The importance of tourism in the global economy

Literature Review

Chapter 2 presents an outline of the tourism industry while emphasizing on the growing importance of the sector in the global economy to postulate the potential of the tourism industry. It emphasizes on country identity and country image. Hence, literature review is formulated to foster a theoretical framework for the premises of answering the research question.

A global perspective on the Tourism Industry

“Shorter working hours, greater individual prosperity, faster and less expensive travel, and the impact of advanced technology has all helped to make the leisure and tourism industry the fastest growing industry in the world” (Edgell, Sr., 1990).

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Tourism has become a flourishing industry in the twentieth century, where destinations rely massively on their natural and manmade resources to build their tourism industry. Nowadays, it is viewed as a major element for economic development and growth. The tourism industry is seen as the most highly significant and integral part of any economy. It is also an industry which generates employment and foreign exchange earnings, Lim (1997) and Crouch (1996).

World Tourism Organization projected the international arrival by the year 2020 to be around 1.56 billion. Out of the projected number, intraregional number is expected to rise to 1,2 billion. Therefore, the projection for long haul travellers alone is estimated to reach 0.4 billion. Notably, statistics indicates that long haul travelers will increase at a rate of 5.4 percent yearly, between 1995 – 2020. This prediction for increase in long haul opens an avenue for distant destinations as Mauritius and others WTO (2006).

The figures above indicate that the tourism industry is a very promising one. However, to attract tourists to the destination, it is important to understand their psychology and buying attitudes so as to have a more precise marketing campaign that will attract them in the first instance itself. The literature that follows gives more insight on the topic.

Tourism in Mauritius

Mauritius is a subtropical island in the Indian Ocean, strategically positioned at the intersection of Africa and Asia, at 855 km east of Madagascar.

According to statistics Mauritius, Mauritius has welcomed 786,963 visitors from January to October 2013 against 765,578 travelers for the same calendar period in 2012.

The Bank of Mauritius, state that Gross tourism receipts for the first nine months of 2013 were at Rs 41,500 million. For 2014, tourism receipt is estimated to be Rs. 44,500 million.

Mauritius is a renowned destination for Quality Tourism- along with being exotic, safe, beautiful and peaceful; it has a unique combination of diverse cultures, well run hotels. All these have enable Mauritius to develop from nothing to become one among its main pillars.

Mauritius has a well established reputation for its tourism industry in the international tourism market. The next five most popular destinations for holidays, according to Travel and Leisure magazine, are Mauritius, New Zealand, Spain, South Africa and Norway. Mauritius is the only resort destination in this set. In addition, during the International Tourism Conclave & Travel Awards (ITCTA) held in Jaipur Rajasthan, on October 2013, Mauritius has also received the award for Best Destination Country.

Country identity versus country image

Since country identity is at the core of this dissertation, it is worthwhile to give an overview of the literature thereof. A destination has unique characteristics that enable it to differentiate itself in the international market. These unique features are called the country identity. Hence country image is formed by country identity.

Therefore, this section addresses and country identity cues and country image. It starts with an introduction of the theory of country image and country identity followed by the significant elements that build up a country’s image and ends by a discussion on the causes of image and tourist destination.

A good image and a positive reputation are probably the most valuable assets a country can possess. (Papadopoulos& Heslop, 2002:295)

Country Identity

According to Nworah (2004), Building the image of a country is the way through which a country is actively seeking to build a unique and competitive identity with the intention of positioning the country internally and externally as a good destination for trade, tourism and investment.

This identity is created based on the combination of exceptional factors of attractiveness that will enable it to be ahead of competitors, Moilanan and Rainisto, (2009). According to Buhalis (2000), these exceptional factors can characterize in the six A’s framework illustrated in the table below:

Table 1: Six A’s Framework for the analysis of tourism destinations

Source: (Buhalis (2000)

Elements of country identity

Elements of country identity are predominant and are stated to influence an individual’s `opinion of a country image that cannot be changed or manipulated for the purpose of place marketing.

The various aspects of country image that directly influences its image are discussed therein. However, for the purpose of this research, only few aspects of country identity, that directly impact on a destination’s image, are analyzed.

Country main factors

Country main factors describes various attributes of country identity, which are predominant and which are cited to impact on an individual’s perception of a country image and it cannot be changed or manipulated for the purpose of place marketing. The works within the theory are adopted from diverse sources like Beerli & Martin (2004), Kotler & Gerner (2002) Kotler et al. 1993, 121 – 135). Destinations– specific elements and their image significance are relatively obvious, because of the limitation of this research only few features of the country specific are addressed.

Personal factors

The image of a country is form based on the stereotypes that people hold on that place. Stereotypes of place or an image, develops over time and space and spread from the premises of the familiarity with illustrations of renowned people and knowledge of the products of a given country, etc. Because image is more of a personal interpretation, image that people have of a country differs from stereotypes. Hence, the image(s) that people have about the same place may vary depending on the individual’s own, wants, enthusiasm, prior knowledge and fondness (Beerli & Martin 2004, 653).

Personal factors can be classified as, psychological and social. Psychological factors have already been discussed in the consumer behavior section. Personal unique motivations, beliefs and personality, social aspects comprise of individual, educational achievements, age background and other social factors (Balogu & McCleary 1999, 870). Therefore, the attributes enumerated above, are said to affect a person’s assessment on any product, service and for the purpose of this research, a destination.

Geographical Location

When dealing with country image, the geographical location of the destination cannot be neglected. Geographical location refers to the accessibility of the destination, and it therefore influences the travelling costs to a given place (country). This aspect is important because it knowingly impacts on consumer’s choice to a long haul country (Vuoristo 2003, 55; Oppermann 2000, 99). Outstandingly, recently, most European tourists have been attracted to travel to closer destinations that meet their needs like “sun and shores” as Spain and Asia rather than opting for distant destinations. To respond to the demands of the European market, Asian countries have orchestrated their destinations because of its closeness to Europe and thus compete with low-priced packages compared to long distance locations like as Mauritius or Seychelles or even Australia.

From the point of view of European or American travelers, when considering time factor to travel to a distant destination and the cost of travelling as criteria, Mauritius in this instance is viewed as a distant location. To support this argument the number of European travelers visiting Mauritius has decreased from 51,529 in 2013 to 50,548 in 2014, for the month of January. (CSO, 2014).

Geopolitics

As far as geopolitics is concerned, the political atmosphere can influence the accessibility of the destination and the overall image of the said country. For example, during the period of Mao of China, his politics and opinions made tourists less keen to visit the destination. WTO has projected the future of China as being a leader in the world by being the first world class destination that will charm greatest number of tourists by the year 2020. Therefore, to cater for this market new China is determined to converting its politics, protocols and evolving infrastructures which now interest international investors, and tourists towards its destination (Weaver & Oppermann 2000). Political accessibility is the regulations, policies, concerning mainly immigration conditions under which a tourist is regulated to have access to that country. Complicated country accessibility in terms of tourist visas procedures, levying costly visas, complicated procedures contributes largely leads in demoralizing a destination image.

Climate and Culture

The attributes of climate and nature, impacts on the formation of country image to a great extent depending on the background of the individual in question. Furthermore, the necessity and wish for a change is among the most dominant factors in tourism decision-making. As a result, individuals coming from very cold climate are more likely to opt for warmer and exotic destinations. Persons coming from developed and urban background might be charmed by nature and adventure (Vuoristo 2003, 29). In instance, the rise in globalization is believed to fuel homogenous culture and tourists are highly interested in revisiting outstanding heritage locations so as to re-capture the lost culture and practices. For instance countries like Egypt, Istanbul and Italy are well appreciated by their profound heritage spots and rich history.

Distance – Decay

Distance decay indicates the tendency of inbound tourism moves to decline as areas become more distant from the destination (Weaver & Oppermann 2000, 98). Gallarza et al (2002, 61), suggest that distance plays an important role in the image formation process. It is also mentioned that the country’s size and global power regarding its economy and politics primarily impacts on the distance – decay effects. Luostarinen (2002) also shares this opinion, in his study he found out that the distance between country of origin and the target market impacts on the international market policy. Even if these studies have been dedicated towards organizations, however the same rules are appropriate with regard of tourist destination.

Travel Intermediaries

Travel intermediaries refer to travel agents and tour operators and they are considered as essential information facilitators. They are strategically positioned at the frontier and having direct contact with travelers or future travelers making them in a solid position to impose destination images to travelers based on the information that they have. Andreu et al. (2002) stated that travel intermediaries are important “protagonist” who spread information to tourists or possible tourists and thereby impact on, image and choices of travel. Therefore, tour operators or travel agents have the art of painting the picture of any tourist destination based on how they want to sell that destination.

Travel operators sell a destination with simple information retrieved from the countries they represent. The marketing material that is, brochures, web pages, personal experience, and so on are at their disposal and are significant in designing an unreal destination to the potential customers. The amount of information available on the internet has allowed travelers with a wealth of information at their disposals. With click of a mouse anyone can easily retrieve essential information about any destination. Therefore customers cannot be fooled easily. However, most travelers rely greatly on information given by those travel intermediaries whose trade is to deal directly on travel destinations.

Balogu & Mangaloglu (2001) have argued that images that travel intermediaries have of a destination is the same as those held by customers in general. Konecnik ( ibid) stated “ mainly for international destinations, the role of travel intermediaries in promoting and framing images of the destination is enhanced, because of tourists who are more apt to consider travel intermediaries in their selections of destination”

It can be said that travel intermediaries has an important role in image formation of a destination. (Ashwoth & Voogd (1994, 49)

Stimulus Factors

Concerning information source, Balogu and Mac Cleary (1999, 892) concluded that the variety and the quantity of information sources adds positively to a cognitive assessment of a destination. Hence, destinations need to encourage everyone to make use of several information sources available. In instance, Media has mainly arranged in painting US facade with image features perceived today (super power and wealth). Thus common media vehicles includes, television, radio, movie to internet has proved significant in dissemination of information to the general public. According to WTO (2006) “it is significant for marketers to tracking of new stories for necessary action. Instance, rapid response to erroneous information news stories affecting the tourism industry” World media leaders like as BBC, CNN acknowledge the role of media and its effects.