Concept

An albergo diffuso is a type of accommodation that offers the services of a traditional hotel along with a space that is like a rented private home. One of the special features of this Italian concept is its horizontal structure, which spreads the hotel services over several buildings. For example, the guest rooms and apartments may be located on different streets in the same neighbourhood, while the reception area is located in location X, the restaurant in location Y and other services in location Z, all within a 200-metre radius.

International publications have sometimes described the concept as a hotel-village.

Source: Villa Retrosi

Another distinctive feature of the albergo diffuso is the age of the buildings that compose it. In fact, one of the goals of the concept is to repurpose abandoned buildings, houses and even monuments. The idea is not to build anything new, but to reuse.

Source: Castello di Montignano Relais & Spa

The guidelines of the albergo diffuso model respect the values of sustainable development in many respects:

• Promote local culture: one reason visitors select this type of accommodation is to enjoy an authentic local experience.
• Stimulate the local economy: the creation of an albergo diffuso encourages one or more homeowners to participate in an organization that is usually a cooperative and supports the development of small businesses working in traditional sectors like handicrafts and food preparation.
• Protect the environment: preserving existing buildings and giving them a second life helps safeguard the area’s history and limits the environmental damage that could be caused by new construction.

This type of hospitality is also reminiscent of the old European tradition of hosting tourists in homes.

An increasingly structured concept

To be able to call itself an albergo diffuso, an accommodation must meet several conditions, summarized as follows:

• The idea must be launched by local stakeholders
• Hotel services (reception, restaurant, etc.) must be provided
• There must be a sole management entity: a single entrepreneur or any other efficient form of association, with a cooperative being the most commonly used form
• There must be a minimum of seven rooms, located within 200 metres of each other and made available for a period of at least nine years
• The town or village where the albergo diffuso is located must offer a minimum of services such as a pharmacy, grocery store, etc.
• The albergo diffuso must take root in a lively, welcoming community that is open to sharing experiences with visitors

In the past few years, an association, the Associazione Nazionale Alberghi Diffusi (ADI), has been founded to help its members market themselves. At the same time, the Scuola Internazionale di Specializzazione in Albergo Diffuso, a school specializing in albergo diffuso, offers seminars, training and tools to assist property owners, management companies and local communities who are implementing this concept in their area.

Examples

The tiny medieval village of Smerillo is a centre of poetry that hosts the festival Le Parole della Montagna (“the words of the mountain”). Since 1998, the local authorities have been inviting certain homeowners to renovate their properties so they could be part of an albergo diffuso. Despite its population of 400, Smerillo can accommodate 60 visitors.

Source: Smerillo Albergo Diffuso

Le grotte della civita is an unusual example of the albergo diffuso concept; the 18 rooms are located in hillside caves! The goal of this albergo diffuso was to conserve Matera, a historic Apennine village in central southern Italy, and preserve its local heritage.

Source: Le grotte della civita

An exportable concept

The albergo diffuso model may be copied in other countries by adapting it to the host region. Moreover, the Business Innovation Centre of the Lazio Region, BIC Lazio, and the ADI offer technical assistance to the various countries that would like to implement this approach.

Will the albergo diffuso concept make its way to Quebec? It would be one way to revitalize certain villages affected by the rural exodus, repurpose some of the buildings from our religious heritage or even develop a network of accommodations in Quebec’s Far North.

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Comment – Giacomo Del Chiappa

Albergo diffuso represents a particular type of hospitality which help to achieve a sustainable tourism development (economic, environmental and sociocultural) of area that usually are abandoned. Indeed, albergo diffuso is usually considers as a way to recover the competitiveness of rural area which are interested by progressive flows of people leaving the rural area (emigrating) attracted from the more sparkling urban area. By this way, albergo diffuso is consider as a way to achieve a sustainable tourism development, creating job opportunities for local people, recovering the builindings, allowing to preserve and exploit the local authenticity and identity thus having the possibility to satisfy the needs of those travelers, the so called responsible tourists, (even more numerous) that travel looking for the possibility to be in touch with local authenticity, identity and culture in its various espressions (food, wine, cooking style, handcraft, etc) . Several examples could be done. One of this is Santo Stefano Sessanio located in the “Gran Sasso” national park in Abruzzo region. There everything is done to preserve local authenticity: research was done to understand how the old house were built, rooms has wool mattresses made as in the past and embroidered sheets accordingly the local traditions. Acccording with Kihgreln, the architect who developed this albergo diffuso, today the real estate in the village has been tripled.

Giacomo Del Chiappa – Assistant Professor in Marketing, Faculty of Economics, University of Sassari

Giacomo Del Chiappa received a Ph.D in “Marketing and Business Administration” at the Faculty of Economics of the University of Milan-Bicocca. He was Visiting Scholar at the University of Melbourne (Australia). He is Assistant Professor in Marketing at the University of Sassari, Faculty of Economics. He teaches in the areas of “Tourism Management and Marketing” and “Destination Management” for the Degree in Tourism Marketing and Management, based in Olbia (Sardinia). He is a member of the editorial board of the journal “Tourism Analysis” and referee for international journals. His research topics are related to destination governance and branding, convention site selection criteria and meeting industry and, finally, consumer behavior in tourism. In this latter field his studies are concentrated on responsible tourism, on web 2.0 in the hospitality sector and, finally, on community-based tourism. Fields of expertise: Destination governance and branding Convention site selection criteria and meeting industry Consumer behavior Organization Web site

Sources:

• Giordano Dichter, Giancarlo Dall’Ara. “Albergo diffuso – Developing tourism through innovation and tradition.”

• Marinela Dropulic, Aleksandra Krajnovic, Pavlo Ruzic. “Albergo diffuso hotels – A solution to sustainable development of tourism,” March 2008.

• M. Droli, S.I.S.A.D®. (International School Specializing in the Albergo Diffuso). “The albergo diffuso in Italy – The strengths of Friuli Venezia Giulia and innovative proposals,” March 22, 2007.

• Michèle Prévost, “L’hôtel diffus – Un concept d’hébergement rural qui se développe en Italie.” Espaces 295, September 2011.

Websites:

• Associazione Nazionale Alberghi Diffusi

• Bic Lazio

• Scuola Internazionale di Specializzazione in Albergo Diffuso

A bold design, (literally) anchored in the community

Installed in a former ferryboat, Bota Bota is moored at the Quays of the Old Port of Montréal; this floating spa offers a unique experience of well-being in an environment that is both urban and maritime. Sid Lee Architecture won a Design gold at the Cannes Lions International Festival of Creativity for this new attraction in Old Montreal.

Source: Bota Bota

The Stonewater Cove luxury resort in the heart of Mark Twain National Forest welcomes clients to its Treehouse Spa. The individual elevated treatment rooms feature nearly a full window wall and offer relaxation and massage in harmony with nature.

Source: Discover Spas

Increasingly health-oriented

Many spas have moved more towards health and wellness, and the trend is likely to continue. According to Amy McDonald , a spa development consultant, a growing number of clients are seeking healthy lifestyles and looking for something more spiritually oriented.

Among the establishments offering more advanced health care is Sanctuary Spa in Arizona, which recently gave all of its therapists special training so they could provide therapeutic massages to cancer patients. In addition, the London Syon Park spa in the Waldorf Astoria has joined forces with a plastic surgeon to develop advanced non-surgical rejuvenating treatments.

Though such products do not usually appeal to the majority of spa clients, they do help the establishment stand out from its competitors, which can be very profitable.

Pioneers in environmental practices

If an establishment is going to be a true oasis of well-being, to be credible, it must adopt environmentally-friendly practices. Many spas follow this guideline and some stand out with their innovations. Located in a UNESCO reserve in Malaysia, The Andaman resort only uses 100% certified organic products and treatments in its spa. The primary challenge of using green treatments is their effectiveness; it is therefore important to take the time to test them properly.

Architecture can also be a part of how a spa innovates when it comes to the environment. For example, the Spa Mont Saint-Hilaire in Montérégie uses a geothermal heating and cooling system. A spa’s outdoor heated pools consume a great deal of energy, particularly during the winter. Green and renewable, geothermal power enables the Spa Mont Saint-Hilaire to meet nearly all of its energy needs: heat and cool a 7,500 sq. ft. building, melt the snow on its paths and maintain the temperature of its pools. Although this technology requires considerable start-up costs, it then provides substantial savings on energy costs.

On par with a tourist destination

Located in a UNESCO biosphere reserve, the Spreewald Therme (Spree Forest Thermal Bath) in Germany is a health resort that uses mineral water from more than 1,300 metres below the ground, composed of salts and minerals similar to those found in the Dead Sea. Since the discovery of this hot spring, the destination has quickly attracted more visitors who go to the new spas, hotels and resorts that have sprung up to offer body treatments. A theme-based itinerary called the kurortroute (spa route, in English) and a bike path wind through the community. A top attraction for the region, the Spreewald Therme is a certified spa destination with a modern complex of nine pools fed by spring water. With temperatures that vary between 18°C and 38°C, these pools cover 772 m2.

Source: The New York Times

China, which is a booming tourist destination, is developing a hot spring resort, the Liaoning Wulong International Hot Spring Town. The overall cost of the project is estimated at US$1.5 billion . The developers hope it will become another international hot spring destination like Evian in France.

Historic charm and ancient traditions

The city of Bath in the United Kingdom has been associated with hydrotherapy since the Roman Empire and was also very popular during the Georgian era. The English Heritage organization recently confirmed a grant that will help create one of the country’s first genuine spa hotels in over 100 years in the city of Buxton . This development will enable the city to restore a gem of architectural and cultural heritage. Also in the UK, a luxury spa has opened in Ellenborough Park, a 16th-century estate in the Cotswolds region.

Spas inspired by ancient cultures are very popular. The last decade has seen a proliferation of Asian-influenced establishments in the Zen style. Now spas are inspired by Native American traditions, offering rituals based on ancient remedies and treatments tied to the earth. In the Marriott hotels of Dubai and Qatar, Saray spas offer a journey through the history and culture of the Middle East. In Quebec, the Auberge du Lac-Taureau offers a Native American spa package.

Alternative treatments and high luxury

A spa in Madrid, CosquilleArte, has developed the art of tickling. Rather than titillating guests or making them laugh, this gentle treatment engages the body and the mind.

Aromatherapy is also an innovative trend. The NoMi Spa at the Park Hyatt Chicago offers a complete sensory experience, during which specialists create a personalized mixture of essential oils that are integrated into every step of the treatment.

As for the height of luxury, the new Six Senses Spa at Hotel Missoni Kuwait offers a variety of treatments and activities in a sumptuous décor.

Source: Luxe Magazine

The spa industry has long defined itself as part of a healthy lifestyle rather than a frivolous indulgence, and now it is focussing on authenticity, prevention and design.

Sources:

- Bagel Storck, Ann. “Next-Generation Spas,” Hotels, June 2011.

- Bradley, Kimberly. “Hot Water Below Brings Pleasures Above in Germany,” The New York Times, August 26, 2010.

- Discover Spas. “New Spa Treehouses to Premier at Stonewater Cove Resort on the Shores of Beautiful Table Rock Lake Memorial Day Weekend,” February 3, 2011.

- Gayot.com. “The Current Spa & Salon – Native American Rituals in Washington State”, June 2010.

- Gayot.com. “CosquilleArte, the World’s First Tickle Spa, Debuts in Madrid”, July 2011.

- HMM Editorial Staff. “Top Ten luxury spa openings in 2011”, Hospitality World Network, August 10, 2011.

- Lafrance, Annie. “Des spas urbains dépaysants à Montréal,” Le Soleil, July 28, 2011.

- Luxe-Magazine.com. “Six Senses Spa opens at Hotel Missoni Kuwait”, May 2011.

- Perreault-Labelle, Anick. “La géothermie est aussi rentable pour les petits projets,” Les Affaires, April 23, 2011.

- Spa Opportunities. “English Heritage grant for Buxton spa hotel”, July 8, 2011.

- Spa Opportunities. “Spa opens at historic estate”, June 15, 2011.

- Tendance Hôtellerie, “Projet de plus d’un milliard d’euros en Chine pour concurrencer les plus grandes références du thermalisme”, August 17, 2011.

- Turenne, M. “Sid Lee : La créativité absolue fait recette,” Les Affaires, July 9, 2011.

Leisure travel

In 2006, leisure travel will continue to drive tourism growth. According to some US experts, rest and relaxation motivate more than half of all leisure travellers. Destinations like spa resorts and those offering a stress-free atmosphere look the most promising. A recent Tripadvisor.com survey showed that 50% of the 3000 respondents planned to take a spa vacation in the next year. With short stays still in vogue, the challenge facing the industry is to offer the most relaxation within the shortest amount of time.

Visits to national parks will rise, while attendance at amusement parks will drop. The cruise industry should continue its upward climb and enjoy an excellent year, notably due to the launch of new boats and the growing popularity of this product among families. Timeshares on cruise ships have been identified as a promising new trend in the coming years.

Cities that emphasize fun and a wide variety of activities within a small area – ideally within walking distance – are likely to attract more travellers. And, finally, the increased demand for leisure travel has led experts to encourage consumers to reserve early to ensure that what they want is available at the desired time.

Business travel

North American business travel will enjoy a good year with projected growth of 5% in 2006, compared to the 4% recorded in 2005. This increase will be driven primarily by the meetings and conventions sector. However, for their daily corporate needs, business people continue to seek alternatives to having to travel for business.

Recent forecasts from Meeting Professionals International (MPI) confirm a 7% increase in meeting expenditures and the number of events for next year. This forecast is based primarily on national markets, because American and European organizers do not expect more events to be held at international destinations. In Canada, the number of visitors attending American conventions should remain stable.

Good news for suppliers: MPI anticipates that convention lead times will begin to increase. In 2006, it is estimated that lead times will grow by nearly 40%, translating into an additional two or three months between the invitation to tender and the event date.

Hotels

In North America, increased demand and slow growth in supply means average room rates should continue to rise in 2006. The upscale and luxury sectors in particular should benefit from this situation. Furthermore, in 2006, the hotel industry, like all travel and tourism sectors, will face the dual challenge of staff shortages and human resource management. According to a recent US study, 25% of hotel industry employees are dissatisfied with their jobs and 32% of these people would like to find a new job in the next year. The year 2006 is also likely to be challenging for hotel owners in major US cities because many collective agreements are up for renewal.

Transportation

Pressures on the North American airline industry will persist as discount carriers continue to invade the traditional routes of the major airlines. In this competitive environment, ticket prices will remain low, but an expected increase in fuel prices (combined with fewer available seats) should nudge average prices higher among regular carriers. There will also be an increase in the number of pay-per-use in-flight services (pillows, blankets, meals, snacks, etc.).

As for airports, we should see an increase in the services offered to travellers. The addition of shops, restaurants, gyms, beauty salons and professional services are some of the tactics being adopted by airport managers to diversify revenue sources and improve the customer experience.

In 2006, the Airbus A-380 will begin commercial flights. The world?s largest passenger jet, the two-storey airplane will be the first to offer on-board areas for socializing.

In the United States, train travel will grow in 2006. Improved services and schedules, and especially the opportunity to transform travel from a utilitarian role into an experience unto itself, have piqued consumer interest in this service, especially among Generation X travellers.

Technology

Travellers, both business and leisure, are increasingly demanding the opportunity to “plug in” anywhere and any time. Hotels, resorts, convention centres, airports and various types of public transit will intensify their efforts to provide high-speed internet access (for free, if possible!). Sometime in the year 2006, US airlines will begin offering wireless in-flight internet access.

Increased internet use by consumers continues to revolutionize the marketing and distribution of travel products and services. In 2006, the number of online transactions will continue its strong growth. The firm PhoCusWright predicts that by the year 2007, 40% of all travel-related purchases in the United States will take place online.

Furthermore, tourism now constitutes a growing presence on major search engines (Google and Yahoo) and general online shopping sites (Pricegrabber). With more comparison tools now available, the resulting price transparency is forcing suppliers to work even harder on their brands, since the consumer?s perception of value is a combination of price and supplier image.

Tourism marketing should attach greater importance to the internet. It is expected that the concepts of “best price guaranteed”, dynamic packaging and search engine positioning (pay-per-inclusion) will grow in popularity. Experts are also pointing to the growing popularity of internet-related media like blogs and instant messaging. Individuals will have a fast and growing influence on the commercial success of products and services.

Destinations

At this point in the year, China is still the destination that excites the most interest and curiosity. According to guidebook publisher Lonely Planet, this country heads the list of hot destinations, followed by Mali, Brazil, Iceland and Serbia & Montenegro. As for destinations offering exceptional value, the publisher puts Argentina at the top, followed by New Zealand, Morocco, India and Mexico.

In Europe, according to American Express, Great Britain, France and Italy remain the most popular destinations for Americans. However, Eastern Europe continues to attract a lot of interest, particularly the countries on the Adriatic Riviera (Croatia, Slovenia, Montenegro), which are a less expensive alternative.

Sources:
- Armstrong, David. “Travel, Tourism Bouncing Back – Conventions and Visitors Returning, but Room Rates and Airfares Are Going Up,” San Francisco Chronicle, January 8, 2006, p. J1.
- Cruise Lines International Association. “Cruise Industry Trends for 2006,” [Traveldailynews.com], January 16, 2006.
- Grossman, David. “What’s in Store for Business Travelers in 2006?” USA Today, January 9, 2006.
- Harpaz, Beth J. “2006 Hot Spots Include Colorado, China & Croatia,” Associated Press, [CNN.com], December 29, 2005.
- Jones, Steve. “Steady Growth Forecast for Business Travel,” [Travelmole.com], January 3, 2006.
- Meeting Professionals International. “Meetings Industry to Grow in 2006,” [4hoteliers.com], January 11, 2006.
- Randall, Judy. “Top Travel Trends for 2006,” The Charlotte Observer, December 25, 2005.
- Sloan, Gene. “China, the New Croatia?” USA Today, January 5, 2006.
- Westenberg, Kerri. “Travel Trends: Where it’s at in 2006,” [StarTribune.com], January 2, 2006.
- Yesawich, Pepperdine, Brown & Russell. “Ten Trends to Watch in the Year Ahead,” [ehotelier.com], December 30, 2005.
 

The format of the article is structured in a way that considers each of the four elements of the product marketing mix; the 4P’s (product, promotion, price and place). Airports obviously offer a service (as opposed to a product) and so the three elements of the services marketing mix (processes, physical evidence and people) will also be considered but this will be done within the context of the 4P’s as quite often, elements such as processes and people can be discussed within the context of the product. The main points of the article and areas for future research will be summarised in the conclusion.

The airport product

Airports wishing to compete in leisure markets need to be aware of the facilitation requirements of leisure carriers. Runway length, terminal capacity and landing systems will all contribute to the decision of whether or not to operate to a particular airport however; this applies to all types of carrier, not just those that offer opportunities for the development of tourism.

The level of infrastructure available at an airport will to a large extent determine the types of markets or carriers that can be targeted. For instance, only airports with a runway length of over 1600 meters can realistically target low-cost and charter carriers operating dense routes with a Boeing 737 or Airbus 319. Many of the airports in Europe’s northern periphery have fairly long runways that were built for military purposes and can therefore accommodate the typical range of aircraft used by low-cost and charter carriers. Airports with smaller runways will need to target niche regional carriers operating thin routes with smaller aircraft.

The harsh operating conditions that are typically associated with Europe’s northern periphery (e.g. frequent adverse weather and permanent obstacles such as mountains) may provide further constraints to some airports, especially those that are not equipped with modern landing systems and accurate real time weather monitoring, both of which have the capacity to improve airport safety and the reliability of flight operations.

Tangible infrastructure is a basic need of the airline and does not really provide much of a competitive advantage to airports, especially when competing airports offer a similar level of infrastructure. In such instances, airports should look to compete at the augmented level (where additional benefits can be offered).

Leisure carriers are especially focused on achieving low operating costs and an efficiency of operations. Therefore, they will want to see how airports can facilitate cost savings (e.g. by providing simple terminals and minimal services), speed (e.g. by providing fast aircraft turnarounds and an efficient positioning of aircraft), flexibility (e.g. by providing multi-functional and flexible staffing), and access (e.g. by providing longer opening hours and surface transport to the destination). Prestwick Airport in Scotland was able to adapt its augmented product in order to attract low-cost and charter carriers. The airport developed a multi-skilled workforce that is able to provide all airport services and a quick turnaround of aircraft. In addition, the airport made a conscious effort to reduce costs and to pass these savings onto their airlines and tour operators. In the first year of implementing such initiatives, Airtours (a leading tour operator) added seven new routes from the airport and the airports total number of annual passengers increased by over 30% (Lang, 1999).

For airports that target multiple carriers (e.g. traditional full-service or business charters in addition to leisure carriers), increasing consideration is given to whether or not to segment the product offering (e.g. by offering separate terminal facilities that offer different service levels to different types of carrier). Although not located in Europe’s northern periphery, Marseille Airport in southern France is one of the first airports in Europe to offer and actively promote separate facilities for different markets. At Marseille Airport, airlines can choose whether to use a full-service terminal that offers airbridge access to the aircraft or a low-cost terminal that offers remote stand access to the aircraft. The principle here is that the user pays for a superior product.

Associated with the airport product is the idea of the airport brand. Branding has been widely used by airports in Europe’s northern periphery and especially by those seeking to attract charter carriers. In this instance, the brand that is developed may be based upon natural or man-made attractions or aspects of historical importance. A few examples include Lakselv Banak Airport in Norway (now known as North Cape Airport), Kemi-Torino Airport in Finland (uses the logo ‘For Golf in the Midnight Sun’), and Keflavik International Airport Terminal in Iceland (inaugurated in 1987 under the name of Leifur Eiriksson Air Terminal after the Norwegian navigator who, according to Norse sagas, was the first to discover North America). Airports have also been branded in a way that demonstrates their size or scope of services. For example, Prestwick Airport in Scotland is now called Glasgow Prestwick International Airport in order to create awareness of the fact that the airport offers international services.

Branding creates distinctiveness and adds tangible cues to what is essentially an intangible service. In addition, branding can promote recognition, preference and loyalty amongst target markets. However, branding can have a potentially negative impact by being too distinctive and encouraging aspects such as seasonality. Rovaniemi Airport in Finland was branded as Santa Claus Airport in 1984 in order to contribute to the development of ‘Santa-based’ tourism in Finnish Lapland. The airport has become a major tourism gateway to the region and during Christmas 2003, the airport attracted over 200 foreign charter flights and nearly 80,000 international tourists (Rovaniemi Tourist Board, 2004). The problem is that traffic at the airport is concentrated in the winter months and at certain times of the day and week, leading to seasonal and inefficient airport operations. In addition, the dominance of charter traffic, which provided 92% of the airports international passengers in 2003 (Finnish Civil Aviation Authority, 2004) may be a deterrent to the attraction of scheduled low-cost carriers that offer higher frequencies and a year-round service.

Promoting the airport

Advertising is a basic form of marketing that airports do to create awareness and communicate certain messages to target markets. However, advertising tends to communicate general messages to a general audience and can be very costly. For example, it costs an airport ?10,000 to place a one page colour advertisement in the publication Airline Business.

Attending exhibitions is another basic form of marketing that airports do to create awareness amongst target groups. For example, Highlands and Islands Airports Limited (HIAL), operators of the 10 airports in the Scottish Highlands and Islands targeted tour operators at VisitScotland Expo 2004 to promote its airports to around 1,000 buyers from the international travel trade (HIAL, 2005). However, it should be noted that scheduled carriers, especially low-cost carriers increasingly reduce links with the travel trade in order to reduce costs so the effectiveness of attending exhibitions may only be restricted to airports competing in charter markets.

Increasingly, airports adopt a more direct and aggressive means of communicating with target markets. One recent development that has supported this type of direct selling is the World Route Development Forum called “Routes”. Routes is a type of speed dating for airports and airlines as it provides networking opportunities through one-to-one meetings (e.g. see www.routesonline.com). However, airlines increasingly expect to be presented with market research on new route potential and will be particularly interested to know about the tourist appeal of the catchment area for inbound passengers and the purchasing power of residents in the outbound market(s) (Favotto, 1998).

Many smaller airports may not have the financial or human resources to carry out detailed market research and therefore, may find it difficult to target carriers in this way. One way of overcoming this constraint is to develop strategic partnerships with local stakeholders such as tourism and regional development agencies. This enables airports and local stakeholders to pool resources, develop an integrated approach to regional tourism development, and provide airlines or tour operators with a wider overview of the area and its potential. Aberdeen Airport in Scotland has tried to achieve this through the creation of an Airport Business Development Forum; a group of airport stakeholders that meets every two months to discuss route development opportunities and provides potential airlines or tour operators with a one-stop shop for data on the airport, the local catchment area and on potential demand.

Pricing the airport product

Offering price incentives has become particularly important at airports wanting to attract scheduled low-cost carriers (Francis et al., 2004). Such incentives vary greatly between airports but have traditionally included the offer of reduced or discounted airport user charges and/or the provision of marketing support.

One of the constraints faced by airports that belong to national or regional airport systems is the inability to offer flexibility in airport user charges. Quite often at these airports, charges are levied in the same way throughout the entire airport system and may be set and controlled by the State. This relinquishes the opportunity for airports to compete on pricing and is one of the reasons why low-cost carrier concentration is higher at privately or locally owned airports where there is more opportunity for them to offer flexible and discounted airport user charges.

Another way in which airports are known to offer price incentives is through the provision of marketing support. This is in recognition of the fact that airports are a derived demand and that instead of conducting their own advertising and promotional campaigns, it may be more effective for them to support campaigns via intermediaries such as airlines or tour operators. These intermediaries have a much greater level of brand recognition amongst end users (i.e. passengers) and are able to penetrate markets more effectively than airports, through aggressive marketing campaigns.

Price incentives such as reduced or discounted airport user charges and/or marketing support have traditionally been offered by airports as one off payments or discounts, or on a scale that diminishes over time. The assumption here is that the start up risk is shared until the route becomes more established and commercially viable however, airlines have often argued that such discounts should always be available and this has been a source of friction between airports and their airlines in the past (Graham, 2003).

On 3rd February 2004, the European Commission ruled that the incentives granted to Ryanair by the Walloon government for the use of Brussels South Charleroi Airport (BSCA) breached EC State aid rules. The ruling means that state-owned airports in Europe can only offer incentives that meet strict criteria. For instance, they will only be accepted by the Commission if: they are necessary to the opening of new routes and granted in a transparent and non-discriminatory manner; their duration is limited (5 years for direct flights); they do not represent more than 50% of the costs incurred to start the new route; and, they are available to any airline established at the airport. he ruling will have profound implications on the ability for airports to offer incentives and the arrangements at a number of airports, especially those that are locally owned, will have to be reassessed.

The Commission ruling does not apply to privately owned airports and because of this; we may see an increasing level of private investment at state-owned airports, especially those seeking to attract low-cost carriers through incentives.

Placing the airport product

Airports sell direct to airlines or tour operators for rights to use the airport. They then rely on intermediaries such as airlines, tour operators, travel agents or travel planning portals to reach end-users. Despite this, airports are increasingly involved in providing online travel planning support to passengers and also to their airlines or tour operators. This is particularly important considering that online travel sales in Europe increased by as much as 41% between 2003 and 2004 (Marcussen, 2005).

The provision of online timetable services (as provided by companies such as OAG and Innovata) is a basic level of online support but surprisingly, less than 10% of world airports currently buy into online timetable services (Compton, 2005). In addition, whilst most airports have an online presence, their support for airlines or tour operators is fairly limited and especially at airports that belong to large national airport systems where websites tend to be fairly plain and simple. HIAL maintains a fairly good level of online presence and support. The company provides online timetable services and links to the tourism industry, airline websites, and Expedia (a travel planning portal) (e.g. see www.hial.co.uk).

Concluding remarks

This article has provided a preliminary discussion on the challenges and opportunities for airports in Europe’s northern periphery that aim to adopt a leisure-orientated marketing mix in order to facilitate the development of tourism. Greater debate on this subject is required before a more balanced and informative analysis can be conducted however, initial discussions have identified the following issues and considerations.

Firstly, airports need to understand the facilitation requirements of target markets and the ability for airports to compete at the augmented level is especially strong. Branding can also be used to gain a competitive advantage. The challenge is in deciding whether or not to specialise or to develop multiple product offerings that offer a range of service levels. This does not only apply to the infrastructure and services available but also to the airport brand.

Secondly, airports should adopt more direct and aggressive means of communication and events such as “Routes” offer tremendous opportunities however, this means of communication needs to be supported with detailed market research. For those airports that do not have the resources to conduct such research, strategic partnerships with local stakeholders are vital and enable the pooling of resources. Strategic partnerships also facilitate a more integrated approach to the development of tourism and are therefore of importance to all airports, not just those with resource constraints.

Thirdly, airports can offer incentives to encourage routes that may otherwise not have been considered however, the European Commission ruling has affected the way in which these may be applied. Airports may subsequently seek private investment in order to overcome the effects of the ruling.

Finally, airports should do more to support the distribution channels of their airlines or tour operators and the travel planning needs of end users. Airports that belong to large national airport systems tend to offer plain and simple support in this area and should consider developing a more advanced and personal approach.

Perhaps it is the nature of airport ownership or the style of airport management that facilitates the ability of airports to adopt such marketing principles. In addition, it is unclear as to whether or not such marketing principles affect the performance of airports. These are some of the issues that I hope to address in future studies?..

References:
-Compton, P. (2005). “Timetable for success,” Airport World, 10(2), April-May, 56-57.
- Favotto, I. (1998). “Not all airports are equal,” Airport World, December, 17-18.
- Finnish Civil Aviation Authority. (2004). “CAA’s Air Traffic Statistics, Ilmailulaitos A 5/03,” Vantaa.
-Francis, G., Humphreys, I. and Ison, S. (2004). “Airports’ perspectives on the growth of low-cost airlines and the remodelling of the airport – airline relationship,” Tourism Management, 25, 507-514.
-Graham, A. (2003). “Managing airports: an international perspective,” 2nd ed. Butterworth-Heinemann, Oxford.
- HIAL (Highland and Islands Airports Limited). (2005). “HIAL targets tour operators at VisitScotland Expo 2004,” HIAL Press, Inverness.
- Lang, H. (1999). “Attracting business to Prestwick airport. In: 1st Forum on Air Transport in Remoter Regions,” 2-4 April, Nairn.
- Marcussen, C.H. (2005). “Trends in European Internet distribution – of travel and tourism services.” [http://www.crt.dk/uk/staff/chm/trends.htm] (accessed 26th October 2005).
- Rovaniemi Tourist Board. (2004). “Rovaniemi Region Marketing Strategy 2005,” Rovaniemi Tourist Board, Rovaniemi.

Hoping for a magic solution

Most participants who attend conferences, conventions and workshops are hoping to discover the next big trend that will magically solve all their problems. All too often, they are presented with information they already know: growth in short-term trips and nearby destinations, rapid urbanization, extending the tourism season, strong competition among destinations, etc. Is there anything to be learned here?

How about combining trends?

We all know about the rapid growth of urban populations. By 2015, more than half of the world’s population will be city-dwellers; by 2020, close to 90% of Canadians will be living in the country’s 25 greater metropolitan areas.

“Urbanization” means a large number of tired, stressed-out people, many of whom are desperate to escape to the country and enjoy nature. Rapidly increasing urbanization, combined with the growing trend towards short-term stays, could well be the magic solution we have all been hoping to find.

First seduce, then pounce

Rural areas are blessed with a natural resource that can meet the physical and mental needs of city-dwellers year-round. How can these stressed-out individuals resist the invitation to relax, slow down, drink in the fresh air, escape the rat-race, reconnect, enjoy interacting with others, savour a sense of well-being… these all constitute persuasive arguments for companies eager to attract this kind of clientele.

Some Club Med brochures have been designed with this principle in mind. The first two or three pages flaunt the country’s charms and highlight its most seductive aspects. The contact information for the relevant Club Med offices is printed on the final page, to capitalize immediately on the customer’s decision to purchase.

Seductive marketing

Your “seduction campaign” will be even more effective if, in addition to highlighting your region’s assets, you segment the information based on the lifestyles of your prospective clientele. For example, the marketing strategy developed by the CDT (Comité départemental du tourisme or Regional tourism committee) of Orne, France focuses on the “sheer pleasure” of its weekend getaways:

Experience a weekend of Sheer Pleasure in the Orne region of Normandy, France.

• If you love golf or riding, click the Great Outdoors icon
• If you prefer setting your own pace, click the Relaxation icon
• If you’d rather laze in the sun, click the Beach Bum icon
• If you’re the get-back-to-nature type, click the Country Style icon

The Aube region in Champagne, France is marketing itself as “Aube, the place you’ve been longing for”. A number of French tourism organizations have used the slogan “Go ahead; indulge yourself” to emphasize the pleasure factor of their weekend getaways, resorts and other tourism products. And, the phrase “No artificial colours or additives” is the perfect endorsement for a region’s natural charms!

Perhaps reading these examples has inspired you to develop a strategy that relies less on enumerating the various activities on offer, and more on seducing the potential consumer with your region’s unique appeal.

Sources:
- Dany, Carole. “Enjeux et pratiques de désaisonnalisation dans les territoires ruraux,” Agence de communication Cadran Solaire, colloque Imatourisme 2004, Moliets – Landes, France, 5 octobre 2004.
- Laliberté, Michèle. “Boule de cristal, que nous prédis-tu?,” Réseau de veille en tourisme, 31 mai 2004.

Leaving the Beaten Path Behind

Discover the “Paris des Parisiens” and the soul of its neighbourhoods, immerse yourself in the city’s history and culture, eat traditional dishes with a family, take a guided tour led by residents of the area, visit local hangouts, join in a community event, stay with local people, and so on. What better way to accommodate visitors looking for this kind of interaction?

Beyond the scope of organized tours and classic itineraries, an alternative range of travel options is springing up to cater to small groups and independent travellers seeking uncommon experiences and contact with the locals. Not missing a beat, Paris has incorporated these alternative services into its tourism diversification strategy.

Neighbourhood Pride

Services such as Meet the Danes, Like-a-Local, Global Greeters, Fédération Stattreisen and Belleville insolite are cropping up all over the place. Their role is to connect travellers with local residents who act as tour guides. The formula varies; some services are free and some charge a fee, some operate with the help of volunteers and some offer a more personalized service. For instance, Meet the Danes gives tourists the opportunity to share a traditional meal with a Danish family in a friendly and welcoming setting. The organization finds host families of similar age and interests.

Meals, lodging and outings are all part of the unique experience offered by Like-a-Local, an organization which operates in The Netherlands, Belgium, Portugal, Spain and Sweden. Be it shopping in Stockholm, discovering the old and new faces of Lisbon, checking out the nightlife in Oporto, sampling “pinchos & tapas” in Madrid or staying on a houseboat in Amsterdam, there’s something to appeal to every traveller.

Under the banner of Global Greeters, services in Toronto, Fairbanks (Alaska), Melbourne and Adelaide (Australia), Buenos Aires (Argentina), New York, Houston, and Chicago make a visit to their city memorable with a free tour-guide service staffed by volunteers. Speaking different languages, and of all ages and backgrounds, they proudly show off their city while providing visitors with a wealth of “insider” information.

In Germany, the organization Fédération Stattreisen (loosely meaning “travelling differently”) adheres to the practices of sustainable development and low-impact tourism, and standards are very strict. Comprising 19 associations in 23 German cities as well as Brussels and Bern, their tours focus on exploring a city and its neighbourhoods while avoiding the usual tourist traps. They combine encounters with local residents with an in-depth look at the city’s history, politics and people. Quirky or little-known aspects of the destination are also covered.

In Paris, Belleville insolite is doing some groundbreaking work in the art of community-supported tourism with an approach that differs radically from the traditional tour blueprint. Young guides, mostly students on the verge of entering the professional world, take visitors to see the attractions of this vibrant and cosmopolitan Paris neighbourhood. Several other initiatives have also been developed, including some that target new residents, seniors and the unemployed.

Trading Places

Along with saving the traveller money, home-exchange is another way of fulfilling a visitor’s desire for authenticity. Living in a house in a foreign country, buying from local merchants, adapting to the local rhythm of life, meeting local residents and seeking neighbourly advice are all experiences the make tourists feel they are soaking up the local culture.

The Internet has given the home-exchange phenomenon a real boost. The HomeLink International website has 13,500 members in 69 countries, while HomeExchange.com boasts 9,000 members in 85 countries.

Going Local

Introducing visitors to the local culture begins with a chocolate from the local confectionary placed on a guest’s pillow, with furnishings that reflect the national culture, with a B&B operator who invites the visitors to join the family for dinner, with a party that gets the visitor up and dancing, with a tour of undiscovered areas, with a car rally that involves tourists discovering new places, with shopping locally and chatting to residents…

In essence, local community participation enhances a visitor’s experience while reducing the stresses high-volume tourism can cause.

Sources:
- Gaboury, Louise. “Des résidants font découvrir leur ville aux touristes,” La Presse, April 8, 2006.
- Holm, Olaf. “De Paris à Berlin, de Bruxelles à New York – Visiter autrement les villes du monde,” Cahier Espace. No. 78, July 2003, p. 134-143.
- Springwise. “Cultural Exchange for a Day.” Springwise Newsletter, May 2, 2006.
On the Web:
www.meetthedanes.dk
www.like-a-local.com
www.adelaidegreeters.asn.au
www.homelink.org
www.homeexchange.com
www.trocmaison.com
www.echangedemaison.com

Gen Y hybrid consumers will use price transparency provided by the Internet and the euro to combine five-star hotel accommodations with low-cost flights, both reserved at discount travel sites. Although practitioners of conspicuous consumption, the Millennial Group sees no contradiction in following a 5-minute lunch at McDonald’s with a 5-hour dinner chez Ducasse. New concepts of value for money will result in consumers mixing and matching products to satisfy their desire of the moment.

Merger and acquisition activity in the hotel sector will continue at a torrid pace. Starwood’s recent purchases of Meridien and Société du Louvre, the Fairmont-Raffles merger and the reunification of Hilton are precursors of the rapid consolidation ahead.

Multi-brand lodging companies will further capitalize on the reputations of their flagship properties to create upscale product groups using brands such as St. Regis, Waldorf-Astoria and Crillon. These super-luxury properties will justify stratospheric rates by offering enhanced amenities and employing database technology to introduce new standards of service excellence.

As budget airlines emerge in new geographic regions, they will expose the long-ignored fact that air transport is a commodity where low-cost leaders are most profitable. Investors who shied away from traditional carriers will find confidence in these new airlines as manifested by Ryanair’s ranking of maintaining the second highest market capitalization of European airlines (behind Air France-KLM).

While travelers become increasingly accustomed to living in an unsafe world, security will play a significant role in selecting leisure destinations. Disease, crime, air safety and terrorism will become important criteria for holidaymakers planning trips abroad.

While Mr. Chevrier provides a broad optimistic forecast for North America, other destinations will manifest greater variations in demand. In Europe, the United Kingdom, Austria and the Netherlands will see increasing growth in their business and leisure markets while Poland, Germany and Sweden will struggle to fill hotel rooms and tourist facilities. François Chevrier cites the growing attraction of China and India but Asian tourism markets such as Indonesia, Sri Lanka and Nepal will suffer from political instability.

In 2006, analysts, scholars and industry leaders will discover the meaning of Albert Einstein’s observation that “The only constant in the universe is change”.

> The cruise industry will experience explosive growth.

> An older, better-educated population in Europe and North America will increasingly seek ecotourism and cultural travel products.

> “Slow cities” and “slow food” trends will expand from Italy to much of Europe.

> London, New York, Sydney and Dubai will be the leading tourism poles through the end of the decade.

> Non-residents will pay significantly higher entry fees to tourist attractions than those paid by locals (Venice, Petra, Bath, etc.).

> Tourism Satellite Accounting will be adopted by several developing countries but ignored by the U.S., China, Japan, Russia and most Western European countries.

> Prayer rooms and compasses will be installed on most passenger aircraft serving the Islamic world.

> Antarctica will become an ecotourism tourism destination complete with hotels, restaurants and full-service tours.

> Shopping, from mega-malls to folk craft centers, will increasingly become a critical feature for tourism destinations.

> Rides on private spacecraft will become a recreational outing for the wealthy.

> Mega-resorts (Las Vegas, Orlando, Sun City, etc.) will do what no one thought possible: get bigger.

> Cruise ships will sell condominiums, becoming ocean-going resorts.

> In spite of organized international efforts to fight them, sex and drug-focused tourism will flourish.

> Airlines, travel agents and tour operators will ally themselves with financial institutions to offer consumer travel loans.

> Western tourists will shun countries with immense tourism potential but “rogue” leaders (Zimbabwe, Libya, Iran, North Korea, etc.).

> MGM Mirage will beat out rivals Hilton, Harrah’s and Bally’s to become the undisputed leader of the casino industry.

> National economies in Cuba, Egypt, Spain and Thailand will become dangerously dependent on tourism.

> “Rave” tourists will travel further abroad in search of the perfect party (BringItOn! Travel, Like Hiptrips, Experienceibiza, etc.).

> Enormous infrastructure projects will significantly expand automobile-accessible tourism options (Channel Tunnel car lane, Bahrain-Qatar causeway, etc.).

> China will be the first country to receive 100 million international arrivals in a 12-month period, sometime around 2018 - France will follow within 2-3 years.

Product & Service Trends

> Hotel rooms, increasingly equipped as offices with full-size desks, computers and advanced communications technologies, will minimize the need for business centers.

> Expansion of Europe’s high-speed train network will eliminate short haul flights.
 
> Hotel meeting and dining areas will be designed less formally in an attempt to attract the casual business traveler.

> Small super-luxury boutique inns will take market share from Four Seasons, Ritz Carlton and Fairmont.

> Hub airports will install capsule-cocoon hotels in terminal facilities.

> Hotel and restaurant facilities will be designed for an aging population with lower rise steps, more handrails and wider doors.

> Travel guidebooks will become highly specialized and more frequently consulted - primarily on the web.

> The distinction between business and leisure hotels will erode as business clients seek fitness and entertainment activities and vacation guests demand advanced telecommunications IT.

> “100% Satisfaction Guaranteed” will replace “Let the Buyer Beware”.

> Growth in demand for home food delivery will outpace all other food service segments.

> An aging population and growing infatuation with healthful living will bring a wave of European holistic spas and  ‘health-tels’ to North America and Asia.

> A new wave of budget conference & exhibition hotels will be built to meet the convention needs of cost conscious companies.

> European and Japanese new-build hotels will be obliged to design larger guest rooms closer to North American standards.

> Restaurant groups will operate F&B outlets wherever people gather (Laundromat bars, espresso counters at service stations, etc.).

> Center-city urban resorts will challenge sun, sand & sea vacation villages in the leisure market.

> Credit card check-in/check-out, F&B vending machines, self-cleaning bathrooms and self-serve laundries will eliminate most human contact in budget hotels.

> Luxury resorts that once shunned children will welcome them with an expanded array of activities and tailored dining options.

Investment & Finance

> Hotel real estate assets will be increasingly concentrated in the portfolios of fewer investors, particularly private equity funds.

> Intense competition for hotel operating contracts will push management fees as low as 1% of gross, 5% of IBFC and $4 per reservation.
 
> Airlines will continue to rack up significant losses as they struggle to deal with high fuel costs, new security requirements, an onslaught of no-frills carriers and brutal competition from ‘open skies’ agreements.

> Following the big American sell off of the 1980s and 1990s, hotel companies will be repatriated to the U.S. (Westin, Ramada, Renaissance, etc.).

> Airline alliances of the 20th century will evolve into acquisitions as weaker players struggle to survive (Air France-KLM, American-TWA, etc.).

> By the end of the decade, a score of management companies will control the world inventory of branded hotel rooms.

> Hotel feasibility studies will become an unprofitable commodity for hospitality consulting firms.

> Hotel operating companies will sell their remaining equity in real estate to free up capital for expansion of management contracts.

> Per room hotel acquisitions in Europe will reach stratospheric new records (i.e. Savoy Group).

> Franchising will experience explosive growth as hotel companies strategically reposition to get out of the hotel business and into the business of hotels (i.e. Radisson, Choice, Cendant, Holiday Inn, etc.).

> Fewer new-build hotels in Europe and North America, more existing property renovations.

Human Resources

> Critical shortages of skilled staff will encourage hospitality corporations to develop or outsource proprietary training centers.

> The introduction of new technologies in the upscale tourism industry will not replace the human element in service delivery - to the contrary, it will gain importance.

> Unionized hotel and restaurant workforces will trade scheduling and task flexibility for job security and quality-of-life benefits.

> Tourism and hotel management schools will move out of the classroom and out of the library, onto the web and into the field.

> Powerful unions, a shorter workweek and reluctance to taper social benefits will maintain Europe’s standing as the world’s most expensive tourism destination.

> Middle Eastern countries enforcing employment quotas for nationals will experience reduced productivity and higher labor costs.

> Airline employees will accept significant wage and benefit cuts to prevent their employers from going bankrupt.

Marketing

> The Internet will become the dominant distribution channel for all travel and tourism products eliminating most intermediaries.

> Understanding customers as people - their likes, dislikes, habits, interests and hobbies - will become critical to establishing competitive advantage in hospitality marketing.

> Customer retention will replace customer acquisition as travel agencies’ strategic objective.

> Homogenization of airline services will render them commodities while lodging products will continue to focus on differentiation.

> Data warehousing and data mining will provide one-to-one and relationship-marketing opportunities never imagined.

> Print media advertising will move onto the Web.

> Increasingly value-conscious customers will demand more and better product information.

> Consumers will increasingly expect to negotiate hotel and airline rates.

> Cross-sector strategic alliances between food service, lodging, travel and entertainment companies will prove to be effective marketing formats.

> Better understanding of psychographic consumer behavior will lead to more precise identification of customer segments and sub-segments.

> As marketers increasingly distinguish between loyalty and satisfaction, frequent use programs will become more elaborate.

> Hotel revenue management systems will become more sophisticated and be relocated from the reservations department to sales & marketing.

> Revenue management tactics will be applied to pricing in restaurants, amusement parks, golf courses, tour buses, cinemas, convention centers and sports stadiums.

> Hotel companies’ PMS standardization will result in the transfer of database and data warehousing responsibilities to CRS for greater operational and marketing efficiency.

> Market share and product profitability will be replaced by customer share and customer profitability as measures of marketing effectiveness in the hotel industry.

Safety & Security

> Consumers will systematically consult travel health sites before checking ticket or room availability.

> Security concerns in the Holy Land encourage religious tourists to make pilgrimages to sites in Ethiopia, Cuba, Greece, Italy and Morocco.

> Crime and terrorism will render some traditional tourist destinations unsellable.

> Customer credit cards will replace coded key cards in most hotels.

> Guest room safes will be enlarged to accommodate standard laptop computers.

> International hotel companies will refuse management contracts and franchises for hotels without in-room sprinkler systems.

> Terrorism fears will keep Israel, Indonesia, Iraq and India off the mainstream tourist circuit for the foreseeable future.

> Advanced encryption technology will make on-line payment genuinely secure.

Financial Management & Cost Control

> Zero-based budgeting will become the industry norm.

> GOPAR will replace RevPAR as the standard measure of hotel sales profitability.

> Speech recognition technology will lower staffing levels and operating costs in CRS call centers.

> To improve energy and water conservation, hotels will install usage meters and levy charges for consumption.

> Deregulation of the global telecommunications market will benefit the hospitality industry more than the deregulation of the airline markets.

> As hotel reservations made through global distribution systems diminish, GDS will exploit communications advances to reduce fees and costs.

> While hotel and café guests will increasingly expect wireless Internet access, other factors will encourage hospitality operators to invest in it - serving as a platform for mobile point-of-sales, reducing cable costs and more efficient restaurant table auditing.

Tourism Control Intelligence
E-mail: Nowlis@aol.com

• The cruise industry will experience explosive growth.
• An older, better-educated population in Europe and North America will increasingly seek ecotourism and cultural travel products.
• “Slow cities” and “slow food” trends will expand from Italy to much of Europe > London, New York, Sydney and Dubai will be the leading tourism poles through the end of the decade.
• Non-residents will pay significantly higher entry fees to tourist attractions than those paid by locals (Venice, Petra, Bath, etc.).
• Tourism Satellite Accounting will be adopted by several developing countries but ignored by the U.S., China, Japan, Russia and most Western European countries.
• Prayer rooms and compasses will be installed on most passenger aircraft serving the Islamic world.
• Antarctica will become an ecotourism tourism destination complete with hotels, restaurants and full-service tours.
• Shopping, from mega-malls to folk craft centers, will increasingly become a critical feature for tourism destinations.
• Rides on private spacecraft will become a recreational outing for the wealthy.
• Mega-resorts (Las Vegas, Orlando, Sun City, etc.) will do what no one thought possible: get bigger.
• Cruise ships will sell condominiums, becoming ocean-going resorts.
• In spite of organized international efforts to fight them, sex and drug-focused tourism will flourish.
• Airlines, travel agents and tour operators will ally themselves with financial institutions to offer consumer travel loans.
• Western tourists will shun countries with immense tourism potential but “rogue” leaders (Zimbabwe, Libya, Iran, North Korea, etc.).
• MGM Mirage will beat out rivals Hilton, Harrah’s and Bally’s to become the undisputed leader of the casino industry.
• National economies in Cuba, Egypt, Spain and Thailand will become dangerously dependent on tourism.
• “Rave” tourists will travel further abroad in search of the perfect party (BringItOn! Travel, Like Hiptrips, Experienceibiza, etc.).
• Enormous infrastructure projects will significantly expand automobile-accessible tourism options (Channel Tunnel car lane, Bahrain-Qatar causeway, etc.).
• China will be the first country to receive 100 million international arrivals in a 12-month period, sometime around 2018 – France will follow within 2-3 years.

Product & Service Trends

• Hotel rooms, increasingly equipped as offices with full-size desks, computers and advanced communications technologies, will minimize the need for business centers.
• Expansion of Europe’s high-speed train network will eliminate short haul flights.
• Hotel meeting and dining areas will be designed less formally in an attempt to attract the casual business traveler.
• Small super-luxury boutique inns will take market share from Four Seasons, Ritz Carlton and Fairmont.
• Hub airports will install capsule-cocoon hotels in terminal facilities.
• Hotel and restaurant facilities will be designed for an aging population with lower rise steps, more handrails and wider doors.
• Travel guidebooks will become highly specialized and more frequently consulted – primarily on the web.
• The distinction between business and leisure hotels will erode as business clients seek fitness and entertainment activities and vacation guests demand advanced telecommunications IT.
• “100% Satisfaction Guaranteed” will replace “Let the Buyer Beware”.
• Growth in demand for home food delivery will outpace all other food service segments.
• An aging population and growing infatuation with healthful living will bring a wave of European holistic spas and ‘health-tels’ to North America and Asia.
• A new wave of budget conference & exhibition hotels will be built to meet the convention needs of cost conscious companies.
• European and Japanese new-build hotels will be obliged to design larger guest rooms closer to North American standards.
• Restaurant groups will operate F&B outlets wherever people gather (Laundromat bars, espresso counters at service stations, etc.).
• Center-city urban resorts will challenge sun, sand & sea vacation villages in the leisure market.
• Credit card check-in/check-out, F&B vending machines, self-cleaning bathrooms and self-serve laundries will eliminate most human contact in budget hotels.
• Luxury resorts that once shunned children will welcome them with an expanded array of activities and tailored dining options.

Investment & Finance

• Hotel real estate assets will be increasingly concentrated in the portfolios of fewer investors, particularly private equity funds.
• Intense competition for hotel operating contracts will push management fees as low as 1% of gross, 5% of IBFC and $4 per reservation.
• Airlines will continue to rack up significant losses as they struggle to deal with high fuel costs, new security requirements, an onslaught of no-frills carriers and brutal competition from ‘open skies’ agreements.
• Following the big American sell off of the 1980s and 1990s, hotel companies will be repatriated to the U.S. (Westin, Ramada, Renaissance, etc.).
• Airline alliances of the 20th century will evolve into acquisitions as weaker players struggle to survive (Air France-KLM, American-TWA, etc.).
• By the end of the decade, a score of management companies will control the world inventory of branded hotel rooms.
• Hotel feasibility studies will become an unprofitable commodity for hospitality consulting firms.
• Hotel operating companies will sell their remaining equity in real estate to free up capital for expansion of management contracts.
• Per room hotel acquisitions in Europe will reach stratospheric new records (i.e. Savoy Group).
• Franchising will experience explosive growth as hotel companies strategically reposition to get out of the hotel business and into the business of hotels (i.e. Radisson, Choice, Cendant, Holiday Inn, etc.).
• Fewer new-build hotels in Europe and North America, more existing property renovations.

Human Resources

• Critical shortages of skilled staff will encourage hospitality corporations to develop or outsource proprietary training centers.
• The introduction of new technologies in the upscale tourism industry will not replace the human element in service delivery – to the contrary, it will gain importance.
• Unionized hotel and restaurant workforces will trade scheduling and task flexibility for job security and quality-of-life benefits.
• Tourism and hotel management schools will move out of the classroom and out of the library, onto the web and into the field.
• Powerful unions, a shorter workweek and reluctance to taper social benefits will maintain Europe’s standing as the world’s most expensive tourism destination.
• Middle Eastern countries enforcing employment quotas for nationals will experience reduced productivity and higher labor costs.Airline employees will accept significant wage and benefit cuts to prevent their employers from going bankrupt.

Marketing

• The Internet will become the dominant distribution channel for all travel and tourism products eliminating most intermediaries.
• Understanding customers as people – their likes, dislikes, habits, interests and hobbies – will become critical to establishing competitive advantage in hospitality marketing.
• Customer retention will replace customer acquisition as travel agencies’ strategic objective.
• Homogenization of airline services will render them commodities while lodging products will continue to focus on differentiation.
• Data warehousing and data mining will provide one-to-one and relationship-marketing opportunities never imagined.Print media advertising will move onto the Web.
• Increasingly value-conscious customers will demand more and better product information.
• Consumers will increasingly expect to negotiate hotel and airline rates.
• Cross-sector strategic alliances between food service, lodging, travel and entertainment companies will prove to be effective marketing formats.
• Better understanding of psychographic consumer behavior will lead to more precise identification of customer segments and sub-segments.
• As marketers increasingly distinguish between loyalty and satisfaction, frequent use programs will become more elaborate.
• Hotel revenue management systems will become more sophisticated and be relocated from the reservations department to sales & marketing.
• Revenue management tactics will be applied to pricing in restaurants, amusement parks, golf courses, tour buses, cinemas, convention centers and sports stadiums.
• Hotel companies’ PMS standardization will result in the transfer of database and data warehousing responsibilities to CRS for greater operational and marketing efficiency.Market share and product profitability will be replaced by customer share and customer profitability as measures of marketing effectiveness in the hotel industry.

Safety & Security

• Consumers will systematically consult travel health sites before checking ticket or room availability.
• Security concerns in the Holy Land encourage religious tourists to make pilgrimages to sites in Ethiopia, Cuba, Greece, Italy and Morocco.
• Crime and terrorism will render some traditional tourist destinations unsellable.
• Customer credit cards will replace coded key cards in most hotels.
• Guest room safes will be enlarged to accommodate standard laptop computers.
• International hotel companies will refuse management contracts and franchises for hotels without in-room sprinkler systems.
• Terrorism fears will keep Israel, Indonesia, Iraq and India off the mainstream tourist circuit for the foreseeable future.
• Advanced encryption technology will make on-line payment genuinely secure.

Financial Management & Cost Control

• Zero-based budgeting will become the industry norm.
• GOPAR will replace RevPAR as the standard measure of hotel sales profitability.
• Speech recognition technology will lower staffing levels and operating costs in CRS call centers.
• To improve energy and water conservation, hotels will install usage meters and levy charges for consumption.
• Deregulation of the global telecommunications market will benefit the hospitality industry more than the deregulation of the airline markets.
• As hotel reservations made through global distribution systems diminish, GDS will exploit communications advances to reduce fees and costs.
• While hotel and café guests will increasingly expect wireless Internet access, other factors will encourage hospitality operators to invest in it – serving as a platform for mobile point-of-sales, reducing cable costs and more efficient restaurant table auditing.

Tourism Control Intelligence
E-mail: Nowlis@aol.com

General characteristics

• Among industrialized countries, Canada experienced the biggest baby boom.
• Mass retirement of boomers from 2010 to 2020; their median age will be 55 in 2010.
• 9.8 million boomers in Canada, or 33% of the population (Foot and Stoffman, 1999).
• 76 million boomers in the United States, or over 25% of the population (American Demographics, 2004).
• By the year 2010, the countries of the European Union will be home to 140 million people aged 50 and over (Austrian Institute of Economic Research).

Nothing new in their profile

• Enjoy high disposable income
• Tend to be stressed workaholics
• Demanding, quality-oriented
• Active, healthy and intent on staying young
• Interested in learning and new experiences
• Adventurous

Beyond age and income

It is easy to divide the population into segments according to age and income, but reality is more complex. Lifestyles and attitudes towards ageing are becoming important factors. Some people are healthy and fit at age 70, while others feel old at age 50. In Canada, a 50+ Communication Marketing study defined four segments among those aged 40-plus:

• the wealthy

  (21%) – satisfied with their financial situation, careful with money, thrifty, with a long-term attitude towards things, rather dissatisfied with their appearance and open to the idea of cosmetic surgery, see their health as an investment (good eating habits, exercising to stay fit);

• the enthusiasts

  (27%) – are more or less concerned about their financial situation, eternally optimistic, enjoy life’s pleasures, open to taking job-related courses and continuing to work past retirement age, sensitive to the time factor (prefer one-stop shopping), often eat in restaurants for fun and to save time, more or less concerned with the state of their health (good food habits and exercising for fun);

• the careful

  (30%) – make independence a priority (living at home and driving one’s car for as long as possible), interested in continuing to work post-retirement, worried about financial security and even more about their physical health, seeking durable products and discounts, with poor health habits (overweight, large proportion of smokers);

• the worriers

  (21%) – pessimistic with regard to their finances and physical appearance, looking for products to help them regain their youth both mentally and physically, feel a loss of energy, seek a good quality-price ratio, think they should improve their eating habits.

A wired clientele

In the United States in the 50-58 age group:

• 62% have access to the Internet. Of that number, 75% read the news online and 55% do information searches.
• 76% use a computer on a regular basis (Pew Internet & American Life Project).

In Quebec, in the 45-54 age group:

• 55.4% use the Internet on a weekly basis (Cefrio).

Baby boomers who travel

In the United States, boomers travel more and spend more than any other age category:

• 44% of all trips, or 241 million trips in 2002.
• US$491 per trip, excluding transportation (Travel Industry Association of America).

In France:

• 48.7% of 50-somethings make travelling a spending priority versus only 40.3% of the national average (INsee and Notre Temps magazine).

Coveted tourism products

• Growth of the high-end market.
• Gradual decline in travel to the south and to resorts in favour of adventure and ecotourism products (observation of wildlife in Costa Rica, travel to Irkutsk on the Trans-Siberian Railway).
• Increase in demand for cruises and diversification of this product with smaller craft offering quality trips to limited groups.
• Demand for packages and personally tailored vacations.
• Increase in passive activities (golf, walking, bird-watching, etc.) and cultural pursuits.
• Popularity of safe destinations.
• More frequent travel to nearby countries.
• Popularity of bus trips for tourists who want to leave responsibility behind and be pampered – low-kilometre itineraries to enable travellers to get to know certain regions in depth or tours to little-known countries.

Look for uneven growth

Expectations about the rising boomer travel curve will have to be revised. Although this clientele will be very sought after, it will not behave uniformly. Some boomers will go into semi-retirement, or take progressive retirement. Others will retire later, or have less money upon retiring than anticipated, for the following reasons:

• lower returns on pension funds, due to dropping share values and low interest rates;
• a growing disproportion in the number of pensioners to workers – money is being withdrawn from retirement funds faster than it can be put in because there are fewer workers to make contributions;
• recent corporate governance scandals have compromised employee pension plans;
• the government will probably raise the official retirement age;
• more and more workers will be asked to continue working because of their experience;
• many people already receiving pension benefits will return to work.

With today’s longer life spans, people must make their post-retirement revenues last longer, which reduces annual income. Many fear that their pension plan will expire before they do.Sources:
- 50+ Communication Marketing. “Une étude marketing sur le marché des baby-boomers et des personnes âgées,” press release, April 28, 2004.
- La Presse canadienne. “Les baby-boomers rêvent maintenant d’une retraite progressive,” February 16, 2004.
- Research ALERT. “Leading-Edge Boomers Approach Senior Status, Changing the Face of Aging,” vol. 22, no. 8, April 16, 2004.
- Sarrasin, Bruno and Guy-Joffroy Lord. “L’évolution du tourisme international : une analyse prospective à l’horizon 2010,” Téoros, fall 2003, p. 5-9.