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Discussion group reports
The following notes are an abbreviated summary of eight reports prepared by groups ofdelegates considering particular aspects of tourism development. These views are not necessarily those of the Conference as a whole, but do reflect approaches and opinions which have a bearing on current practices and trends. The subject headings are indicated.
1.
Project appraisal
Project criteria. The most significant criteria affecting decisions on projects are the quality of management, financial viability of the project, investment policy of the applicant and creation of employment.
Attractions: The provision of large-scale attractions cannot be considered only in terms of commercial investment. Some form of public involvement is essential.
Grant aiding ofprojects is considered the most effective way of stimulating development but the level of grant should be determined by the nature of the project, its relative importance in relation to the overall plan and its commercial viability. Provision must be made in grant aiding projects for repayment should the business be sold.
Organization: Direct involvement of public authorities in project development should be avoided except where there are recognized deficiences in management. However, the provision of extension services and/or technical assistance is a valuable role. Tourism multipliers are considered useful as an investment screening device and indicative statistic when choosing between different types of projects but should not be used to justify projects unless the particular circumstances are very. exceptional.
2.
Financing tourism projects
Infrastructure costs are a major constraint to all forms of development and it is difficult to envisage an alternative mechanism for funding infrastructure works other than by investment of public or joint venture capital.
Major development agencies appear to use different criteria when evaluating different situations. There is a need for lending criteria to be more explicitly set out.
In underdeveloped economies a different strategic process is involved and the problems of funding projects are more severe even with government guarantees to support development.
One approach is to divide major projects into component schemes which will each attract investment but the problems of continuity and overall implementation must also be taken into account.
Seeding by government can act as an effective stimulus to more wide-scale development and help to establish appropriate standards.
Management contracts, as a non-capital component of development, can offer advantages in attracting other sources of capital investment.
Time sharing projects may play a pan in promoting tourism investment but the long term paybacks and the need to finance recreation and other central facilities as part of the development must be taken into account in determining viability.
Feasibility studies should provide more specific information on the sensitivity of profit and loss projections, on sources of loans - - specifying the parameters by which such loans may be obtainable - - and on appropriate funding processes.
3.
Economic impacts
Economic studies have a value in demonstrating to government the contribution of tourism to employment, revenue and other benefits. In this respect they can serve as a means of influencing government decisions.
Economic sensitivity. Such studies may also be used to indicate the economic sensitivity to tourism of specific regions or areas. As an example, of some I 500 US counties which have so far been surveyed, only three showed absolutely zero economic impact from tourism.
In developed economies the financing of small projects can usually be adequately met by conventional lending sources, such as the clearing banks, subject to normal commercial criteria and with grant aid where appropriate to assist viability. With larger schemes the viability must be clearly demonstrated.
Funding agencies. In seeking financial aid from funding agencies such as local authorities, conflicts of interest and priority can cause unacceptable delays.
Tourism Management December 1982
4.
Physical impacts, social impacts and conservation
Physical impacts. In assessing potential physical impacts of the intended types of tourism, the manner and scale of development and the nature of resources must all be taken into account. Through careful evaluation, planning and monitoring, sensitive tourism development can contribute to the conservation of delicate wild life resources. 319
Discussion group reports Spatial positioning is often as important as the scale and character of tourism development in determining how well it will harmonize with the environment.
Social impacts. It is usually necessary' to attach different values of sensitivity to underdeveloped as opposed to developed cultures, although there are difficulties in defining the values to be applied and in determining the extent to which indigenous cultures can be segregated.
Effects of tourism. Whilst tourism is widely held to be responsible for the diffusion of alien cultures, it can be argued that other external factors, such as shared media, have similar if not more widespread effects.
Conservation. There is a general misunderstandingabout the role of conservation. Whilst preservation is a negative mechanism of control, conservation is positive: it is concerned with the management of resources; it accepts that although change may occur, the rate of change must be compatible with the rate at which the system can adapt naturally. Guidelines for tourism development. Emphasis must be given to the philosophy of sustainable development: the need to achieve long-term viability rather than short-term gains, to accept that the care of the environment is an essential aspect of development and to recognize that, in the long run, environmental protection and economic development are not only compatible but interdependent and mutually reinforcing. Central direction, such as through the zoning and control legislation, can assist in regulating tourism development but, in aesthetic matters, other means of guidance may be more effective, for example by making use of the marketing mechanism, involving public and private sectors working in liaison, by the use of education, interpretive facilities and management techniques.
in having an influence on their decisions when and how to travel.
Image. There is a need for improved training to raise the image and status of tourism as a source of employment.
6.
Trends in development
(a) Transportation trends Potential conflicts are anticipated between airline interests and the interests of smaller destinations especially in long haul sectors. Airlines need limited stop/large numbers to be profitable whereas small destinations need multi stop/small numbers if their tourism is to develop.
Air fares are expected to rise in real terms in the next few years with implications for the product quality/perceived value relationships of destinations. The contrasts in longhaul v short-haul fares (eg transatlantic and UK domestic) are increasingly significant.
(b) Accommodation trends Falling market shares for serviced accommodation all around the world were noted. This is seen to be a continuing trend for the 1980's reflecting customer concern with flexibility and freedom as well as with rising costs. Conversion of serviced units into unsex'iced units (a shifting combination of serviced/unserviced) is expected to continue.
(c) Market shifts The growing apparent preference for individual travel v group/packaged tourism was noted. This preference is seen as a reflection of changes in air fares and further developments of'ground-based' packages to be sold as 'add ons' for cheap seat deals are foreseen.
Packaging is considered to have lost some of its long-term
5.
Management of tourism
Current emphasis. In the current economic climate, management policies influencing tourism in most countries appear to be primarily concerned with employment creation. Management roles. A large range of agencies are involved in tourism to a greater or lesser degree - - planning, tourism, administration, conservation etc. An important role of management is to ensure these agencies are pursuing aims and policies which lead in the same direction.
Management techniques can only influence tourism demand to a small degree. Tourism markets, channelled through numerous small independent operators, are affected by more dominant external economic factors.
Qualio' control in tourism is important but it is difficult to effect price and quality control of accommodation. The role of the tourist authority is extending. In some c o u n t r i e s - for example, S w e d e n - - i t is involved in the setting up of reservation services for small independent units.
Information systems are a powerful tool in managing tourism flows, such as in directing tourists to particular services and 320
basic rationale in delivering relatively standardised, quality controlled products to mass tourists.
(d) Administration trends All participants recorded experience of project delays, and problems of completing projects on original budgets, often reflecting bureaucratic and other delays in the administration process for tourism developments-- especially larger projects.
Newforms of administrative arrangements, involvingpublic sector and commercial interests and joint commitment to project completion were seen to be essential. The examples discussed in the conference were considered highly relevant.
7.
Trends in tourism marketing
Importance of marketing. Given the uncertain environment within which the tourism phenomenon takes place and the complexities of exchange rate fluctuations, periodic energy crises and recessions which seem to be occurring with greater frequency, tourism marketing is both more difficult and more important.
Tourism Management December 1982
Discussion group reports Trends: It is essential for long-term trends to be distinguished from short-term fluctuations and identified in time to allow some corrective action. Flexibility. There is a need for a flexible marketing approach, particularly with flexibility in segmenting the market, and for continuous market research to identify appropriate target markets. Trends in demand: There is some evidence to indicate fashion cycles occur in tourism and a correlation between increasing affluence and a demand for holidays further from home. The development of communications technology, particularly in computerized reservation systems, may lead to a bypassing of travel agency services and increasing individuality in holiday design. In the short to medium term (5-8 years) the rate of growth in destination supply could outstrip the growth in tourism demand placing more emphasis on marketing and promotion. Regional tourism in countries like Africa, is increasing with more opportunities to provide packaging arrangements encompassing several countries within the region.
8.
Trends in planning and design
Tourism planning. ! emphasis from the I:
~eneral there is a progressive shift in ,'ation of large-scale Master Plans to
Tourism Management December 1982
more specific developments and towards greater flexibility in planning to meet changing conditions.
In developing countries there is an increasing tendency to involve local architects and planners but also a need to draw on broader experience, particularly in specialist services, in order to save time and mistakes. The traditional tourist areas of Europe are faced with major problems in deciding how best to stimulate regeneration and to encourage wide-scale investment to improve their ageing stocks of hotels, many of which are of marginal viability and in resorts which are declining in popularity. One solution could be to use cooperative or joint venture schemes to improve blocks or streets of properties collectively, thereby enhancing the area as a whole. New attractions. There is also a need to consider ways of stimulating demand, by researching and developing new attractions for identified markets. This is considered to be the role of the local authority but within the framework of a regional tourism development plan. Dispersed tourism: The problems facing small dispersed tourist facilities arise partly from difficulties in market communication and organization. With the development of regional reservation systems and other benefits from computerized services, there is expected to be an increase in tourism demand, wider individual choice and greater variety of experience - - including a wide range of activity holidays and products catering for specialized interests.
321
1.
Project appraisal
Project criteria. The most significant criteria affecting decisions on projects are the quality of management, financial viability of the project, investment policy of the applicant and creation of employment.
Attractions: The provision of large-scale attractions cannot be considered only in terms of commercial investment. Some form of public involvement is essential.
Grant aiding ofprojects is considered the most effective way of stimulating development but the level of grant should be determined by the nature of the project, its relative importance in relation to the overall plan and its commercial viability. Provision must be made in grant aiding projects for repayment should the business be sold.
Organization: Direct involvement of public authorities in project development should be avoided except where there are recognized deficiences in management. However, the provision of extension services and/or technical assistance is a valuable role. Tourism multipliers are considered useful as an investment screening device and indicative statistic when choosing between different types of projects but should not be used to justify projects unless the particular circumstances are very. exceptional.
2.
Financing tourism projects
Infrastructure costs are a major constraint to all forms of development and it is difficult to envisage an alternative mechanism for funding infrastructure works other than by investment of public or joint venture capital.
Major development agencies appear to use different criteria when evaluating different situations. There is a need for lending criteria to be more explicitly set out.
In underdeveloped economies a different strategic process is involved and the problems of funding projects are more severe even with government guarantees to support development.
One approach is to divide major projects into component schemes which will each attract investment but the problems of continuity and overall implementation must also be taken into account.
Seeding by government can act as an effective stimulus to more wide-scale development and help to establish appropriate standards.
Management contracts, as a non-capital component of development, can offer advantages in attracting other sources of capital investment.
Time sharing projects may play a pan in promoting tourism investment but the long term paybacks and the need to finance recreation and other central facilities as part of the development must be taken into account in determining viability.
Feasibility studies should provide more specific information on the sensitivity of profit and loss projections, on sources of loans - - specifying the parameters by which such loans may be obtainable - - and on appropriate funding processes.
3.
Economic impacts
Economic studies have a value in demonstrating to government the contribution of tourism to employment, revenue and other benefits. In this respect they can serve as a means of influencing government decisions.
Economic sensitivity. Such studies may also be used to indicate the economic sensitivity to tourism of specific regions or areas. As an example, of some I 500 US counties which have so far been surveyed, only three showed absolutely zero economic impact from tourism.
In developed economies the financing of small projects can usually be adequately met by conventional lending sources, such as the clearing banks, subject to normal commercial criteria and with grant aid where appropriate to assist viability. With larger schemes the viability must be clearly demonstrated.
Funding agencies. In seeking financial aid from funding agencies such as local authorities, conflicts of interest and priority can cause unacceptable delays.
Tourism Management December 1982
4.
Physical impacts, social impacts and conservation
Physical impacts. In assessing potential physical impacts of the intended types of tourism, the manner and scale of development and the nature of resources must all be taken into account. Through careful evaluation, planning and monitoring, sensitive tourism development can contribute to the conservation of delicate wild life resources. 319
Discussion group reports Spatial positioning is often as important as the scale and character of tourism development in determining how well it will harmonize with the environment.
Social impacts. It is usually necessary' to attach different values of sensitivity to underdeveloped as opposed to developed cultures, although there are difficulties in defining the values to be applied and in determining the extent to which indigenous cultures can be segregated.
Effects of tourism. Whilst tourism is widely held to be responsible for the diffusion of alien cultures, it can be argued that other external factors, such as shared media, have similar if not more widespread effects.
Conservation. There is a general misunderstandingabout the role of conservation. Whilst preservation is a negative mechanism of control, conservation is positive: it is concerned with the management of resources; it accepts that although change may occur, the rate of change must be compatible with the rate at which the system can adapt naturally. Guidelines for tourism development. Emphasis must be given to the philosophy of sustainable development: the need to achieve long-term viability rather than short-term gains, to accept that the care of the environment is an essential aspect of development and to recognize that, in the long run, environmental protection and economic development are not only compatible but interdependent and mutually reinforcing. Central direction, such as through the zoning and control legislation, can assist in regulating tourism development but, in aesthetic matters, other means of guidance may be more effective, for example by making use of the marketing mechanism, involving public and private sectors working in liaison, by the use of education, interpretive facilities and management techniques.
in having an influence on their decisions when and how to travel.
Image. There is a need for improved training to raise the image and status of tourism as a source of employment.
6.
Trends in development
(a) Transportation trends Potential conflicts are anticipated between airline interests and the interests of smaller destinations especially in long haul sectors. Airlines need limited stop/large numbers to be profitable whereas small destinations need multi stop/small numbers if their tourism is to develop.
Air fares are expected to rise in real terms in the next few years with implications for the product quality/perceived value relationships of destinations. The contrasts in longhaul v short-haul fares (eg transatlantic and UK domestic) are increasingly significant.
(b) Accommodation trends Falling market shares for serviced accommodation all around the world were noted. This is seen to be a continuing trend for the 1980's reflecting customer concern with flexibility and freedom as well as with rising costs. Conversion of serviced units into unsex'iced units (a shifting combination of serviced/unserviced) is expected to continue.
(c) Market shifts The growing apparent preference for individual travel v group/packaged tourism was noted. This preference is seen as a reflection of changes in air fares and further developments of'ground-based' packages to be sold as 'add ons' for cheap seat deals are foreseen.
Packaging is considered to have lost some of its long-term
5.
Management of tourism
Current emphasis. In the current economic climate, management policies influencing tourism in most countries appear to be primarily concerned with employment creation. Management roles. A large range of agencies are involved in tourism to a greater or lesser degree - - planning, tourism, administration, conservation etc. An important role of management is to ensure these agencies are pursuing aims and policies which lead in the same direction.
Management techniques can only influence tourism demand to a small degree. Tourism markets, channelled through numerous small independent operators, are affected by more dominant external economic factors.
Qualio' control in tourism is important but it is difficult to effect price and quality control of accommodation. The role of the tourist authority is extending. In some c o u n t r i e s - for example, S w e d e n - - i t is involved in the setting up of reservation services for small independent units.
Information systems are a powerful tool in managing tourism flows, such as in directing tourists to particular services and 320
basic rationale in delivering relatively standardised, quality controlled products to mass tourists.
(d) Administration trends All participants recorded experience of project delays, and problems of completing projects on original budgets, often reflecting bureaucratic and other delays in the administration process for tourism developments-- especially larger projects.
Newforms of administrative arrangements, involvingpublic sector and commercial interests and joint commitment to project completion were seen to be essential. The examples discussed in the conference were considered highly relevant.
7.
Trends in tourism marketing
Importance of marketing. Given the uncertain environment within which the tourism phenomenon takes place and the complexities of exchange rate fluctuations, periodic energy crises and recessions which seem to be occurring with greater frequency, tourism marketing is both more difficult and more important.
Tourism Management December 1982
Discussion group reports Trends: It is essential for long-term trends to be distinguished from short-term fluctuations and identified in time to allow some corrective action. Flexibility. There is a need for a flexible marketing approach, particularly with flexibility in segmenting the market, and for continuous market research to identify appropriate target markets. Trends in demand: There is some evidence to indicate fashion cycles occur in tourism and a correlation between increasing affluence and a demand for holidays further from home. The development of communications technology, particularly in computerized reservation systems, may lead to a bypassing of travel agency services and increasing individuality in holiday design. In the short to medium term (5-8 years) the rate of growth in destination supply could outstrip the growth in tourism demand placing more emphasis on marketing and promotion. Regional tourism in countries like Africa, is increasing with more opportunities to provide packaging arrangements encompassing several countries within the region.
8.
Trends in planning and design
Tourism planning. ! emphasis from the I:
~eneral there is a progressive shift in ,'ation of large-scale Master Plans to
Tourism Management December 1982
more specific developments and towards greater flexibility in planning to meet changing conditions.
In developing countries there is an increasing tendency to involve local architects and planners but also a need to draw on broader experience, particularly in specialist services, in order to save time and mistakes. The traditional tourist areas of Europe are faced with major problems in deciding how best to stimulate regeneration and to encourage wide-scale investment to improve their ageing stocks of hotels, many of which are of marginal viability and in resorts which are declining in popularity. One solution could be to use cooperative or joint venture schemes to improve blocks or streets of properties collectively, thereby enhancing the area as a whole. New attractions. There is also a need to consider ways of stimulating demand, by researching and developing new attractions for identified markets. This is considered to be the role of the local authority but within the framework of a regional tourism development plan. Dispersed tourism: The problems facing small dispersed tourist facilities arise partly from difficulties in market communication and organization. With the development of regional reservation systems and other benefits from computerized services, there is expected to be an increase in tourism demand, wider individual choice and greater variety of experience - - including a wide range of activity holidays and products catering for specialized interests.
321