Chapter Ten Understanding Tourism Markets. © 2008 Pearson Education, Upper Saddle River, NJ 07458....

Chapter Ten

Understanding Tourism Markets

© 2008 Pearson Education, Upper Saddle River, NJ 07458.

All Rights Reserved.2

Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw

Importance of Travel and Tourism United Nations World Tourism

Organization (UNWTO) defines tourism as the activities of people traveling to and from places outside their usual environment for not more than one consecutive year

Affects the economy of every country, city and community in the world




Importance of Travel and Tourism Tangible and intangible components are

all interrelated and sensitive to environmental trends including:

The tourist The tourist-generating region Transportation systems Tourist destinations Hospitality services The tourism industry




Importance of Travel and Tourism The multiplier effect

The impact the tourist dollar has on a destination’s economy in that wage earners working in hospitality and tourism also spend earnings in the local community




Exhibit 10-1; The Multiplier Effect




Importance of Travel and Tourism Growth since World War II and 1960 Fastest growing destinations have been

Asia, the Pacific and Middle East Competition among destinations is fierce Travelers wants and needs constantly

change Tourism is susceptible to changes in the

macro environment




Local Residents’ Attitudes Towards Tourism Success and sustainability of tourism

depends on the attitudes of local residents towards tourism

Hospitality of local residents is important Will support tourism when the expected

benefits exceed the costs Residents of depressed economies are

likely to support tourism for its perceived benefits

Ultimately there must be a fit between what the market wants and the destination offers




National Tourism Organizations (NTOs) Governments promote their

countries with NTOs via: Publicity campaigns Research Plans for destinations

US is the only major country without a federally funded NTO




National Tourism Organizations (NTOs) Traditionally NTOs marketing goals

have been to create and communicate overall appealing destinations images and messages to the target market

Today marketing programs are more collaborative with the private sector

NTOs are focused mainly on marketing the county as a whole




National Tourism Organizations (NTOs) NTOs also facilitate:

Collecting analyzing and decimating market research data

Establishing a representation in the markets of origin

Participating in trade shows Organizing and coordinating familiarization

trips Supporting the private sector in the

production and distribution of literature




How Hotels and Tourist Destinations Work Together

A critical issue for the hotel is how to maintain it’s identity and not get lost in the promotion of the destination

Interview with Leanne Pletcher of the Hilton Waikoloa on Hawaii




Destination Marketing Strategy Before strategy must come an

assessment of opportunities and threats Examine the major forces in the macro

environment Identify factors that that are likely to

influence the business and future business Should include a brief review of major forces

like market acceptance, social perceptions, and consumer trends




Five Forces Model

Risk of Entry byPotential Competitors

Bargaining PowerOf Buyers

Rivalry AmongEstablished Firms

Threat ofSubstitute Products

Bargaining Power ofSuppliers

EcologicalEnvironment

EconomicEnvironment

PoliticalEnvironment

SocioculturalEnvironment

RegulatoryEnvironment

TechnologicalEnvironment




Forces in the Macro Environment Economic

environment International

tourism is largely dependent on the economic conditions in areas where the prospective visitors live

Technological environment Technology has

helped foster the rapid growth of travel and tourism in the last 20 years

Advent of computer technology has assisted the travel industry




Forces in the Macro Environment Political/Legal Environment

Government interest largely due to the economic significance of tourism

Restrictions or changes in international travel policy can greatly affect tourism

September 11, 2001 Air transportation increasing international flights in

the 1980’s In 2004 the Chinese government expanded its list

of approved countries its residents are able to visit




Forces in the Macro Environment Ecological

environment Impact of travel on a

destination’s ecology has brought the issue to the forefront for both travelers and host communities

Measures such as limiting tour operators or increasing visitors’ fees may help

Sociocultural environment

Involves the beliefs, values, attitudes, opinions, and lifestyles

Demographic shifts of age in the population

Shrinking population due to lower fertility rates

Rising education levels Increasing economic role

of women




Forces In the Macro Environment There is rivalry among destinations Must have sound understanding of the

market to compete Destinations are mutually dependent in

that competitive moves will be addressed also by competitors in the same market

Identifying competition is crucial as it provides a basis for competitive analysis

Context and situation influence a traveler’s consideration set




Segmenting the Tourist Market

Destinations cannot be everything to every traveler

Identify groups Travelers who have common interests and

share common values Travelers that may be interested in the

kinds of attractions, services and facilities that the destination offers




Segmenting the Tourist Market Understand the destinations

capabilities and resources and use them to attract tourist segments

Services the destination offers What customers make purchases and

why Meeting customer needs Core competencies




Segmenting the Tourist Market How to describe markets:

Demographics The travelers’ wants and preferences and the

frequency of their purchases which are associated with demographic characteristics

Psychographics Describes psychographic information, such as

lifestyle or personality attributes, which is usually subjective

Behavior Categorize based on knowledge, attitude, use,

motivation, or response to an attraction, facility, or service




Communicating with the Tourist Market Importance of image promotion

Every communication related to a destination helps the potential tourist form and image

Negative images can also have a profound effect on tourism

Countries spend millions of dollars to create positive images




Communicating with the Tourist Market Choosing a destination: College

student traveling to Cancun as an example

Image, actual travel, recollection Experiences live up to expectations

satisfaction Decision to return Word-of-mouth




Travelers’ Information Search Behavior Part of the decision making process Understanding can aid marketers to

develop effective communication Consumers prior knowledge:

Expertise Familiarity




Expertise As familiarity increases, so does expertise Product related experiences influence expertise

Advertising exposure Interactions with sales people Purchase Product usage Exposure to brand name

Need understanding of consumer’s external information source utilization

Travelers’ involvement is likely to have a positive effect




Familiarity Familiarity has been determined to

be an important factor in consumer decision making

Gained from ongoing information search

Guidebooks or books Advertising and newspaper write-ups TV and radio advertisements




Familiarity Learning is likely to influence

consumers’ decisions Intentional

Learning through active cognitive processing of information

Likely to increase traveler’s expertise and familiarity

Incidental Learning that occurs unintentionally Likely to increase only a traveler’s familiarity




Familiarity Importance of perceived cost

Make external searches inexpensive and time efficient

Clearly identify the unique selling points of the destination to differentiate the destination and make it easier for potential travelers to understand

Word of mouth communication




Discussion Give an example to illustrate what is

meant by “destination marketing.”

Chapter Ten Understanding Tourism Markets. © 2008 Pearson Education, Upper Saddle River, NJ 07458....

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Transcript of Chapter Ten Understanding Tourism Markets. © 2008 Pearson Education, Upper Saddle River, NJ 07458....