Destination competition

Destination competitiveness refers to the potential of tourism variables to outperform other tourist features that influence the tourism sector. Destination competition is one field of study that considers price differentiation, exchange rates in terms of service, and good offering in exchange for money. As a result, managing destination competition entails aligning destination efficiency to the demands of tourism sectors in order to gain a competitive edge. This study conducts a thorough examination of the elements that determine competitiveness in tourism destination management. The research will concentrate on statistics and literature from both industrialized and developing countries. Therefore, data from Switzerland and Indonesia will be examined respectively and will focus on data derived from 3 to 5 years.

The research integrated various findings including factors that elicited negative and positive reactions among the tourism community. The research integrated a mixed methods research approach for data collection; however, there were some limitations that are further discussed in the paper. The core purpose of the research is to identify the respective segments of tourism demand that are identifiable with developed and developing countries especially industry management strategies, strengths and limitations. The impacts of key elements in the tourism sector such as business environment towards influencing tourism demand are examined. This is done with a view to identifying the optimal approach that is uniquely suited for both developed and developing countries towards enhancing tourism management outcomes.

Strategic Management of Tourism

The management of tourism destinations often require a concerted effort by various key stakeholders to ensure that there is sustainable growth in the industry. A comprehensive analysis of the sector and tourism competitiveness dynamics of a destination must be considered prior to implementing strategic plans. Therefore, systemic use of available resources and tools is essential for key planners with a view of identifying key issues that may affect performance. These include performing a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. Tourism goals can be examined to determine whether they are SMART (specific, measurable, achievable, relevant and timely). The strategic planning process must take into consideration the prevalent conditions in the tourism industry and issues that affect supply and demand of tourism destination services. The management must consult widely with experts and professionals in the field to ensure that the proposed strategic plans are feasible, actionable and capable of realizing the intended goals.

The tourism industry is among the largest economic industries in the world that integrates unique and creative strategies to attract and retain visitors. These are aimed to create competitive tourist destinations that are friendly and meet the unique needs of the visitors. Hence, it is necessary to ensure that an attractive and competitive tourism strategy is developed and implemented to ensure that a customer-oriented service is delivered (Goeldner, Brent & Mclntosh, 2000). The idea of developing an attractive and competitive tourism strategy aims at ensuring that there is a consistent balance between supply and demand in tourism products. These contribute in the development of a sustainable social and economic development for a country; hence, the need for a comprehensive tourism policy. The aim of the policy is to ensure that the tourism industry is ready to meet the progressive challenges that it continues to face while capitalizing on new emerging opportunities for the industry in the country. Therefore, the policy aims to provide a framework within which the industry will grow and ensure the country’s tourism sector continues to be competitive in view of the dynamic global tourism environment. Therefore, the policy will seek to;

Encourage the development and deployment of strategies that will faster heightened tourism experiences especially for the indigenous tourism.

Eliminate or reduce significantly the regulatory restrictions that inhibit the growth of the industry, particularly, taxation and red tape issues.

Develop and implement comprehensive global marketing strategies that aim to enhance tourism demand for the country and present its various tourist destinations as attractive and competitively priced packages.

Establish a working relationship with various stakeholders in the tourism industry towards the development of reliable and effective tourism infrastructure that will attract new tourists and drive demand in the process (Ritchie & Crouch, 2007).

The development of tourism policy takes into consideration various factors including the economic, social and cultural factors in the country. Since the tourism sector benefits the entire country, key stakeholders in the government and private sector were consulted and participate in the formulation of the policy. The various stakeholders included key industry players, State and Territory government’s agencies. These stakeholders made significant contributions in the identification of critical areas and presentation of essential reform proposals that would be integrated in the policy framework towards the realization of its goals.

The policy formulation process involved intricate process that took into consideration the country’s social and economic environment. Considering the economic and population growths of countries, it is necessary to identity strategic economic areas that will enhance its revenues to ensure that service delivery is able to meet the new challenges and demands of its population. The tourism sector has potential for growth considering that the country has unique tourism destinations, flora and fauna that are not found anywhere else in the world. In view of the growing domestic consumption, it is necessary for the government to facilitate the development and implementation of an attractive and competitive tourism policy and strategies (Ritchie & Crouch, 2003).

The policy formulation took into consideration the legal and regulatory environment for the country. Tourist organizations, operators and agents are subject to legal and regulatory provisions that expect them to comply fully including filing and reporting on incomes, operating their businesses within the confines of the law and filing tax returns (Goeldner, Brent & Mclntosh, 2000). While it is necessary to ensure that legal and regulatory measures preserve an honest business environment, some measures have restricted the operations of tourism operators especially taxation of various products and services that are directly associated with tourism. The tourism policy intends to reduce these restrictions significantly by proposing changes to taxation laws. The impact of eased legal and regulatory measures is that it enhanced the attractiveness of the tourism sector to investors and business communities leading to improvements in infrastructure and services delivered to tourists (Ritchie & Crouch, 2007). These enhance the country’s competitiveness on a global scale making it a tourist destination of choice.

The economic and social environment also influences the formulation of the policy since it determines which areas should be emphasized and developed. Most countries are home to unique indigenous people, fauna and flora. Therefore, the policy formulation takes into consideration the country’s rich culture and traditions to market it as an exotic tourist destination where visitors will experience experiences that cannot be acquired anywhere else in the world. These factors influence how attractive the country will appear to potential tourism both domestic and international.

The country’s population also form part of the targeted tourist population. Considering that there are numerous technical issues that often discourage the local population from partaking in tourism activities, the Tourism Policy has engaged stakeholders across the country to ensure that such issues are identified and solutions found. For instance, it may be costly for local populations to access tourism destinations, facilities and options that are considered as premium. The policy aims to ensure that such areas are accessible to local population at affordable rates, making the tourism sector attractive to local and international tourists.

Since the policy aims to promote the tourism sector, it has set goals that will see the industry grow in terms of facilities, employment rates, infrastructure and attraction of more tourists. Therefore, the policy implementation is not restricted at the national level, but it is also being implemented in the local, state, national and international levels. The policy formulation process takes into account the local communities and their contribution in the implementation and sustenance of tourism strategies. It is prudent to ensure that the community takes part in the policy implementation process as key stakeholders. These initiatives ensure that the community benefits directly from the tourism industry through creation of employment and business opportunities. In addition, local, state and national governments establish programs that ensure the community’s culture, traditions, beliefs and practices are preserved not only as a tourist attraction but also as part of the country’s national heritage.

The tourism policy aims to implement key strategies that will be implemented progressively in spite of changes in government. Since the tourism sector like any other sector is subject to political wrangles and power shifts, the policy aims to ensure that such issues do not influence the core aims and goals. This is guaranteed by decentralizing decision making from a single individual basis and making it an institutional mandate where key stakeholders must be involved in order for decisions to be made. Since not all stakeholders can assume managerial or directorship positions, these power centers will require prior authority before making major changes to the policy implementation plans. In view of this, the policy aims to implement any number of strategies that aim to make the sector more attractive and competitive on a national and global scale.

Demand Side Tourism

A. Overview of Tourism Demand

Tourism demand is largely influenced by various factors that include economic, psychosocial and geo-location factors. In most cases, tourism demand is determined by the attractiveness of the destination and its ability to offer competitive packages. A psychosocial perspective would view demand as a factor of attraction and individual motivation to visit a given destination because it offers a set of unique services that an individual needs.

The attractiveness of a tourist destination can be defined as the ability of a company to present a destination as a reflection of opinions and feelings of tourist with respect to their perception of its ability to meet and satisfy their various needs. Therefore, if a destination is able to offer tourism packages that meet the unique needs of the visitors, then it is perceived as attractive. Essentially, the capacity of a tourist destination to provide individual visitors with incremental benefits through service delivery and quality management is considered as the ideal definition of attractiveness. Meanwhile, competitiveness is considered as presentation of favorable options in a destination that makes it unique in the tourism industry (Ritchie & Crouch, 2007). Therefore, competitiveness entails the establishment of a sustainable position in the tourism market that is profitable in view of prevalent market forces that influence competition in the tourism sector. Therefore, competitiveness of a tourist destination may include critical factors such as “economics, marketing and strategic perspectives, price, quality and satisfaction” (Vengesayi, 2016).

B. Review of the Growth of Tourism in a Developing Country (Switzerland)

Tourism has been a critical component of the Swiss economy. The tourism industry in Switzerland is one of the major economic pillars that has created jobs and reduced unemployment in the country. The tourism sector were estimated to have increased to represent an estimated 4% of the country’s Gross Domestic Product (GDP) in 2012. Studies indicate that an estimated 34.8 million visitors were registered as tourists in the country; these figures represented a 7% decline in tourist turnover in a period of four years since 2008. However, the decline in the number of tourists was attributed to the global financial crisis that affected most countries and the ability of people to save enough for tourism purposes. Therefore, the reduction in tourism rates was not unique to the country but an occurrence that affected the numerous countries. Statistical data indicate that in 2012, there were 8.6 million tourists visiting Switzerland. This figures where higher by 0.4% from the previous years recorded number of tourists. However, in spite of the economic challenges, the tourism sector began to recover in 2013.

The country’s tourism policy is under the purview of the State Secretary; however, various national tourism bodies are also directly involved in the management of tourism in the country at various levels. The governance structure of Switzerland’s tourism industry also involves the ”Secretariat for Economic Affairs” and is mandated with the implementation of the ”Federal Act on the Promotion of Innovation and co-operation in Tourism” (Guo & Woo, 2016). In addition, the ”Switzerland Tourism and Swiss Hotel Company is responsible for the implementation of policies and strategic plans towards the promotion of tourism in the country. This body mandated with development and deployment of marketing initiatives within the country and abroad. The organization also offers the needed resources to establish tourism operations in key areas.

The tourism industry in Switzerland is progressively looking for ways to enhance growth through development of policies and implementation of programs that promote the tourism sector. Strategic measures that were proposed by the Federal council towards the development of the tourism industry were implemented and become effective in 2012. Among the strategies that were emphasized included encouraging innovation and seeking the cooperation and partnership with various stakeholders. The country makes use of the ‘Innotour’, a strategic tools that is applicable in providing support for the industry through promoting innovative and investing activities.

The 2009 global economic crisis has significant effects on the tourism sector especially causing the strategic plans that were in-place to be rendered ineffective. Mitigating measures were developed and deployed that in part included a reimbursement of monies amounting to 36 million directed at funding alternative marketing strategies for the tourism industry in the country (Guo & Woo, 2016). It was noted that while the country had numerous strengths, it faced various shortcomings that effectively weakened the tourism sector. Some of the issues that affected the tourism sector were business related while others were based on destination management challenges. However, the structural changes that affected performance were addressed through the implementation of strategic initiatives geared towards injecting stimulus in the tourism sector.

C. Review Tourism in a developed Country (Indonesia)

The social-economic impact of the travel and tourism industries can have major positive impacts and may have an incremental impact on the tourism business sector as well as trade and capital investment. These developments would result in creation of jobs and enhancing secure, well cultivated culture and that cannot be tampered with. Some of the direct contributors of tourism and travel industry in Indonesia include business that support the tourism industry through the provision of services such accommodation for tourists, entertainment and transport services. The Indonesian tourism sector is driven by diverse businesses including those offering transport, entertainment, sport, food and beverage and retail trade among others (Ivanovic & Wassung, 2009).

The contributions made the tourism sector in Indonesia can be linked to expenditures incurred by the travel and transport sectors. These are critical contributors of the total income generated which affect both the growth and future activities such as capital investment in the industry. Another contribution is the government expenditure aspect that is collective such that it helps in the travel and tourism aspects in Indonesia. The collective expenditure initiate by the government of Indonesia has also eased the cost and process of purchasing goods and services from other sector that are in very close proximity to the tourism industry. For instance, services such as cleaning and catering by hotels make significant contribution to the sector (Felsenstein, Schamp & Schachar, 2002). These contributions to tourism can be used to determine the GDP and the level of job creation that has been directly or indirectly contributed to the tourism industry.

Though Indonesia is considered as among the major tourism destinations in Asia, the sector’s contribution to the country’s GDP was at 3.9% in 2004. The decline in productivity for the sector was attributed to a number of causal factors that included economic and social-political challenges that were facing the country. There projected growth in tourism for 2004 was at 15 million tourists; however, there were major challenges that prevented more tourists from visiting the country causing the actual recorded figures to plummet to 6.9 million tourists. However, the situation changed significantly and the number of tourists increased progressively over the years. Indonesia was ranked at number 17 among 184 on the basis of tourism contributions to a country’s GDP in 2014. The growth forecast place Indonesia at position 12 out of 184; meanwhile long-term growth projections placed the country at number 27.

Comparison of Switzerland and Indonesia

The comparison of the tourism sectors of the two countries indicates that Indonesia has a more developed sector. Meanwhile, Switzerland has a struggling tourism industry that is progressively attempting to meet the demands of the sector (United Nations, 2005). Though Indonesia is well ahead, it is progressively developing strategies and innovative initiatives aimed at enhancing its tourist destinations with a view of remaining competitive. Though the two countries have divergent approaches to tourism, they have bilateral ties that include a memorandum of understanding signed with the aim of developing the key four destinations in Indonesia. The identified destinations included ”the island of Flores, Tanjung Putting in central Kalimantan, Wakatobi archipelago in South East Sulawesi and Toraka highlands” (United Nations, 2005).

Business Tourism

While tourism covers various segments, the business aspect of tourism is critical. Business tourism has often encompassed various aspects trade and agricultural tourism where people visit other countries to learn and experience new ways of doing business with a view of applying similar strategies in their respective countries. The aim of business tourism is to promote and market an economy to other regions and cultivate business relations that can enhance bilateral relations and cooperation (Burns & Noveli, 2008). Business tourism contributes towards the realization of critical solutions to problems that arise periodically, creation of job opportunities and solutions to unique problems that affect various regions. Furthermore, business tourism encourages the creation of new markets for local small and medium enterprises in the tourism and other economic sectors.

Positive and negative Impacts

The positive aspects of business tourism is that it leads to increased economies of scale and competitive advantage by encouraging innovation and development of key tourism assets, destinations and infrastructure. However, business tourism can also have adverse impacts that may not be adequately managed such as increased wastage and environmental pollution. An increase in business tourism is accompanied by environmental pollution. Local communities need additional funding that may not be sustainable in order to accommodate the demands of increased levels of tourism in a given region. Though the tourism industries is a leading foreign exchange income earner for the country, there is little trickledown effect for the local communities. Therefore, their benefits received by the local communities from the tourism sector are significantly reduced at any given time. However, it is notable that the business tourism sector has a number of positive impacts that include an increase in job creation and availability of market for local products.

Motivational Based Recommendations

The cross-portfolio engagement among various government institutions and agencies ensure that the necessary operational, legal and regulatory changes are made to eliminate red tape and ensure that the industry becomes competitive in the national and international market. These strategies make tourism competitive since it facilitates a reduction of major operational costs for industry players and makes it affordable for tourists to visit the country.

Among the challenges that tourists face include gaining access to a country especially if the visa application and issuance process is prolonged. The enhancement of visa application process makes the tourism sector more attractive since tourists have to spend little time and effort in applying and getting a visa. In addition, this makes it competitive since it reduces the costs associated with applying and waiting for a visa. Furthermore, the more visitors are cleared in a shorter time, the higher number of tourists will gain access to the country. This process is cost effective for the tourist and profitable for the country since it allows more tourists to enter the county in a given time span.

The increased capacity of the aviation sector ensures that the country is prepared to receive more visitors. For instance, Europe is among the most travelled destinations in the world, ”and it remains the region with the most international arrivals per year” (World Economic Forum, 2015). Therefore, training of customer service personnel ensures that the services being delivered in the country’s aviation sector are high class. These make the industry competitive as it will attract more visitors from various destinations. In addition, training staff in various tourism facilities and establishments will ensure that top quality services are delivered; hence preventing incidences of conflict and bad experiences for tourists that may portray the country in a negative light.

Product promotion familiarizes tourists with the country tourism; as such, the policy provides for the use of advertising strategies to ensure that visitors are informed and persuaded to purchase the tourist packages offered in the country. The implementation of promotional strategies is realized through substantial advertising. Adjustments should be made on the basis of market dynamics, customer and product changes, and territorial economic situation. Furthermore, critical factors that may influence buying decision including competition, labor related activities and potential regulatory changes must be considered when making budgetary decisions for marketing the country in international arenas.

Tourism companies should integrate sales training a part of the training program for new sales personnel. For instance, France has a ”combination of rich history and attractions, ski resorts and coastlines” (World Economic Forum, 2015); therefore, provision of product knowledge training is essential in preparing the sales people for field work especially acquisition of new customers for a country like France. The integration of sales and product training will ensure that employees are well prepared to engage potential and existing customers with the aim of convincing them to visit and buy the various tourism packages offered. In the case of the resigning employee, the ideal replacement will be a new or experienced employee whose is given a market orientation for a given period of three months to ensure that he or she becomes familiar with all clients and other market dynamics that influence sales levels in the tourism sector.

The integration of planning strategies ensures that effective and reliable infrastructure is developed that facilitates the delivery of services to tourists and local communities especially for a country such as Italy that has a tourism sector based on ”demand for culture and entertainment and natural tourism” (World Economic Forum, 2015).In addition, it encourages individuals to invest in businesses and infrastructure that promotes tourism. These augment the tourism experience; hence making it more attractive and competitive regionally and internationally. Significantly, sourcing funds for marketing the country in the international market is essential since it ensures that the international community is educated and made aware of the country’s tourist destination, facilities and benefits.

Conclusion

It is evident that developing an attractive and competitive tourism strategy succeeds in ensuring that there is a consistent balance between supply and demand in tourism products. These contribute in the development of a sustainable social and economic development for a country. The development and implementation of a comprehensive tourism policy ensures that a country is able to sustain the sector. Hence, the country is able to enhance its attractiveness and competitiveness towards an enhanced economic growth and development of key industries. It is prudent to periodically review the tourism policy with the aim of determining its effectiveness in realizing set goals and objectives.

References

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