instance the concern of addressing Canary Wharf’s, located in London’s financial district, deepening infrastructure constraints, which according to a ‘world travel and tourism council’ press release is jeopardizing economic prospects and seriously affects the experience of millions of travelers across the world. The development of travel infrastructure is also essential as to portray London as a “Gateway to the UK” and also as the travel industry is one that holds many job opportunities that can be readily distributed within the population thus increasing the quality of life of the local Londoners.