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Tourism Management, Vol. 16, No. 2, pp. 101-105, 1995 Copyright © 1995 Elsevier Science Ltd

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Prospects for tour i sm- a practitioner's view

Alan Jefferson 30 Merton Avenue, London W41TA, UK

The recently retired International Marketing Director of the British Tourist Authority (BTA) presents an informed forecast for tourism over the next I0 years, based on demographic, socio-economic and political trends. The growth in the number of older travellers and the increase in expectations and sophistication, coupled with the taking of second, third and fourth holidays, is particularly noteworthy. Value for money will assume greater importance, Western Europe will face stiffer competition as a destination - not helped by lukewarm support for the EU and national governments - and environmental issues will continue to become more significant.

Keywords: trends, Europe, age-groups, segmentation, green issues

Tourism growth has come from the developed world, where disposable incomes and leisure t ime have increased with affluence. Some 90% of world travel is accounted for by the residents of O E C D m e m b e r states. Travel has become an expectat ion of the masses in the industrialized world, and we are beginning to see this extending to many unde- veloped countries.

With affluence came increased car ownership, which in turn made populations more mobile. In the United Kingdom, for example, car ownership in- creased from 5.5 million in 1960 to around 23 million in 1990. In Europe today the car is the most fre- quently used method of t ransport for holiday- makers , and car ownership continues to increase year on year.

This massive increase in travel has been accompa- nied by substantial investment in tourism plant in receiving countries. In the 1960s there was enormous growth in Mediterranean and Adriatic resorts, alas at the expense of the northern European cold-water resorts. England has gained more than 400 new attractions over the past five years, and some of these are already exceeding half a million visits a year. Florida and Queensland have seen massive developments in infrastructure, accommodat ion and attractions. Singapore 's hotel stock has burgeoned. Mexico has several new resorts, as have Thailand and Turkey. More and more developers are moving into the tourism and leisure sector. Some of Britain's

larger industrial cities - Glasgow, Manchester , Liverpool and Birmingham for example - have forged ahead in developing a significant tourism industry. They mirror the developments in other cities such as Balt imore, Sydney and Toronto.

In at tempting to forecast what tourism will mean over the next ten years, we need to look at trends - demographic, socio-economic, and political - and we need to learn to read the trends.

Among the more important macro trends, vitally important for tourism, are the demographic ones such as population growth, life expectancy and age profile.

Retired people will account for a larger share of the population. By the turn of the century about one in seven people in North America and Japan will be over 64. By the year 2001, one in four Europeans will be over the age of 55 and the average age of ret i rement is getting earlier. The biggest change in the 1990s, then, will be record numbers of senior citizens in most of the developed countries of the world - the tourism-generating countries.

It is this mature and concerned segment, in- creasingly active in 'green ' issues and preoccupied with lifestyle, which is already impacting on tourism management . They were the mass travellers of the 1950s and 1960s. They were the ones who extended their horizons in the 1970s following the introduction of jumbo jets. They are today's sophisticated and discerning travellers with the means and the will to

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Prospects for tourism - a practitioner's view." A Jefferson

travel. They expect high standards and above all they expect value for money. They want modular packaging, but the trade is still overly concerned with the mass market movement to sun destinations.

As people travel further afield they are exposed to standards of accommodation and levels of service in Asia and America which cause them to revise their expectations about standards in some of our Euro- pean cities and resorts. As expectations increase the tourism providers need to improve and adapt to meet these expectations.

Europe will undoubtedly continue to dominate the international travel picture over the next decade. Compared with the rest of the world, practically all Western Europeans enjoy above-average standards of living and this is matched by longer than average holiday entit lement and higher than average dispos- able income. Europe as a destination offers the sort of cultural experience which is appealing to long- haul travellers.

Eight of the top 10 tourist destinations in terms of tourism receipts are in Europe; 16 of the top 20 are in Europe; 15 of the top 20 generating countries are in Europe. So it is important as both a receiver and generator of traffic and will, in my view, continue to be so.

The EC declared 1990 European Tourism Year and for the first time prepared an action plan for tourism. Yet Brussels still accords a very low priority to tourism - there really is no overall policy, even though changes in trading conditions will have a t remendous impact on travel movements.

The EC may well have promoted tourism out of the third division into the second, but this is certainly not the case in all member countries, and even more so in some non-member states. The Swiss govern- ment has made a swingeing cut in the resources of their national tourist office. Sweden withdrew gov- ernment support from its tourist office. They either don' t recognize the social and economic importance of tourism or they believe that the tourism industry itself must sell the destination. This does not happen in my experience. The key roles of Guardian of the Image, Marketing Coordinator, Pioneer in develop- ing new markets, segments and techniques, and Monitor of Visitor Satisfaction can only be under- taken by government or an agency of government. As government financial support in Europe reduces it is stepped up in other countries, and in some Third World countries ironically a great deal of their promotional spend is funded by the EC. The result is that Europe is now seriously under-promoted vis-a- vis the competition. Europe has lost share of voice in an increasingly competitive environment.

Some of that competition for Western Europe will come increasingly from Eastern Europe. While the rapid political changes there are creating substantial new markets for the future, they are unlikely to be significant before the end of the century because of

the shortage of hard currency, In the short and medium term, the balance of traffic will be in the direction of the east. Within a very few years tourism will undoubtedly be Hungary's most lucrative indus- try.

The Economist Intelligence Unit expects the growth in international travel to moderate between now and the end of the century, with the greatest expansion coming from Japan and Europe and a decline in travel by US residents. A recent European Travel Commission report , on the other hand, sug- gests that current US traffic to Europe represents only about one-fifth of the target audience. Un- doubtedly the majority of US travel is domestic - as much as 97% - and deregulation of America's airline industry has further encouraged holidays at home. The greatest boost to outbound travel would be an increase in holiday entitlement. For Americans it is normally two weeks; in The Netherlands and Ger- many it can be seven or eight weeks. In Japan, similarly, it is only two weeks of which often only eight days is taken, though this is changing - the younger generation is developing a different cultural attitude.

The British Tourist Authori ty recently commis- sioned some research in Japan and one of the findings related to the plusses which the Japanese see Europe as having over other destinations. These were history, deep-rooted culture and tradition, shopping and the appeal of being able, easily, to visit many countries during a relatively short time. This is, I suggest, the appeal which Europe has as a destination not just for the Japanese but for interna- tional travellers generally, and particularly the inter- national 'culture vultures'.

As I have said, Europeans have long holiday entitlements and in the developed world there is an increase in the number of retired people who have the means and the will to travel. The transport improvements we are seeing in Europe will facilitate intra-European travel, especially for the second or third short holiday. The ease of travel in frontier- free European will mean that traffic across the present borders will increase faster than domestic travel in most European countries and faster, I believe, than long and medium-haul travel, which have been the front-runners in recent years.

These second, third and even fourth holidays will be designed to meet the lifestyle needs of the 'culture vultures', those pursuing a special interest and the active. Holidays will increasingly be about slimming bodies and broadening minds. And what of main holidays. Will it continue to be the mass movements to the Mediterranean and Florida for Europeans? Already we are seeing a decline in the Mediterranean share; already we are seeing trading- up to South Africa, Australia, California and the Caribbean.

Environmental issues will become more impor-

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tant. It seems certain that tourism providers will more and more have to meet the needs o f a much more environmental ly aware consumer as well as a much more sophisticated and discerning one. Des- tinations which offer a clean, attractive environment will have a substantial advantage in the future. The new legislation in the Balearic Islands is not just the result of a caring regional government - it is their response to a declining traffic. The World Bank and the W TO both argue strongly for environmentally sound development. The World Travel and Tourism Council, with support from the BTA, has set up a database of good practice.

Tourism and leisure are here to stay, but if they are to progress they will need to adapt to demog- raphic trends, to changes in fashion, changes in climate, changes in attitude. Destinations are being scrutinized by an increasingly sophisticated clientele - the international traveller - and by the conserva- tionists. The appreciation of the countryside and wilderness, concern for conservation and the en- vironment, will become much more important over the next decade.

Increasingly, developers of tourism product will need to apply the following criteria:

• Is there a market? • Is it viable economically? • Is it socially compatible? • Is it environmentally acceptable?

The evolution of demand for international tourism on the global scale has resulted in substantial changes in the great travel flows and cross-currents which have affected destinations differently. There has been a strong, fairly consistent, growth in inter- national travel since the 1960s, with some hesitations in the 1970s following the energy crisis. In the early 1980s there was another fall in the rate of growth following on world recession, and again in the early 1990s. Nevertheless, in the decade 1978 to 1988 there was an average increase of over 5% per annum in total arrivals notwithstanding recession, political instability and exchange rates. For the coming 10 years, growth is likely to average 4%.

These changes in travel flows arise for three reasons: changes in the market , changes at the destination and, not least, transport services betwen the two. Eastern Europe in the longer term could provide substantial markets. There has been sub- stantial investment in hotels, facilities and attrac- tions in Southeast Asia and Australia, which has attracted increased business.

In the short period since the Japanese outward travel movement started there has been massive development in air services and airports - Tokyo's Narita, followed by Kansai International at Osaka: London's third airport, Stansted, has recently be- come operational. Even so, a major handicap in the airline industry is congestion. Single Europe resulted

Prospects for tourism - a practitioner's view: A Jefferson

in liberalization of air travel, which opened up all major routes to direct compet i t ion between airlines, provided stimulation for new routes to regional airports and brought some reduction in fares. It is forecast that 16 European airports will be capacity constrained by the year 2000 and that Europe will run out of airspace by 2000 or even as early as 1995, unless the air space map of Europe is redrawn. The advent in 1994 of the Channel Tunnel has seen trains challenging aircraft on many prime European routes: London/Paris, London/Brussels.

But people do not travel simply because a new route opens. There is a trinity of forces: price, convenience/comfort and trip satisfaction/fashion. An advantage in one of these alone will divert traffic, but to increase movement there must be an advantage in at least two of the three factors.

Socio-economic factors influence the generation and the location of tourism. Time, desire to travel and income levels are the prerequisites. The most important factor, however, is likely to be the level of economic growth in those countries which are im- portant generators of tourism traffic now, or can be in the future. Travel spending traditionally rises at twice the rate of G D P increases or even more. Economic forecasts suggests that Community mem- ber countries' national incomes will rise between 2.5% and 7% over the growth rates of the old separate national systems - a massive increase in prosperity. Economies in many Asian countries will undoubtedly continue to strengthen and the Amer- ican market will continue to offer huge potential. Thus the potential for growth in the world's largest travel markets is enormous.

Opportunities exist in market segments such as senior citizens, with disposable income, the will and ability to indulge in international travel; the youth market, with its anxiety to succeed, to learn new skills essential for success; the special interest traveller; the business traveller.

The rapid expansion of tourism over the last 30 years or so has impinged on cultures and lifestyles and in turn has given rise to social problems. Too often economic aid from wealthier nations to poorer ones has been used to finance tourism developments without too much thought being given to the social or environmental fabric of the destination. Tourism was seen as a panacea for economic problems, for trade imbalances or for unemployment. But plan- ners and developers did not take account of the social implications. In extreme cases the local population has been exploited by unscrupulous businessmen. The experience of the last 30 years, though, has resulted in an awareness at least of the social pressures which can develop, an understand- ing of the potential social problems, and hopefully an improved planning regime, training and manage- ment of tourism development. Tourism develop- ment must be socially compatible. It will no longer

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Prospects for tourism - a practitioner's view: A Jefferson

be enough for governments to determine tourism developments solely on the basis of economic criteria. Social and environmental issues will also need to be addressed. This will determine, for example, whether to go for mass tourism or the independent traveller, the rate of growth, the level of incentives, legislation, regulation, investment in infrastucture and training.

Soft tourism, alternative tourism, ecotourism, sus- tainable tourism - whatever we call it we must recognize that green issues are increasingly a perma- nent item on the political agenda of national and local governments. Tourism developments , like other developments , must be politically acceptable; and to be politically acceptable they must be socially responsible and environmental ly sound. While en- vironmental issues are becoming popular , and thus politically interesting, much of the comment and study at present tends to be very academic or theoretical - reflecting the interest of the commenta- tor rather than being practical. Restriction of traffic and control may not be the right answer but rather creative planning and expansion, which needs the collective effort of operators and controllers. Sus- tainable tourism is not cheap - it needs a responsible approach, careful management and controlled plan- ning, creative and selective marking, education and training. It will be increasingly important - a major political issue of the 1990s.

A working group of research directors in the European Travel Commission identified a number of mega-trends for tourism in the next decade. I have to say I do not agree with all of them. They suggest that global travel spending, and particularly transport spending in, into and from Europe will increase faster than other budget items owing to more frequent, albeit shorter, holidays. They sug- gest that long-haul holidays to and from Europe will increase faster than intra-European holidays to and from practically all the continents, notably America, Asia and Oceania. I would agree, if one is talking about main holidays.

They suggest that, within Europe, city travel will increase faster than summer and beach holidays, because of parallel and steady increases in both short breaks with cultural or pseudo-cultural motivations and all forms of business travel - incentive, conven- tion, conference, visits to trade fairs and exhibitions. Certainly I would agree with this.

Indeed I would go further and suggest that it will become less fashionable to take sea and sun holi- days, less fashionable to have a golden tan. South- north, east-west and west-east travel will increase relatively faster than traditional nor th-south holi- days, for this reason. But winter sunshine holidays will continue to be attractive, as will cultural winter tours and cruises, which will increase faster than winter sports holidays.

I very much agree with their conclusion that traffic

across present intra-European borders will increase faster than domestic travel in most European coun- tries as travel becomes easier. There is something of a railway renaissance in Europe and the Channel Tunnel is now open. But even so, air traffic both short and long haul will still increase faster than other types of transportation.

The group suggested that inclusive travel will grow faster than independent travel. I am not sure that l agree with this, though some form of modular packaging will allow for more flexibility.

Late reservations will increase faster than early bookings and the role of computerized reservations systems will increase. We are already seeing a sub- stantial move to late bookings.

l have already talked about demographic trends. They identified two age-groups which will increase faster than others - senior citizens and young people - and, as a consequence, both the demand for cultural visits and holidays and for active summer or winter holidays will grow faster than other forms of vacation.

Lifestyle is already beginning to change quite rapidly: more concerns for health, resulting in an increase in membership of leisure clubs and an increase in activity holidays - walking, cycling, golf- ing; more concern with self- improvement and self- expression as evidenced in the increased uptake of adult learning and leisure learning weekends as well as special-interest holidays. Both trends will, in my view, accelerate over the next decade.

Segmentat ion will become even more important. Marketing will be the key to success and so there will be a move to large groups, more cooperative market ing undertaken by consortia, more branding. Seasonality remains a major challenge but will be seen increasingly as a market ing opportunity rather than a problem. Segmentation and a response to the seasonality challenge can already be seen in city centre hotels throughout the world, with the equiva- lent of business class - the executive floors. More than 50% of most hotels ' occupancy comes from the business traveller but this tends to leave the weekends with low occupancy levels unless some- thing is done to attract additional business. This could be that same business traveller extending his stay to include a leisure break, or more likely a leisure traveller. The needs of the business traveller will continue to be paramount , and so health and fitness facilities are here to stay and there will be more and more demand for non-smoking rooms or floors, women-only floors with dedicated lift service, or even women-only hotels to meet the needs of the increasing number of female business executives. In the USA, for example, almost 40% of all business executives are female.

Not all business travellers have an unlimited budget though. This is certainly true of the leisure traveller who wishes to stay in hotels. So there will

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be an increase in branding of hotel products to cater for different budget brackets. The Singapore Tourist Promotion Board is taking stock of its budget hotels for anticipated further increases in visits from China and ASEAN. There will be niche marketing, appeal- ing to one particular market segment. Already a large number of people are vegetarian and their numbers are growing. Top hotels need to have vegetarian dishes on their menus. Increased seg- mentation will also affect design. Guests' safety, especially for elderly and women guests, will become more important. Environmental issues will affect the design of hotels - noise pollution, energy conserva- tion, hygiene. The need for no-frills, limited-service hotels will become important. The Forte Travelodge and Ibis hotels in Europe are examples. Asian hotels consistently feature in the world's best league tables and are looking to expand into America and Europe

Prospects for tourism - a practitioner's view: A Jefferson

and they will set new standards for service and design.

Making it easy to buy will be vitally important. Computer reservations systems, video, fax, personal computers - the effects of the new technology moves us inexorably towards the instant customized holi- day. Only those destinations and services which have the technology will benefit from the increasing trend to shorter gestation between planning and decision. There will be a much shorter lead time and those with the technology will not only gain in this way but will be able to reduce costs.

Tomorrow's traveller will be a child of the in- formation technology age, a sophisticated and dis- cerning consumer increasingly alive to 'green' issues, seeking out value for money. The successful destina- tions will match their aspirations.

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