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Globalization,Globalization, International Tourism and International Tourism and
the Lodging Sectorthe Lodging Sector
INTERNATIONAL TOURISM MANAGEMENT
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Globalization
About 30 years ago international enterprises was a phenomenon but as globalization is a common term today, the rise in industry numbers, severe competitive in business life, application of a wide range of marketing techniques and modern technology, changed the business to transnational and global.
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With this concept all the countries, liberalized their foreign investment policies and aggressively courted foreign investments with generous fiscal incentives. Between 1983-1988 world trades volumes grew at a compounded rate of %5. Over the same period, global direct foreign investment increased more than 20% annually in real terms.
We experience internationaltransactions daily
Imports and exports reacheven remote areas
Technology and e-bizpromote trade
Consumers and companiespull markets closer
The Shrinking Globe
1500 -1840 1850 - 1930 1950s 1960s
Best average speed ofhorse-drawn coachesand sailing ships, 10mph.
Steam locomotivesaverage 65 mph.Steamships average36 mph.
Propelleraircraft300 - 400mph.
Jetpassengeraircraft,500 - 700mph.
Positive
Technology
Open Markets
Economic Integration
Peace
Corporate Strategy
Global Focus
Negative
Culture
Market Barriers
National Barriers
War
Corporate Strategy
Local Focus
1-3
Regional tradeRegional tradeagreementsagreements
GATTGATT
WTOWTO
Remove barriers to trade and investment
E-mail and videoconferencing
Internet, intranets,and extranets
Transportationadvancements
Better coordination and control
Improved communications and
management
More efficient, dependable
shipping
Physicalsecurity
Digitalsecurity
Reputationalrisk
Examine companyvulnerability (weakness)
andcreate a disaster
recovery plan
Guard proprietaryinformation and
confidentialcommunications
Require ethical andlawful behavior from
all employees andbusiness partners
Comparing revenue of the world's 10 most global firms to the gross domestic product of nations
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Today, global corporations are controlling approximately half of the world’s assets. Some examples of the companies and trade marks may include; IKEA, Nestle, Coca-Cola Lever, General motors, Honda, Toyota, IBM, Microsoft and many other mega global companies .
In our subject industry (Tourism), by the internationalization of Business ownership and management has had a major impact on the travel, tourism and hospitality industry.
And these trends have resulted in intensified demand and competition for airline seats and hotel accomodations in various part of the world. (especially in USA)
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INTERNATIONAL HOTELS
With the dissolution of borders, many economic and regional unities, tourism industry moved towards globalization Internationalization of business ownership and management had a major impact on the travel, tourism and hospitality industry in the last decade thus resulting in intensified demand and competition for hotel accommodations and restaurants in various part of the world.
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The tourism industry is one of the fastest growing industries of the world. Since 1950’s, due to internationalization of domestic chains like Hilton and introduction of jet planes to the industry, it has a steady growth globally. The figures are quite interesting thus WTO's Vision forecasts (UNWTO, 2007) indicates that international arrivals are expected to reach over 1.56 billion by the year 2020.
Year # of tourists Total tourism income
1950 25 2.1
1960 70 6.8
1970 165 18
1980 285 105
1990 458 268
2000 698 475
2002 714 470
2009 903 856
2010 935
2023 (prediciton) 1700 2000 17
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Rank Country UNWTORegionalMarket
InternationalTourismReceipts(2008)[9]
InternationalTourismReceipts(2007)[4][9]
InternationalTourismReceipts(2006)[10]
1 United States North America $110.1 billion $96.7 billion $85.7 billion
2 Spain Europe $61.6 billion $57.6 billion $51.1 billion
3 France Europe $55.6 billion $54.3 billion $46.3 billion
4 Italy Europe $45.7 billion $42.7 billion $38.1 billion
5 China Asia $40.8 billion $37.2 billion $33.9 billion
6 Germany Europe $40.0 billion $36.0 billion $32.8 billion
7 United Kingdom
Europe $36.0 billion $38.6 billion $33.7 billion
8 Australia Oceania $24.7 billion $22.3 billion $17.8 billion
9 Turkey Europe/Asia $22.0 billion $18.5 billion $16.9 billion
10 Austria Europe $21.8 billion $18.9 billion $16.6 billion
Rank Country UNWTORegionalMarket
InternationalTourismExpenditures(2008)[9]
InternationalTourismExpenditures(2007)[9]
InternationalTourismExpenditures(2006)[11]
1 Germany Europe $91.0 billion $83.1 billion $73.9 billion
2 United StatesNorth America
$79.7 billion $76.4 billion $72.1 billion
3 United Kingdom
Europe $68.5 billion $71.4 billion $63.1 billion
4 France Europe $43.1 billion $36.7 billion $31.2 billion
5 China Asia $36.2 billion $29.8 billion $24.3 billion
6 Italy Europe $30.8 billion $27.3 billion $23.1 billion
7 Japan Asia $27.9 billion $26.5 billion $26.9 billion
8 CanadaNorth America
$26.9 billion $24.7 billion $20.5 billion
9 Russia Europe $24.9 billion $22.3 billion $18.2 billion
10 Netherlands Europe $21.7 billion $19.1 billion n.a.
Top 21 most visited cities by estimated number of international visitors by selected year
City CountryInternationalvisitors(millions)
Year/Notes
Paris France 15.62007 (Excluding extra-muros visitors)[12]
London United Kingdom 14.8 2008[13]
Bangkok Thailand 10.842007 (External study estimation)[14]
Singapore Singapore 10.1 2008[15]
New York City United States 9.5 2008[16]
Hong Kong China 7.942008 (excluding Mainland China)[17]
Istanbul Turkey 7.05 2008[18]
Dubai United Arab Emirates 6.9 2007[19]
Shanghai China 6.66 2007[20]
Rome Italy 6.122007 (External study estimation)[14]
Seoul South Korea 4.992007 (External study estimation)[14]
Barcelona Spain 4.72 2008[21]
Madrid Spain 4.64 2008[22]
Mecca Saudi Arabia 4.5 2007[23]
Kuala Lumpur Malaysia 4.42007 (External study estimation)[14]
Beijing China 4.4 2007[24]
TURKET
YearsTourism Income
( 1000 $ )Number of Tourists
Average spending($)
2001 10 067 155 13 450 121 748
2002 11 900 925 15 214 516 782
2003 13 203 144 16 302 050 810
2004 15 887 699 20 262 640 784
2005 18 153 504 24 124 501 752
2006 16 850 947 23 148 669 728
2007 18 487 008 27 214 988 679
2008 21 910 964 26 336 677 708
Kaynak: Kültür ve Turizm Bakanlığı, TÜİK.
Turkey- International Arrivals According to Country of Origin (2008)
Years Share(%) Change(%)
COUNTRY 2007 2008 2007 2008 2008/2007
Germany4 149 805 4 415 525 17,78 16,77
6,40
Russian fed.2 465 336 2 879 278 10,56 10,93
16,79
England1 916 130 2 169 924 8,21 8,24
13,25
Bulgaria 1 239 667 1 255 343 5,31 4,77 1,26
Netherlands 1 053 675 1 141 580 4,51 4,33 8,34
Iran1 058 206 1 134 965 4,53 4,31
7,25
France 768 167 885 006 3,29 3,36
15,21
Gorgia 630 979 830 184 2,70 3,15 31,57
Ukraine 593 302 730 689 2,54 2,77
23,16
USA 642 911 679 445 2,75 2,58
5,68
Kaynak: Kültür ve Turizm Bakanlığı.
Internatonal arrivals - Turkey
Reason for travel 2001 2002 2003 2004 2005 2006
Total 11 276 530 12 921 983 13 701 418 17 202 997 20 522 621 19 275 948
Recreation 5 231 272 6 401 017 6 815 797 8 216 757 9 904 716 8 529 890
Culture 917 368 1 016 739 1 004 079 1 116 206 1 310 082 1 008 513
Sports 127 657 128 893 156 162 213 971 249 765 179 419
Visiting relatives 794 651 980 005 839 086 1 044 575 1 480 442 1 929 800
Health 96 860 82 693 103 404 133 721 164 598 153 895
Religion 30 962 60 171 58 456 61 053 106 710 101 564
Shopping 829 207 759 589 968 486 1 041 585 1 085 802 1 135 273
MICE 239 777 235 156 297 903 324 152 410 326 443 500
Business 500 328 571 573 730 272 814 150 862 997 1 030 319
Fairs 503 300 376 813 442 431 633 994 610 106 747 599
Transit 308 428 252 722 246 377 168 330 404 940 321 607
Education 197 834 72 060 125 060 88 356 94 399
Other 427 704 115 944 399 684 588 267 624 989 755 038
Kaynak: TÜİK Çıkış Yapan Yabancı Ziyaretçilerin Geliş Nedeni, 2001–2006
Rank Country UNWTORegionalMarket
Internationaltouristarrivals(2008)[9]
Internationaltouristarrivals(2007)[4][9]
Internationaltouristarrivals(2006)[10]
1 France Europe 79.3 million 81.9 million 78.9 million
2 United States
North America
58.0 million 56.0 million 51.0 million
3 Spain Europe 57.3 million 58.7 million 58.2 million
4 China Asia 53.0 million 54.7 million 49.9 million
5 Italy Europe 42.7 million 43.7 million 41.1 million
6 United Kingdom
Europe 30.2 million 30.9 million 30.7 million
7 Ukraine Europe 25.4 million 23.1 million 18.9 million
8 Turkey Europe 25.0 million 22.2 million 18.9 million
9 Germany Europe 24.9 million 24.4 million 23.5 million
10 MexicoNorth America
22.6 million 21.4 million 21.4 million
Number of beds (000)
Europe 11375
America 9334
Asia / Pacific 6708
Africa 825
Middle East 400
South Asia 310
Total 28952
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In 2001 it is estimated to account for some:• $3.5 trillion of Economic Activity• 207 million jobs
In 2011 it is estimated to account for :• $7.0 trillion of Economic Activity• 260 million jobs
Travel and Tourism ---World’s Largest Industry
Source: WTTC
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Years and Number of tourists 1963 :198.000 2010 : 33.027.943
Years and Tourism revenues 1963: 7 million $ 2010: 20,806 billion US$
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World’s total tourism investment level 802 billlion US $ (9.4 % of world total investment)
Turkey’s total tourism investment level 2.9 billlion US $ (7.5 % of world total investment)
Growth rate of world tourism sector 5.9 %
Growth rate of Turkey’s tourism sector 12.2 %
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International hotels “are not only foreign firms with direct investments in a particular host country, but are those firms having all major forms of contractual arrangements and enterprises in host countries”
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-Reasons to go global:
-ability to establish global marketing
-purchase network
-expertise to satisfy the demand
-Reasons to encourage firms:
-increase employment rate
-increase national income
-Problems:
-cultural, political and social differences
-cultural climate
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Main pioneers in international hotel industry are;
-Cesar Ritz, (Ritz Hotels)
-E. M. Statler, (Statler Hotels)
-Conrad Hilton, (Hilton Hotels)
-Ernest Henderson (Sheraton Hotels)
The Historical Aspects Of International HotelsThe Historical Aspects Of International Hotels
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Before World War II,
-American hotels have no investment abroad.
-Reasons;
-Great risk to choose the best location,
-Financing complicated,
-Currency fluctuations,
-Restrictions,
-Power of domestic hotels.
With the help of media, Americans wanted to go to places they saw.
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After World War II,
-Roosevelt, Latin America,
-Pan – Am and Inter – Continental, (Brazil)
-Inter Continental and Grand Metropolitan (109 hotel)
-Hilton,
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Developments in ContinentsDevelopments in Continents
Europe;
- first from USA,
- Marshall Plan,
- first in main cities (London, Rome, Paris),
- travel increase, European chains appeared,
- Energy Crisis (1973), stopped,
- European Economic Community, increased,
- high labour cost, plan restrictions.
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North America;
- only Americans,
- 1980’s, foreign hotels
. stability of economy,
. low construction and operation costs.
Middle East:
- oil producing country’s wealth,
- not an attractive place;
. economic and politic instability,
. complex problems
. war in Kuwait, problems in Iran, Iraq, Israel.
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Asia – Pacific;
- mass travel and extreme demand,
- first American hotels,
- Japanese and Asian brand hotels
- attractive;
. low costs
. labour cheap
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Reasons To Become a ChainReasons To Become a Chain
-stay as a local and weak hotel,
-lack of technology,
-cheaper equipments,
-distribution of risks.
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Famous International HotelsFamous International Hotels
American Chains;
Hilton
(Great Depression, 7 brands: Hilton, Conrad, Hampton Inn, Homewood Garden Inn, Doubletree and Embassy)
(2.709 hotels: Hilton 717, Conrad 22, Hampton Inn 1.293, Homewood 132, Garden Inn 191, Doubletree 166, Embassy 188)
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Inter – Continental
(part of Pan – Am airlines, restorate palace, old buildings.)
(total 135 hotels: 26 North America, 20 South America, 18 Asia – Pacific, 31 Europe, 35 Africa ad Middle East.)
Sheraton
(first to; automate reservation system, develope toll free customer line, joint venture in Moscow)
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Holiday Inn
(first that fully capitalized by franchising)
Hyatt
(attract customer from surroundings, first to emphasize on unique in – hotel dining facilities.)
Choice Hotels
(first to; use network, implement non – smoking rooms, introduce midpriced all – suites, established a three tiered hotel system – limited service budget hotel, full service midpriced hotel, full service luxury hotels)
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European Chains;
Forte PLC
(merged with Trust House, development strategy; continue developping properties, seek management contracts, pursue joint ventures, seek franchisees.)
Club Mediterranée
(sports assc.,change environment, first for singles then for couples, rent villages to companies)
Accor
(strong f&b operation, towards olders)
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Meridien
(Air France route, expand French culture)
(182 hotels; Europe 60, America 17, 23 Middle East, 62 Asia – Pacific 20 Africa, incopr. With Nikko’s 40 hotels)
Grupo Sol
(buildings impress Spanish architecture)
(350 hotels; Africa 17, America 77, Asia 9, Caribbean 23, Europe 216)
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Indian Chains
Low labour cost & training system.
Taj Group
(oldest hotel chain, 48 hotels)
Oberoi
(have 3 staff per room, 21 hotels)
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Asian – Pacific Chains
cheap labour and land
New Otani
(Olympic games, largest and tallest hotel in Japan, 19 hotels (1993))
Nikko Hotels
(Japan Airlines, own their hotels 18 hotels + 40 Meridien hotels)
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Regent International
(first with Tokyo Inn, today with Rezidor SAS, 10 hotels; 5 Asia, 2 USA, 1 Europe)
Mandarin Oriental
Dusit Thani (15 hotels)
African Chains
Southern Sun Hotels
(largest in Africa, 80 hotels.)
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Hilton Regent Int
Inter-Cont
2.472 12
26 2
1
Meridien
Nikko
49
23 20
354
174
Inter-Cont
Meridien
Hilton
Grupo Sol
Taj Group
Nikko
50
210 60
311
2162
2
Inter-Cont
Meridien
Hilton
Grupo Sol
Nikko
Regent Int
Taj Group
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18
21
2
9
5
1
Inter-Cont
Meridien
Hilton
Grupo Sol
Regent Int
Taj Group
Oberoi
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1 3
5
1
Inter-Cont
Meridien
Hilton
Nikko
53
Inter-Cont
Meridien
Hilton
Grupo Sol
Nikko
Regent Int
20
1 5
1
2
77
54
159
5
59
14
40
18
32
Inter-Cont
Meridien
Hilton
Grupo Sol
Regent Int
Taj Group
Oberoi
Nikko
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Airline ConnectionAirline Connection
-First Pan – Am and Inter – Continental,
-To where they fly to,
-Then hotels with domestic airlines where they are located,
-1994, 1.068 hotels 277 merged with airlines,
-Advantages: promotion effort, increase the market share
-Disadvantages: managers, seasonal hotel (low season), hotel poor in service.
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MergersMergersReasons to merge;
-to have more revenue
-Need to represent themselves in key markets
-Access to new markets
-Access to home markets
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Impacts of Chains on TourismImpacts of Chains on TourismAdvantages:
-increase capital in less dev. countries,
-technology and management knowlegde got,
-distribution of risks,
-market in global environment,
-to increase supply, capital is needed,
-increase employment and income,
-make tourism season longer,
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Disadvantages:
-Creates monopoly,
-Disability to compete as a local investor,
-Not encourage domestic tourism,
-Company and country benefits may not fit,
-Profit is transferred outside.
Impacts of Chains on TourismImpacts of Chains on Tourism
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There is severe competition within such a promising and profitable industry, since it not only brings positive economic impacts but also provides social and cultural positive impacts for the host countries. Therefore, the countries and establishments, which are aiming to have a high market share within the global tourism product are using all the strategies applicable( in order to stand out from the severe competition by showing and communicating their competitive advantages and positive image).
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http://www.youtube.com/watch?v=X5EL3PN8Yg8
Know the customer
Emphasize global awareness
Develop world-class products
Market effectively
Improve logistics
Analyze problems correctly