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1 Globalization, Globalization, International Tourism International Tourism and the Lodging Sector and the Lodging Sector INTERNATIONAL TOURISM MANAGEMENT

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Page 1: 1 Globalization, International Tourism and the Lodging Sector International Tourism and the Lodging Sector INTERNATIONAL TOURISM MANAGEMENT

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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.

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We experience internationaltransactions daily

Imports and exports reacheven remote areas

Technology and e-bizpromote trade

Consumers and companiespull markets closer

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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.

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Positive

Technology

Open Markets

Economic Integration

Peace

Corporate Strategy

Global Focus

Negative

Culture

Market Barriers

National Barriers

War

Corporate Strategy

Local Focus

1-3

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Regional tradeRegional tradeagreementsagreements

GATTGATT

WTOWTO

Remove barriers to trade and investment

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E-mail and videoconferencing

Internet, intranets,and extranets

Transportationadvancements

Better coordination and control

Improved communications and

management

More efficient, dependable

shipping

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Physicalsecurity

Digitalsecurity

Reputationalrisk

Examine companyvulnerability (weakness)

andcreate a disaster

recovery plan

Guard proprietaryinformation and

confidentialcommunications

Require ethical andlawful behavior from

all employees andbusiness partners

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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.

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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

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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.

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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]

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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.

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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.

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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

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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

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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

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23 20

354

174

Inter-Cont

Meridien

Hilton

Grupo Sol

Taj Group

Nikko

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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

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Inter-Cont

Meridien

Hilton

Grupo Sol

Nikko

Regent Int

20

1 5

1

2

77

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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

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Know the customer

Emphasize global awareness

Develop world-class products

Market effectively

Improve logistics

Analyze problems correctly