Getting the best out of the growth potential The strategy : tourism as the locomotive of world economic development Tourism, through its multiplier effect, has a dimension that permeates the entire economy of the nation, generating additional jobs and income. In certain countries that specialise in tourism it long ago assumed strategic importance. As a result of the irreversible process of globalisation and the accompanying phenomenon of market expansion, tourism development is establishing itself as the new locomotive of worldwide economic integration. The international community, the world's governments and the regions concerned must ask themselves on the basis of demand forecasts and growth projections if they intend to promote tourism as a strategic sector of the economy. The answer is unlikely to be the same in the traditional industrialised countries and the so-called "newly industrialised countries". Given the rapid growth of tourism in these "NICs" indeed it is clear that the conditions for development are better in the new destinations. What these countries have in common is low costs and prices, plus the necessary labour and tourism resources. The advanced level of development of the traditional tourism countries does of course give them certain competitive advantages over their new rivals. The multiplier effect of tourism is greater in the advanced countries. Unlike the world's poor countries the developed world consists of a number of domestic markets which continue to grow from an already high level of development. There are disadvantages too of course, which are of a structural nature, including strong currencies and relatively high prices. Today in fact the public authorities are rediscovering the strategic importance of tourism for site development. Indeed there is a tendency to overestimate the contribution that tourism promotion is able to make. Tourism is now considered a panacea for solving the economic problems of peripheral areas and undeveloped natural sites, as well as for industrial regions hard hit by the crisis and neglected city centres. In this context however not enough attention is paid to the fact that success can be more or less guaranteed only by ensuring the optimum combination of local advantages, skills and networks on the supply side. Moreover there is a tendency to neglect the key factors required for tourism growth. Questions Is tourism a strategic sector for development of the world economy ? Are the framework conditions more favourable in the poor countries than in the wealthy nations ? Should the state encourage full utilisation of the potential for tourism development ? The main trends : the creative demand-side forces Tomorrow's trends in the development of tourism demand are the key factors for growth. Creative forces on the demand side are leading to the opening of new markets and the development of new products. The effect these have on existing structures is one we may describe as "creative destruction". They help to bring about the necessary change and contribute to increased productivity. The globalisation process is one of these demand-side trends. It has resulted in an unexpected expansion of the tourism market. Although the domestic market of each country or continent still provides the lion's share of tourism, intercontinental tourism is gaining ground rapidly. Above all we are witnessing an entirely new situation in the area of competition. Today's potential tourist can choose between a seaside holiday and skiing in the mountains, regardless of the time of year. Tourism is now a buyer's market. It would be a mistake even so to write off the traditional tourism countries. New developments on the demand side are promoting the growth of tourism. In the most developed countries the information technology revolution is leading to new growth in productivity and even greater levels of prosperity, making a larger budget available for immaterial or "virtual" services of a highly personalised nature. A sort of event-oriented economy is being created, and tourism is part of it. This new "quaternary" sector will increase the range of tourism in the so-called "wellness" sector, in education and in culture, creating new demand, new jobs and new revenues. Questions Does globalisation in tourism create winners and losers ? Is tourism an industry, a service sector or a new creative economy ? Will the long cycle of information technology revolutionise tourism ? Knowledge accumulation : the mechanisms for creating innovation It is more important to invest in order to constantly improve tourism production factors than to defend the status quo. And that is why research into trends and innovations in tourism is essential. This makes it possible to invest wisely in order to make the best use of existing tourism infrastructures and superstructures. Beautiful landscapes, cultural treasures and traditional tourism equipment, notably in the hotel and catering sector, are no longer sufficient today. The demand is for manmade attractions and "events". Renewing the supply of products and services is one possible growth strategy in today's circumstances. A great many instruments are available for speeding up the innovation process. One of the most popular is benchmarking, which helps to identify and then to close gaps in education, in market intelligence, in the packaging of products and services and management. Generally speaking insufficient use is made of existing know-how and experience when it comes to encouraging innovation, improving organisational efficiency and managing risk. And typically there is a lack of knowledge management within the organisation. Too little use is made of the existing client base as a test market, and there is too little effort to obtain the knowledge of potential partners in support of strategic management. Resistance to change is endemic and can only be overcome in the long term by improving the education of tourism managers and employees. Moreover we need new educational concepts designed specifically to develop the necessary economic, communicative and technical skills and abilities. Questions Do education and training in tourism help to provide the quality the market requires ? What is the best way to collect knowledge and disseminate it to the managers of tourism enterprises ? Who could take care of the research and development needs of the small-to-medium-sized enterprises in tourism ? The production factors : access to resources Constant upgrading of tourism products and services is only possible through major investments. Due to the ever greater expectations of the customer, leading to increasing development and building costs, together with ever more stringent state requirements in the area of safety and hygiene, it is increasingly costly to adapt the supply structure to market requirements. Tourism economies which rely on outmoded installations and equipment have enormous difficulty in meeting their investment needs. Due to the underutilisation of capacity and insufficient productivity they are usually unable to obtain the necessary financing at favourable conditions on the capital market. This leads to a vicious circle of insufficient investment, less and less capacity utilisation, falling revenues, and a lowering of the standards of comfort and quality. This begs the question, how can we increase productivity in tourism, an industry dominated by small-to-medium-sized enterprises. Such an increase in productivity is usually necessary to enable the supplier to succeed in the highly competitive factor markets (land, labour, capital). Rationalisation often means the dismantling of services. Tourism needs to find a middle road between the alternatives of a service economy, and a self-service economy . Questions How is it possible to prevent tourism products and services from becoming outmoded ? Can new ways of financing investments in tourism be found ? Should tourism be a service economy or a self-service economy ? The market : developing new products, and quality assurance Difficulties in the production factor markets make it necessary for tourism-dependent sectors of the economy to develop new competitive advantages through the development of new packages of services, on the basis of existing attractions. These difficulties can also be expected to lead to the penetration and development of new markets. Tourism-dependent sectors have yet to take advantage of the opportunities which globalisation offers. The traditional tourism countries are ripe territories for marketing. Although there is much talk about new products compatible with the landscape and the environment, little is known in fact about the actual potential and the economic impact of projects in this area of tourism. Products sold under the "ecological tourism" label as yet offer relatively unfamiliar close-to-natural landscapes, in mainly exotic destinations, and are relatively well received on the markets. However it seems that small-scale "green tourism" is more the concern of state-supported institutions, and their chances of success on the market are uncertain. With the development of new packages of services (products) the supply can be renewed and upgraded in a spirit of innovation. The penetration of new markets is an additional complementary strategy which is necessary to ensure the loyalty of the traditional client base. All marketing efforts presuppose new quality drives which must extend to the entire tourism value-added chain of creation, from preparation of the travel element to the client's ultimate return to his daily routine. Questions Is the creation of new tourism products one way to rejuvenate tourism on the supply side ? How can quality be improved at the level of the tourism resort ? How important are environment-friendly types of tourism in economic terms ? Industrialisation : new competitive structures The size of the tourism enterprise plays an increasingly important role in globalisation conditions. Small-to-medium-sized structures are a competitive disadvantage in the traditional destinations. They do of course provide the guest with a wide range of products and services. They are however in many cases inferior to the new competitors being developed in the style of American resorts, in collaboration with the international travel industry. Such resorts are often able to offer attractive products at unbeatable prices. Sales success in the markets and with new products depends on different forms of co-operation in the areas of production and commercialisation. Co-operation helps to bring down costs thanks to economies of scale and synergies. Co-operation make take the form of a strategic alliance, an international joint venture, participation in the capital, or something else. In each case it helps SMEs to overcome their disadvantages, to become productive and to export as the big corporations do. Co-operation is the answer to the new market situation, making it possible to become competitive in the conditions of globalisation. Information technology is another force that is bringing about a major transformation in organisation, production, commercialisation and distribution. Combined with transport systems, which are also developing on a continual basis, IT will promote growth in tourism and make management of the flow of tourists less costly and more sustainable ecologically. Questions How can one make SME structures more receptive to the requirements of the international market ? In what way can the new information technologies help increase productivity on the supply side of tourism ? Is co-operation management one of the new duties of tourism organisations ? Institutional aspects : incentive systems Setting up co-operative ventures, investing in order to upgrade existing equipment, creating new attractions, penetrating new markets, creating knowledge and developing skills - these are some of the priority tasks for tourism operators. There are however market failures such as the fragmentation in the supply of products and services, and the small size of the companies involved, which make it impossible to fully exploit the potential for growth and for job creation in tourism. The state is therefore called upon, particularly in conditions of imperfect competition, to play a subsidiary role of considerable importance as a catalyst for tourism development. Countries which promote tourism according to a specific strategy obtain the best results in the market. As the natural regulator and co-ordinator, the state inevitably influences the tourism market in significant ways. And as a provider of services of all kinds, the state is even a co-producer of goods and services in the field of tourism. It provides key infrastructure, safeguards the countryside against depradations, generally protects the environment and participates in the financing of cultural attractions. Successful tourism growth requires a partnership between the public sector and the private sector, without which it will simply not be possible to develop the tourism production apparatus over the long term. Although the economy is the motor which drives growth, it is unable to control it. There is usually too much growth, or not enough. In such cases growth becomes a public commodity. It is the state's job to stimulate growth when it is insufficient, and to bring it under control when it is excessive. In doing so the state makes it possible to achieve the kind of growth that genuinely serves the cause of sustainable development. There is a difference between "growth" and "development". Development is more than just an economic phenomenon, for it also serves meta-economic objectives such as the quality of life of the local population and environmental protection. Questions What type of market failure justifies state intervention ? Do countries that adopt a strategic tourism policy fare better than those that make no effort to promote tourism ? In a given country, what impact can intergovernmental organisations concerned with tourism matters and the development of the tourism sector have ?