Tourism and Regional Development

New Pathways

Maria Giaoutzi, Peter Nijkamp, Peter Nijkamp

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351878623
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Local & Regional Planning Public Policy
• Index: Politics & International Relations

Tourist visits used to be a less common activity in the past. However, more people than ever now make leisure trips, making this an era of mass tourism. This drastic change in spatial behaviour is not only caused by economic prosperity, but the scale of this phenomenon means that it is able to generate economic growth, making tourism a key factor in regional development policy. One of the main challenges of current regional policy is to market the attractiveness of an area, thereby increasing tourist visits and subsequent revenue. In particular, regions are attempting this through the use of Information and Communication Technologies (ICT), which offer information on interesting places, and efficient methods for organizing and booking trips. This book examines the interconnections between tourism, ICT and regional development. Bringing together a range of European case studies illustrating various ICT and policy innovations, it not only critiques current activity by regions in terms of tourism development, but also considers how this sector is likely to continue to grow.

Chapter 1
Emerging Trends in Tourism Development in an Open World

Maria Giaoutzi and Peter Nijkamp

1.1 The magic of tourism

In the eyes of many decision makers and politicians tourism has magic potential. It generates income and is based on the indigenous resources of the tourist areas concerned. Tourism has indeed been a rapidly growing sector and a wide-sweeping socio-economic phenomenon with broad economic, social, cultural and environmental consequences. It is likely that tourism will continue to dominate the international scene for many years to come.

Tourism is part of the leisure sector that is rapidly gaming economic importance. The volume of tourist flows at a worldwide level is showing a continued growth path, mainly as a result of increasing incomes and improvement of transport systems (see Pearce, 1981). People are travelling more frequently and over longer distances for leisure purposes. Our world is becoming a global tourist village. Remote destinations are in easy reach and the modern telecommunications sector provides direct information access to such destinations.

Prosser (1994) argues that the dynamics m the choice of tourist destinations is caused by three motives: conspicuous consumption of an elite class; successive class copying, as lower income classes imitate the elite's behaviour, and the expansion of the tourism frontier (or 'pleasure periphery'). Consequently, there are waves of tourism all over the world. This phenomenon can easily be depicted in a diagram of the tourist life cycle that maps out the various stages of tourist demand at a certain holiday destination (see Figure 1.1). This life cycle incorporates clearly distinct classes of tourists who have their own specific behaviour in the various stages of the tourist life cycle, viz. explorers, adventurers off the beaten track, elites, and early mass and mass package tourists.

Over the past 40 years tourism has become a major activity m our society and an increasingly important sector in terms of economic development. It forms an increasing share of discretionary income and often provides new opportunities for upgrading the local environment. Tourism is increasingly regarded as one of the development vehicles of a region, while it is an important growth sector in a country's economy. In both the industrialized and developing world, tourism is often seen as a source of revenues, as a potential for rapid growth, and as an environmentally-benign activity. Whether or not this is true remains to be seen, however.

Figure 1.1 The tourist life cycle

Not only is it evident that tourism is a rapidly growing economic activity, on all continents, in all countries and regions, but it is also now recognized that this new growth sector has many adverse effects on environmental quality. In the context of the worldwide debate on sustainable development, there is also an increasing need for a thorough reflection on sustainable tourism, where the socio-economic interests of the tourist sector are brought into harmony with environmental constraints, now and in the future. Tourism is intricately involved with environmental quality, as it directly affects the natural and human resources, and at the same time is conditioned by the quality of the environment. Much empirical evidence has shown the negative effects of tourism, in particular on the environment. Such a relationship has important implications for policies, management and planning (see Giaoutzi and Nijkamp, 1994).

Tourism is thus a double-edged sword. It may have positive economic impacts on the balance of payments, on employment, on gross income and on production. Moreover, tourism development may be seen as a main instrument for regional development, as it stimulates new economic activities (e.g. construction activities, retail shopping) in a certain area. Nevertheless, because of its complexity, the direct impacts of tourism development on a national or regional economy are hard to assess.

Tourist development poses special problems for environmental resources that are 'exploited' by tourism. The use of such resources has two important consequences. The quantity of available resources diminishes and this, in turn, limits a further increase of tourism. Furthermore, the quality of these resources deteriorates which has a negative influence on the tourist product.

Given the multidimensional dynamics of tourism, it is hard to identify a sustainable development path for the sector, since there are conflicting objectives involved, and the definition of an unambiguous sustainable state for tourism is a thorny question. Müller (1994) has made an attempt to specify sustainable tourism development by using what he called the 'magic pentagon' (see Figure 1.2). This magic pentagon takes for granted that sustainable tourism reflects a state of affairs where economic health, the well-being of the local population, the satisfaction of the visitors/tourists, the protection of the natural resources, and the health of the local culture are all in balance. Any imbalance in this prism means a distortion and will have a negative impact on the benefits of all actors involved.

Figure 1.2 The 'magic pentagon' of sustainable tourism

1.2 Impacts of tourism

It goes without saying that tourism induces changes m many areas, not only socioeconomic but also environmental. The assessment of such effects is, however, fraught with many difficulties, as the tourist sector comprises a complex set of interlinked activities, such as travel, accommodation, catering, shopping, etc. (see for details Briassoulis, 1995). Consequently, in a strict sense, tourism cannot be considered as a specific sector or industry; it is essentially a complex ramification of economic activities that, in combination, determine the quantity or quality of the tourist product of an area. Hence, given the multi-activity and multi-sectoral nature of tourism, the various sectors that constitute tourism make their own different contribution to the production and consumption of the tourist product.

Firms in the tourist sector are numerous, offering various types of product, each one contributing to the quality of the tourist product. This product is thus a 'packaged' selection of elements that are decisive for the perceived attractiveness of a tourist place. This also means that the determination of a single unambiguous price for the tourist product is almost impossible. Consumers face a multi-product and multi-priced set of amenities, about which they do not have perfect information and free choice, so that they tend to take sub-optimal decisions. And finally, the tourist product is a mix of private and public goods, which complicates the application of purely public or purely private sector policies for the control of its quality and impacts.

An additional complication is that the tourist sector has the typical features of a seasonal activity that may lead to discontinuous economic impacts. In summary, the tourist demand is dynamic, fluctuating over space and time as a result of frequent changes in tourist preferences and marketing policies.

The socio-economic effects of tourism are manifold and can be classified as follows (see Pearce, 1981):

• Balance of payments: tourism is essentially an export good which brings in foreign currency, although foreign tourist operators, promotion campaigns abroad, etc. may reduce the net benefits for the balance of payments.
• Regional development: tourism also addresses peripheral areas and hence spreads economic activity more evenly over the country.
• Diversification of the economy, given the multifaceted nature of the tourist sector, it may help to build up a robust economic development.
• Income levels: the income effects of tourism are twofold: building/construction and operations. This may also explain variation in income multipliers (see later).
• State revenue: the state earns revenues from tax collection, although it has to be recognized that significant outlays for the infrastructure may also be needed.
• Employment opportunities: tourism is rather labour-intensive and also requires much unskilled and semi-skilled labour, which offers great opportunities for less favoured regions.

The extent to which these effects will manifest themselves varies a great deal and is dependent on the stage of the tourist life cycle, local tourist policy strategies and the use of sophisticated communication technology in promotion campaigns. In all cases, the quality of the tourist product offered is decisive for the economic impact on the local and regional economy. In this context, a keen marketing strategy is of the utmost importance, as such a strategy has to ensure the best possible match between the tourist's aspiration level and the opportunity set of the tourist's resources and attributes.

It is a well-known tact that the revenues of the transportation sector — an activity meant to physically transport people and goods — are rather modest. In fact, the transportation sector (interpreted in the above-mentioned limited sense) is, just like the agricultural sector, an infra-marginal economic activity. However, in a modern economy the strategic importance of the transportation sector and the supra-marginal profitability of parts of this sector are dependent on the logistic management of the sector. In other words, it is not the physical movement that is the main source of revenues, but the non-physical organization and coordination of the sector based on modern telecommunication, telematic and logistic services. The latter branch of economic activity does not constitute a low-skilled segment of the labour market, but is determined by highly educated, specially trained and internationally-oriented employees. Thus, logistics and distribution has become more important than material production and transportation.

This observation also applies to the tourist sector. This sector started as a simple, relatively low-skilled segment of the market by offering accommodation and related services to travellers. This traditional picture has drastically changed in recent decades. First, economic prosperity has generated a relatively large share of leisure time and discretionary income, so that more people can now enjoy the benefits and pleasure of international tourism. Second, worldwide mobility has drawn the attention of potential customers to distant and unknown destinations. And, finally, modern telecommunications brings attractive tourist destinations directly into the living rooms of potential travellers. This means that rising welfare and modern information and communication technology (ICT) may be held responsible for the global drive towards mass tourism.

At the same time, a drastic restructuring of the tourist industry itself has taken place. First, a concentration in the sector has occurred: witness the emergence of large-scale international hotel chains. Secondly, as a result of these economies of scale, a further rationalization has taken place, where electronic booking and advanced pay systems have taken over much of the traditional 'handicraft' character of the hotel business. But more importantly, the organization of tourism has come into the hands of a few large-scale tour operators who govern a significant part of the international market. These operators form a critical intermediate segment between demand and supply, in that they do not only organize packages of trips for the traveller, but they increasingly dominate the hotel accommodation market, as well as the tourist transport market. By a keen combination of various opportunities and by using modern ICT as a spearhead, they are in a position to control large parts of the travel agency market and the transport market for tourists. As a consequence, both tourist carriers and hotel owners are becoming increasingly dependent on the vested interests of a highly qualified and technologically well-developed group of tour operators. The question that arises now is: How can regions exploit the opportunities of the modem information and communication sector, without falling into the hands of the monopoly power of international tour operators?

It seems, therefore that a package of measures can be envisaged to nurture indigenous strength and to seek cooperation at the regional level. Elements of such a package are:

• Increase the quality of tourist facilities by addressing in particular the environmental quality of the area.
• Coordinate the information on the supply of tourist facilities (not only hotels, but also culture and nature) at the regional level, so that the region can be perceived as the supplier of a strong package of attractive tourist facilities.
• Invest in sophisticated regional ICTs (for example, electronic booking systems and Internet information on the area via a website page).
• Organize the regional forces so that the international traveller is presented with a uniform tourist image of the area which may favour an inflow of tourism without being dependent on international tourist operators.

1.3 Tourism and ICT

Thus there is a main role for marketing the tourist product by creating new customers through a balanced combination of product, price, distribution and communication services, as such services are often more effective and efficient than other forms of marketing. It is recognized in the tourist sector that markets gain a competitive advantage with improved communication, due to better access to information and distribution, as well as a more proper response to market signals.

Tourism plays a critical role in local economic development in many countries and is an important constituent of the emerging global network society, which is in turn stimulated by the modern ICT sector. The Internet plays an indispensable role in international and national tourism and will most likely become the critical tool for tourism in the future. The introduction of ICT in recent decades has created new opportunities for the tourist attractiveness of remote and peripheral areas, which nowadays also have a virtual access to major centres of tourist origin. This also leads to service competition among tourist facilities in areas of destination, where firms are increasingly involved in global competition (even when they belong to the SME sector).

The past few decades demonstrate a continuously growing trend in modern societies towards long-distance tourism. This trend has been to a large extent the result of:

• a steadily increasing income available for tourist activities;
• an increase of the time available for such purposes;
• greater mobility of people due to the shrinkage of distance resulting from new technological developments in the transportation sector (mainly the airline sector);
• the expansion of the transport system towards new destinations;
• people's changing behavioural patterns and lifestyles connected to travelling, due to increasing internationalization trends in the information era;
• logistic developments of the ICT sector.

The introduction of the various ICT applications related to the tourism sector opens new horizons for the introduction of new tourist services of either existing or new emerging tourist resorts in peripheral areas. As a result, the position of these resorts in the tourist market will be strengthened. The need for an updated network infrastructure, modern telecommunications systems and a skilled labour force is of the utmost importance in the context of these applications.

Such applications are, inter alia, focussing on:

• the promotion of tourist destinations through the advertisement of the tourist product in the context of multimedia applications;
• interactive communication between interested parts (tourist destination and the tourist);
• on-line transactions between the tourist destination and the tourist, su...