4. SCENARIO DRIVING FORCES
4.4. T ECHNOLOGICAL
As the world is changing and globalization is going on, tourism in only one part of human mobility. People are moving and they have second homes. Technology is developing and trip that used to take three days, now can be done in one day or less. Beside holiday tourism there is range of different tourism types like visiting friends and relations, business travel, travel to second homes, health related travel, education-related travel, religious travel, shopping travel and volunteer tourism. With these types of tourism it is hard to define for how long people stay in foreign country. Travel industry has faces big changes like digitalization recently. Digital services are easily accessible and taking place instead of personal service of the travel agencies.
(Amadeus, 2007) Innovation in tourism services and enterprises has been analyzed as low liability to development into products. It has been studied that tourism businesses are less innovative than manufacturing business. (Camison & Monfort-Mir, 2010)
Internet has made information available for everyone who uses a computer or smartphone. For that reason, brand loyalty is not a case anymore, price and quality are the most important drivers during the decision making process. (Cala, Fernandez & Domecq, 2011) Technology is the new evolution in travel costs. People are ordering and buying flights and booking hotels online for cheaper price than ever before. Technology has developed quickly and people are more and more connected with everyone because of technology. Also information is now easily available and customers become more informed. Technology and internet are the reasons why travel agencies became less popular. People has become informed of the different ways on purchasing trips.
New services can be also developed easier and quicker than new products. (Furseth &
Cuthbetson, 2016)
E-commerce in travel industry is one of the most successful ones. Customers can make a lot of decisions based on the information available online. More and more reservations are made by purchasing flights, hotels and activities separately. The services of the travel agency are not necessary nowadays if consumer is able to use internet. There are couple of barriers in purchasing online, like payment safety and decision making skills of the consumer. Travel agencies should provide security for online payments and some possibilities for making decision making easier online. (Souffriau & Vansteenwegen, 2010)
Beside use of online services for booking a flight tickets and hotels, people more often use a mobile device or computer for attractions booking for the trip. Applications have become very popular for that purpose. Many people visit some region or a city only for short time so it is not possible to see and visit every sight at the destination. The tourist has to make a plan for what is worth visiting. However tourist can face some trouble while searching for the information as some travel guidebooks can have outdated information about the attractions and wrong information for the current time. Guidebooks cannot provide temporary information as the change of the opening hours, routes or discounts which are important for the traveler. Mobile applications and websites are more useful for that. Modern tourists want to use their time effectively and they want to be informed all the time of the offers at the destination. (Souffriau &
Vansteenwegen, 2010) Beside the easier booking process for the flights, there are more flights available overall. Better flight connections and low-cost companies have taken a big role in tourism. (Vainikka, 2014)
Instead of booking a trip from a local tour provider it is easy to plan the whole trip online. Some applications like “Personal interest estimation” POI does the whole travel planning for you taking into account weather, hotel reservations, budget, transportation and many more functions.
Unfortunately many personalized trip agencies are not able to do the same as effectively and cost efficiently as an application. (Souffriau & Vansteenwegen, 2010)
Technological impact on travel industry and consumer behavior is huge. Beside online reservations and applications there is one huge impact called “Shared economy”. Shared economy platforms are technological innovations which provide shared apartments or other services. One of the most popular is Airbnb. It is the most successful platform for the accommodation as a “P2P” platform. Airbnb connects hosts who have some space for the sleeping and guests who are searching for an accommodation. For the expanding Airbnb has also better possibilities as apartments are located everywhere. For the hotels it is more difficult to expand in the old cities for example. Many tourists prefer to use Airbnb over the hotels as they provide more local life style and neighborhoods than touristic hotels. (Gutierrez, Garcia- Palomares, Romanillos & Salas- Ilmendo, 2016; Airbnb, 2017)
One of the latest innovations in the technology, related to travel industry is “virtual travelling” It is called (3D) technology, allows people to see the destinations through Web. “Tourist” can take a virtual tour to the destination. The experience can feel “real” as it allows a virtual visitor to even create and communicate with the image of the destination. (Buhalis & Law, 2007)
Beside all the other technological impacts, there one more very important influence on travel industry overall, the transportation. Faster and better transportation is making the accessibility of the travel destinations more attractive worldwide. New technologies are making transportation faster, cheaper and more environment friendly. At the same time access to internet provides huge possibilities to travel customers on how they spend their time and money. (Dwyer et al. 2007) 4.5. Environmental
People are interested in wider issues like environment, animal rights nowadays. Talking about more trends in the consumption of the people, people are spending more money on holidays, eating out, and theatre and so on. In other words, consuming is changing from buying some
products and stuff, toward more environment friendly services, non- material products. Yeoman et al. 2007)
Travel industry is based on the cultural and environmental recourses. Business sustainability is based on the making good picture and environment friendly image. Society wellbeing on the destination and environment friendliness are the important keys to creating good image of the company. (Sheldon & Sun- Young, 2011) Travel organizations are trying to create a picture of an environment friendliness of the industry. Aviation companies are pointing the environment friendliness by pointing that fling is not more harmful for the environment than trains or cars.
However organizations and companies are not showing that is the fact. People have more awareness on the environment and the information is available all over the internet and social media. It is easier nowadays to compare what is the truth by using searching skills. (Gössling&
Peeters, 2007)
Beside the environmental reasons for deciding about the travelling, the destination itself plays a role. Some destinations are more “Independent traveler- friendly” than the others. For example, Sydney and Bangkok are welcoming independent travelers with a huge range of different accommodation types. Some resort destinations on the other hand are still not “independent traveler- friendly” as they have a limited availability of accommodation types. (Chen et al. 2010) As the travel industry has grown fast during last 50 years, amount of destinations has also grown.
Based on the information from “World tourism organization”, tourism is the largest industry in the world, based on the information of 2004. These are the most visited countries in the world based on the information of 2002. (Yeoman et al. 2007)
Table 4. World’s most popular destinations from 1950 to 2002. (Yeoman et al. 2007)
From this statistic it can be seen that in 50’s over 70% of the trips were concentrated on the USA, Canada, Italy, France and Switzerland. In 2002, the range of the most visited destinations is much wider. Destinations which are more “iconic” than the others, will stand out from the competition. By iconic means that the destination have more cultural and historical value than the others. (Yeoman et al. 2007)
Climate change is a global issue and it influences on every industry. Snow is melting, sea- level is rising, temperature changes and so on. Climate change influences on the choice of the destination for travel. It can also effect on the travel industry by increasing the costs of energy.
Natural recourses are getting lower. Industrial development and raise of population are together the key reason for a loss of natural recourses. The cost of the transportation might be increasing because cost of the oil will become more expensive. Climate change can cause some local nature disasters like tsunamis. (Dwyer et al. 2007)
4.6. Legal
Legal issues in travel industry are connected with environmental and political issues.
Governments are supporting aviation companies, even they know that it is not environment friendly industry. However, there are rising awareness of the climate change going on. Politics and governments around the world are worried about climate change. Travel industry including airlines, ground transportation and tour companies are facing these issues and they are under critical discussion. Also researchers has taken a tourism industry under the critical opinion on the destination sustainability. There is a danger of putting more limitations on the travel industry from the legal side. (Sheldon & Sun- Young, 2011)
As independent traveling has become more popular, danger of breaking the local laws or getting into danger has raised. Such incidents as a robbery, fire, car accident, natural disaster and some criminal incidents are the issues while traveling independently. Independent information searching skills can overcome these issues. (Chen et al. 2010)
4.7. Analysis of Driving forces
In order to analyze possible alternatives about potential developments of the travel influence in Finnish market and environment, specific scenario driving forces need to be identified. Based on Pestel analysis made before, the impacts are analyzed by dividing them into groups: Constants, Cycles, Trends, Events and Issues. This is the first step of scenario creating. First, Pestel analysis will be summarized by using short “key words” of each driving force. After summarizing, each driving force will be put in the table of analysis in the “right place”.
Political
Terrorism, regional and ethnical conflicts, border controls stricter, diseases and health issues are spread in outcome of traveling.
Economic
Globalization- borders are easier to cross, more customers, more destinations.
More transport connections. Economy growth. More tourism flows. More experience- driven consumption. Advertisement resistance.
Social
Multiculturalism. Connection between people through social media. Internet- Information is available and moving fast. Experience- driven culture. “Money-rich-time-poor people”.
Individualists. Aging population. Social structure- more singles. Independent traveling. Well known price and quality- expectations. Health and wellness as a trend. People are not seem to care on the world situation, traveling has not decreased in 2015 and 2016. Urbanization. Long-haul traveling. Off-season traveling. Better education, better income, better able to do on their own. Experience- economy. Ethic way of traveling, volunteering. More international trips than before. “Global- network- knowledge- society”. People are open to new destinations and experiences. “Gazinda”- a lot of activities to fulfill the time. Long term activities.
Technological
E-commerce. Developing transportation- fast, cheap and convenient. Internet, availability everywhere, all the time. Applications. Virtual traveling. Shared economy, like Airbnb and Uber.
Environmental
People are concerned about environmental and animal issues. More environment- friendly consumption. Traveling- environmental friendly? Destinations- more choices, more spread worldwide. Climate change. Natural recourses getting lower.
Legal
Climate change. Critical discussion about supporting travel companies. Independent traveling- danger of breaking local laws.
Pestel analysis is now summarized and the Driving forces can be placed into “Driving force”-analysis to the right places.
Trends are changes that have been moving toward specific direction over a long period. Cycles are the changes that recur. It can be said “it happened again”. Issues are the changes that has been currently happening and can become a bigger influences in the future. Constants are the quantities or changes that are most likely to stay the same before the time line (five years) will end. Events are happenings which have created the current situation. This analysis is the first step of recognizing the most significant influencers on the future. Dividing into these groups will help recognize which changes will most likely still exist in five years from now. They are called scenario driving forces. (Bishop& Hines, 2012)
Constants Cycles Trends Events Issues
Demographic
Constants mean some changes that are going on all the time. Here the population growth is one of the factors. Population is growing worldwide all the time. Population is also getting older, as
“baby boomers” are getting older now and people live longer as before in outcome of the modern medicine. (Amadeus, 2007) Urbanization has been going on for decades as the population of the cities is growing and the population of countryside is decreasing. (Dwyer et al. 2007)
People are doing more international trips as before, because the modern world and technology are giving a better chance for it. Global- network- society is something we call modern society. It has also been created by the use of technology and media, people are more connected to each other. These are all constants because these will most likely not be changed or coming up to the end until the time frame, five years. (Curthbertson & Furseth, 2016)
Trends are changes that have been moving in a specific direction over a long period. As there are older people, they also have different expectations, like having a luxury in their life but for less money. Individualists are those travelers who want to do thing on their own. They prefer to travel alone and do exactly what they decide to do. By independent traveling it is meant that more and more of travelers are not booking the packages from the travel agency. Instead they book flights, hotels and attractions separately on their own. (Yeoman et al. 2007) Long haul traveling is traveling for a longer periods, for example, young people who are taking a year off after high school graduation are long haul travelers. Ethic traveling is the way of taking care of the society or nature while traveling. One way of ethic travels is to do volunteering abroad. All of these trends in traveling has been going on for some time. (Brent et al. 2005)
Event is something that has created the current situation. Changed social structures, like society accepts different life styles has created the current situation with more singles. (Dwyer et al.
2007)
Environmental
Constant in environmental category is climate change, it has been going on for so long and will continue for five years. Natural recourses will most likely continue getting lower. People are more informed and worried about environmental issues, it will also continue as people are getting more information from the internet. (Dwyer et al. 2007)
Cycles are changes that can be described as “it can happen again”. In this category belongs local weather conditions like tsunami or storms. They can happen again at any time. (Dwyer et al.
2007)
Trend is environmental friendly consumption. As people are more aware of the issues, they try to be less harmful to the environment. (Yeoman et al. 2007)
Issue is that is traveling really environmental friendly? Using transportation causes air pollution.
Tourist destinations are getting polluted as well. This can lead to different kind of decision from the side of the traveler. (Gössling& Peeters, 2007)
Technological
Constants in technological aspects are internet and e-commerce. Internet is getting more and more available as people are using smart phones connected to the internet. Internet connections are getting faster and cheaper, which makes it more affordable for people. E-commerce will most likely continue growing and people will buy more trips online even than before. Developed transportation is one of the reasons traveling is made easy nowadays. By using cheap airlines it is cheap and fast to get almost anywhere. (Furseth & Cuthbetson, 2016)
Trends in technological factors are connected to internet as well. More applications which can make traveling easier are available on the market. Airbnb is a huge player on the market which is challenging even the biggest hotel chains. Virtual traveling is the newest thing and it is still not well known for everyone. (Gutierrez et al. 2016; Buhalis & Law, 2007)
Economic
Constant in economic factors is that people are willing to purchase more experiences than manufactured products. It seems to be the thing which will most likely continue for five years and even more. (Yeoman et al. 2007)
Trend in economic sector is globalization. Globalization has started long time ago and most likely will be continuing for decades. It seems to be the way the world is leading us: toward global life style in everything. By the influence of globalization, it is easier to cross the borders and travel independently. The thing which is also connected with globalization and border crossing, is that there are much more destinations for a travelers available. As it is easier to travel, also more people travel. (Dwyer et al. 2007)
Event is happening which has created the current situation. The economy has started to recover after the world economy crisis. It has led to the situation that people travel more again.
(Databank, worldbank, 2017)
Issue in economic related aspect is that people are resisting the commercial advertisements. It seems that people are trusting more “each other” so the money company use on the advertisement can be less effective than before. It can be issue for the travel agencies to find a way for marketing in modern world. (Yeoman et al. 2007)
Governmental
Cycle in governmental forces is that as an outcome of traveling people have spread more deceases in the world than before. Some deceases can be “epidemical” and come back after some time period. (Dwyer et al. 2007)
Trend is independent traveling. By doing so, people can be uninformed of the local laws and by not knowing them, they can break them easily. (Chen et al. 2010)
Event Is that border controls are getting actually stricter now by the result of more terror attacks all over the world. In case this will continue, it will create more barriers for independent traveling. (Dwyer et al. 2007)
Issue in terrorism. It can influence on the number of the trips taken abroad. Another issue is more national conflicts, whether the destination is not safe, the willingness to visit it can become lower. (Dwyer et al. 2007) Climate change is an issue as well. Politics are the ones who decide on the climate change prevention strategies. In case they will decide not to support travel companies anymore, they can create more barriers for travel companies to do their business.
(Sheldon & Park, 2011) Cultural
Constant in cultural forces is that information is available easily everywhere by the more common use of the internet. Price and quality expectations will most likely to stay the same for five next years. This is also connected to the internet usage and technological development. It is constant that people are getting more educated and getting “better paid” jobs. By doing so people are able to get more information, make decisions on their own and travel more. (Yeoman et al.
2007)
Cycle is consumption of the behavior of the customer. Now it seems to have a clear line:
experience driven consumption. However, the consumption can change in time and “non-experience driven” consumption can come back in some time. (Weiermair, 2004)
experience driven consumption. However, the consumption can change in time and “non-experience driven” consumption can come back in some time. (Weiermair, 2004)