Globalization,
International Tourism and
the Lodging Sector
INTERNATIONAL TOURISM
MANAGEMENT
1
Globalization
About 30 years ago international enterprises was a
phenomenon but as globalization is a common term
today, the rise in industry numbers, severe
competitive in business life, application of a wide
range of marketing techniques and modern
technology, changed the business to transnational and
global.
2
With this concept all the countries,
liberalized their foreign investment
policies and aggressively courted foreign
investments
with
generous
fiscal
incentives.
Between 1983-1988 world trades volumes
grew at a compounded rate of %5.
Over the same period, global direct foreign
investment increased more than 20%
annually in real terms.
3
We experience international
transactions daily
Imports and exports reach
even remote areas
Technology and e-biz
promote trade
Consumers and companies
pull markets closer
The Shrinking Globe
1500 -1840
Best average speed of
horse-drawn coaches
and sailing ships, 10
mph.
1850 - 1930
1950s
Propeller
Steam locomotives aircraft
average 65 mph.
300 - 400
Steamships average mph.
36 mph.
1960s
Jet
passenger
aircraft,
500 - 700
mph.
Positive
Technology
Negative
Culture
Open Markets
Market Barriers
Economic Integration
National Barriers
Peace
War
Corporate Strategy
Corporate Strategy
Global Focus
Local Focus
1-3
Remove barriers to trade
and investment
GATT
WTO
Regional trade
agreements
E-mail and
videoconferencing
Better
coordination
and control
Internet, intranets,
and extranets
Improved
communications and
management
Transportation
advancements
More efficient,
dependable
shipping
Physical
security
Digital
security
Reputational
risk
Examine company
vulnerability
(weakness)
and
create a disaster
recovery plan
Guard proprietary
information and
confidential
communications
Require ethical and
lawful behavior from
all employees and
business partners
Comparing
revenue of
the world's
10 most
global firms
to the gross
domestic
product of
nations
Today, global corporations are controlling approximately half of
the world’s assets. Some examples of the companies and trade
marks may include; IKEA, Nestle, Coca-Cola Lever, General
motors, Honda, Toyota, IBM, Microsoft and many other mega
global companies .
In our subject industry (Tourism), by the internationalization of
Business ownership and management has had a major impact on
the travel, tourism and hospitality industry.
And these trends have resulted in intensified demand and
competition for airline seats and hotel accomodations in various
part of the world. (especially in USA)
13
1-4
INTERNATIONAL HOTELS
With the dissolution of borders, many economic and
regional unities, tourism industry moved towards
globalization
Internationalization of business ownership and
management had a major impact on the travel,
tourism and hospitality industry in the last decade
thus resulting in intensified demand and competition
for hotel accommodations and restaurants in various
part of the world.
15
The tourism industry is one of the fastest
growing industries of the world. Since 1950’s,
due to internationalization of domestic chains
like Hilton and introduction of jet planes to the
industry, it has a steady growth globally. The
figures are quite interesting thus WTO's Vision
forecasts (UNWTO, 2007) indicates that
international arrivals are expected to reach
over 1.56 billion by the year 2020.
16
Year
# of tourists
Total tourism income
1950
25
2.1
1960
70
6.8
1970
165
18
1980
285
105
1990
458
268
2000
698
475
2002
714
470
2009
903
856
2010
935
2023 (prediciton)
1700
2000
17
18
Rank
Country
UNWTO
Regional
Market
1
United States
North America
2
Spain
3
International
Tourism
Receipts
(2008)[9]
International
Tourism
Receipts
(2007)[4][9]
International
Tourism
Receipts
(2006)[10]
$110.1 billion
$96.7 billion
$85.7 billion
Europe
$61.6 billion
$57.6 billion
$51.1 billion
France
Europe
$55.6 billion
$54.3 billion
$46.3 billion
4
Italy
Europe
$45.7 billion
$42.7 billion
$38.1 billion
5
China
Asia
$40.8 billion
$37.2 billion
$33.9 billion
6
Germany
Europe
$40.0 billion
$36.0 billion
$32.8 billion
7
United
Kingdom
Europe
$36.0 billion
$38.6 billion
$33.7 billion
8
Australia
Oceania
$24.7 billion
$22.3 billion
$17.8 billion
9
Turkey
Europe/Asia
$22.0 billion
$18.5 billion
$16.9 billion
10
Austria
Europe
$21.8 billion
$18.9 billion
$16.6 billion
Rank
Country
UNWTO
Regional
Market
1
Germany
Europe
2
United States North America
International
Tourism
Expenditures
(2008)[9]
International
Tourism
Expenditures
(2007)[9]
International
Tourism
Expenditures
(2006)[11]
$91.0 billion
$83.1 billion
$73.9 billion
$79.7 billion
$76.4 billion
$72.1 billion
3
United
Kingdom
Europe
$68.5 billion
$71.4 billion
$63.1 billion
4
France
Europe
$43.1 billion
$36.7 billion
$31.2 billion
5
China
Asia
$36.2 billion
$29.8 billion
$24.3 billion
6
Italy
Europe
$30.8 billion
$27.3 billion
$23.1 billion
7
Japan
Asia
$27.9 billion
$26.5 billion
$26.9 billion
8
Canada
North America
$26.9 billion
$24.7 billion
$20.5 billion
9
Russia
Europe
$24.9 billion
$22.3 billion
$18.2 billion
10
Netherlands
Europe
$21.7 billion
$19.1 billion
n.a.
Top 21 most visited cities by estimated number of international visitors by selected year
International
visitors
(millions)
City
Country
Paris
France
15.6
2007 (Excluding extra-muros
visitors)[12]
London
United Kingdom
14.8
2008[13]
Bangkok
Thailand
Singapore
Singapore
New York City
United States
Hong Kong
China
7.94
2008 (excluding Mainland
China)[17]
Istanbul
Turkey
7.05
2008[18]
Dubai
United Arab Emirates
6.9
2007[19]
Shanghai
China
6.66
2007[20]
Rome
Italy
6.12
Seoul
South Korea
4.99
Barcelona
Spain
4.72
2008[21]
Madrid
Spain
4.64
2008[22]
Mecca
Saudi Arabia
4.5
2007[23]
Kuala Lumpur
Malaysia
4.4
2007 (External study
estimation)[14]
10.84
Year/Notes
2007 (External study
estimation)[14]
10.1
2008[15]
9.5
2008[16]
2007 (External study
estimation)[14]
2007 (External study
estimation)[14]
Kaynak: Kültür ve Turizm Bakanlığı, TÜİK.
TURKET
Years
Tourism Income
( 1000 $ )
Number of Tourists
Average spending
($)
2001
10 067 155
13 450 121
748
2002
11 900 925
15 214 516
782
2003
13 203 144
16 302 050
810
2004
15 887 699
20 262 640
784
2005
18 153 504
24 124 501
752
2006
16 850 947
23 148 669
728
2007
18 487 008
27 214 988
679
21 910 964
26 336 677
708
2008
Kaynak: Kültür ve Turizm Bakanlığı.
Turkey- International Arrivals According to Country of Origin (2008)
Years
COUNTRY
Share(%)
2007
2008
4 149 805
4 415 525
17,78
16,77
2 465 336
2 879 278
10,56
10,93
1 916 130
2 169 924
8,21
8,24
Bulgaria
1 239 667
1 255 343
5,31
4,77
1,26
Netherlands
1 053 675
1 141 580
4,51
4,33
8,34
1 058 206
1 134 965
4,53
4,31
768 167
885 006
3,29
3,36
630 979
830 184
2,70
3,15
593 302
730 689
2,54
2,77
642 911
679 445
2,75
2,58
Germany
Russian fed.
England
Iran
France
Gorgia
Ukraine
USA
2007
2008
Change(%)
2008/2007
6,40
16,79
13,25
7,25
15,21
31,57
23,16
5,68
Kaynak: TÜİK Çıkış Yapan Yabancı Ziyaretçilerin Geliş Nedeni, 2001–2006
Internatonal arrivals - Turkey
Reason for travel
2001
2002
2003
2004
2005
2006
Total
11 276 530 12 921 983 13 701 418 17 202 997 20 522 621 19 275 948
5 231 272
6 401 017
6 815 797 8 216 757
9 904 716
8 529 890
Culture
917 368
1 016 739
1 004 079 1 116 206
1 310 082
1 008 513
Sports
127 657
128 893
156 162
249 765
179 419
Visiting relatives
794 651
980 005
839 086 1 044 575
1 480 442
1 929 800
Health
96 860
82 693
103 404
133 721
164 598
153 895
Religion
30 962
60 171
58 456
61 053
106 710
101 564
Shopping
829 207
759 589
968 486 1 041 585
1 085 802
1 135 273
MICE
239 777
235 156
297 903
324 152
410 326
443 500
Business
500 328
571 573
730 272
814 150
862 997
1 030 319
Fairs
503 300
376 813
442 431
633 994
610 106
747 599
Transit
308 428
252 722
246 377
168 330
404 940
321 607
197 834
72 060
125 060
88 356
94 399
115 944
399 684
588 267
624 989
755 038
Recreation
Education
Other
427 704
213 971
Rank
Country
UNWTO
Regional
Market
International
tourist
arrivals
(2008)[9]
International
tourist
arrivals
(2007)[4][9]
International
tourist
arrivals
(2006)[10]
1
France
Europe
79.3 million
81.9 million
78.9 million
2
United States
North
America
58.0 million
56.0 million
51.0 million
3
Spain
Europe
57.3 million
58.7 million
58.2 million
4
China
Asia
53.0 million
54.7 million
49.9 million
5
Italy
Europe
42.7 million
43.7 million
41.1 million
6
United
Kingdom
Europe
30.2 million
30.9 million
30.7 million
7
Ukraine
Europe
25.4 million
23.1 million
18.9 million
8
Turkey
Europe
25.0 million
22.2 million
18.9 million
9
Germany
Europe
24.9 million
24.4 million
23.5 million
10
Mexico
North
America
22.6 million
21.4 million
21.4 million
Europe
America
Asia / Pacific
Africa
Middle East
South Asia
Total
Number of beds (000)
11375
9334
6708
825
400
310
28952
26
Travel and Tourism --World’s Largest Industry
In 2001 it is estimated to account for some:
• $3.5 trillion of Economic Activity
• 207 million jobs
In 2011 it is estimated to account for :
• $7.0 trillion of Economic Activity
• 260 million jobs
Source: WTTC
28
Years and Number of tourists
 1963 :198.000
2010 : 33.027.943
Years and Tourism revenues
 1963: 7 million $ 2010: 20,806 billion US$
29




World’s total tourism investment level 802
billlion US $ (9.4 % of world total
investment)
Turkey’s total tourism investment level 2.9
billlion US $ (7.5 % of world total
investment)
Growth rate of world tourism sector 5.9 %
Growth rate of Turkey’s tourism sector 12.2
%
30
International hotels “are not only foreign firms with
direct investments in a particular host country, but
are those
firms having all major forms of
contractual arrangements and enterprises in host
countries”
-Reasons
to go global:
-ability to establish global marketing
-purchase network
-expertise to satisfy the demand
-Reasons
to encourage firms:
-increase employment rate
-increase national income
-Problems:
-cultural, political and social differences
-cultural climate
32
The Historical Aspects Of International Hotels
Main pioneers in international hotel industry are;
-Cesar Ritz,
-E.
(Ritz Hotels)
M. Statler, (Statler Hotels)
-Conrad
-Ernest
Hilton, (Hilton Hotels)
Henderson (Sheraton Hotels)
33
Before World War II,
-American
hotels have no investment abroad.
-Reasons;
-Great risk to choose the best location,
-Financing complicated,
-Currency fluctuations,
-Restrictions,
-Power of domestic hotels.
With the help of media, Americans wanted to go to
places they saw.
34
After World War II,
-Roosevelt,
-Pan
Latin America,
– Am and Inter – Continental, (Brazil)
-Inter Continental
and Grand Metropolitan (109 hotel)
-Hilton,
35
Developments in Continents
Europe;
- first from USA,
- Marshall Plan,
- first in main cities (London, Rome, Paris),
- travel increase, European chains appeared,
- Energy Crisis (1973), stopped,
- European Economic Community, increased,
- high labour cost, plan restrictions.
36
North America;
- only Americans,
- 1980’s, foreign hotels
. stability of economy,
. low construction and operation costs.
Middle East:
- oil producing country’s wealth,
- not an attractive place;
. economic and politic instability,
. complex problems
. war in Kuwait, problems in Iran, Iraq, Israel.
37
Asia – Pacific;
- mass travel and extreme demand,
- first American hotels,
- Japanese and Asian brand hotels
- attractive;
. low costs
. labour cheap
38
Reasons To Become a Chain
-stay
as a local and weak hotel,
-lack
of technology,
-cheaper equipments,
-distribution
of risks.
39
Famous International Hotels
American Chains;
Hilton
(Great Depression, 7 brands: Hilton, Conrad,
Hampton Inn, Homewood Garden Inn, Doubletree
and Embassy)
(2.709 hotels: Hilton 717, Conrad 22, Hampton Inn
1.293, Homewood 132, Garden Inn 191, Doubletree
166, Embassy 188)
40
Inter – Continental
(part of Pan – Am airlines, restorate palace,
old buildings.)
(total 135 hotels: 26 North America, 20
South America, 18 Asia – Pacific, 31 Europe, 35
Africa ad Middle East.)
Sheraton
(first to; automate reservation system,
develope toll free customer line, joint venture in
Moscow)
41
Holiday Inn
(first that fully capitalized by franchising)
Hyatt
(attract customer from surroundings, first to
emphasize on unique in – hotel dining facilities.)
Choice Hotels
(first to; use network, implement non – smoking
rooms, introduce midpriced all – suites, established a three
tiered hotel system – limited service budget hotel, full
service midpriced hotel, full service luxury hotels)
42
European Chains;
Forte PLC
(merged with Trust House, development
strategy; continue developping properties, seek
management contracts, pursue joint ventures, seek
franchisees.)
Club Mediterranée
(sports assc.,change environment, first for
singles then for couples, rent villages to companies)
Accor
(strong f&b operation, towards olders)
43
Meridien
(Air France route, expand French culture)
(182 hotels; Europe 60, America 17, 23 Middle
East, 62 Asia – Pacific 20 Africa, incopr. With Nikko’s 40
hotels)
Grupo Sol
(buildings impress Spanish architecture)
(350 hotels; Africa 17, America 77, Asia 9,
Caribbean 23, Europe 216)
44
Indian Chains
Low labour cost & training system.
Taj Group
(oldest hotel chain, 48 hotels)
Oberoi
(have 3 staff per room, 21 hotels)
45
Asian – Pacific Chains
cheap labour and land
New Otani
(Olympic games, largest and tallest hotel in
Japan, 19 hotels (1993))
Nikko Hotels
(Japan Airlines, own their hotels 18 hotels
+ 40 Meridien hotels)
46
Regent International
(first with Tokyo Inn, today with Rezidor
SAS, 10 hotels; 5 Asia, 2 USA, 1 Europe)
Mandarin Oriental
Dusit Thani (15 hotels)
African Chains
Southern Sun Hotels
(largest in Africa, 80 hotels.)
47
Inter-Cont
Meridien
12
2.472
Hilton
Regent Int
Nikko
26
2
1
48
20
23
35
4
Inter-Cont
Hilton
Meridien
17
4
Grupo Sol
Taj Group
Nikko
49
Inter-Cont
Meridien
Hilton
60
210
Grupo Sol
Nikko
Regent Int
31
1
216
Taj Group
2
2
50
21
18
2
5
Inter-Cont
Meridien
Hilton
9
1
Grupo Sol
Taj Group
Regent Int
Oberoi
51
Inter-Cont
1
3
Meridien
Hilton
Nikko
5
1
52
5
1
20
2
Inter-Cont
77
Meridien
Hilton
1
Grupo Sol
Nikko
Regent Int
53
Inter-Cont
Meridien
9
15
Hilton
Grupo Sol
5
Taj Group
Regent Int
59
Oberoi
14
Nikko
40
18
32
54
Airline Connection
-First
-To
Pan – Am and Inter – Continental,
where they fly to,
-Then
hotels with domestic airlines where they are
located,
-1994,
1.068 hotels 277 merged with airlines,
-Advantages:
promotion effort, increase the market
share
-Disadvantages:
managers, seasonal hotel (low season),
hotel poor in service.
55
Mergers
Reasons to merge;
-to
have more revenue
-Need
to represent themselves in key markets
-Access
to new markets
-Access
to home markets
56
Impacts of Chains on Tourism
Advantages:
-increase
capital in less dev. countries,
-technology
and management knowlegde got,
-distribution
-market
-to
of risks,
in global environment,
increase supply, capital is needed,
-increase
-make
employment and income,
tourism season longer,
57
Impacts of Chains on Tourism
Disadvantages:
-Creates
monopoly,
-Disability
-Not
to compete as a local investor,
encourage domestic tourism,
-Company
-Profit
and country benefits may not fit,
is transferred outside.
58
There is severe competition within such a
promising and profitable industry, since it not
only brings positive economic impacts but also
provides social and cultural positive impacts for
the host countries.
Therefore, the countries and establishments,
which are aiming to have a high market share
within the global tourism product are using all
the strategies applicable( in order to stand out
from the severe competition by showing and
communicating their competitive advantages and
positive image).
59
http://www.youtube.com/watch?v=
X5EL3PN8Yg8
60

Know the customer

Emphasize global awareness

Develop world-class products

Market effectively

Improve logistics

Analyze problems correctly