There are several ways of studying future trends. First it is important to
examine the immediate past history, then the present position and how it
has arisen, and lastly the outlook projected from the present.
Another exercise is the comparison of a variety of forecasts of traffic, by
destination, by route and by sector. Most forecasts are usually at least in part
a projection of past trends, with quantitative (econometric) models or
Whatever methods are chosen, a detailed study of the main agents for
change is essential. These are:
1 Demand determinants.
2 Supply-side response through industry development, taking into account
external and general economic factors.
3 Political philosophies and the role of government.
Past experience is a good guide in studying trends, but in the present state of
massive economic development and high technology this task has never been
more difficult, particularly because of the vast scale of operation in world
trade and commerce and the speed of change as a result of progress in
technology. Tourism is no exception. Indeed, as it is a totally market-oriented
activity in a highly competitive worldwide trade, consumer preferences
leading to demand changes have a major influence on tourism movement.
Although tourism is a service industry, and sometimes in terms of foreign
trade is referred to as an ‘invisible export’, in reality as the world’s largest
trade, its influence on economic development, especially in tourism
destinations, is enormous. Tourism requires massive investment in infrastructure,
which is a fixed long-term capital commitment. In particular, it is
totally dependent for survival on transport infrastructure. The tourism
trades’ professional representative associations in Europe (ETAG, 1990) have
warned the EU that growth forecasts indicating tourism will double by the
year 2010 are quite unrealistic unless such investment takes place.
Unfortunately governments, transport and tourism ministries do not always
talk or plan together in tourism terms.
The large scale of operation in tourism, its great economic and social
impacts, and vast potential for future development, make forecasting and
forward planning more essential than ever. There must be a partnership by
public and private sectors, embracing a range of trade sector activity and
coordination between the services. Transport growth must match demand,
but to realize the potential, destination or resort services must expand in a
coordinated way. In practice, this rarely happens. However, modern
techniques enable trades to expand quickly and catch up.
The scale and speed of resort development, especially for the mass
markets in North America and Europe, demonstrate this. But tourism
growth can never be taken for granted. History warns that even in periods
when experts confidently predict long-term expansion, not all destination
areas, nor all tourism and transport businesses succeed. The penalty for
failure can be very great, even when massive tourism flows continue to
increase. Forecasting and studying demand changes become more than ever
necessary, but the tools for such work need much improvement.
Increasing volatility in tourism demand is a major difficulty. Travel and
holiday taking even half a century ago, albeit on a much smaller scale,
followed traditional forms. They could be predicted with some certainty.
Many holidaymakers went to the same resort, and even to the same
lodgings year after year. Familiarity with the destination and holiday
companions was a popular attraction. Now there is increasing volatility
in travellers’ choice, fiercer competition with effectively the whole world
to choose from, and powerful influences of external factors, some of
which in the short term can have sudden and major consequences.
Unstable currencies, for example, affect exchange rates and therefore
prices. Recession, health and security challenges are all liable to affect
current travel movement with little warning and to a major extent. As
mentioned earlier, both the Libyan crisis in 1986 and the Gulf War in
1991 virtually halted the tourism movement from the USA to Europe,
with the loss of several million visits and several billion dollars
However, tourism has so far proved resilient to recession and the
turbulence of special security or health situations. Traffic has usually
recovered quickly and continued at anticipated or even higher rates of
expansion. But losses have been sustained, and in an uncertain world the
risk continues. Each recession or pause in growth has taken longer in
recovery. There can be some more permanent effects needing remedial
action. The Chairman of the International Federation of Tour Operators
(IFTO) pointed out that a Mediterranean resort at the end of the last decade
gained an unfortunate reputation for inadequate standards and pollution
which led to an early reaction from the market, in a very short time. Action
to repair damage physically and in marketing terms was essential, but
expensive in time and money. Environmental awareness is growing and
likely to play a more determining role.
It is the longer term factors, often more difficult to predict, that can have
massive impacts; for example, in technology especially in transport, in
information and marketing, in economic and political changes. Furthermore,
shifts in consumer preferences tend now to be longer rather than
short term in their incidence.
Since the advent of wide-bodied jet aircraft in the 1970s, for example, air
fares have been lowered substantially in real terms as technical efficiency
reduces real costs. But this powerful influence in market expansion may be
coming to an end. Revolutionary changes in air and indeed other forms of
tourism transport cannot be expected on the same scale in the future. Indeed
there may be counter-currents, through costly regulation, environmental
controls and taxes. The World Travel and Tourism Council (WTTC, 1995a)
forecast a 30 per cent rise in tourism taxation in the next decade.
Changes in purchasing power due to structural changes can either reduce
or create new markets, as richer countries become poorer and developing
countries become richer. The effect of recession or cyclical economic
variation, normally shorter term, can clearly be seen. In the 1991 recession
many major travel flows were reduced, some substantially, e.g. US to
Europe, intra-European, and to the Mediterranean. In the case of Britain
alone, package travel, mostly to the Mediterranean, decreased by over 20
per cent or by 3 million packages between 1990 and 1993. Changes of this
size can have massive economic impacts on destinations, if prolonged.
But there are counter-currents. In the UK, total outward movement
continued to increase in these years due to the strength of individual travel,
and the total reached new record levels. At the same time, countries with
expanding economies create new and substantial travel flows. Outward
movement from Japan is a leading example. The newly enriched countries
of Asia and the Far East also show signs of substantial outward travel. In
Europe, while traffic from the north to the warmer south has reduced in
growth and in certain areas in absolute terms, movement from the south to
the north has expanded rapidly, especially from Spain and Italy.
Long-distance travel by European residents travelling overseas was one of
the fastest growing market segments. In the 1990s, movement to and from
Eastern European countries escalated as political barriers were removed.
Traffic at first was much greater to the West as capacity of good-quality
services was very limited in the Eastern countries.
The WTO (1992) recorded an 18-fold increase in world tourism flows in
the four decades between 1950 and 1990. This enormous expansion, creating
mass tourism on a large scale for the first time, was fuelled by rising incomes
and leisure time, as the revolution in technology got under way in the
industrialized countries. Greater efficiencies in operation, management and
marketing led to substantial reductions in real costs and prices. But
continuing cost reductions of this kind cannot be taken for granted.
There was almost continuous growth until the modest recession in 1981
and the much greater setback in 1991, partly the effect of the Gulf War, but also
the longer term influence of a much more serious cyclical recession and the
speed-up in structural change responding to new technologies. This has led to
a marked increase in long-term unemployment and volatility in currencies
and exchange rates. These uncertainties may cast a shadow over the older
industrialized countries, especially in Europe, for some time to come.
The past massive growth, with little interruption, was heavily influenced
by large flows of holiday traffic from cold northern industrial areas to south
sunny beaches in both Europe and North America. Towards the end of the
period, new emerging markets, notably Japan, South East Asia and the
Pacific, began to add to growth movements.
Demand trends are changing. Increased segmentation by purpose of trip,
greater specialization and choices in destinations, including many new areas
throughout the world, increase competition. Some of the older and wellknown
resort areas are in decline at a time of the greatest expansion in travel
Between 1960 and 1990, Europe and the Americas maintained their
position as the two leading tourism regions, in both reception and
originating travel. Europe, for example, continued as the world’s largest
region in terms of movement, but suffered a major loss of world market