1. International Tourism

2. Incoming Tour Operators ‘Ground-handling agents’
The Tourism Industry
Attractions C u s t o m e r
Accommodation
Internal
Transport
International
Transport
Facilities
Tour
Operators
Travel
Agents
Incoming Tour Operators
‘Ground-handling agents’
National Tourist Office

3. Issues in international tourism
Who controls the channel?
vertically integrated oligopolies
multi-national mergers (see my website)
Impacts on quality
unsustainable over-development
low margins -> low reinvestment
homogenised products
Morgan in Theobald(1996) Global Tourism: the next decade BH

4. UK’s position in World Markets
UK is world no. 7 destination
after US, Spain, France, Germany, China and Italy in terms of £
lower growth rate than rivals (down 2 since 1998)
tourism 4.5% of GDP
7% of the workforce (2.1m)
UK is world no. 3 source country
after US, Germany and ahead of Japan & France
UK tourist spend abroad has doubled
Balance of payments deficit in tourism £6.8bn
increased to £11.5bn in 2000 (FMD etc)

5. Incoming Tourism Top five markets 2001 (1998)
USA 3.6(3.9)m visitors £2.4 (2.5)bn
France 2.8 (3.2)m £0.7 (£0.7)
Germany 2.3 (2.8)m £0.7 (0.9)
Ireland 2.0 (2.1)m £0.6bn
Netherlands 1.4 (1.6) £0.4
Total (25.4)m £11.3 £12.5bn

6. The role of the NTO How do you market a product you don’t own?
Theming and branding Promotion
Tourist promotion & information
Facilitation of exchanges (Middleton) Distribution
between elements of the industry
Joint marketing campaigns
Quality control and assurance Product
training, advice and research
Infrastructural improvements
Flagship projects
grants and subsidies

7. VisitBritain www.visitbritain.org
New National Tourism Marketing body
Strategic policies
price competitiveness
sustainability
partnerships and communication
quality of welcome
Engage public and private stakeholders in the marketing of Britain

8. Brand identity (Kapferer)
PICTURE OF SENDER
Physical
Features
Personality
INTERNALISATION
EXTERNALISATION
Relationship
Culture
Reflection
Self-image
PICTURE OF RECIPIENT

9. Marketing Strategy 27 target countries with offices
Segmented by key markets, for example:

10. Have the New Tourists arrived?
Independent, confident, and curious
Affluent and active
Looking for more than the 4 Ss
Poon (1993)
What do the figures show?
For some years now, writers on tourism have been forecasting a new type of tourist, more independent, more confident of their ability to deal with unfamiliar places and cultures, indeed curious to discover new things, about the world and about themselves.
These tourists would have more disposable income than before and be ready to spend it on active holidays, either conquering a rock face, learning to sail or learning about the art, history and gastronomy of a region
They would no longer be satisfied by the old sun, sand, sea etc type of holiday.
Is this just wishful thinking, or are the new tourists now a significant segment of the British tourist market?
What do the figures show?

11. UK Air holidays 1997-2002 (UK International Passenger Survey)
If you look at the British government International Passenger Survey, until recently both inclusive holidays and independent holidays have grown at similar rates and the market share of the two have remain steady around 52/48. Independent holidays have a higher share and growth in short-break and in holidays to North America.
What is interesting from this graph is that the growth in independent holidays has continued through the troubled years of 2001/2 while inclusive holidays have levelled off.
It is very premature to talk about the death of the package holiday but the independent traveller is likely to become an increasingly important target in the future.
So I would like to draw your attention to some of the underlying social factors behind the growth in independent holidays and some of the supply side changes that may be accelerating the growth

12. Underlying factors Ageing population Third generation tourists
peak age groups born 1947 and 1964
Third generation tourists
well educated and experienced
sophisticated Lifestyle consumers
food, fashion, home improvements and travel
Money Rich / Time Poor
Like most of Western Europe Britain has an ageing population profile. The bulge is in the and 55 plus age groups. These are or soon will be empty nesters with the money and freedom to travel more often. No longer tied to schoolholidays and resorts with kids clubs. The younger generations are smaller than before - the youth and family markets are still substantial but shrinking.
The British are now third generation tourists - flying, foreign food and languages are less of a worry. There is less reason to stick to the same tried and trusted holidays.
At home we are lifestyle consumers, encouraged to express ourselves through what we buy, and to experiment with the latest styles wherever they come from. [We may not speak your language, but we know all about your food and drink!] Spending on food fashion, DIY and travel have grown faster than the average. The holiday has become an important part of that lifestyle statement.
But while disposable income has continued to rise, leisure time has not. The British are following the Americans to become workaholics - successive surveys show we are working longer hours than ten years ago - 48hr week. We are money rich but time poor - so when we do take a holiday we want it to be special, because we’ve earned it.
All this points to the desire for change, for better value and for a wider choice in our holidays.

13. The Impact of the Internet
50% of the population now use it at home or work
65% of ABC1s and under 45s (Mintel 2003)
Half of these have browsed holiday/travel sites
but only 18% have bought flights/holidays on line
Better informed customers
Dis-intermediation or Re-intermediation?
We are able to exercise that choice more easily through the internet. In all sections of the population internet access is the norm 50%…. Rising to…..
Researching our holidays is a popular way of using the net. According to Mintel surveys, half of those with access have browsed holiday or travel sites.
That is as far as most of them go. The majority still make the booking by phone or with their travel agent. The 18% figure includes flight-only bookings. First Choice figures suggest that for package holidays only 3% book on-line.
So the impact of the internet, so far, is mainly to create better informed customers for the existing channels.
There is a lot of debate on whether the internet will lead to dis-intermediation - tourists going direct to hotels and airlines to book and cutting out the middle-men. That is now possible but it is still time-consuming and risky. People still need the services of the intermediaries, but they are now finding them on-line. This re-intermediation is clearly seen when you look at this list of top ten travel sites….

14. The top ten travel sites
Lastminute.com
Expedia.co.uk
Travel Select
Opodo UK
My Travel
Cheapflights
Ebookers.com
thomascook.com
Teletext
Airline Network
All of these are intermediaries offering a choice of flights and in some cases packages. But along with the new intermediaries - Last minute/Travel Select, Expedia and Opodo - are the web sites of the old intermediaries - My Travel and Thomas Cook.
However, the biggest impact the internet has had on tourism is in enabling the growth of the low-cost airlines...

15. Take it easy -low cost airlines
16 million passengers a year to/from UK
15% of UK international scheduled air travel
48% increase in capacity
‘Your next flight....’
a package holiday 41%
an independent holiday 35%
Business trip 5%
Never flown 19%
It is difficult to quantify the effect of these low cost carrier on the holiday market specifically as most figures do not differentiate between business and leisure travel
16 million passengers ….15% of scheduled air passengers …48% increase in capacity. (2001 figures for the big four)
What is certain is that many people now see them as an option when choosing a holiday. A Mintel survey asked people what they thought their next flight would be…..
So what are the implications of the rise in flight-only bookings

16. Implications Impulse buys - growing the market New destinations
Links with Hotel websites
an alternative package
issues of bonding and insurance
Commoditisation
The first is that by making travel so affordable they are creating impulse buys, generating extra overseas short-breaks and so growing the overall market.
In their search for cheaper airports the airlines have accidentally created new destinations. In small towns near these airports accommodation, restaurants and attractions have all benefited from these new impulse tourists.
By linking up with Hotel Booking agencies such as Hotel Connect and Octopus Travel, the carriers can offer an alternative package holiday. There were suggestions in the press last year that these were winning business away from the traditional operators even in mass market resorts like the Balearics. Why should anyone book with Mytravel anymore? Asked the travel editor of the Observer. The answer might have been because if you book each element separately you are not covered by the Package Holiday Directive and if things go wrong you are left unprotected.
The ability to surf the net, or ask a virtual operator, to find the cheapest deal for flights and accommodation is turning travel into a commodity market where price matters more than destination or brand image

17. The end of the World of TUI?
Travel agents losing share to call-centres and the internet
Tour operators less affected
Their advantages still apply on-line
cheap, convenient, consistent
Reinventing themselves
Goodbye Airtours, Hello My Travel
So do these trends mean that the end of the world is nigh?or at least the end of the world of TUI. Recent research (TGI) does suggest that the travel agent in the high street is losing market share to telephone call centres and the internet. 62% in 1998 used TA to book holiday abroad cf to 50% in 2002
The same figures show a slight rise 4% in direct bookings to tour operators and as we have seen earlier the package holiday itself shows no signs of decline.
The tour operators will I think continue to prosper as long as their advantages apply on line. Their purchasing power means their prices are still cheaper, they offer the convenience and simplicity of a package deal and the reassurance of a well-known brand.
The big operators adapting themselves to the new environment, creating their own presence on the web and diversifying into niche markets. The recent name change illustrates this intention - they are no longer Airtours, the mass market operator, they are now everyone’s gateway to their individual choice of holiday - My Travel

18. Sources http://www.staruk.org.uk/
Cope, R(2000) ‘UK Outbound’ Travel and Tourism Analyst, Jan 2000 Corporate Intelligence Group, London