Thesis Proposal

Investigation of Factors Affecting Tourism Industry: A Study of

Pakistan

Rida Mansoor

17032

Hina Zulfiqar

17431

In Partial Fulfillment of

the Requirements for Degree of

Masters of Business Administration

Department of Management Sciences

Iqra University, Islamabad Campus

2015

ii

Certificate

It is to certify that M.B.A (MGT) thesis proposal titled “Investigation of Factors

Affecting Tourism Industry: A Study of Pakistan” prepared by Rida Mansoor and

Hina Zulfiqar Enrollment No. 17032 and 17431 has been approved for

submission/defense.

Mr. Kashif Ur Rehman

Thesis Supervisor

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ABSTRACT

Since the war on terror initiated in 2001, after the attack on the Twin Towers,

situated in New York, United States. The US led invasion of Afghanistan has spilled its

consequences across its Eastern border. Since then Pakistan has been a victim of

terrorism and religious extremism due to its strategic alliance with the United States of

America. There are many factors due to which Pakistan’s tourism industry is not getting

much attraction by tourists at the national and international levels. Some of the factors

include low budget, low income level of visitors, terrorism, low support from government

as well as visitors and societal and cultural factors. The objective of this research paper is

to find out those factors which are affecting the tourism industry in Pakistan.

Furthermore, this study will also find out the marketing strategies which can help

promote tourism in those areas where there is low patronage of tourism as well as to

analyze the current situation of tourism in Pakistan. This study will be quantitative in

nature. The study will use survey approach to gather data from respondents. The

convenient sampling technique will be used to select the respondents. The adopted or

self-structured questionnaire will be used. The data will be collected from university

students and tourists. The advance econometric technique will be employed to determine

the determinants of tourism industry. The SPSS software will be used to analyze the data.

The findings of study will extend the existing literature. The findings of study will also

facilitate the policy makers and owners of restaurants in making the suitable marketing

policies to cope up the problems. The results of study will also help in improvement

tourism industry in Pakistan.

Keywords: Tourism, Terrorism, Cultural factors, Societal factors, Victims of

terrorism, War on terror, Pakistan

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Dedication

This thesis is dedicated to my parents.

For their endless love, support and encouragement

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Table of Contents Certificate ............................................................................................................................ ii

ABSTRACT ....................................................................................................................... iii

Dedication .......................................................................................................................... iv

CHAPTERS ....................................................................................................................... 1

1. INTRODUCTION ..................................................................................................... 1

1.1 Background of Study ............................................................................................ 1

1.2 Background and Problem Statement .................................................................... 3

1.3 Problem Statement ............................................................................................... 4

1.4 Objectives and Research Questions of the Study ...................................................... 4

1.5 Research Hypotheses................................................................................................. 4

1.6 Rationale of Study ..................................................................................................... 5

2. LITERTURE REVIEW ............................................................................................ 6

2.1 Tourism Environment’s Impact ................................................................................ 6

2.2 Tourism and quality of life ........................................................................................ 9

2.3 Tourism development and prosperity: Challenges measurement ........................... 10

2.4 Prospects for Competitiveness ................................................................................ 10

2.5 Successful Tourism Explore Social Paradigm: Competition and Cooperation....... 11

2.6 Hotel Selection Factors Influencing Tourism ......................................................... 12

2.7 Perceptions of Business and Leisure Travelers towards Hotels .............................. 12

3. RESEARCH DESIGN AND METHODOLOGY .................................................... 13

3.1 Research Method ..................................................................................................... 13

3.2 Sampling Technique ................................................................................................ 13

3.3 Sample Size ............................................................................................................. 13

3.4 Data Collection Methods ......................................................................................... 13

3.4.1 Primary Data .................................................................................................... 13

3.5 Data Collection Tool ............................................................................................... 13

3.6 Reliability Analysis ................................................................................................. 14

3.7 Data Analysis .......................................................................................................... 14

REFERENCES ................................................................................................................. 15

1

CHAPTERS

1. INTRODUCTION

1.1 Background of Study

It is a major concern in many countries to prevent and grow their tourism industry

and also prevent natural and cultural heritage for the future generations. In order to

prevent cultural heritage for future generations, about 157 countries collectively

established the World Heritage Convention in 1972 and 582 sites are registered for the

prevention of the cultural endowment on the UNESCO World Heritage list. Many

countries are contagious towards tourism as a business to generate revenue for the

country, like Thailand. The volume of foreign visitors increased to 13.83 million in the

year 2006 which boosted the Thai economy, while currently its annual income from

tourism is more than 482.319 million baht (Tourism Authority of Thailand, 2008). The

performance of South Asians is also improving regarding tourism for last few years but

according to the 2005 statistics, Pakistan is continuously behind hand from other

countries (WTO, World Tourism Barometer, 2005). Pakistan is far behind countries like

Nepal, India, Sri Lanka, and, even Maldives and Bangladesh. Pakistan tourism receipts

demurred by -2% from $185.6 million in 2004, to $185.3 million in 2005. Some of

Pakistan’s heritage areas are completely ignored by the local citizens without

understanding the importance and significance of the natural and cultural beauty.

Furthermore the local communities, stakeholders and people treat the dilapidation

and extermination of heritage as a normal thing. No Government authority or the general

public is taking any responsibility to prevent the heritage resources for future

generation. Although, there is a need that Govt. provides some funding for the

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maintenance of present heritage. And, an alternative solution is that the general public

also takes some preventive actions and stand on their own feet to develop a proper

marketing plan and other strategies for making tourism more effective (Jokilehto, 1999).

These strategies can help the local communities to prevent their own natural heritage

resources by their own and also generate sustainable income and save there, as well as

heritage future.

After the Second World War, this marked the beginning of the end of modern

international tourism growth quickly (Chen & Tseng, 2005). Toson, (2002) suggested

that this high growth was, " as a high income elasticity and high price elasticity of major

achievement compared to Many factors Common to the development of modern

industrial society to contribute to foreign tourism, increased urbanization, population,

education and leisure activities designed to stimulate the desire of individuals to travel

abroad. Increase revenue and reduce the cost of international travel is also surprisingly

rapid growth of international tourism". An early researcher in the field, Pike (2002), was

shocked "to discover how little attentions to the flow of tourists between the two

countries were given the geography, demography and other social scientist. Judging by

the accumulation of empirical studies, however, the situation changed. In the past three

decades, a growing number of studies have attempted to model the determinants of

international tourism flows. Although each study has made contributions to the field

were, they generally understand the impact of this issue is minimal. Object of study

conditions, methods, results and research, often very different in another, it is difficult to

call a general rule. This study will be a research, therefore, necessary to determine the

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response of examining a number of factors, while keeping in mind the differences

between studies, which may explain the different results.

1.2 Background and Problem Statement In modern world, tourism industry is gaining importance. According to

researchers, the tourism is a focal point for marketing and development of new tourist’s

destinations in third world country (Echtner & Prasad, 2002). According to WTO, about

30% of all international tourist arrivals are in Third World (WTO, 1999). However, over

the last few decades, there has been mounting criticism of the portrayal of these

destinations and their people in promotional materials (Britton, 1979; Mohamed, 1988;

Cohen, 1989; Crick, 1989; Selwyn, 1993; Silver 1993; Cooper, 1994; Wilson 1994;

Dann, 1996a, b; Morgan and Prichard, 1998; Sturma 1999 as cited in Echtner, 2002). It is

also found that a few studies have been conducted and noticed the issues of tourism

industry in third world countries (Britton, 1979: Silver, 1993). A few researchers also

examined the tourism promotion in these third world countries (Cohen, 1989; Morgan &

Pritchard, 1998; Cooper, 1994).

Pakistan is a developing country and a few studies have been conducted and gave

no much attention to tourism industry in Pakistan. It is also found that tourism industry in

Pakistan has a bright view and it can greatly contribute to development and economy. But

it is also found that this sector is not flourished up to the mark due to lack of proper

attention and initiatives of concerned institutions. Only a few researchers have worked on

marketing problems and after the war and terror by United States (Hossain, 2002).

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1.3 Problem Statement Based on the previous discussion, the specific problem statement of study is to

determine the determinants of tourism industry in Pakistan. Furthermore, the study will

also investigate the types of marketing strategies that can enhance and promote the

tourism industry in Pakistan.

1.4 Objectives and Research Questions of the Study On the basis of extensive literature review, the following are the objectives of

present study.

To determine which factors affect the tourism industry in Pakistan.

To facilitate marketers in the knowledge of these factors according to the results.

To determine the reasons of decline of tourism industry in Pakistan.

To determine the marketing strategies that can help in promotion of tourism industry

in Pakistan.

On the basis of above objectives, the specific research questions of study are as follows:

What are the determinants of tourism industry in Pakistan?

Is the tourism industry really affected by societal and cultural factors?

How do these factors affect the tourism industry in Pakistan?

Which type of strategies of marketing the tourism developers use to promote the basic

tourism heritage areas in Pakistan?

1.5 Research Hypotheses H1: There is an impact of societal factors on the tourism Industry.

H2: There is an impact of cultural factors on the tourism industry.

H3: Better marketing strategies can promote Tourism in areas of low tourism patronage.

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H4: How do the local communities and authorities share amenability for the formulation

of polices and strategic management plan?

1.6 Rationale of Study Pakistan is a developing country and a few studies have been conducted and gave

no much attention to tourism industry in Pakistan. In 1993, research focused on the

problems faced by tourism industry (Patwari, 1993). The results of previous studies also

found that there is ample scope for development and extension of tourism industry in

Pakistan. The review of literature also revealed that host countries are not providing

ample facilities to tourist according to their needs and demands. Only a few researchers

have worked on marketing problems and after the war and terror by United States

(Hossain, 2002). It is also found that tourism industry in Pakistan has a bright view and it

can greatly contribute to development and economy. But it is also found that this sector is

not flourished up to the mark due to lack of proper attention and initiatives of concerned

institutions. As the tourism industry in Pakistan have enormously suffered due to

inadequate resources and promotional campaigns, it is necessary to study the approaches

to promote this industry. In Pakistan, a number of societal, cultural and security factors

have great effect on tourism industry. It is needed to study these factors to overcome the

limitations and problems and provide remedial guidelines.

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2. LITERTURE REVIEW

2.1 Tourism Environment’s Impact

History tells us that human beings are always in search of their paradise on earth

as well as they have a thirst to explore and visit new as well as for most places. Tourism

is one of the best tools for human beings who can easily quench their thirst of visiting and

exploring different areas and cultures. But there are certain conflicts in tourism strategies

which lead towards poor control and imbalance over it. So, there is a need of application

of better management theories along with the practices so that tourism marketing can be

easily understood and can be enhanced. Sometimes visitors may get the advantages or

disadvantages by the tourism of a particular place. So the development is very necessary

in this field so that visitors may get the maximum benefits from their visits to a particular

area or site. Most of the times the selection of environment or climate is also not

appropriate by a visitor which may lead to the negative impacts over the tourist of a

particular place. Lack of visitor’s understandings and knowledge about a particular place

also leads towards the lack of tourism growth in Pakistan’s heritage sites. There is also

the need of understanding the various impacts which influences the tourism growth in

Pakistan. It includes impacts on economy, impacts of tourists and local residents,

terrorism, environmental safety and damage, impact on economy.

According to (Law, 2002) economic impact of tourism is very difficult to

calculate because there are huge complexities in the methods which are used to

calculate impacts of economy over tourism. It is also difficult to analyze those methods.

For instance, it is difficult to measure and calculate the income level as well as

employment level of people from their shops, roads, hotels, restaurants, etc. because it is

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a time taking method. Sometimes, the visitors pursue negative impacts from any heritage

site instead of pursuing the positive impacts. Qualified tourists are also required for the

growth of heritage in chital valley of Pakistan. Inflation is one of the big reasons for

lower growth of tourism in Pakistan. Furthermore, it may include the opening costs as

well as over dependency on tourism which leads towards low growth in Pakistan.

According to (Pearce, 1996), and (Mason, 1995)the jobs patterns have been changed

due to high cost of living in the tourist’s places. The use of land has also been changed

due to the mass tourism (Fowler, 1992). Social growth as well as global growth is also

required in this perspective. According to (Smith, 2003), tourism sites should be managed

with great responsibility and carefully so that more tourists can be attracted. Some

practices can also be used for this perspective so that the positive impacts can easily

influence the local as well as foreign tourists. The positive impacts of tourism include:

Balance between the demand and supply of a particular economy

Employment generation

Contributing in the earnings of foreign exchange

Sometimes the negative effects also materialize from the development of the tourism

away from the satisfactory point. For the historical point of view tourism environment

plays an important role for the development and betterment of tourism in the heritage

places. If we do not create stability in the tourism environment we have to deal with the

carrying capacity of heritage attraction (Simpson, 1999). Many tourism sites are so

scrappy that they need to be cared more sensitively. Other negative point regarding the

tourism promotion comes that, many people are working on high managerial positions

or having their own businesses (Mathieson & Wall, 1982). So the local people

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generate enough money from their own resources and this will discourage the tourism

promotion to much extent. Tourism did not improve their way of living; in fact the

created job will feel them substandard. People want the job opportunities which are more

effective, want high skills of employment and provide them better opportunities to

generate money and high wages rate (Marcouiller, 1997). This job doesn’t need high

skills to perform the job also this job gives temporary employment with low wage rate

and this becomes a major flaw of the tourism promotion and sustainable development

(Ribeiro & Marques, 2002). Regrettably, tourism has not been promoted in

developing countries as it has been promoted in the developed countries. So it is very

important to know the existing condition of tourism in local areas so that it can be easily

encouraged. Some of the fiscal circumstances applicable to the current situation of

tourism are:

Developing countries should depend on tourism to increase the revenues.

KA large quantity of productivities and rates flow-back to foreign investors and

high escape arises.

Executive positions and professional seats are employed by non-local employees.

A country may lose its authority if it is facing such kind of factors in its economy. It is

said that a society should help its own to promote the tourism of its country. Economic

monopoly also raises conflicts in tourism marketing. It is also stated that it is difficult to

analyze that should have the major right of any heritage or cultural area and how they

should be managed. According to (Masson, 2003), the perception of any visitor depends

upon the judgment and position of the witness which leads towards the positive or

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negative impacts of a certain site. For example, more jobs can be achieved if a hotel is

built in a low tourism area and it has a positive impact.

As (Masson, 2003) states that: “Any relevant debate on tourism impacts need to

consider the value position of observers and commentators and should be set within cares

of the wider context of tourism”

Tourism places are also affected by the following causes:

The attractions of a particular place are not raised for the tourists so that they can

fully enjoy a particular place.

Most of the times the environment or climate has not been raised for the tourists

and locals are failed to attract the attention of tourists towards the traditional

buildings.

In tourism sector, jobs are not raised for the people who actually want to promote

tourism with their skills and abilities.

Hotels and restaurants are very expensive for the tourists.

2.2 Tourism and quality of life Travelers will be affected by the source and quality of life of the citizens of these

countries enjoys a traveler who carries. In particular, the static nature of the industry

obviously does not take into account the profile and behavior of visitors to the different

nature of a particular destination, or the rapid development of the international tourism

market. This is the best first approximation at a given time to reach visitors to understand

the possible dimensions. For example, a futurist think, unlike today's travel market, the

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future will see a prosperous, various forms of tourism and culture, history and education

(Augustyn & Ho, 1998).

2.3 Tourism development and prosperity: Challenges measurement Specific objectives, hides a key aspect of our understanding of these complex

phenomena opportunities. Each discussion has assumed that the measures and the

hypotheses are accurate to capture the "truth." This assumption has long been concerned

professionals (Ashley, Boyd, & Goodwin, 2000). The most serious of these problems

associated with the true size and nature of the direct economic costs of tourism, as well as

its subsequent indirect economic impact. Significant progress has been made in recent

years to strengthen the reliability of these measures and the development of a separate so-

called “satellite accounts”, these sub-accounts more accurately portray the national

accounting standards and the country's tourism. Additionally, satellite accounts offer

additional way of measuring things can be difficult to directly in the national accounts

treasury(Dritsakis, 2004). Significant progress has been made in recent years to

strengthen the reliability of these measures and the development of a separate so-called

“satellite accounts”, these sub-accounts more accurately portray the national accounting

standards and the country's tourism. Government become more involved in the tourism

industry has grown as tender. They encourage tourism (e.g., foreign currency from

France, England and Japan in the late 1960s, bonds, 1979 restrictions, as well as to

encourage foreign travel (Chen & Chen, 2010)

2.4 Prospects for Competitiveness At first glance, the competitiveness, it seems a simple concept, these small

differences. According to the Concise Oxford Dictionary, the quality of competition is in

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a better position. But when we try to measure, we begin to understand the difficulties it

defines as competitive and as a relative concept (i.e. a relatively favorable that?), usually

multidimensional (i.e. no outstanding qualities?) (Sirakaya, Teye, & Sönmez, 2002).

There seems to be no universally accepted definition of competitiveness. It may be too

broad and complex concept, despite the attempts to encapsulate it in generally applicable

provisions. Buhalis, (1998) documented different competitive point of view, and (San

Martin & Rodriques Del Bosque, 2008) argues that poor policies at the national level, as

a result of a competitive force obsession. Perhaps the situation is best summed up by

(Crouch & Ritchie, 2010)

2.5 Successful Tourism Explore Social Paradigm: Competition and

Cooperation In this study, the main theme of the model will be to increase the competitiveness

of the destination. This theme will reflect the realities of the international tourism market.

Should recognize that to be successful, the destination must ensure that their general

appeal, and they offer visitors to experience wholeness must be equal to or exceed the

experience of many other areas open to potential tourists in the world. The most serious

of these problems associated with the true size and nature of the direct economic costs of

tourism, as well as its subsequent indirect economic impact. Quality of tourism products

on a global scale may be what some authors call the competing (Fodness & Murray,

1999), to compete effectively. From a social point of view, these authors also argue that "

in the twentyfirst century international tourism will be the primary means to satisfy

human desire to hold a higher quality of life, some of which will " promote a more

realistic human social relations " (Copeland, 1991).

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2.6 Hotel Selection Factors Influencing Tourism These properties directly influencing choice is deterrence determinant Properties

“: They may cause consumers to purchase intention and differentiate between two

competitors (Chu & Choi, 2000). Services and facilities can be ordered by phone or

through online routes, is a function of a product or service that leads consumers to choose

a product than others (Ngai, 2003). Germany " view site NED degree Traveler " ND

variety of services and amenities important to customer satisfaction. Garbers et al.,

(2006) found that clean accommodation, and then safety and security for the money, stay

polite and STA, the value of helping others happy (Dolnicar, Business travellers’ hotel

expectations and disappointments: a different perspective to hotel attributes importance

investigation. 2002). Researchers also noted that personal service, physical attraction,

relaxation, service standards, appealing image, and value for money are significant

opportunities for guest’s to choose a hotel choose property from the top, “estimate

traveler.

2.7 Perceptions of Business and Leisure Travelers towards Hotels Many studies have examined their criteria for the selection of the hotel business

and leisure travelers. These studies show that it is important tribute Arras hotel choice for

business travelers is the cleanliness and the location (Yu & Chang, 2009). Many studies

have been published in its focus areas of the hotel and tourism to support applications

such as rent, hotel management, concierge services, and tour planning methods. Mueller

& Kaufmann, (2001) discussed the need for the development of expert systems for a

number of precautions hospitality industry. Dolnicar, (2002) introduced theories, which

were applied to real estate, renting and domain management at three expert systems.

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3. RESEARCH DESIGN AND METHODOLOGY

3.1 Research Method This research will be quantitative. Data will be collected from students who are

studying in different universities of Islamabad and Rawalpindi. Sources will be different

within the university so that monotonous results could be avoided as it was also noted

while reviewing previous researches.

3.2 Sampling Technique The technique used to acquire my sample for this research will be convenient

sampling technique. This is to maintain the quality of research so only concerned people

will fill out the questionnaire.

3.3 Sample Size This study will collect data from 200 students studying in different universities of

Islamabad and Rawalpindi.

3.4 Data Collection Methods

3.4.1 Primary Data

Questionnaire survey will be conducted as a tool for primary research and collection of

data.

3.5 Data Collection Tool To extract the necessary answers for this study to formulize questionnaires were

developed and circulated. The adopted questionnaire will be used to gather the data from

respondents.

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3.6 Reliability Analysis Reliability of the data gathered would be calculated via the reliability test option

in this software, which will produce a coefficient known as Cronbach’s alpha, which

represents validity of the gathered data.

3.7 Data Analysis Ordinary linear regression will be used for this research. The hypotheses will be

tested via this statistical model. This model will be executed through computer software

for statistical calculations known as SPSS.

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