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The integrated resort (IR) is a casino resort in Singapore-based. The “integrated resort” is a euphemism for opposing the casino. To date, licenses have been issued to the Marina Bay Sands and Resorts World Sentosa. This is the first casino in the country since the beginning of 2010 started operation.

Singapore historical point of view, as early as in 1823, gambling was briefly legalized the then British colony of Singapore, but the experiment led to gambling addiction and increased crime, and again within three years of gambling as a criminal offense. Since then, the operation of legal gambling in Singapore is limited to government-run Singapore Pools Lottery, Singapore Jockey Club Jockey. However, in a parliamentary session on April 18, 2005, Singapore Prime Minister Lee Hsien Loong announced the Cabinet’s decision to develop two casinos and hotels and shopping malls in Marina South and Sentosa. Government claimed that the project aims to enhance Singapore the tourism industry has been facing fierce competition from other destinations in the surrounding areas, especially from the nearby Bangkok and Hong Kong, because also, the casino legalization wake measures, in Singapore. Even closer to home, Malaysia has long been a legitimate casino and theme park, Genting Highlands, This proves that a visitor to Singapore. IRS directly and indirectly creates about 35,000 jobs in Singapore. Except in the casino, the IRS will have other facilities, including hotels, restaurants, shopping and convention center, theaters, museums and theme parks. Industry insiders estimate that investment of U.S. $ 710 million (USD $ 350 million integrated resort Marina Bay (Marina Bay), U.S. $ 360 million in Resorts World).

Whether to set up the casino people in Singapore, there is a great controversy, including several groups, such as belonging to the Muslim and Christian communities, as well as social workers, publicly expressed disapproval casino. The negative impact of gambling on society raised some concerns, citing concerns about encourage more casinos gambling, increased risk of compulsive gambling. The activities of groups that the casino also may lead to adverse often associated with gambling-related activities, including money laundering, usury, and even organized crime.

Acknowledged the shortcomings of the government, with the integrated resorts and the concerns expressed by the public. Singapore Government’s commitment that there will be safeguards to limit the impact of gambling on society. The government will introduce a number of restrictive policies For example; the family members of the hospital local people into the casino patron may prevent him or her to enter the gambling. The Singapore Government has announced a steep entrance fee of S $ 100 each to enter or S $ 2,000 and exclude system each year, for all Singaporeans. In addition, the casino will not be allowed to extend credit to the local residents.

Voting in the six month period, hundreds of thousands of Singaporeans to vote against the casino opened. Singapore Government or approved casino operators, resort debate has also brought the attention of the public discussion in Singapore, the government policy should consider ways and means, and whether they are effective, necessary reforms.

The debate over integrated resorts also brought to the public’s attention a discussion on the methods and ways government policies should be deliberated in Singapore, and whether they were effective or needed reform. This is especially because the political climate is dominated by the People’s Action Party. Low Thia Khiang, the leader of the opposition Workers’ Party, warned in a parliament session:

“The Government sought the opinion of the people but it does not go along with the opinion of the people and it has now made a unilateral decision. Eventually, will it turn out to be a blessing or a curse to our people? We have towait and see. Under the current situation, where a party is dominant and the civil society is very weak, the people cannot sway the Government’s decision on such a matter that concerns the fate of the people. If the Government’s judgmentis wrong, it would lead the nation and our people on to the ‘river of no return’, where the cost would be very real and very heavy.

Contrast under the Macau Venetian tourist resorts. The Venetian is a bar, eating, shopping, accommodation and entertainment in one of the resort. Here large enough to accommodate 90 Boeing 747 aircraft, in other parts of Asia, it is difficult to find unbeatable comprehensive flagship projects, including the gorgeous attractions, more than 3,000 luxury suites and recreational facilities. (Chen X, 2011)Specialties from around the world more than 30 restaurants and more than 350 international brand stores, The Grand Canal Shoppes, the Grand Canal gondola are the most prominent feature of the Venetian. “Venetian” by the U.S. gambling giant Las Vegas Sands to invest $ 2.4 billion to build, covers an area of 110,000 square meters of exhibition venues. The world’s second largest and Asia’s largest casino resort complex the architectural (Li X.D, 2009). The hotel is located in the heart of Macau Cotai Strip, 39-storey hotel, the theme of the Italian city, Venice, around the hotel is filled with Venetian specialties arch bridge, small canals and stone road. Full of Venetian romantic wild exotic enjoy life. In addition to the architectural features, the Venetian resort features a world-class gaming, convention and exhibition, shopping, sports, arts and leisure facilities. The luxurious rooms of more than 60 square meters, the shopping street of the Grand Canal Shoppes at Four Seasons nearly 100,000 square meters and brings together the world famous spa center covers an area of 8,000 square meters, and has superb performances in the performances of Cirque Du Solei.(Jack W.Plunkett,2006)

Macau Venetian resort hotel with 3,000 suites, enough to hold ninety loaded Boeing 747 jumbo jet, is in Asia, the only set of huge facilities, tourist destination, and a variety of excellent equipment in a flagship building. More important is the gaming hall of the hotel has more than 800 table games and other casino difficult advantage. A total of 850 gaming tables, 4,100 slot machines (slot machines), the number of gaming tables around the world.(Dennis R. Harrison 2008)

Why Macau need this integrated resort? The following four factors will outline the reasons.

From political factors, Macao’s stable political environment, and the promulgation of the Macao Basic Law “, provides a legal guarantee for the prosperity and stability of Macao. Macau return to China, the implementation of “one country, two systems”, “Macao people governing Macao” and a high degree of autonomy, maintaining the previous capitalist system and way of life unchanged. (Qian Z.S, 2008)

Macau Government attaches great importance to the development of tourist resorts. Macau Government attaches importance to the development of tourism in addition to performance outside the active development of tourism resources, but also in the following two aspects: The first is to simplify entry procedures. In early 1990, the Macau government to simplify entry procedures for foreign travelers, from Australia, Austria, Belgium, Brazil, Canada, Denmark, France, Germany, Greece, Iceland, Italy, Japan, Luxembourg, Malaysia, Netherlands, New Zealand, Norway, Philippines , residents of Singapore, South Korea, Spain, Sweden, Switzerland, Thailand, United Kingdom, United States and other countries exempt from entry visas, all Hong Kong residents, whether Chinese or foreign, are without a visa for a stay of up to 90 days after the Hong Kong Immigration the Taiwanese tourists just in Hong Kong visa formalities to enter Macau .(Li D, 2011)Followed by the Macau Government to strengthen the propaganda activities by adding the relevant international organizations and the establishment of the Tourism Service. Since 1997, Macau has joined the Asia-Pacific Tourism Association, the East Asia Tourism Association and the World Tourism Organization, Macau still in Hong Kong, Tokyo, Manila, Singapore, Sydney, New York, Los Angeles, London, Paris, Frankfurt, Lisbon, Hawaii, Vancouver , Toronto and other major cities to set up a travel service at various tourism promotional activities, such as distributing promotional materials about Macau, screenings of the movie about Macao scenery and slides, to answer travelers a variety of consulting. At the same time, the Macau government to take advantage of Portugal’s overseas travel representative advocacy work published from time to time to the Macau Government Tourist issued around the world; often advertised in the publications of some international travel organization founded Macao scenery. In the past few years, the legitimacy of the Macau gaming industry do not have the status of a free port, the location and neighbors or neighborhood, so that Macao’s tourism industry to develop rapidly in the coming years, as long as the Macao continue to take advantage of their special status and its economic, religious and righteous and so favorable conditions, with the developed modern city of Hong Kong’s international reputation and rich tourism resources in the Pearl River Delta, and further excavation Macao various potential tourism resources, give full play to gaming industry existing strengths, Macao’s tourism industry there will be greater development.

Macau is a free port, tariff protection; the tax rate is relatively low, living in low tax areas listed in the world. Macao SAR Government has been encouraging foreign investment, in order to attract foreign investment, the introduction of a series of investment incentives scheme, including interest subsidy programs and tax incentives. The interest subsidy scheme implemented aimed at industrial and commercial industries and organizations are encouraged to develop their business by way of interest on subsidized loans, so as to achieve the optimization of the industrial structure, to assist corporate innovation and transformation in order to enhance their competitiveness and business trends modern. Benefited enterprises can enjoy basic subsidy interest rate of 4% per year, depend on corporate investment projects is the development of the local industry, the opportunity to subsidize interest rates to 5% or 6%, the interest subsidies issuance a maximum period of 4 years, from the date of repayment of loans from the beginning. (Tian W.N, 2009)

Tax incentives aimed at investors interested in the region industries contribute to give tax concessions to encourage through increased investment, promote industrial growth and development in the region, especially with regard to production efficiency, technological level improve the manufacture of the new product, and the other caused by the progress of production activities effect. On the financial front, more in 2000 introduced preferential measures to encourage foreign investors to set up offshore services business, in order to attract foreign investment and promote the development of the tertiary industry. IPIM license to comply with the conditions in offshore services company in Macau, the profits can be tax-free. The SAR Government the Macau development offshore services must comply with three conditions: the palaces trading and clearing, the products are not sold to SAR residents, business are not for the Macau market.

Form economic factors, integrated Tourism Resort have brought a lot of foreign exchange earnings to Macau.

Macao’s economic environment in the economic field, the protection of individuals and legal persons in accordance with the law, the SAR government to maintain financial independence, there is no need to be turned over to the central government fiscal revenue, to enact its own economic development policies. To more than eight years after the reunification, the principle of “one country, two systems” in the economic field, effectively and creatively implement. Such as the signing of the Closer Economic Partnership Arrangement with the Mainland and its supplementary agreement, cooperation with Zhuhai construction of the Zhuhai-Macao Cross Border Industrial Zone, is the premise of “one country”, two different systems of regional economic cooperation initiative.(Shen W.X, 2006)

Macau vigorously develop integrated tourism resort resources, increasing foreign tourists to Macau every five years to step onto a new level, since foreign tourists to Macau in 1965 exceeded the one million mark for the first time.(Smith W, 2007) Almost 1994 visitors has exceeded 800 million. From 1980 to 1994, nearly 82 million of the total number of foreign tourists in Macau, Macau 350,000 population is nearly 240 times. Macau visitors on average stayed for only 0.85 days, but they are expensive in Macau. 1990, the average per person consumption of foreign tourists to 626 palaces, including the highest consumption of Japanese tourists, to 1,785.46 palaces; followed by Taiwan tourists, to 1,087.44 palaces. In 1971, the total spending of foreign tourists in Macau for 900 million palaces in 1981 to $ 2.735 billion palaces, up to about 15 billion palaces in 1994. Tourism has brought hundreds of billions of dollars of foreign exchange earnings in Macau.

For the Venetian Macao which is a very successful year in 2007. Although, within the opening of the new Lisboa hotel and Crown hotel during the year, greatly increasing the market competitiveness, a decline in net income. The gambling receipts and other income had increased. The Venetian Macao has a strong competitive. In 2007 The Venetian Macao also implemented a number of strategic resolutions to increase the overall operational efficiency. For the Venetian Macao was a challenging in 2008. From June 2008, China has increasingly tightened the free exercise of policy. This restriction is still in force until the end of the year. The project financing was limited by the global credit crunch. This is also beginning to affect the gaming industry. For Venetian the third and fourth quarters of 2008, the financial position was adversely. The net income was continued to decline. In order for the weak revenue trends, the management has taken several important measures.(Jian Q, 2008) First, the company will actively explore other Asian gaming markets to seek new business. Second, the company works closely with Cotai Jet Co. (Susan S ,1997)Ltd to increase visitors in the promotion strategy. Finally, they had improved overall operational efficiency and promote cost savings. These measures were still quite successful. We can see that the gambling receipts and other income growth. The company’s performance was better in 2009. Mainly due to the Asian economy from the global economic crisis began, and shadow of swine flu recovery. Visa restriction for Mainland China has also been relaxed. So that the gaming industry’s Market was expansion. Revenue fell in the past 2 years have been picked up. Overall, the company’s financial condition and development prospects are bright.(Wong T.C, 2008)

From Social factors, integrated tourism resort provides a lot of employment opportunities in Macau.(Dai A.Q, 2009)

The development of integrated tourism resort industry needs some service industries to match, such as hotels, restaurants, shops and a variety of recreational facilities. The number of the employed population in Macao directly engaged in hotels, travel agencies, restaurants and other tourism-related work, more than 40,000 people, accounting for about 20% of total employment and 12% of the total population of Macau, where casino employees amounted to 10,000 come to the restaurant employs nearly 5,000 people, 6,000 hotel employees, travel goods industry employs nearly 2,000 people, travel agencies and more than 1,000 employees, those employed to the Macau Government attaches importance to the development of tourism beneficiaries.

Promoting Macau’s infrastructure construction and economic development of integrated tourism resort.(Cologne Berg, 2009)

Macau Government STDM signed the franchise contract requires the the STDM company to bear the economic, social, cultural, and infrastructure construction and funding obligations, such as the construction of a luxury hotel; subsidized electricity, dock, sea, pier, reclamation projects, schools and residential construction; construction of Article Macau-Taiga Bridge, the airport, the deepwater port; establishment of a special fund. In addition, it also provides for STDM 1964 per year payable prosperity fees shall not be less than 300,000 palaces in 1972 increased to 1.25 million palaces. Construction and economic development of Macau’s infrastructure, which has played a great role in promoting.(Zhen T.Q, 2004)

From environmental factors: Venetian resort for the environmental impact lies in three aspects, the first is the water quality impacts: very large sewage discharge tube and swimming pool of the resort’s spa. Since the hotel is changing the water frequently, the the travelers very large amount of water applications, the waste of water resources is also inevitable.

The second aspect is that the noise impact, the resort’s noise impact the lives of local residents. Often due to some of the facilities within the integrated resort is open 24 hours for passengers, it will affect the normal daily routine of life of the residents of the integrated resort around.

The third aspect is that light impact, Venetian casino is open 24 hours, 24-hour power supply to tourists. The light 24 hours affect the surrounding local Macau residents, in particular, to the need to sleep at night time, many residents of the surrounding dissatisfied with the casino lights too bright that they can not sleep.

The operating objective of Venetian in next 5-10 years is make 60% profit from exhibition, retail and other business that not gamble. But its last year one quarterly report shows, its income that expect bets increase 10 million from 2009, but only has 11.2% of all income. So Venetian must strive to develop its entertainment business expect bets, make them get more profit. In the future, the second phase project of Cotai Strip is on construction, when it finish, the marketing share and profit of Venetian will increase rapidly, and its entertainment business will expand. At that time, its competitive advantage will increase and its position in Macau economy and casino industry will very important.

Singapore Government attaches great importance to the development of tourism, the tourism industry as unlimited resources. As early as 1964, Singapore set up a Tourism Promotion Board currently known as Singapore Tourism Board, to lead and promote the development of tourism in Singapore and to promote Singapore as an international tourist destination. The Singapore Tourism Board cooperation with relevant departments and make full use of favourable conditions for their great efforts to develop tourism. Currently, tourism has become one of a major engine economic growth in Singapore.

Singapore which was currently known as “Singapura” which “Lion City” has created a various tourism development in the past years. Singapore’s cultural and heritage tourism shows it is still very active in the old traditions. From the past, under the title to one of these ethnic minorities: Chinatown, Kampong Glam, Arab Street and Little India. . First, you can enjoy Chinese antiques, traditional clothing, or Chinatown, calligraphy, and then there is a variety of spices in Little India to buy a loved one taste and a sari or some jewellery. Finally, get to Kampong Glam and Arab Street for bazaar-style shopping, and received the fine from Indonesia and Malaysia, hand-made batik.

Recent and upcoming attractions

Merlion Park, one of the famous tourist spots, is well known for its rich history. Many tourists are attracted to visit the Merlion Park. September 2008, Singapore hosted the annual F1 SingTel Singapore F1 Grand Prix marked the milestone in the history: it is the first street race in Asia, and the first night race in the world. Two long-awaited development of the entertainment is: Marina Bay Sands integrated resort (a world-class luxury resort hotel and conference facilities and high-end restaurants casino) and Resorts World, Sentosa, will house the first Universal Studios theme in Southeast Asia Park, the world’s largest marine life park, six hotels. This year, 2010, people are looking forward to the Gulf, including three Marina Bay Promenade gardens. To the garden to greet visitors to a super surprise and they will be dwarfed over the tree – the tree, measures up to 16 layers high. This lush looking the Bay Area will support is ‘in a garden’ dream city of Singapore.

(b) ROLES PLAYED BY SINGAPORE GOVERNMENT

Singapore is one of the most popular tourist destinations in Asia-Pacific region. Tourism industry is strengthening by the infrastructure developments, various events and the countries strategic location in the heart of region. Hence, the government has set up Singapore Tourism Board which has played a very significant role in assisting Singapore’s tourism industry to boom with success. The government sector played many roles and the 3 most significant roles are being the planner, promoter and developer.

Planner

Singapore government set up the Singapore Tourism Board (STB) to assists in the planning of every event being held, publications, developments and all the services needed on Singapore’s tourism industry. STB’s includes divisions of Manpower Development, Resource Development, Service Quality, Strategic Planning and Corporate Planning, under the Sector and Development Group, shape the long-term development of the tourism sector and enhance the role of being a planner of the tourism industry. Singapore government has planned many events to attract more tourist into Singapore and the co-ordination of these events have to go through serious planning to be able to be successfully held in Singapore. Due to the limited size of Singapore, the accommodation is limited to cater for a large number of tourists coming in. Singapore has taken part in major events like Formula 1, Chingay and many more. The upcoming event would be the youth Olympics. STB has to plan according to the peak and off-peak of their tourism period in order to have enough accommodation to accommodate for the number of tourists. In addition, the dates must go through planning to make sure it does not clash with other major events. As Singapore is considered small to host a major event, the availability of event venues is limited. Therefore, STB comes in place to take charge of these plans to ensure the possibility of Singapore being the host countries of these events. Hence, the Singapore government plays as a role of a planner and assists in the development of Singapore’s tourism industry.

Developer

After the process of planning, the government also plays a role in continuing with the plans and becomes a developer for Singapore’s tourism industry. Singapore government has done their part as a developer for its tourism industry by investing in basic infrastructure such as roads, sewage, bridges and many varieties of transportation. In addition, developing Singapore’s environment into a clean and fine city also improves the development of the tourism industry. Singapore government has used road tax to constantly upgrade the roads, invested in sewages and also building sufficient overhead bridges to ensure the safety environment. This has helped to in the tourism industry as tourist would have a good image of Singapore during their travel. Transportation is also a key factor for convenience of tourist that visits Singapore. The government has also invested in the train systems with clear signboards with multiple languages for tourist to have an easy way out to travel on their own around Singapore. In addition, buying tickets has also been made convenient by investing in automated machines to buy standard cards which can be refunded for cash after their trip. The machines have 4 different kind of language so that more tourists are able to understand the usage of the machine. Signboards are also made with clear illustrations of the locations of each stop of location to prevent tourist from getting lost. Also, road signs and directional signs are also in 4 languages at the airport and tourists spots to assist in their desired pathway. Singapore government has contributed generously in being the developer of Singapore and this has left many tourists with great impression while travelling in Singapore. These developments has ensured the comfort of tourist and made everything easy for them. This being compared to many countries like Japan or Europe, has out-shined them as only in the cities tourist are able to travel freely on their own but when they are out of the city, language and finding for directions has always become a worry for tourist to go on free and easy trips.

Promoter

Singapore Tourism Board which is a sector of the government’s contributions to Singapore’s tourism industry and it includes the responsibilities of the publicity and promoting tourism for potential tourist to attract them into travelling to Singapore. Government provides funding for tourism marketing campaigns. For example, STB organized an annual event – Great Singapore Sale, it is to promote tourism in Singapore. The government has also invested in promoting Singapore tourism in advertisements and gaining more opportunities on major events so that more tourists will be attracted to travel to Singapore. STB also changed its branding from “Uniquely Singapore” to “Your Singapore”, which will captivate more people to explore Singapore in a deeper sense.

Question 2
Various Impacts of Tourism in Singapore
Positive Economic Impacts

Creation of Job Opportunities with the opening of Integrated Resorts

As Singapore continues to aim to be the Leading Convention and Exhibition City in Asia, the country needs With the newest Integrated Resorts built, the Marina Bay Sands and Resorts World Sentosa, there will be an over flowing opportunities for job employment may it be seasonal or permanent jobs. Singaporeans as well as foreigners are looking forward to have a wonderful experience working in these integrated resorts. “I think it helps us all. It makes everything smoother, more efficient and as I said, at the end of the day, the objective is to hire Singaporeans – Singapore jobs for Singaporeans. And I think we all clearly have that ambition in mind” (Roberts, 2010)

Increase in Tourism Receipts

The Singapore Tourism Board (STB), set out an ambitious amount of S$30 billion tourism receipts by 2015, which is triple increase from the amount last 2004, which is S$10 billion, not only that, and doubling the visitors arrival to 17 million with the help of S$2 billion Tourism Development Fund. (STB, 2010)

Table A: 2015 Targets
Indicator
2004
2015 Target

Tourism Receipts (S$ billions)

10

30

Visitors Arrivals (million)

8

17

Tourism Employment

150,000

250,000

(Singapore Tourism Board, 2010)

Negative Economic Impacts

Singapore has no natural resources therefore relying on imported goods and service which leads to leakage of revenue.

Singapore is a small developing country with no natural resources therefore relying on imported goods and service which leads to leakage of revenue. These leakages of revenue will lead to the inaccuracy measurement of the economic impact of tourism that is affected by tourism expenditure. (TMC School of Business, 2010)

Due to the lack of expertise and lack manpower, Singapore hires foreign workers which also cause economic leakage as they send money back to their home country.

Competition with other sectors in the destination

Resorts World Sentosa and Marina Bay Sands are the two newly-built integrated resorts in Singapore. They are both competing for who is the best, not only with their casinos, but also with the facilities and infrastructure. Mr. Lim says that “Marina Bay Sands is more to convention area whereas Resorts World got support which is the Universal Studios, and besides Universal Studios, there’s a lot more places to explore in Sentosa.” (Lim, 2010)

Positive Socio-cultural Impacts

Promoting and developing cultural relations and international cooperation

Through socialising and interacting with different kinds of people, Cross-cultural and Intercultural communication is being developed. It enhances the skills of the local residents to communicate to different types of tourist and how to handle situations relating to self-expression.

Preserving culture and heritage

Preservation of historical places and monuments, like the Merlion Park at the Marina Bay, Chinatown, Clarke Quay, National Museum of Singapore, Singapore Fort Siloso and many other places which shapes Singapore as a place with full of history and culture. (Dutta, 2008)

Negative Socio-cultural Impacts

Creation of Social Problems

There’s an overwhelming response from people since the opening of IRs. A lot of foreigners roll over to casinos during their free time. Whereas, local residents seems so relaxed in entering casinos without knowing there are eyes on them, which are related in these situations:

Loo Siew Wan, a 53-year taxi driver, managed to enter RWS, but was arrested because of impersonation by stealing his brother’s driving licence, theft, and giving false details to the police. (© Inter Press Service, 2010)

Loss of authenticity of culture and traditions

This is illustrated by demonstration effect which results adaptation to foreign influences and westernization. It is like following the dressing styles and lifestyle of the tourists or foreigners staying in the host country. “The demonstration effect is seen as a corruptor of values in places that have strong cultural influence and strict social norms.” (Winter, 2008) Example: A temple in Chinatown called Buddha Tooth Relic Temple and Museum, we know it’s a sacred place for worshipping, but then, nowadays, it became a tourist attraction. Some may see it as disrespect for the place, but most people will not care anymore.

Positive Environmental Impacts

Singapore has earned the name of Garden City after decades of planning and cultivation. (MND.gov, 2010) There are more development of such gardens coming up like Gardens by the bay, a Singapore waterfront gardens at Marina Bay and the creation of Sky Park at the top of Marina Bay Sands. These places including our current nature reserves would be a major attraction for tourists as tourists like to visit places that are attractive, clean and not polluted. Therefore, more flora and fauna are planted to improve the landscape of Singapore.

The creation of SembCorp NEWater plant- one of the world’s largest water recycling facilities

We all know that Singapore doesn’t have enough natural resources unlike the neighbourhood countries, Indonesia and Malaysia. But with the opening of the fifth and biggest SembCorp NEWater plant, last May 3, 2010 in conjunction with PUB, there will be enough sustainability of 30% safe water supply for the Singapore’s total demand. NEWater will provide 50 million imperial gallons or 228, 000 cubic metres of NEWater per day. (SG Press Centre, 2010) It means in every hotel, or any accommodation places, restaurants, cruise ships, there will be an enough supply not only for the local residents, but for the guests or tourists who will be staying in Singapore.

Building of Infrastructures

As tourism plays a significant role in Singapore’s economy our government will spend on improving infrastructure and transportation to help visitors to have an easier accessibility. On 31 March 2010, Land Transport Authority, LTA has been honoured “The Best in Land Transport”. (LTA, 2010) Singapore government has also invested more money in the tourism industry to attract more foreign tourists. In my research and observation of Singapore in recent years, some of the tourism development programmes are:

The world’s largest observation wheel, The Singapore Flyer in 2008

The Formula 1 Grand Prix in 2008

Development of sports industry

Creating of Singapore Sports Hub at Kallang.

Building of Integrated Resorts like Resorts World Sentosa and Marina Bay Sands

Negative Environmental Impacts

Pollution and Littering

With a target of 17 million visitors coming to Singapore in 2015, (STB, 2010) there is a high chance of more air pollution from all the carbon emissions from planes and land transport. Littering would be more as well, as people will have the mindset of “This is not my country” and will tend to do whatever they want, including of spitting.

Depletion of Water Resources

Wasting of water resources in the hotel like having bathtub, laundry services and housekeeping services like frequently change of towels and bed linen will contribute to shortage of water in the future. “The United Nations Food and Agriculture Organization (FAO) notes that 1.2 billion people, almost 20 percent of the Earth’s population, are experiencing water scarcity.” (Black, 2008)

Question 3
SUSTAINABLE SINGAPORE: A LIVELY and LIVEABLE CITY

Singapore government has imposed three ways on how to develop sustainable tourism:

Efficient way – since Singapore has less resources, we will maximize all the resources we have and with less waste.

Clean way – developing, without harming and polluting the environment.

Green way – preserving energy, water resources, and natural heritage with the help of ecotourism

(Ministry of the Environment and Water Resources, 2010)

STRATEGIES TO ACHIEVE SUSTAINABLE TOURISM IN SINGAPORE

Promote a more sustainable lifestyle. Reduce water consumption, use water efficient devices and water conservation. Like in hotels, reduce the usage of towels or bed sheets. Guests can inform housekeepers that we don’t want to change our towels; in that case, we will be helping to conserve water.

Promote Resource-Efficient Buildings. Building SkyRise Greenery. Like planting trees and plants on the rooftop of buildings or hotel.

Enhance public cleanliness. As tourists know that Singapore is a “Fine City” there will have this thinking not to litter around. But sometimes, some tourists will not follow if they see that local residents don’t care.

Promote Ecotourism. Singapore has variety of national parks and wildlife reserves. Parks, like Zoological Gardens and Botanic Gardens, Pulau Ubin and Bukit Timah Reserves. Encourage nature loving tourists to appreciate the beauty of nature. To explore different adventurous activities like nature walks or hiking.

(National Parks Board, Singapore, 2009)

CONCLUSION

Singapore is developing and will still continue to develop in the next few years. Decades ago, there were many concept plans made that changed the whole image of Singapore. These concept plans have slowly cultivated Singapore as to what it is now. The first concept plan was made in 1971 which includes major infrastructure projects such as Singapore’s first MRT lines and the Changi Airport.

According to Mah Bow Tan, Minister for National Development, he said that after two decades, there is another concept plan made in 1991 which is empowering CBD to decentralise the commercial space in that area. (Mah, 2010)

Future concept plans of 2011 would focus on the softer side of Singapore’s soul as on infrastructure. Having a vibrant place to live in is ideal to make a real difference. There are three factors involved in concept 2011.

To make Singapore a more active and livelier place with vibrant music scene, outdoor restaurants, organic supermarkets, juice bars, rather than passive cultural amenities and big-ticket items. (Florida, 2010)

To have organic growth changes in “distinctive neighbourhoods” for inter-generational bonding and to develop diversity among people.

To recommend environmentally-friendly projects ranging from bike lanes and better public transportation to create a Heritage charter to preserve historic buildings.

With the recently opened Resorts World Sentosa and Marina Bay Sands, there will be creation of more jobs and more employment opportunities as it is a labour-intensive industry. Not only that, many tourists would come to visit Singapore for the new attractions like the casino and the Universal Studios, therefore increase in tourism receipts. As Marina Bay Sands is being built to cater to the MICE industry, more revenue would be expected as business travellers tend to spend more as they are not cost conscious.

An ideal vacation for many people is a trip to an exotic location where they stay at a luxurious resort. All throughout the year, people from developed countries flock to those that are less developed to take advantage of the beautiful surroundings, warm weather and all inclusive resorts. I have been on a few vacations like these and I have always found the experience to be highly unrealistic and superficial as the resorts are completely separate from the local community and culture. I have been to resorts in Mexico and Cuba, however I never got to experience true Mexican or Cuban culture, for the most part my family never strayed far from the resort. My experiences and taking DEVS have caused me to wonder what effect these resorts have on the local people and how does it affect my view of them. Not only that but how does this relate to the bigger issues we have studied so far in DEVS; the relationship between the developing and Third World countries and Edward Said’s notion of Orientalism. This paper will argue that vacation resorts in Third World countries have a negative effect of the culture of the locals and that they contribute to the Western view that Third World countries are inferior.

Resorts are kept separate from the local communities. There is usually some sort of boundary marking the edges of the resort that creates a

2sense of keeping the tourists in, but also keeping the locals out. There is also limited transportation for tourists to travel around the area surrounding their resort. Not only is there a physical barrier but a psychological one. Tourists are encouraged to stay within the confinements of the resort, this isolation brought on by the resort is to keep the money spending within the hotel so it gains maximum profit (United 1976:83). The resorts provide everything a tourist might want from many types of food and drinks, and a wide range of activities. However, there are many adverse affects to this. The resorts are made to seem safe and the surrounding areas to seem unfamiliar and dangerous. Tourists are told of high crime rates and encouraged to take hotel transportation instead of local taxis as well as to always keep a close eye on their belongings in fear of them being stolen. This causes resort vacationers to seldom leave the resort and they never actually see or experience the local culture. Tourists arrive with a feeling of uncertainty of experiencing a new way of life, which is further emphasized through the segregation of the resort. If a tourist does want to leave the resort, usually they go on some sort of guided tour provided to them, which causes the encounters to be contrived and superficial (McRae 2003: 241). This clear and deliberate separation, between the luxurious and pristine resorts and the surrounding areas, which are usually impoverished, creates a distinction between the tourists and the locals, which translates to the developed countries and the Third World (Ibid: 239). It causes a sense of superiority on the part of the tourists and creates views that the local people are dangerous and inferior (United 1976:79).

When tourists do leave the resort and meet the local people, it usually is not a true representation and can contribute to misguided conclusions. These encounters are usually short and brief, as tourists must see everything in a condensed manor, which is not enough time for anyone to draw proper conclusions (Ibid: 80). There is also a distinct lacking of spontaneity. The contact that tourists have with locals is forced and insincere, in terms of organized shows put on for the tourists or through the gifts and souvenirs that they buy from the locals (Ibid: 80). This exchange between the locals and tourists causes feelings of material superiority of the tourists over the locals (Brohman 1996: 50). The tourists seem to have endless amounts of money in comparison with the locals. Tourist encounters with locals does not only happen outside the resort but also within it, through their interactions with the workers. This can also cause feelings of superiority, as the workers are there to serve the tourists, they cook for them, clean for them and perform for them. This contact causes a clear distinction between the tourists and the locals and makes the locals seem inferior, which is a problem when this is the main encounter with local people a tourists has.

4

These superficial and misguided encounters that tourists have with locals contributes to how people from developed countries see Third World countries as a whole. The segregation and limited genuine contact with the locals does not benefit the cultures of Third World countries; on the contrary it emphasizes inequalities (McRae 2003: 248). Even if tourists do try and venture out of the resorts and experience some true culture different from their own, they never view the Third World for what it truly is as everything they see and experience will be viewed through westernized notions of what is the norm (Ibid: 250). It is impossible to view new cultures completely objectively. This limitation ties into Edward Said’s concept of Orientalism, which is viewing different cultures through a Eurocentric mindset and combining many different cultures and peoples into one category (Ibid: 251). By this definition, resorts are causing a modern day Orientalism. Through separation and a lack of encounters, tourists view Third World countries through a Eurocentric mindset and lump many different cultures of people together. They see the people outside the resort as the “other,” and therefore inferior. Other factors of resorts that suggest Orientalism is the idea of the “white man’s burden,” one of the main arguments for tourism is that it brings new developments such as transportation systems and infrastructures to the area surrounding the resort, which is similar to the defense of colonialism (Ibid: 250). Contributing to the Orientalism created by resorts and the distinction between the superior developed countries and the inferior Third World countries is the fact that most of the companies involved in the resorts are from the developed countries and the majority of the revenue goes to them, not the Third World country (Brohman 1996: 50). This creates a sense of power and domination over the Third World countries and takes away the agency of locals near the resort and their ability to have control over the land and resources.

5Although the development brought to Third World countries is sometimes seen as a benefit, for the most part resort locations are expected to remain static and available for tourist consumption (McRae 2003: 237). When people go to a resort they usually choose a place that is not very developed, where the land is secluded and exotic, like Mexico, Cuba or the Caribbean. If Third World countries developed to the extent of developed countries, they would loose their appeal. This causes a limit as to how much a resort location can develop and takes away significant power from Third World countries as they must change development strategies depending on the needs and wants of Western tourists.

6

The effect that a resort has on the local community is large and for the most part negative. Integration of tourists from developed nations into Third World countries creates conflicts that result from the contrast of different ways of life (United 1976:79). The tourists bring new ideas, culture and practices with them to Third World country, which will inherently affect the cultures of the people already living there. When a resort enters a community the locals have two main options, either exploit their culture and market it in order to make money (Backman, S., et al 2000: 88). For example selling souvenirs or putting on shows and exhibits. Or the locals can keep their culture private and therefore more authentic (Ibid: 88). However, keeping their culture private and unchanged is virtually impossible, when a resort is built they loose their cultural identity and social control.

7 Not only do the locals loose control over their culture but also over their land and resources. Economic benefits from tourism for a Third World country correlates with the amount of control the local residence have over the tourism (Ibid: 88). However, the majority is controlled but large companies from developed countries. The bulk of the profits go to these large foreign corporations and Third World countries do not see much of the revenue (Ibid: 88). This takes away the traditional means of sustenance from the locals and makes them dependent on developed countries. This has the same effect that transnational corporations have on Third World countries. They exploit the people and the resources of the country in order to make a profit. The locals then become dependent on the foreign resorts for economic survival. This is made even more problematic by the fact that resorts have fluctuating success. Not only are there off seasons where few people come to the resort, but also a recession in a developed country could have devastating effects of the amount of revenue a resort makes (Brohman 1996: 50). Resorts, like TNCs, cause dependency and exploitation. Foreign resort companies are able to exploit Third World Countries as they are competing with other countries to gain the resort. This takes the control away from the locals and gives it to those in developed countries, which further emphasizes the distinction of superior developed countries and inferior Third World countries.

8 Segregated vacation resorts pose a large threat to the cultures of the locals as well as creating a distinction between developed nations and the Third World in terms of superiority and inferiority. Third World countries are being exploited for their pristine and exotic locations, and they are loosing their social identity as well as their control over the land. Resorts cause the Third World to be dependent on developed countries for their economic success, however barely any of the revenue from tourism actually goes to the Third World country as it is controlled by large foreign organizations. These problems are similar to ones that have been discussed in DEVS throughout the year. A common trend that I have found during this course is that we are taught the problems, but there very seems to be a clear solution. An approach needs to be taken when considering whether a resort should be built or not where the interests of the locals need to be considered along side the economic benefits (Ibid: 65). This requires institutional reform so that the people have opportunities to organize themselves into groups, represent themselves and exert some influence over decision-making (Ibid: 66). Tourism planning should be made accountable to the local governing bodies so that it can be sure that the specific needs of the people are met. This will give Third World countries more power in respect to tourism, support their culture and hopefully dismantle ideas such as Orientalism and that the Third World is inferior.

9

Cyprus is an island in the Mediterranean Sea in the south of Turkey. Cyprus has a warm and dry with little rainfall climate which is a typical Mediterranean climate and this climate makes Cyprus very popular as tourist destination. The official languages of Cyprus are Turkish and Greek, while English is widely spoken by both sides. You can get to Cyprus by boat or plane. Charter flights are frequent scheduled from England and other European countries to Cyprus.

Cyprus provides a wide range of accommodation in all areas of the island. Its accommodation covers all types of guests and all budgets ranging from luxury hotels, holiday villages, apartments to rent and camping. If somebody wants to explore the island, a car hire is needed. Cyprus has many things to offer to tourists, while Cyprus is known for its sandy beaches with the amazing water sports, rugged mountains, impressive ancient structures, churches and museums which make it a perfect holiday destination. There are also various recreation and sports activities available such as diving, golfing and carting. In Cyprus you can experience in bird watching, turtle watching and hiking and for those people who love the lucky games there are many casinos in the island.

The travel adventurers can discover all over the island attractive beaches, ancient ruins, mountain peaks and vineyards that has olive trees all over. In Paphos you can go to Roman Mosaics, the Tombs of the Kings, the Byzantine Museum and Kato Paphos Archeological Park. Nicosia has the Cyprus Museum, Limassol boasts of its Lambouri Winery, Kolossi Castle and its Limassol Castle and Galatex. Avios Ioannis has the Turkish Ethnographic Museum, among others.

Larnaka is a harbor with huge palm trees, cafes and taverns and also houses the international airport of Cyprus. In Larnaka you can visit Byzantine Museum, agios Lazaros Church, the District Archeological museum, the Pierides Museum etc. During the Kataklysmos feast which is celebrated all over Cyprus everyone can gather the shores of Larnaka, dancing, singing, driknking, eating and enjoying water sports.

Lemesos is famous for the industrial center and port and wine industry. During September the wine lovers can enjoy the wine festival where the food and wine is served free. Witness the grand Lenten carnival when bands, decorated floats and dancing mark the celebration of this carnival. Tourists can enjoy the beaches, sea foods, visiting the museums and relax in the gardens.

Paphos was the capital of the island in Roman times. Paphos has become a popular seaside resort with a large population. The Ktima section of the city is the main residential area, while Kato Paphos is the playground of holidaymakers, built around the medieval port with its numerous luxury hotels, taverns and entertainment venue. You can visit the Acropolis with its complex ancient buildings, including a Roman Odeon which is used for summer orchestral and stage performances as well as the Tombs of the Kings which is located 2km northwest of Paphos harbour towards the Coral Bay. Paphos is also known for its Mosaics floors in a series of ancient Roman noblemenaˆ™s villas and every visitor must see it. An excursion to the baths of Aphrodite is something that all the visitors should see because it is a visit to the natural grotto on the Akamas Peninsula where legend has it that the Greek goddess of love, Aphrodite, used to take her baths.

Anyone cannot describe the beauty of Cyprus with words because every corner of this place is worth seeing.

Assess the impact (positive and negative) of your visit on the environment.

The quality of the environment, natural and man-made is essential to tourism. Many of the environmental impacts are connected with the structure of the general infrastructure such as roads and airports, and of tourism facilities such as resorts, hotels, shops, restaurants, golf courses and marinas. These negative impacts of tourism can cause damage to the environmental resources on which it depends. Alternatively, tourism has the potential to create positive effects on the environment by helping to environmental protection and maintenance and this is a method to raise awareness of environmental principles and it can serve as tool to finance protection of natural areas and increase their economic importance.

When the level of visitor use is greater than the environmentaˆ™s ability to manage with this use negative impacts arise from tourism. When conventional tourism is uncontrolled poses possible threats to many natural areas. It can lead to impacts such as: soil erosion, natural habitat loss, increased pollution, discharges into the sea, heightened vulnerability to forest fires and increased pressure on endangered species. It frequently puts a strain on water resources, and it can force local populations to compete for the use of critical resources.

The negative impacts of my visit in Cyprus are:

The depletion of natural resources: this means that the tourism development can put pressure on natural resources when the consumption in areas is increased and the resources are already scarce. For example, with my visit on the island I cause problem because of my depletion of water resources such as my needs of water for washing and bath, my use of the swimming pool and other uses. The consequences are the water shortages and degradation of water supplies, as well as generating a bigger volume of waste water. Cyprus is an island in the Mediterranean Sea and is well known that in such dry regions, the water scarcity is greater because of the hot climate and the tourists tend to consume more water in their holidays than do at home. Another negative impact of my visit was the use of local resources such as energy, food, and other raw materials that previously was in short supply. Usually in high season the exploitation of these resources is greater than other periods because of the big number of visitors. The destination managers try to cover this high demand of local resources in order to meet the high expectations that tourists usually have for proper heating or cooling, hot water etc.

Pollution: tourism can cause the same forms of pollution as any other industry, such forms are: solid waste and littering, air emissions, releases of sewage, noise, oil and chemicals, even architectural and visual pollution. My impact in the air pollution was my transportation by air and the excursions with the car. The air pollution that caused from the transportation of tourists has negative impact on the global level, especially from CO2 emissions related to the use of energy for the transportation which contributes to severe local air pollution. Noise pollution caused by cars, buses, airplanes, jet skis etc. Additionally to causing annoyance and stress to humans, it causes distress to wildlife and can cause animals to alter their natural activity. Another negative impact in which and me as tourist contribute to its increase is the Solid Waste. The tourism industry produces enormous quantities of waste products. Airlines, hotels, attractions and other businesses that serve tourists throw away tons of garbage a year.

Some other physical impacts that caused from tourist activities (including myself as a tourist) are: trampling, in cases that tourists using the same trail over and over again trample the vegetation and soil, finally causing damage that lead to loss of biodiversity. Anchoring and other marine activities, in marine areas many tourist activities occur around fragile systems. Anchoring, scuba diving, yachting and cruising are some of the activities that can cause degradation of marine ecosystems such as coral reefs. Change of ecosystems by tourist activities, habitat can be degraded by tourism leisure activities. For example, tourists by watching the wildlife can cause stress for the animals and alter their natural behavior when tourists come too close.

The positive impacts of my visit in Cyprus are:

Financial contributions such as:

-Direct financial contribution is the revenue from park-entrance fees and similar sources which are allocated specifically to pay for the protection and management of environmentally sensitive areas.

-Contributions to government revenues are the money that I paid to rent recreation equipment. This money can provide governments with the funds needed to manage natural resources.

Describe two actions that individuals could take in the future to maintain the sustainability of this environment.

The anxiety for our environment no longer remains in the realm of sustainability projects. It is a real-time that individuals, locals and tourists should start concern about all this thing that destroy our environment: changing seasons, expanding deserts, global warming, depleting forests and ice at the poles and increasing sea levels, climatic aberration, melting glaciers, suffocating pollution and food shortage are clear manifestations of an environment that is leaded into a global catastrophe. Small changes can bring a positive impact, and we may still be able to leave a cleaner, habitable planet for our children. Here are two actions that individuals, locals and tourist can take in the future in order to maintain the sustainability of the environment:

Use less electricity: Lots of fossil fuels are burned to generate electricity. This is like a chain: the more we use, the more we burn, the more we pollute the environment. A simple act is to switch off the lights and electrical appliances when are not needed and by doing this we can save huge amounts of energy. Many people can construct their houses, hotels etc. in a way that even more daylight can be used instead of using light bulbs.

Use public transport or bicycles: We are all well informed about the fuel crisis which is caused by an ever-increasing number of gas-guzzling automobiles being acquired by millions of people. To make matters worse even food crops are being used to produce biofuels so that people can drive their cars. A good solution is that any individual, local and tourist can use more often the public transport because itaˆ™s healthier and environment friendly. First, you will have to walk a distance to use the public transport and second fewer vehicles will be on the road. In fact this will also reduce the frequency of traffic jams.

Describe two actions that destination managers could take in the future to maintain the sustainability of this environment.

The development of tourism is well-matched with environmental protection through proper planning and controlled development and tourist management. Destination managers need to develop appropriate protection policies and strategies to efficiently manage tourism. Tourism managers must think the needs of an area and its residents, and determine the physical and social carrying capacities of a destination. Two actions that destination managers could take in order to maintain the sustainability of the environment are:

Legislation and regulation: government by establishing rules and regulations such as fees, laws etc. can help control negative impacts. It is possible to regulate development and mandate environmentally pleasing building design. Government can also control pollution problems and cleanliness of public areas. Laws can be obtained that control certain types of tourist actions, such as over-collecting. In some cases, establishing protected areas may reduce the negative natural resource impacts of tourism.

Alternative tourism can be developed to meet the needs of certain groups of people, allowing them to experience the natural and cultural wealth of regions. It is also positive for economic development in countryside areas, or in environmentally fragile areas that cannot support major change. Alternative tourism is basically the antithesis of mass tourism. Alternative tourism results in fewer severe impacts while still providing positive economic effects. Numerous types of tourism are considered alternative: biotourism, nature or environmental tourism, farm and ranch tourism, scientific tourism, special interest tourism, village tourism etc. One new trend in environmentally alternative tourism development has emerged: ecotourism and it is concerned with gaining the economic advantages of tourism development and minimal environmental impact.

In the 1960s, internet was used to applying computers for sharing information on research and development in scientific and military fields. In 1962 a global network of computers was proposed by Licklider of MIT. The developing progress of using internet continued till 1991 when Tim Berners Lee proposed the concept of HTML .With the advent of the web browser, the internet has grown to become a information supplier and in the recent years a commercialization tool. The origin of the commercial use of internet mostly contained of vendors providing basic networking products, and basic internet services. Nowadays Internet is used as an global information infrastructure for supporting other commercial services (Baggio, 2007; Wu, 2010).In the last decades the performance of organizations and their competing way have influenced by internet (Porter, 1993). On the other hand internet has created a new economic environment for doing business, providing rapid communication of information, accessible globally and negligible cost (Rayman-Bacchus & Molina, 2001). Internet provides a great deal of information directly accessible at low costs on prices, products and gain opportunities. The efficiency of internet has been increased by the multiplication of infomediaries offering easier access to the information, the creation of shopbots comparing prices or selecting sites according different choice criteria(Smith & Brynjolfsson, 2001).

Tourism and internet

Tourism is particularly adapted to highlight the nature of the upheavals implied by the development of internet in service activities and it was one of the primal industries applying internet and electronic commerce (Buhalis, 1998; O’connor & Frew, 2008). Internet has enabled tourism industry to broadcast tourism and travel related information to customers all around the world , in a direct, cost minimizing , and time effective way(Buhalis, 1998; Inkpen & Board, 1998; Poon, 1993; Sheldon, 1997).

“The era of mass communication has transformed the tourist gaze”( Rayman-Bacchus and Molina 2001 p.592).The develpoment of the internet empowered the new tourist who is becoming knowledgeable and is seeking exceptional value for money and time. Internet is not only a source of information but also an important vector of transactions. Online sales is growing considerably in tourism industry (Jeong & Ohand Mary, 2003; Weber, Murphy, Schegg, & Murphy, 2005).The number of online sales is increasing dramatically with a large number of successful online booking platforms in the different areas of tourism such as transportation, accommodation, package deals or regional offers(Gratzer, Werthner, & Winiwarter, 2004) and most tourism organizations such as hotels, airlines, and travel agencies have applied internet technologies as part of their marketing and communication strategies (Buhalis & Law, 2008).

The result of an European study about the use of internet in tourism showed that the use of internet for marketing purpose is more common in touism industry comparing with other industries. Finding showed that among tourism related industries, air travels and hotels apply internet marketing more than others. More than one in three tourist enterprise in Europe( or twice as many as in other sectors combined) sell their products online and this share is increasingly rapidly (European Commission 2003). Internet marketing is suitable for tourism services because of their intangibility as well as high price, risk, and involvement levels. By online searches, travelers can access to more in-depth materials and deeper content compared with conventional promotional agents(Govers & FM, 2003). Internet is the most popular channel to research information, find the best price and reservation for travelers (Laudon & Traver, 2001).

Countries use internet to promote tourism to gain advantages such as (Buhalis & Law, 2008) :

Enhancement in the competitiveness and performance of tourism industry businesses ,creating opportunity for selling tourism product to potential tourists , displaying information at electronic speed, Distribution costs are decreased and an increasing proportion of internet users are buying online and tourism will gain a larger and larger share of online customer market.(Lu & Lu, 2004), Direct communication is created between tourism suppliers and tourists for purchasing services and also requesting information. As a result travel suppliers can understand each customer’s needs, and therefore target each customer individually and deliver tailor-made products(Buhalis & Law 2008). It is needless to say that it is essential that in order to obtain competitive advantage, a tourism enterprise/destination must use IT well before its competitors otherwise it would not be able to achieve any competitive advantage. For example American Hospital Supply made an innovative use of online order entry terminals before its competitors and captured lion’s share of market (Eraqi, 2006). Several tourism organizations/destinations have exploited IT in their pursuit of competitive advantage. It is, however, not necessary that a tourism organization/destination achieving competitive edge will always sustain it because their competitors can copy IT easily and quickly and new IT capabilities are also available to every competitor in the market(O’Brien, 1992). However, tourist business sector managers need to align IT strategies to their business strategies and take the dimensions of e-quality into consideration such as performance, features, reliability, durability, serviceability, conformance, perceived quality and aesthetics (Madu & Madu, 2002) when making decision related to the use of IT for effective tourism strategic marketing(Eraqi, 2009) Tourism organization/destination management must understand that IT is only a tool and competitive advantage can only be achieved via creative and innovative use of that tool (Morrison et. al. 2000; Fuchs 2004).

In addition to these advantages , it is suggested that public agencies involved in tourism development also are increasingly using the internet. These agencies use internet to promote the attractions of their respective nations, enhancing the economic benefits by :hypertext links to commercial service providers, varying degrees of interactivity ; and 3) accessibility in multiple languages”( Rayman-Bacchus and Molina 2001).

Chalwon Kim (2004) did a research to recognize problems and solutions related electronic commerce in the tourism industry in Korea. Inform. The findings showed that benefits of e-commerce from the view point of cutomers are : providing easy access to information on tourism services, providing better information on tourism services and providing convenience for customers. This research suggested that security of the e-commerce system and user-friendly web interface are the two key factors for successful tourism e-commerce practice

Representation of tourism place in the internet

In the tourism industry creation and promotion of destination images is the specific aspect of place representation. A destination image is the “picture” which those promoting a country-government travel bureaus, airlines, hotels, service industries, and travel companies- wish to portray to outsiders, particularly foreign tourists(Jenkins, 1999). The destination image reflects how the promoter views the country and what aspects of its people, landscape, and culture they wish to recognize. In tourism industry promoters ary to present positive of the country’s history and attractions, to attract visitors. Guide books, brochures, maps and websites are the products using by promoters to entice visitors(Price, 2008).Because of the popularity of using internet as the primary information source, among tourists ,travel information mediums, such as travel websites are important destination image indicators. The number of tourists that use internet to find destination information is increasing dramatically . In the other hand internet has become the major information source for traveler (Doolin, Burgess, & Cooper, 2002; Gursoy & McCleary, 2004; Price, 2008; Wiig). A website looks to be a major tool to conduct business in the tourism field( and, probably, it will be the only one in the future) tool to conduct business in the tourism field (Doolin, et al., 2002). Jackson and Purcell (1997 p. 220) note that the internet allows users (i.e. tourism companies) to present information to their target audience “without an intermediary to censor or structure the data in either content or form.” In their analysis of the websites of states once part of Yugoslavia, they found that the states used symbolic imagery and text to “strengthen the user’s perceptions of place” (Purcell,1997 p.235).So tourism providers need to understand how to maximize the persuasiveness of their websites. In the other hand the principal role of destination website is affecting travel- related decision making, converting potential tourists to real visitors .

Because of high competition among travel and hospitality , market leaders and followers should differentiate their websites by developing creative measures to attract and satisfy customers (Pastore, 2001). Pastore (2001) noted that leading travel companies have been absorbing online customers, gaining purchase decisions and building a satisfying experience , so creating customer loyalty and repeat purchase intention. It is essential for tourism companies to use new technological development and fullest potential of internet by continuously redesigning their websites ,creating ease of use and more personalization(Baloglu & Pekcan, 2006; Connolly, Olsen, & Moore, 1998). Because of high rate of competition among tourism industry, importance of website design as a marketing medium is becoming increasingly important . Web should not be only considered as an communication channel for decreasing physical interaction but also as an advertising medium(Rowley, 2004). Effective web design leads to attract, entice, and retain the online traveler(D. Kim, Morrison, Taylor, & Lee, 2004). There are some factors which, contributes to the proliferation of travel on the internet including: making websites easy to use, improving the tourism website information, improving the functionality of travel sites like advance check in, printing of flight status check and using the software that has designed to anticipate users’ wants based on their travel history and preferences (Transportation Group International, L.C.,2002).

Doolin, Burgess, and Cooper (2002, p. 557) state that”the internet, which offers global reach and multimedia capability, is an increasingly important means of promoting and distributing tourist information. Destination websites have developed to market and promote local, regional, or national destinations(Blain, Levy, & Ritchie, 2005; Palmer & McCole, 2000).After introducing first travel websites in the mid-1990s (Blain, et al., 2005), gaining these benefits were expected including: increasing market share, absorbing new customers, retaining more customers and increasing customer satisfaction (Sussmann & Baker, 1996).

Destination websites have been and continue to be challenged online particularly with regard to their level of sophistication, quality of websites, diversity of travel websites, as well as online marketing and promotion (Hudson & Lang, 2002). The result of a study done by Choi, Wong and Fesenmaier (2006) revealed that design of destination websites, promotional strategies and customer relationship management programs have effects on success of web-marketing strategies. Tourism websites use online marketing in different capacities. For instance ,Hudson and Lang(2002) stated however ease of use factor that enables visitors navigate quickly through websites ,has noticed only in few tourism website designs. Another example is that some destination websites are still use elementary level of website features, without style and elegance , displaying information in a brochure-like mode, and low level of interaction ( Wang & Fesenmaier, 2006). For instance destination websites should have deep information mostly regarding to attractions, shopping, restaurants, accommodation, and directions. It is worth considering that some tourism websites have advanced and effective features compare with their competitors. Interactivity , personalization, e-commerce related capabilities , and recommendation capabilities are some ways to increase the level of sophistication of travel websites (Wang & Fesenmaier,2006). Furthermore, “the content of tourism destination websites is particularly important because it directly influences the perceived image of the destination and creates a virtual experience for the consumer” (Cooper 2002, p. 157). When visitors are new to the website and destination, experience and judgments made from surfing the website influence the overall image of the destination and the decision making process of whether or not to travel to the destination. If the destination image portrayed on the website is not satisfactory or the website is not well-designed and contains insufficient information, travellers are less likely to form a good impression towards a destination which, in turn, negatively influences the decision making process. There is a relationship between a positive experience and judgment formed through interaction with the destinaqtion website and actual visiting (Bar, Neta, & Linz, 2006; Borkenau & Liebler, 1992; Kenny, Horner, Kashy, & Chu, 1992; Zebrowitz & Collins, 1997). For example Wu (2010) analyzed 61 local tourism government websites in China and evaluated the effectiveness of the local tourism e-government with content analysis from the following aspects: website usage, administrative agencies, administration affairs, information service, administration service online and website design. The research suggested some improvements for the tourism government including: providing electronic map, connect telephone and multi media for download, building bbs or forum for advice, improving declare online for tourism practitioners and setting up feedback mechanism, making the website more attractive to enhance the usage efficiency.

Website design

It is important to indentify which factors lead to the success of a website. Web design is a key factor for the website success (Flavian, Gurrea, & Orus, 2009) and it is necessary for companies to compete in the extremely competitive World Wide Web (Liang & Lai, 2002; Ranganathan & Ganapathy, 2002; Tan & Wei, 2007). The website designing has been studied from different points of view(Childers, Carr, Peck, & Carson, 2001; Hoque & Lohse, 1999; S. Kim & Stoel, 2004; Liang & Lai, 2002).Web designing is “the process of creating an artefact with structure of form which is planned, artistic, purposeful, and useful”(cato 2001 ,p.3). A successful website is the attractive, trustworthy, dependable, and reliable for customers (Liu & Arnett, 2000). From a consumer point of view , all these characteristics should be considered in website designing in order to increase online visits or purchase intensions (cato 2001). Following this concept Flavian (2009) did a research to identify website aspects that influence users’ perceptions and behaviours from a marketing point of view .An extensive literature review was developed emphasising the special role that web design could play in the interaction user-interface. Besides, the methodology related to benchmarking allows firms to know the best practices and to learn some key lessons for developing their business online. The research proposed a guidelines for the development of successful e-commerce websites. Appearance ,Navigation, Content and Shopping process are the key aspects that shoud be considered in order to improve e-commerce websites. In the guidelines some tools have introduced for each aspect . Guidelines are basis for development of websites but some website designers without considering visitors’ needs , only notice to challenges of technology, designing sophisticated websites (Zhang 2005). Industry experts and consultants have proposed different frameworks and guidelines for designing commercial websites , but there is no unified view on its key characteristics .The key characteristics of commercial websites can be divided to design and content. Information, features and offering services by website consist content, while the way of presenting content to customers refers to website design(Huizingh, 2000). Buying process can be divided to two stages: information evaluation and information search. Purchase decision process is affected by the content of website. The website information should be sufficient for decision making, but not too much , resulting in information overload (Taylor & Joudrey, 2004). Users should be allowed locate and select merchandise that best satisfies their needs. Not only information content but also navigation tools influences the usefulness of websites. Navigation toolslike search engines help users to locate merchandise and related information in a website (Krug, 2005).For example users of Cdnow.com can search based on the song title, album title and artist name.

Before final purchase decision , consumers tend to evaluate of alternatives. Online shopping creates the opportunity to comparison of alternatives. Decision aids have positive influence on online purchase decisions .Some websites like Excite and My Simon offer decision aids , helping users for making product-price comparisons. For instance in Dell’s web site (www.dell.com) , consumer custom build a computer and compare prices for different computer configurations. Another example is Priceline website which offers calender as a decision aid. Decision aids can be useful in tourism destination websites. For instance destination website n can offer tools for trip-price comparisons based on different accommodations etc. Another significant different between traditional retailing and online selling is related to the extent of interaction between customer and seller. Commercial websites should serve electronic interactivity by means of email and frequently asked questions (FAQs),answering questions about products and services or payment. However consumers visit websites with FAQ more than websites without it, FAQ section and interactive email are not seen in many websites. Traditional FAQ sections helped users a little ,offering no assistance and information), flexible interactioninterface, etc(Yang, 2009).

Despite of internet technical developments Such as electronic signatures ,Security of the transactions is one of the common concern in online shopping . Since perceived security have direct effect on online buying intention , some commercial websites offer telephonic transactions or checks and individual accounts (Grabner-Kraeuter, 2002). As it mentioned above website design affects on attracting , sustaining and retaining the interest of a customer at a site. The design have the same importance that content have. Ease of navigation, page download time and improving the visual appeal of websites by using multimedia are the principals should take into consideration for website designing. Out of these factors , ease of the navigation is the most important one(Srikant & Yang, 2001).Today websites are becoming more complex and users have difficulties to find desired information, spending too much time ,surfing webs(Kilfoil, et al.). To reduce the amount of irrelevant information and information overload , the common used tool is site map. The website information structure is defined by map, helping users to adjust the scope of their search. Some websites offer personalized sitemap which helps visitors’ navigation (Toolan & Kusmerick, 2002). The other tool that websites can add to help users finding information is search toolbar. Despite the popularity of search toolbars, irrelevant and not sufficient information may be resulted(Han & Kamber, 2006). The third solution to prevent overload and unwanted information is intelligent navigation aid tools, dividing to recommendation systems and adaptive website techniques . Some recommendation systems are collaborative filtering, content-based recommenders, utility-based recommenders, knowledge based recommenders, and demographic recommenders (Guttman, Moukas, & Maes, 1998; Rich, 1979; Towle & Quinn, 2000). Other one is adaptive website.The word “adaptive” refers to “the ability of the website or tool to change its behavior based on the way it is used”(Schafer, Konstan, & Riedi, 1999).Two ways for building adaptive websites are: improving the website design as a whole or providing personalized navigation aid for individual visitors (Spiliopoulou & Pohle, 2001).

In the past information quality or usability have been considered as the most influential aspect of tourism websites for perusing visitors but now new strategies are needed to use website as a persuasive tool (H. Kim & Fesenmaier, 2008). Figure 2.4 shows the progress of technology design(Fogg, et al., 2002). Foggs (2002) noted that it is important to understand how persuasive design of destination websites can be used to support conversion rates (converting site viewers to site users and moderate users to heavy users)and to create favorable images of destinations. The website that successfully persuade travel information searchers elicit a click-though (the desired outcome), which gives the website a second opportunity to interact with the searcher . When they first view the website’s homepage, searchers automatically evaluate the website in terms of relevance and usefulness to their trip planning task.

Make Technology Persuasive

Make Technology Usable

Make Technology Functional

Figure 2.4 Progress of Technology Design

Persuasion is the principal role of destination websites and it is important to understand how to use website design to create favorable images of destination and convert more site viewers to customers .Design of the website can increase persuasiveness in order to influence Internet user’s beliefs, perceptions, and attitudes in the manner desired by Internet marketers (Fogg, et al., 2001). Zhang and von Dran (2002)(P. Zhang & von Dran, 2002) extended Herzberg’s dual structure model to an online context to investigate hygiene andmotivating factors in Web design. In accordance with Herzberg, Zhang and von Dran(2002) argued that websites should necessarily include hygiene factors to avoid user dissatisfaction, while motivating factors can be employed on an added-value basis to optimize user satisfaction and enjoyment. And collection), while additional features like credibility, fun/entertainment, visual attractiveness, multimedia, etc are persuasive factors since they enhance the experience affectively. Websites should always incorporate hygiene factors like like informativeness and usability, while additional elements (trustworthiness, inspiration, involvement, and reciprocity) of destination websites should be considered persuasive variables(Y. Zhang & Hiltz, 2003).

By contrast, good examples of a motivating factor are, multimedia features (virtual tour, podcast, etc.) that enhance website visitors’ satisfaction with their experience and motivate their return to the site. The absence of these features would not necessarily lead to dissatisfaction with the website, as long as hygiene factors are provided (Zhang 2000).

Kim (2008) studied the persuasive design of destination websites, proposing a conceptual model of first impression formation toward tourism destination websites .The influence of informativeness, usability, inspiration, involvement ,trustworthiness and reciprocity on tourists’ first impression were analyzed in this study. In the other word the purpose of the study was to investigate what persuasive design characteristics influence the formation of first impression toward destination websites. Result showed that informativeness is the most effective factor Perceived Persuasiveness. Destination websites must be informative and useful. In most cases, trip planners, however, tend to infer anticipated quality of information through website design. Thus, design of destination websites must be supportive for the contents. Certainly, informativeness must be conveyed, but a website that does not create a favourable impression at the beginning is typically not given a further chance to demonstrate its value. informativeness, inspiration and involvement have direct effects on a first impression, and impression is directly related to an intention to use the website for trip planning. These results suggest that the Limited Completion Group of trip planners is more influenced by the visual attractiveness of Web design and their choice of website is accordingly based on the extent of a destination website’s purely aesthetic appeal. In contrast, the Full Completion Group of trip planners is more likely to be influenced by the utility of destination websites. In other words, the more functional benefits the websites seem to provide, the more favorable their impression will be. This study identified six underlying dimensions of persuasiveness in destination websites, but it did not investigate the website elements that correspond to respective dimension of persuasiveness.

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Time has changed now, no one want be static people like to travel abroad to explore the world. It is in human nature to find more and more place to entertain him. The main reason behind this all revolution is; the life is becoming materialistic day by day. This trend is helping the many countries to grow their economic condition as well. Like in any country have historic places; now they are making these places more attractive to get more people visit those monuments. People visit different areas according to their on liking. Every city and country has various types of attraction for the visitors. As we can say people go to Egypt to see mummies. If we talk about London, London has lots historic and cultural places like museum, art galleries, monuments and forts.

Keeping in accounts all these points tourism has become a growing industry now and every country is trying to promote its tourism industry. In this assignment we would try to analyse the definition of urban tourism and its impact. How the tourism industry is growing in the urban area. We selected the Edinburgh the city of Scotland. We would try to elaborate the history of tourism industry of Edinburgh. How they are planning to make it more attractive for future. We also tried to cover all the attraction of Edinburgh and all statistics regarding industry. Our main focus on the problem of tourism in Edinburgh. In this assignment, we shall try to find out problems and will give the conclusions and recommendations.

2. Urban Tourism:-

The concept of urban tourism is very broad and it consists of all kinds of entertainment activities that are held in cities. “The improvement of urban environment and the perfection of all kinds of services and facilities are all great attractions to tourists” It consists of good and suitable transport links, well-blooming market, better trade and good atmosphere for shopping, latest and developed information and technology, great service and leisure, modern urban land rich urban culture. Therefore a lot of people decide different types of cities as a destination to spend their holidays and the urban tourism in those cities are well-known. (Zou and Tian, 2002)

According to Colantonio and Potter (2006) the tourism that is held in urban area of the city is known as urban tourism. Urban tourism consists of different types of the activities. Different people visit urban cities for different purposes. They like to visit historical buildings, tourist attractions, landscapes, art galleries, special events, to see culture and heritage and for leisure purposes. Urban city also offers a lot of activities to increase tourism and attract the people. All those things are the characteristics of urban tourist. The image of the city is very important for all types of visitor, they (visitors) have a lot of expectations like the behaviour and attitude of the community. If it is positive, it attracts the visitors again and again. In this way, the tourism growth increases of that city.

The cities change in public culture, architecture and design, education, urban planning, parks and leisure and public party which resulted from dramatic redevelopment of the city’s central business and historic district. Urban tourism increasingly generates images of heritage and identify that are consumed as much by residents as by visitors. The cities where the tourism infrastructure and marketing are largely build up. (Chambers, 1997)

2.1 Impacts of Urban Tourism:-

According to Law (2002) now a day, the urban tourism is growing rapidly in every country of the world. It is providing a lot of advantages to local people in many different ways. The tourism growth in urban areas has caused economic, socio cultural and environmental. They have both positive and negative impacts.

According to Mak (2004) urban tourism has a wide range of economic impacts in urban areas. The community plays an important role to create more and more tourism in their city and in this their economies go up and they are the people who get benefits. The tourism and community depends on each other. When the growth of tourism increases, the more people who come to visit the city, they spend their money in different ways like accommodation, food, transportation, shopping etc.

The positive impacts of urban tourism help to increase in local economy of the city and also increase the living standard of the people. The numbers of job created in local area in different sectors e.g. hotels, travel agencies, restaurant etc. It also helps to improve infrastructure of transportation and created much business opportunity in that area. There are some negative impacts of economy is in urban cities as well. In such type of city, it is very difficult to live because the living cost is too much because the rate of land and houses are very high. Sometime it causes the unemployment because of season tourism in urban city. People do not get minimum wages because of a lot of manpower is available. (Theobald, 2004)

According to Holden (2008) when we talk of the environment, we talk of the surroundings such as soil, water, air, vegetation, wildlife and other scare resources. Everyday we are made aware of the environmental issues in the newspapers, on television or by observing our own surroundings. Pollution of the land, air, rivers and seas are just come of the issues that we are faced with. Tourism and environment are closely linked. When tourist visit urban area, they come to experience the environment and its natural beauty such as the sea, beaches, ancient sights, the wild life and the flora and fauna (vegetation). It makes sense to protect it. The positive impacts of urban tourism are as follows:

All the natural environments attract the visitors to come in urban cities.
The local authority tries to improve more and more natural resources in the city and improves the look of city as well.
The negative impacts of environment on urban cities are given below:
Every type of pollution increases in urban cities e.g. air pollution, noise distortion and water pollution.
Natural lands are converted into the commercial areas; it is difficult to find landscapes and natural beauty.
Shortfall of natural resources like water.

According to Smith (2003) urban tourism has also impact socially. When a lot of visitors come to visit a particular area they leave social impacts on the region. The relation between visitors and residents get closer and when you go close to some one, you obviously influence to person which can be both positive and negative nature. The growth of tourism in urban city, attract but force as well to community to accept their culture and standard. The positive impacts of social and culture are as follows:

It helps to improve living standard of people. The urban city provides a lot of attractions and well managed infrastructure of tourism. When tourists come to visit urban city they belong to different ethnicity and urban tourism provides a lot of resident opportunities e.g. get together with good and friendly people, to explore the knowledge about their countries or cities. The tourists encourage their historical sights and culture.

Due to urban tourism, the local community learn a lot of positive things like the knowledge about world, different languages. Its helps people to understand different civilisation.

The negative impacts of social and culture:

In some countries drinking is not allowed but in tourism case people do drinking and it effect badly.
It also indulges under age people in drinking.
It disturbs the family structure of the place.
Many negative changes take place in values and customs.
Urban tourism also increases in crimes, usages of drugs and prostitution.
3. Edinburgh:-

Edinburgh is Scotland’s capital and most successful tourist destination. The Edinburgh is divided into Old Town and New Town. There are a lot of tourist’s attractions, rich museum collections, arts galleries. Edinburgh is the home to three national art collections and a number of galleries (Wordsworth, 2002).

Edinburgh City (Source: www. travel.webshots.com)

According to Shelby,(2007)Edinburgh is a beautiful and historical city of Scotland. Most of the traveller says that if you want to visit two cities of the Great Britain, one is London and second is Edinburgh. The city is known as for festivals. There is a lot festivals that held in the Edinburgh like films, books, comedy, drama, music, dance etc.

Famous Edinburgh residents include Harry Potter author J.K. Rowling, who has become one of the best-selling writers in history and wrote her first book in one of the city’s coffee shop. (Shelby, 2007) According to Parlett, Fletcher and Cooper (1995) “Edinburgh is going through a process of change and centre of attention. This city plays a vital role in refocusing of tourism in Scotland. The main thing in Edinburgh is its attractions and heritage”

3.1 Attractions of Edinburgh:-

The main purpose of destination is to provide leisure and facilities to the visitors. A tourist destination needs to have variety of attractions, events and entertainment that are value for money and keep an eye on the requirements of the visitors. (Blackman and Stewart. 2005)

Attractions have the ability to draw people to them and they are often the main motivation for travel. For example, if you think to about travelling to a destination, what is that makes it worth visiting? The beach? The shopping? All these examples of tourist attraction.

There are many sightseeing attraction in Edinburgh that are given below;

1) Edinburgh Castle 2) National Gallery of Scotland

3) Royal Museum of Scotland 4) Edinburgh Zoo

5) National Gallery Complex 6) St. Giles Cathedral

7) Royal Botanic Garden 8) National War Museum

9) Scottish Parliament Visitor Centre 10) Our Dynamic Earth Calton Hill

11) Prince Street Garden 12) Georgian House

13) Museum of Childhood

3.1.1 Edinburghh Castle:-

Edinburgh Castle Source: (www.michaelp.org, 2003)

Edinburgh castle is situated in the centre of the city. Edinburgh castle is one of the most famous historic and most visited attractions. Ever year million of people come to see this historical attraction. If you go to Scotland and you do not visit this castle, it means that your trip is not complete. There are a lot of events held in this castle like fireworks, World Heritage Day and many more. (Wordsworth, 2002)

3.1.2 National Gallery of Scotland:-

National Gallery of Scotland (Source: www.edinphoto.org.uk)

This gallery is designed by William Playfair in 1850-1857. The gallery has a good collection of paintings, prints, drawing, photographs and books of history. The gallery displayed chronological are complemented by appropriate period furniture and sculpture. Everyday most of the visitors come here to visit this gallery. (Dailey, 2005)

3.1.3 Royal Museum of Scotland:-

Royal Museum of Scotland (Source: www.nms.ac.uk)

The royal museum of Scotland is one of the most visited attractions. This museum displays of arts and science in the grand victorian cast iron building. Exhibits include natural history, archaeology, costumes and decorative art from all around the world. There are some new galleries that provides the vast collection of Scotland and it people. (Blackman and Stewart. 2005)

3.1.4 Edinburgh Zoo:-

Edinburghh Zoo (Source: www. travel.webshots.com)

It was built by “Royal Zoological Society of Scotland in 1913”. Edinburgh Zoo is one of the most visited places in Edinburgh. There are lots of things to see inside the zoo like birds, mammals, reptiles and many more. The zoo has different types of animals that have come from different parts of the world. It attracts all types of age group. (Shelby, 2007)

3.2 Tourism Statistics of Edinburgh:-

Edinburgh is the 2nd most visited destination in the U.K. every year a lots of domestic and international visitors come to visit Scotland and of course their first priority is to visit Edinburgh.

Approximately 45% international tourists visit to Edinburgh if the come to Scotland.

Many people visit Edinburgh because of its history and nearly 4 million people visit every year. The main reason behind this huge number of visitors the different type of festivals.

Edinburgh is the second city in UK and fifth in Europe to generate revenue per room.

Rooms to let in hotels are very high in UK is likely 76%.

The tourism industry has a big contribution in the employment, the industry providing job approximately 31,000 people.

(Source: www.edinburghguide.com. 15 April 2009)

3.4 The Edinburgh Festivals:-

The Edinburgh festivals are well known in all over the world. “It was started in 1947”. There are a lot of festivals that held whole year. Million of people come to attend those festivals from all part of the world. (Whyte, 1998)

According to Dailey (2005) the first three weeks of august is very important for international festivals. This month is filled with performers and entertainer that come from different areas of the world to perform and entertain the visitors in Edinburgh. Those festivals offer “exhibitions, music, theatre and dance” the famous musicians, artists, actors, singers, dancers and comedians come to Edinburgh to perform.

Some of the most festivals are given below;

The Festival Fringe

Edinburgh Military Tattoo

Hogmanay

Science

Jazz

3.4.1 The Festival Fringe:-

Fringe festival is the world largest art festival. This festival held in August and presents dance, theatre and music shows that are preformed by good performers. The Fringe festival is a great gathering of artists, musicians, actors and comedians.

3.4.2 Edinburgh Military Tattoo:-

Edinburgh Military Tattoo held in the “castle Esplanade” every year in August. It offers the music of the massed pipes and drums. Near about 0.2 millions people come to watch this festival.

3.4.3 Edinburgh’s Hogmanay:-

Edinburgh’s second great festival is Hogmanay. The festival takes place Dec-Jan. Near about 0.5 million people attend this festival. It is the Scottish New Year celebration with a spectacular Fire Procession and fireworks, a carnival and open-air concerts running for several days.

4. Problems of Edinburgh:-

There is no country or city in world that has not any problem. Those problems are directly affected to economy. The best way to sort out those problems and improve as much as we can. Edinburgh is a nice place to visit. It is a developed tourist’s destination Although Edinburgh has not too many problems but still some problems exist that are given below;

4.1 Edinburgh and Crime:-

Security is very important for the growth of tourism. The regions where the tourism is very high, there would be also a negative aspect that it will also increase the criminality from. Prostitution, pick-pocketing, drugs and petty crime are very common problems in major tourist destination. Crime has always been a threat to travellers because people are vulnerable when they are away from their home. They may be carrying a lot of money and expensive things. They do not know too much about the area and surroundings. Tourist have always made easy picking for thieves, the thieves, know that when they will go back home, they will reclaim the theft on their insurance. (Blackman and Stewart, 2005)

UK has many places to visit and Edinburgh is one of them. It seems very safe and quiet place for visitors actually, it is not that safe because it has lots of clubs and pubs in that area. It is safe to walk in this area but do not go in alley street. If you want to go there must be some people to around you. Ever tourist place has same negative factor with its all positive factors like Edinburgh. It is very clear tourism is a growing industry in Edinburgh, according to the statistics of Edinburgh tourism authority. But with the passage of time like other tourist place some fatal diseases are also coming to see. It is not only Edinburgh almost every tourist place. Like particularly. If we talk about Edinburgh people are being addicted to use of drugs. Due to open environment many other diseases like HIV also has been reported. Not only HIV been reported it is also going into dangerous figures. Moreover, the usage of cocaine and heroine has been come into records. There are well stable bodies who are managing all these activities. It is not only terrible for the people but also a challenge for the police as well to control all this. Source: (www.news.scotsman.com, 13 April 2010)

According to Hanna (10 March 2010) recently, near about 60 people arrested which were involved in suspicious activities and the concerned bodies seized the assets of ?400.000 of those criminals. They had some drug and weapon too.

The new town of Edinburgh is considered the high criminal area. This town is classified as the second in terms of crime in Scotland. It is situated behind the Amberdeen Union street. There are a lot of bars and nightclubs are increasing the numbers of crimes in this area. Due to high crime rate, 5274 offences have recorded in this area.

Source: (www.edinburghhnews.scotsman.com, 14 September 2009)

4.2 Transport Problems in Edinburgh:-

Transport plays very vital role in tourism industry. The good facilities of transport help to maximize the industry’s potential. The transport links is very important in success of tourism product. The international visitors depend on the transport to get in the cities and attractions because they do not know about the destination too much. So, the first priority of the destination management is to provide good transport facilities and services. In this way they can explore more and more about destination. Most visitors have not too much time to spend in destination; they want to get in destination as quickly as possible. (Blackman, Smith, Rowe and Stewart, 2005)

Infrastructure and transportation plays an important role in tourism of a particular area. Edinburgh is the second most visited city in United Kingdom. Every day a lot of people come to visit this city. The traffic growth is increasing day by day and it is creating more problems in Edinburgh. The economic growth of Edinburgh is increasing very rapidly from last a few years. This economic improvement has made a lot of positive and negative changes. The positive changes are, it created thousands of jobs, which are why lots of people travel to Edinburgh on a daily basis. They travel in cars and buses. The main roads of Edinburgh are very busy. Most of the travellers from different cities come to Edinburgh from different source of travelling like trains, cars, buses and aeroplanes. Most of them come in cars and buses which is causing congestion on the roads. That is why the congestion on the road has been increased and nearly it increased up to 60%.

Source: (www.scottish.parliament.uk, 21 August 2002)

The Scottish Govt took a step to resolve the diversion tram issues. This was a good step to handle all the traffic issues. But, there are some issues between the Scottish Govt. and the construction firm. The work has been suspended till the problem is resolved. All the utilities works mostly completed but the laying of tram are suspended.

Source: (www.transportxtra.com, 10 March 2010)

4.3 Tourist’s Problems in August:-

There is a lot of tourist’s attraction in Edinburgh. Tourists come to visit whole year. There is no particular time period for tourists. There are lots social and cultural festivals in the august of every year. These are very big festival and lots people come to attend these festivals form the whole world because of this massive attendance of people the tourism board of Edinburgh is unable to control the number of people that is why they close most of the tourist points and open them in Sundays. (Dailey, 2005)

The second main problem is many people visit Edinburgh in August and they book the hotel and travel tickets. In the result the price of hotel rooms and tickets automatically goes up. Not only prices goes up but also unable to book room and travel ticket. The prices of other tangible item goes up as well. (Wordsworth, 2002)

5. Conclusions and Recommendations:-

In conclusion and recommendations we need would focus to resolve the problem which the destination facing in the tourism industry. There are lots problem which need special attention to rectify for the enhancement of tourism. Although, tourism is growing in Edinburgh but the problems are also. The main problem is transport. The numbers of tourist are increasing day bye day but the transportation facilities are not enough to meet all the requirements. Infrastructure need to improve to provide better transport facilities. They can handle the traffic problem to apply the congestion charges on busy area. They should encourage visitors and local people to use public transport.

The second main issue is crime, although, the crime is not high enough but when more tourist visit Edinburgh they have different nature and the nature can be any type. People are being addict of drugs. Tourists come to these places for maximum entertainment. When they come to these places they use alcoholic drinks and drugs. With all these issues the prostitution is also increasing and is becoming common. The pubs and night clubs open till late night and they cause problem for local residents. In August they arrange some international festival in Edinburgh and these event gives help to criminals to promote their activities.

Edinburgh attracts the people to visit Scottish history. There are lots forts and monuments which represent the Scottish history. Every age group visit the Edinburgh like 10 to 70. There are many other attraction points are as well should be identified to visitors like Edinburgh castle and National gallery of Scotland. A big population of the world is consisting of senior people and they should do some thing to attract them as well.

6. Bibliography:-

Whyte, D. (1998) Landmark visitors guide (Scotland), Landmark Publishing Ltd., Derbyshire

Martine, R. (2008) Edinburgh, Apa Publication, Singapore

Reid, D. (2002) The rough guide to Edinburgh, 3rd edition, Rough Guides Ltd., London

Yeoman. I., Robertson, M., Ali, J. and Durmmond, S. (2003) Festivals and events management: an international arts and culture perspective, A Butterworth-Heinemann, Oxford

Maclellan, R. and Smith, R. (1998) Tourism in Scotland, Thomson Learning, London

Stevenson, R., L. (2009) Edinburgh, Bibliolife LLC, U.K.

Howie, F. (2003) Managing the tourist destination, Thomson Learning, London

Vanhove, N. (2004) Economics of tourism destination, Butterworth-Heinemann, Oxford

Universal Studio is 20 hectares in size, occupying the easternmost part of the 49-hectare Resorts World Sentosa. There are a total of 24 attractions, of which 18 are original or specially adapted for the park. The park consists of seven themed zones which surround a lagoon. The park is currently divided into seven themed areas: Hollywood, New York, Sci-Fi City, Ancient Egypt, The Lost World, Far Far Away and Madagascar, each zone is based on a blockbuster movie or a television show, featuring their own unique attractions, character appearances, dining and shopping areas. The park features the world’s tallest pair of dueling roller coasters that are based on the popular television series, Battlestar Galactica; a castle from the world of Shrek and Monster Rock, a live musical show featuring the Universal Monsters. Universal Studio has over 30 restaurants and food carts, together with 20 unique retail stores and carts located around the park. Attractions premiering are marked “Premiere” and dining outlets that are certified Halal are marked with “Halal”.

3. What are the current services provided?

Universal Studio has a number of recreational facilities, Breathtaking and stimulate, so impressive. The following six not to be missed: Transformers, Battlestar Galactica, Sherk 4D theater, Steven Spielberg’s special effects studio, the Crate adventure of Madagascar, Hollywood dreams.

Firstly, Transformers.

Transformers this project in Universal studio opened in December 2011.The process itself is not only thrilling but also fun.

Secondly, Battlestar Galactica.

It is one of the highest of the two-track roller coaster in the world, if you enjoy the stimulation, you absolutely cannot miss it.

Thirdly, Sherk 4D theater.

This is the sequel “Shrek” won the Academy Award for best animated feature, in this original three-dimensional movies, everyone can enjoy whole-heartedly of surprises in the movie world without leaving the seat.

Fourth, Steven Spielberg’s special effects studio.

It is chaired by Steven Spielberg, designed specifically for Singapore, with the magic of the movie, you can enjoy a different charm of New York City.

Fifth, the Crate adventure of Madagascar.

This is a popular indoor amusement projects, very interesting and exciting.

Finally, the Hollywood dreams.

14 Magnificent floats, together with the special effects, tailored music, as well as the widely popular characters, plus more than 100 performers chic luxury apparel, and add unique charm to Universal Studios of Singapore.

4. What are your experiences when using such services? How do you feel? Any areas to improve

Personally, I feel that it is an extraordinary and enjoyable to experience such wonderful things. When you are undergoing these by yourselves, you would feel extremely not only amazing but also unforgettable. And in my opinion, I suggest that controlling the amount of people to visit the place every day is necessary because that could make the tourists feel more relaxed.

5. Do you feel the staff needs training to further improve their service?

I would like to say that I do feel the staff needs training to further improve their service; it is because it will help a lot in some ways. For example, it will help to enhance customer’s satisfaction. Also, it will encourage the staff to improve themselves and make them feel self-confident thus they can service the tourists better. Moreover, it will indirectly affect the economic efficiency and popularity of Universal Studio.

6. If you are the director of Marketing of this attraction, what are some of the ideas you would like to introduce? You may ignore the budget but use wild ideas to impress the Lecturer.

We can build one of the largest ecological playgrounds, which are not only large recreational projects, Zoo, Underwater World, a Singapore plant-based forest landscape health district will also be build. According to the plan, the area of the ecological playground on acres of rides inside the top equipment are imported from abroad, we could accept visitors of five million people per year after the completion .

Or,

We can build a water park; there are a lot of different kinds of game projects, stimulating, risky, relaxing, and suitable for children and the elderly. We need to find some young people to work inside the park; they can make sure the security, meanwhile they also able to bring vitality and young’s atmosphere to the park.

7. In each of your idea, you have to identify what kind of income you think the attraction can get?

In my opinion, I think the mainly income is from young people. It is because that young people nowadays are becoming more relaxed about life, they do things they want to do in order to enjoy their lives, and they spend much more money to things that attracts them compared to the past. So it will be easier to get money from the young.

8. Another challenge will be how to get the visitor spend $100 or more on that day?

We can charge for the ticket when they enter the door, and then charge a reasonable price for each programme, and we can also provide places to sell some snacks and drinks, restaurant prices due to increase a little, at the same time ask some staff to do promotional activities so that visitors to buy souvenirs conveniently.

in the short termi??less than 1 yeari?‰i??what do you think the attraction can boost their marketing effort?in the long term(3 years and beyond),what do you think the Marketing Dept should create to make the attraction sustainable?

Universal Studios Singapore is Southeast Asia’s only Universal Studios theme park. It covers an area of about 20 hectares, including 21 amusement and performance project, the main theme of the Universal Pictures to create, such as Jurassic Park, Shrek and mummies, also including Battlestar two-track roller coaster and the world’s first to Madagascar the theme of the indoor rafting attractions. Sentosa Resorts World is the second phase of the project, from the third quarter of this year, after another debut, including the aquarium and marine life park. So keep the attractions will attract more tourists come to visit and play.

Universal Studios recently new facilities enabled, every 28 seconds there is a “wooden box”, each can carry 20 passengers. To 0:15, it’s queuing time is also 85 minutes, with the Universal Studios other popular facilities about 90 minutes waiting time, not far off. Madagascar: A Crate Adventure is the first design based on the movie “Madagascar” rides. Visitors ride in a “wooden box”, drift with the flow, you can visit the water on both sides follow the example of Alex the Lion, zebra Horseshoe River Magnus LuoLiya, giraffes Mailman School of movie characters 89 moves the robot visitors rendered movie screen 12 feature from Dream Works Animation film shooting, especially animated fragments for rides. Each adult costs $ 60, children and the elderly fee are 30 In short, this facility enabled a significant increase in the curiosity of tourists, so bring a substantial income. So, in the next 1 to 3 years, this facility will inject fresh blood into the Universal Studios. Because the managers of innovation, create the facility, in order to ensure that the Universal Studios excess funds in the next few years, and is ready to buy the new facilities adequate preparation

Conclusion

Universal Studios Singapore began trial operation in March last year to attract tourists to the first nine months of about 200 million people. Universal Studios Singapore this year, is expected to attract 400 million visitors, management said. Sentosa Resorts World correspondingly increase the number of visitors is expected to increase from 15 million passengers to 16 million passengers. Resorts World Sentosa president Chen Qide, Universal Studios Singapore visitors, foreigners accounted for 75%, Chinese tourists accounted for about 10-15%. I would like to Universal Studios in a few years after the market is growing, it is possible to open other branches in other countries such as China

The United Kingdom is one of Europes most influential country. United Kingdom is a sovereign state positioned near the north-western coast of continental Europe (Appendix 1), comprising of England, Scotland, Wales and Northern Ireland. The UK is surrounded by the Atlantic Ocean, the North Sea, the English Channel and the Irish Sea.

The UK is one of the 27 member states of the European Union and is spread across about 243,000 sq. km (about 94000 sq. miles). The UK has the world’s seventh largest economy by nominal GDP and eight largest economy by purchasing power parity. It was the world’s first industrialized country Mathias (2001).

Tourism is one of the foremost industries in the UK size wise. According to statistics by Wikipedia, the UK is the world’s 7th biggest tourist attraction behind France, USA, China, Spain, Italy and Turkey, with approximately 29.2 million visiting in 2011. In 2011 15.3 million visitors spent time in London with an estimated spending of over ?9.4bn that represents 52% of all inbound visitor spending calculated by VisitBritain in 2011. (Appendix 2)

It is predicted that UK tourism could grow to ?188b within the next decade that is 60% by 2020 and the number of jobs related to tourism could increase 264,000 to 2.89 million, according to VisitBritain.

Recently however, the UK tourism industry though having a great potential of growing faces some challenges and a serious competition from other most visited tourist destinations.

CRITICAL ANALYSIS:

UK tourism industry can easily be analysed critically with the help of Michael Porter’s five forces model. Porter in his five forces model refers to an organization but can be applied to a certain industry via which we can determine the competitive strength and weaknesses of that particular organization/industry. (Appendix 3)

PORTER’S 5 FORCES:

Porter’s five forces include:

THREAT OF NEW ENTRANTS:

When it comes to tourism, people want to explore new fascinating countries and that is why new entrants catch the attention of travelers. The UK tourism industry faces threat by new entrants such Turkey, Germany and Egypt while Malaysia and Mexico have attracted many tourists in 2011.

The estimated number of international tourist arrivals in the UK till June 2012 were around 29.2 million which was 28.3 million in 2010 and the change from 2010 to 2011 had an increase of +3.2% according to UNWTO (2012).

In 2011, Turkey climbed up in the most visited tourist destination above the UK to become the 6th most visited tourist destination in the world with an estimated number of 29.3 million tourists which was 27 million in 2010 and showed a massive +8.7% changed from 2010 till 2011 mentioned in Tourism Highlights by UNWTO (2012).

The UK is facing a serious competition from Germany, which had 28.4 million visitors in 2011 and has shown +5.5% change from 2010 until 2011.

THREAT OF SUBSTITUTES AVAILABLE AND COMPETITIVE RIVALRY WITHIN THE INDUSTRY:

Most of the tourists look for alternative destinations when they face problems in getting visas, bookings etc. and that is when substitutes get the upper hand. In Europe, Spain, France and Italy have been the biggest competitors of the UK tourism industry from the beginning, attracting huge amount of interest from tourists all over the world.

France, which has been the most visited tourist destination and a country with a romantic image, still leads the raking of tourists visiting with approximately 79.5 million and is third in receipts with US $54 billion. Spain is second on the earners list with US $60 billion with approx. 57 million arrivals in 2011. Italy, ranks 5th with 46.1 million tourists in 2011 and receipts of $43 billion in 2011 UNWTO (2012).

BARGAINING POWER OF BUYERS AND SUPPLIERS:

There is a lot of influence of buyers and suppliers on a tourism industry. In this report, buyers are the main tour operators of the product here, which is tourism. There are many tour operators working in the UK that offer competitive prices to tourists and discounts such as Thomas cook. They identify new locations/places and possess the power of convincing tourists to visit those destinations that has a lost cost attached to it.

For every tourism industry, three “A’s” are very important and this similar is the case with suppliers. The three A’s are:

Attractions

Amenities

Access

Attractions include those places that are either famous for their natural beauty or are built in such a way that attracts tourists. If such places are owned by the government/owners, tourist should be allowed to visit them and the owners should always welcome them. There are many places in the UK that attracts a lot of tourist just because of their natural beauty or the way they are being constructed like

The Tower of London, Windermere Boat Cruises, Flamingo Land Theme Park and Zoo, Royal Botanical Gardens, Stonehenge, Eden Project etc. Amenities include basic conveniences for tourist such as hotels, guesthouses, motels etc. A lot of funding is needed for this and there has to be a proper look after of these facilities. Last but not the least, Access includes means of travelling. The UK has an excellent transportation system that includes airports, railways, busses, motorways etc. London is famous for its magnificent underground tube system, which serves almost 3.22 million; people daily UNWTO (2012).

PEST ANALYSIS:

UK tourism industry can also be analyzed by doing PEST analysis. Which comprises of Political Factors, Economic Factors, Social Factors and Technological Factors.

POLITICAL FACTORS:

Political factors are those in which there is governmental interference such as laws, policies, tariffs, good and services, education, infrastructure etc. When we talk about businesses, political factors plays an important role in the regulation and operation of it. Political environment of the UK is fairly stable.

There have been minor ups and downs with the issues regarding the UK joining EU and accepting Euro plus European Union’s expansion and the UK supporting USA in its terrorism campaign, which has adversely affected its political stability. Other key issues includes the Visa Processing by the UKBA, VAT on tourism services, Air Passenger Duty etc.

VISAS:

Over the past few years, there has been a lot of new rules and regulations by the UKBA because of which many tourists face problems in getting their visas even after paying a hefty sum in visa fees. A short term visa to the UK costs ?78 which is ?25 more than that of a Schengen Visa (?53) that gives an access to 25 counties and this is why 50% more visitors from India travel to the UK via France. From 2000 till 2009 the revenue generated via tourists from other countries has increased by 37.4% (in USD) which when compared to France (49.7%) and Germany (85.6%) is very low, according to Tourism Alliance (2012).

Those tourists that come from counties other than the EU or those who require a visa are about 11% of all tourist that visit the UK (3.4m) and spend a lot on their travelling expenses per trip that contributes to an approx. ?3 billion to UK’s economy, Tourism Alliance (2012).

VAT:

According to recent statistics by Tourism Alliance (2012) , the UK is one of the only four (others include Denmark, Slovakia and Lithuania) out of 27 EU member countries that charges full rate VAT to tourist on accommodations which is the second highest rate of VAT in Europe. This can be in a sense harmful to the UK tourism industry when compared to other tourist destinations across Europe. If the UK reduces taxes on accommodations and famous tourist destinations, it could result in a profit of ?2.6 billion over the next 10 years according to Deloitte/Tourism Respect. Other locations that have a full rate VAT in the UK includes amusement parks, museums, theaters, shows and cinemas and the UK also charges full rate VAT on restaurant meals which in EU countries averages up to 8.8%., while the average rate of VAT on accommodation in Europe is 10.3% as per statistics of Tourism Alliance (2012). When we look at competitors of UK, France in a couple of years after reducing VAT on restaurant meals from 19.6% to 5.5% showed that there were about 62,700 new jobs in that sector Tourism Alliance (2012) which is a clear indication of what other countries are trying to achieve and change in their tourism sector.

AIR PASSENGER DUTY:

IATA predicts by looking at the current figures that in 2014 there will be an estimated 3.3 billion tourist travelling via airplanes of which 2 billion will be travelling domestically. In November 2010, the UK Government increased APD of up to 55% and statistics from Tourism Alliance study in 2012 shows that APD has jumped to 650% for passengers travelling in economy class and 750% for those travelling in business class in the previous 5 years that contributes approx. ?2.2 billion yearly in revenue to the Government. A report by Oxera for Airport Operations Association in 2010 showed that if the government replace APD with that of EU, the Gross Value Added would show an increase of ?4 billion and there will be approximately 100,000 more jobs.

ECONOMIC FACTORS:

Economic factors are those due to which the spending of tourists can be affected. It includes inflation in the country, employment/unemployment statistics, Exchange rates, GDP etc.

At the beginning of inflation that started to take place in second quarter of 2008, shortage in arrivals was reported and the inbound tourism of UK fell by 5% according to the Euromonitor International Figures. When the inflation struck in 2009, it affected a lot of business and tourism industry was one of those. People living in the UK preferred to spend their holidays domestically and the number of tourists from abroad also shown a decline. The Euromonitor International Figures that were recorded in 2009 showed that there was an approx. 12% decline of people travelling abroad from the UK. The inflation rate of the UK, which was last recorded in November 2012, was 2.70% according to ONS. (Appendix 4)

In a report published by UKCES in 2012, it is mentioned that tourism accounts for approximately 6% of UK’s GDP and has given employment to approximately 2.5 million people. Each UK nation has a tourism strategy that aims to ‘raise the ambition of tourism over the next decade’ (People 1st, 2010a).

Exchange rate and the fluctuations in currencies also play an important role in the spending patterns of tourists. The comparison of pound sterling versus euro has contributed a lot in the Britons spending more when they travel to other European destinations and Experts have noticed that the euro being cheaper than pound sterling has made it cheaper for the Britons to travel on holidays to European countries (Hall, 2012). The total UK tourism spend by sector can easily be seen in this image. (Appendix 5)

SOCIAL FACTORS:

The style of living of people and the cultural aspects that mainly comprises of population, growth, trends, careers, how safe the place is where they are living and being cautious about their health are generally considered as social factors. Tourists from other countries may not know much about the traditions and customs of the country they are visiting that may prove to be a problem at times.

Some impacts of such social factors mentioned in a report of Travel and Tourism by Ann Rowe, John Smith and Fiona Borein in 2002 suggests that it will be good for the local people as well as the tourists to get together and learn more about different lifestyles which can be beneficial to both the parties as there is a room for improvement in the sectors of infrastructure, health and education, sports, traditions, heritage etc., as London is main hub of people for across the globe.

In recent time’s people of the UK and the tourists are concerned about their safety and when travelling to the UK the riots of 2011 served as a minus for the tourism industry at that time. According to the Daily Mail UK, in India the editor of a magazine warned his followers in twitter that they should avoid coming to the UK at all. Due to these riots, many questions were raised on the safety and security procedures for the upcoming 2012 Olympics.

TECHNOLOGICAL FACTORS:

Technology plays an important role in the development of any business or industry and when a certain business provides facilities and are equipped with latest technology it creates a better relation between them and the customers. Bookings tickets and online holiday bookings have really excelled as the time progressed. According to ONS (2011), wireless hotspots in the UK were accessed by approximately 4.9 million users and 77 per cent of households had internet access.

OPTIONS AVAILABLE TO THE UK TOURISM INDUSTRY AND RECOMMENDATIONS:

If the UK wants to compete with the other famous tourist destinations across Europe and on the list, first of the few recommendations would be to reduce the visa application charges and restrictions along with the APD and bringing them on the same level as that of other European destinations because a family comprising of 4 members from India/China pays a hefty sum of ?612 as their Visa and APD charges when travelling to the UK, Tourism Alliance (2012).

Tourism Alliance (2012) in their report show that when in 2009, Taiwanese visitors were granted visas to the UK, visitors grew by 39% and the revenue obtained from them increased by 155%.

Another report by Tourism Alliance in which it is clearly mentioned that APD has already cost 23000 people their jobs in last seven years and if it continues to increase at this level by 2017 it would have resulted in ?1.1 billion loss and 6000 more jobs.

Secondly the high VAT that the UK charges to its tourists, Tourism Alliance in 2011 predicted that if VAT on tourism is reduced to and brought in alignment with that of European nations, the UK tourism could earn approximately ?1.3 billion per annum that is 7% increase and since this report looks at the upcoming three years the short term losses in VAT receipts would be recovered in short span of three years.

CONCLUSION.

There has to be a better investment and marketing plans, events like the Olympics 2012, managing them successfully so that tourist get value for the money they paid, about which a report by Deloitte and Forecasting organization Oxford Economics has predicted that tourism sector is likely to grow by 3.5% per annum between 2010 and 2020. Together all the governing bodies and agencies should work in collaboration and every one of them can play their part in making the UK a better place to visit and explore.

Annotated Bibliography

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Globalization of the world market brings new possibilities as well as enormous hurdles for both established and young businesses. With the emergence of international entrepreneurship, entrepreneurs are concentrating on specific issues that they face operating in complex environments affected by diverse national cultures and institutional influences (Johanson & Vahlne, 2009). New global entrepreneurs depend on global networks for resources, distribution, and designs for growth. International entrepreneurs realize that success in a new marketplace requires agility, ingenuity, and certainty with a global viewpoint to acquire sustainability. Thus, global thinking is beneficial since foreign business clients can choose ideas, products, and services from many countries and cultures. However, entering into a foreign environment and culture can also become an obstacle psychologically in and of itself for the individual international entrepreneur (Mitchell et al., 2002). This paper will examine two areas that focus on the importance of cultural understanding in international entrepreneurship. The first will comprise of how entrepreneurs who expand into international markets must know how to think globally in order to design and adopt strategies for different nations as a business ventures into an uncertain market. The second part will explore how psychological adaptation of the individual entering a foreign culture is interconnected with the international entrepreneur.

Entrepreneurs can expand their business by participating in the global market; as every year thousands of small business enterprises are actively engaged in the international field. International entrepreneurship studies have started to focus on specific topics that confront entrepreneurs as they expand their new ventures (Zahra, Korri, & Yu, 2005). The definition of ‘international entrepreneurship’ in this paper will focus on the process of creatively discovering and exploiting opportunities that lie outside of a firm’s domestic markets in the pursuit of competitive advantage (Zahra & George, 2002); across national borders, to create future goods and services (Oviatt & McDougall, 2005). This meaning incorporates the process aspect of international entrepreneurship, which focuses on a central issue of why some individuals exploit international opportunities while others equally well placed do not act on them (Zahra, Korri, & Yu, 2005). Globalization is a process fuelled by increasing cross border flows of goods, services, money, people, information, and culture (Held et al., 1999, p. 16). However, the use of this term will refer to Guillen’s (2001) definition of globalization as a process leading to greater interdependence and mutual awareness among participants in general. Guillen (2001) combines the understanding of globalization as the intensification of consciousness of the world as a whole, and as the ‘diffusion of practices, values and technology that have an influence on people’s lives worldwide’ (Guillen, 2001).

Noticing opportunities is normally more difficult in international settings, and the level of uncertainty that the potential entrepreneur must undergo will also be greater. Entrepreneurs able to function successfully in international settings may be both more skilled at noticing opportunities and have a greater capacity to endure the uncertainty associated with international entrepreneurship (Lu & Beaamish, 2001). Noticing opportunities is normally more difficult in international settings, and the level of uncertainty that the potential entrepreneur must endure will also be greater (Coviello, 2006).

Oviatt and McDougall (2005) emphasized that international entrepreneurs display the intention to compete in multiple locales at the inception of the firm to exploit existing international opportunities and would have the intention to do so when they started their firms (McNaughton, 2003). Starting a firm is a difficult process under the best of circumstances. International business scholars have traditionally argued that internationalization is difficult because firms had to overcome a liability of foreignness, although Johanson and Vahlne (2009) have recently acknowledge that being part of an effective network and prior knowledge can greatly accelerate the international entrepreneurship process. This liability of foreignness was based on the fact that firms and entrepreneurs lacked knowledge about doing business in other countries, which meant they had to endure the costs of learning and the discomfort of uncertainty (Lu & Beaamish 2001). However, by positioning themselves in relevant networks, or because of their past experience, many entrepreneurs have high levels of operational knowledge about foreign markets. In this manner, the traditional approaches for dealing with the liability of foreignness of either imitating local firms or by transferring unique organizational or managerial competences to their foreign unit (Sapienza et al., 2006) have been supplemented with a knowledge component, which is more related to uncertainty. There has been an acknowledgement that firms could begin to internationalize sooner and Sapienza et al. (2006, p. 915) suggest that “the earlier a firm internationalizes, the more deeply imprinted its dynamic capability for exploiting opportunities in foreign markets will be.” Others have pointed out the benefits of internationalizing earlier, or at least exporting at an earlier stage (Kundu & Katz 2003). This may be because although there is a cost to learning, early entrants begin this process sooner (Autio, Sapienza, & Almeida, 2000) and at least some suggest they should do this before they actually start the firm (Coviello, 2006).

An entrepreneur who would like to take advantage of international markets may have to study a foreign language, may have lived abroad and may be face with culture shock. Entrepreneurs must realize their company’s competitive advantage such as: technology, price, financial superiority, or marketing, product innovation, an efficient distribution network or possession of exclusive information about the foreign market (Sapienza et al., 2006). Declining market conditions at home may cause entrepreneurs to seek foreign markets to help their business. Successful global entrepreneurs should have the following characteristics: a global vision, international management experience, innovative marketing or technology processes, a strong international business network, and effective organizational coordination worldwide (Lee, Peng, & Barney, 2007).

When global opportunities occur, entrepreneurs are likely more open-minded about internationalizing. The advantage of international trade is that a company’s market is expanded much and growth prospects are greatly raised. Other advantages include minimizing seasonal slumps, reducing idle capacity, getting knowledgeable about products not sold in target markets, technology used in other countries, and learning about other cultures (Johnson, Lenartowicz, & Apud, 2006). Before going to a foreign market, it is essential to study the unique culture of the potential consumers. Concepts of how the product is used, psychographics, demographics, and political norms as well as legal normally differ from an entrepreneurs’ home country (Miller & Parkhe, 2002). De Tienne & Chandler (2004) suggest that entrepreneurs must consider five factors relative to the country and cultures that the business venture will inhabit. First, they must study foreign government regulations: patent, import regulations, trademark laws, and copyright that affect their products. Second, they must know political climate: relationship between business and government or public attitudes and political events in a given country affect foreign business transactions. Third, they must consider infrastructure: packaging, distribution system, and shipping of their export product. Fourth, they must research distribution channels: accepted trade both retail and wholesale, service charges and normal commissions, distribution agreements and laws pertain to agency. And fifth, they must study competition: number of competitors in target nations and their market share, as well as their price, place, product and promotion. Additionally, they must find market size: of their product stability, size, country by country, and know what nations are markets expanding, opening, maturing, or declining (De Tienne & Chandler, 2004). Eventually, entrepreneurs must understand culture of their products. Small businesses can study international cultures by business travel, participating in training programs, reading the current literature, and undertaking formal educational programs. Small business, who wants to sell product on a worldwide basis must realize different standardization in each country. In some cases, goods must be adapted for different local markets if it is to be accepted and consumer goods always require much more adaptation (Johanson & Vahlne, 2009).

One issue related to international opportunity is why individuals in home countries are not the ones that take action on these opportunities, which would seem logical, as they are better positioned to notice. This question is especially important because research indicates that local firms usually have higher levels of performance than do foreign firms (Miller & Parkhe, 2002). While the matter of liability of foreignness is present in some cases, this relates to firms competing in the same industry. Thus, when locals begin to imitate the foreign firm, they may in fact end up with higher levels of performance, because of factors such as lower lawsuit awards (Mezias, 2002). However, national average levels of entrepreneurship to uncertainty, opportunity, and cognition uncertainty avoidance are not identical across countries (Hofstede, 2001). This suggests that although it is possible that both a local and foreigner notice a specific opportunity at the same time, the local may not act for both the fear of failure and stigma attached to that failure in certain cultures (Lee, Peng, & Barney, 2007). Thus, the potential entrepreneur must also be willing to endure the uncertainty associated with acting on these opportunities.

To gain insight into effective professional task performance across cultures, an understanding of effective communication and psychological adaptation has to be complemented by an exploration of the effect of culture on task process. Over the last few years studies on cross cultural competencies in different professional fields have started to emerge.

Examining the relationship between national culture and entrepreneurship is an important emerging subject matter in international entrepreneurship (Hayton, George, & Zahra, 2002). The sociological viewpoint on entrepreneurship proposes that entrepreneurs are intertwined in a social framework and their cognitive process and behaviours are shaped by the interactions between the environment and entrepreneur (Zahr, Korri, & Yu, 2005). There is also evidence of the impact of national cultural values on the characteristics and behaviour of individual entrepreneurs (Mitchell et al., 2002). Mitchell et al. (2002) confirmed that entrepreneurs share a set of cultural values, regardless of their national origin or cultural background. However, it appears that whilst some core values are shared across different countries and cultures, some of the behaviours of individual entrepreneurs reflect the value system of their respected national culture.

With regards to adaptation in international entrepreneurship, entering into a foreign environment is not a transition for the business venture alone. The actors, international entrepreneurs, involved are also plunging into same the foreign environment (Hofstede, 2001). Entering a new culture means commencing to share a pattern of thinking, feeling, reacting, and problem-solving (Saee, 1999). Cross-cultural psychology argues that unfamiliar cultural territory negatively affects an individual’s affective, both the sense making and cognitive mechanisms, and undermines the appropriateness and effectiveness of their behavioural responses (Maznevski & Lane, 2004). This happens when individuals are unable to accurately perceive and interpret the alien cultural environment, nor explain or predict the behaviour of people with different cultural backgrounds (Maznevski & Lane, 2004). Evidence suggests that exposure to a foreign cultural environment can cause ‘culture shock’, a psychological condition which adversely affects psychological and affective states (Johnson et al., 2006). Saee (1999) contends that opportunity identification competencies developed in an entrepreneur’s home cultural environment may not be sufficient to perceive a high level of entrepreneurial self-efficacy about performing the task of identifying opportunities across borders and cultures.

Cross-cultural studies have explored the challenges that a foreign cultural environment poses to human behaviour, cognition, and professional performance. Human behaviour is considered the coping mechanism that individuals consequently develop. Some researchers suggest that building this coping mechanism, in individuals, amounts to developing a global mindset or cultural intelligence (Maznevski & Lane, 2004; Early & Mosakowski, 2004). According to Maznevski and Lane (2004, p. 172), a global mindset is ‘the ability to develop and interpret criteria for personal and business performance that are independent from the assumptions of a single country, culture, or context’; then to adequately implement those in different countries, cultures, and contexts. Cultural intelligence is seen as the ability to interpret the foreigner’s behaviour the way the foreigner’s countryman would (Earley & Mosakowsi, 2004). Cross-cultural competence is defined as the appropriateness and effectiveness of one’s behaviour in a foreign cultural environment (Mitchell et al., 2000). Psychological adaptation is considered the centre point of personal traits and attributes that help generate internal responses in an unfamiliar environment by managing stress (Saee, 1999). Successful adaptation to a host cultural environment requires the abilities to be mindful, to tolerate ambiguity, and the ability to explain and make accurate predictions of strangers’ behaviour (Saee, 1999). This also includes the levels of anxiety and uncertainty that affect the intercultural encounter (Saee, 1999).

CONCLUSION:

International entrepreneurs actually face greater uncertainty than is generally common in more established businesses, which benefit from learning and experience, because international entrepreneurship is about the implementation of a new innovative business. There is an uncertainty to entrepreneurship and the role it plays in initiating the process. Mitchell et al., (2000) observes that entrepreneurial action is a result of overcoming and paralysis that is caused by the uncertainty that precedes the entrepreneurial act. Guillen (2001) adds that the key concept that entrepreneurs create new combinations, which become the innovations that are the engine of economic growth. The entrepreneur is likely to see the opportunity as relatively certain. This is important with regards to international entrepreneurship in that exploiting an international opportunity requires more than dealing with operational certainty; there is also a high level of cultural uncertainty that the entrepreneur has to endure to ensure the new venture’s prosperity. The volume of research on international entrepreneurship supports the notion that a period of domestic development is no longer necessary for many firms and that international entrepreneurship is possible at the time the firm is established or shortly thereafter. However, consideration must be taken with respect to the foreign culture a venture will go into and the psychological affects upon the entrepreneurs joining in the venture.

Effective operation in the globalised economy requires that entrepreneurs develop new skills and competencies. Some of these skills and competences are needed to deal with national and regional cultural differences that are becoming intense with the continuance of globalisation (De Tienne & Chandler, 2004). (Authors) believe that current and future international entrepreneurs need to develop cross-cultural competence to successfully identify business opportunities.

A tour operator combines tour and travel components to create a holiday, it designs travel routes for tourists and offer perfect arrangements of the airlines and hotels. In a word, a tour operator offers package holidays. A travel agent is a kind of retail business which is a buyer of tour operator, it sells travel-related products and services to customers on behalf of tour operators, airlines, hotels and other entities. Nowadays, tour operators and travel agencies are closely related to each other. Some tour operators own the distribution channel, they set up retail shops selling products and services directly to the final customers, or they establish close relationships with travel agencies under contracts. The development of the industry should be attributed to the development of transportation in the early age. With the invention of aircraft, the demand for travel increased rapidly. But in recent years, situations become more complex than ever before in such a changeable economic climate, UK’s tour operator industry are fluctuated in growth. This part of report focuses on the market and development during the year 2005-2008. The Association of British Travel Agents (ABTA) was formed in 1950 by 22 leading travel companies, now represents over 5,300 travel agencies and nearly 1000 tour operations. Its Members range from small, specialist tour operators and independent travel agencies through to publicly-listed companies and household names; from call centres to internet booking services to high street shops, occupy more than 90% of the British market. Thus statistics of ABTA can be used to conduct this report. According to the annual report of ABTA, during the year 2005-2006, bookings through ABTA members were 6% down on the prior year. The package holiday market continued to decline but specialist holidays, cruise tours and flight-only bookings all grew significantly. Company failure level rose substantially from 33 in the previous year to 47 this year. The industry structure changed a lot: independent agents turned to favour dynamic packaging with concentration on niche markets including long-haul, cruising, UK holidays and self-packaging. Big operators drove bookings online and through their own retail networks. 2006 is one of the most challenging years in the industry’s history, with traditional business model under great pressure and uncertain future for many others. During the year 2006-2007, 32.8A million overseas visitors who came in 2007 spentA ?16.0A billion in the UK, the volume remained stable but spending fell in cash terms for the first time since 2001. Financial statuses of ABTA members were quite positive: total net current assets of ?5.11 million (6% up) and total income of ?5.70 million (13% up). Company failure levels fell dramatically from 47 to 32 compared to the previous year. Several weaker players in the industry have been winnowed out of the market but the figures are still very encouraging. The industry remained in good health. Consolidation and merger activity has been a key feature of the outbound tourism market in 2007. New business models had made that the differences between the tour operator and travel agency become increasingly blurred. 2008 is again a challenging time for the industry: at one time the fuel price had reached $150 a barrel which is the double of the price in 2007; sterling lost a large amount of its value against most currencies; what makes things worse is that the credit crunch caused the world’s economic downturn, consumers changed their spending patterns, companies struggled to survive. In spite of these factors, UK outbound visits remained increase by 1.5 million from 69.2 million last year to 70.7 million this year. The number of company failures fell from 32 to 30 compared to the previous year. But unfortunately, because of the high cost of fuel, the UK’s third largest travel group-XL Leisure Group collapsed on 12 September 2008 leaving 85000 passengers still on their holidays. This failure resulted in one of the most extensive repatriations in the UK travel industry’s history with 85,000 passengers being flown home in a joint action by TUI, Thomas Cook and Virgin orchestrated by the CAA. Another important issue happened in 2008 is the merger of ABTA and the Federation of Tour Operators (FTO) which represents the continuing integration of travel agency and tour operator within the industry. The industry will benefit greatly from the combined different strengths that both organisations offer. The FTO’s experience and expertise in operational issues fit ideally with ABTA’s traditional functions.

PEST analysis of the remote environment
(P)olitical/Legal
3.1.1 Political instability and Terrorism

Political instability is described as a condition of a country where a government has been toppled, or is controlled by factions following a coup, or where basic functional pre-requisites for social-order control and maintenance are unstable and periodically disrupted (Cook 1990). It is clear that the political instability in a certain country is negatively influencing travelers’ decision making with prospective travelers seeking substitute travel plans. It will reduce the demand for travel significantly as tourists concern about the safety first and nobody wants to travel in a dangerous environment that strikes, wars and terrorists attacks happen. Among all the factors influencing political instability, terrorism is the most significant one that affecting tourism in UK in recent years. After the heart-broken event of terrorist attack on 11th September 2001, the concern about safety in travelling is increasing rapidly. A series of coordinated suicide bomb attacks on London’s public transport system during the morning rush hour happened on 7th July 2005. The discovery of two car bombs set to detonate in London’s bustling theater and nightclub district Friday, June 29th, 2007 has encouraged residents to remain alert. Following that case, a jeep rammed into a Scottish airport in Glasgow on June 30th, forced Britain to raise the threat level to “Critical” -the highest alert status. All of the events listed above had negative influences on tourism in UK and businesses of UK’s tour operators. Report said that 15% of the advanced bookings were cancelled during the summer peak travel time in 2007.

Government and Tourism

Government always participates in tourism activities through several kinds of ways: government makes policies for the development of tourism industry; government makes policies that will have impacts on tourism industry. In this part, the report will address issues like the carbon tax influences on the industry, VAT effects on the industry and financial incentives government used on the industry.

According to Conservatives 2007, aviation contributes just 5.5% of the UK’s CO2 emissions but emissions from UK aviation increased significantly by more than 90% between 1990 and 2004. Government urged to take measures to reduce the negative impact of carbon emissions on environment: from 2001 to 2007, the original APD which is at a rate of ?5.50 on flights from the UK to elsewhere in the European Union and the European Economic Area and ?22.00 for other flights was introduced; a new tax which doubled these charges was introduced from February 2007. These changes in carbon taxation would result in changes in prices of travel products using aviation and finally affect the demands for travelling and sales for tour operators. According to Karen Mayor and Richard S.J. Tol, due to the changes in February 2007, countries near the UK would see a small drop in visitor numbers, and the UK itself would see a larger drop (1.2%). The recent doubling of the boarding tax will reduce arrivals by some 528,800 people in 2010, this is a 1.3% reduction (Karen Mayor, Richard S.J. Tol, 2007).

UK government applies a rate of 15% VAT (Value Added Tax, temporary cut from 17.5%) which is the standard rate on tourism products, while most other EU countries apply reduced rate of VAT around 5% on tourism products. Report said that a cut to the 5% UK reduced VAT rate on tourist attractions admission and accommodation will boost employment and result in gains of up to ?760 million savings in increased income and corporation tax. It also predicts an additional ?440 million will be injected into the industry supply chain.

The Government had announced an 18% cut in funding for VisitBritain over the next three years on October 2007. Tourism Alliance Chairman, Ros Prichard OBE, stated “This cut in funding means that, in real terms, the Government will have reduced VisitBritain’s funding by around 50% between 1997 and 2011.” That is a catastrophe for UK’s tourism industry, VisitBritain will be lack of funding to advertise and promote UK’s attractions, financial incentives to the industry had been withdrawn and other capital allowances had been reduced, while funding for VisitBritain had been cut back just at the time when they were needed the most, the growth in sales of the industry will suffer.

(E)conomic
3.2.1 National economy and disposable income (impact of economic recession)

The world is now suffering from the economic downturn caused by financial crisis, businesses collapse, jobs are destroyed, UK’s economy is significantly influenced by the crisis. According to National Statistics Online, UK’s GDP contracted by 1.6% in the fourth quarter of 2008 when the crisis started. It is now 2% lower than the fourth quarter of 2007. For the year 2008 as a whole, GDP rose by 0.7 per cent with a down trend of 3% in the previous year. UK’s economy is experiencing the worst recession in over a century. The recession is a disaster for employment in UK, unemployment rate rose to 6.7% (0.6% higher than the last quarter and 1.5% on last year). 29.3 million people were in work in the period December to February according to the labour force survey (LFS). The number of people employed fell by 126,000 this quarter and down by 227,000 on the last year. All the situations listed above lead to the decrease of national income and disposable income. Tourism is sensitive to economic uncertainty and downturn: most travel activities involve disposable income, as total income drops, disposable income drops, people would conserve their money to cover the cost of life essentials, food, shelters and family necessities. The demands then decrease making tour operators suffer.

3.2.2 Fuel price

Fuel cost is a major cost of airline companies, the cost will be paid by customers as fuel surcharge. Tour operators will raise the price of their products, especially for long-haul products when fuel price goes up. The travel enterprises will then be in danger of losing customers. When international crude oil price hit the record of $148 a barrel in September 2008, both airline companies and travel enterprises struggled to make ends meet. The fuel surcharge of some long-haul flights was even same as the ticket price, this might change customers behaviour at some degree, people may stay closer to their home or switch to other entertainments. The economic crisis UK encounters leads to a substantial decrease of oil price which could possibly boost travel industry to some extend though the major influence is negative.

3.2.3 Exchange rate

The exchange rate, or the value of the British Pound relative to the currencies of other countries, has had a significant effect on both inbound tourism and outbound tourism. In 2007, the weak dollar makes UK accommodation and food more expensive for visitors from America, the exchange rate put London 15th in its popularity table in July 2007 – down from number seven a year earlier according to Cheapflights. Due to the recent Pound depreciation, visitors from other European countries or America can expect to pay around 30% less than they would have done a year ago. British Tourist Authority (BTA) produced a study on ‘The Price Sensitivity of Tourism to Britain’, the findings show that overseas visitors are highly sensitive to changes in the cost of staying in Britain: for every 1% movement in the exchange rate which increases the cost of staying in Britain, the UK’s international tourism earnings will decrease by 1.3% (?160m). Research also found that more fixity in the exchange rate arrangements generates a positive effect on tourism and the more fix the exchange regime is, the greater the impact on tourism (Maria Santana-Gallego, Francisco J. Ledesma-Rodriguez, Jorge V. Perez-Rodriguez, 2007).

(S)ocial

Social factors like age, changing life style affect the industry through changing consumer behavior.

3.3.1 Age and tourism

According to United Nations Statistics and National Statistics Online, for the whole world, since 1950 the proportion of older persons has been rising steadily, passing from 8 per cent in 1950 to 11 per cent in 2007, and is expected to reach 22 per cent in 2050; For UK, the percentage of the population of state pensionable age exceeded the percentage of the population under 16 for the first time in history in 2007. The industry now is facing an older growing society due to rising life expectancy, marketing of the industry should focus more on older persons: the advertising and products should target more at older persons.

3.3.2 Changing lifestyle

There is a growing trend of buying online which could reduce a person’s shopping trip frequency, the access to the world’s products through internet reduces the flows of shopping tourists from one city to another or cross countries. More and more people tend to prefer clubs or watching TV at home rather than going out for a trip at weekends.

3.3.3 Growing concern about environment

Tourism is one of the largest industries in the world with incredible developments each year, it contributes a lot to the world’s economy while the huge infrastructural and resource demands of tourism (e.g. water consumption, waste generation and energy use) can have severe impacts upon local communities and the environment if it is not properly managed. A concept: sustainable tourism which is defined as ” tourism which leads to management of all resources in such a way that economic, social and aesthetic needs can be fulfilled while maintaining cultural integrity, essential ecological processes, biological diversity and life support systems” by World Tourism Organisation becomes more and more popular. People concern more about the environment, they tend to favour ecotourism products. When developing new tourism products, tour operators should design their trips to be environmentally, culturally and socially friendly.

(T)echnological
3.4.1 Technology development of transportation

With the development of piston engine aircraft, the mass tourism boomed in 1950s. Transportation technology is always regarded as crucial in the development of tourism, places inaccessible before by car or train can be accessed swiftly by air. It is largely due to the improvement of transportation that tourism has expanded. The highlight of a trip is usually the experience in destination, visitors often neglect the process of getting to the destination. In this case, the faster the visitor can reach the destination, the more attractive the destination will be. The development of transportation especially the speed of the transportation tool will have a major impact on long-haul travel.

3.4.2 Internet and the industry

The world enters a new information era with the development of internet technology. The world’s internet users are increasing sharply. According to Internet World Stats, there were 43,800,000 internet users in UK in March 2009 which represents 70.9% of the population, that is a 180% growth from the year 2000. Internet has become an essential part of people’s life. For tour operators, internet provides tour operators platforms of advertising and transaction, which can make their products more accessible to the customers thus bring more sales and profits. Moreover, it is cost-effective and time-efficient using the internet. For customers, internet makes it easier for them to browse the products and make bookings. More and more people are now booking their holidays on the internet, tour operators need to focus on the website design as well as the security of the transaction system.

The internet technology makes it possible for meetings online, different companies can communicate or negotiate with their counterparts more efficient through videoconference. Face to face contact is not compulsory anymore. Business travel will suffer from that, there might be a decline in business travel sales for tour operators.

3.4.3 Virtual Tour

Another developing technology which will have a strong impact upon tourism is virtual reality (VR), which is a technology allows a user to interact with a computer-simulated environment. Most current virtual reality environments are mainly visual experiences, displayed either on a computer screen or through special stereoscopic displays. According to Chemistry & Industry technology news (March 2009), recently, Mobile aroma recreation system (MARS) devices, developed by researchers at the University of Warwick, UK, could be used to recreate these detected odours for VR users in real-time with the help of electronic noses. Electronic noses could one day be incorporated into virtual reality (VR) systems to add realism to simulations of holiday experiences. The new technology will make VR much more real than ever before, enable customers to experience the whole “live” holiday at home. On one side, virtual reality leads to the risk of diminishing the interest for travel; On the other side, “Virtual Reality can be used to recreate historic sites and events for such purposes as education, special project commissions and showcase features at national and World Heritage visitor centres. VR technologies are also being used to provide a means of protecting the fragile state of some heritage sites, helping to educate visitors not so much about their history but in how to explore, interpret and respect them,” says Professor Bob Stone, Scientific Director of Virtual Presence Limited, based in Manchester, UK.

Though tour operators can’t change the remote environment, they should change their strategies to adapt to the environmental changes.

Porter’s 5 forces Analysis of the competitive environment

UK’s tour operator market is a quite mature market with four major players. After a long history of consolidation, Thomson Holidays (part of The World of TUI group), Thomas Cook, MyTravel Group (formerly Airtours) and First Choice dominate the tour operator market in UK. The industry is full of vertical and horizontal integration, vertical integration includes forward integration-acquisition of the retail network namely travel agencies, backward integration-acquisition of suppliers like airlines, hotels and transportation companies. Horizontal integration includes mergers between big companies and mergers between big and small tour operators.

Michael Porter (1980) developed a framework for industry competitive analysis, consisting of five different competitive forces which refer to microenvironment. The frame work is shown in the figure below:

4.1 Threat of new entrants

Tour operator industry is an industry which has relatively high entry barriers. UK’s tour operator market is quite mature and its vertical integration had finished in the 1990s. Today all major tour operators in UK are highly vertically integrated and operate their own travel agencies, airlines, hotels and resorts, transportation companies and so on. Some of the tour operators become quite large multinational enterprises, they can reduce transaction cost due to large amount of orders, they enjoy the benefits of quantity discount and economies of scale. They always have esteemed reputation for organizing good tours. When people have demands for travel, they turn to those tour operators, people recognize their brand thus will be loyal to the companies. All of the factors mentioned above reduce the threat of industry entry, however, the threat still exists. With the individualistic change of demands and the changeable nature of tourism environment, new players are entering the tour operator industry focusing on niche markets. They supply special products designed for customers with special needs. The new players always rely on product quality to gain competitive advantage as well as filling gaps between new demand and supply. Ecotourism and adventure tourism was introduced by those new players. In order to expand the market share and cope with the threat new player had brought, major player began to purchase the niche operators, series of mergers happened within the industry: Headwater is a tour operator specialized in organizing cycling holidays and walking holidays which enables customers to explore at their own pace. Simply Travel is a leading specialist tour operator in UK offering an off-the-beaten-track alternative to the package holiday, creating inspirational holidays and providing a high-level of personal service. Thomson acquired both of the two companies as departments of Thomson Holidys; Panorama used to be the largest tour operator in Ireland for Winter Sun departures from Ireland and Irish Ski holidays, it became one part of MyTravel Group and was given the responsibility of managing Manos Holidays after it was also acquired by MyTravel; First Choice took control of Meon Holdings specialized in villa holidays and Sunsail which is a tour operator specialized in watersports clubs, Yacht charter and Flotilla sailing. Large players can enhance their brand name attractiveness and achieve a long-term sustainable competitive advantage through acquiring new specialist players.

4.2 Rivalry among existing competitors

The industry competitive environment has changed due to industry’s horizontal integration, which is a tour operator offering one or several travel products takes over another that offers very similar travel products or services. The industry’s competitive environment among existing competitors used to be full of disordered competitions, players competed with each other focusing on low price, they cut their price as much as possible to gain market shares, the whole industry became profitless and all the players suffered from that. In addition, their product quality was quite low due to the reduction on cost, they tried to keep their profits at a certain level while the prices they offered must be low. After industry horizontal integration, situation has changed: mergers and take-overs not only take place among small and large tour operators but also happen among large tour operators. According to Air Travel Organisers’ Licensing (ATOL) 2007 figures, the four big players in the industry occupy more than 80% of the tour operator market shares: Thomson accounts for 28% of total market shares while MyTravel Group has 21%, followed by Thomas Cook with 19% and First Choice with the proportion of 17%. All the four big tour operators offer full-range products from domestic holidays to outbound holidays, from business travel to leisure travel, from normal sight-seeing holidays to specialist holidays, differences among the four players are not significant. Companies compete with each other mainly based on brand identity and creating brand loyalty, a good brand offers distinctiveness and consistency to its target customers, thus branding strategy becomes dramatically important in companies marketing strategy to expand market shares. MyTravel Group launched “freedom card”-a kind of bonus card offers its members discounts bonus points and upgrades in order to maintain customer purchase and loyalty; Thomson also sought a way to keep their customers loyal to the company by setting up Founders Club – new shareholders were given membership in the “Thomson Founders’ Club” which offered a 10% discount on Thomson holidays. Exit barriers of the industry are high due to some reasons listed below: Though investments on non-transferable fixed assets are quite low, redundancy costs are very high because those large travel companies often have a large number of employees thus it costs a lot to dismiss employees, in addition, there will be significant social problems if such large companies go bust. Those large tour operators usually have close relationships with their suppliers and buyers under restricted contracts, the penalty costs would be significant if they break the contracts.

4.3 Threat of substitutes

The development of information technology especially internet has brought new opportunities and threats to the tour operator industry. Through using computerized reservation system (CRS), tour operators can obtain efficient information distribution systems and networks. Internet plays an important role in purchasing holiday products in terms of provision, accessibility and flexibility.

With the emergence of internet technology, a kind of online holiday booking website was created. It can be seen as a kind of substitute to the traditional tour operators. Online holiday booking websites like Expedia.co.uk and Lastminute.com offers designed holiday routes, air tickets booking, hotel booking and so on just like what traditional tour operators do but in another much more efficient way. Customer can gain great benefits through using the new technology on booking, they have more choices and have easier access to the holiday products. The major tour operators are not resistant to the technology and are now investing heavily on their own virtual networks: MyTravel Group announces its intention to launch a new interactive digital television channel to be called ‘Going Places TV’ and finally it was launched on channel 669 in February 2003; Thomson, recently enhanced its main website with a series of new features and content, in an attempt to retain customers and encourage them to book through the site. It also introduced additional editorial content to help consumers, as well as to enable the site to be picked up by Google in natural searches. Takeovers and merger are quite common: MyTravel Group acquired WorldChoiceTravel.com (WCT), a fast growing, US based provider of travel reservation services in March 2001; Thomson acquired a teletext operator – Travel House in order to gain control of the virtual marketplace.

The technology of internet makes information shared much easier and more widely than ever before, people can gain knowledge about the destination, the way to get there and accommodations there by easily clicking on the relevant websites. Information asymmetry no longer happens in recent years, the usage of tour operator becomes less and less. Cheap budget airline companies and online hotel booking websites provide travelers opportunities to get low-price air tickets and accommodations, these are really threats to tour operators. People tend to organize their own trips, they choose their own destinations, drive their own cars, book hotels from hotel websites or booking websites or even live in their own houses, they will experience more freely holidays through doing that. There is a growing trend of using this do-it-yourself (DIY) approach in travelling which could be a substitute of tour operators. Most travelers concern about price when making decisions, when there is no price advantage booking from tour operators, travelers tend to favor DIY travel. Major tour operator like Thomson, MyTravel, Thomas Cook, First Choice offer a range of products featured with free concept, with only air tickets and hotel bookings at a low price with their popular trusted brand names.

4.4 Bargaining power of suppliers

The bargaining power of the industry’s suppliers should be described as low. On one hand, there are few tour operators in the industry to bargain with: suppliers like independent hotels and airline companies widely exist in recent times while only few tour operators are operated due to the consolidations within the industry, the suppliers don’t have too much power bargaining with the major tour operators but still have certain degree of bargaining power on smaller tour operators. On the other hand, vertical integration with the hotels, airline companies and other transportation companies makes the bargaining power of suppliers at the lowest point. The backward integration enables tour operators to establish close relationships with their suppliers by signing contracts of cooperation or even the purchase of the suppliers: First Choice launched its own airline quite early in 1987 which represents the beginning of forward integration, in 2000 a joint venture with Royal Caribbean Cruises Ltd is announced and later a company called Island Cruises was set up and put into operation in 2002; MyTravel Group acquired Europe’s biggest resort complex, the Bellevue Hotel in Majorca, which comprised of 17 blocks of apartments and 8 swimming pools in January 2000. In June 2001 the company announced strategic alliance with Aqua Sol Hotels Limited, a leading hotel group in the Eastern Mediterranean. The Group’s in-house airlines – Airtours International and Premiair – begin to trade as “MyTravel Airways” in May 2002. Thomas Cook owns Thomas Cook Airline and has a fleet of 45 aircrafts, the company has a partnership with SENTIDO Hotels & Resorts – the international hotel chain based on a franchise concept with 4-star plus beach hotels. The major tour operators all participant in the dynamic areas of tourism, there are few needs to bargain with suppliers, in a simply word, tour operators are “self-sufficient”.

4.5 Bargaining power of buyers

The bargaining power of buyers should also be described as low. The buyers being discussed here stands for travel agencies not the ultimate customers due to the nature of the industry. The most important factor that affects bargaining power of buyers is forward integration between tour operators and travel agencies. According to Bloomsbury Business Library – Business & Management Dictionary, forward integration is a means of guaranteeing distribution channels for products and services by building relationships with, or taking control of, distributors. Forward integration can free the supplier from the threat or influence of major buyers and can also provide a barrier to market entry by potential rivals (Business & Management Dictionary, 2007). Through forward integration, major tour operators take control of the distribution channel, they can sell their products in a more efficient and cost-effective way. Forward integration of tour operators and travel agencies makes it increasingly difficult for smaller independent tour operators who can’t reach their customers through high street travel agencies. As major tour operators all have their own travel agencies, independent tour operators rely on independent travel agencies. The number of independent travel agencies is declining because they can’t offer customers the same discount as the integrated chains, in this case, independent tour operators can’t compete with major tour operators on price, the number of smaller independent tour operators also decreases. The development of internet technology also has an important impact on the bargaining power of buyers, it has changed the pattern of traditional distribution, shocking the market by the rapid transformations which it generates across the whole industry. These days, the online travel market is experiencing a profound evolution. Trends in overall online travel market size are shown below:

Now the bargaining power of buyers is being threatened by “disintermediation” – the elimination of intermediaries, for example, the wholesalers found in traditional retail channels, in favor of direct selling to the consumer (Bloomsbury Business Library – Business & Management Dictionary, 2007). The disintermediation is caused mainly by the development of internet. Major tour operators have embraced the growth of online travel systems and the need for fast and efficient distribution systems and networks, they have built their own online distribution channels like websites and