Trends and Issues in the Tourism and Hospitality Industry

Dr. S K Cheung
Master of Social Science (Social Work) Master in Applied Management (Tourism Management) Master in Environmental and Business Management PhD

Contents
Social impact of tourism Effects of globalization on tourism development Sex tourism and exploitation of women Trends and issues shaping tourism and hospitality development
Lifestyles Branding Food production and supply Technology Legislation and regulations

Positive Impact of Tourism

Creation of employment Break down of stereotypes Revitalization of poor or non-industrialized regions

 The rebirth of local arts and crafts and traditional cultural activities
Aboriginal bark painting on bark: Price: AUD $185 Vanuatu's Original Bungee Jumpers: This awe inspiring ancient tradition, also known as land diving, is a feat of courage and Stone Age ingenuity that gave birth to modern bungee jumping.

The revival of social and cultural life of local population Renewal of local architectural traditions Promotion of the need to conserve areas of aesthetic and cultural value

Negative Impact
Overcrowding Decline of traditional activities such as farming Regions become over-dependent on tourism Demonstration effect
Local people aspire to the material standard and sex openness of the tourists

Acculturation
Local culture gradually give way to foreign culture McDonaldization, Coca-colaization

Globalization
Globalization is essentially a process by which an ever tightening network of ties that cut across national political boundaries connects communities in a single, interdependent whole, a shrinking world where local differences are steadily eroded and subsumed within a massive global social order
Mowforth & Mundt, 1998

Material

Money

People

Information

Technology

Globalization and Tourism

Affordable air travel
Increase in disposable incomes and vacation Information communication Increased familiarity of people with their own country Look for the new, the other, peripheral, and beyond the beaten track

Increased intention to travel abroad

New destinations

Negative Impact of Globalization

Commodification
conversion of a destinations culture into a commodity in response to the perceived or actual demands of the tourist market Loss of authenticity

Americanization Homogenization

Tourism, Culture and Commodification

Staged and performed Performance Traditional

Modified to make it easily digested or consumed

Ceremonies

Souvenirs Tourist gaze Exotic hotels

Look at or take photos

Arts and Crafts

Architecture

Props

Costumes

Case Study: Maasai

Tourists visit Maasai of East Africa
Dance in Maasai Local people pose for photos Maasai artwork as souvenirs

Azarya, V. (2004)

Loss of Authenticity vs. Preservation of Culture

Modified

Becomes commoditized and made for tourists. Local people forget its original meanings
Loss of authenticity

Traditional culture

Preserved

Traditions (e.g., ceremonies) are separated and made for locals and traditional skills are saved from oblivion

Forces against Commodification

Since 1970, Mardi Gras has become a year-round industry, attracting many tourists in New Orleans, USA

Gotham (2005)

Some companies wish to sponsor and advertise within parades

Some businesses wish to buy float ridership for their employees

Loss of Authenticity in Food due to Commodification

Canadians / tourists wish to taste Thai food, but not so hot or exotic

Thai food has to be adapted

Limited favoured dishes are offered Mainly 13 dishes Illusion of homogeneity of Thai cuisines

Blending of culture Loss of authenticity

e.g., Tom Yam Pak

Americanization of Food Services

Trans-National Corporations manufactured culture products spreads throughout the world Cultural proliferation People everywhere eat US food, watch US films, wear US dresses

Cultural Americanization Cities are infused with American culture

Cultural homogenization Local culture mixed with foreign culture; city loses its identity

 Cultural homogenization
Things, practices and values become increasing alike all over the world People use similar things, eat similar food, have similar lifestyles, and believe in material, technology and competition

 Cultural homogenization is not only about food

Fast food Original food style becomes less original or authentic

McDonalds
Work orientation Fast food Familial enjoying meal together
Benjamin Barber in Globalization and Culture, Cato Policy Report

 However, some studies found that fast food stores in China (e.g., Grand Mother Dumpling Restaurant) were encouraged to improve their dcor, hygiene and service upon the arrival of western fast food restaurants. They learned and succeeded but were not replaced.

 Globalization also allows Chinese, Indian and Japanese food to spread to other parts of the world

Sydney

Kuala Lumpur

Los Angeles

Americanization? Homogenization? Diversification?

City A City A

It seems Americanization does not really occur in most cities

Rather, there is increased diversity within a city; A tourist city is a theme park of world cuisines

There is also increased similarity among cities

City B

Globalization and International Investment in Tourism It may give tax

It may need to borrow money to build airports etc. For developing countries to develop tourism, they must have world class infrastructure to become competitive concessions to outside developers to attract their investments

Developing country

The investors may ask for change of law before going ahead with the development, e.g., more lenient environmental regulation.

 In Kenya, hotels are built in fragile coastal and marine eco-systems Tour operators have marketed all-inclusive tour packages international flight, accommodation, food, recreation, car rental, internal flight etc.

International Investment and Leakage

The Republic of the Maldives relies on tourism for its income Resorts are mainly funded by European tour operators

More than 50% of all labour is imported.

Pressure of Large Operations on SMEs

Best Western

Club Med

American Express

Thomson

STAR ALLIANCE

International Operations enjoy economy of scale, concerted marketing, and efficient use of computer reservation systems

This puts pressure on local small and medium enterprises (SME)

B&B

Sex Tourism
Some tourists travel overseas for sex Americans comprise an estimated 25% of all sex tourists Men mostly choose Asia (Bangkok, Philippines, Indonesia, Sri Lanka), but the trends has spread to Brazil, Cuba, Costa Rica, Eastern Europe and African countries (Kenya, Tunisia, South Africa) Women mostly choose Greece, Caribbean Basin, Genoa and Kenya (Africa), Bali (Indonesia) and Phuket (Thailand)
Omondi (2003)

 Different forms of sex tourism

Voyeurism (watching sex shows) Casual prostitutes Prostitutes through intermediaries Bonded prostitutes

Omondi (2003)

 Motivation factors
Anonymity Cheap Wish to try something new with a different race Buy their egos back Fleeing from unhappy relationships at home

 Supply factors
Poverty of the prostitutes Limited alternative opportunities to improve living

Destination factors
Facilitating infrastructure (nightclubs, hotels) Laxity of police control

 Are the tourists helping the poor women?

Some people think that the sex workers sell their services at their own choice Some people think that the workers are selling their service as other available labour Sex tourism can contribute to national economy

 But sex workers

May be infected with AIDS or other sexually transmitted diseases, and so are their family members Only get a small portion of money; most of it goes to the pimps; some have to pay the police; some lose their money to theft

Trends and Issues Shaping Tourism and Hospitality Development

Lifestyles Branding Food production and supply Technology Legislation and regulations

Hospitality Trends
Location: restaurants and bars will be available everywhere, plus a few exceptional places being destination restaurants
Bars in Dublin, Ireland Meson de Candido, Spain

Jones, P. (2006). Hospitality megatrends.

 Hospitality products are designed for market segments based on lifestyle

Family restaurants, sports bars and boutique hotels

 Branding
It is a key factor for companies to stand out from the competitors

Trends in hospitality process design

Production lining: services are organized on a production-line basis Decoupling: separating back-of-house from front-ofhouse activity in place and time Customer participation: customers help themselves for service

 Sustainability
Concerned about the environment

Security and assets

Customers expect that hotels are safe places for the guests and their property

A. Lifestyles
Lifestyle and segmentation
Different products

Different promotion Lifestyle groups Different expectations Different prices

Segmentation

Different places

Your Generation?
You consider 80s music to be oldies You have a cell phone but no land line One of your first favourite movies was Star Wars or E.T. Youve used floppy computer discs but consider them old-fashioned You were fascinated by Mickey Mouse and Donald Duck Cigarette ads on TV once seemed normal

Lifestyle cohorts
Baby boomers (born between 1946 and 1964)
The working ones have less leisure time than other adults Continue to travel and go out Treating work and personal sacrifice as keys to success Occupied with materialistic possessions and money Skeptical about advertising Prefer classic comfort foods They seek new places to visit that often are off the beaten path They avoid organized tours
Cheung, Harker, & Harker (2008).

 Generation X (born between 1965 & 1979)

Embrace change and dislike stability Emphasize work-home balance Like material possessions and shopping Associate good foods with certain brands Those with children are family travellers. They often stay with friends and relatives when they leave home, spending less on hotel rooms. They like packages that are reasonably priced and convenient.

 Generation Y (born between 1980 & 1995/2000)

Spend impulsively Technologically savvy Impatient and requiring immediate gratification Want fast food, but also healthier foods Fans for brands and fashions

 Implications
As new lifestyle groups emerge, hospitality products will be developed to meet the tastes of different groups.
More boutique hotels providing unique experiences

The baby boomer market is important in terms of size, their propensity to travel and the willingness to spend.

Socio-economic Types
Budget travellers
Average income, fewer household assets, average age, but large in number They prefer roadside or budget motels and family restaurants chains They look at value added features, such as kids sleep free at hotels, free in-room television, discount at restaurants etc.

 Adventure travellers
They have household income and personal assets above the norm They take more domestic and international travel trips than the average They want to explore new places and meet new and different kinds of people Soft adventure group wants more services and spend more Hard adventure types are likely to go to places without hotels and restaurants

 Luxury travellers
They are wealthy and take the most trips and longer trips They use travel agents They are NOT old They need to get rid of stress and seek new experiences They look for excellent service and follow through But this is a small market

Factors Influencing What People Eat

Cultural factors

Lifestyle factors Food decisions Psychological factors

Food trends
Asp (1999)

 Cultural factors
Classification of what plants and animals are edible varies according to culture Food is used to promote family unity when members eat together Food can indicate ethnic, regional and national identity Food is also used to develop friendships, provide hospitality, as a gift and for celebration Foods that symbolize these functions are consumed

 Psychological factors
People usually prefer foods that are
Familiar Considered pleasant Usually the ones eaten

Sensory attributes
Taste Texture Colour Shape, form, size of pieces and temperature

 Lifestyle factors
Lifestyles describe how people seek to express their identity in many areas, including food selection Pleasure-oriented: sensory attributes food, brand and high-value foods, convenience foods Nutrition-oriented: freshness, quality, safety

 Food trends
Emerging food trends that emphasize foods that are
Fresh Convenient Ethnic foods with distinctive ingredients, flavors and spices Fusion foods Prepared home meal replacement, more food mixtures particularly those with less meat More vegetarian meals Labelled natural or organic Easily available or bought Promoting health Physical performance-enhancing energy foods

B. Brand
Brand = the name, associated with one or more items in the product line, which is used to identify the source or character of the item(s) Kotler Brand associations
facilitate memory retrieval attitudes / feeling credibility and confidence differentiate/position basis for extension

 The brands of large and international hospitality firms reassure consumers that the standards and the system will be the same everywhere
Hilton, Hyatt, Toyoko Inn Starbucks, McDonalds

 However, foodservice chains are less reliant on tourists than on the local population and may adapt their operation to reflect local tastes

The growth of the Internet has enabled small hotels and restaurants to promote themselves effectively in competition with big brands

C. The Food Supply Chain

Labour

Labour contractor
Grower / farmer Broker Manufacturer, Processor

Distributors, Wholesaler, Broker

Restaurant, Supermarket Consumer

 Genetically Modified Food Major GM food categories

Soya beans Maize / corn Cotton Canola

 Other possible sources of GMO

Dairy products from cows injected with rbGH (a kind of
genetically engineered hormone).

Food additives, enzymes, flavorings, and processing agents, including the sweetener aspartame and rennet used to make hard cheeses Meat, eggs, and dairy products from animals that have eaten GM feed Honey and bee pollen that may have GM sources of pollen Contamination or pollination caused by GM seeds or pollen

 Human health risks

Many children in the US and Europe have developed life-threatening allergies to peanuts and other foods. Introducing a gene into a plant may create a new allergen Environmentalists are afraid that GM food may pose health risks that are not yet discovered

 European Union
Consumers distrust biotechnology, its applications, and its regulators EU Regulations generally assume that GM foods differ from the risk associated with other food products Precautionary principle

North America
Consumers are much more passive than in the EU In Canada and the US, GM foods are regulated in the same manner as food derived from conventional methods Principle of substantive equivalence
Hobbs & Plunkett (2006).

Seed provider

Farmers

Manufacturer

The other parties in the supply chain may deliberately hide up information about GM or do not know the status themselves

Wholesalers

Restaurants

Consumers

 GM labelling
In EU, products which contain 0.9% or more of authorized GMOs have to be labelled In Hong Kong, labelling scheme is voluntary on the grounds that there is no international consensus and the cost impact to the trade
Food items with 5% or more GM materials in the ingredient(s) are recommended to be labelled as genetically modified

 GM organisms traceability mechanism

Businesses should retain information about products that contain or are produced from GM organisms throughout the food supply chain
GM food causing problems

Previous steps in the supply chain

Other restaurants
Other consumers

 The Ministry of Agriculture in China granted bio-safety certificates to two pest-resistant GM rice varieties and a corn variety in November 2009 The application and research on GM agriculture is definitely a future trend in China and is among the strategic measures to strive for a more competitive agricultural sector through technology, Wei Chao An, Vice Minister of Agriculture, said in March 2010.

D. Technology
Information Communication Technologies / Web 2.0 have great impact on the marketing of restaurants Tripadvisor and OpenRice.com are some of the famous platform for community members to share their reviews
Reviews Ratings Photos
tripadvisor OpenRice.com

OConner (2008)

Restaurant

Pay to join as members

customer

Restaurant

Review platform

Risk of dishonest reviews

Restaurant
Those not linked to a network become less competitive

Word of mouth: Information cost low Review from users More objective, credible (?)

customer

Web 2.0 and Consumer Community

customer

customer

customer

Web 2.0 Platform

customer

Restaurant

customer

customer

Community collective bargain power

Groupon: Collective Buying Power

Groupon started in November 2008 in Chicago It features discounts of 50-90% off great restaurants and dining

 Good business for the restaurants?

Groupon customers seldom spend more. These customers also seldom come back unless with another groupon. Redemption seems unrestricted by anything other than a time limit on 'the deal'. Whether a restaurant is equipped to deal with ALL people redeeming their 50% off Groupons within a short time is questionable

E. Legislation and Regulation

Non-smoking legislation
Smoking (Public Health) Ordinance (Hong Kong) Hong Kong (2007), China (2006; May 2011), France (2008), Spain (2011)

Smoke-free restaurants and bars reduce exposure to tobacco smoke toxins among hospitality workers and patrons

 In China, the law's critics say the penalties are only empty talk The smokers can easily leave the scene long before the arrival of the law enforcement officials Neither the smoking-control volunteers nor the area's supervision officials have the right to detain offenders even if they refuse to stop smoking. It is complicated and time consuming for people to dial the public supervision hotline to report offenders, and wait for the law enforcement units to take over the case

 According to a review, all of the best designed studies report no impact or a positive impact of smoke-free restaurant and bar laws on sales or employment. But studies funded by the bar and restaurant associations and tobacco companies often find that smoking legislation has a negative effect on restaurant and bar profits

Scollo, Lal, Hyland and Glantz (2003)

 Dutiable Commodities (Liquor) Regulations (Cap. 109B)

No licensee shall permit any person under the age of 18 years to drink any intoxicating liquor on any licensed premises.

In US, research shows young people begin to drink at 11 for boys and at 13 for girls. Youth that begin drinking prior to age 15 are 40% more likely to become alcoholics.

 Prevention of Bribery Ordinance

: 2008 116

Minimum Wage Ordinance

The Statutory Minimum Wage came into force on 1 May 2011 and the initial Statutory Minimum Wage rate is $28 per hour What may be the effects on the workers, the customers and the employers?

Corporate Social Responsibility

A corporation may be held socially and ethically accountable by an expansive array of stakeholders such as customers, employees, governments, communities, NGOs, investors, supply chain members, unions, regulators and media.

Maloni & Brown (2006)

Dimensions of CSR
Animal welfare Biotechnology Health and safety

Environment

CSR in the Supply Chain: Food Industry

Labour and human rights

Community

Fair trade

Procurement

 Animal welfare: animals should not endure unnecessary suffering Biotechnology: sensitive to consumer attitudes about the use of biotechnology Community: volunteering and philanthropy (e.g., McDonald House) Environment: sewage, air pollution, waste disposal, food miles

 Fair trade: should support prices to the suppliers to allow them to avoid poverty and sustain business longevity
Starbucks was accused by NGOs for not providing fair trade prices to coffee suppliers

Health and safety: food security, food traceability, healthy lifestyles Labour and human rights: worker registration, minimum wage, employment terms and conditions disclosure, safety training, work safety Procurement: issues of favouritism and preferential treatment, bribery, gifts, obscure contract terms