Travel and Tourism Market
Tourism is often considered to be a twentieth-century phenomenon, although it has existed since the times of ancient Greeks and Romans. The tourism has been a feature of society since the earliest recorded times and many of the contemporary industry structures and the problems experienced by tourists were also features of classical tourism. In the past, tourism was a privilege of affluent groups of society that wanted to experience different cultures or learn new languages, whereas now is widely available to almost everyone.
The travel and tourism industry is often referred to as the ‘world’s largest industry’, which accounts for approximately 10 per cent of world GDP. The global tourism market has expanded greatly, especially in the past 20 years. The future does not look bleak either, with the prediction that the industry will continue to grow at an annual rate of 4.2% for the next decade (WTTC, 2006, ref.1). According to World Travel & Tourism Council the global market for travel and tourism is expected to generate more than US$7 trillion (₤3.6 trillion) in 2007, rising to over $13 trillion (₤6.7 trillion) over the coming decade (WTTC, 2006). The above figures prove that the market is far from being saturated and it still presents a lot of potential. The market is in a very stable form and even the events of the September 11th terrorist attacks or Bali bombing did not destabilize the industry. These events did have a rather temporary effect on the market, which recovered quickly, exceeding for the first time in 2002 the number of international global tourist arrivals of 700 million.
Many countries heavily rely on income generated from tourism. It is not only small countries such as Maldives or Barbados that are reliant on it, but also well developed First World countries such as France or United States, for which travel & tourism industry plays an important role in the economy. The improvement in infrastructure of many countries contributed to the growth of mass tourism on the international scale. The emergence of cheap air travel accelerated the process greatly.
There are a few factors that drove to the change in the industry. The emergence of new information technologies, deregulation of the airline industry and environmental pressures were the factors that demanded the transformation. But attitudes of tourists have also changed over time and this has had an impact on the industry. People were rapidly changing the ‘search for the sun ‘approach for ‘sun – plus’, which was much more individual and incorporated experiencing nature. The transformation toward new industry ‘best practice’ was partly caused by changing consumer tastes, work patterns and income distribution. Tourists have now higher disposable income, they are better educated and have more sophisticated taste. These factors cause a demand for a better quality and more customized product.
The economies of new tourism are very different from the old. Profitability no longer rests on economies of scale and the exploitation of mass markets. Profitability and differentiation in the competitive tourism industry comes from customized holidays and expansion into segments and niches of the market. The mass market in tourism is splitting apart because tourists themselves do not longer have standardized and similar wants. This trend has led to segmentation of the market. The customer can chose a holiday that is segmented according to market requirements rather than traditional uni-dimensional lines of gender, age and income.
Some of the most popular niches of the market are: adventure, backpackers, sport and ecotourism. Sustainable tourism has also become a very popular as people start to realize the negative effects tourism can have on communities and local environments. One of the most interesting and exiting segments is space tourism, which is currently very expensive. It should become more affordable in 2009, when Richard Branson’s Virgin Galactic will be launched.
It is predicted that nature-based tourism will continue to grow in future and that people will inquire more about the impact their holidays have on the environment. The changes in work conditions and working hours will further popularize the trend for many short trips in a year and combining business with recreation. Increased competition in the market will demand on travel suppliers’ even greater level of service and a push for more individualized packages. Internet will certainly be further popularized for planning and purchasing of holidays. Advances in transport technologies will expand the range of tourism possibilities. Increased concern over health will create a growth in health tourism.
