Tourism in the time of terrorism

Sustainable winners, losers, opportunities

Let’s get one thing right, the tourism industry follows market trends, it doesn’t create them. More than in any other marketplace the customer is king (or queen).

And it’s very easy to see what customers want, much more difficult to see what they are going to want.

Thus far the industry has grown (and to a large extent prospered) by giving customers what they want… cheap holidays and cheap travel. Lots of both.

It’s interesting that the biggest annual travel show in the world is held in Berlin, because it could be said that Berlin was the birthplace of mass tourism.

In 1947, just 69 years ago, there could be no such thing as mass international tourism. Everything was just too expensive. But we’d just had a horrible world war and what we did have was lots of airplanes and lots of people that could fly them and an appetite for world trade prosperity and an appetite for travel.

The Chicago Convention of 1947 released all world airlines from minor considerations like tax on their consumables (fuel and spare parts), created rules for global routes, organized an organization to protect airlines’ rights (the ICAO) and freed them to expand dramatically.

Then something important happened in Berlin. After the war the city was left as a kind of island totally in Soviet territory. The Potsdam agreement, however had divided Berlin into four sectors – Soviet, French, British and American. But in 1948, the Russians closed all land routes (rail, road and canals) to West Berlin (the sectors in French, British and American control). The three western governing powers had no option other than to supply their parts of Berlin by air.

The task was enormous, it is said that an aircraft was landing and taking off every 2 minutes day and night from Berlin’s Templehof airport – over 200,000 flights  in a year were needed to feed this city.

During the airlift, every western aircraft available was called into service, including commercial operations. Companies like Laker Airways and Dan Air prospered and expanded greatly as a result of the airlift.

They went on to use their airplanes, pilots, experience of mass transportation and profits to fuel the rise of the air package tour – the first swallow of the mass tourism summer.

As more transportation facilities were available for leisure travel, accommodation was built to accommodate the tourists. In a world hungry for enjoyment and prosperity, governments provided low cost loans for hotel developments.

Thus mass tourism was born, providing cheap holidays, cheap travel, economic development in destinations and profits for organizations who served this marketplace.

The marketplace proved insatiable, but to expand along those lines requires cheap travel, cheap accommodation and cheap food. But as they developed economically and got a bit richer, the original (Mediterranean) destinations could not fulfil the demand for cheap, cheap rooms and food so the new market intermediaries (tour operators) had to look elsewhere.

Naturally, to obtain low cost facilities they looked to low cost economies in the Caribbean and in Africa and in the Far East to accommodate the simple demand for cheap holidays.

But what does a cheap destination in a low cost economy mean? To the customer it means a quality of luxury that they couldn’t afford at home. And the reason that they couldn’t afford it is that the building blocks of a holiday are property (a room), service (people) and food – all more expensive at home. So providing you pay the staff much less than you get paid and they keep food costs down by not having much money to pay for it, ditto property (they can’t afford to pay much for a home) – you get a good holiday destination. Often these destinations don’t have much in the way of manufacturing or commercial activities so they have nice beaches and lots of sunshine.

To fulfil the market demand for cheap holidays, tour operators look for poor places in the sun. Their interest is in keeping them poor because if they don’t, prices will rise and their winning formula will be destroyed. Obviously that’s also the reason why the airlines will fight to the death to protect their tax-haven routes (OK they have to pay tax on their profits just like Google, Facebook and Amazon – but they don’t on their raw materials).

The fact is that the people who make the holiday cheap are those that are paid the least. In other words it is the waiter, the bellhop, the chambermaid, the cruise staff (sleeping in multiple accommodation on the bowels of the posh cruise ship) that subsidise the client’s holiday by having worse conditions than the paying holidaymakers.

This powerful marketing formula – which entails us all preying on others’ poverty and disempowerment – has made us not only addicted, but also dishonest and lazy. It has meant that the latest and biggest successes in the industry are those, like the OTAs, which are designed to pay the disempowered less, the powerful, more. So little hotels pay maximum commissions, big groups can negotiate better deals. Of course, the customer is King (or Queen) and the OTA manages this regal power. At this moment the global travel industry is like a feeding frenzy – big fishes eating shoals of smaller ones

Most participants in the industry are far too frightened to complain about this situation – you know the old formula – fear of loss and greed for gain – but other industries have confronted similar situations and have begun to change.

It is sad, too that the current addiction to cheap holidays has dramatically reduced the potential for innovation. Why try anything else when cheap is the trump card and it’s always possible to make cheap cheaper still while you can find someone else to work for peanuts.

A sustainable tourism industry would imply that all partners have the opportunity to profit equally, but at the moment all the power is in the source markets.

Other industries, too, have had similar moral quandaries. They have generally been resolved by pressure from purchasers. In that respect Ralph Nader and Naomi Klein have both revealed unpalatable truths and as a result the market has changed and the market suppliers have followed.

What are the chances of this resolution happening in tourism? Given the current market situation, which includes a high premium on transparency and a distrust of business and authority – this may come sooner than expected.

After this 70-year period of dramatic growth can tourism change to become more sustainable?

The truth is that it will have to. At some stage tourism-related emissions will come under scrutiny. At some stage it will be recognized that tax-protected airlines are responsible for 80% of these emissions. At some stage it will be recognized that high-emission tourism cannot be allowed to double again in another 30 years.

And there is another big reason that tourism will have to change. More and more terrorism attacks are being targeted at mass tourism destinations. It’s easy to see why – tourists in danger make big media opportunities in rich, flabby developed countries and mass, low-spending tourists are not entirely the honoured guests they think they may be in impoverished destinations.

And what opportunities will there be as a result? The opportunities could include:

Niche markets

• More genuine information-rich security (the more information available the more information-based decisions can be made)
• Brands and alternative brands (destination branding for reliability is a real opportunity – more and more customers will search for edgy alternatives)
• Innovation in product design (think Apple)
• In depth value-led marketing (think fuller disclosure adds value)
• More focus on destinations’ true security & ethical dynamics (create destination/operator brands that truly attract evangelists)

This current global tourism marketing situation combined with the need to manage emissions and resources , is making available a great swathe of massive opportunities…

SustainableTourism2016 sets these challenges out in detail in its folio and vodcast – and offers the opportunities with updates on a weekly basis.

Make sure that you get yours now… find out more at: TOTEMTOURISM and join the experiential hands-on Green Tourism Seminar in Italy this autumn

Valere Tjolle

@ValereTjolle [email protected]