Tourism Facing New Challenges in a New Year

[Peter Tarlow]

Part I  (see below for Part II)

Now that the December holidays are past, and the parties have ended, just like almost everyone else, tourism professionals must return to a world of work and new challenges.  From health issues to economic issues, from issues of social unrest to all too often substandard customer service, tourism officials face a host of problems.  Some of these problems are within the tourism and travel industry’s control.  Although others are not in the industry’s direct control their consequences directly or indirectly the industry and must be taken into account.  Below is a summary of some of the issues with which tourism officials may have to deal during 2015.

 -Health issues.  Although it is still too early to note what the long range impact of Ebola will be on the tourism industry, tourism professionals would be wise to consider this disease not as a single event but rather as symbolic of any potential pandemic.  There is a clear potential interrelationship between travel and the spread of a pandemic.  The Ebola case should put the tourism industry on-notice as this is the first time in many decades when banning travel from one part of the world to another has been seriously discussed.  Tourism officials must not only worry about the spread of disease but also a disease’s economic impact. 

 -Security Issues.   The rise of ISIS and other radical terrorism groups posses a major threat to tourism.  Not only is the tourism industry security sensitive, but major disruptions tend to have longer life spans than the news cycle at large.  The coming year will present tourism security specialists with any number of challenges.  Among these are:

1. Terrorism has not diminished but rather mutated.  Single cell or lone wolf terrorism will increase their threat to the tourism industry and will be harder than ever to detect
2. Terrorists have become social media savvy.  Terrorism is no longer just about acts of violence, instead terrorists have learned how to create media centric violence.   This means that terrorists have learned how to adapt the media to their own needs.
3. Cyber crimes will continue to haunt the tourism industry.  Cyber crimes, once relatively rare in tourism, have become a major issues in the world of tourism.  The fact that credit cards may be stolen and used without permission means that both public and private security officials must become ever more mindful of this new threat.  Many areas of tourism have adopted cash-free policies and if travelers are now afraid to use their credit cards or fear identity theft then the system is placed in jeopardy. 
4. Cyber attacks on large corporations and privacy issues may become the norm.  Until recently the idea of a cyberwar seemed to be more science fiction than reality.  Now large corporations such as hotel chains and airlines may be vulnerable to attack. A cyber attack on the airline industries computers would be more devastating than the attacks of September 11 and could bring airlines to a complete halt. The fact that airlines are now equipped with Wi-Fi while in flight is both a convenience and a threat.

 Tourism Policing Forces (TOPPs) around the world will be more needed than ever.  Currently in much of the world and especially in the United States police departments are facing an ever more hostile public. TOPPs units can go a long way to changing the image of the police and this positive blow-back may help all aspects of law enforcement. If security personnel can convince marketers of the importance of TOPPs units then these forces may help to create a dent in international crimes against tourists. If, however, these forces remain underfunded then additional problems may occur.  Tourism police will need to have sub-specialties that range from issues of fraud to cyber crimes, from issues of petty theft to terrorism, from issues of terrorism to crowd control.  The key will be that tourism can no longer afford to have law and security provider generalists, but rather will need specialists in multiple areas.

 -Economic Issues.  Although in some parts of the world, such as the United States, the economy appears to be improving or at least not getting worse, this trend is not true for other parts of the world.  In 2015 Europe may well enter into another recession and this may mean that Europeans may have to vacation less, and stay closer to home.  Another worry is the viability of Europe’s currency, the euro.  A weaker euro or basket of currencies may make travel to Europe less expensive, but it also may mean that Europeans may have to cut our or shorten their vacation plans.  Tourism professionals would do well to consider:

 

1. The cost of credit.  Because so much of the middle class’ purchases for expendable items are dependent on credit, it is essential to track the trends in credit.  If interest rates rise, then middle class purchases become more expensive.  In some places there is now the threat of deflation.  Deflation tends to encourage people to wait for lower prices and deflationary cycles can become self-fulfilling prophecies.
2. As in past years, the middle class will remain the heart of the tourism industry.  The middle class must live on some form of budget.  That means that if there is a major rise in taxes or other required services, the middle class may tend to hold back on what it considers luxury items.  On the other hand, during periods of deflation, the middle class often waits for cheaper prices and creates a marketer’s nightmare.  Tourism is highly sensitive to economic uncertainty and the more turbulent the economy, the more precise the marketing needs to be. 
3. The New Year may bring a great many undulations within the financial industries and these ups and downs will impact tourism.  When the stock markets tend to rise, many people feel wealthier and are more willing to spend money.  The opposite is true of a falling market.  Note that the psychological macro impact is not connected to an individual’s personal wealth.  Members of the middle class tend to spend money as influenced by macro rather than micro trends.

 -Customer service.   The traveling public is learning how to demand more and is seeking alternatives to those businesses that are providing poor customer service.   The past year saw new lows in many areas of customer service within the travel industry.  Although airlines still lead the way in poor customer service, other parts of the tourism industry need to reconsider the quality of the service that they provide.  A major sore point with travelers is the fact that there is a charge for minimal service items.  Hotels that charge for water or Internet service are not winning new friends.  The consistent “we charge for everything” policy of many tourism service providers has created a sense among many that the hospitality industry is more hostile than hospitable. 

Part II

Last month we explored some of the challenges that lie ahead for the world of tourism in 2015.  Among the issues that we looked at were the question of security, health, issues of policing a few of the economic issues facing the world of tourism and customer service challenges.  This month Tourism Tidbits exams some of the other issues that may impact the world of tourism during 2015.  It also looks at the evolving and ever-worsening terror situation in Europe.

 

-Tourism officials, like it or not, are going to have to confront Europe’s unraveling.  The recent terrorist attacks in France along with major police raids in Belgium, the Netherlands, Greece, and the United Kingdom combined with Euro zone’s ever increasing economic problems will present tourism’s leadership with new challenges. It would be a major mistake for tourism’s leadership that mere rallies will solve what is an endemic problem within Europe.  The potential for spill over into the American and African nations is ever present.  Attacks on key tourism centers such as airports, train stations and major attractions may have a profound impact on tourism. Europe’s economic problems may result not only in fewer Europeans being able to afford to take vacations outside of their region, but its deflation may hurt tourism on a world wide basis.  Here are some of the other 2015 issues about which tourism and travel leaders need to be aware.

 -Visas may become a hot issue. There was a time when Europe was not seen as a terrorist threat.  As Europe’s demographics have changed, so have opinions regarding visas. If visa restrictions become the norm, the tourism industry will face a threat around the world that it long thought was a thing of the past.

 - Transportation issues. Airlines have become the business that travelers love to hate.   With the merger of airlines around the world tourism leaders can expect higher costs and a continual downgrading of services.  Not only have airline costs continued to rise, but also there are fewer flights to fewer places.  Both Europe and the US suffer from airline personnel who simply do not seem to care.  The cost of an airline ticket is now merely an approximation as the ticket only buys the most basic of services and then passenger is asked to pay for additional fees for almost everything else.  The cost of airline travel is perhaps less of a challenge to the tourism industry than is the lack of comfort, and hassles that travelers are forced to endure.  Few airports around the world can handle supersized aircraft that can bring well over 300 people to an airport at one time.  These larger aircraft mean higher probabilities of lost luggage, great lines by which to pass through a nation’s customs and immigration procedures and higher levels of traveler frustration and anger.

-Pay attention to alternative transportation modes.  Due to problems in the airline industry an eve-increasing number of travelers are seeking alternative forms of transportation.  Expect to see more people traveling by car, rail, and if the cruise industry can control on board illness and publicity disasters, then higher usage of sea transportation.  These transportation changes will have beneficial effects on small communities’ tourism products. Rural tourism may greatly benefit from these changes.  In order to benefit however, small towns and rural areas will need to think through their tourism product.  Issues as to what to do at night or what to do during inclement weather must be addressed. These communities will also need to create regional rather than local tourism products.  On the other hand, those tourism locations that are airplane dependents will need to create hospitality centers that compensate for the hassle of airline travel.

-Travel demographics are changing.  The travel and tourism industry will continue to see a wide demographic spread and determine how it will cater to these different demographic groupings.   Te baby boom generation (people born between 1946-1959)  is now hitting retirement age. These people will have the leisure time to travel, tend to deal poorly with hassles and are prone to seek alternatives to what they consider to be unnecessary or unfair travel difficulties.  Both in Europe and in the US this age group may look to alternatives means of transportation, such as road trips and rail.  Furthermore, many of these people have children who are living far from where they live and may use travel as means to connect with grandchildren rather than merely to explore.  At the other end of the spectrum, is the now growing youth travel. These are people who seek economy over comfort and look for adventure rather than five star luxury. The growth of this market will be especially important for places offering adventure tourism.

-New opportunities for alternative or niche travel experiences are everywhere.  Many legacy destinations will have to compete with new travel experiences.  A new generation will seek combination tourism in which it can mix business with pleasure, short-term vacations, that embrace long weekends, and boutique tourism experiences that are out of the ordinary.  Many of the legacy destinations will suffer from the “been-there-done-that” syndrome and will have to offer more conveniences or tourism opportunities if they are to keep their status as premier destinations.  Some of the new and fast growing markets are the religious tourism market, the farm-vacation market, the history seeking market, and the travel and food market.  The key to niche marketing is to find something unique about a specific community, brand it and publicize to the demographic that may fit into the niche.  For example, educational tourism should continue to be an important tourism product both on cruise ships and at places with educational centers whose faculty is willing to become part of the leisure industry. 

-Business travelers will expect more from hotels and transportation companies.  Business travelers around the world expect free internet and wi-fi services.  Many business travelers now use some form of tablet rather than a laptop computer.  These people need access to free printing via the Internet, flexible check-in and check-out times and dining options that are both affordable and varied.  Travelers will continue to seek healthy food options and increased after work opportunities.  Many business travelers also travel with family members and seek not only to combine business with pleasure but in the case of single fathers or mothers, need to bring their children with them.  Tourism centers must adjust to the traveling single father.  These men who either have partial or full custody of their children and seek services such as bonded baby sitters, playrooms and rest room with places to change diapers.

-Be aware of potential economic deflation.  Most of us have been raised with the fear of inflation, but a review of the world’s chronic unemployment or under-employment, poor economy despite world governments’ statistical games can be as dangerous or even more dangerous than inflation.  Low interest rates are especially hard on the retiring baby boomers who are dependent on fixed incomes.  Deflation at first seems great but as consumers hold back from making purchases in the belief that tomorrow things will only be cheaper, the potential for economic chaos, especially in industries that are based on discretionary income such as tourism, becomes greater.

Congratulations to a number of places around the world which have come up with new creative measures in their tourism offerings.  Panama has created a program to provide visitors with one month of free health insurance.  The Dominican Republic has created perhaps the world’s best-trained tourism police force and in 2015 seeks to open the first school of tourism policing.  The US-Cuban accord may change the face of Caribbean tourism, and tourism agencies around the world are taking tourism safety and security more seriously than ever before.  These are a few of the creative innovations that should give tourism professionals hope that 2015 may be the best year ever for tourism.

 

Please note:  I have a special article on the issue of Travel Waivers, published two days ago.  You can find it at:

http://www.eturbonews.com/55084/case-us-visa-waver-program