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Globalization,

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Title: Globalization,


1
Globalization, International Tourism and the
Lodging Sector
INTERNATIONAL TOURISM MANAGEMENT
2
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.
3
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.
4
Globalization Involves Us All
5
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6
International Business
7
Global Drivers
Positive
Negative
Technology Open Markets Economic
Integration Peace Corporate Strategy Global Focus
Culture Market Barriers National Barriers
War Corporate Strategy Local Focus
1-3
8
Globalization Drivers I
Remove barriers to trade and investment
9
Globalization Drivers IITechnological Innovation
E-mail and videoconferencing
Internet, intranets, and extranets
Transportation advancements
Better coordination and control
Improved communications and management
More efficient, dependable shipping
10
Challenges to Business
11
How They Stack Up
Comparing revenue of the world's 10 most global
firms to the gross domestic product of nations
12
Global Business Environment
13
Today, global corporations are controlling
approximately half of the worlds 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)
14
Globalization of Markets
1-4
15
  • 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.

16
The tourism industry is one of the fastest
growing industries of the world. Since 1950s,
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.
17
Number of InternationalTourists (millions) and
World Tourism Income (billion USD)
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
18
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19
Rank   Country   UNWTORegionalMarket   InternationalTourismReceipts(2008)9   InternationalTourismReceipts(2007)49   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
20
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 States North 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  Canada North 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.
21
Top 21 most visited cities by estimated number of international visitors by selected year Top 21 most visited cities by estimated number of international visitors by selected year Top 21 most visited cities by estimated number of international visitors by selected year Top 21 most visited cities by estimated number of international visitors by selected year Top 21 most visited cities by estimated number of international visitors by selected year
City Country Internationalvisitors(millions) Year/Notes
Paris  France 15.6 2007 (Excluding extra-muros visitors)12
London  United Kingdom 14.8 200813
Bangkok  Thailand 10.84 2007 (External study estimation)14
Singapore  Singapore 10.1 200815
New York City  United States 9.5 200816
Hong Kong  China 7.94 2008 (excluding Mainland China)17
Istanbul  Turkey 7.05 200818
Dubai  United Arab Emirates 6.9 200719
Shanghai  China 6.66 200720
Rome  Italy 6.12 2007 (External study estimation)14
Seoul  South Korea 4.99 2007 (External study estimation)14
Barcelona  Spain 4.72 200821
Madrid  Spain 4.64 200822
Mecca  Saudi Arabia 4.5 200723
Kuala Lumpur  Malaysia 4.4 2007 (External study estimation)14
Beijing  China 4.4 200724
22
Kaynak Kültür ve Turizm Bakanligi, TÜIK.
TURKET TURKET TURKET TURKET
Years Tourism 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
23
Kaynak Kültür ve Turizm Bakanligi.
Turkey- International Arrivals According to Country of Origin (2008) Turkey- International Arrivals According to Country of Origin (2008) Turkey- International Arrivals According to Country of Origin (2008) Turkey- International Arrivals According to Country of Origin (2008) Turkey- International Arrivals According to Country of Origin (2008) Turkey- International Arrivals According to Country of Origin (2008)
Years Years Share() Share() Change()
COUNTRY 2007 2008 2007 2008 2008/2007
Germany 4 149 805 4 415 525 17,78 16,77 6,40
Russian fed. 2 465 336 2 879 278 10,56 10,93 16,79
England 1 916 130 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
Iran 1 058 206 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
24
Kaynak TÜIK Çikis Yapan Yabanci Ziyaretçilerin
Gelis Nedeni, 20012006
Internatonal arrivals - Turkey Internatonal arrivals - Turkey Internatonal arrivals - Turkey Internatonal arrivals - Turkey Internatonal arrivals - Turkey Internatonal arrivals - Turkey 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
25
Rank   Country   UNWTORegionalMarket   Internationaltouristarrivals(2008)9   Internationaltouristarrivals(2007)49   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  Mexico North America 22.6 million 21.4 million 21.4 million
26
World Bed Capacity (1997)
Number of beds (000)
Europe 11375
America 9334
Asia / Pacific 6708
Africa 825
Middle East 400
South Asia 310
Total 28952
27
Travel and Tourism ---Worlds Largest Industry
  • 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

Source WTTC
28
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29
In 40 yearsTurkey has reached...
  • Years and Number of tourists
  • 1963 198.000 2010 33.027.943
  • Years and Tourism revenues
  • 1963 7 million 2010 20,806 billion US

30
  • Worlds total tourism investment level 802
    billlion US (9.4 of world total investment)
  • Turkeys 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 Turkeys tourism sector 12.2

31
Globalization, Tourism and the Lodging Sector
  • 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

32
  • 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

33
The Historical Aspects Of International Hotels
  • Main pioneers in international hotel industry
    are
  • Cesar Ritz, (Ritz Hotels)
  • E. M. Statler, (Statler Hotels)
  • Conrad Hilton, (Hilton Hotels)
  • Ernest Henderson (Sheraton Hotels)

34
  • 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.

35
  • After World War II,
  • Roosevelt, Latin America,
  • Pan Am and Inter Continental, (Brazil)
  • Inter Continental and Grand Metropolitan (109
    hotel)
  • Hilton,

36
Developments 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.
37
North America - only Americans, - 1980s,
foreign hotels . stability of economy, . low
construction and operation costs. Middle East -
oil producing countrys wealth, - not an
attractive place . economic and politic
instability, . complex problems . war in
Kuwait, problems in Iran, Iraq, Israel.
38
Asia Pacific - mass travel and extreme
demand, - first American hotels, - Japanese and
Asian brand hotels - attractive . low costs
. labour cheap
39
Reasons To Become a Chain
  • stay as a local and weak hotel,
  • lack of technology,
  • cheaper equipments,
  • distribution of risks.

40
Famous 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)

41
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)
42
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)
43
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 fb operation,
towards olders)
44
Meridien (Air France route, expand French
culture) (182 hotels Europe 60, America 17, 23
Middle East, 62 Asia Pacific 20 Africa, incopr.
With Nikkos 40 hotels) Grupo Sol (buildings
impress Spanish architecture) (350 hotels
Africa 17, America 77, Asia 9, Caribbean 23,
Europe 216)
45
Indian Chains Low labour cost training system.
Taj Group (oldest hotel chain, 48
hotels) Oberoi (have 3 staff per room, 21
hotels)
46
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)
47
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.)
48
Hilton Regent Int
Inter-Cont
Meridien
12
2.472
Nikko
26
2
1
49
20
23
35
4
Inter-Cont
Hilton
17
4
Meridien
Grupo Sol
Taj Group
Nikko
50
Inter-Cont
Meridien
Hilton
60
210
Grupo Sol
Nikko
Regent Int
31
1
Taj Group
216
2
2
51
1
52
Inter-Cont
3
1
Meridien
Hilton
Nikko
5
1
53
Inter-Cont
Meridien
Hilton
Grupo Sol
Nikko
Regent Int
54
9
15
5
59
14
40
18
32
55
Airline 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.

56
Mergers
  • Reasons to merge
  • to have more revenue
  • Need to represent themselves in key markets
  • Access to new markets
  • Access to home markets

57
Impacts of Chains on Tourism
  • Advantages
  • 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,

58
Impacts of Chains on Tourism
  • 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.

59
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).
60
http//www.youtube.com/watch?vX5EL3PN8Yg8
61
Advice of Global Managers
  • Know the customer
  • Emphasize global awareness
  • Develop world-class products
  • Market effectively
  • Improve logistics
  • Analyze problems correctly
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