Vol. 4, No 1 (2014): January-June

Editorial Team

Editor in Chief

Alfonso Vargas-Sánchez, University of Huelva, Spain

Associate Editor

T.C. Huan, National Chiayi University, Taiwan

Books Review Editor

Steve Watson, York St. John University, United Kingdom

Secretariat

Cinta Borrero-Domínguez, University of Huelva, Spain

Mirko Perano, University of Salerno, Italy

Style reviewer and text editor

Beatriz Rodríguez-Arrizabalaga, University of Huelva, Spain

Editorial Board

José Manuel Alcaraz, Barna Business School, República Dominicana Mario Castellanos-Verdugo, University of Seville, España José Antonio Fraiz-Brea, University of Vigo, España José Manuel Hernández-Mogollón, University of Extremadura, España Shaul Krakover, Ben Gurion University, Israel Jean Pierre Levy-Mangin, University of Quebec, Canadá Tomás López-Guzmán, University of Córdoba, España Alfonso Morvillo, National Research Council (CNR), Italia Yasuo Ohe, Chiba University, Japón María de los Ángeles Plaza-Mejía, University of Huelva, España Nuria Porras-Bueno, University of Huelva, España João Albino Silva, Algarve University, Portugal

Advisory Board (Spanish Members)

César Camisón-Zornoza, Jaume I University, Spain Enrique Claver-Cortés, University of Alicante, Spain María Teresa Fernández-Alles, University of Cádiz, Spain José Luis Galán-González, University of Seville, Spain Félix Grande-Torraleja, University of Jaén, España Inmaculada Martín-Rojo, University of Málaga, Spain Antonio Manuel Martínez-López, University of Huelva, España Francisco José Martínez-López, University of Huelva, Rector, España María Jesús Moreno-Domínguez, University of Huelva,

España Pablo A. Muñoz-Gallego, University of Salamanca, España Francisco Riquel-Ligero, University of Huelva, España Josep Francesc Valls-Giménez, ESADE, España

Advisory Board (Other European Members)

Paulo Aguas, Algarve University, Portugal Gustavo Barresi, University of Messina, Italy Carlos Costa, Aveiro University, Portugal Salvatore Esposito de Falco, University of Rome “La Sapienza", Italy Sheila Flanagan, Dublín Institute of Technology, Ireland Tania Gorcheva, Tsenov Academy of Economics, Bulgaria Tadeja Jere-Lazanski, University of Primorska, Slovenia Metin Kozak, Mugla University, Turkey Álvaro Matias, Lusiada University, Portugal Claudio Nigro, University of Foggia, Italy Angelo Presenza, University "G. D'Annunzio" of Chieti-Pescara, Italy Renee Reid, Glasgow Caledonian University, United Kingdom

Advisory Board (Members from the rest of the world)

John Allee, American University of Sharjah, United Arab

Emirates

Nestor Pedro Braidot, National University of La Plata,

Argentina

Roberto Elias Canese, Columbia University, Rector,

Paraguay

Luca Casali, Queensland University of Technology, Australia

Nimit Chowdhary, Indian Institute of Tourism and Travel

Management, India

Steven Chung-chi Wu, National Pingtung University of

Science and Technology, Taiwán

Dianne Dredge, Southern Cross University, Australia

Daniel Fesenmaier, Temple University, United States

Babu George, University of Southern Mississippi, United

States

Dogan Gursoy, Washington State University, United States

Kanes Rajah, Tshwane University of Technology, South

Africa

Albert Yeh Shangpao, I-SHOU University, Taiwán

Pauline Sheldon, University of Hawaii, United States

Germán A. Sierra-Anaya, University of Cartagena de Indias,

Rector, Colombia

Xiaohua Yang, University of San Francisco, United States

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Ramjit S.

Enlightening Tourism. A Pathmaking Journal, Vol 4, No 1 (2014), pp. 1-29 ISSN 2174-548X

1

EVALUATING AND UNDERSTANDING THE TOURIST

EXPERIENCE: AN EMPIRICAL STUDY IN JAMMU

AND KASHMIR

Ramjit S.

Central University of Kashmir (India)

[email protected]

ABSTRACT

The aim of the present study is to identify and understand the tourist experience construct, and how it differs by their age, sex, income level, education and to suggest and recommend the strategies to develop the Jammu and Kashmir as a tourist destination and enhance its brand image. The study was carried out by collecting relevant information from secondary data sources, which included books, journals and reports published by government of India, Government of Jammu and Kashmir. A self structured Questionnaire was designed and distributed among the domestic and international tourists who visited Jammu & Kashmir. The sample size was 291 and the study was conducted in the whole state of Jammu and Kashmir. Data analysis was done by applying factor analysis, and descriptive statistics. There were five factors those constituted the tourist experience like ''Transportation and Service by the different Carriers', 'Services at the Destination', 'Hotels and restaurants', 'Infrastructure at the destination' and Safety Security and Crowd Management' and out of these the first two leaves the implications for further improving and developing the destinations in Jammu and Kashmir. The outcomes of the study as whole have significant managerial implications for destination marketing managers.

KEYWORDS Tourist; Experience; Demographic Factors; Destination Development; Brand Image; Jammu and Kashmir; India. ECONLIT KEYS

L83; M30

Ramjit S.


2

1. INTRODUCTION

The Tourism industry, which benefits the Transportation, Accommodation,

Catering, Entertainment, and Retailing sectors, has been blooming in the past few

decades. Tourism has been a critical factor in the economic development strategy of

many countries (Lea, 1988). In recent years, tourism has been one of the most

important and consistent growth industries worldwide, and is currently held to be one

of the major service industries (Bansal and Eiselt, 2004; Sang et al., 2004). All over

the world, with 846 million international tourist arrivals, corresponding to an increase

of 5.4% over the previous year, 2006 exceeded expectations. Of these 43 million, 22

million were in Europe, 12 million in Asia and the Pacific, and 3 million for each of the

remaining regions – the Americas, Africa and the Middle East. The tourism sector

continued to enjoy above average results and recorded a third year of sustained

growth.

The India travel and tourism industry ranked 5th in the long-term (10-year) growth

and is expected to be the second largest employer in the world by 2019. India has

been ranked the “best country brand for value-for-money” in the Country Brand Index

(CBI) survey conducted by Future Brand, a leading global brand consultancy. India

also claimed the second place in CBI’s “best country brand for history”, as well as

appears among the top 5 in the best country brand for authenticity and art & culture,

and the fourth best new country for business. India made it to the list of "rising stars"

or the countries that are likely to become major tourist destinations in the next five

years, led by the United Arab Emirates, China, and Vietnam.

From the various studies and it has been found that tourism carries advantages for

any country or destination and it should be utilized as an instrument for development

at the particular destination, especially where it is having various opportunities to

develop the various tourism products and services (Van Hill, 2001; Bodlender et al.,

1991). A tourist destination is then simply described as a “geographic location to

which a person is travelling” (Metelka, 1990). Buhalis (2000) broadens this definition

by stating that the geographical location “is understood by its visitors as a unique

entity, with a political and legislative framework for tourism marketing and planning”.

Ramjit S.


3

(Lynch and Tinsley, 2001) state that most studies tend to look at the tourist

destination as a “system containing a number of components such as attractions,

accommodation, transport, and other services and infrastructure”. Each of these

components is then “dependent upon other parts for success in attracting, servicing,

and satisfying the tourist” (Mill and Morrison, 1985). Yet, according to the Laws

(1995), a destination’s primary resource comprises its climate, ecology, traditions and

architecture. Its secondary resources are then those developments brought in

especially for tourists, such as catering, accommodation, transport and activities.

The state of Jammu and Kashmir is not merely the Vale of Kashmir. The state of

Jammu and Kashmir comprises of three distinct regions and is the largest Himalayan

state in India. These regions are Jammu, mainly the Hindu region lies in the foothills

in the south; Srinagar and the Vale of Kashmir is mainly the Muslim region and lies in

the centre; Leh and Ladakh, from the eastern highlands across the great Himalayan

axis and comprises of mainly the Buddhists. Therefore, by knowing the fact that

Jammu and Kashmir has great potential for tourism and there is no as such study

been conducted before on the tourists experience and its relationship with the

demographic profile of the tourists, it becomes imperative to conduct the study on

this particular theme by identify and understand the tourist experience construct, and

how it differs by their age, sex, income level, education and to suggest and

recommend the actions to develop the Jammu and Kashmir as a tourist destination

and enhance its brand image.

2. REVIEW OF LITERATURE AND HYPOTHESES DEVELOPMENT

The various authors who had carried out the discussions and investigation of the

tourists or visitors experiences concept in the literature differs in context, such as

“consumption experience” (Hirschman and Holbrook, 1982; Holbrook, 2000; Carù

and Cova, 2003) “experiential marketing” (Hirschman and Holbrook,1982; Schmitt,

1999), and “co-creation experiences” (Prahalad and Ramaswany, 2004). Their

contribution through their carried research have imparted knowledge to us on tourist

or visitor behavior as well as the use of experience as a marketing tool in the global

competition in order to build up the brand image. What do you mean by experience?

Ramjit S.


4

For this answer the plethora of studies has been carried out by many authors and

researchers, Although the experience has been discussed by many authors, the

concept lacks a common understanding in various situations at the various

destinations and business setting. The disparity amongst academics has resulted in

a fuzzy understanding of the concept (Moscardo, 2009; Murray et al., 2010) and no

clear consensus of the conceptualization of what constitutes an experience has been

reached (Konu and Kampala, 2012). Experience is defined as a business approach

in which “memorable events” are attached to economic offerings to “engage the

consumer in a personal way”. Pine and Gilmore, 1999; Schmitt, 2008) has rightly

said “private events that occur in response to any stimulation". In this regard,

memorable events can be referred to as things created by businesses in anticipation

to stimulate or “engage consumer’s emotions” (Le Bel and Cooke, 2008). This act

depicts experience as a deliberate construct by businesses to increase the value of

their offerings (Pine and Gilmore, 1998). Li (as cited in Morgan et al. 2010) reviews

the various definitions of the tourist experience, which include a contrived and

created act of consumption, a response to problems with ordinary life, a search for

authenticity and a multifaceted leisure activity. The only thing Li found to be common

to all definitions is that the tourist experience is significant for the individual. Oh et al.

(2007, p. 129) contends that ‘the experience economy has been introduced to the

tourism literature at an introductory conceptual level’ and needs much more research

to understand the components and characteristics of tourist experiences (Larsen,

2007).

In the present scenario in tourism and hospitality, identifying the tourist experience

or factors or dimensions laid stress on service providers, Destination marketers and

Organization to design and create experiences for consumers in order to make their

experience memorable and get their intention to revisit again on a particular

destination. It has been argued that consumers’ interactions with destination service

provider’s results in the co-creation of distinctive experiences (Prahalad and

Ramaswamy, 2004). Before it used to happen like the service providers decide on

the offerings in the market, but this has changed to include consumers by identifying

their needs and desires in order to develop the products and services or offering,

according to meet with the satisfaction levels with them and build the unique brand or

Ramjit S.


5

identity among the others destination throughout the world. This suggests that some

experience offering are produced on the demands of the consumer. This approach is

also considered as the way in which destination organization and service providers

bring to light “new sources of competitive advantage” (Prahalad and Ramaswamy,

2004).

Visiting a particular tourist destination is typically motivating less by the elaborated

physical characteristics of the site than by the powerful mental and emotional image,

or “pre-experience” the tourist has for the expected experience of the destination.

Tourists flocked to the bridges of Madison County in rural Iowa to immerse, at least

temporarily, in the romantic fantasy involving the film’s two lovers more than to see

the actual details of the bridge. In essence, what tourists primarily seek and consume

at destinations is engaging experiences accompanied by the goods and/or service

components of the destinations. Hence, entire tourist destinations are beginning to

be positioned as “experiences” (Richards, 2001). Experience has served as a key

construct in travel and tourism research as well as destination positioning. Central to

McConnell’s (1989) tourist experience, for example is, the tourist’s quest for an

authentic experience; tourism destinations are viewed as a means to stage the

authenticity that cannot be found in the tourist’s daily life. Searching for self identity

as a tourist was an early classification criterion in the phenomenology of tourist

experiences (Cohen, 1979).

Several researchers have conducted studies on the relationship between tourism

planning, development, visitor satisfaction, host perception (Kintnuntaviwat, 2008)

psychology of tourist experience (Larsen, 2007). Tourism has been a crucial factor in

the economic development strategy of many countries (Lea, 1988) or destinations. It

has been recorded an important and consistent tourism growth industries worldwide,

and is currently known and emerged to be one of the major service industries

(Bansal and Eiselt, 2004; Zang et al., 2004). Destination management is one of the

major concerns of any country or any region or destination in any part of the world.

The nature of the destination, resources available, hosts, the visitor’s behavior and

experiences and management of tourism resources optimally is studied in this

subject area. Therefore, it is the responsibility of the concerned destination

management of development offices or potential authorities to have defined

Ramjit S.


6

approach for improving the sustainability of tourism destination will help the

management of tourist destinations and make the tourists experiences memorable

and enhance the satisfaction along with improving the brand image of the destination

in the competitive with other destinations. (Schiantez and Kavanagh, 2007; Manhas,

and Ramjit. 2011).

The development of a destination can be characterized by the phases it goes

through (Laws, 1995). It is having two phases pre tourism in a ‘pre-tourism phase’,

the destination is visited and experiences mainly for the purpose of visiting friends

and relatives, or for business. In the second phase the destination develop and the

local residents or community begin to study the tourists behavior and try to study the

requirements needs and desires like traditional dress codes, social relationships,

working patterns and styles of eating change, type of accommodation they required

to craft the tourists memorable experience particular destination. The ‘tourism

management phase’ comes out as a result of these changes. The destination’s

authorities try to anticipate the changing tastes of the tourists. Furthermore, local

government will have to face an increasing and changing resident population as

tourism managers and employees are attracted by new job opportunities. This arrival

of new residents leads to alterations in the original tourist-community relationship and

may cause frictions with the local job-seeking people. This overall change in the

nature of the destination may signify that it will attract different types of visitors at the

different development phases (Laws, 1995).

In 1977, Baud-Bovey and Lawson worked out a plan for tourism development

which they entitled Products Analysis Sequence for Outdoor Leisure Procedure

(Baud-Bovy and Lawson, 1998). Clarke and Godfrey (2000) also simplified the

management of tourism development. They used a three-step scheme to follow: first

has to be found out what tourism resources are present in the destination, than the

type of tourists they want to attract has to be selected and finally has to be decided

on how to reach the desired result (ibid). Similarly, Goeldner et al. (2000) divided the

process of tourism policy formulation in four phases: a definitional, an analysis, an

operational and an implementation phase. Here, the three-step scheme of Clarke

and Godfrey (2000) will be followed and, where needed, complemented by other

findings.

Ramjit S.


7

Sharpley (2002, p. 27) described the development as “the continuous and positive

change in the economic, social, political and cultural dimensions of the human

condition, guided by the principle of freedom of choice and limited by the capacity of

the environment to sustain such change”. This description highlights the fact that

when putting destination development into practice, one should acknowledge that

development is a multidimensional concept. Consequently, destination developers

should not only consider the economic factor of tourism, but also attempt to match it

with all other stakeholders.

Besides the beneficial effect on the economy, tourism has also the potential to be

utilised as a tool to reach development (Schlüter, 1998; Nagle, 1999). In order to

become a successful destination, decisions will have to be taken on how to develop

the destination’s infrastructure and the tourism facilities. In addition, investment and

staff recruitment and training will have to be decided about. Furthermore, promotion

has to be carried out creating an image that best suites the destination’s

characteristics and the type of visitors aspired (Laws, 1995). Baloglu and McCleary

(1999) found that the greater the variety of information sources used to advertise the

destination, the more positive is the contribution to the shaped image. The same

authors also point out that word-of-mouth recommendations are the primary source

in forming a tourism image; consequently, offering a satisfying experience to the

tourist is of great importance.

Due to the globalization and competition around the world, where destinations are

also becoming more and highly choice, the service providers and the destination

marketing offices are so keen to attract the tourists or visitors at their destinations

and participating in branding initiatives, such as the use of taglines and logos in order

to attract visitors and expenditures to their respective destinations (Pike and Ryan,

2004, Blain, Levy and Ritchie, 2005). As places seek to become distinctive,

destination personality is viewed as a viable metaphor for understanding tourists’

perceptions and experiences of destinations and for building a unique destination

identity (Caprara, Barbaranelli and Guido, 2001; Crask and Henry, 1990; Morgan,

Pritchard and Piggott, 2002, Triplett, 1994).

The destination brand image is defined as the consumer’s mental representation

of the offering (Dobni and Zinjkan, 1990) where symbolic meanings are associated

Ramjit S.


8

with the specific features of a product (Padgett and Allen, 1997) or destination. With

a clear and powerful brand image, destinations are able to position their products and

directly appeal to the needs of their customers (Aaker, 1991; Baloglu and Brindberg,

1997; Cai, 2002).

Destination Brands generally generate sets of quality expectations or images of

the destination that individuals usually desire prior to consumption (Metelka, 1981)

and positioned the destinations after the consumption by negatively or positively.

Several studies have also focused on the brand image attributes of destinations

(Embacher and Buttle, 1989; Echtner and Ritchie, 1993; Walmsley and Jenkins,

1993). The concept of brand image is defined based on the definitions of tourist

image and destination image and acknowledges that these terms can be used

interchangeably. The brand image is developed largely from marketing stimuli

provided by formal marketing communication tools and development for the particular

destination. The brand image is also influenced by informal promotional tools being

WOM (Berry and Parasuraman, 1991) and the consumers’ own experiences of the

destination which they had after paying the visit and consuming the different services

which are provided by the different service providers and stakeholders. (Berry and

Seltman, 2007). These numerous factors create mental pictures representing what

tourists observe and feel/experience about the destination.

The tourism policy makers or destination organization and service providers have

to be set up that “seeks to provide high-quality visitor experiences that are profitable

to destination stakeholders while ensuring that the destination is not compromised in

terms of its environmental, social, and cultural integrity” and development should be

carried out in order to make a memorable tourists experience and to get their

behavioural Intention to revisit at the particular destination ,Goeldner et al. (2000). it

is assumed that it will result in a positive image of a destination, loyalty to tourist

destinations and satisfaction felt by tourists, such as variables (Coban, 2012; Manhas

and Ramjit. 2013).

In the present study the following hypotheses are developed.

Hypothesis: There exists a significant difference among the perceptions of tourist

experience demographically. It can be further subdivided into the following.

H1: There is no significant difference in the tourist experience by gender.

Ramjit S.


9

H2: Tourists experience differs significantly by marital status.

H3: Tourists experience differs significantly by age.

H4: Tourists experience differs significantly by income.

3. RESEARCH METHODOLOGY

3.1) DESIGN OF THE STUDY

The aim of the present study is to identify and understand the tourist experience

construct, and how it differs by their age, sex, income level, education and to suggest

and recommend the actions to develop the Jammu and Kashmir as a tourist

destination and enhance its brand image. The current research used a descriptive

and explorative design to determine the levels of tourist experience and to investigate

relationships between some demographic variables, such as gender, age, income.

To test the hypotheses, the study used survey approach to collect data and to draw

the results and conclusions.

3.2) SAMPLE

Data was collected in the month of September 2013 with the help of the BBA,

hotel management students of School of Hospitality and Tourism Management,

University of Jammu. The data collection was carried out at hotels, guesthouses, tour

operators, airlines operators, travel agencies offices Railways stations. The total 350

questionnaires was distributed out of 305 was received in filled and due to

incomplete and missing values marked by the respondents, 14 were discarded

completely before coding and feeding into the SPSS data sheet. The tour operators

and others stakeholders were also contacted and taken the feedback about the

destination development other services they were providing to the visitors and taken

into consideration to compare the data analyzed. Questionnaires, as well as cover

letters to describe how the questionnaire should be answered, were distributed to all

participants.

Ramjit S.


10

3.3) MEASURES The study is done by collecting relevant information from primary and secondary

data sources, which include books, journals and reports published by government of

India, Government of Jammu. A Questionnaire has been designed by consulting the

previous literature with five point likert scale 1 very dissatisfied and 5 very satisfied

and distributed among the domestic and international tourists who visited to Jammu

region winter capital of the Jammu and Kashmir.

3.4) DATA ANALYSIS TOOLS USED

Data analysis is done by factor analysis, analysis of variance, and descriptive

statistics. The findings of the study can be implicated by the service providers and

tourism organization in order to enhance the memorable tourist experience and

encourage repeat visitors by developing the destination and its brand image among

the other destinations in India and all over the world too. ANOVA and independent t-

test was applied in order to test the hypothesis.

4. RESULTS & DISCUSSION

Factor analysis with the principle component method was applied to identify the

tourists or visitors experience constructs and investigate the relationship among the

different attributes which indicates the satisfaction of the tourists.

The first part of the study is demographic of the tourists who visited to the Jammu

and Kashmir. It was included gender, age, and marital status, average length of stay,

education level and average annual income. The tourists were selected on random

basis. The sex ratio was 53:44, 186 (53 %) were males and 44 (105 %) females. The

majority of the tourists were found married and travelling with their family members.

The Majority of people, 48.1% in the 20-35 years age group, followed by 36-50 years,

33.3%; 15.2% and 51years or above percentage was 18.6 %. The people who had

visited to Jammu and Kashmir had varied purposes like pilgrimage, business and to

experience the beauty and climate of Kashmir and ladakh region, temples and

Ramjit S.


11

shrines of the Jammu. These are the positive part of the Jammu and Kashmir as a

stunning destination in this world. But it is having the negative part too, like safety

and security concern of the tourists due to the infiltrations and militancy in the state,

especially in the Kashmir valley. The maximum tourist percentage i.e. 66 % comes to

Jammu and Kashmir by using the railways and 33 % flights and 11 % others modes

of transportation .Main destination within the India, where the tourists are coming

from like Punjab, Himachal Delhi, Bhopal. Patna, Lucknow, Dehradun, Jaipur, Indore

and other parts of the India. The education level of the tourist was high school and

below- 11.6 (34%), senior high school-55 respondents, 18.9 %, Graduate- 123

respondents (42.2 %), Master and Higher education- 89 (30.5%). The annual income

of the tourists were highest percentage, 150 (51.5%) - 2 to 5 Lakh and followed by 88

respondents (30.2%), 18.2 % for 6-10 Lakh and less than 90 thousands - 11% and at

the last 6% for 11 lakh and above. The tourist’s average length of stay was 4-8 days.

Ramjit S.


12

VARIABLES MEAN PERCENTAGE

Gender Male Female Total

186 105

291

63.9 36.1

100

Marital status Married Unmarried

197 94

67.7 32.3

Age 20-35 years 36-50 years 51 and above

140 97 54

48.1 33.3 18.6

Income 2-5 lakh 6-10 lakh 11 lakhs &above

150 88 53

51.5 30.2 18.2

Educational level High school and below-, Senior high school Graduate Master and Higher education-

34 55

123 79

11.6 18.9 42.2

27.14

Table 1: Characteristic of the Respondents

Initially 36 variables were identified based on secondary data and respondents

were asked to list their experiences on these variables and deleted one by one which

were not able to attain (.50 )variance or more than it, these values were sorted by

size and suppressed. Finally 32 variables were taken for the present study, the result

of the Principle Component analysis of all the variables are shown in the table 2. The

Principle component analysis was employed to extract the factor underlying the

relationship between a number of variables. The KMOs (Kaiser-Meyer-Olkin) value

was .936 which indicates that the adequacy and sufficiency of the data. However,

Comrey (1973) suggested that anything above 0.44 could be considered salient with

increased loading becoming more vital in determining the factor loading. The index

Ramjit S.


13

for present solution accounts for 74.957 % of the total variance for choosing the

destination. It is a pretty good extraction as it can be economize on the number of

factors (from 36 It has reduced to 5 Factors).

FACTOR ALPHA FACTOR LOADING

EIGEN VALUES

VARIANCE EXPLAINED

(%)

COMMUNALITIES

1. Transportation and service by the different carriers. 1. Connectivity 2.Airlines services 3. Behavior of the aviation staff. 4.Inflight services 5.Railways service 6.Train connectivity 7. Road connectivity 8. Services by railways staff 9. Local conveyance 10. Assistant by local transporters

.82

.970

.970

.970

.970

.892

.862

.859

.762

.760

.668

10.997

22.342

.822

.796

.932

.920

.823

.801

.856

.844

.843

.834 2. Services at the destination 1. Assistance by tourists’ reception department. 2. Tourist guide services 3. Services by local transporters. 4.Accommodation quality at the destination 5. Availability of the tourist information. 6. Local sightseeing. 7. Ease of communication 8.Medical facilities 9.Night life and entertainment services

.79

.891

.881

.883

.873

.878

.816

.811

.792

.698

7.849

19.934

.775

.655

.802

.774

.656

.573

.687

.674

.812

3.Hotels and restaurants 1.Rooms service facilities and service 2. Restaurant ambience 3.Professionalism of staff 4.Varieties and qualities of hotel accommodation 5.Choice and quality of food 6.Service delivery time

.76 .863 .829 .827

.825 .686 .645

3.685 14.087 .780 .711 .644

.788 .496 .462

4. Infrastructures at the destination 1. Maintenance and management of Destination infrastructure 2. Shopping markets and Bazaars 3. Attractions and sites 4. Infrastructure at the destinations

.71

.849

.802

.561

.526

2.549 11.373

.761

.752

.796

.439 5. Safety and security and crowd management 1.Safety and security of the visitors 2.Assistance by the local police 3.Crowd levels of visitors

.74

.896

.863

.799

1.904

7.221

.867

.832

.889 Total variance Explained 74.957

Extraction Method: Principle Component Analysis. Rotation Method: Varimax with Kaiser Normalization. A. Rotation Converged into 7 iterations.

Table 2: Factor Analysis

Ramjit S.


14

Factor 1: Transportation and Service by the different Carriers - The table

2 shows that factor 1 has high loading on Connectivity (.970), Airlines services (.970)

Behaviour of aviation staff (.970), In flight services (.970), Railway services(.892),

Train connectivity (.862), Road connectivity (.859), Service by railway catering staff

(.762), local conveyance(.760), assistance by local transporter(.668) explained the

22.34 % total variance, (Table 2).

Factor 2 : Services at the Destination- shows high loadings on Assistance

by tourists reception department (.891), Tourists guide services (.883), Services by

local transporters (.883), Accommodation quality at the destination (.878), Availability

of the tourists information (.878), Local sightseeing (.816), Ease of communication

(.811), Medical facilities (.712), Night life and entertainment services (.698) explained

the 19.93 % total variance (Table No 1).Offices, shopping markets and bazaars, local

conveyances and assistance by the local residents and it can be named as

destination services and information.

Factor 3: Hotels and restaurants: table 1 Shows high loadings on the

Rooms service facilities and service (.863), Restaurants ambience (.829),

Professionalism of staff (827), Varieties and qualities of hotel accommodation (.825),

Choice and quality of food (.686), Service delivery time (.645) and explained the

14.087 % total variance (Table 1).

Factor 4: Infrastructure at the destination- Table 1 shows the highest

loading Maintenance and management of Destination infrastructure (.943), Shopping

markets and Bazaars (.943), Attractions and sites (.896), Infrastructure at the

destinations (.883) explained the total 11.37% variance (Table 1).

Factor 5: Safety Security and Crowd Management: Table 1 Shows highest

loading on Safety and security of the visitors (.896), Assistance by the local police

(.863), Crowd levels of visitors (.799) and explained the 7.221 % Total variance

(Table 1).

The various factors on which tourists had given their priorities on the following

areas like 1. Safety and security, and local police or regulating body assistance

2.Improvents of infrastructures and supers structures 3. Availability of the information

about the Destination and Awareness programmes conducted by the tourism

departments 4.Cleanliness of the destination i.e. natural environment.5.effecient any

Ramjit S.


15

means of Transportation 5.skilled and professional competency based staff. The

tourists who are visiting to Jammu and Kashmir they have a little fear in mind due to

the insurgency and militancy in this area. Therefore, they had put on the first priority

to ensure the efficient safety and security measures so, that peace can build up

destination, which would be getting more and more tourist in every year and

development of the state can be seen in the future.

Table 3 shows the mean values of the variables local conveyance (3.378),

Connectivity (3.68), Railways services (3.72), Train Connectivity (3.92), Room

services (3.72) ,Restaurant ambiance (3.58), professionalism of staff (3.61),

Assistant by the Local transporter (3.65), Choice Of quality Of Food (3.76), Service

by Local Transporters (3.19), Accommodation quality at the destination (3.68),

Availability of the tourists information (3.40),Tourists guide services (3.79),

Assistance by the Local police (3.28), airline service (3.61), Local sightseeing (3.72),

ease of communication (3.64), shopping markets and Bazaars (3.55) were to be

observed as satisfactory experiences index score.

Mean values of other variables were Behaviour of aviation staff (2.66), road

connectivity (2.98), Service by railways catering (2.59),Varieties and quality of

accommodation (2.98), Service delivery time (2.44), assistance by the tourists

Reception department (2.98), safety and security (2.43), maintenance and

management of destination infrastructure (3.06), Medical facilities (3.12), Nightlife

entertainment (3.10), crowd levels of Tourist (2.99), infrastructure at the destination

(3.19), attraction and sites (2.79) were observed to have dissatisfied experiences by

the tourists visiting to Jammu and Kashmir.

Ramjit S.


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TOURIST EXPERIENCE VARIABLES MEAN STD. DEVIATION

Local conveyance 3.3780 .87969 Connectivity 3.6804 .84543 Behavior of the aviation staff 2.6667 1.10277 Airline service 3.6117 .83278 In flight services 2.9828 1.15208 Railways services 3.7216 .96213 Train connectivity 3.9210 .88509 Rooms service facilities and service 3.7216 .96213 Restaurants ambience 3.5808 .87662 Professionalism of staff 3.6117 .83278 Road connectivity 2.9828 1.15208 Service by railways catering staff 2.9588 1.21130 The towns and cities.* 2.6667 1.07746 Assistant by local transporters 3.6529 .87483 Varieties and qualities of hotel accommodation 2.9828 1.15208 Choice and quality of food 3.7698 .78691 Service delivery time 2.4467 1.03378 Assistance by tourists reception department 2.9828 1.15208 Safety and security of the visitors 2.4399 1.14123 Services by local transporters 3.1959 .82595 Accommodation quality at the destination. 3.6804 .84543 Availability of the tourists information 3.4021 .86295 Maintenance and management of Destination infrastructure

3.0619 1.03205

Pollution free environment 2.9931 .77010 Attractions and sites 2.7973 .99488 Infrastructure at the destinations 3.1959 .82595 Tourists guide services 3.7904 .90632 Assistance by the local police 3.2852 .86169 Crowd levels of visitors 2.9931 .77010 Local sightseeing 3.7216 .91058 Ease of communication 3.6426 .96281 Medical facilities 3.1237 .99576 Night life and entertainment services 3.1037 .99579 Service by local tour operators 3.1237 .99576 Shopping markets and Bazaars 3.5533 .94308

* Variables, deleted after factor analysis, Scale 1 very dissatisfied to 5 very satisfied.

Table 3: Descriptive Statistics

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17

4.1 ) HYPOTHESIS TESTING

In the present study the following hypotheses are developed.

There exists a significance difference among the perceptions of tourists experience

demographically. It can be further subdivided into the following:

H1:- There is significance difference in tourists experience by gender.

H2:- Tourists experience differs significantly by marital status.

H3: Tourists experience differs significantly by age.

H4: Tourists experience differs significantly by income.

Independent t- test was applied in order to determine the difference in the means

of male and female group.

FACTORS MALE FEMALE T-TEST

Transportation and services by different carriers 3.34 3.38 0.40 Services at the destination 3.41 3.39 0.67 Hotels and restaurants 3.36 3.33 0.55 Infrastructure at the destination 3.08 3.26 0.00** Safety and security and crowd management 2.95 2.82 0.08

Table 4: Independent T- test

FACTORS MALE FEMALE T-TEST Transportation and services by different carriers 3.31 3.37 0.24 Services at the destination 3.40 3.40 0.88 Hotels and restaurants 3.37 3.30 0.18 Infrastructure at the destination 3.12 3.19 0.31 Safety and security and crowd management 2.89 2.92 0.60 ** P <. 05

Table 5: Independent t- Test

Independent samples t tests were conducted to examine whether the tourist

experience (at the factor level) differs significantly by gender. Table above shows the

results of these tests. The results revealed that there were no significant differences

in the tourist experience regarding the four factors except one, i.e. Infrastructure at

the destination, which is consisting of the variables like "maintenance and

management of destination infrastructure, shopping markets and bazaars, attractions

Ramjit S.


18

and sights, infrastructure at the destinations" Hence, gender did not significantly

influence the tourist’s experience, and by this H1 is rejected. It leaves the

Implications for the destination marketers and government development agencies

like Jammu and Kashmir development corporations and Ministry of Tourism in India

to concentrate on this particular factor in order to accommodate the large traffic of the

tourist visiting to the Jammu and Kashmir.

In order to prove the H2: there is significance difference among the tourists by

their marital status. The independent t test was applied and table 4 shows the results

of these tests. The results have given the idea that there was no significance

difference among the tourists experience regarding their marital status, So, H2 is

rejected.

One way ANOVA’s were conducted to Refer table no 5 and 6 Anova was applied

with post hoc analysis in order to check the H3: tourists experience differ significantly

by age. Post hoc tests were carried out to determine which age groups differed

significantly from each regarding these tourists experience factors. All the t values

P>0.05 referred that the tourists experience not differed significantly by any age

group. Hence this particular hypothesis is rejected.

Similarly H4 was rejected, all t (significant) values P>0.05 refer table no 6 that

means no significance difference found on each factor regarding each group of

incomes. So, in short we can conclude that all the hypotheses in the present study

were stand rejected and concluded that the tourists experiences did not differ tourist

demographically.

Ramjit S.


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Table 6: One way Anova, Tukey HSD multiple comparison by age (Post Hoc Analysis)

Dependent Variable (I) age (J) age Mean

Difference (I-J)

Std. Error

Sig. ( t )

95% Confidence

Interval

Lower Bound

Upper Bound

Upper Bound

Lower Bound

Transportation and services by different carriers 20-35 36-50 -0.02 0.05 0.91 -0.14 0.103

51 years and

above -0.13 0.06 0.08 -0.28 0.01

36-50 20-35 0.020 0.05 0.91 -0.10 0.14

51 years and

above -0.11 0.06 0.21 -0.27 0.04

51 years and

above 20-35 0.13 0.06 0.08 -0.01 0.28

36-50 0.11 0.06 0.21 -0.04 0.27 Services at the destination 20-35 36-50 -0.019 0.04 0.90 -0.13 0.09

51 years and

above -0.02 0.05 0.89 -0.16 0.10

36-50 20-35 0.01 0.04 0.90 -0.09 0.13

51 years and

above -0.00 0.06 0.99 -0.14 0.13

51 years and

above 20-35 0.02 0.05 0.89 -0.10 0.16

36-50 0.00 0.06 0.99 -0.13 0.14 Hotels and restaurants 20-35 36-50 0.00 0.05 0.99 -0.13 0.14

51 years and

above 0.016 0.07 0.97 -0.15 0.18

36-50 20-35 -0.00 0.05 0.99 -0.14 0.13

51 years and

above 0.01 0.07 0.98 -0.16 0.19

51 years and

above 20-35 -0.01 0.07 0.97 -0.18 0.15

36-50 -0.01 0.07 0.98 -0.19 0.16 Infrastructure at the destination 20-35 36-50 -0.13 0.07 0.15 -0.30 0.03

51 years and

above 0.000 0.08 0.99 -0.20 0.20

36-50 20-35 0.13 0.07 0.15 -0.03 0.30

51 years and

above 0.13 0.09 0.31 -0.08 0.35

51 years and

above 20-35 -0.00 0.08 0.99 -0.20 0.20

36-50 -0.13 0.09 0.31 -0.35 0.08

Safety and security and crowd management 20-35 36-50 -0.02 0.08 0.96 -0.21 0.16

51 years and

above -0.07 0.09 0.74 -0.30 0.15

36-50 20-35 0.02 0.08 0.96 -0.16 0.21

51 years and

above -0.04 0.10 0.88 -0.29 0.197

51 years and

above 20-35 0.07 0.09 0.74 -0.15 0.30

36-50 0.04 0.10 0.88 -0.19 0.29

Ramjit S.


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Dependent Variable (I) income (J) income Mean

Difference (I-J)

Std. Error Sig.

95% Confidence

Interval

Lower Bound

Upper Bound ( t ) Upper

Bound Lower Bound

Transportation and services by different carriers

2-5 lakh 6-10 lakh -0.038 0.05 0.76 -0.16 0.08

11 lakh and above -0.09 0.06 0.29 -0.24 0.05

6-10 lakh 2-5 lakh 0.03 0.05 0.76 -0.08 0.16

11 lakh and above -0.05 0.06 0.68 -0.22 0.1

11 lakh and above 2-5 lakh 0.09 0.06 0.29 -0.05 0.24

6-10 lakh 0.05 0.06 0.68 -0.1 0.22 Services at the destination 2-5 lakh 6-10 lakh 0.06 0.04 0.34 -0.04 0.17

11 lakh and above 0.02 0.05 0.93 -0.11 0.15

6-10 lakh 2-5 lakh -0.06 0.04 0.34 -0.17 0.045

11 lakh and above -0.04 0.06 0.73 -0.19 0.09

11 lakh and above 2-5 lakh -0.02 0.05 0.93 -0.15 0.11

6-10 lakh 0.04 0.06 0.73 -0.09 0.19 Hotels and restaurants 2-5 lakh 6-10 lakh -0.06 0.06 0.56 -0.2 0.08

11 lakh and above -0.05 0.07 0.7 -0.22 0.11

6-10 lakh 2-5 lakh 0.06 0.06 0.56 -0.08 0.2

11 lakh and above 0 0.07 0.99 -0.18 0.18

11 lakh and above 2-5 lakh 0.05 0.07 0.7 -0.11 0.22

6-10 lakh 0 0.07 0.99 -0.18 0.18 Infrastructure at the destination

2-5 lakh 6-10 lakh 0.05 0.07 0.7 -0.11 0.23

11 lakh and above 0.1 0.08 0.42 -0.09 0.31

6-10 lakh 2-5 lakh -0.05 0.07 0.7 -0.23 0.11

11 lakh and above 0.05 0.09 0.85 -0.17 0.27

11 lakh and

above 2-5 lakh -0.1 0.08 0.42 -0.31 0.09

6-10 lakh -0.05 0.09 0.85 -0.27 0.17 Safety and security and crowd management 2-5 lakh 6-10 lakh 0 0.08 0.99 -0.19 0.18

11 lakh and above 0.08 0.09 0.66 -0.14 0.31

6-10 lakh 2-5 lakh 0 0.08 0.99 -0.18 0.19

11 lakh and above 0.08 0.1 0.68 -0.16 0.33

11 lakh and above 2-5 lakh -0.08 0.09 0.66 -0.31 0.14

6-10 lakh -0.08 0.1 0.68 -0.33 0.16

Table 7: ANOVA, Tukey HSD multiple comparisons by Income Group

Ramjit S.


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4. SUMMARY, CONCLUSION AND RECOMMENDATIONS

The purpose of the present study was to identify the underlying factors of the

tourist experience. The present study was conducted in the three provinces of

Jammu and Kashmir. The three provinces consisted of Jammu, Kashmir and Ladakh.

The investigation itself was carried out at hotels, guesthouses, tour operators,

airlines, operators, travel agencies offices Railways stations.

This study discussed the various experiences of the tourist or visitors on the thirty

six and finally on thirty two variables or attributes like connectivity, local conveyance,

Railway services, restaurant and ambience, assistance from local police, assisted by

the tour guide, assisted by local transporters and local residents and so on, who

visited Jammu and Kashmir. The data have been collected on a random basis from

the visitors from the three regions of the state. The data analyzed by applying the

various research tools like factor analysis, descriptive analysis on SPSS 17.0

version. The study found five factors ''Transportation and Service by the different

Carriers', 'Services at the Destination', 'Hotels and restaurants', 'Infrastructure at the

destination' and Safety Security and Crowd Management''.

It has given an idea that factors ''Transportation and Service by the different

Carriers', 'Services at the Destination', the most important for the improvement,

development and building up of an image of the destination. The findings of the study

suggested that the variables like airline service, Road connectivity, service by railway

catering, service delivery time, assisted by tourist reception department, maintenance

and management of destination infrastructure crowd levels, Infrastructures, Crowd

management safety and security, professionalism of staff at hotels, were having low

mean value ranges. This implied that the tourists were not having a satisfactory

experience on these parameters. There was an urgent need to upgrade the services

in these areas in order to make the experiences of the tourists memorable. It was

found out that if the destination management organizations and other stakeholders

upgraded their services on these parameters, it would really help to improve and

build up the brand image of the Jammu and Kashmir (Manhas, P. S. & Ramjit. 2011).

Ramjit S.


22

Developing and Improvement of infrastructure, tourist safety and crowd

management are a very serious concern now these days. Many countries have

warned their tourist about insecurity in India and have issued travel advisories. The

respondents were also of the opinion that the existing facilities are insufficient to

meet the growing demands. Tourist are really concerned about the safety and

security like militant attacks, crimes, looting, fraudulence etc., Crowd management

therefore there must be efficient safety and security arrangements taken in order to

make Jammu and Kashmir a peaceful and calm destination. There must be

sufficiently designed and constructed infrastructure at destinations like shopping

mart, accommodation quality, restaurants Ambience. As these are the areas which

the tourists felt that it was inadequately managed. The following are the suggestions

and recommendations for developing the Jammu and Kashmir as a destination

Brand not within in India but also outside the India.

• Destination Management Organizations must include the development of all

tourist attractions, major access points, internal transportation networks,

specific resort and other tourism sites, types of urban tourism development

needed, regional tour patterns and traffic patterns.

• Planning in a province should involve improvements of hotels and other types

of accommodation; commercial, cultural, and sometimes national and

international conferences.

• There must be awareness programmes organized for the local community,

accenting the benefits and opportunities of tourism, if they are able to provide

a clean and safe stay to the tourist.

• There is a dire need to improve the proper and sufficient infrastructure at the

destinations.

• The tourism websites must provide the exact and up to date information

about the attractions or destination.

• Safety and security of the tourists must be ensured.

• Any tourism development programme will be successful only when the

involvement of local communities is ensured.

Ramjit S.


23

• All the DMOs (Destination Management Organisations) and NTOs (National

and Tourist Organisations) should work in coordination with each other and

actively participate in promotional activities.

• Training programmes or refresher courses must be organised at regular

intervals to impart the knowledge of tourism among the general public, staff or

employees of hotel and travel agencies and the entrepreneurs /businessman.

• Subsidies and tax escapism may be provided to the entrepreneurs who are

investing in the tourism industry.

Future research should seek to determine whether tourists experience vary

between tourists who travel themselves and those who travel as couples or with large

families. Other potential ante-cedents that can be investigated include occupation

type, personality, and values.

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Article info: Received 18/04/14. Accepted 02/06/14. Refereed anonymously.

S. Hajdinjak

30 Enlightening Tourism. A Pathmaking Journal, Vol 4, No 1 (2014), pp. 30-51 ISSN 2174-548X

IMPACT OF TOURISM ON ECONOMIC GROWTH IN

CROATIA

Sanja Hajdinjak

Central European University (Hungary)

[email protected]

ABSTRACT

Although impact of tourism on the economy has been researched in the literature, the results of studies deliver varying conclusions leaving the field open to further studies. While the literature has so far dealt with cases of large tourism sectors, there has been no research on cases of dominant tourism sector in transitional post-socialist economies. Tourism certainly plays an important role in the Croatian economy, but so far research tested the impact it actually has on economic growth. This paper attempts to fill this gap by testing what is the long-term impact of tourism on growth of GDP. The author tests whether tourism enables increase in level of productive factors and indirectly ensures long-term development (TKIG hypothesis), or it contributes by delivering short-term profits. The results of the paper imply that TKIG hypothesis is confirmed in the case of Croatia. Tourism receipts can enable increase in capital goods imports and there is a mechanism through which increase in tourism specific productive factors leads to economic growth. However, the organization of the tourism sector, as well as political elite’s attitudes towards tourism have an important effect on determining impact tourism has on the economy.

KEY WORDS

VAR model; tourism sector; capital goods; imports; economic growth; Croatia.

ECONLIT KEYS C32; H54; L83; O11.

31 Enlightening Tourism. A Pathmaking Journal, Vol. 4 No 1 (2014), pp. 30-51 ISSN 2174-548X

1. INTRODUCTION

Importance of tourism exports for the growth of the economy has recently started

to gain momentum. While the current body of literature provides quite extensive

research of the relationship between tourism and growth, the debate is still largely

opened. Moreover, the literature has so far not focused on the cases of post-socialist

countries where tourism has a large contribution to GDP and exports structure.

This paper focuses on the case of Croatia where tourism is one of the most

important sectors, but so far, there has been no research aimed at testing the

relationship between tourism and economic growth. Moreover, it is a case of

transitional post-socialist economy in which tourism was initially part of planned,

rather than market economy. The paper contributes to the existing literature by

focusing on this relationship in a tourism dependant, service sector focused economy

which has so far pursued a ‘middle way’ between mass, low-income and diversified,

high-income, elite type of tourism. Croatia is also an interesting case because it is a

relatively small country which can be dependent on coastal tourism and yet it is much

different from small island tourism countries which have little option than to rely on

tourism for their development (Brown, 1998).

Methodologically, the paper tests for Granger causality between tourism exports,

capital goods imports and economic growth in the case of Croatia. Due to nature of

the statistical data the paper explores the hypothesized relationships through a

Vector Autoregression model. Statistical analysis shows that that there is a positive

relationship between tourism receipts and imports of capital goods, which further

translates into economic growth. However, lack of relationship between economic

growth and goods for further production tentatively implies that revenues fail to be

invested properly into other sectors of the economy. The findings seems to confirm

earlier research according to which tourism development without monopoly over

production of tourism good does not provide a clear channel for growth (Nowak et al.,

2007).

Paper is organized as follows. Second section reviews the existing literature on

the relationship between tourism exports and growth and highlights the niche this

paper is planning to research. In the third section I provide background on Croatian


economic development, on the role tourism plays in Croatian economy and on the

type of transition tourism and the overall economy went through in last three

decades. In the fourth section I introduce the method of analysis, data and the results

of the Vector Autoregression model and Granger causality. Fifth section discusses

the results of the statistical analysis in the Croatian context. Sixth section discusses

the results, provides some concluding remarks and suggests possibilities for future

research.

2. LITERATURE REVIEW

After Shan and Wilson initially proposed the so-called tourism led growth

hypothesis (TLGH) (Shan and Wilson, 2001), it has been tested on a wide sample of

countries and regions. Several regions such as the Mediterranean (Dritsakis, 2004;

Katircioglu, 2009) and Asia-Pacific (Chen and Chiou-Wei, 2009; Khalil et al., 2007;

Kim et al., 2006; Lee and Chang, 2008) have been widely researched through single

case study analyses, and most of the results imply either that tourism-led growth or

growth-led tourism development occurs. Proenca and Soukiazis brought some

evidence that tourism in certain South European countries from 1990-2004 was

conducive to income convergence (Proenca and Soukiazis, 2008). Fayissa et al. on

the sample of 17 Latin American countries show that profits from the tourism industry

and investments in physical and human capital have a positive contribution to GDP

and economic growth (Fayissa et al., 2009). The authors draw the same conclusion

on the case of 47 African countries (Fayissa et al., 2007).

However, some papers have also argued that effects of tourism might not be

unambiguously positive for the growth. Studies of Copeland and Chao et al. have

been first to introduce the theoretical possibility of negative impact tourism might

have on growth. Both show through mathematical simulations and models that

tourism can lead to immiserizing growth (Chao et al., 2006; Copeland, 1991). Their

research efforts were supported through work on impact tourism has on welfare,

either through national and sub-regional case studies, or through theoretical models

(Hazari and Nowak, 2003; Hazari et al., 2003; Nowak et al., 2003, 2005).

Holzner’s paper tested the existence of “beach disease” on a sample including 134

countries and argued that countries with higher income from tourism have both


higher levels of investment and secondary school enrolment which are explained by

increased demand for transport infrastructure and foreign languages acquisition

(Holzner, 2010). The author’s analysis shows that countries dependant on tourism

are rather outward oriented with low levels of real exchange rate distortion. Countries

that have high income from tourism also have high revenues from taxes on goods

and services and moreover, opposite to the conclusions of Copeland and Chao,

tourism does not seem to lead to a contraction of the manufacturing sector. Cross-

country growth regressions on income level sub-samples also show that tourism

specialization had a significant impact only in countries with above average income

per capita levels. This finding is comparable to additional panel data studies which

also show that investments in tourism tend to be more profitable in countries with

higher levels of physical capital. However, the author adds a warning that his results

are short-to-medium term based and that in the long run, Copeland’s model of

negative impact tourism has on the growth could be correct.

Arguably different is the study of Capo et al. on the case of the sub-national

Balearics and the Canary Islands, whose economies are heavily orientated towards

tourism (Capo et al., 2007). The authors argue that both show signs of Dutch tourism

disease and that, as a result, their economic growth is compromised in the coming

years. The tourist boom that took place in the early 1960s led to a considerable

increase in wealth, thanks to the new recreational use that was found for the islands’

natural coastal resources. Tourism and non-tradable commodities (services and

construction) received greater investments, while agriculture and especially industry

received only marginal attention. Even though the incomes of the population have

risen considerably as a result of this shift in production, long-term sustainability of

these growth rates has been shown to be illusory. The paper singles out depletion of

natural resources and lowering profits due to low levels of education and training,

innovation and technological progress.

The relationship between tourism and development was also tested on the case of

small tourism countries (STC) where the general conclusion was that tourism

specialization is correlated with faster growth. One of the most important studies in

this group is written by Brau et al. on growth of tourism micro-states with less than 1

million inhabitants. The authors show that tourism is a viable option for less

developed countries in which development through industrialization is not easy due


to the existence of persistent gaps in technology levels. They document that small

tourism countries grow faster specifically due to tourism specialization than oil,

OECD, less developed countries (LCD) and other small countries do. However, they

do suggest that two mechanisms can explain these results –first, terms of trade effect

which enables sustainable fast growth in the long run and second, environment

exploitation where STCs obtain fast growth for a period by accelerating the

exploitation of the environment to which tourists are attracted (Brau et al., 2007). It

should be noted that even the long-run growth scenario can be pessimistic if the

dynamics of sectoral productivities are in favour of high-tech industries, as suggested

by much of the endogenous growth literature.

Directly opposing Brau et al. (Brau et al., 2007) positive findings on STC is the

research undertaken by Figini and Vici. They show that previous studies have been

plagued by methodological misspecifications and have not fully encompassed long

term effects of tourism specialization. Finally, their study argues that there was not

any significant causal relationship between tourism specialisation and economic

growth in micro-size tourism countries (Figini and Vici, 2010).

Literature identifies two main channels through which tourism can help in

delivering economic growth. First channel is through the so called tourism exports led

growth hypothesis which assumes that tourism leads to increase in total factor

productivity and through spill-over effect acts as technological improvement. The

second channel which has been termed tourism exports – capital goods imports –

growth hypothesis (TKIG) has until recently been neglected. In this framework,

tourism revenues ensure foreign currency needed for further finance of capital

imports. Even if tourism does not lead to technological progress, it promotes capital

accumulation through expansion of the volume of imports. Tourism-capital goods

imports-growth hypothesis (TKIG) has been originally tested on the case studies of

Spain (Nowak et al., 2007) and Tunisia (Cortes-Jimenez et al., 2011). Cortes-

Jimenez confirms that tourism, through providing finance for capital goods, has had a

positive impact on the economic growth in Spain. Tunisian case is to an extent even

more interesting since the authors argue that tourism does seem to finance imports

of capital and intermediary good, but that transmission effect from capital imports to

growth applies only in the short run. They argue that in the long-run, although tourism


contributes significantly to Tunisian economy, the role of tourism has not been

instrumental in supporting growth and development.

While the relationship between tourism exports and growth has been extensively

researched, the literature review show unclear findings as to in which situation is the

impact positive or negative in the long run. There has been no research on a case

study which is characterised by the middle way between mass “sun, sea and sand”

and diversified high income type of tourism. In addition, based on the literature review

I argue that Croatia represents an interesting case study for re-testing the

relationships between tourism exports due to its relative dependence on tourism

sector. Next section outlines the role of tourism in Croatian economy and classifies

the type of tourism pursued.

3. THE ROLE OF TOURISM IN THE CROATIAN ECONOMY

Development of Croatian economy has been strongly impacted by recent war for

independence which resulted in secession from Socialist Federative Republic of

Yugoslavia and transition from socialist self-management to capitalism. Much of the

economic activity in Croatia still reflects impacts of socialism, tourism not being an

exception. After Croatia became independent large branches of industrial sector

collapsed due to the lack of profitability and mismanaged privatization. Service sector

became increasingly important, especially real estate, financial and insurance

activities, as well as trade and tourism related services(Croatian Bureau of Statistics,

2012). For Croatia, one of the most important foreign policies was opening up and re-

joining the Europe, especially through membership in the European Union. In this

sense, the role of tourism was important in turning Croatia towards service dominated

economy as opposed to socialist orientation towards large and mostly unprofitable

industries (Poljanec-Borić, 2010).

Tourism had a significant and strategic role even while Croatia was part of

Yugoslavia. During the period of socialism, tourism served as economic confirmation

of non-aligned status of Yugoslavia. As argued by Poljanec-Boric, tourism was a

source of foreign currency and it was considered to be strategically important sector

since identity-wise it turned the country towards the West, as compared to heavy

industrialization which was designed under the impact of the socialist block. On the


country level, considering that 88% of tourism receipts came from Croatia it has also

been interiorised as part of Croatian national economic identity within Yugoslavia

(Poljanec-Borić, 2010).

In the phase of initial international tourism development, Croatia was a part of a

socialist country which resulted in tourism sector being systematically shaped

through strategy of low prices and high numbers of guests with specific focus on

workers right for vacation. Development of the sector in socialism led to creation of

uniform, “bathing tourism” characterized by overall low costs and cheap

accommodation. Additionally, tourism was focused primarily on the coast which

received 95% of overnights, while the inner part remained tourism-wise mostly

underdeveloped. However, such orientation has started to change from since 1970s

in accordance with global orientation towards sustainable development in general

and tourism specifically (Kobasic, 1987).

According to World Tourism and Travel Council (WTTC), tourism remained among

important sources of revenue even during the war. Hence it is not surprising that it is

continued to be seen as one of the most important economic sectors. Additionally,

total tourism revenues in the last decade generated more than 25% of the Croatian

GDP. Values are available in Table 1 in the Appendix.

Infrastructure inherited from Yugoslavia reflects well socialist philosophy of tourism

for masses. Just before the war escalated, Yugoslavia had 450,000 accommodation

units in private housing, or more than twice as much as in hotel accommodation,

where it had 266,000 units. This relationship was even stronger in Croatia since

coastal based tourism was mostly developed through construction of private summer

houses and development of camping sites. Hotels and apartments villages were

significantly less represented, which reflected mass and low cost tourism. Moreover,

while the number of tourist arrivals grew almost up until the war started, the rise in

quantity substituted, rather than supplemented rise in quality (Kobasic, 1987).

There has been significant change in the attitude towards mass type of tourism in

the meanwhile and currently both academics and practitioners advocate sustainable

tourism. To an extent this has also had an impact on Croatian policy makers.

Regardless of their political orientation Croatian governments have strongly

emphasized the need for further development of tourism sector. There is formal

acknowledgment that tourism sector needs to be based on principles of sustainability,


but policy implementation does not necessarily follow the rhetoric. In certain cases

emphasis on sustainability seems to include “on the surface” adaptation of ideas that

are advocated by academia and international organizations, rather than real

dedication to a certain policy goal Hence, tourism strategies developed have so far

reflected declarative acceptance of sustainability principles, while application of

principles is still lagging behind. Moreover, tourism coordination requires substantial

capacities since it requires cooperation of private, public and state institutions.

Therefore, beside in lack of motivation, implementation of certain plans oriented

towards more sustainable and diversified tourism might also be problematic due to

coordination problems.

Therefore, although there has been declarative change of orientation towards

sustainable practices and towards an increase in the quality of the offer, quantity still

seems to be prevailing policy goal. Moreover, tourism still tends to be mostly

connected to coastal regions which have strong natural advantage in pursuing

summer oriented - sun, sea and beach tourism. Inner parts of the country remain

largely underused. The capital city Zagreb is slowly becoming a touristic destination,

but for most of the tourists arriving to Croatia it is still rather a transitory than a goal

point. Moreover, tourism is still characterized by distinct seasonal patterns, where

most of the visitors arrive in the summer months and existing tourism offer is

concentrated on this period (Institute for Tourism, 2013). Pre- and post-season can

be characterized by lack of tourism offer, even though necessary natural and cultural

resources could enable either longer or whole year season (Corak and Marusic,

2009). Due to strongly expressed regional and seasonal character, tourism can

hardly be considered as a key sector of the economy (Poljanec-Boric, 2011). This

assessment is only supported by the type of the infrastructure tourism is based on in

which complementary accommodation capacities, such as private accommodation

and campsites, have a more pronounced role than primary ones.

This section has provided a short background on the role of tourism in Croatian

economy as one of the main sectors contributing to GDP. Moreover, I have also

outlined how tourism developed in Croatia and what are its characteristics; strong

seasonality, regional character, orientation to mass rather than quality tourism and

focus on sun, sea and beach type of tourism product. Finally, I have pointed out that


based on these characteristics tourism should perhaps not be considered as the key

economic sector of the economy.

4. ECONOMETRIC ANALYSIS AND RESULTS

Based on the outlined importance of tourism for Croatian economy, as well as

country specificity in development of mid-way tourism type characterized by quantity

rather than quality I proceed with quantitative analysis of the impacts tourism has on

economic growth. The paper tests for Granger causality between tourism exports,

capital goods imports and economic growth in the case of Croatia. The hypothesis is

that imports of capital goods financed through tourism revenues enable increase of

productivity and result in economic growth. Variables used are real gross domestic

product (GDP), real imports of capital goods (CIG) and tourism expenditures

(TOUR).Time series plot of variables is shown as Figure 1 in the Appendix.

The analysis can be summarized in following steps. I start by checking if the

variables are stationary or integrated of first order. I further test if the variables are

cointegrated by using Johansen trace test. In the cases when variables are not

cointegrated, the literature suggests proceeding with Vector Autoregression Model

and appropriate tests for Granger causality.

There were two sources of data available for the tourism variable. I originally

tested the model with the data for tourists’ expenditures available from WTTC

database. I used the cointegration method and Granger causality analysis based on

the vector error correction model, but since data was available only from 1988 there

were no clear findings on the relationship between economic growth and tourism.

However, tourism expenditures were also available from Currie et al. (Currie et al.,

2004), available from 1980 till 2002 which adjust the existing data from Croatian

Bureau of Statistics to current methodology of measuring tourism expenditures by

Croatian National Bank. These data were complemented with Croatian National

Bank’s data available till 2011. Hence, I have decided to use Currie and CNB’s data

which provide observations also for earlier years and increase the reliability of the

results and power of the model. The problem with data is that it includes pre-

independence data which are methodologically relatively consistent, but represent

relationships between three variables in two different countries. While this is


methodologically problematic, I assume that there is a certain level of institutional

continuity from Yugoslav period to independent Croatia. Therefore, within this

theoretical framework encompassing observations from final Yugoslavian period,

from 1980 to 1991, should not be too problematic. However, further studies with

additional time points should enable checking the validity of this analysis.

Source for GDP growth and imports of capital goods (CIG) variables is Croatian

Bureau of statistics (CBS). All of the variables are expressed in American (USD)

dollars and have been transformed into real terms by using consumer price index

with 2000 as a base year. Plot of the level and growth variables are available as

Figure 1 and Figure 2 in the Appendix.

In the first step I use two unit root tests for checking stationary of the variables: the

augmented Dickey Fuller test (ADF) and Kwiatkowski Phillips Schmidt Shin (KPSS)

test. Enders elaborates that variables are stationary when mean and the variance of

a series are constant through time and the autocovariance of the series is not time

varying (Enders, 1995). Optimal lag length is chosen based on Akaike's information

criterion (AIC), since it provided a more conservative suggestion than Schwarz's

Bayesian information criterion (SBIC) and the Hannan and Quinn information criterion

(HQIC). Output is presented in Table 2 of the Appendix. All three tests include a

constant in the regression and do not reject the null hypothesis that there are no unit

roots, hence GDP, CIG, TOUR are non-stationary in levels and integrated of first

order. Output of both tests is shown in Table 3 in the Appendix.

In the next step I check if the variables are related in the long-term, by using

Johansen test for cointegration. Results show that there is no long-run equilibrium

between LTOU, LIMP and LY series. Since there are no cointegrating vectors among

LY, LIMP and LTOUR I proceed with a Vector Auteregression (VAR) instead of

Vector Error Correction (VECM) model, which allows application of conventional

causality tests with non-cointegrated variables. Output is presented in the Table 4.

Generating the first differences and re-running the tests for unit root shows that

variables CIG and TOUR are stationary in first differences, while tests for stationarity

in first differences ∆GDP deliver mixed results. Both Augmented Dickey Fuller and

KPSS test shows that first differences are stationary only on 90% confidence level. In

order to avoid excessive differentiation of GDP variable I construct a GDP growth

variable which is integrated of first order. Output is represented in the Appendix as


Table 3. I run a basic autoregressive model specified with one lag for ∆GDP growth,

∆CIG and ∆TOUR, followed by a Granger causality test. In this case, the VAR model

can be notated as:

Where α is the vector of the constant term and β, γ and δ are the coefficients of

the lagged variables. In order to test whether ∆CIG Granger causes GDP growth,

joint significance of the coefficients is examined with F-test. Same applies

for the hypothesis that ∆TOUR Granger causes GDP growth; if are jointly

significant it would imply that results favour that there is Granger causality from

∆TOUR to ∆GDP growth. Output of Granger causality Wald test is shown in Table 5

of the Appendix.

We start analysing the results from the perspective of tourism-capital goods

import-economic growth hypothesis. Based on these results it can be argued that

there is Granger causality from tourism receipts to imports of capital goods. Due to

small p-value it can be concluded that the coefficients on the lags of ∆TOUR are not

jointly zero in the equation for ∆CIG, indicating the alternative hypothesis that tourism

receipts Granger cause capital goods imports. This finding confirms that tourism

revenues were instrumental in financing goods for further production over the period

of 1980 to 2011. But the results also show that this relationship is bidirectional since

imports of capital goods also Granger cause tourism receipts. Significance of this

relationship implies that tourism development is boosted by capital goods, such as

roads, hotels and other parts of infrastructure developed for tourism in past three

decades.

Moreover, the output seems to imply on a 90% confidence level that capital goods

imports Granger cause GDP growth. Therefore, since tourism receipts finance capital

goods imports and GDP growth is encouraged by imports of capital goods, the


tourism – capital goods import – growth hypothesis in the case of Croatia is

confirmed. On the other hand, results do not indicate that GDP growth Granger

causes import of capital goods, which would indicate that increase in real gross

domestic product does not lead to investments into capital goods required for further

production. These two relations, between tourism receipts and imports of capital

goods and lack of unidirectional causality between GDP growth and capital goods

imports could imply that tourism enables import of capital goods necessary and

specific for tourism development, but that overall GDP growth boosted by tourism

does not lead to further imports of productive means necessary for development of

other sectors. While one should be careful in the interpretation of the data, lack of

relationship between GDP growth and capital goods imports CIG could perhaps be

interpreted as a type of policy failure. There seems to be no causal relationship from

economic growth to capital goods imports, while the existing Granger causality from

tourism receipts to imports of capital goods, leads to GDP growth. Imported

intermediary goods are used for tourism development and revenues obviously fill the

central budget, but tourism revenues are not reinvested for the development of

productive means in other sectors of the economy. Reasons for suggested policy

failure should be searched for within institutional environment which relatively

successfully develops tourism sector while neglecting other parts of the economy.

From the perspective of tourism led growth hypothesis, it can be argued that

tourism receipts do not directly Granger cause economic growth. Based on the result

in Table 5 coefficients on the lags of ∆TOUR in the equation for GDP growth are not

jointly zero. While tourism is an important part of GDP in Croatia, this finding can be

interpreted as lack of sectorial ability to influence growth potential, perhaps because

other sectors would also need to contribute to growth in a cross-sector connected

economy.

Such an explanation would also be in agreement with theoretical background of

TKIG model; namely growth through tourism can only be achieved through offer

diversification and monopoly over tourism good. Croatia provides a tourism good that

is easily substituted by the tourism product of other Mediterranean countries. In

conditions of dependency on tour operators (Cavlek, 2005) and a small number of

countries tourists come from, the prices of tourism product are forced downwards, but

so is the quality of the product. These factors have a negative impact on the ability of


the tourism to be the key sector in the economy and to contribute to economic growth

in the long-run. Simultaneously, tourism revenues grow due to increase of tourism

sector productive volume, rather than quality. Such a strategy has a rather short term

focus and should be complemented by emphasis on redistribution of other sectors of

the economy.

5. DISCUSSION

While the results of this study are not generalizable to other developing countries,

they imply that high dependency on tourism is perhaps not the optimal way for

development. While Croatian case delivers differing results from already existing

studies on Spain and Tunisia(Cortes-Jimenez et al., 2011; Nowak et al., 2007), it

confirms that increase in accommodation capacity without quality increase can

deliver a short term growth, but that mass type of tourism is not the best

developmental model. Utilization of natural resources, such as beautiful scenery and

climate can enable high participation of tourism in the GDP levels, but due to certain

type of policy failure there is no diversification of the economy. In the absence of

quality increase, countries like Croatia are facing a danger of overusing their natural

beauties, while effectively failing to encourage wider economic development through

tourism revenues.

In this sense, the paper confirms Nowak et al. findings; tourism development

based on un-differentiated sun, sea and sand tourism which does not enable

monopoly over production of tourism good does not seem to be a clear channel for

growth (Nowak et al., 2007). However, it can help maintain a relative social peace

due to extremely high rents that specialization in tourism offers in short run. Relying

on tour operators and a small number of source countries leads to a type of race to

the bottom in producing the same tourism good for lowest prices and quality of the

product. Two hypotheses which seem to provide mechanisms of how tourism sector

receipts translate to growth do not seem to be plausible in mass tourism locations

with no diversification in product offer. There is no technological progress and

economic diversification, while increase of productive means contributes only to

tourism sector growth, which can be instructive in the course of further economic

development of Croatia. While tourism cannot be dismissed as valuable source of


income, development of other sectors which could deliver technological progress

would be a policy worth pursuing. Moreover, relying on tourism sector in creating

revenues even when there is no specific policy followed for its development or

sufficient efforts of coordination between sectors in implementation should be a

strategy to avoid. Partnerships between public and business sector as well as

cooperation of all decision-makers are instrumental for development of tourism

product which can incentivize further economic development. Finally, even if ad-hoc

tourism development, engineered without following a specific policy design does help

in filling the budget, it would not be a long-term potential since mass tourism

inevitably destroys the very ground on which it is made, natural environment.

Environmental degradation as well as cultural blending undoubtedly have a negative

impact on the potential of tourism to be a long-term engine of growth in tourism

dependant countries.

6. CONCLUSION, STUDY LIMITATIONS AND FUTURE RESEARCH

The paper has researched whether tourism exports-capital goods imports-growth

hypothesis can be inferred for the case of Croatia. Moreover, the paper tests if there

is direct causal relationship between tourism receipts and economic growth. In order

to test these two hypotheses I use a Granger Causality test and Vector

Autoregression model due to lack of cointegration among non-stationary variables.

The case of Croatia is especially important since it is one of the new examples of

tourism dependency in a non-island, but still a small open economy, which has in

observed period gone through a transition from socialist self-management to

capitalism system. Moreover, it pursuits a middle way of mass tourism with relatively

undifferentiated tourism offer in classical sun, sea and beach model, dependence on

tour operators and strong regional bias. Additionally, the country is an interesting

case study due to its services orientation, but is still considered to be among

developing countries.

The paper confirms the tourism exports – imports of capital goods – economic

growth hypothesis; tourism receipts and imports of capital goods are in a bidirectional

causal relationship and imports of capital goods spill over to economic growth.

However, growth of productive means seems to be limited to tourism sector since


achieved growth does not translate to further technological progress and economic

diversification. This hypothesis would require further testing with more robust

specification that depicts a complex relationships technological progress and growth

of human capital on the basis of tourism revenues. Nevertheless, the results of

Granger causality test imply that tourism should not be considered a key sector of

Croatian economy since its contributions to growth of Croatian economy have been

overemphasized. Further research should focus on elaborating what is preventing

use of achieved economic growth through increase in productive means to close a

loop and further inspire imports of capital goods in sectors other than tourism.

This paper suggests two explanations. First, type of tourism sector in Croatia does

not enable monopoly over production of tourism good, hence preventing long term

positive impacts of increased capital goods in delivering economic growth. This would

confirm previous research arguing that mass “bathing” type of tourism oriented to

sea, sun and beach, can be seen only as short-term developmental policy in

developing countries. Second explanation would refer to a policy failure in the use of

increased capital goods for which it should also be further researched to understand

how it relates to tourism dependency. Finally, results of this model should be taken

with caution; in order to increase the number of observations data was gathered also

for the Croatian pre-independence period. With the passage of time and perhaps

quarterly acquired data one should be able to test impacts of tourism on the

economic growth solely on the basis of data from the period after Croatia gained

independence.

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Appendix

2000

030

000

4000

050

000

6000

070

000

GD

P

020

0000

040

0000

060

0000

080

0000

01.

00e

+07

CIG

, TO

UR

1980 1990 2000 2010year

TOUR CIGGDP

Figure 1 Time series plot of GDP, CIG, TOUR Source: Croatian Statistical Bureau, annual statistical reports and Croatian National Bank

-.2

-.1

0.1

.2.3

GD

P g

row

th

-1-.

50

.51

CIG

, TO

UR

gro

wth

1980 1990 2000 2010year

TOUR growth CIG growthGDP growth

Figure 2 Time series plot of GDP growth, CIG growth, TOUR growth

Source: Croatian Statistical Bureau, annual statistical reports and Croatian National Bank


Year Total tourism contribution to GDP

Year Total tourism contribution to GDP

1988 21.5 2000 16.2 1989 17.3 2001 18 1990 13.7 2002 26.7 1991 10.8 2003 26.2 1992 9.7 2004 27.9 1993 17.1 2005 28.6 1994 17.8 2006 27.8 1995 11.5 2007 29.1 1996 15.9 2008 25.3 1997 17.6 2009 26.9 1998 17.1 2010 26.3 1999 15.4 2011 27.8

Table 1 Total tourism contribution as percentage of GDP Source: World Travel and Tourism Council

Augmented Dickey Fuller test GDP GDP growth CIG TOUR

Constant -0.966 -2.687* -1.424 0.221 Result I(0) Unclear I(0) I(0)

∆GDP ∆GDP growth

∆CIG ∆TOUR

Constant -2.857* -4.723*** -4.408*** -4.389***

Result unclear I(1) I(1) I(1) Notes: *,**, *** denote significance at 10%, 5% and 1%, respectively

Table 3a. Augmented Dickey Fuller stationarity test

LAGS AIC HQIC SBIC 0 56.84 56.88 56.98 1 56.19 56.36* 56.77* 2 56.17* 56.47 57.18 3 56.54 56.96 57.98 4 56.78 57.34 58.66

Table 2 VAR lag selection criteria


KPSS test GDP GDP growth CIG TOUR

Constant 0.787481*** 0.065 1.36077*** 1.36127*** Result I(0) I(1) I(0) I(0)

∆GDP ∆GDP growth

∆CIG ∆TOUR

Constant 0.376276* 0.0548193 0.096675 0.247104 Result Unclear I(1) I(1) I(1)

Notes: *,**, *** denote significance at 10%, 5% and 1%, respectively Table 3b. KPSS stationarity test


Maximum rank Trace statistic 5% critical variable 0 21.9672 29.68 1 9.2767 15.41 2 0.0397 3.76 3

Table 4. Johansen test for cointegration (2 lags)

Equation Excluded Chi2 DF Prob>chi2

GDP growth ∆CIG 3.05 1 0.08 GDP growth ∆TOUR 1.00 1 0.32 GDP growth ALL 3.08 2 0.22

∆CIG GDP growth 0.52 1 0.47 ∆CIG ∆TOUR 3.73 1 0.05 ∆CIG ALL 5.94 2 0.05 ∆TOUR GDP growth 0.97 1 0.32 ∆TOUR ∆CIG 7.45 1 0.01 ∆TOUR ALL 10.01 2 0.01

Table 5. Granger Causality Wald tests

J. Vázquez-Illa Navarro


UNFOLDING THE SPA INDUSTRY:

SPA BUSINESS MODELS TROUGH THE PRODUCT

LIFE CYCLE

Javier Vázquez-Illa Navarro

Consultant & Entrepreneur for Wellness Hotels (Spain)

[email protected]

ABSTRACT This article pursues inspiring theory building that helps in the understanding of spas. The industry’s life cycle is subject to examination to ascertain its predominant business model. Employed methodologies are literature review, study of a sample of European and American spas, and case study research on a European spa company. The amenity spa is singled out as the prevalent business model: its value proposition offers a more comprehensive experience than the traditional destination spa. The consequences of the present model’s choices: high amortization and fixed costs, besides market confusion, are highlighted as the industry enters its early maturity stage, after two decades of growth. Future prospects are optimistic, though, due to the linkage of spas with well-rooted social trends, provided incumbents fine-tune their competitive strategies and implement more efficient operations. The spa industry’s partial nonconformity to the product life cycle theory remains unresolved and will require further research.

KEYWORDS

Spa; Product Life Cycle; Business Models; Strategy

ECONLIT KEYS

L830; M130; E320

1. INTRODUCTION

Spas have existed for centuries. Whether you consider them places for taking the

waters or places to help one achieve physical and inner balance, spas have been



universally present. Until recently, however, their economic impact has not been

clearly assessed (ISPA, 2002-2008), despite this sector accounting for approximately

$438.6 billion worldwide, about 14% of all domestic and international tourism

expenditures (Stanford Research Institute, 2013).

Otherwise, hardly any attempt has been made to explain the industry’s evolution

within a theoretical structure (Kapczynski and Szromek, 2008; Mak et al., 2009; Bell–

Vazquez-Illa, 1996). The explanation and evolution of the spa industry has been built

around professional magazines and industry report analysis (Intelligent Spa Pte

Limited, 2009; Hartman Group, 2006; La Gazette Officielle du Thermalisme, 1997).

Cases have been described (Montenson, 2008; Montenson and Singer, 2009), but

with an empirically-driven approach, lacking a theoretical framework that establishes

compelling propositions and predicts facts and relationships.

There is, then, an opportunity to relate theory and practice in order to generate a

theoretical construct that serves to anticipate the evolution of the spa industry. This

paper represents an attempt to tackle the research gap between practice and theory

in relation to the spa industry.

Following Kapczynski’s and Szromek’s works on the life cycle of Polish spas

(2008), the present study applies the product life cycle theory (PLC) (Levitt, 1965-

1966) to analyse spa industry evolution since the beginning of the Contemporary Age

in Western societies. The business models theory (Zott et al., 2011) is also used to

help in the depiction of the predominant spa business model at every stage of its life

cycle.

Employed methodologies are literature review, study of a sample of European and

American spas, and in-depth case study research on a European spa company.

Research methodology includes both primary and secondary approaches (web-

based). More than 50% of Spain’s resort spas or spa resorts, plus the ten most

distinguished European and North American destination spas, have been subject to

direct observation. Near 20 of them have been directly managed by this research’s

author.

The use of qualitative methodologies derives from the embryonic state of works in

this sector and, consequently, the lack of a commonly-shared theory to aid in the

explanation of the whole phenomenon that would justify the deductive method.

Abercrombie et al. (1984), Yin (1984), Eisenhardt (1989) highlight the usefulness

of the case-study methodology in the preliminary stages of a research task, because



it allows the development of hypothesis that eventually may be proved with a higher

number of cases.

Although qualitative methodology is mainly reserved for the development of theory

by using the inductive method, this does not belie the principle that recommends the

use of a series of theoretical propositions as a template for the researcher (Glaser

and Strauss, 1967).

Accordingly, the work is presented in the following way. First, the theoretical

propositions are developed. Second, spa definition and taxonomy are tackled. Third,

a discussion on the spa industry’s conformity to the propositions is carried out, and

the predominant spa business model is depicted. Fourth, the analysis is further

enhanced with the presentation of a case study, the company TermaEuropa, which is

an illustrative example of the transition from the thermal paradigm to the well-being

one. Finally, conclusions are drawn.

The analysis of the spa industry literature, the sector’s direct observation, and the

assessment of the case study, has established the industry’s limited conformity to the

product life cycle theory. Neither early entry into the industry, nor size seems to be a

critical factor for success for spa companies. The emergence of a dominant design

does not deter new entrants, either.

The amenity spa becomes the most popular business model: its value proposition

offers a more comprehensive experience than the traditional destination spa. The

consequences of the present model’s choices: high amortization costs, high fixed

costs, and market confusion, are emphasized as the industry enters its early maturity

stage, after two decades of dramatic growth. Future prospects are optimistic, though,

due to the linkage of spas with well-rooted social trends, provided incumbents fine-

tune their competitive strategies and implement more efficient operations.

More case studies will be needed to fully extend, through analytical generalization,

the results obtained with this research. The study of how innovation shapes the

industry will also contribute to enriching the theory about the spa industry.



2. THEORETICAL PROPOSITIONS

2.1 Proposition 1:

A product, or industry, undergoes several stages: introduction, growth, maturity

and decline (Levitt, 1965-1966; Kotler, 1988; Agarwal et al., 2002; Mansfield and

Fourie, 2004).

The product life cycle, though a secret for marketing success in its inception, has

progressively extended to most disciplines as a valuable instrument for industry

analysis. From a sort of self-fulfilling theory, it has developed into a methodology that

helps industries compete more effectively. Several studies (Klepper, 1997) agree on

its usefulness to unveil how different industries evolve. Even those companies with

dissimilar behaviours tend to share some common principles.

2.2 Proposition 2:

At every stage of the life cycle it is possible to ascertain the predominant business

model (Kuhn, 1962; Agarwal and Audretsch, 2001).

A business model is made up of the basic elements that describe how a company

carries out its ordinary operations. Following product life cycle theory, the dominant

business model within the companies belonging to an industry throughout the

different stages covered by the specific product can be established.

2.3 Proposition 3:

Business models explain how companies create value and capture value with

transactions (Magretta, 2002; Casadesus-Masanel and Ricart, 2011).

As a result, any business model must contain information regarding company

fundamentals: value proposition, target market, distribution channel, customer

relationship, value configuration, capability, partnership, revenue model and cost.

2.4 Proposition 4:

The emergence of a dominant design at the mature stage discourages the entry of

new competitors and decreases the survival rate of incumbents (Carrol and Hannan,

1989; Utterback and Suarez, 1993; Klepper, 1997; Agarwal et al., 2002).

The growth stage is characterized by low population density and reduced

competition intensity. This encourages new entrants up to a point when a dominant



design prevails at the maturity stage that forces most unsuccessful incumbents out of

the market and increases entry barriers for new competitors.

2.5 Proposition 5:

Company survival rates depend on their size -the larger the better- and early entry

into the industry (Stigler, 1951; Porter, 1980; Abernathy and Clark, 1985; Klepper,

1997; Sutton, 1997; Klepper and Simons, 1999; Christensen et al., 2000; Caves and

Porter, 1997).

Early entry gives companies the possibility of escalating the learning curve of an

industry from the very beginning. Large size makes it possible for most companies to

beat competition and overcome entry barriers. Size is not an issue at maturity stage,

in technological environments, and in market-niche strategies.

3. THE SPA CONCEPT

3.1 Spa definition and taxonomy

The spa industry enjoys a long tradition, but a relatively short one as a relevant

phenomenon. The industry’s dramatic growth in the past few years (ISPA, 2002-

2008) builds on its link with well-rooted social trends (see table one).

1. Fast-paced lifestyle (International Spa Associat ion, 2009)

2. Pampering yourself is viewed favourably (Bjursta m, 2010)

3. Increasing life expectancy (European Travel Comm ission, 2006)

4. The desire to be forever young (Deloitte-New Yor k University, 2006)

5. Prevention is better than curing (Kyricos, 2010)

6. Alternative medicine boom (European Travel Commi ssion, 2006)

7. Splitting of leisure time (European Travel Commi ssion, 2006)

Table 1: Trends promoting spa demand

Source: own

Many definitions and spa classifications coexist, as the necessary consequence

of its consideration as an emerging industry.

The International Spas Association (ISPA) defines spas as places meant to

provide well-being through professional services that allow the renewal of mind, body



and spirit. According to ISPA, spas may be classified taking into account the

following distinguishing factors: star service, type of water used, and location.

Spa Finder (“the world’s largest marketing company for the wellness industry”)

adds other categories such as connoisseur spas, lifestyle spas, real estate spas,

casino spas, medical spas, cosmetic and wellness spas, dental spas, mobile spas,

and airport spas.

The spa concept and its taxonomy may be observed from a perspective that

permits a clearer vision of the industry as a whole. Table 2 presents a typology of

spas according to three distinguishing elements: water kind, customers’ dominant

motivation, and location. Each category derives from applying every distinguishing

factor to the spa diversity.

DIFFERENTIATING

FACTOR CATEGORIES

Kind of water used Thermal Spas Thalassotherapies Spas

(Thermal water) (Sea-water spas) (Running water)

Motivation Destination Spas Amenity Spas

(Spa as the main driver) (Spa as an ancillary service)

Location Day Spas Resort Spas

(Urban setting) Spa Resorts

Table 2: Taxonomy of spas

- According to the Kind of Water Used.

• Mineral Springs Spas: establishments whose service offering is based on the

exploitation of mineral springs. Its chemical composition and temperature,

depending on each water variety, makes it useful for the treatment of multiple

ailments.

• Thalassotherapies: establishments whose service offering is based on the

exploitation of pure sea water, heated to body temperature, and the marine

climate.

• Spas: a centre where running water is used for the providing of services. Even

in the US, most centres using the word spa do not offer hydrotherapy.

- According to the Customer Motivation.



• Destination spas: institutions where their clients’ main motivation relates to

health.

• Amenity spas: establishments where their clients’ predominant motivation is

not only health; health is not the main driver for stays at the resort or for

acquiring club membership as in the case of an urban spa.

- According to the Location.

• Day Spas: urban centres operating daytime. They may be located at hotels or

work as independent units. Day spas could be destination spas or amenity

spas, depending on the motivation of their primary segment.

• Resort spas or spa resorts/destination spas (depending if their customers’

main motivation is the resort or the spa).

Additional classifications are also possible. There are spas with a preponderant

body focus as opposed to a spiritual one, and there are more health- or leisure-

inclined spas than others within the same category.

The spa configuration map (see figure 1) depicts a more comprehensive

arrangement, according to a broader list of differentiating factors.

Figure 1: Spa configuration map

Source: Deloitte, 2005-2007

The higher competitive intensity (figure 1) is identified within the spas with a

stronger body approach (lower part of the map), while the number of centres whether

Retreathomes

Mindgeared spas Personal

growth geared spas

Hollisticwellnescenters

LeisureThalasso

Medical Spa

Recreationalhealth resort

Urban spa

Spa fitnesscenters

Amenity spa

Beauy farm

SportsSpa

Thermludicplace

Traditionalhealing

thalassoTraditional

health resort

Spa classifiedby treatments/ingredients

Service Focus

Product F

ocus

Health

Corporal

Spiritual

Leisure

Retreathomes

Retreathomes

Mindgeared spas

Mindgeared spas Personal

growth geared spas

Personal growth

geared spasHollisticwellnescenters

Hollisticwellnescenters

LeisureThalassoLeisureThalasso

Medical Spa

Medical Spa

Recreationalhealth resortRecreationalhealth resort

Urban spaUrban spa

Spa fitnesscentersSpa fitnesscenters

Amenity spaAmenity spa

Beauy farmBeauy farm

SportsSpa

SportsSpa

Thermludicplace

Thermludicplace

Traditionalhealing

thalasso

Traditionalhealing

thalassoTraditional

health resortTraditional

health resort

Spa classifiedby treatments/ingredientsSpa classifiedby treatments/ingredients

Service Focus

Product F

ocus

Health

Corporal

Spiritual

Leisure



they be with a health focus or a leisure one is almost equally divided; this highlights

the fact that most spas combine both approaches.

The traditional spa, with a clear-cut focus on health, is different from the

recreational spa or recreational health resort positioned in the beauty and relaxation

segment (within the health focus quadrant) but is much closer to the leisure one. The

former draws its main market from subsidized stays promoted by health authorities in

Europe. The latter is a spa resort; as with the spa an array of complementary

services and amenities have been developed to attract new segments.

A similar distinction is made between the traditional thalasso and the recreational

one. The former holds a greater medical focus, especially rehabilitation, and follows

the model that was coined in France in the 1950s. The latter is a result of the need

for covering new segment expectations since the 1980s. This vision means that

areas for recreation and medical therapy are clearly separated.

The medical spa are those centres with weight loss and anti-ageing programs,

segments not usually present at the older spas, and are more common at American

spas.

Spas classified by treatments/ingredients refer to a variety of minority spas, with a

medium-high rate positioning, whose attractiveness lies in the strengthening of their

theme. Examples are centres offering macrobiotic diets, such as Sha Wellness Clinic

in Alicante, Spain, or wine spas.

Mind-geared spas are not very common. They usually have a medium-low price

positioning. The reason for this positioning has to do with their spa philosophy

fostering back to basics, disregarding unnecessary luxuries and material assets.

Retreat homes represent the most Spartan option and correspond to areas of

religious interest.

Personal-growth geared spas have been subject to more media attention. Their

products are directed to company groups willing to reinforce their personal and

labour links to bring about a group spirit to beat the competition more easily. The

New Age Health Spa in New York State is the paradigmatic example.

Beauty farms are spas more focused on light beauty treatments, with no surgery.

The international model is Main Chance in Arizona, with high-cost positioning (there

are no low-cost centres in the beauty segment).

Spa fitness centres and those related are amenity spas with distinct features:

fitness, recreation and/or sports.



At present, most popular kinds of spas are those in the lower part of the map,

hence with a body focus, and close to the line separating both parts of the rectangle,

but with a tendency to move upwards, gradually incorporating treatments that are

geared towards the mind (ISPA, 2002-2008).

4. DISCUSSION OF THE SPA INDUSTRY’S CONFORMITY TO THEORETICAL

PROPOSITIONS AND THE CURRENT SPA BUSINESS MODEL

4.1 Conformity to the theoretical propositions

Life cycle fundamentals are observed in the historic evolution of the spa industry,

as stated by propositions 1 to 3. There exists, however, no conformity to the theory in

propositions 4 and 5.

The end of the “Ancien Régime” and the beginning of the Late Modern Period, in

the late 18th century, coincide with the resurgence of the spa industry, represented

by the only model at that time: the traditional thermal destination spa. After the Early

Modern Period’s in which the leisure sector was almost non-existent, and where the

culture of taking the waters prompted social contempt (Cátedra, 2009), a new class

was born, the bourgeoisie, who declared the need for spa vacations, leading the

industry to experience a period of growth throughout the 19th century (Soto-Roland,

2006).

The growth stage of destination thermal spas, with their more rigid health

approaches in their service providing, lasted until the third quarter of the 19th century

(see figure two). The questioning of the Hygienic movement, whose principles

fostered the change of environment, like the one typically experienced at a stay in a

spa, as the best remedy for any disease, and the rising competition of beach resorts

coalesced to endorse the paradigm shift (San Pedro, 1994).

The paradigm crisis ended in a stage of decline that extended over several

decades. Its effects were worsened as a result of the world wars. The sector only

held out in countries such as France, Italy and Germany where thermal treatments

were reimbursed by the social security system, and where the state, mainly in the

German case, had played a prominent role in the development of the great spa

towns in the second half of the 19th century (Weisz, 2001). The visibility of the sector

and its strength in those countries also helped to arouse state support and, as a

consequence, to guarantee its own feasibility (Bacon, 1997).



Figure 2: Life cycle of the spa industry and its business models. This figure presents the product life cycle of the

spa industry, and, superposed, the life cycle of the prevalent spa business model (amenity spa or destination spa)

at each stage. Under the curve, the paradigm of the industry at each time is defined.

A new growth curve was not observed until the mid-1960s in the US, which

brought about a more modern way of considering spa vacations. The destination spa

continues to be the predominant business model, although with a totally different

product presentation. The spa is no longer a centre to provide anti-rheumatic

treatments, but a place to eat healthy food and get fit as the best way to attain beauty

(Tabacchi, 2010). The new destination spa did not have anything to do with its

predecessor, nor were its customers the same, nor its treatments, aside from thermal

waters and opting for strict diets and strenuous exercises as the way to beauty.

In Europe, however, the traditional destination spa survived, slowly incorporating

some of the services provided by the American spas (Bywater, 1990; Intelligent Spa

Pte Limited, 2009). The influence of the fitness craze is more evident in the

increasing number of fitness day spas that started to open since then.

The fitness destination spa model was gradually replaced by the amenity spa

business model in the US in the 90s (Orbeta Heytens & Tabacchi, 1995; Van Putten,

2003).

In Europe, the transition from the pseudo-traditional destination spa to the amenity

spa business model took place in a more drastic way, bringing about a new paradigm

(Bell & Vazquez-Illa, 1996). The spa sector experienced a radical change due to the



questioning of the thermal spa paradigm in order to open industry establishments to

younger clients yearning for relaxation treatments. This was very distant in concept

and execution from the traditional rheumatic treatments in the older segments.

The amenity spa, with its more open business concept, without the strict diets and

exhausting fitness sessions in North-American destination spas, and without the

single use of facilities for therapeutic treatments at European spas, was widely

adopted as the model to be developed. The amenity spa, whether in the US or

Europe, adds a more user-friendly presentation, through selecting tourist destinations

as usual locations, covering, besides, its customers’ seek and escape needs (Mak et

al, 2009). Amenity spas focus on the most attractive segment, the users in search of

relaxation, those who seek to feel recovered after their stay and happy during their

vacations, enjoying a unique experience (Keri et al, 2007). Travellers for whom

wellness is a secondary purpose (those who typically attend amenity spas) represent

87% of wellness tourism trips (Stanford Research Institute, 2013).

At the beginning of the 21st century, the spa sector has gone a little further in

proposing holistic treatments for the body, mind and spirit. Inner balance is the next

objective after getting fit and being relaxed (Tabacchi, 2010). The current paradigm is

quite prevalent and has allowed for the blurring of differences between European and

American spas (Bywater, 1990; Intelligence Spa Pte Limited, 2009).

The recent enlargement of the spa offering -adding relaxation treatments for mind

and spirit- has not triggered a shift in the dominant business model, which continues

to be the amenity spa (Hartman Group, 2006; Trucco, 2000). At the same time, a

very successful business model, the day spa, has been launched in the market,

complementing the amenity spa and, in a few instances, the destination spa (ISPA,

2002-2008). Though it deals with the same customers, it intends to cover their needs

in different circumstances of place and time, capitalizing on its urban setting.

At present, the industry seems to be entering into a new maturity stage, after two

decades of dramatic growth, characterized by dwindling growth rates and the

targeting of “dependent” clients -consumers who mirror other people’s behaviour, are

more on a budget and travel less frequently- instead of clients, innovators or early

entrants (DBK, 2009; Keri at al. 2007; Tabacchi, 2010; PKF, 2009; Lerner, 2010;

ISPA, 2002-2008, Plog, 2001).

The sector does not conform, nevertheless, to propositions 4 and 5. When a

prevailing design is adopted, unsuccessful spa competitors do not usually abandon



the market since real estate investments are not easily discarded (DBK, 2009; PKF,

2009).

Furthermore, neither early industry nor size determines a company’s survival rate,

as the disappearance of the powerful English spa sector in the 19th century

emphasizes (Lerner, 2010; Tabacchi, 2010; Instituto de Empresa, 2006; Bacon,

1997). The kind of innovation present at spas, and how innovation shapes industry

evolution may help explain this standoff from the norm; which will require further

research.

As a result, the intensity of competition continues to increase due to the fact that

ineffective incumbents do not leave the market, coupled with a relentless entry of

new competitors enticed by the apparently easy way to gain a position in this market,

as the logical outcome of nonconformity to propositions 4 and 5.

4.2 The spa current business model

Following Stewart & Zhao (2000) the business model is a statement of how a firm

will make money and sustain its profit stream over time. The prototypical spa

business model, however, evidences the same confusion that characterizes the spa

industry as a whole, due to its booming growth in the past few years, as a result of an

increasing demand that arises from well-rooted social trends regarding holistic health

(Instituto de Empresa, 2006). In a context where demand prevails, every solution

works until market intensity, incumbents’ learning curve, or dwindling consumption,

as a consequence of a crisis, lead companies to consider whether their strategy is

the right one, or their product design is suitable (Porter, 1980).

The spa industry has recently enjoyed the above mentioned situation and is now

enduring its consequences. The state of “anything works” has reduced entry barriers,

and many centres have been planned to cater to their suppliers’ interests, bringing

about establishments without the required layout to meet customers’ expectations

regarding relaxation and holistic health (Pastor, 2007).

The model’s choices or fundaments are: heavy investment in real estate, an

approach focused on health and leisure and a body focus. The consequences of

those choices are: high amortization costs, high fixed costs and market confusion

(see figure 3).

Each spa category is characterized by demanding real estate investments. Most

spas feature an area for collective use, i.e., a dynamic pool (a pool with massage



jets, whirlpool, air seats and lazy river) and/or a water course with pools at different

temperatures, sauna and steam room. Conversely, an area for individual treatments,

whether with a therapeutic focus or a relaxation one, is set up (Pastor, 2008).

The choice of making strong investments in real estate generates high

amortization costs and reduces operating margins, fostering a differentiation

strategy1 to overcome the initial disadvantage.

High investment triggers a medium-high price positioning, requiring, therefore, a

differentiation strategy to present the product as unique. Being that most companies

seek to appear as distinctive, competitive intensity and market confusion increase.

The differentiation strategy encourages a loaded treatment menu to cater to the

needs of an array of market segments in order to enhance the spa feasibility, leading

to more market turmoil, since non-segmented communication is broadly used to get

the product closer to the customer.

The variety of target markets involves a large staff that increases overhead and a

specialized staff that increases training costs and fixed costs dramatically. The high

fixed costs reduce operating margins, strengthening the negative impacts from the

amortization costs, which eventually, encompasses the implementation of a

differentiation strategy.

A differentiation strategy is also promoted by the two other choices. The twofold

positioning, towards the holistic health segment and to the peripheral segment,

prompts market confusion, allowing for the adoption of a differentiation strategy that

activates the cycle of consequences already mentioned. Twofold positioning pushes

companies into an environment of high competitive intensity, validating the

implementation of a differentiation strategy, whether or not the company holds the

necessary exclusive features.

The body focus, by being adopted by most spas, intensifies competition and

encourages a differentiation strategy that, in turn, gives rise to the emphasized

negative consequences in the end.



Figure 3: The current spa business model

Overall, the spa business model portrays the current state of the spa industry,

characterized, on the supply side, by inadequate product design offering

compromising feasibility, and confusion or/and discontent on the demand side.

5. TERMAEUROPA CASE STUDY

5.1 Justification

The selection of the subject-company, TermaEuropa, responds to its consideration

as the first hotel spa company that was launched in Spain (2001) to cater to the

emerging segments’ needs (the relaxation segment). The company represents the

transition from the older paradigm, the thermal spa, to the new one, the wellness and

well-being paradigm.

This is a case study with multiple levels of analysis. Its justification is derived from

Yin’s (1984) and Eisendhardt’s (1989) defence of the selection of a single case with

multiple levels of analysis in order to better illustrate the occurrence of a

phenomenon in its preliminary stages.

Eisendhardt (1989) points out that case-study methodology combines ways of

gathering data such as: archives analysis, interviews, surveys and observation. In the

case of TermaEuropa the instrument has been the analysis of archives with

qualitative and quantitative information, observation and empirical evidence.

Big Investment in Fixed Assets

High amortization costs Medium-highprice positioning

Low net operating income

High overhead

Market confusion

Health and Leisure Approach

Body Approach

High training costs

Large staff

Specialized equipment

High intensity competition

Wide range target segments

Wide menu of treatments

Differentiation strategy

Non segmented communication



The rigor of the analysis is demonstrated by the observation of the principles of

internal validity (there is a cause/effect relationship between the company’s strategy

and the achieved results), construct validity (the variables subject to study are set

forth), external validity (analytical generalization to the theoretical propositions is

possible) and reliability (the absence of random error is assured through the

possibility of examining original documents by other researchers) (Campbell and

Stanley, 1963).

5.2 Relationship between PLC and the emergence of TermaEuropa

The European spa industry is the scene of a heated debate in the 1990s, between

those in favour of catering to the emerging segments’ needs regarding relaxation

programmes, and those fostering the traditional way, based on taking care of seniors’

rheumatic ailments (Bywater, 1990; La Gazette Officiel du Thermalisme, 1997; Les

Dossiers de la Lettre Touristique, 1992).

Eventually, most spas changed gears and decided to revamp to adapt to market

changes. However, at the beginning, only a selected group managed to understand

the paradigm crisis in place; TermaEuropa Company is an illustrative example.

Table 3 compares the distinguishing features of the older paradigm, still prevailing

in the 1990s, with the emerging one, whose main points are incorporated into

TermaEuropa’s strategy.

• Thermal water loses its magical appeal and broadens its uses. It is not merely

used for medical purposes, but also for relaxation and, even, for providing fun

through leisure pools.

• More segments are targeted and rheumatic sufferers stop being the only

consumers of spas. Stays are shortened as a way of complying with the

demand’s tendency to split vacation periods throughout the year. As a

consequence, the sector becomes economically stronger and drops its

seasonality.

• Spartan facilities and meagre service are replaced by refurbished rooms and

flexibility to improve the customer’s perception of quality. More ancillary

services are added, transforming most traditional spas into spa resorts and

traditional resorts into resort spas. Business models with open innovation

(Chesbrough, 2003) turn out to be common. As a result, products are quickly

subject to substitution.



• Customer loyalty dwindles since the therapeutic effects of mineral waters are

questioned and new segments prefer variety regarding their choice of where to

spend their holidays. Bundle products become a critical factor of success.

• Packages become paramount, and it is possible to buy and book a hotel stay

and a spa treatment in advance.

Spa industry paradigm components until the 1990s in Europe

Exclusive use of thermal waters for treatments

Single target market: seniors suffering from rheumatic ailments

Long stays at resorts

Seasonality of business: most resorts only operate at summer season

Spartan facilities and unattractive and inefficient service provision

Lack of ancillary services

Customer loyalty is out of the question

Lack of packages

Spa industry paradigm components since the 1990s in Europe

Thermal water is used for clients who search for different benefits

Less seasonality

Increase in the number of target markets

Short stays at resorts

Room comfort goes to the forefront

Business models with open innovation

More ancillary services

Perception of quality improves

Loss of customer loyalty

Products burn out quickly

Table 3: Thermal paradigm versus well-being paradigm

The launching of TermaEuropa coincides with the repositioning of the older health

resorts and the appearance of new hotel spas in order to capitalize on the emerging

social trends promoting relaxation treatments while on vacation from 1995 to 2002

(Metra Seis, 1997, 2000, 2004).



TermaEuropa is created with the mission of becoming the first hotel spa company

in Spain, with open innovation, catering to segments with different motivations, in

centres run under a rigid quality policy.

TermaEuropa’s vision is the offering of centres located in nature, but not too far

from big cities, and with an array of health-related programmes. Health means, in this

case relaxation, feeling well, looking younger.

TermaEuropa has the following positioning strategy:

• As a company:

– Being a leading company at the Spanish market and expanding through the

development of new products, market penetration and targeting of new

segments.

• As a product:

– Offering the highest market quality with the exclusive use of mineral springs

water or sea water in secluded locations.

• For their clients:

– Providing the best service, guaranteeing quality and safety at the same time.

Its expansion strategy comprises the development of new hotel spas as well as

the addition of third-party projects, participating in their designs from the very

beginning through the attainment of lease agreements:

- Arnedillo Spa Resort is the first hotel to be managed. On a highland zone of

La Rioja-Spain, the Arnedillo mineral springs spa has existed since 1847. In

the mid-1990s the resort initiated a repositioning strategy (Bell and Vazquez-

Illa, 1996) that lead it to focus on the emerging relaxation segments. Its entry

into TermaEuropa reinforces its recently-adopted strategy.

- Carlos III Spa Resort, located in Trillo (Guadalajara, Spain), is the first

Spanish mineral springs spa that was laid out during the Age of Enlightment.

After its decadence throughout the 20th century, the resort reopened in

August 2005, as a result of a deal between TermaEuropa and the town hall of

Trillo.

- Coma-Ruga Spa Resort is a mineral springs spa situated in close proximity to

the Mediterranean Sea, hence capitalizing on its two main drivers: the spa

and the beach. Its opening as a new venture took place in July 2006. The

hotel incorporates the typical characteristics of TermaEuropa’s health resorts:



dynamic pools, Roman baths, thermal treatment rooms, and beauty and

massage rooms.

- In the heart of the city of Valencia stands the Alameda mineral springs day

spa, which had its heyday during most of the 20th century until its decline.

The venue revamping in 2006 would add to the city’s tourist positioning, while

it would offer locals the possibility to enjoy the array of services of an urban

mineral springs spa.

5.3 TermaEuropa’s business model

TermaEuropa’s business model incorporates the predominant spa model’s

distinctive features (the amenity spa), although keeping its singularity as a

destination spa with thermal waters. To this respect, it integrates the social trends

that foster hotel stays motivated by the need for relaxation, and the average client’s

expectations regarding health and leisure. Its differentiation strategy is here justified

due to TermaEuropa’s unique value proposition that merges the essence of the older

paradigm, the mineral springs spa, with a pristine product presentation clearly linked

to its medium-high target market.

TermaEuropa’s main contribution stems from the fact that developing an open

business model, targeted to several segments and with a variety of options, does not

belie its profile of destination spa, where its clients come due to health motivations in

a broad sense. Its clients’ main motivation involves health concerns. In fact, it is

observed that former innovators (first customers) motivated by relaxation

considerations in their stays at spa resorts at the beginning, evolve gradually to be

stimulated by health reasons.

The choices and consequences of the model are:

- Thermal waters. The management of mineral springs spas provides the basis

for a differentiation strategy in relation to the ordinary spa, making it possible

for the customer to obtain a greater benefit from the treatments.

- Proximity to the market. The location of resorts close to their primary markets’

places of residence, make it possible for the resort to focus on short stays

(weekend vacations mainly), constitutes a key factor for success.

- Attractive surroundings. The attractiveness of the landscape adds to the

customer’s experience and reinforces their satisfaction.



- Full panoply of effective programs. The customer is reinforced in their decision

power by presenting them with a variety of services that eventually improve

the perception of the service provided.

- Classic hotel renovated and spa with modern design. Spas add contemporary

features in order to eliminate the older image of decadence associated with

old-fashioned spas and municipal properties. However, the linkage with history

is established through the reproduction of pictures of the old facility on the spa

walls. Both elements contribute to the company’s differentiation and to the

strengthening of its market positioning.

- Strict policy of cleaning and disinfection. Cleaning and disinfection procedures

are enforced and communicated to the client. As a result, customer trust and

loyalty are increased.

- Standardized providing of the service and product customization. The

standardization of the service makes it possible to keep labour costs within

limits by blurring the differences between therapists, and avoiding the situation

of a therapist with an excessive work-load while others are practically idle.

Flexibility to adapt to the customer’s needs is considered respecting the strict

time limits of the treatment.

- Target markets: RX, NRR. Every model’s choice is bond to the primary

segment targeted by the company: the RX or relaxation segment that pushes

the growth rate experienced by the industry since the mid-1990s. The other

segment, the NRR (new rich rheumatic) comprises the first clients who

attended spas due to relaxation motivations, but, ten years later, start to be

seduced by health motivations.

- Capacity to get in touch with the target markets. The RX segment is a large

one, whose needs are well known, with whom the company may

communicate, due to the previous experience with Arnedillo spa resort.



6. CONCLUSIONS

The research’s objectives were the creation of theory to help in the understanding

of the spa industry evolution and future prospects.

The undertaken research yields the following results:

1. The spa industry’s conformity to product life cycle and business model

theories has been ascertained except for the crucial role played by early

entrants at maturity stage, and the high-impact effects of the dominant design,

also at maturity stage, which forces unsuccessful incumbents out of the

industry and deters new entrants. The kind of innovation present at the spa

industry and how it shapes its evolution should be further studied for a

comprehensive assessment of the phenomenon.

2. The current and predominant spa business model is the amenity spa whose

value proposition offers a more comprehensive experience than the traditional

destination spa.

3. The current model’s deficiencies derive from the model’s choices: heavy

investment in real estate, a health and leisure approach and a body focus. The

consequences of those choices are: high amortization costs, high fixed costs

and market confusion.

4. The industry’s future prospects look, however, encouraging since the sector is

highly related to long-range social trends.

5. Working on improving the prevalent spa business model, through the

development of low-cost alternatives and focus strategies, will help moderate

the highly competitive environment, as nonconformity to propositions 4 and 5

brings to the fore, and, eventually, will foster a new growth curve that prevents

the industry from entering into a phase of stagnation.



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1 Differentiation strategy, as in Porter’s, 1980, seeks to create something that is perceived industry wide as unique. Costs, however, are the firm’s main concern in a cost leadership strategy. A focus strategy will concentrate on a particular segment, product line or geographic market; the firm will achieve cost leadership, differentiation or both with regard to its market niche.

A. Botti; S. Esposito de Falco; M. Vesci

79


A MODEL OF ANALYSIS FOR THE EVALUATION OF

TOURIST DESTINATION APPEAL: THE AMALFI COAST.

A CASE STUDY

Antonio Botti

University of Salerno (Italy)

[email protected]

Salvatore Esposito de Falco

University of Rome “La Sapienza” (Italy)

[email protected]

Massimiliano Vesci

University of Salerno (Italy)

[email protected]

ABSTRACT

Core resources and attractors have long been at the center of studies on the competitiveness

of tourist destinations. However, such studies treat factors of appeal in a cumulative way

without, or at least rarely, integrating the perspectives of both supply and demand. Our paper

intends to verify whether the scale of importance of the attractors detains an absolute value or

whether such value varies on the basis of type of destination. The study proposes a model of

analysis of destination appeal which takes into account the perception that both hotel

management and potential tourists have of such attractors.

KEY WORDS

Destination Management, Territorial Competitiveness, Hotel Management.

ECONLIT KEYS

L83, M10, M21, O10


80

1. INTRODUCTION

The studies on tourist destination competitiveness can be identified substantially by

means of two approaches: one with a focus on the specifics (core resources and

attractors) of the destination and the other that considers more general elements of

competitiveness that can be applied not only to tourism enterprises but also to any other

kind of enterprise. In the first approach numerous studies address attention to the image

and appeal of a destination (Chon, Weaver, Kim, 1991, Hu, Ritchie, 1993, Gallarza, Saura,

Garcia, 2002) linking the capacity to attract tourists by the presence of specific factors

such as climate, scenery and accommodation.

Crouch and Ritchie’s approach to destination competitiveness (1999) broaden previous

studies that focus on destination image or appeal. Enright and Newton (2004) maintain

that in order to analyze the competitive capacity of a destination besides the traditional

factors of tourist appeal it is necessary to consider also factors that impact on corporate

competitiveness in terms of available tourist product. A destination is competitive if it

succeeds in attracting and satisfying the needs of potential tourists. Consequently, core

resources, attractors and firm’s competitiveness capacity are essential.

Our paper starts from the perspective of analysis based on core resources and

attractors and attempts to examine the same in terms of matching supply and demand as

suggested by Formica (2002), and Formica and Uysal (2006). In this context, the paper

focuses on two objectives:

– Ascertain whether the scale of importance of the attractors has an absolute value. i.e.

whether the attractors proposed for the analysis of the competitiveness of a tourist

destination can be classified within a single scale.

– Assess whether the attractors are attributed the same degree of importance by

potential tourists and enterprises alike.

In the first instance, the paper puts in place a comparative analysis between two tourist

destinations: Hong Kong and the Amalfi Coast, in terms of the importance attributed to

destination attractors by tourist firms. Subsequently, importance is measured in terms of

demand (tourist potential) and of supply (tourist firms). The analysis is elaborated by

means of an attribute based perspective (Enright, Newton, 2004; Crouch, Ritchie, 1999;

Ritchie, Crouch, 2000; Ritchie, Crouch, 2003).


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2. DESTINATION AND TERRITORY COMPETITIVENESS

One of the main issues in defining the concept of competitiveness of a destination or

territory lies in the identifying of factors that decree its success. Currently, the literature on

territorial competitiveness has begun to shift from a strictly micro-economic approach

based on the results of individual firms, to a wider vision envisaging the territory as a

‘source’ of competitiveness.

The territory in other words, becomes a factor of competitiveness when it is able to offer

the enterprises a favorable environment of ‘intense’ social and economic relations, open to

cooperation and participation in the numerous networks external to the firms, fundamental

in determining success1. The concept of territorial competitiveness proposed by Scott and

Storper (2003)2 encloses the concept of relational capital, albeit preserving competitive

advantage in line with Porter’s approach. The need to take into account a wider territorial

dimension as concerns the study of destination competitiveness is evidenced by Keller

(2000) who maintains that tourist service packages cannot be separated from the territory

itself, for which tourist product and destination tend to overlap. Mannell and Iso-Ahola

(1987) acknowledge the existence of many points of view in defining destinations but they

evidence how from the client’s point of view, the idea of destination is the sum of their

experience, expectations, and degree of satisfaction. Consequently, the uniqueness of the

tourist product resulting from a tourist’s experience and the destination can be considered

as Tamma (2000) observes, on a par with an ‘ideal concept’: it is a ‘category of syntheses’.

The same approach is evidenced in Buhalis (2000, p. 97-98) who goes beyond the

traditional conceptions3 remarking that a destination can also be “…a perceptual concept,

which can be interpreted subjectively by consumers, depending on their travel itinerary,

cultural background, purpose of visit, educational level and past experience …

destinations are considered to be a defined geographical region which is understood by its

1 Esposito De Falco (2012) analyzed a model for the study of the competitiveness of tourism firms based on the ability to influence of the territorial system. Cfr. Esposito De Falco S., 2012, p. 39-57.

2 “… theory that we shall attempt to elaborate here puts considerable emphasis on the role of the region as a source of critical developmental assets in the form of increasing returns effects and positive externalities” Scott e Storper (2003, pag. 193).

3 In particular the reference is to those who consider a destination as a well defined geographical area, such as a

Nation, an Island, or a city (Davidson, Maitland, 1997).


82

visitors as a unique entity, with a political and legislative framework for tourism marketing

and planning”.

Murphy, Pritchard and Smith (2000) evidence that a tourist destination product includes

both service infrastructure (hospitality, refreshment, transport, shops, leisure services,

etc.) and environmental elements. The concept of competitiveness therefore, takes on a

much wider and multidimensional perspective considering not only economic growth in the

strictest sense but also the qualitative-quantitative enhancement of all the other

dimensions of the territory including sustainability (Gemmiti, 2007; Kitson, Martin, Tayler,

2004). In this sense Ejarque (2003, p.7) maintains that “…destination is made up of a

series of attractors and services ” for which “… it is no longer sufficient just to have

services in the same way that it is no longer sufficient to have only attractors”.

The association between the competitiveness of the tourism sector and the territorial

dimension is the object of research studies relative to Systems of Tourism Supply (Rispoli,

Tamma, 1995; Della Corte, 2000) and destination management (Ritchie, 1993; Laws,

1995; Bieger, 2000; Buhalis, 2000; Franch, 2002). Such studies compared to sociological

and industrial analysis introduce the element of the strategic-managerial approach, without

neglecting the systems element which pivots on the capacity of the destination to offer

integrated, coordinated and differentiated services proper to a specific territory (Della

Lucia, Franch, Martini, Tamma, 2007, p. 5).

Returning to the issue of competitiveness it is quite evident that the concept cannot be

considered from an absolute dimension but has to be seen from the perspective of

competitors. Thus a further element of complexity has to be considered given that such

comparison necessitates a multidimensional measuring, based on a plurality of elements

(Scott and Lodge, 1985).

The success of a tourist destination depends on a variety of factors which can only in

part be governed. The destination, besides possessing attractors equal or superior to

those of competitors, has to offer excellent quality in terms of services. The attaining of

such services requires cooperation and collaboration among the stakeholders (Edgell,

Haenisch, 1995).

3. FACTORS OF COMPETITIVENESS

The success of tourist destinations being influenced by their competitiveness both in

terms of structural elements of the territory and to its factors of competitiveness (Porter,


83

1998; Enright, Newton, 2004) and to the dynamic aspect of strategic corporate behavior

(Claver-Corte´s, Molina-Azorìn, Pereira-Moliner, 2007).

Enright, Scott e Dodwell (1997) proposed a model of analysis of tourist destination

competitiveness wherein they divide factors of competitiveness into six categories:

“inputs”, “industrial and consumer demand”, “inter-firm competition and cooperation”,

“industrial and regional clustering”, “internal corporate organization and strategy”,

“institutions, social structures and agendas”. For his part, Buhalis (2000) has proposed a

model of the “six A” to define the factors of competitiveness of a destination. For Buhalis

(2000, page 98) most destinations have numerous “attractions available (natural, man-

made, artificial, purpose built, heritage, special events), accessibility (entire transportation

system comprising of routes, terminals and vehicles), amenities (accommodation and

catering facilities, retailing, other tourist services), available packages (pre-arranged

packages by intermediaries and principals), activities (all activities available at the

destinations and what consumers will do during their visit), ancillary services (services

used by tourists such as banks, telecommunications, post, newsagents, hospitals, etc.)”.

On the other hand, De Holan and Phillips (1997, page. 781) using as reference Porter’s

“competitiveness diamond of nations” (1990), maintain that for “…countries like Cuba, the

existence of world-class ‘‘sun and sand’’ provides a basis for competitiveness in tourism,

but it does not guarantee development or success in the tourism industry. Other factor

conditions, such as human resources, infrastructure and capital, and the other three

determinants that make up the diamond stand as potential barriers to development”.

Consequently, the availability of core resources acknowledged on a worldwide scale in the

case of the sun and sand in Cuba is no guarantee for success if other resources are not

available.

Chon and Mayer (1995), for their part, taking inspiration from the general model of

competitiveness elaborated by Porter (1990), develop a model of analysis of tourist

destination competitiveness by defining five dimensions: appeal, management,

organization, information and efficiency. Furthermore, they incorporate in their study also

tourism specific issues (such as the intangibility of the tourism product). Crouch and

Ritchie, (1993) too, using Porter’s diamond paradigm (1990), proposed a model based on

four components: “core resources and attractors”, “supporting factors and resources”,

“destination management”, “qualifying determinants”. The model has been extended and

updated several times (Crouch, Ritchie, 1999) becoming an effective point of reference in


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the evaluation of the competitiveness of a destination and comprising besides the basic

elements indicated, also destination policy, planning and development and the distinct

concept of sustainability (Ritchie, Crouch, 2000; Ritchie, Crouch, 2003).

The model of Crouch and Ritchie (1999) has been adapted to a certain extent by

Enright and Newton (2004) who have identified fifteen items defined “attractors” and thirty

seven items defined “business-related factors” useful for measuring and comparing the

competitiveness of a destination. The attractors include items that derive in substance,

directly from the resources and from the fundamental factors of appeal included in Crouch

e Ritchie’s (1999) model and specific items deriving from studies on urban tourism. The

business related factors on the other hand, mainly concern those deriving from Porter’s

(1990) diamond.

Core resources and attractors are primary elements which generate the capacity to

attract tourists; consequently, they can be considered the structural factors of

competitiveness. They do not however, guarantee the success of a destination but have to

be integrated and enhanced through synergic action on the part of all the stakeholders

involved in the successful realization of an excellent “tourism product”.

In the literature, core resources and attractors are classified as any factor from a tourist

viewpoint constituting the fundamental reason for their choice of a particular destination.

Usually these factors are represented (Crouch & Ritchie, 1999, Ritchie & Crouch, 2000,

Enright, Newton, 2004, Kim, 1998) by geo-morphological (climate, panorama, etc.),

historical cultural elements, the presence of specific ties (between residents and the

Regions of origin of the tourists), by particular events or tourist structures (hospitality

services, catering, transport, appeal factors, etc.).

The models proposed by scholars in the literature consider core resources and

attractors on the same plane4. In our paper, however, the focus is placed on the attractors

in order to verify whether the importance attributed to them creates a stable hierarchical

structure or whether such structure varies on the basis of type of destination and kind of

tourism. At the same time, the paper attempts to develop the analytical perspective

suggested by Formica (2002) and Formica and Uysal (2006) evaluating for the Amalfi

Coast, the perception of importance attributed to the attractors by demand and supply.

In short, the paper intends to respond to the following research questions:

4 Vargas (2011, 93-110), in particular, highlights that the evolution in the tourism research is determined on active research groups, centers and networks concerned with tourism that exist in the country at the moment.


85

1. Does the importance attributed to the attractors by those who predispose supply

(hotels in particular) result in a univocal hierarchical structure or does such structure vary

on the basis of type of destination?

2. Is the perception of the importance attributed to the attractors by supply similar to

that attributed by demand?

4. METHODOLOGY

To respond to the first question (verify whether the importance attributed by enterprises

to the attractors is univocal) a comparison was carried out between the evaluations

reported in the study by Enright and Newton (2004). For this reason an homogeneous

analytical tool was constructed compared to the one used by the two researchers. Enright

and Newton (2004), in effect evaluated the importance attributed to factors of appeal for

destinations in Hong Kong. Enright and Newton’s analysis was carried out by submitting a

questionnaire to enterprises working in the tourism sector (hotels) that were part of the

HKTA (Hong Kong Tourist Association). In the present study, a similar questionnaire was

submitted relative to the tourist structures of the Amalfi Coast5.

It emerges that the Amalfi Coast, on the basis of the classification of tourist destinations

proposed by Buhalis (2000), fits adequately entrance criteria for the so-called seaside

destinations and according to the model, numbers several characteristics that would

collocate the such destination in a phase of maturity or even, decline6.

The questionnaire was sent to all of the 108 hotel facilities classified as three, four and

five star respectively. The period covering data collecting ranged from March to May 2012,

with 52 questionaires returned. The uncompleted ones were discarded. This left a dataset

of 38 units. The hospitality structure of the respondents is illustrateed in Table 1 where

distribution by category is reported with respect to the composition of the area. The sample

represents 35% of the total and the distribution frequency of the responses on the basis of

5 The choice of the Amalfi Coast was selected for analysis as it represents a context that goes beyond the territorial dimension issues of competitiveness. In paragraph 2 differing opinions as to whether competitiveness has to be evaluated at individual destination scale or territorial scale was highlighted. The Amalfi Coast acknowledged as a World Heritage Site by UNESCO, represents an example in which the image of the single destinations is equal to that of the entire territorial area. Consequently, its dimensions (single destination or territorial area as a whole) cannot be clearly distinguished either in terms of its geographic profile or from the perspective of potential client perceptions.

6 In the Amalfi Coast area, hospitality capacity is high while that of the employment rate in the structures is low. Profits

are on the decline and generally, with the exception of the exclusive destinations such as Positano and Ravello), the hospitality structures mainly cater for the mass market not necessarily characterized by the international segment.


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number of stars reflects to a satisfactory extent the hospitality structures as a whole; it

follows that the result can thus be considered representative of the total.

Values in absolute Values in percentage

Stars Random sample Valid questionnaires Random sample

Valid questionnaires

5 16 3 15% 8% 4 38 10 35% 26% 3 54 25 50% 66%

Totale 108 38 100% 100% Table 1: Distribution of frequency of the sample by number of stars

Source: OWN ELABORATION.

In order to respond to the first research question, the enterprises were asked to

evaluate the importance and the presence of twelve attractors. Obviously, in order to carry

out the comparison between the two destinations (clearly belonging to different categories)

reference was made only to attractors that both Hong Kong and the Amalfi Coast have in

common.

To respond to the second research question, the same question was submitted to the

entire cohort of students registered for the ‘Magistrale’ Degree Courses of the Faculty of

Economics, equal to 579 in number. 174 questionnaires were returned and selected: in

particular, the ones where the respondents were familiar with or at least had been on

holiday to the Amalfi Coast were selected. The comparison of this circumstance and how

Italian families are structured with that of subjects who influence the choice of holiday

destinations enabled us to match the opinions of the students with that of potential or

effective clients of the structures7.

As concerns the role of offspring in choosing holiday destinations, this has been widely

underestimated in the past and little studied. Anyway, Ryan (1992) has evidenced that

children play an important role in determining adult satisfaction in that a holiday is

satisfactory for the family when all its members are happy and content. Gram (2005) also

points out that opportune choices combining the needs of all the family are fundamental.

According to Ryan (1992) children influence the behavior and decisions of the rest of the

family both in terms of negotiating power and of the specific requests that they make. This

capacity for influence is clearly greater in families with what Carlson and Grossberg (1988)

7 With reference to the liking expressed by young tourist destination appeal, see also M. Viassone (2012, 96-116).


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define as democratic and permissive parents. At International scale, Gram (2007) in a

research carried out in Denmark and Germany, evidenced how in decisions relative to

family purchases, children exert great influence directly and indirectly, consciously and

unconsciously. In this context, Watne and Winchester (2011) studied the influence

adolescent children have over their parents with regard to holiday decisions. The research

shows that families in general do not see their adolescent children as more knowledgeable

than the parents when it comes to holidays. However, the level of knowledge the family

perceives the children to have is strongly related to how much influence the children then

have over their parents. Generally daughters have a greater influence on their parents’

holiday decision making than sons. Fontana e Maeran (2009) highlight how also in Italy

the influence children have in the choice of holiday is significant.

Thus children generally speaking, have remarkable influence on the choice of tourist

destinations and as they get older and acquire more knowledge so their influence grows.

Consequently, the decision to interview a sample of university students derived from at

least three considerations:

– they are mature enough to influence parental or family decision making;

– they could be potential clients;

– in Italy the cultural model rarely envisages children leaving the family before marriage

(Inps, Ministero del Lavoro e delle Politiche Sociali, Istat, 2013, Kuijsten, 1996)8.

Student responses indicated a perceptive framework relative to the importance of the

attractors selected and their presence in the Amalfi Coast area. The subsequent

comparison between the evaluations of enterprises and the students indicated a

framework of the extent to which supply and eventual demand concur with regard to the

importance attributed to factors of appeal as well as the extent to which the subjects

themselves perceive the presence of such factors in the area.

This ulterior analysis enabled us to investigate the appeal of the the Amalfi Coast area

by examining relations between supply and demand indicators. The importance has been

underlined in the literature of proceeding by means of joint analyses of demand and supply

8 The latest Report on Social Cohesion (Inps, Ministero del Lavoro e delle Politiche Sociali, Istat, 2013) evidences that in Italy over 60% of unmarried men under 35 (6,964,000) still live with at least one parent , an increase of 2% compared to the previous year. Youngsters between the age of 18 and 24 living at home with their parents number 3,864,000; the number is not much lower as concerns the age group 25-34 (3,100,000). Consequently, unmarried young people aged between 20 and 30 in almost 50% of cases live at home with their parents. This is more accentuated in the South of Italy - where the Amalfi Coast is situated – arriving at a percentage of 68.3% of young people living at home.


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also in the tourism sector (Formica, 2002). Also Formica and Uysal (2006) perceived

destination attractiveness to be the relationship between the availability of attractions and

their perceived importance to the tourist.

The questionnaire was submitted on-line. To evaluate importance and presence a Likert

5 point scale was used with 1= none and 5 =all.

A comparison was then made between means scores and in particular, between the

mean score of importance and the acknowledged presence assigned to each group by the

various groups of respondents. To evaluate whether the difference between the results

reported in the two distributions were statistically significant a T-Test – typically formulated

for independent samples –was carried out. This format resolved problems related to the

varying dimensions of the sample. In order to transform the indications from the statistical

analysis into pragmatic indications suggesting an eventual course of action and in order to

evaluate jointly the perception of supply and demand, a grid was devised similar to that of

the importance-performance tool elaborated by Martilla and James (1977).

4.1) THE IMPORTANCE PERFORMANCE ANALYSIS: A TOOL IN EVOLUTION FOR

CONSIDERING BOTH SUPPLY AND DEMAND.

Martilla and James (1977) presented the IPA Grid (Importance-Performance Analysis)

as a simple but useful tool for transforming the results obtained from research into actions.

In particular, the tool proposed by the two Authors evaluates factors of success compared

to the characteristics of importance and perfomance. The tool has often been used in

studies on tourism (Evans & Chon, 1989; Go & Zhang, 1997; Guadagnolo, 1985;

Hollenhorst, Olson, & Fortney, 1992; Enright & Newton, 2004). In our study a matrix by

means of which the factors with regard to perceptions two categories of subjects have, i.e.

the client of the destination (demand) and the hospitality structures themselves (supply), is

proposed.

The result of the analysis is represented by two matrices in which the perceptions of

potential clients are compared to those of hotel managers (see par. 6):

– one focuses on the importance attributed to theattractors;

– the other evidences the presence perceived of such attractors in the Amalfi Coast

area.

The interpretation of the matrices is not so different from that proposed by Martilla and

James (1977) since it enables a quick comparison of the coherence between the


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expectations of hotel management with respect to the ‘destination’in which they are placed

compared to the expectations the tourists have with regard to the destination themselves.

In the same way as for the IPA Grid, also in this paper, the representation of the

variables has been carried out using as the start axes, the mean score observed for all the

indicators.

In the case of attributed “importance” we have:

− a quadrant characterized by the perception of ‘very important’ both on the part of the

tourists and of hotel management. All the attractors in this quadrant are considered

important both by hotel management and by tourists. Destination Management

Organization (DMO) will have to take this element into account when setting up tourism

supply as it cannot disregard its strong impact;

− a quadrant characterized by the perception of ‘not very important’ on the part of hotel

management and of ‘very important’ on the part of tourists. The attractors of this quadrant

are perceived differently from those of demand and supply. Potential tourists consider

them important while hotel management doesn’t. Evidently, hotel management will have to

reassess its competitive strategies seeing as the attributes of supply to which they refer

differ radically from those which interest potential tourists. This quadrant, as is the one

that follows, results as rather problematic for the DMO since contrasting indications

emerge on the part of two components of the system. In other words, two important

stakeholders (hospitality structures and tourists) give different indications on the modality

of composing the system of tourism supply;

− a quadrant characterized by a perception of ‘very important’ by hotel manangement

and’not very important’ by tourists. The previous considerations apply also for this

quadrant with the aggravating factor of the clientele considering the attractors of little

relevance. The DMO, in this case could eventually agree to satisfy tourist needs in the

event tourists could be considered a market segment for the destination. Should the DMO

decide to put such a strategy in place, hotel management would also have to refocus their

strageies;

− a quadrant characterized by a perception of attractors as ‘not very important’ both by

hotel management and by tourists does not create any problem given that both groups

consider the attractors irrelevant and consequently, they can be classified among those of

low priority attractors.


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The matrix constructed on the basis of the perception of the presence of various

attractors generate implications above all in relation to the needs of the DMO and in any

event, should be read jointly with the previous matrix. In that case the result would be:

− a quadrant characterized by perceptions of ‘high presence’ both on the part of the

tourists and on the part of hotel management. In relation to such attractors the evaluations

on the part of the hotels were coherent with those of the market thus not generating any

implications. Also for DMO the attractors in this quadrant did not pose any problem given

that the attractors were considered positively from a performance perspective both by

demand and supply. In any event, a comparative analysis can be carried out using the

matrix of presence. In particular the attributes of this quadrant could be compared with

those of the first quadrant of the matrix discussed above. In the event of non-coherence

between the attributes of the present quadrant and those detected in the first quadrant of

the presence matrix, most likely the overall strategy put in place by DMO with regard to the

destination suffers from an issue of incoherency;

− a quadrant characterized by perceptions of ‘low presence’ by hotel management and

‘high’ by tourists. In this case the implication for management is represented by the need

to rethink perceptions of the ‘destination system’ in which it operates; i.e. management

perceiving as negative the characteristics of a system which tourists viceversa perceive

positively; DMO in this case, could decide not to take into account the expectations of

hotel management and privilege on the contrary the expectations (in this case positive) of

the clientele of the destination;

− a quadrant characterized by a ‘high presence’ on the part of hotel management and

‘low’ on the part of tourists. The same considerations apply in this instance to those

relative to the previous quadrant, with in addition, the perception of negative performance

on the part of potential tourists;

− a quadrant characterized by a percepion of ‘low presence’ both on the part of hotel

management and by the tourists. In this case DMO has a precise indication since both

hotel manangement and tourists do not consider such characteristics present in the

destination. In any event, before putting in place any strategies DMO should verify

whether such attributes are considered important with respect to the generating of tourist

flows. In the event the attribute is not considered relevant by either hotel management or

the tourists, it is evidently a factor that no category of stakeholders analyzed through the

two matrices considers worthy of intervention.


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5. FINDINGS

In Table 2 the attractors are classified on the basis of importance assigned by Hong-

Kong enterprises. Hong Kong is prevalently characterized by urban citizen tourism closely

linked to the many opportunities for shopping. The Amalfi Coast on the contrary, is a

destination considered mainly for its sun and beach tourism.

The table shows that the mean scores for each factor and for each destination were

considered to be relevant (all mean scores are above the ‘‘neutral’’ 3). Therefore, it can be

concluded that the view of respondents confirms the frameworks of tourism

competitiveness proposed. The most important attractors in the case of Hong Kong,

according to the Enright and Newton study (2004), are safety, cuisine, dedicatedtourism

attractions, visual appeal, and well-known landmarks. In the case of the Amalfi Coast,

according to respondents, the most important attractors are well-known landmarks, safety,

visual appeal, climate, museum and galleries.

The T-test evidences a significant statistical difference between groups for museum and

galleries, nightlife, well-known landmarks, climate, dedicatedtourism attractions.

Although the findings are more or less expected for climate, well-known landmarks and

nightlife, they are surprising in other cases seeing as:

– Museum and galleries are at 14th place on the scale of importance of the attractors

for Hong-Kong and at 5th place in the case of the Amalfi Coast. Perhaps less importance

attributed to museums and galleries was expected in the case of sun and beach

destination.

– Dedicated tourism attractions is at 3rd place on the scale of importance of attractors

for Hong Kong and at 11th in the case of the Amalfi Coast; Perhaps not such a low degree

of importance was expected relative to the factor dedicatedtourism attractions in the case

of a sun and beach destination.

An initial result of the analysis therefore, is that the ranking of the factors relative to the

Amalfi Coast does not exactly match that proposed by Enright and Newton (2004) for

Hong Kong. On the basis of this result it can be hypothesised that the scale of the

attractors varies on the basis of the type of destination, type of tourist or in other words, of

segment of demand catered for .

Table 3 reports the comparison between attractors with reference to perception of

importance for the Amalfi Coast, hospitality structures and potential clientele.


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Attractors Importance

Hong Kong – N=183 Importance

Amalfitana coast – N=38 T-test p-value

Rank Mean SD SE Rank mean SD SE

Museum and Galleries 14 3.42 0.77 0.06 5 4.24 1.283 0.208 3.80 0.00

Nightlife 6 4.06 0.67 0.05 12 3.5 0.952 0.154 3.45 0.00

Well-Known Landmarks 5 4.12 0.65 0.05 1 4,.8 0.962 0.156 3,43 0,00

Climate 12 3.71 0.8 0.06 4 4.32 1.042 0.169 3,41 0,00

Dedicated tourism attractions 3 4.33 0.73 0.05 11 3.74 1.032 0.167 3,35 0.00

Cuisine 2 4.36 0.63 0.05 6 4.05 1.064 0.173 1,73 0.09

Visual Appeal 4 4.2 0.67 0.05 3 4.47 1.033 0.168 1,55 0.13

Interesting architecture 11 3.72 0.74 0.05 7 4.03 1.241 0.201 1,49 0.14

Different Culture 7 3.98 0.74 0.05 10 3.76 1.324 0.215 0,99 0.33

Safety 1 4.64 0.55 0.04 2 4.5 1.007 0.163 0,83 0.41

Special Events 8 3.6 0.72 0.05 8 3.82 1.291 0.21 0,65 0.52

Local way of life 10 3.73 0.87 0.06 9 3.82 1.87 0.176 0,48 0.63 Table. 2: Distribution frequency of attractors (Hong Kong and Amalfi Coast) by mean score of importance

If an initial consistent finding of the analysis is the acknowledgement of a degree of

variability in the ranking of the factors of attraction, the second relevant point of the

analysis is represented by the evaluation of importance and presence of the factors taking

into account the comparative interpretation put in place by hotel management and

clientele. This second analysis was applied only with reference to the Amalfi Coast.

Table 3 shows that the mean scores for each factor and for each typology of respondent

were considered to be relevant (all mean scores are above the ‘‘neutral’’ 3). The most

important attractors, according to hotels manager, are well-known landmarks, safety,

visual appeal, climate, museum and galleries while, according to tourist respondents, are

well-known landmarks, climate, safety, nightlife, special events.

The T-test evidences a significative statistical difference between groups for visual

appeal, nightlife, different culture, well-known landmarks, interesting architecture.


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Attractors Importance Hotel

Management– N = 38 Importance stud - N=174 T-test p-value

Rank mean SD SE Rank mean SD SE

Visual Appeal 3 4.47 1.033 0.168 7 3.855 0.986 0.075 3.349 0.002

Nightlife 12 3.5 0.952 0.154 4 4.069 1.049 0.080 3.278 0.002

Different Culture 11 3.76 1.324 0.215 12 3.162 1.219 0.093 2.558 0.014

Well-Known Landmarks 1 4.68 0.962 0.156 1 4.277 0.898 0.068 2.364 0.022

Interesting architecture 7 4.03 1.241 0.201 11 3.520 1.060 0.081 2.352 0.023

Safety 2 4.5 1.007 0.163 3 4.179 0.957 0.073 1.795 0.078


Cuisine 6 4.05 1.064 0.173 9 3.728 1.090 0.083 1.681 0.098

Dedicated tourism attractions 10 3.74 1.032 0.167 6 3.890 0.961 0.073 0.822 0.415

Special Events 8 3.82 1.291 0.21 5 3.977 0.940 0.071 0.709 0.482

Local way of life 8 3.82 1.087 0.176 10 3.688 0.974 0.074 0.691 0.493

Climate 4 4.32 1.042 0.169 2 4.243 0.970 0.074 0.419 0.677 Table. 3: Distribution frequency of attractors (Amalfi Coast) by mean score of importance attributed by Hotel

Management and potential clients

In order to check that the differences in the rankings are not due to a simple sampling

error, table 3 shows the standard error (Kline, 2000) at 95% confidence level for each

result. The ranking of the importance of the factors in the perception of the enterprises is

sufficiently stable, in fact by adding to or subtracting from the mean score standard error,

the classification does not vary except for:

– different culture and well-known landmarks which in one case only (mean score +

s.e.) change places;

– special events and local way of life which in one case only (mean score + s.e.)

change places.

Also the ranking of importance of the factors in the perception of potential clients is

sufficiently stable in that in a single case (mean score + s.e.) visual appeal and museum

and galleries change places.

An initial observation is that nearly 50% of the factors are perceived differently in terms

of impact on competitiveness, occurring also in the case in which the factors receive the

same ranking by the two groups of respondents. For instance, the factor well known

landmarks is placed at first place both by hotel management and tourists. However, the

perception each group of respondents has to this factor differs significantly as evidenced

by the t-test which presents a p-value <.05.

A further finding is that hotel management does not consider important offering or

setting up leisureactivity services organized directly by the hotel; viceversa the potential


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tourists consider fundamental a widespread presence in the territory of such activities.

Hence it can be deduced that the market target of the hotels most likely does not

correspond with that represented by the potential clients interviewed.

While the “importance” of attractors gives information about the theoretical relevance of

each factor in destination competitiveness, it is necessary to address attention to the

dimension of the “presence” of those attractors in the destination if an analysis of how a

specific destination is performing is required. Table 4 explores this issue reporting the

“presence” of each factor as it is perceived by potential tourists in the Amalfi Coast area.

Here the mean scores ranged from a high of 4.45 to a low of 2.69, indicating a wide

variation in Amalfi Coast performance.

Attractors Presence Hotel – N =

38 Presence stud N=174 T-test p-value

Rank mean SD SE Rank mean SD SE


Climate 5 3.46 0.78 0.06 2 4.416185 0.869492 0.066106 6.702 0.000

Well-Known Landmarks 6 3.38 0.89 0.06 1 4.456647 0.852237 0.064794 6.807 0.000

Visual Appeal 4 3.73 0.75 0.06 3 4.381503 0.851882 0.064767 4.730 0.000

Different Culture 7 3.38 0.84 0.07 5 3.953757 0.975365 0.074156 3.701 0.000

Interesting architecture 10 3.29 0.88 0.07 6 3.82659 0.90476 0.068788 3.388 0.001

Safety 2 4.04 0.83 0.06 10 3.514451 1.076206 0.081822 3.338 0.001

Cuisine 1 4.34 0.74 0.06 4 3.99422 0.955383 0.072636 2.466 0.016

Nightlife 3 3.82 0.89 0.07 11 3.479769 1.128848 0.085825 2.027 0.047

Special Events 9 3.35 0.79 0.06 9 3.641618 0.963823 0.073278 1.977 0.052

Local way of life 8 3.36 0.84 0.06 8 3.647399 0.956895 0.072751 1.862 0.068

Dedicated tourism attractions 11 3.18 0.94 0.07 12 3.080925 1.053419 0.08009 0.576 0.567 Table. 4: Distribution frequency of attractors (Amalfi Coast) by mean score of presence pperceived by Hotel

Management and potential clients

Also in this case, as for the characteristic of importance, table 4 shows standard error at

95% confidence level for each result in order to check whether the differences in the

ranking are due merely to a sampling error. The ranking of presence of factors in the

perception of enterprises and potential clients is extremely stable. By adding to or

subtracting from the mean score, standard error, the classification never varies for

potential clients while for the enterprises a single case is evidenced (mean score + s.e.) in

which different culture and well-known landmarks change places.

The most present attractors, according to hotel management are cuisine, safety,

nightlife and visual appeal, climate while according to tourist respondents they are well-

known landmarks, climate, visual appeal, cuisine, and different culture.


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T-test evidences a significative statistical difference between groups for museum and

galleries, climate, well-known landmarks, visual appeal, different culture, interesting

architecture, safety, cuisine and nightlife.

In practice, the perception of the presence of 8 attractors out of 12 results statistically

different in the two groups of respondents. This results is of remarkable significance for

hotel management in that there is a substantial gap between the perception of destination

competitiveness on the part of hotel management and the perception of such

competitveness that the potential clients have.

6. MANAGERIAL IMPLICATIONS

Fig. 1 and Fig. 2 report the matrices for the evaluation of the attractors9. In particular

Fig. 1 reports the matrix of the importance attributed to the attractors by the group

represented by demand (tourists) and the group represented by supply (hotels).

Fundamental elements of competition are considered climate and well known

landmarks and safety. Collocated as problematic issues in the two quadrants are

nightlife, special events, dedicated tourism attractions, museum and galleries and visual

appeal. The remaining attractors are collocated in the fourth quadrant (low importance for

both categories of respondents) and consequently of scarce priority status.

9 Both matrices have been constructed measuring the distance between each attractor by the mean score of all the attractors. It follows that the coordinates of each attractor are given by x = value of the attractor in the distribution α – mean score of all the factors in the same distribution; y = value of the attractor in the distribution β – mean score of all the factors in the same distribution.


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Figure 1 – Matrix of ‘Importance’of Attractors in the Amalfi Coast Area

The matrix reported in Fig 2 indicates two types of information:

– in the first place by describing perceptions on the part of both supply and demand

relative to the tourism system, inferences can be made relative to the univocal nature of

the interpretation of the supply system;

– in the second place, indications are offered to DMO relative to the modality of

strategic management of the tourist territory.

As concerns the former element, the more the divergence existing between the

perception of the presence of the various attributes the more it emerges that demand and

supply are interpreting the tourist product system in a contrasting way. For instance, as

represented in Fig 2 hotel management and potential tourists are in agreement on 7

factors relative to what is present and what is not present while they differ in agreement as

concerns the remaining 5.

In relation to the latter element on the contrary, the fundamental quadrant to observe is

that characterized by a perception of low presence on the part of both categories of

interviewees.

Information can be deduced from the quadrant only by means of a comparative reading

with respect to the information provided by the importance matrix. In particular two types of

comparison are possible:


97

– the first with the quadrant of the importance matrix that identifies the attractors

considered of scarce importance (both by hotel management and by potential tourists). If

there are factors considered not present by both categories of respondents and such

factors are considered also not important by both categories, the indication energing is that

such factors are not considered relevant attractors for the destination. This for example is

the case for the attribute ‘local way of life’, considered not present by both categories of

respondents and at the same time, evalued as of little importance;

– the second with the quadrant of the importance matrix isolating the attractors

detected as problematic (i.e. evaluated with differing indications on the part of demand and

supply). This type of evaluation enables the isolating of factors the development of which

meets the expectations of one category of subjects (demand or supply), while it does not

produce any effects on the satisfaction of the other. DMO will therefore be called upon to

select which factor to develop in coherence with the specific relation it intends to develop

with the relevant stakeholder. For example, the factor ‘special events’ is reported as being

important only by some of the tourists. It follows that if DMO decides to active support

strategies for that factor, it will meet expectations on the part of demand but will not

achieve any appreciation from hotel management or those who offer hospitality services

in the territory.


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Figure 2 – Matrix of ‘Presence’ of Attractors on the Amalfi Coast

7. CONCLUSION

The work analyzes the factors of appeal of a tourist destination evaluating two

elements:

– The potential defining of a univocal hierarchical scale.

– The perception of the attractors in terms of demand and supply with respect to a

specific territorial area. The perception of demand and supply is evaluated from a

comparative perspective by means of matrices. This analytical tool enables the deducing

of specific managerial implications both for the hospitality structures and for the

Destination Management Organization.

The limit of the study consists in the fact that the research has been tested with

reference to just one local area within the confines of one timescale. Furthermore the

sample of respondents in the case of the hospitality structures is slightly above that

considered the established threshold for the application of a t-test in the formulation for

independent samples. It would be opportune to retest the value of the attractors with


99

reference to a different spatial context and timescale. A further limit is represented by not

taking into account a part of the clientele structure (that of international importance).

In relation to the first research question, the analysis starting from a systematic study of

Enright and Newton (2004) evidences that no full correspondence can be achieved in the

ranking of the factors of appeal. The test carried out on the sample of respondents showed

that the hospitality structures of Hong Kong and those of the Amalfi Coast assign a

differing degree of importance to the twelve factors selected. The analysis evidences that

for the 5 attractors (museum and galleries, nightlife, well known landmarks, climate and

dedicated tourism attractions) a statistically significant difference emerges in the score

attributed by the respondents of the various destinations. It can be hypothesized therefore,

that the importance of the attractors can depend on the type of destination and type of

tourism segment catered for. It can also be argued that variability in the importance

assigned to the attractors linked to the period or to the life cycle of the destination can

exist. The research hypotheses formulated open the way for future research to broaden

the scope of the numerous studies already in place (Iso-Ahloa, 1982; Pyo, Mihalik and

Uysal, 1989; Yuan and Mc Donald, 1990; Buhalis, 2000; Konu and Laukkanen, 2010;

Prayag and Ryan, 2011).

This initial conclusion however, is limited by the fact that only two types of destination

have been considered in the study and consequently, two types of potential tourism

segments. It would therefore be necessary to extend the analysis and to compare

destinations catering for diverse segments of the tourism market. From this point of view,

the work can be considered an explorative study with regard to the research questions

proposed and only a more in-depth analysis could confirm a definitive generalization. In

any event, it should be underlined that the hypothesis of linking the scale of importance to

competitive decision making and to the type of segment catered for, albeit in some cases

indirect or with reference to specific segments, has already been proposed by numerous

authors (Gibson and Yiannakis, 2002; Buhalis, 2000; Konu and Laukkanen, 2010).

The need to respond to the second research question has enabled the devising and

developing of a functional model for the joint evaluation of the perceptions of demand and

supply. Two matrices were constructed in which the perceived importance and presence of

attractors on the part of hotel management and potential tourists were measured. The

methodology of analysis convinces us to consider jointly the perception of demand and

supply in order that useful indications can emerge which are useful both for hotel


100

management and for Destination Management Organizations (Formica. Uysal. 2006).

Furthermore, the matrices of the importance of attractors and that of perception of

performance of the attractors lend themselves to an independent interpretation on the one

hand and a comparative one on the other. In relation to the first case:

- the matrix of the importance of the attractors represents the expectations nurtured

relative to the components of the supply system requested by two among the numerous

stakeholders involved (e.g. the attractor ‘different culture’ has no relevance in the Amalfi

Coast in that it is considered of little importance both by hotel management and by the

potential clientele while ‘nightlife’ is a problematic factor in that it is not considered

strategic by hotel management while it is considered important by potential clients);

- at the same time, the matrix of the perception of performance of the attractors

describing the perception of demand and supply, enables inference in terms of a univocal

interpretation of supply (e.g.’nightlife’ is considered important, but lacking by potential

clients, while hotel management consider it on average, less important than the other

attractors, but on the whole, quite present. This consequently highlights an evident gap

between demand and supply in the evaluation of the tourism product).

An evaluation of the factors of appeal from the perspective of demand and supply

determines the possibility for enterprise to define linear competitive strategies, in other

words, based on particular perceptions of appeal factors. If potential tourists evaluate

appeal factors differently from enterprises this means there is a need to redefine

competitive strategies. In other words enterprises have to reconsider the order of

importance of the appeal factors and adapt their own competitive strategies to the new

order10.

In relation to the second element, the two matrices enable the obtaining of indications

on the modality of strategic management of the tourist territory on the part of the DMO

(returning to the discourse on ‘nightlife’ the circumstance that demand and supply evaluate

differently the importance and presence of this factor renders problematic decision making

on the part of the DMO: if the DMO decides to satisfy the expectations of demand and

invest in these attractors, it risks not being supported in this choice by a large quota of the

supply system, i.e. the hospitality structures. On the other hand, if it decides to neglect the

request of potential clients. it risks losing them).

10 Cfr. Valls, J.F.; Parera A.; Andrade M.J., 2012, pp. 142-176.


101

In reference to both modalities of interpreting data, this does not mean we have devised

a complete and definitive tool of analysis. On the contrary, the two matrices still require

numerous studies above all in relation to the quadrant that classifies the attractors both in

terms of importance/non importance (e.g. special events, nightlife, dedicated tourism

attractions, museum and galleries) and in terms of results good performance/weak

performance of the attractor (e.g. nightlife, safety, well known landmarks, climate and

different culture). For all these quadrants, it would be more opportune to proceed with

refining the tool to a greater degree i.e. a comparative interpretation by means of ulterior

elements or critical factors of success that can impact on the competitive strategies for the

destination.

At the same time undoubtedly the comparative interpretation of the two matrices

proposed provides enormous support in terms of strategic indications for Destination

Management Organizations inasmuch as in the case of quadrants that do not show

elements of contradiction (i.e. that go in the direction of concordant variables of the type

both positive or both negative).

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S. Watson

Enlightening Tourism. A Pathmaking Journal, Vol. 4, No 1 (2014), pp. 108-111 ISSN 2174-548X

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BOOK REVIEW:

Sugar Heritage and Tourism in Transition, (2013) edited by Lee

Joliffe, Tourism and Cultural Change, Channel View;

ISBN: 978-1-84541-387-3 (hbk), ISBN-13: 978-1-84541-386-6

(pbk), 225 pps.

Steve Watson

York St. John University (UK)

[email protected]

This is another fascinating book in what has become a landmark series from

Channel View, under the series editorship of Alison Phipps and Mike Robinson. The

fascination here is in the breadth and depth of material that has been so lucidly

derived from what at first seems a rather unpromising title. Lee Joliffe, however, is an

experienced and skilful editor, and has made and facilitated all manner of revealing

connections between sugar and tourism in ways that also shed light on both heritage

and tourism generally and their contemporary cultural meanings.

The book itself is part of Joliffe’s own ‘series within a series’ as it builds on her

previous studies that have used every day products as a way of prompting thoughts

and reflections about the nature of heritage and tourism as cultural practices. This

way of opening up such connections and relationalities inevitably invites

interdisciplinary perspectives and these are very evident in her own writing and in the

range and variety of contributions to this book and indeed its predecessors.

S. Watson


109

So, an unusual theme, ‘sweet yet dark’ as Joliffe puts it in her

acknowledgements, but as she makes clear in her insightful and clearly written

introductory chapter, there are some fascinating connections to be made between

sugar, sugar history, heritage and tourism. At first sight such connections might seem

overly-contrived or even forced, but as Joliffe suggests, they flow very naturally from

the role that sugar has played in the evolution of sugar consumption, the

relationships between Europe and the sugar producing areas and contemporary

globalisation. These connections are then used to draw out what she refers to as the

research framework of the book: Contexts, points of view and issues, within each of

which she organises her key themes. The Contexts are: historic; economic; cultural

change and cultural heritage management; the points of view: are postcolonialism;

commodification and sustainability, and the issues are defined as politics,

globalisation and tourism development. At this point it becomes evident that the

editor has created a very substantial agenda with all the editorial challenges that are

consequently posed. For the reader it becomes equally evident that there is more

here than might have been anticipated, and more there certainly is.

The contributors are drawn from a range of disciplines in several different

countries, and apart from the editor’s own sole- authored chapters, another ten

cover a range of topics that are cognate with the book’s research framework,

although the connections are not always explicitly made. Following the editor’s

introduction, the subsequent section explores the perspectives of sugar-producing

countries, looking at the potential that sugar heriatge has in creating tourism. Linda

Joyce Forristal offers an intriguing account of the Indian subcontinent as a locus for

sugar tourism, placing emphasis on the variety of tourist types that could be created,

from heritage and cultural tourism to agri-tourism as well as rural and culinary

tourism, with the right kind of planning and marketing strategies. Peter Griggs

employs an Australian perspective to explore the relationship between the history of

tourism and sugar production and discusses the challenges of presenting this in an

informative and engaging way for an international tourism audience, whilst Angela

Cabral Flecha and Linda Joyce Forristal use a similar approach in their case study of

S. Watson


110

the potential for sugar heritage tourism in Brazil. These studies are presented with

great clarity and on the basis of well researched source material.

The next section begins with three chapters on Caribbean contexts. Tara A.

Innis and Lee Joliffe examine sugar heritage at world heritage sites, and Rachel

Dodds and Lee Joliffe offer a compelling postcolonial perspective on the past

development and potential in St Kitts. Mechelle N. Best and Winston F. Phulgence

produce one of the most incisive chapters of the book, looking at the representation,

or more precisely the non-representation, of slavery through the production of

heritage tourism in Barbados and St Lucia. The ‘silence of the slaves’, they conclude,

‘is deafening’. Abby Liu presents a lucid account of a familiar topic in tourism, the

transition from other forms of capital accumulation into tourism and the managerial

challenges of the new service sector. A substitute economy of leisure and tourism

thus occupies the spaces once dedicated to industrial production and in doing so

evokes new sensibilities around ecological concerns, cultural exchange and

nostalgia.

The final substantive section of the book deals with the consumption aspects

of sugar heritage with a wide-ranging account of the relationship between sugar and

food tourism in Devon (England), one of the country’s long established tourism

destination areas. The way that food products have developed alongside tourism and

evoke its traditions through locally-specific food souvenirs and their distinctive

heritage- styled packaging was a particularly interesting perspective. The two

subsequent chapters turn to Australia and New Zealand, with Leanne White’s

comprehensive exploration of the complex of heritage attractions that have

developed around sugar production in North Queensland and Jane Legget’s

fascinating account of the way that sugar-related industrial heritage has gained

recognition in New Zealand, and the challenges it has faced in doing so. Lee Joliffe

rounds off this section with an account of the way that sugar is represented in the

museum sector and the ways in which developments in museology have affected

these representations.

It is invidious to single out particular chapters in such a collection of high

quality contributions, but Best and Phulgence provide, for me, the stand out chapter

S. Watson


111

in their analysis of the politics and vestigial colonialism that still dominate the sugar

industry and its heritage. Joliffe provides the concluding chapter and highlights

succinctly and cogently the key movements and themes that have emerged from the

book – a challenge in itself considering the richness and diversity of the contributions.

My one minor criticism is that having established a very clear framework for

the book around the themes of historical, points of view and issues, these are not

then followed through in organizing the book and forming its subsequent sections.

Instead, they are used to ‘set the scene’. It does seem a shame, however, that in

establishing such a coherent research framework and making such a compelling

case for all the connections and insights it reveals, that the remainder of the book

seems to follow a different plan. But this is a minor point, one of the vagaries of

edited volumes, and certainly does not detract from the depth and scope of this

excellent collection.

This book is thoroughly recommended for anyone with a scholarly or

professional interest in heritage and tourism and offers a depth of theoretical and

practitioner concerns that is difficult and not always successfully achieved in this

field. One can only look forward to Lee Joliffe’s next voyage of exploration.

P.S.: If you would like to review a new or recent book, or you have a suggestion

for a book to be reviewed in the journal, please contact Steve Watson, Book

Reviews Editor, at [email protected]

Vol. 4, No 1 (2014): January-June

Documents

Transcript of Vol. 4, No 1 (2014): January-June