6/8/2010

International Tourism Business

Opportunities 2011 and Beyond:
A Marketing Perspective
Prof. Alastair M. Morrison, UNWTO Consultant; Purdue University,
USA and Belle Tourism International Consulting, Shanghai

Presentation Outline

Recent trends in international tourist flows worldwide

Recent trends in Indonesias international tourist
arrivals
Forecasts of future international tourist arrivals to
Indonesia
Customer trends that represent future business
opportunities for Indonesia
Marketing planning tips for the future and some supply-
side trends

International tourist arrivals

worldwide down by 4% in 2009

UNWTO estimates that arrivals

dropped to 880 million in 2009;
down by 4% over 2008.
The World Travel Monitor by
IPK International also found a
decline of 4%; but their base
number of arrivals did not
include same-day trips.
Indonesia fared very well in
2009 compared to most other
countries.
3% to 4% growth forecast in
2010 by UNWTO.

Source: UNWTO, January 2010.

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Recent trends in Indonesias tourist

arrivals

International Tourist Arrivals to

Indonesia: 1987-2009

Indonesias
international
tourist arrivals
in 2009 were
up by 0.05%
over 2008 to
6.459 million.
Visitors up
15% in first 4
months of
2010.

Source: Stuppa Indonesia, 2009.

Forecasts of international tourist

arrivals to Indonesia

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International tourist arrivals will

double in next 15 years

All of the forecasts predict at least a doubling of the 2009

international tourist arrivals by 2025.
The moderate-level forecast is for approximately 14.3 million
arrivals.
If these arrival levels are achieved, they will require an
expansion of capacities in several sectors of tourism,
including among airlines and in accommodation.

Stuppa Indonesia

Forecasts of international tourist

arrivals to Indonesia
Year Pessimistic Moderate Optimistic Accelerated
2009 5,777,144 6,450,755 6,933,743 8,157,000
2010 5,847,312 6,548,989 7,075,248 9,063,334
2011 6,142,327 6,879,406 7,432,216 9,704,877
2012 6,478,460 7,255,875 7,838,937 10,235,967
2013 6,913,814 7,743,472 8,365,715 11,062,102
2014 7,225,884 8,092,990 8,815,578 12,139,485
2015 7,687,573 8,610,082 9,609,466 13,068,874
2016 8,039,372 9,245,278 10,290,396 13,908,114
2017 8,404,445 9,833,201 10,925,779 14,959,912
2018 8,765,908 10,256,112 11,395,680 15,603,316
2019 9,090,585 10,635,984 11,817,761 16,181,241
2020 9,520,268 11,138,714 12,757,159 17,517,293
2021 10,016,229 11,518,663 13,221,422 18,229,537
2022 10,538,069 12,118,779 13,910,251 19,179,286
2023 11,114,789 12,782,007 14,671,521 20,006,620
2025 12,473,019 14,343,972 16,464,385 22,451,434

International visitor source

market rankings by 2025
Source Market and Rank in 2025 Arrivals 2008 Pessimistic 2025 Moderate 2025 Optimistic 2025 Accelerated 2025 Rank in
2015

1. Malaysia () 1,117,454 2,561,032 2,945,187 3,380,562 4,609,858 1

2. Singapore () 1,397,056 1,699,600 1,954,540 2,243,472 3,059,280 2
3. PR China () 337,082 994,021 1,143,124 1,312,108 1,789,238 4
4. South Korea () 320,808 862,427 991,791 1,138,404 1,552,369 5

5. Australia () 450,178 848,913 976,250 1,120,565 1,528,043 3

6. Japan () 546,713 548,648 630,945 724,215 987,566 6
7. USA () 174,331 471,695 542,449 622,637 849,051 9
8. Taiwan () 224,194 463,591 533,130 611,940 834,464 7
9. Russia () 69,628 408,910 470,247 539,761 736,038 14
10. Germany () 137,854 396,291 455,735 523,104 713,324 11
Sub-total: Top 10 4,877,231
11. Philippines () 159,003 369,681 425,133 487,979 666,426 8

12. India () 102,179 258,740 297,551 341,537 465,732 12

13. UK () 150,412 249,633 287,078 329,516 449,339 10
14. Netherlands () 140,771 214,535 246,715 283,186 386,163 13

15. Hong Kong () 81,073 201,313 231,510 265,733 362,363 16

16. France () 125,216 164,127 188,746 216,648 295,429 15

17. Thailand () 76,842 146,217 168,150 193,006 263,191 17
Italy 33,300 79,640 91,586 105,125 143,352 21
Belgium 21,996 73,689 84,742 97,269 132,640 25
New Zealand () 22,633 72,659 83,558 95,910 130,786 19
Switzerland () 31,662 61,278 70,470 80,887 110,300 22
Canada () 39,784 57,626 66,270 76,066 103,727 24
Saudi Arabia 47,480 n/a n/a n/a n/a 18
Spain 33,407 n/a n/a n/a n/a 20
Scandinavia 68,543 102,279 117,621 135,009 184,102 n/a
Spain/Portugal 45,830 119,868 137,848 158,226 215,762 n/a

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16 Top-priority Source Markets

for 2010-2020
Malaysia Philippines
Singapore Germany
Australia UK
China Russia
South Korea India
Japan Netherlands
Taiwan France
USA Hong Kong

FORMULATION OF A TOURISM MARKETING STRATEGY

Customer trends that

represent future
business opportunities

Aging but engaging:

The Baby Boomers
Western countries are aging.
There are about 76 million
Baby Boomers in the USA.
By 2020, 700 million people in
the world will be over 65
(Deloitte Touche Tohmatsu).
Older age groups are more
willing to travel than previous
generations and are interested
in active and adventurous travel
experiences.

Source: Hospitality and Travel Marketing, 4th ed . Alastair M. Morrison, 2010.

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Aging but engaging:

The Baby Boomers
ElderTreks, a Toronto-based
tour operator, serves travelers
aged 50 and over "who love
adventure" and who do not
want "to see a country through
the windows of a tour bus."
The company's trip are of the
"soft adventure" variety and
include visits to destinations
such as Belize, Borneo, Costa
Rica, Ecuador, Nepal, and
Vietnam.

Source: ElderTreks, http://www.eldertreks.com/tour/ETTD000022

Break-ationing due to time

poverty
Cash-rich, time-poor
- difficulties in taking
longer holidays.

More frequent and

shorter-duration trips
are a major trend
around the world.

Breaking Away, the 1979

movie was based in
Bloomington, Indiana, USA

Source: www.VisitBloomington.com June 2, 2010

Building with BRICs

BRIC = Brazil +
Russia + India +
China.
The worlds
fastest-growing
country
economies.
All four will all
generate many
more international
visitors
(outbound) in the
next decades.

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Multi-purposing travel
Again, time poverty is
a factor influencing
this trend.
Increasing number of
consumers pursue
multiple trip purposes.
Combining business
and leisure on trips,
especially.
Long-haul destinations
experience higher
levels of multi-purpose
travel trips.

Getting and staying healthier

Consumers are
increasingly concerned
about health and
wellness.
The number of
vegetarians traveling is
increasing and general
food safety concerns are
also.
Active holidays, even for
older people, are
preferred.
Source: http://www.responsibletravel.com/TripSearch/Special%20requirements/Activity100208.htm

Getting and staying healthier

Newer and traditional active,

outdoor sports are enjoying
much higher popularity and
participation.

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Decompressing in style

The stress in consumers

daily lives is creating a need
for pampering and spas are
a means of escaping the
pressures and getting re-
energized.
The International Spa
Association estimated that
32 million adults in the USA
visited a spa in 2007.

http://experienceispa.com/media/facts-stats/

Getting gayer in travel

The gay, lesbian,
bisexual, and
transgender (GLBT) is
now a mainstream
segment of tourism.
Many major tourist
destinations consider
GLBTs to be an
important market with
great potential.

http://www.visitmelbourne.com/ http://www.iglta.org/

Greening with meaning

Consumers are
showing increasing
concern for the
environment.

Demand for nature-

based and ecotourism
destinations and
packages is growing.

Source: Sabah Tourist Board, 2010.

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Blogging the memories

Consumers are becoming
travel writers and critics!
Blogging is a form of
communications; but now
its also a hobby.
For destinations, blogs are
a good source of
information about
consumers satisfaction
and experiences.
34 million monthly visitors
to TripAdvisor.com and 15
million members.
Source: TripAdvisor.com, 2010.

Meet you in the (social) media

Source: Websites of social media sites, 2010.

Going it alone

Increasing travel by singles and

growing popularity of independent
travel (FIT).
BTIs research in 2009-2010
showed that 63% of all
international pleasure travel
visitors to Shanghai were
independent travelers.
They tend to be younger.
They rely heavily on the Web and
guidebooks.

Source: Shanghai Municipal Tourism Board and Belle Tourism International Consulting, 2010

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Looking and booking

1.8 billion Internet users in the world in December 2009.
Asia is the biggest regional market with 764 million users.
However, Internet penetration is highest in North America,
Oceania/Australia, and Europe.

Source: http://www.internetworldstats.com/stats.htm.

Looking and booking

Websites and the Internet (3.98/5.00): #1 rank

Guidebooks (3.64/5.00): #2 rank
Friends and relatives (3.35/5.00): #3 rank
Travel agencies (3.12/5:00): #4 rank
Tour operators (2.72/5.00): #5 rank
Blogs of other people (2.6/5.00): #6 rank
Magazine articles (2.43/5.00): #7 rank
Newspaper articles (2.34/5.00): #8 rank
Marketing materials from tourism bureau (2.27/5.00): #9 rank
Advertising by tourism organizations (2.21/5.00): #10 rank

In planning this trip to Mainland China, how important were the following sources of information? International visitors
ranked 10 sources on a scale from 1 to 5, with 1 being not important at all to 5 representing extremely important.

Source: Shanghai Municipal Tourism Board and Belle Tourism International Consulting, 2010.

Racking up the miles

Many millions of travelers are members of airline frequent

flyer and hotel frequent guest programs.
One estimate is that there are over 100 million members of
FFPs in the U.S. alone.
Some two-thirds of Canadian households are members of
the AIR Miles Reward Program, which has 9.5 million active
accounts.
These are highly experienced and discerning travelers who
can be readily targeted through the specific airline or hotel
chain programs.

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Decreasing brand loyalty

The loyalty to specific travel and hospitality brands is

eroding and corporations may lose as much as 50% of their
customers over a 5-year period (Skogland, Iselin, and
Siguaw, 2004).
This may also be applicable to destinations, so newer and
untraveled destinations might be able to capture demand
from the more popular places.

Finding their niche

Special-interest (SIT) or niche travel is one of the hottest

trends in tourism.
Customers interests today are much more diverse.
Source: http://www.specialtytravel.com Source: http://www.infohub.com

Finding their niche

Some of the SIT segments include: Ecotourism and nature-

based tourism
Adventure travel
Health/wellness tourism
Cruise travel
Heritage/historic
Casino gaming tourism
Culinary/gastronomic tourism Industrial tourism
Cultural tourism Religious tourism
Dark tourism Voluntourism
Wine tourism

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Connoisseuring

Many customers have become or want to become

connoisseurs of food, wine, art, architecture, culture,
memorabilia, and other items.
The fast-growing interest in enjoying, appreciating or
collecting these items has increased travel to those
destinations and businesses that can meet the needs and
expectations of these connoisseurs.

Marketing planning tips

for the future and some
supply-side trends

The Tourism System Model

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The Hospitality and Travel

Marketing System

The Hospitality and Travel

Marketing System
Planning and Research 1. Where are we now?

Analysis and Strategy 2. Where would we like to be?

Implementation 3. How do we get there?

Control 4. How do we make sure we get there?

Evaluation 5. How do we know if we got there?

The PRICE Model

Planning
P
Research
R
I Implementation
C
E Control

Evaluation

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The Marketing Mix

8 Ps of Tourism Marketing
Traditional Additional

Product Packaging
Price Programming
Place People
Promotion Partnership

McCarthy Morrison

The Marketing Mix

8 Ps of Tourism Marketing
Product
The range of services and
facilities that an organization
provides for visitors.
Price
The monetary value at which
an organizations services
and facilities are provided.
Place
The ways in which the
organization distributes its
services and facilities directly
to visitors and through travel
trade intermediaries
(channels) and the Internet.
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Tourism Product Trends

Increasing brand segmentation in many sectors of
hospitality and travel.
Increasing use of brand extensions as a strategy by
major companies, especially hotel chains, e.g., branded
beds and bedding.
Growing diversity of special-interest travel (SIT)
destinations and organizations.
Increasing supply and market
popularity of some industry
sectors, e.g., cruises.

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Pricing Trends

More attention being given to

revenue or yield management
systems and approaches.
More special prices being
offered through the Internet
including coupons.
Increasing importance of low-
cost and no frills carriers,
suppliers and travel trade
intermediaries, e.g., LCCs (low-
cost airlines).

Place (Distribution) Trends

Increasing use of the Internet

for online bookings and
reservations.
Growing importance of online
travel companies.
Greater diversification and
activity in more parts and
sectors of the industry by GDS
companies.

The Marketing Mix

8 Ps of Tourism Marketing
Promotion
Promotional mix: the combination of five elements for each target
market + Internet marketing

Advertising
Sales Promotion
Merchandising
Personal Selling
PR/Publicity
Internet Marketing

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Promotion Trends
Increasing use of the Internet (e-
commerce) and mobile
technologies (m-commerce) for
promotion.
Widening communications
channels and approaches, e.g.,
Web-delivered press/media
releases and RSS feeds.
Increasing globalization of
communications through the use
of multi-lingual approaches.
Social media use by tourism
organizations is increasing. Social media

The Marketing Mix

8 Ps of Tourism Marketing
People
All of the people who work in
tourism within the organization
and the quality of service they
provide to visitors.

Partnership
The cooperative promotions
and other cooperative
marketing efforts in which the
organization participates.

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People Trends

Targeting a broader
range of market
segments, both globally
and by other
segmentation
characteristics.
Increasing emphasis on
improving service quality
among hosts.
Increasing importance
and use of customer
databases.

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Partnership Trends
Partnering with other
organizations in hospitality
and travel is being given a
much higher priority.
Partnering with organizations
and brands outside of
hospitality and travel is now
becoming much more
common.
The Internet is providing an
increasingly convenient and
popular platform for virtual
partnerships.

Source: http://www.BestCities.net

The Marketing Mix

8 Ps of Tourism Marketing

Packaging
The combination of related and
complementary services into a
single-price offering.
Programming
The development of special
activities, events, or programs to
increase customer spending, or
to give added appeal to a
package or other tourism
service.

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The Marketing Mix

8 Ps of Tourism Marketing
Relationship of Packaging and Programming

Packaging
and
Packaging programming Programming
Packaging together Programming
without without
programming packaging

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Packaging Trends

Greater emphasis on customizing

packages including the concept of
dynamic packaging.
Greater involvement in packaging
(e.g., DMOs) by more parts and
sectors of the industry.
Increasing range of short-break and
mini-vacation packages being
offered.

Programming Trends

Increasing range of
entertainment facilities being
provided by the hospitality and
travel industry (e.g., new theme
parks).
Growing emphasis in providing
hands-on and participative
activities for visitors to many
attractions.
Increasing range of educational
program opportunities and
learning while traveling.

Built to Innovate!
Belle Tourism International Consulting

18 Shunyi Road, Suites 601-602, Shanghai 200063, PR China
Telephone (in China): 021-52360996 - Fax: 021-52360991
Telephone (international): 8621-52360996
Website: www.BelleTourism.com
E-mail: contact@belletourism.com

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