1.1 Question No.: 1 regarding the World Tourism Organisation 2020 Vision
In its report Tourism 2020 Vision the WTO predicted that by the year 2020 international tourists arrivals would grow to almost three times the 1995 rate and that tourism spending would grow to 2 trillion US $, which is five times the 1995 spending level. Provide a thorough analysis of the social, political, economic and technological trends driving this astounding growth.
Answer:
The World Tourism Organization (WTO) works with existing international standards on tourism statistics which where approved in 1993 and 2000. While the purpose of the first standard was to develop a first set of basic elements of the System of Tourism Statistics, the second standard relates to the design of the instrument that today is the unifying framework of most of its components (i.e. the Tourism Satellite Account). The Tourism Satellite Account is a project to adapt conceptual framework form a regional perspective. Identifying market trends as they are happening; short term and long-term forecasting; analyzing the world’s generating markets; conducting research into niche markets are some of the activities carried out. WTO’s seven-volume forecast Tourism 2020 Vision on worldwide forecasts is a landmark study based on data gathered from Member States and interviews with over 75 tourism visionaries about the future of the industry. It predicts that international tourist arrivals will grow by an average of 4,1 % annually for the 25-year period 1995 to 2020. Tourism 2020 Vision includes forecasts of inbound and outbound tourism growth for countries in every region of the world and examines the outlook for several market segments.
The long-term forecast from the World Tourism Organization is based on the assumption that the future development is similar to the last 10 Years. On the internet page of WTO is written “Although the evolution of tourism in the last few years has been irregular, WTO maintains it is in the forecast for the moment. The underlying structural trends of the forecast are believed not to high and significant changed. Experience shows that in the short term, periods of faster growth (1995 – 2000) alternate with periods of slow growth (2000 – 2002). While the pace of growth till 2000 actually exceeded the Tourism 2020 Vision forecast, it is generally expected that the current slowdown will be compensated in the medium to long term”. These assumptions are shown in the following chart:
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Source: World Tourism Organization
From the area of political and economical drivers, the argument has been made that we are entering a new era of “flexible specialization” where consumers require a wide variety of products. As a consequence, methods of mass production are being replaced by more flexible systems.
There are many political changes in the past which have influenced the development of the tourism industry positively. It basically started of with the perestroika in Russia and the reunification of Germany in 1989. East Germany was the first communist country who broke down and opened its doors to allow outbound travel due to the reunification. Within the next years all the Eastern European Countries have moved from a communist government to open democratic governments allowing outbound travel and opening up for international trade in order to improve their economic situation. By May 2004, the European Union has expanded from 15 to 20 members. In 2004 10 former Eastern European Countries have joined the EU. Besides these changes in Russia and Eastern Europe, China has as well opened its doors for trade and travel. Since beginning of 2004 Chinese people have received travel permission to the first European countries without difficult visa conditions. Whereas in 2001 only 12.13 Million Chinese people traveled, it is expected by the World Tourism Organization that the number will grow to 100 Million by 2020. Another country of interest is India. Whereas the increase in travel in India is more for an economical than political reason, therefore it will be discussed in the next chapter.
Significantly more is known about the economic drivers. More and more companies will work on a global level and therefore the economy will grow globally. The economy growth is also influenced by two new players China and India. Besides, that China has opened its doors for outbound travel it also has opened its doors for international investments within China. China will develop until 2020 and become most probably the largest supplier of outbound travel. Besides China, India has found its market niche in the area of technology, IT and finance. They will become the market leader country in this field. This market leadership will improve the overall economical situation in India and allow more people to travel abroad.
The social drivers are to a large extent demographically influenced. Probably the most important one is the growth of the population. US scientists expect a population growth by end of 2015 to 7.2 billion people on earth. Even so the main growth will take place in the developing countries, it will still have a great influence on the overall tourism growth. A further driver is the increased aging of the population. Due to better health care systems people will live longer and in a better condition and will therefore have more possibilities and the necessary money and time to travel. Coherent with the increase in age is also an increase in the average working life which again will have influence on the travel pattern. In addition more and more people decide to live in single households instead of having a family. These people will travel by far more than traditional families as they have more resources available. Having a family traditionally is cost intensive and limits travel opportunities. Traveling brings people into contact with each other and has an educational element as well.
The technology improvements and developments will influence the tourism in two areas. The first area is the transportation. The development of the new Airbuses and planes will allow transporting up to 850 people on one long distance flight in the future. This is almost double of what can be transported today per flight. In addition the overall infrastructure on the continents will further improve. Europe will be covered by a high speed trains, which will allow to travel through Europe in a cost efficient and speed way. The low cost carrier airline segment will further grow and allow a wider group of tourists to go on flight journeys. Besides the developments in the transportation area, another aspect is the development of the distribution channels. In the future the internet will be the main distribution channel for travel. It will allow anybody in the world with an internet access to get information and booking possibilities on any destination (price, availability, location) in the world.
But there are also negative drivers which should be mentioned. There are some risk factors, which could stop a growth like the projected one. These are in example our energy reserves. Should the oil reserves become limited, tourism will be badly affected, if no alternative energy solutions for transport have been found by then. Another risk factor is terrorism. The Early 21st Century was hit by some massive terrorism acts, which brought a great amount of insecurity to the population and which have held a lot of people away from traveling abroad. There have been several recent major terrorist acts in Europe, but because Americans were not involved they got only fleeting attention from the American media. Over the past 2 years there has been a major surge in terrorism abroad, both internal and international incidents. While it is easy to hit on the fear of terrorism as the culprit in the decline in European tourism, and it is an important factor, we believe a combination of factors are involved: terrorism (9/11, or the attack in Madrid, the unrests in Israel), the weakening of the US dollar, disease like SARS (mainly in Asia), or the recent natural disaster like the tidal wave (Tsunami), and the competition of other countries and regions of the world.
On the other hand the WTO issued a statement on Friday, January 7, 2005, in which it assessed that the recent earthquake and tsunami disaster in Indian Ocean will have only a limited impact on world tourism. There are seven reasons for that, WTO says, among them the present expansion of tourism in the region and Asia’s capacity in dealing with crises.