Essay, 2005, 19 Pages
2. Theory of Strategic Planning
2.1. What is Strategic Planning?
2.2. Five approaches related to tourism planning
3. Practice of Strategic Planning
3.1. When Strategic Planning is done right
3.1.1. ‘The White Paper on tourism’, South Africa
3.2. When Strategic Planning goes wrong
3.2.1. Disneyland Paris
Tourism is said to be the largest industry in the world. More and more people have the possibility to travel around the globe thanks to cheaper flights and increased leisure time. More than 760 million international tourist arrivals worldwide were counted in 2004 WTO, 2005). According to the WTO, international tourism revenue reached a new record high of US $ 622 billion in 2004. 52% of it was earned by Europe, 21% by the Americans, 20% by Asia and the Pacific, Africa and the Middle East contributed with 3% each (South African Tourism, 2005). Moreover, the tourism and travel industry supports directly and indirectly approximately 200 million jobs worldwide, this is 8% of the total employment at present, which is expected to grow to 260 million jobs in 2011 (Hall and Page, 2002). These figures give us a short impression of the importance of this sector. However, the tourism industry is very volatile. Political changes, the opening of former communism countries like China or Cuba, permanent economic fluctuation as well as social, environmental and technological changes influence the tourism industry. Nowadays tourists prefer high quality standards, safety environments and interesting locations and are more concerned of environmental impacts (Gunn and Var, 2002). All the above mentioned facts show the necessity of effective and sustainable tourism planning.
This assignment will assess the theories of strategic planning and will investigate its application in practice on the basis of two case studies. One case, The ‘White Paper Plan’ South Africa, is an example for good practice and the other, Disneyland Paris, is an example for bad practice.
Simply speaking, strategic planning determines the companies’ or destination’s current position, where they want to go, how to get there and how they’ll know if they got there or not (Hall, 2000). The current position can be assessed with the help of a SWOT Analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats (Bramwell, 1997). Strategic planning should respond to the changing circumstances of the environment in the best possible way. It can be described as externally orientated planning i.e. the own product and competitors’ products will be viewed from an outsider’s point of view (Athiyaman and Robertson, 1995). Therefore the setting of goals is necessary and an approach must be developed to achieve those goals. As the tourism industry is very dynamic and often unpredictable, strategic planning stresses the importance of making decisions that will ensure the ‘survival’ of the organization in the long-term in the changing environment. In the past, insufficient tourism planning has led to a negative image of tourism development like high pollution and the destruction of tourism destinations. The purpose of tourism planning must be that tourism development will enlarge the positive effects and minimize its negative impacts. Therefore it is important to explore possible and negative effects right at the beginning, before a plan is put into action (Gunn, 1997). The way that a strategic plan is developed depends on several criteria, e.g. structures (government and non-government organisations), or scales (international, national, local or regional level) (Hall and Page, 2002). Although the tourism industry is mainly organised by private enterprises, public involvement, i.e. governments and non-governmental organizations become more and more important. Only if all sectors are involved in tourism planning best results can be achieved (Laws, 1995). As tourism is a more and more globalized industry it is necessary that these sectors communicate at international level to gain best possible knowledge of that industry as one change of the international tourism industry can have effects throughout the whole tourism system (Harrison and Husbands, 1996). There is no one perfect strategic planning model. Each organization has to develop its own model of strategic planning, often by selecting a model and modifying it.
For example Whittington (2001) differentiates between four different models of strategic thinking: the Classical, the Processual, the Evolutionary and the Systematic strategy. Each one of these provides a different view on what strategy is for and how it is done.
The classical view, also described as a rational process, emphasizes analysis, order and control to achieve long-term advantages and profit maximization. The decisions-making process as well as the quality of analysis determines the difference between failure and success of the strategy (Whittington, 2001). Veal (2002) called this strategy the rational-comprehensive decision-making process, which is structured as follows: defining a strategy, formulating objectives and goals, assessing the current situation of the organization and analyse it, find options and consult other experts, local people etc., if necessary identify alternative policies, develop the plan, implement and finally monitor and review it (Veal, 2002).
The processual view is that a strategy can’t be planned for the long-term as the environment is to unpredictable and volatile. Furthermore, human beings are considered as not perfect. Their interests differ, they are limited in their understanding and careless of their actions. Therefore they cannot carry through a perfectly calculated plan. This strategy can be described as a permanent process of learning and adaptation (Whittington, 2001).
The evolutionary view is that strategy is too expensive and that long term planning is useless, since the environment changes too fast. The market and not the manager is the only determinant for the strategy. The evolutionary view can be compared with Darwin’s theory of natural selection as it believes that only the fittest will survive in the market (Whittington, 2001).
The systematic view is that the strategy’s outcome depends on the social, economic and political structure in which the strategy-making process takes place. Profit maximization is not the primary goal (Whittington, 2001).
Finally, one have to keep in mind that strategic planning does not typically flow without interruptions from one step to the next. It is a process and over time new current insights may alter decisions made before. Inevitably the process moves forwards and back several times before arriving at the final set of decisions.
In the tourism planning process five approaches can be distinguished:
2. Economic planning approach
3. Physical/Spatial approach
4. Community orientated approach
5. Sustainable tourism planning approach
The first four approaches were identified by Getz (1987), while Hall (1995) added the fifth a few years later. As well as the strategic thinking models of Whittington (2001) these approaches differ each in the way of analysing, their associated research and planning methods and problems. However, these approaches help to investigate the different and sometimes overlapping ways in which tourism is planned. Every organization has to decide which approach/approaches are useful for their specific situation (Hall and Page, 2002).
The first approach, Boosterism, is not really a planning method. Its underlying assumption is that tourism is inherently good and hotels will automatically benefit. The strategy is to develop tourism as long as its resources are exploited, while local people are not involved in the decision-making process. Mainly governments, whose goal it is to boost the economy like blazes and others who gain financially from tourism are promoters of this approach.
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