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Airline industry has always been an area of interest to many professionals, academics and business moguls due to the economic impact of the industry. Transport industry as a whole is very crucial not only to the economy but also to individuals, ranging from pensioners; students; and working class people. The increased interest of people around the world to holiday, study, conduct businesses and network outside their home countries; the new world order of globalization; and also associated security issues have called for a good analysis of the airline industry. In this write up the performance of the airline industry will be examined, the level of competition within the industry , the effect of the environmental factors on the industry and how attractive it was 5years prior to 9/11 terrorist attack.

Nature of product and demand in the industry

It is worthwhile to look at the type of product of the airline industry which is mainly service. There is high degree of homogeneity in the type of service all the firms in the industry delivered and the demand for the services are considered not to be an end in itself but a means to an end, which is business or leisure. Due to the nature of their services and government regulations there were few firms in the industry with high level of profitability. Flying was on the increase and the industry was attractive. Shortly after the deregulation of the American airline industry in 1978 and that of the European Union in 1997 another era began in the industry. There is an increased competition on price, service level etc due to new entrants. Despite the increase in the number of customers from around 250 million to around 660 million between 1978 and 2000 as stated by G J Stockport in his article ,there was an aggressive competition within the industry which forced some operators into extinction, some into changing their business models. This brings us to the appreciation of the importance of Porters five forces which will be discussed later in this essay.

Classification of firms in the airline industry .

Due to new entrants into the industry and the accelerated competition the dichotomy between the firms became clearer. Two major carriers became dominant in the industry. Long haul and Short haul carriers which are other wise known as Long Service Carriers and Low Cost Carriers.

Low Cost Carriers: – These are carriers that premised their business model on cost effective operations by providing customers with good alternatives. E.g Ryanair, Easy jet, southwest airline, west jet, They do short haul services with limited or no connectivity. A good cost management which reduces their operating cost was spread to customers through low fares. This gave them a very subtle entry into the market and posed a very tough challenged to the FSC.

Full Service Carriers: – This type of carriers is also known as Network Legacy Carriers. They do long haul services and based their business models on delivery of quality service. They serve numerous cities regularly. They require high operation cost which in turn reduced their profit under an intense competition.

This classification can also be done using hub and spoke model. Hub and spoke is a model that is dated back to 1980 which helped the FSCs to enjoy cost advantage and increase efficiency during the competition posed by new entrants in the 90s. Hub and spoke is the model used to move passenger to a central place from within the vicinity for connectivity. Both the LCCs and FSCs benefitted from Hub and spoke. The FSCs have a comprehensive hub and spoke which comprises of regional domestic, mainline domestic and international while the LCCs have a simple hub and spoke and point to point models.

Porters’ five forces

This is a strategic framework that can be used to measure the attractiveness of an industry. Porters advanced five forces that determine the profitability of an industry. These forces includes: Competition among the existing firms in the industry, the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products.

The extent to which new firms enters an industry is dependent on the ease of entry. The attractiveness of an industry can be measured by how easy it is for new firm to enter and sustain the power of the existing firms. In the case of the airline industry pre 9/11 the entry barriers was soften through government deregulation policy. Not only that the entrants especially the LCCs were able to differentiate their product by entering the market though pricing strategy that can be likened to low penetration pricing strategy. The LCCs was able to deal with the retaliatory threat of forcing them out by the FSCs through a good cost management. The power of suppliers was able to be over come through the use of cheaper airports and reduction in the payment for landing space.

The competition among the existing industry was intense due to the fact that they are all competing for the same customers and this can reduce the attractiveness of the industry. The existing competition in the industry couple with the associated competition of the new entrants increased the bargaining power of the customers by offering them alternatives.

The PESTEL framework

PESTEL this is an acronym for the environmental factors that have a great impact on the operations and strategic decisions of an industry. These include: Political, Economic, Social, Technological, Environmental and Legal factors.

The attractiveness of the airline industry has been greatly affected by the PESTEL framework. As discussed previously the deregulation of the airline industry in USA in 1978 and in Europe in 1997 brought about a monumental changes in the industry. it gave a green signal to new entrants. Political situations within and among countries can also affect the industry greatly. Eg visa policy, war such as Gulf war of early 1990s which led to a huge lost in the US air industry prior to 9/11. Social factors such income level, class etc also led to the boom of the air industry prior to 9/11. acoording to Gary j Stockport in his article “Chaos in the skies” between 1990 and 2000 due to high no of pensioners leisure travel that was an increase in tourist passenger from approximately 450 million to 700 million.

The interplay between 5 forces of Porters model and the PESTEL frame work which led to a high competition in the industry brought about Changes in the strategic decisions of the Full Service Carrier. eg Alliances etc.

Alliances

The challenge posed by the new entrants forced some of the dominant FSCs into strategic alliances which includes code sharing, block spacing, franchising. This strategic decision was taken by the traditional firms so as to enjoy economic of scale and cope with the emerging competition. Code sharing helped the firms to increase their market share of international market.

Conclusively, despite the level of competition in the industry, the economic turbulence and the increase overhead cost the profitability of the airline industry rose especially with some LCCs between 1995 and 2000. and this year was regarded as ‘golden 90s’.

THE ATTRACTIVENESS OF THE AIRLINE INDUSTRY POST 9/11

September, 11 terrorist attack which involved two major US firms (American and United Airlines) has been a major shock to the entire airline industry. This aspect of this essay will look into the impact of this major event on the industry, the attractiveness of the industry post 9/11 up till 2006 and the effect of the event on the external and internal environments of the industry which in turn affects the operations of the industry. The analysis will be situated within the realm of the PESTEL Framework.

9/11 event has been majorly implicated for the record loss in the US and global airline industries despite the staggering performance prior to the event. There is no doubt about the fact that the event has reshaped the operating environment of the industry. According to Ellen Naylor in her article “has American airline industry become too competitive” Between 2000 and 2005 American airline industry lost cumulative amount of $35billion. In order to give an insight into the attractiveness of the industry the PESTEL variables are discussed below:

Political factor: The political environment surrounding the operations of the airline industry immediately changed following the event of 9/11. On the same day of this tragic event US airspace was completely shut to commercial aircraft. This marks the beginning of a stiffer political environment in the airline industry.

Tourism is a fast developing industry and a valuable sector in many countries. Its contribution is important to the countries’ economy. Furthermore, tourism performs an ever more significant role in the communities’ development.

A comprehension of resident’s perceptions on tourism impacts is important (Ap. 1992). One of the main reasons for increasing interest in this topic has been the confirmation that tourism can both have positive and negative impacts on local residents (Lankford & Howard, 1994). Tourism benefits are both tangible (e.g. tax revenue, job creation, etc.) and intangible (e.g. social structure, quality of life, etc.). Tourism affects the economic structure as well as the social and environmental structure of the community. Attitudes of residents towards tourism impacts are most likely to be important in planning for successful community development (Ko & Stewart, 2002; Aref et al. 2009).

According to Baker (1992), an attitude is a complex theoretical construct, which is used to “explain the direction and persistence of human behavior” (Baker 1992:10). In other words, an attitude is what Sarnoff (1970) defines as a disposition to react favorably or unfavorably to a class of objects. Disposition consists of three components namely feeling, thoughts and predisposition to act and it influences the individuals responses (Ajzen, 1988). Attitudes are defined as “a state of mind of the individual toward a value” and as “an enduring predisposition towards a particular aspect of one’s environment” (McDougall & Munro, 1987). They are developed upon the perceptions and attitudes of reality, but are strongly related to values and personality. Researchers identified that residents’ attitudes toward tourism are not just the reflections of residents’ perception of tourism impacts, but effect of exchange between residents’ perceptions and the factors influencing their attitudes (Lankford et al, 1994).

Local residents’ attitudes toward tourism have been widely examined in the literature. Three types of factors that influence attitudes toward tourism development: socioeconomic factors, spatial factors, and economic dependency were outlined (Harill, 2004).

Tourism development has been usually identified as a double-edged sword for host communities. It does not generate only revenues, but it also inflicts costs (Jafari 2001). Local residents build up their attitudes toward tourism by taking into consideration and evaluating these benefits and costs. Nonetheless, previous research showed that these factors do not solely determine residents’ attitudes towards tourism. They are altered by various moderating variables (Lankford et al. 1994).

2.2 Residents attitude towards tourism

Several studies have been previously carried out to find those variables that influence residents’ attitudes toward tourism (Perdue et al. 1987, Ap 1992, Lankford 1994). These studies identified those variables, which included residents’ demographic and socio-economic attributes. Changes in lifestyle of local residents directly influenced their perceptions of tourism development and its impacts (Esu, 2008)

Previous researches have looked at the relationship between residents’ attitudes and socioeconomic variables such as gender, income and length of residence, though results from these studies are not always constant. McCool and Martin’s (1994) and a study in Virginia (Harill 2004) found that long-term residents were more supportive of tourism development than short-term residents were. On the other hand, Allen et al. (1993) found that length of residence did not considerably influence attitudes towards tourism development in 10 rural communities in Colorado. Other studies suggested that gender is a more regular predictor of residents’ attitudes toward tourism development. Mason and Cheyne (2000) observed that men are more supportive for tourism development than women are. This is because mainly due to women perceived negative impacts like increases in crime, traffic and noise. Harill and Potts (2003) also reported the same results in their study of Charleston, SC.

Many studies have explored the relationship between residents’ attitudes and locations, and activities of tourism development. They were established on the hypothesis that “the nearer a resident reside to concentrations of tourism activity, the more negative his or her perception will be of tourism development” (Harill 2004, p.253)

A survey of attitudes toward tourism growth in Rhode Island by Tyrell and Spaulding (1984), reported that local residents attitudes toward the tourism facilities close to their home were not so positive because of litter and trash. Gursoy and Jurowski (2002) found that residents who used a neighboring recreation area regularly were more firmly opposed to tourism development than those who visited less frequently. Additionally, in another study, Harill and Potts (2003) found that nearby residents in a tourism center of Charleston were less supportive of tourism development than residents of other communities who live further away from the core as they received the influence of the negative impacts from tourism.

Resident perception towards the impacts of tourism on a community can vary considerably. Positive attitudes about tourism impacts among residents will bring about more successful tourism development. Tourism developers need to consider residents’ attitudes and perceptions before investing in scarce resources (Cevirgen and Kesgin, 2007).

Throughout the past 25 years, North American researchers have examined many different features related to residents’ attitudes toward tourism impacts and perceptions of tourism development (Haley et al 2005). Pizam (1978) suggested that negative host attitudes were emerging because of heavy concentration. Rothman (1978) emphasized on negative resident perceptions towards the growth in crime, over-crowding, litter, noise and increase in prices, although studies also showed the perception of positive aspects. These included higher employment opportunities (Milman and Pizam 1988), enhancement of local infrastructures and a rise in leisure opportunities (Davis, Allen and Cosenza 1988). Other important findings were known to influence attitudes and perceptions, mainly personal and demographic factors. Tourism researchers also assessed the differences in perceived impacts among various types of local residents. These included socio-demographic characteristics (Belisle & Hoy, 1980; Liu & Var, 1986; Milman & Pizam, 1988; Pizam, 1978); economic dependence on tourism (Milman & Pizam, 1988; Pizam, 1978); and place of residence or distance from the tourism area of the community (Belisle & Holy, 1980; Sheldon & Var, 1984). Research found that as distance between residents’ home and the tourism sector of the community increases, perceived impact of tourism decreases.

2.3 Theoretical Background on impact of tourism on residents

A number of theoretical approaches have been developed to explain the impact of tourism on residents. The initial models were Doxey’s Irridex model and the tourism area life cycle model (Butler, 1980). Several studies focusing on residents’ attitudes toward tourism followed (Juroski 1998; Ap, 1992, and Allen et al, 1993). Theories such as lifecycle theory, power theory, equity theory and social exchange theory were used for further research

2.3.1 Social Exchange Theory

Social exchange theory (SET) explains that residents’ are most probable to support tourism providing that perceive benefits exceed perceived costs. The theory derived from sociology, economics and psychology. SET is founded on the principle that human beings are reward seeking and punishment avoiding and that they are induce to act with the prospect of profits (Skidmore, 1975). SET has to do with understanding the exchange of resources between groups in a relation situation where the entities to exchange are measurable, have value, and there is a common allowance of rewards and costs between players (Ap, 1992, Madrigal, 1993). SET supposes that social relations comprise of exchange of resources among parties looking for common benefits from exchange interactions. The main purpose of exchange is the development of the community’s economic benefits (Aref & Redzuan, 2009). Various studies have been carried out bases on social exchange theoretical framework (Juroski 1998; Ap, 1992, and Perdue et al, 1987). These research works discovered that local residents support tourism when they gain more than they do loose from tourism activities. Individual’s perception of the impacts will also demonstrate whether the impacts of tourism development will lead to the support for or the objection against local tourism development (Aref & Redzuan, 2009).

Social Exchange Theory (SET) has been frequently adapted by researches in the tourism field. A previous research of rural resident perceptions of tourism impacts of development in Colorado showed that support for further development was positively or negatively related to the perceived positive or negative impacts of tourism. Extra support for tourism development was also negatively associated to the perceived future of the society (Purdue et al, 1990) (Nunkoo et al, 2009). The social exchange theory was also utilized as a theoretical base by other researchers to identify why residents perceived tourism impacts positively or negatively.

Support for tourism development in their community will be higher from local residents when they assume that the benefits from tourism activities will be more important than the negative consequences. Previous researches showed that local residents would take part in tourism activities when they can benefit more than they will lose. Individual’s perception of tourism impacts will influence whether they will lead to support for or protests again local tourism development. Local people will look for economic impacts before other aspects. Hence, the primary attention of local residents will be towards the tourism impacts on the economy and they tends to be positive rather than negative as tourism development create impacts such as employment opportunity and income generation.

In conclusion, we may say that residents will be inclining to interact if they believe that they will reap benefits without suffering huge cots. By perceiving that the rewards are superior to the costs, residents will be more likely to be involved in the exchange, thus support future development in the community. Although popular among researches, SET does not take into account others non-economic benefits such as social and cultural benefits.

2.4 Tourism Impacts

Throughout studies on tourism impacts, which appeared in the 1960s, much emphasis has been put on positive effects of tourism and economic growth as a form of national development (Pizam 1978). In the 1970s, research on tourism impacts laid more emphasis on the negative socio-cultural impacts. The 1980s stressed more on the environment impacts of tourism (Butler 1980). The 1990s have been characterized by a more objective perspective, called sustainable tourism, where positive and negative effects are taken into consideration (Ap and Crompton, 1998).

Tourism development can foster when local residents have a positive attitude toward it and they feel involved in it. Tourism activity causes changes to local residents’ life, both positive and negative. It leads to higher traffic, increase in crime rates, more population and the pollution of all environment resources. Furthermore, tourism brings changes that disturb traditional way of life, family relations and many unpredictable problems (Puczko and Ratz 2005).

On the other hand, there is job creation, regeneration of old facilities and places and improvement in social life. New business opportunities emerge with tourism development and local residents are encouraged to explore them. However, they know that there will be the emergence of negative impacts such as cultural, social, economic and physical impacts.

The relationship between local residents and tourists is also problematical. Besides that, tourism development has restrictions that are directly related with carrying capacity and the quality of life of local residents. Going beyond these limits will cause local residents to develop negative attitudes toward tourism. If these negative attitudes persist and turn into values, tourism development obstacle appears.

Mass tourism generally leads to modification in the physical and cultural environment which impact on local residents’ values and lifestyle. Local community structure and family relations are also affected by these changes, as great effort is required by local residents to handle these alterations. Jamal and Getz (1995) stated that these changes compel local residents to be actively engaged in the tourism planning process and development of tourism destination.

Many researches in the tourism field are persuaded that for tourism development to be successful, a good relationship between local residents and tourists is vital (Ap and Crompton 1998).

In a study on Social Impacts of Tourism on Central Florida, Milman and Pizam (1988) found out that local residents have positive attitudes towards tourists. Nonetheless, many of them talked about negative impacts of tourism such as alcohol, crime, drugs, traffic congestion, and conflicts arising between local residents and tourists and so on. At the same time, they identified positive impacts like employment opportunities, increased quality of life and income generated from taxes. While researchers put more emphasis on the positive impacts of tourism at the beginning of mass tourism, the last three decades emphasized more on social, economic and environmental impacts with the emergence of sustainable tourism (Harill and Potts 2003)

2.4.1 Economic Impact

Questions concerning economic factors have been dealt with in all the studies of resident attitude toward or perception of tourism impacts. The research revealed that local residents perception towards economic impact were positive as they feel that tourism increases the standard of living of local residents, and that it helps a country earn foreign exchange (Var et al. 1985)

Tourism can be considered as an export industry as it generates revenue from external sources. A country will acquire foreign currency from tourism and this will contribute to improve its balance of payment (Liu and Var 1986). Tourism also brings about job opportunities, which decreases unemployment (Sheldon and Var, 1984). Tourism also leads to the development of community infrastructure and service (Var and Kim, 1990).

Tourism development results in higher level of economic activity, which increases the amount of taxes generated by it and which are collected by the government.

Growth of tourism lead to better communication and transportation facilities (Milman and Pizam, 1988) and new infrastructure investment (Inskeep, 1991).

However, if tourism is not well planned and managed, it might give rise to negative impacts or even decrease the efficacy of positive ones. Higher tourism activities and increased demand from foreigners might cause the prices of goods and services to go up (Liu and Var, 1986). The rise in demand for accommodation, mainly in tourism season, might lead to higher rent being charged as well as an increase in land prices (Pizam, 1978; Var et al, 1985). Tourism also creates a sense of bitterness from local residents concerning the employment of foreigners in managerial positions.

Nevertheless, some researchers conclude that residents agreed that tourism’s economic gains were greater than social costs (Liu & Var, 1986; Sheldon & Var, 1984; Weaver & Lawton, 2001).

Hypothesis 1: Perceived economic impacts significantly influence a residents’ attitude towards tourism
2.4.2 Cultural Impact

Tourism can cause a change in society’s values, cultural practices and beliefs. Tourism has frequently been criticized for the disruption of traditional social and culture structures and behavioral patterns. The one to feel these impacts more heavily are local residents. They might change their lifestyle through contact with tourists. By observing the foreigners, they might adopt their way of life such as eating, dressing, entertainment and so on. This influence might be considered as a positive impact as it increases the standard of living of local residents. However, it can be considered as a negative impact as it leads to acculturation (Brunt and Courtney 1999, Eccles and Costa 1997, Dogan 1989). Acculturation occurs when two or more cultures meet each other for a continuous period and ideas are exchanged (Liu and Var, 1986).

Locations that have adopted tourism for its economic benefits have observed a rise in the level of crime, prostitution and displacement due to the rising land costs and loss of the cultural heritage of local residents, mainly youth.

Tourism can encourage to the realization of cultural identity and heritage as well as the revival of arts, local culture and crafts. In the process of tourism development, architectural and historical sites are refurbished and safeguarded (Inskeep 1991).

Tourism also facilitates the exchange of cultures as many people from different cultures come together (Brayley et al, 1990).

Hypothesis 2: Perceived cultural impacts significantly influence residents’ attitude towards tourism
2.4.3 Social Impacts

Apart from its cultural impacts, tourism also creates social impacts. It plays a role in changing individual behavior, family relations, lifestyle, moral conduct, social structure and so on (Ap and Crompton, 1998). These impacts may be either positive or negative.

Tourism alters the internal structure of the community by separating it into those who have a relationship with tourism or tourists and those who do not (Brunt and Courtney, 1999).

Tourism development in a location might also modify the social structure of the community. It could lead to the emergence of two different classes, that is, a rich class that would consist of landlords and businessmen, and a lower class, which would include mostly immigrants (Dogan 1989).

Impacts of tourism on women are seen positively as they have more opportunities to work, more freedom, increased respect, higher standard of living, better education. Yet, some researchers claim that tourism diverts family structure and values and it is a cause of the rise in divorce rates and prostitution (Gee et al 1997; Haley et al 2005).

Other negative impacts that might result from tourism development are a decline in moral values, a rise in the use of drugs and alcohol, increase crime rates and conflicts in the society (Liu and Var 1986; Milman and Pizam 1988)

Hypothesis 3: Social impacts significantly influence residents’ attitude towards tourism.
2.4.4 Environment Impact

Research on resident’s perception of tourism impact on the environment suggested that residents might consider tourism as being positive or negative on the environment. Tourism helps to encourage preservation of the environment by creating awareness (Var and Kim, 1990). Residents also perceive that tourism improves the appearance of their town and surroundings (Perdue et al, 1987).

Fast growth of tourism might lead to the enhancement of government and local services such as fire, police and security (Milman and Pizam, 1988). Moreover, there might be an increase in the range of leisure and recreational activities in the community.

Negative impacts of tourism on the environments have been studied within the range of sustainable development o tourism. Improper planning, uncontrolled constructions and inadequate infrastructure causes environmental pollution, the destruction of natural resources, the degradation of vegetation and the depletion of wild life (Inskeep, 1991; Gee et al, 1997).

However, if efforts and works to build recreation areas, to improve infrastructure system, to prevent water and air pollution and waste disposal and works to restore historic sites and buildings are well planned and managed, it will lead to positive contributions to the community. Residents must be aware of environmental and ecological issues, as tourists prefer an unpolluted environment (Liu and Var, 1986; Inskeep, 1991).

Hypothesis 4: Environmental impacts significantly influence residents’ attitude towards tourism.

The following table presents the major positive and negative tourism impacts.

Positive economic impacts

1. Provides employment opportunities

2. Generates supply of foreign exchange

3. Increases income

4. Increases gross national products

5. Improves an infrastructure, facilities and services (sewage system)

6. Raises government revenue (tax)

7. Diversifies the economy

Negative economic impacts

1. Causes inflation of land value

2. Increases demand for local products, raising price on food and other products

3. Diverts funds from other economic development projects

4. Creates leakage through demand for imports

5. Results in seasonal employment

6. Displaces traditional patterns of labor

7. Involves costs of providing the construction and maintenance of infrastructure

Positive social impacts

1. Creates favorite image of the country

2. Provides recreational facilities for residents as well as tourists

3. Facilitates the process of modernization

4. Provides opportunities education

Negative social impacts

1. Creates resentment and antagonism related to dramatic differences in wealth

2. Causes overcrowding, congestion, traffic jams

3. Invites moral degradation resulting in increased crime, prostitution, drug trafficking

4. Causes conflicts in traditional societies and in values

Positive cultural impacts

1. Encourages pride in local arts, crafts, and cultural expressions

2. Preserves cultural heritage

Negative cultural impacts

1. Create demonstration effect whereby natives imitate tourists and relinquish cultural traditions.

2. Encourage the tranquilization of craft

Positive environmental impacts

1. Justifies environmental protection (marine reserve) and improvement

2. Protects wildlife

3. Encourages education of value of natural based tourism

Negative environmental impacts

1. Fosters water pollution, air pollution and solid waste

2. Tramples delicate soil and beaches

3. Destroys coral and coastal dunes

4. Disrupts flora and fauna (wildlife, plant life wetlands)

This list of tourism impacts was drawn from the literature on the impacts of tourism (Andereck, 1995;McCool & Martin 1994; Ap & Crompton, 1998; Farrell & Runyan, 1991; Weaver & Lawton,2001)

The next chapter provides a summary of the research hypotheses and discusses research design and methodology. The items that are going to be used to measure each hypothesis are also briefly discussed.

Introduction

Shangri-La Hotel is a world class deluxe Asian hotel chain which provides services and places for business and leisure travelers according to its Asian standards of hospitality. Shangri-La Hotel provides customers with a number of excellent services. More specifically, guests may enjoy high quality room services and resort, facilities such as sauna, Jacuzzi gym, lounge and pub. Moreover, the hotel chain also provides different and unique products like, The Spa at several hotels and resorts. Through its high quality services, Shangri-La receives international awards and recognition from prestigious publications and industry partners.

Historical data

Shangri-La Hotels and Resorts was founded in 1971 by the Malaysian-Chinese tycoon Robert Kuok and managed by Westin until January 1983. The headquarters are located in central Hong-Kong. Its name was inspired by James Hilton’s legendary novel “Lost Horizon”. In 1982 the company incorporates Shangri-La Hotel and Resorts.

Business Description

Shangri-La Hotel is highly recognized for its service excellence. The hotel chain highly supports its mission statement, according to which “customers should be delighted each and every timeA» More specifically, the company focuses on offering customers an unforgettable experience by blending cultures, exotic art and lively ambience. . “Shangri-La Hospitality” has developed five core principles: respect, humility, courtesy, helpfulness and sincerity. These core principles have positively affected the successful running of the business and thus they have as a result the creation of pleasant customers and employee relations.

The service principles that Shangri-La has developed is consistent to every country they operate. In other words, customers receive the same level of services and treatment in every hotel no matter the country of location. This is very important as the customers identify Shangri-La hotels as high quality and trustworthy.

The company operates 62 deluxe hotels and resorts under the Shangri-La and Traders Hotel brands in Asia and Middle East. Moreover, the company is willing to expand in Europe and North America. Apart from Shangri-La’s ownership and operation of hotels, the company also leases commercial office buildings, retail space, apartments, real estate development and operation and golf club ownership and operation.

Competition

Competition in general is one of the factors that affect company’s existence and growth. Even though Shangri-La is one of the top luxurious hotels in Asia, there is still fear from other top companies operating in the diversified hotel management industry. The profitability of every company depends on efficient operation because many costs are fixed and on effective marketing. The top three competitors of Shangri-la hotel are:

The Hong Kong and Shanghai Hotels Ltd which also operates in Asia, Australia and North America with 24 deluxe hotels, commercial and residential properties.

New World Development is the second competitor of Shangri-La; the company develops and invests in properties in Hong Kong, mainland China, and Southeast Asia. Its property and infrastructure developments include apartments, office buildings, hotels, department stores, roads, and water and power plants.

The third competitor is Mandarin Oriental Hotel Group which is incorporated in Bermuda and owns, manages and operates 40 upscale hotels in two dozen countries.

The 2008 Olympic Games Event has affected Shangri-La Hotel since premium hotels such as Regent, Ritz-Carlton, Hyatt and Sheraton expanded in various cities in China, particularly in Beijing and Shanghai. Since Shangri-La is an Asian Company, it is highly recognized in Asia, the hotel chain had a competitive advantage as far as brand awareness is concerned. However, as many prestigious and luxurious hotel chains started expanding in the Asian continent Shangri-La faced more intense competition than before. The primary competitor of Shangri-La could be identified as the Marriott chain, which operates the Ritz-Carlton, Renaissance and Courtyard brands (26 hotels in China and expanding its portfolio to 100 by late 2010.)

Driving forces in the company

In order for the company to continue to compete within in the industry, Shangri-La decided on expanding its hotel chain. It went through a rapid expansion in the early 1980’s and built 29 hotels over the next decade, and by the end of 1999, it was announced that they were operating 35 hotels within the Asian continent. Shangri-La’s management group decided on expanding even more aggressively and therefore took advantage of their current success and raised fund during this period of time for further expansion. As a result during the early ’00 Shangri-La began entering new markets through both management contracts and owner/operator development. In 2003 Shangri-La Dubai and Sydney were opened.

The innovation of core brands of Shangri-La Asia Ltd, including the four-star Traders which was established in 1989, provides luxurious experience and sophistication to the business traveler, Rasa Resort and Spa which was launched in 2006 as a new brand spa provides treatment and relaxation based on Chinese principles, Far Eastern Plaza Hotel and Shang Palace are the force driving the changes in the industry. These hotel chains provide differentiated and unique products to a niche market.

Key Success Factors:

The key success factors of Shangri -La Hotel are the following:

1. Unique characteristics of Asian hospitality and high luxury quality of service and products offered to its customers

2. Differentiated products (spa and treatment in hotels and resorts)

3. The use of culture training program in everyday performance More specifically, Shangri-La Care Modules that line out what a service personnel should do and how to serve their customers in the best possible way

Care 1: Shangri-La Hospitality from Caring People

Making the guests feel special and important during their stay in the hotel and focusing on the core values of Shangri-La’s hospitality.

Care 2: Delighting Customer

Delighting guests consistently not just the first time they visit but every single time in order to achieve srotng customer loyalty.

Care 3: Recover to Gain Loyalty

The importance of recovery when mistakes happen. A well done recovery may be an opportunity to gain further commitment and loyalty, and the other way round if recovery is poor. The five steps to recovery as developed by Shangri-La hotels: Listen, Apologies, Delight, Fix the Problem and Follow up.

4. Take Ownership.

Effective promotion and special offer to attract the customers’ attention about the Shangri-La hotel. Promotion and special offer build long term relationship between Shangri-La hotel and their loyal customer. The promotion and special offer by the Shangri-La hotel include special festival, weekend special, value rate and value vacation.

5. Effective process management perspective.

This refers to the system used to assist the organization in delivering the service. Shangri-La demonstrates processes involved in delivering the services provided into six encounters including among others check-in, room encounter, restaurant and breakfast, vacation trip, spa and check out.

Check in Encounter: Shangri-La ensures that guests will be served directly at the receptionist counter or online.

Room Encounter: it provides extra room accommodation for guests. For example, they provide extra bed for children under 12 to stay with their parents in the same room.

Restaurant and Breakfast: Shangri-La provides Children’s Meal Plan; this accommodates hotel guests under 12 can enjoy complimentary meals in Coffee Shops and Pool Cafes.

Vacation Trip: Specially trained staff is assigned in handling booklets with valuable information concerning rooms, airfare and car rental at popular Shangri-La destinations, in order to make guests’ planning vacation easier.

The Spa: provides unique service for treatment activities such as massage, aroma therapy and bathe.

Check-Out: same as check-in but may be crucial to determine the final outcome of satisfaction.

6. The use of effective advertising through television and online commercial

7. Compensation and Career Growth: this is a driving force for the employees to perform high standard performances within the company and making its employees valuable. If employees are motivated they are willing to provide and satisfy customers in any circumstances, therefore gain customer loyalty.

Resource strengths and competitive capabilities of the company:
Valuable organizational assets

Organizational design is an important aspect in every company. Without an organized Chain of Command severe issues could occur in the company. Shangri-La’s organizational design consists of five major levels in order to group its employees. More specifically:

Level 1: Divisional Manager

Level 2: Departmental Manager

Level 3: Sectional Manager

Level 4: Front Front-Line Supervisors

Level 5: Front-Line Employees

Note: Decision comes from the upper level of the structure

Valuable intangible assets

The employees are one of the most important intangible assets of Shangri-La. Therefore, Shangri – La’s corporate management heavily invests in employee development (to gain know-how asset)

Another intangible assets of Shangri-La is its brand name, a synonymous for providing services with the unique characteristics of Asian Hospitality

Unique products such as spa and treatments could also be considered as their intangible assets

Valuable physical asset

One of the most important and crucial physical assets of Shangri-La hotels are its architectural design externally and internally. Every single hotel of the chain has different characteristics and features that differentiate it from other Shangri-La hotels in the world. The design of every hotel matches the culture and environment where it operates. For instance, a typical Shangri-La hotel set in lushly landscaped tropical gardens with huge swimming pools that creates an oasis from the city’ thriving business and social center. Moreover, Shangri-La hotels and resorts provide hotel facilities like Airport Transfer, Parking, Foreign Exchange, Non-Smoking rooms, baby-Sitting or Child Care, Facilities for Disabled, Dining and Entertainment, Restaurant, Bar/Lounge, Sports & Leisure, Spa, Sauna, Steam Room and Fitness Center. They have invested in these assets so as to provide customers with great experience during their stay in the hotel.

Competitive Capabilities

One of the strongest competitive advantages of Shangri-La hotel is the service quality that is provided to its customer. Shangri-La is an award winning hotel as it is highly praised for offering world class service and gracious hospitality that has earned a reputation of excellence throughout Asia.

Identifying strongest and weakest points of competitive forces

Competitive pressures created by the rivalry among competing sellers

Competing with other world class luxurious hotels in the world is a strong competitive force that affects Shangri-la hotels. These other hotels have strong competitive strategies to maintain their position in the market. These hotels also provide the same high quality of service to the same target group.

Competitive pressure of new entrants

New entrants have always been considered as a threat by the existing ones. This is a strong force for the company since they target the same customers in the market.

Competitive pressure from the sellers of substitute products

High quality Motels and other local hotels are considered to be substitute for Shangri-La. This is a weak competitive force in the company since Shangri-La customers seek for high and unique quality of service

Competitive Pressures Stemming from supplier bargaining power and supplier-seller collaboration

Supplier bargaining power is a strong competitive force to Shangri-La hotel. Shangri-La has numbers of different suppliers; for example, food suppliers, material suppliers and information suppliers. If these suppliers increase price of goods and services to its customers then Shangri-la would also increase its operating costs .As a result, Shangri-La would increase prices, in order to cover its operating costs. Competitive Pressures stemming from buyer bargaining power and seller-buyer collaboration.

Buyer’s bargaining power is a weak competitive force for Shangri-La Hotel since Shangri-La has a fixed price charge; and this cannot be negotiated.

Business Strategy

Strategy for Expansion to the East and West

The company’s main strategic plan is to incorporate the goal of expanding the Shangri-La brand globally with a strong foundation and reputation for its excellence in Asia, the Middle East, Europe and North America. According to industry analysts, China was one of the most attractive destinations for tourists in 2008 since The Olympic Games were held there. For this particular reason new hotel developments started to pour in the region.

Shangri-La’s strategy to expand in the East is an asset since their core principles of cultural values matches most of the countries in the Asian market but is still a challenge since most of the luxurious top hotels in the world have the same approach.

In general Shangri-La has slow expansion growth in other part of continents like Europe and North America. Nevertheless, it was announced that the company decided to expand its hotel chains in different parts of the world particularly in Europe, North America and Australia as to be able to compete with their major competitors in the market. Even though the company constantly enters new markets, they still maintain and provide its worldwide service quality standards to its customers and ensure that Shangri-La’s quality and service standards are translated to new hotels in new markets in order to deliver consistent experience of “Shangri-La Hospitality”. When Shangri-La enters new markets in new countries, the company brings new cultural understanding and expectations to these markets. This is a challenge for the company since bringing the essence of the brand to new cultures is tough.

Another strategy of the company is to enhance Corporate Social Responsibility activities in five key areas: Environment, Health and Safety, Employees, Supply Chain Management and Stakeholder Relations.

In the Environment section its main focus is in climate change, water use management, waste disposal management, ozone depletion and indoor air quality. Shangri-La has recognized that resource conservation, biodiversity and pollution prevention are ways to maintain a sustainable environment.

By providing safe and healthy environment, Shangri-La protects its customers, employees, suppliers and the public. This includes training employees for emergency situation like fire, earthquake and any other natural disaster. Also, the company promotes wellness program to improve the health and well-being of the employees.

As mentioned before, Shangri-La management recognizes that staff is one of their most important assets and so they are committed to providing fair employment opportunities, dignity and staff development. Shangri-La will provide an environment where employees may achieve their personal and career goals and fair labor practices as to avoid any activity that results in human right abuse.

For the company to be able to mange its direct and indirect impacts in the environment, Shangri-La has to work effectively with its supply chain partners. The suppliers need to meet the local legal requirements relating to the environment, human rights and other regulatory work practices. Also, suppliers are expected to be part of the system to ensure that the food served is safe and of high quality.

According to CSR all stakeholders include customers, employees, members of the communities in which they operate, shareholders and suppliers will engage in a clear, honest and respectful way to the company.

SWOT Analysis:
Strengths
Brand recognition
Unique services and products quality (Shangri-La Hospitality)
Expansion network in Asian Continent
Luxurious facilities like the Shangri-La Spa and Trader
Expansion globally
Strong suppliers relationship
Innovation of unique products
Weaknesses:
Not having enough number of hotel chains in Europe and N. America to compete with other luxurious five star hotels operating there.
Shangri-La is dependant on other hotel owners companies since it doesn’t own all of its hotel chains
One of the problems that Shangri-La’s hotels in China faces is the fact that front-lines employees are uncomfortable in making decisions. Chinese employees are dependent on operational guidelines
Opportunities:
Its market positioning in China; since China has become the world’s fourth largest economy and one of the most attractive destination as far as tourism is concerned
Training program facilities to prepare first-line employees to more effectively utilize decision-making authority
The Olympic Games Events in China increased Shangri-La’s sales
Expand to other geographic destinations
Acquisition of local hotels
Threats:
Intense competition
Local Hotels are considering forming alliances with international brands to manage and operate the business.
Pressure on wages (expanding into high-wage economies)
Since Shangri-La is an Asian company and has been operating in Asian territory, its management group is used to having lower labor costs compare to Europe and N. America
Global recession
Since Shangri-La is expanding with its principles values, it’s a great challenge for the company to expand beyond its Asian territory where cultures are different. Is the company able to adapt in a different environment..?
Target Market

Shangri-La Hotel operates in the five class hotels industry associated with luxury and well-being for customers. Hence, the target market mostly comes from the upper class. We focus on this section to the two Shangri-La Hotels and Resorts that produce greater profitability to the company.

The Golden Sands Resort that is located in Batu Feringgi Beach that is mostly visited by tourists who come from European and Western countries. It is believed that these travelers have high consuming ability compared to local travelers. Therefore, Shangri-La management targeted the tourists that are of higher financial and consuming ability.

The target market for Trader Hotel mostly consists of business travelers and those that come from the upper class groups of society. Business travelers can afford to purchase services from high quality hotels as their expenses are accommodated by their companies.

Strategic Positioning

All of the hotels and resorts of Shangri-La are located at strategic locations that are frequented by a high number of people, either for business purpose, travelling or other reasons. The location selected usually consists of places that are well known for their tourism industry and that are highly visited each year.

Business Model

For the fiscal year ended in December 31, 2006 the management reported that Shangri-La net income was 202.2 million dollars from its services and products. The company’s sales continued to improve in 2006 with 1,002.9 million dollars sale compared with 842 million dollar in 2005. The company owns 50 hotels in Asia and the Middle East and more or less of 40 projects under development in Europe and North America. The company employs approximately 18,400 employees worldwide.

Shangri-La’s case is unusual among international hotel companies since it owns a significant proportion of its hotels,

As shown in the table below, Shangri-La performance in the industry seem to improve every year and ascend to better market positioning.

Shangri-La Income Statement

Our personal Recommendations for Shangri-La Hotel

Improve and give more emphasis to its employees’ training program; especially for the front-line employees to build their confidence and efficiency at the workplace in order to improve its hand to hand interaction with the customers.

Having achieved brand market leadership in Asia, Shangri-La should now try to increase the number of hotel chains in Europe, North America and the Middle East.

Since Shangri-La emphasizes its cultural values in every hotel chains, Shangri-La should take a closer look of its environment in general, to see if the products and services that they provide match the needs of the customer in general. For example, if Shangri -La operates in foreign destinations like the Middle East, they should adapt to its culture and combine it into their own to avoid conflicts between two different cultures.

In general, all of the hotels and resorts of Shangri-La are located at strategic locations that are visited by a high number of people each year, either for business purpose, travelling or other reasons. The location selected is usually places that are well known for its tourism industry that are highly visited each year.

The travel and tourism industry is constantly subjected to change both internal and external. Changes in American foreign policy and the invasion of Iraq have caused an increase in terrorism and terrorist events, such as September 11th 2001 which have caused significant changes in air travel and passengers perception of safety. As a result, airport screening and travel safety regulations have undergone scrupulous changes.

The findings, which were taken from an online survey of 200 respondents, sub-categorised as industry employees, frequent travellers and casual travellers revealed that respondent’s perception to safety in air travel was of concern. Although they felt security was important there was a need to improve upon screening methods to speed up wait time at checkpoints while ensuring screening was sufficient to deter possible terrorist attacks. The study looked at a number of personal factors, including gender and age. A main factor observed within the research is nationality, comparing American perceptions against those of Europeans, concluding that Americans perception against Europeans favour equally on security importance but that Americans preferred a cruise vacation opposed to Europeans who continued to fly. In light of the findings it is recommended that governments and tourism official’s co-ordinate efforts to improve on current pre-screening and airport screening methods whilst reducing passenger wait time.

Keywords: Airport Security, Air Safety, Terrorism, Passenger perceptions

Word count: 6,217

Introduction

The main aim of this paper is to determine passenger perceptions of airport security and safety in air travel. Tourism and security incidents are inevitably interwoven phenomena (Mansfield & Pizam, 2006:1). When a security incident such as terrorism takes place the tourism industry and tourists are directly affected. Therefore, our notions of security have broadened significantly since major terrorist events such as the attacks on America on September 11th 2001. As people show reluctance to fly in the aftermath of a terrorist attack, the impacts to the industry can be considered catastrophic. Hall et al notes that consumer confidence in safety and security of travel decrease significantly (2003:20). As a result, the American government and governments globally reacted by implementing tighter control in airport and air travel security with carry on restrictions and advanced checkpoint screening technology.

1.1 Identification of research area

The main area of research that this paper will focus on will be the study of people’s perception of current and future airport security technology and procedures at airport checkpoints. The study will look at industry employees, frequent travellers and casual traveller’s perception on flying in regard to safety concerns with a focus on determining if American perceptions differ from Europeans. The research conducted will determine if an increase in security procedures and restricted items allowed onboard will deter passengers from flying and cause them to seek alternate travel methods. Following on from this, the aim of this paper will also be to identify if airport security checkpoints will endure delays due to tighter security controls and if passengers are prepared to embrace these changes.

1.2 The aims and objective of the research

The aim and objectives of this research paper are:

To examine whether or not recent terrorist activities have had an influence on traveller’s decision to fly.

To evaluate the role of airport security as a mechanism for reassuring or discouraging traveller’s to fly.

To assess both current and proposed future airport security methods including advanced procedures.

To appraise traveller’s attitudes and future intentions towards airport security and international travel.

Using an online questionnaire the research will adopt a quantitative approach in data collection focusing on passenger views. Previous research has focused on methods of securing international airports and how previous terrorist events had affected the industry. This research paper will aim to fill the gap on research by identifying how these changes to the industry affect passengers in making the decision to fly.

This study will now review previous literature on air travel, terrorism and security.

2.0 Literature Review

Tourism is irrevocably bound up with the concept of security. Tourist behaviour and consequently destinations are deeply affected by perceptions of security and the management of security, safety and risk. (Hall et al, 2003:2) In most cases, security incidents cause changes in tourist’s perception of risk and thus are always translated into travel decisions (Mansfield & Pizam, 2006:7). Research into the relationship between tourism and terrorism acts affecting tourists’ safety or perceptions of safety, started receiving attention from numerous authors in the early 1990s. Brunt et al, (2000:418) and Pearce (1988:28) suggest that personal security is a major factor in the decision-making process through which individuals make their travel choices.

Page (2005) notes that since the 9/11 attacks and subsequent global terrorism events, tourist security issues have become the number one concern for travellers. He further states that much pressure to reassure passengers has fallen upon airlines and airports. The airport has significant responsibility due to its sifting and search functions to ensure passengers do not carry prohibited items onboard. In a more recent publication Page further discusses the US (United States) and the U.K. (United Kingdom), reporting a downturn in international visitor arrivals after terrorist attacks within that country (2009).

2.1 Terrorism

Terrorism is not something which is likely to diminish and is almost certain to increase. In general, it may increase in quantity, range and severity due to a number of factors, exponential in themselves (Brenchley, 1986:2). The increasing incidence of attacks on civil aircraft is causing wide international concern and there is an urgent need to pool information and resources, to review present procedures, tighten controls and introduce more preventative measures. Air travel is particularly vulnerable to terrorist attacks (Brenchley, 1986:1) and the airline industry is inherently unstable because it is an industry constantly buffeted by new and often unexpected developments and constraints both internal and external (Doganis. 2006:1). The structure of an aircraft makes it highly susceptible to damage from devices primed to explode during flight and once a plane is airborne it is isolated from possibilities of government intervention through armed forces. Brenchley (1986:2) discusses the two main manifestations of terrorist attacks; the planting of explosive devices timed to detonate mid-flight and hijacking with the option of negotiating demands for hostage release.

2.2 The Airline Industry Post 9/11

September 11th 2001, the terrorist attacks on the world trade centre (New York) and the Pentagon (Washington, D.C.), changed the inbound, outbound and domestic flow of tourists as the industry came to an abrupt halt and air transportation remained grounded for three days (Hall et al, 2003:20).

The effective shutdown of airspace resulted in mass cancellation of domestic and international inbound and outbound flights and left hundreds of thousands of travellers stranded. According to the Association of European Airlines, between September 11th and the end of 2001, traffic on the North Atlantic routes dropped by 30%, translating to a loss of almost 3 million passengers for European airlines (Doganis, 2006:10). The concept of security, at present, is central not only to tourism but indeed the wider world. This is not just a result of September 11th 2001 terrorism attacks in the US but also a result of major shifts in American foreign policy, the American invasion of Iraq, ongoing concerns regarding the armed expression of religious and political fundamentalism and fears for economic and personal health and well being (Hall et al, 2003:2).

In the weeks following September 11th, about two thirds of US leisure travellers indicated reluctance to fly, while 55% of business travellers planned to drive were feasible as opposed to flying (Hall et al, 2003:21). While US jetliners have been hijacked many times before; TWA 847 hijacked between Rome and Athens in 1985; and a Pam Am flight hijacked in Karachi in 1986; the planes always landed and while lives were lost, many more were saved. Using hijacked planes as a missile was something new and inconceivable and the reaction was instantaneous. While Sonmez (1998) notes that the reaction to terrorism among tourists is frequently delayed by about three months as people have already made their plans and are unwilling to change them, this time the impact was immediate (Hall et al, 2003:23).

As with risk perceptions, when safety concerns are introduced into travel decisions, they are likely to become the overriding factors, altering the context of conventional decision-making models and causing travellers to amend travel plans (George, 2002:578).

In addition to airports, the terrorist attacks spawned new and tightened security measures at high rise hotels and restaurants, entertainment centres, sea ports, bus stations, sports stadiums and other places in the US where large numbers of people, including tourists, are likely to gather (Goodrich, 2002:574).

As terrorism is rare, the best defences are largely invisible (Schneier, 2010:1). Governments have a basic responsibility to ensure the survival of their nation (Elliott, 1997:54). The US State Department issues a travel advisory to U.S. citizens to avoid certain countries (Goodrich, 2002:576) and the U.K. operates “Watch Lists” set up to alert security services. The US government provided $5 billion of direct grants to US carriers to mitigate the disastrous impact of the September 11th 2001 attacks (Doganis, 2006:7) and governments across Europe responded immediately to the impacts.

The attacks triggered an outpouring of public sympathy and government solidarity with the U.S. The French newspaper Le Monde proclaimed “Nous sommes tous americains [1] “; in the German Bundestag, Chancellor Schroder pledged “Uneingeschrankte Solidaritat [2] ; and NATO theoretically invoked the collective defence article 5 for the first time in the history of the alliance (Toje, 2008:119).

On 27th September 2001, in a speech to airline employees in Chicago, President Bush outlined a package of new airline security proposals in the wake of the terrorist attacks (Anon, 2001:20). The U.K. Prime Minister, Tony Blair, set out his views on a general response to the terrorist attacks in the debate on international terrorism during parliamentary recall, emphasising the urgency to rethink the scale and urgency the world takes to combat terrorism to make it more effective.

2.3 Changes in Airport Security

TSA (Transportation Security Agency) officially took over the responsibility for airport security in 2002. Initially, TSA retained private security screeners. However, over a period of almost seven months employees began to conduct passenger-screening operations at all US airports (Blalock et al, 2005:5). The TSA implemented new security measures to include, shoe removal, x-ray scanning and limitations on carry-on items.

The two primary changes in airport security visible to passengers were the federalisation of passenger security screening at all U.S. commercial airports and international airports operating US bound flights by November 19, 2002, and the requirement to begin screening all checked baggage by December 31, 2002. To implement these mandates, the TSA established 158 Federal Security Director positions charged with overseeing security operations at all 429 commercial airports in the U.S. While these new security regulations were enacted to ensure passenger safety and restore confidence in the U.S. aviation system, they have made traveling less convenient (Blalock et al, 2005:2).

Initially, TSA allocated screeners based on airport passenger volumes and screening lanes. According to the House Subcommittee on Aviation Security, this resulted in “thousands standing around” at major connecting airports, where most passengers do not pass through screening, and shortages at origin and destination airports (Subcommittee on Aviation, 2004:27).

Since September 11th, the best example of increased inconvenience is the need for passengers to arrive at airports as much as two hours prior to scheduled departures. Similarly, the random hand-searches of passengers and their carry-on baggage, the prohibitions regarding various seemingly non-dangerous items such as nail clippers and the overall greater scrutiny all reduce the convenience of air travel (Woodward and DeLollis, 2003:9). Sharkey (2002) notes that airlines claim that the increased inconvenience caused by security measures has cost them billions in lost ticket revenues, as business travellers opt to stay at home (pg.9).

On the other hand, several surveys conducted since September 11th 2001 have found that passengers are willing to accept a little inconvenience with higher ticket costs and increased security measures in order to feel more secure (Travelocity, 2002:9).

Moreover, these surveys support TSA claims that the security measures implemented since 9/11 increase passengers’ confidence in the safety of air travel (Compart, 2004).

The attempted attack on Christmas day 2009 from Amsterdam on a Northwest Airlines flight bound for Detroit has since sparked further concerns amongst travellers and prompted Governments globally to react. The U.K. Prime Minister, Gordon Brown, responded to the attempted attack by stating the U.K. will “move quickly” to enhance airport security after the “wake-up call” of the failed Detroit plane attack (BBC. 2010).

BAA (British Airport Authority) spent ?20m ({euro}28m; $41m) on airport security in 2007 alone. Add the $15bn that the government of the United States spent between 2001 and 2005 on aviation screening, or the estimated $5.6bn that worldwide airport protection costs each year, and we reach one conclusion – airport screening is extremely costly. Yet on 30th July 2007, the head of the International Air Transport Association, Giovanni Bisignani, launched a scathing attack on airport security in the United Kingdom: he claimed that the U.K.’s “unique screening policies inconvenience passengers with no improvement in security” (Linos et al, 2007).

The attempted Christmas Day attack reopened the debate of body scanners which produce a naked image of the passenger as they pass through and how airport security gaps need to be filled.

2.4 The future of Air Travel

In the months after September 11th, government officials globally talked about the expectance of technology which would plug gaps in airport security. Today however, airport checkpoints still rely on X-ray machines to scan carry-on bags, and passengers still pass through magnetometers that cannot detect plastic or liquid explosives. TSA regulations still force millions of passengers to check bags or pare down their toiletries to 3 ounce (100ml) containers in carry-on bags (Wilber, 2008).

The U.K. Prime Minister, Gordon Brown, pledged to introduce full body scanners at all British airports. However, the BBC reports, The governments been under funding defence research which could have helped solve the problem and now we’re left in a position where the PM seems to think a couple of scanners are going to make a difference (BBC, 2010).

Whilst the British people seem reluctant to being subjected to a body scanner displaying a naked image, Australia and Canada have reacted on a more positive scale. Wholesalers are confident Australian travellers will take in their stride the U.S. government’s new draconian airport security regulationsaˆ¦. [and] in the main, Australians are more likely to embrace the regulations rather than oppose them (Travel Trade, 2010:4). Canadians are not at all shy about baring their all for the full body scanner. 73% of respondents are in favour of major airports across Canada installing scanners (Travel Courier, 2010:5).

Poole and Passantimo (2003) have put forward a more intelligent approach to airport security by apportioning security resources to passengers and baggage to estimated risk. Risk based security would mean a reduced focus on finding bad objects and an increase on finding potentially bad people. Weiner (2009) however, notes that passengers have simply become accustomed to the shoes and belts off, laptops out and hands up, that we no longer protest. According to Peterson, in microcosm, the liquids loopiness encapsulates everything that has gone awry with our response to the breach of airport security that took place on 9/11. The charges that it is all just security theatre resonate (2009).

Security theatre is a term that refers to security measures that make people feel more secure without doing anything to actually improve their security.

Schneier writes that when people are scared they need something done that will make them feel safe, even if it doesn’t truly make them safer. It can be said that terrorists are not concerned about what they blow up and that changing airport security procedures may only force terrorists to make minor changes in their methods or targets. Schneier also notes the current response to terrorism as a form of “Magical Thinking.” It relies on the idea that we can make ourselves safer by protecting against what the terrorists happened to do last time (2010). He further states that security is both a feeling and a reality.

Counterterrorism is also difficult, the U.S. and the U.K., and indeed countries globally have embarked on strategies of defending targets against specific tactics, overreacting to terrorist videos, stoking fear, demonising ethnic groups and treating terrorists as if they were legitimate military opponents who could actually destroy a country. Schneier (2010) suggests this plays right into the hands of terrorists.

As passengers concerns over safety in the skies increased, the cruise industry benefited as bookings increased by 46% throughout the last 10 weeks of 2001 (MarineLog, 2002). Although “Tourism as a Force for Peace” has been a popular positive message relayed by the industry, consultants and some academics in recent years, the reality is that tourism has very little influence on peace and security issues, at least at the macro level, and that tourism is far more dependent on peace than peace is on tourism (Hall et al, 2003:3).

There is always the risk of handguns and explosives being smuggled onboard an aircraft. Brenchley states that security authorities need to have their airport defences placed under independent examination. He further adds that, ingenious and resourceful pseudo-terrorists, perhaps from special armed forces should be tasked to study the problem of breaching airport security. The researcher believes that the more gaps in defences that can be found and rectified, the better the chances of deterring future terrorist activity.

Methodology

This paper will now continue to look at the research method used to collect the research data.

3.1 Background to Methodology

To effectively meet the objectives, a quantitative research design was used and the main technique employed was a hosted online survey, administering the website address via email and online forums. Three main areas were established for conducting research; Industry employees, frequent travellers and casual travellers. The data stored online not only provides an eco-friendly alternative to the traditional paper questionnaire but also provides a simplistic design of point and click for the user.

3.2 Research Methods

A survey, involving 200 people was hosted online during February 2010 (See appendix A). The online presence allowed data to be collected both within America and Europe. With the increase in online presence today and the growth of social networking, the survey URL was submitted to industry groups and fan pages.

Furthermore, links were posted on airline forums and individual emails were passed along amongst industry employee, enthusiasts and others alike. A reminder email was sent 3 days later for follow up. In order to get a representative cross-section of individuals the survey was distributed by email chains containing the survey web address one week later. The research data collection focuses on a quantitative approach, asking respondents for their views and perceptions and translating these into numeric values. The first section of the survey looks at demographics asking the user to state their gender and age. All respondents were then asked to give their perception on airport security on a scale factor of 5 options to include; strongly agree, agree, neutral, disagree and strongly disagree. In the second part the survey splits the user into a category, Industry employee, frequent traveller or causal traveller and allows each to give their perceptions of safety in air travel as a direct relation to their category. Industry employees are categorised further into ground staff or onboard crew. The industry employees largely consisted of Americans within a large international American airline and several respondents working for a large European airline with transatlantic routes. Industry employees were given the opportunity to express their views on airport screening and views of passenger perception onboard by using the scale factor. Frequent travellers were asked similar questions with comments on security wait time and perception of security and safety concerns. Casual travellers were asked if they had concerns over security and all respondents were asked if improved screening technology and further restrictions would deter them from travelling. Furthermore, casual travellers were asked if security affected their decision to fly and the data was analysed based on gender, age and nationality status.

All respondents were asked for their nationality. All Non-U.S. citizens were asked additionally if they had concerns over flying on transatlantic routes.

The data collected will be analysed based on gender and age but will also look at the views of respondents based on U.S. and Non-U.S. nationality. The research will determine, if any, a difference in perception amongst Americans and Europeans in relation to air travel safety, terrorism and airport security.

The final section of the survey focuses on all respondents perception on technology used at airport screening checkpoints. Regardless of category, all respondents have the option to express their view on the introduction of body scanners. Furthermore, all respondents are asked if improved technology will ease concerns over safety. Each question in this section will also be analysed based on age and gender whilst once again looking at the response from Americans and Europeans to determine any margins of difference.

3.3 Limitations

Preliminary findings for this study were based on exploratory research. One of the limitations for this research was online questionnaires, which possess weakness, were employed as the method of data collection. With an online questionnaire there is no control over the research setting, as such, users were left to complete the questionnaire at their own will. Furthermore, the email containing the questionnaire web link may have been passed along to friends and work colleagues. The online presence also limited the category in respect of age.

Younger respondents have greater computer literacy and seemed more willing to complete the questionnaire whereas older generations may not have had access to the internet. The data looked at perceptions based on geographic location, while the internet allows for global access, the distribution of the email was limited to respondents passing the link along to others and some may have considered the email to be spam and not opened the questionnaire.

4.0 Findings & Discussion

This paper will now analyse and discuss the findings from the data collection.

4.1 Introduction to findings

The findings are a direct result of an online questionnaire which remained active for 10 days. The quantitative research questionnaire allowed users to put forward their views and perception of air travel today and the future, in relation to perception of safety, terrorism and airport security. The data was correlated and analysed based on a number of variables to include age, gender, category and nationality. The information was also sub-divided to show, if any, a difference in American and European views on safety in air travel.

4.2 The Questionnaire Findings

Out of the 200 respondents 93 (46%) were male and 107 (54%) were female. 111 (55%) fell within the age category of 19-29 with 30-39 and 40-49 resulting in 32 (16%) and 23 (12%) respectively. 45 (23%) of the respondents were industry employed, 22 employed onboard as a pilot or flight attendant, 18 were ground staff at the airport, 1 worked within a travel agent and 4 specified other job role. 37(18%) were frequent travellers and 118 (59%) stated they were casual flyers. When asked to determine how important they felt airport security is on a scale of agreement, 140 (70%) stated that they strongly agree with 53 (26.5%) agreeing. Neutral or disagree equated for 7 (3.5%) of the findings. 37 (82%) of the 45 industry employees stated that they strongly agree, 24 (65%) of the 37 frequent travellers strongly agreed and 79 (67%) of the 118 casual travellers strongly agreeing that airport security was important. In relation to gender, 59 (63%) males and 81 (76%) females strongly agreed on the importance of airport security.

58 (29%) strongly agreed that government involvement was needed in airport security, 84 (42%) agreed, 38 (19%) remained neutral, 18 (9%) disagreed and 2 (1%) strongly disagreed. 57 (28.5%) of the respondents held residency in America, 131 (65.5%) in Europe and 12 (6%) stated other. 41 (72%) Americans, 92 (70%) Europeans and 9 (75%) from other parts of the world chose strongly agree or agree when asked if government involvement was necessary within airport security.

139 (69.5%) of respondents stated they were European or other. 26 (19%) suggested that air safety had effected their decision to fly to America whilst 113 (81%) suggested that terrorist attacks and air safety would not deter them from flying to America.

Amongst industry employees, 20 (45%) felt that an increase on restricted items onboard reduced safety concerns, whilst 24 (55%) felt that it would not. In relation to industry employees perception of safety on board, the result showed equal, 22 (50%) said there was a noticeable change in passengers perception of safety onboard the aircraft, whilst 22 (50%) also stated that there was no noticeable change. All 200 respondents were asked if their own concern of safety had increased with 166 (83%) remaining neutral. 25 (12.5%) of the respondents stated that they agreed or strongly agreed over their own concern increasing.

29 (78%) of the frequent travellers who completed the questionnaire stated that they had experienced considerable delays at the airport due to increased security, with 8 (22%) stating they had not. Amongst those frequent travellers, 5 (14%) had made alternate travel arrangement whilst 32 (86%) continued to fly.

91 (45.5%) people chose Airplane as their main method of transport when considering a vacation. 88 (44%) opted for a cruise, with car, bus and walking equating for the remaining 10.5%. 18 (9%) respondents took flying into consideration when booking a holiday destination and 96 (48%) did not. 13 (23%) of the 57 Americans suggested they would fly to their vacation destination but 38 (67%) opted for a cruise. In relation to Europeans however, 75 (57%) of 131 would fly opposed to 42 (32%) who would take a cruise.

Overall, 55 (27.5%) of the 200 respondents stated that an increase in security wait time at the airport would encourage them to seek alternate travel methods but 138 (69%) were prepared to wait in line. 37 (26%) of 143 respondents aged between 19 and 39 were willing to seek alternate travel arrangements as opposed to waiting while amongst respondents aged 40 and above, 17 (34%) of the 50 respondents were also willing to seek alternate arrangements. 42 (74%) of Americans agreed that the introduction of improved technology would create a sense of security and ease passenger concerns over safety. 108 (76%) of Europeans and Other also agreed with 14 (25%) and 29 (20%) of Americans and Europeans disagreeing respectively. In total, 150 (75%) people agreed that improved technology would ease concerns whilst 50 (25%) either disagreed or did not answer. In relation to gender, women, (86, 80%) felt improved technology would ease concerns more than men (64, 69%).

110 (55%) respondents felt that the introduction of body scanners would increase delays at checkpoints, 82 (41%) felt there would be no change in wait times and 8 (4%) chose not to respond.

This paper will now aim to discuss the findings from the online questionnaire.

4.3 Discussion

The findings conclude that tourism and indeed air travel security are essential aspects of the tourism industry. As shown in Fig. 1, 70% of respondents strongly agreed that airport security is important today, as a result of previous terrorist attacks. In total 96.5% agree on the importance overall. These findings are however, not surprising giving the global coverage and reactions towards terrorist events such as September 11th 2001, also, all respondents were linked to the air travel industry in some form.

Fig. 1. Airport security is important

Frequency

Percent

Valid Percent

Strongly Agree

140

70.0

70.0

Agree

53

26.5

26.5

Neutral

6

3.0

3.0

Disagree

1

.5

.5

Total

200

100.0

100.0

Almost all industry employees (82%) strongly agreed that security was paramount with air travel, which is expected considering the sky is where they spend their days. In comparison females viewed a greater importance of security by strongly agreeing rather than males who simply agreed as shown on Fig 1.1.

The government has become heavily involved with regulating security procedures at airports nationwide and in greater context, globally. The future introduction of new technology and regulations has become a global affair and 71% of respondents collectively agreed (42%) or strongly agreed (29%) that governments should be involved with regulating and introducing security protocols at airports. (See Fig. 2) America, having been subjected to major terrorist events, showed a higher rate of need for government involvement (72%) with European respondents also in agreement (70%). 5% of responders commented on airport security and indicated that without security measures in place, terrorism was likely to increase. It is evident from this that airport security can play a major role in reassuring passengers globally that it is safe to fly, but on

Introduction

Today, the involvement of Middle Eastern airlines in extra-regional operations varies, but is already comparably high. Emirates is offering 82% of its seat capacity on extra-regional services. Most other important carriers from the region like Etihad Airways (74%), Qatar Airways (66%) and Gulf Air (54%) also operate more than half of their seats on extra-regional flights (AEA, 2006). Air France (26%) and Lufthansa (23%) show that the share of extra regional offer for European network carriers is considerably less, indicating that these carriers have stronger domestic markets.

It has also projected the following for its financial year outlook. Qatar Airways aims for 40% jump in revenues, says CEO Akbar Al Baker. Defying the global financial downturn, Qatar Airways is expecting to record a 40 per cent increase in its revenues in its current financial year ending March 31, 2011 over the last year, according to the Doha-based airline’s chief executive officer.”We are targeting a 40 per cent increase in revenues for this year, which is slightly over the increase in the airline’s capacity of around 30 per cent. Qatar has also come up with balance marketing Mix to as to shift from competitor of Emirates to main player in the airline industry in the Gulf region.

The Airline Industry and The Challenges

The commercial aviation industry has been characterized by a cyclic nature since its inception. During times of economic prosperity, passenger traffic demand grows and airlines seek to add capacity to meet that demand. Conversely, during economic downturns, airlines respond to decreased travel demand through cancelling flights, grounding or selling aircraft and generally shrinking capacity.

By 2005, a new wave of brash exuberance was experienced in the airline industry, and aircraft orders skyrocketed fourfold, year over-year, to record levels of more than 2000 units, split fairly evenly between Airbus and Boeing. (See Fig. 1.) A sizable portion of aircraft buying originated with airlines based in the Gulf Region. Traffic growth in that region of the world was strong, and carriers like Emirates, Etihad and Qatar began placing large aircraft orders, often in duals of one-upmanship at various air-shows such as Paris, Farnborough and Dubai.

The airline industry has been bedeviled in the recent times by economic downturn, skyrocketing fuel costs, perceived threat of terrorism, the potential outbreak of the “bird flu” virus and massive insurance premiums the international airline industry faces an uncertain, deregulation that has hit major industrialized nation airlines and challenging future. North America is second largest of the four regions examined, with 2827 orders, but with over 80% of these orders being placed for narrow-body equipment (generally 100-200 seats), most of which are destined to join the fleets of LCC airlines in the United States, Canada and Mexico. Europe is the third largest region, at over 2600 orders, also heavily weighted dedicated to narrow-body purchases (70%), again to a large extent ordered to increase the fleets of growing LCCs such as EasyJet and Ryanair. The Middle East is the fourth largest region examined, and though aircraft orders number just over 400, a key distinction from the other regions is that more than 60% of these orders are for twin-aisle widebody (200-400 seats) and Very Large Aircraft (greater than 400 seats, such as the Airbus A380), as shown in Fig. 2.

Fig. 1. Aircraft orders of Gulf States: 1995-2007. Source: www.airbus.com, www.boeing.com.

Fig. 3. Airbus A380 orders by region. Source: Airline Monitor, November 2007.

Situation analysis
Company analysis

Qatar Airways is the national airline company of Qatar which one of the fastest growing airlines in the world. Since its re-launch in 1997, Qatar Airways has achieved staggering growth in fleet size and passenger numbers. From only four aircraft in 1997, the airline grew to a fleet size of 28 aircraft by the end of 2003 and a milestone 50 by October 2006. Today, the airline operates 68 Boeing and Airbus aircraft. By 2013, the fleet size will almost double to 110 aircraft. Qatar Airways currently has more than 200 aircraft on order worth over US$40 billion for delivery over the next few years (www.linkedin.com). Currently, Qatar Airways has a fleet of 87 aircraft serving 92 destinations worldwide. The company employs more than 15,000 employees across Far East, Middle East, Central Asia, Europe, the Africa, North America, South America and Oceania.

Qatar Airways vision is to invest in and maintain, a growing fleet of young and modern aircraft flying to key business and leisure destinations worldwide. Furthermore, company’s mission includes “safety first”, “customer focused”, “culturally aware” and “financially strong”. Moreover Qatar Airways set up its goal which is to be a world’s top airplanes company.

Competitors

Qatar is strategically located in the Gulf States. It has become one of the business hub and stopover. Its airline industry, has come under increasing competition from competitors such as Emirates, Etihad, Bahrain airlines.

Airlines in the Middle East currently account for just 9% of long haul capacity worldwide, but are responsible for about 25% of all global long-haul aircraft deliveries over the next decade (Flanagan, 2006). Dubai-based Emirates Airlines is the largest buyer, with approximately 70% of all new long-haul aircraft orders in the Middle East – the airline is planning to more than double its all-wide body fleet capacity by 2012 (Flanagan, 2006). Once all these aircrafts are in use, Emirates Airlines will be the world’s largest long-haul carrier. Other airlines in the region with sizable wide body aircraft orders include Qatar Airways with an order book of about 140 wide-body aircraft and Etihad Airways with about 20 aircrafts pending delivery. Whilst aircraft orders of Gulf carriers represent real fleet expansions, aircraft orders placed by incumbent carriers are mainly used to replace existing capacity (Fig. 1). Overall, aircraft orders by Middle Eastern carriers are valued at 40 billion USD (list prices). Middle Eastern carriers are building their growth strategy on wide-body aircraft that offer expanded range, enhanced passenger comfort, and improved operating economics. These aircrafts will help Middle Eastern carriers to mitigate the likely ongoing slot shortages and congestion problems experienced at some airports. New-generation aircraft are fundamental to the development of long-haul hubs in the Middle East, allowing the carriers to remain competitive by keeping unit costs low (O’Connell, 2006).

Qatar airways just like other airlines in the Gulf States is part of the government strategy to diversify its revenue base, economies, commerce, tourism and global transport importance. The airline has a rich mission statement which is “Excellence in everything we do.” According to a survey carried out by Pearce and David (1987) to analyze the mission contents of airline companies, the mission, it showed that Qatar’s mission statement is one of the best in the world. Amongst 9 points, it has 6 points.

Fleet expansion plans of Middle Eastern carriers (as March 2008). Source Journal of Transport Geography 18 (2008) 388-394

Collaborators (worldwide partners, codeshare)

Code sharing or codeshare is an aviation business term for the practice of multiple airlines selling space on the same flights, where a seat can be purchased on one airline but is actually operated by a cooperating airline under a different flight number or code. The term “code” refers to the identifier used in flight schedule, generally the 2-character IATA airline designator code and flight number. Qatar Airways is proud to be codeshare partners with some of the world’s premier airlines such Nippon Airways, Asiana Airlines, BMI, Lufthansa, Malaysia Airlines, Philippine Airlines, US Airways and United Airlines which indicated as Star Alliance. (Qatar.com)

Climate
Macro environment (PESTLE analysis)

PESTLE Analysis which is an acronym of Political, Economic, Social, Technological, Legal, is a tool that aids organization make strategies by helping them to understand the external environment in which they operate now and in the near future. Below is a tabulated External analysis in which Qatar air line operates.

Political

Looking at both the demand and the supply side of Middle Eastern aviation growth, it becomes clear that the development has both a demand and a supply side impetus to it. The rise of carriers from the region has become possible due to the overall increase in demand for air travel. Additionally, traffic has already been diverted from the established carriers. However, there is also another side to the growth process: ”Induced demand”. This is because of political stability in the Gulf region not only in Qatar.

Economic

Domestic demand benefits from the topography of the Gulf countries, which favours travelling by air for intra-regional transport. Furthermore, a high per capita income that is still increasing quickly, offers a base for a strong aviation industry. But there are socio-economic constraints, limiting both domestic leisure and business travel potential. Also, wealth is unevenly distributed, with an estimated proportion of 20% to 45% of the population living below the poverty line (AEA, 2006). The United Arab Emirates, Bahrain and Qatar have a combined 5.5 million people which is only about the population of the Philadelphia metropolitan area. With more people living above the poverty line, the airline industry has a bright future.

Social

UAE lies in the heart of the Middle East (ME) and is one of the world’s fastest growing economies with a per capita income of US$31,000 (IMD, 2005). Worldwide, in 2006, the ME Travel and Tourism economy was ranked number nine in terms of absolute size (US$150 billion) and is expected to grow to US$280 billion by 2020 (WTTC, 2007a; Husain, 2007a). UAE ranks 18th in the world and number one in the Arab world, according to the global tourism competitiveness report by the World Economic Forum (Rahman, 2007a, b). Global Futures and Foresight, a British think tank expects the investment in tourism and infrastructure for the ME to be about US$3 trillion by 2020, with current investments standing at US$1 trillion which is much higher than what is considered current global expenditure (Husain, 2007a). Non-oil revenues contribute 63 percent to the GDP (UAE Interact, 2007a). Abu Dhabi contributes 59 percent to the GDP of UAE (56 percent which is oil dependent). Qatar strategy is to feed from the Dubai market.

Technological

Delays, cancellations and diversions are the most visible evidence of the effects of these disruptions on the airlines. Generally, each of these results in aircraft and crews being out of position relative to planned itineraries. Passengers are inconvenienced as arrivals are delayed and scheduled connections missed. As a result, an airline may become responsible for the cost of alternate transportation, lodging, food and, if the delay is sufficiently long, a cash payment to compensate the traveler for any inconvenience. Qatar has achieved great technological feat to avoid such delays unless when the flight is at their hub and they are expecting some flights to make do.

Legal

Qatar airways is a signatory of open skies agreements. Between 1990 and 2003, the United States implemented a series of Open Skies Agreements, providing a unique opportunity to assess the effect that a change in the competition regime has on prices. In our sample, Open Skies Agreements reduce air transport costs by 9% and increase by 7% the share of imports arriving by air. Those results hold for developed and upper-middle-income developing countries but for lower-middle-income and low-income developing countries Open Skies Agreements do not reduce air transport costs.

SWOT analysis

SWOT analysis helps to explore the internal and external environmental factors affecting Qatar Airways and hence enable us to make strategic decisions (Aaker, 2005). The recommended strategies that would be adopted in this paper would be based on the on the SWOT analysis of the company.

SWOT analysis for Qatar Airways

STRENGTHS

WEAKNESSESS

The only 5-star ranked middle eastern airline

Over 90 Destinations Worldwide

Codeshare partners with most of the world’s premier airlines

Qatar Airways profits from the very low charges at its home airport

High ticket prices

Young airlines which established in 1994

Operation costs is very high due to investments on airport reconstructions and buying high-class aircrafts

OPPORTUNITIES

THREATS

Qatar’s favorable location for business

The new airport is scheduled to be operational from the end of 2011

Qatar holds a major asean and international sporting activities, recently Qatar won bidding to host FIFA World Cup 2022 .

Investing on Environmental Studies (first commercial flight with GTL Jet fuel- without particular emissions in 2009)

Unstable political environment of neighbourhood countries

High risk of terroristic activities

Strong neighbouring state competitors (Emirates Airlines, Gulf Air)

Qatar Airways has over 200 aircraft pending delivery with the orders worth more than US$40 billion by Boeing.

Company objectives
Marketing objectives

To help drive their expansion in the UK and internationally, Qatar were looking for an opportunity that would deliver the right audience and broad coverage – with year round presence. While Qatar and their agency Starcom were looking at various weather opportunities available in the market, we were convinced that the breadth and depth of our offering via the award winning Sky News would make it a clear winner – they agreed.

The campaign comprised of 5 different viewing platforms – allowing Qatar to reach Sky News’ desirable and affluent audience via multiple touch points. Coverage also included Sky News International, driving the brand into over 70 million homes and 1 million hotel rooms worldwide. The relationship has now spanned over 4 years with a new 2 year extension just agreed.

Objectives

Grow brand awareness and perception in the UK and internationally

Raise awareness of Qatar as a premium 5-star airline

Communicate the quality of the Qatar service

Increase share of voice against the competition

http://www.skymedia.co.uk/Audience-Insight/Case-Studies/qatar-airlines.aspx

Financial objectives

Qatar Airways aims for 40% jump in revenues, says CEO Akbar Al Baker. Defying the global financial downturn, Qatar Airways is expecting to record a 40 per cent increase in its revenues in its current financial year ending March 31, 2011 over the last year, according to the Doha-based airline’s chief executive officer.”We are targeting a 40 per cent increase in revenues for this year, which is slightly over the increase in the airline’s capacity of around 30 per cent, Akbar Al Baker, told Emirates Business. He added that the airline will experience a “similar capacity increase” in the following year.

Marketing segmentation and target market
Geographic Segmentation:

Qatar Airways is currently operating in most of the regions of the world. They are presently hoping to expand their routes to include the south pacific routes of Australia and its neighboring countries. Qatar Airways is a dynamic, high service carrier, which utilizes the geographic location of its Middle Eastern hub to link 72 international cities. See the company’s website for more information.

Target Market

Product Differentiation:

Akbar Al Baker, Qatar Airways’ Chief Executive Officer, stated, “By offering a variety of entertainment options, we are able to differentiate our passenger service through live entertainment programming while also setting new standards of comfort to ensure we are the airline of choice” (Rockwell Collins, 2005, p. 1).

Some of the features of differentiation are:

Biggest and best business class in the Middle East

Interactive Audio, Video on Demand Entertainment System

Largest personal TV screens in the Middle East

Electronic seat controls

In-seat back massage

First Middle East airline in First Class with flat beds.

Current Marketing Mix (Ansoff product mix & 4P’s)
Product Strategy using Ansoff product mix:

Services is defined as involving one party offering something that is essentially intangible and where the interaction does not result in ownership of anything (Kotler, 2008). Applying Ansoff product grid matrix, it can be said that Qatar airlines is still in market penetration. This is because the airline as was shown in the introductory section of the work, has projected the number of aircraft it wish to buy before 2012. The attributes of a company in growth stage of company life cycle is expansionary qualities.

New Products

Existing Products

Existing Market

Market
Penetration
Product
Development

New Market

Market
Development
Diversification

ansoff’s product / market matrix

The attributes of market penetration strategy in which Qatar airways are using include:

aˆ? Maintain or increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling As part of this growth plan, Qatar Airways will extend its route network to 50 destinations by the end of 2003. It has recently added Manchester and Rome to its increasing route network. It will soon be adding Shanghai, Seoul and Tripoli to its route network. (Airhighways Magazine, 2005, p. 1).

aˆ? Secure dominance of growth markets. Qatar airlines have been known to dominate the ever busy African- Middle east air routes. The company always has some flights available from any part of Africa to the Gulf States. The topology of the area has encouraged the airline to operate in product penetration strategy of Ansoff product grid. Its sparsely populated area has encouraged travelling by air for intra-regional transport. Furthermore, a high per capita income that is still increasing quickly, offers a base for a strong aviation industry. But there are socio-economic constraints, limiting both domestic leisure and business travel potential.

aˆ? Increase usage by existing customers – for example by introducing loyalty schemes .A market penetration marketing strategy is very much about “business as usual”. The business is focusing on markets and products it knows well. It is likely to have good information on competitors and on customer needs. It is unlikely, therefore, that this strategy will require much investment in new market research. There is no evidence that Qatar airways is investing on market research because they are not expanding into unknown routes such as Kula-lumpur – Sydney route.

Pricing Strategy: Going-rate-pricing strategy

Presently Qatar airline practice what is called Going-rate-pricing strategy. The market leader in the middle- east airline industry remains Emirates. Qatar charges its fare based on the price of Emirates which is slightly higher. This is because being the market follower, Qatar does not need to disturb the established market dynamism because it might not be able to compete on the same level with Emirates.

Comparing the price of Qatar and Emirates, on the same route of Kuala-lumpur (Malaysia) – Johannesburg ( South Africa):

Price of Qatar Airways on 21st Nov returning on 23rd Dec from Kuala-Lumpur to Johannesburg

Price of Emirates on 21st Nov returning on 23rd Dec from Kuala-Lumpur to Johannesburg

Promotion Strategy

Qatar airlines are not practicing product differentiation but it is practicing promotion differentiation. According to its chief Executive Officer Akbar Al Baker he said that ” Qatar By offering a variety of entertainment options, we are able to differentiate our passenger service through live entertainment programming while also setting new standards of comfort to ensure we are the airline of choice” (Rockwell Collins, 2005, p. 1). Some of their promotion strategies are as listed below and experienced by its passengers are as

Biggest and best business class in the Middle East

Interactive Audio, Video on Demand Entertainment System

Largest personal TV screens in the Middle East

Electronic seat controls

In-seat back massage

First Middle East airline in First Class with flat beds

Qatar has engaged the services of Global media industries to help spread the good news. Such TV, Corporate Videos, BBC Campaign to position it as a premium carrier, CNN testimonials from airline staff, Sky News reports as a sponsor of the weather service and Sponsors a travel show through Al-Jazeera. Qatar is a major sponsor of high profile sporting activities such as World Tourism Day, World Travel and Tourism Council Summit, World Economic Forum, Leading International sports events. Qatar airlines was the official sponsor of 15th Asian Games, Doha 2006. The company has come up with a new product called “Flying Oryx” Newsletter that it distributes to travel agents. The newsletter is also available through its websites. More links could be established to the newsletter through the Internet. The airlines also give away products to passengers that promote the logo of the Burgundy Oryx and “Taking you personally,” such as watches, computer “mouse” and hand towels.

.Place Strategy:

This places a little impact on the business strategy of Qatar. Qatar airways like any other airways have developed a system of getting their ticket. Unlike the normal businesses, whose distribution channel goes from the manufacturer – wholesaler-retailer-consumer. The normal business cycle Qatar airline and other airways are from the airline operators to consumers when online booking is done or through traveler agent.

Airline operator

Airline operator

Manufacturer

Wholesaler

Travelling Agent

Consumer

Retailer

Consumer

Consumer

Traditional Supply channel Online booking channel Intermediary booking channel
Marketing Implementation
Budget (short & long term projections)

Qatar airlines being a government company operates a closed system whereby no one knows their financial projections. But based on Boeing’s Economic Overview fort the next 20 years, the company predicts an overall economic growth of the international airlines industry will be at 2.9%, the international growth in passenger traffic will be 4.8%, and the largest area of growth will be in cargo at 6.2%. Although the industry will still face highs and lows, which is inherent, the Boeing report says that the long-term outlook is that of positive growth. Part of the factors of positive growth are globalization, increases in international trade, growth of GDP, the liberalizing of regulations in various countries to allow more access and services. World GDP growth is at 2.9% and this is one of the major factors for the growth in the airlines industry. According to that same report, the GDP growth in the Middle East is 3.6%, and growth in the passenger traffic is estimated at 5.5%. Of course, this growth in higher in regions where the GDP is higher. Other factors affecting increased growth in the Middle East are increasing populations and the belief that oil costs will be sustainable long-term.

Integrated Marketing Plan
Low cost

Qatar airways have the leverage to engage in more competitive prices that what they are offering presently. They should borrow a leave from what Qantas did. Qantas came up with a low cost carrier called JETSTAR. The low cost strategy can compete in the low cost flight category of the airline industry while the parent company keeps their normal standard.

Alliances

Qatar airways have the brand image to form strategic alliances with many similar airlines where they can get the benefits of economics of scale. This might come in the form choosing one airline company in the continent to form a loop. They might borrow a look from what Singapore airlines deed as shown below.

Singapore

Airlines

Air New Zealand

Star Alliance

Diners Club

Avis

Singapore Airlines’ alliance network; strategic alliance, follower ( Kotler Pg 812, 2008)

Reduction of booking agents

Commissions and other incentives to sales staff add to the operational cost of the company. These costs either passed on to the customers or absorbed by the organization lowers the margins of the company. The company should come up with a structure of appointing GSA (General Sales Agent) in major cities and towns. They might even pass it to the post office to sale for them since they post office has their fixed cost already running.

Web Friendly Site

The company should as a matter of urgency design a friendly user web site. Their current web site is not user friendly. They should borrow a cue at Airasia website. Airasia website is fast, user friendly and updates every minutes. This has greatly encouraged customers to use the web more frequently than physical office space thereby limiting people or place contacts to the barest minimum.

Conclusion

For Middle Eastern players, there are three potential sources of passenger demand. Firstly, domestic demand originating in the Gulf region can add to fill fleets and airports. Secondly, demand can arise from foreign passengers that are bound for Middle Eastern countries – may they be leisure or business travelers. And thirdly, stop-over travel that is using the Middle Eastern airports as hubs and that is heading for destinations beyond the Gulf countries can be a source of demand. These factors are favorable to Qatar airlines. However, responding to the growth processes in the Middle East only by cutting costs is an insufficient strategy for the incumbent players. Pricing systems, for example, have been developed in decade-long processes and are difficult to copy. Other important fields and assets for reaction are strategic networks and co-operations, frequent flyer programs and booking systems.

Development is critical and essential to the sustenance and growth of any nation. The main goal of each and every country is to reach overall development of the country. The term development encompasses the need and the means by which to provide better lives for people in a country. It includes not only economic growth, although that is crucial, but also human development providing health, nutrition, education, and a clean environment. However, in executing development is a complex issue and the basic perspective of it is equates development with economic growth. According to the United Nations Development Programme (2009) development is ‘to lead long and healthy lives, to be knowledgeable, to have access to the resources needed for a decent standard of living and to be able to participate in the life of the community.

Gboyega (2003) captures development as an idea that embodies all attempts to improve the conditions of human existence in all ramifications. It implies improvement in material well being of all citizens, not the most powerful and rich alone, in a sustainable way such that today’s consumption does not imperil the future, it also demands that poverty and inequality of access to the good things of life be removed or drastically reduced. It seeks to improve personal physical security and livelihoods and expansion of life chances.Thus, development aims at improving important aspects of people’s lives such as livelihood, security, environmental, physical and mental well being. Enhance in knowledge, experience and resources is helped people to build a better life.

The goal of development is to expand the capabilities of people to live the lives they choose to lead (Amartya Sen 1999). It is most appropriately defined with their active participation. Development is different from growth. It has broader and deeper meanings. Economic growth is necessary but not sufficient condition for development and hence it can be viewed as a multi-dimensional phenomenon. The major dimensions of it include the level of economic growth, standards of education, quality of housing, level of health, distribution of goods and services, and access to communication (World Bank, 2005).

Ingredients for development and economic growth are capital formation, human resources, natural resources, and technology/entrepreneurship. Capital formation is essential to invest in sectors with high economic output, saving capital, investing in infrastructure creates jobs directly and indirectly by attracting investors. Human resources are a key to development in any country. There is need to develop a mechanism to address lack of health facilities, lack of education, poverty, malnutrition, and disease. Human resource development is important if people are to make use of ICT for development. Natural resources are crucial in development. Development activities need to be harnessed more of their natural resources. It is imperative that they should improve farming techniques and develop better land ownership methods. Technology and entrepreneurship are important to developing countries to improve the know-how and know-what. Openness to ideas is important if any economy is to develop. The formation of regional and international blocks encourages technology and entrepreneurship.

Development should be a sustainable long-term condition for humanity’s multidimensional well-being. It has been clearly explained in the Rio Declaration, adopted by the United Nations Conference on Environment and Development in 1992, held in Rio de Janeiro in Brazil as; “Human beings are at the center of concern for sustainable development. They are entitled to a healthy and productive life in harmony with nature.” “Sustainable” development could probably be otherwise called “equitable and balanced,” meaning that, in order for development to continue indefinitely, it should balance the interests of different groups of people, within the same generation and among generations, and do so simultaneously in three major interrelated areas-economic, social, and environmental. Sustainable development is about equity, defined as equality of opportunities for well-being, as well as about comprehensiveness of objectives.

Not all the countries in the world have same level of development. While developed countries have reached higher level of development or standard of living due to better standards in their societies, developing countries have faced several issues and challenges along their way towards development. Developed countries are countries whose lives are patterned industry and have some specific characteristics like higher level of average per capita income, level of education, life expectancy of the population and also low level of population growth rate and death rate. Life style is based on the market economy and economic activities are mostly related with industry sector as well as export oriented. Furthermore, majority of the population lives in cities and there is relatively higher level of health of the population. Countries that have Human Development Index (HDI) of 0.788 or over are in the category of developed countries. According to the IMF index of HDI released in 2011, there are 47 countries in the top quartile and classified as possessing a “Very high human development”.

On the other hand several common negative characteristics can be seen among developing countries as well. These are preventing the development of those countries. Low levels of living are manifested qualitatively and quantitatively in form of low incomes, inadequate housing, poor health, limited or no education, high infant mortality, low life and work expectancy, and in many cases, a general sense of malaise and hopelessness are some of them. Moreover, low levels of productivity in many areas like labour productivity, agriculture or farm productivity. In addition, low level of industrial development, high unemployment, small domestic market, small amount of disposable income and uneven regional development, problems in institutional changes in land tenure, credit and banking structures, honest and efficient administrations and the restructuring of educational and training. Most of the developing countries possess high population growth potential characterized by high birth rate and high but declining death rate.

Rural development in developing countries

Rural development is an integral part of the national development of a country. Rural development actions are mainly and mostly to development aim for the social and economic development of the rural areas (Chigbu, 2012). Especially in developing countries, very high emphasis has been given to rural development, aiming to gain equitable and balance development throughout the country. Rural Development which is concerned with economic growth and social justice, improvement in the living standard of the rural people by providing adequate and quality social services and minimum basic needs becomes essential. The present strategy of rural development mainly focuses on poverty alleviation, better livelihood opportunities, provision of basic amenities and infrastructure facilities through innovative programs of wage and self-employment.

Rural development generally refers to the process of improving the quality of life and economic wellbeing of people living in relatively isolated and sparsely populated areas (Malcolm, 2003). Although rural development has traditionally centered on the exploitation of land-intensive natural resources such as agriculture and forestry, due to changes in global production networks and increased urbanization have changed the character of rural areas. Increasingly tourism, niche manufacturers, and recreation have replaced resource extraction and agriculture as dominant economic drivers (Neil and David, 2009). The need for rural communities to approach development from a wider perspective has created more focus on a broad range of development goals rather than merely creating incentive for agricultural or resource based businesses. Education, entrepreneurship, physical infrastructure, and social infrastructure all play an important role in developing rural regions (Conn, 1996). Rural development is also characterized by its emphasis on locally produced economic development strategies (Malcolm, 2003).

Furthermore, rural development aims at finding the ways to improve the rural lives with participation of the rural people themselves so as to meet the required need of the rural area. As such, general people themselves have to participate in their sustainable rural development. When rural development is concerned, in one point of view it can be explained as the development consists of a wide variety of new activities such as the production of high quality and region specific products, nature conservation and landscape management, agritourism and the development of short supply chains (Knickel & Renting, 2000). These new activities in rural areas mean new income sources to local people. Therefore it is believed that, doing diversification and utilizing multi-functionality of agriculture and formation of agritourism can be used as a strategy to enhance rural development.

Rural Development and national development in developing countries

In developing countries, the rural development is one of the most important factors for the growth of the national economy. Desai (2009) has recorded “Rural Development is an important segment of national development”. Developing countries are primarily agriculture-based countries and majority of the population are in rural areas. Agriculture contributes for a significant share of the gross domestic product (GDP) of those countries. Agriculture, mining, forestry, handicrafts, fisheries, poultry, diary and rural tourism are the primary contributors to the rural business and economy of developing countries.

However, in many developing countries sufficient amount of investment in rural sector doesn’t take place (United nation, 2011). The rural sector is not able to contribute its full potential for the national development. For example, in the Asia-Pacific region in many cases governments implement national development strategies, including fiscal and trade policies, which are biased against agriculture and the rural sector in general. These policies are seriously affecting the livelihoods and entrepreneurial development of small agricultural producers, the landless and other producers in rural areas (United nation, 2011). As a consequence of the biased policies and budget allocations government institutions in most countries concerned have been unable to effectively promote agriculture and rural development through the provision of timely and adequate social and production services in rural areas making lesser contribution for the national development (FAO, 2008)

Not only in Asia-Pacific this problem exists in other regions of the world as well. The countries of Latin America and the Caribbean need to invest more and better in rural communities as their economic contribution to national development is twice as large as officially believed, according to a new World Bank report released recently. The report evaluates the effects of the rural sector on national growth, poverty reduction, and environmental degradation both in rural areas and the rest of the economy, as well as the public policies that can enhance its contribution to overall national development (Viveros and Morrison 2005). A study of Onyemelukwe (1981) on the assessment of the performances of the rural sector of the typical African country Nigeria in national development contexts has found out the critical role of the sector and the system effects of inadequate equipment of the sector for such role. The Nigerian situation is used to illustrate the prospects and the problems of the rural sector in most African countries.

Rural sector in Sri Lanka is mainly consisted of farming community. The agriculture sector is the cornerstone in Sri Lanka’s economy with more than 70% of the population living in rural areas depending on agriculture for their livelihoods. Currently this sector contributes to about 18% of the Gross Domestic Product (GDP) and 30% of the employment (Central bank of Sri Lanka, 2011). Therefore, without taking into consideration agricultural development, we can’t even imagine rural development in this country.

What is Agritourism?

In general, agriourism is the practice of attracting travelers or visitors to an area or areas used primarily for agricultural purposes. In particular, it refers to farm enterprises and community events that showcase the activities and produce of rural families and the agricultural heritage of farming regions to travelers. Agritourism provides “rural experiences” to travelers with the goal of generating revenues for farmers and surrounding communities. These experiences typically include a wide range of attractions and activities that take place in agricultural areas. Important ingredients of agritourism’s “rural experiences” include open spaces, low levels of urban or industrial development, and opportunities for visitors to directly experience agricultural, pastoral, and natural environments.

Moreover, agritourism is a type of rural tourism. It is a combination of two complex industries; agriculture and tourism, to open up alternative income sources for the farmers as well as surrounding community (Wicks and Merrett, 2003). Brscic (2006) has explained agritourism as a special form of tourism which takes place within the family farm that symbolizes a specific form of business, giving a number of benefits to the families involved, with multiple impacts on the socio-economic relations and the space in rural areas. It is a form of farm diversification aiming some benefits from exiting farm resources. Agritourism can be also explained as an activity, enterprise or business that combines primary elements and characteristics of agriculture and tourism and provides an experience for visitors that stimulates economic activity and impacts both farm and community income.

Relationship between agritourism and rural development

Several research findings in many developed countries have shown that agritourism as a possible rural development strategy. For example, Haghiri and Okech (2011) discovered role of the agritourism in developing the economy of rural areas in the province of Newfoundland and Labrador, Canada. According to Demirbas Topcu (2009), agritourism is a new element for rural development in Turkey. Agritourism as an effective vehicle for rural development in the Canadian province of Saskatchewan (Dernoi, 2002; Weaver and Fennell, 1998). Study of Hightower (2011) recorded that “Agritourism is being used as a catalyst for additional income and triggering economic growth in rural areas.” Disez, (1999) revealed that agritourism represents and innovative activity taking place within the framework of rural development in Massif Central region in France. In Romania, agritourism is the best way for the preservation of traditions and customs in the rural areas, supplying a sustainable rural development (Mortan, 2006).

In some countries like Italy, Spain, Greece, Austria, Denmark, England, France, Germany, Ireland and Norway it is a growing sector with the policies of the governments aiming to benefit from it as a regional development instrument (DemirtaAY Topcu, 2007; Frater, 1983). Rural tourism provides many benefits to local areas by bringing visitors to the region, increasing awareness for agricultural products and showcasing produce to the local and regional community. It can also provide incentives for local heritage and conservation groups to preserve unique heritage landscapes and built heritage. Most studies have highlighted the multiple benefits that agritourism brings to the farm, local communities, agriculture heritage and natural resources (Fleischer and Pizam, 1997; Busby and Rendle, 2000; Ventura and Milone, 2000; Sharpley, 2002; Wicks and Merrett, 2003; Hegarty and Przezborska, 2005; Fleischer and Tchetchik, 2005; Mitchell and De Waal, 2009).

Agritourism Research conducted in developing countries

A small number of researches have been conducted in some developing countries in Asia. Mayasia, Taiwan, Indonesia, Philippines, Thailand, and India are examples of such countries. When South Asian countries are concerned, the number of research is very few. India is the country leading in agritourism in this region.

According to Tiraieyari and Hamzah (2011) in Malaysia, there are potential benefits of agritourism for farmers and local communities in general. It further indicated that agritourism as an economic development instrument has great potential to contribute to rural development as Malaysia is one of the tourist countries with great potential to develop agritourism. As per the Council of Agriculture (COA) of Taiwan, after registering a decline of 1.9% of GDP in 2001, 173 Farms were established for tourism and this created huge impact in the development of rural areas of Taiwan such as chi-ching and Shwei-Li in Nantou County (Murangwa, 2010) A study on agritourism in Thailand notes that “agritourism can utilize the agricultural holdings and products for the purpose of tourism such as scenery from paddy fields and vineyards, food and drink from agricultural products (vegetable, fruit, etc), souvenirs from local products (handicraft), and accommodations from redundant or vacated property to gain local development in area ” (Cynthiaord, 2012). As reported by the South East Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), in Manila Philippines, agritourism could be a niche tourism product that would help improve farm incomes provided a well-planned program is put in place. It will consolidate initiatives in agriculture and tourism sectors nationwide that contributed to poverty reduction, natural resources management, and rural development. (Aguiba, 2012)

A research in Chitwan District in Nepal found out the importance of agritourism for the rural development in Nepal. Agritourism is the concept of diverting the tourists to those rural areas, where there is range of agricultural activities, services and amenities provided by farmers and rural people attract both internal as well as international tourists in order to generate extra income for their business. The living standard of the farmers and rural poor can be raised by identifying high value-low volume crops, which have comparative advantages and by optimally utilizing the available resources for sustainable development (Maharjan, 2008). However, the available literature evidence that our neighboring country India has engaged in agritourism successfully. According to the research on “Agritourism – the potential for sustainable development and growth” aiming to explore the scope for developing agritourism in India has been conducted by Raghunandan et al.,(2010). This research has concluded that there is potential for Agritourism in India to grow into an important source of income for the rural population if the development is focused on integration and participation. Furthermore, Agritourism has been identified as a source of generation of alternative income for farmers and local community, employment opportunities, reduction of gender bias and accelerate growth rate by Chadda and Bhakare (2010) based on their research on Socio-Economic Implications of Agritourism in India.

Agritourism in Sri Lanka

Evidence on only one study related to agritourism and rural development of Sri Lanka was found as a result of the vigorous literature search during the study. One study is the research conducted by Senanayaka and Wimalaratna (2010) about agritourism and rural development in Sri Lanka with special reference to Nuwara Eliya District. They have found that the economic problems as well as development potentials remain in agricultural areas side by side in the country. Only a small fraction of the vast rural agritourism resource base is being utilized by the industry now with little or no benefits to rural people. Dedicated research work on agritourism will promote the sector with the participation of policy makers, rural communities and private investors on a sustainable manner while trickling down a reasonable fraction of the benefits to the rural people. This would diversify their agricultural livelihoods and improve their income and living standards.

As per the literature review, agritourism in most of the countries has a short history and it is at the developing stage (Maumbe, 2012; Choo, 2012; Bernardo et al., 2007). Several countries have the research findings mainly based on preliminary research and pilot studies. Therefore, there is definitely a need for future research to verify the preliminary findings of these researches especially in developing countries. Moreover, several researchers have shown that agritourism has lots of strengths and opportunities for the improvement of rural areas and rural development. However, those researches have been conducted in specific condition which is unique to that particular country itself. Therefore, generalization of the findings to other countries is not so valid specially, for developing countries having lots of variations in geographical, political, socio-economical and environmental conditions. Not only the differences among the developing countries, there are several regional level differences even within a country. Furthermore, in a country, rural areas are different from each other. Thus, testing the level of contribution of agritourism for the rural development at provincial level is the best way to identify the real potential of it. Since a very few number of research have been conducted at provincial level in developing countries, there is a need for lots of research of this kind. Even though in Sri Lanka there may be a potential in this regard, no sufficient research have been conducted in this field. Therefore, this kind of research is highly important.

Problem statement

Sri Lanka is a developing country and there is a need to enhance the living condition of the people by developing the total economy of the country. There is a gradual, but comparatively slow increase in GDP in the country for several years (Figure1.1).

Figure 1.1: Improvement of the GDP from 2002 to 2012 in Sri Lanka

Source: Central Bank of Sri Lanka, 2012

Sri Lanka tourism has contributed to the growth of total economy for several years. However, due to exist civil war during 2008-2009, tourism had being faced a declining trend. Along with ending the war in 2009, tourism industry restated to flourish and contribute for the national economy significantly. As a result, by now it is one of the main contributors of the national income of the country and expects to have further growth in future. The direct contribution of Travel & Tourism to GDP in 2011 was LKR219.7bn (3.4% of GDP). This is forecast to rise by 5.6% to LKR232.0bn in 2012.This primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). The direct contribution of travel & tourism to GDP is expected to grow by 5.7% per annum to LKR402.4bn (3.4% of GDP) by 2022 (Figure 1.2).

Figure 1.2: Contribution of travel and tourism to GDP from 2002 to 2022.

Source: World Travel and Tourism council, 2012

Moreover, travel & tourism generated 236,500 jobs directly in 2011 (3.0% of total employment) and this is forecast to grow by 0.2% in 2012 to 237,000 (3.0% of total employment). This includes employment by hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). It also includes, for example, the activities of the restaurant and leisure industries directly supported by tourists. By 2022, travel & tourism will account for 293,000 jobs directly, an increase of 2.2% per annum over the next ten years (Figure 1.3).

Figure1.3: Travel and tourism’s contribution to employment opportunities from 2011 to 2022

Source: World Travel and Tourism council, 2012

Rural sector performs a significant contribution for the national development in the country. About 70 percent of Sri Lanka’s population lives in its rural areas. In rural areas, main sectors that are helping for rural development are agriculture, forestry, fisheries, mining, art and craft and rural tourism. Among these sectors, the most important one is agriculture. A large number of people in the rural sector engaged mainly in agriculture and allied activities.

Agriculture sector can generate regionally equitable economic growth, rural livelihood improvement, and food security through efficient production of commodities for consumption for agro-based industries. Since agriculture sector has multi-functionality, it can link with other sectors like tourism and form new opportunities for local and regional development. Considering the experience of other developing countries in Asia, it can be assumed that there will be a potential for agritourism for the rural development in Sri Lanka. Therefore, this study will answer the question “does agritourism represent a significant and viable rural development tool in Sri Lanka?”

1.3 Objectives of the study

The broad objective of this research is to explore the potential of agritourism for rural development in Sri Lanka with special reference to demand and supply issues. Specific objectives of this research are:

To find out the current supply of agritourism in the country.

To study the government policy interventions in tourism and agritourism sector of the country.

To identify and assess the visitors’ needs and satisfaction of agritourism of the country.

To find out the local residents’ attitude towards impacts of agritourism economic and contribution of agritourism for rural development.

To find out the government officials’ attitude towards impact of agritourism to the rural development in the country and also national and provincial level support to the development of agritourism as a sector of rural development.

To recommend ways and strategies to development of agritourism in Sri Lanka as a sector of rural development.

1.4 Conceptual Framework

The aim of this research is to study the agritourism and its contribution for the rural development in the country. The main stakeholders of agritourism are agritourism providers, visitors, local residents and the government. Figure1.4 shows the relationship of the stakeholder in agritourism and how agritourism links with rural development.

Agritourism providers supply the agritourism. They can be farmers, private sector companies or organizations. Agritourism supply can be conducted by adding tourism activities to the existing farm and arranging facilities for the visitors to come to the farm, see those activities and get some knowledge about them, spend leisure time at the farm. In supply agritourism three things are important. Things to see (farm animals, fruits, vegetables, Herbal plants) activities to do (feeding animals, milking cows, harvesting crops, climbing trees, picking fruits, threshing paddy) and farm products to buy (yogurts, curds, fruits, vegetable, jam jelly).

Visitors can be local or foreign people those who are ready to buy the agritourism services. They make demand for agritourism. They come to visit the farm to see things, get a rest, enjoy farm activities and sometimes study on farming, Farm stay for few days, visit surrounding villages, buy local art and craft items, see cultural shows perform by local people and pay for the farm goods and services they consumed. In this way agritourism provider can earn extra income and other returns from agritourism which is the main aim of providing agritourism. Improvement of the level of income and living standard of the agritourism providers (especially farmers) is the main aspects of agritourism business. Other important point regarding agritourism is the presence of other tourism attractions in the area. Other tourism attractions can act as a motivational factor for visiting the agritourism operation. Moreover, proper government interference through correct rules and regulations are essential to operate the agritourism industry smoothly.

Also, on the way, visitors can buy local products of nearby local residents, can visit other interesting places in the village like religious places, cultural sites, national parks, forests, waterfalls, traditional festivals, folk games. In this way, visitors can interact with local residents of the area. These interactions create economic, social-cultural and environmental that impacts for the rural development of the area. Furthermore, local residents can sell their products and labour to agritourism operation and earn some money. Enhancement of the level of income and living standard of local residents are the other aim of agritourism along the way to rural development.

The other important factor is the government attitude towards agritourism and intervention to rural areas where agritourism operations are available. Especially provincial and local level governments have responsibility to enhance the condition of the area up to a good stand making it suitable for conducting tourism activities. So that, provision of infrastructure facilities such as road system, transport facilities, water, electricity, telecommunication to the area have to be taken place. Not only that, banking facilities, safety and security, medical facilities for the area are also needed to be provided. In this way, provisions of infrastructure facilities directly help for the rural develop of the area.

Other Tourism Attractions of the Area

-Mass tourism

-Ecotourism

-Nature tourism

Agritourism

Rural Development

Other Sectors of Rural Development

-Forestry,

-Fisheries,

-Mining,

-Art and craft etc.

National Development

Visitors

Demand and Supply of

Agritourism

Local Residence

Government Policy

-National Level

-Provincial Level

-Local Level

Impacts of

Agritourism

Agritourism providers

-Economic

-Socio-cultural

-Environmental

Local Residents

-Economic

-Socio-cultural

-Environmental

Agritourism Providers
Private Sector Medium and Large Scale Companies
Local
Foreign
Farmers

Figure 1.4 Conceptual Framework of the Study

1. 5 Scope and Limitations of the Study

This study has covered important aspects such as the supply of agritourism (number of destinations, scale of operation, available facilities, number of visitors, length of stay etc). Demand for agritourism (demographic information of visitors, nature of their demand, visitors’ satisfaction towards agritourism, demand function) information of local residents (impacts of agritourism on them, their attitudes towards agritourism development) and policies related to agritourism development in the country. Agritourism is a business process. However, aspects like establishment, management, development, improvement, marketing and promotion of the operations are beyond the scope of this study.

There were few limitations in this research. This is a small-scale research conducted at local level with four types of stakeholder; operators, visitor, local residents and government officials within only few districts without the whole country. In terms of operators, some financial analysis like benefit cost ratio, IRR of agritourism etc., could not be done as they did not want to disclose financial information d

Adventure Tourism has known a rapid popularity during these last past decades. This rise and sudden popularity was partially thanks to a progression in the commercialization of outdoor recreation (Buckley, 2000, 2004a; Travel Industry Association, 2005) in (Buckley, 2007). Adventure travel existed since a long time; it began with early settler and has amplified increasingly since this period. The first adventure travelers were early explorers in quest of discovery, in the hunt for new resources, lands and looking for unknown places. ‘Columbus, Cook, Da Gama, Magellan and Raleigh’ are among the well known early explorers in quest of adventure (Swarbrooke et al, 2003: 41). Mercenaries were also characterized as early adventurers having as main interest money, risk seeking while some others like Pilgrims were looking for spiritual knowledge (Swarbrooke et al, 2003).

Adventure tourism is currently receiving a lot of attention and is the fastest and fashionable growing sector of the tourism industry. It is perceived as being a niche segment and take in land, air and sea-based activities. Adventure travel is becoming well-liked and individuals are now striving to find equilibrium between work and leisure. Adventure travel has recently created a center of attention for the older people most precisely the baby boomers (Patterson and Pan, 2007). This new cohort born between 1946 and 1964 are getting engaged in new adventure activities. This tendency is principally due to a change in lifestyle, being financially secured than previous cohorts and having more time now that their children have left home. Baby boomers are pushed and pulled by different motives to engage in Adventure tourism. One can have the wish for new experiences, escape from the daily routine, baby boomers in today’s world no longer want to sit in a bus going for sightseeing they want to experience in the activity. Baby boomers can be soft adventurers in pursuit of easy-doing activities containing low level of risk like bird watching, horse riding or hard adventurers in quest of thrills, challenge and adrenaline.

Therefore, to better exploit the subject, research has been undertaken to explore and analyze what really motivate this generation to engage in adventure tourism, identify the different motivational factors, the types of activities they are more likely to participate in and their profile characteristics. Lot of research has been done on Adventure Tourism (Vester, 1987; Hill, 1995; Sung, 1997, 2000, 2004; Ewert and Jamieson, 2003; Beedie and Hudson, 2003; Gyimothy and Mykletun, 2004; Kane and Tucker, 2004; Weir, 2004; Flucker, 2005; Williams and Soutar, 2005; Cater, 2006; Page et al, 2006; Buckley, 2000, 2006, 2007; Patterson and Pan, 2007; Schott, 2007; Dimmock, 2009; Reynolds, 2012). Moreover there are some books of particular relevance to adventure tourism. These include Miles and Priest (1999) on adventure programming in outdoor recreation; Swarbrooke et al, 2003 on Adventure Tourism: The new frontier; Buckley (2006) on the structure of adventure tourism products and Patterson (2006) on Growing older, tourism and leisure behavior of older adults.

1.1. Problem Statement

Several studies have been written on adventure tourism, however no other studies apart from Patterson and Pan (2007) has been found on the motivation of baby boomers in adventure tourism. Most of the existing studies focus on adventure tourism from a general point of view (Vester, 1987; Buckley, 2006; Whiriskey and McCarthy, 2006) or look at different perspective such as Mountaineering and Adventure Tourism (Beedie and Hudson, 2003; Pomfret, 2006). Though, there is relatively little research neither on the motivation of people to engage in adventure nor on baby boomers. Ewert and Hollenhorst (1989) focused on adventure travel and its wilderness. Sung, Morrison and O’Leary (2004) investigate on the segmentation of adventure market by activities while Dimmock (2009) explored on the comfort in adventure and Reynolds (2012) studied on the motivation and lifestyle of surfing as an adventure travel.

Thus adventure tourism has been studied but through diverse perspectives and none apart from Patterson and Pan (2006) has focused on the motivation of Baby Boomers in Adventure. Subsequently to compensate this gap, this research will go deeper to assess those motivations that indulge baby boomers to participate in adventure tourism.

1.2. Aim and Objectives
Aim

The main aim of this study is to assess what motivate baby boomers to engage in adventure tourism.

Objectives

Assess the socio-demographic characteristics of baby boomers.

To evaluate the trip arrangement factors of baby boomers

To differentiate between hard and soft adventure and identify in which type of adventure activities baby boomers are more engaged in.

Examine the push and pull factors that influence baby boomers in their choice.

Outline of Study

This study consists of five sections: the introduction, the literature review, methodology, results and discussion and conclusion and possible recommendations.

Chapter 1: The study starts with a brief description on the field of research. This includes an introduction on the expansion of the tourism industry, the emergence of adventure tourism in today’s world. It also includes the problem statement, aims and objectives of the research.

Chapter 2: The literature review is divided into two parts which is chapter 2 and chapter 3. Chapter 2 is the first part of the literature review. This entails the theoretical background; starting with brief definition of different terms namely adventure Tourism, baby boomers, the types of adventure tourism.

Chapter 3: The second part of the literature review lays great emphasis on the motivational theories; this chapter goes deeper onto the different motives that influence individuals in their choice for adventure.

Chapter 4: This comprises of the methodology, this explains how research was conducted, the questionnaire design, method used to collect the data, sampling techniques, the data analysis and limitations of the study.

Chapter5: This includes the results and discussions of the results

Chapter 6: The last chapter reviews all of what have been discussed in the research and ends with some possible recommendations

Chapter 2
2.0. Introduction

This chapter consists of the literature review; the literature review sets the theoretical framework of this study. Before coming to the definition of adventure tourism, the term adventure is first explained, entailing its core characteristics. This is followed by an explanation on the term adventure tourism and baby boomers, types of adventure tourism as well as a the different types of activities involved in adventure tourism.

2.1. Adventure

Adventure is all about action (Kane and Tucker, 2004). The term Adventure does not have a single definition. Adventure could mean different things to different people. What is Adventure for one can be routine for another (Weir, 2004). It varies from a vacation experience to a daily work life of an individual. In order to better understand the term adventure, it is crucial to pass on to its core characteristics; this is demonstrated in the figure below.

Figure 1: The core characteristics of Adventure

Source: Swarbrooke et al. (2003)

These characteristics effectively go over the main points of adventure. Swarbrooke et al. (2003) affirm that these characteristics are mutually dependent since one element can develop the stimuli of another. For instance, novelty may lead to new exploration and discovery, escape from daily life, a look for challenge, danger and risk and develop contrasting emotions.

2.3. Adventure in the context of Tourism

Tourists in today’s world are not the same as it was in previous years. In this day and age, tourists are desperately in pursuing momentous and unique experiences. They want active rather than passive participation, seek new sensation and change from their ordinary life (Moeran, 1983:17). Adventure tourism is the new emergent and niche sector of the tourism industry. This sector count up 15% of all leisure travel and this rate is going to enlarge in the coming future (Hawkins, 1994; Loverseed, 1997; Fluker and Turner, 2000).

Researchers has defined adventure tourism through diverse interpretation (Buckley, 2000; Bentley and Page, 2001; Hudson, 2002; Swarbrooke et al. 2003; Page et al. 2005). Amodeo (2004: 84) define adventure tourism as ‘travel to places that require a certain degree of effort and commitment to get and are about the experience and the journey rather than just a list of places visited or the level of luxury’. On the contrary, Muller and Cleaver (2000, p.156) define adventure tourism as ‘physically bracing, adrenalin-driven, somewhat risky, with moments of exhilaration punctuated by many opportunities to assess and reassess what has been done or accomplished’. As compared to Amodeo (2004), Muller and Cleaver (2000) definition of the term is mostly inter-related to the two constructs of perceived risk and perceived performance, where high physical ability and risk sensation is mended for it to be extreme and dynamic. Nevertheless, Weir (2004) argue that Adventure do not necessarily contain high level of danger, since there exist adventure with no element of risk or hazard. In the tourism industry, this is normally termed as soft adventure. On the contrary of the definition provided by the researchers, Swarbrooke et al (2003) state that Adventure tourism ‘is not defined according to specific activities that are undertaken, but more by the state of mind and approach of the participant’. This means that it is the personal interpretation and perception of individuals towards Adventure that will more clearly define the term.

Six major dimensions of adventure tourism have been developed by Sung, Morrison and O’Leary (1997) and these are namely activity, experience, environment, motivation, risk and performance. These components can be seen as major essentials for people to go for adventure travel. The activity and environment will consist of the physical location of the adventure travel, and this can be the natural environment. The experience will be the outcome to gain at the end, this can be self-achievement. Moreover, the motivation is all about the interest of the individual and endeavors to engage in adventure while risk and performance is a look for challenge and competence to do the activity. Adventure tourism takes in a range of activities and this includes air, sea and land-based activities (Hall, 1992; Fennel, 1999; Page et al. 2003; Pomfret, 2004; Gajda, 2008).This is illustrated in table 1.

Table 1: Conventional and contemporary adventure tourism activities

Land based
Water based
Air based
Mixed (land/water/air)

Abseiling

Body boarding

Ballooning

Adventure racing

Backpacking

Canoeing

Bungee jumping

Charity challenges

Bicycle

Canyoning

Cliff jumping

Conservation expeditions

Caving

Cruise expeditions

Gliding

Cultural experiences

Climbing

Kayaking

Hang-gliding

Gap your travel

Dog sledding

Sailing

Micro-lighting

Hedonistic experiences

Hiking

Scuba diving

Paragliding

Spiritual enlightenment

Hunting

Snorkeling

Parachuting

Wildlife watching

Horseback riding

Surfing

Skydiving

Jungle exploring

Water skiing

Motorcycling

White water rafting

Mountain biking

Wind surfing

Mountaineering

Orienteering

Quad biking

Scrambling

Skiing

Snow boarding

Snow mobiling

Snow shoeing

Via Ferrata*

Wilderness experiences*

ˆ?Backpacking, climbing, hiking, mountaineering, skiing, via ferrata and wilderness experiences are all mountaineering-related activities

Sources: Hall 1992, Page et al. 2003, Pomfret 2004

2.4. Types of Adventure Tourism

Adventure tourism is composed of diverse types of activities which can fit to the need of different adventure traveler (CBI, 2011). Types of Adventure tourism can be categorized in two section which is hard and soft Adventure. The categorization of the Adventure tourism aspects diverge between researchers (Hill, 1995; Cloke and Perkins, 1998; Sung, Morrison and O’Leary, 2000; Ewert and Jamieson, 2003; Ryan and Trauer, 2004) in (Schott, 2007). For example, Sung, Morrison and O’Leary (2000) categorized the types of activities into six groupings including soft nature, risk equipped, question marks, hard challenge, rugged nature and winter snow (Beedie and Hudson, 2003). Several studieswere categorized in terms of activities and principally between hard and soft adventure and the researcher’s study will follow this trend (Hill, 1995; Millington and Locke, 2001; Ewert and Jamieson, 2003:69; Miller, 2003:2; Adventure Travel Society, 2003; Patterson and Pan, 2007). Table 2 present some examples of soft and hard adventure tourism.

Table 2: Examples of soft and hard adventure tourism

Soft adventure
Hard adventure

Wilderness jeep safaris

Climbing and mountaineering

Supervised and escorted trekking

Long distance back country trekking

Cycling holidays

Downhill mountain biking

Sailing holidays

Paragliding

Learning to surf and to windsurf

Heli-skiing holidays

Camping

Canoeing and kayaking

Source: Sung et al. 2000

2.4.1. Soft Adventure

Soft adventure can be defined as adventure activities that require low level of risk, low physical effort and obligation. These are activities usually undertaken by novice adventurers or people who want passive activities level, accompanied with experienced guides (Hill, 1995) in (Schott, 2007).

On the other hand, Goodnow (2005) described Soft adventure journeys as travel to new and exotic locations with low force activities. Some major examples of soft adventure activities are horse-riding, biking, hiking, canoeing, snorkeling, and animal watching, walking in natural areas, safari (Beedie and Hudson, 2003; Swarbrooke et al, 2003; Williams and Soutar, 2005; Patterson and Pan, 2006; CBI, 2011)

Generally, novice adventures engaged in soft activities due to the fact that they lack some experience, it can be misperceiving risk and their competence and perhaps choose soft activities because of a sensation of fear and hesitant and thus want to be on safe in a secured environment (Priest, 1999, p.160, cited in Miles and Priest; Pomfret, 2004).

2.4.2 Hard Adventure

Hill (1995) labeled hard adventure as activities requiring high level of risk, extreme commitment and superior and sometimes specialized skills. Hill also point out that hard adventures necessitate good skills in risky and dangerous situations.

Risk and competence are two major aspects involve in hard adventure activities. Those engage in hard adventure are generally in quest of challenge, adrenaline rush and risk(Peterson, 1989; Rubin, 1989; Mallett, 1992) in (Williams and Soutar, 2005). People have a desire to seek new sensations (Zuckerman, 1979), and are motivated by “challenge and mastery” (Ewert, 1985). These people are commonly known to be brave, skilled and having good physical intensity (Pomfret, 2004)

Some examples of hard activities are mountain climbing, bungee jumping, canyoning, caving, ballooning, parasailing, surfing and so forth.

2.5. Baby Boomers

Baby boomers can be defined as ‘a cohort of young-old people who were born between 1946 and 1964’. They are now aged between 48 and 66 years old in 2012, (Gillon, 2004) in (Patterson, 2006, p.15). The history of baby boomers dated from the period of the Second World War. Baby Boomer develops its name due to a growth in birthrate during the years 1946 and 1964 [1] . During this century, soldiers came back home from war and wanted to start a new life, build up a family, which show this sudden rise in birthrate (Ohio History Central, 2005). Statistics recorded 79 million births during this period1

Another synonym for baby boomers can be ‘Lucky Generation’ (Mackay, 1997, p.60) in (Hamilton, M and Hamilton, C., 2006). The term ‘Lucky’ was used to describe them because they have grown up in the first generation enjoying a reasonably prosperous and serene society. Additionally, Hamilton (2006) point out that during retirement baby boomers will definitely have more money to spend after long years of hardworking and savings from pension plans. Baby boomers enjoy a better health than in the past; they are taking special care to their diet, though living longer and happier and more importantly being physically active by engaging in various types of leisure activities (Cochran, 2005; Sperazza and Banerjee, 2011).

Baby boomers are seeking new change and novelty; they no longer want to rely on repeat leisure program like bingo party, voluntary actions or mere leisure interests. These activities are getting outdated and this is not going to be in the interest of the baby boomers in retirement. As a result, Experts will definitely have to look at new leisure products, or programs that will attractenthusiastic, energetic participants rather than passive participant (Cochran, Rothschadl and Rudick, 2009).

2.6. Adventure Tourism and Baby Boomers

Adventure Tourism has become very popular during these last past decades. Adventure Tourism is considered as an alternative form of tourism. In today’s world, people no longer want to enjoy basic activities; they want to surpass the mass activities, being deeply in the thrill and excitement of the adventures.

The aging process has also altered intensely during these past years. According to Xola Adventure (2006), old people aged between 41-to-60 years old represent the greatest participating age category in adventure travel at a rate of 42.2 percent. This has emerged and is going to develop more in the future. When talking and thinking about aging process our first impression was ‘an inexorable slide into illness, impotence and immobility’ (Kraus, 2001). Nowadays, this image of the baby boomers is no more present. Patterson (2006) also shares his opinion on this change. She argues that this is a time of new experiences and feelings. Baby boomers need to feel they are free to do what they want or what they have always dreamed of and which were not fulfilled years before (MacNeil and Teague, 1987; Leitner, 1996; McGuire et al., 2004).

Adventure is not reserve for younger people, nowadays lots of people aged between 42 and 64 are being engaged in adventurous activities. Gone are those days where older people used to spend their leisure time in ‘sedentary and socially based activities’ like watching movies, listening to the radio (Lawton, 1993) in (Patterson, 2006: 7). Research has demonstrate that we are moving through an era where things are changing, habits of older people from previous generation differs from that of the present generation. Baby boomers see their retirement as being the time to refresh, experience novelty and new sensation. They acquire a feeling of freedom and harmony, do what they want, things that was impossible for them to accomplish perhaps due to overload of work, looking and caring for their children (MacNeil and Teague, 1987; Leitner 1996; McGuire et al., 2004).

Being more financially secure, in good health and physical condition, and also well-educated encourage baby boomers to engage in outdoor recreation activities. This enables them to feel at one with nature, physically fit and more importantly a way to feel they are still young.

Lipscombe (1995) in his research find out that lots of older adults are at present requesting activities that engage physical defy, not purposely danger but travel that have at least journeys, intellectual challenge, and involving the exploration of new places and cultures (Gibson and Singleton, 2012). It is to be noted that baby boomers are not seeking for simple and easy-done activity; they are looking for a certain degree of challenge and risk. They want to have fun, seek thrill, these can be a principle motive because they were too focus on their career years before, striving hard to cater for the needs of the family. All this was such a big responsibility that they now want to relax and enjoy, do something for themselves while children had grown up and get away in the routine they had imprisoned themselves for years.

Chris Doyle, vice president of ATTA point out from an interview with Airoldi (2008) that the’50-plus traveler’ is a major market for adventure sector; especially because they are among those who travel more frequently since they have the financial ability to do so.

Muller and O’Cass (2001) explore the different motive of older men and women in engaging in adventure activities. He note down that ‘young at heart’ older men were more interested to take part in activities such as white-water rafting, glacier hiking, rock climbing, caving and hot air-ballooning. On the contrary to the ‘young at heart’ older men, the ‘young at heart’ older women has a preference for mountain hiking, rainwater treks, bird-watching and walking for inner journeys while being on travel holiday. It is then observed that men prefer hard adventure activity as compared to women who enjoyed generally soft ones. A ‘Marketing to women’ report (2000) sustain such statement by arguing that women aged between 55 and 75 are more likely to engage in soft activities like safaris, hikes and trips to striking locations. They further point out to favor being in a secure environment with professional adventure providers, and with company of others having similar ages.

Adventure can be classified in certain words, ‘Play’, ‘Freedom’ and ‘Reality’ (Kane and Tucker, 2004). The authors basically described adventure as a game played by participants in tourism; being free to engage in any particular activities and experiencing the reality of it. Moreover Kane and Tucker interpret the term ‘play’, as being a game for the adults, reliving their childhood and though enjoying this freedom to play like a child again. Hence, this fresh cohort of retirees is ‘hungry to get off the beaten path’ (Symonds, 1998).

2.7. Summary

From this chapter, the researcher has been able to gain a theoretical knowledge of the basic theories on adventure tourism and baby boomers. The different types of adventure tourism was examined, which is hard and soft adventure. The baby boomers generation was also defined, where proper information was gathered in regards to their lifestyle and their interaction in leisure and adventure tourism

Introduction

According to the World Tourism Organization tourists are the people who “travel to and stay in places outside their usual environment for not more than one successive year for leisure, business and other purposes not interrelated to the exercise of an activity rewarded from within the place visited”. Tourism is mainly popular as a global freedom activity.

Tourism is a critical source of income for many countries and it generates income through the consumption of goods and services by tourists, the taxes levied on businesses in the tourism industry, and the opportunity for employment in the service industries associated with tourism.

Some of the services offered by these industries include transportation services such as cruise ships and taxis, accommodation services such as hotels, restaurants, bars, and entertainment venues, and other hospitality industry services such as spas and resorts.

The tourism requires having some of disposable income, time off from work and other responsibilities, proper transportation and accommodation facilities and legal clearance for travelling. More than all, sufficient health condition during the course of travel is required.

There are some countries which have legal limitations on travelling abroad. Any projections of growth in tourism serve as an suggestion of the relative influence that each country will exercise in the future.

Content

Essay Question: Report for critically analysing a location or sector of the tourist industry, and the key issues affecting that sector or location and suggest a change strategy to address the issues

1. What is meant by Tourism Industry?

Tourism has been identified as one of the world’s largest industries and is more and more developing world wide. Further it is moving for primarily recreational or leisure purposes or the provision of services to support this leisure travel. Business and other purposes not related to the exercise of an activity compensated from within the place visited”. Tourism has become a popular global leisure activity. In 2004, there were over 763 million international tourist arrivals in UK.

Tourism is very important for many countries, due to the income generated by the utilization of goods and services by tourists, the taxes levied on businesses in the tourism industry, and the opportunity for employment in the service industries associated with tourism. These service industries are included transportation services such as cruise ships and taxis, accommodation such as hotels, restaurants, bars, and entertainment venues, and other hospitality industry services such as spas and resorts. (Harrison, 2001)

1.1 Definition for Tourism

The World Tourism Organization defines tourists as people who “travel to and stay in places outside their usual environment for not more than one consecutive year for leisure

One of the earliest definitions of tourism was provided by the Austrian economist in 1910, who defined it as, “bob total of operators, mainly of an economic nature, which directly relate to the entry, stay and movement of foreigners inside and outside a certain country, city or a region. (Swarbrooke, 2001)

Hunziker and Krapf, in 1941 state that tourism as “the sum of the phenomena and relationships arising from the travel and stay of non-residents, insofar as they do not lead to permanent residence and are not connected with any earning activity.

1.2 Advantages and Disadvantages of Tourism

Tourism is the act of travel for the purpose of not only recreation, but also the provision of services for this act. It might occupy local services such as entertainment, accommodation and catering for tourists. It may seem, that tourism brings only benefits, but further consideration shows that it also has disadvantages.

Generally, many countries depend greatly upon travel expenditures by foreigners as a source of taxation and as a source of income for the enterprises. Therefore, the development of tourism is often a strategy to promote a particular region for the purpose of increasing commerce through exporting goods and services.

Secondly, it provides direct employment for the people associated with occupations in bars and hotels. Thanks to it, the average standard of living of people increases well and at the same time unemployment is on the decrease.

However, tourists cause environmental damage through forest fires, destruction of sand dunes and pollution. Consequently this serves negatively as increased pollution disturbs local residents and also it may discourage tourists from further entering the country.

After this, tourism undermines culture by commercializing it and this is often connected with increasing litter, graffiti, vandalism and noise – tourists do not always respect traditional cultures, which is sad but true. In general, tourism is an extremely profitable process in loads of countries, especially those in which the process of development continue to depend on this industry because this industry does not require a lot of literacy and also it yields maximum profits with less investment. (Harrison, 2001)

1.3 Different sectors of Tourism

The tourism industry has been composed of eight different sectors or areas. Those are mentioned below,

Accommodation
Adventure Tourism and Recreation
Attractions
Events and Conferences
Food and Beverage
Tourism Services
Transportation
Travel Trade

Out of these sector I have selected Attraction sector of tourism for the identify the key issues affecting that sector and suggest a change strategy to address the issues

1.4 Attraction of tourism sector

Considering the one of the country, attractions include historic sites, heritage homes, museums, halls of fame, art galleries, botanical gardens, aquariums, zoos, water parks, amusement parks, casinos and cultural attractions. Many attractions are educational in nature, others are only for entertainment. As an example,Canada has a wealth of cultural and heritage attractions: the Parliament Buildings and National Gallery in Ottawa, the Fortress of Louisbourg in Cape Breton, and Lower Fort Garry National Historic Site in Manitoba. There are heritage communities like Vancouver’s Gastown, natural resource attractions like the hot springs in Banff and Jasper National Parks, and the northern lights in the Northwest Territories. In addition, there are large delight parks like Canada’s Wonderland in Ontario, museums such as the Maritime .To maintain this important part of Canada’s tourism industry, the Canadian Tourism Commission has developed . The sub-committee’s mandate is to plan, direct, mange and put into action by programs to improve and develop cultural heritage tourism in Canada. The sub-committee is made up of culture, heritage and tourism industry representatives from across Canada acting to ensure that cultural & heritage tourism will become a vivacious and advantageous part of the Canadian Tourism industry. But every province and territory in Canada has major and minor attractions that attract visitors and generate tourism income Because of the Canadian climate, many outside attractions and seasonal. Indoor attractions operate year round, and some, like West Edmonton Mall, combine activities, such as shopping with an pleasure park, an ice rink and a water park. All attractions may be large or small and need people to sell food and souvenirs, market the attraction, maintain the facility and manage the operation. The attractions sector important for a wide range of employment opportunities, ranging from seasonal part time to permanent full time positions. Further there is also variety in the types of jobs available. As an example, Casinos are rapidly growing area of the attractions sector, adding many new positions, such as pit bosses and dealers, to the labour pool. According to the statistics of tourist sector, It is estimated that in 1997, 120,000 people were employed in the attractions sector and service is expected to reach 152,000 by 2005.

In the UK attractions are at the heart of the tourism industry. Visit attractions are typically the main motivator for both domestic visitors and international tourists. They are organized trips for visit the various places for their entertainment and keep mind rest.

Normally, there are four main types of attractions are identified and it is illustrated below.

Source: Article of Key Issues in Visitor Attraction Management in a Competitive Market, 2001

2.0 Key issues for attraction sector

There are also some issues can be identified as arise of issues from attraction sector. which are specific to particular sectors of the attractions business, some of which are identified below:

2.1 Heritage attractions

making use of the latest technologies for explanation but ensuring that the medium does not become more important than the message

incorporating recent history and the varying nature of society in the UK, such as the growth of ethnic communities,

linking the community whose story is being told by the heritage attraction and

Deciding what stories should be told and how they should be told.

When a community’s heritage is the tool of what it offers visitors, protecting that heritage is essential. Therefore the major challenge in cultural heritage tourism programs is ensuring that increased tourism does not destroy the very qualities that attract visitors in the first place. (Swarbrooke, 2001)

Further some problems related to. Heritage attractions.These problems are travellers increasing in numbers and adding stress and strain to infrastructure and heritage sites are, as Safer says, only beginning, and the travel industry is already addressing them. But a challenge results not only from visitor impact, but also from visitor opportunity of quality products and services. Tourism is essentially in the service industry, which means it depends on the capability of people in many different jobs and locations. In addition to tourism is an attractive form of economic development

2.2. How to improve Heritage attractions

Cultural endowments such as traditional design, unique street-scapes, and historic sites are increasingly recognized as important economic resources in both developed and developing countries. Cities are regularly an important focal point for development based on these resources because they provide concentrations of heritage assets, infrastructure services, private sector activity, and human resources. Improving the preservation and management of urban heritage is not only important for preserving its historic significance but also for its impending to increase income-earning opportunities, city livability, and competitiveness. (Harrison, 2001)

The World Bank-financed projects have identified that heritage conservation has increased city liveability by preserving streets and neighbourhoods built at a human scale, public areas that support positive community relations, and green spaces that offer recreational activities. By preserving their heritage, cities can be produce a unique sense of place and singular urban landscapes, developing strong branding and conditions to attract investors. This is principally true for investors in tourism and which is one of the major industries in the world today and has a pathway record of creating significant levels of employment for unskilled and semi-skilled workers. In addition to improving a city’s self-image and identity through identification of heritage resources has been shown to increase public satisfaction and energize communities to actively address a wide range of development and livelihood issues. (Kotler 1998)

Further the conservation of cultural heritage supports urban recovery by preserving city liveability, increasing competitiveness, and creating a wide range of income-earning opportunities.The Cultural Heritage and Sustainable Tourism Thematic Group (CHST) was established in 2004 as a network of practitioners to mainstream support for heritage conservation into infrastructure, private sector, and social development projects. The thematic group reflects the multi-disciplinary characteristics of the CHST family, prominence by the wealth of information and experience available among more than one hundred Bank professionals. In the urban sector, it is clear that infrastructure projects can supply an entry point for useful interventions in heritage conservation and development. on the other hand, many task team leaders find that discussions of lending that recognize the value of local heritage provide a positive starting point for dialogue on downstream lending operations addressing broader-based infrastructure investment needs. This note focuses on the rationale for World Bank-financed infrastructure projects that include or focus on conservation of cultural heritage belongings either for their own value or as a element of infrastructure and economic development strategies.

2.3 Theme and amusement parks

There is growing pressure for better protection at theme and amusement parks in the light of highly-publicised accidents in recent years, here is a need to incorporate the latest rides, even though this is very expensive and is making it difficult for smaller theme and amusement parks to compete,

parks have to ensure that children can learn something from their visit to the park, and this will help in attracting families and school groups.

2.4. How improve facility of amusement parks

The safety of visitors who enjoy the park’s facilities and services is of dominant concern. Further safety is a collective responsibility. Visitors must take safety measures that reflect the risk involved in their chosen activity. This involves knowledge of natural hazards, proper equipment and provisions, adequate skill and fitness, and the ability to cope with emergencies. Park management will focus on safety information, facility design, and staff training. ark staff continue to work with the local and regional tourism industry, keeping up-to-date on trends and offering reliable experiences based on the park’s key ecological and cultural values. (Kotler 1998)

2.5 Wildlife attraction

wildlife attraction managers are having to come to terms with growing public concern over animals being kept in captivity for the entertainment, or even the education, of visitors,

the opportunity to use Virtual Reality technologies to educate visitors about wildlife.

2.6 How improve Wildlife attractions for tourism

Planning for Action

Biodiversity Action Plan apply for conservation priorities, and it support how to manage and monitor activities of biodiversity including wildlife.

Reviewing your purchasing strategy

Every business consumes products and services supplied by other businesses. By managing what you buy, how you use products and how you dispose of waste you can improve your own, and other companies biodiversity performance.

Managing your environmental impacts

Reviewing and managing your overall environmental performance also benefits biodiversity and can help reduce costs. For example, the energy used to heat and light accommodation will come from the power creation industry. Conserving energy reduces CO2 emissions, Increased rates of climate change adversely impacts on species, habitats and ecosystems. Recycling and waste reduction reduces the amount of landfill and potentially increases the amount of space, which can be left for natural habitat conservation.

Raising Awareness among people

Providing for services or goods by tourism providers that contribute positively to biodiversity conservation can bring visitors closer to wildlife. You can widen the potential for low impact tourism, and help people to make relate between their own environment, lives and communities. Most of the people’s interests in wildlife watching and conservation arise as a direct result of the experience they receive from recreational activities. (Kotler 1998)

Working with others

Many smaller tourism businesses connecting up with forums like Tourism and Environment Forum or local sustainable business forums can be a good mode to awareness creation. Such networks are also important sources of current information about new opportunities, grants, trends and regulations.

3.0 How attraction sector of Tourist industry improve in UK

The attractions sector is very important to the achievement of success I in UK tourist industry. In there managers face wide range of challenges, opportunities and threats, that will determine the future success of the sector. Whether they end up being opportunities or threats may well depend on how managers react to them. For example, for attractions which successfully hold new technologies – such as Virtual Reality and the Internet – these technologies is an opportunity to achieve aggressive advantage.

The UK attractions sector is obviously diverse which accounts for its noticeable fragmentation. There is a need for the sector to become more organized and speak with one voice, so it can have greater influence on the government policy-making process and resulting legislation affecting the industry.

At the same time, the developments in the attractions sector abroad are providing competitive challenges for the UK attractions sector. currently new attractions have been opened in countries as diverse as France and the USA, Spain and Japan, Australia and China. UK attraction managers can learn a lot from successful foreign practices: from design and marketing, to catering and providing for disabled visitors.

Within the UK, the government wishes to take action to create a more level playing field for attraction operators. Subsidies to major national museums and huge National Lottery grants for new projects are probably ‘unfair’ competition for most small attractions. It appears that it is the small attractions that will find the future particularly difficult, as they lack the resources to participate directly with the larger players. The same situation exists in other sectors of tourism, such as hotels and tour operators, and definitely in industry in general. The way ahead for small attractions, as with hotels and tour operators, is the need for interest, differentiation, the use of the Internet for marketing, and an emphasis on personal service. (Swarbrooke, 2001)

As a matter of survival, airlines within the current environment are constantly reviewing and altering their strategies. An important component of any airlines’ strategy to remain viable and maintain competitive advantage in today’s setting is to pool resources and share risk, known as an alliance. A broad definition of an alliance that occurs in the aviation industry is the “collaboration between two or more firms that retain their autonomy during the course of their relationship” (Kleymann & Seristo, 2004). To that end, there are certain variations of airline alliance in vogue today, in particular the Global Airline Alliance. Starting with a synopsis and identification of these alliance groups, the discussion will move to a selection and analysis of benefits and shortcomings that can be associated with global alliances from a business and consumer perspective. From here, an appreciation will be gained of the major airline alliances and typical rationale of alliance strategies.

Currently, the most popular forms of coalition in the airline business are the non-equity marketing alliances known as Airline Alliance Groups (Kleymann & Seristo, 2004) or Global Multicarrier Alliances (Cools & Roos, 2005). At the present time, the main global multicarrier alliance networks are Star Alliance, One World, and Skyteam (UBM, 2010). These alliances are predominantly a massive global network of multilateral codesharing and joint resource Air Service Agreements (ASA’s) between carriers. This allows a central point of contact for the passenger to “ensure a convenient, smooth and efficient worldwide travel experience” (Star Alliance, 1997). Although individual airlines are aligned under the umbrella of a single corporate entity, distinct airline brand identities and cultures are retained. These alliances have set out to revolutionise seamless air travel for the international passenger from hub to hub and beyond. Additionally, the synergies created were only possible due to astute governance of previously implausible collaboration. To that end, airline conglomerates now understand “The best way to generate real business growth and expansion is by forging the appropriate strategic partnerships” (Borovich & Yeheskel, 2001).

From an airline business perspective, membership in a global alliance has one distinct, instantaneous and strategic advantage. Almost overnight, all member airlines’ geographic route structures will have expanded without costly capital investment in infrastructure and assets. This allows airlines to service routes that were previously deemed non-profitable or inaccessible, albeit on other alliance members’ aircraft. This “complementary alliance” (Oum & Park, 1997, as cited in Chen & Ross, 2000, p. 328) has the flow on effect of generating untapped markets within the domestic environment and yielding higher load factors for all alliance members aircraft operations. Henceforth, this produces larger revenues which in turn diminishes overhead costs and maintains more efficient airlines by lowering unit cost base (Doganis 2001, p. 76). While this contributes to diversification and larger profit margins for collaborating airlines, the traveller can be confident airfare cost will remain relatively reasonable assuming competition remains viable on any given route. This is a beneficial outcome for all involved, both airline businesses and the consumer.

A comparable example where alliances between two airlines operating on the same route is however, considered anti-competitive (Chen & Ross, 2000, p 328). Here the competing airlines could strike a codeshare accord, typically after a tenuously long and protracted battle attempting to gain market share. This is routinely known as a “parallel alliance” (Oum & Park 1996, p. 190), however this is unfortunately likely to result in cartel type price fixing. This form of alliance generally benefits the airlines as it narrows competition and has a propensity to create a higher demand for a particular service, hence higher airfares (Chen & Ross, 2000, p 328). Conversely, the pre-alliance scenario utilising “capacity dumping” (NZ Parliament, 2006), where supply exceeds demand, only profits the consumer with ridiculously low and unsustainable airfares. This invariably serves to strengthen the dominant market leader’s position by financially eliminating the competition in the long term. These types of alliance are inherent of predatory behaviour with very little consumer benefit and require antitrust immunity (Bilotkach, 2005, p. 168). An example of this type of arrangement within the global alliance networks does exist, although on the exceedingly competitive North Atlantic route between Lufthansa and United Airlines (Kleymann & Seristo, 2004, p. 23).

While codesharing is one weapon with which to condense costs, create better margins and maintain a reasonably priced service, it is not the only resource available to benefit allying partners and the consumer. One only needs to visit any of the global airline network’s websites to see a large scale joint marketing experience. Consequently, “Extensive market presence plays an essential role in major airlines’ plans for survival and prosperity” (Kleymann & Seristo, 2004, p. 113), and this influence is an effective tool when multiple powerful brands are combined. For the smaller airlines within the alliance groups, association with some of the mega-carriers alone is a sufficient marketing device to increase recognition and augment passenger numbers. This is simply a case of “if passengers do not find you, they will not fly you” (Bammer, 2000, as cited in Kleymann & Seristo, 2004, p. 121). For the bigger carriers in the group, enhanced economies of scale (Doganis, 2001, p. 76), scope and density (Kleymann & Seristo, 2004, p. 39) beckon, to provide growth quickly while mitigating a host of regulatory and economic barriers. This coincides with the global alliance concept “To contribute to the long-term profitability of its members beyond their individual capabilities” (Star Alliance, 2010, p. 6). Another advantage of such extensive market sway is the collective consumable and asset purchasing power. Doganis states, the Star Alliance group is estimated to save between five to seven percent each year with this strategy (2001, p. 78). In contrast, these combined marketing regimens can be inflexible and force a loss of individual brand identity. As the global alliance brand builds its own characteristics, it will be perceived by the customer to deliver a certain expectation, and if not all of the alliance members fit the model, they may be forced to compromise their own identities to conform, or risk being extricated. This is known as the “domino effect” (Kleymann & Seristo, 2004, p. 17).

The airlines are not the sole profiteer from this vast marketing onslaught. Customer satisfaction, retention and relationship quality is the target of any marketing strategy, and with immensely large global brands and reputations at risk, standards will always be under scrutiny. The consumer perception of these alliance groups is that of a “seal of quality” (Kleymann & Seristo, 2004, p. 39), and all members are logically required to exact some consistency over the service spectrum. To that end, the global alliance groups have combined value adding resources to meet or exceed the expectations of the “high value international traveller” (Star Alliance, 2010, p. 6). Some pertinent examples are: priority check-in, lounge access, additional baggage allowances, priority boarding, global ticketing, common terminals and priority baggage handling. As aforementioned, the consistency and variation with which these additional benefits are delivered can provide a potential drawback. Products vary from brand to brand, for example; Air New Zealand has a premium economy seat (Star Alliance, 1997), of which not all airlines utilise. A customer that purchases this seat flying from New Zealand to Germany with alliance codeshare partner Lufthansa (McCaw, 2010), would in all likelihood be downgraded to an economy seat from England or the United States. Furthermore, differing cultures can also play a role with service delivery. Once again, the customer flying from New Zealand to Germany may enjoy the relaxed Kiwi attitude, but may be overwhelmed by the clinical and formal German approach, or vice versa. Henceforth, Kleymann and Seristo suggest successful brand image and customer fulfilment is particularly relevant to quality and consistency of service (2004, p. 121).

Global alliances offer many joint benefits to consumers from airlines prospering within their own niche, which could not be possible without reliance on international partners. While the phenomenon of globalisation is a reality and people seek to condense and simplify work, time and travel experiences, global airline alliances fit the mould as a reaction to seek balance. At present, the rules of international aviation preserve sovereignty and do not endorse a truly competitive environment. While grandfathering provisions of landing rights at major airports and governmental influence in survivability of flag carriers ensues, the only room for growth from independents is to collude. At this point in time, global alliances serve the needs of both consumers and airline businesses. As with every decision, there are good and bad consequences and not all choices will gratify everyone. Global alliances endeavour to satisfy the majority, while sustaining the future of the alliance members to provide a useful service. Until all nations relax rules around freedoms of the air and airline foreign ownership, so as to furnish a genuine open skies policy, these mega-conglomerates will flourish.

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The information contained within this literature provides a complete analysis of The Travel, Tourism and Hospitality Sector. It clearly outlines the importance of quality service delivery, the differences between service in the hospitality industry and service in other business, community based tourism, the advantages and disadvantages of community based tourism, diversification of Jamaica through community based tourism and the effects of technology on the tourism industry.

The Travel Tourism and Hospitality Sector

Definition of key terms

What is hospitality?

Dictionary.com, 2012.”Hospitality is the friendly and generous reception and entertainment of guests, visitors or strangers”.

What is Community Based Tourism?

Responsibletravel.com, 2012 asserts, “Community Based Tourism is tourism in which members of a community, local residents (often rural, poor and economically marginalized) invite tourists to visit their community with the provision of overnight accommodations”.

Pearson Education 2010 online, “Community managed and owned sustainable tourism that aims to share local ways of life and the community’s natural and cultural resources with visitors”.

What is an advantage?

Farlex, The Free Dictionary, 2012, “An advantage is a beneficial factor or combination of factors”.

What is a disadvantage?

Farlex, The Free Dictionary, 2012, “A disadvantage is an unfavourable condition or circumstance.

What is Service?

Farlex, The Free Dictionary, 2012, Service is work done for others as an occupation or business.The Importance of Quality Service Delivery in the Hospitality Industry.

As tourism plays a major role in the economic development of most countries, it is imperative that impeccable services are provided at every given opportunity. A guest or visitor needs to feel welcomed and appreciated to the point where by the end of their trip they have begun planning their return. The industry is also extremely competitive i.e. a lot of products and services offered are similar hence from the customer service perspective providing excellent service is the best option for getting ahead of the competition. A five star hotel may possess the luxurious furniture, the spas, the sporting facilities and all the trimmings that go along with it but because the verbal and physical delivery is lacking in personality and respectfulness, a guest would be willing to settle for the lesser amenities of a three star hotel in which they are made to feel welcome and appreciated as well as treated with the respect they deserve. Providing the service is one thing, however, the method of delivery is another. People tend to pick up on body language, gesticulation as well as facial expression through careful observation. It is best when providing quality hospitality services in the tourism industry to do so with a genuine and honest disposition, anything less will seem as a facade and is unacceptable.

Service in the hospitality and tourism sector is delivered in mostly on a one on one, verbal and or physical manner. This exposes the visitor or guest and the service provider to a range of differences in one or the other which the service provider must handle in a professional manner regardless of his or her personal preferences to secure the longevity and integrity of the business. These differences may include but are not limited to one or more of the following: Religion (Christianity versus Atheism, Islam, Buddhism etc.), Language which causes a barrier (English versus Spanish, French, Japanese, Chinese etc.), preferences in entertainment (an older crowd who is more conservative versus a younger crowd who is more into the party scene), race and cultures (African American and black versus Caucasian), Cuisine and dietary preferences (Asian versus Italian). These differences must be treated with genuine respect rather than disdain as it will undoubtedly create an instant rift between the parties involved and subsequently result in a decline in the return rate of visitors and affect the arrival of new comers. This occurs due to the fact that a bad experience is never forgotten and will most definitely be shared with others to warn them of the possibility of being treated in a similar manner and as individuals tend to believe what is communicated to them by a known acquaintance whether it be friend or family, the end result will mean less business being operated, loss of profit, loss of jobs and subsequently loss of the entire industry. It is widely accepted within the hospitality and customer service industry that a customer’s good experience will be shared with only a few close friends and family while a bad experience will be told to everyone willing to listen. This is proven on a daily basis on websites such as Trip Advisor and it has such far-reaching effect that most progressive companies in the sector have their marketing or public relations teams scouring the internet to respond to all concerns raised and to ensure their reputation remains untarnished.

The Difference between Service Delivery in Hospitality and Other Businesses.

Regardless of industry every business relies on hospitality and customer service to not only retain its current customer base but to also increase it through customer loyalty and positive word of mouth advertisement. Failing to fulfill the needs of a customer through effective and admirable customer service methods is the reason a lot of businesses are failing as their employees are sometimes lacking in the appropriate training, experience and patience required to ensure a satisfactory and memorable experience for the client. There are however differences in the service delivery, in the hospitality industry the service being delivered is geared towards the visitors/tourists and much emphasis is placed on the level of training it requires in order to perfect the necessary skills it takes to get the job done. Due to the fact that the Hospitality industry in Multi- culture there must be a certain level of appreciation for the vast amount culture and cultural diversity, meal preparation, entertainment, dress and rituals of Tourists. The importance of service delivery is stressed more so in the hospitality industry because of the diversity of the consumers and their varying cultural backgrounds. The services must be delivered perfectly to each and every customer in ordered for the guest to have an unmatched experience which will guarantee excellent reviews, return customers, new business opportunities and the survival of the industry which is the fuel of our economy.. The hospitality industry survives due to prompt convenient service which is value for money. In other business the service is mostly geared towards locals (Mono- cultural), who are already a part of the existing community and are familiar with the business. Though some level of customer service is involved it is not as demanding of the service provider to be as vigilant in ensuring that staff provides the best service possible at all times. This is mainly as a result of there being fewer options. For example a Kentucky Fried Chicken (K.F.C) being operated in the down town Montego Bay area, the customer service is extremely lacking however customers return because the location is convenient and they do need to eat, but for no other reason. Some customers do divert their business elsewhere to either Pizza Hut or Island Grill but return after a while because these other entities do not provide what it is they really want. In the hospitality industry it is not the same, there are endless options and if one location fails them, they either find another location within the same country or travel to another country. This now means a loss of business not only for that establishment but also for the country as a whole.

The advantages and Disadvantages of Community Based Tourism

Community tourism has both its supporters and its detractors as does every other type of business venture. Both sides bring across very important concerns which can prove to be either helpful or harmful to the environment based on the implementation methods used and the scale of operations.

Advantages:

Supporters will posit that community based tourism is beneficial and important in that it, transfers decision making to a community level, provides employment, infrastructural development (roads, water, electricity, telecommunications, internet, etc.), superstructure development (buildings and structures covering area),cultural preservation, foreign exchange and development of health care facilities.

Disadvantages

Detractors on the other hand will advance that there will be cultural destruction, environmental destruction, the host country fails to benefit as government is unable to withdraw taxes, marginal employment, low benefits, development of illegal and/ or destructive economical activities, seasonal employment, unrealistic expectations, anti-democratic collusion, land controlled by the elite, negative lifestyles as well as diverted and concentrated development.

The implications of the pros and cons of Community Based Tourism on the country as a Whole.

The effects of the advantages of community based tourism on the country as a whole may prove to be widely beneficial to the economy, wherein the unemployment rate is greatly reduced because as more people become exposed and educated the higher percentage will endeavor to become involved. Communities which were considered marginally poor become developed and are more appealing to visitors and other locals alike, its pushes the use and exchange of foreign currency which boosts the economy giving the local dollar more value but most importantly it educates as locals are introduced to varying cultures and are forced to learn their own history, and culture as well as that of the visitors in order to communicate effectively.That is a limitless opportunity as visitors have varying backgrounds and orientations. Locals make valiant efforts to learn their languages as well as cuisine, religion, preferences in entertainment, day to day living and rituals. This in its entirety equates to a more tourist friendly, economically stable, market aware destination which is more appealing to visitors.

The result of the disadvantages of community based tourism on the country as a whole also brings to light some valid points which must be handled with much consideration in mind as it relates to the long term repercussions. The loss of culture as it pertains to age old rituals, language, art, dance, food, religion etc., through modernization, the destruction of natural habitats as a result of infrastructural and super structural changes by building roads and architecture, employment would become limited to members of the community and result in outsourcing whereas businesses would seek to employ the more educated, the question of job security arises, negative changes in the lifestyle would come about where unscrupulous characters engage in the trade of illegal drugs and endangered and exotic wildlife, drug abuse, prostitution, fraudulent practices and new found get rich quick schemes come into existence and causes young people to divert from school and higher education. Compile all these issues and it would result in a lack of order, an upsurge of crime and violence and finally the consequential loss of previous business with a significant decline in any interest from new customers or the hope of creating new opportunities.

Diversifying the Jamaican Tourism Product Through Community Based Tourism.

Communities must go through a process of empowerment and development before tourism becomes the focal point.The first area of focus is to build a sustainable wealth creating community with organized productive activities. These activities would create economic and social benefits for its members through employment and financial stability. After this has taken root, tourism can be introduced to communities, to create even greater wealth, and this will ultimately diversify the jamaican tourism product.

There are many resources which may be enhanced and marketed to give Jamaica a more diverse and competitive edge over other tourist destinations. These include; culture, heritage, Cuisine, natural flora and fauna, landscapes and human resources. It is known world wide that Jamaica is very different from other countries even those located in the same region. In order for Jamaica to diversify and maintain a competitive advantage in the hospitality industry we need to capitalize on these opportunities and the best way to go is from a community level as every community possesses a different amenity which makes it unique. There are quite a number of these locations in jamaica such as; Maroon Town, Outameni Experience ,Croydon Plantation,Accompong, The Bob Marley Museum, outdoor activities i.e ( horse back riding, dune buggies, canopy tours, zipline tours, ect ), the wonderful blue Mountains and Cockpit Country ,rafting on the Martha Brae river and health spas such as Bath Fountain Hotel and Spa in St. Thomas and Milk River Bath in Clarendon.

The jamaican culture and heritage are unlike any other anywhere on earth, it is essential to get jamaicans more educated in culture and heritage as a means of being able to extend the offering of a richer quality cultural and heritage experience to adventure seekers who travel to our destination. A high percentage of traveler’s are more than interested to learn our language, dance, music and cuisine in their purest forms, however not many get the full on experience as there is a lack of manpower in these areas. Much more use can be made of the abundance land, sunlight and water to aid in the development of Jamaica’s tourism product in the area of agricultural tourism. The Blue Mountains are currently used as a source of adventure tourism and farming ground for the infamous Blue Mountain Coffee, should this be expanded into the Cockpit Country and other products introduced it would become a more wide scale operation, in that, it would create more employment, attract more visitors and there would be a greater demand for those areas as tourists would seek to discover whatever new adventures there are. Another avenue that could be enhanced in order to create a greater demand of Jamaica as a tourist destination is our ancillary services in terms of transportation (comfort and luxury of vehicles and condition of roadways), banking ( the exchange rate), accommodations (the quality and value for money they receive by staying in hotels),upgrading the equipment in hospitals in order to have better healthcare facilities and render enhanced medical services to both locals and tourists, providing travel insurance at competitive rates and so forth. Should the quality of these services be improved then it would give Jamaica a more competitive edge in the tourism market.

The impacts of Technology on the Tourism Industry.

Technology and Transportation.

Tourism is quite as old as time itself, from the earliest days when man would travel for long distances on foot, until the evolution of tools of trade and man themselves gave birth to new technological inventions that made traveling gradually easier to the point where what used to take months has been shaved down to mere hours, a day or two being the maximum for travel to the lesser percentage of destinations. Throughout the ages traveling has been developing more and more with each generation. It all began with traveling by foot; however man soon learned to domesticate animals such as mammoths, horses, donkeys, elephants, camels etc. Ever inventive man created the wheel around 3500 BC, then came the joining of the wheel and some animals to form, horse drawn carriages, chariots and wagons, which made travel easier and faster than foot but nothing close to what was coming next. Boats were the next mode of travel and the earliest type was the dug out canoe where a fire was lit on a log then put out and the burnt part was dug out leaving a hallow space for passengers. As with time they too evolved into ships which were large wooden structures built to travel long distances across oceans and seas and then there were mainly two types, the sail and the later invented steam engine, the powerful and fast railway was next to be developed in the 19th century, closely following was the invention of the first cars which were made in 1865 and 1866 respectively by Karl Benz and Gottlieb Daimler, however cars only became more common in the 1960’s and 1970’s after the first and second world wars as there was mass production companies which made them cheaper. The largest, most used, talked, about and technologically advanced type of travel began in the 20th century, December 17th 1903 to be exact, with the flight of the Wright brothers. This spearheaded the aviation standards which eventually led to the building of larger more elaborate types of aircrafts such as; Zeppelins, blimps, Boeing 700 series airplanes as well as other makes and models, the air balloon, jets, rockets and other spacecraft.

It is clear that technological development has greatly impacted travel and tourism in the field of travel as without these developments the industry would exist but the rate of turn over would be extremely low and slow. Travelers, regardless of net worth would be discouraged as the amount of time it took to get from one place to the next would be so great it would seem a burden and more than likely only destinations that are relatively close to the country of origin would be visited, causing it to become congested, repetitive and eventually boring and uninteresting. Thanks to the inventors and founding fathers of the different types transport, traveling has been made easy and allows for people to travel in large groups in comfort over immense distances within a tolerable time frame. This helps to increase the revenue of the economy for destinations travelled to.

Technology in Research and Communication.

Before anyone thought of “how do I get there?”They first asked, “Where do I go?” In order for one to have gotten an answer to this question he or she spent long periods of time mulling over all sorts of printed media ranging from, newspaper articles,maps,magazines and the like firstly to find a destination, then to garner as much knowledge about the place before deciding to embark on the journey. This was a rather tedious task, very time consuming and exasperating and this combination proved to be a natural deterrent. This was not to remain so as a slew of inventors starting with Konrad Muse and his freely programmable Z1 computer in 1936 began the invention of the computer. It continued with John Anatasoff and Clifford Berry in 1942, Howard Aiken and Grace Hopper in 1944, amongst many others up until 1985 when Microsoft windows became known globally and still is the world leader in computers and computer software. A computer by itself was just another machine. It was the invention of the internet that revolutionized the use of the computer as a means of communication, research and advertisement.According to the Internet, unlike the light bulb and telephone the internet didn’t have any one inventor. Over fifty years ago lt got its start in the United States of America as a weapon In the Cold War and for years scientists and researchers used it to communicate and share data with each other. This technological advancement has made traveling and the tourism industry significantly more developed as it makes life easier for the client and business alike. Instead of spending extended periods of time to get all the necessary information required to travel, everything is now readily available at your fingertips. It has significantly minimized the amount of time it’s takes for booking travel and accommodation as it offers the option of immediate pricing and confirmation as opposed to waiting for a travel agent which could take hours or even days, encourages the use of credit cards as opposed to having to visit a bank to withdraw cash, allows for simultaneous and immediate response in terms of emails and the instant messaging rather than writing letters or sending telegrams. Technology enables tourists to communicate with their family members back home via video chat, instant messaging and emails. Not only has technology benefitted tourists, it has also affected the way in which business is conducted in today’s tourism industry, stakeholders utilize this medium for marketing themselves and their respective companies as well as to communicate with clients before the actual service delivery, communicate with employees and with other business owners as an avenue to conduct business meetings online through video conferencing which has proven to reduce the cost of traveling. Another technological advancement which has greatly affected the growth of the tourism industry is the telephone, an electronic device invented by Mr. Alexander Graham Bell. This device in not only beneficial for tourists for communication with family and friends but also for the tourism industry as it is a means of instant communication between the directors, shareholders and employees within organizations as well as other entities outside the tourism industry which are crucial to the operation of the business. Without both the computer and telephone, communication would be slow and it would cause decision making to be a much delayed process which affects the industry negatively. Other technological advancements which have greatly affected tourism and the tourism industry are the simple machines (lever, pulley, wedge and incline plane etc.) which have been integrated into the design of countless machines used in the building oh hotels to house tourist, roads to travel on, water filtration and plumbing for safe hydration, cooking and bathing purposes, installation of electricity used for lighting and the operation of machines and other electronic devices and in the design of all modes of transportation( ships, airplanes motor vehicles etc.). Without all of these, simply put the tourism industry would not be what it is today and with consistent and continuous modifications being made there is no doubt that in years to come the industry will become a more immense operation.

Conclusion

In conclusion the options must carefully be weighed and careful and contingent planning has to take place before any advertisement or production can manifest. This will allow for smooth and fool proof execution of procedures, hence, the guest/ visitor can have extraordinary and remarkable experiences, the community capitalizes on the opportunities afforded and the country as a whole and its economy can flourish.