🗊Презентация World Tourism Market. Status and prospects of product development in the world tourism market

World Tourism Market Winter semester 2017 TR – B5SE/01 3. 1. Status and prospects of product development in the world tourism market. Addendum Henryk F. Handszuh, M.Ec.Sc. Former Director Market Department World Tourism Organization (UNWTO) Member, UNWTO Knowledge Nertwork

Status and prospects of product development in the world tourism market. Addendum A variety of niche and not so niche tourism products on the global market Adventure travel Black tourism Medical tourism Youth tourism Human dimension of the world tourism market: international movements of consumers Passenger air transport

. Adventure travel All types of adventures can help people to cope with their fast-paced lives, as well as being ways to get out and explore nature, home or away. A rise in adventure travel today is attributed to the consumer shift away from material possessions towards an interest in actual experiences. The adventure travel of today mirrors the past experience of original touring wilderness of the 19th century where “visitors from the areas of industrial civilization” (J. Urry) “opened their eyes and senses to the scenery, landscape, and fresh air, which so far had been hidden by terrifying wilderness” (J. Kurowicki). Adventure travel has picked up again, in particular towards Africa, Asia and South America, as well as the Middle East – in the form of hiking.

Time factor in adventure tourism Adventure tourism requires sufficient time in order to practice it in the real sense. Time is becoming crucial in a world where everything moves fast, so a safari in the middle of nowhere, or a walk in a national park with loved ones is the ultimate form of wellness travel. Time spent with love ones, including oneself, is constantly ranked as most important by respondents in surveys: Time with partner or spouse, with children, with parents, with friends, with extended family or for myself.

. Microadventure travel boom in Europe However, many busy Europeans do not have time for traditional adventuring and so are opting instead for a microadventure, either stand-alone or added to a holiday. Sometimes known as soft adventure, these types of activities tend to be low risk and are usually achievable with minimum previous experience. They tie in with an increasing drive for healthier lifestyles. Microadventure travel is largely practiced by those who weekly exercise (walk, hike) or participate in intensive physical activities (e.g. practicing sports, fitness).

Adventure tourism ramifications Today´s adventure travel represents a dynamic resurgence of the phenomenon and lends itself to practicing renewed concepts of nature admiration and contemplation under the new labels of meditation, mindfulness, wellness or even practicing yoga in the natural environment. Travellers’ concern with health and wellness while seeking unique and authentic experiences is resulting in a demand for spiritual travel with an adventure component.

Adventure tourism ramifications (2) Adventure travel shows strong linkages with cultural and rural tourism, as well as ecotourism. Worldwide, the activity is successfully promoted by the Adventure Travel Trade Association (ATTA) headquartered in Seattle, US. Year by year, it gets more and more adherents. Its success is explained not only by the fashion of adventure tourism, but also the ATTA ability to communicate responsible adventure tourism standards (Adventure Travel Guide Qualification and Performance Standard).

Adventure travel in Asia Adventure tourism continues to be practiced largely by Europeans and “Neo – Europeans”, but is now getting adherence in other world regions, in particular in Asia. Due to the reborn interest in adventure tourism and its great potential requiring travel trade governance, the Adventure Tour Operators Association of India (ATOAI) has come into being. 2015 saw its big participation for the first time in an Adventure Tourism Pavilion comprising operators specializing in adventure tourism during Outbound Travel Mart (OTM) of TTF Travel & Tourism Fair held in Mumbai.

The new face of adventure tourism in Africa In Africa, this has been seen in a rise in the concept of “wellness in the wilderness”, where a traditional safari break is accompanied by meditation, yoga and spa services. Typically, consumers of these types of breaks are relatively older and wealthy holidaymakers, often female, who are looking for more than just a typical African getaway. One aim for many clients is to gain life-enhancing skills through mindful activities that can be applied to everyday life, offering a richer holiday experience.

Adventure tourism offers to be found everywhere The vast majority of mindful safaris are in South Africa or Keya, but destinations such as Botswana and Tanzania could offer differing attractions such as animal migration. Other locations and activities that could match well with mindfulness holidays include exploring flora and fauna in South America, or Canada’s wild nature offering. While current consumers are mainly international leisure holidaymakers, there is much scope to develop for “bleisure” tourists as well as diaspora and regional visitors. Links with schools who are increasingly using mindfulness to assist students with their busy lives could also prove a successful future direction for these types of holidays.

Adventure tourism and sustainability The Global Wellness Summit found that in 2014, wellness travel (travel with a purpose of improving health and wellbeing) was growing 74% more than regular global travel. The mindfulness trend also combines well with travellers` increasing interest in sustainable and reduced-footprint holidays, hence ecotourism. It helps accommodation providers offer to their guests a service which is considered a luxury. The product of sustainable and safe adventure tourism is supported by a great body of national and international standards (ISO).

Another face of wellbeing: medical tourism. Asia Disparity in healthcare costs between developed and emerging countries, coupled with advanced healthcare infrastructure in emerging economies is helping to drive medical tourism in emerging countries. Asia continues to be the top medical destination in medical travel with countries such as India, Malaysia, and Thailand already being well-established medical tourism destinations. Asian medical destinations continue to offer more and better medical procedures and care than most other medical destinations. Several hospitals in Asia have carved such outstanding reputation for themselves that medical tourism has become a major money-spinner.

Another face of wellbeing: medical tourism Thailand followed by others. The Indian government has removed many visa restrictions and introduced a visa-on-arrival scheme for medical tourists from selected countries; this allows foreign nationals to stay in India for 30 days for medical reasons and can even get a visa of up to 1 year depending upon treatment requirements. Thailand accounts for maximum share of the Asia medical tourism market, being followed by India and Singapore. South Korea stands at the fourth spot in the year 2016 and is likely to almost double its market share by the year 2022, while Malaysia is holding the last spot.

Another face of wellbeing: medical tourism. Sri lanka Sri Lanka is amongst the emerging markets in South Asia to be favourably positioned to attract increasing international patients, with countries such as India, Malaysia, and Thailand already being well-established medical tourism destinations. Medical tourism (not only ayerveda) is only at a nascent stage in Sri Lanka; factors such as cost competitiveness, a booming private healthcare industry, internationally trained workers, and so on should help the development of Sri Lanka's medical tourism industry.

The dubious face of “fertility tourism” Fertility Tourism is a global tourism industry, bringing in over USD400 million a year in India alone. For the right price, people can buy IVF treatments, donated eggs and sperm along with surrogate mother. The clients are often white and rich. The suppliers pressed into service are often neither. Based on the UN`s definition of human trafficking, fertility tourism often results in human trafficking by recrcuiting people by coerción, twisting power and vulnerability and given payments that result in physical exploitation.

The dubious face of medical tourism when it comes to transplants The most transplanted organs: kidney (67.85%), liver (20.91) , heart (5.17), lung (3.80), pancrea (2.11%) … Typical fees offered, by countries: South Africa - USD 700 India - USD 1000 Egypt - USD 2000 Moldova - USD 2700 Turkey - USD 10 000 US - USD 30 000 Data by Coalition for Organ-Failure Solutions (USA, Egypt)

The case of suicide tourists More than 600 people travelled to Switzerland for help taking their lives between 2008 and 2012, at one of four clinics which permit non-Swiss nationals. Assisted dying clinics can operate legally in Switzerland, and have attracted large number of people with terminal illnesses and debilitating medical condition, with neurological conditions the most common reason for seking euthanasia, followed by cancer and rheumatic diseases. The rise of suicide tourism has been a major factor in prompting debates over the ethics of euthanasia.

Black tourism – visting atrocity and macabre sites As travellers embrace experiences, rather than just heading to the pool, visits to „dark tourism” sites have risen in tandem. The former Nazi extermination camp Auschwitz (UNESCO World Heritage of 1978) heads the list. Torture museums have been commonplace for some time The Salem Bitch Museum (Massachusetts, US) New spectacular additions include Cambodia`s Killing Fields, Chernobyl (CHERNOBYL.wel.come – enjoy Chernobyl, die later), Fukushima Dai-ichi nuclear power plant. There is an Institute for Dark Tourism Research at the University of Central Lancashire. Death sells.

Youth and trends in travel and tourism Human progress has always, through centuries, been possible just thanks to people`s travels. In tourism, youth is the principal agent of change and innovation among other generational segments. Inasmuch as youth represents the future in general, it equally represents the future of tourism. It is hence the principal trendsetter of tourism.

Characteristics of Chinese Young Adults impacting on tourism (Source: The power of youth travel, AM Reports: Volume 2, UNWTO)

World market dimension of international movements of people Unstopable and growing trend of international movements of people (movements of consumers). Principal protagonists and beneficiaries of international tourism. Regional diversification in distribution and trends. Some conclusions.

Tourist arrivals at national frontiers according to UNWTO. Numerical growth estimate until 2020

International tourist arrivals (2010- 2011, UNWTO data) The first 10 actors of globalization by movements of people

International tourist arrivals (2015-2016 UNWTO data) The first 10 actors of globalization by movements of people

Inbound tourism by month (UNWTO) Marked seasonality continues throughout years (2008 – 2011)

Inbound tourism by purpose of visit (share), 2016 Source: UNWTO

International tourism receipts First ten recipients in 2010 - 2011 (Source: UNWTO)

International tourism receipts First ten recipients in 2015 - 2016 (Source: UNWTO)

International tourism market share in 2012 (UNWTO)

Africa’s case: from 2007 to 2012 to 2030 - conveying an optimistic tourism message to Africa from UNWTO

International tourist arrivals by region of origin (outbound) (million, source: UNWTO)

The international tourism market interpreted in terms of connecting transport links. Inbound tourism by mode of transport, 2016 (Source: UNWTO)

Some conclusions Developed economies, in particular EU countries and „Neo – Europe” (USA...) are the principal actors and beneficiaries (recipients) of international movements of consumers, both inbound and outbound. Diversification of main tourism destinations, as well as travel generating regions, with respect to ranking, is also taking place. Numerical growth of trips considered international picked up after 1990 due to the fragmentation of states (USSR, Yugoslavia, Czechoslovakia). The share of Europe and the Americas in international travel is being reduced in favour of Asia (in particular due to China).

Some conclusions (2) The absolute volume of traffic, both inbound and outbound, is due not only to the economic prowess, the purchasing power, disposable income and attractiveness in the countries concerned, but also to the volume of their population and territory. There is a majority and increasing share of international travellers carried by air. Africa`s share in international tourism, in terms of arrivals (inbound), departures (outbound) and receipts, remains low and stagnant.

Some conclusions (3) The economic, sociological and environmental value of international tourism statistics is relative and far from satisfactory for tourism policies at world level. From the demand side, world or global tourism is a combination of both international and domestic movements of people or consumers. Short-distance travel among European countries is reported as international; long-distance travel between mainland US and its Pacific states and islands is reported domestic; trips within China, but to its territories (Macau, Hong Kong) is reported as international. Environmental impact of air, road and maritime transport carrying passengers, hence tourists, does not respect administrative or political borders, hence travel considered domestic should be included, as a rule, in the count of world tourism.

Air Transport By Tourism Satellite Account (TSA) definition, passenger air transport is a characteristic tourism activity. During recent years, it has become an even more powerful agent of globalization by intensive linking and networking the material and intangible supply of tourism with consumer demand on a global scale by means of: Increasing transport of passengers as consumers or tourists in the broad sense of the term (including domestic flights and consumption abroad in both ways: outbound and inbound), as well as Increasing carriage of goods (cargo) and mail. Air transport is also globalizing or integrating within its own ranks . The global market is both a platform of both fierce competition and cooperation among world airlines.

Air transport (2) Air transport market globalization by means of, and within, air transport is taking place due to the processes of: Expansion of air carriers destinations Broadening the outreach of open skies Mergers of air carriers, to form transnational companies (eg. British Airways and Iberia) Alliances of varying scope of integration and cooperation (such as codesharing)

Air transport recent history and forecast

Major air carriers Source: Forbes, May 2017 By revenue (billion USD) American Airlines Group(40.99) Delta Air Airlines (40.5) United Continental Holdings (37.5) Lufthansa Group (35.5) Air France – KLM (28.9) International Airlines Group (BA+Iberia) (25.3) Southwest Airlines (20.2) China Southern Airlines (17.7) China Eastern Airlines (14.9) All Nippon Airways (14.7)

Major air carriers (2) By number of airports served (2013): United Airlines – 374 Grupa American Airlines – 344 Delta Airlines – 333 Turkish Airlines – 274 Lufthansa – 218 British Airways – 212 China Eastern Airlines – 217 Air Canada – 194 Air France – 191 China Southern Airlines (190)

Major air carriers By number of countries served (2016): 1. Turkish Airlines, Turkey 120 (as of Februrary 2017) 2 Lufthansa, Germany 83 3 Air France, France 78 3 British Airways, United Kingdom 78 5 Qatar Airways Qatar 73 6 Delta Air Lines, United States 71 7 Emirates, United Arab Emirates 70 8 KLM, Netherlands 66 8 Egyptair, Egypt 66 10 United Airlines, United States 60

Air Transport (3) It was first deregulation, leading to liberalization of air transport, taking place in the US in 1978 (Airline Deregulation Act), which can conventionally be considered as a beginning of the new wave of market globalization in this area. From national and bilateral dimension (an agreement between US and the Netherlands) it extended to the international (multilateral) arena. At the time, it was an international NGO, IATA (International Air Transport Association) which played a role of commercial regulator settling accounts (bank settlement plan) for air carriers belonging to the association. It was therefore considered a sort of an air carriers` cartel. It did not deal, however, with the issues of “freedoms of the air” conducive to globalization.

From the Chicago convention (Convention on International Civil Aviation) to the „open sky” The Chicago convention (1944) provides that “every State has complete and exclusive sovereignty over the airspace above its territory”. Attached to the Chicago Convention is the International Air Services Transport Agreement (IASTA) which provides for five freedoms in the air also called traffic rights. Said freedoms are not tacitly available to the signatories of the Chicago convention, but they need to be negotiated by means of bilateral air agreements between governments of two countries on behalf of the air carriers established in their territories. Traffic rights are not covered by the General Agreement on Trade in Services (GATS) of 1995 of the World Trade Organization (WTO), even though GATS deals with air transport services, but these are limited only to the services suppied in airports and to aircraft.

From the Chicago convention (Convention on International Civil Aviation) to the „open sky”(2) The ability to make use of all the freedoms of the air would amount to an entirely open sky, hence a global air transport market. In practice every country engages on behalf of its carriers in bilateral air transport agreements (also called air service agreements, ASAs) agreements of varying coverage. According to ICAO, in October 2012 there were as many as 400 such agreements with 145 countries involved.

The first five Freedoms of the Air referred to in IASTA First Freedom of the Air - the right or privilege, in respect of scheduled international air services, granted by one State to another State or States to fly across its territory without landing Second Freedom of the Air - the right or privilege, in respect of scheduled international air services, granted by one State to another State or States to land in its territory for non-traffic purposes Third Freedom of The Air - the right or privilege, in respect of scheduled international air services, granted by one State to another State to put down, in the territory of the first State, traffic coming from the home State of the carrier Fourth Freedom of The Air - the right or privilege, in respect of scheduled international air services, granted by one State to another State to take on, in the territory of the first State, traffic destined for the home State of the carrier. Fifth Freedom of The Air - the right or privilege, in respect of scheduled international air services, granted by one State to another State to put down and to take on, in the territory of the first State, traffic coming from or destined to a third State

Additional freedoms of the air identified in ASAs Sixth Freedom of The Air - the right or privilege, in respect of scheduled international air services, of transporting, via the home State of the carrier, traffic moving between two other States Seventh Freedom of The Air - the right or privilege, in respect of scheduled international air services, granted by one State to another State, of transporting traffic between the territory of the granting State and any third State with no requirement to include on such operation any point in the territory of the recipient State, i.e. the service need not connect to or be an extension of any service to/from the home State of the carrier. Eighth Freedom of The Air - the right or privilege, in respect of scheduled international air services, of transporting cabotage traffic between two points in the territory of the granting State on a service which originates or terminates in the home country of the foreign carrier or (in connection with the Seventh Freedom of the Air) outside the territory of the granting State (also known as a “consecutive cabotage”). Ninth Freedom of The Air - the right or privilege of transporting cabotage traffic of the granting State on a service performed entirely within the territory of the granting State (also known as a “stand alone "cabotage”).

Nine freedoms of the air in international air transport

From the Chicago convention (Convention on International Civil Aviation) to the „open sky”(3) Europe (EU) A rule-based “open sky”, or a common market of air transport services, is enjoyed by the European Union in view of its single European market. The rule of open skies is gradually introduced between the European Union and other areas, including USA. The current arrengement in place is considered asymetric: it concedes more rights to US carriers at the expense of the European ones. Allowing Norwegian flights in USA was problematic.

Air transport liberalization in the European Union A rule-based “open sky”, or a common market of air transport services, is enjoyed by the European Union in view of its of the European single market. It is technically based on three-four measures or packages and supported by a regulation of 2008. The first measure, passed in 1987, addressed fares and limited each government’s ability to regulate fares. It also allowed some airlines to begin sharing capacity on routes. In 1990, the second round provided even more flexibility on fares and capacity sharing and eliminated capacity controls on routes from carriers’ home countries to other EU nations.

Air transport liberalization in the European Union (2) Finally, in 1993, the “third package” opened up the EU aviation market considerably. The third package allowed any EU -based airline to operate services anywhere within the EU, and in 1997 (fourth measure), this was extended to provide for cabotage, defined in this situation as flights within another member state’s sovereign territory. The third package allowed airlines to fly anywhere they wanted in the EU (and later, via treaties, in Iceland, Norway, and Switzerland) and to establish their own capacity and fares. The system is further supported by Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community. The issue of air traffic control in European air space is on the agenda and competence of EUROCONTROL.

Elements of Airline Alliances, based on the extent of integration and cooperation Coordination of route networks and schedules; Coordination of prices, inventory and yield management; Revenue, cost and profit pooling and sharing; Code sharing; Joint marketing, advertising and distribution networks; Joint procurement (purchase of fuel, catering, etc.)

Elements of Airline Alliances, based on the extent of integration and cooperation Reciprocal access to frequent flyer programs; Sharing of airport facilities; Coordination of IT platforms (ticket reservation and distribution systems, financial and accounting reporting, etc.); Coordination of cargo operations; Standardization of accounting, financial, product development and other practices.

Flight information display system code-shared flights, at Warasw Chopin Airport (photo in Wikipedia)

The international tourism market interpreted in terms of connecting transport links. Inbound tourism by mode of transport, 2016 (Source: UNWTO)

The “ignored” part of the air transport market Aircraft industry Airports

Some conclusions According to UNWTO, there is a majority and increasing share of international travellers which are carried by air. ICAO data show both world (including domestic traffic) and international travel by air, which better represent the wholeness and complexity of the air travel market. ICAO figures on international traffic (number of passengers) exceed and tend to double the UNWTO figures regarding international tourist arrivals. This is partially explained by the fact that ICAO data cover both outbound and inbound traffic (return trips).

Some conclusions (2) US-based airlines top the rankings, which is explained by the fact that they serve in principle the enormous US domestic market. Year by year there are changes in the rankings putting up airlines originating in China and welcoming successful newcomes, such as Turkish airlines. Low-cost airlines, in particular Ryanair, exert competitive, price-based pressure on flagship airlines. Air transport appears as a powerful agent of globalization of the world tourism market

World tourism market 3. Status and prospects of product development in the world tourism market. Addendum End of chapter 3. Addendum henryk.handszuh@gmail.com